Judge: Stephen I. Goorvitch, Case: 21STCV38002, Date: 2023-02-22 Tentative Ruling

Case Number: 21STCV38002    Hearing Date: February 22, 2023    Dept: 39

Jacqueline Schaeffer, et al. v. Nissan North America, Inc.

Case No. 21STCV38002

Petition to Compel Arbitration

            Plaintiffs Jacqueline Schaeffer and Maya Schaeffer (collectively, “Plaintiffs”) filed this action against Nissan North America, Inc. (“Defendant”) under the Song-Beverly Consumer Warranty Act.  Defendant moved to compel arbitration, and the Court granted the motion on August 24, 2022.  The Court incorporates that order by reference.  Now, Plaintiff petitions for an order to compel Defendant to arbitrate this action before “any other arbitration forum other than AAA or a specific arbitrator and to promptly pay all arbitration fees as they become due.” 

Once the Court orders an arbitration and stays the case, “the action at law sits in the twilight zone of abatement with the trial court retaining merely a vestigial jurisdiction over matters submitted to arbitration.”  (Brock v. Kaiser Foundation Hospitals (1992) 10 Cal.App.4th 1790, 1796.)  However, the Court retains jurisdiction to appoint an arbitrator, per Code of Civil Procedure section 1281.2.  Per section 1281.6, “[i]f the arbitration agreement provides a method of appointment, that method should be followed.” 

            Contrary to Defendant’s counsel’s argument, the arbitration agreement does not state definitively that the parties will use the American Arbitration Association.  Instead, the provision states: “You may choose the American Arbitration Association . . . or any other organization to conduct the arbitration subject to our approval.”  This provision states that Plaintiff may “choose” the arbitration service provider, including services other than AAA, and that Defendant would consider alternatives to AAA.  The Court must apply the “accurate and natural construction of” the arbitration agreement.  (Shine v. Williams-Sonoma, Inc. (2018) 23 Cal.App.5th 1070, 1081.)  Moreover, in every contract, there is an implied covenant of good faith and fair dealing, which means that Defendant must consider Plaintiff’s requests in good faith.  Therefore, Defendant cannot take the position that Plaintiff is required to use AAA, and that no other arbitration provider is suitable.  Based upon the language of this provision and the implied covenant of good faith and fair dealing, there must be at least one viable alternative to AAA that Plaintiff may “choose.”  Otherwise, the provision should have been written to remove any choice in the matter. 

            Based upon the foregoing, the Court orders as follows:

            1.         The Court orders the parties to meet-and-confer concerning an alternative to using AAA.  If the parties stipulate to a provider, they shall proceed with that provider.  If not, the Court will select the arbitrator based upon procedure outlined in Code of Civil Procedure section 1281.6. 

            2.         The parties shall file a status report on or before March 1, 2023, informing the Court whether the issue has been resolved.  If not, the parties shall provide a summary of each party’s respective position.

            3.         The Court continues the Order to Show Cause re: Dismissal (Arbitration) from February 27, 2023, to March 8, 2023, at 8:30 a.m.  The Court shall discuss this issue with the parties at the OSC hearing if necessary, currently set for March 8, 2023, at 8:30 a.m.

            4.         Plaintiff’s counsel shall provide notice and file proof of such with the Court.