Judge: Robert B. Broadbelt, Case: 22STCV11336, Date: 2023-10-11 Tentative Ruling

Case Number: 22STCV11336    Hearing Date: October 11, 2023    Dept: 53

Superior Court of California

County of Los Angeles – Central District

Department 53

MOVING PARTY:                 Plaintiff Roberto Valencia Martinez

RESPONDING PARTY:       Defendant Ford Motor Company

Motion for Reconsideration

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

REQUEST FOR JUDICIAL NOTICE

The court denies plaintiff Roberto Valencia Martinez’s request for judicial notice, filed on October 4, 2023, because the matters to be judicially noticed are not relevant to a material issue presented by this motion.  (Malek Media Group LLC v. AXQG Cor. (2020) 58 Cal.App.5th 817, 825.) 

DISCUSSION

Plaintiff Roberto Valencia Martinez (“Plaintiff”) requests that the court (1) reconsider its December 16, 2022 order granting the motion to compel arbitration filed by defendant Ford Motor Company (“Defendant”), and (2) vacate the December 16, 2022 order and issue a new order denying Defendant’s motion.

“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, the court notes that, as a threshold matter, Defendant contends that the court does not have jurisdiction to hear this motion because the court has already ordered this matter to arbitration.  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].)

Second, the court finds that there has been a material change in law regarding the enforcement of arbitration agreements by nonsignatory defendants.

Numerous recent appellate cases have since disagreed with and rejected Felisilda v. FCA US LLC (2020) 53 Cal.App.5th 486 (“Felisilda”), on which the court relied in granting Defendant’s motion on December 16, 2022.  (Dec. 16, 2022 Order, pp. 4:8-22, 6:13-20.)  First, in Ford Motor Warranty Cases (2023) 89 Cal.App.5th 1324, 1334-1335, review granted July 19, 2023, S279969, the Court of Appeal (1) 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, and (2) concluded that the defendant could not enforce the arbitration agreement as a third party beneficiary.  Second, in Montemayor v. Ford Motor Co. (2023) 92 Cal.App.5th 958, 961, review granted September 20, 2023, S281237,  the Court of Appeal similarly 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.  Finally, in Kieler v. Superior Court of Placer County (2023) 94 Cal.App.5th 614, 616, 621, the Court of Appeal joined the other decisions disagreeing with Felisilda, again concluding that equitable estoppel was inapplicable. 

The court finds that these cases demonstrate 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 Defendant cannot enforce the arbitration at issue here.  The court also finds that other factors warrant reconsideration, including the importance of this change of law and Plaintiff’s promptness in filing this motion on June 22, 2023.  The court therefore exercises its discretion to grant Plaintiff’s motion for reconsideration.  (Code Civ. Proc., § 1008, subd. (c).)

Third, the court orders that its December 16, 2022 order granting Defendant’s motion to compel arbitration and stay proceedings 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 Defendant 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, on the one hand, and Galpin Motors, Inc., on the other hand, either (1) pursuant to the doctrine of equitable estoppel, or (2) as a third-party beneficiary, pursuant to the authority set forth above.  (Furse Decl., Ex. 1, RISC, p. 7, Arbitration Provision; Kielar, supra, 94 Cal.App.5th at p. 621 [language extending to “third parties who do not sign this contract” in arbitration agreement “‘was a “delineation of the subject matter of claims the purchasers and dealers agreed to arbitrate” ’ and does not bind the purchaser ‘ “to arbitrate with the universe of unnamed third parties” ’”] [emphasis in original]; Ford Motor Warranty Cases, supra, 89 Cal.App.5th at p. 1340, rev. granted.)  The court therefore finds that Defendant’s motion should be denied.

ORDER

The court grants plaintiff Roberto Valencia Martinez’s motion for reconsideration.

The court orders that the December 16, 2022 order granting defendant Ford Motor Company’s motion to compel arbitration and stay proceedings is vacated.

The court issues a new order denying defendant Ford Motor Company’s motion to compel arbitration and stay proceedings. 

The court orders plaintiff Roberto Valencia Martinez to give notice of this ruling.

IT IS SO ORDERED.

DATED:  October 11, 2023

_____________________________

Robert B. Broadbelt III

Judge of the Superior Court