Unknown v. SEG

(Stanley Mosk Courthouse: Dept. 517) September 8, 2026 DEPARTMENT 517 LAW AND MOTION RULINGS

tentative ruling on SEG's demurrer to Plaintiff's Second Amended Complaint. The Court has questions for both sides. Case Number: 26STCV08844 Hearing Date: September 8, 2026 Dept: 517

Introduction and Overview Plaintiff Rebecca Hernandez ("Hernandez") sued Defendants Culver City Auto Mall, LLC dba Chevrolet of Culver City ("the Dealer"), General Motors, LLC ("GM"), Ally Bank ("Ally"), and Merchants Bonding Company ("Merchants") in connection with Hernandez's purchase from the Dealer of a 2023 Chevrolet Bolt ("the Subject Vehicle") that GM manufactured and distributed.

Hernandez's Complaint alleges that the Subject Vehicle was a "lemon law buyback," i.e., that GM repurchased the Subject Vehicle from a prior owner who made a claim to GM that the Subject Vehicle was a lemon. Hernandez's Complaint further alleges that both GM and the Dealer failed to notify Hernandez that the Subject Vehicle was a lemon law buyback and that she would not have purchased the Subject Vehicle from the Dealer had she known that it was a lemon law buyback.

Hernandez asserts claims against the Dealer and GM for violations of the Consumer Legal Remedies Act; fraud and deceit; negligent misrepresentation; and unlawful and unfair business practices in violation of Business and Professions Code section 17200. Hernandez also alleges in the Complaint that the Dealer assigned its rights under the Retail Installment Sale Contract ("the RISC") between Hernandez and Dealer for the Subject Vehicle to Ally, which makes Ally liable on all of Hernandez's claims against the Dealer. Hernandez further alleges that Merchants issued a surety bond to the Dealer as required for the Dealer to obtain from the California Department of Motor Vehicles a license to sell automobiles, which renders Merchants liable to Hernandez on the bond under Vehicle Code section 11711.

For its part, Merchants has initiated an interpleader action against Hernandez, Freeway Trucks & Vans, Inc., and Alejandro Odeh-Lara through a Cross-Complaint in which it alleges that it has received competing clams on the bond that it issued to the Dealer.

The Dealer has moved to compel arbitration of Hernandez's claims against the Dealer before the American Arbitration Association and to stay the entire litigation in this Court pending the completion of that arbitration. The Dealer's motion is based on an arbitration provision in the RISC ("the Arbitration Provision"). Ally has joined in the Dealer's motion. Merchants had partially joined in it. Also pending before the Court is GM's demurrer to the claim for fraud and deceit against it in Hernandez's Complaint.

The Court is granting the Dealer's motion to compel arbitration of Hernandez's claims against the Dealer. With one exception, the Court is staying the rest of the litigation in this Court pending completion of the arbitration between Hernandez and the Dealer. As a result of this stay, the Court is declining at this time to rule on GM's demurrer to the fraud claim against it in Hernandez's Complaint. The one exception to the stay is to allow Merchants to name in its Cross-Complaint for interpleader additional Cross-Defendants who have claims on the bond Merchants issued to the Dealer. The Court is setting a case