Ford Motor Co. and the dealership that serviced a 2020 F-250 Super Duty can’t force the pickup’s owners to arbitrate their lemon law claim because the automaker and store aren’t third-party beneficiaries of the selling dealership’s retail installment sale contract with an arbitration provision, a California appeals court ruled.
Isai Rivera and Helen Espinosa purchased the pickup new from Fairway Ford San Bernardino and signed a retail installment sale contract that contained arbitration language, the decision said. Fairway Ford is not a defendant in the lawsuit.
During the warranty period, the F-250 developed mechanical problems and was taken to Ford of Ventura for repairs, the court said.
Rivera and Espinosa sued “when attempts to fix the problems failed,” it said, accusing Ford of lemon law violations and Ford of Ventura of negligent repair.
A Ventura County Superior Court judge granted Ford’s motion to compel arbitration.
But that decision was wrong, the appellate court panel held.
Neither Ford nor the servicing store were “intended third-party beneficiaries of the sales contract” and are “not entitled to enforce the arbitration provision,” it said in a Sept. 23 opinion written by Justice Arthur Gilbert.
Gilbert said the retail contract clearly distinguished between the manufacturer and the selling dealership.
The plaintiff’s lawyer, Roger Kirnos of Los Angeles, said the case will now either be sent back to the lower court for trial or appealed further by Ford.
The arbitration issue is awaiting a California Supreme Court decision in a separate case against Ford, Kirnos said. He said five other Court of Appeal panels “have held that a manufacturer cannot use a dealership’s sales contract containing an arbitration provision to force a consumer into arbitration.”
Consumers should be wary of arbitration provisions in consumer transactions, he said, and dealerships can avoid problems if they help their customers find a resolution with their vehicles “when they can’t be repaired after a reasonable number of attempts.”
Richard Binhammer of Ford’s corporate and public policy communications office said the company does not typically comment on ongoing litigation.
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Source: autonews.com
