Judge: Richard Y. Lee, Case: 30-2021-01236091, Date: 2022-09-29 Tentative Ruling

Defendants (1) Jstar Automotive Group, Inc. dba Jstar Chrysler Dodge Jeep Ram of Anaheim Hills (“Jstar”) and (2) FCA US LLC (“FCA”) (collectively, “Defendants”) move to compel Plaintiff Derek David Wilson to arbitration. 

“As a general rule, only a party to an arbitration agreement may enforce the agreement.”  (Felisilda v. FCA US LLC (2020) 53 Cal.App.5th 486, 495, review denied (Nov. 24, 2020).)  “However, there are several exceptions that allow a nonsignatory to invoke an agreement to arbitrate.”  (Ibid.; citing JSM Tuscany, LLC v. Superior Court (2011) 193 Cal.App.4th 1222, 1236-1237].)  “The doctrine of equitable estoppel is one of the exceptions.”  (Ibid.)

“Under the doctrine of equitable estoppel, as applied in both federal and California decisional authority, a nonsignatory defendant may invoke an arbitration clause to compel a signatory plaintiff to arbitrate its claims when the causes of action against the nonsignatory are intimately founded in and intertwined with the underlying contract obligations.”  (Felisilda v. FCA US LLC (2020) 53 Cal.App.5th 486, 495, review denied (Nov. 24, 2020), citations omitted [citing Boucher v. Alliance Title Co., Inc. (2005) 127 Cal.App.4th 262, 268; Goldman v. KPMG, LLP (2009) 173 Cal.App.4th 209, 220]; see also JSM Tuscany, LLC v. Superior Court (2011) 193 Cal.App.4th 1222, 1236-1237.)

“Where the equitable estoppel doctrine applies, the nonsignatory has a right to enforce the arbitration agreement.”  (JSM Tuscany, LLC v. Superior Court (2011) 193 Cal.App.4th 1222, 1237, fn. 18.)

Here, the court finds that the doctrine of equitable estoppel applies as Plaintiff’s claims against FCA and Jstar are intimately founded in and intertwined with the underlying contract obligations contained in the contract of sale between Plaintiff and Jeep Chrysler Dodge Ram of Ontario relating to the condition of the purchased vehicle.  These claims include the warranties, information, and statutes discussed in the contract of sale, which are now Plaintiff’s basis for relief against FCA and Jstar. 

Plaintiff cites to Ngo v. BMW of N. Am., LLC, 23 F.4th 942, 949 (9th Cir. 2022) for his contention that the arbitration is not enforceable by a non-signatory.  Decisions of the federal courts interpreting California law are not binding on this court and are merely persuasive.  (Finley v. Superior Court (2000) 80 Cal.App.4th 1152, 1160, as modified on denial of reh’g (June 22, 2000).)

The court finds that the causes of action against the nonsignatory Defendants are intimately founded in and intertwined with the underlying contract obligations such that doctrine of equitable estoppel applies and Defendants can invoke the arbitration clause as a nonsignatory.

Accordingly, the Defendants’ motions are GRANTED.

This case is STAYED pending the outcome of the arbitration proceedings.  (Code Civ. Proc., § 1281.4.)

The Court sets an ADR Review hearing for March 30, 2023 at 1:30 p.m.

Moving parties to give notice.