Judge Ralph C. Hofer, Case Number: 24NNCV03811, Date: 2025-01-17 Tentative Ruling

Plaintiffs Mike Apressian and Anna Habetyan allege that in May of 2022 plaintiffs leased a new 2022 Tesla Model Y vehicle, and that defendant Tesla Motors, Inc. warranted the vehicle and agreed 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, such as 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, and/or safety of the vehicle. Plaintiffs allege that plaintiffs delivered the vehicle to an authorized repair facility for repair of 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(b).

(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 September 24, 2024, by electronic transmission. Allowing two days for service by email, opposition was due on or before October 6, 2024, months 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 January 6, 2025. The motion could be granted on the ground 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 Tesla Lease Agreement affiliated with plaintiffs’ file, which is authenticated by a Manager of Business Resolution at Tesla, Raymond Kim, as a company record. [Kim Decl., paras. 2-10, Ex. 1].

The Lease includes an arbitration provision. The Lease Agreement, which was executed by both plaintiffs as well as defendant, includes an arbitration agreement which is set off in a box and provides:

“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. You further agree that any disputes related to the arbitrability of your claims will be decided by the court rather than arbitrator, notwithstanding AAA ruled to the contrary.

To initiate the arbitration, you will pay the filing fee directly to the AAA and we will pay all the subsequent AAA fees for the arbitration, except you are responsible for your own attorney, expert, and other witness fees and costs unless otherwise provided by law. If you prevail on any claim, we will reimburse you your filing fee. The arbitration 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 (such as injunctive or declaratory relief), 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 September 24, 2024, my office asked that Plaintiffs stipulate to arbitration. Plaintiffs have not agreed 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 Lease Agreement. 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, and 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 Mike Apressian and Anna Habetyan to arbitrate this matter according to the Agreement to Arbitrate included in the Lease Agreement between the parties, dated 05/30/2022.

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.