Judge: Ralph C. Hofer, Case: 24GDCV00256, Date: 2024-11-15 Tentative Ruling

Case Number: 24GDCV00256    Hearing Date: November 15, 2024    Dept: D

TENTATIVE RULING

 

Calendar:         6

Date:               11/15/2024

Case No.         24 GDCV00256                     Trial Date:       None Set

Case Name:     Gevorkyan v. Hyundai Motor America, et al.

 

MOTION TO COMPEL ARBITRATION

MOTION TO COMPEL FURTHER RESPONSES TO REQUESTS FOR PRODUCTION OF DOCUMENTS

 

 

Moving Party:                         Defendant Hyundai Motor America (Arbitration)

                                                            Plaintiff Nataly Gevorkyan (Further Documents)     

Responding Party:       Plaintiff Nataly Gevorkyan (Arbitration)

                                                            Defendant Hyundai Motor America (Further Documents) 

 

RELIEF REQUESTED:        

Arbitration

            Order compelling plaintiff to arbitrate all of plaintiff’s claims and staying this action pending the outcome of arbitration

 

SUMMARY OF FACTS:

Plaintiff Nataly Gevorkyan alleges that in October of 2021 plaintiff leased a 2022 Hyundai Elantra, in connection with which defendant Hyundai Motor America issued a written warranty, in which defendant Hyundai Motor America undertook to preserve or maintain the utility or performance of the vehicle or provide compensation if there was a failure in such utility or performance.

 

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

 

  Plaintiff alleges that the defects manifested themselves in the vehicle within the applicable warranty period, and substantially impair the use, value, or safety of the vehicle.  Plaintiff alleges that plaintiff 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.

 

Plaintiff alleges that notwithstanding plaintiff’s entitlement, defendant Hyundai Motor America has failed to either promptly replace the vehicle or to promptly make restitution. 

 

The complaint also alleges that plaintiff delivered the vehicle to defendant Hyundai of Glendale for repairs on numerous occasions, and that defendant Hyundai of Glendale breached its duty to plaintiff to use ordinary care and skill by failing to properly store, prepare, and repair the vehicle in accordance with industry standards.

 

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 section 1793.2, as well as a fourth cause of action for negligent repair.

 

The file shows that on February 15, 2024, plaintiff filed two Requests for Dismissal, one requesting dismissal of this action without prejudice as to defendant Hyundai of Glendale, LLC, and the other requesting dismissal without prejudice of the fourth cause of action for negligent repair.  The dismissals were entered as requested the same date. 

 

ANALYSIS:

Arbitration

Defendant Hyundai Motor America (Hyundai) brings this motion seeking an order compelling plaintiff to arbitrate this matter, and an order staying the action pending the outcome of the arbitration.  

 

CCP § 1281.2 , governing orders to arbitrate controversies, provides, in pertinent part:

“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:

(a) The right to compel arbitration has been waived by the petitioner; or

(b) Grounds exist for rescission of the agreement.”

 

            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 an Owner’s Handbook & Warranty Information for plaintiff’s vehicle.  [Ameripour Decl., para. 3, Ex. 3].  Defendant has also submitted a Connected Services Agreement, pursuant to a declaration of the Director of Connected Ops and Owner Apps/Web for Hyundai Motor America Corporation, who indicates had to have been agreed to when plaintiff activated Bluelink services for the vehicle through the online enrollment process. [Rao Decl., paras. 3-6, Ex. 3].  Defendant argues that both of these agreements include binding arbitration provisions.  

 

            The Owner’s Handbook & Warranty Information for 2022 includes a provision, “BINDING ARBITRATION FOR CALIFORNIA VEHICLES ONLY,” which states, in pertinent part:

“PLEASE READ THIS SECTION IN ITS ENTIRETY AS IT AFFECTS YOUR RIGHTS THIS SECTION DOES NOT PRECLUDE YOU FROM FIRST PURSUING ALTERNATIVE DISPUTE RESOLUTION THROUGH BBB AUTO LINE AS DESCRIBED IN THE “ALTERNATIVE DISPUTE RESOLUTION” PROVISION IN SECTION 3 OF THIS HANDBOOK.

 

If you purchased or leased your Hyundai vehicle in the State of California, you and we, Hyundai Motor America, each agree that any claim or disputes between us (including between you and any of our affiliated companies) related to or arising out of your vehicle purchase, advertising for the vehicle, use of your vehicle, the performance of the vehicle, any service relating to the vehicle, the vehicle warranty, representations in the warranty, or the duties contemplated under the warranty, including without limitation claims related to false or misleading advertising, unfair competition, breach of contract or warranty, the failure to conform a vehicle to warranty, failure to repurchase or replace your vehicle, or claims for a refund or partial refund of your vehicle's purchase price (excluding personal injury claims), but excluding claims brought under the Magnuson-Moss Warranty Act, shall be resolved by binding arbitration at either your or our election, even if the claim is initially filed in a court of law. If either you or we elect to resolve our dispute via arbitration (as opposed to in a court of law), such binding arbitration shall be administered by and through JAMS Mediation, Arbitration and ADR Services (JAMS) under its Streamlined Arbitration Rules & Procedures, or the American Arbitration Association (AAA) under its Consumer Arbitration Rules.

 

***

Notwithstanding the above, either you or we may file a lawsuit in small claims court for any claims that otherwise require binding arbitration, if the small claims court has jurisdiction. In addition, either you or we may invoke any JAMS Streamlined Arbitration Rules & Procedures or AAA Consumer Arbitration Rules that allow you or we to have a small claims court decide any claims that otherwise require binding arbitration. This agreement evidences a transaction involving interstate commerce and shall be governed by the Federal Arbitration Act, 9 U.S.C. §§ 1-16. Judgment upon

any award in arbitration may be entered in any court having jurisdiction.

 

IF YOU PURCHASED OR LEASED YOUR VEHICLE IN CALIFORNIA, YOUR WARRANTY IS MADE SUBJECT TO THE TERMS OF THIS BINDING ARBITRATION PROVISION. BY USING THE VEHICLE, OR REQUESTING  OR ACCEPTING BENEFITS UNDER THIS WARRANTY, INCLUDING HAVING ANY REPAIRS PERFORMED UNDER WARRANTY, YOU AGREE TO BE BOUND BY THESE TERMS. IF YOU DO NOT AGREE WITH THESE TERMS, PLEASE CONTACT US AT OPT-OUT@HMAUSA.COM WITHIN THIRTY (30) DAYS OF YOUR PURCHASE OR LEASE TO OPT-OUT OF THIS ARBITRATION PROVISION.

[Ameripour Decl. para. 3, Ex. 3, Section 4, pp. 12, 14, bold in original].

 

            Defendant argues that the claims in this action arise out of the warranty, as plaintiff purchased his vehicle in California, is bringing this action pursuant to the warranty, and has alleged that repairs have been performed under the warranty, giving Hyundai standing to compel arbitration under the warranty, as the claims against Hyundai are fairly interpreted to fall within the arbitration provision of the warranty, involving “use of [plaintiff’s] vehicle, the performance of the vehicle, any service relating to the vehicle, the vehicle warranty, representations in the warranty, or the duties contemplated under the warranty.” 

 

            As an initial matter, plaintiff in opposition argues that the motion based on the purported Owner’s Handbook & Warranty Information booklet is improper as the document is not properly authenticated, as defendant’s counsel, not a person with personal knowledge, has submitted the document, and defendant has provided no declaration from a Hyundai representative to authenticate the document.  

 

            It is correct that the Owner’s Handbook & Warranty Information booklet including the above arbitration provision is submitted by counsel for defendant, who states, without facts establishing personal knowledge, that attached is a “true and correct copy of Plaintiff’s Owner’s Handbook & Warranty Information for Plaintiff’s vehicle.  [Ameripour Decl., para. 3, Ex. 3].   No facts are stated concerning counsel’s personal knowledge of the facts surrounding the origin of the document, such as that counsel was present when there was assent between the parties, or is in a position within defendant Hyundai to have been a custodian of records.

 

            Under Evidence Code 1401(a): “Authentication of a writing is required before it may be received into evidence.”  Under Evidence Code section 1400:

“Authentication of a writing means (a) the introduction of evidence sufficient to sustain a finding that it is the writing that the proponent of the evidence claims it is or (b) the establishment of such facts by any other means provided by law.” 

 

            Under Evidence Code section 702 (a), except for in connection with expert witness opinion testimony, “the testimony of a witness concerning a particular matter is inadmissible unless he has personal knowledge of the matter.  Against a party’s objection, such personal knowledge must be shown before the witness may testify concerning the matter.”   

 

            No such authentication or personal knowledge has been established here. Hence, plaintiff has argued that the evidence is insufficient on this ground. This argument appears to be valid.

 

            In addition, the document submitted under counsel’s declaration appears to constitute hearsay without any qualified witness establishing a business records exception. 

 

Evidence Code sec. 1271 provides:

“Evidence of a writing made as a record of an act, condition, or event is not made inadmissible by the hearsay rule when offered to prove the act, condition, or event if:

(a) The writing was made in the regular course of business;

(b) The writing was made at or near the time of the act, condition, or event;

(c) The custodian or other qualified witness testifies to its identity and the mode of its preparation; and

(d) The sources of information and method and time of preparation were such as to indicate its trustworthiness.”

 

In general, the party seeking arbitration bears the burden of proving the existence of an arbitration agreement by a preponderance of the evidence.  Villacreses v. Molinari (2005) 132 Cal.App.4th 1223, 1230:

 “In determining whether an enforceable arbitration agreement exists, the initial burden is on the party petitioning to compel arbitration. “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.” (Rosenthal v. Great Western Fin. Securities Corp., supra, 14 Cal.4th at p. 413; see Engalla v. Permanente Medical Group (1997) 15 Cal.4th 951, 972 [64 Cal. Rptr. 2d 843, 938 P.2d 903].) Once the petitioner has met that burden, the burden shifts to the party opposing arbitration, to “produc[e]  evidence of, and prov[e] by a preponderance of the evidence, any fact necessary to the defense.” (Rosenthal v. Great Western Fin. Securities Corp., supra, 14 Cal.4th at p. 413.”

Villacreses, at 1230.

 

Under federal law as well, the moving party to compel enforcement of an arbitration agreement bears the burden of establishing the existence of a valid agreement to arbitrate and that the agreement encompasses the dispute at issue, while the opposing party bears the party of establishing any defenses to enforceability.  Sanfilippo v. Tinder, Inc. (C.D. Cal. 2018) 2018 WL 6681197, *2.  

 

Here, the argument concerning the lack of admissible evidence is appropriate. Hence, the court can find that defendant accordingly has failed to prove, either by admissible evidence, or by a preponderance of the evidence, the existence of a valid arbitration agreement within the Owner’s Handbook & Warranty Information booklet.    

 

There is case law under which it is suggested that the procedures of document authentication are relaxed in connection with establishing the existence of an arbitration agreement.   In Condee v. Longwood Management Corp. (2001) 88 Cal.App.4th 215, 218, the court of appeal found that the trial court had improperly denied a petition to compel arbitration on the ground that the purported arbitration agreement had not been properly authenticated.  However, the court of appeal in Condee observed that, “In this case, although no evidence was ever introduced to verify the signature’s authenticity, it was never challenged.”  Condee, at 218.  The case also involved a situation where the trial court had denied a proffer of a declaration of a custodian of records which purported to authenticate the agreement.   Condee, at 217.  Similarly, the Second District observed in Gamboa v. Northeast Community Clinic (2021) 72 Cal.App.5th 158, 165, that if the moving party submits an unauthenticated agreement to meet its prima facie burden, “and the opposing party does not dispute the existence of the arbitration agreement,” then nothing more is required on the initial burden.

 

Here, the opposing party has argued that the evidence is not properly submitted.  Defendant in the reply does not offer further testimony concerning this subject or request that it be permitted to authenticate the document through an appropriate representative. The court is inclined to find that defendant in this circumstance has failed to meet its initial burden sufficient to shift the burden to the party opposing arbitration to produce evidence of facts necessary to a defense.  This posture is a situation where it is conceded that there is no signature to the agreement by either side. Consequently, there is no obligation on the part of plaintiff to directly challenge that plaintiff executed the agreement or that he did not remember seeing it or signing it.  This circumstance is also a situation where, as set forth above, the arbitration provision includes an opt out term.  [See Ameripour Decl. para. 3, Ex. 3, Section 4, p. 14, quoted above].  However, there is no evidence submitted with the motion indicating that plaintiff did not in fact exercise the opt out option.     

 

            Even if the court were to consider the document, there are no signatures indicating assent to be bound by its terms, and defendant in the moving papers has failed to make a clear legal argument or cite to appropriate authorities pursuant to which assent can be found by plaintiff’s conduct in seeking to enforce the warranty.  Plaintiff in opposition has submitted her own declaration in which she states that she “never signed the post-lease ‘Arbitration Agreement,’ including the instant one being submitted by Defendant in the Owner’s Handbook, because this subsequent ‘Arbitration Agreement’ does not require a consumer’s express consent nor contains an actual signature-line.”  [Gevorkyan Decl., para. 6]. 

 

            The motion fails to establish that there was an agreement on the part of plaintiff to arbitrate under the Owner’s Handbook & Warranty Information booklet or that defendant has standing to enforce the arbitration provision in that document. 

 

            The opposition also argues that under existing law, defendant is not permitted to issue an express warranty that also forces a consumer into binding arbitration over disputes that stem from the warranty.  Plaintiff relies on Civil Code section 1793.1 (a)(1) of the Song Beverly Act which states:

“(a)(1) Every manufacturer, distributor, or retailer making express warranties with respect to consumer goods shall fully set forth those warranties in simple and readily understood language, which shall clearly identify the party making the express warranties, and which shall conform to the federal standards for disclosure of warranty terms and conditions set forth in the federal Magnuson-Moss Warranty-Federal Trade Commission Improvement Act (15 U.S.C. Sec. 2301 et seq.), and in the regulations of the Federal Trade Commission adopted pursuant to the provisions of that act.

 

            Plaintiff argues that the federal Magnuson-Moss Warranty Act grants the Federal Trade Commission (FTC) the power to regulate alternative dispute resolution claims involving express or implied warranties.  In exercising that power, the FTC has expressly promulgated rules that binding mandatory arbitration of any warranty claim is unlawful.

 

            The Magnuson-Moss Act, at 15 USC section 2310(a)(2), states, in pertinent part: “(2) The [Federal Trade] Commission shall prescribe rules setting forth minimum requirements for any informal dispute settlement procedure which is incorporated into the terms of a written warranty to which any provision of this chapter applies.”

 

            The FTC, in turn has published 16 C.F.R. section 703.5, which provides for the establishment of informal dispute resolution procedures, and states, at subdivision (j), “Decisions of the Mechanism shall not be legally binding on any person.”

 

            Plaintiff submits legislative history pursuant to which the FTC repeatedly has affirmed its position that pursuant to this Rule binding arbitration agreements in consumer warranties are prohibited. The court notes that the FTC has declined  requests to change Rule 703.5(j) in that respect, including, most recently, in 2015, when the FTC provided a detailed analysis of the history of the Rule, and has stated: “the Commission reaffirms its long-held view that MMWA disfavors, and authorizes the Commission to prohibit, mandatory binding arbitration in warranties….”   [RFJN, Attachs. 1-5;  See Attach. 5, 80 Fed. Reg. 42710, 42719, footnote omitted]. 

 

            Plaintiff also cites to case law in which the courts have deferred to the FTC’s interpretation of the Magnuson Moss Act.  Rickard v. Teynor’s Homes, Inc. (USDC, N.D. Ohio 2003) 279 F.Supp.2d 910, 921 (finding that “the FTC’s expressed rationales for its interpretation of the MMWA indicate that the FTC’s reading of the statute is based on a reasonable construction of the statute,” and deferring “to the FTC’s expertise and construction of the statute,” and concluding, “[t]hus, the MMWA precludes enforcement of binding arbitration agreements for claims under a written warranty.”).

 

            Plaintiff argues the FTC’s reasonable construction of the statutory provisions Congress has entrusted it with interpreting is reasonable, again pointing to legislative history, in that the fate of the aggrieved consumer rests with the seller/manufacturer and its willingness to live up to its promises. Such an interpretation advances the purpose of consumer protection against unnegotiable contracts. The interpretation has persisted since 1975, a lengthy time.  [See RFJN, Exs. 3, 4, 5; Rickard, at 919-921;  Smiley v. Citibank (1996) 517 U.S. 735, 740 (“agency interpretations that are of long standing come before us with a certain credential of reasonableness, since it is rare that error would long persist.”)

 

            Defendant in the reply argues that more recent case law holds that an agency cannot expect deference when the agency seeks to interpret the Federal Arbitration Act which it does not administer, in reliance on Epic Systems Corp. v. Lewis (2018) 584 U.S. 497.  In Epic, the United States Supreme Court found that arbitration agreements entered into by employers and employees which included terms providing for individualized proceedings were enforceable under the FAA despite an argument by the employees that the interpretation by the agency enforcing the National Labor Relations Act (NLRA) offered a conflicting command.  Epic Systems, at 502.

 

            Defendant relies on language in which the Court noted that deference to an administrative agency’s interpretation of law was not warranted in that case, particularly because the determination in that case involved competing positions from the executive branch, as the agency, i.e., the National Labor Relations Board, and the United States (through the Solicitor General) disputed the meaning of the NLRA.  Epic Systems, at 520-521.    

 

            Plaintiff in the moving papers indicates that in Loper Bright Enterprises v. Raimondo (2024) 144 S.Ct. 2244, the U.S. Supreme Court, in evaluating the ruling in Epic Systems with respect to the deference standard established in prior Court precedent, Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc. (1984) 467 U.S. 837, held:

“By [leaving Chevron behind] however, we do not call into question prior cases that relied on the Chevron framework.  The holdings of those cases that specific agency actions are lawful… are still subject to statutory stare decisis despite the Court’s change in interpretative methodology.”

Loper Bright, at 2273.

 

            There does not appear to be any competing interpretation of the regulation involved here.  The legal argument here supports the reasonableness of the consistent interpretation offered by the executive, as supported by the law relied upon by plaintiff.   

 

            The authorities first cited in the reply recognize that there is a split of authority on this issue.  See Walton v. Rose Mobile Homes LLC (5th Cir. 2002) 298 F.3d 470, 478-479, and n. 16.

 

            Moreover, this case, as discussed above, involves a lack of sufficient proof of a valid arbitration agreement.  

 

            The motion is denied to the extent defendant relies on the arbitration provision included in the Owner’s Handbook.

           

            This posture leaves the arbitration provision included in the Connected Services Agreement.   

 

            The Connected Services Agreement is submitted pursuant to the declaration Vijay Rao, the Director of Connected Ops & Owner Apps/Web, for Hyundai, who indicates the Connected Services Agreement was accepted when plaintiff enrolled in the Blueline services and clicked the box acknowledging that plaintiff had “read and agree[d] to the Blue Line Terms and Conditions” and then clicked the “Complete” button.   [Rao Decl., para. 3-6, Ex. 1].  The declaration indicates that the phrase “Terms & Conditions” included a hyperlink to the then effective Connected Services Agreement and was not prepopulated with a check mark, so that plaintiff would have had to click that box to acknowledge assent to the Connected Services Agreement.  [Rao Decl., para. 6].

 

            The Connected Services Agreement which the declarant indicates was in effect at the time of plaintiff’s enrollment provides, in pertinent part:

“C. Binding Arbitration

MOST CUSTOMER CONCERNS CAN BE RESOLVED QUICKLY AND TO THE CUSTOMER'S SATISFACTION BY CONTACTING HYUNDAI’S CUSTOMER SERVICE DEPARTMENT AT CONSUMERAFFAIRS@HMAUSA.COM OR CALLING 800-633-5151 AND THE GENESIS CUSTOMER SERVICE DEPARTMENT AT CUSTOMERCARE@GENESISMOTORSUSA.COM OR CALLING 844-340-9741. IN THE UNLIKELY EVENT THAT THE APPROPRIATE CUSTOMER SERVICE DEPARTMENT IS UNABLE TO RESOLVE YOUR CONCERNS, WE EACH AGREE TO RESOLVE THOSE DISPUTES THROUGH BINDING ARBITRATION OR SMALL CLAIMS COURT INSTEAD OF IN COURTS OF GENERAL JURISDICTION TO THE FULLEST EXTENT PERMITTED BY LAW, AND SUBJECT TO THE TERMS OF THIS AGREEMENT. …

Arbitration Agreement:

            (a) Hyundai and you agree to arbitrate any and all disputes and claims between us arising out of or relating to this Agreement, Connected Services, Connected Services Systems, Service Plans, your Vehicle, use of the sites, or products, services, or programs you purchase, enroll in or seek product/service support for, whether you are a Visitor or Customer, via the sites or through mobile application, except any disputes or claims which under governing law are not subject to arbitration, to the maximum extent permitted by applicable law. This agreement to arbitrate is intended to be broadly interpreted and to make all disputes and claims between us subject to arbitration to the fullest extent permitted by law. However, any dispute you or we may have relating to copyrights or other intellectual property shall not be governed by this agreement to arbitrate. For the avoidance of doubt, this means that any claims you or we may have relating to intellectual property rights against the other, including injunctive and other relief sought, may be brought in a court of competent jurisdiction. The agreement to arbitrate otherwise includes, but is not limited to:

 

claims based in contract, tort, warranty, statute, fraud, misrepresentation or any other legal theory; claims that arose before this or any prior Agreement (including, but not limited to, claims relating to advertising); claims that are currently the subject of purported class action litigation in which you are not a member of a certified class; claims relating to your vehicle for which you seek product or service support via the sites; claims arising out of or relating to the Telephone Consumer Protection Act; claims relating to your data privacy or information security; and claims that may arise after the termination of this Agreement.

For purposes of this arbitration provision, references to "Hyundai," "you," and "us" shall include our respective parent entities, subsidiaries, affiliates, agents, employees, predecessors in interest, successors and assigns, websites of the foregoing, as well as all authorized or unauthorized users or beneficiaries of services, products or information provided or made available under this or prior Agreements between us relating to or arising from any aspect of your use of the Connected Services, Connected Service Systems, Service Plans, your Vehicle or access of the sites. Notwithstanding the foregoing, either party may bring an individual action in small claims court. You agree that, by entering into this Agreement, you and Hyundai are each waiving the right to a trial by jury or to participate in a class or representative action to the maximum extent permitted by law. This Agreement evidences a transaction in interstate commerce, and thus the Federal Arbitration Act governs the interpretation and enforcement of this arbitration provision. This arbitration provision shall survive termination of this Agreement or your relationship with Hyundai for any reason.”

[Rao Decl., Ex. 2, para. 14 C, emphasis in original].

 

             Defendant argues that the claims in this matter fall within the arbitration provision of the Connected Services Agreement, as they fall within the agreement “to arbitrate any and all disputes and claims between us arising out of or relating to…your Vehicle,” and “claims based in contract,…warranty.” 

 

            The declaration of counsel for defendant indicates, “On July 1, 2024, my office asked that Plaintiff stipulate to arbitration.  Plaintiff has not agreed to stipulate to arbitration.” [Ameripour Decl., para. 2].

 

            Plaintiff in opposition argues that the showing in the moving papers fails to sufficiently show that plaintiff assented to the arbitration agreement in the Connected Services Agreement (which plaintiff sometimes refers to as the “Bluelink Agreement”).  Plaintiff argues that the documents which are submitted, purporting to be a checkbox screen that plaintiff “would have seen when they activated Bluelink services,” and the Agreement “that was in effect at that time” are generic and not specific to plaintiff, and so defendant does not establish that they apply to plaintiff.  Plaintiff also argues that the showing does not establish that plaintiff actually checked the box or otherwise signed or agreed to the Connected Services Agreement.  Plaintiff argues that while Rao claims that plaintiff enrolled the vehicle in Bluelink service through the “Dealer-Assisted Enrollment process,” this statement lacks foundation as Rao was not involved in the process, and does not state facts showing that he has personal knowledge that plaintiff enrolled in the Bluelink service, or attach or refer to any documents upon which Rao relied in making this assertion. 

 

            Plaintiff points out that Rao does not state directly, for example, that all purchasers of Hyundai vehicles must enroll in the Bluelink Agreement, or otherwise explain how he knows plaintiff enrolled in the service.  Plaintiff argues that the generic enrollment documents attached as Exhibit 1 to the Rao Declaration suggest that the subscription is voluntary or optional, not that plaintiff agreed to the terms and conditions of the Connected Services Agreement, including the arbitration provision.

 

            A review of the document attached by Rao as Exhibit 1 shows it is not specific to plaintiff, and appears to have a check mark agreeing to the terms and conditions pre-populated, contrary to the declaration.  [See Rao Decl., Ex. 1].  There is no testimony that Hyundai requires enrollment in the Hyundai Blue Link subscription program, or reference to documentation or facts supporting that plaintiff activated the Bluelink services.  The declaration states that plaintiff would have had to check the “read and agreed” terms and conditions box and click the “complete” button to activate the services.  [Rao Decl., para. 6].  This insufficient showing is a significant gap in the evidence with respect to the assent of plaintiff.   Tellingly, the face of the Exhibit shows that the generic page includes at the very top of the page a link to “Waive Enrollment,” and next to the “Complete” button a link to “Enroll in Blue Link Later.”  [Rao Decl., Ex. 1].  This showing strongly suggests that enrollment in Blue Link and acceptance of the Terms & Conditions in the Connected Services Agreement was not required, but voluntary, This evidence establishes that, in the absence of evidence that plaintiff actually opted for this enrollment, defendant has failed to meet the initial burden of establishing that an agreement to arbitrate exists under the Connected Services Agreement.  

 

            The clickwrap agreement case law on which defendant relies involves situations where the user was required to explicitly assent by clicking “I agree” before using a website or purchasing a product or service, and there was evidence of such a manifestation of intent. (See, e.g. Wiseley v. Amazon .com, Inc. (9th Cir. 2017) 709 Fed.Appx. 862, 863-864, in which plaintiff conceded that a Conditions of Use agreement created a valid contract between defendant and its customers, and there was no dispute that plaintiff had clicked a corresponding action button to the hyperlinked Conditions of Use; Fteja v. Facebook, Inc. (USDC S.D.N.Y 2012) 841 F.Supp.2d 829, 834, in which plaintiff’s complaint conceded plaintiff was “an active user of facebook.com,” and there was a declaration of defendant’s employee stating “a putative Facebook user cannot become an actual Facebook user unless and until they have clicked through the registration page where they acknowledge they have read and agreed to Facebook’s terms of use….”).  These cases contrast with the showing offered in this case, where the “click and proceed” evidence is weak or non-existent.  The cited case Foster v. Walmart, Inc. (8th Cir. 2021) 15 F4th 860, 863 addressed clickwrap agreements only in dicta.  

 

            Plaintiff also argues that the statutory warranty claims being asserted by plaintiff here are not subject to the arbitration agreement, as, although the language includes reference to disputes concerning “vehicle” and “warranty,” the provision also limits itself to disputes arising out of the Connected Services Agreement itself.  Plaintiff relies on the introductory clause stating, in capital letters, as set forth above, “IN THE UNLIKELY EVENT THAT THE APPROPRIATE CUSTOMER SERVICE DEPARTMENT IS UNABLE TO RESOLVE YOUR CONCERNS, WE EACH AGREE TO RESOLVE THOSE DISPUTES THROUGH BINDING ARBITRATION OR SMALL CLAIMS COURT…”

 

            Plaintiff argues that “those disputes” mentioned, the inability of a customer service department to resolve plaintiff’s concerns, is not the subject of plaintiff’s warranty claims under statute.  Plaintiff also relies on a provision elsewhere in the Connected Services Agreement which distinguishes between the Connected Services which are covered by Connected Services Agreement and the warranty, stating, “YOUR VEHICLE’S LIMITED WARRANTY does not cover the Connected Services…”  [Rao Decl., Ex. 2, section 11].  Plaintiff argues that these types of specification of claims covered and not covered would be surplusage if the arbitration agreement was intended to apply to anything more than disputes arising under the Connected Services Agreement in which the arbitration agreement is set forth.   This argument also calls into question whether an agreement to arbitrate the specific disputes in this lawsuit exists. 

 

            The court, under the circumstances and showing presented, cannot find that there is an enforceable agreement between the parties to arbitrate the claims presented by this action.  The motion accordingly denied.

 

Motion to Compel Further Documents

Plaintiff brings a motion to compel defendant to serve further responses to requests for production of documents.

 

This matter is subject to the Standing Order Re Discovery (Song-Beverly Litigation) (Order) applicable to Song-Beverly Litigation, now posted and available on the Los Angeles Superior Court website in connection with this Department, Glendale Courthouse, Department D.   An Order was originally signed by the court on January 24, 2023, and revised and again signed on January 11, 2024.

 

Pursuant to the current version of the Order, “any formal discovery propounded and currently pending or outstanding by a party in this matter prior to the date of this CMC Order is stayed pending further order of the Court.”  [Order section (1)(a)].  The court notes that the opposition indicates that the motion is moot, as defendant will supplement its responses, but defendant has evidently not yet done so, so the motion has not been rendered moot.

 

The Order sets forth the following provision concerning discovery in Song-Beverly matters which appear to address the discovery disputes raised by the current motion and opposition.   

 

            With respect to Requests for Production of Documents, the Order provides:

“Production of Documents:  Within 60 days of service of this Order both plaintiff and defendant shall provide copies of the following documents, which are in their respective possession, custody and/or control, to the opposing side(s):

a.       Purchase or lease contracts concerning the subject vehicle, including any associated documents reflecting OEM or aftermarket equipment installed at the dealership, ELWs or service contracts, and any other writings signed by the plaintiff at the point of sale.

b.      Work orders, repair orders, and invoices (including accounting and warranty versions) for any maintenance, service and repair activity concerning the subject vehicles.

c.       Rental car or loaner agreements regarding alternative transportation provided during service or repair visits concerning the subject vehicle.

d.      Records of communications with dealer personnel, and/or factory representatives and defendant’s call center or customer assistance personnel concerning the subject vehicle.

e.       Warrant claims submitted to and/or approved by defendant concerning the subject vehicle.

f.        Warranty Policy and Procedure Manual or similar policies or claim-handling procedures published by Defendant from the date the subject vehicle was purchased or leased to the date the lawsuit was filed.

g.      Defendant’s written statements of policy and/or procedures used to evaluate customer requests for repurchase or replacement pursuant to “Lemon Law” claims, including ones brought under the Song-Beverly Consumer Warranty Act, from the date the subject vehicle was purchased or leased to the date the lawsuit was filed.

h.      A list of or compilation of customer complaints in defendant’s electronically stored information database that are substantially similar to the alleged defects claimed by plaintiff, in vehicles purchased in California for the same year, make and model of the subject vehicle.  A substantially similar customer complaint would be the same nature of reported symptom, malfunction, dashboard indicator light, or other manifestation of a repair problem as the description listed in any work order or repair order for the subject vehicle, other than routine or scheduled maintenance items.  The list provided by defendant may be in the chart or spreadsheet format, and shall include the VIN, date of repair visit, dealership or other reporting location, and text of the other customers’ reported complaint, but shall not include the other customers’ names, addresses, phone numbers, e-mail addresses, or other personal identifying information.

i.        Technical Service Bulletins and Recall Notices for vehicle purchased or leased in California for the same year, make and model of the subject vehicle.

j.        Copies of any repair instruction, bulletin, or other diagnostic/repair procedure identified in any of the repair order/invoice records for the subject vehicle.

k.      Receipts or other written evidence supporting any incidental or consequential damages claimed by plaintiff.

 

If a party believes any of this information should be subject to a protective order, that party shall serve and file a proposed protective order within 5 days of this Order and the parties shall meet and confer as to agreeable language for the same.  The default will be the standard Protective Order provided by the LASC in its website.

 

The information may be provided to the opposing party in electronic form as a PDF at the option of the producing party.

 

Plaintiff and defendant shall serve verification with the documents they produce.

 

Any additional requests for documents may only be propounded by stipulation and/or court order (via motion upon showing of good cause).

 

[Order section (2)(a)-(k)].

 

The parties are also directed to the Notice to All Counsel Re: Lemon Law Cases for Department D, entitled Customary Rulings Re Document Requests (Song Beverly Litigation) (Notice).  That Notice provides:

 

“When the court is faced with a discovery dispute in a Song-Beverly case, the court will usually order that the plaintiff and defendant provide copies of the following documents, which are in their respective possession, custody and/or control, to the opposing side:

1. Defendant shall produce the “Warranty Policy and Procedure Manual” published by Defendant and provided to its authorized repair facilities, within the State of California, for the period of [date of purchase] to present.

 

2. Defendant shall produce any internal analysis or investigation regarding defects alleged in plaintiff's complaint in vehicles for the same year, make and model of the subject vehicle. This includes Recall Notices and Technical Service Bulletins. Defendant is not required to do a search of emails.

 

3. Defendant shall produce any customer complaints relating to defects alleged in plaintiff’s complaint in vehicles purchased in California for the same year, make and model of the subject vehicle.

 

4. Defendant shall produce all documents evidencing policies and procedures used to evaluate customer requests for repurchase pursuant to the Song-Beverly Consumer Warranty Act, for the period of [date of purchase] to present.

 

5. Repair orders and invoices concerning the subject vehicle.

 

6. Communications with dealer, factory representative and/or call center concerning the subject vehicle.

 

7. Warranty claims submitted to and/or approved by Defendant concerning the subject vehicle.

 

8. Purchase and/or lease contract concerning the subject vehicle.

 

9. Repair orders and invoices concerning the subject vehicle.

 

10. Any documents supporting plaintiff’s claim for incidental and/or consequential damages.”

 

            The parties are ordered to engage in good faith meet and confer concerning the outstanding discovery in light of the Order and Notice, and, if necessary, reschedule the motion and file new papers and an updated Code-compliant separate statement reflecting the then current status of the discovery dispute, including in that separate statement as to each request and response any applicable language of the Order and/or Notice.

 

            The court notes with respect to this particular dispute that the Court expects Code compliant responses, and unnecessary objections will be overruled.  For example, if appropriate statements of compliance or inability to comply are served which fully comply with CCP sections 2031.220 and 2031.230, there would be no need to object to a Request for Production of Documents on the ground it is overly broad by seeking documents kept by entities or third parties beyond the responding party’s possession, custody, or control.  

 

Specifically, with respect to a statement of compliance, CCP section 2031.220 requires:

“A statement that a party to whom an inspection demand has been directed will comply with the particular demand shall state that the production, inspection, and related activity demanded will be allowed either in whole or in part, and that all documents or things in the demanded category that are in the possession, custody, or control of that party and to which no objection is being make will be included in the production.”

 

With respect to a statement of inability to comply, CCP section 2031.230 requires:

“A representation of inability to comply with the particular demand for inspection shall affirm that a diligent search and a reasonably inquiry has been made in an effort to comply with that demand.   This statement shall also specify whether the inability to comply is because the particular item or category has never existed, has been destroyed, has been lost, misplaced, or stolen, or has never been, or is no longer, in the possession, custody, or control of the responding party.   The statement shall set forth the name and address of any natural person or organization known or believed by that party to have possession, custody, or control of that item or category of item.”

 

The court also does not find appropriate a response that discovery should be stayed pending the determination of a motion to compel arbitration, when the code section relied upon, CCP section 1281.4, requires that a party seeking such a stay make a motion to stay the action until an application for an order to arbitrate is determined (providing for a stay order “upon motion of a party” to an action in which a application to arbitrate is “pending,” and “such application is undetermined.”).   It is recognized that pursuant to this statutory language, such an action “will not be stayed automatically,” but a motion must be made to stay.  Brock v. Kaiser Foundation Hospitals (1992) 10 Cal.App.4th 1790, 1796. 

 

In any case, the discovery motion has been continued to the same date as the hearing on the motion to compel arbitration, which motion is denied.  This result renders any such objection improper, and the argument in the opposition that the motion is premature is also no longer applicable.

 

To the extent defendant asserts objections based on attorney-client and work product privileges, any further objections that responsive documents are being withheld based on attorney-client or work product privilege must be specifically asserted and accompanied by an appropriate privilege log.  See CCP §2031.240 (b) and (c) (objection shall “[i]dentify with particularity any document…or electronically stored information falling within any category of item in the demand to which an objection is being made,” and “[s]et forth clearly the extent of, and the specific ground for, the objection,” and, if based on privilege or work product, “shall provide sufficient factual information for other parties to evaluate the merits of that claim, including, if necessary, a privilege log.”); see also Catalina Island Yacht Club v Superior Court (2015) 242 Cal.App.4th 1116, 1130 (“In general, … a privilege log typically should provide the identity and capacity of all individuals who authored, sent, or received each allegedly privileged document, the document's date, a brief description of the document and its contents or subject matter sufficient to determine whether the privilege applies, and the precise privilege or protection asserted.”)

 

Finally, it does not appear from the file that the parties have yet entered into a protective order.  The court notes that if either party requires a protective order, the procedures are addressed in the Order, at section 2, subdivision (k), above.   The entry of such a protective order should make it unnecessary for the parties to assert any objections that the discovery seeks confidential, proprietary or trade secret information. 

                       

RULING: 

Defendant’s Motion to Compel Binding Arbitration is DENIED.

 

The Court on the showing presented cannot find that an agreement to arbitrate the controversy exists. 

 

UNOPPOSED Request for Judicial Notice in Support of Defendant’s Motion to Compel Binding Arbitration is GRANTED.

 

Request for Judicial Notice in Support of Plaintiff’s Opposition to Defendant’s Motion to Compel Arbitration is GRANTED.

 

Plaintiff’s Motion to Compel Further Responses to Plaintiff’s Requests for Production of Documents, Set One, is DENIED WITHOUT PREJUDICE/STAYED pursuant to this Standing Order Re Discovery (Song-Beverly Litigation), signed and entered by the Court on January 24, 2023 as revised, signed and entered on January 11, 2024.

 

The parties are ordered to meet and confer in good faith concerning compliance with the Order, taking into consideration this Court’s Notice to All Counsel Re: Lemon Law Cases for Department D, Customary Rulings Re Document Requests (Song Beverly Litigation), and to serve any further discovery, and engage in any further discovery proceedings or motions in compliance with the Order and Notice, as well as with this minute order.

 

Any further objections that responsive documents are being withheld based on attorney-client or work product privilege must be fully Code-compliant and accompanied by a privilege log.

 

If a party believes any of the information requested should be subject to a protective order, that party shall serve and file a proposed protective order within 5 days of this Order and the parties shall meet and confer as to agreeable language for the same.  The default is the standard Protective Order provided by the LASC in its website.

 

Monetary sanctions are DENIED.

 

 

DEPARTMENT D IS CONTINUING TO CONDUCT AND ENCOURAGE

AUDIO OR VIDEO APPEARANCES

 

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.