Compelling Arbitration: Trial Court Showed “Abuse of Discretion” in Siding with Fiat Chrysler

Knight Law Group has been on the forefront of advocating for consumers both in the trial courts, and in the Court of Appeals when the trial courts get it wrong.

For years, auto manufacturers have attempted to keep consumer’s lemon law claims out of public scrutiny by compelling lawsuits into private arbitration even though the consumer never agreed to arbitrate with the manufacturer in the first place. In an attempt to convince courts otherwise, the auto manufacturers have relied on someone else’s arbitration clause: the dealership’s. Since 2020, Knight Law Group has been fighting to keep their client’s claims where they belong: in court before a judge and a jury of their peers.

Knight Law Group has consistently led the way in its litigation practice to dispel a common, but significant misunderstanding of a Court of Appeals opinion in Felisilda v. FCA US LLC (2020) 53 Cal. App. 5th 486 that auto manufacturers have relied on to sweep their dirt under the rug. In Felisilda, the plaintiffs sued a dealership (with whom the plaintiffs agreed to arbitrate) and the auto manufacturer (with whom they hadn’t agreed to arbitrate). The dealership moved to compel arbitration but not the manufacturer. In that specific circumstance, the Court of Appeals relied upon a theory of equitable estoppel to compel both the claims against the dealership and auto manufacturer because they were “intertwined.”

Knight Law Group’s efforts don’t end with the trial courts. In 2023, the Court of Appeals published Ford Motor Warranty Cases (2023) 89 Cal.App.5th 1324 which was another appeal litigated by Knight Law Group. There the Court of Appeal ruled an auto manufacturer who was not a signatory to the arbitration agreement could not rely on a non-party dealership’s arbitration clause between the dealership and the consumer. Since then, Knight Law Group has been moving trial courts to reconsider their orders compelling arbitration in light of this new development in the law. While most courts recognize the impact of Ford Motor Warranty Cases on their prior decisions and reverse course, some do not.

Recently, the Court of Appeal for the Second District released an unpublished opinion in the matter of Contreras v. Superior Court (Case No. B331737) which was brought by Knight Law Group. In that case, the plaintiff only sued an auto manufacturer, but not the dealership. Relying on a non-party dealership’s arbitration clause and Felisilda, the trial court compelled arbitration. Plaintiff moved to reconsider the trial court’s previous ruling in light of Ford Motor Warranty Cases but the trial court still kept the case in arbitration anyways.

Knight Law Group appealed the decision denying plaintiff’s motion for reconsideration, and the Court of Appeal agreed. The Court of Appeal found that the trial court had abused its discretion in failing to reverse course. After giving the trial court an opportunity to explain its position before the Court of Appeals, the appellate court ordered the trial court to enter a new order granting plaintiff’s motion for reconsideration to get the case back where it belongs.

Read the opinion here.

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