Judge: Robert B. Broadbelt, Case: 21STCV12184, Date: 2024-01-25 Tentative Ruling

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Case Number: 21STCV12184    Hearing Date: January 25, 2024    Dept: 53

Superior Court of California

County of Los Angeles – Central District

Department 53

MOVING PARTY:                Plaintiff Curtis Dothard

RESPONDING PARTIES:     Defendants Ford Motor Company and Santa Monica Ford Lincoln  

Motion for Reconsideration

The court considered the moving, opposition, and reply papers filed in connection with this motion.

REQUEST FOR JUDICIAL NOTICE

The court grants plaintiff Curtis Dothard’s (1) request for judicial notice, filed on May 24, 2023, and (2) request for judicial notice, filed on August 30, 2023.  (Evid. Code, § 452, subd. (d).)

DISCUSSION

Plaintiff Curtis Dothard (“Plaintiff”) requests that the court (1) reconsider and vacate its October 24, 2022 order granting the motion to compel arbitration and stay proceedings filed by defendants Ford Motor Company and Santa Monica Ford Lincoln (“Defendants”), and (2) enter a new order denying Defendants’ motion to compel arbitration.  (Oct. 24, 2022 Order, p. 7:26-27.)

“If a court at any time determines that there has been a change of law that warrants it to reconsider a prior order it entered, it may do so on its own motion and enter a different order.”¿ (Code Civ. Proc., §¿1008, subd. (c).)¿ “An appellate decision published during an action’s pendency may be a change of law under section 1008, subdivision (c), and requires a trial court to reconsider its earlier ruling if the decision materially changed the law.”¿ (State of California v. Superior Court (Flynn) (2016) 4 Cal.App.5th 94, 100.)¿ “Even without a change of law, a trial court has the inherent power to reconsider its prior rulings on its own motion at any time before entry of judgment.”¿ (Ibid.)¿ “In addition, the court may consider a number of factors in determining whether to exercise its discretion, including the importance of the change of law, the timing of the motion, and the circumstances of the case.”¿ (Farmers Ins. Exchange v. Superior Court (2013) 218 Cal.App.4th 96, 107.)¿¿ 

First, as a threshold matter, the court notes that Defendants contend that Plaintiff’s motion is untimely because it was not filed within 10 days after service of the October 24, 2022 notice of ruling.  The court disagrees.  Although motions for reconsideration made pursuant to Code of Civil Procedure section 1008, subdivision (a) must be made within 10 days after service upon the moving party of written notice of entry of the subject order, Plaintiff has moved for reconsideration of the court’s October 24, 2022 order under section 1008, subdivision (c), which does not have the same 10-day filing requirement.  (Code Civ. Proc., § 1008, subd. (c); Flynn, supra, 4 Cal.App.5th at p. 100 [a change of law “‘is always an appropriate basis, up until a final judgment is entered, for changing an interim order’”] [emphasis added]; Mot., p. 1:21-24.)

The court therefore finds that Plaintiff’s motion is not untimely.

Second, Defendants assert that the court does not have jurisdiction to hear this motion since this action has been stayed pursuant to Code of Civil Procedure section 1281.4.  The court disagrees.  “While it is correct as a general matter that the granting of a stay under Code of Civil Procedure section 1281.4 places the proceedings before the trial court in ‘the twilight zone of abatement’ [citation], such a stay does not effect the ‘ouster of the judicial power vested in the trial court of this state by our Constitution’ [citation].¿ Because contractual arbitration ‘dr[aws] its vitality from the contract’ [citation], a trial court has inherent power to revisit the foundational ‘question of whether the parties are bound by a particular arbitration agreement’ [citation], just as it may on its own motion revise any other interim ruling in the action pending before it [citation].”¿ (Pinela v. Neiman Marcus Group, Inc. (2015) 238 Cal.App.4th 227, 238 [internal citations omitted].)¿

The court therefore finds that it has the jurisdiction to hear and rule on Plaintiff’s pending motion for reconsideration of the court’s order granting Defendants’ motion to compel arbitration.

Third, the court finds that Plaintiff has shown that there has been “a change of law” regarding the enforcement of arbitration agreements by third party nonsignatories that warrants reconsideration of the court’s order.  (Code Civ. Proc., § 1008, subd. (c).)

Since the date of the court’s October 24, 2022 order, numerous appellate cases have disagreed with and rejected the reasoning set forth in Felisilda v. FCA US LLC (2020) 53 Cal.App.5th 486 (“Felisilda”), on which the court relied in granting Defendants’ motion to compel arbitration.  (Oct. 24, 2022 Order, pp. 3:14-17, 5:4-13.)

In Ford Motor Warranty Cases (2023) 89 Cal.App.5th 1324, 1334-1335, review granted July 19, 2023, S279969, the Court of Appeal expressly disagreed with and declined to follow Felisilda, concluding that equitable estoppel did not apply since the plaintiffs’ claims were based on the manufacturer defendant’s statutory obligations, and not the underlying sale contracts.  Thereafter, in Montemayor v. Ford Motor Co. (2023) 92 Cal.App.5th 958, 961, review granted September 20, 2023, S281237,¿ the Court of Appeal also disagreed with Felisilda and concluded that the nonsignatory defendant could not enforce the arbitration provision in the underlying sales contract because the plaintiffs’ claims were founded on the manufacturer’s express warranty, and not any obligation imposed by the underlying sales contract.¿ Similarly, in Kieler v. Superior Court of Placer County (2023) 94 Cal.App.5th 614, 616, 621, review granted October 25, 2023, S281937, the Court of Appeal joined the other decisions disagreeing with Felisilda, again concluding that equitable estoppel was inapplicable.¿¿¿  

The court finds that these cases show that there has been a material change in the law because the weight of authority now disagrees with the reasoning set forth in Felisilda and supports Plaintiff’s position that Defendants cannot compel Plaintiff to arbitrate pursuant to the doctrine of equitable estoppel.  The court also finds that other factors, including the importance of this change of law and Plaintiff’s promptness in filing this motion on May 24, 2023, support reconsideration.  (Farmers Ins. Exchange, supra, 218 Cal.App.4th at p. 107.) 

The court therefore exercises its discretion to grant Plaintiff’s motion for reconsideration.  (Code Civ. Proc., § 1008, subd. (c).)

Fourth, the court orders that its October 24, 2022 order granting Defendants’ motion to compel arbitration is vacated.

The court finds that the authorities rejecting Felisilda are better reasoned and elects to follow the reasoning set forth therein.¿ (Auto Equity Sales, Inc. v. Superior Court of Santa Clara County (1962) 57 Cal.2d 450, 456 [when appellate decisions are in conflict, “the court exercising inferior jurisdiction can and must make a choice between the conflicting decisions”].)  Thus, the court finds that Defendants cannot enforce the underlying arbitration agreement, as set forth in the “Retail Installment Sale Contract – Simple Finance Charge (With Arbitration Provision)” entered into by and between Plaintiff and nonparty Antelope Valley Mazda, pursuant to the doctrine of equitable estoppel.  (Keithly Decl., Ex. A, Retail Installment Sale Contract; Def. Mot. to Compel Arbitration, pp. 12:21-16:2; Ford Motor Warranty Cases, supra, 89 Cal.App.5th at pp. 1334-1335, rev. granted [language regarding third party nonsignatories is merely a “delineation of the subject matter of claims the purchasers and dealers agreed to arbitrate”].) 

The court therefore finds that Defendants’ motion to compel arbitration should be denied.

ORDER

            The court grants plaintiff Curtis Dothard’s motion for reconsideration.

            The court orders that the October 24, 2022 order granting defendants Ford Motor Company and Santa Monica Ford Lincoln’s motion to compel arbitration is vacated.

            The court issues a new order denying defendants Ford Motor Company and Santa Monica Ford Lincoln’s motion to compel arbitration.

            The court orders that the stay of this action issued as part of the court’s October 24, 2022 order is lifted.

            The court orders plaintiff Curtis Dothard to give notice of this ruling.

IT IS SO ORDERED.

DATED:  January 25, 2024

_____________________________

Robert B. Broadbelt III

Judge of the Superior Court