MILENA FURTADO VS. MERCEDES-BENZ USA, LLC

May 12, 2026 Law and Motion Calendar PAGE 15 Judge: HONORABLE NANCY L. FINEMAN, Department 04 ________________________________________________________________________

2:00 PM LINE 7 25-CIV-05995 MILENA FURTADO VS. MERCEDES-BENZ USA, LLC

MILENA FURTADO NEAL F MORROW MERCEDES-BENZ USA, LLC ALI AMERIPOUR

DEFENDANT MERCEDES-BENZ USA, LLC’S MOTION TO COMPEL BINDING ARBITRATION

CONTINUED FROM 5/5/2026 and the tentative ruling issued for the 5/5/26 hearing is repeated below.

TENTATIVE RULING:

For the reasons stated below, defendant Mercedez-Benz USA, LLC’s (MBUSA) Motion to Compel Binding Arbitration is GRANTED. (9 U.S.C. §§ 1-16 [Federal Arbitration Act (FAA)]; Code Civ. Proc., § 1281 et seq.) Accordingly, the case is HEREBY STAYED, pending resolution of the arbitration. (Code Civ. Proc. § 1281.4.)

Background

According to the complaint’s allegations, on April 29, 2023, plaintiff acquired a 2023 Mercedes- Benz EQB 250 (the Vehicle), relating to which MBUSA provided an express written warranty. Plaintiff contends that during the course of plaintiff’s lease of the Vehicle, it experienced multiple defects that required extensive repairs. Plaintiff contends that despite multiple repair attempts, MBUSA’s authorized dealer was unable to conform it to warranty, and has refused to repurchase it in accordance with the Song-Beverly Act.

On August 8, 2025, plaintiff filed this lawsuit against MBUSA, asserting causes of action for (1) breach of express warranty (Song-Beverly Act); (2) breach of implied warranty (Song Beverly Act); and (3) violation of Business & Professions Code section 17200.

Defendant MBUSA brings this motion to compel plaintiff to arbitrate this matter and to stay this action pending arbitration.

The Motion Is Granted

California law strongly favors arbitration finding it a speedy and relatively inexpensive manner of dispute resolution. (OTO, L.L.C. v. Kho (2019) 8 Cal.5th 111, 125; Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 97 (Armendariz.) A party to an arbitration agreement may seek a court order compelling the parties to arbitrate a dispute covered by the agreement. (Code Civ. Proc., § 1291.2.) The court must grant the petition to compel arbitration unless it finds the right to compel arbitration has been waived by the moving party; grounds exist for the revocation of the agreement; or litigation is pending that may render the arbitration unnecessary or create conflicting rulings on common issues. (Id., § 1281.2.) Private arbitration is

May 12, 2026 Law and Motion Calendar PAGE 16 Judge: HONORABLE NANCY L. FINEMAN, Department 04 ________________________________________________________________________ a matter of agreement between the parties and is accordingly governed by contract law. (Platt Pacific, Inc. v. Andelson (1993) 6 Cal.4th 307, 313.) A proceeding to compel arbitration is in essence a suit in equity to compel specific performance of a contract. (Freeman v. State Farm Mutual Auto Insurance Co. (1975) 14 Cal.3d 473, 479.) Defendant bears the burden of proving the existence of an arbitration agreement, and the party opposing arbitration bears the burden of proving any defense. (Pinnacle Museum Tower Assn. v. Pinnacle Market Development (US), LLC (2012) 55 Cal.4th 223, 236 [citing Engalla v. Permanente Medical Group, Inc. (1997) 15 Cal.4th 951, 972].)

MBUSA contends that there is a valid, enforceable agreement to arbitrate, which it may enforce. MBUSA cites the lease agreement between plaintiff and the lessor (who is not a party to this action) (the Lease). The arbitration provisions (the Arbitration Agreement) appear at its pages 4 and 5. (Sept. 23, 2025 Declaration of Ali Ameripour, ¶ 4, & pp. 4-5, in Exh. 2.) Plaintiff signed the Lease, which includes the Arbitration Agreement, on or about April 29, 2023. (Id.) The signature area specifies that, “By signing below, you acknowledge that: ... You have received and read all 10 pages of this lease carefully and agree to all of its terms, INCLUDING THE IMPORTANT ARBITRATION DISCLOSURES ON PAGES 4 AND 5 ... .” (Id., p. 6, in Exh. 2 (emphasis in original).)

While MBUSA is not a party to the contract, MBUSA has standing to compel arbitration here, as an expressly named third-party beneficiary of the Arbitration Agreement. The Arbitration Agreement explicitly applies to MBUSA, providing that:

Any claim or dispute, whether in contract, tort or otherwise (including any dispute over the interpretation, scope, or validity of this lease, arbitration section or the arbitrability of any issue), between you and us or any of our employees, agents, successors, assigns, or the vehicle distributor, including Mercedes-Benz USA LLC (each a “Third Party Beneficiary”), which arises out of or relates to a credit application, this lease, or any resulting transaction or relationship arising out of this lease (including any such relationship with third parties who do not sign this contract) shall, at the election of either you, us, or a Third Party Beneficiary, be resolved by a neutral, binding arbitration and not by a court action.

(Id., p. 4, in Exh. 2 (emphasis added).) MBUSA, though a nonsignatory to the Arbitration Agreement, has shown that the Arbitration Agreement was made expressly for its benefit, so that it may enforce the Arbitration Agreement. (Ronay Fam. Ltd. P’ship v. Tweed (2013) 216 Cal.App.4th 830, 838 (“[A] third party beneficiary of an arbitration agreement may enforce it.”); Civ. Code § 1559 (“A contract, made expressly for the benefit of a third person, may be enforced by him at any time before the parties thereto rescind it.”).)

Plaintiff’s reliance on Ford Motor Warranty Cases (2025) 17 Cal. 5th 1122, 1127 ignores that the arbitration agreement there, unlike here, did not state that plaintiff could be compelled to arbitration claims against the vehicle’s manufacturer. (Id.) Here, in contrast as the distinguishing factor, the agreement identified MBUSA by name as a “third party beneficiary” who may enforce the agreement.

May 12, 2026 Law and Motion Calendar PAGE 17 Judge: HONORABLE NANCY L. FINEMAN, Department 04 ________________________________________________________________________

Further, plaintiff’s claims clearly fall within the scope of the Arbitration Agreement, as shown in the above quotation therefrom.

Both the FAA and California law require enforcement of the Arbitration Agreement. For instance, the governing California statute provides, in pertinent part, that:

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 that controversy, the court shall order the petitioner and the 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

Grounds exist for rescission of the agreement.

(Code Civ. Proc., § 1281.2, subds. (a) & (b).) A party meets its burden to establish the existence of the arbitration agreement by providing a copy thereof to the Court, or by stating the paragraph verbatim. (Baker v. Italian Maple Holdings, LLC (2017) 13 Cal.App.5th 1152, 1160; Cal. Rules of Court, rule 3.1330.) MBUSA has provided the Arbitration Agreement (Ameripour Decl., ¶ 4, & Exh. 2), meeting this burden. Plaintiff does not dispute the validity of the agreement or argue waiver. Thus MBUSA has established a valid arbitration agreement. (Iyere v. Wise Auto Group (2023) 87 Cal.App.5th 747, 754–755.)

Plaintiff’s “unconscionability” argument (see Opp. at 6-9) lacks merit, for multiple reasons. First, and as a dispositive matter, plaintiff does not identify any purported substantive unconscionability. Procedural and substantive unconscionability must both be present in order for a court to exercise its discretion to refuse to enforce a contract or clause under the doctrine of unconscionability.’ (Armendariz, supra, 24 Cal.4th at p. 114.) They do not need to be present in the same degree, but both must be shown. (Id.) Here, under the heading: “The Arbitration Agreement is Substantively Unconscionable...,” Plaintiff argues the following:

Though the lease agreement attempts to artfully dodge the surprise element of procedural unconscionability, simply putting a warning on the front page and borders around the terms on the final page does not detract from the hidden nature of the provision (final page of a document meant primarily for sale and signed in a high pressure environment with little to no bargaining power) ... Both procedural and substantive unconscionability ... need not be present to the same degree .... It should therefore be noted that any possible shortcomings of the surprise element (notwithstanding the articulation of the Ultimo Court stating that surprise can also include disappointment in method and outcome) are outweighed by the issues presented as substantively unconscionable.

May 12, 2026 Law and Motion Calendar PAGE 18 Judge: HONORABLE NANCY L. FINEMAN, Department 04 ________________________________________________________________________ (Opp. at 8-9.) Plaintiff merely repeats the claim of procedural unconscionability, without identifying any purported substantive unconscionability. The unconscionability argument fails for this reason alone.

Further, Plaintiff’s procedural unconscionability argument is relatively weak. Plaintiff’s contention that the arbitration clause in the Lease was inconspicuous simply ignores the Lease itself, which set forth the arbitration agreement’s terms under the conspicuous heading: “Important Arbitration Disclosures.” And as noted above, the Lease required Plaintiff to sign her name immediately under the following language: By signing below, you acknowledge that ... You have received and read all 10 pages of this lease carefully and agree to all of its terms, INCLUDING THE IMPORTANT ARBITRATION DISCLOSURES ON PAGES 4 AND 5. (Ameripour Declaration, ¶ 4, & pp. 4-5, in Exh. 2 (emphasis in original).) Thus, the evidence does not support plaintiff’s contention that the Arbitration Agreement was in any way inconspicuous or hidden.

Plaintiff also argues procedural unconscionability on grounds that the dealer purportedly presented it to plaintiff on a take-it-or-leave-it basis (i.e., an “adhesion” contract). The mere fact that a contract is an adhesion contract does not render it unconscionable. (Allan v. Snow Summit, Inc (1996) 51 Cal.App.4th 1358, 1375.) And plaintiff offers no evidence supporting the “take-it-or-leave-it” claim. Plaintiff offers no evidence that she ever attempted to discuss or negotiate the terms, or that she would have, given the opportunity.

In sum, even assuming that some degree of procedural unconscionability existed here, she has not shown substantive unconscionability, which factor focuses on overly harsh or one-sided results. (Armendariz, supra, 24 Cal.4th at p. 114.) Arbitration agreements relating to statutory rights “must meet certain minimum requirements, including neutrality of the arbitrator, the provision of adequate discovery, a written decision that will permit a limited form of judicial review, and limitations on the costs of arbitration.” (Armendariz, supra, 24 Cal.4th at p. 91; id. at p. 102.)

The Arbitration Agreement provides for a neutral arbitrator, with the arbitration to be administered by the American Arbitration Association (AAA), a recognized arbitration forum (see Craig v. Brown & Root, Inc. (2000) 84 Cal.App.4th 416, 419 [finding employer using AAA had neutral arbitrator]) and the Arbitration Agreement refers plaintiff to the website of AAA for the rules, which rules allow discovery. (Roman v. Super. Court (Flo-Kem, Inc.) (2009) 172 Cal.App.4th 1462, 1476 [AAA Rules provided “no meaningful difference” from the discovery approved by the Court in Armendariz].)

Plaintiff has failed to show that the AAA Rules do not allow for a written arbitration award, that there are any limits on individual remedies she can seek or that the arbitration fees than she would have to pay are excessive. MBUSA limits arbitration fees plaintiff must pay. For example, plaintiff only has to pay up to $125.00 for the initial arbitration or case management fees and MBUSA will pay for the first day of arbitration, up to eight hours. Accordingly, this court finds that all five Armendariz elements have been met, and therefore the arbitration agreement is not procedurally unconscionable.

May 12, 2026 Law and Motion Calendar PAGE 19 Judge: HONORABLE NANCY L. FINEMAN, Department 04 ________________________________________________________________________ Plaintiff’s alternative request that the court, rather than rule on the motion, permit plaintiff to conduct discovery relating to the Arbitration Agreement, is denied. This argument appears only in the conclusion to Plaintiff’s Opposition brief, without any citation to authority. The information she seeks to obtain, e.g. if and when the arbitration provision was described to plaintiff, whether any questions were answered, and what additional information was provided at the time of contracting are within plaintiff’s own knowledge. Tellingly, she did not submit a declaration in opposition to the motion to raise any facts to show unconscionability.

The Motion is GRANTED, and the case is stayed pending the completion of arbitration. (9 U.S.C. § 3; Code Civ. Proc., § 1281.4.) Defendant’s Request for Judicial Notice MBUSA’s Request for Judicial Notice is GRANTED. (Evid. Code § 452(d).)

If the tentative ruling is uncontested, it shall become the order of the court. Thereafter, counsel for defendant shall prepare for the court’s signature a written order consistent with the court’s ruling, pursuant to California Rules of Court, rule 3.1312, and provide written notice of the ruling to all parties who have appeared in the action, as required by law and by the California Rules of Court.