Judge: Richard Y. Lee, Case: 30-2021-01207203, Date: 2022-10-20 Tentative Ruling

Defendant Nissan North America, Inc.’s (“Defendant”) moves to compel Plaintiff Miguel Suarez (“Plaintiff”) to arbitrate the claims raised in this action and for an order staying this action pending the resolution of arbitration.  Defendant contends that it is entitled to enforce an arbitration provision between Plaintiff and third-party dealership, Buena Park Nissan, as a third-party beneficiary and under the doctrine of equitable estoppel.

Requests for Judicial Notice

Defendant requests judicial notice of: (1) Plaintiff’s Complaint in this action; and (2) a February 11, 2016 Notice of Entry of Dismissal and Proof of Service filed in the matter of Felisilda v. FCA US LLC, Case No. 34-2015-00183668, Sacramento Superior Court.

Plaintiff requests judicial notice of the February 12, 2022 Ninth Circuit Opinion in the matter of Ngo v. BMW of North America, LLC (9th Cir. 2022) 23 F.4th 942.

The Requests for Judicial Notice are GRANTED.  (Evid. Code, §§ 451(a), 452(d).) 

Authority

A party to an arbitration agreement may seek a court order compelling the parties to arbitrate a dispute covered by the agreement.  (Code Civ. Proc., § 1281.2.)  “The trial court may resolve motions to compel arbitration in summary proceedings, in which ‘[t]he petitioner bears the burden of proving the existence of a valid arbitration agreement by the preponderance of the evidence, and a party opposing the petition bears the burden of proving by a preponderance of the evidence any fact necessary to its defense.  [Citation.]  In these summary proceedings, the trial court sits as a trier of fact, weighing all the affidavits, declarations, and other documentary evidence, as well as oral testimony received at the court’s discretion, to reach a final determination.’”  (Lane v. Francis Capital Management LLC (2014) 224 Cal.App.4th 676, 683.)

Arbitration Provision

The arbitration provision in the Retail Installment Sale Contract (“RISC”)between Plaintiff and Buena Park Nissan states, in pertinent part: 

“ARBITRATION PROVISION PLEASE REVIEW – IMPORTANT – AFFECTS YOUR LEGAL RIGHTS

1. EITHER YOU OR WE MAY CHOOSE TO HAVE ANY DISPUTE BETWEEN US DECIDED BY ARBITRATION AND NOT IN COURT OR BY JURY TRIAL. …

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 and 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. If federal law provides that a claim or dispute is not subject to binding arbitration, this Arbitration Provision shall not apply to such claim or dispute. … The arbitrator shall apply governing substantive law and the applicable statute of limitations. … Any arbitration under this Arbitration Provision shall be governed by the Federal Arbitration Act (9 U.S.C. § 1 et. seq.) and not by any state law concerning arbitration.”  (Declaration of Jane Chung, Ex. 3.)

Waiver

Waivers of arbitration “are not to be lightly inferred and the party seeking to establish a waiver bears a heavy burden of proof.”  (St. Agnes Med. Ctr. v. PacifiCare of California (2003) 31 Cal.4th 1187, 1195.)

In deciding whether a party has waived the right to compel arbitration, the Court considers various factors, including: “ ‘(1) whether the party’s actions are inconsistent with the right to arbitrate; (2) whether “the litigation machinery has been substantially invoked” and the parties were “well into preparation of a lawsuit” before the party notified the opposing party of an intent to arbitrate; (3) whether a party either requested arbitration enforcement close to the trial date or delayed for a long period before seeking a stay; (4) whether a defendant seeking arbitration filed a counterclaim without asking for a stay of the proceedings; (5) “whether important intervening steps [e.g., taking advantage of judicial discovery procedures not available in arbitration] had taken place”; and (6) whether the delay “affected, misled, or prejudiced” the opposing party.’ ”  (St. Agnes Medical Center of PacifiCare of California (2003) 31 Cal.4th 1187, 1196.)  Delays of less than seven months in seeking to compel arbitration have been found to be unreasonable and justification for a waiver finding.  (Lewis v. Fletcher Jones Motor Cars Inc. (2012) 205 Cal.App.4th 436, 446.)

Prejudice is not a factor in determining whether a party has waived its right to compel arbitration.  (See Allstate Ins. Co. v. Gonzalez (1995) 38 Cal.App.4th 783, 793 [“While lack of prejudice is a factor to weigh when the claimant has been diligent, given Gonzalez’s protracted and unexplained delay in filing a formal demand for arbitration with the AAA, it is unnecessary to address whether Allstate established it was prejudiced by the delay.”].)

Here, Plaintiff’s Complaint was filed on June 24, 2021 and Defendant filed its Answer on July 26, 2021.  (Declaration of Allen Amarkarian, ¶¶ 16-17.)  On November 11, 2021, Defendant responded to Plaintiff’s Form Interrogatories, Special Interrogatories, Requests for Production of Documents, and Requests for Admission.  (Id., ¶ 19.)  On November 19, 2021, Defendant filed a Case Management Statement requesting a 3-5-day jury trial.  (Id., ¶ 18.)  Notably, Defendant did not check the box indicating that it would be willing to participate in either nonbinding judicial arbitration or binding private arbitration in its statement.  (Id., Ex. 14.)  Jury trial was set for December 12, 2022 at the December 9, 2021 Case Management Conference.  (See ROA 23.)  Then, nearly eight months after responding to discovery and one year after filing its Answer, Defendant filed the instant Motion with a hearing date only two months before trial.  (See ROA 40.)

Defendant offers no explanation for its delay in filing the instant Motion or seeking to stay this action.  Defendant has been aware of the impending trial date since December 9, 2021 yet failed to move to compel arbitration for over seven months.  Viewing Defendant’s conduct on the whole, its actions have been inconsistent with the right to arbitrate and Defendant has unreasonably delayed in seeking arbitration.  (See Zamora v. Lehman (2010) 186 Cal.App.4th 1, 17 [finding delay in pursuing arbitration until four months before trial date constituted waiver]; Guess?, Inc. v. Superior Court (2000) 79 Cal.App.4th 553, 555-556 [finding waiver where motion to compel was brought four months after commencement of suit]; Sobremonte v. Superior Court (1998) 61 Cal.App.4th 980, 992-994 [finding waiver where motion to compel was brought 10 months after service of the complaint].)  Thus, the Court finds that Defendant has waived any right to compel arbitration.

In light of the above, the Motion is DENIED.

Plaintiff to give notice.