Judge: Shirley K. Watkins, Case: 22VECV00992, Date: 2023-05-04 Tentative Ruling

If ALL parties submit on the tentative, then no appearance is necessary unless some other matter (i.e., Case Management Conference) is on calendar. It is not necessary to call the court to request oral argument. Oral argument is permitted on all tentative rulings.

Case Number: 22VECV00992    Hearing Date: May 4, 2023    Dept: T

22VECV00992 ROBERTO NUNEZ MEDINA, et al. vs DOWNEY IMPORT CARS

[TENTATIVE] ORDER:  Defendant Nissan North America, Inc.’s Renewed Motion to Compel Arbitration and Stay Proceedings is DENIED.

Introduction

            Defendant Nissan North America Inc.’s (Defendant) renewed their motion to compel arbitration and to stay Plaintiffs Roberto Nunez Medina and Belmontes Echeverria’s (collectively, Plaintiffs) action.  The motion was previously heard and denied by the Court on December 28, 2022.        

            Discussion 

            Defendant asserted that the Retail Installment Contract (RISC) entered between Plaintiffs and non-party Nissan of Van Nuys contained an arbitration agreement. Despite Defendant not being a signatory to the RISC, Defendant asserted that they could enforce the arbitration agreement against Plaintiffs through equitable estoppel doctrine and third-party beneficiary doctrine.  The Court exercises its discretion in following Ford Motor Warranty Cases/Ochoa v. Ford Motor Company [And four other cases] (Apr. 4, 2023, B312261) 89 Cal.App.5th 1324 [2023 WL 2768484] (FMWC,) especially because the instant arbitration agreement is a verbatim copy of the arbitration agreement reviewed in FMWC.  The Court finds that the FMWC opinion to be directly on point with the two issues presented in the motion – equitable estoppel and third-party beneficiary.  The Court agrees with FMWC that equitable estoppel is inapplicable because there are insufficient facts to show that Plaintiffs are taking advantage of their own misconduct.  Further, Plaintiffs’ claims for violations of the Song-Beverly Consumer Warranty Act (Act) and breaches of express and implied warranties were not founded upon or intertwined with the RISC.  Because Plaintiffs’ claims were not founded upon or intertwined with the RISC, Defendant’s equitable estoppel argument is unpersuasive.  The Court further agrees with FMWC that Defendant is not an intended third-party beneficiary to the RISC or the RISC’s arbitration agreement.  As opined by FMWC, Defendant must show that they are an intended third-party beneficiary by applying a “three-part test.”  (Goonewardene v. ADP, LLC (2019) 6 Cal.5th 817, 830 (Goonewardene.))  Defendant did not prove-up the three-part test to show that Defendant is a third-party beneficiary to the RISC. The equitable estoppel argument and third-party beneficiary argument are unpersuasive per the FMWC opinion.

            Defendant argued that there is a split of authority between Felisilda v. FCA USA LLC (2020) 53 Cal.App.5th 486 (Felisilda) and FMWC.  Because of the split of authority, Defendant argued that the Court should follow Felisilda.  Decisions of every division of the District Courts of Appeal are binding upon all the superior courts of this state.  (Auto Equity Sales, Inc. v. Superior Court (1962) 57 Cal.2d 450, 455; see also Cuccia v. Superior Court (2007) 153 Cal.App.4th 347, 353-354.)  Where there is more than one appellate court decision and those decisions are in conflict, the court exercising inferior jurisdiction can and must make a choice between the conflicting decisions. (Sears v. Morrison (1999) 76 Cal.App.4th 577, 587.)  A superior court ordinarily will follow an appellate opinion emanating from its own district even though it is not bound to do so, while superior courts in other appellate districts may pick and choose between conflicting lines of authority. (McCallum v. McCallum (1987) 190 Cal.App.3d 308, 315, fn. 4.)  Despite Defendant’s argument that the reasoning of the opinion in FMWC is distinguishable and the Felisilda opinion is the correct opinion, the Court again exercises its discretion to follow the reasoning in FMWC.

            Defendant disputed the FMWC Court’s reliance upon two cases – Corp. of Presiding Bishop of Church of Jesus Christ of Latter-Day Saints v. Cavanaugh (1963) 217 Cal.App.2d 492, 514 and Greenman v. Yuba Power Prod., Inc. (1963) 59 Cal.2d 57, 63.  However, the Court, again, finds the FMWC opinion to be directly on point and does not find Defendant’s attempt to distinguish Cavanaugh and Greenman to be persuasive.  The Court of Appeal expressly opined that “California law does not treat manufacturer warranties imposed outside the four corners of a retail sale contract as part of the sale contract.”  (Ford Motor Warranty Cases/Ochoa v. Ford Motor Company [And four other cases] (Apr. 4, 2023, B312261) 89 Cal.App.5th 1324 [2023 WL 2768484] *6.)  The Court follows the reasoning of FMWC. 

            Defendant argued that the issue of interpretation and scope of the arbitration provision and the arbitrability of the claim or dispute is required to be determined by the arbitrator.  However, interpretation and scope of arbitration provision or arbitrability of the instant claim or dispute was not the issue.  The issue presented was whether Defendant has standing to enforce the arbitration agreement and not if the claims alleged in the Complaint are covered under the arbitration agreement.  Per FMWC, Defendant lacked standing to enforce. 

            Based upon the above review, Plaintiffs’ argument as to the unconscionability of the arbitration agreement is moot.

The motion to compel arbitration and to stay the action is DENIED.