Grant v. Santander Consumer USA, N.A.

• Court: District Court, N.D. California
• Decided: April 27, 2023
• Docket: 3:22-cv-04434
• Status: Unknown

Opinion

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 JEFFREY GRANT, Case No. 22-cv-04434-JD

8 Plaintiff, ORDER RE ARBITRATION v. 9

10 PAR, INC. et al., Defendants. 11

12 In this case challenging the manner in which defendants repossessed plaintiff’s car, 13 defendant PAR, Inc. has moved to compel arbitration. Dkt. No. 42. The parties’ familiarity with 14 the record is assumed, and arbitration is denied. 15 “Arbitration is a matter of contract and a party cannot be required to submit to arbitration 16 any dispute which he has not agreed so to submit.” AT & T Technologies, Inc. v. Communications 17 Workers of America, 475 U.S. 643, 648 (1986) (quotations and citation omitted). PAR 18 acknowledges that it “had no direct contract with plaintiff” and “hence is not a signatory to an 19 arbitration provision” with plaintiff. Dkt. No. 42 at 9. Even so, PAR says that it may compel 20 arbitration as an “agent of Santander” under the arbitration clause in plaintiff’s Retail Installment 21 Sale Contract, id. at 10. 22 The point is not well taken. To start, PAR’s agreement with Santander, which PAR 23 submitted in support of its arbitration motion, plainly demonstrates that PAR was an independent 24 contractor of Santander, and not an agent. See Dkt. No. 42-2 at ECF p. 24 (PAR “shall at all times 25 and for all purposes[] constitute an independent contractor,” and “nothing in” the agreement “shall 26 be deemed to create an agency . . . relationship” between Santander and PAR). Even assuming 27 purely for discussion that PAR were an agent of Santander, the plain language of the arbitration 1 arbitration agreement with the plaintiff. Dkt. No. 42-1 at ECF p. 11. That contract is between 2 plaintiff as a co-buyer and Daly City Mitsubishi as the seller-creditor. The arbitration provision in 3 the contract provides in relevant part that “any claim or dispute . . . between you and us or our . . . 4 agent . . . or assigns, which arises out of or relates to . . . this contract or any resulting transaction 5 or relationship . . . shall, at your or our election, be resolved by neutral, binding arbitration.” Id. 6 Both parties have submitted the same copy of the arbitration provision which shows that Daly City 7 Mitsubishi assigned its interest in the contract to Santander Consumer USA. See id. 8 Consequently, only Daly City Mitsubishi (and possibly Santander Consumer USA, as its assignee) 9 had any contractual agreement to arbitrate with plaintiff. Nothing in the contract indicates that 10 plaintiff also agreed to arbitrate with Daly City Mitsubishi’s assignee’s agent, which is what PAR 11 is now contending it is. Simply put, the plain language of the contract does not support PAR’s 12 position that it has the right to enforce this arbitration provision against plaintiff Grant, even 13 though PAR was not a signatory to the agreement. 14 PAR suggests in the alternative that it may enforce this arbitration provision against 15 plaintiff under the “doctrine of equitable estoppel,” Dkt. No. 42 at 10-11. Not so. As the United 16 States Supreme Court has observed, “[g]enerally, in the arbitration context, ‘equitable estoppel 17 allows a nonsignatory to a written agreement containing an arbitration clause to compel arbitration 18 where a signatory to the written agreement must rely on the terms of that agreement in asserting its 19 claims against the nonsignatory.’” GE Energy Power Conversion France SAS, Corp. v. 20 Outokumpu Stainless USA, LLC, 140 S. Ct. 1637, 1644 (2020). Under California law, “[t]he sine 21 qua non for allowing a nonsignatory to enforce an arbitration clause based on equitable estoppel is 22 that the claims the plaintiff asserts against the nonsignatory are dependent on or inextricably 23 bound up with the contractual obligations of the agreement containing the arbitration clause.” 24 Goldman v. KPMG, LLP, 173 Cal. App. 4th 209, 213-14 (2009). 25 That is not the case here. The gravamen of plaintiff’s complaint goes to the manner in 26 which his car was repossessed by defendants PAR and Daybreak Metro. He alleges that those 27 defendants failed to carry out the repossession in a peaceful and lawful manner, and that they 1 Practices Act, and California Commercial Code § 9609, and committed the common law tort of 2 || conversion. These causes of action do not “rely on the terms of” the Retail Installment Sale 3 || Contract, GE Energy, 140 S. Ct. at 1644, and plaintiffs claims against PAR and Daybreak Metro 4 || are not “dependent on or inextricably bound up with the contractual obligations of” the Retail 5 Installment Sale Contract, Goldman, 173 Cal. App. 4th at 213-14. 6 PAR made a cursory mention in a reply brief that it should also be permitted to enforce the 7 arbitration agreement as a third-party beneficiary. Dkt. No. 48 at 4. An argument raised for the 8 || first time in a reply need not be considered, and the point lacks merit in any event. “A third party 9 || may only assert rights under a contract if the parties to the agreement intended the contract to 10 || benefit the third party.” Murphy v. DirecTV, Inc., 724 F.3d 1218, 1233-34 (9th Cir. 2013). PAR 11 has failed to meet its burden to show that that was the case here. See id. As the circuit observed in 12 || Murphy, “(t]he mere fact that a contract results in benefits to a third party does not render that 13 || party a ‘third party beneficiary.’” Jd. PAR has not shown anything more than that. 14 Defendant PAR, Inc.’s motion to compel arbitration, Dkt. No. 42, is consequently denied. 3 15 IT IS SO ORDERED. a 16 || Dated: April 27, 2023

18 JAME NATO 19 Unitedfftates District Judge 20 21 22 23 24 25 26 27 28