Judge Stephen Morgan, Case 23AVCV00021 2023-04-25 Tentative Ruling

Judge: Stephen Morgan, Case: 23AVCV00021, Date: 2023-04-25 Tentative Ruling

Case Number: 23AVCV00021 Hearing Date: April 25, 2023 Dept: A14

Background

This is a Lemon Law action. Plaintiff Feleni Seloti (“Plaintiff”) alleges that on November 07, 2020, Plaintiff purchased a 2020 Nissan Frontier, VIN No: 1N6ED0EA2LN706743 (the “Subject Vehicle”), for which Defendant Nissan North America, Inc. (“Defendant”) issued various warranties, including a written warranty and a 3-year/36,000 mile express bumper to bumper warranty, a 5-year/60,000 mile powertrain warranty. Plaintiff further alleges that the Subject Vehicle was delivered to her with serious defects and non-conformities to the warranty and developed other serious defects and nonconformities to the warranties, including but not limited to, electrical and engine defects.

On January 06, 2023, Plaintiff filed her Complaint alleging three causes of action for: (1) Violation of Song-Beverly Act – Breach of Express Warranty, (2) Violation of Song-Beverly Act – Breach of Implied Warranty; and (3) Violation of Song-Beverly Act Section 1793.2.

On February 14, 2023, Defendant filed its Answer.

On March 09, 2023, Defendant filed its Motion to Compel Arbitration.

On April 13, 2023, Plaintiff filed her Opposition. “All papers opposing a motion so noticed shall be filed with the court and a copy served on each party at least nine court days. . .before the hearing.” (Cal. Code Civ. Proc. § 1005(b).) “Section 1013, which extends the time within which a right may be exercised or an act may be done, does not apply to a notice of motion, papers opposing a motion, or reply papers governed by this section.” (Ibid.) The hearing is set for April 25, 2023. Accordingly, an Opposition was due by April 12, 2023. Plaintiff’s Opposition is untimely. “No paper may be rejected for filing on the ground that it was untimely submitted for filing. If the court, in its discretion, refuses to consider a late filed paper, the minutes or order must so indicate.” (Cal. Rules of Court, Rule 3.1300(d).) The Court considers Plaintiff’s late-filed Opposition.

On April 19, 2023, Defendant filed its Reply.

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Legal Standard

Standard Compelling Arbitration – California law incorporates many of the basic policy objectives contained in the Federal Arbitration Act, including a presumption in favor of arbitrability. (Engalla v. Permanente Medical Group, Inc. (1997) 15 Cal.4th 951, 971-72.) Cal. Code¿Civ.¿Proc.¿§ 1281.2 permits a party to file a motion to request that the Court order the parties to arbitrate a controversy. Under Cal. Code¿Civ.¿Proc.¿section 1281.2, the Court shall order the petitioner and the respondent to arbitrate the controversy if it determines that an agreement to arbitrate the controversy exists, unless it determines that:

(a) The right to compel arbitration has been waived by the petitioner; or

(b) Grounds exist for the revocation of the agreement.

(c) A party to the arbitration agreement is also a party to a pending court action or special proceeding with a third party, arising out of the same transaction or series of related transactions and there is a possibility of conflicting rulings on a common issue of law or fact. For purposes of this section, a pending court action or special proceeding includes an action or proceeding initiated by the party refusing to arbitrate after the petition to compel arbitration has been filed, but on or before the date of the hearing on the petition. This subdivision shall not be applicable to an agreement to arbitrate disputes as to the professional negligence of a health care provider made pursuant to Section 1295.

(Cal. Code¿Civ.¿Proc.¿§ 1281.2.) ¿¿

A second statute creates further impositions for arbitration for uninsured or underinsured motor vehicles: “The policy or an endorsement added thereto shall provide that the determination as to whether the insured shall be legally entitled to recover damages, and if so entitled, the amount thereof, shall be made by agreement between the insured and the insurer or, in the event of disagreement, by arbitration. The arbitration shall be conducted by a single neutral arbitrator. . .” (Cal. Ins. Code § 11580(f).)¿

Doubts as to whether an arbitration clause applies to a particular dispute are to be resolved in favor of sending the parties to arbitration.¿(Id.)¿The Court should order them to arbitrate unless it is clear that the arbitration clause cannot be interpreted to cover the dispute.¿(Id., Cal. Code Civ. Proc. §1281.2 [“. . .unless it determines that: (a) The right to compel arbitration has been waived by the petitioner; or (b) Grounds exist for the revocation of the agreement”].)¿Unless the parties clearly and unmistakably provide otherwise, the question of whether the parties agreed to arbitrate is to be decided by the court, not the arbitrator.¿(Id.)¿¿¿¿ ¿¿¿

The right to arbitration depends upon contract; a petition to compel arbitration is simply a suit in equity seeking specific performance of that contract.¿(Id.)¿There is no public policy favoring arbitration of disputes which the parties have not agreed to arbitrate.¿(Id.)¿¿¿ ¿¿¿

The party seeking to enforce the arbitration agreement bears the burden of proving the existence of a valid arbitration agreement by the preponderance of the evidence.¿(Giuliano v. Inland Empire Personnel, Inc.¿(2007) 149 Cal.App.4th 1276, 1284.)¿The trial court first decides whether an enforceable arbitration agreement exists between the parties and then¿determine whether the plaintiff’s claims are covered by the agreement.¿(Omar v. Ralphs Grocery Co.¿(2004) 118 Cal.App.4th 955, 961.)¿¿¿ ¿¿¿

The party opposing the petition to compel arbitration bears the burden of proving by a preponderance of the evidence any fact necessary to its defense.¿(Giuliano v. Inland Empire Personnel, Inc.,¿supra,¿at¿1284.)¿In these summary proceedings, the trial court sits as a trier of fact, weighing all the affidavits, declarations, and other documentary evidence, as well as oral testimony received at the court’s discretion, to reach a final determination.¿(Id.)¿

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Discussion

Evidentiary Objections – The Court does not rule on Defendant’s objections Nos. 1-4 as they pertain to evidence that are not dispositive to this motion.

Application – Defendant seeks to compel Plaintiff to arbitration to resolve this action.

Under both the Federal Arbitration Act (“FAA”) and California law, arbitration agreements are valid, irrevocable, and enforceable, except on such grounds that exist at law or equity for voiding a contract. (Winter v. Window Fashions Professions, Inc. (2008) 166 Cal.App.4th 943, 947.) The party moving to compel arbitration must establish the existence of a written arbitration agreement between the parties. (Code of Civ. Proc. § 1281.2.) In ruling on a motion to compel arbitration, the court must first determine whether the parties actually agreed to arbitrate the dispute, and general principles of California contract law help guide the court in making this determination. (Mendez v. Mid-Wilshire Health Care Center (2013) 220 Cal.App.4th 534, 541.)

Once petitioners allege that an arbitration agreement exists, the burden shifts to respondents to prove the falsity of the purported agreement, and no evidence or authentication is required to find the arbitration agreement exists. (See Condee v. Longwood Mgt. Corp. (2001) 88 Cal.App.4th 215, 219.) However, if the existence of the agreement is challenged, "petitioner bears the burden of proving [the arbitration agreement's] existence by a preponderance of the evidence." (Rosenthal v. Great Western Fin. Securities Corp. (1996) 14 Cal.4th 394, 413. See also Espejo v. Southern California Permanente Medical Group (2016) 246 Cal.App.4th 1047, 1058-1060.)

“With respect to the moving party's burden to provide evidence of the existence of an agreement to arbitrate, it is generally sufficient for that party to present a copy of the contract to the court. (See Condee, supra, 88 Cal.App.4th 215, 218; see also Cal. Rules of Court, Rule 3.1330 [“A petition to compel arbitration or to stay proceedings pursuant to Code of Civil Procedure sections 1281.2 and 1281.4 must state, in addition to other required allegations, the provisions of the written agreement and the paragraph that provides for arbitration. The provisions must be stated verbatim or a copy must be physically or electronically attached to the petition and incorporated by reference”].) Once such a document is presented to the court, the burden shifts to the party opposing the motion to compel, who may present any challenges to the enforcement of the agreement and evidence in support of those challenges. [Citation]” (Baker v. Italian Maple Holdings, LLC (2017) 13 Cal.App.5th 1152, 1160.)

Here, Defendant presents that Plaintiffs entered into a Retail Installment Sales Contract (“RISC”) which contained a broad arbitration agreement, including a provision to arbitrate any claim or dispute arising out of the purchase or condition of the vehicle. Plaintiff relies on Felisilda v. FCA US LLC (2020) 53 Cal.App.5th 486 (“Felisilda”), among other cases, to support its argument. Defendant contends that the arbitration agreement is governed by the FAA and it is a third-party beneficiary to the contract and argues that Felisilda allows a non-signatory such as Defendant to compel arbitration and that equitable estoppel prevents Plaintiffs from avoiding their obligations to arbitrate where, as here, their claims are intimately founded in, and intertwined with, their sales contract and the purchase and the condition of their vehicle.

Plaintiff presents that Defendant has no right to invoke arbitration in this matter as it is neither a non-signatory nor an intended third-party beneficiary to the RISC. Plaintiff cites to a recent California Appellate Court decision, Martha Ochoa v. Ford Motor Company (Case No. B312261) (“Ford Motor Warranty Cases”) which holds that (1) the sales contract was not the source of the manufacturer’s warranties and that the arbitration provision does not show any consent by the purchasers to arbitrate with unidentified third parties, such as vehicle manufacturers, and (2) manufacturers are not third-party beneficiaries. Plaintiff emphasizes that the Ford Cases specifically relied upon Ngo v. BMW of North America (9th Cir. 2022) 23 F.4th 943 which involved the same arbitration provision upon similar circumstances and is applicable to this case as the FAA governs the arbitration agreement. Plaintiff attempts to distinguish Felisilda from this instant action. Specifically, Plaintiff argues:

· equitable estoppel applies only where a plaintiff seeks to enforce the obligations of a contract containing an arbitration clause but attempts to avoid the arbitration clause and such circumstances do not exist here;

· arbitration-specific equitable estoppel standard developed in the Courts of Appeal - and never endorsed by the California Supreme Court. But the United States Supreme Court has since - repeatedly - explained that defenses to arbitration should be governed by “‘traditional principles”’ of state contract law;

· Plaintiff’s claims are not founded in the RISC as (1) they pertain to statutory obligations under the Song-Beverly Act and the RISC does not impose upon Defendant any obligation to comply with its warranty; (2) Defendant is a non-signatory;

· Felisilda does not apply to cases such as this where a plaintiff sues only a car’s manufacturer and that manufacturer seeks to compel arbitration based on a car dealership’s arbitration clause; and

· Defendant bears the burden of demonstrating that the RISC was made expressly for the non-signatory’s benefit and Defendant cannot satisfy the requirements under Goonewardene v. ADP, LLC (2019) 6 Cal.5th 817, the RISC restricts the parties who may compel arbitration to Plaintiff and Antelope Valley Nissan, and Defendant does not benefit from the RISC.

Defendant has included the RISC in its moving papers as Exh. B. The RISC lays out the following:

· Buyer: Feleni Seloti;

· Seller-Creditor: Antelope Valley Nissan;

· Notice was given to Plaintiff: YOU AGREE TO THE TERMS OF THIS CONTRACT. YOU CONFIRM THAT BEFORE YOU SIGNED THIS CONTRACT, WE GAVE IT TO YOU, AND YOU WERE FREE TO TAKE IT AND REVIEW IT. YOU ACKNOWLEDGE THAT YOU HAVE READ ALL PAGES OF THIS CONTRACT, INCLUDING THE ARBITRATION PROVISION ABOVE, BEFORE SIGNING BELOW. YOU CONFIRM THAT YOU RECEIVED A COMPLETELY FILLED-IN COPY WHEN YOU SIGNED IT (Exh. B at p. 5); and

· An arbitration agreement exists and reads, in pertinent part: ARBITRATION PROVISION [¶] PLEASE REVIEW – IMPORTANT – AFFECTS YOUR LEGAL RIGHTS

1. EITHER YOU OR WE MAY CHOOSE TO HAVE ANY DISPUTE BETWEEN US DECIDED BY ARBITRATION AND NOT IN COURT OR BY JURY TRIAL.

2. IF A DISPUTE IS ARBITRATED, YOU WILL GIVE UP YOUR RIGHT TO PARTICIPATE AS A CLASS REPRESENTATIVE OR CLASS MEMBER ON ANY CLASS CLAIM YOU MAY HAVE AGAINST US INCLUDING ANY RIGHT TO CLASS ARBITRATION OR ANY CONSOLIDATION OF INDIVIDUAL ARBITRATIONS.

3. DISCOVERY AND RIGHTS TO APPEAR IN ARBITRATION ARE GENERALLY MORE LIMITED THAN IN A LAWSUIT, AND OTHER RIGHTS THAT YOU AND WE WOULD HAVE IN COURT MAY NOT BE AVAILABLE IN ARBITRATION.

Any claim or dispute, whether in contract, tort, statute or otherwise (including the interpretation and scope of this Arbitration Provision, and the arbitrability of the claim or dispute), between you and us or our employees, agents, successors or assigns, which arises out of or relates to your 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, at your or our election, be resolved by neutral, binding arbitration and not by a court action. . . Any arbitration under this Arbitration Provision shall be governed by the Federal Arbitration Act (9 U.S.C. § 1 et seq.) and not any state law concerning arbitration. . . (Ibid.)

The Court finds, and neither party disputes, that the arbitration agreement contained in the RISC is governed by the FAA.

The question before the Court, presented by the parties, is not whether there is an enforceable arbitration agreement, but whether the enforceable arbitration agreement within the RISC applies to Defendant as a nonsignatory.

The RISC itself does not include Defendant as a party to the contract.

Although A.A. Baxter Corp. states: “A warranty is as much one of the elements of sale and as much a part of the contract of sale as any other portion of the contract and is not a mere collateral undertaking. (Calpetro Producers Syndicate v. C.M. Woods Co., 206 Cal. 246, 251 [274 P. 65]; Rutherford v. Standard Engineering Corp., 88 Cal.App.2d 554, 565 [199 P.2d 354].)” (A.A. Baxter, supra, 10 Cal.App.3d 144, 153), its facts are different from those in this instant action. In A.A. Baxter Corp., the issue before the appellate court was one of whether the theory of warranty as to the time of delivery gave rise to a theory of negligent misrepresentation.

There is a line of cases specifically relating to manufacturers:

As an initial matter, under California law, warranties from a manufacturer that is not a party to a sales contract are "not part of [the] contract of sale." Corp. of Presiding Bishop of Church of Jesus Christ of Latter-Day Saints v. Cavanaugh, 217 Cal. App. 2d 492, 514, 32 Cal. Rptr. 144 (Cal. Ct. App. 1963); see also Greenman v. Yuba Power Prods., Inc., 59 Cal. 2d 57, 63-64, 27 Cal. Rptr. 697, 377 P.2d 897 (Cal. 1963). Instead, the express and implied warranties arise "independently of a contract of sale." Greenman, 59 Cal. 2d at 60-61; Cavanaugh, 217 Cal. App. 2d at 514; see also Frost v. LG Elecs. MobileComm U.S.A., Inc. No. D062920, 2013 Cal. App. Unpub. LEXIS 6955, 2013 WL 5409906, at *6 (Cal. Ct. App. Sept. 27, 2013) (a manufacturer's warranties are "independent of the purchase agreement").

(Ngo v. BMW of N. Am., LLC (9th Cir. 2022) 23 F.4th 942 at 949 (“Ngo”).)

The recent Ford Motor Warranty Cases[1] addresses Felisilda:

The plaintiffs in Felisilda asserted a single cause of action against FCA for violation of the Song-Beverly Consumer Warranty Act based on FCA's failure to repair or otherwise remedy defects in a used Dodge Caravan they bought from a Dodge dealer. (Felisilda, supra, 53 Cal.App.5th at p. 491.) Relying on the doctrine of equitable estoppel, the Felisilda court concluded the plaintiffs were bound to arbitrate with FCA under the plaintiffs' sale contract with the dealer for three reasons. First, the court reasoned that the condition of the vehicle was within the subject matter of the claims made arbitrable under the sale contract. (Id. at p. 496.) Second, based only on the plaintiffs' allegation that the vehicle was covered by FCA's warranties, the court found “the sales contract was the source of the warranties.” (Ibid.) Third, the court noted the plaintiffs had “expressly agreed to arbitrate claims arising out of the condition of the vehicle—even against third party nonsignatories to the sales contract.” (Id. at p. 497.) We respectfully disagree with Felisilda's analysis for the following reasons.1Link to the text of the note

That the Felisilda plaintiffs and the dealer agreed in their sale contract to arbitrate disputes between them about the condition of the vehicle does not equitably estop the plaintiffs from asserting FCA has no right to demand arbitration. Equitable estoppel would apply if the plaintiffs had sued FCA based on the terms of the sale contract yet denied FCA could enforce the arbitration clause in that contract. (Felisilda, supra, 53 Cal.App.5th at pp. 495–496.) That is not what the plaintiffs did in Felisilda.

The plaintiffs' breach of warranty claims against FCA in Felisilda were not based on their sale contracts with the dealers. We disagree with Felisilda that “the sales contract was the source of [FCA's] warranties at the heart of this case.” (Felisilda, supra, 53 Cal.App.5th at p. 496.) As we discuss further below, manufacturer vehicle warranties that accompany the sale of motor vehicles without regard to the terms of the sale contract between the purchaser and the dealer are independent of the sale contract.

We also disagree with the Felisilda court's interpretation of the sale contract as broadly calling for arbitration of claims “against third party nonsignatories.” (Felisilda, supra, 53 Cal.App.5th at p. 497.) The Felisilda court relied on the following italicized language to conclude that third parties could enforce the arbitration provision: “‘Any claim or dispute, whether in contract, tort, statute or otherwise … , between you and us or our employees, agents, successors or assigns, which arises out of or relates to … purchase or condition of this vehicle, the cont[r]act or any resulting transaction or relationship (including any such relationship with third parties who do not sign this contract) shall, at your or our election, be resolved by neutral, binding arbitration … .’” (Id. at p. 498.)

We do not read this italicized language as consent by the purchaser to arbitrate claims with third party nonsignatories. Rather, we read it as a further delineation of the subject matter of claims the purchasers and dealers agreed to arbitrate. They agreed to arbitrate disputes “between” themselves —“you and us”—arising out of or relating to “relationship[s],” including “relationship[s] with third parties who [did] not sign th[e] [sale] contract[s],” resulting from the “purchase, or condition of th[e] vehicle, [or] th[e] [sale] contract.”

Purchasers, like plaintiff Mathew Davidson-Codjoe, whose sale contract we described above, can elect to buy insurance, theft protection, extended warranties and the like from third parties, and they can finance their transactions with those third parties under the sale contracts. The “third party” language in the arbitration clause means that if a purchaser asserts a claim against the dealer (or its employees, agents, successors or assigns) that relates to one of these third party transactions, the dealer can elect to arbitrate that claim. It says nothing of binding the purchaser to arbitrate with the universe of unnamed third parties.

(Ford Motor Warranty Cases, supra, 2023 Cal.App.LEXIS 255 at 10-13.)

i. Equitable Estoppel

Here, as in Ford Motor Warranty Cases, Plaintiff’s claims stem from the statutory obligations under the warranties Defendant issued with the Subject Vehicle, not violations of the sale contracts' express terms. (See Id. at 14.) Both Ford Motor Warranty Cases and Ngo emphasize that “California law does not treat manufacturer warranties imposed outside the four corners of a retail sale contract as part of the sale contract.” (Id. at 15; Ngo, supra, 23 F.4th 942 at 949.) Ford Motor Warranty Cases emphasizes Felisilda’s interpretation of equitable estoppel: “the ‘ “ ‘ “fundamental point” ’ ” ’ of using equitable estoppel to compel arbitration is to prevent a party from taking advantage of a contract's substantive terms while avoiding those terms requiring arbitration. (Id. at 16.) Ford Motor Warranty Cases held that the plaintiffs’ claims “in no way rely on the sale contracts” and “[e]quitable estoppel does not apply.”

“Decisions of every division of the District Courts of Appeal are binding upon all the justice and municipal courts and upon all the superior courts of this state, and this is so whether or not the superior court is acting as a trial or appellate court. Courts exercising inferior jurisdiction must accept the law declared by courts of superior jurisdiction. It is not their function to attempt to overrule decisions of a higher court. [Citations.]” (Auto Equity Sales, Inc. v. Superior Court (1962) 57 Cal.2d 450, 455 (“Auto Equity”).) The California Supreme Court further states: “Of course, the rule under discussion has no application where there is more than one appellate court decision, and such appellate decisions are in conflict. In such a situation, the court exercising inferior jurisdiction can and must make a choice between the conflicting decisions.” (Id. at 456.)

Defendant would like the Court to follow to follow Felisilda. Defendant cites to the California Supreme Court’s statement in Auto Equity, arguing that Ford Motor Warranty Cases is not binding on this Court and the Court should follow Felisilda because stare decisis does not require following Ford Motor Warranty Cases, Felisilda is better reasoned, and Felisilda remains directly applicable.

However, Defendant’s own argument concedes: “[Where conflicting court of appeal decisions are on point, the trial court] can even adopt the position taken by another district, notwithstanding a conflicting decision emanating from the trial court's own district.” (Reply 2:19-23.) The citation in McCallum v. McCallum (1987) 190 Cal.3d 309, 315 at fn. 4 that Defendant cites to states clearly: “As a practical matter, a superior court ordinarily will follow an appellate opinion emanating from its own district even though it is not bound to do so. Superior courts in other appellate districts may pick and choose between conflicting lines of authority. This dilemma will endure until the Supreme Court resolves the conflict, or the Legislature clears up the uncertainty by legislation.”

Here, Ford Motor Warranty Cases was decided by the Court of Appeal of California, Second Appellate District and Felisilda was decided by the Court of Appeal of California, Third Appellate District. The Second Appellate District is this Court’s appellate district. Thus, as a practical matter, this Court follows Ford Motor Warranty Cases. Further, this action parallels Ford Motor Warranty Cases. The issues presented are nearly identical (i.e., wording of arbitration agreement, parties to arbitration agreement did not include manufacturer, and claims concerned manufacturer’s warranties) and, as such, Ford Motor Warranty Cases is directly applicable.

Accordingly, under the reasoning in Ford Motor Warranty Cases, equitable estoppel does not apply.

ii. Whether Defendant is a Third-Party Beneficiary

Goonewardene v. ADP, LLC (2019) 6 Cal.5th 817 (“Goonewardene”) lays out the requirements a party must meet to be considered a third-party beneficiary: “(1) whether the third party would in fact benefit from the contract, [] (2) whether a motivating purpose of the contracting parties was to provide a benefit to the third party, and (3) whether permitting a third party to bring its own breach of contract action against a contracting party is consistent with the objectives of the contract and the reasonable expectations of the contracting parties.” (Id. at 830.)

Under California law, “a party cannot establish third party beneficiary status unless he or she carries the burden of proving that the contracting parties' intended purpose in executing their agreement was to confer a direct benefit on the alleged third party beneficiary. [Citation.]” (Alling v. Universal Manufacturing Corp. (1992) 5 Cal.App.4th 1412, 1439.)

Defendant does not address the Goonewardene requirements. Defendant’s argument that it is a third-party beneficiary focuses only on the arbitration agreement’s statement “[a]ny claim or dispute . . . which arises out of or relates to . . . any resulting transaction or relationship (including any such relationship with third parties who do not sign this contract)…” and the Felisilda holding.

Defendant has not met its burden to show that it is a third-party beneficiary.

Further, Defendant’s presented arguments for its status as a third-party beneficiary stem from Felisilda. As the Court mentioned, ante, it intends to follow Ford Motor Warranty Cases which was decided by its appellate district.

Ford Motor Warranty Cases holds that a RISC does not benefit a manufacturer under Goonewardene as (1) nothing in the sale contracts or their arbitration provision offers any direct “benefit” to a manufacturer as the benefits are “expressly limited to those persons who might rely on it to avoid proceeding in court—the purchaser, the dealer, and the dealer's employees, agents, successors or assigns (Ford Motor Warranty Cases, supra, 2023 Cal.App.LEXIS 255 at 20-21); (2) there is no indication that a benefit to a manufacturer was the signatories “ ‘motivating purpose’ ” in contracting for the sale and purchase of a vehicle (Id. at 21 [“The manifest intent of the parties was to buy, sell and finance a car, and to allow either the purchaser or the dealer to compel arbitration of the specified categories of disputes between them, or between the purchaser and any of the dealer's ‘employees, agents, successors or assigns.’ ”]); and (3) allowing a manufacturer to enforce the arbitration provision as a third party beneficiary would be inconsistent with the “reasonable expectations of the contracting parties” (Id. at 23.) As in Ford Motor Warranty Cases, Defendant emphasizes the wording of the RISC – “EITHER YOU OR WE”—the purchaser or the dealer—“MAY CHOOSE TO HAVE ANY DISPUTE BETWEEN US DECIDED BY ARBITRATION,” – and reiterated that arbitrable disputes “shall, at your or our”—the purchaser's or the dealer's—“election, be resolved by neutral, binding arbitration … .” (See Motion 5:14-28, 6:1-15; Id. at 22.) Defendant has not met

As mentioned, ante, the issues in this action parallel Ford Motor Warranty Cases. As such, the Court finds Ford Motor Warranty Cases analysis of a sales contract applicable to this instant situation:

That FMC may have provided a financial incentive to facilitate some sales also does not affect the analysis. FMC points out that two of the plaintiffs' sale contracts show they received manufacturer rebates in connection with the purchase of their vehicles. FMC fails to explain how providing incentives to encourage consumers to buy Fords from its dealers evidences an intention by the purchaser and dealer to benefit FMC. A manufacturer profits from its sales to dealers, and dealers profit from their sales to consumers, and the more cars a dealer sells, the more cars it is likely to buy from FMC. That basic aspect of retail sales does not in and of itself imply a shared intent of the dealer and consumer to benefit FMC. A manufacturer's rebate to the consumer does not, without more, make the manufacturer a third party beneficiary of the retail sale and financing contract between the dealer and purchaser, nor does it give the manufacturer a right to enforce the arbitration clause.

(Ford Motor Warranty Cases, supra, 2023 Cal.App.LEXIS 255 at 22-23.)

Accordingly, Defendant is not a third-party beneficiary.

For the foregoing reasons, the Motion to Compel Arbitration is DENIED.

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Conclusion

Defendant Nissan North America, Inc.’s Motion to Compel Arbitration is DENIED.

[1] Plaintiff has cited to this case using its appellate court case number. Lexis Advance contains the case under the citation 2023 Cal.App.LEXIS 255.