Judge Ronald F. Frank, Case 22TRCV00636 2023-05-08 Tentative Ruling

Judge: Ronald F. Frank, Case: 22TRCV00636, Date: 2023-05-08 Tentative Ruling

Case Number: 22TRCV00636 Hearing Date: May 8, 2023 Dept: 8

Tentative Ruling

HEARING DATE: May 8, 2023¿

CASE NUMBER: 22TRCV00636

CASE NAME: Jessica Rodriguez Verdugo and Luis R. Rodriguez v. Ford Motor Company, et al.

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MOVING PARTY: Plaintiffs, Jessica Rodriguez and Luis R. Rodriguez

RESPONDING PARTY: Defendants, Ford Motor Company

MOTION:¿ (1) Motion for Reconsideration

Tentative Rulings: (1) Plaintiff’s motion is denied because it was not made within the statutory 10-day period, but the Legislature recognized that intervening changes in the law may render an earlier decision erroneous, “[i]f 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.” (Code Civ. Proc., § 1008(c).) .

RECONSIDERATION IS GRANTED ON THE COURT’S OWN MOTION, conditioned on Plaintiff reimbursing Defendant for Defendant’s payment if any of any arbitration office fee. On reconsideration, the Court’s intended ruling would be to vacate its January 4, 2023 ruling and enters a new order denying the motion to compel arbitration. The Court predicated its earlier ruling on the lack of any other state-court appellate decision besides Felisilda, which the Court found it was required to follow before April of 2023. The Court’s January 2023 ruling discussed the reasoning of several federal district and Ninth Circuit decisions that had denied manufacturer motions to compel arbitration, but concluded that “this Court is bound to follow Felisilda” in the absence of any other state-court ruling on point. Now that there is another state-court ruling on point, this Court finds Ochoa to be better reasoned and more persuasive than Felisilda. Given that arbitration has not yet commenced despite the Court’s order to arbitrate in January, there is no unfair prejudice to the Court reversing itself as to its prior ruling as the parties and the Court are essentially in the same position now as in January with the additional element of a more recent Second District decision for the Court to consider.

I. BACKGROUND¿

A. Factual¿

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This is a lemon law action brought by Plaintiffs Jessica Rodriguez and Luis R. Rodriguez (“Plaintiffs”) against Defendant, Ford Motor Company (“Ford”) for failing to repair an alleged defect in their 2020 Ford Explorer (the “Vehicle”) they purchased from Defendant. Specifically, Plaintiffs allege that the Vehicle had serious defects and nonconformities to warranty including, the transmission system defects, interior component defects, exterior and body component defects, and other serious nonconformities to warranty. (Complaint (“Compl.”), ¶ 9.) The Complaint alleges causes of action for: (1) Violation of Song-Beverly Act – Breach of Express Warranty; (2) Violation of Song-Beverly Act – Breach of Implied Warranty; and (3) Violation of the Song-Beverly Act Section 1793.2(b).

On January 4, 2023, this Court granted Defendant’s Motion to Compel arbitration, expressly based on the Third District’s holding in Felisilda v. FCA US LLC (2020) 53 Cal.App.5th 486. In light of the recent Second District decision in Ochoa v. Ford Motor Company (Ford Motor Warranty Cases) (2023) 89 Cal.App.5^th 1324, Plaintiffs have requested this Court reconsider its ruling on Defendant’s Motion to Compel Arbitration. Per the Declaration of Mr. Daghighlian in support of the Motion for Reconsideration, Plaintiff filed a demand for arbitration with JAMS, JAMS acknowledged the demand, but Ford refused to consent to JAMS as the arbitration provider. Accordingly, there has been no substantive proceeding in the arbitration in the four months since the Court’s order on the motion to compel arbitration.

B. Procedural

On April 11, 2023, Plaintiffs filed a Motion for Reconsideration of the Court’s order Granting Defendant, Ford Motor Company’s Motion to Compel Arbitration. On April 25, 2023, Defendant filed an opposition. On May 1, 2023, Plaintiffs filed a reply brief.

II. ANALYSIS ¿

A. Legal Standard

When a court granted or denied a prior application for an order in whole or in part, the original party making the application may make an additional application for the same order when it based upon “new or different facts, circumstances, or law in which case it shall be shown by affidavit what application was made before, when and to what judge, what order or decisions were made, and what new or different facts, circumstances, or law are claimed to be shown.” (Code Civ. Proc. § 1008(b).) If a party fails to comply with CCP § 1008(b), the court may revoke or set aside on ex parte motion any order following the application. (Id.) If a change in law warrants reconsideration of a prior order entered, the court may on its own motion enter a new order. (Code Civ. Proc. § 1008(c).) An application that fails to comply with CCP § 1008 cannot be considered. (Code Civ. Proc. § 1008(e).)

Section 1008 is “the clear legislative intent to restrict motions to reconsider to circumstances where a party offers the court some fact or authority that was not previously considered by it” and could not have been considered by it.¿ (Gilberd v. AC Transit (1995) 32 Cal.App.4th 1494, 1500.)¿ Section 1008 is the exclusive means for modifying, amending or revoking an order.¿ That limitation is expressly jurisdictional.”¿ (Id. at p. 1499.)¿¿¿

B. Discussion

Here, Plaintiff seeks reconsideration of the Court’s Order on the Motion to Compel Arbitration since the Second District ruling of Ochoa has been decided and now become final as to that court. Just a month ago, the Second District Court of Appeal addressed the issues raised by Ford’s motion in Ford Motor Warranty Cases and Martha Ochoa vs Ford Motor Company (2023) 89 Cal.App.5th 1324. In relevant part, the Ochoa Court converged from Felisilda’s position that “the sales contract was the source” of the warranties at issue. (Felisilda, supra, 53 Cal.App.5th at p. 496.) Instead, the Ochoa court concluded, as this Court does here, that “manufacturer vehicle warranties that accompany the sale of motor vehicles without regard to the terms of the sale contract between the purchaser and the dealer are independent of the sale contract.” (Ochoa, supra, 89 Cal.App.5^th at p. __, 306 Cal.Rptr.3d 611, 619-20 [emphasis added].) Thus, the Ochoa court found equitable estoppel to be inapplicable because the plaintiffs’ claims “in no way rel[ied] on the sale contracts.” (Id., 306 Cal.Rptr.3d at p. 621.) Therefore, the Plaintiffs were not attempting “to prevent a party from taking advantage of a contract's substantive terms while avoiding those terms requiring arbitration,” which is the “’fundamental point’ of using equitable estoppel to compel arbitration.” (Id.)

If the Ford dealer’s sales contract included the words “or manufacturer warranty’ in the scope of its arbitration clause, the Court might view this issue differently. The Court is aware that motions to compel arbitration have been filed in Los Angeles County Lemon Law cases for over a decade, giving dealers and their franchisors ample opportunity to reconsider the language of their warranties and sales contracts years before the sale and warranty at issue here. The evidence before the Court included pages 7 and 33 of the Ford warranty in this case, reflecting that Ford employs the BBB Auto Line as its pre-litigation Lemon Arbitration program encouraged by the California Legislature as a means of resolving warranty disputes without the need to resort to the court system. (See Civil Code §1793.22(c), (d).) The fact that plaintiffs elected not to use such a pre-litigation arbitration process here and the fact that Ford only established a pre-litigation arbitration system rather than an in-litigation one, are factors the Court weighs in the balance of equities underlying the equitable estoppel theory on which Felisilda and Ford’s motion rest.

Ochoa also disagreed with Felisilda’s holding that a manufacturer could compel arbitration as a third-party beneficiary of the sales contract. Instead, it found the 9th Circuit’s decision in Ngo v. BMW of North America, LLC (9th Cir. 2022) 23 F.4th 942 to be “persuasive,” agreeing that “the sale contracts reflect no intention to benefit a vehicle manufacturer.” (Ochoa, supra, 306 Cal.Rptr.3d at p. 623.) Ochoa did not purport to distinguish Felisilda. Rather, the Court stated flatly that it “disagree[s] with Felisilda’s analysis.” (Id.) The Ochoa Court also noted it was not bound by Felisilda because there is no “horizontal stare decisis” in California. (Id. at fn. 1.) “[W]here there is more than one appellate court decision, and such appellate decisions are in conflict…. the court exercising inferior jurisdiction can and must make a choice between the conflicting decisions.” (See Auto Equity Sales, Inc. v. Superior Ct. of Santa Clara Cnty. (1962) 57 Cal. 2d 450, 456.)

Although Defendant’s opposition asserts that Ochoa does not present a “material change in the law” required for a Motion for Reconsideration under section, 1008(c), the Court disagrees. The long-awaited Second District decision in Ochoa has completely changed the way trial courts now consider Motions to Compel Arbitration in lemon law cases.

1. Equitable Estoppel

As noted in the original Motion to Compel Arbitration, the parties here agree that Defendant is not a signatory to the Contract. Generally, only parties to a contract containing an arbitration agreement may enforce that arbitration clause. (Thomas v. Westlake (2012) 204 Cal.App.4^th 605, 613.) There are exceptions to the general rule. Under one such exception, the doctrine of equitable estoppel, a nonsignatory defendant may move to enforce an arbitration clause. (JSM Tuscany, LLC v. Superior Court (2011) 193 Cal.App.4th 1222, 1236.) Ford’s motion, and its opposition to this Motion for Reconsideration, relies on Felisilda and its reasoning on the equitable estoppel exception to the non-signatory rule. However, on April 4, 2023, the Second District Ochoa declined to follow Felisilda. This Court is thus now given discretion to choose between the two Court of Appeal decisions that the Court finds to be better reasoned and more persuasive.

Ford argues that Plaintiff is bound to arbitrate by equitable estoppel because her claims are “intimately founded in and intertwined with” the obligations of the Sales Contract giving rise to her claims. Ford also cites to language in the Arbitration provision, noting it is identical to the Arbitration Provision here. However, the Second District in Ochoa expressly rejected this argument. The Court there found that the argument proceeds on two lines. The first is that automobile warranty claims are founded in and intertwined with sales contacts in California as a matter of law. The second is that breaches of warranties are generally treated as breaches of contract, so breaches of any warranties that accompanied the sale contract are necessarily intertwined with the sale contract. Similar arguments are made by Ford in this case.

“Intimately Founded In and Intertwined With”

Ford argues that Plaintiff is bound by the doctrine of equitable estoppel to arbitrate because her Song-Beverly claims are “intimately founded in and intertwined with” the obligations of the Sales Contract giving rise to her claims. Ford notes that Plaintiff expressly alleges that “[e]xpress warranties accompanied the sale of the Subject Vehicle to Plaintiffs” and base Ford’s liability on its alleged failure to “conform Plaintiff’s vehicle to the applicable express [warranty] after a reasonable number of repair attempts.” (Compl., ¶¶ 8, 17, 24 (Ex. 1 to RFJN).) Ford also contends that because Plaintiff expressly agreed to arbitrate claims arising out of the purchase and condition of the Vehicle, even against non-signatories, she cannot now avoid arbitration.

The Ochoa court disagreed with Felisilda because the Felisilda plaintiffs and the dealer agreed in their sale contract to arbitrate disputes between them about the condition of the vehicle, but did not expressly or impliedly agree to arbitrate disputes under the consumer protection statute governing manufacturer warranties as distinct fomr promises or warranties made int eh sales contract with the dealer. Ochoa noted that Equitable estoppel would apply if the plaintiffs had sued FCA based on the terms of the sale. But that was not the gravamen of the Lemon Law suit in Felisilda, Ochoa, or here. Like the plaintiffs in Felisilda and in Ochoa, Plaintiff here predicates the suit on Ford’s claimed breach of statutory duties and for breach of the Ford warranty, not based on plaintiffs’ sales contract with the dealer.

Here, Ford argues that Plaintiff signed a contract that bound Plaintiffs to arbitration against “third parties who [did] not sign [the] contract.” (See Sales Contract [Ex. 1 to Maclear Decl.].) Such language was also present in the contracts at issue in Felisilda and Ochoa. The Court in Ochoa disagreed with the Felisilda court’s interpretation of the sales contract as broadly calling for arbitration of any claims concerning the condition of the vehicle “against third party nonsignatories,” and instead noted that it did not read that language as consent by the purchaser to arbitrate any or all claims with third-party nonsignatories. Rather, the Ochoa Court read it as a further delineation of the subject matter of claims the purchasers and dealers agreed to arbitrate, noting the purchaser(s) agreed to arbitrate disputes “between” themselves—“you and us”—arising out of or relating to “relationship[s],” including “relationship[s] with third parties who [did] not sign th[e] [sale] contract[s],” resulting from the “purchase, or condition of th[e] vehicle, [or] th[e] [sale] contract.” The Ochoa Court further noted that the “third-party” language in the arbitration clause means that if a purchaser asserts a claim against the dealer (or its employees, agents, successors or assigns) that relates to one of these third party transactions (such as electing to buy insurance, theft protection, extended warranties, and the like), the dealer can elect to arbitrate that claim. The Second District found that such language says nothing of binding the purchaser to arbitrate with the universe of unnamed third parties. IF Plaintiffs had sued the individual owners or sales personnel at the selling dealership regarding fraud in the inducement of the sale, or refusal to perform services listed on the Due Bill, or for selling a vehicle with scratches on the paint finish (i.e., the condition of the vehicle) that were not visible at the time of retail delivery, or for failure to obtain a promised insurance binder, such third-party claims would be arbitrable. But that is now what Plaintiffs here are claiming.

Ford’s warranty is not intertwined with the sales contract. Song-Beverly claims are not intimately founded in the sale contract. Ford and its dealer are separate entities. The warranty and the sales contract are separate legal documents, neither of which refer to or incorporate each other. Applying Ochoa to this case, the Arbitration Agreement present in Plaintiff’s Sales Contract does not bind her to arbitrate non-sale agreement issues with Ford. While a Lemon Law case arguably is related to the “condition” of the vehicle sold via the Sales Contract, the gravamen of Plaintiffs’ suit here is not as to the condition of the vehicle at the time of sale, but rather as to subsequent events that manifest only after Plaintiff drove the vehicle off the lot, experienced malfunctions or defect, and unsuccessfully sought to have those post-sale matters remedied within a reasonable number of repair attempts.

Breach of Warranty versus Breach of Contract

The second argument the Court in Ochoa rejected was that breaches of warranties are generally treated as breaches of contract, so breaches of any warranties that accompanied the sale contract are necessarily intertwined with the sale contract. Similar to the defendant in Felisilda, Ford also argues that Plaintiff’s Song-Beverly breach of express warranty claim is inextricably intertwined with the Sales Contract because it provides her standing under the Act. Ford notes that the Sales Contract is governed by the Commercial Code, which treats warranties as contractual terms, and under the Commercial Code, claims for breach of warranty are treated as claims for breach of the sales contract. Ford contends that the fact that Plaintiff invoked contractual remedies against Ford to assert these claims further confirms this result.

In Ochoa, the Court noted that most of the plaintiffs attached their sale contracts as an exhibit to their complaints; some did so in support of general allegations about when they bought their vehicles and to identify their vehicles by make and model; and others attached their sale contracts in support of allegations the sale contracts were accompanied by implied warranties under the Song-Beverly Consumer Warranty Act. However, the Second District specifies that no plaintiffs have alleged violations of the sales contracts’ express terms. Rather, Plaintiff’s claims are based on a manufacturer’s statutory obligations to reimburse consumers or replace their vehicles when unable to repair in accordance with its warranty. Similarly, Here, Plaintiff has alleged, against Ford, that Ford violated the Song-Beverly Act by failing to repair, or replace the new motor vehicle or to promptly make restitution in accordance with the Song-Beverly Act. (Complaint, ¶¶ 23, 24-26, 40, 48, 49.) Just as Plaintiff asserts in her original opposition to the Ford’s Motion to Compel Arbitration, these claims do not rely on the terms of the dealership’s sales contract.

Further, in regard to Ford’s argument that Plaintiff’s warranty claims are founded in the sale contracts because California law treats warranty claims as contract claims is not supported by California law. In Ford’s argument they cite to California Commercial Code § 2314, noting “a warranty that the goods shall be merchantable is implied in a contract for their sale if the seller is a merchant with respect to goods of that kind.” In support of Ford’s argument, it offers the example that the statute of limitations for breach of warranty claims (brought under the Song-Beverly Act or otherwise) is governed by the Commercial Code section for breaches of an action for “breach of any contract for sale.” (Cal. Com. Code § 2725; Mills v. Forestex Co. (2003) 108 Cal.App.4th 625, 642 [applying section 2725 as statute of limitations for Song-Beverly Act warranty claims because it “governs breach of warranty claims arising from the sale of goods”].) Such citations were distinguished and not accepted by the Second District in Ochoa, noting that it does not “naturally follow” from any contractual character of manufacturer warranty claims that they inhere in a retail sales contract containing no warranty terms.

However, in Ochoa, the Second District noted that California law does not treat manufacturer warranties imposed outside the four corners of a retail sale contract as part and parcel of the sale contract. In Greenman v. Yuba Power Products, Inc. (1963) 59 Cal.2d 57, the California Supreme Court distinguished between, on the one hand, warranty obligations flowing from the seller to the buyer by contract, and, on the other hand, manufacturer warranties “that arise[ ] independently of a contract of sale between the parties.” (Id. at p. 60, italics added; see also Corporation of Presiding Bishop of Church of Jesus Christ of Latter Day Saints v. Cavanaugh (1963) 217 Cal.App.2d 492, 514 [manufacturer's express warranty “was not part of a contract of sale between the manufacturer and the plaintiff” (italics added)].)

Additionally, this Court takes note that the Sales Contract here included no warranty, nor any assurance regarding the quality of the vehicle sold, not any promise of repairs or other remedies in the event problems arise. To the contrary, the Sales Contract disclaims any warranty on the part of the dealers, while acknowledging no effect on “warranties covering the vehicle that the vehicle manufacturer may provide.” As such, the substantive terms of the sales contract relate to sale and financing and nothing more.

2. Third-Party Beneficiary

Ford also argues that it can compel arbitration as a third-party beneficiary to the arbitration provision. “ ‘A third party beneficiary is someone who may enforce a contract because the contract is made expressly for his benefit.’ ” (Jensen v. U-Haul Co. of California (2017) 18 Cal.App.5th 295, 301, 226 Cal.Rptr.3d 797; see also Civ. Code, § 1559 [“[a] contract, made expressly for the benefit of a third person, may be enforced by him ....”].) A person “only incidentally or remotely benefited” from a contract is not a third-party beneficiary. (Lucas v. Hamm (1961) 56 Cal.2d 583, 590, 15 Cal.Rptr. 821, 364 P.2d 685.) Thus, “the ‘mere fact that a contract results in benefits to a third party does not render that party a “third party beneficiary.” ’ ” (Jensen, at p. 302, 226 Cal.Rptr.3d 797.) Nor does knowledge that the third party may benefit from the contract suffice. (Goonewardene v. ADP, LLC (2019) 6 Cal.5th 817, 830, 243 Cal.Rptr.3d 299, 434 P.3d 124 (Goonewardene).) Rather, the parties to the contract must have intended the third party to benefit.

In order for a third party to show that the contracting parties intended to benefit it, under the express terms of the contract at issue and any other relevant circumstances under which the contract was made, “(1) “the third party would in fact benefit from the contract”; (2) “a motivating purpose of the contracting parties was to provide a benefit to the third party”; and (3) permitting the third party to enforce the contract “is consistent with the objectives of the contract and the reasonable expectations of the contracting parties.” (Ochoa, citing Goonewardene, supra, 6 Cal.5th at p. 830.) Here, Ford argues that the intent to benefit Ford is evident from the plain language of the arbitration provision of the Sales Contract, noting that Plaintiff agreed to arbitrate any claim related to the Sales Contract, including “[a]ny claim or dispute . . . which arises out of or relates to . . . any resulting transaction or relationship (including any such relationship with third parties who do not sign this contract, (Sales Contract at p. 7 (Ex. 1 to Maclear Decl.) (emphasis added).) Ford notes that Plaintiff’s purchase of the Vehicle, memorialized by the Sales Contract, resulted in a warranty relationship with Ford, and because the Arbitration Provision explicitly embraces claims arising out of relationships with third party nonsignatories, Plaintiff’s warranty claims require her to contend that Ford benefitted from the Sales Contract.

In opposition, Plaintiff argues that Ford cannot satisfy any of the Goonewardene requirements. Plaintiff relies, in part, on excerpts from the Ninth Circuit Court of Appeal’s decision of Ngo v. BMW of North America (9th Cir. 2022) 23 F.4th 943. As noted by the Second District, federal authority is not binding on this court, but a discussion of Ngo is persuasive nonetheless. Here, the Ninth Circuit ruling with respect to the law of arbitration is more than persuasive, because the arbitration provision of the sales contract expressly states that any arbitration under that sales contract provision “shall be governed by the Federal Arbitration Act (9 U.S.C. § 1 et seq.) and not by any state law concerning arbitration.” In Ngo, the Ninth Circuit Court found that BMW could not enforce the arbitration provision because the clause, which is identical to the one at issue, was strictly limited to the dealership, the assignee, and the Plaintiff, but not BMW. (See Ngo, supra, at p. 948.) As such, BMW¿was not a party to the agreement and its obligations to¿Ngo¿arose independently of the plaintiff’s agreement with the dealership. (Id. at 949.) The Second District analyzed Ngo at length, ultimately reaching the conclusion that the Sales Contract in Ochoa did not benefit a vehicle manufacturer under Goonewardene for three fundamental reasons.

First, nothing in the sale contracts or their arbitration provision offered any direct “benefit” to the manufacturer. Here, Ford argues that the intent to benefit Ford is evident from the plaint language of the arbitration provision of the Sales Contract, referencing the language that Plaintiff signed: “[a]ny claim or dispute . . . which arises out of or relates to . . . any resulting transaction or relationship (including any such relationship with third parties who do not sign this contract.” This Court disagrees. The Sales Contract here benefits those persons who might rely on it to avoid proceeding in court – the purchaser, the dealer, and the dealer’s employees, agents, successors or assigns. Ford is none of the aforementioned persons. (See Ngo, supra, 23 F.4th at p. 947.) Second, “there is no indication that a benefit to Ford was the signatories’ ‘motivating purpose’ in contracting for the sale and purchase” of the Subject Vehicle or a motivation for including the arbitration clause. (Goonewardene, supra, 6 Cal.5th at p. 830.) Ford argues that because the Arbitration Provision explicitly embraces claims arising out of relationships with third parties who do not sign the Sales Contract, Plaintiff’s warranty claims necessarily require her to contend that Ford benefitted from the Sales Contract. While the argument is a reasonable one, this Court disagrees. As noted above, and as noted by the Ochoa Court, the parties’ intent was to buy, sell, and finance a care, and to allow the purchaser or the dealer to compel arbitration of the specified categories of disputes between them, or between the purchaser and any of the dealer’s “employees, agents, successors or assigns.” This language does not include “franchisors” or “principals”, language which would more clearly have expressed an intention to include Ford within the scope of arbitrability. Lastly, the Ochoa Court notes that allowing a manufacturer to enforce the arbitration provision as a third party beneficiary would be inconsistent with the “reasonable expectations of the contracting parties” where they twice specifically vested the right of enforcement in the purchaser and the dealer only.

Based on the foregoing, the Arbitration Agreement does not apply to Ford as an undisclosed but allegedly intended third party beneficiary, and as such, it may not enforce it against Plaintiff. Thus, Ford’s Motion to Compel Arbitration is tentatively denied.

3. Undisclosed Principal.

A third argument raised in Ochoa is that an alleged agency relationship existed between Ford and its Dealer such that it would be equitable for Ford to be entitled to enforce is purported agent’s arbitration agreement against Plaintiff. “A nonsignatory to an agreement to arbitrate may be required to arbitrate, and may invoke arbitration against a party, if a preexisting confidential relationship, such as an agency relationship between the nonsignatory and one of the parties to the arbitration agreement, makes it equitable to impose the duty to arbitrate upon the nonsignatory.” (Westra v. Marcus & Millichap Real Estate Inv. Brokerage Co. (2005) 129 Cal.App.4th 759, 765.) Whether a nonsignatory has rights under an arbitration agreement through some agency relationship is dictated by the ordinary principles of contract and agency law. (Cohen v. TNP 2008 Participating Notes Program, LLC (2019) 31 Cal.App.5th 840, 860.)

In Ochoa, Ford relied on Cohen for the proposition that “a non-signatory defendant [may] compel a signatory plaintiff to arbitrate where there is a connection between the claims alleged against the non-signatory and its agency relationship with a signatory.” (Cohen, supra, 31 Cal.App.5^th at p. 863, 243 Cal.Rptr.3d 340.) The authorities Cohen cited to ground the affirmative right of a non-signatory to compel arbitration were ones in which the moving party showed that said agency relationship extended to the agreement to arbitrate. (See id. at pp. 863–864, citing Dryer v. Los Angeles Rams (1985) 40 Cal.3d 406, 418(explaining that in Dryer “non-signatory agents were entitled to enforce a contract's arbitration provision where the plaintiff sued them in their capacities as agents for the signatory and the significant issues in the dispute arose out of the contractual relationship between the parties” (italics added by Ochoa)]. (Ochoa, supra, 89 Cal.App.5th at p. __, 306 Cal.Rptr. at pp. 624-25.)

Here as in Ochoa, there is no substantial connection between each of (1) plaintiffs’ claims against Ford, (2) any alleged agency relationship between Ford and its dealer, and (3) the sale contracts between the selling dealer and plaintiffs. The dealer-Ford agency allegation articulated in the complaint is that the dealers are Ford’s authorized “agents for vehicle repairs.” By law, when a consumer needs diagnosis or repair of a vehicle under the Ford warranty, consumers can go to a Ford dealer to get it fixed. Manufacturers have a statutory duty to designate and authorize “independent repair or service facilities reasonably close to all areas where [Ford’s] consumer goods are sold to carry out the terms of the warranties.” (Civil Code § 1792.2(a)(1)(A).) This does not mean the dealers are Ford’s “agents” in connection with the sale of vehicles to consumers that the dealer bought from Ford. While service and repair attempts by an authorized dealer are counted towards the accumulation of a reasonable number of repair attempts “by the manufacturer or its representative” (i.e., a repairing dealer) (id. §1793.2(d)(2)), that relationship does not make the selling dealer to be Ford’s agent for all purposes. Indeed, most dealer franchise agreements specifically state that the relationship is not that of principal and agent. “Generally, retailers are not considered the agents of the manufacturers whose products they sell.” (Murphy v. DirecTV, Inc. (9th Cir. 2013) 724 F.3d 1218, 1232 [applying California law], citing Rest.3d Agency (2006) § 1.01, com. g; Alvarez v. Felker Mfg. Co. (1964) 230 Cal.App.2d 987, 1000.)

Accordingly, the Court does not find that Ford has established an agency relationship sufficient to enable it to enforce the dealer’s arbitration clause against Plaintiff.