Motion to Compel Arbitration and Stay Action
16. Ghali, et al, v. Mercedes-Benz USA, LLC, Case No. CIVSB2535606 Defendant Mercedes-Benz’s Motion to Compel Arbitration and Stay Action 5/12/26, 9:00 a.m., Dept. S-17
Tentative Rulings As to Objections: The Court would OVERRULE Plaintiffs’ evidentiary objections. As to the Request for Judicial Notice: The Court would GRANT. As to the Motion: The Court would GRANT.
Case Summary This is a lemon law case. The Complaint alleges that on October 19, 2024, Plaintiffs leased the subject vehicle. They allege that Defendant gave an express written warranty. The vehicle developed defects emission, engine, and electrical systems. Although it was taken for repairs, it was not conformed to its warranty, and Plaintiff filed suit on December 4, 2025, alleging (1) violation of the Song-Beverly Act – Express Warranty; and (2) violation of the Song-Beverly Act – Implied Warranty. This motion followed.
Statement of the Law California law favors the enforcement of valid arbitration agreements. (Ericksen, Arbuthnot, McCarthy, Kearney & Walsh, Inc. v. 100 Oak Street (1983) 35 Cal.3d 312, 320; In re Tobacco I (2004) 124 Cal.App.4th 1095, 1103.) Any doubts about 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. (Erickson, supra, 35 Cal.3d at p. 320.)
Under Code of Civil Procedure section 1281.2, a party to an arbitration agreement may move to compel arbitration if another party to the agreement refuses to arbitrate, and the court shall order the parties to arbitrate if it determines an agreement to arbitrate exists, unless it determines (a) the right to compel has been waived by the petitioner; (b) grounds exist for revocation of the agreement; or (c) a party to the agreement is also a party to a pending court action or special proceeding, arising out of the same transaction or related transaction, and there is a possibility of conflicting rulings on common issues of law or fact. (Code Civ. Proc., § 1281.4.)
The Court must determine when a petition to compel arbitration is filed and accompanied by prima facie evidence of a written arbitration agreement whether the agreement exists, if any defense to its enforcement is raised, and whether the agreement is enforceable. (Rosenthal v. Great Western Fin. Securities Corp. (1996) 14 Cal.4th394, 413.) The moving party bears the burden of proving the existence of the arbitration agreement by preponderance of the evidence. (Ibid.) If the party opposing the petition raises a defense to enforcement, then he bears the burden of producing evidence and proving by preponderance of the evidence any fact necessary to the defense. (Ibid.)
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The Federal Arbitration Act (FAA), at 9 U.S.C. §1, et seq., also authorizes enforcement of arbitration clauses unless grounds exist in law or equity for the revocation of any contract. (9 U.S.C. § 2). The enforcement language of the FAA is almost identical to Code of Civil Procedure section 1281. 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 [“The FAA contains no express pre-emptive provision, nor does it reflect a congressional intent to occupy the entire field of arbitration . . . . But even when Congress has not completely displaced state regulation in an area, state law may nonetheless be pre-empted to the extent that it actually conflicts with federal law . . . .”].)
Analysis
FAA Applicability: As a preliminary matter, the agreement itself provides that the FAA applies. Plaintiffs do not dispute. Thus, the Court concludes that the FAA applies.
The Right to Compel as a Third-Party Beneficiary: 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, 218-19.) 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, 1058-60.) To satisfy this burden, Defendant the Lease agreement with the dealership, which contains the agreement to arbitrate.
Thus, the Court must review whether movant may avail itself to the benefit of the agreement: “Nonsignatory defendants may enforce arbitration agreements where there is sufficient identity of parties.” (Marenco v. DirectTV LLC (2015) 233 Cal.App.4th 1409, 1417.) “Enforcement is permitted where the nonsignatory is the agent for a party to the arbitration agreement, or the nonsignatory is a third party beneficiary of the agreement.” (Ibid.) “In addition, a nonsignatory may enforce an arbitration agreement under the doctrine of equitable estoppel.” (Ibid.)
Now, Defendant argues that as part of the agreement, Plaintiff agreed to resolve any disputes concerning the lease or condition of the vehicle by binding arbitration. Thus, Defendant argues it is an intended third-party beneficiary as set forth specifically in the agreement, which states it applies to any claim or dispute between Plaintiff, the vehicle’s dealer and the vehicle distributor, including Mercedes-Benz USA LLC arising out of or relating to the lease. Here, Defendant is expressly named as a third-party beneficiary.
Furthermore, Defendant argues – even in the alternative- the delegation clause requires the arbitrator to decide “any dispute over the interpretation, scope, or validity of this lease, arbitration section or the arbitrability of any issue.” Even in the alternative, Defendant appears to meet all the requirements of a thirdparty beneficiary under Goonewardene v. ADP, LLC (2019) 6 Cal.5th 817, 830, as it necessarily 3 benefits every time an independent dealership sells or leases one if its vehicles; the dealership intended to benefit Defendant by expressly naming it; and the Plaintiffs knew or reasonable could have known that the arbitration was intended to benefit it.
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18. Curiel v. Motivational Marketing LLC, et al, Case No. CIVSB2310932 Plaintiff’s Motion for Preliminary Approval of Class Action Settlement 5/12/26, 1:30 p.m., Dept. S-17
The Court would CONTINUE the matter to allow for a Second Amended Complaint to add Ivette Aguilar as a named Plaintiff. Initially, Ivette Aguilar filed a separate action (CIVSB2317884). Here, the settlement agreement and motion seek to have her named as a Representative Plaintiff in this separate proceeding filed by Plaintiff Curiel (CIVSB2310932). However, Aguilar is not a named plaintiff in this matter.
Notably, a First Amended Complaint (FAC) was filed on April 3, 2024, to expand the claims to include a Private Attorneys General Act (PAGA) cause. However, the FAC failed to add Aguilar as a named Plaintiff. The Court declines to add Aguilar as a named Plaintiff here sua sponte, and it would continue the matter to allow a Second Amended Complaint naming Aguilar.
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