Judge: Melvin D. Sandvig, Case: 22CHCV01212, Date: 2023-04-06 Tentative Ruling
Case Number: 22CHCV01212 Hearing Date: April 6, 2023 Dept: F47
Dept. F47
Date: 4/6/23
Case #22CHCV01212
MOTION TO
COMPEL ARBITRATION
Motion filed on 1/12/23.
MOVING PARTY: Defendant Nissan North America, Inc.
RESPONDING PARTY: Plaintiff Martha Villezcas
NOTICE: ok
RELIEF REQUESTED: An order
compelling arbitration and staying this action during the pendency of the
arbitration.
RULING: The motion is granted.
SUMMARY OF FACTS & PROCEDURAL HISTORY
This action arises out of Plaintiff Martha Villezcas’
(Plaintiff) purchase of a used 2020 Nissan Versa on 5/10/22 (the Vehicle) pursuant
to a “Retail Installment Sales Contract – Simple Finance Charge (With
Arbitration Provision)” (the Contract/RISC) Plaintiff entered with Nissan of
Mission Hills. (Motion, Ex.B; Complaint
¶7). The RISC was for the sale of a
warranted vehicle. Id. Plaintiff contends that the Vehicle is
defective and Defendant Nissan North America, Inc. (Nissan) has been unable to
service or repair the Vehicle to conform to the applicable express warranties
contained in the RISC after a reasonable number of opportunities. Plaintiffs further contend that despite the
foregoing, Nissan has failed to promptly repurchase the Vehicle as required
under the Song-Beverly Act. (Complaint
¶¶14-20).
As a result, on 11/21/22, Plaintiff filed this action against
Nissan for: (1) Violation of the Song-Beverly Warranty Act – Breach of Express
Warranty and (2) Violation of Song-Beverly Act – Section 1793.2. On 12/28/23, Nissan filed an Answer to the
Complaint.
On 1/12/23, Nissan filed and served the instant motion
seeking an order compelling arbitration and staying this action during the
pendency of the arbitration. On 3/23/23,
Plaintiff filed an opposition to the instant motion and on 3/29/23, Nissan
filed a reply to the opposition.
ANALYSIS
Plaintiff’s evidentiary objection (objection 1) to
Exhibit B to Nissan’s memorandum is overruled.
(See below).
Nissan’s evidentiary objections (objections 1-3) to the
declaration of Jeffrey Mukai are overruled.
Although Nissan did not include/file the declaration of
Jeck Dizon referred to in the motion and to which the RISC was purportedly
attached, a copy of the RISC was attached as Exhibit B to the motion and Plaintiff
does not dispute that the RISC Plaintiff signed regarding the Vehicle contains
an arbitration provision which provides, in relevant part:
ARBITRATION
PROVISION
PLEASE
REVIEW – IMPORTANT- AFFECTS YOUR LEGAL RIGHTS
1. EITHER YOU OR WE MAY CHOOSE
TO HAVE ANY DISPUTE BETWEEN US DECIDED BY ARBITRATION AND NOT IN COURT OR BY
JURY TRIAL.
2. IF ANY DISPUTE IS ARBITRATED,
YOU WILL GIVE UP YOUR RIGHT TO PARTICIPATE AS A CLASS REPRESENTATIVE OR CLASS
MEMBER ON ANY CLASS CLAIM YOU MAY HAVE AGAINST USE INCLUDING ANY RIGHT TO CLASS
ARBITRATION OR ANY CONSOLIDATION OF INDIVIDUAL ARBITRATIONS.
3. DISCOVERY AND RIGHTS TO
APPEAL IN ARBITRATION ARE GENERALLY MORE LIMITED THAN IN A LAWSUIT, AND OTHER
RIGHTS THAT YOU AND WE WOULD HAVE IN COURT MAY NOT BE AVAILABLE IN ARBITRATION.
Any claim or dispute, whether in
contract, tort, statute or otherwise (including the interpretation and scope of
this Arbitration Provision, and the arbitrability of the claim or dispute),
between you and us or our employees, agents, successors or assigns, which
arises out of or relates to your credit application, purchase or condition of this vehicle, this contract or any
resulting transaction or relationship (including any such relationship with
third parties who do not sign this contract) shall, at your or our
election, be resolved by neutral, binding arbitration and not by a court
action. If federal law provides that a
claim or dispute is not subject to binding arbitration, this Arbitration
Provision shall not apply to such claim or dispute.
…
…
This Arbitration Provision shall
survive any termination, payoff or transfer of this contract. If any part of
this Arbitration Provision, other than waivers of class action rights, is
deemed or found to be unenforceable for any reason, the remainder shall remain
enforceable. If a waiver of class action rights is deemed or found to be
unenforceable for any reason in a case in which class action allegations have
been made, the remainder of this Arbitration Provision shall be unenforceable.
(bold in original; italics added) (Motion,
Ex.B); (See Opposition, generally).
As such, Plaintiff’s objection to Exhibit B attached to
the motion is overruled. See Condee
(2001) 88 CA4th 215, 218; Gamboa (2021) 72 CA5th 158, 165.
Both California and federal law favor the enforcement of
valid arbitration agreements. Armendariz
(2000) 24 C4th 83, 97; Sanchez (2015) 61 C4th 899, 924; AT&T
Mobility, LLC (2011) 563 U.S. 333, 339.
The Federal Arbitration Act (FAA) applies where: (1) the
contract evidences a transaction in involving commerce; or (2) where the
parties expressly agree that the FAA governs arbitration agreement disputes
under the contract. Cronus
Investments, Inc. (2005) 35 C4th 376, 383-384; Victrola 89, LLC
(2020) 46 CA5th 337, 345-346; Buckeye Check Cashing, Inc. (2006) 546
U.S. 440, 442-443; Citizens Bank (2003) 539 U.S. 52, 56. Here, as noted above, the Arbitration
Provision in the RISC specifically states that “[a]ny arbitration under this
Arbitration Provision shall be governed by the Federal Arbitration Act
(9.U.S.C. § 1 et. seq.) and not by any state law concerning arbitration.” (Motion, Ex.B). Additionally, the RISC affects commerce.
A party seeking to compel arbitration under the FAA must
show: (1) the existence of a valid arbitration agreement and (2) the agreement
to arbitrate encompasses the dispute at issue.
Ashbey (9th Cir. 2015) 785 F3d 1320, 1323. Here, the opposition does not dispute that Plaintiff
entered the RISC which contains the above Arbitration Provision. Additionally, Plaintiff’s claims are based on
the fact that Plaintiff entered the RISC which contains the warranties sued
upon. (Complaint ¶¶4,
18-19, 21, 27-29, 31, 35). Contrary
to Plaintiff’s assertion the “warranty contract” attached to the complaint as
Exhibit 1 is not a contract as it is not signed by Plaintiff or any other
party. Rather, it is a document which
merely describes the warranties provided for in the RISC. (See Complaint ¶¶7, 14 and Ex.1
thereto)
Pursuant to both federal and California law, under the
doctrine of equitable estoppel, “a nonsignatory defendant may invoke an
arbitration clause to compel a signatory plaintiff to arbitrate its claims when
the causes of action against the nonsignatory are intimately founded in and
intertwined with the underlying contract obligations.” (internal quotation
marks omitted) JSM Tuscany, LLC
(2011) 193 CA4th 1222, 1237.
With regard to the purchase of a vehicle where the plaintiff
and the selling dealership entered a RISC, this very issue has recently been
decided by the Court of Appeal in Felisilda (2020) 53 CA5th 486 wherein
the Court held:
“Under the doctrine of equitable
estoppel, as applied in both federal and California decisional authority, a
non-signatory defendant may invoke an arbitration clause to compel a signatory
plaintiff to arbitrate its claims when the causes of action against the non-signatory
are ‘intimately founded in and intertwined’ with
the underlying contract obligations [i.e., the purchase and condition of the
vehicle].” (internal citations omitted).
Felisilda, supra, at
495.
Because Plaintiff expressly agreed to arbitrate claims
arising out of the condition of the Vehicle, including against third party
non-signatories to the RISC, Plaintiff is estopped from refusing to arbitrate the
claims made against Nissan in this action.
See Felisilda, supra at 497. As explained by the Court in Felisilda:
“‘the fundamental point’ is that a
party is ‘not entitled to make use of [a contract containing an arbitration
clause] as long as it worked to [his or] her advantage, then attempt to avoid
its application in defining the forum in which [his or] her dispute… should be
resolved.’” (internal citations omitted)
Id. at 496.
Plaintiff’s causes of action against Nissan relate to the
purchase and condition of the Vehicle; therefore, they fall under the
Arbitration Provision in the RISC. (See
Complaint ¶¶4, 8-10, 14-16, 30, 31, 35). The RISC is the source of the warranties
Plaintiff relies on for the claims in this action. As such, the warranties and their purported
breach are “intimately founded in and intertwined” with the RISC. See Felisilda, supra at 497.
Plaintiff’s reliance on Ngo (9th Cir.
2022) 23 F4th 942 and other federal cases for the proposition that Nissan as a
non-signatory to the RISC cannot rely on the arbitration provision because
Plaintiff has not sued the dealership/signatory to the RISC is unavailing.
Plaintiff’s reliance on Ngo, supra, and
other federal cases is misplaced. First,
these federal cases are not binding on this Court whereas Felisilda, supra,
is binding authority. See Auto
Equity Sales, Inc. (1962) 57 C2d 450, 455 (“When deciding matters of
California law, the doctrine of Stare Decisis requires the Court of inferior
jurisdiction follow the published decisions of California courts of superior
jurisdiction.”); Ngo, supra at 946 (“State law determines whether
a non-signatory to an agreement containing an arbitration clause may compel
arbitration.”); Franklin (9th Cir. 2021) 998 F3d 867, 874
fn.9; Felisilda, supra at 497.
Second, Ngo is inconsistent with Ninth Circuit precedent which
held that the signatory to a contract need not have been a defendant in order
for a non-signatory to compel arbitration under a theory of equitable
estoppel. See Franklin, supra
at 869-870, 875.
The warranties on which Plaintiff bases the claims in
this action are an essential part of the benefits Plaintiff received when Plaintiff
decided to enter the RISC. Additionally,
the protections provided by the Song-Beverly Act only apply to consumers who
purchase vehicles directly from the retail seller within the meaning of the
Act. See Dagher (2015) 238
CA4th 905, 926-927; Civil Code 1791.2(a)(1).
Without the RISC from a Nissan-authorized dealer, Plaintiff would have
no standing to seek relief under the Song-Beverly Act which underlies the
causes of action in the complaint.
Plaintiff even claims she is entitled to rescission of the contract
which seemingly refers to the RISC.
(Complaint ¶35). As such,
Plaintiff’s claims are inextricably intertwined with the RISC and Nissan may
enforce the Arbitration Provision under the doctrine of equitable
estoppel.
Nissan may also compel arbitration as a third
party-beneficiary to the Arbitration Provision.
As noted above, the Arbitration Provision provides that Plaintiff agreed
to arbitrate any claim related to the RISC, including “[a]ny claim or
dispute…which arises out of or relates to…condition of this vehicle, this
contract or any resulting transaction or relationship (including any such
relationship with third parties who do not sign this contract)… .” (Motion, Ex.B). Nissan is one of the third parties
contemplated by the agreement. See
Felisilda, supra at 498-499; Ronay Family Limited Partnership
(2013) 216 CA4th 830, 836; Goonewardene (2019) 6 C5th 817.
Plaintiff has failed to show that the arbitration
agreement is unconscionable and, therefore, unenforceable. To make such a showing, Plaintiff must
establish that the agreement is procedurally and substantively unconscionable. Sanchez (2015) 61 C4th 899, 910.
Plaintiff’s claim that the agreement is procedurally
unconscionable because the sales contract is presented to consumers on a “take
it or leave it” basis is without merit as it is not supported by any
evidence. Additionally, Plaintiff could
have purchased a vehicle through other means.
Plaintiff’s claim that the agreement is substantively unconscionable
because it does not allow the purchasers to recover their attorneys’ fees or
arbitration costs also lacks merit as the RISC provides that the parties are
responsible for their own attorneys’ fees and costs, “unless awarded by the
arbitrator under applicable law.”
(Motion, Ex.B). Therefore, if
Plaintiff prevails in the arbitration, the arbitrator can award Plaintiff
attorneys’ fees and costs under the Song-Beverly Act. Further, the arbitration provision is not
one-sided like the one at issue in Armendariz (2000) 24 C4th 83, 90 (an
employment case).
CONCLUSION
Based on the foregoing, Nissan’s request to compel
Plaintiff to arbitrate this action is granted.
The action is stayed pending the resolution of the arbitration. See CCP 1281.4; 9 U.S.C. §3.
Plaintiff’s request for a continuance based on the claim
that the California Second District Court of Appeal will be conducting a
hearing on 3/30/23 that will address the issues presented by this motion is
denied. (See Opposition, p.9,
fn.2). Plaintiff provides no authority
for such a continuance, no specific information as to the case on appeal, and
no indication when a decision after the hearing will be rendered. If a change in the law occurs within the time
period set forth in CCP 1008(a), Plaintiff is free to seek reconsideration of
this ruling.