California Court of Appeal Finds that Car Buyer, Who Paid Full Price at the Time of Sale but Was Required to Sign a RISC Rather than a P.O., Was Required to Arbitrate

In Marchetti v. Ford of Simi Valley, No. B297026, 2020 Cal. App. Unpub. LEXIS 7639 (Nov. 19, 2020), in an unpublished decision, ordered a case to arbitration under a RISC despite the Customers’ payment of full price and not financing the purchase.  The Court of Appeal found an assent to the arbitration agreement despite no financing taking place.

The Marchettis contend that FOSV did not carry its burden of proving the existence of an arbitration agreement because, according to the Marchettis, “it is clear that the form contract [that the parties signed] did not express the parties’ mutual consent and understanding.” The Marchettis contend that the contract is essentially meaningless because it is a financing agreement and the Marchettis did not finance their vehicle. FOSV “required [the Marchettis] to sign the form contract, with all of the financing terms, even though there was no question that [the Marchettis were] not agreeing to any of the financing terms because it was agreed that [the Marchettis were] paying the full purchase price,” the Marchettis argue. Whether the contract’s financing provisions applied to the Marchettis’ purchase, the arbitration provision—on its face—did: “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) . . . which arises out of or relates to your credit application, purchase or condition of this vehicle, this contract or any resulting transaction or relationship . . . shall . . . be resolved by neutral, binding arbitration and not by a court action.” (Italics added.) Neither is the Marchettis’ assent to the agreement ambiguous. In a box on the front page of the two-page agreement, the Marchettis signed under a paragraph that states: “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 a court action. See the Arbitration Provision for additional information concerning the agreement to arbitrate.” We conclude, as did the trial court, that an agreement to arbitrate exists between the parties.

The Court of Appeal found that the RISC’s delegation clause disposed of any arguments about abitrability.

The Marchettis contend that their claims against FOSV are not arbitrable because the arbitration agreement purports to waive claims for public injunctive relief. Citing McGill, they argue that the arbitration agreement’s failure to carve out claims for public injunctive relief renders the arbitration agreement unenforceable. Among other responses, FOSV contends that the arbitration agreement’s delegation clause delegates questions of arbitrability, including the enforceability of the arbitration agreement based on waiver of public injunctive relief, to the arbitrator. We agree with FOSV. In Henry Schein Inc. v. Archer and White Sales, Inc. (2019) ___ U.S. ___, ___ (Henry Schein), the United States Supreme Court explained that “[w]hen the parties’ contract delegates the arbitrability question to an arbitrator, a court may not override the contract. In those circumstances, a court possesses no power to decide the arbitrability issue. That is true even if the court thinks that the argument that the arbitration agreement applies to a particular dispute is wholly groundless.” “[A] court, in response to a motion by an aggrieved party, must compel arbitration ‘in accordance with the terms of the agreement’ [*8]  when the court is ‘satisfied that the making of the agreement for arbitration or the failure to comply therewith is not in issue.'” (Id. at p. ___.) We are satisfied that the parties entered into an agreement to arbitrate. The Marchettis have failed to comply. And the parties’ agreement to arbitrate delegates questions of arbitrability to the arbitrator. At least one other California court has reached the same conclusion. In Aanderud, supra, 13 Cal.App.5th 880, our colleagues in the Fifth District concluded that “it is the arbitrator who will consider the conscionability of the agreement and the scope of the arbitration clause, including whether the class arbitration is available under the arbitration provision, and whether the provision purports to waive the Aanderuds’ right to seek public injunctive relief in all fora and, if so, what impact this has on the enforceability of the arbitration provision as a whole.” (Id. at p. 897, italics added.) We conclude that the Marchettis agreed to arbitrate their disputes, including questions of the interpretation and scope of their arbitration agreement and the arbitrability of specific claims. Consistent with that conclusion and the United States Supreme Court’s guidance in Henry Schein, we affirm the trial court’s order granting FOSV’s motion to compel arbitration. We note that in section II.B. of its order, the trial court reached conclusions about the enforceability of the parties’ arbitration agreement based on its interpretation of the agreement and findings regarding public injunctive relief. As did our colleagues in Aanderud, we will vacate the portion of the trial court’s order in which the trial court made findings that the parties’ arbitration agreement reserved for the arbitrator. (Aanderud, supra, 13 Cal.App.5th at p. 897.)