ALMA M. CASTANEDA v. HYUNDAI MOTOR AMERICA

TENTATIVE RULINGS FOR August 28, 2026 Department S29 - Judge Nicole Quintana Winter

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ALMA M. CASTANEDA v. HYUNDAI MOTOR AMERICA

Motion: Motion to Compel Arbitration Movants: Defendant Hyundai Motor America Respondent: Plaintiff Alma Castaneda

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PROCEDURAL/FACTUAL BACKGROUND Plaintiff Alma M. Castaneda filed a complaint against Defendant Hyundai Motor America, alleging causes of action for: (1) violation of the Song-Beverly Act—breach of express warranty; (2) violation of Song-Beverly Act—breach of implied warranty; and (3) violation of Song-Beverly Act section 1793.2. Plaintiff’s claims arise from Hyundai’s alleged warranty and repair obligations relating to her 2025 Hyundai Ioniq 5. Plaintiff alleges issues with a failure to charge EV battery and “Check Electric Vehicle System” warning message. (Compl. ¶¶ 11-12.) Now before the Court is Hyundai’s motion to compel arbitration under arbitration clauses contained in Hyundai’s Owner Handbook & Warranty Information (Handbook) and the Bluelink Connected Services Agreement (CSA). Plaintiff opposes. Hyundai does not reply (due August 18, 2026).

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DISCUSSION Legal Standard California law favors the enforcement of valid arbitration agreements. (Coast Plaza Doctors Hosp. v. Blue Cross of Calif. (2000) 83 Cal.App.4th 677, 686.) Any doubts about arbitration will be resolved against the party asserting a defense to arbitration. (Ibid.) In addition, the Federal Arbitration Act [9 U.S.C. §1, et. seq.] authorizes enforcement of arbitration clauses unless grounds exist in law or equity for the contract’s revocation. (9 U.S.C. § 2.) The enforcement language of the FAA is almost identical to California’s arbitration requirements under Code of Civil Procedure section 1281.

In situations governed by the FAA, conflicting state law is preempted. (Volt Info. Sciences, Inc. v. Board of Trustees of Leland Stanford Junior University (1989) 489 U.S. 468, 477.) When a petition to compel arbitration is filed and accompanied by prima facie evidence of a written arbitration agreement, the Court must first determine whether an agreement exists. If any defense to its enforcement is raised, the Court must determine whether the agreement is enforceable. (Rosenthal v. Great Western Fin.

Sec. Corp. (1996) 14 Cal.4th 394, 413 (Rosenthal).) The moving party bears the burden of proving the existence of the arbitration agreement by a preponderance of the evidence. (Ibid.) If the party opposing the petition raises a defense to enforcement, then he or she bears the burden of producing evidence to prove any fact necessary to the defense by a preponderance of the evidence. (Ibid.) The party seeking arbitration may also seek a stay of pending litigation either by itself or in conjunction with a petition to compel arbitration. (Code Civ.

Proc., § 1281.4; see also 9 U.S.C. § 3.) Requests for Judicial Notice The Court denies both parties requests for judicial notice. Plaintiff’s Evidentiary Objections The Court overrules Plaintiff’s evidentiary objections.

Analysis 1. Does the FAA apply? The parties do not disagree that the FAA applies to the agreements. The Handbook and CSA each state that they involve transactions that relate to interstate commerce and are governed by the FAA. (Ameripour Decl. Exh. 3 at p. 14; Rao Decl. Exh. 2, ¶ 14C(a).) Under these provisions, the FAA applies. (Davis v. Shiekh Shoes, LLC (2022) 84 Cal.App.5th 956, 964; Victrola 89, LLC v. Jaman Properties 8 LLC (2020) 46 Cal.App.5th 337, 355 [“[T]he presence of interstate commerce is not the only manner under which the FAA may apply....[T]he parties may also voluntarily elect to have the FAA govern enforcement of the Agreement”].)

2. Does an enforceable arbitration agreement exist that covers the claims at issue? No. Hyundai has not shown the existence of an enforceable arbitration agreement between the parties that covers Plaintiff’s claims. Hyundai did not meet its burden to show that Plaintiff received the Handbook, agreed to its terms, or that the arbitration provision is enforceable. Further, Hyundai has not shown that Plaintiff assented to the CSA’s arbitration provision or that it encompasses Plaintiff’s Song-Beverly warranty claims. Arbitration is ordered if an agreement to arbitrate the controversy exists unless the agreement is unenforceable. (Condee v. Longwood Management Corp. (2001) 88 Cal.App.4th 215, 218-219 (Condee).) Arbitration agreements are governed by contract principles, including

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whether a party cannot be bound to or invoke arbitration. (DMS Services, LLC v. Superior Court (Zurich Services Corp.) (2012) 205 Cal.App.4th 1346, 1352.) Furthermore, to form a contract, there must be mutual consent. (Esparza v. Sand & Sea, Inc. (2016) 2 Cal.App.5th 781, 787-788.) Arbitration is a matter of consent. (Granite Rock Co. v. International Broth. Of Teamsters (2010) 561 U.S. 287, 299.) The consent to a contract must be communicated by each party to the other, and mutual consent is determined under an objective standard of outward manifestations or expressions of the parties. (Serafin v.

Balco Properties Ltd., LLC (2015) 235 Cal.App.4th 165, 173.) It lies when all parties agree “on the same thing in the same sense.” (Bowers v. Raymon J. Lucia Companies, Inc. (2012) 206 Cal.App.4th 724, 733.) Consent to a binding arbitration agreement may be expressed (e.g., the execution of an arbitration agreement) or implied in fact (e.g., the employee continues employment after notice). (Pinnacle Museum Tower Assn. v. Pinnacle Market Development (US), LLC (2012) 55 Cal.4th 223, 236; Davis v.

Nordstrom, Inc. (9th Cir. 2014) 755 F.3d 1089, 1093.) However, silence or inaction generally cannot constitute consent. (Golden Eagle Ins. Co. v. Foremost Ins. Co. (1993) 20 Cal.App.4th 1372, 1385.) Yet silence can constitute an implied acceptance when the offeree has a duty to respond and fails to or when the offeree retains the benefit. (Id. at p. 1386; Norcia v. Samsung Telecommunications America, LLC (9th Cir. 2017) 845 F.3d 1279, 1284-1285 (Norcia).) However, the offeree must be aware that an offer was made:

Accordingly, an offeree, knowing that an offer has been made to him but not knowing all of its terms, may be held to have accepted, by his conduct, whatever terms the offer contains. [Citations.] However, when the offeree does not know that a proposal has been made to him this objective standard does not apply. [Citation.] Hence, 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. [Citation.]

(Windsor Mills, Inc. v. Collins & Aikman Corp. (1972) 25 Cal.App.3d 987, 992-993; see also Norcia, supra, 845 F.3d at p. 1285; Marin Storage & Trucking, Inc. v. Benco Contracting and Engineering, Inc. (2001) 89 Cal.App.4th 1042, 1049-1050 [“[W]hen the writing does not appear to be a contract and the terms are not called to the attention of the recipient... no contract is formed with respect to the undisclosed term.”] (Marin Storage).) “For purposes of a petition to compel arbitration, it is not necessary to follow the normal procedures of document authentication.” (Condee, supra, 88 Cal.App.4th at p. 219.)

A defendant seeking to compel arbitration “need only allege the existence of an agreement and support the allegation” by attaching a copy of the agreement, or setting forth the terms of the arbitration provision, in the petition [Italics in original]. (Ibid.) Once this initial showing is made, the burden shifts to the plaintiff to create a factual dispute regarding the agreement’s existence or its enforceability. (Espejo v. Southern California Permanente Medical Group (2016) 246 Cal.App.4th 1047, 1059 (Espejo); Ruiz v.

Moss Bros. Auto Group, Inc. (2014) 232 Cal.App.4th 836, 846; Iyere v. Wise Auto Group (2023) 87 Cal.App.5th 747, 755 (Iyere).) If the plaintiff creates a factual dispute regarding the authenticity of the agreement, the burden shifts back to the defendant to prove the agreement’s authenticity by a preponderance of the evidence. (Iyere, supra, 87 Cal.App.5th at p. 755.)

The Handbook

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Section 4 of the Handbook contains a “Binding Arbitration for California Vehicles Only” provision (“Arbitration Clause”). The Arbitration Clause provides, in relevant part, that a buyer and Hyundai agree “that any claim or disputes between [them] ... related to or arising out of your vehicle purchase, advertising for the vehicle, use of your vehicle, the performance of the vehicle, any service relating to the vehicle, the vehicle warranty, representations in the warranty, or the duties contemplated under the warranty, including ... 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 ... shall be resolved by binding arbitration at either your or our election, even if the claim is initially filed in a court of law.” (Exh. 3 [p. 12] to Ameripour’s Decl.)

Arbitration is ordered if an agreement to arbitrate the controversy exists; an agreement only needs to be found to exist, not an evidentiary determination of its validity. (Condee v. Longwood Management Corp. (2001) 88 Cal.App.4th 215, 218-19.) Arbitration agreements are governed by contract principles, including whether a party cannot be bound to or invoke arbitration. (DMS Services, LLC v. Superior Court (Zurich Services Corp.) (2012) 205 Cal.App.4th 1346, 1352.) Furthermore, to form a contract, there must be mutual consent. (Esparza v.

Sand & Sea, Inc. (2016) 2 Cal.App.5th 781, 787-88.) Arbitration is a matter of consent. (Granite Rock Co. v. International Broth. Of Teamsters (2010) 561 U.S. 287, 299.) The consent to a contract must be communicated by each party to the other, and mutual consent is determined under an objective standard of outward manifestations or expressions of the parties. (Serafin v. Balco Properties Ltd., LLC (2015) 235 Cal.App.4th 165, 173.) It lies when all parties agree “on the same thing in the same sense.” (Bowers v.

Raymon J. Lucia Companies, Inc. (2012) 206 Cal.App.4th 724, 733.) Consent to a binding arbitration agreement may be expressed (e.g., the execution of an arbitration agreement) or implied in fact (e.g., the employee continues employment after notice). (Pinnacle Museum Tower Assn. v. Pinnacle Market Development (US), LLC (2012) 55 Cal.4th 223, 236; Davis v. Nordstrom, Inc. (9th Cir. 2014) 755 F.3d 1089, 1093.) However, silence or inaction generally cannot constitute consent. (Golden Eagle Ins. Co. v.

Foremost Ins. Co. (1993) 20 Cal.App.4th 1372, 1385.) Yet silence can constitute an implied acceptance when the offeree has a duty to respond and fails to or when the offeree retains the benefit. (Id. at p. 1386; Norcia v. Samsung Telecommunications America, LLC (9th Cir. 2017) 845 F.3d 1279, 1284-85 [“Norcia”].) However, the offeree must be aware that an offer was made:

Accordingly, an offeree, knowing that an offer has been made to him but not knowing all of its terms, may be held to have accepted, by his conduct, whatever terms the offer contains. [Citations.] However, when the offeree does not know that a proposal has been made to him this objective standard does not apply. [Citation.] Hence, 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. [Citation.] (Windsor Mills, Inc. v. Collins & Aikman Corp. (1972) 25 Cal.App.3d 987, 992-93.) Page | 4

(See also Norcia, supra, 845 F.3d at p. 1285; Marin Storage & Trucking, Inc. v. Benco Contracting and Engineering, Inc. (2001) 89 Cal.App.4th 1042, 1049-50 [“[W]hen the writing does not appear to be a contract and the terms are not called to the attention of the recipient... no contract is formed with respect to the undisclosed term.”].) As Plaintiff correctly argues, Hyundai’s motion is not based on a contract signed by Plaintiff. Rather, it is based on the Handbook and documents relating to enrollment in the Bluelink services.

In general, a warranty is about the seller’s affirmations, promises, and obligations, i.e., what the seller agreed to sell. (Weinstat v. Dentsply Internat., Inc. (2010) 180 Cal.App.4th 1213, 1228 [“Weinstat”]; Keith v. Buchanan (1985) 173 Cal.App.3d 13, 20.) It may bind the seller, but it does not impose any independent obligation on the buyer. (Weinstat, supra, 180 Cal.App.4th at p. 1228; Daugherty v. American Honda Motor Co., Inc. (2006) 144 Cal.App.4th 824, 830; Norcia, supra, 845 F.3d at p. 1288.)

Although Defendant relies on equitable estoppel, that doctrine can only assist if a contract exists. The Handbook, providing vehicle information and defining the express warranty, is not an offer that Plaintiff needed to accept to bind Hyundai to its warranty promises. Hyundai was obligated to fulfil its promises because it issued the warranty regardless of any action by Plaintiff. Thus, the Handbook is not a contract, which in turn means the Arbitration Clause within it is not binding on Plaintiff.

Nothing on the face of the Handbook implies it is proposing a contractual agreement between Hyundai and the buyer to place the buyer on notice that if he receives the benefits of the warranty, then he agrees to all contractual terms within the Handbook, including the agreement to arbitrate. (See, e.g., Hernandez v. LG Electronics U.S.A., Inc. (C.D.Cal. 2024) 2024 WL 1601260, at pp. *4-5.) The California Supreme Court recently reaffirmed that warranty obligations “are not terms of the sales contracts themselves but are imposed by statute.” (Ford Warranty Cases, supra, 17 Cal.5th at p. 1134.)

Accordingly, Plaintiff is not seeking to enforce a contract while avoiding its arbitration provision. Rather, Plaintiff is asserting statutory rights independent of any contractual agreement. Because no contract exists between Plaintiff and Hyundai in relation to the Handbook, equitable estoppel does not apply. Therefore, Hyundai’s reliance on equitable estoppel is unavailing. Based on the foregoing, the Court finds that the Handbook did not create a contractual, binding agreement to arbitrate between Hyundai and Plaintiff.

CSA. Defendant Hyundai contends that when a purchaser of a Hyundai enrolls in the Bluelink system, he is shown a screen where he must check the box acknowledging having read and understood the Bluelink’s Terms and Conditions, i.e., CSA, and then click complete. (Rao Decl. at ¶6.) Based on Rao’s review of Defendant’s data, on May 6, 2025, Plaintiff enrolled the vehicle in Bluelink services by checking the box next to “I have read and agree to the Blue Link Terms & Conditions,” and clicking complete.4 (Rao Decl. at ¶6.)

Plaintiff argues that the evidence (in the form of declarations and exhibits) lacks personal knowledge and is not direct evidence that she assented to the terms of arbitration. The Court finds these arguments unpersuasive. Mr. Rao has laid adequate foundation to testify as a custodian of records and the evidence he presents is admissible as business records. Plaintiff argues that the CSA is overbroad by including arbitration for anything related to the Subject Vehicle. She has not asserted a claim related to Connected Services being defective.

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The CSA provides that it is binding on any person who purchases, leases, or uses a vehicle equipped with the Connected Services and has activated the Connected Services, and on Hyundai. These parties “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....” (Exh. 2 [§14] to Rao’s Decl.)

Additionally, the agreement covers arbitration of any claims based on contract, warranty, or statute, and claims concerning the Vehicle that seek product or service support. (Exh. 2 [§14] to Rao’s Decl.) The agreement is to be read broadly to ensure all disputes and claims are subject to arbitration “to the fullest extent permitted by law.” (Exh. 2 [§14] to Rao’s Decl.) Hereinafter, the above is referred to as the “Arbitration Section.” In contractual interpretation, the goal is to give effect to the mutual intent at the time of contracting, to understand the contractual words in their ordinary and popular sense, and the whole of the contract should be taken together to give effect to every part, with each clause helping to interpret the others. (Franco v.

Greystone Ridge Condominium (2019) 39 Cal.App.5th 221, 227.) However, any interpretation must not lead to absurd results. (Civ. Code, §1638; Kashmiri v. Regents of University of California (2007) 156 Cal.App.4th 809, 831 [“Kashmiri”].) The interpretation must look to the reasonable expectations of the parties at the time of contracting, which is done by looking at the totality of the circumstances. (Kashmiri, supra, 156 Cal.App.4th at p. 832.) Furthermore, even with broad terms, a contract “extends only to those things concerning which it appears that the parties intended to contract.” (Civ.

Code, §1648; Victoria v. Superior Court (1985) 40 Cal.3d 734, 739.) Initially, the CSA provides that its Arbitration Section is to be “broadly interpreted and to make all disputes and claims between [the parties] subject to arbitration to the fullest extent permitted by law.” (Exh. 2 [§14] to Rao’s Decl.) However, the CSA also states that by enrolling in the Connected Services service plan, the terms and conditions are the agreement between Hyundai and the enrollee “regarding [Hyundai’s] provision of Connected Services....” (Exh.

B [welcome opener] to Rao’s Decl.) Furthermore, the CSA, as a whole, is addressing and providing information on the Connected Services. Under a broad reading of the Arbitration Section, it could be said to govern the claims herein. However, to interpret the CSA in such a manner would lead to an absurdity, i.e., no reasonable person would think that an owner accepting the terms and conditions for the use of his Bluelink system is also agreeing to arbitrate any and every dispute that he may have against the vehicle’s manufacturer related to the vehicle even if the issue is unrelated to the Bluelink system. (Hageman v.

Hyundai Motor America (C.D.Cal. 2024) 758 F.Supp.3d 1194, 1199, 1205-07 [“Hageman”]; see also Revitch v. DIRECTV, LLC (9th Cir. 2020) 977 F.3d 713, 717 [“‘[N]o reasonable person would think that checking a box accepting the “terms and conditions” necessary to obtain cell phone service would obligate them [sic] to arbitrate literally every possible dispute he or she might have with the service provider....’”].) Additionally, under the whole of the CSA, including its context, the only reasonable interpretation is it covers only issues related to Connected Services. (Hageman, supra, 758 F.Supp.3d at p. 1206.)

Lastly, under Rao’s declaration, the CSA is the agreement when a buyer chooses to use and/or purchase the Bluelink system. (Rao’s Decl. at ¶¶4.) Exhibit 1 to Rao’s declaration shows a screen which notes that Bluelink offers a “suite of safety convenience features.” The first unnumbered page to Exhibit 2 to Rao’s declaration states the following:

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As used throughout this Agreement, “Connected Services” are the vehicle technology and service functions received as part of the enrollment in a Hyundai Bluelink or Genesis Connected Services Service Plan, including but not limited to:  Remote Service Activation  Stolen Vehicle Recovery  Enhanced Roadside Assistance  SOS/ACN  POI Send-to-Car and Destination Search  Digital Key 2.0  Verizon Hotspot  Over the Air software updates

Under these circumstances, a reasonable enrollee would only be intending to agree under the CSA to contract for services associated with the Connected Services, and thus, be burdened by the Arbitration Section to the agreed matters contemplated when signing the contract, i.e., the right to use and access the Connected Services. Therefore, the Court denies the motion to compel arbitration based on the CSA.

RULING The Court rules as follows: (1) Denies Defendant Hyundai’s motion to compel arbitration. Defendant Hyundai failed to establish the existence of a valid arbitration agreement between the parties that covers Plaintiff’s claims. (2) Denies Defendant Hyundai’s request for judicial notice. (3) Denies Plaintiff’s request for judicial notice. (4) Overrules Objections Nos. 1, 2, 3. (5) Orders Plaintiff, as the prevailing party to serve formal notice of the Court’s rulings.

Dated: August 28, 2026

____________________________ Judge Nicole Quintana Winter

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