Aysan Walsh vs Santa Barbara Automotive LTD et al

Case Number

24CV04105

Case Type

Hearing Date / Time

Fri, 10/31/2025 - 10:00

Nature of Proceedings

4 Motions to Compel; CMC

Tentative Ruling

For the reasons set forth herein, Defendants Santa Barbara Automotive, Tim Brooks, Scott Westbrook, and Bill Fogg’s Motions to Compel Arbitration are granted.  This action is ordered stayed, including as to Jaguar Land Rover North America, pending the completion of arbitration.

Background:

This action commenced on July 22, 2024, by the filing of the complaint by plaintiff Aysan Walsh (Walsh) against defendants Santa Barbara Automotive, LTD. dba Santa Barbara Auto Group (SBAG), Jaguar Land Rover North America, LLC (Jaguar), Tim Brooks (Brooks), Scott Westbrook (Westbrook), and Bill Fogg (Fogg) for: (1) Violation of Song Beverly Act – Breach of Express Warranty, (2) Violation of Song Beverly Act – Breach of Implied Warranty, (3) Violation of Song Beverly Act section 1793.2, (4) Conversion, (5) Unjust Enrichment, (6) Breach of Statutory Duty, and (7) Unfair Business Practices.

As alleged in the complaint:

On February 27, 2021, SBAG sold Walsh a Land Rover Vehicle (the “vehicle”) that was manufactured by Jaguar for $53,062.40, for which SBAG received from Walsh $20,000.00 in cash. (Compl., ¶¶ 1, 3, 18.) The remainder of the purchase price was financed by a loan from SBAG to Walsh. (Id. at ¶ 1.) The purchase was pursuant to a written Purchase Agreement. (Id. at ¶ 18.)

The vehicle malfunctioned within a few months after purchase and on May 21, 2021, Walsh retuned the vehicle to SBAG, which after multiple attempts could not repair the defect. (Compl., ¶¶ 1, 24.) Acknowledging that under California law that they were obligated to repurchase the vehicle, SBAG took possession of the vehicle but failed to repurchase it, keeping the vehicle, Walsh’s money, and Walsh has been forced to continue making monthly payments on the loan as well as continue paying for insurance and registration. (Ibid.)

Brooks was at all relevant times a Service Manager for Jaguar, Land Rover, Acura, and SBAG, and acted on behalf of SBAG. (Compl., ¶ 6.)

Westbrook was at all relevant times a General Manager for Jaguar, Land Rover, Acura, and SBAG, and acted on behalf of SBAG. (Compl., ¶ 7.)

Fogg was at all relevant times a General Manager for SBAG and acted on behalf of SBAG. (Compl., ¶ 8.)

On December 5, 2024, Jaguar answered the complaint with a general denial and 35 affirmative defenses.

On December 6, 2025, SBAG, Brooks, Westbrook, and Fogg (collectively the “moving defendants”) answered the complaint with general denials and each asserting the same 31 affirmative defenses. As relevant here, the fifteenth affirmative defense is that the dispute is subject to an arbitration agreement.

On July 10, 2025, the moving defendants each filed the present motions to compel arbitration and stay action, pursuant to an arbitration agreement contained in the Retail Installment Sale Contract. Jaguar did not file a motion to compel arbitration.

Walsh opposes the motion arguing that moving defendants have failed to meet their burden of presenting admissible evidence of any enforceable arbitration agreement and that the arbitration agreement is both procedurally and substantively unconscionable. Walsh also argues that her complaint does not arise from the Sale Contract and is therefore not subject to arbitration.

Analysis:

“California law, like federal law, favors enforcement of valid arbitration agreements.” (Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 97.)

“Under both federal and California state law, arbitration is a matter of contract between the parties.” (Badie v. Bank of America (1998) 67 Cal.App.4th 779, 787.)

Arbitration agreements are valid and enforceable under both California and Federal Law. “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.” (Code Civ. Proc., § 1281.)

The arbitration agreement in question is contained in the Retail Installment Sale Contract, dated February 27, 2021 (the “Contract”).

1. Existence of the Arbitration Agreement.

“General principles of contract law determine whether the parties have entered a binding agreement to arbitrate.” (Craig v. Brown & Root, Inc. (2000) 84 Cal.App.4th 416, 420.) “The party seeking arbitration bears the burden of proving the existence of an arbitration agreement, and the party opposing arbitration bears the burden of proving any defense, such as unconscionability.” (Pinnacle Museum Tower Assn. v. Pinnacle Market Development (US), LLC (2012) 55 Cal.4th 223, 236.)

The preliminary question that must be addressed is the existence of the arbitration agreement. Defendants have provided a copy of the Contract.

The arbitration agreement in question reads:

“ARBITRATION PROVISION

PLEASE REVIEW • IMPORTANT • AFFECTS YOUR LEGAL RIGHTS

1. EITHER YOU OR WE MAY CHOOSE TO HAVE ANY DISPUTE BETWEEN US DECIDED BY ARBITRATION AND NOT IN COURT OR BY JURY TRIAL.

2. IF A DISPUTE IS ARBITRATED, YOU WILL GIVE UP YOUR RIGHT TO PARTICIPATE AS A CLASS REPRESENTATIVE OR CLASS MEMBER ON ANY CLASS CLAIM YOU MAY HAVE AGAINST US INCLUDING ANY RIGHT TO CLASS ARBITRATION OR ANY CONSOLIDATION OF INDIVIDUAL ARBITRATIONS.

3. DISCOVERY AND RIGHTS TO APPEAL IN ARBITRATION ARE GENERALLY MORE LIMITED THAN IN A LAWSUIT, AND OTHER RIGHTS THAT YOU AND WE WOULD HAVE IN COURT MAY NOT BE AVAILABLE IN ARBITRATION.

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. If federal law provides that a claim or dispute is not subject to binding arbitration, this Arbitration Provision shall not apply to such claim or dispute. Any claim or dispute is to be arbitrated by a single arbitrator on an individual basis and not as a class action. You expressly waive any right you may have to arbitrate a class action. You may choose the American Arbitration Association, 1633 Broadway, 10th Floor, New York, New York 10019 (www.adr.org), or any other organization to conduct the arbitration subject to our approval. You may get a copy of the rules of an arbitration organization by contacting the organization or visiting its website.

Arbitrators shall be attorneys or retired judges and shall be selected pursuant to the applicable rules. The arbitrator shall apply governing substantive law and the applicable statute of limitations. The arbitration hearing shall be conducted in the federal district in which you reside unless the Seller-Creditor is a party to the claim or dispute, in which case the hearing will be held in the federal district where this contract was executed. We will pay your filing, administration, service or case management fee and your arbitrator or hearing fee all up to a maximum of $5000, unless the law or the rules of the chosen arbitration organization require us to pay more. The amount we pay may be reimbursed in whole or in part by decision of the arbitrator if the arbitrator finds that any of your claims is frivolous under applicable law. Each party shall be responsible for its own attorney, expert and other fees, unless awarded by the arbitrator under applicable law. If the chosen arbitration organization’s rules conflict with this Arbitration Provision, then the provisions of this Arbitration Provision shall control. Any 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. Any award by the arbitrator shall be in writing and will be final and binding on all parties, subject to any limited right to appeal under the Federal Arbitration Act. You and we retain the right to seek remedies in small claims court for disputes or claims within that court’s jurisdiction, unless such action is transferred, removed or appealed to a different court. Neither you nor we waive the right to arbitrate by using self-help remedies, such as repossession, or by filing an action to recover the vehicle, to recover a deficiency balance, or for individual injunctive relief. Any court having jurisdiction may enter judgment on the arbitrator’s award. This Arbitration Provision shall survive any termination, payoff or transfer of this contract. If any part of this Arbitration Provision, other than waivers of class action rights, is deemed or found to be unenforceable for any reason, the remainder shall remain enforceable. If a waiver of class action rights is deemed or found to be unenforceable for any reason in a case in which class action allegations have been made, the remainder of this Arbitration Provision shall be unenforceable.” (Mayo Decl., ¶ 2 & Exh. B (Misidentified as Exhibit A in the declaration.).)

The Contract is signed by Welsh and a representative of SBAG.

Walsh argues that the declaration of moving defendants’ attorney, James P. Mayo, who was not a party to the Contract, is insufficient for purposes of authenticating the Contract.

By way of declaration, Walsh declares that she was not aware of signing an arbitration agreement and that no person at SBAG ever discussed or mentioned that by signing the agreement Walsh was agreeing to arbitration. (Walsh Decl., ¶ 3.) She also declares that she does not recall signing the arbitration agreement and does not understand what signing the agreement would mean. (Ibid.)

The fact of whether or not plaintiff read and understood the agreement is not dispositive. “An arbitration clause within a contract may be binding on a party even if the party never actually read the clause.” (Pinnacle Museum Tower Assn. v. Pinnacle Market Development (US), LLC, supra, 55 Cal.4th at p. 236.)

Significantly, Walsh does not affirmatively declare that she did not sign the arbitration agreement or that the signature is not hers.

“For purposes of a petition to compel arbitration, it is not necessary to follow the normal procedures of document authentication. “ ‘[T]he court shall order the petitioner and the respondent to arbitrate the controversy if it determines that an agreement to arbitrate the controversy exists. . . .’ ” [Citation.] The statute does not require the petitioner to introduce the agreement into evidence. A plain reading of the statute indicates that as a preliminary matter the court is only required to make a finding of the agreement’s existence, not an evidentiary determination of its validity.” (Condee v. Longwood Management Corp. (2001) 88 Cal.App.4th 215, 218 – 219.)

Here, moving defendants have met their burden of showing the existence of an arbitration agreement between Walsh and SBAG. Further, moving defendants have shown, and Walsh’s complaint confirms, that Walsh’s claims are subject to the arbitration agreement. Despite Walsh’s arguments that her claims fall outside of the arbitration agreement, the agreement is very broad and is applicable to: “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.” (Arbitration Agreement.) Clearly, this action arises out of or relates to the purchase and condition of the subject vehicle.

Walsh is correct, and the moving defendants do not dispute, that Jaguar was not a party to the arbitration agreement and cannot invoke it or be bound by it. (Ford Motor Warranty Cases (2025) 17 Cal.5th 1122.) That does not mean that it is invalidated as to the moving defendants. This will be further addressed below.

The burden now shifts to Walsh.

2. Federal Arbitration Act.

Moving defendants argue that the FAA governs the arbitration agreement. Walsh does not dispute that the FAA controls.

“The party asserting the FAA bears the burden to show it applies by presenting evidence establishing the contract with the arbitration provision has a substantial relationship to interstate commerce.” (Carbajal v. CWPCS, Inc. (2016) 245 Cal.App.4th 227, 234.) “In determining whether the employment agreement involved interstate commerce, the parties’ subjective intent is not the determining factor. “ ‘[E]videncing a transaction involving commerce’ ” (9 U.S.C. § 2) simply means that “ ‘the ‘transaction’ in fact ‘involv[e]s’ interstate commerce, even if the parties did not contemplate an interstate commerce connection.’ ” [Citation.]” (Giuliano v. Inland Empire Personnel, Inc. (2007) 149 Cal.App.4th 1276, 1286.)

The United States Supreme Court has “interpreted the term ‘involving commerce’ in the FAA as the functional equivalent of the more familiar term ‘affecting commerce’—words of art that ordinarily signal the broadest permissible exercise of Congress’ Commerce Clause power. [Citation.]” (The Citizens Bank v. Alafabco, Inc. (2003) 539 U.S. 52, 56.) Under this broad interpretation, “application of the FAA [is not] defeated because the individual [transaction], taken alone, did not have a ‘substantial effect on interstate commerce.’ [Citation.] Congress’ Commerce Clause power ‘may be exercised in individual cases without showing any specific effect upon interstate commerce’ if in the aggregate the economic activity in question would represent ‘a general practice . . . subject to federal control.’ [Citations.] Only that general practice need bear on interstate commerce in a substantial way. [Citations.]” (Id. at pp. 56-57.)

In the absence of a substantial relationship to interstate commerce “the language of the Agreement, not an analysis of interstate commerce, dictates the applicable law.” (Valencia v. Smyth (2010) 185 Cal.App.4th 153, 179.)

Here, the parties entered into an agreement that any disputes will be determined by arbitration under the FAA. This agreement alone is sufficient to determine that the FAA is applicable to the arbitration.

3. Unconscionability.

“The burden of proving unconscionability rests upon the party asserting it.” (OTO, L.L.C. v. Kho (2019) 8 Cal.5th 111, 126.)

Walsh argues that the arbitration agreement is both procedurally and substantively unconscionable.

“Unconscionable arbitration agreements are not enforceable.” (Wherry v. Award, Inc. (2011) 192 Cal.App.4th 1242, 1245.) “To be voided on this ground, the agreement must be both procedurally and substantively unconscionable.” (Ibid.) Procedural unconscionability focuses on oppression or surprise due to unequal bargaining power: substantive unconscionability on overly harsh or one-sided results. (Sonic-Calabasas A, Inc. v. Moreno (2013) 57 Cal. 4th 1109.) “But they need not be present to the same degree.” (Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 114.) Rather, the court invokes a “sliding scale” to determine unconscionability: “The more substantively oppressive the contract term, the less evidence of procedural unconscionability is required to come to the conclusion that the term is unenforceable, and vice versa.” (Ibid.) The burden of proving unconscionability rests upon the party asserting it.” (OTO, L.L.C. v. Kho (2019) 8 Cal.5th 111, 126.) Unconscionability is a question of law. (Malone v. Superior Court (2014) 226 Cal.App.4th 1551, 1562.)

After accurately quoting legal authorities, Walsh’s argument regarding procedural unconscionability is summarized in one paragraph:

“Here, the only evidence proffered by the moving Defendants is an unauthenticated agreement which is clearly a preprinted form, allegedly with a purported arbitration provision included within its text. Moving Defendants have provided no evidence that any such arbitration provision was specifically negotiated, and it was clearly offered by an automobile dealer “ ‘on a take-it-or-leave-it basis’ ” if the customer wished to purchase the vehicle being offered. In fact, the moving Defendants have offered no evidence whatsoever as to the formation of the alleged agreement. Plaintiff confirms that the dealer never pointed out any arbitration clause offered any alternatives for whether Plaintiff wished to agree to give up her rights and instead to arbitrate.” (Opp., p. 9, ll. 14-22.)

In this action, as in Sanchez v. Valencia Holding Co., LLC (2015) 61 Cal.4th 899 (Sanchez), which included a similar arbitration agreement associated with the purchase of a vehicle: “[T]he adhesive nature of the contract is sufficient to establish some degree of procedural unconscionability. Yet “ ‘a finding of procedural unconscionability does not mean that a contract will not be enforced, but rather that courts will scrutinize the substantive terms of the contract to ensure they are not manifestly unfair or one-sided.’ ” (Id. at p. 915.)

“[T]he application of unconscionability doctrine to an arbitration clause must proceed from general principles that apply to any contract clause. In particular, the standard for substantive unconscionability - the requisite degree of unfairness beyond merely a bad bargain - must be as rigorous and demanding for arbitration clauses as for any contract clause.” (Sanchez, supra, 61 Cal.4th at p. 912.)

The court does not find the arbitration agreement substantively unconscionable. Both Walsh and the moving defendants have the right to arbitration; Walsh has the ability to participate in the selection of the arbitrator; Walsh and the moving defendants are subject to the same arbitration rules and procedures; Venue is in the federal district where either the contract was executed or where Walsh resides; The amount of liability is not limited; and SBAG will pay the arbitration filing and administration fees up to a maximum of $5,000.00, unless the rules of the arbitral forum otherwise provide. The agreement does not, despite her claim to the contrary, require Walsh to pay excessive fees and costs.

Walsh has not met her burden of showing that the arbitration agreement is unconscionable. Arbitration will be ordered.

As noted above, Jaguar is not a party to the arbitration agreement and did not move to compel arbitration. As such, Walsh cannot be ordered to arbitrate her claims against Jaguar.

“If the court determines that a party to the arbitration is also a party to litigation in a pending court action or special proceeding with a third party as set forth under subdivision (c), the court (1) may refuse to enforce the arbitration agreement and may order intervention or joinder of all parties in a single action or special proceeding; (2) may order intervention or joinder as to all or only certain issues; (3) may order arbitration among the parties who have agreed to arbitration and stay the pending court action or special proceeding pending the outcome of the arbitration proceeding; or (4) may stay arbitration pending the outcome of the court action or special proceeding.” (Code Civ. Proc., § 1281.2, subd. (d). Italics added.)

Despite Walsh’s argument that the court should deny arbitration because of the possibility of inconsistent rulings, the court does not anticipate that occurring. It would be fundamentally unfair to deprive a party of the right to arbitrate, under a valid arbitration agreement, simply because the other side included a party that is not part of the arbitration agreement. As such, the court will order Walsh to arbitration with the moving parties and will stay the current action pending the outcome of the arbitration.