California Legal Brief

The Rule of David Kostandian v. American Honda Motor Co., Inc., et al. is that a party moving to compel arbitration meets its initial burden by presenting a copy of the arbitration agreement and stating its terms verbatim, without needing to prove the agreement's validity or provide evidentiary support for corporate business names, under circumstances where the opposing party fails to dispute the agreement's existence.

Appeal from order denying motion to compel arbitration in Superior Court, Los Angeles County.

Defendants Appellants were American Honda Motor Co., Inc. and Standard Motor, LLC — the manufacturer and authorized dealer who sought to compel arbitration of defective vehicle claims.

Plaintiff Respondent was David Kostandian — the lessee who brought warranty and tort claims against defendants for alleged defects in his 2024 Acura Integra.

The suit sounded in breach of warranty and tort claims relating to alleged vehicle defects. No cross-claims were described.

The key substantive facts leading to the suit were that Kostandian leased a 2024 Acura Integra containing alleged defects, brought the vehicle for repair five times unsuccessfully, revoked acceptance in writing, but defendants refused to provide remedies. The lease agreement contained an arbitration provision signed by Kostandian and Acura of Los Angeles Westside. Additionally, the manufacturer's warranty booklet contained a separate arbitration agreement with an opt-out provision, and Kostandian signed a delivery sheet confirming receipt of warranty information.

The procedural result leading to the Appeal: The trial court denied defendants' motion to compel arbitration without prejudice, ruling that appellants failed to demonstrate an existing arbitration agreement because Standard Motor was not shown to be doing business as Acura of Los Angeles Westside, and that the warranty booklet's arbitration provision was insufficient to establish mutual assent.

The key question(s) on Appeal: 1. Whether appellants met their burden of establishing an arbitration agreement in the lease when respondent alleged in his complaint that Standard Motor was doing business as Acura of Los Angeles Westside; 2. Whether appellants established an arbitration agreement in the warranty booklet when respondent never disputed its existence.

The Appellate Court held that appellants satisfied their initial burden under the burden-shifting framework by presenting copies of arbitration agreements and reciting terms verbatim, and because respondent never disputed the existence of these agreements or provided evidence challenging their authenticity, arbitration must be compelled.

The case is inapplicable when the opposing party actually disputes the existence or authenticity of the arbitration agreement and provides evidence supporting that dispute, or when the moving party fails to present a copy of the agreement or recite its terms.

The case leaves open questions regarding the enforceability, unconscionability, or scope of arbitration agreements once their existence is established, and whether different evidentiary requirements might apply when fictitious business name compliance is actually disputed by the opposing party.