Motion To Compel ArbitrationMotionCal. Super. - 2nd Dist.September 5, 2019Electronically FILED Y U | M O H A N D E S I L L P 63 3 We st Fi ft h St re et , Su it e 28 00 Lo s A n g e l e s , C A 9 0 0 7 1 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 iH YU | MOHANDESI LLP Jordan S. Yu (SBN 227341) 213.377.5502 | jyu@yumollp.com Serje Havandjian (SBN 319024) 213.266.5457 | shavandjian@yumollp.com 633 West Fifth Street, Suite 2800 Los Angeles, CA 90071 213.377.5501 Facsimile Attorneys for Defendants Santander Consumer USA Inc. and DM California Holdings, Inc. EMEKA VICTOR OKWUDILI PETER, Plaintiff, Vs. SANTANDER CONSUMER USA INC., a Texas Corporation; DM CALIFORNIA HOLDINGS, Inc., a California Corporation and DOES 1-100, inclusive. Defendant(s). y Superior Court of California, County of Los Angeles on 06/25/2020 11:35 AM Sherri R. Carter, Executive Officer/Clerk of Court, by C. Coleman,Deputy Clerk SUPERIOR COURT FOR THE STATE OF CALIFORNIA FOR THE COUNTY OF LOS ANGELES Case No.: 19STCV31356 Assigned to the Hon. Lia Martin DEFENDANTS’ NOTICE OF MOTION AND MOTION TO COMPEL ARBITRATION AND STAY THE ACTION; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF Date: TBD Time: TBD Dept.: 16 Trial Date: June 27, 2021 [Filed concurrently with Declaration of Amanda Van Haren; Proposed Order] -1- NOTICE OF MOTION AND MOTION TO COMPEL ARBITRATION AND STAY THE ACTION Y U | M O H A N D E S I L L P 63 3 We st Fi ft h St re et , Su it e 28 00 Lo s A n g e l e s , C A 9 0 0 7 1 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 TO THE HONORABLE COURT, ALL PARTIES AND THEIR ATTORNEYS OF RECORD: PLEASE TAKE NOTICE that on a time and date to be determined by the court, in Department 16 of the above referenced Court, located at 111 North Hill Street, Los Angeles, California 90012, Defendants Santander Consumer USA Inc. (“Santander”) and DM California Holdings, Inc. (“DM”) (collectively “Defendants’) shall move to compel arbitration of Plaintiff Emeka Victor Okwudili Peter’s (“Plaintiff”) claims and stay the litigation pending completion of the arbitration. This Motion is made pursuant to the Federal Arbitration Act, 9 U.S.C. § 1 ef seq., on the grounds that the claims raised in Plaintiff’s Complaint are subject to binding arbitration pursuant to a written agreement between the parties, and that this action must be stayed pending completion of the arbitration. As the United States Supreme Court has noted, “[t]he overarching purpose of the FAA, evident in the text of §§ 2, 3, and 4, is to ensure enforcement of arbitration agreements according to their terms so as to facilitate streamlined proceedings.” AT&T Mobility LLC v. Concepcion, 563 U.S. 333,334 (2011). This Motion is based upon this Notice of Motion, the accompanying Memorandum of Points and Authorities, the Declaration of Amanda Van Haren, the pleadings and papers on file in this action, and upon any other matter the Court deems proper. DATED: June 25, 2020 YU | MOHANDESI LLP er Jordan S. Yu Serje P. Havandjian Attorneys for Defendants Santander Consumer USA Inc. and DM California Holdings, Inc. 1 NOTICE OF MOTION AND MOTION TO COMPEL ARBITRATION AND STAY THE ACTION TABLE OF CONTENTS Y U | M O H A N D E S I L L P 63 3 We st Fi ft h St re et , Su it e 28 00 Lo s A n g e l e s , C A 9 0 0 7 1 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 I. INTRODUCTION. ..ioiiiienrinsnesnnsnesssesnessessscssessanssssssassssssssssassasssssssassssssassssssasssssssssssassassssssaes 1 IL. STATEMENT OF FACTS anmnsnsissssssssnsisssssvesssssssssssisesisssssssesseississssssssssovessssionsosss 1 III. LEGAL ARGUMENT soousenesnsossenassnonenssonaensnsssonsusssnsssorssssnessssunssssssssnsnssssassensssonsnsssasssoxssssassssssns 3 A. Iv. DISPUTES FALLING WITHIN THE SCOPE OF THE FEDERAL ARBITRATION ACT MUST BE PATER TTT snc,0815055, 0,8, EST, SD, S59 5 SARA ES EH, B55 3 THE FAA GOVERNS THE ARBITRATION PROVISION .....ccoiuuiiiiiiiiieieeiiieie eens cess ase ee ens 4 THE VALIDITY AND ENFORCEABILITY OF THE ARBITRATION AGREEMENT MUST BE DECIDED BY THE ARBITRATOR .....uvviiiiiiiieeeiitieeeeesitte ee eesaeeeesetueseesssssas ae sssssseassssssesssssssssessss ssessssnssessannes 5 EVEN IF THE PARTIES HAD NOT DELEGATED THE GATEWAY ISSUE OF ARBITRABILITY, PLAINTIFF’S CLAIMS WOULD STILL BE SUBJECT TO ARBITRATION .....c..cocuiniiiiiniiiieiieciieneeene 6 Santander Is Entitled To Compal ATBIFGLION. um nisssinstinissn is s i in isis 6 DM Is Entitled To Compel AVDItration ................ccccoeeuiiiiieiiiiieieiieeeeeee e 7 The Arbitration Provision Encompasses Plaintiffs Claims for Relief ..............cc.ccccceee... 8 THIS LITIGATION SHOULD BE STAYED PENDING COMPLETION OF THE ARBITRATION.............. 10 CONCLUSTON sovussavsavsnnnssovsnsssvesnas sneer as esses ssssosses sm evess s esvmessms sass s svi sos sesssos semsse 10 i NOTICE OF MOTION AND MOTION TO COMPEL ARBITRATION AND STAY THE ACTION Y U | M O H A N D E S I L L P 63 3 We st Fi ft h St re et , Su it e 28 00 Lo s A n g e l e s , C A 9 0 0 7 1 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 TABLE OF AUTHORITIES Cases Allied-Bruce Terminix Cos. v. Dobson, 513 U.S. 265 (1995) .....oooviiiioee cece 4,5 AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011) eooeeiiieiiiiieieeie cece eee 1,9 AT&T Techs., Inc. v. Communications Workers, 475 U.S. 643 (1986) ......ccceeevveeeveeeiieieeeeeeieeenen. 8 Blackwell v. Robinson, NO. 12-cv-04329-JST, 2013 WL 1501477 (N.D. Cal. April 10, 2013) ......... 8 Boys Club of San Fernando Valley, Inc. v. Fid. & Deposit Co., 6 Cal. App. 4th 1266 (1992) ............ 6 Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440 (2000) .......ccocervriienieeieaieeiie eevee 9 Chiron Corp. v. Ortho Diagnostic Sys., 207 F.3d 1126 (9th Cir. 2000)........ccceeecuieroiieniienieeieeneeeieene 4 Citizens Bank v. Alafabco, Inc., 539 U.S. 52 (2003 ...........coociovieeeeieeeeeeeee eee 5 CompuCredit Corp. v Greenwood, 565 U.S. 95 (2012) ....oooiiiiiiiiieeieiieeieeie ceases eee 9 Cronus Invs., Inc. v. Concierge Servs., 35 Cal. 4th 376 (2005)..........cooveveeeeeee eee ee e e e, 3 Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213 (1985)... eee eee eee eee eee 3,6 First Options v. Kaplan, 514 U.S. 938 (1995) ......coi ieee eects even 6 Goldman v. KPMG LLP, 173 Cal. App.4th 209 (2009) .....c.cocerveiriirriieeeienieneeinie seers eevee 8 Granite Rock Co. v. Int’l Bhd. of Teamsters, 561 U.S. 287 (2010) .........c.ccoovvevvieiieeciieceeeeenn 5,6 Green Tree Fin. Corp.-Ala. v. Randolph, 531 U.S. 79 (2000) ....ccveeiuiiiiieiieeie eee 9 Howsam v. Dean Witter Reynolds 537 U.S. 79, 83-84 (2002) ..........ccocooiveeeeeeeeeeeeceeeeeeee eee, 5 Johnson v. W. Suburban Bank, 225 F.3d 366 (3d Cir. 2000) ........ccovieeiiiieeiieeieeeeeee cr er 9 KPMG LLP v. Cocchi 565 U.S. 18 (2011) o.oo eee eee eee eee eee eee eee eee eee aera e ee eee ene 4 Kramer v. Toyota Motor Corp., 705 F.3d 1122 (9th Cir. 2013) ..ccueeiiiiiiiieeie cece 8 Livingston v. Assocs. Fin., Inc., 339 F.3d. 553 (7th Cir. 2003) ...cceeeiiiiiiiiiienie eects 9 Marmet Health Care Ctr., Inc. v. Brown, 565 U.S. 530 (2012) ......ccccoovvvrvrrineeeeeeeeeeee, 3,9 een te teateetehe eh eeae ea te tanta et eate eh ene eh teat estates he eset eh eRe essen e antes en be eke seek tent estes en bees enbe eh ee ne atte nt este nt anne naan enene 9 Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, 473 U.S. 614 (1985) ...cccceviveiviniiennns 4,5,10 Moses H. Cone Mem’l Hosp. v. Mercury Const., 460 U.S. 1 (1983) ....ooovovioeeeeeeeeeeeeeeeeee n 3,10 Owens v. Intertec Design, Inc., 38 Cal. App. 4th 72 (1995) ...ccciiiiiieiiiiiieiee cece eee 5 ii NOTICE OF MOTION AND MOTION TO COMPEL ARBITRATION AND STAY THE ACTION Y U | M O H A N D E S I L L P 63 3 We st Fi ft h St re et , Su it e 28 00 Lo s A n g e l e s , C A 9 0 0 7 1 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Rent-A-Center, W., Inc. v. Jackson 561 U.S. 63 (2010) ......c.oooeioeeeeeeeeee eee eee eee eee eee e e e eeee s en 6 Rodriguez v. Am. Techs., Inc., 136 Cal. App. 4th 1110 (2006) ........c.oevoeeeeeeeee e e ee e e ee e ee e eens 4 Southland Corp. v. Keating, 465 U.S. 1 (1984) .....o.e ooo eee eee eee eee eee eee eee eraser eee ees 3 Sydnor v, Conseco Fin. Servicing Corp, 252 F.3d 302 (4th. Cit. 2001 )...csm0 sesmssosasnsss ss sunes nsssassssnsas 9 United Steelworkers v. Warrior & Gulf Navigation Co., 363 U.S. 574 (1960).......cccoevvvivniienieanenne. 8 Volt Info. Sciences, Inc. v. Bd. of Trs., 489 U.S. 468 (1989) .......oooe eee eeeeeeeeeeeeeeeeee seen 4 Statutes D ULS.C. § 2 eects seb eee sheet ebb nee b tbe sees tebe sheath ene eb abe se ene 4 GUL S.C. § 3thehhh eben eben 10 Cal. Code of Civ. PrOC. § 1281 onic cece eee ete eee eee saree stares erases ease ee ennas 5,10 Cal. Code of Civ. Proc. § 1281.2 o.oo cies e stares sabe ee eaae ee eaae ee eaneeennes 5 iii NOTICE OF MOTION AND MOTION TO COMPEL ARBITRATION AND STAY THE ACTION Y U | M O H A N D E S I L L P 63 3 We st Fi ft h St re et , Su it e 28 00 Lo s A n g e l e s , C A 9 0 0 7 1 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 MEMORANDUM OF POINTS AND AUTHORITIES I. INTRODUCTION In his First Amended Complaint (“FAC”), Plaintiff Emeka Victor Okwudili Peter (“Plaintiff”) alleges that he suffered injuries during the repossession of his vehicle. Plaintiff does not dispute that he defaulted on his payment obligations, nor does he dispute that the vehicle purchase agreement expressly permits the repossession of the vehicle in the event of payment default. Regardless, Plaintiff now brings this action against Defendants Santander Consumer USA Inc. (“Santander”), the finance lender for the vehicle, as well as DM California Holdings, Inc. (“DM”), the repossession agent, seeking to hold both parties liable under eight separate causes of action for the repossession at issue. 1 Plaintiff’s action, however, cannot proceed in this judicial forum. Long before Plaintiff commenced this action, he expressly agreed to arbitrate “[a]ny claim or dispute, whether in contract, tort, statute or otherwise... which arises out of or relates to... this contract or any resulting transaction or relationship (including any such relationship with third parties who do not sign this contract).” (emphasis added). Accordingly, in an action asserting various claims against Defendants for a repossession resulting from Plaintiff’s payment default under the vehicle purchase agreement, the parties’ voluntary agreement to arbitrate must be honored. Defendants respectfully request that the Court compel this action to binding arbitration and stay this litigation until completion of the arbitration. IL. STATEMENT OF FACTS On November 5, 2016, Plaintiff entered into a “Retail Installment Sale Contract - Simple Finance Charge (With Arbitration Provision)” (“RISC”) with Keyes Lexus to purchase the 2013 Toyota Prius at issue (“Vehicle”).2 Keyes Lexus concurrently assigned the RISC to Santander. Declaration of Amanda Van Haren (“Van Haren Decl.”) 9 4, Exhibit (“Ex.”) A, p. 1-4. 1 Santander and DM are collectively referred to in this Motion as “Defendants.” 2 This is the third action filed by Plaintiff against Santander concerning this repossession. On November 20, 2018, Plaintiff filed his first small claims action in Los Angeles Superior Court, Case No. 18STSC12974, which resulted in judgment being entered against Plaintiff and in favor of Santander. Subsequently, Plaintiff filed another small claims action against Santander. See Los Angeles Superior Court, Case No. 19STSC04321. 1 NOTICE OF MOTION AND MOTION TO COMPEL ARBITRATION AND STAY THE ACTION Y U | M O H A N D E S I L L P 63 3 We st Fi ft h St re et , Su it e 28 00 Lo s A n g e l e s , C A 9 0 0 7 1 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Notably, and as the title of the RISC itself plainly indicates, the RISC contains an arbitration provision. Specifically, immediately above Plaintiff’s signature block, the RISC states: Agreement to Arbitrate: By signing below, you agree that, pursuant to the Arbitration Provision on the reverse side of this contract, you or we may elect to resolve any dispute by neutral, binding arbitration and not by court action. Id. at 4, Ex. A, p. 2. The arbitration provision (“Arbitration Provision”) itself prominently displays the header “ARBITRATION PROVISION PLEASE REVIEW - IMPORTANT -- AFFECTS YOUR LEGAL RIGHTS” and “1. EITHER YOU OR WE MAY CHOOSE TO HAVE ANY DISPUTE BETWEEN US DECIDED BY ARBITRATION AND NOT IN COURT OR BY JURY TRIAL”. Id. Ex. A, p. 2 (emphasis in original). Pursuant to the arbitration provision, the parties agreed that: 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. Ex. A, p. 4 (emphasis added). Further, the arbitration provision 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 executed the RISC, which includes the Arbitration Provision. Id. The RISC executed by Plaintiff also includes the following provision concerning payment defaults: IF YOU PAY LATE OR BREAK YOUR OTHER PROMISES d. We may take the vehicle from you. If you default, we may take (repossess) the vehicle from you if we do so peacefully and the law allows it[.] 2 NOTICE OF MOTION AND MOTION TO COMPEL ARBITRATION AND STAY THE ACTION Y U | M O H A N D E S I L L P 63 3 We st Fi ft h St re et , Su it e 28 00 Lo s A n g e l e s , C A 9 0 0 7 1 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Van Haren Decl., Ex. A, p. 2-3. Plaintiff defaulted on his payments, which resulted in the repossession at issue as expressly set forth in the RISC. Van Haren Decl., 4, Ex. A, p. 2-3. Regardless, Plaintiff now claims that Defendants should be held liable under the following eight causes of action for alleged injuries stemming from the repossession at issue: (1) false imprisonment, (2) negligence, (3) assault, (4) battery, (5) intentional infliction of emotional distress, (6) negligent infliction of emotional distress, (7) violation of Business and Professions Code Section 17200, and (8) injunctive and declaratory relief. See generally, FAC. III. LEGAL ARGUMENT A. Disputes Falling Within the Scope of the Federal Arbitration Act Must Be Arbitrated The Federal Arbitration Act (“FAA”), codified at 9 U.S.C. § 1 ef seq., “reflects an emphatic federal policy in favor of arbitral dispute resolution.” Marmet Health Care Ctr., Inc. v. Brown, 565 U.S. 530, 533 (2012) (internal quotations omitted). When Congress enacted the FAA, it “declared a national policy favoring arbitration and withdrew the power of the states to require a judicial forum for the resolution of claims which the contracting parties agreed to resolve by arbitration.” Southland Corp. v. Keating, 465 U.S. 1, 10 (1984). The FAA “leaves no place for the exercise of discretion by a [trial] court, but instead mandates that [trial] courts shall direct the parties to proceed to arbitration on issues as to which an agreement has been signed.” Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 218 (1985) (emphasis in original). Any doubts as to arbitrability “should be resolved in favor of arbitration, whether the problem at hand is the construction of the contract language itself or an allegation of waiver, delay, or a like defense to arbitrability.” Moses H. Cone Mem’l Hosp. v. Mercury Const., 460 U.S. 1, 24-25 (1983). State courts, like federal courts, are mandated to enforce arbitration agreements falling under the FAA’s scope. Cronus Invs., Inc. v. Concierge Servs., 35 Cal. 4th 376, 384 (2005) (“The policy of enforceability established by Section 2 of the FAA is binding on state courts as well as federal courts.”). Indeed, “[a]greements to arbitrate that fall within the scope and coverage of the [FAA] must be enforced in state and federal courts. State courts, then, ‘have a prominent role to play as 3 NOTICE OF MOTION AND MOTION TO COMPEL ARBITRATION AND STAY THE ACTION Y U | M O H A N D E S I L L P 63 3 We st Fi ft h St re et , Su it e 28 00 Lo s A n g e l e s , C A 9 0 0 7 1 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 enforcers of agreements to arbitrate.” KPMG LLP v. Cocchi 565 U.S. 18, 19 (2011) (per curiam) (citations omitted). Under the FAA, a trial court’s task on a motion to compel arbitration is limited to answering two simple questions: (1) does a valid arbitration agreement exist between the parties; and (2) does the dispute at issue fall within the scope of the agreement. See 9 U.S.C. § 2; Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, 473 U.S. 614, 626-28 (1985); Allied-Bruce Terminix Cos. v. Dobson, 513 U.S. 265, 273-77 (1995); Chiron Corp. v. Ortho Diagnostic Sys., 207 F.3d 1126, 1130 (9th Cir. 2000). If the answer to both questions is “yes,” then arbitration must be compelled. B. The FAA Governs the Arbitration Provision As a preliminary matter, the Arbitration Provision at issue is governed by the FAA. Under the FAA, “parties [to an arbitration agreement] are generally free to structure their arbitration agreements as they see fit,” and may “specify by contract the rules under which that arbitration will be conducted.” Volt Info. Sciences, Inc. v. Bd. of Trs., 489 U.S. 468, 479 (1989). That is exactly what the parties did here: “[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.” Van Haren Decl., Ex. A, p. 4. The parties’ voluntary designation of the FAA as its governing law must be enforced. See, e.g., Rodriguez v. Am. Techs., Inc., 136 Cal. App. 4th 1110, 1122 (2006) (“[T]here is no ambiguity regarding the parties' intent. They adopted the FAA-all of it-to govern their arbitration. The FAA controls, including section 3 which requires the court to stay the judicial proceeding and compel arbitration . . . Thus, the court erred by denying ATI's motion to compel arbitration and stay the court proceeding as to plaintiffs and ATI. In accordance with the agreement of the parties, section 3 of the FAA required the court to compel arbitration between plaintiffs and ATI and to stay the court proceeding with respect to their disputes with each other.”) But even absent the parties’ express agreement, the FAA would nevertheless govern the Arbitration Provision. Pursuant to 9 U.S.C. section 2, the FAA governs any (1) written arbitration provision (2) in a contract evidencing a transaction “involving commerce.” 9 U.S.C. § 2 (“A written provision in any maritime transaction or a contract evidencing a transaction involving commerce to 4 NOTICE OF MOTION AND MOTION TO COMPEL ARBITRATION AND STAY THE ACTION Y U | M O H A N D E S I L L P 63 3 We st Fi ft h St re et , Su it e 28 00 Lo s A n g e l e s , C A 9 0 0 7 1 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 settle by arbitration a controversy thereafter arising out of such contract or transaction . . . shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.”) (emphasis added). Here, both requirements are satisfied. First, the Arbitration Provision is in writing. Second, the RISC, a vehicle purchase and finance contract, is indisputably a contract “involving commerce.” See Citizens Bank v. Alafabco, Inc., 539 U.S. 52, 58 (2003) (“No elaborate explanation is needed to make evident the broad impact of commercial lending on the national economy or Congress’ power to regulate that activity pursuant to the Commerce Clause.”); Dobson, 513 U.S. at 273 (“we conclude that the word ‘involving’ [in Section 2 of the FAA] is broad and is indeed the functional equivalent of ‘affecting.’”). Accordingly, the FAA governs the Arbitration Provision, and the Court must apply federal substantive law in interpreting the Arbitration Provision. Mitsubishi Motors Corp., 473 U.S. at p. 626 (“[ T]he first task of a court asked to compel arbitration of a dispute is to determine whether the parties agreed to arbitrate that dispute. The court is to make this determination by applying the federal substantive law of arbitrability, applicable to any arbitration agreement within the coverage of the Act.”).3 C. The Validity And Enforceability Of The Arbitration Agreement Must Be Decided By The Arbitrator Typically, the two questions under the FAA of (1) whether the parties agreed to arbitrate and (2) whether the dispute falls within the scope of the arbitration provision are answered by the court. See Granite Rock Co. v. Int’l Bhd. of Teamsters, 561 U.S. 287, 296-97 (2010); Howsam v. Dean Witter Reynolds 537 U.S. 79, 83-84 (2002). However, where an arbitration agreement expressly delegates to an arbitrator the decision concerning the enforceability and scope of the arbitration 8 Although the FAA governs the Arbitration Agreement, the result under California law is the same: arbitration must be compelled. Cal. Code of Civ. Proc. § 1281 (“A written agreement to submit to arbitration an existing controversy or a controversy thereafter arising is valid, enforceable and irrevocable, save upon such grounds as exist for the revocation of any contract.”). See also Id. § 1281.2 (“On petition of a party to an arbitration agreement alleging the existence of a written agreement to arbitrate a controversy and that a party thereto refuses to arbitrate such 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 . . . .); Owens v. Intertec Design, Inc., 38 Cal. App. 4th 72, 74-75 (1995) (reversing trial court’s denial of defendant’s petition to compel arbitration where arbitration agreement existed and plaintiff presented no evidence of grounds to revoke the agreement). 5 NOTICE OF MOTION AND MOTION TO COMPEL ARBITRATION AND STAY THE ACTION Y U | M O H A N D E S I L L P 63 3 We st Fi ft h St re et , Su it e 28 00 Lo s A n g e l e s , C A 9 0 0 7 1 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 agreement, the arbitrator - not the court - has exclusive authority to determine these issues. Rent-A- Center, W., Inc. v. Jackson 561 U.S. 63, 72 (2010); see also Granite Rock, 561 U.S. at 296; First Options v. Kaplan, 514 U.S. 938, 943 (1995). In Rent-A-Center, the United States Supreme Court specifically recognized that “parties can agree to arbitrate ‘gateway’ provisions of ‘arbitrability,” such as whether the parties agreed to arbitrate or whether their agreement covers a particular controversy.” Rent-A-Center, 561 U.S. at 68-69. If a court concludes that the parties intended such a delegation, its work is finished and arbitration must be compelled without addressing the merits of any challenge to arbitrability. Id. at 72; see also Byrd, 470 U.S. at 218 (“courts shall direct the parties to proceed to arbitration on issues as to which an arbitration agreement has been signed”) (emphasis in original). Here, the parties expressly agreed to arbitrate “[a]ny 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)...” Van Haren Decl., Ex. A, p. 4 (emphasis added). Asa result, it is the arbitrator, not the Court, who must consider whether Plaintiff’s claims are subject to arbitration. The Court’s role is limited to compelling arbitration so that an arbitrator may decide the ‘gateway’ issue of arbitrability. D. Even If The Parties Had Not Delegated The Gateway Issue Of Arbitrability, Plaintiffs Claims Would Still Be Subject To Arbitration The delegation clause above renders any further analysis of the arbitrability of Plaintiffs claims academic. However, even absent the delegation clause, Plaintiff is nevertheless required to arbitrate his claims against Defendants. 1. Santander Is Entitled To Compel Arbitration Ordinary state law principles of contract construction govern the analysis of whether the parties agreed to arbitrate and, hence, whether the parties should be compelled to arbitrate their claims. First Options, 514 U.S. at 944. Determining the parties’ intent to arbitrate is a question of law, and the parties’ intentions are generously construed in favor of arbitrability. Boys Club of San Fernando Valley, Inc. v. Fid. & Deposit Co., 6 Cal. App. 4th 1266, 1271-72 (1992). 6 NOTICE OF MOTION AND MOTION TO COMPEL ARBITRATION AND STAY THE ACTION Y U | M O H A N D E S I L L P 63 3 We st Fi ft h St re et , Su it e 28 00 Lo s A n g e l e s , C A 9 0 0 7 1 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Here, it is beyond dispute that Plaintiff expressly agreed to arbitrate “any” dispute with Santander, as assignee of the RISC. Specifically, Plaintiff agreed to arbitrate “[a]ny claim or dispute, whether in contract, tort statute or otherwise... 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)...” Van Haren Decl., Ex. A, p. 4 (emphasis added). Plaintiff made his intent to arbitrate against Santander - the finance lender and assignee of the RISC - objectively and verifiably clear by executing the RISC. Accordingly, there can be no serious dispute that the parties entered into a binding agreement to arbitrate their disputes. 2. DM Is Entitled To Compel Arbitration DM, just like Santander, is also entitled to compel arbitration. As a threshold matter, the express language of the Arbitration Provision permits DM to compel arbitration. Specifically, the Arbitration Provision states that “any claim or dispute ... which arises out of or relates to ... this contract or any resulting transaction or relationship (including any such relationship with third parties who do not sign this contract)...” is subject to arbitration. Van Haren Decl., Ex. A, p. 4 (emphasis added). Here, according to Plaintiff’s own admission, DM was hired by Santander to repossess the Vehicle. FAC, 4 6. That repossession was a direct result of Plaintiff breaching the RISC. In fact, the RISC expressly states that the Vehicle may be repossessed in the event of a payment default. Accordingly, DM is undoubtedly a “relationship with [a] third part[y]” “which relates to this [RISC].” This ends the analysis. But even if the Arbitration Provision did not include such specific language conferring DM the right to compel arbitration in its own right, the result would still be the same. Specifically, a non-party to an arbitration agreement can move to compel arbitration when the claims against it are: (1) “intertwined” with an underlying contract with an arbitration provision or (2) where the alleged misconduct is “interdependent” between a signatory defendant and non-signatory defendant. See 7 NOTICE OF MOTION AND MOTION TO COMPEL ARBITRATION AND STAY THE ACTION Y U | M O H A N D E S I L L P 63 3 We st Fi ft h St re et , Su it e 28 00 Lo s A n g e l e s , C A 9 0 0 7 1 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Goldman v. KPMG LLP, 173 Cal.App.4th 209, 221 (2009); Kramer v. Toyota Motor Corp., 705 F.3d 1122, 1128-29 (9th Cir. 2013). Here, both rationales for compelling arbitration are present. First, Plaintiff’s claims against DM are “intertwined” with an underlying contract with an arbitration provision, i.e., the RISC. Again, Plaintiff alleges that DM repossessed his Vehicle. That repossession, however, was a direct result of Plaintiff’s breach of the payment obligations set forth in the RISC, which is the same contract containing the Arbitration Provision. Second, the allegations against DM are also “interdependent” with Plaintiff's allegations against Santander. Specifically, Plaintiff alleges that “Santander hired/employed DM Holdings to reposes [sic] Plaintiff’s car[.] Plaintiff alleges that Santander and DM Holdings are vicariously liable to Plaintiff for misconduct of Doe 1 to Doe 3 including DM Holdings.” FAC, q 6. Stated differently, the claims at issue here are “intertwined” with the underlying RISC containing the Arbitration Provision, and arise from an “interdependent” series of events that led to the repossession of Plaintiff’s vehicle: Plaintiff’s default, which led to the hiring of DM to repossess the Vehicle. Accordingly, DM - like Santander - is entitled to compel arbitration of this action. See Blackwell v. Robinson, NO. 12-cv-04329-JST, 2013 WL 1501477 (N.D. Cal. April 10, 2013) (repossession agent compelling arbitration pursuant arbitration provision in note and security agreement: “Plaintiff's claims against those Defendants, which arise directly out of the contract and the repossession performed under its authority, must also be adjudicated by arbitration.”). 3. The Arbitration Provision Encompasses Plaintiff’s Claims for Relief Once it has been determined that the parties entered into a binding arbitration agreement, “an order to arbitrate the particular grievance should not be denied unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute.” AT&T Techs., Inc. v. Communications Workers, 475 U.S. 643, 650 (1986) (quoting United Steelworkers v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582-83 (1960)). Where the arbitration agreement is broadly-worded, there is a heightened presumption of arbitrability such that “[i]n the absence of any express provision excluding a particular grievance from arbitration, [ | only the most forceful evidence of a purpose to exclude the claim from arbitration can prevail[.]” Id. 8 NOTICE OF MOTION AND MOTION TO COMPEL ARBITRATION AND STAY THE ACTION Y U | M O H A N D E S I L L P 63 3 We st Fi ft h St re et , Su it e 28 00 Lo s A n g e l e s , C A 9 0 0 7 1 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Here, the Arbitration Provision in the RISC contained clear language requiring Plaintiff to arbitrate “any claim or dispute whether in contract, tort, or otherwise (including the interpretation and scope of [the] Arbitration Provision, and the arbitrability of the claim or dispute) . . . which arises out of or relates to... this contract or any resulting transaction or relationship (including any such relationship with third parties who do not sign this contract...).” Van Haren Decl., Ex. A, p. 4. Plaintiff’s action - and each of the eight causes of action asserted within it - is predicated on alleged damages resulting from the repossession of his Vehicle. As examined above, the repossession was a direct result of Plaintiff breaching his payment obligations under the RISC. In fact, the RISC expressly puts Plaintiff on notice that breach of the payment obligations may result in repossession of the Vehicle: IF YOU PAY LATE OR BREAK YOUR OTHER PROMISES d. We may take the vehicle from you. If you default, we may take (repossess) the vehicle from you if we do so peacefully and the law allows it[.] Van Haren Decl., Ex. A, p. 3-4. Accordingly, in an action predicated on a repossession, where Plaintiff asserts tort and statutory claims, and where Plaintiff agreed to arbitrate by expressly executing the RISC containing the Arbitration Provision, arbitration must be compelled. Indeed, each of these reasons alone is sufficient to compel arbitration. Collectively, they establish with certitude that Plaintiff’s claims are within the scope of the Arbitration Provision.* * Courts throughout the country, including the United States Supreme Court, routinely enforce arbitration agreements in consumer contracts like the one here. See, e.g., CompuCredit Corp. v Greenwood, 565 U.S. 95 (2012) (credit card agreement); AT&T Mobility LLC. v. Concepcion, 563 U.S. 333 (2011) (cellular phone services contract); Marmet Health Care Ctr., Inc. v. Brown, 565 U.S. 533 (2012) (nursing home agreements); Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440 (2006) (consumer loan agreement); Green Tree Fin. Corp.-Ala. v. Randolph, 531 U.S. 79 (2000) (finance contract for purchase of mobile home); Mission Viejo Emergency Medical Assoc. v. Beta Healthcare Group, 197 Cal. App. 4th 1146 (2011) (insurance contract); Livingston v. Assocs. Fin., Inc., 339 F.3d. 553 (7th Cir. 2003) (consumer loan agreement); Sydnor v. Conseco Fin. Servicing Corp., 252 F.3d 302 (4th Cir. 2001) (home improvement loan agreement); Johnson v. W. Suburban Bank, 225 F.3d 366 (3d Cir. 2000) (consumer loan agreement). 9 NOTICE OF MOTION AND MOTION TO COMPEL ARBITRATION AND STAY THE ACTION Y U | M O H A N D E S I L L P 63 3 We st Fi ft h St re et , Su it e 28 00 Lo s A n g e l e s , C A 9 0 0 7 1 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 E. This Litigation Should Be Stayed Pending Completion of the Arbitration If a valid arbitration agreement exists, the FAA mandates the court to stay the civil action “until such arbitration has been had in accordance with the terms of the agreement.” 9 U.S.C. § 3; Moses H. Cone, 460 U.S at 26 (“state courts, as much as federal courts, are obliged to grant stays of litigation under § 3 of the [FAA].”); Mitsubishi Motors Corp., 473 U.S. at 639-40.’ Here, staying the litigation is not only mandated by law, but would promote judicial economy by avoiding the multiplicity of claims, discovery, costs and judgments that could result from concurrent proceedings in two different forums. Accordingly, this litigation should be stayed in its entirety pending the completion of the arbitration of Plaintiff’s claims. IV. CONCLUSION For the foregoing reasons, Defendants respectfully request that the Court: (1) grant their Motion in its entirety and compel this action to arbitration; and (2) stay this litigation in its entirety pending completion of the arbitration. DATED: June 25, 2020 YU | MOHANDESI LLP Jordan S. Yu Serje P. Havandjian Attorneys for Defendants Santander Consumer USA and DM California Holdings, Inc. > California law also mandates a stay of this action: “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.” Cal. Code of Civ. Proc. § 1281.4 (emphasis added). 10 NOTICE OF MOTION AND MOTION TO COMPEL ARBITRATION AND STAY THE ACTION Y U | M O H A N D E S I L L P 63 3 We st Fi ft h St re et , Su it e 28 00 Lo s A n g e l e s , C A 9 0 0 7 1 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PROOF OF SERVICE I am a resident of the State of California, over the age of eighteen years, and not a party to the within action. My business address is Yu | Mohandesi LLP, 633 West Fifth Street, Suite 2800, Los Angeles, CA 90071. On June 25, 2020, I served the following document(s) by the method indicated below: DEFENDANTS’ NOTICE OF MOTION AND MOTION TO COMPEL ARBITRATION AND STAY THE ACTION; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF by transmitting via facsimile on this date the document(s) listed above to the fax number(s) set forth below. The transmission was completed before 5:00 p.m. and was reported complete and without error. Service by fax was ordered by the Court. The transmitting fax machine complies with Cal.R.Ct 2.301(3). by placing the document(s) listed above in a sealed envelope with postage thereon fully prepaid, in the United States mail at Los Angeles, California addressed as set forth below. Iam readily familiar with the firm’s practice of collection and processing of correspondence for mailing. Under that practice, it would be deposited with the U.S. Postal Service on that same day with postage thereon fully prepaid in the ordinary course of business. by placing the document(s) listed above in a sealed envelope(s) and by causing personal delivery of the envelope(s) to the person(s) at the address(es) set forth below. by having the document(s) listed above hand-delivered to the person(s) at the address(es) set forth below. by placing the document(s) listed above in a sealed envelope(s) and consigning it to an express mail service for guaranteed delivery on the next business to the address(es) set forth below. by emailing the document(s) listed above to the person(s) at the address(es) set forth below. Plaintiff in Pro Per Emeka Victor Okwudili Peter 13270 Moorpark Street, #1 Sherman Oaks, CA 91423 I declare under penalty of perjury under the laws of the State of California that the above is true and correct. Executed on June 25, 2020, at Los Angeles County, California. Lune L2z- DIANA WOO -1- PROOF OF SERVICE
