Violeta Ansari, et al. v. Mercedes-Benz USA, LLC, et al.

Any claim or dispute is to be arbitrated on an individual basis and not as a class action. The arbitration shall be administered by the American Arbitration Association, or by any other organization that you may choose, subject to our or a Third Party Beneficiary’s approval. You may get a copy of the rules of the American Arbitration Association by visiting its website at www.adr.org.

The arbitrator shall be an attorney or retired judge and shall be selected in accordance with the applicable rules. The arbitrator shall apply the law in deciding the dispute. The arbitration hearing shall be conducted in the federal district in which you reside. If you demand arbitration first, you will pay the claimant’s initial arbitration filing fees or case management fees required by the

applicable rules up to $125, and we will pay any additional filing fee or case management fee. We will pay the whole filing fee or case management fee if we demand arbitration first. We will pay the arbitration costs and fees for the first day of arbitration, up to a maximum of eight hours. The arbitrator shall decide who shall pay any additional costs and fees. Nothing in this paragraph shall prevent you from requesting that the arbitration entity reduce or waive your fees, or that we or a Third Party Beneficiary voluntarily pay an additional share of said fees, based upon your financial circumstances or the nature of your claim.

This 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.) Judgment upon the award rendered may be entered in any court having jurisdiction.

Notwithstanding this provision, both you and Lessor and Lessor’s successors and assigns retain the right to exercise self-help remedies and to seek provisional remedies from a court, pending final determination of the dispute by the arbitrator. Neither you nor we waive the right to arbitrate by exercising self-help remedies, filing suit, or seeking or obtaining provisional remedies from a court.

If any clause within this arbitration section, other than clause 3 or any similar provision dealing with class action, class arbitration or consolidation, is found to be illegal or unenforceable, that clause will be severed from this arbitration section, and the remainder of this arbitration section will be given full force and effect. If any part of clause 3 or any similar provision dealing with class action, class arbitration or consolidation is found to be illegal or unenforceable, then this entire arbitration section will be severed and the remaining provisions of this lease shall be given full force and effect as if the arbitration section of this lease had not been included in this lease.

In no event shall an arbitrator be authorized to resolve a claim or dispute or make awards or grant relief exceeding the limitations in clause 3 or any similar provision on class actions, class arbitrations, or consolidation.

(Declaration of Ali Ameripour, Exh. 4 [emphasis in original].)

Plaintiffs’ Evidentiary Objections

Plaintiffs object to Exhibit 2 to Mr. Ameripour’s declaration, the Motor Vehicle Lease Agreement, on the grounds of hearsay and lack of foundation. These objections are overruled.

“For purposes of a petition to compel arbitration, it is not necessary to follow the normal procedures of document authentication. ‘[T]he court shall order the petitioner and the respondent to arbitrate the controversy if it determines that an agreement to arbitrate the controversy exists....’ (§ 1281.2) The statute does not require the petitioner to introduce the agreement into evidence. A plain reading of the statute indicates that as a preliminary matter the court is only required to make a finding of the agreement’s existence, not an evidentiary determination of its validity.” (Condee v.

Longwood Management Corp. (2001) 88 Cal.App.4th 215, 218-219.) “If the moving party meets its initial prima facie burden and the opposing party does not dispute the existence of the arbitration agreement, then nothing more is required for the moving party to meet its burden of persuasion.” (Gamboa v. Northeast Community Clinic (2021) 72 Cal.App.5th 158, 165.) Once the moving party meets its initial burden by submitting a copy of the agreement, the burden shifts to the party opposing arbitration to identify a factual dispute as to the agreement’s existence. (Iyere v.

Wise Auto Group (2023) 87 Cal.App.5th 747, 755.) For example, if the opposing party disputes the authenticity of her signature, she must “offer admissible evidence creating a factual dispute as to the authenticity” of her signature. (Ibid.) “The opposing party can do this in several ways. For example, the opposing party may testify under oath or declare under penalty of perjury that the party never saw or does not remember seeing the agreement, or that the party never signed or does not remember signing the agreement.” (Gamboa, 72 Cal.App.5th at p. 165.) “If the opposing party meets its burden of producing evidence, then in the third step, the moving party must establish with admissible evidence a valid arbitration agreement between the parties.

The burden of proving the agreement by a preponderance of the evidence remains with the moving party.” (Id. at pp. 165-166.)

Here, MB submits a copy of the Agreement and Plaintiffs do not dispute that the Agreement exists or that they signed the Agreement. MB has satisfied its burden under the authority discussed above.

Plaintiffs attempt to distinguish Condee on the ground that the petition in Condee was verified and the arbitration provision was authenticated by a custodian of records. The court’s decision in Condee was not based on these facts, however. The Condee court held that once the petitioner “had alleged that the agreement exists, the burden shifted to respondents to prove the falsity of the purported agreement.” (Condee, 88 Cal.App.4th at p. 219.) The First District cited Condee in Iyere, supra, noting: “The arbitration proponent must first recite verbatim, or provide a copy of, the alleged agreement.

A movant can bear this initial burden by attaching a copy of the arbitration agreement purportedly bearing the opposing party’s signature. At this step, a movant need not follow the normal procedures of document authentication and need only allege the existence of an agreement and support the allegation as provided in rule [3.1330].” (Iyere, 87 Cal.App.5th at p. 755 [citations and internal quotations omitted].) The Second District followed Condee in Gamboa and more recently in Kostandian v. American Honda Motor Co., Inc. (2026) 120 Cal.App.5th 872.

The Ruiz case relied upon by Plaintiffs is inapposite because the respondent there challenged the moving party’s initial showing by averring that he did not recall signing the agreement. The court found that given this statement by the responding party, the burden shifted back to the moving party to prove the signature was authentic, which it did not do. (See Ruiz v. Moss Bros. Auto Group, Inc. (2014) 232 Cal.App.4th 836, 846.) Here, despite Plaintiffs’ arguments to distinguish Condee and knowing the importance of submitting evidence in order to challenge the existence of the agreement under the relevant case law (including Ruiz), Plaintiffs do not do so here.

Plaintiffs do not submit any declarations or other evidence challenging the Agreement submitted by MB. Accordingly, the Court finds that MB has satisfied its burden of showing the existence of an agreement to arbitrate, shifting the burden to Plaintiffs, and Plaintiffs have failed to satisfy their burden of challenging that agreement. The Court will therefore consider the Agreement in ruling on MB’s motion.

Request for Judicial Notice

MB’s request for judicial notice of Plaintiff’s Complaint is granted. (Evid. Code §§ 452, 453.)

Discussion

Third Party Beneficiary

Plaintiffs contends that MB lacks standing because it is not a signatory to the Agreement. MB argues that it can enforce the Agreement as a third party beneficiary because the Agreement expressly states that MB is a third party beneficiary.

“A contract, made expressly for the benefit of a third person, may be enforced by him at any time before the parties thereto rescind it.” (Civ. Code § 1559.) “[A] third party beneficiary of an arbitration agreement may enforce it.” (Fuentes v. TMCSF, Inc. (2018) 26 Cal.App.5th 541, 552 [citation and internal quotations omitted].)

A non-signatory seeking to compel arbitration as a third-party beneficiary must demonstrate 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.” (Goonewardene v. ADP, LLC (2019) 6 Cal. 5th 817, 830.)

Plaintiffs cite to Ford Motor Warranty Cases, 17 Cal.5th 1122 to support their argument that MB is not a third party beneficiary, but that case was based on an equitable estoppel theory rather than a third party beneficiary theory. Further, the agreement in Ford Motor Cases did not mention the manufacturer. (See id. at p. 1129 [“nothing in the agreement between plaintiffs and

the seller dealers expressed an intent to empower third parties to invoke the arbitration clause”]. Here, not only is MB mentioned in the Agreement, it is expressly identified as a third party beneficiary. MB has therefore satisfied its burden in showing it is entitled to enforce the Agreement. (See Ford Motor Warranty Cases (2023) 89 Cal.App.5th 1324, 1339 [“If the signatories had intended to benefit FMC, such a purpose would have been easy to articulate. They could have simply named FMC—directly or by class as the vehicle’s manufacturer—as a person entitled to compel arbitration”], aff’d 17 Cal.5th 1122; see also McGee v.

Mercedes-Benz USA LLC, Case No. 25-cv-09671-JCS, 2026 WL 667822, *2-3 (N.D. Cal. March 9, 2026); Khachatryan v. Mercedes-Benz USA, LLC, No. 4:25-cv-02749-DMR, 2025 WL 2955995, *4 (N.D. Cal. Sept. 8, 2025); Brown v. Mercedes-Benz USA, LLC, No. 2:25-cv-02300-SVW-JC, 2025 WL 4231564, *4 (C.D. Cal. Aug. 13, 2025); Durkin v. Mercedes-Benz USA LLC, No. 3:25- cv-03064-WHO, 2025 WL 2263681, *2-3 (N.D. Cal. July 15, 2025); Ghazzal v. Mercedes-Benz USA, LLC, No. 2:24-cv-02163 WBS SCR, 2025 WL 406222, *1 (E.D.

Cal. Feb. 5, 2025); Ayad v. Mercedes-Benz USA, LLC, No. 5:24-cv-01111-WLH-SK, 2024 WL 5369370, *2-3 (C.D. Cal. Oct. 21, 2024); Attalah v. Mercedes-Benz USA, LLC, No. 2:24-cv-01245-JDE, 2024 WL 4445275, *3-4 (C.D. Cal. Aug. 15, 2024).)

Plaintiffs’ Claims fall within the Agreement

Plaintiffs argue that their claims are independent of the Agreement and therefore are not subject to the Agreement’s arbitration provision. However, the language of the arbitration provision is broad and covers Plaintiffs’ claims against MB. The Agreement requires arbitration of claims or disputes arising out of “any resulting transaction or relationship arising out of this lease (including such relationship with third parties who do not sign this contract).” This language covers claims and disputes arising out of Plaintiffs’ relationship with MB. (See Durkin, 2025 WL 2263681 at *3; Ghazzal, 2025 WL 406222 at *2; Attalah, 2024 WL 4445275 at *4.)

Equitable Estoppel

Plaintiffs argue that MB does not have standing under the doctrine of equitable estoppel. Because the Court concludes that MB is an intended third party beneficiary, it need not address the issue of equitable estoppel. (See Davis v. Nissan North America, Inc. (2024) 100 Cal.App.5th 825, 843, review granted and dismissed, remanded [equitable estoppel and third party beneficiary “are separate and distinct theories for enforcement of an arbitration clause by someone who is not a party to the contract containing it”]; Fuentes v.

TMCSF, Inc. (2018) 26 Cal.App.5th 541, 547 [describing equitable estoppel and third party beneficiary as two distinct means of enforcement of contract by nonsignatory]; Ayad, 2024 WL 5369370 at *4 [“Given the Court’s conclusion regarding Defendant MBUSA’s status as an intended third party beneficiary, the Court need not reach arguments concerning equitable estoppel as a basis to compel arbitration”].) MB has standing to move to compel arbitration as a third party beneficiary.

Civil Code Section 1790.1

Plaintiffs argue that the FAA does not apply because MB does not make a showing that the dispute involves interstate commerce, and that because the FAA does not apply, the antiwaiver provision of the Song-Beverly Act bars arbitration. The anti-waiver provision, Civil Code Section 1790.1, provides: “Any waiver by the buyer of consumer goods of the provisions of this chapter, except as expressly provided in this chapter, shall be deemed contrary to public policy and shall be unenforceable and void.”

Plaintiffs’ arguments lack merit. Where an agreement states that the FAA applies, there is no need to present evidence of interstate commerce. (See Barrera v. Apple American Group LLC (2023) 95 Cal.App.5th 63, 76; Davis v. Shiekh Shoes, LLC (2022) 84 Cal.App.5th 956, 963; Victrola 89, LLC v. Jaman Properties 8 LLC (2020) 46 Cal.App.5th 337, 355.)1 The Agreement here clearly states that the FAA governs, so Section 1790.1 does not apply to preclude enforcement of the arbitration provision. Plaintiffs do not point to any provision of the Song- Beverly Act which precludes enforcement of an arbitration provision in any event.

Unconscionability

Plaintiffs argue that the Agreement is not enforceable because it is unconscionable.

“California law strongly favors arbitration . . . [and] establishes a ‘presumption in favor of arbitrability.’” (OTO, LLC v. Kho (2019) 8 Cal.5th 111, 125 [citation omitted].) However, generally applicable contract defenses such as unconscionability may be applied to invalidate an arbitration agreement without contravening California law or the FAA. (Ibid.) In order to invalidate an arbitration agreement on this ground, the party opposing arbitration must prove that the agreement is both procedurally and substantively unconscionable. (Armendariz v.

Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 114.) “ʻThe procedural element addresses the circumstances of contract negotiation and formation, focusing on oppression or surprise due to unequal bargaining power. [Citations.] Substantive unconscionability pertains to the fairness of an agreement’s actual terms and to assessments of whether they are overly harsh or one-sided.’” (OTO, 8 Cal.5th at 125 [citation omitted].) “Both procedural and substantive unconscionability must be shown for the defense to be established, but they need not be present in the same degree.

Instead, they are evaluated on a sliding scale. [T]he more substantively oppressive the contract term, the less evidence of procedural unconscionability is required to conclude that the term is unenforceable. Conversely, the more deceptive or coercive the bargaining tactics employed, the less substantive unfairness is

1 There is nothing in the courts’ rulings in the two cases cited by Defendants, Woolls v. Superior Court (2005) 127 Cal.App.4th 197 and Hoover v. American Income Life Ins. Co. (2012) 206 Cal.App.4th 1193, which indicates that the agreements there provided that the FAA would govern.

required.” (Ibid. [citations and internal quotations omitted].) The party resisting arbitration bears the burden of proving unconscionability. (Pinnacle Museum Tower Assn. v. Pinnacle Market Development (US), LLC (2012) 55 Cal.4th 223, 247.)

Plaintiffs argue that the Agreement is procedurally unconscionable because they had no ability to negotiate the language creating a “take it or leave it” scenario. Plaintiffs fail to present any evidence to support this claim, however, and they have the burden of proving unconscionability. (Pinnacle, 55 Cal.4th at p. 247.) Plaintiffs cannot meet this burden by arguing that MB does not present evidence relating to their contention. Moreover, even if Plaintiffs did meet their burden of presenting actual evidence to support their procedural unconscionability argument, the result would be a low degree of procedural unconscionability only. (See Lennar Homes of California, Inc. v. Stephens (2014) 232 Cal.App.4th 673, 689-690; Dotson v. Amgen, Inc. (2010) 181 Cal.App.4th 975, 981-982.)

Because Plaintiffs fail to produce any evidence of procedural unconscionability, the Court need not address whether the Agreement was substantively unconscionable. However, the Court notes that Plaintiffs have failed to make this showing as well. Plaintiffs argue that the Agreement is substantively unconscionable because it violates the anti-waiver provision of the Song-Beverly Act and it deprives Plaintiffs of their right to a jury trial. The first argument fails for the reason discussed above, and waiving a jury trial in an otherwise enforceable arbitration agreement does not make that agreement unconscionable.

Stay

MB’s motion to compel arbitration is granted. This action is stayed pending resolution of the arbitration. (Code Civ. Proc. § 1281.4; 9 U.S.C. § 3.)

All parties must comply with Marin County Superior Court Local Rules, Rule 2.10(B) to contest the tentative decision. Parties who request oral argument are required to appear in person or remotely by ZOOM. Regardless of whether a party requests oral argument in accordance with Rule 2.10(B), the prevailing party shall prepare an order consistent with the announced ruling as required by Marin County Superior Court Local Rules, Rule 2.11.

The Zoom appearance information for July, 2026 is as follows: https://marin-courts-ca-gov.zoomgov.com/j/1605267272?pwd=908CbP6TV2mhCAyai1nzo6lyz2dKaw.1 Meeting ID: 160 526 7272 Passcode: 026935

If you are unable to join by video, you may join by telephone by calling (669) 254-5252 and using the above-provided passcode. Zoom appearance information may also be found on the Court’s website: https://www.marin.courts.ca.gov