Williams, Judson James et al v. Hyundai Motor America

14. 26CV01631 Williams, Judson James et al v. Hyundai Motor America

EVENT: Defendant’s Motion to Compel Binding Arbitration

Defendant’s Motion to Compel Binding Arbitration is GRANTED.

Hyundai Can Enforce the Warranty Under the Equitable Estoppel Doctrine A defendant signatory can compel a nonsignatory plaintiff to arbitrate under equitable estoppel principles. (See Boucher v. Alliance Title Co., Inc. (2005) 127 Cal.App.4th 262, 269) Under that doctrine, as applied in ‘both federal and California decisional authority, a nonsignatory defendant may invoke an arbitration clause to compel a signatory plaintiff to arbitrate its claims when the causes of action against the nonsignatory are “intimately founded in and intertwined” with the underlying contract obligations. (Kielar v. Superior Court (2023) 94 Cal.App.5th 614, 619) Equitable estoppel may also apply where, as here, defendant is the signatory and plaintiff is the non-signatory. (Boucher, supra, at p.269)

Here, there is no genuine dispute that the Complaint is premised on the warranty. The Court has not found a published decision applying equitable estoppel to a warranty issued by a car manufacturer. Nevertheless, the warranty includes language establishing Plaintiff’s assent to the arbitration provision: “BY USING THIS VEHICLE OR ACCEPTING BENEFITS UNDER THIS WARRANTY ... YOU AGREE TO BE BOUND BY THESE TERMS.” Here, by filing this lawsuit premised on the warranty Plaintiff has accepted the benefits of the warranty. Thus, Plaintiff has agreed to the terms of the warranty, including the arbitration clause. Accordingly, Plaintiff cannot selectively choose which provisions of the warranty will be enforced and which provisions will not be enforced.

As to unconscionability, the opposition makes vague references to unconscionability but does not specifically explain how the arbitration clause is both procedurally and substantively unconscionable. Plaintiffs make vague arguments relating to surprise in that there is no evidence the warranty was presented prior to or after the lease of the vehicle. Even if that’s true, they obviously became aware of it prior to filing this lawsuit as the lawsuit is based on the warranty. The Court finds the arbitration agreement is not unconscionable.

The action is stayed pending the outcome of arbitration. The Court will sign the proposed order.

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