Judge: Michael E. Whitaker, Case: 22STCV02524, Date: 2023-03-27 Tentative Ruling

Case Number: 22STCV02524    Hearing Date: March 27, 2023    Dept: 32

PLEASE NOTE:   Parties are encouraged to meet and confer concerning this tentative ruling to determine if a resolution may be reached.  If the parties are unable to reach a resolution and a party intends to submit on this tentative ruling, the party must send an email to the Court at sscdept32@lacourt.org indicating that party’s intention to submit.  The email shall include the case number, date and time of the hearing, counsel’s contact information (if applicable), and the identity of the party submitting on this tentative ruling.  If the Court does not receive an email indicating the parties are submitting on this tentative ruling and there are no appearances at the hearing, the Court may place the motion off calendar or adopt the tentative ruling as the order of the Court.  If all parties do not submit on this tentative ruling, they should arrange to appear in-person or remotely (which is highly encouraged).  Further, after the Court has posted/issued a tentative ruling, the Court has the inherent authority to prohibit the withdrawal of the subject motion and adopt the tentative ruling as the order of the Court. 

TENTATIVE RULING

MOTION

Defendant Lyft Inc. (Petitioner) moves to compel Plaintiff Ana Cervantes (Respondent) to arbitrate Respondent’s claims arising from injuries Respondent alleges she sustained in a multi-vehicle collision involving a Lyft driver.  Respondent opposes the motion.  Petitioner replies.

ANALYSIS

1.      MOTION TO COMPEL ARBITRATION – LEGAL STANDARDS

            “[T]he advantages of arbitration include a presumptively less costly, more expeditious manner of resolving disputes.  It follows a party to a valid arbitration agreement has a contractual right to have its dispute with another party to the contract resolved quickly and inexpensively.”  (Henry v. Alcove Investment, Inc. (1991) 233 Cal.App.3d 94, 99–100 [cleaned up].)  Thus, “on petition of a party to an arbitration agreement alleging the existence of a written agreement to arbitrate a controversy and that a party to the agreement refuses to arbitrate that controversy, the court shall order the petitioner and the respondent to arbitrate the controversy if it determines that an agreement to arbitrate the controversy exists.”  (Code Civ. Proc., § 1281.2; see also

EFund Capital Partners v. Pless (2007) 150 Cal.App.4th 1311, 1320 [the language in section 1281.2 compelling arbitration is mandatory].) The right to compel arbitration exists unless the court finds that the right has been waived by a party’s conduct, other grounds exist for revocation of the agreement, or where a pending court action arising out of the same transaction creates the possibility of conflicting rulings on a common issue of law or fact.  (Code Civ. Proc., § 1281.2, subds. (a)-(c).)   

            “On a petition to compel arbitration, the trial court must first determine whether an agreement to arbitrate the controversy exists.  Because the existence of the agreement is a statutory prerequisite to granting the petition, the petitioner bears the burden of proving its existence by a preponderance of the evidence.  The party seeking arbitration can meet its initial burden by attaching to the petition a copy of the arbitration agreement purporting to bear the respondent's signature.”  (Bannister v. Marinidence Opco, LLC (2021) 64 Cal.App.5th 541, 543-544 [cleaned up].)  The party seeking to compel arbitration must also “plead and prove a prior demand for arbitration and a refusal to arbitrate under the agreement.”  (Mansouri v. Superior Court (2010) 181 Cal.App.4th 633, 640-641.) 

            And while the moving party on a motion to compel arbitration “bears the burden of proving the existence of a valid arbitration agreement by a preponderance of the evidence, [a] party opposing the petition bears the burden of proving by a preponderance of the evidence any fact necessary to its defense.  The trial court sits as the trier of fact, weighing all the affidavits, declarations, and other documentary evidence, and any oral testimony the court may receive at its discretion, to reach a final determination.”  (Ruiz v. Moss Bros. Auto Group, Inc. (2014) 232 Cal.App.4th 836, 842 [cleaned up]; see also Pinnacle Museum Tower Assn. v. Pinnacle Market Development (US), LLC (2012) 55 Cal.4th 223, 236 [“The party seeking arbitration bears the burden of proving the existence of an arbitration agreement, and the party opposing arbitration bears the burden of proving any defense, such as unconscionability”].) 

2.      ENFORCEABLE ARBITRATION AGREEMENT

Petitioner alleges Respondent has improperly denied Petitioner’s demand for arbitration.  Petitioner asserted that an arbitration agreement exists between the parties as an affirmative defense.  (See Answer, Affirmative Defense No. 16.)   Petitioner further sent Respondent a letter reminding Respondent of her contractual obligation to arbitrate.  (See Declaration of Ryan M. Sellers, ¶ 4, Exhibit 5.)  Respondent has refused to dismiss Petitioner, thus necessitating Petitioner’s instant motion to enforce Petitioner and Respondent’s mutual arbitration agreement.  (See Declaration of Ryan M. Sellers, ¶ 4.) 

            As to the existence of an enforceable arbitration agreement, Petitioner advances the declaration of Paul McCachern (McCachern), who is a Program Lead, Safety, for Lyft, Inc. (Lyft).  According to McCachern, to access Lyft's software platform to request rides, an individual, or “user”, must first create a Lyft user account using the Lyft App.  (Declaration of Paul McCachern, ¶ 7.)  During the account creation process, after the user enters the required personal information, the user is then prompted within the Lyft App to accept the then-current Terms of Service during their account creation  process.  (Declaration of Paul McCachern, ¶ 8.)  Thereafter, the user is periodically prompted within the Lyft App to accept Lyft' s updates 27 to its Terms of Service.  (Declaration of Paul McCachern, ¶ 8.)  McCachern confirms that a user cannot access the Lyft software platform without first creating a Lyft user account and cannot request or purchase rideshare services through the Lyft App unless they have affirmatively accepted Lyft’s Terms of Service.  (Declaration of Paul McCachern, ¶ 8.)

            McCachern accessed Lyft’s business records and determined that Respondent created a Lyft user account on June 10, 2016.  (Declaration of Paul McCachern, ¶ 11.)  Respondent affirmatively accepted Lyft's Terms of Service within the Lyft App on 4 four separate occasions: (1) during the account creation process, on June 10, 2016, (2) on October 21, 2019, and (3) January 31, 2021.  (Declaration of Paul McCachern, ¶¶ 12, 14.)  On January 31, 2021, Respondent consented to the December 9, 2020 version of the Terms of Service when the Lyft App directed Respondent to scroll through and read the entire Lyft Terms of Service and required Respondent to click a button under the full text of the Terms of Service to demonstrate her consent and agreement to be bound by the Terms of Service and to proceed with use of the Lyft App.  (Declaration of Paul McCachern, ¶ 15.)  McCachern confirms if Respondent had exited the Lyft App without clicking that consent button, she would have been presented with the full Lyft Terms of Service every time she opened the Lyft App until Respondent clicked the button demonstrating her agreement and consent to the then-current Lyft Terms of Service.  (Declaration of Paul McCachern, ¶ 16.)

            Section 17 of the December 9, 2020 version of the Terms of Service is titled in bold typeface “Dispute Resolution and Arbitration Agreement.”  (Declaration of Paul McCachern, ¶ 12, Exhibit 4.)  Section 17 states the following:

YOU AND LYFT MUTUALLY AGREE TO WAIVE OUR RESPECTIVE RIGHTS TO RESOLUTION OF DISPUTES IN A COURT OF LAW BY A JUDGE OR JURY AND AGREE TO RESOLVE ANY DISPUTE BY ARBITRATION, as set forth below. This agreement to arbitrate ("Arbitration Agreement") is governed by the Federal Arbitration Act ("FAA"); but if the FAA is inapplicable for any reason, then this Arbitration Agreement is governed by the laws of the State of Delaware, including Del. Code tit. 10, § 5701 et seq., without regard to choice of law principles.

(Declaration of Paul McCachern, ¶ 12, Exhibit 4.)  Petitioner has met its burden to establish the existence of an enforceable arbitration agreement.  Based upon the terms in the Terms of Service as agreed to by Respondent, the Court finds the arbitration agreement to be enforceable against Respondent. 

3.      Code of Civil Procedure Section 1281.2, Subdivision (c)

In opposition, Respondent argues the instant motion to compel arbitration must be denied pursuant to Code of Civil Procedure, section 1281.2, subdivision (c).  Respondent attests that because she is seeking damages against an additional defendant who is not subject to the arbitration agreement, for the same underlying accident, there may be conflicting rulings. For example, whether the remaining defendant was an agent of Lyft, and whether said defendant was employee of Lyft acting within the course and scope of his employment at the time of the incident.  Therefore, to enforce the arbitration agreement would be in violation of Code of Civil Procedure section 1281.2, subdivision (c). 

Under Code of Civil Procedure section 1281.2, subdivision (c), “the court shall order the petitioner and the respondent to arbitrate the controversy if it determines that an agreement to arbitrate the controversy exists, unless it determines that: . . . A party to the arbitration agreement is also a party to a pending court action or special proceeding with a third party, arising out of the same transaction or series of related transactions and there is a possibility of conflicting rulings on a common issue of law or fact.”  When an agreement provides that its enforcement will be governed by the Federal Arbitration Act (FAA), the Court cannot look to Code of Civil Procedure section 1281.2, subdivision (c) to deny defendants’ motion to compel arbitration.  (Victrola 89, LLC v. Jaman Properties 8 LLC (2020) 46 Cal.App.5th 337.)  In such a case, the judge may consider whether to stay pending court proceedings under Code of Civil Procedure section 1281.2, subdivision (c) as to any other parties who are not subject to arbitration under the FAA until the arbitration proceeding is resolved to avoid conflicting rulings.  (Rodriguez v. American Technologies, Inc. (2006) 136 Cal.App.4th 1110.)

Here, as Petitioner notes in its reply, the subject arbitration agreement is governed by the FAA.  (Declaration of Paul McCachern, ¶ 12, Exhibit 4, Section 17.)  As such, section 1281.2, subdivision (c) is inapplicable here for the purposes of denying Petitioner’s motion to enforce arbitration. 

CONCLUSION AND ORDER

Therefore, the Court grants Petitioner’s petition to compel arbitration and stays all proceedings before this Court pending completion of the arbitration between Respondent and Petitioner to avoid inconsistent rulings pursuant to Code of Civil Procedure section 1281.2, subdivision (c). 

Further, the Court vacates the Final Status Conference and Trial, and sets a Status Conference re Arbitration, or in the alternative, Trial Setting Conference, on October 2, 2023 at 8:30 A.M. in Department 32. 

Petitioner shall give notice of the Court’s ruling and file a proof of service of such.