NOTICE OF PETITION AND PETITION TO COMPEL ARBITRATION WITH AAA AND STAY PROCEEDINGS PENDING OUTCOME OF ARBITRATION (TRANSACTION ID # 100166637) FILED BY DEFENDANT TESLA, INC. HEARING SET FOR JUL-14-2022 AT 09:30 AM IN DEPT 302
Page 1
Bradley M. Tanner (SBN: 273057)
TESLA, INC.
901 Page Avenue
Fremont, CA Telephone: (415) 340-Email: brtanner@tesla.com
ELECTRONICALLY
FILED
Superior Court of California,
County of San Francisco
Attorney for Defendant TESLA, INC.
06/10/
Clerk of the Court
BY: SANDRA SCHIRO
Deputy Clerk
SUPERIOR COURT OF THE STATE OF CALIFORNIA
FOR THE COUNTY OF SAN FRANCISCO
LEONARDO BALTER, an individual,
Plaintiff,
v.
TESLA MOTORS INC., a corporation, and
DOES 1 to 10, inclusive,
Defendants.
CASE NO. CGC-22-DEFENDANT TESLA, INC.’S NOTICE OF
PETITION AND PETITION TO COMPEL
ARBITRATION WITH AAA AND STAY
PROCEEDINGS PENDING OUTCOME OF
ARBITRATION; MEMORANDUM OF
POINTS AND AUTHORITIES;
DECLARATIONS OF RAYMOND KIM
AND BRADLEY M. TANNER
[Filed concurrently herewith [Proposed]
Order]
DATE: July 14, TIME: 9:30 a.m.
DEPT:
Complaint Filed: May 17,
DEFENDANT TESLA’S NOTICE OF PETITION AND PETITION TO COMPEL ARBITRATION WITH AAA AND STAY
PROCEEDINGS PENDING OUTCOME OF ARBITRATIONPage 2
TO ALL PARTIES AND THEIR ATTORNEYS OF RECORD:
PLEASE TAKE NOTICE that on July 14, 2022, at 9:30 a.m. or as soon thereafter as the
matter can be heard in Department 302 of the San Francisco County Superior Court, which is
located at 400 McAllister Street, San Francisco, California 94102, there will be a hearing on the
Petition of Defendant Tesla Inc.’s (hereinafter “Tesla” or “Moving Party”) to compel arbitration
of this controversy with the American Arbitration Association (“AAA”) and to stay the above-
captioned action.
This Petition (“Petition”) is made pursuant to the Federal Arbitration Act (“FAA”),
U.S.C. § 1 et seq., the California Arbitration Act (“CAA”), California Code of Civil Procedure
section 1280 et seq., federal and California decisional authorities, and the arbitration notice and
provisions set forth in the Motor Vehicle Order Agreement (“MVOA”) and Lease Agreement
(“Lease”), which were both agreed to and signed by Plaintiff Leonardo Balter (“Plaintiff”). Said
authority requires Plaintiff to submit to arbitration of a controversy upon determination that an
agreement to arbitrate the controversy exists. Plaintiff executed valid agreements to submit this
dispute to binding arbitration. Both agreements further require the parties to arbitrate with AAA.
The Court must order this entire action to binding arbitration in accordance therewith and stay
this matter pursuant to 9 U.S.C. § 3 and Code of Civil Procedure section 1281.4 through
arbitration, and to order the arbitration be conducted by AAA as required by the controlling
agreement. This motion is also filed in lieu of the Moving Party’s answer or responsive pleading
pursuant to California Code of Civil Procedure section 1281.7.
On the aforementioned date and at the aforementioned time, Moving Party will also move,
and does hereby move the Court, pursuant to California Code of Civil Procedure section 1281.4,
to stay the above-captioned action until an arbitration is had in accordance with the order to
arbitrate or until such earlier time as the Court specifies.
///
DEFENDANT TESLA’S NOTICE OF PETITION AND PETITION TO COMPEL ARBITRATION WITH AAA AND STAY
PROCEEDINGS PENDING OUTCOME OF ARBITRATIONPage 3
This Petition is based upon this notice of Petition, the accompanying memorandum of
points and authorities, the attached arbitration agreement and declarations of Bradley Mark
Tanner and Raymond Kim, and attached exhibits, the complete files and records in this action,
and such other argument and evidence as may be presented at or before the hearing of this matter.
Dated: June 10,
TESLA, INC.
By:______________________________
BRADLEY M. TANNER
Attorney for Defendant Tesla, Inc.
-2-
DEFENDANT TESLA’S NOTICE OF PETITION AND PETITION TO COMPEL ARBITRATION WITH AAA AND STAY
PROCEEDINGS PENDING OUTCOME OF ARBITRATIONPage 4 MEMORANDUM OF POINTS AND AUTHORITIES
I.
INTRODUCTION
Plaintiff Leonardo Balter (“Plaintiff”) entered into a written contract with Tesla, Inc.
(“Tesla”) for the lease of a new 2020 Tesla Model Y, VIN 5YJYGDEF5LF000097 (the
“Vehicle”). The transaction was governed by a Lease Agreement (“Lease”) containing the terms
and conditions of the sale. The Lease included an arbitration clause which requires binding
arbitration of this entire action with the American Arbitration Association (“AAA”). However,
Plaintiff has ignored his contractual obligations, and instead of initiating arbitration with AAA,
and filed the present lawsuit. Accordingly, because the arbitration agreement is valid and covers
the parties and controversy set forth in the lawsuit, the Moving Party requests this Court order the
action to arbitration with AAA and stay the proceedings pending the completion of such
arbitration.
II.
STATEMENT OF FACTS
On April 8, 2021, Plaintiff placed an order for his Vehicle, agreed to the terms of the
Motor Vehicle Order Agreement (“MVOA”) (See, Declaration of Raymond Kim (“Kim Decl.”),
at ¶ 2, Exh. “A”.) On or about April 10, 2021, Plaintiff completed the purchase of the Vehicle,
and entered into a written contract with Tesla for the lease of the Vehicle pursuant to the
The Lease provides:
Agreement to Arbitrate: Please carefully read this provision,
which applies to any dispute between you and Tesla, Inc. and its
affiliates, (together “Tesla”).
If you have a concern or dispute, please send a written notice
describing it and your desired resolution to resolutions@tesla.com.
If not resolved within 60 days, you agree that any dispute arising
out of or relating to any aspect of the relationship between you and
Tesla will not be decided by a judge or jury but instead by a single
arbitrator in an arbitration administered by the American
Arbitration Association (AAA) under its Consumer Arbitration
Rules. This includes claims arising before this Agreement, such as
claims related to statements about our products.
-1-
DEFENDANT TESLA’S NOTICE OF PETITION AND PETITION TO COMPEL ARBITRATION WITH AAA AND STAY
PROCEEDINGS PENDING OUTCOME OF ARBITRATIONPage 5
We will pay all AAA fees for any arbitration, which will be held in
the city or county of your residence. To learn more about the Rules
and how to begin an arbitration, you may call any AAA office or go
to www.adr.org.
The arbitrator may only resolve disputes between you and Tesla,
and may not consolidate claims without the consent of all parties.
The arbitrator cannot hear class or representative claims or requests
for relief on behalf of others purchasing or leasing Tesla vehicles.
In other words, you and Tesla may bring claims against the other
only in your or its individual capacity and not as a plaintiff or class
member in any class or representative action. If a court or arbitrator
decides that any part of this agreement to arbitrate cannot be
enforced as to a particular claim for relief or remedy (such as
injunctive or declaratory relief), then that claim or remedy (and
only that claim or remedy) shall be severed and must be brought in
court and any other claims must be arbitrated.
If you prefer, you may instead take an individual dispute to small
claims court.
You may opt out of arbitration within 30 days after signing this
Agreement by sending a letter to: Tesla, Inc.; P.O. Box 15430;
Fremont, CA 94539-7970, stating your name, Vehicle Identification
Number, and intent to opt out of the arbitration provision. If you do
not opt out, this agreement to arbitrate overrides any different
arbitration agreement between us, including any arbitration
agreement in a lease or finance contract. (See id. at p. 2.)
After an opportunity to review the Lease, Plaintiff signed in the indicated space, indicating
his agreement to arbitrate pursuant to the applicable provision set forth on the Lease.
The Lease forms the basis of Plaintiff’s allegations against Moving Party. (See id.)
Despite the terms and specific arbitration provision within the Lease, Plaintiff filed the operative
The MVOA also contains the same arbitration provision that states in pertinent terms:
Agreement to Arbitrate. Please carefully read this provision, which applies to any dispute between you
and Tesla, Inc. and its affiliates, (together “Tesla”).
If you have a concern or dispute, please send a written notice describing it and your desired resolution to
resolutions@tesla.com.
If not resolved within 60 days, you agree that any dispute arising out of or relatng to any aspect of the
relationship between you and Tesla will not be decided by a judge or jury but instead by a single arbitrator
in an arbitration administered by the American Arbitration Association (AAA) under its Consumer
Arbitration Rules. This includes claims arising before this Agreement, such as claims related to statements
about our products.
…
-2-
DEFENDANT TESLA’S NOTICE OF PETITION AND PETITION TO COMPEL ARBITRATION WITH AAA AND STAY
PROCEEDINGS PENDING OUTCOME OF ARBITRATIONPage 6
Complaint for Damages on May 17, 2022 (the “Complaint”). (See, See, Declaration of Bradley
M. Tanner (“Tanner Decl.”), ¶ 2, Exh. “C”, Complaint (“Compl.”) The Complaint contains a
single cause of action, for Violation of the Song Beverly Consumer Warranty Act. (See id.) The
above claims is subject to binding arbitration. The Moving Party denies Plaintiff’s allegations,
and demands the controversy be resolved through binding Arbitration, through the AAA, as set
forth in the controlling Lease. Tesla has not received any opt out notice from Plaintiff in response
to opt-out provisions set forth in the MVOA and Lease. (Kim Decl., ¶ 4.)
On May 28 and June 8, 2022, Tesla sent emails to Plaintiff’s counsel to discuss the matter
and requesting Plaintiff agree to arbitrate the matter with AAA under the lease terms. (Tanner
Decl., ¶ 3, Exhs. “D,” “E”, and “F”.) Plaintiff’s counsel responded they refuse to stipulate to
arbitration, but when pressed for a good faith legal basis based on the MVOA and Lease, Plaintiff
did not provide any further response. (Tanner Decl., ¶ 4.) By refusing to arbitrate the instant
action with AAA, Plaintiff has not only ignored, but also breached, the arbitration provisions
contained in the MVOA and Lease.
III.
LEGAL ARGUMENT
Plaintiff’s claims must be arbitrated pursuant to the parties’ express agreement. As
discussed below, both federal law and California law favor the enforcement of valid arbitration
agreements. (See, Armendariz v. Foundation Health Psychcare Svcs., Inc. (2000) 24 Cal.4th 83,
97.) The United States Supreme Court has often reaffirmed the long-standing “liberal federal
policy favoring arbitration,” and the “fundamental principle that arbitration is a matter of
contract” stating, “in line with these principles, courts must place arbitration agreements on equal
footing with other contracts…[and] enforce them according to their terms.” (See e.g., AT&T
Mobility, LLC v. Concepcion (2011) 563 U.S. 321, 131 S.Ct. 1740, 1745-46; DirecTV, Inc. v.
Imburgia, et al. (2015) 136 S.Ct. 463.) The California Supreme Court has additionally favored the
enforcement of arbitration clauses through its adoption of Concepcion. (Sanchez v. Valencia
Holding Company, LLC (2015) 61 Cal.4th 889.) Indeed, courts are required to resolve any doubt
as to whether a dispute falls within an arbitration provision in favor of arbitration. (See id.)
-3-
DEFENDANT TESLA’S NOTICE OF PETITION AND PETITION TO COMPEL ARBITRATION WITH AAA AND STAY
PROCEEDINGS PENDING OUTCOME OF ARBITRATIONPage 7
In this instance, there is no doubt that an agreement to arbitrate the subject transaction
exists. Plaintiff entered into the MVOA, and later the Lease, both containing the arbitration clause
in connection with the order and lease of the Vehicle. (See Lease, ¶ 3 [Exh. “B” to Kim Decl.];
MVOA, ¶ 2, [Exh. “A” to Kim Decl.) Therefore, it is without question that he was placed on
notice that either party to the Lease had the right to elect to arbitrate disputes arising from the
order or lease.
A.
By the terms of the relevant arbitration provision contained in the Lease, Plaintiff’s claims
Plaintiff’s Claims Are Subject to Arbitration Under the FAA.
are subject to arbitration pursuant to the FAA. (See Id.)
The FAA provides in pertinent part that:
A written provision in any maritime transaction or a contract evidencing a
transaction involving commerce to settle by arbitration a controversy
thereafter arising out of such contract or transaction, or the refusal to
perform the whole or any part thereof, or an agreement in writing to
submit to arbitration an existing controversy arising out of such a contract,
transaction, or refusal, shall be valid, irrevocable, and enforceable save
upon such grounds as exist at law or in equity for the revocation of any
contract. (9 U.S.C. § 2.)
Due to the “strong judicial policy favoring the submission of contractual disputes to
arbitration,” the requirement that the contract involve “commerce” is construed broadly. (See,
Concepcion, supra, 131 S.Ct. at 1745-46; Societe Generale de Surveillance, S.A. v. Raytheon
European Mgt. and Systems Co. (1st Cir. 1981) 643 F.2d 863, 867.) In Bernhardt v. Polygraphic
Co. (1956) 350 U.S. 198, 76 S.Ct. 273, the United States Supreme Court indicated that a contract
involves commerce where there is a “showing that petitioner while performing his duties under
the employment contract was working ‘in’ commerce, was producing goods for commerce, or
engaging in activity that affected commerce.” (Bernhardt, 350 U.S. at 200-01.) Here, Tesla does
business as an automobile manufacturer and retailer, and is unquestionably involved in the selling
of automobiles in the course of commerce, as that term is broadly defined in federal cases
interpreting the FAA.
The arbitration language in the MVOA and Lease are broad and require “any dispute”
-4-
DEFENDANT TESLA’S NOTICE OF PETITION AND PETITION TO COMPEL ARBITRATION WITH AAA AND STAY
PROCEEDINGS PENDING OUTCOME OF ARBITRATIONPage 8
between Plaintiff and Tesla to be arbitrated. (See, MVOA [Exh. “A”] at p. 3; Lease [Exh. “B”] at
p. 3.) The claim in the Complaint arises out of the specific automobile sale transaction between
Plaintiff and Tesla, as Plaintiff acknowledges in the Complaint. (Compl. at ¶¶ 4, 5, 9, 11.)
Substantively, the claim is governed by the MVOA and Lease arbitration provision.
B.
The Parties’ Agreement to Arbitrate May Also Be Enforced Through the
Procedures Set Forth in the CAA.
Though the agreements are “subject to and governed by” the FAA, the Court may also
utilize the summary procedures contained in the California Arbitration Act to enforce the parties’
agreement to arbitrate. The interplay between state and federal arbitration law is succinctly
described in Rosenthal v. Great Western Financial Securities Corp. (1996) 14 Cal. 4th 394. In
Rosenthal, the Supreme Court of California ruled agreements which, by their terms, are subject to
federal arbitration law may be enforced via the summary procedures provided by California
arbitration law. (See Id. at 409-10.) The Court stated “the California procedures for a summary
determination of the petition to compel arbitration serve to further, rather than defeat, the
enforceability policy of the USAA.” (Id. at 409.) The Court reasoned that “[l]ike other federal
procedural rules ... ‘“the procedural provisions of the [USAA] are not binding on the state courts
... provided applicable state procedures do not defeat the rights granted by Congress.’” (Id.)
(emphasis in original). Therefore, the agreement between Plaintiff and Tesla to arbitrate their
disputes, though governed by the FAA, can be enforced by this Court through the procedures
provided by California state arbitration law.
As the California Supreme Court has repeatedly confirmed, the comprehensive statutory
scheme regulating private contractual arbitration in this state under the CAA expresses the
“‘strong public policy in favor of arbitration as a speedy and relatively inexpensive means of
This procedure is succinctly stated in Cal. Civ. Proc. Code §1281.2, which states, in pertinent part, that
“On petition of a party to an arbitration agreement alleging the existence of a written agreement to
arbitrate a controversy and that a party thereto refuses to arbitrate such controversy, the court shall order
the petitioner and the respondent to arbitrate the controversy if it determines that an agreement to arbitrate
the controversy exists, unless it determines that (a) the right to compel arbitration has been waived by the
petitioner; or (b) Grounds exist for the revocation of the agreement.”
-5-
DEFENDANT TESLA’S NOTICE OF PETITION AND PETITION TO COMPEL ARBITRATION WITH AAA AND STAY
PROCEEDINGS PENDING OUTCOME OF ARBITRATIONPage 9
dispute resolution’…Consequently, courts will ‘indulge every intendment to give effect to such
proceedings.’” (Moncharsh v. Heily & Blase (1992) 3 Cal. 4th 1, 9; see also, Sanchez, 61 Cal.4th
899.)
C.
The United States Supreme Court and California Supreme Court, pursuant to the FAA,
CAA and policy favoring arbitration, mandate that arbitration agreements be enforced; and, that
arbitration agreements can only be invalidated by generally applicable contract defenses, such as
fraud, duress, or unconscionability, which are not evident within the subject Lease. (See
Concepcion, 131 S.Ct. at 1746; see also Sanchez, 61 Cal.4th 899; Pinnacle Museum Tower
The Agreement is Valid and Enforceable.
Association v. Pinnacle Market Development (US), LLC (2012) 55 Ca1.4th 223, 245.)
In the instant case, a standard motor vehicle lease agreement containing an arbitration
clause, with substantively similar language to that which the California Supreme Court upheld in
Sanchez (and updated to provide further consumer protections), was used in connection with
Plaintiff’s lease of the Vehicle. (Sanchez, 61 Cal.4th 899 [“Commerce depends on the
enforceability, in most instances, of a duly executed written contract. A party cannot avoid a
contractual obligation merely by complaining that the deal, in retrospect, was unfair or a bad
bargain.”].) Standard form contracts are utilized by virtually every automobile dealership in the
State of California and many such contracts contain arbitration provisions. As such, arbitration
clauses are reasonably anticipated by consumers. The sale of a motor vehicle involves interstate
commerce, therefore the FAA clearly applies. Plaintiff was put on notice of the arbitration
provision when he executed the Lease. The Lease arbitration clause is outlined in a bold box and
its bold title “Agreement to Arbitrate” is clearly printed at the beginning of the section. (See,
Exh. “B” at p. 3 [emphasis in original.) The arbitration clause on page 3 of the Lease clearly
states that unless Plaintiff opts out of arbitration in writing within 30 days, then all future claims
were subject to arbitration. 3 (Id.) Tesla has never received notice from Plaintiff to opt out of
arbitration. (Kim, Decl., ¶ 4.)
The MVOA’s arbitration contains the same language but provides for a 60-day period to opt-out.
-6-
DEFENDANT TESLA’S NOTICE OF PETITION AND PETITION TO COMPEL ARBITRATION WITH AAA AND STAY
PROCEEDINGS PENDING OUTCOME OF ARBITRATIONPage 10
Even before executing the Lease, Plaintiff was previously placed on notice of Tesla’s
intent to arbitrate any claims when he signed the MVOA at the time he placed the order for his
Vehicle. 4 (See, Exh. “A” at p. 3.) Therefore, unequivocally, the arbitration of this, or any dispute,
arising between the parties was reasonably anticipated based on the clear and conspicuous notice
located throughout the Lease.
Both parties have the right to demand arbitration and both parties have the same rights to
discovery. The rules of the American Arbitration Association (“AAA”) specified by the clause as
governing the resolution of disputes between the parties are regarded by courts to be neutral and
fair. (See Izzi v. Mesquite Country Club (1986) 186 Cal.App.3d 1309, 1318; Green Tree
Financial Corp. v. Randolph (2000) 531 U.S. 79, 95.) Furthermore, this lawsuit involves
consumers who purchased a product. A cost-sharing clause in an arbitration agreement such as
here requiring the parties to share costs equally is mutual and fair. In the present case, the cost
sharing clause is even fairer to Plaintiff in that it requires Tesla pay all arbitration costs on his
behalf. The arbitration clause is satisfactorily mutual, its provision of a forum presumptively
unbiased against one party, and the decision of the arbitrator is subject to judicial review. Even if
any provision were to be found unconscionable (which Moving Party disputes and would be
contrary to binding authority), the proper remedy is to sever it, not strike down the entire
arbitration agreement. (See Trabert v. Consumer Portfolio Services, Inc. (2015) 234 Cal.App.4th
1154, 1163-64; FAA, CAA, Civ. Code §§ 1599, 1670.5(a); see also, Concepcion, supra, 131 S.
Ct. at 1746 and Little v. Auto Stiegler, Inc. (2003) 29 Cal.App.4th 1064, 1074-75.)
D.
Despite the express terms of the Lease, Plaintiff refuses to arbitrate his claim with AAA,
by ignoring Tesla’s multiple attempts to meet and confer regarding arbitration. (See, Tanner
Decl., ¶ 3, Exhs. “D,” “E,” and “F”.)
This Matter Should Be Ordered to Arbitration with AAA.
This Court should order this action to binding arbitration with AAA pursuant to the
The MVOA also contains an arbitration provision notifying Plaintiff of Tesla’s intent to arbitrate any
claims with AAA. (See, Exh. “A” at p. 3.)
-7-
DEFENDANT TESLA’S NOTICE OF PETITION AND PETITION TO COMPEL ARBITRATION WITH AAA AND STAY
PROCEEDINGS PENDING OUTCOME OF ARBITRATIONPage 11
express terms of the arbitration clause and California Code of Civil Procedure section 1281.6,
which states “[i]f the arbitration agreement provides a method of appointing an arbitrator, that
method shall be followed.” (emphasis added.) Both federal and California courts have
additionally found that arbitration clauses like the one at issue should be followed. (See
Armendariz, supra, 24 Cal.4th at 97.) Pursuant to the terms of the MVOA and Lease, the parties
have already repeatedly expressly agreed to use AAA. The arbitration agreement is “self-
executing” (where it incorporates by reference procedural rules), so Tesla should be able to
proceed with arbitration in AAA. (See, Tutti Mangia Italian Grill, Inc. v. American Textile
Maintenance Co. (2011) 197 Cal.App.4th 733, 738-39; Kustom Kraft Homes v. Leivenstein
may proceed even if any party or representative is absent, so long as proper notice was given and
that party or representative fails to appear or obtain a postponement from the arbitrator.].)
To allow Plaintiff to unilaterally avoid binding arbitration by filing the instant lawsuit
would deny the express terms of the arbitration clause in contravention of Code of Civil
Procedure section 1281.6 and the established precedent of this Court.
E.
This Matter Must Be Stayed While the Application to Arbitration is Pending
Through the Conclusion of Arbitration.
Code of Civil Procedure section 1281.4 provides in pertinent part that “[i]f an application
has been made to a court …for an order to arbitrate...and such application is undetermined…the
court ...shall...stay the action or proceeding until the application…is determined.” “This statute is
clear and unambiguous: it requires that the trial court stay an action pending before it while an
application to arbitrate the subject matter of the action is pending in a court of competent
jurisdiction.” (Twentieth Century Fox Film Corp. v. Sup. Ct. (2000) 79 Cal.App.4th 188, 192; see
also, Heritage Provider Network, Inc. v. Sup. Ct. (2008) 158 Cal.App.4th 1146, 1152.)
Code of Civil Procedure section 1281.4 also provides:
If a court of competent jurisdiction, whether in this state or not, has ordered
arbitration of a controversy which is an issue involved in an action or
proceeding pending before a court of this State, the court in which such action
-8-
DEFENDANT TESLA’S NOTICE OF PETITION AND PETITION TO COMPEL ARBITRATION WITH AAA AND STAY
PROCEEDINGS PENDING OUTCOME OF ARBITRATIONPage 12
or proceeding is pending shall, upon motion of a party to such action or
proceeding, stay the action or proceeding until an arbitration is had in
accordance with the order to arbitrate or until such earlier time as the court
specifies.
Accordingly, Moving Party requests that in addition to ordering the present matter to
binding arbitration with AAA and staying the action until the arbitration is concluded, that this
Court also stay the proceedings in this matter as to all parties while this application to arbitrate is
pending.
IV.
CONCLUSION
The Moving Party has established the existence of a written arbitration agreement which
covers this entire action. For the reasons stated above, the Moving Party respectfully requests this
Court grant this Petition to compel arbitration pursuant to the terms and conditions of the
arbitration clause attached to this Petition, and order this action to arbitration with the American
Arbitration Association. In addition, the Court should order this lawsuit be stayed pending the
completion of arbitration.
Dated: June 10,
Respectfully submitted,
TESLA, INC.
By:___________________________________
BRADLEY M. TANNER
Attorney for Defendant Tesla, Inc.
-9-
DEFENDANT TESLA’S NOTICE OF PETITION AND PETITION TO COMPEL ARBITRATION WITH AAA AND STAY
PROCEEDINGS PENDING OUTCOME OF ARBITRATIONPage 13 DECLARATION OF RAYMOND KIM
I, Raymond Kim declare and state as follows:
1.
I am employed as an Staff Business Resolution Partner for Tesla, Inc. (“Tesla”),
Defendant in the above matter. The facts set forth in this Declaration are based on my own
personal knowledge, and, if called upon as a witness, I could and would competently testify
thereto. In my position, I am familiar with the service and sales of Tesla vehicles, including the
related creation and record-keeping procedures. I am also familiar with those processes as of the
date of the subject transaction involving Plaintiff Leonardo Balter (“Plaintiff”).
2.
On April 8, 2021, Plaintiff placed an order for his Vehicle, agreed to the terms of
the Motor Vehicle Order Agreement (“MVOA”) A true and correct copy of the MVOA executed
by Plaintiff for the Vehicle is attached as Exhibit “A.”
3.
On or about April 10, 2021, Plaintiff completed the lease of the Vehicle, and
entered into a written contract with Tesla for the lease of new 2020 Tesla Model Y, VIN
5YJYGDEF5LF000097 (the “Vehicle”) pursuant to the aforementioned Lease. A true and correct
copy of the Lease Agreement (“Lease”) between Plaintiff and Tesla which contains the binding
arbitration provision, and which is signed by Plaintiff is attached as Exhibit “B,” and by this
reference is incorporated as though in full.
4.
Tesla has never received notice from Plaintiff to opt out of arbitration. Tesla did
not receive an opt out to the arbitration provision within the 60 day period as prescribed in the
MVOA, or the 30-day period allowed in the Lease, and has no record that Plaintiff ever opted out
of arbitration of the MVOA or Lease.
5.
Based on the above, Plaintiff accepted the terms and conditions of the MVOA and
Lease in this matter, including the arbitration provisions identified above. I know this to be true
because the MVOA and Lease would not end up in Tesla’s internal system where I retrieved it
from had he not executed these documents. Further the documents are executed by Plaintiff.
///
- 10 -
DEFENDANT TESLA’S NOTICE OF PETITION AND PETITION TO COMPEL ARBITRATION WITH AAA AND STAY
PROCEEDINGS PENDING OUTCOME OF ARBITRATIONPage 14
I declare under penalty of perjury under the laws of the State of California that the
foregoing is true and correct. Executed this 10th day of June, 2022 in Los Angeles, California.
_____________________,
Raymond Kim
- 11 -
DEFENDANT TESLA’S NOTICE OF PETITION AND PETITION TO COMPEL ARBITRATION WITH AAA AND STAY
PROCEEDINGS PENDING OUTCOME OF ARBITRATIONPage 15 DECLARATION OF BRADLEY M. TANNER
I, Bradley M. Tanner, declare as follows:
1. I am an attorney duly licensed to practice law before all courts of the State of California. I
am a Senior Counsel for Consumer Litigation at Tesla, Inc. and representing Tesla, Inc. (the
“Moving Party”) in this action. This declaration is submitted in support of Moving Party’s
Petition to Compel Arbitration with AAA and Stay Proceedings Pending Outcome of Arbitration
(“Petition”). The following facts are within my personal knowledge and, if called as a witness
herein, I can and will competently testify thereto.
2. Attached as Exhibit “C” is a true and correct copy of Plaintiff’s Complaint in this action,
filed May 11, 2022.
3. On May 28, and June 8, 2022, Tesla sent emails to Plaintiff’s counsel to discuss the matter
and requesting Plaintiff agree to arbitrate the matter with AAA under the lease terms. Attached as
Exhibits “D,” “E,” and “F” respectively are Tesla’s emails to Plaintiff’s counsel to stipulate to
arbitration, sent on May 28, 2022, and two emails on June 8, 2022.
4. Plaintiff’s counsel responded they refuse to stipulate to arbitration, but when pressed for a
good faith legal basis based on the MVOA and Lease, Plaintiff did not provide any further
response.
5. Dispute Tesla’s efforts, as of the filing of this Petition, Plaintiff has ignored Tesla’s meet
and confer attempts, and has failed to agree to stipulate under the arbitration provision.
I declare under penalty of perjury under the laws of the State of California that the foregoing
is true and correct. Executed this 10th day of June 2022, at San Francisco, California.
By ______________________
Bradley M. Tanner
- 12 -
DEFENDANT TESLA’S NOTICE OF PETITION AND PETITION TO COMPEL ARBITRATION WITH AAA AND STAY
PROCEEDINGS PENDING OUTCOME OF ARBITRATION
PDF Page 1
PlainSite Cover Page
PDF Page 2
1
2
3
4
5
Bradley M. Tanner (SBN: 273057)
TESLA, INC.
901 Page Avenue
Fremont, CA 94538
Telephone: (415) 340-0375
Email: brtanner@tesla.com
ELECTRONICALLY
FILED
Superior Court of California,
County of San Francisco
Attorney for Defendant TESLA, INC.
06/10/2022
Clerk of the Court
BY: SANDRA SCHIRO
Deputy Clerk
6
7
8
SUPERIOR COURT OF THE STATE OF CALIFORNIA
9
FOR THE COUNTY OF SAN FRANCISCO
10
11
LEONARDO BALTER, an individual,
Plaintiff,
12
13
14
15
16
17
v.
TESLA MOTORS INC., a corporation, and
DOES 1 to 10, inclusive,
Defendants.
CASE NO. CGC-22-599664
DEFENDANT TESLA, INC.’S NOTICE OF
PETITION AND PETITION TO COMPEL
ARBITRATION WITH AAA AND STAY
PROCEEDINGS PENDING OUTCOME OF
ARBITRATION; MEMORANDUM OF
POINTS AND AUTHORITIES;
DECLARATIONS OF RAYMOND KIM
AND BRADLEY M. TANNER
[Filed concurrently herewith [Proposed]
Order]
19
DATE: July 14, 2022
TIME: 9:30 a.m.
DEPT: 302
20
Complaint Filed: May 17, 2022
18
21
22
23
24
25
26
27
28
DEFENDANT TESLA’S NOTICE OF PETITION AND PETITION TO COMPEL ARBITRATION WITH AAA AND STAY
PROCEEDINGS PENDING OUTCOME OF ARBITRATION
PDF Page 3
1
TO ALL PARTIES AND THEIR ATTORNEYS OF RECORD:
2
PLEASE TAKE NOTICE that on July 14, 2022, at 9:30 a.m. or as soon thereafter as the
3
matter can be heard in Department 302 of the San Francisco County Superior Court, which is
4
located at 400 McAllister Street, San Francisco, California 94102, there will be a hearing on the
5
Petition of Defendant Tesla Inc.’s (hereinafter “Tesla” or “Moving Party”) to compel arbitration
6
of this controversy with the American Arbitration Association (“AAA”) and to stay the above-
7
captioned action.
8
This Petition (“Petition”) is made pursuant to the Federal Arbitration Act (“FAA”), 9
9
U.S.C. § 1 et seq., the California Arbitration Act (“CAA”), California Code of Civil Procedure
10
section 1280 et seq., federal and California decisional authorities, and the arbitration notice and
11
provisions set forth in the Motor Vehicle Order Agreement (“MVOA”) and Lease Agreement
12
(“Lease”), which were both agreed to and signed by Plaintiff Leonardo Balter (“Plaintiff”). Said
13
authority requires Plaintiff to submit to arbitration of a controversy upon determination that an
14
agreement to arbitrate the controversy exists. Plaintiff executed valid agreements to submit this
15
dispute to binding arbitration. Both agreements further require the parties to arbitrate with AAA.
16
The Court must order this entire action to binding arbitration in accordance therewith and stay
17
this matter pursuant to 9 U.S.C. § 3 and Code of Civil Procedure section 1281.4 through
18
arbitration, and to order the arbitration be conducted by AAA as required by the controlling
19
agreement. This motion is also filed in lieu of the Moving Party’s answer or responsive pleading
20
pursuant to California Code of Civil Procedure section 1281.7.
21
On the aforementioned date and at the aforementioned time, Moving Party will also move,
22
and does hereby move the Court, pursuant to California Code of Civil Procedure section 1281.4,
23
to stay the above-captioned action until an arbitration is had in accordance with the order to
24
arbitrate or until such earlier time as the Court specifies.
25
///
26
27
28
DEFENDANT TESLA’S NOTICE OF PETITION AND PETITION TO COMPEL ARBITRATION WITH AAA AND STAY
PROCEEDINGS PENDING OUTCOME OF ARBITRATION
PDF Page 4
1
This Petition is based upon this notice of Petition, the accompanying memorandum of
2
points and authorities, the attached arbitration agreement and declarations of Bradley Mark
3
Tanner and Raymond Kim, and attached exhibits, the complete files and records in this action,
4
and such other argument and evidence as may be presented at or before the hearing of this matter.
5
6
Dated: June 10, 2022
TESLA, INC.
7
8
9
10
By:______________________________
BRADLEY M. TANNER
Attorney for Defendant Tesla, Inc.
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
-2-
DEFENDANT TESLA’S NOTICE OF PETITION AND PETITION TO COMPEL ARBITRATION WITH AAA AND STAY
PROCEEDINGS PENDING OUTCOME OF ARBITRATION
PDF Page 5
MEMORANDUM OF POINTS AND AUTHORITIES
1
2
I.
INTRODUCTION
3
Plaintiff Leonardo Balter (“Plaintiff”) entered into a written contract with Tesla, Inc.
4
(“Tesla”) for the lease of a new 2020 Tesla Model Y, VIN 5YJYGDEF5LF000097 (the
5
“Vehicle”). The transaction was governed by a Lease Agreement (“Lease”) containing the terms
6
and conditions of the sale. The Lease included an arbitration clause which requires binding
7
arbitration of this entire action with the American Arbitration Association (“AAA”). However,
8
Plaintiff has ignored his contractual obligations, and instead of initiating arbitration with AAA,
9
and filed the present lawsuit. Accordingly, because the arbitration agreement is valid and covers
10
the parties and controversy set forth in the lawsuit, the Moving Party requests this Court order the
11
action to arbitration with AAA and stay the proceedings pending the completion of such
12
arbitration.
13
II.
STATEMENT OF FACTS
14
On April 8, 2021, Plaintiff placed an order for his Vehicle, agreed to the terms of the
15
Motor Vehicle Order Agreement (“MVOA”) (See, Declaration of Raymond Kim (“Kim Decl.”),
16
at ¶ 2, Exh. “A”.) On or about April 10, 2021, Plaintiff completed the purchase of the Vehicle,
17
and entered into a written contract with Tesla for the lease of the Vehicle pursuant to the
18
aforementioned Lease. (Kim Decl., ¶ 3, Exh. B, Lease Agreement (“Lease”), and ¶ 6.)
19
20
21
22
23
24
25
26
27
28
The Lease provides:
Agreement to Arbitrate: Please carefully read this provision,
which applies to any dispute between you and Tesla, Inc. and its
affiliates, (together “Tesla”).
If you have a concern or dispute, please send a written notice
describing it and your desired resolution to resolutions@tesla.com.
If not resolved within 60 days, you agree that any dispute arising
out of or relating to any aspect of the relationship between you and
Tesla will not be decided by a judge or jury but instead by a single
arbitrator in an arbitration administered by the American
Arbitration Association (AAA) under its Consumer Arbitration
Rules. This includes claims arising before this Agreement, such as
claims related to statements about our products.
-1-
DEFENDANT TESLA’S NOTICE OF PETITION AND PETITION TO COMPEL ARBITRATION WITH AAA AND STAY
PROCEEDINGS PENDING OUTCOME OF ARBITRATION
PDF Page 6
1
We will pay all AAA fees for any arbitration, which will be held in
the city or county of your residence. To learn more about the Rules
and how to begin an arbitration, you may call any AAA office or go
to www.adr.org.
2
3
The arbitrator may only resolve disputes between you and Tesla,
and may not consolidate claims without the consent of all parties.
The arbitrator cannot hear class or representative claims or requests
for relief on behalf of others purchasing or leasing Tesla vehicles.
In other words, you and Tesla may bring claims against the other
only in your or its individual capacity and not as a plaintiff or class
member in any class or representative action. If a court or arbitrator
decides that any part of this agreement to arbitrate cannot be
enforced as to a particular claim for relief or remedy (such as
injunctive or declaratory relief), then that claim or remedy (and
only that claim or remedy) shall be severed and must be brought in
court and any other claims must be arbitrated.
4
5
6
7
8
9
10
If you prefer, you may instead take an individual dispute to small
claims court.
11
You may opt out of arbitration within 30 days after signing this
Agreement by sending a letter to: Tesla, Inc.; P.O. Box 15430;
Fremont, CA 94539-7970, stating your name, Vehicle Identification
Number, and intent to opt out of the arbitration provision. If you do
not opt out, this agreement to arbitrate overrides any different
arbitration agreement between us, including any arbitration
agreement in a lease or finance contract. (See id. at p. 2.) 1
12
13
14
15
After an opportunity to review the Lease, Plaintiff signed in the indicated space, indicating
16
17
his agreement to arbitrate pursuant to the applicable provision set forth on the Lease.
18
The Lease forms the basis of Plaintiff’s allegations against Moving Party. (See id.)
19
Despite the terms and specific arbitration provision within the Lease, Plaintiff filed the operative
20
21
22
23
24
25
26
27
1
The MVOA also contains the same arbitration provision that states in pertinent terms:
Agreement to Arbitrate. Please carefully read this provision, which applies to any dispute between you
and Tesla, Inc. and its affiliates, (together “Tesla”).
If you have a concern or dispute, please send a written notice describing it and your desired resolution to
resolutions@tesla.com.
If not resolved within 60 days, you agree that any dispute arising out of or relatng to any aspect of the
relationship between you and Tesla will not be decided by a judge or jury but instead by a single arbitrator
in an arbitration administered by the American Arbitration Association (AAA) under its Consumer
Arbitration Rules. This includes claims arising before this Agreement, such as claims related to statements
about our products.
…
28
-2-
DEFENDANT TESLA’S NOTICE OF PETITION AND PETITION TO COMPEL ARBITRATION WITH AAA AND STAY
PROCEEDINGS PENDING OUTCOME OF ARBITRATION
PDF Page 7
1
Complaint for Damages on May 17, 2022 (the “Complaint”). (See, See, Declaration of Bradley
2
M. Tanner (“Tanner Decl.”), ¶ 2, Exh. “C”, Complaint (“Compl.”) The Complaint contains a
3
single cause of action, for Violation of the Song Beverly Consumer Warranty Act. (See id.) The
4
above claims is subject to binding arbitration. The Moving Party denies Plaintiff’s allegations,
5
and demands the controversy be resolved through binding Arbitration, through the AAA, as set
6
forth in the controlling Lease. Tesla has not received any opt out notice from Plaintiff in response
7
to opt-out provisions set forth in the MVOA and Lease. (Kim Decl., ¶ 4.)
8
On May 28 and June 8, 2022, Tesla sent emails to Plaintiff’s counsel to discuss the matter
9
and requesting Plaintiff agree to arbitrate the matter with AAA under the lease terms. (Tanner
10
Decl., ¶ 3, Exhs. “D,” “E”, and “F”.) Plaintiff’s counsel responded they refuse to stipulate to
11
arbitration, but when pressed for a good faith legal basis based on the MVOA and Lease, Plaintiff
12
did not provide any further response. (Tanner Decl., ¶ 4.) By refusing to arbitrate the instant
13
action with AAA, Plaintiff has not only ignored, but also breached, the arbitration provisions
14
contained in the MVOA and Lease.
15
III.
LEGAL ARGUMENT
16
Plaintiff’s claims must be arbitrated pursuant to the parties’ express agreement. As
17
discussed below, both federal law and California law favor the enforcement of valid arbitration
18
agreements. (See, Armendariz v. Foundation Health Psychcare Svcs., Inc. (2000) 24 Cal.4th 83,
19
97.) The United States Supreme Court has often reaffirmed the long-standing “liberal federal
20
policy favoring arbitration,” and the “fundamental principle that arbitration is a matter of
21
contract” stating, “in line with these principles, courts must place arbitration agreements on equal
22
footing with other contracts…[and] enforce them according to their terms.” (See e.g., AT&T
23
Mobility, LLC v. Concepcion (2011) 563 U.S. 321, 131 S.Ct. 1740, 1745-46; DirecTV, Inc. v.
24
Imburgia, et al. (2015) 136 S.Ct. 463.) The California Supreme Court has additionally favored the
25
enforcement of arbitration clauses through its adoption of Concepcion. (Sanchez v. Valencia
26
Holding Company, LLC (2015) 61 Cal.4th 889.) Indeed, courts are required to resolve any doubt
27
as to whether a dispute falls within an arbitration provision in favor of arbitration. (See id.)
28
-3-
DEFENDANT TESLA’S NOTICE OF PETITION AND PETITION TO COMPEL ARBITRATION WITH AAA AND STAY
PROCEEDINGS PENDING OUTCOME OF ARBITRATION
PDF Page 8
1
In this instance, there is no doubt that an agreement to arbitrate the subject transaction
2
exists. Plaintiff entered into the MVOA, and later the Lease, both containing the arbitration clause
3
in connection with the order and lease of the Vehicle. (See Lease, ¶ 3 [Exh. “B” to Kim Decl.];
4
MVOA, ¶ 2, [Exh. “A” to Kim Decl.) Therefore, it is without question that he was placed on
5
notice that either party to the Lease had the right to elect to arbitrate disputes arising from the
6
order or lease.
7
A.
8
By the terms of the relevant arbitration provision contained in the Lease, Plaintiff’s claims
Plaintiff’s Claims Are Subject to Arbitration Under the FAA.
9
are subject to arbitration pursuant to the FAA. (See Id.)
10
The FAA provides in pertinent part that:
11
15
A written provision in any maritime transaction or a contract evidencing a
transaction involving commerce to settle by arbitration a controversy
thereafter arising out of such contract or transaction, or the refusal to
perform the whole or any part thereof, or an agreement in writing to
submit to arbitration an existing controversy arising out of such a contract,
transaction, or refusal, shall be valid, irrevocable, and enforceable save
upon such grounds as exist at law or in equity for the revocation of any
contract. (9 U.S.C. § 2.)
16
Due to the “strong judicial policy favoring the submission of contractual disputes to
17
arbitration,” the requirement that the contract involve “commerce” is construed broadly. (See,
18
Concepcion, supra, 131 S.Ct. at 1745-46; Societe Generale de Surveillance, S.A. v. Raytheon
19
European Mgt. and Systems Co. (1st Cir. 1981) 643 F.2d 863, 867.) In Bernhardt v. Polygraphic
20
Co. (1956) 350 U.S. 198, 76 S.Ct. 273, the United States Supreme Court indicated that a contract
21
involves commerce where there is a “showing that petitioner while performing his duties under
22
the employment contract was working ‘in’ commerce, was producing goods for commerce, or
23
engaging in activity that affected commerce.” (Bernhardt, 350 U.S. at 200-01.) Here, Tesla does
24
business as an automobile manufacturer and retailer, and is unquestionably involved in the selling
25
of automobiles in the course of commerce, as that term is broadly defined in federal cases
26
interpreting the FAA.
12
13
14
27
The arbitration language in the MVOA and Lease are broad and require “any dispute”
28
-4-
DEFENDANT TESLA’S NOTICE OF PETITION AND PETITION TO COMPEL ARBITRATION WITH AAA AND STAY
PROCEEDINGS PENDING OUTCOME OF ARBITRATION
PDF Page 9
1
between Plaintiff and Tesla to be arbitrated. (See, MVOA [Exh. “A”] at p. 3; Lease [Exh. “B”] at
2
p. 3.) The claim in the Complaint arises out of the specific automobile sale transaction between
3
Plaintiff and Tesla, as Plaintiff acknowledges in the Complaint. (Compl. at ¶¶ 4, 5, 9, 11.)
4
Substantively, the claim is governed by the MVOA and Lease arbitration provision.
B.
5
6
The Parties’ Agreement to Arbitrate May Also Be Enforced Through the
Procedures Set Forth in the CAA.
7
Though the agreements are “subject to and governed by” the FAA, the Court may also
8
utilize the summary procedures contained in the California Arbitration Act to enforce the parties’
9
agreement to arbitrate. The interplay between state and federal arbitration law is succinctly
10
described in Rosenthal v. Great Western Financial Securities Corp. (1996) 14 Cal. 4th 394. In
11
Rosenthal, the Supreme Court of California ruled agreements which, by their terms, are subject to
12
federal arbitration law may be enforced via the summary procedures provided by California
13
arbitration law. (See Id. at 409-10.) The Court stated “the California procedures for a summary
14
determination of the petition to compel arbitration serve to further, rather than defeat, the
15
enforceability policy of the USAA.” (Id. at 409.) The Court reasoned that “[l]ike other federal
16
procedural rules ... ‘“the procedural provisions of the [USAA] are not binding on the state courts
17
... provided applicable state procedures do not defeat the rights granted by Congress.’” (Id.)
18
(emphasis in original). Therefore, the agreement between Plaintiff and Tesla to arbitrate their
19
disputes, though governed by the FAA, can be enforced by this Court through the procedures
20
provided by California state arbitration law. 2
21
As the California Supreme Court has repeatedly confirmed, the comprehensive statutory
22
scheme regulating private contractual arbitration in this state under the CAA expresses the
23
“‘strong public policy in favor of arbitration as a speedy and relatively inexpensive means of
24
25
26
27
28
This procedure is succinctly stated in Cal. Civ. Proc. Code §1281.2, which states, in pertinent part, that
“On petition of a party to an arbitration agreement alleging the existence of a written agreement to
arbitrate a controversy and that a party thereto refuses to arbitrate such controversy, the court shall order
the petitioner and the respondent to arbitrate the controversy if it determines that an agreement to arbitrate
the controversy exists, unless it determines that (a) the right to compel arbitration has been waived by the
petitioner; or (b) Grounds exist for the revocation of the agreement.”
2
-5-
DEFENDANT TESLA’S NOTICE OF PETITION AND PETITION TO COMPEL ARBITRATION WITH AAA AND STAY
PROCEEDINGS PENDING OUTCOME OF ARBITRATION
PDF Page 10
1
dispute resolution’…Consequently, courts will ‘indulge every intendment to give effect to such
2
proceedings.’” (Moncharsh v. Heily & Blase (1992) 3 Cal. 4th 1, 9; see also, Sanchez, 61 Cal.4th
3
899.)
4
C.
5
The United States Supreme Court and California Supreme Court, pursuant to the FAA,
6
CAA and policy favoring arbitration, mandate that arbitration agreements be enforced; and, that
7
arbitration agreements can only be invalidated by generally applicable contract defenses, such as
8
fraud, duress, or unconscionability, which are not evident within the subject Lease. (See
9
Concepcion, 131 S.Ct. at 1746; see also Sanchez, 61 Cal.4th 899; Pinnacle Museum Tower
10
The Agreement is Valid and Enforceable.
Association v. Pinnacle Market Development (US), LLC (2012) 55 Ca1.4th 223, 245.)
11
In the instant case, a standard motor vehicle lease agreement containing an arbitration
12
clause, with substantively similar language to that which the California Supreme Court upheld in
13
Sanchez (and updated to provide further consumer protections), was used in connection with
14
Plaintiff’s lease of the Vehicle. (Sanchez, 61 Cal.4th 899 [“Commerce depends on the
15
enforceability, in most instances, of a duly executed written contract. A party cannot avoid a
16
contractual obligation merely by complaining that the deal, in retrospect, was unfair or a bad
17
bargain.”].) Standard form contracts are utilized by virtually every automobile dealership in the
18
State of California and many such contracts contain arbitration provisions. As such, arbitration
19
clauses are reasonably anticipated by consumers. The sale of a motor vehicle involves interstate
20
commerce, therefore the FAA clearly applies. Plaintiff was put on notice of the arbitration
21
provision when he executed the Lease. The Lease arbitration clause is outlined in a bold box and
22
its bold title “Agreement to Arbitrate” is clearly printed at the beginning of the section. (See,
23
Exh. “B” at p. 3 [emphasis in original.) The arbitration clause on page 3 of the Lease clearly
24
states that unless Plaintiff opts out of arbitration in writing within 30 days, then all future claims
25
were subject to arbitration. 3 (Id.) Tesla has never received notice from Plaintiff to opt out of
26
arbitration. (Kim, Decl., ¶ 4.)
27
28
3
The MVOA’s arbitration contains the same language but provides for a 60-day period to opt-out.
-6-
DEFENDANT TESLA’S NOTICE OF PETITION AND PETITION TO COMPEL ARBITRATION WITH AAA AND STAY
PROCEEDINGS PENDING OUTCOME OF ARBITRATION
PDF Page 11
1
Even before executing the Lease, Plaintiff was previously placed on notice of Tesla’s
2
intent to arbitrate any claims when he signed the MVOA at the time he placed the order for his
3
Vehicle. 4 (See, Exh. “A” at p. 3.) Therefore, unequivocally, the arbitration of this, or any dispute,
4
arising between the parties was reasonably anticipated based on the clear and conspicuous notice
5
located throughout the Lease.
6
Both parties have the right to demand arbitration and both parties have the same rights to
7
discovery. The rules of the American Arbitration Association (“AAA”) specified by the clause as
8
governing the resolution of disputes between the parties are regarded by courts to be neutral and
9
fair. (See Izzi v. Mesquite Country Club (1986) 186 Cal.App.3d 1309, 1318; Green Tree
10
Financial Corp. v. Randolph (2000) 531 U.S. 79, 95.) Furthermore, this lawsuit involves
11
consumers who purchased a product. A cost-sharing clause in an arbitration agreement such as
12
here requiring the parties to share costs equally is mutual and fair. In the present case, the cost
13
sharing clause is even fairer to Plaintiff in that it requires Tesla pay all arbitration costs on his
14
behalf. The arbitration clause is satisfactorily mutual, its provision of a forum presumptively
15
unbiased against one party, and the decision of the arbitrator is subject to judicial review. Even if
16
any provision were to be found unconscionable (which Moving Party disputes and would be
17
contrary to binding authority), the proper remedy is to sever it, not strike down the entire
18
arbitration agreement. (See Trabert v. Consumer Portfolio Services, Inc. (2015) 234 Cal.App.4th
19
1154, 1163-64; FAA, CAA, Civ. Code §§ 1599, 1670.5(a); see also, Concepcion, supra, 131 S.
20
Ct. at 1746 and Little v. Auto Stiegler, Inc. (2003) 29 Cal.App.4th 1064, 1074-75.)
21
D.
22
Despite the express terms of the Lease, Plaintiff refuses to arbitrate his claim with AAA,
23
by ignoring Tesla’s multiple attempts to meet and confer regarding arbitration. (See, Tanner
24
Decl., ¶ 3, Exhs. “D,” “E,” and “F”.)
25
This Matter Should Be Ordered to Arbitration with AAA.
This Court should order this action to binding arbitration with AAA pursuant to the
26
27
28
The MVOA also contains an arbitration provision notifying Plaintiff of Tesla’s intent to arbitrate any
claims with AAA. (See, Exh. “A” at p. 3.)
4
-7-
DEFENDANT TESLA’S NOTICE OF PETITION AND PETITION TO COMPEL ARBITRATION WITH AAA AND STAY
PROCEEDINGS PENDING OUTCOME OF ARBITRATION
PDF Page 12
1
express terms of the arbitration clause and California Code of Civil Procedure section 1281.6,
2
which states “[i]f the arbitration agreement provides a method of appointing an arbitrator, that
3
method shall be followed.” (emphasis added.) Both federal and California courts have
4
additionally found that arbitration clauses like the one at issue should be followed. (See
5
Armendariz, supra, 24 Cal.4th at 97.) Pursuant to the terms of the MVOA and Lease, the parties
6
have already repeatedly expressly agreed to use AAA. The arbitration agreement is “self-
7
executing” (where it incorporates by reference procedural rules), so Tesla should be able to
8
proceed with arbitration in AAA. (See, Tutti Mangia Italian Grill, Inc. v. American Textile
9
Maintenance Co. (2011) 197 Cal.App.4th 733, 738-39; Kustom Kraft Homes v. Leivenstein
10
(1971) 14 Cal.App.3rd 805, 811; AAA Consumer Arbitration Rules, Rule R-39 [The arbitration
11
may proceed even if any party or representative is absent, so long as proper notice was given and
12
that party or representative fails to appear or obtain a postponement from the arbitrator.].)
13
To allow Plaintiff to unilaterally avoid binding arbitration by filing the instant lawsuit
14
would deny the express terms of the arbitration clause in contravention of Code of Civil
15
Procedure section 1281.6 and the established precedent of this Court.
16
17
E.
This Matter Must Be Stayed While the Application to Arbitration is Pending
Through the Conclusion of Arbitration.
18
Code of Civil Procedure section 1281.4 provides in pertinent part that “[i]f an application
19
has been made to a court …for an order to arbitrate...and such application is undetermined…the
20
court ...shall...stay the action or proceeding until the application…is determined.” “This statute is
21
clear and unambiguous: it requires that the trial court stay an action pending before it while an
22
application to arbitrate the subject matter of the action is pending in a court of competent
23
jurisdiction.” (Twentieth Century Fox Film Corp. v. Sup. Ct. (2000) 79 Cal.App.4th 188, 192; see
24
also, Heritage Provider Network, Inc. v. Sup. Ct. (2008) 158 Cal.App.4th 1146, 1152.)
25
26
27
Code of Civil Procedure section 1281.4 also provides:
If a court of competent jurisdiction, whether in this state or not, has ordered
arbitration of a controversy which is an issue involved in an action or
proceeding pending before a court of this State, the court in which such action
28
-8-
DEFENDANT TESLA’S NOTICE OF PETITION AND PETITION TO COMPEL ARBITRATION WITH AAA AND STAY
PROCEEDINGS PENDING OUTCOME OF ARBITRATION
PDF Page 13
1
or proceeding is pending shall, upon motion of a party to such action or
proceeding, stay the action or proceeding until an arbitration is had in
accordance with the order to arbitrate or until such earlier time as the court
specifies.
2
3
4
Accordingly, Moving Party requests that in addition to ordering the present matter to
5
binding arbitration with AAA and staying the action until the arbitration is concluded, that this
6
Court also stay the proceedings in this matter as to all parties while this application to arbitrate is
7
pending.
8
IV.
CONCLUSION
9
The Moving Party has established the existence of a written arbitration agreement which
10
covers this entire action. For the reasons stated above, the Moving Party respectfully requests this
11
Court grant this Petition to compel arbitration pursuant to the terms and conditions of the
12
arbitration clause attached to this Petition, and order this action to arbitration with the American
13
Arbitration Association. In addition, the Court should order this lawsuit be stayed pending the
14
completion of arbitration.
15
16
17
Dated: June 10, 2022
Respectfully submitted,
TESLA, INC.
18
19
20
21
By:___________________________________
BRADLEY M. TANNER
Attorney for Defendant Tesla, Inc.
22
23
24
25
26
27
28
-9-
DEFENDANT TESLA’S NOTICE OF PETITION AND PETITION TO COMPEL ARBITRATION WITH AAA AND STAY
PROCEEDINGS PENDING OUTCOME OF ARBITRATION
PDF Page 14
DECLARATION OF RAYMOND KIM
1
2
I, Raymond Kim declare and state as follows:
3
1.
I am employed as an Staff Business Resolution Partner for Tesla, Inc. (“Tesla”),
4
Defendant in the above matter. The facts set forth in this Declaration are based on my own
5
personal knowledge, and, if called upon as a witness, I could and would competently testify
6
thereto. In my position, I am familiar with the service and sales of Tesla vehicles, including the
7
related creation and record-keeping procedures. I am also familiar with those processes as of the
8
date of the subject transaction involving Plaintiff Leonardo Balter (“Plaintiff”).
9
2.
On April 8, 2021, Plaintiff placed an order for his Vehicle, agreed to the terms of
10
the Motor Vehicle Order Agreement (“MVOA”) A true and correct copy of the MVOA executed
11
by Plaintiff for the Vehicle is attached as Exhibit “A.”
12
3.
On or about April 10, 2021, Plaintiff completed the lease of the Vehicle, and
13
entered into a written contract with Tesla for the lease of new 2020 Tesla Model Y, VIN
14
5YJYGDEF5LF000097 (the “Vehicle”) pursuant to the aforementioned Lease. A true and correct
15
copy of the Lease Agreement (“Lease”) between Plaintiff and Tesla which contains the binding
16
arbitration provision, and which is signed by Plaintiff is attached as Exhibit “B,” and by this
17
reference is incorporated as though in full.
18
4.
Tesla has never received notice from Plaintiff to opt out of arbitration. Tesla did
19
not receive an opt out to the arbitration provision within the 60 day period as prescribed in the
20
MVOA, or the 30-day period allowed in the Lease, and has no record that Plaintiff ever opted out
21
of arbitration of the MVOA or Lease.
22
5.
Based on the above, Plaintiff accepted the terms and conditions of the MVOA and
23
Lease in this matter, including the arbitration provisions identified above. I know this to be true
24
because the MVOA and Lease would not end up in Tesla’s internal system where I retrieved it
25
from had he not executed these documents. Further the documents are executed by Plaintiff.
26
///
27
28
- 10 -
DEFENDANT TESLA’S NOTICE OF PETITION AND PETITION TO COMPEL ARBITRATION WITH AAA AND STAY
PROCEEDINGS PENDING OUTCOME OF ARBITRATION
PDF Page 15
1
2
I declare under penalty of perjury under the laws of the State of California that the
foregoing is true and correct. Executed this 10th day of June, 2022 in Los Angeles, California.
3
4
_____________________,
Raymond Kim
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
- 11 -
DEFENDANT TESLA’S NOTICE OF PETITION AND PETITION TO COMPEL ARBITRATION WITH AAA AND STAY
PROCEEDINGS PENDING OUTCOME OF ARBITRATION
PDF Page 16
DECLARATION OF BRADLEY M. TANNER
1
2
I, Bradley M. Tanner, declare as follows:
3
1. I am an attorney duly licensed to practice law before all courts of the State of California. I
4
am a Senior Counsel for Consumer Litigation at Tesla, Inc. and representing Tesla, Inc. (the
5
“Moving Party”) in this action. This declaration is submitted in support of Moving Party’s
6
Petition to Compel Arbitration with AAA and Stay Proceedings Pending Outcome of Arbitration
7
(“Petition”). The following facts are within my personal knowledge and, if called as a witness
8
herein, I can and will competently testify thereto.
9
10
2. Attached as Exhibit “C” is a true and correct copy of Plaintiff’s Complaint in this action,
filed May 11, 2022.
11
3. On May 28, and June 8, 2022, Tesla sent emails to Plaintiff’s counsel to discuss the matter
12
and requesting Plaintiff agree to arbitrate the matter with AAA under the lease terms. Attached as
13
Exhibits “D,” “E,” and “F” respectively are Tesla’s emails to Plaintiff’s counsel to stipulate to
14
arbitration, sent on May 28, 2022, and two emails on June 8, 2022.
15
4. Plaintiff’s counsel responded they refuse to stipulate to arbitration, but when pressed for a
16
good faith legal basis based on the MVOA and Lease, Plaintiff did not provide any further
17
response.
18
19
20
21
22
23
5. Dispute Tesla’s efforts, as of the filing of this Petition, Plaintiff has ignored Tesla’s meet
and confer attempts, and has failed to agree to stipulate under the arbitration provision.
I declare under penalty of perjury under the laws of the State of California that the foregoing
is true and correct. Executed this 10th day of June 2022, at San Francisco, California.
By ______________________
Bradley M. Tanner
24
25
26
27
28
- 12 -
DEFENDANT TESLA’S NOTICE OF PETITION AND PETITION TO COMPEL ARBITRATION WITH AAA AND STAY
PROCEEDINGS PENDING OUTCOME OF ARBITRATION