Judge Michael P. Linfield, Case Number: 23STCV15703, Date: 2023-09-18 Tentative Ruling

Judge: Michael P. Linfield, Case: 23STCV15703, Date: 2023-09-18 Tentative Ruling

Case Number: 23STCV15703 Hearing Date: September 18, 2023 Dept: 34

SUBJECT: Motion to Compel Arbitration

Moving Party: Defendant Pella Window and Door Showroom of South Pasadena

Resp. Party: Plaintiff Norma Sarkin

The Motion is GRANTED.

This matter is STAYED pending the conclusion of arbitration. The Court sets a post-arbitration Status Conference for November 25, 2024 at 8:30 am. The parties are to file a Joint Status Conference Report 5 court days prior to the status conference hearing.

BACKGROUND:

On July 6, 2023, Plaintiff Norma Sarkin filed her Complaint against Defendant Pella Window and Door Showroom of South Pasadena on causes of action arising from Plaintiff’s purchase of windows from Defendant.

On August 11, 2023, Defendant filed its Motion to Compel Arbitration. Defendant concurrently filed its Proposed Order.

On August 29, 2023, Defendant filed its Notice of Non-Opposition.

On September 1, 2023, Plaintiff late-filed the following items: (1) Opposition; (2) Declaration of Norma Sarkin; and (3) Declaration of Jonathan Gonzalez.

On September 5, 2023, the Court accepted the late-filed documents and continued the hearing on the Motion.

On September 11, 2023, Defendant filed its Reply.

ANALYSIS:

I. Legal Standard

“A written agreement to submit to arbitration an existing controversy or a controversy thereafter arising is valid, enforceable and irrevocable, save upon such grounds as exist for the revocation of any contract.” (Code Civ. Proc., § 1281.)

“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 [unless it makes certain determinations].” (Code Civ. Proc., § 1281.2.)

“Under both federal and state law, arbitration agreements are valid and enforceable, unless they are revocable for reasons under state law that would render any contract revocable. . . . Reasons that would render any contract revocable under state law include fraud, duress, and unconscionability.” (Tiri v. Lucky Chances, Inc. (2014) 226 Cal.App.4th 231, 239, citations omitted.)

“The party seeking to compel arbitration bears the burden of proving by a preponderance of the evidence the existence of an arbitration agreement.¿The party opposing the petition bears the burden of establishing a defense to the agreement's enforcement by a preponderance of the evidence.¿In determining whether there is a duty to arbitrate, the trial court must, at least to some extent, examine and construe the agreement.” (Tiri, supra, at p. 239.)

II. Discussion

A. The Arbitration Agreement

Defendant provides the Court with a contract (that contains an arbitration provision) signed by Plaintiff on June 13, 2022. (Motion, Exh. 1, p. 14.)

Plaintiff admits that she signed this contract. (Opposition, p. 2:19–22; Decl. Sarkin, ¶ 7.)

The entire arbitration provision is as follows:

ARBITRATION AND CLASS ACTION WAIVER ("ARBITRATION AGREEMENT")

YOU and Pella and its subsidiaries and the Pella Branded Distributor AGREE TO ARBITRATE DISPUTES ARISING OUT OF OR RELATING TO YOUR PELLA PRODUCTS (INCLUDES PELLA GOODS AND PELLA SERVICES) AND WAIVE THE RIGHT TO HAVE A COURT OR JURY DECIDE DISPUTES. YOU WAIVE ALL RIGHTS TO PROCEED AS A MEMBER OR REPRESENTATIVE OF A CLASS ACTION, INCLUDING CLASS ARBITRATION, REGARDING DISPUTES ARISING OUT OF OR RELATING TO YOUR PELLA PRODUCTS. You may opt out of this Arbitration Agreement by providing notice to Pella no later than ninety (90) calendar days from the date You purchased or otherwise took ownership of Your Pella Goods. To opt out, You must send notice by e-mail to pellawebsupport@pella.com, with the subject line: “Arbitration Opt Out” or by calling (877) 473-5527. Opting out of the Arbitration Agreement will not affect the coverage provided by any applicable limited warranty pertaining to Your Pella Products. For complete information, including the full terms and conditions of this Arbitration Agreement, which are incorporated herein by reference, please visit www.pella.com/arbitration or e-mail to pellawebsupport@pella.com, with the subject line: “Arbitration Details” or call (877) 473-5527. D'ARBITRAGE ET RENONCIATION AU RECOURS COLLECTIF ("convention d'arbitrage") EN FRANÇAIS SEE PELLA.COM/ARBITRATION. DE ARBITRAJE Y RENUNCIA COLECTIVA ("acuerdo de arbitraje") EN ESPAÑOL VER PELLA.COM/ARBITRATION.

(Motion, Exh. 1, p. 10.)

B. The Parties’ Arguments

Defendant moves the Court to compel arbitration of this matter, arguing: (1) that Plaintiff’s claims are subject to arbitration; and (2) that the Parties met and conferred prior to this Motion. (Motion, pp. 3:23, 5:17, 7:2–3.)

Plaintiff opposes the Motion, arguing: (1) that the arbitration provision does not apply because Plaintiff rejected the non-conforming goods and never took ownership of the non-conforming goods; and (2) that grounds (specifically, intentional and/or negligent misrepresentation) exist for rescission of the contract, and thus the Court cannot enforce the arbitration provision pursuant to Code of Civil Procedure section 1281.2. (Opposition, pp. 3:11–13, 5:15–17, 6:13.)

In its Reply, Defendant argues: (1) that the arbitration provision is enforceable because Plaintiff did not opt out of it within 90 days of purchase; and (2) that a cause of action for fraud does not mean the matter cannot be arbitrated because Plaintiff has not provided evidence of fraudulent inducement to enter into the arbitration provision. (Reply, pp. 2:11–12, 4:3–5.)

The Court notes that although Defendant appears to have made an arbitrability argument in a letter sent to Plaintiff’s Counsel, no such argument is made in the Motion or the Reply. (Motion, Exh. 2.)

C. Rescission of the Contract

The Court considers rescission of the contract prior to considering enforceability of the contract, as rescission of the contract would moot the issue of its enforceability.

Rescission of the contract on the basis of fraud is a valid defense to an arbitration agreement. (Tiri, supra, 226 Cal.App.4th at p. 239.)

However, as Defendant argues correctly, the allegations of intentional and/or negligent misrepresentation in both the Complaint and the Opposition regard the products Plaintiff purchased from Defendant and thus the contract as a whole, not the arbitration provision within the contract. (Complaint, ¶¶ 19–22, 29–32; Opposition, pp. 6:14–18, 6:27, 7:1–4, 16–24.) Moreover, Plaintiff does not provide any evidence of fraud regarding the making of the arbitration provision in either the Declaration of Norma Sarkin or the Declaration of Jonathan Gonzalez.

“The scope of arbitration is, of course, a matter of agreement between the parties, and if they choose to limit that scope so as to exclude questions of fraud in the inducement of the contract that choice must be respected. In this state, as under federal law, doubts concerning the scope of arbitrable issues are to be resolved in favor of arbitration. Therefore, in the absence of indication of contrary intent, and where the arbitration clause is reasonably susceptible of such an interpretation, claims of fraud in the inducement of the contract (as distinguished from claims of fraud directed to the arbitration clause itself) will be deemed subject to arbitration.” (Ericksen, Arbuthnot, McCarthy, Kearney & Walsh, Inc. v. 100 Oak Street (1983) 35 Cal.3d 312, 323, citations omitted.)

“We construe section 1281.2, subdivision (b), to mean that the petition to compel arbitration is not to be granted when there are grounds for rescinding the agreement. Fraud is one of the grounds on which a contract can be rescinded. (Civ. Code, § 1689, subd. (b)(1).) In order to defeat a petition to compel arbitration, the parties opposing a petition to compel must show that the asserted fraud claim goes specifically to the making of the agreement to arbitrate, rather than to the making of the contract in general.” (Engalla v. Permanente Med. Group, Inc. (1997) 15 Cal.4th 951, 973 [cleaned up].)

Here, there are no allegations or evidence of fraud that go specifically to the making of the agreement to arbitrate. Thus, there is no basis here for rescinding the arbitration provision.

D. Enforceability of the Arbitration Provision

Plaintiff argues that the arbitration provision does not apply because Plaintiff rejected the non-conforming goods and never took ownership of the non-conforming goods. (Opposition, p. 3.) According to Plaintiff, “the provision only comes into effect if Plaintiff took ownership over the non-conforming goods.” (Id. at p. 4:25–26.)

Plaintiff’s argument overlooks the explicit language of the arbitration provision, which states in relevant part: “You . . . agree to arbitrate disputes arising out of or relating to your Pella Products . . . . You may opt out of this Arbitration Agreement by providing notice to Pella no later than ninety (90) calendar days from the date you purchased or otherwise took ownership of your Pella Goods.” (Motion, Exh. 1, p. 10, bold and capitalization omitted.)

The provision applies to “disputes arising out of or relating to your [i.e., Plaintiff’s] Pella Products”. Plaintiff purchased the Pella Products, and Plaintiff does not dispute that she purchased the goods. (Decl. Sarkin, ¶ 7 [“Based on these representations, I decided to purchase the windows . . . and I entered a contract for purchase of 16 windows . . . .”].) As there is a dispute arising out of or relating to the products Plaintiff purchased, the arbitration provision applies. It is immaterial that Plaintiff rejected the goods after purchase or refused to take ownership of them after purchase.

Plaintiff’s citation to a 100-year-old appellate case regarding the return of non-conforming goods is simply irrelevant to the issue of arbitration. (See Opposition, p. 4:11-13.)

Plaintiff briefly argues that “even if the arbitration provision was triggered when Plaintiff tendered payment, Plaintiff is still well within the timeframe allowed to opt [out] of the arbitration provision, as Plaintiff never took ownership of the non-conforming goods, and therefore, the 90-day period allowed to opt [out] of the arbitration agreement has not even commenced.” (Opposition, p. 5:8–13.)

This argument is incorrect. The 90-day period to opt out runs “from the date You purchased or otherwise took ownership of Your Pella Goods.” (Motion, Exh. 1, p. 10.) The 90-day period to opt out began from the date of purchase, and there is no dispute that the date of purchase was June 13, 2022. The 90-day period has long come and gone, and there is no allegation or evidence that Plaintiff opted out during that period and in the manner allowed by the arbitration provision.

Plaintiff does not argue that the arbitration provision is either procedurally or substantively unconscionable. Therefore, the Court need not analyze these issues.

III. Conclusion

The Motion is GRANTED.