BARLEY REAL ESTATE INVESTMENTS LLC VS. KRAUSE

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 CASE NUMBER: 26CVG-00051 This matter is on calendar for status of accounting. The Inventory and Accounting have been filed pursuant to California Civil Code section 798.61. The clerk is directed to close the file. No appearance is necessary on today’s calendar.

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