Judge Thomas D. Long, Case Number: 24STCV06386, Date: 2025-02-20 Tentative Ruling

On March 14, 2024, Plaintiff Carolina Smith filed this action against Defendants Wish Automotive Inc. and Victor Navarro, alleging (1) violation of the Unruh Civil Rights Act, (2) fraud, and (3) negligence.

When seeking to compel arbitration of a party’s claims, the movant must allege the existence of an agreement to arbitrate. (Condee v. Longwood Management Corp. (2001) 88 Cal.App.4th 215, 219.) The burden then shifts to the opponent to prove the falsity of the agreement. (Ibid.) After the Court determines that an agreement to arbitrate exists, it then considers objections to its enforceability. (Ibid.)

The Court must grant a petition to compel arbitration unless the movant has waived the right to compel arbitration or if there are grounds to revoke the arbitration agreement. (Ibid.; Code Civ. Proc., § 1281.2.) Under California law and the Federal Arbitration Act (“FAA”), an arbitration agreement may be invalid based upon grounds applicable to any contract, including unconscionability, fraud, duress, and public policy. (Sanchez v. Western Pizza Enterprises, Inc. (2009) 172 Cal.App.4th 154, 165-166.)

On December 13, 2023, Plaintiff signed a contract for the purchase of a vehicle, and the contract contained an arbitration provision. (Motion at p. 5; Wishengrad Decl. ¶ 8 & Ex. A at p. 5 [“Arbitration Agreement”].) Through the Arbitration Agreement, the parties agreed to arbitrate “[a]ny 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 your credit application, purchase or condition of this Vehicle, this contract or any resulting transaction or relationship . . . .” Plaintiff’s claims arise from her purchase of a vehicle from Defendants and Defendants’ allegedly deceptive and discriminatory practices. (E.g., Complaint ¶ 27.)

Defendants have satisfied their burden of showing the existence of an agreement to arbitrate.

Plaintiff argues that the Arbitration Agreement is unenforceable because there are grounds for rescission. (Opposition at p. 5; see Code Civ. Proc., § 1281.2, subd. (b).)

First, Plaintiff argues that the entire contract is voidable due to her lack of capacity and Defendants’ undue influence. (Opposition at p. 6.) According to Plaintiff, “Defendants presented themselves to Ms. Smith as having the authority to know that she could afford the vehicle even though she had no income. Defendants took unfair advantage of Ms. Smith’s weakness of mind.” (Ibid.)

“In essence undue influence involves the use of excessive pressure to persuade one vulnerable to such pressure, pressure applied by a dominant subject to a servient object. In combination, the elements of undue susceptibility in the servient person and excessive pressure by the dominating person make the latter’s influence undue, for it results in the apparent will of the servient person being in fact the will of the dominant person.” (Odorizzi v. Bloomfield School Dist. (1966) 246 Cal.App.2d 123, 131.) “Undue susceptibility may consist of total weakness of mind which leaves a person entirely without understanding (Civ. Code, § 38); or, a lesser weakness which destroys the capacity of a person to make a contract even though he is not totally incapacitated (Civ. Code, § 39; [citation]); or, the first element in our equation, a still lesser weakness which provides sufficient grounds to rescind a contract for undue influence (Civ. Code, § 1575; [citation]).” (Ibid.) “[O]verpersuasion is generally accompanied by certain characteristics which tend to create a pattern. The pattern usually involves several of the following elements: (1) discussion of the transaction at an unusual or inappropriate time, (2) consummation of the transaction in an unusual place, (3) insistent demand that the business be finished at once, (4) extreme emphasis on untoward consequences of delay, (5) the use of multiple persuaders by the dominant side against a single servient party, (6) absence of third-party advisers to the servient party, (7) statements that there is no time to consult financial advisers or attorneys. If a number of these elements are simultaneously present, the persuasion may be characterized as excessive.” (Id. at p. 133.)

At this stage, Plaintiff has not demonstrated undue influence that voids the contract and Arbitration Agreement. Plaintiff declares that she is developmentally disabled and did not understand the contract. (Smith Decl. ¶¶ 3, 12.) The salesperson needed to run a credit check before telling Plaintiff the price of the vehicle, and she was approved for a car loan. (Smith Decl. ¶¶ 5.) According to Plaintiff, after signing the contract, she “was about to say to take it back because [she] could not afford it, but he immediately said there is no taking it back.” (Smith Decl. ¶ 13.) This statement was made after Plaintiff’s decision to sign the contract and therefore could not have pressured her into signing. Moreover, the contract includes—directly above Plaintiff’s signature—information about there being no cooling-off period except under a specific statutory two-day contract cancellation option. (Wishengrad Decl., Ex. A at p. 5.) This is insufficient to show Plaintiff’s undue susceptibility and Defendants’ over-persuasion.

Second, Plaintiff argues that the entire contract is void due to fraud in the execution of the credit application on which the contract is based. (Opposition at p. 8.) According to Plaintiff, “[t]he credit application was an integral part of the basis for the legitimacy of the Contract,” and because “Defendants created a fraudulent credit application, the Contract is not legitimate.” (Ibid.) Plaintiff contends that the credit application contained false information about her employment, and the signature is not hers. (Smith Decl. ¶¶ 18-19.) The signature on the loan application and the declaration are nearly identical, and they are very similar to the signature on the sales contract. Regardless, the Arbitration Agreement was contained in the sales contract, not the loan application. Even if Plaintiff would not have been able to sign a sales contract without the initial loan application, she nevertheless signed an agreement to arbitrate all claims “aris[ing] out of or relat[ing] to [her] credit application, purchase or condition of this Vehicle, this contract or any resulting transaction or relationship.”

In sum, Plaintiff has not shown any basis for rescission of the Arbitration Agreement.

Defendants’ motion to compel arbitration is GRANTED. The entire action is STAYED pending the conclusion of the arbitration.

A Status Conference re: Arbitration is scheduled for February 20, 2026 at 8:30 a.m. in Department 48 at Stanley Mosk Courthouse. Five court days before, the parties are to file a joint report stating the name of their retained arbitrator and the status of arbitration.

Parties who intend to submit on this tentative must send an email to the Court at SMCDEPT48@lacourt.org indicating intention to submit. If all parties in the case submit on the tentative ruling, no appearances before the Court are required unless a companion hearing (for example, a Case Management Conference) is also on calendar.

Hon. Thomas D. Long

Judge of the Superior Court