Judge Michael Small, Case Number: 21STCV32098, Date: 2023-08-18 Tentative Ruling

Judge: Michael Small, Case: 21STCV32098, Date: 2023-08-18 Tentative Ruling

Inform the clerk if you submit on the tentative ruling. If moving and opposing parties submit, no appearance is necessary.

Case Number: 21STCV32098 Hearing Date: August 18, 2023 Dept: 57

Plaintiff filed a motion for reconsideration of the August 23, 2022 order (per Judge Steven Kleifield) granting Defendant's motion to compel arbitration of Plaintiff's Song-Beverly Consumer Warranty Act ("Song-Beverly”) claims. The motion for reconsideration was initially heard on July 12, 2023. In advance of the hearing, the Court issued a tentative ruling to grant the Plaintiff’s motion for reconsideration. The tentative ruling set forth the following points.

First, the reconsideration motion is untimely under Code of Civil Procedure Section 1008(a). That provision requires motions for reconsideration to be filed within 10 days after service of the order on which reconsideration is sought. Here, Plaintiff's motion for reconsideration was filed long after the expiration of the 10-day period.
Plaintiff contends that it is seeking reconsideration under Section 1008(c), which does not contain a time period for reconsideration. The problem is that subsection (c) speaks to reconsideration by the trial court itself on its own motion, not a party's motion. This begs the question whether this Court can, and should, on its own motion reconsider the August 23, 2022 order compelling arbitration.

Second, as to whether the Court can reconsider the order compelling arbitration, the answer is yes. The stay of proceedings in this Court that resulted from the order compelling arbitration does not deprive the Court of jurisdiction to reconsider the order on its own motion. (Pinela v. Nieman Marcus Group, Inc. (2015) 238 Cal.App.4th 227, 237-239.)

Third, as to whether the Court should reconsider the order compelling arbitration, this turns on whether, as Section 1008(c) states, "there has been a change of law that warrants . . . reconsideration [of the] prior order . . . ." The basis for the Court's order compelling arbitration here was Felisilda v. FCA US LLC (2020) 53 Cal.App.5th 486. The Court of Appeal in that case held that an automobile manufacturer that was not a signatory to an arbitration agreement between a Song-Beverly plaintiff and the dealer from which the plaintiff purchased the automobile that was the subject of the plaintiff's claims could enforce the agreement and compel arbitration of the claims under the doctrine of equitable estoppel. In April 2023, however, Division 8 of the Second District Court of Appeal in Ochoa v. Ford Motor Co. (2023) 89 Cal.App.5th 486, reached the opposite conclusion on that same question and rejected the reasoning of Felisilda. The Court in Ochoa held that an automobile manufacturer that was a non-signatory to the arbitration agreement between a Song-Beverly plaintiff and the dealer from which the plaintiff purchased the automobile that was the subject of the claims could not compel arbitration of the claims based on the doctrine of equitable estoppel. More recently, Division Seven of the Second District Court of Appeal also rejected Felisilda and followed Ochoa instead. (See Montemayor v. Ford Motor Co. (2023) 92 Cal.App.5th 958.

Fourth, at the time the order compelling arbitration was entered in this case, Felisilda was the only California state court precedent addressing the application of equitable estoppel to motions to compel arbitration under circumstances like those in this case. That is not so anymore, in light of Ochoa and Montemayor. There thus has been a change in the law. That change is embodied in the conflict between Felisilda, on the one hand, and Ochoa and Montemayor, on the other hand. Unless and until the California Supreme Court resolves the conflict, trial courts have discretion to follow the lead of Felisilda, or the lead of Ochoa and Montemayor. (Auto Equity Sales, Inc. v. Superior Court (1962) 57 Cal.2d 450, 456.)

Fifth, this Court exercised discretion to express its view that Ochoa was better reasoned than Felisilda on the issue of the application of equitable estoppel, and that it would therefore follow Ochoa, not Felisilda. Based on that determination, the Court tentatively ruled that the motion for reconsideration should be granted.

Sixth, the Court declined, however, to finalize the tentative ruling. Instead, the Court continued the hearing on the motion for reconsideration to today (August 18, 2023). The Court took this approach because, at that time of the July 12, 2023 hearing, a petition for review of the decision in Ochoa was pending at the Supreme Court. The Court decided to wait to see if the Supreme Court granted review, and if review was granted, whether the Supreme Court would, pursuant to California Rule of Court 8.1115(e), issue any guidance to lower courts on the precedential force of Ochoa pending review. Rule 8.1115(e)(1) provides that “[p]ending review and filing of the Supreme Court's opinion, unless otherwise ordered by the Supreme Court under [Rule 8.1115(e)(3)], a published opinion of a Court of Appeal in the matter has no binding or precedential effect, and may be cited for potentially persuasive value only.”

That summarizes what the Court said in the tentative ruling issued in connection with the July 12, 2023 hearing. Since then, the Supreme Court granted review in Ochoa. (Ford Motor Warranty Cases (2023) – Cal.5th, 310 Cal.Rptr.3d 440. In so doing, the Supreme Court also guidance under Rule 8.1115(e)(3) that this Court was anticipating. Specifically, the Supreme Court stated that “[p]ending review, [Ochoa] may be cited, not only for its persuasive value, but also for the limited purpose of establishing the existence of a conflict in authority that would in turn allow trial courts to exercise discretion . . . to choose between sides of any such conflict.” (Ibid.) In other words, notwithstanding the grant of review in Ochoa, the Court of Appeal decision in that case continues to have precedential force and this Court is able to follow that decision over the decision in Felisilda. Because this Court remains persuaded that Ochoa is better reasoned than Felisilda, and because the order compelling arbitration is at odds with Ochoa, the Court is granting the Plaintiff’s motion for reconsideration. In light of that decision, this case is no longer stayed. The case will be set for trial at the August 18, 2023 hearing.