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Two Courts of Appeal Repudiate Their Earlier Decisions
Third District Now Says Manufacturer Cannot Force Arbitration Based on Contract Between Car Dealer and Buyer; Div. Six’s Previous Minority View on Appealability of Magistrate’s Order Lowering Charge Becomes Holding
By a MetNews Staff Writer
Two courts of appeal yesterday abandoned positions they had taken earlier, with the Third District now holding that a manufacturer of an allegedly defective vehicle may not invoke an arbitration clause in a contract between a dealership and a purchaser, and Div. Six of this district declaring that the People may appeal from an order following a preliminary hearing reducing a felony “wobbler” to a misdemeanor.
The Third District, in an opinion by Justice Jonathan K. Renner, joined in by Presiding Justice Laurie M. Earl and Justice Harry E. Hull Jr., repudiated the district’s July 24, 2020 holding in Felisilda v. FCA US LLC. That opinion was authored by Justice Andrea L. Hoch, with Acting Presiding Justice Ronald B. Robie and Justice William J. Murray Jr. concurring.
Hoch reasoned that because the purchasers “expressly agreed to arbitrate claims arising out of the condition of the vehicle—even against third party nonsignatories to the sales contract—they are estopped from refusing to arbitrate their claim against” the manufacturer.
Renner said in yesterday’s opinion:
“This issue is now on review. In the meantime, we join those recent decisions that have disagreed with Felisilda and conclude the court erred in ordering arbitration.”
Grimes’s Opinion
Review was granted not in Felisilda but in Ford Motor Warranty Cases, decided on April 4 by Div. Eight of this district’s Court of Appeal. In that opinion, Justice Elizabeth A. Grimes expressed agreement with Los Angeles Superior Court Judge Amy D. Hogue that Ford Motor Company (“FMC”) “could not compel arbitration based on plaintiffs’ agreements with the dealers that sold them the vehicles,” explaining:
“Equitable estoppel does not apply because, contrary to FMC’s arguments, plaintiffs’ claims against it in no way rely on the agreements. FMC was not a third-party beneficiary of those agreements as there is no basis to conclude the plaintiffs and their dealers entered into them with the intention of benefitting FMC.”
Renner embraced that decision, as well as that reached on June 26 by this district’s Court of Appeal in Montemayor v. Ford Motor Co. There, Justice Gail Ruderman Feuer of Div. Seven said, in an opinion affirming an order by Los Angeles Superior Court Judge Mel Red Recana, that Ford cannot force arbitration of a claim brought under the lemon law by Rosanna and Jesse Montemayor.
Feuer’s Decision
She set forth:
“We conclude Ford cannot enforce the arbitration provision in the sales contract because the Montemayors’ claims against Ford are founded on Ford’s express warranty for the vehicle, not any obligation imposed on Ford by the sales contract, and thus, the Montemayors’ claims are not inextricably intertwined with any obligations under the sales contract. Nor was the sales contract between the Montemayors and AutoNation intended to benefit Ford.”
Renner said in yesterday’s decision:
“Whether a manufacturers’ express or implied warranties that accompany a vehicle at the time of sale constitute obligations arising from the sale contract, permitting manufacturers to enforce an arbitration agreement in the contract pursuant to equitable estoppel is a question now pending before our Supreme Court. In the meantime, we agree with Montemayor and Ford Motor that they do not.”
The case is Kielar v. Superior Court, C096773.
Yegan’s View Prevails
Justice Kenneth Yegan of this district’s Div. Six on Nov. 28, 2022, dissented from an opinion by then-Justice Steven Z. Perren in which Perren, joined by Presiding Justice Arthur Gilbert, said that an appeal from a magistrate’s order reducing a charge from a felony to a misdemeanor “is not authorized by law” and “must be dismissed. His dissenting view in that case, People v. Bartholomew, yesterday became a holding.
This time, Gilbert sided with Yegan, signing his opinion. Perren is now retired and his replacement, Justice Hernaldo J. Baltodano, also agreed with Yegan, who wrote:
“We hold that Penal Code section 1238, subdivisions (a)(1) and (a)(8) permit the People to appeal a superior court’s post-preliminary hearing, pretrial order reducing a felony ‘wobbler’ to a misdemeanor because the order is unauthorized and tantamount to a dismissal of the felony offense.”
Div. Six granted the People’s petition for a writ of mandate, dismissing as moot its concommitant appeal, noting that “in view of the People’s valid appeal, the superior court’s unauthorized order reducing the felony wobbler to a misdemeanor would be reversed on appeal even if we denied the petition.”
Agrees With Himself
Yegan, agreeing with his dissent last year, said:
“We conclude the dissenting opinion is correct. We disapprove of the holding in Bartholomew.”
He provided this discussion:
“If section 1238, subdivisions (a)(1) and (a)(8) authorize an appeal from the instant order reducing the felony wobbler to a misdemeanor, there is no impediment to the People’s petition for a writ of mandate. Subdivision (a)(1) provides that the People may appeal from ‘[a]n order setting aside all or any portion of the indictment, information, or complaint.’ (Italics added.) Subdivision (a)(8) provides that the People may appeal from ‘[a]n order or judgment dismissing or otherwise terminating all or any portion of the action....’ (Italics added.)
“When the superior court reduced the felony wobbler to a misdemeanor, it actually set aside or terminated a ‘portion’ of the information or action. The ‘portion’ set aside or terminated was the wobbler’s felony attributes.”
He commented:
“It would be absurd to allow an appeal from the superior court’s statutorily authorized order reducing a felony wobbler to a misdemeanor at the time of sentencing or after suspending the imposition of judgment and granting probation, but to bar an appeal from the court’s unauthorized pretrial order accomplishing the same result. Barring an appeal in these circumstances could encourage a court to take the unauthorized route in order to evade appellate review.”
Trial Judge Criticized
Criticizing the action by Ventura Superior Court Judge David R. Worley in declaring a charge of resisting an executive officer to be a charge of a misdemeanor, Yegan pointed out that, if a misdemeanor, defendant Richard Allen Mitchell would not be subject to increased penalties based on recidivism. He said:
“[T]he superior court’s order here was not only unauthorized; it was also unconstitutional because it violated the separation of powers clause. The order was especially egregious because it invalidated the information’s allegation of one prior strike within the meaning of California’s ‘Three Strikes’ law.”
The case is People v. Superior Court (Mitchell), 2023 S.O.S. 2981.
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