Tasha Camille Owens-Green, et al vs. Mercedes – Benz USA, LLC

On April 23, 2026, Mercedes-Benz filed a motion to compel arbitration of all claims and to stay this Action pending resolution of the arbitration. On May 27, 2026, Plaintiffs filed an opposition. On June 1, 2026, Mercedes-Benz filed a reply.

Procedural Issue – Untimely Opposition

Plaintiffs’ Opposition is untimely. Under Code of Civil Procedure section 1005, subdivision (b), all papers opposing a motion so noticed shall be filed with the Court and a copy served on each party at least nine court days before the hearing.

Given that the hearing date for this Motion is currently scheduled for June 8, 2026, any opposition brief would be due by May 26, 2026. However, Plaintiffs did not file their opposition until the next day on May 27, 2026.

Nevertheless, Mercedes-Benz timely filed a reply brief directed to the merits. The Court determines that the issue timely service and or filing of the pleading as waived. (Clark v. Stabond Corp. (1987) 197 Cal.App.3d 50, 59 (Clark) [concluding lack of timely service is waived when the party discusses merits despite its objection]).

Judicial Notice

Plaintiffs request the Court take judicial notice of the following judicial opinions:

• Exhibit 1 – Appellate Court Opinion in Martha Ochoa v. Ford Motor Company (2023) 89 Cal.App.5th 1324;

• Exhibit 2 – Appellate Court Opinion in Kielar v. Superior Court (2023) 94 Cal.App.5th 614; and

• Exhibit 3 – Ninth Circuit Opinion in Ngo v. BMW of North America, LLC (9th Cir. 2022) 23 F.4th 942.

The requests are denied. The Court need not take judicial notice of the published cited opinions to consider them.

Evidentiary Objections

In opposition, Plaintiffs object to the exhibits proffered by Mercedes-Benz’s Counsel, Macy M. Chan. Plaintiffs object on the basis of lack of foundation/personal knowledge irrelevancy, improper lay opinion, hearsay, lack of authentication, and speculation and prejudice. The Court rules as follows:

1. Chan Decl. ¶ 2, Exh. 1 (Consumer Lease Agreement) – Overruled 2. Chan Decl. ¶ 3, Exh. 2 (Complaint filed in this Action) – Overruled

The Reply papers by Mercedes-Benz contain citations and references to Superior Court decisions, which are not binding on this court and are not considered by this court in making its determinations of issues raised by the moving and opposing pleadings.

The Federal Arbitration Act Applies

The Federal Arbitration Act (“FAA”) [9 U.S.C. § 1, et seq.] authorizes enforcement of arbitration clauses unless grounds exist in law or equity for the revocation of any contract. (9 U.S.C. § 2.) In situations governed by the FAA, conflicting state law is preempted in either state or federal courts. (Volt Info. Sciences, Inc. v. Board of Trustees of Leland Stanford Junior University (1989) 489 U.S. 468, 477.)

To compel arbitration under the FAA, a finding must be made that an arbitration agreement exists between the parties and that the agreement covers the dispute. (AT&T Technologies, Inc. v.

Communications Workers of America (1986) 475 U.S. 643, 648-649.) Arbitration agreements are on equal footing with other contracts and should be enforced according to their terms. (AT&T Mobility LLC v. Concepcion (2011) 131 S. Ct. 1740, 1745.) “[C]ourts applying the FAA rely on state law contract principles in determining whether an arbitration agreement exists.” (Peleg v. Neiman Marcus Group, Inc. (2012) 204 Cal.App.4th 1425, 1463.) Thus, arbitration agreements can be declared unenforceable based on contract defenses, such as fraud, duress, or unconscionability. (Id. at p. 1746.)

Similar to California law, any doubt about the arbitrability of a dispute under the FAA is resolved in favor of arbitration. (AT&T Technologies, Inc., supra, 475 U.S. at p. 650.)

The enforcement language of the FAA is almost identical to the California Arbitration Act (“CAA”) (Code Civ. Proc., §§ 1281, et seq.), which governs the application of arbitration under California law. The CAA provides a procedure for the determination of whether a valid agreement to arbitrate exists that satisfies both state and federal law. (Rosenthal v. Great Western Fin. Securities Corp. (1996) 14 Cal.4th 394, 413.)

Under the FAA and California law, analysis of whether to compel arbitration is the same, in that both the FAA and California law require a finding of an enforceable agreement that covers the claims. Contract defenses such as fraud, duress, or unconscionability apply. (AT&T Mobility LLC, supra, 563 U.S. at 339.)

California law favors the enforcement of valid arbitration agreements. (In re Tobacco I (2004) 124 Cal.App.4th 1095, 1103.) Any doubts to arbitration will be resolved against the party asserting a defense to arbitration, whether the issue is construction of contract language, waiver, delay or any like defense to arbitrability. (. at p. 1103.)

The FAA applies to arbitration clauses involving interstate commerce. (9 U.S.C. § 2; Aviation Data, Inc. v. American Express Travel Related Services Company, Inc. (2007) 152 Cal.App.4th 1522, 1534.) The moving defendant bears the burden of demonstrating FAA coverage by declarations and other evidence. (Shepard v. Edward Mackay Ent., Inc. (2007) 148 Cal.App.4th 1092, 1101.)

Here, Mercedes-Benz presents a copy of the Consumer Lease Agreement for the Subject Vehicle (“Lease Agreement”), which Mercedes-Benz asserts contains a binding arbitration agreement. (Chan Decl. ¶ 2, Exh. 1.) The Lease Agreement explicitly states that “[t]his lease evidences a transaction involving interstate commerce. Any arbitration under this lease shall be governed by the Federal Arbitration Act (9 USC 1, et seq.).” (Chan Decl. ¶ 2, Exh. 1 at p. 4.) Under these provisions, the FAA applies. (Cronus Investments, Inc. v. Concierge Services (2005) 35 Cal.4th 376, 394; Davis v. Shiekh Shoes, LLC (2022) 84 Cal.App.5th 956, 964.)

Enforceability

In California, general principles of contract law determine whether the parties have entered a binding agreement to arbitrate and the party seeking arbitration bears the burden of proving the existence of an arbitration agreement. (Ruiz v. Moss Bros. Auto Group, Inc. (2014) 232 Cal.App.4th 836, 842 (Ruiz).) The defendant providing an executed copy of the arbitration agreement satisfies the initial burden. (Espejo v. Southern California Permanente Medical Group (2016) 246 Cal.App.4th 1047, 1058-1060 (Espejo).)

Here, the Lease Agreement contains an arbitration clause, which provides, in relevant part, that:

Any claim or dispute, whether in contract, tort or otherwise (including any dispute over the interpretation, scope, or validity of this lease, arbitration section or the arbitrability of any issue),

between you and us or any of our employees, agents, successors, assigns, or the vehicle distributor, including Mercedes-Benz USA LLC (each a “Third Party Beneficiary”), which arises out of or relates to a credit application, this lease, or any resulting transaction or relationship arising out of this lease (including any such relationship with third parties who do not sign this contract) shall, at the election of either you, us, or a Third Party Beneficiary, be resolved by a neutral, binding arbitration and not by a court action. Any claim or dispute is to be arbitrated on an individual basis and not as a class action...

(Chan Decl. ¶ 2, Exh. 1, at p. 4, emphasis added.)

Arbitration is ordered if an agreement to arbitrate the controversy exists; an agreement only needs to be found to exist, not an evidentiary determination of its validity. (Condee v. Longwood Management Corp. (2001) 88 Cal.App.4th 215, 218-219.) Arbitration agreements are governed by contract principles, including whether a party cannot be bound to or invoke arbitration. (DMS Services, LLC v. Superior Court (Zurich Services Corp.) (2012) 205 Cal.App.4th 1346, 1352.) Furthermore, to form a contract, there must be mutual consent. (Esparza v. Sand & Sea, Inc. (2016) 2 Cal.App.5th 781, 787-88.) Arbitration is a matter of consent. (Granite Rock Co. v. International Broth. of Teamsters (2010) 561 U.S. 287, 299.)

Here, Mercedes-Benz is only required to present an arbitration agreement to meet its burden. (Espejo, supra, 246 Cal.App.4th at pp. 1058-1060.) Because it did just that, the burden then shifts to Plaintiffs to dispute its existence. (Id. at p. 1059; Ruiz, supra, 232 Cal.App.4th at p. 846.)

In opposition, Plaintiffs do not dispute the existence of the Lease Agreement and do not argue that they did not sign it. However, Plaintiffs point out that Mercedes-Benz is not a signatory to the Lease Agreement, which is only between Mercedes-Benz of Ontario, as lessor, and Plaintiffs, as lessees. Plaintiff argues that Mercedes-Benz is not a true third-party beneficiary of the Lease Agreement and therefore cannot enforce it against Plaintiffs. Additionally, Plaintiffs dispute whether the scope of the Lease Agreement covers the claims herein.

Analysis

Third-Party Beneficiary—Standing

Mercedes-Benz argues that it has standing to compel arbitration under the Lease Agreement because it is explicitly named as a third-party beneficiary to the Lease Agreement and because it falls within the class of entities for whom the arbitration provision was intended, and because the claims against it arise out of and relate to the lease of the Subject Vehicle and the resulting warranty relationship that followed the execution of the Lease Agreement.

Plaintiffs largely rely on the California Supreme Court’s opinion in Ford Motor Warranty Cases (2025) 17 Cal.5th 1122 (Ford Motor Warranty Cases), to argue that Mercedes-Benz is not a true third-party beneficiary. Plaintiffs further argue that their claims against Mercedes-Benz arise under the Song-Beverly Consumer Warranty Act, which include claims for breach of express and implied warranty, do not arise from or seek to enforce any term in the subject Lease Agreement.

On reply, Mercedes-Benz correctly argues that the Lease Agreement expressly names it as a third-party beneficiary and that none of the agreements in the cases relied on by Plaintiffs expressly identifies the movant as a third-party beneficiary. Mercedes-Benz further argues that it satisfies the third-party beneficiary requirements set forth by the California Supreme Court in Goonewardene v. ADP (2019) 6 Cal.5th 817 (Goonewardene).

Under California law, a non-signatory is a third-party beneficiary only to a contract “made expressly for [its] benefit.” Cal. Civ. Code § 1559. [The non-signatory] was obligated to prove that “express provisions of the contract,” considered in light of the “relevant circumstances,” show that (1) “the third party would in fact benefit from the contract;” (2) “a motivating purpose of the contracting parties was to provide a benefit to the third party;” and (3) permitting the third party to enforce the contract “is consistent with the objectives of the contract and the reasonable expectations of the contracting parties.

(Ngo, supra, 23 F.4th at p. 946, citing Goonewardene, supra, 6 Cal. 5th at p. 830.)

Mercedes-Benz persuasively argues that these elements are met here. First, Mercedes-Benz clearly benefits from the Lease Agreement because it retains a benefit whenever a dealership leases one of its vehicle. Second, there is a clear “intent to benefit the third party” as the arbitration clause unambiguously identifies Mercedes-Benz as a third-party beneficiary. (See Chan Decl. ¶ 2, Exh. 1, at p. 4.) Lastly, given the express language of the contract, it is clearly consistent with its objective where Mercedes-Benz seeks to enforce the arbitration clause.

Regardless, in Ford Motor Warranty Cases, supra, 17 Cal.5th 1122, the California Supreme Court held that a manufacturer could not compel arbitration as a third-party beneficiary despite a reference to “third parties” in the arbitration clause. Specifically, the provision in Ford Motor provided:

“ ‘[a]ny claim or dispute, whether in contract, tort, statute or otherwise (including the interpretation and scope of this Arbitration Provision, and the arbitrability of the claims 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 did not sign this contract) shall, at your or our election, be resolved by neutral, binding arbitration and not by a court action.’ ”

(Ford Motor Warranty Cases, supra, 17 Cal.5th at p. 1127, emphasis added)

The Court of Appeal ... explain[ed]: “We do not read this ... language as consent by the purchaser to arbitrate claims with third party nonsignatories. Rather, we read it as a further delineation of the subject matter of claims the purchasers and dealers agreed to arbitrate. They agreed to arbitrate disputes ‘between’ themselves - ‘you and us’—arising out of or relating to ‘relationship[s],’ including ‘relationship[s] with third parties who [did] not sign th[e] [sale] contract[s],’ resulting from the ‘purchase, or condition of th[e] vehicle, [or] th[e] [sale] contract.’ ”

(Ford Motor Warranty Cases, supra, 17 Cal.5th at p. 1129, emphasis in original.)

The California Supreme Court agreed with the Court of Appeal’s reading of the provision and analyzed the language of this provision as follows:

[T]he provision begins and ends with references to the contract signatories. It describes disputes between “you and us,” and clarifies that “us” includes the dealers’ employees, agents, successors or assigns. There is no claim here that Ford is an employee, agent, successor, or assign of any of the dealers. By its terms, the arbitration clause controls disputes (between “you and us”) that arise out of the credit application, purchase, or condition of the vehicle, “this contract,” or any “resulting transaction or relationship with third parties.”

...

The “third party” language in the arbitration clause means that if a buyer sues a dealer based on the condition of the vehicle, the dealer can elect to arbitrate that claim. The sales contract “says nothing of binding the purchaser to arbitrate with the universe of unnamed third parties.”

(Ford Motor Warranty Cases, supra, 17 Cal.5th at p. 1130, emphasis in original.)

Thus, “[w]hile mentioning a dispute based on ‘a transaction or relationship with third parties,’ the provision as a whole makes clear that the parties to the contract are agreeing to arbitrate described disputes between themselves.” (Ford Motor Warranty Cases, supra, 17 Cal.5th at p. 1130.) Ultimately, the California Supreme Court read this provision as stating that while disputes relating to a third party resulting from the purchase or condition of the vehicle, or the sale of a contract may be a basis for which the dealer, as a signatory, could compel arbitration against the purchaser, the third-party was not able to do so.

However, in the appellate decision Ford Motor Warranty Cases (2023) 89 Cal.App.5th 1324, 1339 (Ochoa), that was affirmed by the California Supreme Court, the court stated: “If the signatories had intended to benefit [defendant], such a purpose would have been easy to articulate. They could have simply named [defendant]-directly or by class as the vehicle’s manufacturer-as a person entitled to compel arbitration.”

That is what the Lease Agreement does here. While the agreement in Ford Motor Warranty Cases described disputes between “you and us,” and clarified that “us” includes the dealers’ employees, agents, successors or assigns,” the Lease Agreement describes disputes “between you and us or any of our employees, agent, successor, assigns, or the vehicle distributor, including Mercedes-Benz USA LLC (each a “Third Party Beneficiary”)” and further provides that the disputes are to be resolved by a neutral binding arbitration, “at the election of either you, us, or a Third Party Beneficiary”. (Chan Decl. ¶ 2, Exh. 1 at p. 4, emphasis added.) Thus, while Plaintiffs argue that Mercedes-Benz is neither mentioned nor benefited by the Lease Agreement’s terms, Mercedes-Benz is, in fact, explicitly mentioned in the Lease Agreement as a party that may elect to have disputes heard before an arbitrator.

Plaintiffs also rely on Ngo v. BMW of North America, LLC (9th Cir. 2022) 23 F.4th 942, in which the court found that a non-signatory was precluded from compelling arbitration as a third-party beneficiary. The agreement in Ngo, however, contained the same language as in Ford Motor Warranty Cases, and the court therefore considered that the arbitration clause did not expressly state that the defendant may compel arbitration in its analysis. (Id. at p. 946-947.) Here, the Lease Agreement explicitly identifies Mercedes-Benz as a “Third Party Beneficiary” who may compel arbitration

Therefore, Mercedes-Benz has standing to enforce the arbitration agreement as a third-party beneficiary.

Scope of the Arbitration Clause/Delegation Clause

Mercedes-Benz maintains that Plaintiffs’ claims fall within the scope of the arbitration clause because they arise out of not only the lease, but the relationship between Plaintiffs and Mercedes-Benz. Specifically, Mercedes-Benz contends that Plaintiffs’ claims in this action arise out of Mercedes-Benz’s manufacture of the Subject Vehicle, the lease of the Subject Vehicle to Plaintiffs, the warranting of the Subject Vehicle, and repairs to the Subject Vehicle, all of which arise out of and relate to the resulting relationship between the parties created by and through the Lease Agreement.

Plaintiffs argue that Mercedes-Benz confuses the scope of the arbitration clause and that it should only cover a credit application, the lease, or any resulting transaction or relationship arising out of the lease. Plaintiffs claim that this is a warranty dispute which has nothing to do with the lease. However, it is hard to imagine how the breach of warranty claims in this action do not relate to or arise out of the Lease Agreement as the Subject Vehicle that was warranted was obtained by Plaintiffs through this Lease Agreement.

Moreover, it appears the scope is so broad that it covers these claims as it is also stated to cover any “resulting transaction or relationship arising out of this lease.” (Chan Decl. ¶ 2, Exh. 1 at p. 4.) Further, as noted in the Reply, the arbitration clause itself states that it applies to “any claim or dispute, whether in contract, tort or otherwise” between Plaintiffs and Defendant. (Ibid.)

Ultimately, however, Mercedes-Benz argues that any issue regarding the scope of arbitrability is for the arbitrator, and not the Court, to decide. In doing so, it points to a delegation provision in the Agreement that provides: “any dispute over the interpretation, scope, or validity of this lease, arbitration section, or the arbitrability of any issue ... shall ... be resolved by a neutral, binding arbitration and not by a court action.” (Chan Decl. ¶ 2, Exh. 1 at p. 4.) Plaintiffs do not address the delegation provision.

Parties to an arbitration agreement may agree to delegate to the arbitrator, instead of a court, questions regarding the enforceability of the agreement. They can agree to arbitrate almost any dispute – even a dispute over whether the underlying dispute is subject to arbitration. (Tiri v. Lucky Chances, Inc. (2014) 226 Cal.App.4th 231, 241, citations omitted.) There are two prerequisites for a delegation clause to be effective. First, the language of the clause must be clear and unmistakable. Second, the delegation must not be revocable under state contract defenses such as fraud, duress, or unconscionability. (Id. at p. 242, citations omitted.)

The requirement that the language of the delegation clause be clear is straightforward. The law presumes that a delegation to an arbitrator of enforceability issues is ineffective absent clear and unmistakable evidence that the parties intended such a delegation. (Ibid.) Silence or ambiguity are insufficient. (Ibid.) As to the second requirement, any claim of unconscionability must be specific to the delegation clause. (Id. at p. 244, emphasis in original, citing Rent-A-Center, W., Inc. v. Jackson (2010) 561 U.S. 63, 73.)

Here the arbitration clause provides that the “any dispute over the interpretation, scope, or validity of this lease, arbitration section, or the arbitrability of any issue . . . shall . . . be resolved by a neutral, binding arbitration and not by a court action.” (Chan Decl. ¶ 2, Exh. 1 at p. 4.) This language clearly and unmistakably delegates to the arbitrator, and not the court, questions of arbitrability. (See, e.g., Malone v. Superior Court (2014) 226 Cal.App.4th 1551, 1560 [delegation clause that provided “[t]he arbitrator has exclusive authority to resolve any dispute relating to the interpretation, applicability, or enforceability of this binding arbitration agreement” was clear and unmistakable].)

Plaintiffs do not address the delegation provision or make any argument regarding unconscionability with respect to the delegation provision (or to the arbitration clause as a whole). Accordingly, pursuant to the arbitration clause in the Lease Agreement, the issue of whether the scope of the arbitration provision covers Plaintiffs’ claim is one that has been delegated to the arbitrator to decide.

TENTATIVE RULING

Mercedes-Benz’s motion to compel arbitration and stay all proceedings is granted.