Judge: William A. Crowfoot, Case: 22STCV03678, Date: 2022-08-31 Tentative Ruling

Case Number: 22STCV03678    Hearing Date: August 31, 2022    Dept: 27

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES - CENTRAL DISTRICT

I.         BACKGROUND

On January 28, 2022, Plaintiffs Vladimir Manucharyan and Vilen Ayvazyan initiated this action against Defendants Samvel Vardanyan and Svetlana Shirinyan for motor vehicle and general negligence.

On May 25, 2022, Plaintiffs substituted Defendant Uber Technologies, Inc. for Doe 1.

On August 5, 2022, Uber filed the instant motion to compel arbitration. Plaintiffs oppose.

II.        LEGAL STANDARD

California law incorporates many of the basic policy objectives contained in the Federal Arbitration Act, including a presumption in favor of arbitrability. (Engalla v. Permanente Medical Group, Inc. (1997) 15 Cal.4th 951, 971-972.) The petitioner bears the burden of proving the existence of a valid arbitration agreement by the preponderance of the evidence, the party opposing the petition then bears the burden of proving by a preponderance of the evidence any fact necessary to demonstrate that there should be no enforcement of the agreement, and the trial court sits as a trier of fact to reach a final determination on the issue. (Rosenthal v. Great Western Financial Securities Corp. (1996) 14 Cal.4th 394, 413.) The Court is empowered by Code of Civil Procedure section 1281.2 to compel parties to arbitrate disputes pursuant to an agreement to do so. 

Code of Civil Procedure § 1281.2 states that:

“The court shall order the petitioner and the respondent to arbitrate the controversy if it determines that an agreement to arbitrate the controversy exists, unless it determines that:

(a) The right to compel arbitration has been waived by the petitioner; or

(b) Grounds exist for the revocation of the agreement.

(c) A party to the arbitration agreement is also a party to a pending court action or special proceeding with a third party, arising out of the same transaction or series of related transactions and there is a possibility of conflicting rulings on a common issue of law or fact. For purposes of this section, a pending court action or special proceeding includes an action or proceeding initiated by the party refusing to arbitrate after the petition to compel arbitration has been filed, but on or before the date of the hearing on the petition. This subdivision shall not be applicable to an agreement to arbitrate disputes as to the professional negligence of a health care provider made pursuant to Section 1295.”

(Code Civ. Proc., § 1281.2.)

The party petitioning to compel arbitration under written arbitration agreement bears the burden of proving the existence of a valid arbitration agreement by a preponderance of the evidence, and party opposing petition must meet the same evidentiary burden to prove any facts necessary to its defense. The trial court acts as the trier of fact, weighing all the affidavits, declarations, and other documentary evidence. (Code Civ. Proc., § 1281.2; Provencio v. WMA Securities, Inc., 125 Cal.App.4th 1028, 1031.)  

III.      EVIDENTIARY OBJECTIONS

          Plaintiff objects to portions of the Declaration of Ryan Buoscio. The objections are OVERRULED in their entirety.

IV.     DISCUSSION

A.   Existence of an Agreement

Under the California law, arbitration agreements are valid, irrevocable, and enforceable, except on such grounds that exist at law or equity for voiding a contract. (Winter v. Window Fashions Professions, Inc. (2008) 166 Cal.App.4th 943, 947.) The party moving to compel arbitration must establish the existence of a written arbitration agreement between the parties. (Code of Civ. Proc. § 1281.2.) In ruling on a motion to compel arbitration, the court must first determine whether the parties actually agreed to arbitrate the dispute, and general principles of California contract law help guide the court in making this determination. (Mendez v. Mid-Wilshire Health Care Center (2013) 220 Cal.App.4th 534, 541.)

Once petitioners allege that an arbitration agreement exists, the burden shifts to respondents to prove the falsity of the purported agreement, and no evidence or authentication is required to find the arbitration agreement exists. (See Condee v. Longwood Mgt. Corp. (2001) 88 Cal.App.4th 215, 219.) However, if the existence of the agreement is challenged, “petitioner bears the burden of proving [the arbitration agreement's] existence by a preponderance of the evidence.” (Rosenthal v. Great Western Fin. Securities Corp. (1996) 14 Cal.4th 394, 413. See also Espejo v. Southern California Permanente Medical Group (2016) 246 Cal.App.4th 1047, 1058-1060.) 

“With respect to the moving party's burden to provide evidence of the existence of an agreement to arbitrate, it is generally sufficient for that party to present a copy of the contract to the court. (See Condee, supra, 88 Cal.App.4th at 218; see also Cal. Rules of Court, rule 3.1330 [“A petition to compel arbitration or to stay proceedings pursuant to Code of Civil Procedure sections 1281.2 and 1281.4 must state, in addition to other required allegations, the provisions of the written agreement and the paragraph that provides for arbitration. The provisions must be stated verbatim or a copy must be physically or electronically attached to the petition and incorporated by reference”].) Once such a document is presented to the court, the burden shifts to the party opposing the motion to compel, who may present any challenges to the enforcement of the agreement and evidence in support of those challenges. [Citation]” (Baker v. Italian Maple Holdings, LLC (2017) 13 Cal.App.5th 1152, 1160.)

Here, Uber has met its initial burden of showing that an arbitration agreement exists between the parties. On December 24, 2021, and December 30, 2021 Plaintiffs were presented with an in-app pop-up, indicating that Uber has updated its Terms of Use, and Plaintiffs consented to the updated December 2021 terms by clicking the checkbox. (Buoscio Decl. ¶¶ 7-9, Exhs. A, C.) As found in the Uber’s December 2021 Terms, the arbitration agreement states in pertinent part:

"(a) Agreement to Binding Arbitration Between You and Uber.

(1)  Covered Disputes: Except as expressly provided below in Section 2(b) [relating to small claims, sexual assault/harassment claims and intellectual property claims, none of which is applicable here, you and Uber agree that any dispute, claim or controversy in any way arising out of or relating to (i) these Terms and prior versions of these Terms, or the existence, breach, termination, enforcement, interpretation, scope, waiver, or validity thereof, (ii) your access to or use of the Services at any time, (iii) incidents or accidents resulting in personal injury that you allege occurred in connection with your use of the Services, whether the dispute, claim or controversy occurred or accrued before or after the date you agreed to the Terms, or (iv) your relationship with Uber, will be settled by binding arbitration between you and Uber, and not in a court of law. This Agreement survives after your relationship with Uber ends."

(Buoscio Decl., ¶ 11, Exh. E, ¶ 2.) Consequently, this arbitration agreement would also encompass Plaintiffs’ injuries resulting from the January 31, 2020 incident.

          In opposition, Plaintiffs argue that Plaintiff Manucharyan did not have an agreement with Uber at the time of the incident. However, the arbitration clause above makes clear that the subsequent arbitration agreement between Manucharyan and Uber applies retroactively, and thus encompasses the subject incident. Plaintiffs also attack Mr. Buoscio declaration and exhibits. The Court does not find this persuasive. As Mr. Buoscio declares, he is the Senior Program Manager, Safety & Core Services + CLO Tech Operations and he has access to the records Uber maintains “regarding when and how Riders register and the Terms of Use.” (Buoscio Decl. ¶¶ 2, 7.) Additionally, Mr. Buoscio has provided a “copy of Plaintiff s rider account sign-up date and consent record, confirming Plaintiff clicked the checkbox and tapped ‘Confirm.’” (Buoscio Decl. ¶¶ 8, 10, Exhs. B, D.) The declaration and attachments appear sufficient.

          Plaintiffs also argue that the terms were not clear and conspicuous so as to bind Plaintiffs. Plaintiffs cite to non-binding federal and out of state authority for this proposition. Upon review of the agreement attached to Mr. Buoscio’s declaration, the text is larger, in bold, and on the second page of the agreement. Plaintiffs’ argument is unavailing.

     Based on the foregoing, the Court finds that Uber has proven the existence of the arbitration agreement to which Plaintiffs assented to.

B.   Controlling Law

Uber argues that the arbitration agreement is governed by the Federal Arbitration Act (“FAA”).

The general rule is that the FAA governs all agreements to arbitrate in contracts “involving interstate commerce.”  (Higgins v. Superior Court (2006) 140 Cal.App.4th 1238, 1247.) The term “involving” commerce is broad and is the functional equivalent of “affecting” commerce.  (Allied-Bruce Terminix Cos. v. Dobson (1995) 513 U.S. 265, 273–274.) The application of the FAA means that state laws that attempt to undercut the enforceability of arbitration agreements and that interfere with the enforcement of arbitration agreements according to their terms are preempted.  (Tompkins v. 23andMe, Inc. (9th Cir. 2016) 840 F.3d 1016, 1022.) The FAA contains a savings clause that “permits agreements to arbitrate to be invalidated by generally applicable contract defenses, such as fraud, duress, or unconscionability, but not by defenses that apply only to arbitration or that derive their meaning from the fact that an agreement to arbitrate is at issue.” (Ibid. [internal quotations omitted].)

Here, the arbitration agreement expressly states that the FAA shall “govern its interpretation and enforcement and proceedings pursuant thereto.” (Buoscio Decl., Exh. E, ¶ 2(c).) Uber further argues the dispute relates to internet commerce. (Motion at pg. 11; United States v. Sutclffi (9th Cir. 2007) 505 F.3d 944,953 [“the Internet is an instrumentality and channel of interstate commerce” (citations and quotations omitted)].)

Accordingly, the Court finds that the FAA applies.

C.   Delegation of Arbitrability

“[C]ourts presume that the parties intend courts, not arbitrators, to decide ... disputes about ‘arbitrability,’ ... such as ‘whether the parties are bound by a given arbitration clause,’ or ‘whether an arbitration clause in a concededly binding contract applies to a particular type of controversy.’ ”  (Aanderud v. Super. Ct. (2017) 13 Cal. App. 5th 880, 891.) However, “parties can agree to arbitrate ‘gateway’ questions of ‘arbitrability,’ such as whether the parties have agreed to arbitrate or whether their agreement covers a particular controversy.” (Ibid.)

“When the parties' contract delegates the arbitrability question to an arbitrator, a court may not override the contract.” (Henry Schein, Inc. v. Archer & White Sales, Inc. (2019) 139 S. Ct. 524, 529.) “In those circumstances, a court possesses no power to decide the arbitrability issue.” (Ibid.) However, “courts should not assume that the parties agreed to arbitrate arbitrability unless there is ‘clea[r] and unmistakabl[e]”’ evidence that they did so. (First Options of Chicago, Inc. v. Kaplan (1995) 514 U.S. 938, 944.) The “clear and unmistakable” test reflects a “heightened standard of proof” that reverses the typical presumption in favor of the arbitration of disputes. (Aanderud, supra, 13 Cal. App. 5th at 892.) 

Here, in terms of whether Plaintiff’s claims against Uber are subject to arbitration, the arbitration agreement expressly states that the arbitrator, not the Court:

“shall have exclusive authority to resolve any disputes relating to the interpretation, applicability, enforceability or formation of this Arbitration Agreement, including any claim that all or any part of this Arbitration Agreement is void or voidable. The Arbitrator shall also be responsible for determining all threshold arbitrability issues, including issues relating to whether the Terms are applicable, unconscionable or illusory and any defense to arbitration, including waiver, delay, laches, or estoppel.”

(Buoscio Decl., Exh. E, ¶ 2.) Therefore, because of this delegation provision, the Court lacks the authority to rule on the scope of the arbitration agreement as it relates to Plaintiffs’ claims. “If the party's challenge is directed to the agreement as a whole--even if it applies equally to the delegation clause the delegation clause is severed out and enforced; thus, the arbitrator, not the court, will determine whether the agreement is enforceable.” (Malone v. Superior Court (2014) 226 Cal.App.4th 1551, 1559–560.) 

Accordingly, the court lacks the authority to make any determination on the issue of arbitrability, and if Plaintiffs seek to pursue these arguments, they must be decided by the arbitrator.

D.  Code of Civil Procedure § 1281.2(c)

Plaintiffs also argue that the arbitration agreement cannot be enforced because the arbitration agreement does not cover Plaintiff’s claims against Defendants Vardanyan and Shirinyan, and Plaintiffs reason that, because Uber has yet to respond to propounded discovery, it is unknown whether Uber will deny that Defendant Vardanyan was in the scope and course of his employment at the time of the subject incident. Thus, there is a risk of conflicting rulings between the arbitrator and the jury. Therefore, in the Court’s discretion, it may refuse to enforce the arbitration agreement under D.     Code of Civil Procedure § 1281.2(c). However, Plaintiffs’ reliance on Section 1281.2 is inapplicable because the FAA applies. “Under the [FAA] an arbitration agreement must be enforced notwithstanding the presence of other persons who are parties to the underlying dispute but not to the arbitration agreement.” (Moses H. Cone Memorial Hosp. v. Mercury Const. Corp. (1983) 460 U.S. 1, 20.) Because the arbitration agreement incorporates the FAA, “the court [can]not look to Section 1281.2(c) to deny the [Uber’s] motion to compel arbitration.” (See Victrola 89, LLC v. Jaman Properties 8 LLC (2020) 46 Cal.App.5th 337, 343.)

V.        CONCLUSION

            Defendant Uber Technologies, Inc.’s Motion to Compel Arbitration is GRANTED.  The action is stayed during the pendency of arbitration.

Moving party to give notice. 

            Parties who intend to submit on this tentative must send an email to the Court at SSCDEPT27@lacourt.org indicating intention to submit on the tentative as directed by the instructions provided on the court’s website at www.lacourt.org.  Please be advised that if you submit on the tentative and elect not to appear at the hearing, the opposing party may nevertheless appear at the hearing and argue the matter.  Unless you receive a submission from all other parties in the matter, you should assume that others might appear at the hearing to argue.  If the Court does not receive emails from the parties indicating submission on this tentative ruling and there are no appearances at the hearing, the Court may, at its discretion, adopt the tentative as the final order or place the motion off calendar.