Shaffer, Christopher T v. Hyundai of Roseville

21. S-CV-0056603 Shaffer, Christopher T v. Hyundai of Roseville

The moving party is advised the notice of a motion must include notice of the court’s tentative ruling procedures. (Local Rule 20.2.3(C).)

Defendants’ Motion to Compel Arbitration and Motion to Stay

Defendants Hyundai of Roseville LLC; Hyundai of Folsom, LLC; Hyundai of Elk Grove, LLC; and R&A Elk Grove HY RE, LLC move to compel arbitration and to stay proceedings. Plaintiff opposes this motion.

Facts in pleadings

On November 19, 2025, plaintiff filed a complaint alleging 1. breach of voluntary express trust and imposition of constructive trust 2. breach of fiduciary duty 3. conversion 4. accounting, inspection, and damages 5. declaratory relief. (Pl. Compl.)

On November 4, 2005, plaintiff signed an employee acknowledgment and agreement (2005 agreement) with Hyundai of Roseville, which included an agreement to arbitrate disputes arising from his employment. (Defs. Mot. Compel, Kolb Decl. ¶ 4, Exh. A). The 2005 agreement states:

“[B]oth the Dealership and I agree that any claim, dispute, and/or controversy (including, but not limited to ...claims of discrimination and harassment, whether they be based on the California Fair Employment and Housing Act, Title VII of the Civil Rights Act of 1964, as amended, as well as all other state or federal laws or regulations) that either I or the Dealership (or its owners, directors, officers, managers, employees, agents, and parties affiliated with its employee benefit and health plans) may have against the other which would otherwise require or allow resort to any court or other governmental dispute resolution forum arising from, related to, or having any relationship or connection whatsoever with my seeking employment with, employment by, or other association with the Dealership, whether based on tort, contract, statutory, or equitable law, or otherwise ... shall be submitted to and determined exclusively by binding arbitration under the Federal Arbitration Act, in conformity with the procedures of the California Arbitration Act ... I UNDERSTAND BY VOLUNTARILY AGREEING TO THIS BINDING ARBITRATION PROVISION, BOTH I AND THE DEALERSHIP GIVE UP OUR RIGHTS TO TRIAL BY JURY OF ANY CLAIM I OR THE DEALERSHIP MAY HAVE AGAINST EACH OTHER.”

((Defs. Mot. Compel, Kolb Decl., Ex. A.)

On January 1, 2010, plaintiff signed a formal employment agreement with Hyundai of Roseville and Hyundai of Elk Grove, but that employment agreement did not contain an arbitration agreement. (See Pl. Shaffer Decl., ¶ 11 & Exh. 1 (2010 agreement).)

Plaintiff never signed any arbitration agreement regarding his employment or otherwise with defendants Hyundai of Folsom or R&A Elk Grove HY RE. (See Pl. Shaffer Decl., ¶ 11 & Exh. 1 (2010 agreement); (Defs. Mot. Compel, Kolb Decl. ¶ 4, Ex. A (2005 agreement).) Plaintiff never signed anything relative to his purchase of a percentage ownership interest in defendant R&A Elk Grove HY RE. (See Pl. Shaffer Decl., ¶ 4 & Exh. 1 (2010 agreement); (Defs. Mot. Compel, Kolb Decl., Ex. A (2005 agreement).) Plaintiff alleges he acquired and owns, or should have acquired and owns, a 15% equity interest in the Blue-Sky Value (including goodwill and other intangible assets) of the defendant dealerships. (Pl. Compl. ¶ 16.)

Legal Standard

Section 2 of the Federal Arbitration Act (“FAA”) makes agreements to arbitrate “valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.” (9 U.S.C. § 2.) This provision reflects both a “liberal federal policy favoring arbitration” and the “fundamental principle that arbitration is a matter of contract.” (AT&T Mobility LLC v. Concepcion, (2011) 563 U.S. 333, 339.)

A threshold question for any motion to compel arbitration is whether an agreement to arbitrate exists between the parties. (Cruise v. Kroger Co. (2015) 233 Cal.App.4th 390, 396.) Defendant carries this initial burden of proving, by a preponderance of the evidence, the existence of a valid arbitration agreement. (Engalla v. Permanente Medical Group, Inc. (1997) 15 Cal.4th 951, 972.) A party opposing a motion to compel arbitration then “bears the burden of proving by a preponderance of the evidence any fact necessary to its defense” including evidence challenging the acceptance of the agreement. (Ruiz v. Moss Bros. Auto Group, Inc. (2014) 232 Cal.App.4th 836, 842; Gamboa v. Northeast Community Clinic (2021) 72 Cal.App.5th 158, 165.)

Pursuant to Code of Civil Procedure section 1281.2, a trial court shall order arbitration of a controversy if an agreement to arbitrate the controversy exists, with certain exceptions inapplicable here. California has a strong public policy in favor of arbitration, but “a party cannot be compelled to arbitrate a dispute that he has not agreed to resolve by arbitration.” (Buckner v. Tamarin (2002) 98 Cal.App.4th 140, 142.) Gordon v. Atria Management Co., LLC (2021) 70 Cal.App.5th 1020, 1026.

Analysis

In support of the motion to compel arbitration, defendants present an employment agreement with an arbitration clause signed in 2005 by plaintiff and only one of the party defendants, Hyundai of Roseville. (Defs. Mot. Compel, Kolb Decl. ¶ 4, Exh. A). This agreement predates the 2010 employment agreement plaintiff signed with Hyundai of

Roseville (which was party to the prior agreement) and Hyundai of Elk Grove (not party to the prior agreement), and the 2010 agreement did not contain an arbitration clause. (See Pl. Shaffer Decl., ¶ 11 & Exh. 1 (2010 agreement).) Plaintiff never signed any arbitration agreement regarding his employment or otherwise with defendants Hyundai of Folsom or R&A Elk Grove HY RE. (See Pl. Shaffer Decl., ¶ 11 & Exh. 1 (2010 agreement); (Defs. Mot. Compel, Kolb Decl. ¶ 4, Ex. A (2005 agreement).) Thus, defendants seek to compel plaintiff to arbitration with a prior agreement that includes only one of the party defendants.

The 2010 agreement contains the following provisions:

We are pleased to present you with this Agreement setting forth the terms and conditions of your continued employment by Hyundai of Roseville, LLC, a Delaware limited liability company (“Roseville Hyundai”) and Hyundai of Elk Grove, LLC, a Delaware limited liability company (“Elk Grove Hyundai”) (collectively, the “Dealerships”). The Dealerships are currently owned by Robert and Alan Potamkin (“Potamkin”).

The Dealerships shall continue to employ you on an at will basis under the following terms and conditions ...

This Agreement sets forth the entire agreement and understanding among the parties superseding all prior understandings and agreements and can be amended only in writing executed by the parties hereto.

(See Pl. Shaffer Decl., Exh. 1 (2010 agreement).)

Under state law, the terms of a final, integrated contract “may not be contradicted by evidence of any prior agreement or of a contemporaneous oral agreement.” (Code Civ. Proc., § 1856, subd. (a).) But a written instrument “may be explained or supplemented by evidence of consistent additional terms unless the writing is intended also as a complete and exclusive statement of the terms of the agreement.” (Code Civ. Proc., § 1856, subd. (b).) “The crucial issue in determining whether there has been an integration is whether the parties intended their writing to serve as the exclusive embodiment of their agreement.

The instrument itself may help to resolve that issue.” (Masterson v. Sine (1968) 68 Cal.2d 222, 225.) The existence of an integration clause is a key factor in divining that intent. (See Founding Members of the Newport Beach Country Club v. Newport Beach Country Club, Inc. (2003) 109 Cal.App.4th 944, 953-54). Grey v. American Management Services (2012) 204 Cal.App.4th 803, 807. The parol evidence rule “generally prohibits the introduction of extrinsic evidence—oral or written—to vary or contradict the terms of an integrated written instrument.” (EPA Real Estate Partnership v.

Kang (1992) 12 Cal.App.4th 171, 175.)

By its plain language, the 2010 agreement between plaintiff, Hyundai of Roseville, and Hyundai of Elk Grove superseded all prior agreements, including the 2005 agreement

between plaintiff and Hyundai of Roseville. As a result, defendants may not compel arbitration by the terms of the 2005 agreement, as the 2010 agreement superseded all prior agreements via an integration clause.

Conclusion

Based on the foregoing, the court denies defendants’ motion to compel arbitration of plaintiff’s claims and denies defendants’ motion to stay the action. Defendants shall file their answer by July 6, 2026.

22. S-CV-0056703 Casebolt Flynt, Elizabeth v. Whitely, Jesse

Defendants’ Motion to Strike Portions of Plaintiff’s First Amended Complaint

Defendants’ motion to strike portions of plaintiff’s first amended complaint is dropped as moot in light of the filing of the second amended complaint.

Defendants’ Demurrer to Second Amended Complaint

Defendants demur to the third and fourth causes of action alleged in the second amended complaint for negligent misrepresentation and intentional misrepresentation.

A party may demur where the pleading does not state facts sufficient to constitute a cause of action. (Code Civ. Proc., § 430.10 (e).) A demurrer tests the legal sufficiency of the pleadings, not the truth of the allegations or the accuracy of the described conduct. (Bader v. Anderson (2009) 179 Cal.App.4th 775, 787.) The allegations in the pleadings are deemed true no matter how improbable they may seem. (Del E. Webb Corp. v. Structural Materials Co. (1981) 123 Cal.App.3d 593, 604.) However, the court does not assume the truth of contentions, deductions, or conclusions of facts or law. (Evans v. City of Berkeley (2006) 38 Cal.4th 1, 6.) The court may only refer to matters outside the pleading that are subject to judicial notice. (Rea v. Blue Shield of California (2014) 226 Cal.App.4th 1209, 1223.)

To state a claim for negligent misrepresentation, plaintiff must allege the following elements: misrepresentation of a past or existing material fact, without reasonable ground for believing it to be true, with intent to induce another’s reliance on the fact misrepresented; ignorance of the truth; justifiable reliance on the misrepresentation by the plaintiff; and resulting damage. (Shamsian v. Atlantic Richfield Co. (2003) 107 Cal.App.4th 967, 983.) To state a claim for intentional misrepresentation, plaintiff must allege the following elements: a misrepresentation, with knowledge of its falsity, with the intent to induce another’s reliance, actual and justifiable reliance, and resulting damage. (Daniels v. Select Portfolio Servicing, Inc. (2016) 246 Cal.App.4th 1150, 1166.)

Negligent and intentional misrepresentation must be pleaded with sufficient particularity that shows “how, when, where, to whom, and by what means the representations were tendered.” (Stansfield v. Starkey (1990) 220 Cal.App.3d 59, 73.) Against a corporate

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