Nguyen vs. Mercedes-Benz USA LLC

Defendant Rich to give notice.

14 Nguyen vs. Motion to Compel Binding Arbitration Mercedes-Benz USA LLC The court GRANTS Defendant MERCEDES-BENZ USA, LLC’s (“MBUSA”) motion to compel Plaintiff PETER NGUYEN to arbitrate his claims against Defendant Mercedes-Benz and staying this action pending completion of the arbitration.

The Arbitration Agreement

A party moving to compel arbitration bears an initial burden of producing “prima facie evidence of a written agreement to arbitrate the controversy.” (Gamboa v. Northeast Community Clinic (2021) 72 Cal.App.5th 158, 165–166.) If the moving party meets its initial prima facie burden and the opposing party disputes the agreement, then in the second step, the opposing party bears the burden of producing evidence to challenge the authenticity of the agreement. (See Gamboa, 72 Cal.App.5th at 165- 166.)

Here, Defendant MBUSA meets its initial prima facie burden by submitting the Motor Vehicle Lease Agreement (the “Lease Agreement”) apparently executed by Plaintiff, which contains the following arbitration provision:

Any claim or dispute, whether in contract, tort or otherwise (including any dispute over the interpretation, scope or validity of this lease, arbitration section or the arbitrability of any issue), between you and us or any of our employees, agent, successors, assigns, or the vehicle distributor, including Mercedes-Benz USA LLC (each a ‘Third-Party Beneficiary’), which arises out of or relates to a credit application, this lease, or any resulting transaction or relationship arising out of this lease (including any such relationship with third parties who do not sign this contract) shall, at the election of either you, us, or a Third-Party Beneficiary, be resolved by a neutral, binding arbitration and not by a court action.

(Ameripour Decl., Exh. 2, emphasis supplied.)

Plaintiff does not appear to dispute the existence, validity, or authenticity of the arbitration provision.

Plaintiff’s claims fall within the broad scope of the arbitration agreement contained in the Lease Agreement/ (See, e.g., Rice v. Downs (2016) 248 Cal.App.4th 175, 186, as modified on denial of reh'g (June 23, 2016), as modified (June 28, 2016) [holding that examples of “broad” clauses include “any claim arising from or related to this agreement” and are sufficiently broad to include torts and claims where the allegations “touch matters” covered by the contract].)

Third-Party Enforcement

Plaintiff argues that Defendant MBUSA, a non-signatory to the Lease Agreement, lacks standing to enforce the agreement and that the Ford Motor Warranty Cases foreclose Defendant MBUSA’s enforcement of the arbitration agreement.

The Ford Motor Warranty Cases provide little guidance here.

There are six theories by which a nonsignatory may compel or be bound to arbitrate. These theories are as follows: “ ‘(a) incorporation by reference; (b) assumption; (c) agency; (d) veil-piercing or alter ego; (e) estoppel; and (f) thirdparty beneficiary’ [citations].” (Suh v. Superior Court (2010) 181 Cal.App.4th 1504, 1513 [collecting cases of each theory].)

The California Supreme Court in the Ford Motor Warranty Cases considered and ultimately concluded that equitable estoppel did not apply to bar the plaintiffs in that case from pursuing their remedies against Ford Motor Company in court. (Ford Motor Warranty Cases (2025) 17 Cal.5th 1122, 1126, 1133-1138.) Here, on the other hand, Defendant MBUSA invokes an entirely different theory for enforcement: third-party beneficiary.

Third-party beneficiary doctrine provides that: “A contract, made expressly for the benefit of a third person, may be enforced by him at any time before the parties thereto rescinded.” (Civ. Code, § 1559.) A third party becomes a third-party beneficiary where an “intent to benefit [that] third person appears from the terms of the contract.” (See Jensen v. U-Haul Co. of Calif. (2017) 18 Cal.App.5th 295, 301-302 [internal quotes omitted].) “To show the contracting parties intended to benefit it, a third party must show that, under the express terms of the contract at issue and any other relevant circumstances under which the contract was made, (1) ‘the third party would in fact benefit from the contract’; (2) ‘a motivating purpose of the contracting parties was to provide a benefit to the third party’; and (3) permitting the third party to enforce the contract ‘is consistent with the objectives of the contract and the reasonable expectations of the contracting parties.’” (Ford Motor Warranty Cases (2023) 89 Cal.App.5th 1324, 1337, citing Goonewardene v.

ADP, LLC (2019) 6 Cal.5th 817, 830.)

Here, the arbitration agreement expressly identifies Defendant MBUSA as a third-party beneficiary. (Ameripour Decl., Exh. 2.) By expressly designating MBUSA as a thirdparty beneficiary entitled to enforce the arbitration agreement, the Lease Agreement expressly benefits—and communicates an intent to benefit—Defendant MBUSA. The court finds that permitting MBUSA to enforce the arbitration provision is also consistent with the objectives of the contract and the reasonable expectations of the parties. As such, the court finds the Goonewardene elements are met.

Unconscionability

Plaintiff also argues that even if the court finds an otherwise enforceable arbitration agreement, the arbitration provision should not be enforced because it is unconscionable.

A court may refuse to enforce an arbitration agreement that is unconscionable. (Civ. Code, § 1670.5.) To be unenforceable, a contract must be both procedurally and substantively unconscionable, but the elements need not

be present in the same degree. (Armendariz v. Foundation Health Psychcare Servs., Inc. (2000) 24 Cal.4th 83, 114.) The analysis employs a sliding scale: “. . . the more substantively oppressive the contract term, the less evidence of procedural unconscionability is required to come to the conclusion that the term is unenforceable, and vice versa.” (Ibid; Mercuro v. Superior Court (2002) 96 Cal.App.4th 167, 174-175.)

Procedural Unconscionability

Plaintiff argues that the arbitration agreement is procedurally unconscionable because the arbitration provision appears in small print alongside other information, and the contract of adhesion was presented in a high-pressure sales environment.

The court finds this contract of adhesion includes a modest degree of procedural unconscionability. (See, e.g., Nguyen v. Applied Medical Resources Corp. (2016) 4 Cal.App.5th 232, 248.)

Substantive Unconscionability

Plaintiff argues that the arbitration agreement is substantively unconscionable because the agreement deprives Plaintiff of his right to a jury trial.

“Substantive unconscionability focuses on the actual terms of the agreement and evaluates whether they create ‘overly harsh’ or ‘one-sided’ results.’” (Serafin v. Balco Properties ltd., LLC (2015) 235 Cal.App.4th 154, 177.) “A contract term is not substantively unconscionable when it merely gives one side a greater benefit; rather, the term must be ‘so one-sided as to ‘shock the conscience.’” (Pinnacle Museum Tower Association v. Pinnacle Market Development (US), LLC (2012) 55 Cal.4th 223, 246.) In assessing substantive unconscionability, the “paramount consideration” is mutuality of the obligation to arbitrate. (Nyulassy v. Lockheed Martin Corp. (2004) 120 Cal.App.4th 1267, 1287.)

Plaintiff cites no authority to support his position that waiving his right to jury trial is substantively

unconscionable, and California and federal authorities uniformly reiterate the strong public policy in favor of arbitration. (See, e.g., AT&T Mobility LLC v. Concepcion (2011) 563 U.S. 333, 339 [holding the FAA reflects the “liberal federal policy favoring arbitration”]; Coast Plaza Doctors Hospital v. Blue Cross of California (2000) 83 Cal.App.4th 677, 686 [nothing “California has a strong public policy in favor of arbitration”].)

In sum, Plaintiff shows a modest amount of procedural unconscionability but no substantive unconscionability.

Accordingly, the court GRANTS Defendant MBUSA’s motion to compel arbitration.

Defendant MBUSA is the only named defendant. As such, the court also STAYS the entire action pending resolution of the parties’ binding arbitration.

The court VACATES the Case Management Conference scheduled for 10/05/2026.

The court hereby SETS an ADR Review Hearing for December 14, 2026 at 9:00 a.m. in Department W08.

Plaintiff SHALL file and serve a status report no later than 10 court days before the ADR Review Hearing.

Defendant to give notice.

15 Christner vs. Demurrer Warrior Management The court SUSTAINS with 20 days leave to amend, Company LLC Defendants GARRETT WHITE and DANIELLE WHITE (“Moving Defendants”) general demurrer to the fifth and eighth causes of action in the Complaint filed by Plaintiff CAMERON CHRISTNER. Moving Defendants’ demurrer to other causes of action are DISREGARDED for the reasons explained below.

The Complaint contains the following eight causes of action against all defendants, including Moving Defendants:

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