Maluto v. Mercedes-Benz USA, LLC

13. Cerda v. Robledo, et al, Case No. CIVSB2428710 Motion to be Relieved as Attorney of Record for Plaintiff 6/23/26, 9:00 a.m., S-17 The Court would CONTINUE or seek in camera discussion of the facts in support.

Here, attorney Tymkowicz seeks to be relieved as counsel for Plaintiff. The declaration submitted in support only indicates that no information can be provided without breach of the duty of confidentiality. While the Court is cognizant of the protections related to attorney-client relationship, the Court will need some sort of averment establishing good cause pursuant to rule 1.16(b) of the Rules of Court. As currently worded, the submitted declaration is insufficient.

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15. Maluto v. Mercedes-Benz USA, LLC, Case No. CIVSB2606111 Defendant Mercedes-Benz’s Motion to Compel Arbitration 6/23/26, 9:00 a.m., S-17 Tentative Rulings As to Requests for Judicial Notice: The Court would DENY Plaintiff’s requests as to Exhibits 1-3, as unnecessary.

As to Objections: The Court would OVERRULE Plaintiff’s evidentiary objections numbers 1-2.

As to the Motion: The Court would GRANT and stay all proceedings pending arbitration.

Case Summary This is a lemon law case. The Complaint alleges that on September 23, 2023, Plaintiff leased the subject vehicle with a warranty from the Defendant. The vehicle developed defects in its electrical, seating, and other systems. Although it was taken for repairs, it was not conformed to its warranty, and Plaintiff filed suit on February 24, 2026, alleging (1) violation of Song- Beverly Act – breach of express warranty; (2) violation of Song-Beverly Act – breach of mplied Warranty; and (3) negligent repair.

Statement of the Law Under Code of Civil Procedure section 1281.2, a party to an arbitration agreement may move to compel arbitration if another party to the agreement refuses to arbitrate, and the court shall order the parties to arbitrate if it determines an agreement to arbitrate exists, unless it determines (a) the right to compel has been waived by the petitioner; (b) grounds exist for revocation of the agreement; or (c) a party to the agreement is also a party to a pending court action or special proceeding, arising out of the same transaction or related transaction, and 2

there is a possibility of conflicting rulings on common issues of law or fact. (Code Civ. Proc., § 1281.4.)

The Court must determine when a petition to compel arbitration is filed and accompanied by prima facie evidence of a written arbitration agreement whether the agreement exists, if any defense to its enforcement is raised, and whether the agreement is enforceable. (Rosenthal v. Great Western Fin. Securities Corp. (1996) 14 Cal.4th394, 413.) The moving party bears the burden of proving the existence of the arbitration agreement by preponderance of the evidence. (Ibid.)

Analysis

The FAA Applies: Here, Mercedes-Benz presents a copy of the Consumer Lease Agreement for the subject vehicle (“Lease Agreement”), which Mercedes-Benz asserts contains a binding arbitration agreement. (White Decl., ¶2, Exh. 1.) The Lease Agreement explicitly states that “[t]his lease evidences a transaction involving interstate commerce. Any arbitration under this lease shall be governed by the Federal Arbitration Act (9 USC 1, et seq.).” (White Decl., ¶2, Exh. 1 at p. 4.) Under these provisions, the FAA applies. (Cronus Investments, Inc. v. Concierge Services (2005) 35 Cal.4th 376, 394; Davis v. Shiekh Shoes, LLC (2022) 84 Cal.App.5th 956, 964.)

Enforceability of the Arbitration Agreement: As a preliminary matter, in California, general principles of contract law determine whether the parties have entered a binding agreement to arbitrate and the party seeking arbitration bears the burden of proving the existence of an arbitration agreement. (Ruiz v. Moss Bros. Auto Group, Inc. (2014) 232 Cal.App.4th 836, 842 (Ruiz).) The defendant providing an executed copy of the arbitration agreement satisfies the initial burden. (Espejo v. Southern California Permanente Medical Group (2016) 246 Cal.App.4th 1047, 1058-1060.) Because Mercedes-Benz provided a copy of the at-issue lease agreement, the burden then shifts to Plaintiff to dispute its existence. (Id. at p. 1059; Ruiz, supra, 232 Cal.App.4th at p. 846.)

In opposition, Plaintiff does not dispute the existence of the lease agreement and does not argue that she did not sign it. However, Plaintiff points out that Mercedes-Benz is not a signatory to the agreement, which is only between Walter Auto Sales & Service, Inc., as lessor, and Plaintiff, as lessee. Plaintiff argues that Mercedes-Benz is not a true third-party beneficiary of the lease agreement and therefore cannot enforce it against Plaintiff. Additionally, Plaintiff disputes whether the scope of the lease agreement covers the claims herein.

Mercedes is a Third-Party Beneficiary – Under California law, a non-signatory is a thirdparty beneficiary only to a contract “made expressly for [its] benefit.” (Cal. Civ. Code, § 1559.) The non-signatory was obligated to prove that “express provisions of the contract,” considered in light of the “relevant circumstances,” show that (1) “the third party would in fact benefit from the contract;” (2) “a motivating purpose of the contracting parties was to provide a benefit to the third party;” and (3) permitting the third party to enforce the contract “is consistent with the objectives of the contract and the reasonable expectations of the 3

contracting parties.” (Ngo v. BMW of North America, LLC (9th Cir. 2022) 23 F.4th 942, 946, citing Goonewardene v. ADP (2019) 6 Cal.5th 817, 830.)

Here, Mercedes-Benz persuasively argues that these elements are met here. First, Mercedes- Benz clearly benefits from the lease sgreement because it retains a benefit whenever a dealership leases one of its vehicle. Second, there is a clear “intent to benefit the third party” as the arbitration clause unambiguously identifies Mercedes-Benz as a third-party beneficiary. (White Decl., ¶2 & Exh. 1, at p. 4.) Lastly, given the express language of the contract, it is clearly consistent with its objective where Mercedes-Benz seeks to enforce the arbitration clause.

As to the arguments citing to the Ford Warranty Cases, the Court of Appeal explained: We do not read this . . . language as consent by the purchaser to arbitrate claims with third party nonsignatories. Rather, we read it as a further delineation of the subject matter of claims the purchasers and dealers agreed to arbitrate. They agreed to arbitrate disputes “between” themselves – “you and us”—arising out of or relating to ’‘relationship[s],” including “relationship[s] with third parties who [did] not sign th[e] [sale] contract[s],” resulting from the “purchase, or condition of th[e] vehicle, [or] th[e] [sale] contract.” Ford Motor Warranty Cases (2025) 17 Cal.5th 1122, 1129.

The California Supreme Court agreed with the Court of Appeal’s reading of the provision and analyzed the language at issue there, as follows: [T]he provision begins and ends with references to the contract signatories. It describes disputes between “you and us,” and clarifies that “us” includes the dealers’ employees, agents, successors or assigns. There is no claim here that Ford is an employee, agent, successor, or assign of any of the dealers. By its terms, the arbitration clause controls disputes (between “you and us”) that arise out of the credit application, purchase, or condition of the vehicle, “this contract,” or any “resulting transaction or relationship with third parties.” ...

The “third party” language in the arbitration clause means that if a buyer sues a dealer based on the condition of the vehicle, the dealer can elect to arbitrate that claim. The sales contract “says nothing of binding the purchaser to arbitrate with the universe of unnamed third parties.” (Ford Motor Warranty Cases, supra, 17 Cal.5th at p. 1130, emphasis in original.)

In the appellate decision Ford Motor Warranty Cases that was affirmed by the California Supreme Court, the court stated: “If the signatories had intended to benefit [defendant], such a purpose would have been easy to articulate. They could have simply named [defendant]- directly or by class as the vehicle’s manufacturer-as a person entitled to compel arbitration.”

(Ford Motor Warranty Cases, supra, 17 Cal.5th at p. 1130, 1339.) And, that is exactly what the lease agreement does here: While the agreement in Ford Motor Warranty Cases described disputes between “you and us,” and clarified that “us” includes the dealers’ employees, agents, successors or assigns,” the lease agreement describes disputes “between you and us or any of our employees, agent, successor, assigns, or the vehicle distributor, including Mercedes-Benz USA LLC (each a ‘Third Party Beneficiary’).” (White Decl., ¶2 & Exh. 1 at p. 4.) Thus, while Plaintiffs argue that Mercedes-Benz is neither mentioned nor benefited by the lease agreement’s terms, Mercedes-Benz is, in fact, expressly mentioned in the lease agreement as a party that may elect to have disputes heard before an arbitrator.

The Scope of the Arbitration Clause – Here, the arbitration clause provides that the “any dispute over the interpretation, scope, or validity of this lease, arbitration section, or the arbitrability of any issue . . . shall . . . be resolved by a neutral, binding arbitration and not by a court action.” (White Decl., ¶2 & Exh. 1 at p. 4.) This language clearly and unmistakably delegates to the arbitrator, and not the court, questions of arbitrability. (See, e.g., Malone v. Superior Court (2014) 226 Cal.App.4th 1551, 1560 [delegation clause that provided “[t]he arbitrator has exclusive authority to resolve any dispute relating to the interpretation, applicability, or enforceability of this binding arbitration agreement” was clear and unmistakable].)

Plaintiff does not address the delegation provision or make any argument regarding unconscionability with respect to the delegation provision (or to the arbitration clause as a whole). Accordingly, pursuant to the arbitration clause in the lease agreement, the issue of whether the scope of the arbitration provision covers Plaintiff’s claim is one that has been delegated to the arbitrator to decide.

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