Ratliff, Melaina M. vs. Hyundai Motor America

Case No.: VCU328191 Date: May 26, 2026 Time: 8:30 A.M. Dept. 2-The Honorable Bret D. Hillman Motion: Motion to Compel Arbitration Tentative Ruling: To grant the motion and delegate issues of arbitrability to the arbitrator. The court sets a Case Management Conferenced to review the status of the arbitration on December 18, 2026, at 8:30 AM in Dept.

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Background

Facts In this Song Beverly Act case, Defendant seeks to compel arbitration of claims for (1) "Violation of Subdivision (d) of Civil Code Section 1793.2"; (2) "Violation of Subdivision (b) of Civil Code Section 1793.2"; (3) "Violation of Subdivision (a)(3) of Civil Code Section 1793.2"; and (4) "Breach of the Implied Warranty of Merchantability.

Facts - Agreement to Arbitrate and Delegation Clause Defendant notes that the vehicle at issue was accompanied by a warranty provided by Hyundai, located in the Owner's Handbook & Warranty Information ("Warranty"), which included a binding arbitration provision. Defendant's counsel provides a copy of the warranty in support of the motion. Plaintiff objects to the presentation of the warranty as lacking authentication via the declaration of counsel. Plaintiff further argues that the existence of the arbitration term within the warranty does not constitute an enforceable contract. Neither party appears to discuss the presence of the delegation clause.

The Warranty contains the following provision: BINDING ARBITRATION FOR CALIFORNIA VEHICLES ONLY: PLEASE READ THIS SECTION IN ITS ENTIRETY AS IT AFFECTS YOUR RIGHTS THIS SECTION DOES NOT PRECLUDE YOU FROM FIRST PURSUING ALTERNATIVE DISPUTE RESOLUTION THROUGH BBB AUTO LINE AS DESCRIBED IN THE "ALTERNATIVE DISPUTE RESOLUTION" PROVISION IN SECTION 3 OF THIS HANDBOOK. If you purchased or leased your Hyundai vehicle in the State of California, you and we, Hyundai Motor America, each agree that any claim or disputes between us (including between you and any of our affiliated companies) 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 without limitation claims related to false or misleading advertising, unfair competition, breach of contract or warranty, 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

(excluding personal injury claims), but excluding claims brought under the Magnuson-Moss Warranty Act, shall be resolved by binding arbitration at either your or our election, even if the claim is initially filed in a court of law. If either you or we elect to resolve our dispute via arbitration (as opposed to in a court of law), such binding arbitration shall be administered by and through the American Arbitration Association (AAA) under its Consumer Arbitration Rules. ... This agreement to arbitrate is intended to be broadly interpreted and to make all disputes and claims between us (including our affiliated companies) relating to or arising out of your vehicle purchase, use or performance of your vehicle, or the vehicle warranty subject to arbitration to the maximum extent permitted by law.

The arbitrator (and not a court) shall decide all issues of interpretation, scope, and application of this agreement. In any arbitration, the arbitrator shall be bound by the terms of this agreement and shall follow the applicable law. The arbitrator shall not have the power to commit manifest errors of law, and any award rendered by the arbitrator that employs a manifest error of law may be vacated or corrected by a court of competent jurisdiction for such error...If arbitration is elected by either party, the parties collectively agree that they waive their right to a jury trial. ...

This agreement evidences a transaction involving interstate commerce and shall be governed by the Federal Arbitration Act, 9 U.S.C. Sec.Sec. 1-16. Judgment upon any award in arbitration may be entered in any court having jurisdiction. IF YOU PURCHASED OR LEASED YOUR VEHICLE IN CALIFORNIA, YOUR WARRANTY IS MADE SUBJECT TO THE TERMS OF THIS BINDING ARBITRATION PROVISION. BY USING THE VEHICLE, OR REQUESTING OR ACCEPTING BENEFITS UNDER THIS WARRANTY, INCLUDING HAVING ANY REPAIRS PERFORMED UNDER WARRANTY, YOU AGREE TO BE BOUND BY THESE TERMS.

IF YOU DO NOT AGREE WITH THESE TERMS, PLEASE CONTACT US AT OPT-OUT@HMAUSA.COM WITHIN THIRTY (30) DAYS OF YOUR PURCHASE OR LEASE TO OPT-OUT OF THIS ARBITRATION PROVISION. (emphasis added.)

Authority and Analysis - Delegation Clause Malone v. Superior Court (2014) 226 Cal.App.4th 1551 summarizes the applicable analysis with respect to delegation clauses: "A delegation clause requires issues of interpretation and enforceability of an arbitration agreement to be resolved by the arbitrator. Delegation clauses have the potential to create problems of circularity. For example, suppose an arbitration agreement delegates the issue of enforceability to the arbitrator. If the arbitrator concludes that the arbitration agreement is, in fact, not enforceable, this would mean that the entire agreement, including the delegation clause, is unenforceable-a finding that would undermine the arbitrator's jurisdiction to make that finding in the first place.

For this reason, courts have treated the delegation clause as a separate agreement to arbitrate solely the issues of enforceability... "For this reason, when a party is claiming that an arbitration agreement is unenforceable, it is important to determine whether the party is making a specific challenge to the enforceability of the delegation clause or is simply arguing that the agreement as a whole is unenforceable. If the party's challenge is directed to the agreement as a whole--even if it applies equally to the delegation clause--the delegation clause is severed out and enforced; thus, the arbitrator, not the court, will determine whether the agreement is enforceable.

In contrast, if the party is making a specific challenge to the delegation clause, the court must determine whether the delegation clause itself may be enforced (and can only delegate the general issue of enforceability to the arbitrator if it first determines the delegation clause is enforceable). (Rent-A-Center, West, Inc. v. Jackson (2010) 561 U.S. 63, 70)"

Here, the delegation clause clearly and unmistakably, with consistent and unambiguous reservation of all issues, delegates the authority as to an agreement to enforce, including defenses to enforcement, to the arbitrator by stating:

"The arbitrator (and not a court) shall decide all issues of interpretation, scope, and application of this agreement."

Challenge to Agreement in its Entirety as Unenforceable Here, Plaintiff has challenged the agreement noted above as unenforceable in its entirety. The Court, therefore, interprets this challenge, under Rent-A-Center and Malone, above, a challenge "...directed to the agreement as a whole--even if it applies equally to the delegation clause--the delegation clause is severed out and enforced; thus, the arbitrator, not the court, will determine whether the agreement is enforceable." Therefore, the Court will sever out the delegation clause and enforce it.

As such, the Court grants the motion and compels issues of interpretation, applicability, enforceability, and formation to the arbitrator pursuant to warranty information noted above. The Court further stays this matter pending the arbitrator's rulings on these issues. The court sets a Case Management Conferenced to review the status of the arbitration on December 18, 2026, at 8:30 AM in Dept.

2.

If no one requests oral argument, under Code of Civil Procedure section 1019.5(a) and California Rules of Court, rule 3.1312(a), no further written order is necessary. The minute order adopting this tentative ruling will become the order of the court and service by the clerk will constitute notice of the order. Court reporters are usually not available for law and motion matters in the civil division. The parties and counsel must provide their own reporter if they want a transcript of the proceedings. Re: RENFRO, MARGIE M vs. PRIME TOWING & TRANSPORT, INC, et al