1

Filed 9/6/23

CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION FOUR

JAQUELYN YEH et al.,

Petitioners,

v.

THE SUPERIOR COURT OF 

CONTRA COSTA COUNTY,

Respondent;

MERCEDES-BENZ USA, LLC,

 Real Party in Interest.

 A166537

 (Contra Costa County

 Super. Ct. No. MSC22- 

 00170)

Petitioners Jaquelyn Yeh and David Chin seek a writ of mandate 

compelling the superior court to reverse its order compelling to arbitration 

their action under the Song-Beverly Consumer Warranty Act (the Act)

against real party in interest Mercedes-Benz USA, LLC (MBUSA). They

contend that the trial court improperly compelled arbitration because

MBUSA is not a party to their agreements with the vehicle dealer and their 

claims against MBUSA are not intertwined with those agreements. We agree 

and shall direct the superior court to deny the motion to compel arbitration.

Background

Petitioners, husband and wife, allege that in October 2017, they leased 

a Mercedes-Benz B250E from Mercedes-Benz of Walnut Creek (the dealer), 

and in May 2020 at the end of the lease, signed a Retail Installment Sales 

Contract (RISC) with the dealer to finance the purchase of the vehicle. Both 
2

the lease and the RISC contained arbitration agreements.1

Petitioners allege that MBUSA, as the manufacturer or distributor of 

the vehicle, provided them with two express warranties and a separate 

implied warranty of merchantability, which warranties we set out below.

Petitioners allege the vehicle had undisclosed defects covered by the 

warranties, including “defective windshield wipers, steering column, 

electrical issues, defective software, vehicle shuts off.” They took the vehicle 

to the dealer, which was authorized by MBUSA for repairs, but despite

multiple attempts, the vehicle could not be fixed. 

Petitioners filed suit naming only MBUSA and Does as defendants and 

alleging claims solely under the Act.2 Specifically, they assert causes of action 

for violation of the Act based on breach of an express warranty, “Failure To 

Commence Repairs Within A Reasonable Time And To Complete The[m]

Within 30 Days in violation of Civil Code section 1793.2(b)” based upon the 

warranties, and “Breach of the Implied Warranty of Merchantability” based 

on Civil Code section 1794. They seek statutory repurchase, recission of the 

purchase agreement, damages, including incidental and consequential 

damages, pre-judgment interest, and attorneys’ fees and costs. 

MBUSA moved to compel arbitration arguing that (1) it had standing 

to compel arbitration as a third-party beneficiary of both the lease and the 

RISC, and (2) petitioners should be compelled to arbitration under the 

1 The parties do not distinguish between the two agreements, and, for 

purposes of this opinion, we also make no distinction.

2 The Act, codified at Civil Code sections 1790 et seq., also known as the 

“lemon law,” is a consumer protection statute created to encourage consumers 

to vindicate their rights when they have defective vehicles or other products. 

(Murillo v. Fleetwood Enterprises, Inc. (1998) 17 Cal.4th 985, 992.)
3

doctrine of equitable estoppel.3 MBUSA attached the agreements containing 

the arbitration provisions to its motion. 

The arbitration provision in the lease agreement provides:

Important Arbitration Disclosures

The following arbitration provisions significantly affect your rights in 

any dispute with us. Please read the following disclosures and the 

arbitration provision that follows carefully before you sign the contract.

1. If either you or we choose, any dispute between you and us will be 

decided by arbitration and not in court. . . . [¶] . . . [¶] . . .

Any claim or dispute, whether in contract, tort or otherwise 

(including any dispute over the interpretation, scope, or validity of this 

lease, arbitration section or the arbitrability of any issue), between you 

and us or any of our employees, agents, successors or assigns, which 

arises out of or relates to a credit application, this lease, or any 

resulting transaction or relationship arising out of this lease shall, at 

the election of either you or us, or our successors or assigns, be resolved 

by a neutral, binding arbitration and not by a court action. . . .

The arbitration agreement in the RISC provides: “EITHER YOU OR

WE MAY CHOOSE TO HAVE ANY DISPUTE BETWEEN US DECIDED BY 

ARBITRATION AND NOT IN COURT OR BY JURY TRIAL.” The agreement 

further provides:

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. . . .

3 David Chin is not a signatory to the agreements, but he does not 

claim that he is not bound by the agreements. 
4

Petitioners opposed the motion to compel arbitration. The trial court 

granted the motion. While the court rejected MBUSA’s argument that it was 

a third-party beneficiary of the agreements, it agreed with MBUSA’s 

equitable estoppel argument, relying on what was then the only California 

appellate opinion on the issue, Felisilda v. FCA US LLC (2020) 53 

Cal.App.5th 486 (Felisilda). 

Petitioners filed a petition for writ of mandate with our court

challenging the order compelling arbitration. We solicited preliminary 

briefing and then issued an order to show cause. 

Discussion

Petitioners challenge the trial court’s ruling that they are equitably 

estopped from refusing to arbitrate their claims against MBUSA. MBUSA 

asserts the equitable estoppel doctrine applies because the warranties upon 

which petitioners sue are an integral part of petitioners’ contracts with the 

dealer that contain the agreements to arbitrate.4

We review the trial court’s decision to compel arbitration de novo 

because it presents a question of law based upon undisputed facts. (Pinnacle 

Museum Tower Assn. v. Pinnacle Market Development (US), LLC (2012) 55 

Cal.4th 223, 236 (Pinnacle Museum); Ford Motor Warranty Cases (2023) 89 

Cal.App.5th 1324, review granted July 19, 2023, No. S279969 (Ford 

Warranty).) As the party seeking to compel arbitration, MBUSA has the 

burden to prove it “is a party to the arbitration agreement covering the 

4 While MBUSA states that petitioners allege an agency relationship in 

paragraph 12 of the complaint, and references the third-party beneficiary 

exception, it does not discuss, much less explain with analysis and citation to 

authority, why the agency or third-party beneficiary exceptions would apply 

in this case. Accordingly, we deem any argument regarding agency and thirdparty beneficiaries waived. 
5

dispute.” (Jones v. Jacobson (2011) 195 Cal.App.4th 1, 15, citing Code Civ. 

Proc., § 1281.2.)

Below, the parties disagreed about which law governed the arbitration 

agreements, with petitioners arguing that California law applies and 

MBUSA arguing that the Federal Arbitration Act (FAA) applies.

5 The 

parties have not addressed the issue here, and we have no need to resolve it 

because even if the FAA applies, “[s]tate law determines whether a nonsignatory to an agreement containing an arbitration clause may compel 

arbitration.” (Ngo v. BMW of North America, LLC (9th Cir. 2022) 23 F.4th 

942, 946 (Ngo); Ford Warranty, supra, 89 Cal.App.5th at p. 1332 [“Under 

certain circumstances, a nonsignatory to an arbitration agreement may seek 

to enforce it against a signatory. Whether such enforcement is permissible is 

a question of state law.”].) 

Under the doctrine of equitable estoppel, “applied in ‘both federal and 

California decisional authority, a nonsignatory defendant may invoke an 

arbitration clause to compel a signatory plaintiff to arbitrate its claims when 

the causes of action against the nonsignatory are “intimately founded in and 

intertwined” with the underlying contract obligations.’ ” (JSM Tuscany v. 

Superior Court (2011) 193 Cal.App.4th 1222, 1237 (JSM Tuscany).) “ ‘By 

relying on contract terms in a claim against a nonsignatory defendant, even if 

not exclusively, a plaintiff may be equitably estopped from repudiating the 

arbitration clause contained in that agreement.’ [Citations.] ‘The rule applies 

to prevent parties from trifling with their contractual obligations.’ ” (Ibid., 

footnote omitted.)

Until recently, there were no California appellate cases deciding 

whether a nonsignatory vehicle manufacturer could compel arbitration based 

5 The arbitration agreement provides that the FAA applies. 
6

upon the equitable estoppel theory. The first California appellate decision to 

address the issue was Felisilda, supra, 53 Cal.App.5th 486, where the Third 

Appellate District held the vehicle owner was equitably estopped from 

refusing to arbitrate with the nonsignatory manufacturer. (Id. at p. 497.) The 

manufacturer relied on an arbitration provision in a sales contract between 

the owner and dealer that is identical to the arbitration provision in the 

agreements here. The Felisilda court explained: “Based on language in the 

sales contract and the nature of the Felisildas’ claim against FCA [the 

defendant], we conclude the trial court correctly ordered that the entire 

matter be submitted to arbitration. In signing the sales contract, the 

Felisildas agreed that ‘[a]ny claim or dispute, whether in contract, tort, 

statute or otherwise . . . between you and us . . . which arises out of or relates 

to . . . [the] condition of this vehicle . . . shall . . . be resolved by neutral, 

binding arbitration and not by a court action.’ Here, the Felisildas’ claim 

against FCA relates directly to the condition of the vehicle.” (Id. at p. 496.)

Based upon the allegations of the complaint that “ ‘express warranties 

accompanied the sale of the vehicle to [them] by which FCA . . . undertook to 

preserve or maintain the utility or performance of [their] vehicle or provide 

compensation if there was a failure in such utility or performance,’ ” the court 

concluded “the sales contract was the source of the warranties at the heart of 

this case.” (Ibid.) 

Earlier this year, after we issued an order to show cause in this case, 

the Division Eight of the Second Appellate District decided Ford Warranty, 

supra, 89 Cal.App.5th 1324, where the court reached the opposite conclusion 

from Felisilda and affirmed the trial court’s denial of the petition to compel 

arbitration in a coordinated action with multiple plaintiffs whose arbitration 

agreements with defendant Ford Motor Company (FMC) were similar. (Id. at 
7

pp. 1329, 1335.) The court rejected defendants’ arguments that equitable 

estoppel, third party beneficiary, or agency applied. (Id. at pp. 1329, 1332–

1343.) Relevant here, the court held: “Equitable estoppel does not apply 

because, contrary to FMC’s arguments, plaintiffs’ claims against it in no way 

rely on the agreements.” (Id. at p. 1329.)

The Ford Warranty court declined to follow Felisilda, disagreeing with 

Felisilda’s interpretation that the sales contract was the source of the 

warranties and broadly called for arbitration of claims against third-party 

nonsignatories. (Ford Warranty, supra, 89 Cal.App.5th at p. 1334.) It rejected 

the manufacturer’s argument that “plaintiffs’ claims are ‘intimately founded 

in and intertwined with the underlying obligations of the sale[ ] contracts’ 

because the sale contracts between plaintiffs and the dealers gave plaintiffs 

certain contractual rights they now sue on—warranty claims against the 

manufacturer.” (Id. at pp. 1333–1334.) Instead, the court held that the 

buyer’s claims were not founded in the sales contracts because the sales 

contracts included no warranties, and disagreed with the manufacturer that 

California law treats “manufacturer warranties imposed outside the four 

corners of a retail sales contract as part of the sales contract.” (Ford 

Warranty, supra, 89 Cal.App.5th at pp. 1335–1336 citing Greenman v. Yuba 

Power Products, Inc. (1963) 59 Cal.2d 57; 60 (Greenman) & Corporation of 

Presiding Bishop of Church of Jesus Christ of Latter Day Saints v. 

Cavanaugh (1963) 217 Cal.App.2d 492, 514 (Cavanaugh).)

After this case was fully briefed, Division Seven of the Second 

Appellate District decided Montemayor v. Ford Motor Co. (2023) 92

Cal.App.5th 959 (Montemayor). Like their colleagues in Ford Warranty, the 

court in Montemayor declined to follow Felisilda and affirmed the trial court’s 

order denying arbitration. (Id. at pp. 968, 975.) The court explained that “the 
8

Montemayors allege as part of each cause of action against Ford [the 

manufacturer] at issue on appeal that Ford’s obligations arose out of its 

express written warranty, not the sales contract.” (Id. at p. 970.) “[T]he fact 

the Montemayors purchased the defective vehicle from [the dealer] pursuant 

to the sales contract, and as a result of their purchase they received separate 

express warranties from Ford, does not mean their causes of action against 

Ford based on those express warranties are founded in the sales contract.” 

(Id. at p. 971.) Similarly, the Third Appellate District, the same district that 

decided Felisilda, joined Ford Warranty and Montemayor in disagreeing with 

Felisilda that the sales contract was the source of the warranties, and the 

court concluded that equitable estoppel did not apply to compel arbitration. 

(Kielar v. Superior Court (Aug. 16, 2023, C096773) __ Cal.App.5th___

(Kielar).)

Petitioners argue that we should follow Ford Warranty, Montemayor,

and Kielar, while MBUSA contends that we should follow Felisilda.

6 As we 

explain, we agree with the conclusions reached by Ford Warranty,

Montemayor, and Kielar and hold that MBUSA cannot compel arbitration 

with petitioners.

We analyze the equitable estoppel issue as it applies to this case based 

upon the facts of the operative complaint. (Ford Warranty, supra, 89 

Cal.App.5th at p. 1333; Felisilda, supra, 53 Cal.App.5th at pp. 495–496.) We 

must decide whether the causes of action are “ ‘intimately founded in and 

6 Petitioners also urge us to follow the Ninth Circuit case of Ngo, supra, 

23 F.4th 942. We find it unnecessary to analyze Ngo, which has only

persuasive value, because Ford Warranty, Montemayor, and Kielar cite the 

same California cases to support their conclusions that equitable estoppel 

does not apply, and the federal cases Ngo cites are not relevant to this 

analysis. (Ford Warranty, supra, 89 Cal.App.5th at pp. 1335–1336, Ngo,

supra, 23 F.4th 942, 949–950.)
9

intertwined’ with the underlying contract obligations.” (JSM Tuscany, supra,

193 Cal.App.4th at p. 1237.)

Goldman v. KPMG, LLP (2009) 173 Cal.App.4th 209 is instructive in 

how we determine if the allegations in the complaint are intimately founded 

in and intertwined with the underlying contract obligations. In Goldman,

plaintiffs sued accountants and lawyers—with whom they did not have 

arbitration agreements—arising out of a fraudulent tax shelter scheme based 

on claims that that these defendants aided and abetted the fraudulent 

scheme. (Id. at pp. 213, 216.) The operating agreements of the limited 

liability companies (set up by the investment advisors to facilitate the 

investments) contained an arbitration clause. (Id. at p. 217.) The 

nonsignatory defendants moved to compel arbitration arguing that the

plaintiffs’ claims presupposed the existence of the operating agreements as 

the vehicle in which the fraudulent tax scheme was carried out and, 

therefore, plaintiffs were equitably estopped from refusing to arbitrate

pursuant to the arbitration clause in the operating agreements. (Id. at p. 

218.) The court disagreed and affirmed the denial of the motion compelling 

arbitration. The court noted that the complaints did not “rely on or use any 

terms or obligations of the operating agreements as a foundation for their 

claims.” (Ibid.) The court explained that the inequity the doctrine seeks to 

address arises when a plaintiff relies on the substantive terms of the 

agreement to assert a claim against a nonsignatory defendant, and at the 

same time seeks to disavow the arbitration clauses of those very agreements. 

(Id. at p. 221.) The operating agreements “were merely incidental to the 

scheme” and “none of the terms in those agreements are alleged to have been 

violated or otherwise to form any part of the [plaintiffs’] complaints,” and 

therefore no inequity would result in denying arbitration. (Id. at p. 233.) The 
10

court concluded that despite broader language that could be “cherry-pick[ed],” 

the “underlying principle, stated in all the cases” was “actual reliance on the 

terms of the agreement to impose liability on the nonsignatory.” (Id. at p. 

231.)

In this case, petitioners allege that MBUSA, as the manufacturer or 

distributor of the vehicle, provided them with two express warranties and a 

separate implied warranty of merchantability. Specifically, the complaint 

describes these warranties as follows: “Defendant MBUSA manufactured or 

distributed the Vehicle. MBUSA provided a 4 year/50,000 mi[le] basic 

warranty and, a 4 year/50,000 mile powertrain warranty.” “MBUSA also 

provided plaintiffs with a separate implied warranty of 

merchantability. . . . [¶] . . . [¶] . . . MBUSA’s express and implied warranties 

accompanied the sale of the Vehicle to Plaintiffs. Manufacturer expressly 

warranted that the Vehicle was a fully inspected, certified without defects in 

compliance with all certification standards.” “In connection with the 

purchase, Plaintiffs received an express written warranty in which 

Defendants undertook to preserve or maintain the utility or performance of 

the Vehicle or to provide compensation if there is a failure in utility or 

performance for a specified period of time. The warranty provided, in relevant 

part, that in the event a defect developed with the Vehicle during the 

warranty period, Plaintiffs could deliver the Vehicle for repair services to 

Defendant or Defendant’s representative and the Vehicle would be repaired.” 

Like the complaint in Goldman, petitioners’ complaint does not 

reference either of the two agreements with the dealer and does not allege 

that MBUSA breached obligations based on those agreements. MBUSA is not 

mentioned in the agreements and does not have any obligations arising out of 

the agreements. Petitioners’ claims are thus not “intimately founded and 
11

intertwined” with the agreements (JSM Tuscany, supra, 193 Cal.App.4th at 

p. 1237), but instead arise from a statutory scheme separate and apart from 

the contracts. 

MBUSA disagrees with this analysis. It argues that “Under the 

California Uniform Commercial Code both express and implied warranties 

are part of the contractual bargain and are considered to be supplemental 

terms to a sales contract.”

We disagree. “California law does not treat manufacturer warranties 

imposed outside the four corners of a retail sale contract as part of the sale 

contract.”

7 (Ford Warranty, supra, 89 Cal.App.5th at pp. 1335–1336 citing 

Greenman, supra, 59 Cal.2d at pp. 60–61; see also Cavanaugh, supra, 217 

Cal.App.2d at p. 514 [“[T]he express warranty herein involved was not part of 

a contract of sale between the manufacturer and the plaintiff.”]; Burr v. 

Sherwin Williams Co. (1954) 42 Cal.2d 682, 696 [discussing exception to 

general rule requiring privity when manufacturer makes representations in 

labels or advertising and citing cases]; 4 Witkin, Summary of Cal. Law (11th 

ed. 2023) Sales, § 100 [citing cases].)8

7 Express independent warranties can be created, for example, when a 

consumer relies on a manufacturer’s labels or advertising materials even if 

there is not privity of contract. (Fundin v. Chicago Pneumatic Tool Co. (1984) 

152 Cal.App.3d 951, 957.)

8 As noted by a law review article published prior to the adoption of the 

Uniform Commercial Code in California, the Uniform Commercial Code does 

not attempt to resolve problems of “diagonal privity,” e.g., between consumer 

and manufacturer. (Ezer, The Impact of the Uniform Commercial Code on the 

California Law of Sales Warranties (1961) 8 U.C.L.A. L. Rev. 281, 324–325 & 

fn. 267; see Franklin, When Worlds Collide: Liability Theories and 

Disclaimers In Defective-Product Cases (1996) 18 Stan. L. Rev. 974, 1016 

[“The Code has avoided most of the controversial questions of extending 

warranties in the absence of privity and has left this to state law.”].)
12

In Greenman, the plaintiff sued the retailer and manufacturer of a 

power drill that injured him. He failed to provide notice to the defendants 

until ten-and-one-half months after his injury. (Greenman, supra, 59 Cal.2d

at p. 59.) At trial, the jury found the retailer was not liable but the 

manufacturer was liable for negligence and breach of express warranties (the 

warranties were based on statements in the manufacturer’s brochures). (Id. 

at p. 60.) On appeal, the manufacturer argued that the plaintiff’s action was 

barred because he failed to provide reasonable notice pursuant to then 

existing Civil Code section 1769, a provision of the former Uniform Sales Act 

providing that, absent an agreement to the contrary, a buyer who accepts 

goods does not discharge the seller from liability if the buyer provides notice 

within a reasonable time of the breach. (Id. at pp. 60–61.) The Supreme Court 

held that the statute, which dealt with “the rights of the parties to a contract 

of sale or a sale . . . does not provide that notice must be given of the breach of 

a warranty that arises independently of a contract of sale between the 

parties. Such warranties are not imposed by the sales act but are the product 

of common-law decisions that have recognized them in a variety of 

situations.” (Id. at p. 61.) The court continued: “It is true that in many of 

these situations the court has invoked the sales act definitions of warranties 

[citations] in defining the defendant’s liability, but it has done so, not because 

the statutes so required, but because they provided appropriate standards for 

the court to adopt under the circumstances presented.” (Id. at pp. 60–61.) 

The court in Cavanaugh, supra, 217 Cal.App.2d 492, answering the 

question of whether notice under the Uniform Sales Act had to be provided to 

a manufacturer sued for a defective product, reached the same conclusion as 

Greenman that the express warranty was not part of the contract of sale 

between the manufacture and plaintiff. (Id. at p. 514.) Similarly, the court in 
13

Gherna v. Ford Motor Co. (1966) 246 Cal.App.2d 639, also applying the 

Uniform Sales Act and Greenman, held that the warranty that usually comes 

through the dealer to the buyer is applicable to both the manufacturer and 

dealer, and also that advertisements by the manufacturer that constitute 

warranties are independent of the contract. (Id. at pp. 652–653.)

MBUSA, like FMC in Ford Warranty, supra, 89 Cal.App.5th at pages

1335–1336, criticizes reliance on Greenman and Cavanaugh on the basis that 

they were decided under the Uniform Sales Act, the predecessor to the 

California Uniform Commercial Code. Contrary to MBUSA’s argument, the

enactment of the California Uniform Commercial Code did not change 

existing law that manufacturer warranties can exist separate from a sales 

contract. The California Uniform Commercial Code Comment to the Section 

2313 states: “Although this section is limited in its scope and direct purpose 

to warranties made by the seller to the buyer as part of a contract for sale, 

the warranty sections of this Article are not designed in any way to disturb 

those lines of case law growth which have recognized that warranties need not 

be confined either to sales contracts or to the direct parties to such a contract. 

They may arise in other appropriate circumstances such as in the case of 

bailments for hire, whether such bailment is itself the main contract or is 

merely a supplying of containers under a contract for the sale of their 

contents. The provisions of Section 2-318 on third party beneficiaries 

expressly recognize this case law development within one particular area. 

Beyond that, the matter is left to the case law with the intention that the 

policies of this Act may offer useful guidance in dealing with further cases as 

they arise.” (Cal. U. Com. Code, com. 2 to § 2213, italics added.)

In addition, the Supreme Court in Hauter v. Zogarts (1975) 14 Cal.3d 

104 (Hauter) explained that the California Uniform Commercial Code 
14

expands rather than limits liability under the Uniform Sales Act. (Id. at p.

115, fn. 10 [“Thus the California Uniform Commercial Code expands sellers’

liability beyond the former Uniform Sales Act (former Civ. Code, §§ 1732–

1736) . . . .”]; Klein v. Asgrow Seed Co. (1966) 246 Cal.App.2d 87, 102–103 

[“As we view it, however, the Commercial Code does not curtail, in any 

respect we have noted, liability imposed by its predecessor (the Uniform 

Sales Act) upon sellers for breaches of warranty nor extend their power to 

disclaim or limit liability for such breaches.”].) Further, both Greenman and 

Cavanaugh rely on sections of the Uniform Sales Act that have been adopted 

by the California Uniform Commercial Code. (Greenman, supra, 59 Cal.2d at 

pp. 60–62 citing Civil Code §§ 1732, 1735; Cavanaugh, supra, 217 Cal.App.2d 

at pp. 504, 509, 514 citing Civil Code §§ 1732–1735, 1721–1800.)

9 Thus, 

MBUSA’s argument that Greenman and Cavanaugh are “not on point” is 

incorrect.

We disagree with MBUSA that Hauter, supra, 14 Cal.3d 104 supports 

its position. MBUSA relies on language from Hauter that “ ‘[t]he basis of the 

bargain requirement represents a significant change in the law of 

warranties.’ ” (Id. at p. 115.) This language, however, pertains to the issue of 

whether a buyer needs to rely on the seller’s affirmation, not whether 

manufacturer warranties are incorporated into a separate contract. (Ibid.

[“Whereas plaintiffs in the past have had to prove their reliance upon specific 

promises made by the seller [citation], the Uniform Commercial Code 

requires no such proof.”].)

9 The comparable section from current section 2313 to the Uniform 

Sales Act are former Civil Code sections 1732, 1734, 1736. (Cal. U. Com. 

Code, § Disp Table.) The comparable section from current section 2314 was 

former Civil Code section 1735. (Ibid.)
15

Hauter is also distinguishable on its facts. In Hauter, the plaintiff who 

was injured by a training device for unskilled golfers sued the seller and 

manufacturer. (Hauter, supra, 14 Cal.3d at p. 108, fn. 1.) The container 

stated: “Completely Safe Ball Will Not Hit Player,” which the Supreme Court 

held was an express warranty by the manufacturer and seller. (Id. at pp. 109, 

114–115.) The distinguishing feature of Hauter from the facts of this case is 

that in Hauter, the seller and manufacturer provided the same warranty. 

(See id. at pp. 108–109, 114, 118.) The court had no need to address the 

established law that applies when a manufacturer provides an independent 

warranty, the situation presented here. Hauter in no way changed the 

holding of Greenman, supra, 59 Cal.2d 57 or the cases preceding it. We also 

find A. A. Baxter Corp. v. Colt Industries, Inc. (1970) 10 Cal.App.3d 144, 153, 

relied upon by MBUSA, distinguishable because similar to Hauter, there was 

only one warranty provided collectively by the maker, lessor, and a third 

defendant. (Id. at p. 148.) 

We are not persuaded by MBUSA’s assertion that the Act “makes 

express warranties an integral part of the sales contract.” The purpose of the 

Act is to provide greater consumer protection than previously existed (Mexia 

v. Rinker Boat Co., Inc. (2009) 174 Cal.App.4th 1297, 1303–1304), and its 

remedies are cumulative. (Civ. Code, § 1790.4; see also id., § 1790.3 [“The 

provisions of this chapter shall not affect the rights and obligations of parties 

determined by reference to the Commercial Code except that, where the 

provisions of the Commercial Code conflict with the rights guaranteed to 

buyers of consumer goods under the provisions of this chapter, the provisions 

of this chapter shall prevail.”].) The Act defines an “express warranty” as “a 

written statement arising out of a sale to the consumer of a consumer good 

pursuant to which the manufacturer, distributor, or retailer undertakes to 
16

preserve or maintain the utility or performance of the consumer good or

provide compensation if there is a failure in utility or performance.” (Civ. 

Code, § 1791.2, subd. (a)(1).) Based upon a plain reading of the language of 

the statute, an express warranty arises out of a sale rather than the 

underlying contracts. 

We are also unpersuaded by MBUSA’s citation to Gavaldon v. 

DaimlerChrysler Corp. (2004) 32 Cal.4th 1246 for the proposition that the 

Legislature, in enacting the Act, intended for an express warranty to become 

part of a purchase agreement. The Supreme Court in Gavaldon considered

whether a service agreement was part of an express warranty, concluding 

that the two were different: “[T]he Legislature apparently conceived of an 

express warranty as being part of the purchase of a consumer product, and a 

representation of the fitness of that product that has particular meaning for 

consumers. In contrast, it apparently thought of the purchase of a service 

contract as distinct from the purchase of the product, and not as a 

representation of fitness but only an agreement to provide repair services, a 

kind of insurance. Hence, one difference between express warranties and 

service contracts is that the latter is generally purchased ‘for an additional 

cost.’ ” (Id. at p. 1258.) Nothing in the court’s holding suggests that the 

manufacturer’s express warranty is part of the sales contract. 

In this case, although the parties do not provide MBUSA’s express 

warranties, it is undisputed that they are separate from the lease agreement 

and RISC because the language of the express warranties, as described by 

the complaint, is not part of the lease agreement or RISC. Moreover, the 

dealer in the RISC expressly disclaims any warranties, which provides 

further evidence that the warranties are independent: “The Seller makes no 

warranties, expressed or implied on the vehicle . . . .[¶] This provision does 
17

not affect any warranties covering the vehicle that the vehicle manufacturer 

may provide.” Accordingly, MBUSA’s warranties are not part of the sales 

contract. (Ford Warranty, supra, 89 Cal.App.5th at pp. 1335–1336; 

Montemayor, supra, 92 Cal.App.5th at pp. 970–971, Kielar, supra, at p. 3) 

We also reject MBUSA’s reliance on the portion of the arbitration 

provision in the RISC stating it applies to any claim “between you and us . . . 

which arises out of or relates to . . . [the] 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).” We agree with 

Ford Warranty that this language does not show “consent by the purchaser to 

arbitrate claims with third party nonsignatories. Rather, we read it as a 

further delineation of the subject matter of claims the purchasers and dealers 

agreed to arbitrate. They agreed to arbitrate disputes ‘between’ themselves—

‘ “you and us——arising out of or relating to ‘relationship[s],’ including 

‘ “relationship[s] with third parties who [did] not sign th[e] [sale] 

contract[s],” ’ resulting from the ‘ “purchase, or condition of th[e] vehicle, [or] 

th[e] [sale] contract.” ’ ” (Ford Warranty, supra, 89 Cal.App.5th at pp. 1334–

1335.) Like the claims of plaintiffs in Ford Warranty, petitioners’ claims are 

not founded on the agreements because, as discussed, they did not allege 

violations of the lease agreement or RISC or sue on any warranties in the 

agreements, but instead seek to recover based upon MBUSA’s statutory 

obligations. (Id. at p. 1335.) 

MBUSA does not provide any separate analysis for the breach of 

implied warranty claim. Thus, we apply the same analysis to petitioners’ 

claims for breach of implied warranty as applied to their express warranty 

claim. Petitioners allege in their third cause of action that: “41. Pursuant to 

Civil Code sections 1792 and 1791.1, the sale of the Vehicle was accompanied 
18

by Defendants’ implied warranty of merchantability. The duration of the 

implied warranty is coextensive in duration with the duration of the express 

written warranty provided by Defendant. [¶] 42. The implied warranty of 

merchantability means and includes that the Vehicle will comply with each of 

the following requirements: (1) The Vehicle will pass without objection in the 

trade under the contract description; (2) The Vehicle is fit for the ordinary 

purposes for which such goods are used; (3) The Vehicle is adequately 

contained, packaged and labeled; and (4) The Vehicle will conform to the 

promises or affirmations of fact made on the container or label.” Like the 

express warranty claim, the complaint does not reference either of the two 

agreements with the dealer and does not allege that MBUSA breached 

obligations based on the agreements with the dealer, but instead the claim is 

based upon an independent statutory scheme. Accordingly, petitioner’s 

implied warranty claim is not “ ‘intimately founded and intertwined’ ” with 

the dealer agreements such that petitioners are equitably estopped from 

refusing to arbitrate with MBUSA. (JSM Tuscany, supra, 193 Cal.App.4th at 

p. 1237.) 

Disposition

Let a peremptory writ of mandate be issued directing the respondent 

superior court to vacate its August 12, 2022 order compelling arbitration and 

enter a new and different order denying the motion to compel arbitration. 

Petitioners shall recover their costs in this proceeding. (Cal. Rules of Court, 

rule 8.493(a).) 
19

_________________________

Fineman, J.*

WE CONCUR:

_________________________

Brown, P. J.

_________________________

Goldman, J.

* Judge of the Superior Court of California, County of San Mateo, 

assigned by the Chief Justice pursuant to article VI, section 6 of the 

California Constitution.
20

Yeh v. SuperiorCourt

(A166537)

Trial Court: Contra Costa County

Trial Judge: Hon. Barry Baskin

Attorneys:

Rosner, Barry & Babbitt, Christopher P. Barry, Arlyn L. Escalante; Auto 

Fraud Legal Center, Michelle A. Cook for Plaintiff and Petitioner.

Nixon Peabody, Jennifer A. Kuenster, Leon V. Roubinian; Law Office of

David Tennant and David H. Tennant, Kathy L. Eldrige

for Defendants and Real Party in Interest.

Theta Law Firm, Soheyl Tahsildoost, Ali Ameripour for Real Party in 

Interest.