On 11/02/2020 ROBERT HEDVAT filed a Contract - Other Contract lawsuit against BMW OF NORTH AMERICA, LLC. This case was filed in Los Angeles County Superior Courts, Stanley Mosk Courthouse located in Los Angeles, California. The case status is Pending - Other Pending.
Pending - Other Pending
Los Angeles County Superior Courts
Stanley Mosk Courthouse
Los Angeles, California
BMW OF NORTH AMERICA LLC
BARMASSE JASON M
5/27/2021: Case Management Order
5/27/2021: Minute Order - MINUTE ORDER (CASE MANAGEMENT CONFERENCE; ORDER TO SHOW CAUSE RE: CONTEMPT ...)
5/12/2021: Case Management Statement
4/23/2021: Order - RULING RE: MOTION TO COMPEL ARBITRATION
4/16/2021: Request for Judicial Notice
4/12/2021: Opposition - OPPOSITION PLAINTIFF'S MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEFENDANT'S MOTION TO COMPEL ARBITRATION
3/23/2021: Motion to Compel Arbitration
3/23/2021: Declaration - DECLARATION OF MICHELLE PINKSTON ISO MTC ARBITRATION
3/2/2021: Notice - NOTICE NOTICE OF CASE MANAGEMENT CONFERENCE AND ORDER TO SHOW CAUSE HEARING RE: FAILURE TO APPEAR
2/26/2021: Minute Order - MINUTE ORDER (CASE MANAGEMENT CONFERENCE)
2/11/2021: Case Management Statement
12/18/2020: Notice - NOTICE NOTICE OF CASE MANAGEMENT CONFERENCE
12/7/2020: Answer - ANSWER DEMAND FOR JURY TRIAL
11/19/2020: Notice of Case Management Conference
11/10/2020: Proof of Personal Service
11/2/2020: Summons - SUMMONS ON COMPLAINT
11/2/2020: Civil Case Cover Sheet
Hearing08/30/2022 at 09:30 AM in Department 78 at 111 North Hill Street, Los Angeles, CA 90012; Jury TrialRead MoreRead Less
Hearing08/16/2022 at 08:30 AM in Department 78 at 111 North Hill Street, Los Angeles, CA 90012; Final Status ConferenceRead MoreRead Less
Hearing05/02/2022 at 08:30 AM in Department 78 at 111 North Hill Street, Los Angeles, CA 90012; Post-Mediation Status ConferenceRead MoreRead Less
Docketat 08:30 AM in Department 78; Case Management Conference - HeldRead MoreRead Less
Docketat 08:30 AM in Department 78; Order to Show Cause Re: (Contempt for Defendant's Failure to Appear at the 02/26/21 Hearing) - HeldRead MoreRead Less
DocketCase Management Order; Filed by ClerkRead MoreRead Less
DocketMinute Order ( (Case Management Conference; Order to Show Cause Re: Contempt ...)); Filed by ClerkRead MoreRead Less
DocketCase Management Statement; Filed by Robert Hedvat (Plaintiff)Read MoreRead Less
DocketDeclaration (of Anthony P. Greco re Failure to Appear at Case Management Conference); Filed by BMW of North America, LLC (Defendant)Read MoreRead Less
Docketat 08:30 AM in Department 78; Hearing on Motion to Compel Arbitration - HeldRead MoreRead Less
DocketMinute Order ( (Case Management Conference)); Filed by ClerkRead MoreRead Less
DocketCase Management Statement; Filed by Robert Hedvat (Plaintiff)Read MoreRead Less
DocketNotice (Notice of Case Management Conference); Filed by Robert Hedvat (Plaintiff)Read MoreRead Less
DocketAnswer (DEMAND FOR JURY TRIAL); Filed by BMW of North America, LLC (Defendant)Read MoreRead Less
DocketNotice of Case Management Conference; Filed by ClerkRead MoreRead Less
DocketProof of Personal Service; Filed by Robert Hedvat (Plaintiff)Read MoreRead Less
DocketNotice of Case Assignment - Unlimited Civil Case; Filed by ClerkRead MoreRead Less
DocketComplaint; Filed by Robert Hedvat (Plaintiff)Read MoreRead Less
DocketCivil Case Cover Sheet; Filed by Robert Hedvat (Plaintiff)Read MoreRead Less
DocketSummons (on Complaint); Filed by Robert Hedvat (Plaintiff)Read MoreRead Less
Case Number: 20STCV41941 Hearing Date: April 23, 2021 Dept: 78
BMW OF NORTH AMERICA, LLC, et al.,
Case No.: 20STCV41941
Hearing Date: April 23, 2021
[TENTATIVE] RULING RE:
DEFENDANT BMW OF NORTH AMERICA, LLC’S MOTION TO COMPEL ARBITRATION
Defendant BMW of North America, LLC’s Motion to Compel Arbitration is DENIED.
This is a lemon law action. The Complaint alleges as follows. Plaintiff Robert Hedvat (“Hedvat”) leased a 2018 BMW on May 31, 2018 from non-party Beverly Hills BMW with an express written warranty. (Compl. ¶¶ 7-8.) Defendant BMW of North America, LLC (“BMW”) manufactured and/or distributed the vehicle. (Compl. ¶ 7.) During the warranty period, the vehicle developed various defects and conditions, and BMW’s repair facilities have been unable to service or repair the vehicle to conform to the express warranties. (Compl. ¶¶ 10-11.)Hood
Hedvat filed the Complaint on November 2, 2020, alleging two causes of action:
Violation of Song-Beverly Consumer Warranty Act
Violation of the Magnuson-Moss Warranty Act
On December 7, 2020, BMW filed an Answer.
On March 23, 2021, BMW filed the instant Motion to Compel Arbitration.
On April 12, 2021, Hedvat filed an Opposition.
On April 16, 2021, BMW filed a Reply.
REQUESTS FOR JUDICIAL NOTICE
BMW requests judicial notice of various court rulings. However, the Request for Judicial Notice was submitted with BMW’s Reply, after Plaintiff’s Opposition was due and submitted. Accordingly, the Request is untimely because it raises new information and did not allow Plaintiff an opportunity to respond and is DENIED..
MOTION TO COMPEL ARBITRATION
Code of Civil Procedure section 1281.2 provides, in relevant part:
On petition of a party to an arbitration agreement alleging the existence of a written agreement to arbitrate a controversy and that a party thereto refuses to arbitrate such controversy, the court shall order the petitioner and the respondent to arbitrate the controversy if it determines that an agreement to arbitrate the controversy exists…
(Code Civ. Proc. § 1281.2.)
“California law reflects a strong public policy in favor of arbitration as a relatively quick and inexpensive method for resolving disputes. [Citation.] To further that policy, [Code of Civil Procedure] section 1281.2 requires a trial court to enforce a written arbitration agreement” unless one of four limited exceptions applies. (Acquire II, Ltd. v. Colton Real Estate Group (2013) 213 Cal.App.4th 959, 967.) Those statutory exceptions arise where (1) a party waives the right to arbitration; (2) grounds exist for revoking the arbitration agreement; and (3) pending litigation with a third party creates the possibility of conflicting rulings on common factual or legal issues; (4) the petitioner is a state or federally chartered depository institution that, on or after January 1, 2018, seeks to compel arbitration pursuant to a contract whose agreement was induced by fraud or without respondent’s consent. (CCP §1281.2(a)–(d).)
Existence of Arbitration Agreement
“[T]he petitioner bears the burden of proving the existence of a valid arbitration agreement by the preponderance of the evidence . . . .” (Giuliano v. Inland Empire Personnel, Inc. (2007) 149 Cal.App.4th 1276, 1284.) “In these summary proceedings, the trial court sits as a trier of fact, weighing all the affidavits, declarations, and other documentary evidence, as well as oral testimony received at the court's discretion, to reach a final determination. ([citations].) No jury trial is available for a petition to compel arbitration.” (Engalla v. Permanente Medical Group, Inc. (1997) 15 Cal.4th 951, 972, as modified (July 30, 1997).)
“To determine whether a contractual arbitration clause requires arbitration of a particular controversy, the controversy is first identified and the issue is whether that controversy is within the scope of the contractual arbitration clause.” (Titolo v. Cano (2007) 157 Cal.App.4th 310, 316.) “Doubts as to whether an arbitration clause applies to a particular dispute are to be resolved in favor of sending the parties to arbitration. The court should order them to arbitrate unless it is clear that the arbitration clause cannot be interpreted to cover the dispute.” (California Correctional Peace Officers Ass'n v. State (2006) 142 Cal.App.4th 198, 205.)
“[A] party opposing the petition bears the burden of proving by a preponderance of the evidence any fact necessary to its defense. [Citation.] In these summary proceedings, the trial court sits as a trier of fact, weighing all the affidavits, declarations, and other documentary evidence, as well as oral testimony received at the court's discretion, to reach a final determination.” (Giuliano, supra, (2007) 149 Cal.App.4th at 1284.)
The Federal Arbitration Act (“FAA”), while a federal statute, applies in California courts and requires state courts to enforce arbitration agreements as required by the federal common law developed under the FAA. (See, Southland Corp. v. Keating (1984) 465 U.S. 1, 15-16; Broughton v. Cigna Healthplans of California (1999) 21 Cal.4th 1066, 1074-78.) The FAA creates a public policy favoring arbitration agreements and preempts and invalidates state law and state judicial decisions that disfavor arbitration or require arbitration provisions to pass higher scrutiny. (Keating, supra, 465 U.S. at 12; Perry v. Thomas (1987) 482 U.S. 483, 490.) A court’s inquiry is limited to a determination of (1) whether a valid arbitration agreement exists and (2) whether the arbitration agreement covers the dispute. (9 U.S.C. § 4; Chiron Corp. v. Ortho Diagnostics Systems, Inc. (9th Cir. 2000) 207 F.3d 1126, 1130; Howsam v. Dean Witter Reynolds, Inc. (2002) 537 U.S. 79, 84; see, Simula, Inc. v. Autoliv, Inc. (9th Cir. 1999) 175 F.3d 716 (if the finding is affirmative on both counts the FAA requires the Court to enforce the arbitration agreement in accordance with its terms).) “An order to arbitrate the particular grievance should not be denied unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute.” (United Steelworkers of America v. Warrior & Gulf Navigation Co. (1960) 363 U.S. 574, 582-83.) And if the parties designate the FAA applies, then California arbitration law is preempted. (See e.g., Rodriguez v. American Techs., Inc. (2006) 136 Cal.App.4th 1110, 1121-22.)
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 indeed the functional equivalent of “affecting’ commerce.” (Allied-Bruce Terminix Companies, Inc. v. Dobson (1995) 513 U.S. 265, 273–74.) The defendant bears the burden of proving applicability of the FAA by showing that its activities constitute interstate commerce.” (Hoover v. American Income Life Insurance Co. (2012) 206 Cal.App.4th 1193, 1207.) Failure to demonstrate that the agreement affects interstate commerce renders the FAA in applicable. (See, Lane v. Francis Capital Management LLC (2014) 224 Cal. App.4th 676, 687; Woolls v. Superior Court (2005) 127 Cal.App.4th 197, 211.)
BMW argues that paragraph 38 of the lease agreement between Hedvat and Beverly Hills BMW contains an arbitration clause. (Motion at p. 1.) The arbitration is numbered 38 with a bolded, capitalized paragraph heading entitled “ARBITRATION CLAUSE PLEASE REVIEW – IMPORTANT – AFFECTS OUR LEGAL RIGHTS[.]” (Pinkston Decl., Exh. 1, p. 6.). The arbitration clause states:
“Either you or I may choose to have any dispute between us decided by arbitration and not in a court or by a jury trial. If a dispute is arbitrated, I will give up my right to participate as a class representative or class member on any Claim I may have against you including any right to class arbitration or any consolidation of individual arbitrations. Discovery and rights to appeal in arbitration are generally more limited that in a lawsuit, and other rights you and I would have in court may not be available in arbitration.” Pinkston Decl., Exh. , A. 6.).
A claim subject to this clause is defined as: “any claim, dispute or controversy, whether in contract, tort, statute or otherwise, whether preexisting, present or future, between me and you or your employees, officers, directors, affiliates, successors or assigns, or between me and any third parties if I assert a Claim against such third parties in connection with a Claim I assert against you, which arises out of or relates to my credit application, lease, purchase or condition of this Vehicle, this Lease or any resulting transaction or relationship (including any such relationship with third parties who do not sign this Lease).” (Pinkston Decl., Exh. A, p. 6.)(emphasis added).
Non-signatory Defendant – Third Party Beneficiary
Here, Hedvat argues that the arbitration clause does not apply to BMW because BMW is not a signatory to the agreement. (Oppo. at p. 4.) BMW does not argue that it is a signatory, however, BMC contends that it is a third-party beneficiary of the lease agreement. (Motion at p. 4.)
“It is well established that a non-signatory beneficiary of an arbitration clause is entitled to require arbitration.” (Harris v. Superior Court¿(1986) 188 Cal.App.3d 475, 478, citing¿Dryer v. Los¿Angeles Rams¿(1985) 40 Cal.3d 406, 418;¿Birman v. Dean Witter & Co., Inc.¿(1975) 44 Cal.App.3d 999.)¿Third-party beneficiaries may be entitled to enforce arbitration clauses in contracts entered into on their behalf, even if not named in the agreement.¿(See,¿Macaulay v. Norlander¿(1992) 12 Cal.App.4th¿1,7-8.)
However,¿non-signatories¿seeking to compel arbitration as¿third-party¿beneficiaries must prove that they are in fact third party beneficiaries of the agreement that provides for arbitration. (Jones v. Jacobson¿(2011) 195 Cal.App.4th¿1, 22.)¿This¿requires proof that the subject agreement is applicable to the controversy that is the subject of the litigation.¿(Id.)¿Moreover, the third party’s right to enforce an arbitration provision is predicated on proving the contracting parties’ intent. (See,¿City of Hope v. Bryan Cave, L.L.P.¿(2002) 102 Cal.App.4th 1356, 1369.)
Per the language of the arbitration clause, a claim against a third-party is only implicated under this arbitration clause if the same claim is also brought against the dealership who is a party to this agreement: “or between me and any third parties if I assert a Claim against such third parties in connection with a Claim I assert against you[.]” (Pinkston Decl., Exh. A, p. 6.). Therefore, BMW may not compel arbitration under this arbitration clause as third-party beneficiary because the signatory to the agreement, Beverly Hills BMW, is not a party to this action.
BMW implies that it may be an affiliate or an assign, based on its selective highlighting of the arbitration clause in its Motion (see, Motion at p. 4). However, BMW does not expressly argue that it is an affiliate or assign. On the face of the lease agreement, the lease agreement defines “assignee” as BMW Financial Services NA, LLC, which Defendant BMW (BMW of North America, LLC) does not argue is a description of itsself. (Pinkston Decl., Exh. A, p. 1.). Further, the moving party bears the burden of proving by the preponderance of the evidence the existence of a valid arbitration agreement giving it a right to compel arbitration. (Personnel, Inc., supra, 149 Cal.App.4th at 1284.) The Court finds that BMW has not established that it is an affiliate or assign, as defined under this arbitration agreement.
Non-signatory Defendant – Equitable Estoppel
BMW also argues that it can compel arbitration based on equitable estoppel. (Motion at p. 6.)
Under the equitable estoppel doctrine, a¿non-signatory to an agreement¿may enforce an arbitration clause when the claims against the¿non-signatory¿are “dependent upon, or founded in and inextricably intertwined with,” the obligations imposed by the agreement containing the arbitration clause. (Goldman v. KPMG LLP¿(2009) 173 Cal.App.4th 209, 217-218;¿Marenco¿v. DirectTV LLC¿(2015) 233 Cal.App.4th 1409, 1419-1420.) “By relying on contract terms in a claim against a nonsignatory defendant, even if not exclusively, a plaintiff may be equitably estopped from repudiating the arbitration clause contained in that agreement.” (Boucher v. Alliance Title Company, Inc. (2005) 127 Cal.App.4th 262, 271-272.) When asserting claims against defendants that “rely on, make reference to, and presume the existence of” a contract containing an arbitration agreement, the plaintiff is estopped from avoiding arbitration of his causes of action against the non-signatory defendant. (Id. at 272.)
Both parties discuss Felisilda Felisilda, plaintiff buyers purchased a used vehicle manufactured by FCA US, LLC from an automobile dealer. After the buyers experienced mechanical problems with the vehicle and presented the vehicle for repair, the dealer was “unable to repair the vehicle to conform to the warranties within a reasonable number of attempts” and thereafter refused to repurchase or replace the vehicle. (Id. at 490-491.) The buyers then filed suit against both the dealer and manufacturer, alleging one cause of action for violation of the Song-Beverly Act arising out of “serious defects and nonconformities to warranties” existing in the vehicle and failure to make restitution under the Act. (Id. at 491.) The court concluded that “The Felisildas’ claim against FCA directly relates to the condition of the vehicle that they allege to have violated warranties they received as a consequence of the sales contract. Because the Felisildas expressly agreed to arbitrate claims arising out of the condition of the vehicle – even against third party nonsignatories to the sales contract – they are estopped from refusing to arbitrate their claim against FCA.” (Id. at 497.)
Felisada is not applicable in this case. The arbitration clause in this case specifically provides that it includes against third parties where the defendant signatory has not been joined as a party. (Pinkston Decl., Exh. A, p. 6 [“or between me and any third parties if I assert a Claim against such third parties in connection with a Claim I assert against you”].) Here plaintiff is not asserting a claim against the dealer, the party with whom he had an agreement to arbitrate. In Felisada, the arbitration agreement did not contain a similar limitation. In fact, the court in Felisada expressly found that the arbitration agreement between the parties allowed for third-party claims: “Because the Felisildas expressly agreed to arbitrate claims arising out of the condition of the vehicle – even against third party nonsignatories to the sales contract – they are estopped from refusing to arbitrate their claim against FCA.” (Felisilda v. FCA US LLC, supra, 53 Cal.App.5th at 497.) BMW has not provided any legal authority supporting a finding that equitable estoppel usurps the terms of an agreed-upon contract.
Accordingly, the Motion to Compel Arbitration is DENIED.
Dated: April 23, 2021
Hon. Robert S. Draper
Judge of the Superior Court
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