MONROE VS. LITHIA CIMR, INC., ET AL.

Following a series of alleged mechanical failures and disputes over repair authorizations, Plaintiff filed the instant action on October 27, 2025. Safe-Guard notified Plaintiff of its intent to arbitrate on January 27, 2026. Plaintiff did not respond. Safe-Guard now moves to enforce the Agreement's arbitration provision. The California Arbitration Act governs the Agreement. The Agreement states, in relevant part: “Any arbitration proceedings arising under the Agreement will proceed under procedures outlined in the California Arbitration Act. Such procedures can be found in the California Code of Civil Procedure section 1280.” (Agreement pp. 12-13, Section 5.)

Merits: The CAA mandates that a court order arbitration upon a showing that (1) a written agreement to arbitrate exists, and (2) the opposing party refuses to arbitrate. (Code Civ. Proc. § 1281.2.) “Under California law, as under federal law, an arbitration agreement may only be invalidated for the same reasons as other contracts. That policy favors the enforcement of arbitration agreements as it favors the enforcement of any other contract; it requires courts to “place arbitration agreements on an equal footing with other contracts, [citation], and enforce them according to their terms. (AT&T Mobility LLC v.

Concepcion (2011) 563 U.S. 333, 339 [179 L. Ed. 2d 742, 131 S. Ct. 1740].)” Quach v. California Commerce Club, Inc. (2024) 16 Cal.5th 562, 578. A party opposing arbitration bears the burden of establishing grounds for revocation, including unconscionability. Engalla v. Permanente Medical Group, Inc. (1997) 15 Cal.4th 951, 972.

The Agreement, executed by Plaintiff on January 22, 2025, contains an express and conspicuous California-specific arbitration provision. The existence and authenticity of the Agreement are established by the Declaration of Ches Graham. Plaintiff does not dispute that she signed the Agreement. All eight of Plaintiff's causes of action — for breach of express warranty, breach of implied warranty, violation of the Magnuson-Moss Warranty Act, negligent repair, conversion, breach of bailment, breach of contract and the covenant of good faith and fair dealing, and unfair business practices — arise from or relate to the Agreement and therefore fall within the scope of the arbitration clause.

Procedural and Substantive Unconscionability: To defeat a motion to compel arbitration on unconscionability grounds, a party must establish both procedural and substantive unconscionability. Armendariz, 24 Cal.4th at 114. Plaintiff has not opposed the Motion and therefore has not met that burden here. The Agreement is not procedurally unconscionable. The arbitration provision is prominently identified, clearly labeled, and bolded. While the Agreement may qualify as a contract of adhesion, adhesion alone does not render an arbitration provision 2

unconscionable. Graham v. Scissor-Tail, Inc. (1981) 28 Cal.3d 807, 817–820; Harper v. Ultimo (2003) 113 Cal.App.4th 1402, 1409.

The Agreement is not substantively unconscionable. Its terms follow CAA procedures, provide each party the right to conduct reasonable discovery, require a written arbitral award, and mandate equal cost sharing. (Code Civ. Proc. §§ 1283.05, 1283.4, 1281.97, 1281.98.) The terms are bilateral and balanced. Nothing in the Agreement shocks the conscience or operates in an impermissibly one-sided manner.

Third-Party Litigation Exception: The Court previously identified in its April 20, 2026 Order a potential issue under Code of Civil Procedure § 1281.2(c), which grants the Court discretion to deny or stay arbitration where a party to the arbitration agreement is also a party to pending litigation with non-signatories arising from the same transaction, and conflicting rulings on a common issue of law or fact are possible.

The Court is satisfied that the third-party litigation exception does not bar arbitration here. While the first two statutory conditions are met — the non-signatory defendants (Hyundai Motor America, Lithia, and Santander) are parties to this action and the claims arise from the same underlying transaction — there is little risk of conflicting rulings on a common determinative issue. The arbitration will address solely Safe-Guard's contractual and statutory obligations to Plaintiff under the Safe-Guard Agreement.

The Court also notes that Hyundai and Plaintiff have submitted a joint stipulation and proposed order to arbitrate their dispute. The court proceedings, as to the remaining defendants, will address the independent legal duties of the dealer and the lender — duties that are distinct in both source and substance from those at issue in arbitration. Shared factual background does not, without more, create the risk of incompatible results that § 1281.2(c) is designed to prevent.

Because all of Plaintiff's claims against Safe-Guard are subject to arbitration, a stay of those claims is mandatory. CCP § 1281.4. The Court further finds that a stay of the entire proceeding as to all defendants is appropriate pending the outcome of arbitration. Safe-Guard’s Motion to Compel Arbitration is GRANTED. This action is stayed pending the outcome of arbitration. The matter is set for review regarding status of arbitration on Monday, November 23, 2026 at 9:00 a.m. in Department 64. Safe-Guard and Plaintiff are ordered to file a status statement at least five court days prior to the review hearing.

****************************************************************************** 9:00 a.m. Review Hearings ****************************************************************************** BARLEY REAL ESTATE INVESTMENTS LLC VS. KRAUSE