MARK KIELAR, Petitioner, v. THE SUPERIOR COURT OF PLACER COUNTY, Respondent; HYUNDAI MOTOR AMERICA, Real Party in Interest.
C096773 (Super. Ct.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA THIRD APPELLATE DISTRICT (Placer)
Filed 8/16/23
CERTIFIED FOR PUBLICATION
ORIGINAL PROCEEDING in mandate. Petition granted. Michael W. Jones, Judge.
Knight Law Group, Roger Kirnos; Gupta Wessler, Jennifer Bennett and Linnet Davis-Stermitz for Petitioner.
No appearance for Respondent.
Horvitz & Levy, John A. Taylor, Jr., Jason R. Litt, Eric S. Boorstin; Bowman and Brooke, Brian Takahashi, Jimmy Y. Park. and Michael C. Foley; for Real Party in Interest.
In this extraordinary writ proceeding, Mark Kielar challenges the superior court‘s decision to grant Hyundai Motor America‘s (Hyundai) motion to compel arbitration of his causes of action for violation of the Song-Beverly Consumer Warranty Act (
I. BACKGROUND
Kielar‘s complaint alleges three causes of action for violations of the Song-Beverly Act and two causes of action for fraudulent inducement. The complaint states: “These causes of action arise out of the warranty obligations of Hyundai in connection with a vehicle purchased by [Kielar] and for which Hyundai issued a written warranty.” The complaint further alleges Hyundai and its agents concealed a known engine defect.
Hyundai filed a motion to compel arbitration and stay the action until arbitration concludes. Hyundai asserted it was entitled to compel arbitration under Felisilda, which “upheld a trial court‘s ruling that the exact same arbitration language in a sales contract provided the car manufacturer the right to compel arbitration as a third party, nonsignatory to the sales contract.”
The sales contract between Kielar and the dealership referred to the dealership as the “creditor-seller,” “we,” or “us.” Hyundai was not a party to the agreement. The arbitration provision provides: “Any claim or dispute, whether in contract, tort, statute or otherwise (including the interpretation and scope of this Arbitration Clause, 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.”
The trial court followed Felisilda and granted Hyundai‘s motion to compel arbitration based on the doctrine of equitable estoppel. The court explained Kielar‘s claims “arise from purported mechanical defects in the condition of
Kielar filed this petition for writ of mandate challenging the trial court‘s order compelling arbitration. We issued an order to show cause in September 2022.
II. DISCUSSION
A. Propriety of Writ Review
Hyundai argues we should discharge the order to show cause because Kielar has an adequate remedy at law. “Generally[,] the availability of an appeal constitutes an adequate remedy at law precluding writ relief.” (Kawasaki Motors Corp. v. Superior Court (2000) 85 Cal.App.4th 200, 205-206.) An order directing arbitration “is reviewed on appeal from the judgment entered after the arbitration is completed or in exceptional circumstances . . . by writ of mandate.” (Muao v. Grosvenor Properties, Ltd. (2002) 99 Cal.App.4th 1085, 1088-1089.) “[R]eviewing an order compelling arbitration by writ should be done sparingly and only in an appropriate circumstance to avoid defeating the purpose of the arbitration statute.” (Cortez v. Doty Bros. Equipment Co. (2017) 15 Cal.App.5th 1, 10Zembsch v. Superior Court (2006) 146 Cal.App.4th 153, 160.) Kielar does not demonstrate his arbitration would be unduly time consuming or expensive and, given the split of authority on the issue, we cannot conclude the matters ordered arbitrated clearly fall outside the scope of the arbitration agreement. Clarity on this issue will not come until our Supreme Court provides it. Nonetheless, the petition presents unusual circumstances justifying writ review and we decline to discharge the order to show cause.
B. Standard of Review
“The standard of review for an order on a petition to compel arbitration is either substantial evidence where the trial court‘s decision on
C. Equitable Estoppel
Kielar argues the trial court incorrectly held equitable estoppel allows Hyundai to rely on his sales contract with his dealership to force his claims against Hyundai into arbitration. We agree.
The doctrine of equitable estoppel is an exception to ” ‘the general rule that a nonsignatory to an agreement cannot be compelled to arbitrate and cannot invoke an agreement to arbitrate, without being a party to the arbitration agreement.’ [Citations.] [¶] . . . Under that doctrine, as applied in ‘both federal and California decisional authority, a nonsignatory defendant may 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.] ‘The rule applies to prevent parties from trifling with their contractual obligations.’ ” (JSM Tuscany, LLC v. Superior Court (2011) 193 Cal.App.4th 1222, 1236-1237.) “[M]erely ‘mak[ing] reference to’ an agreement with an arbitration clause is not enough.” (Goldman v. KPMG, LLP (2009) 173 Cal.App.4th 209, 218Jensen v. U-Haul Co. of California (2017) 18 Cal.App.5th 295, 306, emphasis omitted.) “[B]ut-for causation” alone is insufficient. (DMS Services, LLC v. Superior Court (2012) 205 Cal.App.4th 1346, 1356-1357.)
Kielar does not rely on any terms of the sales contract with his dealership to establish any of his causes of action. Hyundai does not argue otherwise.1
Hyundai‘s assertion that Kielar‘s claims are founded on or intimately connected with the sales contract relies on Felisilda. In that case, the Felisildas filed a complaint against a dealership and a manufacturer alleging a violation of the Song-Beverly Act based on the manufacturer‘s express warranties. (Felisilda, supra, 53 Cal.App.5th at p. 491.) The Felisildas and the dealership had entered into a sales contract with an identical arbitration provision to the one at issue in this proceeding. (Id. at p. 490.) The dealership moved to compel arbitration of the entire matter, including as to the nonsignatory manufacturer. (Id. at p. 491.) In affirming the superior court‘s decision to order the entire case to arbitration based on the doctrine of equitable estoppel, a panel of this court explained “the sales contract was the source of the warranties at the heart of this case.” (Id. at p. 496.) We join Ford Motor and Montemayor in disagreeing with this statement and concluding equitable estoppel does not apply in this situation. (Montemayor, supra, 92 Cal.App.5th at pp. 968-971; Ford Motor, supra, 89 Cal.App.5th at pp. 1333-1336, rev. granted.)
Kielar‘s complaint alleges “Hyundai issued a written warranty.” This warranty was not part of his sales contract with the dealership. Indeed, the sales contract acknowledges this separate warranty and disclaims any implied warranties by the dealership: “If you do not get a written warranty, and the Seller does not enter into a service contract within 90 days from the date of this contract, the Seller makes no warranties, express or implied, on the vehicle, and there will be no implied warranties of merchantability or of fitness for a particular purpose. [¶] This provision does not affect any warranties covering the vehicle that the vehicle manufacturer may provide.”2 In Ford Motor and Montemayor, Ford Motor Company moved to compel arbitration of the same type of claims at issue in this proceeding based on “the same form arbitration provision” in the plaintiffs’ sales contract with dealerships. (Ford Motor, supra, 89 Cal.App.5th at p. 1333, rev. granted; see also Montemayor, supra, 92 Cal.App.5th at p. 968.) These sales contracts also included the same disclaimer regarding warranties. (Montemayor, supra, at p. 962; Ford Motor, supra, at p. 1335.) These authorities explained Felisilda‘s statement that “the sales contract was the source of the warranties” was flawed because “manufacturer vehicle warranties that accompany the sale of motor vehicles without regard to the terms of the sale contract between the
Additionally, we agree with Montemayor and Ford Motor that the parenthetical language in the arbitration provision referring to nonsignatory third parties “was a ‘delineation of the subject matter of claims the purchasers and dealers agreed to arbitrate’ ” and does not bind the purchaser ” ‘to arbitrate with the universe of unnamed third parties.’ ” (Montemayor, supra, 92 Cal.App.5th at p. 971, quoting Ford Motor, supra, 89 Cal.App.5th at p. 1335, rev. granted.)
For these reasons, the trial court erred in ordering arbitration.3
III. DISPOSITION
Let a peremptory writ of mandate issue directing respondent superior court to vacate its June 16, 2022 order granting Hyundai Motor America‘s motion to compel arbitration and stay the action, and enter a new order denying the motion. Mark Kielar shall recover his costs in this original proceeding. (Cal. Rules of Court, rule 8.493(a)(1)(A).)
/S/
RENNER, J.
We concur:
/S/
EARL, P.J.
/S/
HULL, J.