LVNV Funding LLC v. Deluna (Class Action)

LINE # CASE # CASE TITLE RULING LINE 1 22CV399095 Terra Fritch et al vs Universal Protection L.P et al Hearing: Motion Summary Judgment

Tentative ruling will be electronically sent to the parties only, as it contains information filed under seal LINE 2 22CV403117 LVNV Funding LLC v. Deluna (Class Action) Motion: Compel Arbitration is GRANTED

Click on line 2 for tentative ruling LINE 3 22CV405334 Hecker v. Mathew Enterprise, Inc. (Class Action) Motion: Preliminary Approval is GRANTED

Click on line 3 for tentative ruling LINE 4 23CV424597 Cowley v. Apple, Inc. Hearing: Motion for Reclassification is DENIED

Click on line 4 for tentative ruling LINE 5 24CV431503 Mirza-Aliev v. 800 Moffett MV Manager, LLC (Class Action) Hearing: Motion for Final Approval is Continued to July 23 to allow parties to file declaration of settlement administrator LINE 6 24CV433252 Gaspar v. Big T Supermarket, Inc. (Class Action/PAGA) Motion: Preliminary Approval is GRANTED

Click on line 6 for tentative ruling LINE 7 24CV446330 Haynie v. Google (Defendant Alphabet has been dismissed per stipulation and order) Hearing: Demurrer is OVERRULED

Click on line 7 for tentative ruling LINE 8 25CV470518 SARINA HALEY et al vs FF PROPERTIES, L.P et al Motion: Compel Arbitration continued to June 25, CMC continued to same date as well

1 Calendar Line 2

Case Name: LVNV Funding, LLC v. Robert DeLuna, et al. Case No.: 22CV403117

This action is comprised of a collection lawsuit by plaintiff/cross-defendant LVNV Funding LLC (“LVNV”) and putative class action cross-complaint by defendant/crosscomplainant Rober DeLuna alleging that LVNV engaged in unfair debt buying practices in violation of the California Fair Debt Buying Practices Act, (Civ. Code, §§ 1788.50-1788.64) (“CFDBPA”).

Before the Court is LVNV’s motion to compel arbitration, which is opposed. As discussed below, the Court GRANTS LVNV’s motion to compel arbitration and GRANTS LVNV’s request to stay the matter.

I. BACKGROUND

According to the allegations of the operative complaint (“Complaint”), filed on August 12, 2022, LVNV is the owner of debt owned by Mr. DeLuna. (Complaint, p. 2, ¶ 10.) In its judicial form complaint, LVNV asserted common counts for open book account, money had and received, money lent by plaintiff to defendant at defendant’s request and money paid, laid out, and expended to or for defendant a defendant’s special instance and request.

On June 30, 2023, Mr. DeLuna filed a putative class action cross-complaint (“Cross- Complaint”) against LVNV asserting a single cause of action for violation of the California Fair Debt Buying Practices Act (“CFDBPA”) codified in Civil Code section 1788.50, et. seq. According to the allegations of the Cross-Complaint, Mr. DeLuna is alleged to have incurred a financial obligation in the form of a consumer credit account issued by WebBank, which is evidenced by an electronic promissory note created and maintained by LendingClub Corporation (“LendingClub”). (Cross-Complaint, ¶¶ 10-11.) The alleged debt and electronic promissory note (the “Note”) were transferred by WebBank to LendingClub within two business days after June 20, 2017. (Cross-Complaint, ¶ 12.)

On information and belief, Mr. DeLuna pleads that the debt and Note were thereafter allegedly transferred to an investor, Golden Caps Trust (“Golden Caps”), for whom LendingClub acted as an agent. (Cross-Complaint, ¶ 13.) LendingClub received the last payment on the alleged debt on December 2, 2019, with no further payments made after that point. (Cross-Complaint, ¶ 14.)

On July 31, 2019, Golden Caps removed the alleged debt from its books as an asset and treated the alleged debt as a loss or expense, and as a result as the “charge-off creditor at the time of charge off” within the meaning of Civil Code section 1788.58, subdivision (a)(6), and the alleged debt was thereafter a “charged-off consumer debt” within the meaning of Civil Code section 1788.50, subdivision (a)(2). (Cross-Complaint, ¶ 15.)

Mr. DeLuna alleges that on April 30, 2020, the alleged debt was sold or resold to LVNV for collection purposes, but possession or control of the Note was never transferred to it. (Cross-Complaint, ¶ 16.) On August 12, 2022, LVNV filed the underlying Complaint in an attempt to collect on the alleged debt. (Cross-Complaint, ¶ 18.) Mr. DeLuna alleges that

2 LVNV falsely pleads in the Complaint that it complied with the applicable provisions of the CFDBPA and alleges common counts instead of breach of contract because it does not possess or control the Note. (Cross-Complaint, ¶¶ 20-22.)

II. REQUESTS FOR JUDICIAL NOTICE

A. DeLuna’s Request

In support of his opposition, DeLuna requests judicial notice of the following items: (1) The Complaint, filed on August 12, 2022; (2) The Answer filed on October 10, 2022; (3) The Motion for Leave to File Class Action Cross-Complaint and Reclassification filed on December 8, 2022; (4) The Stipulation and Order Granting Leave to File Amended Answer filed on December 21, 2022; (5) The Order granting Motion for Leave to File Class Action Cross-Complaint and Reclassification filed on June 30, 2023 (6) Class Action Cross-Complaint filed on June 30, 2023; (7) LVNC’s Answer to the Cross-Complaint filed on August 1, 2023; (8) LVNV’s anti-SLAPP motion filed on September 6, 2023, (9) Joint Status Report Regarding Discovery Necessary to Oppose anti-SLAPP motion filed on November 6, 2023; (10) Motion to Conduct Discovery filed on December 1, 2023; (11) Plaintiff’s Opposition to Motion to Conduct Discovery filed on December 22, 2023; (12) Joint Further Case Management Conference Statement filed on March 26, 2024; (13) LVNV’s Reply in Support of anti-SLAPP motion filed on May 8, 2025; (14) Case Management Statement filed on June 11, 2025; (15) Joint Further Case Management Statement filed on June 20, 2025; and (16) Joint Further case Management Statement filed on August 11, 2025;

Evidence Code section 452, subdivision (d), permits judicial notice of records of any court of this state or any court of record of the United States or of any state of the United States. (Code Civ. Proc., § 452, subd. (d).) The above items are court records, therefore they are proper items of judicial notice. Thus, the Court takes judicial notice of the existence of the documents and the legal effect of the court orders but does not take notice of the truth of any disputed contents. (Oh v. Teachers Ins. & Annuity Assn. of America (2020) 53 Cal.App.5th 71, 79-81 (Oh).) Accordingly, DeLuna’s request for judicial notice is GRANTED.

B. LVNV’s Request for Judicial Notice

LVNV requests judicial notice of the following items: (1) The Complaint, filed on August 12, 2022:Exhibit A; (2) The Answer filed on October 10, 2022: Exhibit B; (3) Substitution of Counsel filed by DeLuna on December 8, 2022: Exhibit C; (4) The Motion for Leave to File Class Action Cross-Complaint and Reclassification filed on December 8, 2022: Exhibit D;

3 (5) Dismissal with Prejudice of Complaint filed by LVNV on December 30, 2022: Exhibit E; (6) Amended Notice of Hearing on the Motion for Order Granting Leave to File Class Action Complaint filed on March 13, 2023: Exhibit F; (7) The Order granting Motion for Leave to File Class Action Cross-Complaint and Reclassification filed on June 30, 2023: Exhibit G; (8) Class Action Cross-Complaint filed on June 30, 2023: Exhibit H; (9) LVNC’s Answer to the Cross-Complaint filed on August 1, 2023: Exhibit I; (10) LVNV’s anti-SLAPP motion filed on September 6, 2023: Exhibit J; (11) Stipulation setting Hearing on anti-SLAPP motion on September 6, 2023: Exhibit K; (12) Ex Parte Application to Amend or Vacate anti-SLAPP Motion Briefing Schedule filed on October 4, 2023: Exhibit L; (13) Opposition to Ex Parte Application filed on October 6, 2023: Exhibit M; (14) Order Granting Ex Parte Application filed on October 10, 2023: Exhibit N; (15) Motion to Conduct Discovery filed on December 1, 2023: Exhibit O; (16) Order Granting Leave to Conduct Discovery filed on April 5, 2024: Exhibit P; (17) Stipulation and Proposed Order re: anti-SLAPP Briefing Schedule and Setting Hearing filed on November 25, 2024: Exhibit Q; and (18) Order Denying LVNV’s anti-SLAPP motion filed on June 23, 2025.

Here, the exhibit are all court records. As explained above, court records are proper items for judicial notice. Thus, the Court takes judicial notice of the existence of the documents and the legal effect of the court orders but does not take notice of the truth of any disputed contents. (Oh, supra, 53 Cal.App.5th at pp. 79-81.) Accordingly, LVNV’s request for judicial notice is GRANTED.

III. LVNV’S MOTION TO COMPEL ARBITRATION

LVNV moves for an order compelling arbitration and staying proceedings pursuant to the arbitration provision in the Borrower Agreement.

A.

Legal Standard

In ruling on a motion to compel arbitration, the Court must inquire as to (1) whether there is a valid agreement to arbitrate, and (2) if so, whether the scope of the agreement covers the claims alleged. (See Howsan v. Dean Witter Reynolds (2002) 537 U.S. 79, 84.) “Under both federal and state law, the threshold question presented by a petition to compel arbitration is whether there is an agreement to arbitrate. [Citations.] The threshold question requires a response because if such an agreement exists, then the court is statutorily required to order the matter to arbitration.” (Fleming v. Oliphant Financial, LLC (2023) 88 Cal.App.5th 13, 19, internal quotation marks omitted.) The agreements at issue expressly provide that they are governed by the Federal Arbitration Act.

“The FAA [Federal Arbitration Act], which includes both procedural and substantive provisions, governs [arbitration] agreements involving interstate commerce.” (Avila v. Southern California Specialty Care, Inc. (2018) 20 Cal.App.5th 835, 840.) However, “[t]he procedural aspects of the FAA do not apply in state court absent an express provision in the arbitration agreement.” (Ibid.) Where the Agreement expressly provides that it “shall be

4 interpreted and enforced in accordance with the [FAA],” federal procedural and substantive law apply. (See Rodriguez v. American Technologies, Inc. (2006) 136 Cal.App.4th 1110, 1122 [“[t]he phrase ‘pursuant to the FAA’ is broad and unconditional,” and unambiguously adopts both the procedural and substantive aspects of the FAA].)

Under the FAA, the Court must grant a motion to compel arbitration if any suit is brought upon “any issue referable to arbitration under an agreement for such arbitration” (9 U.S.C. § 3), subject to “such grounds as exist at law or in equity for the revocation of any contract...” (9 U.S.C. § 2). The moving party must prove by a preponderance of evidence the existence of the arbitration agreement and that the dispute is covered by the agreement. (See Cruise v. Kroger Co. (2015) 233 Cal.App.4th 390, 396 [under both federal and state law, “the threshold question presented by a petition to compel arbitration is whether there is an agreement to arbitrate”]; Rosenthal v.

Great Western Fin’l Securities Corp. (1996) 14 Cal.4th 394, 413 (Rosenthal) [moving party’s burden is a preponderance of evidence].) The burden then shifts to the resisting party to prove a ground for denial. (Rosenthal, supra, 14 Cal.4th at p. 413.)

“In determining the rights of parties to enforce an arbitration agreement within the FAA’s scope, courts apply state contract law while giving due regard to the federal policy favoring arbitration.” (Pinnacle Museum Tower Assn. v. Pinnacle Market Development (US), LLC (2012) 55 Cal.4th 223, 236 (Pinnacle).)

But the FAA’s policy favoring arbitration ... is merely an acknowledgment of the FAA’s commitment to overrule the judiciary’s longstanding refusal to enforce agreements to arbitrate and to place such agreements upon the same footing as other contracts. Or in another formulation: The policy is to make arbitration agreements as enforceable as other contracts, but not more so. Accordingly, a court must hold a party to its arbitration contract just as the court would to any other kind. (Morgan v. Sundance, Inc. (2022) 596 U.S. 411 (Morgan), internal citations and quotation marks omitted.)

On a motion to compel arbitration under the CAA, “[t]he party seeking arbitration bears the burden of proving the existence of an arbitration agreement, and the party opposing arbitration bears the burden of proving any defense, such as unconscionability.” (Pinnacle, supra, 55 Cal.4th at p. 236.)

B.

Discussion

LVNV argues there is a valid arbitration agreement and requests for a stay pending arbitration. (Motion, p. 2:7-9.)

1. Waiver of Right to Compel Arbitration

As a threshold matter, DeLuna argues that LVNV’s motion should be denied because it did not move to compel arbitration for three years since initiating this action and thus, it has waived its right to do so. (DeLuna’s Opposition (“Opp.”), pp. 5:17-24, 8:7.)

“[W]here the FAA applies, whether a party has waived a right to arbitrate is a matter of federal, not state, law.” (Davis v. Shiekh Shoes, LLC (2022) 84 Cal.App.5th 956, 963 (Davis).)

5 However, “the test for determining waiver of the right to arbitrate is the same under the FAA and the [California Arbitration Act].” (Zamora v. Lehman (2010) 186 Cal.App.4th 1, 11.) The leading California case discussing waiver, St. Agnes Medical Center v. PacifiCare of California (2003) 31 Cal.4th 1187 (St. Agnes), adopted a set of factors from the Tenth Circuit opinion in Peterson v. Shearson/American Express, Inc. (10th Cir. 1988) 849 F.2d 464. Both federal and California law “reflect[] a strong policy favoring arbitration agreements and require[] close judicial scrutiny of waiver claims.” (St. Agnes, supra, 31 Cal.4th at p. 1195.) “[W]aivers are not to be lightly inferred and the party seeking to establish a waiver bears a heavy burden of proof.” (Ibid.)

Under the St. Agnes test, the following factors are relevant in deciding whether a party’s conduct constitutes a waiver of arbitration: (1) whether the party’s actions are inconsistent with the right to arbitrate; (2) whether the litigation machinery has been substantially invoked and the parties were well into preparation of a lawsuit before the party notified the opposing party of an intent to arbitrate; (3) whether a party either requested arbitration enforcement close to the trial date or delayed for a long period before seeking a stay; (4) whether a defendant seeking arbitration filed a counterclaim without asking for a stay of the proceedings; (5) whether important intervening steps [e.g., taking advantage of judicial discovery procedures not available in arbitration] had taken place; and [formerly] (6) whether the delay affected, misled, or prejudiced the opposing party. (St.

Agnes, supra, 31 Cal.4th at pp. 1195–1196 [internal quotations omitted].)

The sixth factor regarding prejudice is based on federal cases that “applied an arbitration-specific rule that required a showing of prejudice to establish waiver.” (Quach v. California Commerce Club, Inc. (2024) 16 Cal.5th 562, 569 (Quach).) In its 2022 Morgan decision, “the United States Supreme Court rejected this rule.” (Quach, 16 Cal.5th at p. 569.)

Morgan clarified that the federal “‘policy favoring arbitration’” is about putting arbitration agreements on equal footing with other contracts, not about favoring arbitration. ([Morgan, supra, 596 U.S. at p. 418].) Accordingly, the Supreme Court held that, under federal law, a court must apply the same rules that apply to any other contract when determining whether a party to an arbitration agreement has lost the right to enforce the agreement. (Ibid.) Because our state law arbitration-specific prejudice requirement is based upon the federal precedent that Morgan overruled, we now abrogate it.

California policy, like federal policy, puts arbitration agreements on equal footing with other types of contracts. Accordingly, under California law, as under federal law, a court should apply the same principles that apply to other contracts to determine whether the party seeking to enforce an arbitration agreement has waived its right to do so. (Ibid.)

“To establish waiver, there is no requirement that the party opposing enforcement of the contractual right demonstrate prejudice or otherwise show harm from the waiving party’s conduct.” (Id. at p. 585.) The multifactor test is not “a mechanical process in which each factor is assessed and the side with the greater number of favorable factors prevails,” nor is the list of factors exclusive: rather, the factors reflect the principles that should guide courts in determining whether a party has waived its right to demand arbitration. (Zamora, supra, 186

6 Cal.App.4th at p. 15, internal quotation marks and citation omitted.) “The waiver inquiry is exclusively focused on the waiving party’s conduct; neither the effect of that conduct on the party seeking to avoid enforcement nor that party’s subjective evaluation of the waiving party’s intent is relevant.” (Quach, supra, 16 Cal.5th at p. 585.)

California case law makes it clear that a waiver of arbitration is not lightly inferred, and the party seeking to establish a waiver bears a heavy burden of proof. (St. Agnes, supra, 31 Cal.4th at p. 1195; see also Fleming Distribution Co. v. Younan (2020) 49 Cal.App.5th 73, 80 (Fleming).) The Court will resolve any doubts as to whether a party’s conduct constitutes a waiver in favor of finding no waiver. (Franco v. Arakelian Enterprises, Inc. (2015) 234 Cal.App.4th 947, 958 (Franco).)

Here, DeLuna argues that it is “highly probable” that LVNV knew of its right to compel arbitration. (Opp., p. 11:26-28.) He argues that LVNV knew of the arbitration provision (“Arbitration Provision”) but it still filed the collections Complaint. (Opp., p. 11:24- 26.) In response, LVNV argues that the Arbitration Provision expressly addressed whether a counterclaim could be compelled to arbitration. (Reply, p. 6-11.) It defines “claims,” as “any past, present, or future claim, dispute, or controversy involving you (or persons claiming through or connected with you) ...

Claims include matters arising as initial claims, counterclaims, cross-claims, third-party claims, or otherwise. The scope of this Arbitration Provision is to be given the broadest possible interpretation that is enforceable.” (Sajjad Decl., Exh. A.) Thus, the fact that LVNV filed its Complaint does not support waiver of LVNV’s right to compel arbitration as to DeLuna’s Cross-Complaint.

He further argues that LVNV abandoned its right to compel arbitration because: it failed to mention any desire to arbitrate this case; it filed an anti-SLAPP motion; it did not mention arbitration as an affirmative defenses; filed responses to motions filed by DeLuna; and on June 11, 2025, it filed an individual Case Management Statement and it did not check the “binding arbitration” option of the alternative dispute resolution section. (Opp., pp. 12:16- 13:17.) Additionally, LVNV did not mention arbitration in the August 11, 2025, Joint Further Case Management Statement. (Opp., p. 13:20-21.) It was not until December 5, 2025, that the parties filed a Stipulation Regarding Various Matters Associated with Plaintiff’s Anticipated Motion to Compel Arbitration. (Opp., p. 13:21-23.)

In reply, LVNV argues that the delay in filing the instant motion was caused by DeLuna’s request for anti-SLAPP discovery. (Reply, p. 2:15-18.) It further asserts the timeline is as follows: on June 30, 2023, DeLuna filed his Cross-Complaint; on August 31, 2023, LVNV filed its anti-SLAPP motion; on September 7, 2023, the parties initially stipulated to set the hearing for the anti-SLAPP motion on November 16, 2023; on October 4, 2023, DeLuna moved ex parte to amend or vacate the briefing schedule so he could conduct discovery necessary to oppose the anti-SLAPP motion; on October 10, 2023, the Court granted DeLuna’s request; on April 5, 2024, the Court granted DeLuna’s motion for discovery related to the creation, maintenance, and transfer of the electronic promissory note related to DeLuna’s note; on November 25, 2024, the parties filed a stipulation setting the hearing on the anti-SLAPP motion for May 22, 2025; and on June 23, 2025, the Court entered its order which denied the anti-SLAPP motion. (Reply, pp. 2:20-3:13.)

On this basis, LVNV contends that if the delay due to the anti-SLAPP is removed from the timeline then less than 8 months passed from DeLuna’s Cross-Complaint to the instant motion being filed. (Reply, p. 3:15-21.) The Court is not persuaded by this assertion because LVNV did not include arbitration as an affirmative

7 defense in its answer to DeLuna’s Cross-Complaint. (See Guess”, Inc. v. Superior Court (2000) 79 Cal.App.4th 553, 558 [“At a minimum, the failure to plead arbitration as an affirmative defense is an act inconsistent with the later assertion of a right to arbitrate.”]; see also Oregal v. PacPizza LLC (2015) 237 Cal.App.4th 342, 355 [“an agreement to arbitrate is an affirmative defense to claims asserted in a lawsuit.”].) Additionally, it was entirely silent as to any intent to compel arbitration in this matter until the Stipulation filed on December 5, 2025. Thus, LVNV failed to indicate its intent to arbitrate earlier and the Court declines to disregard the delay related to the anti-SLAPP motion.

While filing a dispositive motion can constitute participation in the litigation machinery, here, the Court notes that LVNV only filed the anti-SLAPP motion and most of the subsequent filings were in relation to the anti-SLAPP motion. While DeLuna argues the conduct at issue is more egregious than in Quach, supra, the Court disagrees. Here, there is no evidence that LVNV participated in discovery outside of the matters relevant to the anti- SLAPP motion; participated in meet and confer of substantive matters; and neither party contends that any depositions have been noticed. (cf.

Quach, supra, 6 Cal.5th at pp. 586-587.) The factors in DeLuna’s favor are LVNV’s delay in its right to compel arbitration and the fact that it didn’t give any indication in the answer, or the June 11, 2025, case management statement of its intent to assert that right. However, DeLuna does not address the remaining factors of the waiver analysis. Moreover, where there are any doubts as to whether a party’s conduct constitutes a waiver, the Court will resolve them in favor of finding no waiver. (Franco, supra, 234 Cal.App.4th at p. 958.)

Thus, the Court finds that DeLuna does not establish, by clear and convincing evidence, that LVNV waived its right to arbitrate.

2. Assignment of Right to Compel Arbitration

DeLuna argues that LVNV was not assigned any right to compel arbitration because his Cross-Complaint is based on the allegation that LVNV was not in possession of the electronic promissory note and the authoritative copy of it was never transferred to LVNV. (Opp., pp. 14:24-15:3.) In response, LVNV argues that it became the owner of DeLuna’s loan on April 30, 2020, and the Borrower Agreement permits any subsequent holder to require binding arbitration of disputes. LVNV provides the bill of sale (“Bill of Sale”) between LendingClub and Resurgent Acquisitions LLC, dated April 27, 2020. (See Declaration of Kimberly Hurley (“Hurley Decl.”), Exh. 1.)

Attached to the Bill of Sale is a Transfer and Assignment between Resurgent Acquisitions LLC and LVNV, which states, “[Resurgent Acquisitions LLC] without recourse, to the extent permitted under applicable law, hereby transfers, sells, assigns, conveys... to [LVNV] all of its right, title, interest in and to the receivables and other assets.. which was signed by authorized agents for both companies. (Hurley Decl, Exh. 1, p. 19.) DeLuna fails to submit any evidence to oppose the assignment from Resurgent Acquisitions LLC to LVNV.

Moreover, the Borrower Agreement, states, “we may assign this Agreement and the Loan Agreement and Promissory Note, or any of our rights under this Agreement or the Loan Agreement and Promissory Note, in whole or in part at any time...” (Borrower Agreement, § 13; see also § 21(a) [“either party to this agreement, or any subsequent holder, may at its sole election, require that the sole and exclusive forum and remedy for resolution of a Claim be final and binding arbitration...”] [emphasis added].)

DeLuna argues that the Loan Agreement and Promissory Note is the only document that evidences the complete loan transaction here. (Opp., pp. 15:24-16:3.) Despite DeLuna’s request for production of the Loan Agreement and Promissory Note, LVNV did not produce it. Therefore, a copy of it is not before the Court at this time. The Court cannot review the language of a document that is not

8 before it. Consequently, the Court cannot resolve this issue at this time. As a result, the Court will turn to LVNV’s initial burden on this motion.

3. Existence of an Agreement

As one Court of Appeal summarized, [T]he moving party bears the burden of producing “prima facie evidence of a written agreement to arbitrate the controversy.” (Rosenthal, supra, 14 Cal.4th at p. 413.) The moving party “can meet its initial burden by attaching to the [motion or] petition a copy of the arbitration agreement purporting to bear the [opposing party’s] signature.” (Bannister v. Marinidence Opco, LLC (2021) 64 Cal.App.5th 541, 543–544 [279 Cal. Rptr. 3d 112] (Bannister).) Alternatively, the moving party can meet its burden by setting forth the agreement’s provisions in the motion. (Condee v.

Longwood Management Corp. (2001) 88 Cal.App.4th 215, 219 [105 Cal. Rptr. 2d 597] (Condee); see also Cal. Rules of Court, rule 3.1330 [“The provisions must be stated verbatim or a copy must be physically or electronically attached to the petition and incorporated by reference.”].) For this step, “it is not necessary to follow the normal procedures of document authentication.” (Condee, at p. 218.) If the moving party meets its initial prima facie burden and the opposing party does not dispute the existence of the arbitration agreement, then nothing more is required for the moving party to meet its burden of persuasion. (Gamboa v.

Northeast Community Clinic (2021) 72 Cal.App.5th 158, 165–166.)

LVNV provides the declaration of Dan Sajjad, a software engineer for LendingClub Bank, National Association which is wholly owned by LendingClub. (Declaration of Dan Sajjad (“Sajjad”), ¶ 2.) Sajjad states that on June 14, 2017, DeLuna electronically signed the Borrower Agreement by checking a box to indicate his acceptance.

As a general matter, an electronic signature has the same legal effect as a handwritten signature. (See Ruiz v. Moss Bros. Auto Group, Inc. (2014) 232 Cal.App.4th 836, 843 (Ruiz).) “Still, any writing must be authenticated” before it may be received in evidence. (Ibid., internal citations omitted.) “Civil Code section 1633.9 addresses how a proponent of an electronic signature may authenticate the signature- that is, show the signature is, in fact, the signature of the person the proponent claims it is.” (Ibid.) This code section provides, in pertinent part:

An electronic record or electronic signature is attributable to a person if it was the act of the person. The act of the person may be shown in any manner, including a showing of the efficacy of any security procedure applied to determine the person to which the electronic record or electronic signature was attributable. (Civ. Code, § 1633.9, subd., (a).)

“Under both federal and state law, the threshold question presented by a petition to compel arbitration is whether there is an agreement to arbitrate... This threshold inquiry stems from the basic premise that arbitration is consensual in nature.” (B.D. v. Blizzard Entertainment, Inc. (2022) 76 Cal.App.5th 931, 942-943 (B.D.) [internal quotations and citations omitted].) “A clickwrap agreement is one in which an internet user accepts a

9 website’s terms of use by clicking an “I agree” or “I accept” button, with a link to the agreement readily available.” (Sellers v. JustAnswer LLC (2021) 73 Cal.App.5th 444, 463 (Sellers.) Generally, California and federal courts have found clickwrap agreements to be enforceable. (See B.D., supra 76 Cal.App.5th at p. 946; see also Zachman v. Hudson Valley Federal Credit Union (2022) 49 F.4th 95, 103.)

“When the transactions occur electronically, as here, the consumer is not typically provided a physical copy of the contractual terms. In that context, and in the absence of actual notice, a manifestation of assent may be inferred from the consumer’s actions...including, for example, checking boxes and clicking buttons-but any such action must indicate the parties’ assent to the same thing which occurs only when...the contractual terms were presented to the consumer in a manner that made it apparent the consumer was assenting to those very terms when checking a box or clicking a button.” (Doe v.

Massage Envy Franchising, LLC (2022) 87 Cal.App.23, 31 [internal quotations omitted].) Thus, in order to establish mutual assent for the valid formation of an internet contract, a provider must first establish the contractual terms were presented to the consumer in a manner that made it apparent that consumer was assenting to those very terms when checking a box or clicking on a button.” (Sellers, supra, 73 Cal.App.5th at p. 461.)

Sajjad states that his duties include maintaining archived website code for LendingClub’s online lending platform. (Sajjad Decl., ¶ 2.) After reviewing business records maintain in the ordinary course of business, Sajjad describes the online application process, and he asserts that on June 14, 2017, DeLuna applied for a loan from WebBank through LendingClub’s platform; he electronically signed the Borrower Agreement that day, which included checking the box accepting the terms; and the loan documents were generated, signed, and stored electronically. (Sajjad Decl., ¶¶ 3-10.)

The Borrower Agreement included an arbitration opt-out and LendingClub’s business records to not show that an arbitration opt-out was received from DeLuna. (Sajjad Decl., ¶¶ 11-12.) DeLuna would not have been able to proceed unless he electronically signed and accepted the terms of the Borrower Agreement. (Sajjad Decl., ¶8.) Thus, DeLuna would have been put on notice that the terms of Borrower Agreement would be contained within the hyperlink. (See Sellers, supra, 73 Cal.App.5th at p. 461.) As a result, it appears to the Court that there was mutual assent and thus, there was an agreement.

DeLuna does not offer any argument as to the existence or validity of the Borrower Agreement.

4. Delegation Clause

LVNV argues that Arbitration Provision contains a delegation clause which delegates the validity and enforceability of the Agreement to the arbitrator. (MPA, p. 8:21-23.)

“Challenges to the validity of an arbitration clause itself are generally resolved by the court in the first instance. An exception to this rule applies when the parties have clearly and unmistakably agreed to delegate questions regarding the validity of the arbitration clause to the arbitrator.” (Nielsen Contracting, Inc. v. Applied Underwriters, Inc. (2018) 22 Cal.App.5th 1096, 1108 [citing Aanderud v. Superior Court (2017) 13 Cal.App.5th 880, 890 (Aanderud)].) “There are two prerequisites for a delegation clause to be effective. First, the language of the clause must be clear and unmistakable. Second, the delegation must not be revocable under state contract defenses such as fraud, duress, or unconscionability. The ‘clear and unmistakable’ test reflects a heightened standard of proof that reverses the typical presumption

10 in favor of the arbitration of disputes.” (Aanderud, supra, 13 Cal.App.5th at p. 892 [internal citations omitted].) An unconscionability challenge must be specifically directed at the delegation provision, not the entire arbitration agreement. (Id. at p. 895; see also Tiri v. Lucky Changes, Inc. (2014) 226 Cal.App.4th 231, 248 (Tiri).)

The Arbitration Provision provides, Claim shall include any past, present, or future claim, dispute, or controversy including you..., on the one hand, and us and/or any subsequent holder..., on the other hand, relating to or arising out of this Agreement, any Loan Agreement and Promissory Note(s), the Site, and/or activities or relationships that involve, lead to, or result from any of the foregoing, including... the validity or enforceability of this Arbitration Provision, any part thereof, or the entire Agreement. (Borrower Agreement, § 21(a) [emphasis added].)

Here, the delegation clause is clear and unmistakable because it explicitly delegates disputes regarding the interpretation of enforceability and validity of the Arbitration Provision to the arbitrator. DeLuna fails to offer any argument in response. (See Sehulster Tunnels/Pre- Con v. Traylor Brothers, Inc. (2003) 111 Cal.App.4th 1328, 1345, fn. 16 [failure to address point is "equivalent to a concession"].)

Based on the foregoing, the Court GRANTS LVNV’s motion to compel arbitration and DeLuna is ordered to submit to arbitration pursuant to the Arbitration Provision. However, the Court notes that this decision is based on the delegation clause and thus, it has not opined on the question of whether the Arbitration Provision, as a whole, is unconscionable. Pursuant to the delegation clause, that is a question for the arbitrator to decide.

As the Court grants the motion, the matter is STAYED pending the completion of arbitration. (See 9 U.S.C. § 3; Code Civ. Proc., § 1281.4.)

IV. CONCLUSION

LVNV’s motion to compel arbitration is GRANTED and the matter is STAYED pending the outcome of the arbitration.

The Court will prepare the order.

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