Judge: Richard Y. Lee, Case: 30-2022-01251558, Date: 2022-10-06 Tentative Ruling

Defendant Evan Paul Auto Leasing’s unopposed Motion to Compel Arbitration is GRANTED.

The FAA Applies

“In accordance with choice-of-law principles, the parties may limit the trial court’s authority to stay or deny arbitration under the CAA by adopting the more restrictive procedural provisions of the FAA.”  (Victrola 89, LLC v. Jaman Properties 8 LLC (2020) 46 Cal.App.5th 337, 345.)  “[T]he FAA’s procedural provisions (9 U.S.C. §§ 3, 4, 10, 11) do not apply unless the contract contains a choice-of-law clause expressly incorporating them.”  (Ibid.)

Here, the Arbitration Provision in the Lease for the vehicle at issue expressly states that “[t]his Arbitration Provision, and any arbitration conducted hereunder, shall be governed by the Federal Arbitration Act (9 U.S.C. § 1 et. seq.) and not by any state law concerning arbitration.”  As such, the FAA applies.

The Arbitration Provision is Enforceable

“Section 2 of the FAA provides that arbitration agreements ‘shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.’”  (Gutierrez v. Autowest, Inc. (2003) 114 Cal.App.4th 77, 86, as modified on denial of reh’g (Jan. 8, 2004) [citing 9 U.S.C. § 2].)

“In determining the rights of parties to enforce an arbitration agreement within the FAA’s scope, courts apply state contract law while giving due regard to the federal policy favoring arbitration.”  (Pinnacle Museum Tower Assn. v. Pinnacle Market Development (US), LLC (2012) 55 Cal.4th 223, 236.)

“In California, ‘[g]eneral principles of contract law determine whether the parties have entered a binding agreement to arbitrate.’”  (Pinnacle Museum Tower Assn. v. Pinnacle Market Development (US), LLC (2012) 55 Cal.4th 223, 236.)  “Generally, an arbitration agreement must be memorialized in writing.”  (Ibid.)  “A party’s acceptance of an agreement to arbitrate may be express, as where a party signs the agreement.”  (Ibid.)  “An arbitration clause within a contract may be binding on a party even if the party never actually read the clause.”  (Ibid.)

“The party seeking arbitration bears the burden of proving the existence of an arbitration agreement, and the party opposing arbitration bears the burden of proving any defense, such as unconscionability.  (Pinnacle Museum Tower Assn. v. Pinnacle Market Development (US), LLC (2012) 55 Cal.4th 223, 236.)]

“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, 92 Cal.Rptr.3d 534]; 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, moving party established that Plaintiff signed an enforceable arbitration agreement, agreeing to arbitrate any dispute relating to the lease.  The dispute at issue relates to the Lease and therefore Defendant Evan Paul Auto Leasing has right to enforce the Arbitration Provision, although not a signatory to the Arbitration Provision.  The Arbitration Provision expressly states:

“IF EITHER OF US CHOOSES, ANY CLAIM OR DISPUTE BETWEEN US (AS DEFINED BELOW) WILL BE DECIDED BY ARBITRATION AND NOT IN COURT OR BY A JURY.  IF EITHER OF USE CHOOSES TO ARBITRATE, YOU WILL GIVE UP YOUR RIGHT TO PARTICIPATE AS A CLASS OR OTHER REPRESENTATIVE ON BEHALF OF OTHER PERSONS OR AS A CLASS MEMBER OR OTHER REPRESENTED PERSON ON ANY CLASS CLAIM OR OTHER REPRESENTATIVE TYPE OF CLAIM YOU MAY HAVE AGAINST US INCLUDING ANY RIGHT TO CLASS OR OTHER REPRESENTATIVE ARBITRATION OR ANY CONSOLIDATION OF INDIVIDUAL ARBITRATIONS.  DISCOVERY AND RIGHTS TO APPEAL IN ARBITRATION ARE GENERALLY MORE LIMITED THAN IN A LAWSUIT, AND OTHER RIGHTS THAT YOU AND WE WOULD HAVE IN COURT MAY NOT BE AVAILABLE IN ARBITRATION.  Any claim or dispute, whether in contract, tort, statute, or otherwise (including the interpretation and scope of this clause, and the arbitrability of the claim or dispute), between you and us or our employees, agents, successors or assigns, which arise out of or relate to your application, this lease or any resulting transaction or relationship (including any such relationship with third parties who do not sign this Lease) shall, at your or our election, be resolved by neutral, binding arbitration and not by a court action.”  (Complaint, Ex. A.)

Plaintiff failed to oppose the Motion to Compel Arbitration and therefore failed to carry her burden of establishing any defense to the enforceability of the arbitration agreement.  Moreover, Plaintiff’s failure to oppose the motion may be treated as an abandonment of any opposition to the issues raised in the moving papers.  (Herzberg v. County of Plumas (2005) 133 Cal.App.4th 1, 20.)

The action is STAYED pending arbitration.  (9 U.S.C. § 3.)

The Court sets an ADR Review hearing for March 23, 2023 at 1:30 p.m.

Moving Party to provide notice.