Judiana Velazquez, et al. v. Hyundai Motor America, et al.

Plaintiff is ordered to give notice of the Court's ruling within five calendar days of this order.

NAME: Judiana Velazquez, et al. v. Hyundai Motor America, et al. Defendant's Motion to Compel Binding Arbitration

The Court DENIES Defendant Hyundai Motor America's Motion to Compel Binding Arbitration in its entirety. Defendant Hyundai must file and serve a responsive pleading to the Complaint within ten days of this order. Plaintiff is ordered to give notice of the Court's ruling within five calendar days of this order. BACKGROUND This is a Song-Beverly action. On May 11, 2026, plaintiffs Judiana Velazquez and Rick D Sanchez (collectively, Plaintiffs) filed this action against defendant Hyundai Motor America (Defendant) and Does 1 through 10, alleging causes of action for violation of the Song-Beverly Consumer Warranty Act Breach of Express Warranty, violation of the Song-Beverly Consumer Warranty Act Breach of Implied Warranty, and violation of Business and Professions Code Sec. 17200.

On June 17, 2026, Defendant moved to compel binding arbitration. Plaintiffs did not oppose the Motion. LEGAL STANDARD Parties may be compelled to arbitrate a dispute upon the court finding that: (1) there was a valid agreement to arbitrate between the parties; and (2) said agreement covers the controversy or controversies in the parties' dispute.¿(Omar v. Ralphs Grocery Co. (2004)¿118 Cal.App.4th 955, 961.) A party moving to compel arbitration has the burden of establishing the existence of a valid agreement to arbitrate and the party opposing the petition has the burden of proving, by a preponderance of the evidence, any fact necessary to its defense. (Banner Entertainment, Inc. v.

Superior Court ¿(1998) 62 Cal.App.4th 348, 356-357 (Banner Entertainment).) "California has a strong public policy in favor of arbitration and any doubts regarding the arbitrability of a dispute are resolved in favor of arbitration." (Coast Plaza Doctors Hospital v. Blue Cross of California (2000) 83 Cal.App.4th 677, 686.) "This strong policy has resulted in the general rule that arbitration should be upheld 'unless it can be said with assurance that an arbitration clause is not susceptible to an interpretation covering the asserted dispute. [Citation.]'" (Ibid.)

This is in accord with the liberal federal policy favoring arbitration agreements under the Federal Arbitration Act (FAA), which governs all agreements to arbitrate in contracts involving interstate commerce. (9 U.S.C. Sec. 2, et seq.; Higgins v. Superior Court (2006) 140 Cal.App.4th 1238, 1247.) PRELIMINARY

ISSUES Defendant's Motion misquotes United States v. Oliver (9th Cri. 1995) 60 F.3d 547, 550. Specifically, Defendant's Motion reads, "cars are themselves instrumentalities of interstate commerce." (Motion, 2:2-3.) The word "interstate" is not contained in that quotation. (See United States v. Oliver (9th Cir. 1995) 60 F.3d 547, 550.) The Court also notes that Defendant's table of authorities includes Felisilda v. FCA US LLC (2020) 53 Cal.App.5th 486, which the California Supreme Court disapproved in Ford Motor Warranty Cases (2025) 17 Cal.5th 1122. (See id. at p. 1129.)

The Court will discuss these matters further with Defendant's counsel at the hearing on this Motion. REQUEST FOR JUDICIAL NOTICE The Court GRANTS Defendant's request for judicial notice. (Evid. Code, Sec. 452, subd. (d).) However, the Court takes judicial notice only as to "the existence, content and authenticity of public records and other specified documents" and the legal effect of the documents' language when that effect is clear, it does not take judicial notice of the truth of the factual matters asserted in those documents. (Dominguez v.

Bonta (2022) 87 Cal.App.5th 389, 400; Fontenot v. Wells Fargo Bank, N.A. (2011) 198 Cal.App.4th 256, 265.) DISCUSSION FAA v. CAA "[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 89, LLC v.

Jaman Properties 8 LLC (2020) 46 Cal.App.5th 337, 345 (Victrola 89), 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.) The Warranty Handbook (defined below) does not provide any language indicating that the enforcement of its arbitration terms is governed by the FAA. (Ameripour Decl., Ex. 3, pp. 14-20 of pdf.)

The CSA (defined below) on the other hand does provide language indicating the enforcement of its arbitration terms is governed by the FAA. (Rao Decl., Ex. 2, p. 34 of pdf.) Accordingly, the CAA governs this Motion to Compel Binding Arbitration as it pertains to the Warranty Handbook and the FAA governs this Motion as it pertains to the CSA. (Victrola 89, LLC v. Jaman Properties 8 LLC, supra, 46 Cal.App.5th at p. 345.) Existence of Valid Arbitration Agreement and Covered Claims - Warranty Handbook

Defendant moves to compel arbitration based on language in its Owner's Handbook & Warranty Information (the Warranty Handbook). (Ameripour Decl., Ex. 3, pp. 14-20 of pdf.) Defendant quoted language from the Warranty Handbook in its moving papers and attached a copy to the Motion. (Motion, pp. 7-9 of pdf.) While there is authority that says this can be sufficient to meet the initial burden for a motion to compel arbitration, there is no evidence of an agreement. Recent authority dealing with a similar warranty booklet specifically noted that the manufacturer presented documentary evidence of the plaintiff's receipt and acknowledgment of the warranty booklet, namely a "final inspection at delivery sheet, showing respondent provided his signature and initials confirming receipt of the owner's manual and warranty information." (See Condee v.

Longwood Mgmt. Corp. (2001) 88 Cal.App.4th 215, 218-219 [a party seeking to compel arbitration meets their initial burden of establishing the existence of a valid arbitration agreement by attaching a copy to the motion or setting forth its terms verbatim]; Kostandian v. Am. Honda Motor Co. (2026) 120 Cal.App.5th 872, 882 (Kostandian) [reversing denial of motion to compel arbitration where defendant manufacturer satisfied its initial burden of establishing an arbitration agreement and plaintiff never disputed existence of arbitration agreement in warranty booklet].)

Here, Defendant presented no evidence that Plaintiffs received the Warranty Handbook and therefore has not established the existence of a valid arbitration agreement vis-à-vis the Warranty Handbook. (See generally, Ameripour Decl.) Plaintiffs' lack of opposition to this Motion does not change this outcome because the initial burden is on Defendant to establish the existence of a valid arbitration agreement. (Banner Entertainment, supra, 62 Cal.App.4th at pp. 356-357.) Based on the foregoing, the Court DENIES the Motion to Compel Binding Arbitration as to the Warranty Handbook.

Existence of Valid Arbitration Agreement and Covered Claims - Connected Services Agreement Defendant alternatively moves to compel arbitration based on language in the Connected Services Agreement (CSA). (Rao Decl., Ex. 2, pp. 33-37.) Defendant quoted the arbitration language from the CSA and attached a copy of it to the Motion. (Motion, pp. 9-10.) However, the CSA suffers from the same problem as the Warranty Handbook, namely that Defendant failed to present evidence showing Plaintiffs received the CSA.

Defendant presented only an example screen capture of an online acknowledgement provision; it does not show that Plaintiffs ticked the box acknowledging the CSA's terms. (See generally, Rao Decl.; see Kostandian, supra, 120 Cal.App.5th at p. 882.) Defendant has therefore failed to establish the existence of a valid arbitration agreement vis-à-vis the CSA. Moreover, even if Defendant had met its moving burden as to the existence of an agreement, the Court would still deny the Motion to Compel Binding Arbitration because the scope of the arbitration agreement in the CSA reaches only connected service disputes, not vehicle defect claims. (See Rao Decl., Ex. 2, pp. 33-37.)

The Central District of California also found the scope of the arbitration agreement in Defendant's CSA does not cover vehicle defects. (Hageman v. Hyundai Motor Am. (C.D. Cal. 2024) 758 F.Supp.3d 1194, 1205-1207, aff'd sub nom. Hageman v. Hyundai Motor Am., Inc. (9th Cir. 2026) No. 24-7823, 2026 WL 821890, italics in original ["Reading the CSA in context and in its entirety, everything in the relevant language--from the titles, to the definitions, to the discussion of

remedies--makes clear to a customer that the contract is about (and is only about) the Bluelink services"].) While the Hageman decision is not binding, the Court does find it persuasive. Based on the foregoing, the Court DENIES the Motion to Compel Binding Arbitration as to the Connected Services Agreement. CONCLUSION The Court DENIES Defendant Hyundai Motor America's Motion to Compel Binding Arbitration in its entirety. Defendant Hyundai must file and serve a responsive pleading to the Complaint within ten days of this order. Plaintiff is ordered to give notice of the Court's ruling within five calendar days of this order. | Home -->)" -->