Judge: Stephen I. Goorvitch, Case: 21STCV04620, Date: 2023-02-09 Tentative Ruling

Case Number: 21STCV04620    Hearing Date: February 9, 2023    Dept: 39

Pedro Herrera, et al. v. Nissan North America, Inc.

Case No. 21STCV04620

Motion to Compel Arbitration

            Plaintiffs Pedro Herrera and Jennifer Reyes Gonzalez (collectively, “Plaintiffs”) filed this action under the Song-Beverly Consumer Warranty Act against Nissan North America, Inc. (“Defendant”).  Defendant now moves to compel arbitration. 

            The moving party on a motion to compel arbitration “bears the burden of proving the existence of a valid arbitration agreement by a preponderance of the evidence, while a party opposing the petition bears the burden of proving by a preponderance of the evidence any fact necessary to its defense.  The trial court sits as the trier of fact, weighing all the affidavits, declarations, and other documentary evidence, and any oral testimony the court may receive at its discretion, to reach a final determination.”  (Ruiz v. Moss Bros. Auto Group, Inc. (2014) 232 Cal.App.4th 836, 842, internal citations omitted.)

            Plaintiff argues that there is insufficient evidence to authenticate the arbitration agreement.  First, the moving party bears the burden of producing prima facie evidence of a written agreement to arbitrate the controversy.  (See Gamboa v. Northeast Community Clinic (2021) 72 Cal.App.5th 158, 165.)  For this step, “it is not necessary to follow the normal procedures of document authentication.”  (Id., quoting Condee v. Longwood Management Corp. (2001) 88 Cal.App.4th 215, 219.)  “If the moving party meets its initial prima facie burden and the opposing party does not dispute the existence of the arbitration agreement, then nothing more is required for the moving party to meet its initial burden of persuasion.”  (Ibid.)  Then, “the opposing party bears the burden of producing evidence to challenge the authenticity of the agreement.”  (Id., citation omitted.)  In this case, Defendant proffers the arbitration agreement, and Plaintiff does not introduce any evidence challenging its authenticity.  For example, Plaintiff does not provide admissible evidence suggesting that the arbitration agreement is not authentic, or that he “never saw or does not remember seeing the agreement,” or that he “never signed or does not remember signing the agreement.”  (Id., citations omitted.)  Therefore, the Court shall consider the arbitration agreement, even though it is not accompanied by a declaration from a document custodian of Defendant or Defendant’s dealership.

            Plaintiff argues that this dispute is not encompassed by the arbitration agreement.  Plaintiff is incorrect.  The agreement provides that Plaintiffs will arbitrate “[a]ny claim or dispute, whether in contract, tort, statute or otherwise . . .  between [Plaintiff] and [Dealership] or [Dealership]’s employees, agents, successors or assigns, which arises out of or relates to [Plaintiff’s] credit application, purchase or condition of this vehicle, this contract or any resulting transaction or relationship (including any such relationship with third parties who do not sign this contract) shall . . . be resolved by neutral, binding arbitration and not by a court action.”  (Declaration Edgard J. Salinas, Exh. B, p. 5, ¶ 3.)

            Plaintiff argues that the arbitration agreement is not enforceable against Defendant because Defendant’s representative never signed the agreement.  Plaintiff is incorrect, per Felisilda v. FCA US LLC (2020) 53 Cal.App.5th 486.  That case held that the doctrine of equitable estoppel permits a non-signatory automobile manufacturer to enforce an identical arbitration clause.  In the alternative, the Court finds that Defendant is a third-party beneficiary of the arbitration agreement.  A non-signatory to an arbitration agreement may enforce an arbitration agreement if the non-party is a third-party beneficiary.  (Jenks v. DLA Piper Rudnick Gray Cary US LLP (2015) 243 Cal.App.4th 1, 9-10; see also Civ. Code, § 1559.)  To establish that it is a third-party beneficiary to a contract, a party must “plead a contract which was made expressly for his benefit and one in which it clearly appears that he was a beneficiary . . . .”  (Luis v. Orcutt Town Water Co. (1962) 204 Cal.App.2d 433, 441.)  The arbitration agreement expressly covers lawsuits based on the “condition of this vehicle” and references “third parties who do not sign this contract” has having a basis to enforce the arbitration agreement.

            Plaintiff argues that Defendant has waived the right to enforce this arbitration agreement.  This arbitration agreement is governed by the Federal Arbitration Act (the “FAA”).  The issue whether litigation conduct waived the right to compel arbitration must be decided by the trial court, not the arbitrator, under the FAA unless the agreement requires the arbitrator to determine this issue.  (Hong v. CJ GVC America Holdings, Inc. (2013) 222 Cal.App.4th 240, 258.)  The arbitration agreement does not delegate this issue to the arbitrator, so the Court will resolve the issue. 

Under the FAA, waiver of the right to compel arbitration is not viewed as a question of substantive contract law.  Thus, federal law, and not state law, governs the inquiry whether a party has waived its right to compel arbitration.  (See, e.g., Aviation Data, Inc. v. American Express Travel Related Services Company, Inc. (2010) 152 Cal.App.4th 1522, 1535.)  Under federal law, the party arguing waiver of arbitration bears a heavy burden.  (Britton v. Co-op Banking Group, 916 F.2d 1405, 1413 (9th Cir. 1990.)  There is no concrete test to determine whether a party has engaged in acts that are inconsistent with its right to arbitrate.  (Martin v. Yasuda, 839 F.3d 1118, 1125 (9th Cir. 2016).  Instead, the question of waiver depends on the totality of the moving party’s actions.  (Ibid.)  Any question whether a party has waived the right to compel arbitration should be resolved in favor of arbitration.  (Moses H. Cone Memorial Hosp. v. Mercury Constr. Corp. (1983) 460 U.S. 1, 24.)  The Court does not find waiver based upon this record.

The Court has considered Plaintiff’s remaining arguments but finds none is persuasive.  Therefore, the Court orders as follows:

1.         Defendant’s motion to compel arbitration is granted.

2.         The Court advances and vacates all dates.

3.         The Court orders the parties to meet-and-confer and to schedule the arbitration forthwith. 

4.           The Court sets an Order to Show Cause why this case should not be dismissed following arbitration for September 25, 2023, at 8:30 a.m.  The Court provides notice that if Plaintiff’s counsel does not appear, absent good cause, the Court will assume this case has been resolved by way of arbitration or settlement and shall dismiss the case with prejudice.

5.         Defendant’s counsel shall provide notice and file proof of such with the Court.