Jazmin Rosas, et al. v. Hyundai Motor America, et al.

"Motion to Vacate."

OF CALIFORNIA FOR THE COUNTY OF LOS ANGELES - SOUTH CENTRAL DISTRICT JAZMIN ROSAS, an individual, and LEROY NASTON, an individual, Plaintiff, vs. HYUNDAI MOTOR AMERICA, a California Corporation, and DOES 1 through 10, inclusive, Defendants. |)))))))))) | CASE NO: 25CMCV01461 [TENTATIVE] ORDER RE: MOTION TO COMPEL ARBITRATION AND FOR STAY OF PROCEEDINGS DATE: August 19, 2026 TIME: 8:30 A.M. DEPT.: E | Moving Party: Defendant Hyundai Motor America Responding Party: Plaintiffs Jazmin Rosas and Leroy Naston Notice: Ok SHAPE \* MERGEFORMAT Tentative Ruling: Defendant's Motion to Compel Arbitration and for Stay of Proceedings is DENIED. SHAPE \* MERGEFORMAT I.

BACKGROUND This is a Song-Beverly action arising from the purchase of an allegedly defective 2020 Hyundai Sonata (the "Subject Vehicle"). Plaintiffs Jazmin Rosas and Leroy Naston (collectively, the "Plaintiffs") allege that, on April 18, 2020, they purchased the Subject Vehicle which was warranted by Defendant Hyundai Motor America ("Hyundai"). Plaintiffs further alleged that the Subject Vehicle was delivered with serious defects and nonconformities to warranty which Hyundai or its authorized repair facilities were not able to conform to warranty after a reasonable number of attempts.

On September 3, 2025, Plaintiffs filed the operative Complaint against Hyundai and Does 1 through 10, inclusive, alleging causes of action for: (1) Violation of Song-Beverly Act - Breach of Express Warranty, (2) Violation of Song-Beverly Act - Breach of Implied Warranty, and (3) Violation of the Song-Beverly Act Section 1793.2.

On January 2, 2026, Hyundai filed the instant Motion to Compel Arbitration and for Stay of Proceedings (the "Motion"). On April 22, 2026, Plaintiffs filed their Opposition. On April 28, 2026, Hyundai filed its Reply. II. ANALYSIS A.

Legal Standard

Whether the Federal Arbitration Act (the "FAA") or the California Arbitration Act (the "CAA") applies, courts "apply general California contract law to determine whether the parties formed a valid agreement to arbitrate their dispute." (Avery v. Integrated Healthcare Holdings, Inc. (2013) 218 Cal.App.4th 50, 59-60.) "General contract law principles include that '[t]he basic goal of contract interpretation is to give effect to the parties' mutual intent at the time of contracting. [Citations.] ... "The words of a contract are to be understood in their ordinary and popular sense." ' [Citation.] Furthermore, ' "[t]he whole of a contract is to be taken together, so as to give effect to every part, if reasonably practicable, each clause helping to interpret the other." ' " (Franco v. Greystone Ridge Condominium (2019) 39 Cal.App.5th 221, 227.)

California law reflects a strong public policy favoring arbitration and the fundamental principle that arbitration is a matter of contract. (See AT&T Mobility LLC v. Concepcion ¿(2011) 563 U.S. 333, 339 (" Concepcion "); Moncharsh¿v.¿Heily¿&¿Blase¿ (1992) 3 Cal.4th 1, 8-9 (" Moncharsh ").) ¿"To further that policy, Code of Civil Procedure, section 1281.2 requires a trial court to enforce a written arbitration agreement unless one of three limited exceptions¿applies. Those statutory exceptions arise where (1) a party waives the right to arbitration; (2) grounds exist for revoking the arbitration agreement; and (3) pending litigation with a third party creates the possibility of conflicting rulings on common factual or legal issues." (Acquire II, Ltd. v. Colton Real Estate Group¿ (2013) 213 Cal.App.4th 959, 967 (" Acquire II ")(internal citation omitted).)

"[U]nder¿[] California law, 'arbitration agreements are valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.'"¿(Higgins v. Superior Court ¿(2006) 140 Cal.App.4th 1238, 1247; Quach v. California Commerce Club, Inc., (2024) 16 Cal.5th 562, 569 (" Quach "); Morgan v. Sundance (2024) 596 U.S. 411, 419 (" Morgan ") .)

A party to an arbitration agreement may summarily move or petition the Court for an order compelling another non-compliant party to arbitrate their covered claims. (See Code Civ. Proc. Sec.Sec. 1281.2, 1290.2.) A motion to compel arbitration must "alleg[e] the existence of a written agreement to arbitrate a controversy." (Code Civ. Proc. Sec. 1281(a).) It must state the provisions of the written agreement and the paragraph that provides for arbitration (either verbatim or by copy of the agreement attached to the petition). (Cal. R. Ct., Rule 3.1330.)

When a petition to compel arbitration is filed and accompanied by prima facie evidence of a written agreement to arbitrate the controversy, the court must determine whether the agreement exists and, if any defense to its enforcement is raised, whether it is enforceable. The petitioner bears the burden of proving the existence of a valid arbitration agreement by a preponderance of the evidence, and the opposing party bears the burden of proving any fact necessary to its defense by the same evidentiary standard.¿(Ramirez v. Golden Queen Mining Co., LLC (2024) 102 Cal.App.5th 821, 829-830.)

Finally, "[i]f a court of competent jurisdiction, whether in this State or not, has ordered arbitration of a controversy which is an issue involved in an action or proceeding pending before a court of this State, the court in which such action or proceeding is pending shall, upon motion of a party to such action or proceeding, stay the action or proceeding until an arbitration is had in accordance with the order to arbitrate or until such earlier time as the court specifies." (Code Civ. Proc. Sec. 1281.4.) B. Request for Judicial Notice ("RJN")

Pursuant to Evidence Code Sec. 452(d) and (h) and citing Ingram v. Flippo (1999) 74 Cal.App.4th 1280 (" Ingram "), Hyundai requests the Court take judicial notice of (1) Plaintiffs' Complaint in this action (RJN, Exh. 1) [1] and (2) the Hyundai 2020 Owner's Handbook and Warranty Information Publication No. USAHYUNDAI-200310 (RJN, Exh. 2 (the "Owner's Handbook")).

The Court may take judicial notice of "[r]ecords of (1) any court of this state or (2) any court of record of the United States or of any state of the United States. (Evid. Code Sec.452(d).) Further, Evidence Code Sec. 452(h) permits a court to take judicial notice of "[f]acts and propositions that are not reasonable subject to dispute and are capable of immediate and accurate determination by resort to sources of reasonably indisputable accuracy." (Evid. Code Sec. 452(h).)

Although Hyundai's request that the Court take judicial notice of the Complaint in this matter is not entirely necessary given that the Court is permitted to, and does, review the records of this matter in its evaluation of Hyundai's motion, Hyundai's RJN, Exh. 1 is a document of which the Court is permitted to take judicial notice pursuant to Evidence Code Sec. 452(d). The Court therefore GRANTS Hyundai's Request for Judicial Notice as to Exhibit 1.

As to the Owner's Handbook, the Court does not find it is a document suitable for judicial notice. Citing the Ingram case above, Hyundai argues that the warranty "upon which Plaintiffs rely in their Complaint, constitutes 'facts and propositions that are not reasonably subject to dispute and are capable of immediate an accurate determination by resort to sources of reasonably undisputable accuracy.'" (RJN, p. 1:13-18.) But Plaintiffs reference multiple warranties in the operative Complaint and there is nothing within the Complaint that specifically ties the Owner's Handbook to the Complaint nor has the Court found anything within the Owner's Handbook that makes reference to the make and model of the Subject Vehicle such that the handbook could be tied to the Subject Vehicle.

Put simply, a generic document titled "2020 Owner's Handbook and Warranty Information" does not present the same procedural and factual circumstances as was presented to the Ingram Court when deciding to take judicial notice of the documents referenced in the Complaint presented there. (See Ingram, supra, 74 Cal.App.4th at p. 1258, fn. 3 (In a demurrer hearing, noting that it was essential to take judicial notice of a letter and media release that formed the basis of the Complaint but were not attached to the Complaint and noting that the Complaint "excerpted quotes from the letter and summarized parts of it in some detail" and also noting that during the hearing " both sides referred to the letter and quoted from it").)

Finally, the Court notes that Hyundai's Request for Judicial Notice differs from the circumstances presented in Ingram in a more substantive way - the Ingram Court took judicial notice of documents referenced and quoted in the Complaint (and quoted by both counsel) to substantiate the quoted and referenced portions (see id.); here Hyundai asks the Court to take judicial notice of the Owner's Handbook not to substantiate the express warranty referenced in Plaintiffs' Complaint but rather to introduce a new provision of the Owner's Handbook not referenced in the Complaint and contested by Plaintiffs. The Court DENIES Hyundai's Request for Judicial Notice of the 2020 Owner's Handbook. C. Evidentiary Objections

In opposition, Plaintiffs raise evidentiary objections to the declaration submitted in support of Hyundai's motion. As to each, the Court rules as follows: · Objection Nos. 1 and 2: Declaration of Jovani Villa ("Villa Decl.") P. 3 and Exhibit 2 (Plaintiffs' Owner's Handbook & Warranty Information) - SUSTAINED (Foundation, Lack of Personal Knowledge) · Objection No. 3: Declaration of Anthony Goel ("Goel Decl.") P. 5 - OVERRULED. · Objection No. 4: Goel Declaration P. 7 - SUSTAINED IN PART. Sustained only as to the language "which was included in the glovebox materials provided to Plaintiff at the time of purchase of the Subject Vehicle." (Goel Decl., P. 7, p. 1:26-27.) (Lack of Foundation, Lack of Personal Knowledge.)

OVERRULED as to the remainder. · Objection No. 5: Declaration of Vijay Rao ("Rao Decl.") P. 18 - OVERRULED. D. The Alleged Arbitration Agreements 1. The Arbitration Agreement in the New Vehicle Limited Warranty ("NVLW") i. Existence of the Agreement

In ruling on a motion to compel arbitration, the court must first determine whether the parties actually agreed to arbitrate the dispute, and general principles of California contract law help guide the court's determination. (Mendez v. Mid-Wilshire Health Care Center (2013) 220 Cal.App.4th 534, 541.) Courts apply a three-step burden-shifting process to determine whether an agreement to arbitrate exists. (Gamboa v. Northeast Community Clinic (2021) 72 Cal.App.5th 158, 164 (" Gamboa ").)

"First, the moving party bears the burden of producing 'prima facie evidence of a written agreement to arbitrate the controversy.'" (Id. at p. 165 (quoting Rosenthal v. Great Western Fin. Securities Corp. (1996) 14 Cal.4th 394, 413).) The moving party can meet this initial burden by attaching a copy of the arbitration agreement purporting to bear the opposing party's signature or setting forth the agreement's provisions in the motion. (Gamboa, supra, at p. 165; Baker v. Italian Maple Holdings, LLC (2017) 13 Cal.App.5th 1152, 1160 (" Baker "); Espejo v. Southern California Permanente Medical Group (2016) 246 Cal.App.4th 1047, 1060 (" Espejo ").)

For the purposes of this initial burden, "it is not necessary to follow the normal procedures of document authentication." (Condee v. Longwood Management Corp. (2001) 88 Cal.App.4th 215, 218 (" Condee "); Gamboa, supra, 72 Cal.App.5th at p. 165.) Rule of Court 3.1330 provides that a motion or petition to compel arbitration pursuant to Code Civ. Proc. Sec.Sec. 1281.2 and 1281.4, "must state, in addition to other required allegations, the provisions of the written agreement and the paragraph that provides for arbitration." (Ibid.) "The provisions must be stated verbatim or a copy must be physically or electronically attached to the petition and incorporated by reference." (Id.)

"If the movant bears its initial burden, the burden shifts to the party opposing arbitration to identify a factual dispute as to the agreement's existence--in this instance, by disputing the authenticity of their signatures. To bear this burden, the arbitration opponent must offer admissible evidence creating a factual dispute as to the authenticity of their signatures. The opponent need not prove that his or her purported signature is not authentic, but must submit sufficient evidence to create a factual dispute and shift the burden back to the arbitration proponent, who retains the ultimate burden of proving, by a preponderance of the evidence, the authenticity of the signature." (Iyere v. Wise Auto Group (2023) 87 Cal.App.5th 747, 755 9 (" Iyere ").)

Hyundai seeks to compel binding arbitration pursuant to the arbitration agreement contained in the NVLW allegedly provided to Plaintiffs upon their purchase of the Subject Vehicle, which provides in pertinent part as follows: BINDING ARBITRATION FOR CALIFORNIA VEHICLES ONLY PLEASE READ THIS SECTION IN ITS ENTIRETY AS IT AFFECTS YOUR RIGHTS 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 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. We will pay all JAMS fees for any arbitration except for the initial filing fee of $250. The arbitration will be held in the city or county of your residence. To learn more about arbitration, including how to commence arbitration, you may call any JAMS office or go to www.jamsadr.org.

This 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. In any arbitration, the arbitrator shall be bound by the terms of this agreement and shall follow the applicable law. The arbitrator shall not have the power to commit manifest errors of law, and any award rendered by the arbitrator that employs a manifest error of law may be vacated or corrected by a court of competent jurisdiction for such error.

The arbitrator may only resolve disputes between you and us and may not consolidate claims without the consent of all parties. The arbitrator cannot hear class or representative claims or requests for relief on behalf of others purchasing or leasing Hyundai Motor America vehicles as permitted by law. In other words, you and we may bring claims against the other only in your or our individual capacity, and not as a plaintiff or class member in any class or representative action to the maximum extent permitted by law.

If a court or arbitrator decides that any part of this agreement to arbitrate cannot be enforced as to a particular claim for relief, then that claim (and only that claim) must be brought in court and must be stayed pending arbitration of the arbitrable claims. If arbitration is elected by either party, the parties collectively agree that they waive their right to a jury trial. In no event shall class arbitration be permitted. Notwithstanding the above, you may file a lawsuit in small claims court for any claims that otherwise require binding arbitration.

This agreement evidences a transaction involving interstate commerce and shall be governed by the Federal Arbitration Act, 9 U.S.C. Sec.Sec. 1-16. Judgment upon any award in arbitration may be entered in any court having jurisdiction. IF YOU PURCHASED OR LEASED YOUR VEHICLE IN CALIFORNIA, YOUR WARRANTY IS MADE SUBJECT TO THE TERMS OF THIS BINDING ARBITRATION PROVISION. BY ACCEPTING BENEFITS UNDER THIS WARRANTY, INCLUDING HAVING ANY REPAIRS PERFORMED UNDER WARRANTY, YOU AGREE TO BE BOUND BY THESE TERMS.

IF YOU DID NOT AGREE WITH THESE TERMS, PLEASE [email protected] WITHIN THIRTY (30) DAYS OF YOUR PURCHASE OR LEASE TO OPT-OUT OF THIS ARBITRATION PROVISION. (Goel Decl., P. 7, Exh. A, pp. 13-14 (emphasis in original); see also Mot., p. 3:6-19 (same).)

Although the Court has sustained Plaintiffs' objections to the Villa Declaration, for the purposes of meeting the movant's initial burden of proving the existence of an arbitration agreement, "it is not necessary to follow the normal procedures of document authentication." (Condee, supra, 88 Cal.App.4th at p. 218.) Hyundai need only state verbatim the provisions of the arbitration agreement within its motion and/or provide a copy of the agreement, both of which have been done here. (See Cal. R. Ct., Rule 3.1330.) The Court finds that Honda has met its initial evidentiary burden.

Plaintiffs do not dispute that Hyundai has met its initial (low) evidentiary burden of proving the existence of the NVLW arbitration provision but rather contest the existence of the arbitration agreement via declarations from both Plaintiffs that "[t]o the best of [their] memory, [neither Plaintiff] was [] personally provided with a copy of any Owner's Handbook and Warranty Information booklet when [they] purchased the subject vehicle." (See Rosas Decl., P. 5; see also Naston Decl., P. 5.) [2] Both Plaintiffs further declare that they were never given notice that the Owner's Handbook and Warranty Information were purportedly inside the Subject Vehicle when it was sold to them. (Id.) Both continue to declare that neither signed any arbitration agreement and neither relied upon the Owner's Handbook in alleging their instant claims but rather both relied upon representations made by the selling dealership. (Id., P.P. 6-7.)

Plaintiffs argue that, via their declarations, they have directly challenged the validity of the purported arbitration agreement and further argue that Defendant fails to authenticate the arbitration agreement or provide any facts as to when or how Plaintiffs were provided with that document.

To establish an enforceable contract, four essential elements must exist: (1) parties capable of contracting; (2) the consent of those parties; (3) a lawful object; and (4) a sufficient cause or consideration. (Civ. Code Sec. 1550; Fleming v. Oliphant Financial, LLC (2023) 88 Cal.App.5th 13; Santana v. Studebaker Health Care Center, LLC (2026) 120 Cal.App.5th 1, 11 (" Santana ").) Consent is a fundamental prerequisite to contract formation and must be free, mutual, and communicated by each party to the other. (Civ. Code Sec. 1565; Santana, supra, 120 Cal.App.5th at p. 12.)

California applies an objective standard to determine mutual consent, focusing on the outward manifestations or expressions of the parties--specifically, the reasonable meaning of their words and actions. (Herzog v. Superior Court (2024) 101 Cal. App. 5th 1280, 1293 (" Herzog "); see also Wilkins v. Cruise LLC (2026) 2026 Cal.App.LEXIS 429.) Consent must be outwardly manifested; unexpressed subjective intentions, understandings or silent thoughts of the parties do not manifest consent. (Rodriguez v. Otto (2013) 212 Cal.App.4th 1020, 1027.)

Similarly, absent a duty to speak or previous course of dealing, generally silence does not constitute acceptance of contractual terms. (See Wold v. League of the Cross, Inc. (1931) 114 Cal.App. 474 (Mere silence or inaction in the face of an offer to contact does not amount to acceptance absent the offeree's duty to speak; see also Gentry v. Superior Court (2007) 42 Cal.4th 443, 467 (Failure to opt out of arbitration agreement constituted consent only where employee had previously signed form explaining that he had to opt out).) This principle of knowing consent "applies with particular force" to arbitration provisions. (Herzog, supra, 101 Cal.App.5th at p. 1294 (quoting Sellers v. Just Answer LLC (2021) 73 CalApp.5th 444, 460.)

Hyundai presents no evidence establishing any outward manifestation of consent to the Owner's Handbook arbitration agreement by either Plaintiff. Instead, Hyundai argues that Plaintiffs assented to the NVLW arbitration agreement by failing to opt out and retaining the benefits offered by the agreement. (Reply, p. 3:12-21.) Hyundai further argues that Plaintiffs are estopped from denying the existence of the NVLW arbitration agreement because they "seek to simultaneously benefit from the express warranty while disavowing its mandatory arbitration provision." (Id., p. 4:26-27.)

(a) Equitable Estoppel Hyundai argues that Plaintiffs are equitably estopped from denying the existence of the arbitration agreement due to their Complaint alleging the existence of a warranty and seeking benefit from the warranty. Hyundai's argument is not persuasive. Equitable estoppel is applicable where a nonsignatory plaintiff's claims are "'dependent upon, or inextricably intertwined with' the underlying contractual obligations of the agreement containing the arbitration clause." (Jensen v. U-Haul Co. of California (2017) 18 Cal.App.5th 295, 306.) "The focus is on the nature of the claims asserted ... . [Citations.] That the claims are cast in tort rather than contract does not avoid the arbitration clause." (Boucher v. Alliance Title Co., Inc. (2005) 127 Cal.App.4th 262, 272.)

Rather, "[t]he plaintiff's actual dependence on the underlying contract in making out the claim against the nonsignatory ... is ... always the sine qua non of an appropriate situation for applying equitable estoppel." (Goldman v. KPMG, LLP (2009) 173 Cal.App.4th 209, 229 (" Goldman ")(internal quotations omitted).) "[E]ven if a plaintiff's claims 'touch matters' relating to the arbitration agreement, 'the claims are not arbitrable unless the plaintiff relies on the agreement to establish its cause of action.'" (Id., at p. 230 (internal quotations omitted).)

While it might be arguable that Plaintiffs' First Cause of Action is so inextricably intertwined with the warranty such that Plaintiffs might be equitably estopped from avoiding the application of the warranty's arbitration agreement, Plaintiffs' other two causes of action are simply not. Plaintiffs' Second Cause of Action for Breach of the Implied Warranty does not arise at all from the warranty but instead is premised upon a warranty imposed by law. (See Civ. Code Sec. 1792; Mexia v. Rinker Boat Co., Inc. (2009) 174 Cal.App.4th 1297, 1303.)

And Plaintiff's Third Cause of Action for Violation of the Song-Beverly Act Section 1793.2, though it references the express written warranty and presumes the existence of the warranty, seeks recovery based on alleged statutory violations rather than relying upon any substantive term of the warranty to establish liability. (See Goldman, supra, 173 Cal.App.4th at p. 231 (actual reliance on the terms of the contract is required; merely asserting a claim that presumes the contract's existence is not enough); Mattson Technology, Inc. v.

Applied Materials, Inc. (2023) 96 Cal.App.5th 1149, 1156 ("Nor is it sufficient that ... the controversy would not have occurred but for the existence of the contract, provided the contract is not the basis for the claims against the non-signatory").)

Accordingly, the Court determines that Plaintiffs' Second and Third Causes of Action are not so inextricably intertwined with the warranty such that Plaintiffs might be equitably estopped from denying the warranty's arbitration provision. Plaintiffs do seek to enforce the terms of the warranty via their First Cause of Action for Breach of Express Written Warranty and as such Plaintiffs might be deemed estopped from denying existence of the arbitration agreement as to their First Cause of Action.

But equitable estoppel is a defensive doctrine employed to prevent fundamental unfairness. (Hoopes v. Dolan (2008) 168 Cal.App.4th 146, 162 ("Broadly speaking, 'estoppel' refers less to a doctrine than to a conceptual pattern, first articulated in the courts of equity, which has come to pervade our law . . . It is commonly said that the party to be estopped, having conducted himself in manner X, will 'not be heard' to assert Y")(quoting City of Hollister v. Monterey Ins. Co. (2008) 165 Cal.App.4th 455, 486.)

As Plaintiffs correctly point out in opposition, the application of equitable estoppel requires a showing that "(1) the party to be estopped must be apprised of the facts; (2) he must intend that his conduct shall be acted upon, or must so act that the party asserting the estoppel has a right to believe it was so intended; (3) the other party must be ignorant of the true state of facts; and (4) he must rely upon the conduct to his injury." (Strong v. County of Santa Cruz (1975) 15 Cal. 3d 720, 725; accord Ashou v.

Liberty Mutual Fire Ins. Co. (2006) 138 Cal.App.4th 748, 766-767).) Hyundai has presented no evidence in relation to any Plaintiffs' asserted causes of action that: (1) Plaintiffs engaged in conduct they intended to be acted upon; (2) Hyundai was ignorant of the true state of facts; or (3) Hyundai relied upon Plaintiffs' conduct to its injury. For the foregoing reasons, the Court determines that Plaintiffs are not equitably estopped from denying the existence of the arbitration agreement.

(b) Consent by Conduct Hyundai next contends that Plaintiffs' consent to the NVLW is established via their conduct in failing to opt out within 30 days and accepting the benefits of the warranty. "[S]ilence can constitute acceptance when 'the conduct of the party denying a contract has been such as to lead the other reasonably to believe that silence, without communication, would be sufficient' to create a contract." (Gentry v. Superior Court (2007) 42 Cal.4th 443, 468 (citation omitted.) However, where a party "did not have actual knowledge of [an arbitration] provision until after it had received defendant's demand for arbitration," that party cannot be bound by an arbitration term based on a failure to opt out; and "an offeree, regardless of apparent manifestation of his consent, is not bound by inconspicuous contractual provisions of which he was unaware, contained in a document whose contractual nature is not obvious." (Windsor Mills, Inc. v.

Collins & Aikman Corp. (1972) 25 Cal.App.3d 987, 993-994.) As noted above, both Plaintiffs attest that they were unaware of the NVLW's arbitration provisions. (See Rosas Decl., P. 5; see also Naston Decl., P. 5.)

As for acceptance of the benefits of the warranty, the Court does not find that Plaintiffs' actions constituted acceptance such that their consent might be imputed through conduct. The question of what constitutes the "acceptance of a benefit of a transaction" here is rather nuanced, not as to the benefit itself but as to the transaction giving rise to the benefit. Hyundai would term the "benefit" to be repairs made pursuant to the warranty agreement. The Court concurs. The real question lies in what transaction gave rise to those benefits. In Hyundai's reading, the repairs are a benefit afforded by the NVLW warranty agreement, thus making the arbitration provision contained therein something which Plaintiffs are deemed to have read and cannot now disavow.

A more accurate determination is that the warranty itself, and its attendant repair obligations, are a benefit of Plaintiffs' purchase of the Subject Vehicle. [3] As Plaintiffs declare, they each were verbally assured of the existence of a manufacturer's warranty upon their purchase of the Subject Vehicle. (Naston Decl.., P. 4; Rosas Decl., P. 4.) That warranty, although embodied in a separate agreement, was a benefit resulting from the sale of the Subject Vehicle, which transaction obligated Hyundai to perform the promised repairs. Thus, any transactional benefit Plaintiffs would be enforcing is one arising from the vehicle purchase transaction.

Furthermore, a corollary to the warranty having been issued in conjunction with the sale of the Subject Vehicle is that Hyundai was already legally obligated to perform repairs pursuant to the warranty and no new consideration was offered such that Plaintiffs might be obligated to assume any new obligation, such as the arbitration agreement. (See Louisville Title Ins. Co. v. Surety Title & Guar. Co. (1976) 60 Cal.App.3d 781 (An agreement that adds new and onerous terms to an existing contract, without providing any compensating advantage or favorable modification to the other party, requires new consideration to be enforceable).) [4] In this more accurate depiction of the parties' transaction, Plaintiffs' conduct in accepting the benefit of the sales agreement in no way constitutes consent through conduct of the NVLW arbitration agreement.

Hyundai's Motion to Compel Arbitration pursuant to the NVLW Arbitration Agreement is DENIED.

2. The Arbitration Agreement in the Bluelink Connected Services Agreement (the "CSA") Hyundai also contends that Plaintiffs' claims may be compelled to arbitration via the arbitration agreement contained in the CSA. i. Existence of the Agreement

As set forth by Hyundai, the CSA's arbitration provision provides 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 site 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. The agreement to arbitrate otherwise includes, but it 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) ... (Mot., p. 4:21-27 (quoting CSA, Exhibit B to Rao Decl., pp. 9-11 (Section 15(C)(a).)

Hyundai contends Plaintiffs specifically agreed to be bound by the CSA because Plaintiffs enrolled the Subject Vehicle in Bluelink and, in order to enroll to use Bluelink, Plaintiffs had to affirmatively click a box acknowledging their agreement to Bluelink's terms and conditions otherwise they could not have activated the Bluelink services. (Rao Decl., P.P. 7, 10-11, 14.) The Court finds that Hyundai has met its initial burden of producing prima facie evidence of the existence of a written arbitration agreement by setting forth the terms of the CSA arbitration agreement. (See Cal. R. Ct., Rule 3.1330.)

Plaintiffs contest the existence of the CSA arbitration agreement, arguing that Hyundai has failed to establish mutual assent because the declaration of Vijay Rao, Hyundai's Director of Ops & Owner Apps/Web, submitted in support of Hyundai's motion does not set forth in sufficient detail Plaintiff's purported acceptance of the terms of the CSA or how he knows that Plaintiff enrolled in Bluelink services. Plaintiff further notes that Exhibit C to Rao's declaration "states: 'Your Hyundai includes 3 years of complimentary Blue Link services which offers a suite of safety and convenience features.

This subscription includes the Connect Care, Remote and Guidance packages.'" (Opp., p. 15: 22-24 (quoting Rao Decl., Exh. C.) Thus, Plaintiff argues, "all this shows is that the subscription is voluntary or optional, not that Plaintiff agreed to the terms and conditions of the CSA, including the arbitration provision." (Id., p. 15:25-26.)

The Court does not find Plaintiff's arguments persuasive. Rao declares that in his capacity as Director of Connected Ops & Owner Apps/Web, he "administer[s] business activities and processes relating to the Hyundai Bluelink services for Hyundai vehicles" and later declares that to enroll in Bluelink services customers must agree to the CSA (containing the arbitration agreement) and that the Subject Vehicle was enrolled in Bluelink services on December 30, 2023. (Rao Decl., P.P. 1, 6.) Rao's declaration as to his employment is sufficient to establish his knowledge of the procedures and requirements for enrollment in Bluelink services and the Subject Vehicle's actual enrollment in Bluelink services. And Plaintiffs do not deny or otherwise contest that they enrolled the Subject Vehicle in Bluelink services. (See, generally, Rosas and Naston Decls.)

Rao further declares that "[t]o enroll [in Bluelink], Plaintiff would have had to click the box to acknowledge that they 'read and agreed[d] to the Blue Link Terms & Conditions' and then select the 'Complete' button just below. As presented to Plaintiffs, the box acknowledging the Terms and Condition would not have been 'prepopulated' with a check mark. Plaintiffs would have had to check that box themselves to acknowledge assent to the CSA. Plaintiffs would have also separately needed to select the 'Complete' button to proceed with the enrollment." (Rao Decl., P. 11.)

This type of "clickwrap" agreement is generally enforceable. (See Sellers v. JustAnswer LLC (2021) 73 Cal.App.5th 444, 470 ("[C]lickwrap agreements, 'in which website users are required to click on an 'I agree' box after being presented with a list of terms and conditions of use' to 'confirm their assent to the agreement's terms,' are generally considered enforceable"); B.D. v. Blizzard Entertainment, Inc. (2022) 76 Cal.App.5th 931 (same).)

Here, the CSA is a standard "clickwrap" agreement. Plaintiffs enrolled in the Bluelink services plan and agreed to the CSA by clicking a box to acknowledge that they "read and agree[d] to the Blue Link Terms & Conditions" and then clicking a "Complete" button. (Rao Decl., P. 11.) Those "Terms & Conditions" included the arbitration provision. Thus, the arbitration provision in the CSA is a valid agreement to arbitrate. Accordingly, the Court finds that Plaintiff assented to the CSA arbitration agreement. ii. The Scope of the CSA Arbitration Agreement

Parties may only be compelled to arbitrate a dispute where an arbitration agreement covers the controversies at issue in the parties' dispute. (Omar v. Ralphs Grocery Co. (2004) 118 Cal.App.4th 955, 961; Code Civ. Proc., Sec. 1281.2.) "In determining whether an arbitration agreement applies to a specific dispute, the court may examine only the agreement itself and the complaint filed by the party refusing arbitration [citation]. The court should attempt to give effect to the parties' intentions, in light of the usual and ordinary meaning of the contractual language and the circumstances under which the agreement was made."(Weeks v. Crow (1980) 113 Cal.App.3d 350, 353.)

"To determine whether a contractual arbitration clause requires arbitration of a particular controversy, the controversy is first identified and the issue is whether that controversy is within the scope of the contractual arbitration clause." (Titolov. Cano (2007) 157 Cal.App.4th 310, 316.) The court should order parties to arbitrate, even if there are doubts, unless the clause clearly cannot be interpreted to cover the dispute. (California Correctional Peace Officers Assn. v. State (2006) 142 Cal.App.4th 198, 205.)

The arbitration clause in the CSA requires arbitration of any dispute arising from the vehicle. The CSA appears at first to relate only to the "Connected Services" because there are references to the "Connected Services" throughout the agreement, including the title "Connected Services Agreement Terms And Conditions." (Rao Decl., Exh. B, Connected Services Agreement, p. 1.) However, the Agreement also states "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, your Vehicle, use of the sites, or products, services, or programs you purchase, enroll in or seek product/service support for . . . to the maximum extent permitted by applicable law." (Id., p. 10.)

The controversies at issue in Plaintiff's complaint are warranty claims related to defects in Plaintiff's vehicle that Defendant manufactured. Although Plaintiffs' arguments regarding the overall context of the agreement have merit, the clause here is worded broadly enough to cover the parties' disputes and thus the Court must order the parties to arbitration. (California Correctional Peace Officers Assn. v. State of California (2006) 142 Cal.App.4th 198, 205 ("The court should order them to arbitrate unless it is clear that the arbitration clause cannot be interpreted to cover the dispute")(emphasis added)(Amalgamated Transit Union Local 1277 v.

Los Angeles County Metropolitan Transportation Authority (2003) 107 Cal.App.4th 673, 684-685).) Hyundai has met its burden to show both the existence of a valid agreement to arbitrate and that the arbitration agreement covers the controversies in dispute. iii. Defenses Against Enforcement

Plaintiff argues that the arbitration agreement is not enforceable because it is unconscionable. "Once ... [an existent arbitration agreement] is presented to the court, the burden shifts to the party opposing the motion to compel, who may present any challenges to the enforcement of the agreement and evidence in support of those challenges." (Baker v. Italian Maple Holdings, LLC (2017) 13 Cal.App.5th 1152, 1160.) As stated above, both under California and Federal law, courts are obligated to treat arbitration agreements as equally enforceable as any other contractual agreement. (Morgan, supra, 596 U.S. at p. 419; Quach, supra, 16 Cal.5th at p. 569.)

Accordingly, "under¿both the FAA and California law, 'arbitration agreements are valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.'"¿(Higgins v. Superior Court, supra, 140 Cal.App.4th at p. 1247.)¿Thus, Plaintiff's arguments that the Arbitration Agreement is unconscionable, though based on California law, still hold. (See Concepcion, supra, 563 U.S. at p. 339 (Arbitration agreements may "be invalidated by 'generally applicable contract defenses, such as fraud, duress, or unconscionability,' but not by defenses that apply only to arbitration or that derive their meaning from the fact that an agreement to arbitrate is at issue. [Citation.]").)

Under California law, the party opposing the agreement must show both substantive and procedural unconscionability. (Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 114 (" Armendariz "); Stirlen v. Supercuts, Inc. (1997) 51 Cal.App.4th 1519, 1533.) "But they need not be present in the same degree." (Armendariz, supra, at p. 114.) Procedural and substantive unconscionability are measured on a sliding scale; where a contract is more procedurally unconscionable, less substantive unconscionability is required, and vice versa. (OTO, LLC v.

Kho (2019) 8 Cal.5th 111, 125 (" OTO ").)¿"Procedural unconscionability focuses on oppression, surprise and the manner in which the agreement was negotiated. [Citation.]¿Substantive unconscionability focuses on the actual terms of the agreement and evaluates whether they create such overly harsh or one-sided results as to shock the conscience. [Citation.]" (Suh v. Superior Court (2010) 181 Cal.App.4th 1504, 1515 (" Suh ").) (a) Procedural Unconscionability

"Procedural unconscionability focuses on oppression or surprise due to unequal bargaining power." (Armendariz v. Foundation Health Psychcare Services, Inc. ¿(2000) 24 Cal.4th 83, 114, internal quotes omitted.) "Procedural unconscionability addresses the manner in which agreement to the disputed term was sought or obtained, such as unequal bargaining power between the parties and hidden terms included in contracts of adhesion." (Mission Viejo Emergency Medical Associates v. Beta Healthcare Group ¿(2011) 197 Cal.App.4th 1146, 1158.) " 'The procedural element addresses the circumstances of contract negotiation and formation, focusing on oppression or surprise due to unequal bargaining power.' " (OTO, supra, 8 Cal.5th at p. 125.)

The "analysis 'begins with an inquiry into whether the contract is one of adhesion.' [Citation.] An adhesive contract is standardized, generally on a preprinted form, and offered by the party with superior bargaining power 'on a take-it-or-leave-it basis.' " (Id., at p. 126.) For an adhesive contract, the court must consider "whether circumstances of the contract's formation created such oppression or surprise that closer scrutiny of its overall fairness is required." (Ibid.) " Oppression occurs where a contract involves lack of negotiation and meaningful choice, surprise where the allegedly unconscionable provision is hidden within a prolix printed form." (Id., at p. 126 (quotations omitted)(emphasis in original).)

" 'The circumstances relevant to establishing oppression include, but are not limited to (1) the amount of time the party is given to consider the proposed contract; (2) the amount and type of pressure exerted on the party to sign the proposed contract; (3) the length of the proposed contract and the length and complexity of the challenged provision; (4) the education and experience of the party; and (5) whether the party's review of the proposed contract was aided by an attorney.' " (OTO, supra, 8 Cal.5th at pp. 126-127.) "By itself ... adhesion establishes only a 'low' degree of procedural unconscionability." (Davis v. Kozak¿ (2020) 53 Cal.App.5th 897, 907.)

Plaintiffs contend that the CSA arbitration agreement is a contract of adhesion. Plaintiffs argues that they had no ability to negotiate the terms of the CSA. Plaintiff further claims surprise in that the arbitration provision "was inserted at the very bottom of the terms and conditions, literally the second-to-last section of the CSA's 16 pages (if printed out) [and,] while the 'binding arbitration' section starts with a paragraph in all capital letters . . . the immediately preceding sections [] and the immediately following section [] each contain provisions that are also in all capital letters." (Opp., p. 18:24-28.)

The Court finds Plaintiffs' arguments persuasive only in that the CSA is correctly termed as a contract of adhesion. Plaintiffs' argument that the CSA was presented with no ability to negotiate terms and necessary to obtain the proffered 3 years of complimentary Bluelink services are adequate to establish the adhesive nature of the agreement. However, the Court does not find Plaintiffs' arguments as to the location of the agreement and the capitalization persuasive. As is noted above, "clickwrap" agreements are generally enforceable and furthermore it is a basic rule of contract law is that in the absence of fraud, overreaching or excusable neglect, failure to read a contract does not allow a party to avoid the impact of its terms. (See Madden v. Kaiser Found. Hosps. (1976) 17 Cal.3d 699, 710; see also Roldan v. Callahan & Blaine (2013) 219 Cal. App. 4th 87, 88.)

The terms here are not hidden. To the contrary, portions are capitalized so as to stand out. And despite there being capitalized language in the CSA before and after the at-issue terms, the other capitalization does not render the at-issue terms so "hidden" as to amount to a surprise. In accordance with the above, the Court finds a low level of procedural unconscionability. (b) Substantive Unconscionability

"Substantive unconscionability examines the fairness of a contract's terms." (OTO, L.L.C. v. Kho (2019) 8 Cal.5th 111, 129.) "[T]he unconscionability doctrine is concerned not with a simple old-fashioned bad bargain, but with terms that are unreasonably favorable to the more powerful party." (Id., at p. 130 (cleaned up)(internal citations and quotations omitted).) "In assessing substantive unconscionability, the paramount consideration is mutuality." (Pinela v. Neiman Marcus Group, Inc. ¿(2015) 238 Cal.App.4th 227, 241, internal quotes and citations omitted.)

Plaintiff first argues that the CSA 's attorney fee provision is unconscionable because it "illegally permits Defendant to recover statutory attorneys' fees from Plaintiff (in direct contravention of California law) if Defendant prevails in arbitration." (Opp., p. 19:22-24.) The provision, as cited by Plaintiff, states "HOWEVER, IN ARBITRATION, BOTH YOU AND HYUNDAI WILL BE ENTITLED TO RECOVER ATTORNEYS' FEES FROM THE OTHER PARTY TO THE SAME EXTENT YOU WOULD BE IN COURT." (Rao Decl., Exh. B, p. 10, Section 15C (emphasis in original).)

The Court finds Plaintiffs' argument persuasive. In Song-Beverly actions, the fee-shifting statute is one-sided; prevailing consumers may recover their attorney fees, but prevailing manufacturers may not. (Civ. Code Sec. 1794(d); see Murillo v. Fleetwood Enters, Inc. (1998) 17 Cal.4th 985 (superseded by statute on other grounds as stated in Toste v. CalPortland Construction (2016) 245 Cal.App.4th 362); see also Davis v. Ford Motor Credit Co. LLC (2009) 179 Cal.App.4th 581.) " The Legislature's intent in allowing for a prevailing buyer to recover attorney fees, as with most fee-shifting statutes, was 'to enable private parties to obtain legal help in seeking redress' for violations of the Song-Beverly Act." (Reynolds v. Ford Motor Co. (2020) 47 Cal. App. 5th 1105, 1116.)

By intentionally making the fee-shifting provision one-sided, it is clear the Legislature did not intend to create a financial disincentive to private parties via the specter of a potential obligation to pay a manufacturer's attorney fees should the manufacturer prevail. In setting out that either party may obtain an award of attorney fees "to the same extent you would be in court," with "you" being defined as Plaintiff, the arbitration provision in the CSA impermissibly makes Song-Beverly's intentionally one-sided fee-shifting reciprocal. And doing so not only undermines the legislative intent behind the one-sided fee-shifting but also results in the imposition of greater substantive risk on Plaintiff. The Court finds the attorney fee language contained in the CSA's arbitration provision contrary to legislative intent and therefore substantively unconscionable.

Plaintiffs next contend that the CSA's limitations period, set at one year, is substantively unconscionable because the statutory limitations period in the Song-Beverly Act is four years. (Opp., p. 20:21-21:6.) Plaintiff argues that not only is the reduction in time unconscionable, but the fact that the limitation is one-sided renders it even more unconscionable. The relevant CSA language reads: "EXCEPT WHERE PROHIBITED BY LAW, YOU ARE NOT ALLOWED TO BRING ANY CLAIM AGAINST HYUNDAI (OR ANY OTHER THIRD PARTY BENEFICIARY) MORE THAN ONE YEAR AFTER THE CLAIM ARISES." (Rao Decl., Exh. B, p. 10, Section 15B (emphasis in original).)

Again, the Court finds Plaintiffs' arguments persuasive. Although the statute of limitations for Plaintiffs to bring a Song-Beverly Act claim fluctuates depending upon whether the claim asserted is in relation to an express or implied warranty, at least one of Plaintiffs' claims as asserted here has a four-year statute of limitations. (See Krieger v. Nick Alexander Imports, Inc. (1991) 234 Cal.App.3d 205 (Applying Commercial Code Sec. 2725's four-year statute of limitations to Song-Beverly express warranty claims).)

As Plaintiffs correctly assert, the reduction of the four-year statute of limitations to just one year - as would be mandated by the CSA's arbitration provision - is substantively unconscionable. (See Fisher v. MoneyGram International, Inc. (2021) 66 Cal.App.5th 1084, 1105 (" Fisher ")(Finding a reduction from a four-year limitations period to a one-year period combine with the one-sided nature of the arbitral limitations period at issue to be unconscionable).)

And Plaintiffs are correct in that the language of the CSA applies only to Plaintiffs; Hyundai is bound by no such shortened limitations period. Here, as in Fisher, the combined shortened limitations period and on-sided nature of the limitations period render it unconscionable. In all, the Court finds a high degree of substantive unconscionability because the CSA purports both to expand the legislative limitation on recovery of attorney fees and dramatically lessen the time period pursuant to which Plaintiffs may bring a claim. III. CONCLUSION

Defendant's Motion to Compel Arbitration is DENIED. Trial in this matter is set for March 27, 2028 at 9:30 a.m. in Dept. E. A Final Status Conference is set for March 17, 2028 at 9:00 a.m. in Dept. E. A Post-Mediation Status Conference is set for February 25, 2028 at 8:30 a.m. in Dept. E.