Judge Ralph C. Hofer, Case Number: 24GDCV00199, Date: 2024-07-12 Tentative Ruling

Plaintiffs Steven Kaufman and Triad Communications Group, Inc. allege that in September of 2021, plaintiffs purchased a 2021 Tesla Model S vehicle, and that express warranties accompanied the lease of the vehicle to plaintiff by which defendant Tesla, Inc. undertook to preserve or maintain the utility or performance of plaintiff’s vehicle or to provide compensation if there was a failure in such utility or performance.

Plaintiff alleges that the vehicle was delivered to plaintiffs with serious defects and nonconformities to warranty and developed other serious defects and nonconformities to warranty, including structural and electrical system defects.

Plaintiffs allege that the defects manifested themselves in the vehicle within the applicable warranty period, and substantially impair the use, value, or safety of the vehicle. Plaintiffs allege that plaintiffs delivered the vehicle to an authorized repair facility to repair the nonconformities, but defendant has been unable to conform the vehicle to warranty after a reasonable number of repair attempts.

Plaintiffs allege that despite their entitlement, defendant Tesla Motors, Inc. has failed to either promptly replace the vehicle or to promptly make restitution.

The complaint alleges three causes of action for Violation of the Song Beverly Act, for breach of express warranty, breach of implied warranty, and violation of Song-Beverly Act section 1793.2.

(Served and filed within 10 days after service of petition, or within 30 days if service outside the state, after petition is served (§1290.6) [unless extension granted by stipulation or court order determining good cause])

There is no timely opposition to this motion. Under CCP § 1290.6, a response to a petition to compel arbitration “shall be served and filed within 10 days of the service of the petition.” Here, the motion was served on June 3, 2024, by electronic transmission. Allowing two days for service by email, opposition was due on or before June 15, 2024, weeks ago. Opposition has also not been filed within nine court days of the date set for hearing, as required for standard motions under CCP §1005(b), which would have been on June 28, 2024. The motion may be granted on the grounds no timely opposition has been served or filed.

Defendant Tesla, Inc. (Tesla) seeks an order compelling plaintiffs to arbitrate their claims in accordance with an arbitration agreement with Tesla and to stay this action pending the outcome of the arbitration.

“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 determines that:

Under the Federal Arbitration Act, arbitration agreements “shall be valid, irrevocable and enforceable, save upon such grounds that exist at law or in equity for the revocation of a contract.” 9 U.S.C. section 2.

There is a strong public policy in favor of arbitration of disputes and any doubts concerning the scope of arbitrable disputes should be resolved in favor of arbitration. Moncharsh v. Heily & Blase (1992) 3 Cal.4th 1, 9 (“courts will ‘indulge every intendment to give effect to such proceedings.’”) (quotation omitted). “[A]rbitration agreements should be liberally interpreted, and arbitration should be ordered unless the agreement clearly does not apply to the dispute in question.” Vianna v. Doctors’ Management Co. (1994) 27 Cal.App.4th 1186, 1189, quoting Weeks v. Crow (1980) 113 Cal.App.3d 350, 353. See also AT&T Mobility, LLC v. Concepcion (2011) 563 U.S. 333, 339.

In this case, defendant has submitted a copy of a Motor Vehicle Order Agreement affiliated with plaintiffs’ file, as well as a Retail Installment Sale Contract between plaintiffs and Tesla Motors, Inc., which are authenticated by a Staff Business Resolution Partner at Tesla, Raymond Kim, as company records. [Kim Decl., paras. 2-13, Exs. 1, 2].

Both documents include arbitration provisions. The Retail Installment Sale Contract, which was executed by both plaintiffs as well as defendant, provides, in pertinent part:

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….”

“Agreement to Arbitrate. Please carefully read this provision, which applies to any dispute between you and Tesla, Inc. and its affiliates, (together “Tesla”).

If not resolved within 60 days, you agree that any dispute arising out of or relating to any aspect of the relationship between you and Tesla will not be decided by a judge or jury but instead by a single arbitrator in an arbitration administered by the American Arbitration Association (AAA) under its Consumer Arbitration Rules. This includes claims arising before this Agreement, such as claims related to statements about our products.

We will pay all AAA fees for any arbitration, which will be held in the city or county of your residence. To learn more about the Rules and how to begin an arbitration, you may call any AAA office or go to www.adr.org.

The arbitrator may only resolve disputes between you and Tesla and may not consolidate claims without the consent of all parties. The arbitrator cannot hear class or representative claims or requests for relief on behalf of others purchasing or leasing Tesla vehicles. In other words, you and Tesla may bring claims against the other only in your or its individual capacity and not as a plaintiffs or class member in any class or representative action. If a court or arbitrator decides that any part of this agreement to arbitrate cannot be enforced as to a particular claim for relief or remedy, then that claim or remedy (and only that claim or remedy) must be brought in court and any other claims must be arbitrated.

You may opt out of arbitration within 30 days after signing this Agreement by sending a letter to: Tesla, Inc.; P.O. Box 15430; Fremont, CA 94539-7970, stating your name, Vehicle Identification Number, and intent to opt out of the arbitration provision. If you do not opt out, this agreement to arbitrate overrides any different arbitration agreement between us, including any arbitration agreement in a lease or finance contract.”

This showing is sufficient to establish the existence of an agreement to arbitrate between the parties. The declaration of counsel for defendant also indicates, “On June 3, 3024, my office asked that Plaintiffs stipulate to arbitration. Plaintiffs did not agree to stipulate to arbitration.” [Ameripour Decl., para. 3].

There is no opposition to the motion to dispute this evidence, and, in fact, under CCP § 1290, “The allegations of a petition are deemed to be admitted by a respondent duly served therewith unless a response is duly served and filed.”

The complaint here clearly arises from “any dispute arising out of or relating to any aspect of the relationship between” plaintiff and Tesla, as set forth in the Motor Vehicle Order Agreement, and which “arises out of or relates to…” the purchase or condition of” the vehicle, the “contract or any resulting transaction or relationship,” as set forth in the Retail Installment Sale Contract. This situation is not a case where a non-signatory is attempting to enforce the agreement.

"shall, upon motion of a party to such action or proceeding, stay the action or proceeding until an arbitration is had in accordance with the order to arbitrate or until such earlier time as the court specifies."

Defendant has requested in the motion that the action be stayed. The matter is currently pending only between plaintiffs and defendant as a named defendant. The entire action is stayed pending arbitration.

The Court notes that it received no timely opposition to the motion to compel, as required by CCP § 1290.6. Accordingly, pursuant to CCP §1290, the allegations of the motion are deemed to be admitted by plaintiffs.

The Court finds that an agreement to arbitrate the controversy exists, that there is no showing that there has been any waiver of the right to compel arbitration, and no showing that the agreement has been rescinded or that grounds exist for rescission of the agreement.

The Court orders plaintiffs Steven Kaufman and Triad Communications Group, Inc. and defendant Tesla, Inc. to arbitrate this matter according to the Arbitration Provision included in the Retail Installment Sale Contract between the parties, dated 09/21/2021.

Please make arrangement in advance if you wish to appear via LACourtConnect by visiting www.lacourt.org to schedule a remote appearance. Please note that LACourtConnect offers free audio and video appearances. However, ADVANCE REGISTRATION IS REQUIRED.

If no appearance is set up through LACourtConnect, or no appearance is otherwise made, then the Court will assume the parties are submitting on the tentative.