Judge: Stephen I. Goorvitch, Case: 23STCV11460, Date: 2023-10-12 Tentative Ruling

Case Number: 23STCV11460    Hearing Date: October 12, 2023    Dept: 39

Paul Kim v. Airstream, Inc.

Case No. 23STCV11460

Motion to Stay

            Plaintiff Paul Kim (“Plaintiff”) filed this case under the Song-Beverly Consumer Warranty Act against Airstream, Inc. (“Defendant”).  Plaintiff purchased the Airstream in California.  However, Plaintiff signed a limited warranty with a forum selection clause that states:

“Exclusive jurisdiction for deciding legal disputes relating to alleged breach of express warranty and breach of implied warranties arising by operation of law as well as those relating to representations of any nature rests in the courts within the state of manufacture, which is Ohio.  Also, this limited warranty shall be interpreted and construed in accordance with the laws of the State of Ohio.  Any and all claims, controversies, and causes of action arising out of or relating to this limited warranty, whether sounding [in] contract, tort, or statute, shall be governed by the laws of the State of Ohio, including its statute of limitations, without giving effect to any conflict of law rules that would result in the application of the laws of a different jurisdiction.”

(Declaration of Rick March, Exh. A, p. 2.)

            The problem with this forum selection clause is that it applies Ohio law, “without giving any effect to conflict of law rules that would result in the application of the laws of a different jurisdiction.”  This is a problem because the Airstream was purchased in California, and the Song-Beverly Consumer Warranty Act cannot be waived.  (See Civ. Code, § 1790.1.)  Recognizing this problem, Defendants have stipulated that the Ohio court shall “utilize the Song-Beverly Consumer Warranty Act to adjudicate those allegations.”  (Declaration of James R. Robertson, ¶ 5.)  The Court grants the motion, conditioned on Defendant—and the Ohio court—applying the Song-Beverly Consumer Warranty Act to this dispute.  The Court finds that striking the waiver provision cures the unconscionability. 

The remainder of Plaintiff’s arguments are not persuasive.  Per California law, a forum-selection clause is presumptively valid, and is enforceable unless the opposing party meets the “heavy burden” of proving enforcement would be unreasonable under the circumstances of the case.  (Bancomer S.A. v. Superior Court (1996) 44 Cal.App.4th 1450, 1457.)  Where a contract contains a forum-selection clause that requires litigation to proceed exclusively in one particular forum, the court will enforce the clause unless it is unreasonable.  (Animal Film, LLC v. D.E.J. Productions, Inc. (2011) 193 Cal.App.4th 466, 471.)  “A clause is reasonable if it has a logical connection with at least one of the parties or their transaction.”  (Verdugo v. Alliantgroup, L.P. (2015) 237 Cal.App.4th 141, 147.)  Defendant manufactures its vehicles in Ohio.  As such, the forum-selection clause is reasonable.

            Plaintiff’s counsel suggests that his client did not freely and voluntarily agree to the forum selection clause because he did not read it.  Plaintiff’s declaration does not support that argument.  (Declaration of Paul Kim, ¶¶ 6-8.)  Clearly, he received the warranty and signed it.  (See Declaration of Rick March, Exh. A.)  The Court has considered Plaintiff’s counsel’s remaining arguments and finds none to be persuasive.

            Based upon the forgoing, the Court orders as follows:

            1.         The Court strikes the provision stating that Ohio law shall apply to this dispute, regardless of Ohio’s choice-of-law provisions.

            2.         The Court grants the motion on the condition that the Ohio court applies the Song-Beverly Consumer Warranty Act in its entirety (e.g., the law governing what is a defect, the law governing what is a reasonable number of repair attempts, etc.)    

            3.         The Court advances and vacates all dates and stays this case.

4.         This order is without prejudice to a motion to lift the stay if the Ohio court refuses to apply the Song-Beverly Consumer Warranty Act in its entirety.  (See Investors Equity Life Holding Co. v. Schmidt (2015) 233 Cal.App.4th 1363, 1376.)

5.         The Court sets an Order to Show Cause why this case should not be dismissed.  The hearing shall be on May 13, 2024, at 8:30 a.m.  The Court orders Plaintiff’s counsel to file a status report on or before May 2, 2024.  The Court provides notice: If Plaintiff’s counsel fails to file a status report and fails to appear at the hearing, either remotely or in-person, absent good cause, the Court will assume this matter has been resolved in Ohio and will dismiss this case with prejudice.

6.         The Court’s clerk shall provide notice.