Qian Lu v. AHC Acquisition LLC dba LA City Cars, et al.

(Inglewood Courthouse: Dept. 5) August 19, 2026 DEPARTMENT 5 LAW AND MOTION RULINGS

Superior Court of California County of Los Angeles - SOUTHWEST District Department 5 QIAN LU; Plaintiff, vs. AHC ACQUISITION LLC DBA LA CITY CARS, A CALIFORNIA LIMITED LIABILITY COMPANY, et al.; Defendants. | Case No.: |

| | | Hearing Date: | August 19, 2026 | | | Time: | 8:30 a.m. | | | [tentative] Order RE: (1) DEFENDANT THE REYNOLDS AND REYNOLDS COMPANY'S PETITION TO COMPEL ARBITRATION

(2) DEFENDANT THE REYNOLDS AND REYNOLDS COMPANY'S MOTION TO STAY ACTION PENDING ARBITRATION (3) DEFENDANT AMERICAN ARBITRATION ASSOCIATION'S DEMURRER TO PLAINTIFF QIAN LU'S FIRST AMENDED COMPLAINT | MOVING PARTY: Arbitration and Stay - Defendant, the Reynolds and Reynolds Company Demurrer - Defendant, American Arbitration Association RESPONDING PARTY: Plaintiff, Qian Lu (1) Defendant the Reynolds and Reynolds Company's Petition to Compel Arbitration is GRANTED pursuant to Code of Civil Procedure section 1281.2. (2) Defendant the Reynolds and Reynolds Company's Motion to Stay Action Pending Arbitration is GRANTED pursuant to Code of Civil Procedure section 1281.4. (3) Defendant American Arbitration Association's Demurrer to Plaintiff Qian Lu's First Amended Complaint is CONTINUED.

Regarding the petition to compel arbitration, the Court considers the moving papers filed on June 12, 2026, the opposition brief filed on August 6, 2026, and the reply brief filed on August 12, 2026. Regarding the motion to stay action, the Court considers the moving papers filed on June 12, 2026, and the reply brief filed on August 12, 2026. To date, no opposition brief has been filed. Regarding the demurrer, the Court considers the moving papers filed on March 9, 2026, the notice of non-opposition filed on May 6, 2026, the opposition brief filed on May 27, 2026, the reply brief filed on June 8, 2026, the unauthorized opposition brief filed on August 6, 2026, and the unauthorized reply brief filed on August 12, 2026.

BACKGROUND Factual Background On November 17, 2025, plaintiff Qian Lu ("Plaintiff") filed the Complaint against defendants Ahc Acquisition LLC dba LA City Cars ("Landa"), the American Arbitration Association ("AAA"), the Reynolds and Reynolds Company ("Reynolds"), and DOES 1 through 20. On December 17, 2025, Plaintiff filed the First Amended Complaint ("FAC") against defendants Landa, AAA, Reynolds, and DOES 1 through 20. The FAC includes the following causes of

action: (1) Violation of the Unfair Competition Law (Bus. & Prof. Code, Sec. 17200 et seq.); (2) Violation of the Consumers Legal Remedies Act (Civ. Code, Sec. 1750 et seq.); (3) Violation of False Advertising Law (Bus. & Prof. Code, Sec. 17500 et seq.); (4) Violation of Song-Beverly Consumer Warranty Act (Civ. Code, Sec. 1790 et seq.); (5) Violation of Magnuson-Moss Warranty Act (15 U.S.C. Sec. 2301 et seq.); and (6) Violation of Carwright Act (Bus. & Prof. Code, Sec. 16720 et seq.). On March 25, 2026, Landa filed the Ex Parte Application to Stay Action Pending Arbitration, and to Coordinate Hearing Schedule in Department M of the Torrance Courthouse.

On March 26, 2026, the Honorable Gary Y. Tanaka of Department M granted the ex parte application. (March 26, 2026, Minute Order, p. 1.) On July 24, 2026, the parties filed the Stipulation to Advance and Coordinate Hearing Date of Defendant Landa's Motion to Compel Arbitration. They agreed to advance the hearing to August 19, 2026. However, the Court did not sign this stipulation.

Procedural Background

Petition to Compel Arbitration On May 21, 2026, Reynolds filed the petition to compel arbitration. On June 4, 2026, the Court found that this case is related to Case No. 24TRCV04177, Qian Lu v. Ahc Acquisition LLC (Qian Lu I), within the meaning of California Rules of Court, rule 3.300(a). Consequently, the Court placed this hearing off calendar. Although this information was not reflected in the minute order, the hearing was rescheduled for August 19, 2026. On August 6, 2026, Plaintiff filed an opposition brief.

On August 12, 2026, Reynolds filed a reply brief. Motion to Stay On June 12, 2026, Reynolds filed the motion. On August 12, 2026, Reynolds filed the reply brief. To date, no opposition brief has been filed. Demurrer On March 9, 2026, AAA filed the demurrer. On May 6, 2026, AAA filed a notice of non-opposition. On May 8, 2026, the Court continued the hearing to June 15, 2026. On May 27, 2026, Plaintiff filed an opposition brief. On the same day, the parties filed the Stipulation and [Proposed] Order regarding June 15, 2026 Briefing Schedule ("Stipulation").

In the Stipulation, the parties agreed that: "any opposition to the matter identified in paragraph 1 filed within the ordinary statutory schedule measured from the June 15, 2026 hearing date, or any subsequent hearing date, shall be deemed timely and may be considered on the merits." (Stipulation, p. 2:8-20.) The Court did not sign the Stipulation.

On June 4, 2026, the Court found that this case is related to Case No. 24TRCV04177, Qian Lu I, within the meaning of California Rules of Court, rule 3.300(a). Consequently, the Court placed this hearing off calendar. Although this information was not reflected in the minute order, the hearing was rescheduled for August 19, 2026. On June 8, 2026, AAA filed a reply brief. On August 6, 2026, Plaintiff filed an unauthorized opposition brief. On August 12, 2026, AAA filed an unauthorized reply brief.

MOTIONS TO COMPEL ARBITRATION AND STAY PROCEEDINGS Legal Standards California Code of Civil Procedure section 1281 provides that "[a] written agreement to submit to arbitration an existing controversy or a controversy thereafter arising is valid, enforceable, and irrevocable, save upon such grounds as exist for the revocation of any contract." (Code Civ. Proc., Sec. 1281.) "California law, like federal law, favors enforcement of valid arbitration agreements." (Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 97 (Armendariz).) "On petition of a party to an arbitration agreement alleging the existence of a written agreement to arbitrate a controversy and that a party to the agreement refuses to arbitrate that controversy, the court shall order the petitioner and the respondent to arbitrate the controversy" unless grounds exist not to compel arbitration. (Code Civ.

Proc., Sec. 1281.2.) "There is no public policy favoring arbitration of disputes which the parties have not agreed to arbitrate." (Engineers & Architects Assn. v. Community Development Dept.¿ (1994) 30 Cal.App.4th 644, 653.) Nevertheless, the strong public policy promoting private arbitration of civil disputes gives rise to a presumption in favor of arbitrability, compelling the court to construe the terms of the arbitration agreement liberally. (Vianna v. Doctors' Management Co.¿ (1994) 27 Cal.App.4th 1186, 1189). "If 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.

If an application has been made to a court of competent jurisdiction, whether in this State or not, for an order to arbitrate a controversy which is an issue involved in an action or proceeding pending before a court of this State and such application is undetermined, 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 the application for an order to arbitrate is determined and, if arbitration of such controversy is ordered, 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.) DISCUSSION Petition to Compel Arbitration Reynolds moves to compel arbitration with Plaintiff pursuant to the Arbitration Provision included in Plaintiff's FAC. (Motion, pp. 6:20-7:7.) However, the Court must first consider whether Reynolds, as an alleged nonsignatory third party, possesses the ability to compel Plaintiff to arbitration under this provision. Upon review, the Court finds that Reynolds does indeed have such authority, as it is a party to the Arbitration Provision rather than a mere third party.

Party to the Arbitration Provision "Even the strong public policy in favor of arbitration does not extend to those who are not parties to an arbitration agreement or who have not authorized anyone to act for them in executing such an agreement. [Citation.]" (Suh v. Superior Court (2010) 181 Cal.App.4th 1504, 1512, internal citation and quotations omitted.) "There are circumstances in which nonsignatories to an agreement containing an arbitration clause can be compelled to arbitrate under that agreement.

As one authority has stated, there are six theories by which a nonsignatory may be bound to arbitrate: '(a) incorporation by reference; (b) assumption; (c) agency; (d) veil-piercing or alter ego; (e) estoppel; and (f) third-party beneficiary[.]' [Citations.]" (Ibid., internal citations omitted.) The relevant portion of the Arbitration Provision explicitly articulates that: "Any claim or dispute, whether in contract, tort, statute or otherwise (including the interpretation and scope of this Arbitration Provision, any allegation of waiver of rights under this Arbitration Provision, and the arbitrability of the claim or dispute), between [Plaintiff] and [Landa] or our employees, agents, successors or assigns, which arises out of or relates to your credit application, purchase or condition of this Vehicle, this contract or any resulting transaction or relationship (including any such relationship with third parties who do not sign this contract) shall, at your or our election, be resolved by neutral binding arbitration and not by a court action." (Declaration of Kim S.

Sandell ("Sandell Decl."), Exh. A.) In the case of Wilkins v. Cruise, LLC, the Court of Appeal concluded that related entities are agents for the explicitly named party, Cruise LLC, based on the allegations presented by the plaintiff in their complaint. (Wilkins v. Cruise, LLC (July 30, 2026, A173832) 121 Cal.App.5th 927 [2026 WL 2029446, *17-18].) This ruling permitted the related entities to enforce the relevant arbitration provision. The Court of Appeal scrutinized the plaintiff's complaint, in which the plaintiff explicitly stated, " 'each named Defendant' was 'the owner, agent, servant, employee, or joint venturer of each of the remaining Defendants and was at all times acting within the course and scope of said agency, service, employment, and/or joint venture, and each Defendant has ratified and approved the act for each Defendant.' " (Id. at p. *17.)

The Court of Appeal noted that the plaintiff

had asserted each cause of action against all defendants and claimed that the same operative facts were applicable to each defendant. (Ibid.) Consequently, the Court of Appeal determined that, "In short, like the plaintiffs in RN Solutions, Laswell, and Thomas, [the plaintiff's] own allegations allow these related entities--Cruise LLC, GM Cruise Holdings LLC, and General Motors LLC--to enforce the arbitration provisions of the Terms of Service against him, and they therefore are not 'third parties' for purposes of section 1281.2, subdivision (c). (See Rowe, supra, 153 Cal.App.4th at pp. 1284-1285, 63 Cal.Rptr.3d 787 [nonsignatory defendants alleged to be alter egos of signatory corporate defendant were not 'third parties' under Sec. 1281.2, subd. (c)]; Thomas, supra, 204 Cal.App.4th at pp. 614, 618, 139 Cal.Rptr.3d 114 [nonsignatory defendants alleged to have acted as agents of signatory party could enforce arbitration agreement and were not 'third parties' under Sec. 1281.2, subd. (c)]; Laswell, supra, 189 Cal.App.4th at pp. 1407-1408, 117 Cal.Rptr.3d 310 [entities related to signatory entity could invoke arbitration agreement where plaintiff's claims against all defendants were inherently inseparable and based on the same facts and theory and therefore were not 'third parties' under Sec. 1281.2, subd. (c)]; RN Solution, supra, 165 Cal.App.4th at p. 1520, 81 Cal.Rptr.3d 892 [nonsignatory defendant allegedly acting as agent of signatory company was not a 'third party' under Sec. 1281.2, subd. (c)].)" (Wilkins v.

Cruise, LLC (July 30, 2026, A173832) 121 Cal.App.5th 927 [2026 WL 2029446, *17].) This case presents comparable circumstances. In the FAC, Plaintiff asserts, "Plaintiff is informed and believes and thereon alleges that at all times mentioned herein, each of the Defendants acted as the agent, employee, partner, joint venturer, or co-conspirator of each of the other Defendants. In doing the things hereinafter alleged, each Defendant acted in the course and scope of said agency, employment, or conspiracy, and with the knowledge, consent, and ratification of the other Defendants." (FAC, P. 58.)

Thus, Plaintiff clearly identifies Reynolds as an agent or employee of the other defendants, including Landa, who is specifically referenced in the Arbitration Provision. Furthermore, Plaintiff asserts each cause of action against all defendants. (FAC, pp. 39, 41, 44-47.) Consequently, the Court finds that Reynolds is an agent of Landa and is therefore entitled to enforce the arbitration provision. Consistent with the Court of Appeal's reasoning in Wilkins v. Cruise, LLC, the Court shall not permit Plaintiff to use "a disingenuous argument" and "dismiss their own allegations as meaningless verbiage when the allegations suddenly become inconvenient for them. (See Thomas, supra, 204 Cal.App.4th at p. 614, 139 Cal.Rptr.3d 114 ['Having alleged all defendants acted as agents of one another, [the plaintiff] is bound by the legal consequences of his allegations.'].)" (Wilkins v.

Cruise, LLC (July 30, 2026, A173832) 121 Cal.App.5th 927 [2026 WL 2029446, *18].) Therefore, Plaintiff's assertion that "[t]he generalized FAC allegation that defendants acted as agents or coconspirators for liability purposes is not evidence establishing contractual agency and cannot shift Reynolds's moving

burden" lacks merit. (Opp., p. 9:10-12.) Given that Plaintiff alleges Reynolds is an agent of Landa, they must accept the legal consequences of these allegations. Applicability of the Federal Arbitration Act Reynolds contends that the Arbitration Provision requires Plaintiff to submit their claims in this action to arbitration in accordance with the Federal Arbitration Act ("FAA"), as the Arbitration Provision explicitly states that the FAA shall govern its provisions. (Motion, pp. 10:2-27.) The Court agrees.

The FAA applies to contracts that involve interstate commerce (9 U.S.C. Sec.Sec. 1,¿2), but since arbitration is a matter of contract, the¿FAA¿also applies if it is stated in the agreement. (See Victrola 89, LLC v. Jaman Properties 8 LLC¿ (2020) 46 Cal.App.5th 337, 355 (Victrola).) California provides that parties may expressly designate that any arbitration proceeding should move forward under the FAA's procedural provisions rather than under state procedural law. (C ronus Investments, Inc. v.

Concierge Services (2005) 35 Cal. 4th 376, 394 (Cronus).) "[T]he FAA's procedural provisions do not apply unless the contract contains a choice-of-law clause expressly incorporating them. [T]he question is not whether the parties adopted the CAA's procedural provisions: The state's procedural statutes apply by default because Congress intended the comparable FAA sections to apply in federal court. The question, therefore, is whether the parties expressly incorporated the FAA's procedural provisions into their agreements." (Victrola, supra, 46 Cal.App.5th 337, 345, internal citations omitted and italics in original.) "[P]revious cases have held that when an arbitration agreement provides that its 'enforcement' shall be governed by California law, the [CAA] governs a party's motion to compel arbitration.

It follows that when an agreement provides that its 'enforcement' shall be governed by the FAA, the FAA governs a party's motion to compel arbitration." (Id. at p. 346.) In the recent case of Tuufuli v. West Coast Dental Administrative Services, LLC (2026) 117 Cal.App.5th 1048, 1054-1056, the Court of Appeal concluded that an arbitration agreement containing the phrase "shall be governed by the Federal Arbitration Act" sufficiently indicates the parties' intent to be governed by the provisions of the FAA.

The Arbitration Provision explicitly states: "Any arbitration under this Arbitration Provision shall be governed by the Federal Arbitration Act (9 U.S.C Sec.Sec. 1 et seq.) and not by any state law concerning arbitration." (Sandell Decl., Exh. A.) By expressly invoking the FAA, Reynolds has successfully established that the FAA governs its ability to arbitrate. Pursuant to the FAA, the Court's role "is limited to determining (1) whether a valid agreement to arbitrate exists and, if it does, (2) whether the agreement encompasses the dispute at issue." (Philadelphia Indemnity Ins.

Co. v. SMG Holdings, Inc. (2019) 44 Cal.App.5th 834, 840, quoting U.S. ex rel. Welch v. My Left Foot Children's Therapy, LLC (9th Cir. 2017) 871 F.3d 791, 796.) Existence of an Arbitration Agreement

"The moving party 'can meet its initial burden by attaching to the [motion or] petition a copy of the arbitration agreement purporting to bear the [opposing party's] signature.' [Citation.] Alternatively, the moving party can meet its burden by setting forth the agreement's provisions in the motion. [Citation.] For this step, 'it is not necessary to follow the normal procedures of document authentication.' [Citation.]" (Gamboa v. Northeast Community Clinic (2021) 72 Cal.App.5th 158, 165, citations omitted.)

Furthermore, an arbitration agreement included within a vehicle's warranty booklet is deemed sufficient to satisfy this burden. (Kostandian v. American Honda Motor Co., Inc. (2026) 120 Cal.App.5th 872, 882.) Reynolds provides a copy of the Arbitration Provision. (Sandell Decl., Exh. A.) Therefore, Reynolds has satisfied its initial burden of proof. "If that initial burden is met, the second step requires the party opposing arbitration to carry the burden of producing evidence to challenge the authenticity of the agreement." (Ramirez v.

Golden Queen Mining Co., LLC (2024) 102 Cal.App.5th 821, 830 (Ramirez), citing Gamboa v. Northeast Community Clinic (2021) 72 Cal.App.5th 158, 165 (Gamboa).) "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, supra, 72 Cal.App.5th at p. 165.) In this instance, Plaintiff did challenge the authenticity of the agreement.

Consequently, the Court finds that an agreement to arbitrate exists. Delegation Clause The Court finds that an arbitrator must determine the arbitrability of Plaintiff's claims. An arbitration clause that "clearly and unmistakably" empowers the arbitrator to decide issues of arbitrability is enforceable, provided the delegation is not revocable by a contractual defense, such as unconscionability, fraud, or duress. (B.D. v. Blizzard Entertainment, Inc. (2022) 76 Cal.App.5th 931, 957, 959.) "There are two prerequisites for a delegation clause to be effective.

First, the language of the clause must be clear and unmistakable. [Citation.] Second, the delegation must not be revocable under state contract defenses such as fraud, duress, or unconscionability.' [Citations.] The 'clear and unmistakable' test reflects a 'heightened standard of proof' that reverses the typical presumption in favor of the arbitration of disputes." (Id. at p. 957.) The delegation clause within the Arbitration Provision specifies: "Any claim or dispute, whether in contract, tort, statute or otherwise (including the interpretation and scope of this Arbitration Provision, any allegation of waiver of rights under this Arbitration Provision, and the arbitrability of the claim or dispute), between you and us or our employees, agents, successors or assigns, which arises out of or relates to your credit application, purchase or condition of this Vehicle, this contract or any resulting

transaction or relationship (including any such relationship with third parties who do not sign this contract) shall, at your or our election, be resolved by neutral, binding arbitration and not by a court action" (Sandell Decl., Exh. A, emphasis added.) Consequently, the Court finds that the delegation clause clearly and unequivocally grants the arbitrator the authority to adjudicate threshold issues of arbitrability, including whether the Arbitration Provision encompasses Plaintiff's claims. Plaintiff makes no claims that the delegation clause is revocable or unenforceable.

Accordingly, the Court GRANTS Reynolds' petition, compelling arbitration between Reynolds and Plaintiff, allowing the arbitrator to determine if the Arbitration Provision covers Plaintiff's claims. Motion to Stay Action Pending Arbitration Reynolds requests that the Court stay Plaintiff's claims if the Court grants either its petition to compel arbitration or Landa's motion to compel arbitration. (Motion, pp. 8:4-13:12.) Code of Civil Procedure section 1281.4 provides that if a court has ordered the arbitration of a controversy, it "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.) In light of the Court's decision to grant Reynolds' petition, and in accordance with Code of Civil Procedure section 1281.4, the Court GRANTS Reynolds' request to stay the proceedings. DEMURRER Legal Standard A demurrer can be used only to challenge defects that appear on the face of the pleading under attack or from matters outside the pleading that are judicially noticeable. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) "To survive a demurrer, the complaint need only allege facts sufficient to state a cause of action; each evidentiary fact that might eventually form part of the plaintiff's proof need not be alleged." (C.A. v.

William S. Hart Union High School Dist. (2012) 53 Cal.4th 861, 872.) For the purpose of testing the sufficiency of the cause of action, the demurrer admits the truth of all material facts properly pleaded. (Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 966-967.) A demurrer "does not admit contentions, deductions or conclusions of fact or law." (Daar v. Yellow Cab Co. (1967) 67 Cal.2d 695, 713.) A pleading is uncertain if it is ambiguous or unintelligible. (Code Civ. Proc., Sec. 430.10, subd. (f).)

A demurrer for uncertainty may lie if the failure to label the parties and claims renders the complaint so confusing that the defendant cannot tell what he or she is supposed to respond to. (Williams v. Beechnut Nutrition Corp. (1986) 185 Cal.App.3d 135, 139, fn. 2.) However, "[a] demurrer for uncertainty is strictly construed, even where a complaint is in some respects uncertain, because ambiguities can be clarified under modern discovery procedures." (Khoury v. Maly's of California, Inc. (1993) 14 Cal.App.4th 612, 616.)

Discussion

AAA demurs to the entirety of Plaintiff's FAC, asserting that "Plaintiff fails to plead facts sufficient to constitute a cause of action." (Dem., p. 2:8-9.) However, on March 26, 2026, the Honorable Gary Y. Tanaka of Department M at the Torrance Courthouse granted Landa's Ex Parte Application to Stay Action Pending Arbitration, and to Coordinate Hearing Schedule. (March 26, 2026, Minute Order, p. 1.) As part of the ex parte application, Landa specifically requested that "[a]ll proceedings in this action are STAYED in their entirety until the hearing on Defendants' motion[s] to compel [have] been heard." (Proposed Order, p. 2:8-9.)

Moreover, the Court has stayed Plaintiff's claims pending arbitration. Given that Landa's motion to compel arbitration has not yet been heard and the Court has stayed Plaintiff's claims, the Court CONTINUES AAA's demurrer to be heard on TBD at hearing. Additional briefing is not permitted. ORDERS 1) Defendant the Reynolds and Reynolds Company's Petition to Compel Arbitration is GRANTED. 2) Defendant the Reynolds and Reynolds Company's Motion to Stay Action Pending Arbitration is GRANTED. 3) Defendant American Arbitration Association's Demurrer to Plaintiff Qian Lu's First Amended Complaint is CONTINUED to ___________. 4) Reynolds is ordered to give notice of the Court's ruling.

IT IS SO ORDERED. DATED: August 19, 2026 _____________________________ Tamara Hall Judge of the Superior Court | Home -->)" -->