Court Opinion

ID: 9405008
Source: CourtListenerOpinion
Date Created: 2023-06-26 22:03:44.163738+00
Date Added: 2024-06-11T17:20:18.529775
License: Public Domain

Filed 6/26/23
                CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                SECOND APPELLATE DISTRICT

                        DIVISION SEVEN

ROSANNA MONTEMAYOR et al.,           B320477

       Plaintiffs and Respondents,   (Los Angeles County
                                     Super. Ct.
       v.                            No. 19STCV37946)

FORD MOTOR COMPANY,

       Defendant and Appellant.

      APPEAL from an order of the Superior Court of Los
Angeles County, Mel Red Recana, Judge. Affirmed.
      Shook Hardy & Bacon, Amir Nassihi and Andrew L. Chang
for Defendant and Appellant.
      Gupta Wessler, Linnet Davis-Stermitz, Jessica Garland,
Jennifer Bennett; Strategic Legal Practices and Tionna G. Dolin
for Plaintiffs and Respondents.
                    __________________________
       Ford Motor Company (Ford) appeals from an order denying
its motion to compel arbitration of Rosanna and Jesse
Montemayor’s causes of action for breach of warranty, violations
of the Song-Beverly Consumer Warranty Act (Civ. Code, § 1790
et seq.; the Song-Beverly Act) and for fraudulent omission arising
from alleged defects in a sports utility vehicle the Montemayors
purchased from the dealership, AutoNation Ford Valencia
(AutoNation). The central question on appeal is whether Ford as
the manufacturer of the vehicle can enforce an arbitration
provision in the sales contract between the Montemayors and
AutoNation to which Ford was not a party under the doctrine of
equitable estoppel or as a third party beneficiary of the contract.
       We disagree with the decision of our colleagues in the Third
District in Felisilda v. FCA US LLC (2020) 53 Cal.App.5th 486,
495 (Felisilda) that equitable estoppel applies to enable the
nonsignatory manufacturer to enforce the arbitration provision in
a similar sales contract. 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. We affirm.

      FACTUAL AND PROCEDURAL BACKGROUND

A.    The Sales Contract and Arbitration Agreement
      On June 20, 2012 the Montemayors executed a retail
installment sale contract (sales contract) with AutoNation, then

                                2
doing business as Power Ford Valencia, for the financing and
purchase of a 2013 Ford Edge sports utility vehicle (the vehicle).
The four-page sales contract identified Rosanna Montemayor and
Jesse Montemayor as the “Buyer” and “Co-Buyer,” respectively,
and referred to them collectively as “you”; Power Ford Valencia
was identified as the “Seller” and referred to as “we” or “us.”
Paragraph 4, titled “Warranties Seller Disclaims,” stated, “If you
do not get a written warranty, and the Seller does not enter into
a service contract within 90 days from the date of this contract,
the Seller makes no warranties, express or implied, on the
vehicle, and there will be no implied warranties of
merchantability or of fitness for a particular purpose. [¶] This
provision does not affect any warranties covering the vehicle that
the vehicle manufacturer may provide.” (Capitalization and
boldface omitted.)
       The sales contract included a half-page arbitration clause,
which stated in capital letters, “Either you or we may choose to
have any dispute between us decided by arbitration and not in
court or by jury trial.” The provision further stated, in relevant
part, “Any claim or dispute, whether in contract, tort, statute or
otherwise (including the interpretation and scope of this
Arbitration Clause 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
       Ford was not party to the sales contract, and the contract
did not refer to Ford other than identifying the make and model
of the vehicle as a “2013 Ford Edge” and listing the dealer as
“Power Ford Valencia.”

B.      The Complaint
        On October 22, 2019 the Montemayors filed this action
against Ford and AutoNation. Their complaint asserted six
causes of action solely against Ford, including three for violations
of the Song-Beverly Act (Civ. Code, § 1793.2, subds. (a)(3), (b), &
(d)); 1 breach of express written warranty; violation of the
Magnuson-Moss Warranty Act (15 U.S.C. § 2301 et seq.); and
fraudulent omission. The complaint also asserted a single cause
of action against both Ford and AutoNation for breach of the
implied warranty of merchantability.

1       Civil Code section 1793.2, subdivision (a)(3), provides that
“[e]very manufacturer of consumer goods sold in [California] and
for which the manufacturer has made an express warranty shall:
. . . [m]ake available to authorized service and repair facilities
sufficient service literature and replacement parts to effect
repairs during the express warranty period.” Section 1793.2,
subdivision (b), provides in relevant part that “service and repair
shall be commenced within reasonable time by the manufacturer
or its representative,” and “goods shall be serviced or repaired so
as to conform to the applicable warranties within 30 days.”
Section 1793.2, subdivision (d)(2), states, “If the manufacturer or
its representative in this state is unable to service or repair a
new motor vehicle . . . to conform to the applicable express
warranties after a reasonable number of attempts, the
manufacturer shall either promptly replace the new motor
vehicle . . . or promptly make restitution to the buyer.”

                                 4
       The complaint alleged the Montemayors purchased the
vehicle from AutoNation, and the vehicle was “manufactured and
or distributed by [Ford].” The complaint did not refer to the sales
contract. As alleged in the first cause of action against Ford for
violation of Civil Code section 1793.2, subdivision (d), and
incorporated into subsequent causes of action, “In connection
with the purchase, [the Montemayors] received an express
written warranty, including, a 3-year/36,000 mile express
bumper to bumper warranty, [and] a 5-year, 60,000 mile
powertrain warranty . . . .” “The warranty provided . . . that in
the event a defect developed with the [vehicle] during the
warranty period,” the Montemayors “could deliver the [v]ehicle
for repair services to [Ford’s] representative” for repair.
       During the warranty period numerous defects appeared in
the vehicle, including problems with the electrical system,
various computer and control modules, the back-up camera,
transmission and shifting, headlights, wipers, door latches, door-
ajar warning lights and sound. Despite “a reasonable number of
opportunities,” “[Ford] and its representatives failed to commence
the service or repairs within a reasonable time and failed to
service or repair the [v]ehicle so as to conform to the applicable
express warranties,” and Ford refused to replace the vehicle or
make restitution as required under the Song-Beverly Act. (Italics
added.) The cause of action against Ford for fraud by omission
further alleged Ford was “well aware” that Ford Edges
manufactured between 2011 and 2017 frequently experienced
defects involving the door latches and door-ajar lights and sound,
creating a safety hazard, yet Ford failed to inform consumers of
these defects or to remedy them.

                                5
      The Montemayors’ fifth cause of action against Ford and
AutoNation for breach of the implied warranty of merchantability
alleged that pursuant to Civil Code section 1792, 2 the sale of the
vehicle was accompanied by a one-year implied warranty of
merchantability that the vehicle “will pass without objection in
the trade under the contract description,” “is fit for the ordinary
purposes for which such goods are used,” “is adequately
contained, packaged, and labelled,” and “will conform to the
promises or affirmations of fact made on the container or label.”
However, as result of the alleged defects present at the time of
purchase or that developed within one year, the vehicle did not
satisfy these standards of merchantability.
      On November 25, 2019 Ford filed an answer to the
complaint with a general denial and 45 affirmative defenses,
including that “[t]he purchase or lease agreement for the subject
vehicle, signed by [the Montemayors], includes an agreement to
arbitrate.” AutoNation also answered. The following day Ford
and AutoNation filed a notice of removal to federal court. On
April 13, 2020 Ford and the Montemayors filed in federal court a
stipulation of dismissal without prejudice of the Montemayors’
cause of action under the Magnuson-Moss Warranty Act, and on
April 21 the Montemayors filed a motion to remand the case to

2      Civil Code section 1792 provides, “Unless disclaimed in the
manner prescribed by this chapter, every sale of consumer goods
that are sold at retail in this state shall be accompanied by the
manufacturer’s and the retail seller’s implied warranty that the
goods are merchantable. The retail seller shall have a right of
indemnity against the manufacturer in the amount of any
liability under this section.”

                                6
state court. On or around June 22, 2020 the case was remanded
to the trial court.

C.     Motion To Compel Arbitration
       On October 28, 2021 Ford and AutoNation jointly filed a
motion to compel arbitration and to stay the action in the trial
court. 3 They argued the arbitration provision of the sales
contract was a valid and enforceable agreement to arbitrate
under the Federal Arbitration Act (9 U.S.C. § 2) and California
law. Further, the entire action—including the causes of action
asserted solely against Ford—should be ordered to arbitration
(even though Ford was not a party to the sales contract) under
the doctrine of equitable estoppel as articulated by the Third
District in Felisilda, supra, 53 Cal.App.5th at page 495. The
court in Felisilda concluded the vehicle purchasers’ Song-Beverly
Act claim against both the manufacturer and the dealership
could be compelled to arbitration based on an arbitration
provision in the sales contract between the purchasers and the
dealership, explaining, “Under the doctrine of equitable estoppel,
‘as 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.”’”
(Ibid.)
       Ford and AutoNation also argued Ford was a third party
beneficiary of the arbitration provision because the provision

3     AutoNation identified itself as Magic Acquisition Corp.
d/b/a AutoNation Ford Valencia.

                                 7
applied to disputes arising from the “‘purchase or condition’” of
the vehicle or “‘any transaction or relationship’” resulting from
the contract. Therefore, they argued, “it is clear from the plain
language of [the sales contract] that it was intended to cover the
exact type of claims asserted by [the Montemayors] against non-
signatories such as Ford.”
        On January 7, 2022 the Montemayors filed their opposition
and dismissed AutoNation from the action without prejudice.
The Montemayors argued Ford and the Montemayors did not
enter into an agreement to arbitrate, and Ford dealerships such
as AutoNation are independent sellers, not agents of Ford.
Further, the doctrine of equitable estoppel under Felisilda, supra,
53 Cal.App.5th at pages 495 to 496 did not apply to the
Montemayors’ claims against Ford because the claims were not
“‘“‘intimately founded in and intertwined with’”’” the sales
contract with AutoNation. To the contrary, the sales contract
explicitly acknowledged the separate existence of a
manufacturer’s warranty and disclaimed any such warranties
made by the dealership in the “Warranties Seller Disclaims”
provision. The Montemayors also argued Ford was not a third
party beneficiary to the sales contract because the contract did
not evidence an express or implied intent of the parties to benefit
Ford. Further, Ford waived any right to compel arbitration by
engaging in conduct inconsistent with an intent to arbitrate,
including by conducting discovery in the trial court for more than
a year before seeking to compel arbitration. 4

4     The parties conducted discovery during the 16 months after
the action was remanded from federal court and before Ford and
AutoNation moved to compel arbitration. The Montemayors

                                8
       In a declaration supporting their opposition, the
Montemayors attached Ford’s 2013 Model Year Warranty Guide
(warranty guide) contained in a booklet summarizing the three-
year, 36,000-mile “bumper to bumper” warranty and five year,
60,000-mile powertrain warranty for new vehicles. The warranty
guide referred to a program for voluntary mediation and
nonbinding arbitration of disputes arising from the express
warranty.
       In its reply Ford argued the dismissal of AutoNation
without prejudice did not render Felisilda, supra, 53 Cal.App.5th
486 inapplicable or prevent Ford’s enforcement of the arbitration
provision under the doctrine of equitable estoppel. Ford noted
that although Felisilda involved a Song-Beverly Act claim
against both the dealership and manufacturer, and the
dealership alone filed the motion to compel arbitration, the
Felisilda plaintiffs, like the Montemayors, later dismissed the
dealership (albeit after the motion to compel was granted but
prior to the appeal). (Id. at 489.) The dealership’s ultimate
absence as a party did not affect the Court of Appeal’s conclusion
that the purchasers’ warranty claims arose from the sales
contract. (Id. at pp. 496-499.)

D.    The Trial Court’s Ruling
      After a hearing, on February 7, 2022 the trial court granted
Ford’s motion to compel arbitration of the Montemayors’ cause of
action for breach of the implied warranty of merchantability and

asserted as part of their waiver argument that Ford moved to
compel arbitration only after the Montemayors served a motion
to compel production of documents concerning the vehicle’s
service history and Ford’s safety bulletins.

                                9
denied the motion as to the remaining causes of action. 5 In an
18-page statement of decision, the court considered the
applicability of Felisilda, supra, 53 Cal.App.5th 486 to the
Montemayors’ complaint. The court reasoned Felisilda involved a
single cause of action for violation of the Song-Beverly Act
asserted against both the dealership and vehicle manufacturer,
and therefore, under Felisilda the Montemayors were equitably
estopped from avoiding arbitration of their implied warranty
claim asserted against both Ford and AutoNation. However,
Felisilda did not control the Montemayors’ remaining causes of
action against Ford based on the express manufacturer’s
warranty because the sales contract was not mentioned in the
complaint, there was no reasonable inference the express
warranties underlying the causes of action against Ford arose
from the sales contract, and the Montemayors had “establish[ed]
that Ford has a separate Express Warranty Booklet for the
subject vehicle, which contains no binding arbitration provision.”
The trial court concluded, “[I]t cannot be said that the [s]ales
[c]ontract is the ‘source of the warranties at the heart of this case’
. . . [and] it cannot be concluded that the claims against Ford are
‘intimately founded in and intertwined’ with the [s]ales [c]ontract
obligations.” (Quoting Felisilda, at pp. 495-496.)
        The trial court also found Ford could not enforce the
arbitration provision as a third party beneficiary because the

5     The trial court held Ford did not waive its right to
arbitration by its delay in bringing its motion to compel. The
court severed the implied warranty cause of action and ordered
the arbitration stayed pending resolution of the court action. On
April 18, 2022, shortly after filing this appeal, the Montemayors
dismissed the implied warranty cause of action.

                                 10
arbitration provision was limited to “‘[a]ny claim or dispute’”
between the Montemayors and AutoNation, or its “‘employees,
agents, successors or assigns.’” Ford “fail[ed] to show that it is a
member of the class of parties for whose benefit the [sales
contract] was made,” and it therefore failed to meet its burden of
proof to show standing as third party beneficiary.
      Ford timely appealed.

                          DISCUSSION

      A.     Governing Law and Standard of Review
      Code of Civil Procedure section 1281.2 requires the trial
court to order arbitration of a controversy “[o]n petition of a party
to an arbitration agreement alleging the existence of a written
agreement to arbitrate a controversy and that a party to the
agreement refuses to arbitrate such controversy . . . if it
determines that an agreement to arbitrate the controversy
exists.” Accordingly, the threshold question is whether there is
an agreement to arbitrate. (American Express Co. v. Italian
Colors Restaurant (2013) 570 U.S. 228, 233 [“arbitration is a
matter of contract”]; Pinnacle Museum Tower Assn. v. Pinnacle
Market Development (U.S.), LLC (2012) 55 Cal.4th 223, 236 [“‘“A
party cannot be required to submit to arbitration any dispute
which he has not agreed so to submit.”’”]; Trinity v. Life Ins. Co.
of North America (2022) 78 Cal.App.5th 1111, 1120 [“As the
language of this section makes plain, the threshold question
presented by every petition to compel arbitration is whether an
agreement to arbitrate exists.”].)
      Under state and federal state law, there is a public policy in
favor of arbitration. (Morgan v. Sundance, Inc. (2022) __ U.S.

                                 11
___, 142 S.Ct. 1708, 1713; OTO, L.L.C. v. Kho (2019) 8 Cal.5th
111, 125 [acknowledging strong public policy favoring arbitration
under state law]; DMS Services, LLC v. Superior Court (2012)
205 Cal.App.4th 1346, 1352 (DMS Services) [recognizing strong
state and federal policy favoring arbitration].) However, “‘[e]ven
the strong public policy in favor of arbitration does not extend to
those who are not parties to an arbitration agreement or who
have not authorized anyone to act for them in executing such an
agreement.’” (Jensen v. U-Haul Co. of California (2017)
18 Cal.App.5th 295, 300 (Jensen); accord, Ford Motor Warranty
Cases (2023) 89 Cal.App.5th 1324, 1331 (Ford Warranty); DMS
Services, at p. 1352 [with limited exceptions, “‘“one must be a
party to an arbitration agreement to be bound by it or invoke
it”’”].)
         Where, as here, the facts are undisputed, we review the
denial of a motion to compel arbitration de novo. (OTO, L.L.C. v.
Kho, supra, 8 Cal.5th at p. 126; Ford Warranty, supra,
89 Cal.App.5th at p. 1331.) Likewise, “[i]n the absence of
conflicting extrinsic evidence, ‘“[w]hether and to what extent
[nonsignatories] can also enforce the arbitration clause is a
question of law, which we review de novo.”’” (Jensen, supra,
18 Cal.App.5th at p. 300; accord, Jenks v. DLA Piper Rudnick
Gray Cary US LLP (2015) 243 Cal.App.4th 1, 8 [“‘Our de novo
review includes the legal determination whether and to what
extent nonsignatories to an arbitration agreement can enforce
the arbitration clause’”]; DMS Services, supra, 205 Cal.App.4th at
p. 1352 [same].)

                                12
B.     Ford Cannot Enforce the Arbitration Agreement as a
       Nonsignatory to the Sales Contract Based on the Doctrine of
       Equitable Estoppel
       Ford contends it had a right to compel arbitration based on
the sales contract between the Montemayors and AutoNation
under the doctrine of equitable estoppel, and the trial erred in
distinguishing this case from Felisilda, supra, 53 Cal.App.4th at
page 495. In Ford Warranty, our colleagues in Division Eight of
this district recently considered Ford’s equitable estoppel
argument in the context of dealership sales contracts that had
identical arbitration provisions to the ones in Felisilda and here. 6
(Ford Warranty, supra, 89 Cal.App.5th at pp. 1333-1335.) The
court declined to follow Felisilda and concluded Ford could not
invoke equitable estoppel to compel arbitration of the plaintiffs’
Song-Beverly Act and related claims asserted only against Ford
to address defects in the purchasers’ vehicles. (Ford Warranty, at
p. 1334.) We too decline to follow Felisilda and adopt the
reasoning in Ford Warranty.
       In Ford Warranty, supra, 89 Cal.App.5th at page 1329,
each plaintiff purchased a vehicle manufactured by Ford from a
dealership in Southern California. The purchasers signed a form
retail installment sale contract with the dealerships to finance
their vehicle purchases; Ford was not a party to the contracts or
named in the contracts. (Ibid.) In each contract, as here, the
dealership expressly disclaimed any warranties but stated the
disclaimer did “‘not affect any warranties covering the vehicle

6     In Ford Warranty, multiple lawsuits by purchasers of a
specific Ford model, alleging the same defects, were administered
as a coordinated proceeding. (Ford Warranty, supra,
89 Cal.App.5th at p. 1330.)

                                 13
that the vehicle manufacturer may provide.’” (Id. at p. 1330.)
The arbitration provision in the sales contracts provided (as in
this case) that “‘either you or we’” could elect to arbitrate, in
relevant part, “‘[a]ny claim or dispute . . . between you and us or
our employees, agents, successors or assigns, 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 did not sign this
contract). . . .’” (Ibid., capitalization and boldface omitted.) The
purchasers experienced problems with the transmissions in their
vehicles and sued Ford under various theories, including
violations of the Song-Beverly Act, the Magnuson-Moss Warranty
Act, breach of implied warranty, and fraudulent inducement.
(Ibid.)
       Affirming the trial court’s order denying Ford’s motion to
compel arbitration, the court in Ford Warranty rejected Ford’s
argument that the purchasers’ claims were intimately founded in
and intertwined with the obligations imposed on Ford under the
sales contracts, as the court held in Felisilda in concluding
equitable estoppel applied. (Ford Warranty, supra,
89 Cal.App.5th at p. 1333.) The Ford Warranty court explained,
“That the Felisilda plaintiffs and the dealer agreed in their sale
contract to arbitrate disputes between them about the condition
of the vehicle does not equitably estop the plaintiffs from
asserting [the manufacturer] has no right to demand arbitration.”
(Ford Warranty, at p. 1334, italics omitted.)
       The Ford Warranty court agreed with Felisilda that
“[e]quitable estoppel would apply if the plaintiffs had sued [the
manufacturer] based on the terms of the sale contract yet denied
[the manufacturer] could enforce the arbitration clause in that

                                   14
contract.” (Ford Warranty, supra, 89 Cal.App.5th at p. 1334.)
But the court disagreed with Felisilda’s conclusion that “‘the
sales contract was the source of [the manufacturer’s] warranties
at the heart of [the] case.’” (Ford Warranty, at p. 1334, quoting
Felisilda, supra, 53 Cal.App.5th at p. 496.) To the contrary,
“manufacturer vehicle warranties that accompany the sale of
motor vehicles without regard to the terms of the sale contract
between the purchaser and the dealer are independent of the sale
contract.” (Ford Warranty, at p. 1334.)
       “‘“[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.”’” (DMS Services, supra, 205 Cal.App.4th at p. 1354;
accord, Ford Warranty, supra, 89 Cal.App.5th at pp. 1332-1333.)
As we explained in DMS Services, “The reason for this equitable
rule is plain: One should not be permitted to rely on an
agreement containing an arbitration clause for its claims, while
at the same time repudiating the arbitration provision contained
in the same contract.” (DMS Services, at p. 1354; see Jensen,
supra, 18 Cal.App.5th at p. 306 [“‘The fundamental point’ is that
a party is ‘not entitled to make use of [a contract containing an
arbitration clause] as long as it worked to [his or] her advantage,
then attempt to avoid its application in defining the forum in
which [his or] her dispute . . . should be resolved.’”]; Goldman v.
KPMG, LLP (2009) 173 Cal.App.4th 209, 220 [“a signatory to an
agreement with an arbitration clause cannot ‘“have it both
ways”’; the signatory ‘cannot, on the one hand, seek to hold the
non-signatory liable pursuant to duties imposed by the
agreement, which contains an arbitration provision, but, on the

                                15
other hand, deny arbitration’s applicability because the
defendant is a non-signatory’”].) However, “‘[e]ven if a plaintiff’s
claims “touch matters” relating to the arbitration agreement, “the
claims are not arbitrable unless the plaintiff relies on the
agreement to establish its cause of action.”’” (Jensen, at p. 306.)
       We look to the facts alleged in the complaint to determine
whether the Montemayors’ claims against Ford are dependent on
and inextricably intertwined with the obligations imposed by the
sales contract. (Ford Warranty, supra, 89 Cal.App.5th at p. 1333;
DMS Services, supra, 205 Cal.App.4th at p. 1354; Goldman v.
KPMG, LLP, supra, 173 Cal.App.4th at pp. 229-230.) They are
not. As discussed, the Montemayors allege as part of each cause
of action against Ford at issue on appeal that Ford’s obligations
arose out of its express written warranty, not the sales contract.
As the Ford Warranty court explained with respect to similar
allegations, “[P]laintiffs’ claims are based on [Ford’s] statutory
obligations to reimburse consumers or replace their vehicles
when unable to repair in accordance with its warranty. . . . Not
one of the plaintiffs sued on any express contractual language in
the sale contracts.” (Ford Warranty, at p. 1335.) Moreover, the
“sale contracts include no warranty, nor any assurance regarding
the quality of the vehicle sold, nor any promise of repairs or other
remedies in the event problems arise. To the contrary, the sale
contracts disclaim any warranty on the part of the dealers, while
acknowledging no effect on ‘any warranties covering the vehicle
that the vehicle manufacturer may provide.’” (Ibid.) “In short,
the substantive terms of the sale contracts relate to sale and
financing and nothing more.” (Ibid.)
       Ford contends the Montemayors’ claims are inextricably
intertwined with the sales contract because the claims concern

                                16
the condition of the vehicle sold by AutoNation, and the
arbitration agreement specifically applies to the purchase and
“condition of this vehicle.” But this argument conflates the
concept of “but for” causation with a determination whether the
Montemayors’ claims are founded on obligations imposed on Ford
under the sales contract. To be sure, the Montemayors would not
have sued Ford for the defective condition of the vehicle but for
the sale of the vehicle by AutoNation pursuant to the sales
contract. And Ford provided an express warranty to the
Montemayors as a result of the sale. 7 But that does not mean
Ford’s obligation to provide a non-defective vehicle under its
separate express warranty is in any way founded on an obligation
imposed by the sales contract or is intertwined with those
obligations.
      In DMS Services, supra, 205 Cal.App.4th at pages 1356 to
1357, we rejected a similar argument made with respect to a
cause of action asserted by plaintiff DMS against the third-party
administrator of DMS’s workers’ compensation claims (ZSC) for
mishandling claims. The trial court granted ZSC’s motion to
compel arbitration based on the arbitration provision in a
separate insurance agreement between DMS and its insurer (to
which ZSC was a nonsignatory), finding DMS’s claims against
ZSC were inextricably intertwined with the separate insurance
agreements. We issued a writ of mandate directing the superior

7      Civil Code section 1791.2, subdivision (a)(1), defines an
“‘[e]xpress warranty’” as “[a] written statement arising out of a
sale to the consumer of a consumer good pursuant to which the
manufacturer . . . undertakes to preserve or maintain the utility
or performance of the consumer good or provide compensation if
there is a failure in utility or performance.”

                                17
court to vacate its order compelling arbitration, explaining as to
ZSC’s argument, “This argument confuses the concept of ‘claims
founded in and intertwined with the agreement containing the
arbitration clause’ with but-for causation.” (Id. at pp. 1348-1349,
1356-1357.) Although ZSC’s breach of its administration contract
with DMS caused DMS to owe more money to the insurer under
the insurance agreements, DMS did not allege ZSC breached the
insurance agreements, and therefore, DMS’s claims against ZSC
were not founded in or intertwined with the insurance
agreements. (Id. at pp. 1356-1357.)
       The same analysis applies here—the fact the Montemayors
purchased the defective vehicle from AutoNation 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. Ford’s but-for argument that
“[w]ithout a purchase, the Montemayors would lack any basis for
their fraud claims” based on Ford’s knowledge of the defects
similarly fails.
       Further, we disagree with Felisilda that the language in
the arbitration provision referencing “third parties who do not
sign this contract” provides a basis for nonsignatory
manufacturers to compel arbitration of claims brought by vehicle
purchasers. (See Felisilda, supra, 53 Cal.App.5th at p. 498.) We
agree with Ford Warranty, supra, 90 Cal.App.5th at page 1334
that this language refers to the subject matter of covered claims,
not the scope of who may enforce the arbitration provision. As
discussed, the arbitration provisions in Ford Warranty and
Felisilda (and here) required arbitration of claims and disputes
arising from the sales contract and “‘any resulting transaction or

                                18
relationship (including any such relationship with third parties
who do not sign this contract).’” (See Ford Warranty, at p. 1334,
quoting Felisilda, at p. 498.) As the Ford Warranty court
reasoned, the parenthetical language referring to third-party
nonsignatories was a “delineation of the subject matter of claims
the purchasers and dealers agreed to arbitrate,” but the
purchasers clearly agreed only to arbitrate disputes between
“‘you and us,’” that is, with the dealership. (Ford Warranty, at
pp. 1334-1335.) In other words, “[t]he ‘third party’ language in
the arbitration clause means that if a purchaser asserts a claim
against the dealer (or its employees, agents, successors or
assigns) that relates to one of these third party transactions, the
dealer can elect to arbitrate that claim. It says nothing of
binding the purchaser to arbitrate with the universe of unnamed
third parties.” (Id. at p. 1335.)
       The Montemayors’ causes of action against Ford are
explicitly based on allegations of “an express written warranty,
including a 3-year/36,000[-]mile express bumper to bumper
warranty” that the Montemayors alleged they received “[i]n
connection with the purchase” of the vehicle. The trial court
found the Montemayors provided evidence (which is undisputed)
of Ford’s express warranty in the warranty booklet attached to
their opposition to the motion to compel arbitration. And the
sales contract disclaimed any warranties while recognizing there
could be a separate manufacturer’s warranty. Because
“manufacturer vehicle warranties that accompany the sale of
motor vehicles without regard to the terms of the sale contract
between the purchaser and the dealer are independent of the sale
contract,” equitable estoppel does not apply. (Ford Warranty,
supra, 89 Cal.App.5th at p. 1334.)

                                19
       We recognize the Montemayors sued Ford and AutoNation,
whereas the purchasers in Ford Warranty only sued the
manufacturer, not the dealerships that signed the sales
contracts. (Ford Warranty, supra, 89 Cal.App.5th at p. 1329.)
And in Felisilda, supra, 53 Cal.App.5th at page 491, as here, the
purchasers sued both the dealership and the manufacturer for
violations of the Song-Beverly Act based on allegations the
manufacturers failed to promptly replace the plaintiffs’ defective
vehicle or make restitution. But whether vehicle purchasers file
suit against only the manufacturer, or the manufacturer and the
car dealer, does not affect the analysis of whether a cause of
action against the manufacturer may be compelled to arbitration.
       It is clear from the complaint that the causes of action
alleged against Ford for breach of express warranty and
violations of the Song-Beverly Act are predicated on Ford’s
express warranty, not any alleged wrongdoing by AutoNation.
The cause of action for fraudulent omission similarly arises from
Ford’s alleged knowledge and failure to disclose or remedy the
defective door system, not any obligation imposed on Ford under
the sales contract.

C.    Ford Was Not a Third Party Beneficiary of the Sales
      Contract
      Ford contends the trial court erred in finding it could not
enforce the sales contract’s arbitration provision because it was
not an employee, agent, successor, or assign of AutoNation—the
only third parties referenced in the arbitration provision. Ford
argues the universe of third party beneficiaries who may enforce
a contract is broader than the parties listed in the arbitration
provision, and the trial court failed to apply the multifactor test

                                20
enunciated in Goonewardene v. ADP, LLC (2019) 6 Cal.5th 817,
830 (Goonewardene) to determine third party beneficiary status.
We agree with Ford Warranty, supra, 89 Cal.App.5th at
page 1340 that applying the Goonewardene test, Ford is not a
third party beneficiary of the dealership’s sales contract.
       “‘“A third party beneficiary is someone who may enforce a
contract because the contract is made expressly for his benefit.”’”
(Ford Warranty, supra, 89 Cal.App.5th at p. 1336; accord, Pillar
Project AG v. Payward Ventures, Inc. (2021) 64 Cal.App.5th 671,
677; see Civ. Code, § 1559 [“A contract, made expressly for the
benefit of a third person, may be enforced by him. . . .”].) “‘“‘The
test for determining whether a contract was made for the benefit
of a third person is whether an intent to benefit a third person
appears from the terms of the contract.’”’ [Citation.] ‘[T]he “mere
fact that a contract results in benefits to a third party does not
render that party a “third party beneficiary.”’” (Pillar Project, at
p. 677; accord, Ford Warranty, at pp. 1336-1337 [“the parties to
the contract must have intended the third party to benefit”];
Jensen, supra, 18 Cal.App.5th at pp. 301-303.)
       In Goonewardene, the Supreme Court held that in
considering third party beneficiary contract claims, a court
should “carefully examine[] the express provisions of the contract
at issue, as well as all of the relevant circumstances under which
the contract was agreed to, in order to determine not only (1)
whether the third party would in fact benefit from the contract,
but also (2) whether a motivating purpose of the contracting
parties was to provide a benefit to the third party, and (3)
whether permitting a third party to bring its own breach of
contract action against a contracting party is consistent with the
objectives of the contract and the reasonable expectations of the

                                21
contracting parties.” (Goonewardene, supra, 6 Cal.5th at p. 830;
accord, Ford Warranty, supra, 89 Cal.App.5th at p. 1337.) “All
three elements must be satisfied to permit the third party action
to go forward.” (Goonewardene, at p. 830.)
       In Ford Warranty, supra, 89 Cal.App.5th at page 1338, the
Court of Appeal analyzed the plaintiffs’ sales contracts with the
dealerships, and, focusing on the first and second Goonewardene
elements, the court concluded the contracts “reflect no intention
to benefit a vehicle manufacturer under Goonewardene.”
Further, “nothing in the sale contracts or their arbitration
provision offers any direct ‘benefit’ to [Ford].” (Ford Warranty, at
p. 1338.) Based on our review of the sales contract between the
Montemayors and AutoNation and the allegations of the
complaint, we agree with Ford Warranty. Apart from a single
reference in the sales contract identifying the make and model of
the vehicle to be purchased and financed as a Ford Edge (and
identification of the seller as Power Ford Valencia), the form
sales contract is generic, without any reference to Ford, and there
is nothing in the contract language that supports an inference
Ford had an interest in the contract.
       Ford argues, as it did in Ford Warranty, that it “benefits
from arbitration as an efficient means of dispute resolution,” and
“the arbitration provision’s broad language expressly
encompassing claims arising out of relationships or transaction
‘with third parties who do not sign this contract’” shows the
agreement was intended to benefit Ford. We again agree with
Ford Warranty, which rejected this argument, observing that
Ford failed to address how it specifically benefited from the
arbitration provision where the “direct benefits are expressly
limited to those persons who might rely on it to avoid proceeding

                                22
in court—the purchaser, the dealer, and the dealer’s employees,
agents, successors or assigns.” (Ford Warranty, supra,
89 Cal.App.5th at p. 1338.) The fact the arbitration provision
identified several categories of non-parties who were subject to
the arbitration provision (employees, agents, successors, and
assigns) undermines the argument the language envisioned that
disputes arising from third-party relationships would endow
unnamed third parties outside of those categories standing to
demand arbitration. Indeed, Ford’s argument, if accepted, would
mean any nonparties with whom the Montemayors might have a
dispute relating to the vehicle or its purchase, including parties
whose existence or relationship the Montemayors could not have
contemplated, could claim they are intended beneficiaries of the
arbitration agreement simply because they would benefit from
arbitration.
      Moreover, there is “no indication that a benefit to [Ford]
was the signatories’ ‘motivating purpose’ . . . in contracting for
the sale and purchase of a Ford vehicle.” (Ford Warranty, supra,
89 Cal.App.5th at pp. 1338-1339, citing Goonewardene, supra,
6 Cal.5th at p. 830.) “The manifest intent of the parties was to
buy, sell and finance a car, and to allow either the purchaser or
the dealer to compel arbitration of the specified categories of
disputes between them, or between the purchaser and any of the
dealer’s ‘employees, agents, successors or assigns.’” (Ford
Warranty, at p. 1339; see Ngo v. BMW of N. Am., LLC (9th Cir.
2022) 23 F.4th 942, 947 [“[T]he vehicle purchase agreement in
question was drafted with the primary purpose of securing
benefits for the contracting parties themselves. In such an
agreement, the purchaser seeks to buy a car, and the dealership
and assignees seek to profit by selling and financing the car.

                                23
Third parties are not purposeful beneficiaries of such an
undertaking.”].)
       The Montemayors and AutoNation agreed in the sales
contract on terms for the financing and purchase of the vehicle
from AutoNation, and they agreed to arbitrate disputes between
them arising out of the credit application, purchase, or condition
of the purchased vehicle. In no way was the sales contract “made
expressly for the benefit of a third person.” (Civ. Code, § 1559.)

                         DISPOSITION

      The order denying Ford’s petition to compel arbitration is
affirmed. The Montemayors are entitled to recover their costs on
appeal.

                                                 FEUER, J.

      We concur:

                   PERLUSS, P. J.                ESCALANTE, J. *

*     Judge of the Los Angeles Superior Court, assigned by the
Chief Justice pursuant to article VI, section 6 of the California
Constitution.

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