Motion to Compel Arbitration; Motion to Stay
24CV-01683 Gabriel Zamorano Lugo, et al. vs Auto Resources, Inc., et al.
Motion to Compel Arbitration Pursuant to Cal Code Civ Proc 1281.2, 1281.4, and 1281.7; to Stay the Proceedings Pending Completion of Arbitration
The motion to compel arbitration is GRANTED.
The request to stay this action is GRANTED.
When a motion to compel arbitration is filed and accompanied by prima facie evidence of a written agreement to arbitrate the controversy, the court itself must determine: (1)
whether the agreement exists, and (2) if any defense to its enforcement is raised, whether it is enforceable. The moving party bears the burden of proving the existence of an arbitration agreement by a preponderance of the evidence. The party claiming a defense bears the same burden as to the defense. (Rosenthal v. Great Western Fin. Securities Corp. (1996) 14 Cal.4th 394, 413-414.)
The moving party “can meet its initial burden by attaching to the [motion] a copy of the arbitration agreement purporting to bear the [opposing party's] signature.” (Bannister v. Marinidence Opco, LLC (2021) 64 Cal.App.5th 541.)
By attaching the arbitration agreement as Exhibit 2, to the Declaration of Jameel Taha, with Apodaca’s handwritten signature, Auto Resources has established a prima facie case that an enforceable agreement to arbitrate exists.
Unless there is a dispute over authenticity, the mere recitation of the terms is sufficient for a party to move to compel arbitration. (Sprunk v. Prisma LLC (2017) 14 Cal.App.5th 785, 793.) Here, Apodaca does not challenge the existence of the arbitration agreement or her signature.
Apodaca challenges the motion on the basis ACIC is not a party to the arbitration agreement. As argued by Auto Resources, it is seeking to enforce the arbitration agreement against Apodaca and not ACIC. ACIC was found to have a right to interplead the funds, has deposited the funds with the court, and has been dismissed from this case. The issue that remains is the resolution of the underlying dispute between Apodaca and Auto Resources, which does not include ACIC. As to the interplead funds, although the underlying dispute may be subject to arbitration, the court maintains jurisdiction over the deposited funds.
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Apodaca also challenges the arbitration agreement as unconscionable. Here, there are some aspects of procedural unconscionability. However, a finding of procedural unconscionability “does not mean that the contract will not be enforced, but rather that the courts will scrutinize the substantive terms of the contract to ensure they are not manifestly unfair or one-sided.” (Baltazar v. Forever 21, Inc., (2016) 62. Cal.4th 1237, 1244.) In other words, because procedural unconscionability has been found, the analysis turns on consideration of the substantive unconscionability prong.
The substantive inquiry considers whether the overall bargain is overly harsh or unreasonably one sided. (Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 114.)
Here, the terms of the arbitration agreement are not so harsh, unreasonable, or unfairly one sided as to render the agreement unconscionable. The arbitration agreement applies to all parties, provides for a neutral arbitrator that must follow the law, provides adequate discovery, and provides types of relief otherwise available in this court.
The court declines to order arbitration with JAMS. The arbitration agreement is clear in that absent an agreement between the parties, either AAA or NAM are to be the arbitration organization. However, Auto Resources is to pay for costs unique to arbitration.
This action is stayed pending arbitration.
An arbitration status hearing is set for Tuesday, January 13, 2027, at 8:15 a.m. in Courtroom 8.
Auto Resources, as prevailing party, is ordered to prepare an order consistent with this order, to be filed with this court within five (5) days.