Judge: Teresa A. Beaudet, Case: 22STCV37856, Date: 2024-02-29 Tentative Ruling

Case Number: 22STCV37856    Hearing Date: February 29, 2024    Dept: 50

Superior Court of California

County of Los Angeles

Department 50

            Background

Plaintiff Teresita Ong (“Plaintiff”) filed this lemon law action on December 5, 2022, against Defendant Nissan North America, Inc. (“Defendant”). The Complaint alleges causes of action for (1) breach of implied warranty of merchantability, (2) breach of express warranty, and (3) violation of Song-Beverly Warranty Act section 1793.2.

Defendant now moves for an order compelling arbitration of this action and staying the

action during the pendency of arbitration. Plaintiff opposes. 

Request for Judicial Notice

The Court grants Defendant’s request for judicial notice.

Legal Standard

In a motion to compel arbitration, the moving party must prove by a preponderance of evidence the existence of the arbitration agreement and that the dispute is covered by the agreement. The burden then shifts to the resisting party to prove by a preponderance of evidence a ground for denial (e.g., fraud, unconscionability, etc.). ((Rosenthal v. Great Western Fin. Securities Corp. (1996) 14 Cal.4th 394, 413-414).)   

Generally, on a petition to compel arbitration, the court must grant the petition unless it finds either (1) no written agreement to arbitrate exists; (2) the right to compel arbitration has been waived; (3) grounds exist for revocation of the agreement; or (4) litigation is pending that may render the arbitration unnecessary or create conflicting rulings on common issues. ((Code Civ. Proc., § 1281.2); (Condee v. Longwood Management Corp. (2001) 88 Cal.App.4th 215, 218-219.)

“California has a strong public policy in favor of arbitration and any doubts regarding the arbitrability of a dispute are resolved in favor of arbitration.” ((Coast Plaza Doctors Hospital v. Blue Cross of California (2000) 83 Cal.App.4th 677, 686.) “This strong policy has resulted in the general rule that arbitration should be upheld unless it can be said with assurance that an arbitration clause is not susceptible to an interpretation covering the asserted dispute.” ((Ibid. [internal quotations omitted].) This is in accord with the liberal federal policy favoring arbitration agreements under the Federal Arbitration Act (“FAA”), which governs all agreements to arbitrate in contracts “involving interstate commerce.” (9 U.S.C. section 2, et seq.; (Higgins v. Superior Court (2006) 140 Cal.App.4th 1238, 1247.)

            Discussion

A.    Existence of Arbitration Agreement

Defendant submits the declaration of its counsel in support of the motion. Defendant’s counsel’s supporting declaration provides, inter alia, “[a]ttached as Exhibit 1 is a true and correct copy of the Retail Installment Sale Contract for the sale of the 2018 Nissan Kicks (VIN: 3N1CP5CUXJL538295) which is the subject of this action.” (Salinas Decl., ¶ 2.) This “Retail Installment Sale Contract” (“Sale Contract”) lists “Teresita C Ong” as the buyer and Ross Nissan of El Monte as the “Seller-Creditor.” (Salinas Decl., ¶ 2, Ex. 1.)  

As an initial matter, the Sale Contract attached as Exhibit 1 to Mr. Salinas’s declaration contains three pages. As Defendant notes, the second page of Exhibit 1 provides, inter alia, “Agreement to Arbitrate: By signing below, you agree that, pursuant to the Arbitration Provision on the reverse side of this contract, you or we may elect to resolve any dispute by neutral, binding arbitration and not by a court action. See the Arbitration Provision for additional information concerning the agreement to arbitrate.” (Salinas Decl., ¶ 2, Ex. 1.)  However, the subject “Arbitration Provision” is not provided with the Sale Contract attached as Exhibit 1 to Mr. Salinas’s declaration.   

Rather, Defendant relies on a purported “exemplar” contract that was not executed by the parties here to purportedly demonstrate that Plaintiff’s claims are covered by the Arbitration Provision in such exemplar contract. Specifically, Defendant’s counsel states in his declaration that “[a]ttached hereto as Exhibit 2 is a true and correct copy of what I am informed is the exemplar of a Retail Installment Sale Contract LAW Form No. 553-CA-ARB (Rev. 7/16).” (Salinas Decl., ¶ 3, Ex. 2.)

As discussed, Defendant’s motion is based on the “Arbitration Provision” contained in such “exemplar” contract. (Salinas Decl., ¶ 3, Ex. 2.) Defendant asserts that it can enforce the Arbitration Provision under the doctrine of equitable estoppel, citing Felisilda v. FCA US LLC (2020) 53 Cal.App.5th 486. Defendant argues that “[l]ike the Felisildas, Plaintiff expressly agreed that ‘[a]ny claim or dispute…between you and us…which arises out of or relates to your…purchase or condition of this vehicle…shall…be resolved by neutral, binding arbitration and not by a court action.’ (Sales Contract Ex. 1 and 2 to Salinas Decl.) Plaintiff expressly agrees to arbitrate claims arising out of the purchase and condition of the Vehicle, even against nonsignatories.” (Mot. at p. 15:23-27.) But this referenced provision is contained in Defendant’s purported “exemplar” contract that is not signed by Plaintiff. (Salinas Decl., ¶ 3, Ex. 2)

The Court notes that “[t]he party seeking to compel arbitration bears the burden of proving by a preponderance of the evidence an agreement to arbitrate a dispute exists. To carry this burden of persuasion the moving party must first produce prima facie evidence of a written agreement to arbitrate the controversy.” ((Trinity v. Life Ins. Co. of North America (2022) 78 Cal.App.5th 1111, 1120 [internal quotations and citations omitted].) In light of the fact that Defendant submits the above-referenced “exemplar” contract in support of the motion, the Court does not find that Defendant has presented adequate evidence of an agreement by the parties to arbitrate the claims set forth in Plaintiff’s Complaint. Accordingly, the burden does not shift to Plaintiff to prove a ground for denial.¿¿ 

Conclusion

For the foregoing reasons, Defendant’s motion to compel arbitration is denied.

Plaintiff is ordered to provide notice of this Order.

DATED:  February 29, 2024                         

________________________________

Hon. Teresa A. Beaudet

Judge, Los Angeles Superior Court