Judge Teresa A. Beaudet, Case Number: 23STCV12975, Date: 2024-03-06 Tentative Ruling

Plaintiff Alvaro Peniche (“Plaintiff”) filed this lemon law action on June 7, 2023 against Defendant Hyundai Motor America (“Defendant”). The Complaint alleges causes of action for (1) violation of the Song-Beverly Act - breach of express warranty, (2) violation of the Song-Beverly Act - breach of implied warranty, and (3) violation of the Song-Beverly Act Section 1793.2(b).

In the Complaint, Plaintiff alleges that “[o]n October 181 [sic], 2020, Plaintiff leased a 2020 Hyundai Ioniq, having VIN No.: KMHC75LJ3LU060504…and subsequently purchased the Subject Vehicle on April 16, 2022.” (Compl., ¶ 8.) Plaintiff alleges that “[i]n connection with the purchase, Plaintiff received various warranties, inter alia, a 5-year/60,000 mile express bumper to bumper warranty, a 10-year/100,000 mile powertrain warranty which, inter alia, covers the engine and the transmission, as well as various emissions warranties that exceed the time and mileage limitations of the bumper to bumper and powertrain warranties.” (Compl., ¶ 9.) Plaintiff alleges that “[t]he Subject Vehicle was delivered to Plaintiff with serious defects and nonconformities to warranty and developed other serious defects and nonconformities to warranty including, but not limited to, engine, emission, electrical, and suspension system defects.” (Compl., ¶ 10.)

Defendant now moves for an order compelling Plaintiff to arbitrate his claims in accordance with his arbitration agreement, and for an order staying this action pending the outcome of arbitration. The motion is unopposed.

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. § 2, et seq.; Higgins v. Superior Court (2006) 140 Cal.App.4th 1238, 1247.)

In support of the motion, Defendant submits the Declaration of Vijay Rao, the “Director of Connected Ops & Owner Apps/Web” for Hyundai Motor America Corporation. (Rao Decl., ¶ 1.) Mr. Rao states that “[i]n my capacity as Director of Connected Ops & Owner Apps/Web, I administer business activities and processes relating to the Hyundai Bluelink services for Hyundai vehicles,” and that “Hyundai Bluelink services refers to a connected car system that includes various functions and features.” (Rao Decl., ¶¶ 1, 3.)

Mr. Rao states that “[t]o enroll in Bluelink services, customers must agree to the then-effective Connected Services Agreement (‘CSA’). Hyundai makes a copy of the CSA available to every customer who enrolls in the Bluelink services plan.” (Rao Decl., ¶ 4.) Mr. Rao further states that “[o]n October 18, 2020 Plaintiff enrolled their Vehicle[1] in Bluelink service through the Dealer-Assisted Enrollment process.” (Rao Decl., ¶ 5.)

Mr. Rao indicates that “[w]hen new Bluelink services enrollees like Plaintiff activates Bluelink services through the Dealer-Assisted Enrollment process, they agree to the then-effective CSA. An example screen capture that reflects the content and general layout that Plaintiffs would have seen when they activated Bluelink services through the Dealer-Assisted Enrollment process on October 18, 2020 is attached as Exhibit 1. To enroll, Plaintiff would have had to click the box to acknowledge that they ‘read and agree[d] to the Blue Link Terms & Conditions’ and then click the ‘Complete’ button. The phrase Terms & Conditions included a hyperlink to the then-effective CSA. As presented to Plaintiff, the box acknowledging the Terms & Conditions would not have been ‘prepopulated’ with a check mark. Plaintiffs would have had to click that box to acknowledge assent to the CSA. A customer cannot successfully activate Bluelink services through the Dealer-Assisted Enrollment process unless they complete the step requiring them to click the box acknowledging they agree to the Bluelink Terms and Conditions. Attached hereto as Exhibit 2 is a true and correct copy of the CSA that was in effect at that time.” (Rao Decl., ¶ 6, Exs. 1-2.) As discussed above, Mr. Rao states that “[o]n October 18, 2020 Plaintiff enrolled their Vehicle in Bluelink service through the Dealer-Assisted Enrollment process.” (Rao Decl., ¶ 5.)

Exhibit 2 to Mr. Rao’s Declaration is the “Connected Services Agreement Terms and Conditions” (herein, the “Connected Services Agreement”). (Rao Decl., ¶ 6, Ex. 2.) The Connected Services Agreement contains a provision titled “Binding Arbitration” which provides, inter alia, as follows:

“Hyundai and you agree to arbitrate any and all disputes and claims between us arising out of or relating to this Agreement, Connected Services, Connected Services Systems, Service Plans, your Vehicle, use of the sites, or products, services, or programs you purchase, enroll in or seek product/service support for, whether you are a Visitor or Customer, via the sites or through mobile application, except any disputes or claims which under governing law are not subject to arbitration, to the maximum extent permitted by applicable law. This agreement to arbitrate is intended to be broadly interpreted and to make all disputes and claims between us subject to arbitration to the fullest extent permitted by law…The agreement to arbitrate otherwise includes, but is not limited to: claims based in contract, tort, warranty, statute, fraud, misrepresentation or any other legal theory; claims that arose before this or any prior Agreement (including, but not limited to, claims relating to advertising); claims that are currently the subject of purported class action litigation in which you are not a member of a certified class; claims relating to your vehicle for which you seek product or service support via the sites; claims arising out of or relating to the Telephone Consumer Protection Act; claims relating to your data privacy or information security; and claims that may arise after the termination of this Agreement.” (Rao Decl., ¶ 6, Ex. 2, emphasis added.)

The “Connected Services Agreement” also provides that “[a]s used in this Agreement, the terms ‘you’ and ‘your’ shall be deemed to refer to, and this Agreement shall be binding upon, any person or entity who has purchased or leased a Vehicle equipped with, or uses as a driver or occupant (e.g., additional drivers, passengers) of your Vehicle, the Connected Services and/or has activated the Connected Services pursuant to Section 3A of this Agreement. Also, as used in this Agreement, the terms ‘we,’ ‘us,’ ‘our’, ‘Hyundai Motor America’, ‘Hyundai’ or ‘Connected Services’ shall be deemed to collectively refer to the following persons/entities, each of which are intended beneficiaries of this Agreement: (i) Hyundai Motor America, Genesis Motor America and their affiliates, their parent company, Hyundai Motor Company, its successors and assigns and Hyundai dealers/Genesis retailers in the United States...” (Rao Decl., ¶ 6, Ex. 2.)

In the motion, Defendant asserts that “[w]ith respect to the CSA, Plaintiff’s Claims on their face arise directly out of not only the Vehicle itself, but also the warranty, both of which are directly within the scope of the agreement to arbitrate. In fact, although Plaintiff’s claims are specifically accounted for in the arbitration provision, the language of the arbitration provision makes clear that is it is to be broadly interpreted and to make all disputes and claims between Plaintiff and Defendant subject to arbitration. Given the allegations in Plaintiff’s Complaint are all entirely centered on the Vehicle and its warranty, Plaintiff’s Claims necessarily come under the direct purview of the arbitration provision.” (Mot. at p. 16:9-16.)

As set forth above, Plaintiff does not oppose the instant motion. Thus, Plaintiff does not dispute that he agreed to the Connected Services Agreement or that it covers the claims alleged by Plaintiff in the Complaint. Based on the foregoing, the Court finds that Defendant has established that an arbitration agreement exists and that it covers the claims asserted by Plaintiff in this action. In addition, as Plaintiff does not oppose the instant motion, he has not raised any grounds for denial.

For the foregoing reasons, Defendant’s motion to compel arbitration is granted. The entire action is stayed pending completion of arbitration of Plaintiff’s arbitrable claims.

The Court sets an arbitration completion status conference on March 6, 2025, at 10:00 a.m. in Dept. 50. The parties are ordered to file a joint report regarding the status of the arbitration five court days prior to the status conference, with a courtesy copy delivered directly to Department 50.

[1]Mr. Rao states that “I understand this action involves a 2020 Hyundai loniq, with VIN No. KMHC75LJ3LU060504 (‘Vehicle’), originally leased by Alvaro Peniche (‘Plaintiff’), on October 18, 2020.” (Rao Decl., ¶ 2.)

ALVARO PENICHE, Plaintiff, vs. HYUNDAI MOTOR AMERICA, et al., Defendants.	Case No.:	23STCV12975
	Hearing Date:	March 6, 2024
	Hearing Time:	10:00 a.m.
	[TENTATIVE] ORDER RE: DEFENDANT’S MOTION TO COMPEL BINDING ARBITRATION

Superior Court of California

County of Los Angeles

Department 50