Motion to Compel Arbitration; Case Management Conference
6. Ortiz vs. Hyundai 1. Motion to Compel Arbitration Motor America 2. Case Management Conference
26-01539730 Defendant Hyundai Motor America’s Motion to Compel Arbitration is DENIED.
Defendant’s Request for Judicial Notice is GRANTED.
Plaintiffs’ Evidentiary Objections to the Declaration of Ali Ameripour are OVERRULED. (See (Condee v. Longwood Management Corp. (2001) 88 Cal.App.4th 215, 218-219.)
Defendant Hyundai Motor America seeks an order (1) compelling Plaintiffs to arbitrate their claims, and (2) stay this action pending completion of arbitration.
As discussed below, Defendant has failed to meet its burden to demonstrate the existence of an agreement to arbitrate by a preponderance of the evidence. (See Victrola 89, LLC v. Jaman Properties 8 LLC (2020) 46 Cal.App.5th 337, 345-346.)
Defendant’s motion is primarily based on an arbitration provision in the “Owner’s Handbook and Warranty Information” booklet (Warranty) typically found in the glove compartment of a vehicle. . This handbook sets forth the details of HMA’s express warranty, and Plaintiffs’ claims in this action are based in part on the existence of this warranty. (See Ameripour Decl. at Ex. 2.)
The arbitration provision is found at pages 13-14 of the handbook and broadly requires binding arbitration of any and all claims between Plaintiffs and HMA related to or arising out of the vehicle purchase, use or performance of the vehicle, or the vehicle warranty, with the exception of Magnuson-Moss Warranty Act claims and claims falling within the jurisdiction of the small claims court, through JAMS under its Streamlined Arbitration Rules & Procedures, or the American Arbitration Association (AAA) under its Consumer Arbitration Rules. (Ameripour Decl. at Ex. 2 [handbook, pp. 13-14].) There is no signature line. Rather, the arbitration provision automatically applies merely by plaintiffs’ use of the vehicle. (Ibid.)
“Under the Federal Arbitration Act (FAA; 9 U.S.C. § 1 et seq.), a written agreement to arbitrate ‘shall be 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
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arbitration has been had in accordance with the terms of the agreement ....” (9 U.S.C. § 3.) [I]n ruling on a motion to compel arbitration, the court must first determine whether the parties actually agreed to arbitrate the dispute. General principles of California contract law guide the court in making this determination. The party seeking arbitration bears the burden of proving the existence of an arbitration agreement,” (Ford Motor Warranty Cases (2025) 17 Cal.5th 1122, 1128.)
The FAA reflects a policy favoring arbitration, requiring that agreements to arbitrate be enforced in the same manner as any other contract. (Ibid.) To form a contract under California law, there must be mutual assent. (Herzog v. Superior Court (2024) 101 Cal.App.5th 1280, 1293-1294.) “ ‘Mutual assent is determined under an objective standard applied to the outward manifestations or expressions of the parties, i.e., the reasonable meaning of their words and acts, and not their unexpressed intentions or understandings. The parties’ outward manifestations must show that the parties all agreed ‘upon the same thing in the same sense.’ If there is no evidence establishing a manifestation of assent to the ‘same thing’ by both parties, then there is no mutual consent to contract and no contract formation.” (Herzog, at pp. 1293-1294.)
Assent requires notice. (B.D. v. Blizzard Entertainment, Inc. (2022) 76 Cal.App.5th 931, 944.) “[I]n the absence of actual notice, a manifestation of assent may be inferred from the consumer’s actions ... but any such action must indicate the parties’ assent to the same thing, which occurs only when the [provider] puts the consumer on constructive notice of the contractual terms.” (Sellers v. JustAnswer LLC (2021) 73 Cal.App.5th 444, 461
Here, Defendant has presented no evidence (no declarations, no affidavits, and no testimony) Plaintiffs were put on notice of the arbitration agreement in the Warranty prior to the purchase the Vehicle and using it. Nor is there sufficient evidence they received the Warranty.
The Warranty itself did not provide any notice that it contained contractual obligations outside the scope of the warranty. It is simply labeled “2021 Owner’s Handbook & Warranty Information.” The binding arbitration provision appears on page 13 of the Warranty, but to this Court, one could easily miss it unless focused on finding it.
Without notice of the arbitration agreement there can be no assent to its terms. Thus, Plaintiffs, regardless of their apparent manifestation of
consent by using the vehicle and taking it in for repairs, “[are] not bound by [the subject] inconspicuous contractual provisions of which [they] [were] unaware, contained in a document whose contractual nature is not obvious.” (Sellers, supra, at p. 461 [cleaned-up].)
Defendant attempts to muddy the issue of mutual assent by arguing that Plaintiffs are equitably estopped from claiming the arbitration agreement is unenforceable claiming “it would be manifestly unjust to allow Plaintiffs to rely on the Warranty as a basis for this action but then avoid the binding arbitration provision in the Warranty.”
The doctrine of equitable estoppel is meant to “prevent a party from playing fast and loose with its commitment to arbitrate, honoring it when advantageous and circumventing it to gain undue advantage.” (Metalclad Corp. v. Ventana Environmental Organizational Partnership (2003) 109 Cal.App.4th 1705, 1714.) Defendant contends Plaintiff’s claims against it fundamentally result from and are inseparable from the Warranty and the alleged obligations of Defendant that flow from the obligations that were created by and through the Warranty.
But there is no statement in the Warranty that the warranties contained therein do not apply if Plaintiffs were to opt out of the arbitration agreement. Therefore, the warranties provided by Defendant are not “inseparable” from the underlying warranty. To the contrary, the warranties would still apply even if a consumer opted out of the arbitration agreement. To this Court, no inequity exists in allowing Plaintiffs to pursue a claim for breach of express warranties without enforcing the arbitration agreement.
Accordingly, the Court finds Defendant has failed to sustain its burden in demonstrating a valid agreement to arbitrate exists under the Warranty as there was no mutual assent by the parties. For this reason, the Motion is DENIED.
Defendant is to file and serve an answer within 30 days.
The Case Management Conference is CONTINUED to February 4, 2027, at 9:30 a.m. in Department C12.
Moving Party to give notice of this ruling.