MOTION TO COMPEL ARBITRATION
1. CASE # CASE NAME HEARING NAME MONTERO vs HYUNDAI MOTION TO COMPEL
MOTOR AMERICA ARBITRATION Tentative Ruling:
Defendant Hyundai Motor America’s Motion to Compel Arbitration is denied. Defendant is ordered to file responsive pleading within 20 days.
REQUEST FOR JUDICIAL NOTICE
Defendant seeks judicial notice of the Complaint filed in this matter. However, judicial notice is unnecessary because the Court has authority to look through its own file. (See Davis v. Southern California Edison Company (2011) 236 Cal.App.4th 619, 632, fn. 11 [judicial notice of document included in appellate record is unnecessary]).
The court must grant the motion to compel arbitration unless it finds either: no written agreement to arbitrate exists; the right to compel arbitration has been waived; grounds exist for revocation of the agreement; or litigation is pending that may render the arbitration unnecessary or create conflicting rulings on common issues. (C.C.P. § 1281.2.) A proceeding to compel arbitration is in essence a suit in equity to compel specific performance of a contract. (Freeman v. State Farm Mutual Auto Insurance Co. (1975) 14 Cal.3d 473, 479.)
The motion to compel must set forth the provisions of the written agreement and the arbitration clause verbatim, or such provisions must be attached and incorporated by reference. (C.R.C., Rule 3.1330; see Condee v. Longwood Mgmt. Corp. (2001) 88 Cal.App.4th 215, 218–219.) This rule does not require the movant to authenticate the agreement or do anything more than allege its existence and attach a copy. (Condee, supra, 88 Cal.App.4th at 218-219.) Once this is done, the burden shifts to the opposing party to demonstrate the falsity of the purported agreement. (Ibid.)
Here, Defendant contends that the parties are bound by the arbitration clause contained within its 2022 Owner’s Handbook & Warranty Information (“Warranty Handbook”). (Ameripour Decl., Exh. 3 [“Warranty Handbook”].) Specifically, section 3 of the Warranty Handbook sets out a section on “Alternative Dispute Resolution” that describes an arbitration program through the BBB Auto Line provided at no cost. Section 4 of the Warranty Handbook provides, “You must also use BBB AUTO LINE if you are seeking remedies under the “Lemon Laws” of your state if your state statute requires you to do so.” (Warranty Handbook, § 4.) Section 4 further states in pertinent part:
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If you purchased or leased your Hyundai vehicle in the State of California, you and we each agree that any claim or disputes between us (including between you and any of our affiliated companies) related to or arising out of your vehicle purchase, use of your vehicle, the vehicle warranty, representations in the warranty, or the duties contemplated under the warranty, including without limitation claims related to the failure to conform
a vehicle, or claims related to the failure to conform a vehicle to warranty, failure to repurchase or replace your vehicle, or claims for a refund or partial refund of your vehicle’s purchase price (excluding personal injury claims), shall be resolved by binding arbitration at either your or our election, even if the claim is initially filed in a court of law. If either you or we elect to resolve our dispute via arbitration (as opposed to in a court of law), such binding arbitration shall be administered by and through JAMS Mediation, Arbitration and ADR Services (JAMS) under its Streamlined Arbitration Rules & Procedures.
The Warranty Handbook goes on to explain that Defendant will pay for JAMS fees except for the initial filing fee, and that “[t]his agreement to arbitrate is intended to be broadly interpreted and to make all disputes and claims between us (including our affiliated companies) relating to or arising out of your vehicle purchase, use of your vehicle, or the vehicle warranty subject to arbitration to the maximum extent permitted by law.” (Warranty Handbook, § 4.)
In California, general principles of contract law determine whether the parties have entered a binding agreement to arbitrate. (Pinnacle Museum Tower Assn. v. Pinnacle Market Development (US), LLC (2012) 55 Cal.4th 223, 236.) “An essential element of any contract is the consent of the parties or mutual assent.” (Donovan v. RRL Corp. (2001) 26 Cal.4th 261, 270; Civ. Code §§ 1550, 1565.) Consent is typically shown by one party’s offer, followed by the other’s acceptance and its communication to the offeror. (Rest. 2d Contracts §§ 22(1), 23-24.)
In this case, there is no evidence that Plaintiffs signed the Warranty Handbook’s arbitration clause, the Warranty Handbook itself, or an acknowledgement of receipt of the Warranty Handbook. Although Defendant alleges in the motion that the Warranty Handbook accompanied the sale of the Vehicle, there is no evidence that the Warranty Handbook was presented to Plaintiffs before, during, or after, their purchase of the Vehicle. Rather, defense counsel simply attaches the Warranty Handbook as an exhibit to his declaration. There is no declaration by a representative of Defendant or a Hyundai dealership stating that the Warranty Handbook was, in fact, provided to Plaintiffs, that the Warranty Handbook is provided to all Hyundai purchasers, or that the Warranty Handbook is even applicable to the Vehicle.
It should also be noted that warranties are different from contracts. Warranties, unlike contracts, do not impose binding obligations on the buyer. (See Weinstat v. Dentsply Int’l, Inc. (2010) 180 Cal.App.4th 1213, 1228-1229.) “A warranty relates to the title, character, quality, identity, or condition of the goods. The purpose of the law of warranty is to determine what it is that the seller has in essence agreed to sell.” (Keith v. Buchanan (1985) 173 Cal.App.3d 13, 20.) Based on those warranties, the seller is bound to deliver and the buyer to accept goods that match the warranties made. (Ibid.)
Written warranties are merely a written statement of promises made to the consumer prior to a purchase, which constitute a declaration of the facts presented or promises made to the consumer in connection with the sale of a good. (Comm. Code, § 2313; Civil Code, §§ 1791.2, 1790.3; 15 U.S.C. § 2301(6).)
Accordingly, while the seller may be held to the promises/warranties it made to a consumer prior to the sale of a vehicle, the written warranties do not constitute a contract between the manufacturer and the buyer. Rather, it is the retail installment sales contract that evidences the transaction.
Under both federal and state law, arbitration cannot be compelled absent an arbitration agreement. (Adajar v. RWR Homes, Inc. (2008) 160 Cal.App.4th 563, 569 [“ ‘Absent a clear agreement to submit disputes to arbitration, courts will not infer that the right to a jury trial has been waived.’ [Citation.]”].) Given the above, there is no clear agreement to arbitrate under the Warranty Handbook.
Defendant then argues that Plaintiff is equitably estopped from avoiding the arbitration clause set forth in the Warranty Handbook because Plaintiffs’ claims are based on the warranty and Plaintiffs sought repairs pursuant to the warranty. (Reply, pp. 2-3.) In support of its claim, Defendant cites to Ford Motor Warranty Cases (2025) 17 Cal.5th 1122. However, the Ford plaintiffs all “bought cars from various dealerships, signing sales contracts that included an arbitration provision.” (Ford, supra, 17 Cal.5th at 1125.) There is no signed sales contract containing an arbitration clause here, and as noted above, the Warranty Handbook is a warranty that does not constitute a contract between the parties. Accordingly, Defendant’s equitable estoppel argument fails.
Customer Services Agreement Alternatively, HMA argues that Plaintiffs should be compelled to arbitrate this dispute because Plaintiffs agreed to the Bluelink Agreement’s arbitration provision while enrolling in HMA’s Bluelink services. The Bluelink Terms and Conditions provide as follows:
Hyundai and you agree to arbitrate any and all disputes and claims between us arising out of or relating to this Agreement, Connected Services, Connected Services Systems, Service Plans, the Vehicle, use of the sites, or products, services, or programs you purchase, enroll in or seek product/service support for, whether you are a Visitor or Customer, via the sites or through mobile application, except any disputes or claims which under governing law are not subject to arbitration, to the maximum extent permitted by applicable law.
This agreement to arbitrate is intended to be broadly interpreted and to make all disputes and claims between us subject to arbitration to the fullest extent permitted by law. However, any dispute you or we may have relating to copyrights or other intellectual property shall not be governed by this agreement to arbitrate. For the avoidance of doubt, this means that any claims you or we may have relating to intellectual property rights against the other, including injunctive and other relief sought, may be brought in a court of competent jurisdiction.
The agreement to arbitrate otherwise includes, but is not limited to:
claims based in contract, tort, warranty, statute, fraud, misrepresentation or any other legal theory; claims that arose before this or any prior Agreement (including, but not limited to, claims relating to advertising); claims that are currently the subject of purported class action litigation
in which you are not a member of a certified class; claims relating to the Vehicle for which you seek product or service support via the sites; claims arising out of or relating to the Telephone Consumer Protection Act; claims relating to your data privacy or information security; and claims that may arise after the termination of this Agreement.
(Rao Decl. ¶ 6, Ex. 2.)
The express language of the Bluelink Agreement indicates that it covers HMA’s “provision of Connected Services to [Plaintiff].” (Id., Ex. 2 at § 1.) “Connected Services” refers to a connected car system that includes various functions and features, including Automatic Collision Notification and Assistance; SOS Emergency Assistance; Stolen Vehicle Recovery, Vehicle Immobilization and Vehicle Slowdown; Curfew Alerts, Geo- Fence, Driving Information, Speed Alert & Valet Alert; Remote Door Unlock/Lock; Remote Horn & Lights; Remote Start; Recall Advisor; Diagnostic Information/Maintenance Alert; Daylight Savings Time; Location Sharing; and/or Wi-Fi. (Id., Ex. 2 at § 8.)
Although the arbitration provision is worded broadly and refers to claims arising out of the “[Subject] Vehicle” and “claims based in . . . warranty [and] statute” (Id., Ex. 2 at § 15(C)(a)), these provisions must be read in the context of the entire Bluelink Agreement, which is ultimately an agreement relating to or governing HMA’s provision of its Bluelink services. The reasonable interpretation of the agreement as a whole is that it covers issues arising out of or relating to HMA’s provision of its Bluelink services, not any possible problem with the vehicle unrelated to the provision of Bluelink services.
Here, Plaintiffs’ claims do not arise out of the Bluelink Agreement, or any defects related to the Bluelink services. Rather, Plaintiffs allege nonconformities to warranty, including defects in the engine and fuel injectors. (Comp. ¶ 9.) These issues have nothing to do with the Bluelink services provided pursuant to the Bluelink Agreement.