JANET HERNANDEZ VS HYUNDAI MOTOR AMERICA (2024)

Tentative Rulings

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Case Number: *******4183 Hearing Date: October 4, 2021 Dept: 17

Superior Court of California

County of Los Angeles

DEPARTMENT 17

TENTATIVE RULING

Defendant’s motion to compel arbitration is GRANTED.

On 2/2/2021, Plaintiff Janet Hernandez (Plaintiff) filed suit against Defendant Hyundai Motor America (Defendant) alleging violations of statutory obligations.

Now, Defendant moves to compel Plaintiff to arbitrate her claim.

Legal Standard

Where the Court has determined that an agreement to arbitrate a controversy exists, the Court shall order the petitioner and the respondent to arbitrate the controversy …unless it determines that… grounds exist for rescission of the agreement.” (Code Civ. Proc., ; 1281.2.) Among the grounds which can support rescission are fraud, duress, and unconscionability. (Tiri v. Lucky Chances, Inc. (2014) 226 Cal.App.4th 231, 239.) The Court may also decline to compel arbitration wherein there is possibility of conflicting rulings on a common issue of law or fact. (Code Civ. Proc., ; 1281.2 (c).)

Discussion

The party moving to compel arbitration “bears the burden of proving [the] existence [of an arbitration agreement] by a preponderance of the evidence.” (Rosenthal v. Great Western Fin. Securities Corp. (1996) 14 Cal.4th 394, 413.) The moving party also bears the burden of demonstrating that the claims fall within the scope of the arbitration agreement. (Omar v. Ralphs Grocery Co. (2004) 118 Cal.App.4th 955, 961.)

A. Existing Agreement

Defendants presented evidence of a contract signed by Plaintiff which contains an arbitration clause and a heading “PLEASE REVIEW – IMPORTANT- AFFECTS OUR LEGAL RIGHTS.” (Tahsildoost Decl, Exh. 2.) The contract was entered into by Plaintiff and Cerritos Hyundai. Defendant argues that it was an intended third-party beneficiary under the contract, and has standing to enforce the arbitration clause under the doctrine of equitable estoppel.

In opposition, Plaintiff argues that Defendant is not a intended third beneficiary under the agreement, and the doctrine of equitable estoppel is inapplicable to the facts here. Specifically, Plaintiff contends that these theories are inapplicable because she does not assert a claim against the dealership and Defendant, and because the agreement disclaims warranty claims and recognizes a distinction between the selling dealership’s warranties and Defendant’s warranties.

As to the applicability of the intended third-party beneficiary theory, the express language of the arbitration agreement reads:

Any claim or dispute, whether in contract, tort, statute or otherwise (including the interpretation and scope of this Arbitration Provision) and the arbitrability of the claim or dispute), 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 (including any such relationship with third parties who do not sign this contract) shall, at your or our election, be resolved by neutral, binding arbitration and not by court action.

(Tahsildoost Decl, Exh. 2.)

Here, Plaintiff has brought a claim against third-party Defendant based on the purchase and condition of the subject vehicle. Thus, the express language of the arbitration agreement clearly contemplated that this type of claim would be subject to arbitration. This evinces an intent to benefit third-parties like Defendant under the agreement. (See Cione v. Foresters Equity Services, Inc. (1997) 58 Cal.App.4th 625, 636.)

However, even assuming Defendant wasn’t a third-party beneficiary to the agreement, Defendant could still compel arbitration under a theory of equitable estoppel.

Where a nonsignatory seeks to enforce an arbitration clause, the doctrine of equitable estoppel applies in two circ*mstances: (1) when a signatory must rely on the terms of the written agreement in asserting its claims against the nonsignatory or the claims are “intimately founded in and intertwined with” the underlying contract [citations], and (2) when the signatory alleges substantially interdependent and concerted misconduct by the nonsignatory and another signatory and “the allegations of interdependent misconduct [are] founded in or intimately connected with the obligations of the underlying agreement.” (Felisilda v. FCA US LLC (2020) 53 Cal.App.5th 486, 495.)

Here, Plaintiff’s Complaint not only assumes the existence of the underlying vehicle sales contract, but necessarily relies on this contract’s existence in order to assert causes of action under the Song-Beverly Consumer Warranty Act. Accordingly, Plaintiff’s claim here relies on the terms of the written contract and her claims against Defendant are intimately connected with the obligations of the underlying agreement. (Felisilda, supra, 53 Cal.App.5th at p. 495.)

The Court is unswayed by the cases cited by Plaintiff to argue that Defendant may not enforce this agreement because Plaintiff has never brought claims against the dealership Cerritos Hyundai. The cases are unreported and thus the Court declines to rely on them.

Under either a third-party beneficiary theory or an equitable estoppel theory, Defendant may enforce the arbitration agreement.

B. Covered Claims

As set forth above, Plaintiff’s claim against Defendant arises out of the purchase and condition of the subject vehicle, and thus falls within the scope of the arbitration agreement.

Given that Defendants have established by a preponderance of the evidence that an arbitration agreement exists, and that Plaintiff’s claims are covered by that agreement, the burden shifts to the Plaintiff to establish that the arbitration clause should not be enforced. (Pinnacle Museum Tower Assn. v. Pinnacle Market Development (US), LLC (2012) 55 Cal.4th 223, 236. (Pinnacle).)

II. Plaintiff’s Burden

The party opposing arbitration bears the burden of proving, by a preponderance of the evidence any defense, such as unconscionability or duress. (Pinnacle, supra, 55 Cal.4th at p. 236.)

Here, Plaintiff did not advance any basis for not enforcing the arbitration agreement other than that Defendant did not have standing to enforce the arbitration agreement.

As set forth above, the Court concluded that Defendant does not have standing to enforce the agreement as a third-party beneficiary.

Based on the foregoing, Defendant’s motion to compel arbitration is granted.

Motion to Continue Hearing

On 7/12/2021, Plaintiff sought ex parte relief to continue the motion to compel arbitration based on a contention that Plaintiff’s counsel suspected Defendant was withholding an important document. Specifically, Plaintiff’s counsel contended that he had learned of agreements by Ford and Kia which prevented dealerships from creating obligations on behalf of the manufacturers/distributors, and Plaintiff assumed that such an agreement would also exist for Defendant. Plaintiff argued that if such an agreement existed, it would preclude Defendant from moving to compel arbitration under the underlying purchase agreement here.

In the Court’s 7/12/2021 order, Plaintiff was told that “[t]o obtain the relief sought regarding the discovery issues, the moving party/plaintiff must bring a properly noticed motion with a hearing date reserved on the Court Reservation Management.” No such motion was ever filed, and no supplementary materials were filed by Plaintiff. Thus, the Court considers the issue moot.

It is so ordered.

Dated: October , 2021

Hon. Jon R. Takasugi Judge of the Superior Court

Parties who intend to submit on this tentative must send an email to the court at smcdept17@lacourt.org by 4 p.m. the day prior as directed by the instructions provided on the court website at www.lacourt.org. If a party submits on the tentative, the party’s email must include the case number and must identify the party submitting on the tentative. If all parties to a motion submit, the court will adopt this tentative as the final order. If the department does not receive an email indicating the parties are submitting on the tentative and there are no appearances at the hearing, the motion may be placed off calendar.

Due to Covid-19, the court is strongly discouraging in-person appearances. Parties, counsel, and court reporters present are subject to temperature checks and health inquiries, and will be denied entry if admission could create a public health risk. The court encourages the parties wishing to argue to appear via L.A. Court Connect. For more information, please contact the court clerk at (213) 633-0517. Your understanding during these difficult times is appreciated.

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