Chen v. Tesla Motors, Inc.

Under the CAA, when a party to an arbitration agreement refuses to submit to arbitration, the other party may petition the court to compel arbitration and stay any pending lawsuit. (See Code Civ. Proc., § 1281.2; Condee v. Longwood Management Corp. (2001) 88 Cal.App.4th 215, 218.)

However, the right to arbitration is based on contract. (See Little v. Pullman (2013) 219 Cal.App.4th 558, 565.) Thus, the parties also may agree in the contract that the arbitration will be controlled by the Federal Arbitration Act (FAA).

In addition, “[t]he FAA applies to any ‘contract evidencing a transaction involving commerce’ that contains an arbitration provision.” (Carbajal v. CWPSC, Inc. (2016) 245 Cal.App.4th 227, 238, quoting 9 U.S.C. § 2.)

The FAA states that written arbitration agreements “shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.” (9 U.S.C. § 2.)

The United States Supreme Court has described 9 U.S.C. section 2 as reflecting both a “’liberal federal policy favoring arbitration,’” and the “’fundamental principle that arbitration is a matter of contract.’” (AT & T Mobility LLC v. Concepcion (2011) 563 U.S. 333, 339, quoting Moses H. Cone Memorial Hospital v. Mercury Constr. Corp. (1983) 460 U.S. 1, 24 and Rent–A–Center, West, Inc. v. Jackson (2010) 561 U.S. 63, 67.)

As with the CAA, when a party to an arbitration agreement governed by the FAA refuses to submit to arbitration, the other party may petition the court to compel arbitration and stay any pending lawsuit. (See 9 U.S.C. § 4.)

On a motion to compel arbitration under the FAA, the court’s role is limited to deciding: “(1) whether there is an agreement to arbitrate between the parties; and (2) whether the agreement covers the dispute.” (Brennan v. Opus Bank (9th Cir. 2015) 796 F.3d 1125, 1130.)

If these conditions are satisfied, the court is without discretion to deny the motion and must compel arbitration. (9 U.S.C. § 4; see Dean Witter Reynolds, Inc. v. Byrd (1985) 470 U.S. 213, 218 [“By its terms, the [FAA] leaves no place for the exercise of discretion by a district court, but instead mandates that district courts shall direct the parties to proceed to arbitration.”].)

When deciding whether a valid arbitration agreement exists, courts generally apply “ordinary state-law principles that govern the formation of contracts.” (First Options of Chicago, Inc. v. Kaplan (1995) 514 U.S. 938, 944.) Thus, the FAA permits arbitration agreements to be invalidated by “’generally applicable contract defenses, such as fraud, duress, or unconscionability.’” (AT & T Mobility LLC v. Concepcion, supra, 563 U.S. at p. 339, quoting Doctor's Associates, Inc. v. Casarotto (1996) 517 U.S. 681, 687.)

The party seeking to compel arbitration bears an initial burden to make a prima facie showing the claims asserted in the complaint are covered by a valid agreement to arbitrate. (Molecular Analytical Systems v. Ciphergen Biosystems, Inc. (2010) 186 Cal.App.4th 696, 710-711.) Then, “the party resisting arbitration bears the burden of proving that the claims at issue are unsuitable for arbitration.” (Green Tree Fin. Corp. v. Randolph (2000) 531 U.S. 79, 91.)

Here, Defendant presents evidence that Plaintiff entered into a Retail Installment Sales Contract (RISC) that contained an arbitration provision that stated “Any arbitration under this Arbitration Provision shall be governed by the Federal Arbitration Act (9 U.S.C. § 1 et seq.)” (See Decl. of Raymond Kim in Supp. of Def.’s Mot. to Compel Binding Arbitration (Kim Decl.), ¶¶ 9-11 and Exh. 2 at p. 7.)

Thus, any agreement to arbitrate in this case will be controlled by the FAA.

The court therefore will determine whether there is an agreement to arbitrate and whether the agreement covers the dispute in this case.

Existence of Arbitration Agreement

With regard to the existence of an agreement to arbitrate, the party seeking to compel arbitration bears “the ultimate burden of proof, but the court [is] obliged to resolve the dispute using a threestep burden-shifting process.” (Iyere v. Wise Auto Group (2023) 87 Cal.App.5th 747, 755.)

The Court of Appeal explained that this process requires that:

The arbitration proponent must first recite verbatim, or provide a copy of, the alleged agreement. A movant can bear this initial burden “by attaching a copy of the arbitration agreement purportedly bearing the opposing party’s signature.” At this step, a movant need not “follow the normal procedures of document authentication” and need only “allege the existence of an agreement and support the allegation as provided in rule [3.1330].”

If the movant bears its initial burden, the burden shifts to the party opposing arbitration to identify a factual dispute as to the agreement’s existence — in this instance, by disputing the authenticity of their signatures. To bear this burden, the arbitration opponent must offer admissible evidence creating a factual dispute as to the authenticity of their signatures. The opponent need not prove that his or her purported signature is not authentic, but must submit sufficient evidence to create a factual dispute and shift the burden back to the arbitration proponent, who retains the ultimate burden of proving, by a preponderance of the evidence, the authenticity of the signature.

(Ibid., citations omitted, quoting Espejo v. Southern California Permanent Medical Group (2016) 246 Cal.App.4th 1047, 1060 and Condee v. Longwood Management Corp., supra, 88 Cal.App.4th at pp 218-219.)

Here, Defendant has provided evidence that there exists a Motor Vehicle Order Agreement (MVOA) and a RISC, both of which contain arbitration provisions. (See Kim Decl.), ¶¶ 3-14, Exh. 1 at p. 3, Exh. 2 at p. 7.)

Defendant also presents evidence that Plaintiff electronically accepted the terms and conditions of the MVOA on August 31, 2021, (see id., ¶ 3, Exh. 1), and the RISC on September 28, 2021, (see id., ¶ 3, Exh. 2.)

Plaintiff failed to file an opposition or respond to the motion to compel arbitration. Thus, Plaintiff has waived any arguments regarding this issue. (See Nazir v. United Airlines, Inc. (2009) 178 Cal.App.4th 243, 288 [failure to address or oppose issue in motion constitutes waiver of that issue]; see DuPont Merck Pharmaceutical Co. v. Superior Court (2000) 78 Cal.App.4th 562, 566 [holding that failure to challenge contention in brief results in the concession on that issue].)

Thus, Defendant has established the existence of an arbitration agreement.

Scope of Arbitration Agreement

Before the parties can be ordered to arbitration, the court must carefully examine the terms of the contract and apply the statutory rules of contract interpretation. (See Bono v. David (2007) 147 Cal.App.4th 1055, 1063.

One overriding rule is that “[a] contract must be so interpreted as to give effect to the mutual intention of the parties as it existed at the time of contracting, so far as the same is ascertainable and lawful.” (Civil Code, § 1636.)

The parties’ intent “is to be inferred, if possible, solely from the written provisions of the contract, and the ‘clear and explicit’ meaning of these provisions, interpreted in their ‘ordinary and popular sense,’ controls judicial interpretation unless ‘used by the parties in a technical sense, or unless a special meaning is given to them by usage.’” (Montrose Chemical Corp. v. Admiral Ins. Co. (1995) 10 Cal.4th 645, 647, quoting Civil Code, §§ 1638, 1639, 1644, citations omitted.)

Therefore, “[i]f the meaning a layperson would ascribe to the language of a contract of insurance

is clear and unambiguous, a court will apply that meaning.” (Montrose Chemical Corp. v. Admiral Ins. Co., supra, 10 Cal.4th at p. 647; see Bank of the West v. Superior Court (1992) 2 Cal.4th 1254, 1264 [“If contractual language is clear and explicit, it governs.”].)

Defendant contends that the arbitration provision in the MVOA is broad and covers the claims asserted by Plaintiff against Defendant in this action: Agreement to Arbitrate. Please carefully read this provision, which applies to any dispute between you and Tesla, Inc. and its affiliates, (together “Tesla”). If you have a concern or dispute, please send a written notice describing it and your desired resolution to resolutions@tesla.com.

If not resolved within 60 days, you agree that any dispute arising out of or relating to any aspect of the relationship between you and Tesla will not be decided by a judge or jury but instead by a single arbitrator in an arbitration administered by the American Arbitration Association (AAA) under its Consumer Arbitration Rules. This includes claims arising before this Agreement, such as claims related to statements about our products.

We will pay all AAA fees for any arbitration, which will be held in the city or county of your residence. To learn more about the Rules and how to begin an arbitration, you may call any AAA office or go to www.adr.org.

(Kim Decl., Ex. 1 at p 3.)

Defendant also argues that the arbitration provision in the RISC is similarly broad and requires arbitration of the claims contained in the Complaint:

1. EITHER YOU OR WE MAY CHOOSE TO HAVE ANY DISPUTE BETWEEN US DECIDED BY ARBITRATION AND NOT IN COURT OR BY JURY TRIAL.

2. IF A DISPUTE IS ARBITRATED, YOU WILL GIVE UP YOUR RIGHT TO PARTICIPATE AS A CLASS REPRESENTATIVE OR CLASS MEMBER ON

ANY CLASS CLAIM YOU MAY HAVE AGAINST US INCLUDING ANY RIGHT TO CLASS ARBITRATION OR ANY CONSOLIDATION OF INDIVIDUAL ARBITRATIONS.

3. DISCOVERY AND RIGHTS TO APPEAL IN ARBITRATION ARE GENERALLY MORE LIMITED THAN IN A LAWSUIT, AND OTHER RIGHTS THAT YOU AND WE WOULD HAVE IN COURT MAY NOT BE AVAILABLE IN ARBITRATION.

Any claim or dispute, whether in contract, tort, statute or otherwise (including the interpretation and scope of this Arbitration Provision, and the arbitrability of the claim or dispute), between you and us or our employees, agents, successors or assigns, which arises out of or relates to your credit application, purchase or condition of this vehicle, this contract or any resulting transaction or relationship (including any such relationship with third parties who do not sign this contract) shall, at your or our election, be resolved by neutral, binding arbitration and not by a court action.

(Id., Ex. 2 at p. 7.)

The court agrees that the arbitration provisions of the MVOA and RISC are broad and encompass the claims asserted by Plaintiff in this action. (See Bono v. David (2007) 147 Cal.App.4th 1055, 1067 [“A ‘broad’ clause includes those using language such as ‘any claim arising from or related to this agreement.’”], citation omitted; Rice v. Downs (2016) 248 Cal.App.4th 175, 186 [provision that uses language such as “‘arising in connection with the [a]greement,’” is broad], quoting Simula, Inc. v. Autoliv, Inc. (9th Cir. 1999) 175 F.3d 716, 720– 721.)

As noted above, Plaintiff failed to file an opposition or respond to the motion to compel arbitration. Thus, Plaintiff has waived any arguments regarding this issue.

Further, no basis has been presented to invalidate the arbitration provisions of the MVOA or RISC.

Therefore, the court must grant the motion to compel arbitration.

Stay of Pending Court Action

Civil Procedure Code section 1281.4 provides:

If a court of competent jurisdiction, whether in this State or not, has ordered arbitration of a controversy which is an issue involved in an action or proceeding pending before a court of this State, the court in which such action or proceeding is pending shall, upon motion of a party to such action or proceeding, stay the action or proceeding until an arbitration is had in accordance with the order to arbitrate or until such earlier time as the court specifies.

(Code Civ. Proc., § 1281.4.)

The Court of Appeal has interpreted Section 1281.4 to mean that “[a]ny party to a judicial proceeding ‘is entitled to a stay of those proceedings whenever (1) the arbitration of a controversy has been ordered, and (2) that controversy is also an issue involved in the pending judicial action.’” (Heritage Provider Network, Inc. v. Superior Court (2008) 158 Cal.App.4th 1146, 1152, quoting Marcus v. Superior Court (1977) 75 Cal.App.3d 204, 209.)

This means that, as a general matter, if the court grants the motion to compel arbitration, it must stay the court action until completion of the arbitration. (See Thomas v. Westlake (2012) 204 Cal.App.4th 605, 620 [if court orders arbitration, “it must also stay proceedings on the claims until completion of arbitration”].)

In addition to Section 1281.4, Section 3 of the FAA states that:

If any suit or proceeding be brought in any of the courts of the United States upon any issue referable to arbitration under an agreement in writing for such arbitration, the court in which such suit is pending, upon being satisfied that the issue involved in such suit or proceeding is referable to arbitration under such an agreement, shall on application of one of the parties stay the trial of the action until such arbitration has been had in accordance with the terms of the agreement, providing the applicant for

the stay is not in default in proceeding with such arbitration.

(9 U.S.C., § 3.)

Here, the court has granted the motion to compel arbitration and ordered arbitration. Therefore, it must also order a stay of these proceedings pending completion of the arbitration.

Defendant shall give notice of this ruling.

3 Farooquee vs. Cinderella Motion to Specially Set Hearing Cakes Defendant Cinderella Cakes’ Motion for an Order to Specially Set Hearing Date on or Within 30 30-2024-01423993 Days of Trial on Motion for Summary Judgment/Adjudication or, in the Alternative, to Continue Trial Date is taken OFF CALENDAR pursuant Defendant’s Notice of Withdrawal of Motion for an Order to Specially Set Hearing Date on or Withing 30 Days of Trial on Motion for Summary Judgment/Adjudication filed on June 4, 2026 (ROA #103).

4 Othman vs. Monetiva Inc. Motion to Confirm Validity of Service

Plaintiff Tarek Othman’s Motion to Confirm Validity 30-2025-01511444 of Prior Service on Defendant EndlessOne Global Inc. Via Nevada Secretary of State Pursuant to Nev. Rev. Stat. § 14.030 is DENIED.

Plaintiff Tarek Othman’s Motion for Ordering [sic] Authorizing Service of Defendant EndlessOne Global Inc. Via Nevada [or California] Secretary of State is GRANTED.

The court ORDERS that service may be effectuated upon Defendant EndlessOne Global Inc. by personal delivery to the California Secretary of State or to an assistant or deputy secretary of state of one copy of the process and this order.

The court further ORDERS that California Secretary of State or her agents shall send the process to EndlessOne Global Inc., 1800 East