Kinsbursky v. Hyundai Motor America

CASE NO.: 26NWCV01449 HEARING: 8/27/26 @ 9:30 a.m. #8

Defendant Hyundai Motor America's Motion to Compel Arbitration is DENIED. Defendant to answer within 10 days. Plaintiff to give notice. Defendant Hyundai Motor America (Defendant) moves to compel arbitration and requests to stay the action.

Background

This is a lemon law action. Plaintiff NICOLETTE M KINSBURSKY (Plaintiff) alleges to have acquired a 2024 HYUNDAI PALISADE, VIN: KM8R34GE8RU794142. (Compl., P. 7.) Plaintiff alleges Defendant violated the Song-Beverly Consumer Warranty Act by failing to conform the Vehicle to the express written warranties within a reasonable number of repair attempts or within the warranty periods, and by failing to promptly replace the vehicle or make restitution to Plaintiff. (Compl., P. 14.) The Subject Vehicle manifested certain

unspecified defects. The Complaint alleges the following causes of action: 1) Breach of Express Warranty, 2) Breach of Implied Warranty, and 3) Violation of the Song-Beverly Consumer Warranty Act. Request for Judicial Notice The Court grants Defendant's Request for Judicial Notice of the Complaint but notes that judicial notice for documents already in the record are unnecessary.

Legal Standard

Parties may be compelled to arbitrate a dispute upon the court finding that: (1) there was a valid agreement to arbitrate between the parties; and (2) said agreement covers the controversy or controversies in the parties' dispute.¿ (Code Civ. Proc., Sec. 1281.2; see also Omar v. Ralphs Grocery Co. (2004)¿118 Cal.App.4th 955, 961.) A party petitioning to compel arbitration has the burden of establishing the existence of a valid agreement to arbitrate and the party opposing the petition has the burden of proving, by a preponderance of the evidence, any fact necessary to its defense. (Banner Entertainment, Inc. v.

Superior Court¿ (1998) 62 Cal.App.4th 348, 356-57.)¿ "If a court of competent jurisdiction. . .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., Sec. 1281.4.)¿¿ Discussion I. Existence of Arbitration Agreement Defendant moves to compel arbitration of Plaintiff's claims and stay all further judicial proceedings in this action pending completion of arbitration. Defendant contends that Plaintiff entered into an arbitration agreement on August 3, 2024, as part of the warranties provided for the Subject Vehicle. Defendant provides a copy of the Owner's Handbook & Warranty Information ("Warranty") which includes the arbitration section titled " BINDING ARBITRATION FOR CALIFORNIA VEHICLES ONLY ". (Ameripour Decl., Exh. 3.)

The 2024 Owner's Handbook & Warranty Information ("Warranty Booklet") provides the following: PLEASE READ THIS SECTION IN ITS ENTIRETY AS IT AFFECTS YOUR RIGHTS THIS SECTION DOES NOT PRECLUDE YOU FROM FIRST PURSUING ALTERNATIVE DISPUTE RESOLUTION THROUGH BBB AUTO LINE AS DESCRIBED IN THE "ALTERNATIVE DISPUTE RESOLUTION" PROVISION IN SECTION 3 OF THIS HANDBOOK. If you purchased or leased your Hyundai vehicle in the State of California, you and we, Hyundai

Motor America, each agree that any claim or disputes between us (including between you and any of our affiliated companies) related to or arising out of your vehicle purchase, advertising for the vehicle, use of your vehicle, the performance of the vehicle, any service relating to the vehicle, the vehicle warranty, representations in the warranty, or the duties contemplated under the warranty, including without limitation claims related to false or misleading advertising, unfair competition, breach of contract or warranty, the failure to conform a vehicle to warranty, failure to repurchase or replace your vehicle, or claims for a refund or partial refund of your vehicle's purchase price (excluding personal injury claims), but excluding claims brought under the Magnuson-Moss Warranty Act, shall be resolved by binding arbitration at either your or our election, even if the claim is initially filed in a court of law.

If either you or we elect to resolve our dispute via arbitration (as opposed to in a court of law), such binding arbitration shall be administered by and through the American Arbitration Association (AAA) under its Consumer Arbitration Rules. We will pay all fees for any arbitration except for the initial filing fee of $200. The arbitration will be held in the city or county of your residence. To learn more about arbitration, including the applicable rules and how to commence arbitration, please contact: AAA at www.adr.org; 800-778-7879.

This agreement to arbitrate is intended to be broadly interpreted and to make all disputes and claims between us (including our affiliated companies) relating to or arising out of your vehicle purchase, use or performance of your vehicle, or the vehicle warranty subject to arbitration to the maximum extent permitted by law. The arbitrator (and not a court) shall decide all issues of interpretation, scope, and application of this agreement. In any arbitration, the arbitrator shall be bound by the terms of this agreement and shall follow the applicable law.

The arbitrator shall not have the power to commit manifest errors of law, and any award rendered by the arbitrator that employs a manifest error of law may be vacated or corrected by a court of competent jurisdiction for such error. The arbitrator may only resolve disputes between you and us and may not consolidate claims without the consent of all parties. The arbitrator cannot hear class or representative claims or requests for relief on behalf of others, or issue any award or remedy in arbitration against or on behalf of anyone who is not a named party to the arbitration, as permitted by law.

In other words, you and we may bring claims against the other only in your or our individual capacity, and not as a plaintiff or class member in any class or representative action to the maximum extent permitted by law. You and we acknowledge and agree that, to the fullest extent permitted by law, we are each waiving the right to participate as a plaintiff or class member in any purported class action lawsuit, class-wide arbitration, private attorney general action, or any other representative proceeding.

If a court or arbitrator decides that any part of this agreement to arbitrate cannot be enforced as to a particular claim for relief or remedy, then that claim or remedy (and only that claim or remedy) must be brought in court and must be

stayed pending arbitration of the arbitrable claims and remedies. If a court or arbitrator decides that any part of this agreement cannot be enforced as to a particular request for public injunctive relief, then that request for public injunctive relief (and only that request for public injunctive relief) must be brought in court and must be stayed pending arbitration of the arbitrable remedies. If arbitration is elected by either party, the parties collectively agree that they waive their right to a jury trial.

Notwithstanding the above, either you or we may file a lawsuit in small claims court for any claims that otherwise require binding arbitration, if the small claims court has jurisdiction. In addition, either you or we may invoke any AAA Consumer Arbitration Rules that allow you or we to have a small claims court decide any claims that otherwise require binding arbitration. This agreement evidences a transaction involving interstate commerce and shall be governed by the Federal Arbitration Act, 9 U.S.C.

Sec.Sec. 1-16. Judgment upon any award in arbitration may be entered in any court having jurisdiction. IF YOU PURCHASED OR LEASED YOUR VEHICLE IN CALIFORNIA, YOUR WARRANTY IS MADE SUBJECT TO THE TERMS OF THIS BINDING ARBITRATION PROVISION. BY USING THE VEHICLE, OR REQUESTING OR ACCEPTING BENEFITS UNDER THIS WARRANTY, INCLUDING HAVING ANY REPAIRS PERFORMED UNDER WARRANTY, YOU AGREE TO BE BOUND BY THESE TERMS. IF YOU DO NOT AGREE WITH THESE TERMS, PLEASE CONTACT US AT [email protected] WITHIN THIRTY (30) DAYS OF YOUR PURCHASE OR LEASE TO OPT-OUT OF THIS ARBITRATION PROVISION. (Ameripour Decl., P. 3, Exh. 3, pp. 14-16 (emphasis added).)

Defendant also argues that if arbitration cannot be enforced under the Warranty, arbitration may be enforced under the Bluelink Connected Services Agreement ("CSA"). (Motion, at p. 6.) Defendant contends that on August 3, 2024, Plaintiff enrolled the Subject Vehicle in Defendant's CSA through a dealer-assisted enrollment process which included an agreement to arbitrate. (Ibid.; Rao Decl., P. 5.) Defendant declares that Plaintiff had to affirmatively click the box acknowledging that they agreed to the CSA's terms and conditions. (Id. at P. 6.)

The arbitration provision provides as follows: "Hyundai and you agree to arbitrate any and all disputes and claims between us arising out of or relating to this Agreement, Connected Services, Connected Services Systems, Service Plans, your Vehicle, use of the sites, or products, services, or programs you purchase, enroll in or seek product/service support for, whether you are a Visitor or Customer, via the sites or through mobile application, except any disputes or claims which under governing law are not subject to arbitration, to the maximum extent permitted by applicable law.

This agreement to arbitrate is intended to be broadly interpreted and to make all disputes and claims between us subject to arbitration to the fullest extent permitted by law. [...] The agreement to arbitrate otherwise includes, but is not limited to: claims based in contract, tort, warranty, statute, fraud, misrepresentation or any other legal theory; claims that arose before this or any prior Agreement (including, but not limited to,

claims relating to advertising) [...]" (Rao Decl., P.P. 4-6, Exh. 2.) The Court finds that Defendant has not met its burden of showing that a valid arbitration agreement exists. Defendant has not provided any contract or agreement that contains Plaintiff's signature. (Garrison v. Superior Ct. (2005) 132 Cal.App.4th 253, 263-64 ["Although, as noted, California has a strong public policy in favor of arbitration, there is no preference for the arbitral forum when the parties have not agreed to arbitrate."]; Ramirez v.

Golden Queen Mining Co., LLC (2024) 102 Cal.App.5th 821, 831 ["[A] party seeking arbitration can carry its initial burden " 'by attaching a copy of the arbitration agreement purportedly bearing the opposing party's signature.'"].) Defendant provides no evidence that the Warranty was presented to Plaintiff and that Plaintiff signed or assented to the terms of the arbitration provision within. Moreover, Defendant fails to show that the arbitration provision contained in the Warranty constituted an offer to which Plaintiff assented by failing to opt-out. (Leslie v.

Brown Bros. Inc. (1929) 208 Cal. 606, 621 [offer cannot be turned into agreement merely because the person to whom it is made makes no reply, even where offer states that silence will be taken as consent]; Norcia v. Samsung Telecommunications America, LLC (9th Cir. 2017) 845 F.3d 1279, 1291 [offeree, regardless of apparent manifestation of her consent, is not bound by inconspicuous contractual provisions of which she was unaware, contained in a document whose contractual nature is not obvious]; Golden Eagle Ins.

Co. v. Foremost Ins. Co. (1993) 20 Cal.App.4th 1372, 1385 [silence or inaction do not constitute acceptance].) The Court notes that warranties generally bind only the seller and do not impose independent obligations on the buyer. (Norcia, supra, 845 F.3d at 1288.) In other words, Plaintiff was not required to accept Defendant's warranties to make them binding. Thus, there was no acceptance of a benefit that can serve as Plaintiff's assent to the terms of the arbitration provision. (Civ. Code, Sec. 1589.)

The Court finds that Plaintiff did not enter into an agreement to arbitrate her statutory claims via the CSA. Defendant fails to demonstrate that the causes of action in Plaintiff's complaint arise from the CSA, thereby implicating the arbitration provision. The arbitration clause in the CSA applies to claims related to the "connected services" that are the subject of the agreement, not the statutory claims brought by Plaintiff. Finding that the CSA covers all claims regarding the Subject Vehicle would overreach the intent of the agreement, and the understanding of the parties at the time Plaintiff accepted the CSA terms.

I. Equitable Estoppel Alternatively, Defendant maintains an equitable estoppel theory to compel arbitration. According to Defendant, because Plaintiff relies on the Warranty to maintain the instant action, Plaintiff is estopped from disclaiming the arbitration provision within the Warranty. "[E]quitable estoppel allows a nonsignatory defendant to

invoke an arbitration clause to compel a signatory plaintiff to arbitrate its claims when the causes of action against the nonsignatory are 'intimately founded in and intertwined' with the underlying contract obligations." [Citations.] "By relying on contract terms in a claim against a nonsignatory defendant, even if not exclusively, a plaintiff may be equitably estopped from repudiating the arbitration clause contained in that agreement." [Citations.]' [Citation.] [P.] 'Where the equitable estoppel doctrine applies, the nonsignatory has a right to enforce the arbitration agreement.' [Citation.] '"The fundamental point" is that a party is "not entitled to make use of [a contract containing an arbitration clause] as long as it worked to [his or] her advantage, then attempt to avoid its application in defining the forum in which [his or] her dispute ... should be resolved."' [Citation.] 'In any case applying equitable estoppel to compel arbitration despite the lack of an agreement to arbitrate, a nonsignatory may compel arbitration only when the claims against the nonsignatory are founded in and inextricably bound up with the obligations imposed by the agreement containing the arbitration clause.' [Citation.]

In determining whether plaintiffs' claim is founded on or intimately connected with the sale[] contract, we examine the facts of the operative complaint." [Citation.] (Ford Motor Warranty Cases v. Ford Motor Co. (2023) 89 Cal.App.5th 1324, 1332-1333., italics in original.) Here, Defendant contends that Plaintiff's Complaint not only presumes the existence of the Warranty, but in fact necessarily relies on its existence in order to maintain the cause of actions alleged under their Song-Beverly Consumer Warranty Act ("Song-Beverly) and breach of warranty claims, as there would be no claims under Song-Beverly or warranty but for the existence of the Warranty provided to Plaintiff by Defendant.

According to Defendant, Plaintiff would not have a basis for alleging the first cause of action for breach of express warranty under the Song-Beverly Act unless Plaintiff was relying upon the warranty to bring suit. As stated above, the warranty issued by Defendant does not create an enforceable contract between the parties. (Norcia, supra, 845 F.3d at 1288.) The authority Defendant relies upon to support the application of equitable estoppel in this case presupposes the existence of a contract between the parties which does not exist here.

Thus, it cannot be said that Plaintiff is making use of a contract to their advantage, while attempting to avoid its application in defining the forum in which their dispute should be resolved. Even if the warranty issued by Defendant is determined to be a contract, Plaintiff's claims are not premised upon the warranty. Instead, Plaintiff's claims are premised on Defendant's statutory obligations under the Song Beverly Act. The complaint alleges: "As a direct and proximate result of said violations of the Song-Beverly Act, Plaintiff has sustained, and continues to sustain, actual, incidental and consequential damages in the approximate amount of the purchase price according to proof at trial." (Complaint, P.P. 1 8.) "The failure of Defendants to comply with the Song-Beverly Act was willful in that they had actual knowledge of the Vehicle's defects, malfunctions, and nonconformities, knew of its legal duties under the warranty act, but repeatedly refused to make necessary repairs and/or provide compensation to plaintiff." (Complaint, P.19.)

It is the Song-Beverly Act, not the express warranty, which provides the

enforcement mechanism and the remedies which Plaintiff seeks. Considering the Complaint as a whole, the Court determines that Plaintiff sues under the Song-Beverly Act, not the Warranty. Thus, it cannot be said that Plaintiff's claims are so intertwined with the Warranty that Plaintiff is equitably estopped from pursuing them in court. (Mattson Technology, Inc. v. Applied Materials, Inc. (2023) 96 Cal.App.5th 1149, 1157-1158, 314 Cal.Rptr.3d 918 [no equitable estoppel where the plaintiff's statutory trade secrets claim existed without regard to the signatory's contractual obligations to the plaintiff]; UFCW & Employers Benefit Trust v.

Sutter Health (2015) 241 Cal.App.4th 909, 929, 194 Cal.Rptr.3d 190 [no equitable estoppel where the plaintiff alleged statutory claims for unlawful competition and antitrust rather than claims relying on the contract].) Accordingly, Defendant's Motion to Compel Arbitration is DENIED. | Home -->)" -->