Arthur Hearn v. Ford Motor Company et al.

The Court GRANTS the request that upon deposit, North River will be discharged from liability in this matter, and dismissed with prejudice.

IV. CONCLUSION Based on the foregoing, the Court GRANTS the request for attorney’s fees and cost in the total amount of $2,533.63 ($2,448.50 in attorney’s fees and $85.13 in cost).

The Court GRANTS the request to deposit the full bond penal sum, $25,000 less attorney fees and costs of 2,533.63 equals $22,466.37.

The Court GRANTS the request that upon deposit the bond will be exonerated and North River will be dismissed in the matter with prejudice.

Calendar Line # 6 Case Name Arthur Hearn vs Ford Motor Company et al. Case No. 25CV468852 Petition to Compel Arbitration

I. BACKGROUND

A. BRIEF FACTUAL BACKGROUND Plaintiff Arthur Hearn (“Hearn”) purchased a 2021 Ford Navigator L (Subject Vehicle) in June 2021 from Future Ford Lincoln of Roseville (“Dealership”). (Complaint at ¶ 7). Plaintiff delivered the Subject Vehicle to Dealership for substantial repair on at least one occasion. (Id. at ¶ 59). Plaintiff alleges that Dealership “breached its duty to Plaintiff to use ordinary care and skill by failing to properly store, prepare, and repair the Subject Vehicle in accordance with industry standards.” (Id. at ¶ 61). Plaintiff sued Dealership and Ford Motor Company in June 2025. The sole cause of action alleged against Dealership is for negligent repair.

B. PROCEDURAL BACKGROUND On December 11, 2025, Defendant Dealership filed this petition to compel arbitration, based on the Retail Installment Sales Contract (RISC) signed by Plaintiff and Dealership when Plaintiff purchased the Subject Vehicle and stay proceedings. The motion is accompanied by a proof of electronic service on the same date.

On January 31, 2026, the Honorable Shella Deen issued an Order staying the action until a determination the motion to compel arbitration.

The motion is unopposed. Per Code of Civil Procedure section 1005(b) opposition papers were due on July 29, 2026. A failure to oppose a motion may be deemed a consent to the granting of the motion. (California Rule of Court Rule 8.54(c)). Failure to oppose a motion leads to the presumption that the defendant has no meritorious arguments. (Laguna Auto Body v. Farmers Ins. Exchange (1991) 231 Cal.App.3d 481, 489).

II. LEGAL ANALYSIS Defendant maintains that the Federal Arbitration Act (“FAA”) governs the Arbitration Provision based on the language itself and because the agreement affects interstate commerce. (Motion, at p. pp. 5:1-22).

The court in ruling on a petition to compel arbitration, is guided by general principles of California contract law, must first determine whether the parties actually agreed to arbitrate the dispute. Diaz v Sohnen Enters. (2019) 34 CA5th 126, 129. The court must determine whether: (1) there was a valid agreement to arbitrate between the parties; and (2) said agreement covers the controversy or controversies in the parties’ dispute. (Omar v. Ralphs Grocery Co. (2004) 118 Cal.App.4th 955, 961; see also, Chiron Corp. v. Ortho Diagnostic Systems, Inc. (9th Cir. 2000) 207 F.3d 1126, 1130). To determine “whether a valid contract to arbitrate exists,” courts apply “ordinary state law principles that govern contract formation.” (Davis v. Nordstrom, Inc. (9th Cir. 2014) 755 F.3d 1089, 1093 [citations omitted]; Ingle v. Circuit City Stores, Inc. (9th Cir. 2003) 328 F.3d 1165, 1170).

A party that wishes to pursue arbitration must take active steps to secure that right because an arbitration agreement is not self-executing. (Fleming Distribution Co. v. Younan (2020) 49 Cal.App.5th 73, 80-81. A party moving to compel arbitration bears the burden of establishing the existence of a valid agreement to arbitrate and the party opposing the petition bears the burden of proving by a preponderance of evidence, any fact necessary to its defense. (Banner Entertainment, Inc. v. Superior Court (1998) 62 Cal.App.4th 348, 356-357).

The party challenging a contractual arbitration provision bears the burden of proving that it is both procedurally and substantively unconscionable. (OTO, L.L.C. v. Kho (2019) 8 Cal.5th 111, 126 (OTO)). This may be done on a sliding scale, where the more substantively oppressive the contract term, the less evidence of procedural unconscionability is required, and vice versa. (Id. at pp. 125-126). Nevertheless, both must be shown. Procedural Unconscionability focuses on oppression or surprise to the “weaker” party based on unequal bargaining power, whereas substantive unconscionability focuses on the terms of the agreement and whether they are overly harsh or one-sided. (OTO, supra, 8 Cal.5th at pp. 125-129).

Code of Civil Procedure section 1281.2 provides: “On petition of a party to an arbitration agreement alleging the existence of a written agreement to arbitrate a controversy and that a party to the agreement refuses to arbitrate such controversy, the court shall order the petitioner and respondent to arbitrate the controversy if it determines that an agreement to arbitrate the controversy exists, unless it determines that: [¶] The right to compel arbitration has been waived by the petitioner; or [¶] (b) Grounds exist for rescission of the agreement.”

In determining the threshold question of whether an arbitration agreement exists between the parties, the court employs a three-step burden shifting analysis. (Iyere v. Wise Auto Group (2023) 87 Cal.App.5th 747, 755 (Iyere); Espejo v. Southern California Permanente Medical Group (2016) 246 Cal.App.4th 1047, 1060). The party seeking to compel arbitration bears the initial burden of showing an agreement to arbitrate. If that burden is met, the burden shifts to the opposing party to show a factual dispute regarding the agreement’s existence. If the opposing party does so, then the burden shifts back to the proponent of arbitration to show the existence of a valid agreement by a preponderance of the evidence. (Iyere, supra, 87 Cal.App.5th at p. 755).

III. ANALYSIS

A. VALID AGREEMENT TO ARBITRATE The Court finds that there was a valid agreement. Defendant asserts that the plaintiff purchased a 2020 Ford Lincoln Navigator (“Subject Vehicle) from Future Ford on June 19, 2021. (Declaration of Ihara; Exh. 1). Plaintiff executed the Purchase Agreement titled “RETAIL INSTALLMENT SALE CONTRACT – SIMPLE FINANCE CHARGE (WITH ARBITRATION PROVISION).” (Id. at 1). Plaintiff Hearn is identified as the “buyer’ and “you,” and refers to Future Ford as “seller-Creditor” and identifies the Subject Vehicle by its Vehicle Identification Number: 6LMJJ3LT6MEL06996. (Motion, p. 7-8).

Defendant asserts that the Purchase Agreement sets for the arbitration provision on page 7:

ARBITRATION PROVISION PLEASE REVIEW – IMPORTANT – AFFECTS YOUR LEGAL RIGHTS EITHER YOU OR WE MAY CHOOSE TO HAVE ANY DISPUTE BETWEEN US DECIDED BY ARBITRATION AND NOT IN COURT OR BY JURY TRIAL. 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. 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. (Exhibit 1 to Declaration of Ihara).

Defendant emphasizes that the agreement broadly sets forth that any claim relating to the Purchase Agreement or any resulting relationship with “third” parties who do not sign this contract could be resolved by binding arbitration, as follows:

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.).

The Arbitration Provision also states: The Arbitration Provision also states that “[a]ny arbitration under this Arbitration Provision shall be governed by the Federal Arbitration Act (9 U.S.C. § 1 et seq.) and not by any state law concerning arbitration.” (Id.).

Plaintiff does not dispute that he signed the RISC when he purchased the Subject Vehicle. Plaintiff signed and acknowledged the following notice of the arbitration provision: “Agreement to Arbitrate. By signing below, you agree that, pursuant to the Arbitration Provision on page 7 of this contract, you or we may elect to resolve any dispute by neutral, binding arbitration and not by court action. See Arbitration Provision for additional information concerning the agreement to arbitrate.” (Id., Ex. A at p. 1). The RISC further drew the arbitration provision to

Plaintiffs’ attention through the following disclaimer: “. . . YOU ACKNOWLEDGE THAT YOU HAVE READ ALL PAGES OF THIS CONTRACT, INCLUDING THE ARBITRATION PROVISION ON PAGE 7 OF THIS CONTRACT, BEFORE SIGNING BELOW.” (Id., Ex. A at p. 6). Plaintiff’s signature on those sections of the RISC indicates express assent to the arbitration provision. (See Mendoza v. Trans Valley Transport (2022) 75 Cal.App.5th 748, 777 [“ ‘ “A party’s acceptance of an agreement to arbitrate may be express, as where a party signs the agreement.” ’ ”]).

Dealership has also properly authenticated the RISC and has met its burden of proving the existence of a valid agreement to arbitrate. “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. Alternatively, the moving party can meet is burden by setting forth the agreement’s provisions in the motion.’ ” (Gamboa v. Northeast Community Clinic (2021) 72 Cal.App.5th 158, 165, internal citations and quotations omitted.).

Here, Dealership attached a copy of the RISC signed by Plaintiffs as Exhibit A to the Declaration of Karyn Ihara. Dealership has also set forth the terms of the arbitration provision in the motion itself. (Motion, at pp. 2:21-3:8). In any event, “[f]or purposes of a petition to compel arbitration, it is not necessary to follow the normal procedures of authentication.” (Gamboa, supra, 72 Cal.App.5th at pp. 165-166). Dealership has shown a valid agreement to arbitrate.

B. THE SCOPE OF THE ARBITRATION AGREEMENT COVERS PLAINTIFF’S CLAIMS Defendant avers that Plaintiff’s claims are subject to arbitration under the FAA based on the provisions in the purchase agreement. Ford asserts that the arbitration is valid and enforceable.

Defendant has not waived its rights to arbitrate and there are no other grounds for revocation. The California Supreme Court has identified various factors that are “relevant and properly considered in assessing waiver claims.” (St. Agnes Medical Center v. Pacific Care of California (2003) 31 Cal.4th 1187, 1195-1196). Those factors are: (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 (6) whether the delay affected, misled, or prejudiced the opposing party.

Here, the arbitration provision broadly applies to “[a]ny claim or dispute, whether in contract, tort, statute or otherwise. . ., between you and us. . ., which arises out of or relates to your credit application, purchase or condition of this Vehicle, this contract or any resulting transaction or relationship.” (Declaration of Ihara, Ex. A at p. 7). Plaintiff’s sole cause of action against Dealership is a tort action for negligent repair. Plaintiff and Dealership are the parties to the transaction.

Plaintiff’s action relates to the condition of the vehicle, namely the condition of the vehicle following repair by Dealership. That the allegedly negligent repair occurred after the parties signed the RISC is ultimately irrelevant because the arbitration provision states it applies to both “this contract” and “any resulting transaction or relationship” between the parties. Plaintiff’s claim against Dealership is covered by the arbitration provision.

For the avoidance of doubt, however, only Plaintiff’s negligent repair claim against Dealership is subject to arbitration. The remaining breach of warranty and fraud claims against Ford Motor Company are not arbitrable

because it is not a party to the RISC. (See Ford Motor Warranty Cases (2025) 17 Cal.5th 1122, 1126 [rejecting non-signatory manufacturer’s attempt to compel arbitration on a third party and equitable estoppel theory])/ All other issues concerning arbitrability have clearly and unmistakably been delegated to the arbitrator since the RISC provides “the interpretation and scope of this Arbitration Provision and the arbitrability of the claim or dispute . . . shall [] be resolved by neutral, binding arbitration and not by a court action.” (Declaration of Ihara, Exh. A at p. 7). (First Options of Chicago v. Kaplan (1995) 514 U.S. 938, 944 [noting that courts should find that the parties agreed to arbitrate arbitrability only where there is clear and unmistakable evidence that they did so, resolving any ambiguity in favor of a finding that the issue is for the court to determine]).

Plaintiff does not object to these arguments. In fact, Plaintiff has not filed any opposition. The failure to timely file an opposition is a basis for the Court to grant the motion, as the Court may construe such non-opposition as a concession that the motion is meritorious. (See D.I. Chadbourne, Inc. v. Super. Court (1964) 60 Cal.2d 723, 728, fn. 4; see also Cal. Rule of Court 8.54, subd. (c) [“A failure to oppose a motion may be deemed consent to the granting of the motion.”]). Plaintiff forfeited any argument about the agreement’s existence and scope by not opposing Dealership’s arguments on those points.

The party challenging a contractual arbitration provision bears the burden of proving that it is both procedurally and substantively unconscionable. (OTO, L.L.C., supra, 8 Cal.5th at 126). Here, Plaintiff Arthur Hearns did not oppose the motion. Per Code of Civil Procedure section 1005(b) opposition papers were due on July 29, 2026. A failure to oppose a motion may be deemed a consent to the granting of the motion. (California Rule of Court Rule 8.54(c)). Failure to oppose a motion leads to the presumption that the defendant has no meritorious arguments. (Laguna Auto Body v.

Farmers Ins. Exchange (1991) 231 Cal.App.3d 481, 489).

C. STAY OF ACTION Dealership requests a stay of the entire action. Plaintiff has sued two entities, Ford Motor Company and Dealership, for different causes of action. Proceeding against both defendants in separate forums carries the risk of rendering inconsistent rulings. As noted above, Plaintiff has not offered any arguments opposing a stay to the entire action. A stay of these proceedings is proper under Code of Civil Procedure § 1281.4 and 9 U.S.C. § 3. The court STAYS this action in its entirety pending the outcome of arbitration.

IV. CONCLUSION Based on the foregoing, the motion being unopposed, the petition to compel arbitration is GRANTED. The action is STAYED in its entirety pending the outcome of the arbitration. The Court will prepare the formal Order.

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