Judge Robert B. Broadbelt, Case Number: 23STCV07709, Date: 2025-01-27 Tentative Ruling

Judge: Robert B. Broadbelt, Case: 23STCV07709, Date: 2025-01-27 Tentative Ruling

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

The court grants defendant Genesis Motor America’s request for judicial notice, filed on June 11, 2024, of the Complaint filed in this action. (Evid. Code, § 452, subd. (d).)

The court sustains plaintiff Rafael Mendoza’s evidentiary objections to the second declaration of Ali Ameripour because (1) new evidence is not permitted with reply papers, and (2) exhibits 1 and 5 are irrelevant and improper because rulings from other trial courts do not have binding or persuasive authority on this court. (Jay v. Mahaffey (2013) 219 Cal.App.4th 1522, 1537; Cal. Rules of Ct., rule 8.1115.)

Defendant Genesis Motor America (“Defendant”) moves the court for an order (1) compelling plaintiff Rafael Mendoza (“Plaintiff”) to submit the claims alleged in Plaintiff’s Complaint to binding arbitration, and (2) staying this action pending completion of arbitration.

The court finds that Defendant has met its burden to show that the Federal Arbitration Act governs this motion because (1) the Owner’s Handbook & Warranty Information, on which this motion is partially based, states that it “evidences a transaction in interstate commerce and shall be governed by the Federal Arbitration Act,” and (2) the Connected Services Agreement Terms and Conditions, on which this motion is partially based, similarly states that it “evidences a transaction in interstate commerce, and thus the Federal Arbitration Act governs the interpretation and enforcement of this arbitration provision.” (Ameripour Decl., Ex. 3, Warranty, p. 14; Rao Decl., Ex. 2, Connected Services Agreement, ¶ 15, subd. (C)(a); Evenskaas v. California Transit, Inc. (2022) 81 Cal.App.5th 285, 292 [the party asserting the FAA applies has the burden to demonstrate FAA coverage]; Victrola 89, LLC v. Jaman Properties 8 LLC (2020) 46 Cal.App.5th 337, 346 [“when an agreement provides that its ‘enforcement’ shall be governed by the FAA, the FAA governs a party’s motion to compel arbitration”].)

The Federal Arbitration Act requires courts to direct parties to proceed to arbitration on issues covered by an arbitration agreement upon a finding that the making of the arbitration agreement is not in issue.¿ (9 U.S.C. § 4; Chiron Corp. v. Ortho Diagnostic Sys. (9th Cir. 2000) 207 F.3d 1126, 1130.)¿ “The court’s role under the [FAA] is therefore limited to determining (1) whether a valid agreement to arbitrate exists and, if it does, (2) whether the agreement encompasses the dispute at issue.”¿ (Chiron Corp., supra, 207 F.3d at p. 1130.)¿ The FAA reflects “both a ‘liberal federal policy favoring arbitration,’ [citation], and the ‘fundamental principle that arbitration is a matter of contract,’ [citation].”¿ (AT&T Mobility LLC v. Concepcion (2011) 563 U.S. 333, 339.)¿

“‘ “The party seeking to compel arbitration bears the burden of proving the existence of an arbitration agreement, while the party opposing the petition bears the burden of establishing a defense to the agreement’s enforcement.” ’”¿ (Beco v. Fast Auto Loans (2022) 86 Cal.App.5th 292, 302.)¿ To determine the existence of an arbitration agreement, the court uses “a three-step burden-shifting process.”¿ (Iyere v. Wise Auto Group (2023) 87 Cal.App.5th 747, 755.)¿ “The arbitration proponent must first recite verbatim, or provide a copy of, the alleged agreement.¿ [Citations.]¿ A movant can bear this initial burden ‘by attaching a copy of the arbitration agreement purportedly bearing the opposing party’s signature.’”¿ (Ibid. [internal citations omitted].)¿ “If the movant bears its initial burden, the burden shifts to the party opposing arbitration to identify a factual dispute as to the agreement’s existence . . . .”¿ (Ibid.)¿ If the opposing party meets its burden to “submit sufficient evidence to create a factual dispute” as to the existence of the agreement, the burden shifts back to the arbitration proponent, who retains the ultimate burden of proving its existence by a preponderance of the evidence.¿ (Ibid.)

Here, Defendant contends that the parties entered into two agreements to arbitrate the controversy alleged in this action, set forth in (1) the Owner’s Handbook & Warranty Information booklet (the “Warranty”), and (2) the Connected Services Agreement (the “CSA”).

First, the court finds that Defendant has not met its burden to prove that the parties entered into an agreement to arbitrate this controversy based on the Warranty. (Iyere, supra, 87 Cal.App.5th at p. 755.)

Although the court recognizes that the Warranty includes an arbitration provision, the court finds that Defendant did not present adequate argument, analysis, and evidence to show that Plaintiff agreed to the terms of the Warranty. For example, Defendant did not (1) present evidence showing that Plaintiff signed the Warranty, as the version that Defendant submitted with the court is unsigned,[1] or (2) present evidence showing that Plaintiff affirmatively consented to its arbitration provision, which is set forth on the 14th page of 50-page document entitled “Owner’s Handbook & Warranty Information.” (Ameripour Decl., Ex. 3, Warranty; Iyere, supra, 87 Cal.App.5th at p. 755 [moving party can meet its initial burden “‘by attaching a copy of the arbitration agreement purportedly bearing the opposing party’s signature’”] [emphasis added]; Herzog v. Superior Court (2024) 101 Cal.App.5th 1280, 1293-1293 [mutual assent is essential to the existence of a contract], 1293-1294 [“‘California law is clear—an offeree, regardless of apparent manifestation of his consent, is not bound by inconspicuous contractual provisions of which he [or she] was unaware, contained in a document whose contractual nature is not obvious’”].) Moreover, although Defendant asserts, in its memorandum of points and authorities, that the sale of the subject vehicle was accompanied by the Warranty, Defendant did not present evidence showing that Plaintiff ever received the Warranty at any time, including before, during, or after the sale of the subject vehicle, and its assertion of that fact in the memorandum of points and authorities is not competent evidence thereof. (Mot., p. 3:2-3; Alki Partners, LP v. DB Fund Services, LLC (2016) 4 Cal.App.5th 574, 590 [“Matters set forth in points and authorities are not evidence”].)

Second, the court finds that Defendant has met its burden to prove the existence of an agreement to arbitrate this controversy based on the CSA. (Iyere, supra, 87 Cal.App.5th at p. 755.)

Defendant has submitted the declaration of the Director of Connected Ops & Owner Apps/Webs for Hyundai Motor America Corporation, Vijay Rao, in which Rao states the following. (Rao Decl., ¶ 1.) To enroll in Genesis Connected Services, which is a connected car system, a customer must agree to the subject CSA through the Dealer-Assisted Enrollment process. (Rao Decl., ¶¶ 3-4.) As part of that enrollment process, a customer must affirmatively (1) click a box “to acknowledge that they ‘read and agree[d] to the Genesis Connected Services[,]’” and (2) “click the ‘Complete’ button.” (Rao Decl., ¶ 6 and Ex. 1.) A screenshot of the enrollment page shows an unfilled box, next to which is the statement “By checking this box, I agree all information is accurate and I agree to GMA’s Privacy Policy and Terms & Conditions.” (Rao Decl., Ex. 1.) Further, “[t]he phrase Terms & Conditions included a hyperlink to the then-effective CSA.” (Rao Decl., ¶ 6.) In order to activate the Genesis Connected Services through the Dealer-Assisted Enrollment process, a customer must “complete the step requiring them to click the box acknowledging they agree to the Genesis Connected Services Terms and Conditions.” (Ibid.) Rao has attested, in his declaration, that Plaintiff enrolled his vehicle in the Genesis Connected Services through the Dealer-Assisted Enrollment process on January 18, 2022. (Rao Decl., ¶ 5.)

The court finds that this evidence is sufficient to show that (1) Plaintiff enrolled his vehicle by using the Dealer-Assisted Enrollment process, which (2) requires all customers, including Plaintiff, to affirmatively check a box acknowledging his assent to the Terms and Conditions, which includes the subject CSA, such that (3) Defendant has shown that Plaintiff agreed to the CSA, which includes an arbitration provision that applies to Plaintiff and Defendant, as a named beneficiary to the CSA. (Herzog, supra, 101 Cal.App.5th at p. 1296 [a clickwrap agreement is “a form of internet agreement generally regarded as enforceable because it requires the user to manifest assent to a website’s terms of use ‘by clicking an I agree or I accept button, with a link to the agreement readily available’”]; Rao Decl., ¶ 15; Rao Decl., Ex. 2, CSA, p. 1 [including Defendant in the definition of the terms we, us, our, Hyundai Motor America, Hyundai, or Connected Services].)

The court finds that Plaintiff has not met his burden to identify a factual dispute as to whether he agreed to the terms of the CSA (including its arbitration provision) because he has not (1) presented evidence to show that he did not agree to the CSA or enroll in the Genesis Connected Services through the Dealer-Assisted Enrollment process described above on January 18, 2022, (2) argued that he did not have actual, constructive, or inquiry notice of the CSA and the arbitration provision, or (3) otherwise challenged the validity of the agreement (e.g., by arguing that Defendant did not provide Plaintiff with reasonably conspicuous notice of the existence of the arbitration provision in the CSA). (Herzog, supra, 101 Cal.App.5th at p. 1296 [to establish contract formation of a clickwrap agreement on a constructive or inquiry notice theory, the defendant “needed to show that it provided prospective . . . users with reasonably conspicuous notice of the existence of the terms to which they were to be bound”].)

The court further finds that Plaintiff has not met his burden to show that the arbitration provision does not encompass the claims alleged in this action. (Victrola 89, LLC, supra, 46 Cal.App.5th at p. 356 [“‘The party opposing arbitration has the burden of demonstrating an arbitration clause cannot be interpreted to require arbitration of the dispute’”].)

The first paragraph of the CSA states, inter alia, the following: “These Terms and Conditions are the agreement between us [(which is defined to include Defendant as a beneficiary)] regarding our provision of Connected Services to you (collectively referred to herein as ‘Agreement’ or ‘Connected Services Agreement’). If you activate, receive, use, accept or otherwise access Connected Services, including by downloading software or using websites to access these services, you accept and agree to be bound by these Terms and Conditions even if you have not signed this Agreement.” (Rao Decl., Ex. 2, CSA, p. 1.) The arbitration provision of the CSA states that the parties “agree to arbitrate any and all disputes and claims between us arising out of or relating to this Agreement, Connected Services, Connected Services Systems, Service Plans, your Vehicle, use of the sites, or products, services, or programs you purchase, enroll in or seek produce/service support for, whether you are a Visitor or Customer, via the sites or through mobile application, except any disputes or claims which under governing law are not subject to arbitration, to the maximum extent permitted by applicable law.” (Rao Decl., Ex. 2, CSA, ¶ 15, subd. (a).)

Although the court acknowledges, as set forth above, that the CSA states that it is the agreement regarding Defendant’s provision of Connected Services, the arbitration provision therein states that the parties have agreed to arbitrate “any and all disputes and claims between” them “arising out of or relating to . . . your vehicle . . . .” (Rao Decl., Ex. 2, CSA, ¶ 15, subd. (a) [emphasis added].) Thus, the court finds that the scope of the arbitration provision is broad and encompasses any disputes between Defendant and Plaintiff relating to Plaintiff’s vehicle, notwithstanding the introductory language asserting that the CSA concerns the provision of the Connected Services to Plaintiff. (Ibid.; Rice v. Downs (2016) 248 Cal.App.4th 175, 186 [“A broad clause includes those using language such as any claim arising from or related to this agreement [citation] or arising in connection with the [a]greement”] [internal emphasis, quotation marks, and citations omitted].) The court further finds that Plaintiff’s causes of action against Defendant for violations of the Song-Beverly Consumer Warranty Act relate to Plaintiff’s vehicle and are therefore encompassed by the arbitration provision in the CSA. (Compl., ¶¶ 20-22, 27-28, 32, 35, 39-41.)

The court notes that, while Plaintiff has argued that the arbitration agreement in the Warranty is unconscionable, Plaintiff did not argue that the CSA is unconscionable. (Opp., pp. 4:11-5:25.) The court also notes that Plaintiff has argued that Defendant may not rely on the doctrine of equitable estoppel to compel Plaintiff to arbitration. (Opp., p. 8:20-9:21.) However, the CSA expressly includes Defendant as a beneficiary of the CSA, such that Defendant may enforce the terms thereof independent of the doctrine of equitable estoppel. (Rao Decl., Ex. 2, CSA, p. 1 [“as used in this Agreement, the terms ‘we,’ ‘us,’ ‘our’, ‘Hyundai Motor America’, ‘Hyundai’ or ‘Connected Services’ shall be deemed to collectively refer to the following persons/entities, each of which are intended beneficiaries of this Agreement: (i) Hyundai Motor America, Genesis Motor America . . . .”] [emphasis added].)

Thus, for the reasons set forth above, the court finds that (1) Defendant has met its burden to show that there exists an agreement to arbitrate this controversy, and (2) Plaintiff has not met his burden to establish a defense to the enforcement of the agreement. (Beco, supra, 86 Cal.App.5th at p. 302.)

The court grants defendant Genesis Motor America’s motion to compel arbitration.

The court orders (1) defendant Gensis Motor America and plaintiff Rafael Mendoza to arbitrate the claims alleged in plaintiff Rafael Mendoza’s Complaint, and (2) this action is stayed until arbitration is completed.

The court sets an Order to Show Cause re completion of arbitration for hearing on August 26, 2025, at 8:30 a.m., in Department 53.

[1] Plaintiff has attested, in his declaration, that he “did not sign the Owner’s Handbook & Warranty Information booklet.” (Mendoza Decl., ¶ 4.)

rafael mendoza ; Plaintiff, vs. genesis motor america, llc , et al.; Defendants.	Case No.:	23STCV07709

	Hearing Date:	January 27, 2025

	Time:	10:00 a.m.

	[tentative] Order RE: defendant’s motion to compel arbitration