Judge Stephen Morgan, Case Number: 23AVCV00733, Date: 2023-11-14 Tentative Ruling

This is a Song-Beverly Act action. Plaintiffs Nick. N. Ashtary (“Nick”)[1] and Mariko M. Ashtary (“Mariko” and collectively “Plaintiffs”) allege that on January 20, 2023, they purchased a 2023 Jayco 24RP with VIN number W1X8F33Y8NN190471 (the “Subject Vehicle”) that came with warranties from Defendant Jayco, Inc. (“Jayco”) that the Subject Vehicle would be free from defects in materials and workmanship and, should defects exist, Jayco promised to make or provide repairs that were free of charges during the warranty period. Plaintiffs further present that, from the time of purchase, the Subject Vehicle has suffered extensive and ongoing problems with mechanical and fit and finish issues. Plaintiffs present that they brought the vehicle to Defendant All Valley RV Center, Inc. (“All Valley” and collectively with Jayco “Defendants”) for repairs and that All Valley failed to repair the vehicle.

On July 12, 2023, Plaintiffs filed their Complaint alleging four causes of action for: (1) Violation of the Song-Beverly Consumer Warranty Act Breach of Express Warranty; (2) Violation of the Song-Beverly Consumer Warranty Act Breach of Implied Warranty; (3) Violation of Business and Professions code § 17200; and (4) Negligent Repair.

On September 06, 2023, Plaintiffs filed an Ex Parte Application for an Order to Continue, granted on September 07, 2023.

On October 17, 2023, Defendants filed an additional declaration in support of their motion. It is unclear why such a declaration was not presented with the moving papers. However, the Court has reviewed the declaration and it is duplicative of the one filed on August 15, 2023. As such, the Court does not consider the October 17, 2023 declaration.

On November 01, 2023, Plaintiffs filed their Opposition. Plaintiffs’ Opposition is untimely. “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 scheduled for November 14, 2023. November 10, 2023 is a national holiday. Accordingly, an Opposition was due by October 31, 2023. “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, in its discretion, considers the late filed Opposition.

Standard for Forum Non Conveniens/Forum Selection Clauses – “Forum non conveniens is an equitable doctrine, codified in Code of Civil Procedure section 410.30, under which a trial court has discretion to stay or dismiss a transitory cause of action that it believes may be more appropriately and justly tried elsewhere. [citation] The inquiry is whether ‘in the interest of substantial justice an action should be heard in a forum outside this state.’ (Code Civ. Proc., § 410.30, subd. (a).” (Animal Film, LLC v. D.E.J. Productions, Inc. (2011) 193 Cal.App.4th 466, 471 (“Animal Film”).)

Cal. Code Civ. Proc. § 410.30 provides that “[w]hen a court upon motion of a party or its own motion finds that in the interest of substantial justice an action should be heard in a forum outside this state, the court shall stay or dismiss the action in whole or in part on any conditions that may be just.” (Cal. Code Civ. Proc. § 410.30(a).) This action may be served by a defendant on or before the last day of his time to plead or within any further time that the court may for good cause allow. (Cal. Code Civ. Proc. § 418.10(a)(2).) However, the provisions of Cal. Code Civ. Proc. § 418.10 do not apply to a motion to stay an action by a defendant who has made a general appearance. (Cal. Code Civ. Proc. § 410.30(b).) Rather, as Section 410.30 does not state a limit, a reasonableness standard is necessarily inferred. (Trident Labs, Inc. v. Merrill Lynch Commercial Finance Corp. (2011) 200 Cal. App.4th 147, 155.)

Ordinarily, a court must (1) determine whether the alternate forum is a “suitable” place for trial; if it is, the court must next (2) consider the private interests of the litigants and the interests in the public in retaining the action for trial in California. (Stangik v. Shiley (1991) 54 Cal.3d 744, 751.) Such private interests include those that make trial and enforceability of the ensuring judgment expeditious and relatively inexpensive, such as the ease of access to sources of proof; the cost of obtaining attendance of witnesses and the availability of a compulsory process for attendance of unwilling witnesses. (Id.) As to the public interest, relevant factors include avoidance of overburdening local courts with congested calendars; protecting the interests of potential jurors so they are not called upon to decide cases in which the local community has little concern; and weighing the interests of California and the alternate jurisdiction in the litigation. (Id.)

“In a contract dispute in which the parties' agreement contains a forum selection clause, a threshold issue in a forum non conveniens motion is whether the forum selection clause is mandatory or permissive. A mandatory clause ordinarily is ‘given effect without any analysis of convenience; the only question is whether enforcement of the clause would be unreasonable.’ But, if ‘the clause merely provides for submission to jurisdiction and does not expressly mandate litigation exclusively in a particular forum, then the traditional forum non conveniens analysis applies.’” (Animal Film, supra, at 471.)

The burden is typically on the party seeking to avoid enforcement of a forum selection clause to show that its enforcement would be unreasonable. (Drulias v. 1st Century Bancshares, Inc. (2018) 30 Cal.App.5th 696, 703.) However, the burden is reversed when the claims at issue are based on unwaivable rights created by California statutes; in those circumstances, the party seeking to enforce the forum selection clause bears the burden to show that litigating the claims in the contractually designated forum will not diminish in any way substantive rights afforded under California law. (Id.; see also Verdugo v. Alliantgroup L.P. (2015) 237 Cal.App.4th 141, 147-48 (“Verdugo”).)

Application – Defendants seek to stay the action in order to continue the action in Indiana due the forum selection clause within the warranty.

Defendants highlight that they will stipulate to the application of California law in the Indiana forum on Plaintiff’s claims.

Defendants argue that forum selection clauses are valid and may be given effect by the Court in the absence of a showing that such a clause would be unreasonable and that it is Plaintiffs’ burden to show that the forum selection clause is unreasonable. Defendants present that where a forum selection clause is mandatory, the normal factors for forum non conveniens do not apply and a simple reasonableness test will suffice. Defendants highlight that Jayco’s limited warranty’s forum selection clause is mandatory due to the language used, the forum selection clause is enforceable as (1) the Jayco Warranty Registration was executed at the time of the sale of the Motorhome; and (2) the Jayco Limited Warranty’s forum selection clause is mandatory; and Plaintiffs rights and claims will be preserved if this goes forward in Indiana as Defendants will stipulate to apply California substantive law to preserve Plaintiffs’ rights under the Song-Beverly Act, California’s Unfair Competition Law, and Negligent Repair claims.

Plaintiffs argue that Mariko cannot be compelled to litigate this case in Indiana as she is a nonsignatory to the contract. The Court notes no citation to case law or statute has been provided. (See Opp. 8:1-9.) Plaintiffs next argue that their rights will be violated if the forum selection clause is enforced as: (1) the Subject Vehicle is excluded under Indiana law; (2) Indiana law precludes a trial by a jury for the Subject Vehicle; (3) Defendant bears the burden of proof that enforcement of the forum selection clause will not diminish Plaintiffs’ substantive rights under California law; (3) the forum selection clause is not mandatory as the Court must determine whether enforcement would diminish Plaintiffs’ substantive rights under California law; (4) the forum selection clause is unenforceable as Nick was never given an owner’s manual for the Subject Vehicle on January 17, 2023 and Plaintiffs did not do a walkthrough of the Subject Vehicle until they picked up the Subject Vehicle on January 28, 2023. Plaintiffs highlight that Nick does not remember signing the warranty form and the warranty form was filled out by Rick Ward (“Ward”). Plaintiffs further argue that their substantive rights under California law will be diminished as: (1) Plaintiffs did not waive their Song Beverly rights, (2) California public policy is aligned with keeping Plaintiffs’ warranty claims in California courts, (3) Plaintiffs’ right to a jury trial will be violated if the forum selection clause is enforced, and (4) Plaintiffs’ Cal. Bus. & Prof. Code § 19200 claims cannot be preserved in Indiana because Defendant is licensed by the California Department of Motor Vehicles and Indiana cannot exercise personal jurisdiction.

Defendants present that Plaintiffs have failed to provide sufficient evidence to disavow the signing and acceptance of the conditions of the Jayco Limited Warranty, under which they are filing suit. Specifically, Defendants argue that Nick cannot seek relief based on the warranty while also seeking to hide from the forum selection clause. Defendants present that this argument applies to Mariko as well. Defendants also present that Nick’s declaration goes against the declaration of Ward and Ward’s declaration testifies to a full recollection of his dealing with Plaintiffs while Nick’s declaration is only speculation. Third, Defendants present that they have provided adequate evidence that Plaintiffs knew about the warranty. Defendants emphasize that the forum selection clause is mandatory and the stipulation shows that Defendants have eliminated any doubt and uncertainty as to Plaintiffs’ substantive rights under California law as California law will apply as recognized in Verdugo. Defendants, in reply to Plaintiffs’ arguments regarding a jury trial, reiterate that (1) an Indiana court will apply California law; (2) Defendants have requested a stay, not a dismissal, so that in the event that an Indiana court refuses to apply California law, this Court may lift the stay and the action can proceed in California; and (3) personal jurisdiction is exercised by Defendants’ stipulation to personal jurisdiction in Indiana.

As an initial matter, the stipulation proposed by Defendant’s counsel was mentioned in one paragraph throughout the opposing papers. It reads, in relevant part: “JAYCO generously offers to stipulate that California substantive law would apply. Counsel for the Plaintiffs has personal experience with this purported stipulation to apply California substantive law. (Declar. Dupart, ¶ 19) If the Court is so inclined to some extracurricular reading, Raymond v. Thor, 3:21-CV-00222-JD-MGG is an enlightening tale of stipulation by California Defense counsel and the filing of a FRCP rule 12(b)6 motion to dismiss by corporate counsel.” (Opp. 16:10-18.) Plaintiffs do not provide a document for the Court to look at. While the case cited by Plaintiffs is not binding on this Court, the Court takes judicial notice of the opinion and order for the Motion for Summary Judgment on this case under Cal. Evid. Code § 452(d). (See Raymond v. Thor Motor Coach Inc. (N.D.Ind. Aug. 2, 2023, No. 3:21-CV-222 JD) 2023 U.S.Dist.LEXIS 134020 (“Raymond”).) The document shows: (1) the court did address California substantive law, including Song Beverly and Magnuson-Moss and found that they did not apply as the purchase of the recreational vehicle in Raymond did not occur in California; and (2) the plaintiff’s submitted evidence in Raymond indicates that all but two of the defects submitted for repair were repaired and the two that were not repaired and there was no evidence plaintiff sought repair a second time, thus defendant was not afforded a reasonable opportunity to repair. Accordingly, Raymond is distinguished from the case at hand. As is, Raymond serves only to show that a federal court in Indiana would have applied California law should it have found the statutes were applicable to the action.

As another initial matter, the Court must address Mariko’s standing. Plaintiffs have presented that (1) Mariko is not a signatory to the contract that underlies this action; (2) the declaration of Nick states clearly that he, not Mariko, executed the documents to finalize the purchase of the Subject Vehicle (see Decl. Nick at ¶ 7-8); (3) the copies of retail documents provided by Plaintiffs support Nick’s declaration as his signature is the only one on the documents and no co-buyer is listed (see id. Exhs. 1-2); and (4) Mariko was added onto the Jayco warranty registration and delivery form request of Nick for reasons unknown (see Decl. Rene J. Dupart Exh. 1 23:15-24:12). The evidence shows that Mariko is not a party to the contract involving the Subject Vehicle. Under Song-Beverly, a plaintiff has standing when they are a “buyer” or “retail buyer” of consumer goods from a person engaged in the business of manufacturing, distributing, or selling consumer goods at retail. (See Cal. Civ. Code § 1791; see also Dagher v. Ford Motor Co. (2015) 238 Cal.App.4th 905, 917 [“Second, under section 1791, subdivision (b), was the purchaser a ‘buyer’ or ‘retail buyer,’ as an individual ‘who buys consumer goods from a person engaged in the business of manufacturing, distributing or selling consumer goods at retail[?]’ (Italics added.)”].) The only thing Mariko signed is the DMV application for Registration. (See Decl. Rene J. Dupart, Exh. 1 27:14-24.) The Court notes that the evidence shows that there was another purchase agreement (see Decl. Rene J. Dupart, Exh. 1 35:5-15); however, this purchase agreement is not the one at issue. Thus, Plaintiffs’ Opposition concedes that Mariko is not a party to the contract, Mariko did not purchase the Subject Vehicle, and, as such, it appears that Mariko did not suffer any injury. The Court, in its discretion, intends to strike Mariko from the Complaint under Cal. Code Civ. Proc. § 436. The Court inquires at the hearing.

Finally, as another initial matter, the Court address the contention that Nick did not sign the warranty document. The declaration by Nick is in direct conflict with the deposition testimony of Ward provided by Plaintiffs. Nick claims: “I was told by my attorney, Rene J Dupart, that I had signed a Jayco Warranty Registration and Consumer Delivery Form (hereinafter “Jayco Registration”). I was provided a copy of the Jayco Registration by my attorney. I do not have any recollection of signing the Jayco Registration. The signature on the Jayco Registration does not look like my signature and I did not fill out the form. (Copy of Jayco Warranty Registration and Consumer Delivery Form, attached to Declar. of Bruce McGovern, Exhibit “3”).” (Decl. Nick at ¶ 1.) However, throughout the deposition testimony provided by Plaintiffs, Ward states clearly that he watched Nick sign the Jayco Warranty Registration and Customer Delivery Form (Decl. Rene J. Dupart, Exh. 1 21:9-11). This was emphasized further in the deposition which reads, in relevant part:

Q So after you finished going over how to receive service on the warranty, is that when you go through the Jayco warranty registration form?

But I mean, is there any doubt in your mind whatsoeverthat you sat there and literally watched Mr. Ashtary sign that document?

Q If he were to make some assertion saying that's not his signature and he never signed it, what would your response be?

Due to conflicting evidence, there is a question of material fact. (See Bustamante v. Intuit, Inc. (2006) 141 Cal.App .4th 199, 208; ASP Properties Group, L.P. v. Fard, Inc. (2005) 133 Cal.App.4th 1257, 1269.) A determination on such a matter is not appropriate for this motion.

The Court looks to the language provided in the Owner’s Manual, Warranty & Service Section:

LEGAL REMEDIES: EXCLUSIVE JURISDICTION FOR DECIDING LEGAL DISPUTES RELATING TO AN ALLEGED BREACH OF WARRANTY OR ANY REPRESENTATIONS OF ANY NATURE, MUST BE FILED IN THE COURTS WITHIN THE STATE OF MANUFACTURE, WHICH IS INDIANA. THIS LIMITED WARRANTY SHALL BE INTERPRETED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF INDIANA. UNLESS PROHIBITED BY STATE LAW, ALL CLAIMS, CONTROVERSIES AND CAUSES OF ACTION ARISING OUT OF OR RELATING TO THIS LIMITED WARRANTY SHALL BE GOVERNED BY THE LAWS OF THE STATE OF INDIANA, INCLUDING ITS STATUTE OF LIMITATIONS, WITHOUT GIVING EFFECT TO ANY CONFLICT OF LAW RULE THAT WOULD RESULT IN THE APPLICATION OF THE LAWS OF A DIFFERENT JURISDICTION.

THIS WARRANTY GIVES YOU SPECIFIC LEGAL RIGHTS. YOU MAY ALSO HAVE OTHER RIGHTS, WHICH VARY FROM STATE TO STATE AND PROVINCE TO PROVINCE. ALL ACTIONS OF ANY KIND RELATING TO THE MOTORHOME SHALL BE DECIDED BY A JUDGE RATHER THAN BY A JURY

Language that has been found to indicate a permissive clause include: “Berg, supra, 61 Cal.App.4th at p. 357 [‘ “ ‘The company … has expressly¿submitted to the jurisdiction¿of the State of California and United States Federal courts sitting in the City of Los Angeles, California, for the purpose of any suit … arising out of this Offering.’ ” ’ (italics added)];¿Southwest Intelecom, Inc. v. Hotel Networks Corp. (Tex.Ct.App. 1999) 997 S.W.2d 322, 323, 325–326¿[‘ “ ‘The Parties¿stipulate to jurisdiction and venue¿in Ramsey County, Minnesota, as if this Agreement were executed in Minnesota.’ ” ’ (italics added)].)” (Animal Film, supra, 193 Cal. App.4th 466, 472.) Language that has been found to indicate a mandatory clause include: ¿Cal-State Business Products¿& Services, Inc. v. Ricoh¿(1993) 12 Cal.App.4th 1666, 1672, fn. 4 [16 Cal. Rptr. 2d 417] [‘ “ ‘[A]ny appropriate state or¿federal district court located in the Borough of Manhattan, New York City, New York¿shall have exclusive jurisdiction¿over any case of controversy arising under or in connection with this Agreement … .’ ” ’ (italics added)]; see also¿Smith, Valentino & Smith, Inc. v. Superior Court¿(1976) 17 Cal.3d 491, 494 [131 Cal. Rptr. 374, 551 P.2d 1206]¿[plaintiff agreed to bring all actions arising out of agency agreement only in Philadelphia];¿Furda v. Superior Court¿(1984) 161 Cal.App.3d 418, 422, fn. 1 [207 Cal. Rptr. 646]¿[“ ‘Any controversy or claim arising out of or relating to this Agreement …¿shall be litigated¿either in a state court for Ingham County, Michigan, or in the U.S. District Court for the Western District of Michigan.’ ” (italics added)].)¿(Id.)

The Court finds that the language in the warranty clause at hand includes language that California courts have held to be mandatory.

Here, Plaintiff is not in a class action lawsuit, Plaintiff went out and purchased the Subject Vehicle from an authorized dealer, there are no limitations on Plaintiffs’ suit, California law will be applied (see ante), Plaintiff incurs no costs for finding an attorney who is familiar with Indiana law, notice was provided (see infra), and the contract is one of adhesion, not negotiation at arm’s length. Jayco’s vehicles are manufactured in Indiana and, as such, it not so unreasonable as to shock Plaintiffs’ conscience that litigation would occur in the state of manufacture.

As the burden is on Defendant and not Plaintiffs due to unwaivable rights created by California law, the Court does not address Defendant’s argument that Plaintiffs must prove the enforcement of the clause to be unreasonable.

Defendants have provided that Plaintiffs’ rights for all actions will be preserved if the case goes forward in Indiana pursuant to a stipulation. Defendants cite to Verdugo. Indeed, Verdugo held that (1) “[a defendant] must show enforcing the forum selection clause “will not diminish in any way” [a plaintiff’s] statutory rights and (2) a defendant could have eliminated any uncertainty on which law a court designated by the forum selection clause would apply by stipulating to have that court apply California law in deciding the claims. (Verdugo, supra, 237 Cal.App.4th 141, 158.) Defendants offer to stipulate that California law will apply to all claims pursued in this action should the case be re-filed in Indiana. (Motion to Stay the Action 11:5-13:27; Decl. Bruce McGovern ¶ 7; 08/15/2023 Decl. Tina Slabach ¶ 10.) The Court notes, however, that a stipulation is not the only element to be considered. The Verdugo Court took notice of a previous case in which Nevada law included an antiwaiver provision comparable to California's that would have rendered any stipulation by the parties to apply California law unenforceable in a Nevada court. (Id. [citing Hall v. Superior Court (1983) 150 Cal.App.3d at pp. 418–419.].) The Verdugo case was distinguished from Hall as Texas law, in which the forum selection clause court resided, did not include an antiwaiver provision that would prevent the parties from preserving Verdugo's unwaivable Labor Code rights by stipulating to have a Texas court apply California law. (Id.) There has been no presentation by Defendants as to an antiwaiver provision.

The Court takes judicial notice of Indiana’s laws under Cal. Evid. Code § 452(c) [“[o]fficial acts of the legislative, executive, and judicial departments of the United States and of any state of the United States.”]. It appears that, under Ind. Code 24-5-13-5, motor homes such as the Subject Vehicle, a recreation vehicle, are not covered under the definition of “motor vehicle” in Indiana’s Motor Vehicle Protection statutes. (See Ind. Code §§ 24-5-13-0.1 - 24-5-13-24.) However, it does not appear that Indiana has an antiwaiver provision and, there has been no suggestion that an Indiana court would not honor the stipulation and apply California law. Based on the foregoing, the Court finds that Defendant has sufficiently met its burden to show that enforcement of the forum selection clause, along with its stipulation, will not diminish Plaintiff's unwaivable statutory rights under California law.

Defendants Jayco, Inc. and All Valley RV Center, Inc.’s Motion to Stay the Action is GRANTED.

[1] Plaintiffs Nick N. Ashtary and Mariko M. Ashtary share the same surname. The Court addresses each plaintiff by their first name for the purpose of clarity. No disrespect is meant.