Court Opinion

ID: 9384767
Source: CourtListenerOpinion
Date Created: 2023-04-04 21:03:02.341711+00
Date Added: 2024-06-11T17:17:56.397011
License: Public Domain

Filed 4/4/23
                CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                 SECOND APPELLATE DISTRICT

                         DIVISION EIGHT

    FORD MOTOR WARRANTY              B312261
    CASES.

    MARTHA OCHOA,                    JCCP No. 4856

         Plaintiff and Respondent,   Los Angeles County
                                     Super. Ct. No. BC593397
         v.

    FORD MOTOR COMPANY,

          Defendant and Appellant.
    [And four other cases.*]

     APPEAL from an order of the Superior Court of Los
Angeles County. Amy Hogue, Judge. Affirmed.
     Shook Hardy & Bacon, Amir Nassihi, Andrew L. Chang
and Nalani L. Crisologo for Defendant and Appellant.

*     Salcido v. Ford Motor Company (No. B312345); Davidson-
Codjoe v. Ford Motor Company (No. B312350); Perez v. Ford
Motor Company (No. B312356); Brito v. Ford Motor Company
(No. B312360).
       Gupta Wessler, Jennifer Bennett, Linnet Davis-Stermitz;
Kiesel Law, Paul R. Kiesel; Knight Law Group and Roger Kirnos
for Plaintiffs and Respondents.
                    ___________________________
       This is an appeal of an order denying the motion of
defendant Ford Motor Company (FMC) to compel arbitration of
plaintiffs’ claims relating to alleged defects in vehicles it
manufactured. We agree with the trial court that FMC could not
compel arbitration based on plaintiffs’ agreements with the
dealers that sold them the vehicles. 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. And FMC is not entitled to
enforce the agreements as an undisclosed principal because there
is no nexus between plaintiffs’ claims, any alleged agency
between FMC and the dealers, and the agreements.
       Because we conclude that FMC was not entitled to compel
arbitration, we need not consider whether it waived any right to
so do.
                          BACKGROUND
       Each plaintiff bought a Ford vehicle—i.e., one
manufactured by FMC—from a motor vehicle dealer in Southern
California. In each instance, they signed a preprinted form
contract entitled “RETAIL INSTALLMENT SALE
CONTRACT—SIMPLE FINANCE CHARGE (WITH
ARBITRATION PROVISION).” We refer to these as the sale
contracts. Plaintiffs executed the sale contracts because they
elected to finance, rather than pay cash, for their Ford vehicles.

                                 2
       The sale contracts are between the vehicle purchaser, on
the one hand, and the selling dealer, on the other. The purchaser
is referred to as the “Buyer” or “you,” and the selling dealer is
referred to as the “Creditor - Seller,” “we,” or “us.” FMC is not a
party to the sale contracts and is not named in the sale contracts.
       Each sale contract identifies the vehicle sold, makes
“TRUTH-IN-LENDING” and other financing disclosures, sets
forth the repayment schedule, and itemizes the amount financed.
The itemizations include every charge and credit relating to the
sale transactions. These are not limited to the cost of the vehicles
or payments already made. Rather, they include related
purchases from, or other payments to, third parties arising in
connection with the sale. For example, plaintiff Mathew
Davidson-Codjoe financed with the cost of his vehicle the
following additional items: sales tax to the State of California;
optional theft deterrents provided by “Vehicle Theft Protec,”
“Express Code Etch,” and “GPS1”; an electronic vehicle
registration or transfer charge to “MVSC”; three optional Ford
vehicle service plans; “gap” insurance from “Express Gap 61-72”;
and other governmental fees. The form sale contract also
contemplated other add-ons the purchaser could buy and finance
through the dealer, such as vehicle insurance and credit
insurance from a third party.
       Although the sale contracts contemplate the purchase of
service, warranty, and insurance contracts relating to the vehicle
sale, they do not contain comprehensive terms of any of these
contracts. Not only do the sale contracts not contain any terms of
warranty coverage; the dealer expressly disclaims any warranty.
However, the dealer qualifies that this disclaimer “does not affect

                                 3
any warranties covering the vehicle that the vehicle
manufacturer may provide.”
       The sale contracts also contain an arbitration provision. In
relevant part, it provides “EITHER YOU OR WE MAY
CHOOSE TO HAVE ANY DISPUTE BETWEEN US
DECIDED BY ARBITRATION AND NOT IN COURT OR BY
JURY TRIAL.” It later elaborates: “[a]ny claim or dispute,
whether in contract, tort, statute or otherwise (including the
interpretation and scope of this Arbitration Provision, and the
arbitrability of the claims 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 did not
sign this contract) shall, at your or our election, be resolved by
neutral, binding arbitration and not by a court action.”
       Plaintiffs experienced problems with the transmissions in
their Ford Focus and Fiesta model vehicles. In 2015 and 2016,
they sued FMC but did not sue the dealer parties to the sale
contracts. Their theories variously included violations of the
Song-Beverly Consumer Warranty Act and the federal
Magnuson-Moss Warranty—Federal Trade Commission
Improvement Act; breach of the implied warranty of
merchantability; and fraudulent inducement. Many other
purchasers of the same models of Ford vehicles had similar issues
and filed similar lawsuits. On FMC’s motion, plaintiffs’ and
certain other purchasers’ lawsuits were administered as a
coordinated proceeding beginning in 2016.
       In August 2020, FMC filed a motion to compel arbitration
of plaintiffs’ claims based on the arbitration provision in the sale

                                 4
contracts. FMC argued that agency allegations in plaintiffs’
complaints entitled it to enforce the provision as an undisclosed
principal; that it was an intended third party beneficiary of the
provision; and that plaintiffs were equitably estopped from
avoiding the obligation to arbitrate in the sale contracts when
suing on warranties acquired upon purchase of their vehicles.
       Plaintiffs opposed FMC’s motion, including on the grounds
that FMC had waived its right to compel arbitration through its
litigation conduct. The trial court denied FMC’s motion on its
merits. FMC timely appealed.
                           DISCUSSION
1.     Standard of Review
       The parties did not dispute the sale contracts’ terms or
authenticity. The trial court did not resolve factual issues when
it denied FMC’s motion to compel. Whether FMC is entitled to
compel arbitration is therefore a question of law we review de
novo. (See Mendez v. Mid-Wilshire Health Care Center (2013)
220 Cal.App.4th 534, 541 [“ ‘Ordinarily, we review a denial of a
petition to compel arbitration for abuse of discretion. [Citation.]
However, where the trial court’s denial of a petition to arbitrate
presents a pure question of law, we review the order de novo.’ ”].)
2.     Governing Law
       The trial court found, and the parties agree, that the sale
contracts are governed by the Federal Arbitration Act (FAA;
9 U.S.C. § 1 et seq.). The FAA manifests a policy favoring
arbitration. (Morgan v. Sundance, Inc. (2022) __ U.S. __
[142 S.Ct. 1708, 1713].) It does so by requiring courts to enforce
agreements to arbitrate to the same extent as any other contract.
(See 9 U.S.C. § 2; see also Morgan v. Sundance, Inc., at p. __

                                 5
[142 S.Ct. at p. 1713] [“[t]he policy is to make ‘arbitration
agreements as enforceable as other contracts, but not more so’ ”].)
       “[N]o public policy favors requiring arbitration of issues
that the parties have not agreed to arbitrate.” (Garcia v.
Superior Court (2015) 236 Cal.App.4th 1138, 1144; see also
AT&T Technologies v. Communications Workers (1986) 475 U.S.
643, 648.) That is because it is a “foundational FAA principle
that arbitration is a matter of consent.” (Stolt-Nielsen S. A. v.
AnimalFeeds Int’l Corp. (2010) 559 U.S. 662, 684; see also
Pinnacle Museum Tower Assn. v. Pinnacle Market Development
(US), LLC (2012) 55 Cal.4th 223, 236 [“it is a cardinal principle
that arbitration under the FAA ‘is a matter of consent, not
coercion’ ”].)
       “Although the FAA preempts any state law that stands as
an obstacle to its objective of enforcing arbitration agreements
according to their terms, . . . we apply general California contract
law to determine whether the parties formed a valid agreement
to arbitrate their dispute.” (Avery v. Integrated Healthcare
Holdings, Inc. (2013) 218 Cal.App.4th 50, 59-60, citation
omitted.) “General contract law principles include that ‘[t]he
basic goal of contract interpretation is to give effect to the parties’
mutual intent at the time of contracting. [Citations.] . . . “The
words of a contract are to be understood in their ordinary and
popular sense.” ’ [Citation.] Furthermore, ‘ “[t]he whole of a
contract is to be taken together, so as to give effect to every part,
if reasonably practicable, each clause helping to interpret the
other.” ’ ” (Franco v. Greystone Ridge Condominium (2019)
39 Cal.App.5th 221, 227.)
       Under certain circumstances, a nonsignatory to an
arbitration agreement may seek to enforce it against a signatory.

                                   6
Whether such enforcement is permissible is a question of state
law. (Kramer v. Toyota Motor Corp. (9th Cir. 2013) 705 F.3d
1122, 1128; Thomas v. Westlake (2012) 204 Cal.App.4th 605, 614,
fn. 7.) We therefore look to California law to determine whether
FMC, as a nonsignatory to the sale contracts, may compel
plaintiffs to arbitrate.
3.     Analysis
       For the reasons that follow, we agree with the trial court
that FMC failed to establish any right to compel arbitration
under the sale contracts—not under the doctrine of equitable
estoppel, not as a third party beneficiary, and not as an
undisclosed principal. As FMC had no such right, we need not
reach the question of whether FMC waived the claimed right
through its litigation conduct.
      a.      Equitable estoppel does not apply because FMC
              fails to show plaintiffs’ claims against it are
              founded in or intertwined with the sale
              contracts.
       FMC argues it is entitled to compel arbitration under the
doctrine of equitable estoppel. As recently explained in Felisilda
v. FCA US LLC (2020) 53 Cal.App.5th 486 (Felisilda), equitable
estoppel allows a nonsignatory defendant to “ ‘ “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.” [Citations.] “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.]’ [Citation.] [¶] ‘Where the equitable estoppel

                                 7
doctrine applies, the nonsignatory has a right to enforce the
arbitration agreement.’ [Citation.] ‘ “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.” ’ [Citation.] ‘In any case applying equitable estoppel
to compel arbitration despite the lack of an agreement to
arbitrate, a nonsignatory may compel arbitration only when the
claims against the nonsignatory are founded in and inextricably
bound up with the obligations imposed by the agreement
containing the arbitration clause.’ [Citation.] In determining
whether plaintiffs’ claim is founded on or intimately connected
with the sale[] contract, we examine the facts of the operative
complaint.” (Id. at pp. 495–496.)
       FMC argues 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. We disagree.
       FMC’s argument proceeds along two lines. The first is that
automobile warranty claims are founded in and intertwined with
sales contracts in California as a matter of law. This argument
relies on Felisilda, supra, 53 Cal.App.5th 486, in which our
colleagues in the Third District determined that equitable
estoppel required vehicle purchasers to arbitrate their claim
against FCA, a vehicle manufacturer like FMC, pursuant to a
dealer sale contract containing the same form arbitration
provision at issue here. (Id. at pp. 489–490.) The second is that
breaches of warranties are generally treated as breaches of

                                 8
contract, so breaches of any warranties that accompanied the sale
contract are necessarily intertwined with the sale contract. We
explain below why we reject each of these arguments.
            i.      We decline to follow Felisilda.
       The plaintiffs in Felisilda asserted a single cause of action
against FCA for violation of the Song-Beverly Consumer
Warranty Act based on FCA’s failure to repair or otherwise
remedy defects in a used Dodge Caravan they bought from a
Dodge dealer. (Felisilda, supra, 53 Cal.App.5th at p. 491.)
Relying on the doctrine of equitable estoppel, the Felisilda court
concluded the plaintiffs were bound to arbitrate with FCA under
the plaintiffs’ sale contract with the dealer for three reasons.
First, the court reasoned that the condition of the vehicle was
within the subject matter of the claims made arbitrable under the
sale contract. (Id. at p. 496.) Second, based only on the plaintiffs’
allegation that the vehicle was covered by FCA’s warranties, the
court found “the sales contract was the source of the warranties.”
(Ibid.) Third, the court noted the plaintiffs had “expressly agreed
to arbitrate claims arising out of the condition of the vehicle—
even against third party nonsignatories to the sales contract.”
(Id. at p. 497.) We respectfully disagree with Felisilda’s analysis
for the following reasons.1
       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

1     FMC incorrectly refers to Felisilda as “binding precedent.”
As plaintiffs observe, “ ‘there is no horizontal stare decisis in the
California Court of Appeal,’ ” and this court is not bound by
another California Court of Appeal’s decision. (Sarti v. Salt
Creek Ltd. (2008) 167 Cal.App.4th 1187, 1193–1194.)

                                  9
from asserting FCA has no right to demand arbitration.
Equitable estoppel would apply if the plaintiffs had sued FCA
based on the terms of the sale contract yet denied FCA could
enforce the arbitration clause in that contract. (Felisilda, supra,
53 Cal.App.5th at pp. 495–496.) That is not what the plaintiffs
did in Felisilda.
       The plaintiffs’ breach of warranty claims against FCA in
Felisilda were not based on their sale contracts with the dealers.
We disagree with Felisilda that “the sales contract was the
source of [FCA’s] warranties at the heart of this case.” (Felisilda,
supra, 53 Cal.App.5th at p. 496.) As we discuss further below,
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.
       We also disagree with the Felisilda court’s interpretation of
the sale contract as broadly calling for arbitration of claims
“against third party nonsignatories.” (Felisilda, supra,
53 Cal.App.5th at p. 497.) The Felisilda court relied on the
following italicized language to conclude that third parties could
enforce the arbitration provision: “ ‘Any claim or dispute,
whether in contract, tort, statute or otherwise . . . , between you
and us or our employees, agents, successors or assigns, which
arises out of or relates to . . . purchase or condition of this vehicle,
the cont[r]act 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 . . . .’ ” (Id. at p. 498.)
       We do not read this italicized language as consent by the
purchaser to arbitrate claims with third party nonsignatories.

                                  10
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.”
       Purchasers, like plaintiff Mathew Davidson-Codjoe, whose
sale contract we described above, can elect to buy insurance, theft
protection, extended warranties and the like from third parties,
and they can finance their transactions with those third parties
under the sale contracts. The “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.
          ii.        Plaintiffs’ claims are not founded in the
                     sale contracts.
       Most of the plaintiffs attached their sale contracts as an
exhibit to their complaints. Some did so in support of general
allegations about when they bought their vehicles and to identify
their vehicles by make and model. Others attached their sale
contracts in support of allegations the sale contracts were
accompanied by implied warranties under the Song-Beverly
Consumer Warranty Act. But no plaintiffs alleged violations of
the sale contracts’ express terms. Rather, plaintiffs’ claims are
based on FMC’s statutory obligations to reimburse consumers or
replace their vehicles when unable to repair in accordance with

                                11
its warranty. Certain plaintiffs also sued on theories of breach of
implied warranty of merchantability and fraudulent inducement.
Not one of the plaintiffs sued on any express contractual
language in the sale contracts.
       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.”
In short, the substantive terms of the sale contracts relate to sale
and financing and nothing more.
       FMC’s argument that plaintiffs’ manufacturer warranty
claims are founded in the sale contracts because California law
treats all warranty claims as contract claims is not supported by
California law.
       California law does not treat manufacturer warranties
imposed outside the four corners of a retail sale contract as part
of the sale contract. In Greenman v. Yuba Power Products, Inc.
(1963) 59 Cal.2d 57 (Greenman), our Supreme Court
distinguished between, on the one hand, warranty obligations
flowing from the seller to the buyer by contract, and, on the other
hand, manufacturer warranties “that arise[] independently of a
contract of sale between the parties.” (Id. at p. 60, italics added;
see also Corporation of Presiding Bishop of Church of Jesus
Christ of Latter Day Saints v. Cavanaugh (1963) 217 Cal.App.2d
492, 514 (Cavanaugh) [manufacturer’s express warranty “was not
part of a contract of sale between the manufacturer and the
plaintiff” (italics added)].)

                                12
       FMC only acknowledges these authorities in its reply,
dismissing them as “dat[ing] back nearly sixty years.” But it
cites no more recent authority establishing that manufacturer
warranty obligations are implied terms in a retailer’s sale
contract. FMC cites authorities that warranty claims are treated
like contract claims: California Uniform Commercial Code
section 2725 (limitations period for breach of warranty governed
by same provision as governing breach of sale contract claims);
Mills v. Forestex Co. (2003) 108 Cal.App.4th 625, 642 (same);
Cardinal Health 301, Inc. v. Tyco Electronics Corp. (2008)
169 Cal.App.4th 116, 134–135 (same). But, contrary to FMC’s
assertion, it does not “naturally follow” from any contractual
character of manufacturer warranty claims that they inhere in a
retail sale contract containing no warranty terms. Following
Greenman, supra, 59 Cal.2d 57, and Cavanaugh, supra,
217 Cal.App.2d 492, independent manufacturer warranties are
not part of, but are independent from, retail sale contracts.
       Again, the “ ‘ “fundamental point” ’ ” of using equitable
estoppel to compel arbitration is to prevent a party from taking
advantage of a contract’s substantive terms while avoiding those
terms requiring arbitration. (Felisilda, supra, 53 Cal.App.5th at
p. 496.) Plaintiffs’ claims in no way rely on the sale contracts.
Equitable estoppel does not apply.
      b.      FMC was not a third party beneficiary of the
              sale contracts.
       “ ‘A third party beneficiary is someone who may enforce a
contract because the contract is made expressly for his benefit.’ ”
(Jensen v. U-Haul Co. of California (2017) 18 Cal.App.5th 295,
301; see also Civ. Code, § 1559 [“[a] contract, made expressly for
the benefit of a third person, may be enforced by him . . . .”].) A

                                13
person “only incidentally or remotely benefited” from a contract is
not a third party beneficiary. (Lucas v. Hamm (1961) 56 Cal.2d
583, 590.) Thus, “the ‘mere fact that a contract results in benefits
to a third party does not render that party a “third party
beneficiary.” ’ ” (Jensen, at p. 302.) Nor does knowledge that the
third party may benefit from the contract suffice. (Goonewardene
v. ADP, LLC (2019) 6 Cal.5th 817, 830 (Goonewardene).) Rather,
the parties to the contract must have intended the third party to
benefit. (Hess v. Ford Motor Co. (2002) 27 Cal.4th 516, 524 [“ ‘[a]
putative third party’s rights under a contract are predicated upon
the contracting parties’ intent to benefit’ it”].)
       To show the contracting parties intended to benefit it, a
third party must show that, under the express terms of the
contract at issue and any other relevant circumstances under
which the contract was made, (1) “the third party would in fact
benefit from the contract”; (2) “a motivating purpose of the
contracting parties was to provide a benefit to the third party”;
and (3) permitting the third party to enforce the contract “is
consistent with the objectives of the contract and the reasonable
expectations of the contracting parties.” (Goonewardene, supra,
6 Cal.5th at p. 830.)
       The trial court here found FMC could not compel
arbitration as a third party beneficiary because it failed to
address the Goonewardene requirements. FMC addresses them
in its opening brief but only in cursory fashion. As to the benefit
requirement, it contends that, as the vehicle manufacturer, FMC
“benefits from the sale[] contracts the dealers execute to sell
Ford[] vehicles,” and “[FMC] would benefit from utilizing
arbitration as an efficient means of dispute resolution.” As to the
intent to benefit FMC—the “motivating purpose” requirement—it

                                14
points, without elaboration, to the “broad language expressly
encompassing claims arising out of relationships or transactions
‘with third parties who do not sign th[e] [sale] contract’ . . . .”
And, because FMC contends that plaintiffs seek to hold it liable
“based on alleged agency and warranty relationships between
[FMC] and the dealers and/or between [FMC] and [plaintiffs],”
FMC argues permitting it to enforce the arbitration provision is
consistent with the objectives of the sale contracts and the
parties’ reasonable expectations.
       In response, plaintiffs argue FMC can satisfy none of the
Goonewardene requirements. As part of their analysis, plaintiffs
discuss the Ninth Circuit Court of Appeal’s recent decision in Ngo
v. BMW of North America (9th Cir. 2022) 23 F.4th 943 (Ngo).
Federal authority is not binding on this court, but we discuss Ngo
here at some length because we find it persuasive. (See, e.g.,
Haynes v. EMC Mortgage Corp. (2012) 205 Cal.App.4th 329, 334
[“federal decisions on questions of state law can be persuasive
authority”], citing 9 Witkin, Cal. Procedure (5th ed. 2008) Appeal,
§ 507, p. 571; Brakke v. Economic Concepts, Inc. (2013)
213 Cal.App.4th 761, 770 [“ ‘[w]hile decisions of federal courts in
matters of state law are not binding on state courts, they may be
persuasive’ ”].)
       Ngo involved efforts by BMW, a vehicle manufacturer like
FMC, to compel arbitration under a sale contract containing the
same form arbitration provision at issue here. The Ngo court
reversed the district court’s order compelling arbitration, finding
that BMW was neither a third party beneficiary under California
law nor entitled to compel arbitration on equitable estoppel
grounds. (Ngo, supra, 23 F.4th at pp. 946–950.)

                                15
       As to BMW’s claimed third party beneficiary status, Ngo
found that it satisfied none of the Goonewardene requirements.
It found the arbitration provision did not benefit BMW because it
was “pellucid that only three parties [(the purchaser, the dealer,
and its assignee)] may compel arbitration, none of which is
BMW.” (Ngo, supra, 23 F.4th at p. 947.) Second, it found BMW
failed to show the dealer and purchaser had a “motivating
purpose” to benefit it. Based on the limitations on who could
compel arbitration, the court found “[n]othing in the clause or, for
that matter, in the purchase agreement reflects any intention to
benefit BMW by allowing it to take advantage of the arbitration
provision.” (Id. at p. 948.) Rather, it found the sale contract “was
drafted with the primary purpose of securing benefits for the
contracting parties themselves. . . . [T]he purchaser s[ought] to
buy a car, and the dealership and assignee[] s[ought] to profit by
selling and financing the car. Third parties are not purposeful
beneficiaries of such an undertaking.” (Id. at p. 947.) Third, it
found that allowing BMW to enforce the arbitration provision
would not be consistent with the “ ‘objectives of the contract’ and
the reasonable expectations of the contracting parties.’ ” (Id. at
p. 948.) Among the reasons it offered was that the clause
specifically identified who could compel arbitration,
demonstrating that “the parties knew how to give enforcement
powers to non-signatories when they wished to but gave none to
BMW. . . . [¶] . . . [¶] . . . BMW’s relative proximity to the
contract confirms that the parties easily could have indicated
that the contract was intended to benefit BMW—but did not do
so.” (Ibid.)
       We agree with Ngo that the sale contracts reflect no
intention to benefit a vehicle manufacturer under Goonewardene.

                                16
First, nothing in the sale contracts or their arbitration provision
offers any direct “benefit” to FMC (Goonewardene, supra,
6 Cal.5th at p. 830). FMC’s claim that it “would benefit from
utilizing arbitration as an efficient means of dispute resolution”
(italics added) if treated as a third party beneficiary begs the
question: does the provision directly benefit FMC? The answer is
patently “no.” Its direct benefits are expressly limited to those
persons who might rely on it to avoid proceeding in court—the
purchaser, the dealer, and the dealer’s employees, agents,
successors or assigns. FMC is none of these.
       Second, there is no indication that a benefit to FMC was
the signatories’ “motivating purpose” (Goonewardene, supra,
6 Cal.5th at p. 830) in contracting for the sale and purchase of a
Ford vehicle. 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.” (See Martinez v.
BaronHR, Inc. (2020) 51 Cal.App.5th 962, 967 [intent of
arbitration agreement ascertained solely from words of written
agreement, if possible; language controls if clear and explicit].)
       Any interest FMC may have in where its dealers and
consumers choose to resolve their disputes is remote and
certainly not articulated in FMC’s briefing. If the signatories had
intended to benefit FMC, such a purpose would have been easy to
articulate. They could have simply named FMC—directly or by
class as the vehicle’s manufacturer—as a person entitled to
compel arbitration. But they did not. What they said was that
“EITHER YOU OR WE”—the purchaser or the dealer—“MAY
CHOOSE TO HAVE ANY DISPUTE BETWEEN US

                                17
DECIDED BY ARBITRATION,” and reiterated that arbitrable
disputes “shall, at your or our”—the purchaser’s or the dealer’s—
“election, be resolved by neutral, binding arbitration . . . .”
(Italics added.)
       FMC contorts the meaning of the arbitration clause when it
claims the reference to “third parties who do not sign this
contract” gives it a right to arbitrate. As already discussed, this
reference concerns what may be arbitrated, not who may
arbitrate. Who may enforce an arbitration agreement is a
separate matter from the types of disputes the agreement covers.
(See Ngo, supra, 23 F.4th at p. 948 [“Although the arbitration
clause may have extended to claims regarding the purchase of
the vehicle, it does not follow that additional parties can enforce
the arbitration clause”].) The parties’ choice of the subject of the
disputes they agree to arbitrate does not evince an intention to
benefit nonparties so as to affect who is entitled to compel
arbitration.
       That FMC may have provided a financial incentive to
facilitate some sales also does not affect the analysis. FMC
points out that two of the plaintiffs’ sale contracts show they
received manufacturer rebates in connection with the purchase of
their vehicles. FMC fails to explain how providing incentives to
encourage consumers to buy Fords from its dealers evidences an
intention by the purchaser and dealer to benefit FMC. A
manufacturer profits from its sales to dealers, and dealers profit
from their sales to consumers, and the more cars a dealer sells,
the more cars it is likely to buy from FMC. That basic aspect of
retail sales does not in and of itself imply a shared intent of the
dealer and consumer to benefit FMC. A manufacturer’s rebate to
the consumer does not, without more, make the manufacturer a

                                18
third party beneficiary of the retail sale and financing contract
between the dealer and purchaser, nor does it give the
manufacturer a right to enforce the arbitration clause.
       Finally, allowing FMC to enforce the arbitration provision
as a third party beneficiary would be inconsistent with the
“reasonable expectations of the contracting parties”
(Goonewardene, supra, 6 Cal.5th at p. 830) where they twice
specifically vested the right of enforcement in the purchaser and
the dealer only.
       c.    Plaintiffs’ purported agency allegations are
             insufficient to permit FMC to compel
             arbitration as an undisclosed principal.
       “A nonsignatory to an agreement to arbitrate may be
required to arbitrate, and may invoke arbitration against a party,
if a preexisting confidential relationship, such as an agency
relationship between the nonsignatory and one of the parties to
the arbitration agreement, makes it equitable to impose the duty
to arbitrate upon the nonsignatory.” (Westra v. Marcus &
Millichap Real Estate Inv. Brokerage Co. (2005) 129 Cal.App.4th
759, 765.) Whether a nonsignatory has rights under an
arbitration agreement through some agency relationship is
dictated by the ordinary principles of contract and agency law.
(Cohen v. TNP 2008 Participating Notes Program, LLC (2019)
31 Cal.App.5th 840, 860 (Cohen), quoting 21 Williston on
Contracts (4th ed. 2017) § 57:19, p. 194.)
       FMC relies on Cohen, supra, 31 Cal.App.5th 840, for the
proposition that “a nonsignatory defendant [may] compel a
signatory plaintiff to arbitrate where there is a connection
between the claims alleged against the nonsignatory and its
agency relationship with a signatory.” (Id. at p. 863.) The

                               19
authorities Cohen cites establishing the affirmative right of a
nonsignatory to compel arbitration show that such connection
must also extend to the agreement to arbitrate. (See id. at
pp. 863–864, citing Dryer v. Los Angeles Rams (1985) 40 Cal.3d
406, 418 [explaining that in Dryer “nonsignatory agents were
entitled to enforce a contract’s arbitration provision where the
plaintiff sued them in their capacities as agents for the signatory
and the significant issues in the dispute arose out of the
contractual relationship between the parties” (italics added)] and
Knight et al., Cal. Practice Guide: Alternative Dispute
Resolution (The Rutter Group 2018) ¶ 5:266.5, p. 5–282
[explaining that, according to the Rutter Guide, nonsignatories
are permitted to “enforce an arbitration agreement where the
claims against the nonsignatory ‘aris[e] under the contract’
containing an arbitration provision, ‘but not other claims’ ”
(italics added)].) Garcia v. Pexco, LLC (2017) 11 Cal.App.5th 782,
cited by FMC, similarly reflects a nexus between the claims, the
agency allegations, and the contract containing the arbitration
provision. The court interpreted the central joint employer
allegations as making the defendants agents of one another in all
their “dealings with [the plaintiff].” (Id. at p. 788.) This
necessarily included the plaintiff’s employment agreement with
one of the defendants, which contained the arbitration provision
and “governed” the plaintiff’s claims against both defendants.
(Id. at p. 787.)
       Here, there is no connection between each of (1) plaintiffs’
claims against FMC; (2) any alleged agency relationship between
FMC and the dealers; and (3) the sale contracts between the
dealers and plaintiffs. The sole dealer-FMC agency allegation
that is clearly articulated in some of the complaints is that the

                                20
dealers are FMC’s authorized “agents for vehicle repairs.” (Italics
added.) When FMC has to fix something under warranty,
consumers can go to a dealer to get it fixed. This does not mean
the dealers are FMC’s agents in connection with the sale of
vehicles to consumers that the dealer bought from FMC. The
other agency allegations in this case are so vague that it is
difficult to ascertain what they mean at all.
       FMC contends that plaintiffs’ “theory of liability is based on
a principal-agent relationship between Ford and the dealers.”
Plaintiffs, while not repudiating any purported agency, respond
that FMC’s claimed right to compel arbitration as an undisclosed
principal “depends entirely on allegations the plaintiffs did not
actually make—and that [FMC] itself, apparently, disputes.”
Indeed, FMC does not admit that plaintiffs’ dealers are its agents
and “reserves the right to dispute (at trial or arbitration) whether
[plaintiffs] can meet their burden of proving liability based on an
agency relationship.”
       FMC catalogues the purported agency allegations most
helpful to it in its opening brief, but none clearly states that the
dealers acted as FMC’s agents. Rather, all references to FMC’s
“agents” are ambiguous. For example, plaintiffs allege that they
relied on “[FMC] and its agent’s omissions and/or
misrepresentations”; that “[FMC] and its agents intentionally
concealed and failed to disclose facts”; and that “[FMC] and its
agents actively concealed the existence and nature of the
Transmission Defect.” These allegations do not establish agency
between FMC and the dealers. Any allegation of wrongdoing by
FMC necessarily entails actions of its agents. (See Kelly v.
General Telephone Co. (1982) 136 Cal.App.3d 278, 286
[“A corporation can act only through its agents”].) But alleged

                                 21
wrongdoing by FMC’s unspecified agents does not necessarily
entail wrongdoing by plaintiffs’ dealers.
      Plaintiffs also allege they relied on “statements made
during the sales process by [FMC]’s agents and within the
marketing brochures provided by [FMC].” But, again, they do not
specifically identify who these purported agents are. In the
context of the complaints, these allegations could be read to refer
to the dealers’ employees; but they could just as well be read as
referring to FMC’s employees who prepared the vehicle window
stickers or authorized the copy in the marketing brochures.
Indeed, three of the four complaints refer to “statements on the
window sticker” that plaintiffs reviewed prepurchase in the
immediately preceding paragraph. These perfunctory references
to FMC’s “agents” lack clarity and substance. They also lack
connection to plaintiffs’ claims and the sale contracts.
      FMC urges that plaintiffs’ fraudulent inducement causes of
action are based on an alleged agency relationship between FMC
and its dealers. This is not true. The specific allegations
supporting the misrepresentation causes of action are that
plaintiffs, in making their purchasing decisions, relied on FMC’s
statements in a marketing brochure and, in particular cases, the
window sticker or an FMC press release as well. These
allegations make no reference to any other alleged
misrepresentations—not by the dealers; not by dealers’
salespeople.
      Likewise, the concealment allegations do not rest on an
agency relationship. While plaintiffs allege FMC communicated
some information about vehicle defects to its dealers, we are
directed to no allegations that the dealers from which plaintiffs
bought their cars knew the legally significant information that

                                22
FMC allegedly concealed from plaintiffs. To have fraudulently
concealed information on FMC’s behalf, it is necessary that the
dealers had that information. (See Assilzadeh v. Cal. Fed.
Bank (2000) 82 Cal.App.4th 399, 411 [no duty to disclose
information not known]; San Diego Hospice v. County of San
Diego (1995) 31 Cal.App.4th 1048, 1055 [duty to disclose requires
knowledge of legally significant facts].) But the only entity
alleged to have full knowledge of the relevant facts allegedly
concealed—knowledge that was “superior and exclusive”— is
FMC.
      Perhaps recognizing the lack of concrete agency allegations
in the complaints, FMC introduces evidence that other plaintiffs
sought to treat dealers as FMC’s agents in related proceedings.
But FMC directs us to no authority where conduct of other
plaintiffs in other proceedings was considered in evaluating
whether the allegations of a complaint sufficed to satisfy the
agency exception to the usual rule that only a signatory to an
arbitration agreement is entitled to enforce it.
      Ambiguities in the allegations aside, even if plaintiffs did
adequately allege that the dealers acted as FMC’s agents in
misrepresenting the qualities of the vehicles prior to sale, any
nexus with the sale contracts, and thus the right to compel
arbitration, is lacking. There are no allegations to support the
conclusion that the dealers acted as FMC’s agent in executing the
sale contracts. “Generally, retailers are not considered the
agents of the manufacturers whose products they sell.” (Murphy
v. DirecTV, Inc. (9th Cir. 2013) 724 F.3d 1218, 1232 [applying
California law], citing Rest.3d Agency (2006) § 1.01, com. g;
Alvarez v. Felker Mfg. Co. (1964) 230 Cal.App.2d 987, 1000.)
There are no allegations that the vehicles sold belonged to FMC,

                               23
as opposed to the dealer. There are no allegations that FMC,
rather than the dealer, financed the sales. There are no
allegations that FMC controlled or had any direct interest in the
transactions. In short, there are no allegations that the dealers
were transacting other than for their own account in entering
into the sale contracts.
       Finally, FMC argues that plaintiffs request relief that
would only be available if the dealers were agents for FMC.
Requests for relief do not amount to allegations and we will not
infer allegations from them. It is allegations that show
entitlement to relief and not the other way around.
       In short, in the absence of some nexus between the agency
allegations, plaintiffs’ claims, and the sale contracts, FMC is not
entitled to compel plaintiffs to arbitrate as an undisclosed
principal.
                            DISPOSITION
       The trial court’s order denying FMC’s motion to compel
arbitration is affirmed. Plaintiffs are to recover their costs on
appeal.

                               GRIMES, J.

      WE CONCUR:

                        STRATTON, P. J.

                        VIRAMONTES, J.

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