Judge: Upinder S. Kalra, Case: 23STCV07883, Date: 2023-12-06 Tentative Ruling

Case Number: 23STCV07883    Hearing Date: December 6, 2023    Dept: 51

Tentative Ruling

Judge Upinder S. Kalra, Department 51

HEARING DATE:   December 6, 2023                                          

CASE NAME:           Stepan Hovhannisyan v. Mercedes-Bens USA, LLC, et al.

CASE NO.:                23STCV07883

MOTION TO COMPEL ARBITRATION

MOVING PARTY:  Defendants Mercedes-Benz USA, LLC and Sonic Santa Monica M, Inc. dba W.I. Simonson / Plaintiff Stepan Hovhannisyan

RESPONDING PARTY(S): Plaintiff Stepan Hovhannisyan / Defendants Mercedes-Benz USA, LLC and Sonic Santa Monica M, Inc. dba W.I. Simonson

REQUESTED RELIEF:

1.      Each party has separately moved for an order compelling arbitration;

2.      An Order appointing an Arbitrator.

TENTATIVE RULING:

1.      Motion to Compel Arbitration is GRANTED;

2.      Within 10 days of this order, Plaintiff and Defendants are to lodge with the court lists of three arbitrators who handle Song-Beverly actions in the Los Angeles area.

STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS:

On April 10, 2023, Plaintiff Stepan Hovhannisyan (Plaintiff) filed a Complaint against Defendants Mercedes-Benz USA, LLC and Sonic Santa Monica M, Inc., d/b/a W.I. Simonson (Defendants) with two causes of action for: (1) breach of implied warranty of merchantability under the Song-Beverly Warranty Act; and (2) breach of express warranty under the Song-Beverly Warranty Act.

According to the Complaint, this action concerns a new 2021 Mercedes Benz S580, VIN #W1K6G7GB7MA054228 that Plaintiff leased on September 21, 2021. Plaintiff alleges he returned the vehicle for service concerning the steering/suspension, safety systems, and other defects resulting in an excess of 100 days down during the presumption period. Plaintiff alleges Defendants failed to conform the vehicle.

On May 11, 2023, Defendant Mercedes-Benz USA, LLC filed an Answer.

On June 5, 2023, Defendant Sonic Santa Monica M, Inc. d/b/a W.I. Somonson filed an Answer.

On August 1, 2023, Defendants filed a Motion to Compel Arbitration.

On August 10, 2023, Plaintiff filed a Motion to Compel Arbitration.

On August 28, 2023, Plaintiff filed a Notice of Acceptance of Defendants’ CCP 998 Offer. Accordingly, the court vacated the pending hearings for Motions to Compel Arbitration.

On October 26, 2023, the court re-calendared the two Motions to Compel Arbitration for December 6, 2023 at 9:00 a.m.

On November 16, 2023, Plaintiff filed another Motion to Compel Arbitration that is set for hearing on January 2, 2024.

On November 21, 2023, Defendants filed a Response to Plaintiff’s Motion to Compel Arbitration (to be heard on December 6, 2023). As of November 29, 2023, Plaintiff has not filed an Opposition.

On November 29, 2023, Defendants filed a Notice of Plaintiff’s Non-Opposition to Defendants’ Motion to Compel Arbitration. Plaintiffs filed a Reply in support of their Motion to Compel Arbitration.

LEGAL STANDARD:

The Federal Arbitration Act and California Arbitration Act both require that arbitrator selection clauses be enforced according to their terms. (9 U.S.C. § 5 [“If in the agreement provision be made for a method of naming or appointing an arbitrator ... such method shall be followed.”]; Code¿Civ. Proc., (CCP) §¿1281.6 [“If an arbitration agreement provides a method for appointing an arbitrator, that method shall be followed.”].) Section 1281.6 further provides that if the arbitration agreement does not provide a method or if the agreed method fails or cannot be followed, the court, on petition of a party to the arbitration agreement, shall appoint the arbitrator.

ANALYSIS:

Upon reviewing the two pending motions to compel arbitration and Defendants’ Response to Plaintiff’s Motion to Compel Arbitration, the only dispute at issue is who should be the arbitrator. Defendants wish to proceed with AAA. Plaintiffs wish to proceed with any organization other than AAA due to Plaintiff’s counsel’s “less positive experiences” with AAA administration, the AAA rules are less favorable to consumers, AAA has a reputation for hostility to consumers, and AAA emphasizes speed and frugality over procedural fairness.[1]

Contrary to both parties’ assertions, the agreement does provide for a method to select the arbitrator. First, the agreement provides that “[w]however first demands arbitration may choose to proceed under the applicable rules of, and be administered by, the American Arbitration Association (www.adr.org) or any other organization that you may choose subject to our approval.” (Declaration of Guadalupe Arroyo (Arroyo Decl.), Exhibit 1.) According to the filings, Defendants moved to compel arbitration first since they filed their papers on August 1, 2023 and Plaintiff filed his motion to compel arbitration on August 10, 2023. However, upon reviewing the Defendants’ moving papers, Defendants did not “choose to proceed” with the AAA. On the other hand, Plaintiff’s motion indicates they would be willing to proceed with JAMS. But, it is clear from the filings that Defendants did not agree to proceed with JAMS.

As the parties have been unable to agree on a method to select the arbitrator, the court must appoint an arbitrator. (CCP § 1281.6.) Within 10 days of this order, both Plaintiff and Defendants are to lodge with the court lists of at least four arbitrators who handle Song-Beverly actions arbitration in the Los Angeles area. The court will nominate five arbitrators from the parties list. Thereafter, if the parties cannot agree on an arbitrator, whether or not on the list provided by the court, within five days of notice of the Court’s proposed arbitrators, the court will select an arbitrator from the nominees.

CONCLUSION:

            For the foregoing reasons, the Court decides the pending motion as follows:

1.      Motion to Compel Arbitration is GRANTED;

2.      Within 10 days of this order, Plaintiff and Defendants are to lodge with the court lists of arbitrators who handle Song-Beverly actions in the Los Angeles area.

Defendants to give notice.

IT IS SO ORDERED.

Dated:             December 6, 2023                   __________________________________                                                                                                                Upinder S. Kalra

                                                                                    Judge of the Superior Court