Judge Salvatore Sirna, Case Number: 24PSCV01896, Date: 2025-01-13 Tentative Ruling

Judge: Salvatore Sirna, Case: 24PSCV01896, Date: 2025-01-13 Tentative Ruling

Case Number: 24PSCV01896 Hearing Date: January 13, 2025 Dept: G

Defendant Tesla, Inc.’s Motion to Compel Binding Arbitration

Respondent: NO OPPOSITION

TENTATIVE RULING

Defendant Tesla, Inc.’s Motion to Compel Binding Arbitration is GRANTED. The case is STAYED pending completion of binding arbitration.

BACKGROUND

This is a Song-Beverly action. In March 2023, Plaintiff Francisco Naranjo-Zendejas allegedly entered into a warranty contract with Defendant Tesla, Inc. (Tesla) by purchasing a 2023 Tesla Model Y. Subsequently, Naranjo-Zendejas alleges the vehicle presented with exterior and body component defects, drivetrain system defects, and other serious nonconformities to warranty.

On June 12, 2024, Naranjo-Zendejas filed a complaint against Tesla and Does 1-10, alleging (1) breach of express warranty pursuant to the Song-Beverly Act, (2) breach of implied warranty pursuant to the Song-Beverly Act, and (3) violation of section 1793.2, subdivision (b) of the Song-Beverly Act.

On July 18, 2024, Tesla filed the present motion. A hearing on the present motion is set for January 13, 2025, along with a case management conference.

ANALYSIS

Tesla moves to compel Naranjo-Zendejas to binding arbitration pursuant to an arbitration agreement. For the following reasons, the court GRANTS Tesla’s motion.

Legal Standard

“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.” (Code Civ. Proc., § 1281.) The court must grant a petition to compel arbitration unless it finds no written agreement to arbitrate exists, the right to compel arbitration has been waived, grounds exist for revocation of the agreement, or litigation is pending that may render the arbitration unnecessary or create conflicting rulings on common issues. (Code Civ. Proc., § 1281.2.) A petition to compel arbitration functions as a motion. (Code Civ. Proc., § 1290.2.)

In a motion or petition to compel arbitration, “the moving party bears the burden of producing ‘prima facie evidence of a written agreement to arbitrate the controversy.’” (Gamboa v. Northeast Community Clinic (2021) 72 Cal.App.5th 158, 165 (Gamboa).) Once the court finds an arbitration agreement exists, the party opposing arbitration bears the burden of establishing a defense to enforcement by preponderance of the evidence. (Rosenthal v. Great Western Fin. Securities Corp. (1996) 14 Cal.4th 394, 413.) In interpreting an arbitration agreement, courts apply the same principles used to interpret contractual provisions with the fundamental goal of giving effect to the parties’ mutual intentions and applying contractual language if clear and explicit. (Valencia v. Smyth (2010) 185 Cal.App.4th 153, 177.) Because public policy strongly favors arbitration, “any doubts regarding the arbitrability of a dispute are resolved in favor of arbitration.” (Coast Plaza Doctors Hosp. v. Blue Cross of California (2000) 83 Cal.App.4th 677, 686.)

The Federal Arbitration Act (FAA) applies to contracts that involve interstate commerce (9 U.S.C. §§ 1, 2), but since arbitration is a matter of contract, the FAA also applies if stated in the agreement. (See Victrola 89, LLC v. Jaman Properties 8 LLC (2020) 46 Cal.App.5th 337, 355.) Pursuant to the FAA, the court’s role “is limited to determining (1) whether a valid agreement to arbitrate exists and, if it does, (2) whether the agreement encompasses the dispute at issue.” (Philadelphia Indemnity Ins. Co. v. SMG Holdings, Inc. (2019) 44 Cal.App.5th 834, 840, quoting U.S. ex rel. Welch v. My Left Foot Children’s Therapy, LLC (9th Cir. 2017) 871 F.3d 791, 796.)

Discussion

In this case, Tesla argues the present action is subject to an arbitration provision that was included in an order agreement and a sale contract. According to Tesla, when Naranjo-Zendejas placed an order for the subject vehicle on January 30, 2023, Naranjo-Zendejas agreed to the terms of a Motor Vehicle Order Agreement. (Kim Decl., ¶ 3.) The third page of the order agreement included an agreement to arbitrate which stated as follows in relevant part:

“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.” (Kim Decl., Ex. 1, p. 3.)

The agreement also allows individual disputes to be heard in small claims court and gave Naranjo-Zendejas the option to opt out of the arbitration provision within thirty days of signing the order agreement. (Kim Decl., Ex. 1, p. 3.) When Naranjo-Zendejas took delivery of the subject vehicle on March 12, 2023, Naranjo-Zendejas executed a Retail Installment Sale Contract that included a similar arbitration provision. (Kim Decl., ¶ 3, Ex. 2, p. 5.) Subsequently, Tesla states Naranjo-Zendejas failed to opt out of the arbitration provision in the order agreement. (Kim Decl., ¶ 7.) Based on the provisions of the first arbitration agreement, the present action is subject to binding arbitration as Naranjo-Zendejas’s lemon law claims arise out of Naranjo-Zendejas’s relationship with Tesla. Furthermore, Naranjo-Zendejas has failed to file any timely opposition to this motion.

Accordingly, the court GRANTS Tesla’s motion.

CONCLUSION

Based on the foregoing, Tesla’s motion to compel arbitration is GRANTED. The case is STAYED pending completion of binding arbitration.