Judge Ronald F. Frank, Case Number: 24TRCV01647, Date: 2024-12-05 Tentative Ruling

Judge: Ronald F. Frank, Case: 24TRCV01647, Date: 2024-12-05 Tentative Ruling

Case Number: 24TRCV01647 Hearing Date: December 5, 2024 Dept: 8

Tentative Ruling

HEARING DATE: December 5, 2024¿

CASE NUMBER: 24TRCV01647

CASE NAME: Jeanne Cashaw Pierce v. Tesla Motors, Inc.

MOVING PARTY: Defendant, Tesla Motors, Inc.

RESPONDING PARTY: Plaintiff, Jeanne Cashaw Pierce (No Opposition)

TRIAL DATE: Not Set.

MOTION: (1) Motion to Compel Arbitration

Tentative Rulings: (1) GRANTED.

I. BACKGROUND

A. Factual

On May 15, 2024, Plaintiff, Jeanne Cashaw Pierce (“Plaintiff”) filed a complaint against Defendant, Tesla Motors, Inc., and DOES 1 through 10. The complaint alleges causes of action for” (1) Violation of Civil Code § 1793.2(d); (2) Violation of Civil Code § 1793.2(b); (3) Violation of Civil Code § 1793.2(a)(3); (4) Breach of Express Written Warranty – Civil Code § 1791.2 (a), Section 1794; and (5) Breach of the Implied Warranty of Merchantability – Civil Code § 1791.1, Section 1794.

The complaint is based on a December 14, 2018 purchase by Plaintiff of a 2018 Tesla Model X, manufactured and/or distributed by Defendant, with corresponding Vehicle Identification Number 5YJXCBE25JF137580. Plaintiff purchased the Vehicle from a person or entity in the business of manufacturing, distributing, or selling consumer goods at retail. (Complaint, ¶ 8.) Plaintiff states she received an express written warranty in which Defendant, Tesla, undertook to preserve or maintain the utility or performance of the Vehicle or to provide compensation if there is a failure in utility or performance for a specified period of time. (Complaint, ¶ 9.) Plaintiff contends that the warranty provided, in relevant part, that in the event a defect developed with the Vehicle during the warranty period, Plaintiffs could deliver the Vehicle for repair services to a repair shop and the Vehicle would be repaired. (Complaint, ¶ 9.)

After Plaintiff took possession of the Vehicle and during the warranty period, the Vehicle is alleged to have contained or developed defects, that substantially impair the use, safety, and/or value of the vehicle. (Complaint, ¶ 10.) During the warranty period, Plaintiff alleges the Vehicle contained or developed defects, including, but not limited to: (1) defective noise vibration harshness; (2) defective body system; (3) defective engine system; (4) defective safety system; (5) defective electrical system; (6) defective axle system; (7) defective fuel system; and (7) any

additional complaints made by Plaintiffs, whether or not they are contained in the records or on any repair orders. (Complaint, ¶ 11.)

Plaintiff argues that the defects violate the express written warranties issued by Defendant, as well as the implied warranty of merchantability. (Complaint, ¶ 12.) Plaintiff alleges that she provided Defendant sufficient opportunity to service or repair the Vehicle, however, that Tesla was unable and/or failed to service or repair the Vehicle within a reasonable number of attempts. (Complaint, ¶¶ 13, 14 .)

Defendant, Tesla Motors, Inc. (“Tesla”) filed a Motion to Compel Binding Arbitration as its initial responsive pleading.

B. Procedural

On July 26, 2024, Tesla filed a Motion to Compel Binding Arbitration. To date, no opposition has been filed.

II. REQUEST FOR JUDICIAL NOTICE

In addition to filing Tesla’s Motion to Compel Arbitration, Tesla also filed a request fr this Court to take Judicial Notice of the following document:

1. Plaintiff JEANNE CASHAW PIERCE’s Complaint, filed on or about May 15, 2024 which is attached to the Declaration of Ali Ameripour as Exhibit “2.”

This Court GRANTS Tesla’s request and takes judicial notice of the above pursuant to California Evidence Code section 452.

III. ANALYSIS

A. Legal Standard

California Code of Civil Procedure, Section 1281 provides that “[a] written agreement to submit to arbitration an existing controversy or a controversy thereafter arising is valid, enforceable, and irrevocable, save upon such grounds as exist for the revocation of any contract.”¿ “California law, like federal law, favors enforcement of valid arbitration agreements.”¿ (Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 97.)¿ “On petition of a party to an arbitration agreement alleging the existence of a written agreement to arbitrate a controversy and that a party to the agreement refuses to arbitrate that controversy, the court shall order the petitioner and the respondent to arbitrate the controversy” unless grounds exist not to compel arbitration.¿ (Code Civ. Proc. § 1281.2.) The Song-Beverly Act also favors arbitration of Lemon Law disputes with a series of “carrot and stick” provisions that immunize a warrantors from a species of civil penalty if they have a certified lemon arbitration program in place. The AAA arbitration provision in Tesla’s contract is not the pre-litigation lemon arbitration program contemplated by Song-Beverly, but rather is a litigation diversion provision contemplated by the Federal Arbitration Act and by the California Arbitration Act. Tesla’s provisions do not indicate that federal law controls, so this Tentative Ruling will rest on California law.

“There is no public policy favoring arbitration of disputes which the parties have not agreed to arbitrate.” (Engineers & Architects Assn. v. Community Development Dept.¿(1994) 30 Cal.App.4th 644, 653.) Nevertheless, the strong public policy promoting private arbitration of civil disputes gives rise to a presumption in favor of arbitrability and compels the Court to construe liberally the terms of the arbitration agreement. (Vianna v. Doctors’ Management Co.¿(1994) 27 Cal.App.4th 1186, 1189).¿ ¿¿

B. Discussion

i. Existence of Arbitration Agreement

Here, Tesla attaches its written agreement, the Motor Vehicle Order Agreement (“Order Agreement”), exists that included an arbitration agreement. That Arbitration Agreement in the Order Agreement provides:

Agreement to Arbitrate. Please carefully read this provision, which applies to any dispute between you and Tesla, Inc. and its affiliates, (together “Tesla”).

If you have a concern or dispute, please send a written notice describing it and your desired resolution to resolutions@tesla.com.

If not resolved within 60 days, you agree that any dispute arising out of or relating to any aspect of the relationship between you and Tesla will not be decided by a judge or jury but instead by a single arbitrator in an arbitration administered by the American Arbitration Association (“AAA”) under its Consumer Arbitration Rules. This includes claims arising before this Agreement, such as claims related to statements about our products.

We will pay all AAA fees for any arbitration, which will be held in the city or county of your residence. To learn more about the Rules and how to begin an arbitration, you may call any AAA office or go to www.adr.org.

The arbitrator may only resolve disputes between you and Tesla, and may not consolidate claims without the consent of all parties. The arbitrator cannot hear class or representative claims or requests for relief on behalf of others purchasing or leasing Tesla vehicles. In other words, you and Tesla may bring claims against the other only in your or its individual capacity and not as a plaintiff or class member in any class or representative action. If a court or arbitrator decides that any part of this agreement to arbitrate cannot be enforced as to a particular claim for relief or remedy, then that claim or remedy (and only that claim or remedy) must be brought in court and any other claims must be arbitrated.

If you prefer, you may instead take an individual dispute to small claims court.

You may opt out of arbitration within 30 days after signing this Agreement by sending a letter to: Tesla, Inc.; P.O. Box 15430; Fremont, CA 94539-7970, stating your name, Vehicle Identification Number, and intent to opt out of the arbitration

provision. If you do not opt out, this agreement to arbitrate overrides any different arbitration agreement between us, including any arbitration agreement in a lease or finance contract.

(Declaration of Raymond Kim (“Kim Decl.”), Exhibit 1, Order Agreement, p. 3.) Further, Tesla highlights that the Order Agreement contains a 30-day opt-out provision, enabling a Tesla purchaser or lessee to send a letter to Tesla within 30 days expressing the customer’s desire to reject arbitration for matters embraced by the Order Agreement arbitration provision. The Kim declaration in support of the motion indicates Tesla maintains letters in which its customers opted out of the Agreement to Arbitrate, but that it did not receive any opt-out letter from Plaintiff. (Kim Decl., ¶ 5.)

ii. Enforcement of Arbitration Clause

In its motion to compel arbitration, Tesla asserts that Arbitration Agreements exist in their Order Agreement. Tesla has also presented evidence that Plaintiffs failed to opt out of the Order Agreement’s arbitration provision, which Tesla allows by way of a consumer sending a letter to Tesla stating that intention. (Kim Decl., ¶ 5.)

The Complaint alleges various statutory violations for alleged vehicle defects. The Court further finds that the Arbitration Agreement applies to, “any dispute between [Plaintiff] and Tesla.” (Kim Decl., Exhibit 1, Order Agreement, p. 3.) The Court finds that the claims in Plaintiff’s Complaint are covered within the scope of the arbitration agreement. As such, this Court finds that on the face of the agreement made between the parties, the Arbitration clause is enforceable.

Here, because there is no opposition filed, and the Court finds that the allegations in the Complaint fall under the Arbitration Agreement, this Court’s tentative ruling is to GRANT the Motion to Compel Arbitration.