Opinion

1 2 3 4 5 6 7 8 9 UNITED STATES DISTRICT COURT 10 SOUTHERN DISTRICT OF CALIFORNIA 11 12 EDWARD HORTON, Case No.: 25-CV-2607 JLS (MMP)

13 Plaintiff, ORDER GRANTING IN PART AND 14 v. DENYING IN PART DEFENDANT'S MOTION TO DISMISS AND 15 OREMOR EUROPEAN, LLC, dba STAYING ACTION PENDING Mercedes-Benz of El Cajon, 16 ARBITRATION Defendant. 17 (ECF No. 17) 18 19 20 Presently before the Court is Defendant Oremor European, LLC’s (“Defendant”) 21 Motion to Dismiss or in the Alternative Stay Action (“Mot.,” ECF No. 17) and supporting 22 Memorandum of Points and Authorities (“Mem.,” ECF No. 17-1), as well as Plaintiff 23 Edward Horton’s Opposition thereto (“Opp’n,” ECF Nos. 13, 21) and Defendant’s Reply 24 in support thereof (“Reply,” ECF No. 25). The Court took the matter under submission 25 without oral argument pursuant to Civil Local Rule 7.1(d)(1). See ECF No. 26. Having 26 carefully reviewed Plaintiff’s First Amended Complaint (“FAC,” ECF No. 10), the Parties’ 27 arguments, and the law, the Court GRANTS IN PART AND DENIES IN PART the 28 Motion. 1 BACKGROUND 2 This action arises from a January 14, 2023, vehicle transaction at Defendant’s 3 Mercedes-Benz dealership in El Cajon, California. Plaintiff Edward Horton (“Plaintiff”), 4 proceeding pro se, is an elderly veteran residing in Washington, Utah. FAC ¶ 1. Plaintiff 5 alleges that while visiting Defendant’s dealership for routine service on his 2021 Mercedes- 6 Benz Sprinter Van, Defendant’s sales representative told him that a foreign object had been 7 left in the engine and that repairs would take approximately two weeks. Id. ¶ 3. Plaintiff 8 further alleges that Defendant refused to provide a loaner vehicle, that he became 9 disoriented after taking prescription medication, and that Defendant’s agent thereafter 10 coerced him into purchasing a 2023 Mercedes-Benz Sprinter Van. Id. ¶¶ 4–8. Plaintiff 11 also alleges that Defendant misrepresented the vehicle’s purchase price and monthly 12 payments and falsified Plaintiff’s credit application without his knowledge. Id. ¶¶ 13–15, 13 32. 14 On July 12, 2024, Plaintiff filed a substantially similar complaint in San Diego 15 Superior Court against Defendant. Mem. at 2; see also Mot., Ex. 1. On September 10, 16 2024, Defendant moved to compel arbitration in the state court action, arguing that the 17 Retail Installment Sale Contract (“RISC”) Plaintiff signed contained a valid and 18 enforceable binding arbitration provision. Mot., Ex. 2. On March 21, 2025, the San Diego 19 Superior Court granted Defendant’s Motion to Compel Arbitration and stayed the state 20 court action pending completion of binding arbitration before National Arbitration and 21 Mediation (“NAM”). Mot., Exs. 3–4. Following withdrawal of his counsel from the state 22 court action, Plaintiff filed the instant action on October 2, 2025. See ECF No. 1. On 23 December 1, 2025, Plaintiff filed the operative First Amended Complaint, asserting five 24 causes of action arising entirely under California law: (1) violation of the Consumer Legal 25 Remedies Act, Cal. Civ. Code § 1750 et seq.; (2) financial elder abuse in violation of the 26 Elderly and Dependent Adult Civil Protection Act, Cal. Welf. & Inst. Code § 15600 et seq.; 27 28 1 (3) violation of California’s Unfair Competition Law, Cal. Bus. & Prof. Code § 17200 et 2 seq.; (4) fraud; and (5) violation of California Vehicle Code § 11711. FAC at 1.1 3 LEGAL STANDARD 4 Federal Rule of Civil Procedure 12(b)(6) permits a party to raise by motion the 5 defense that the complaint “fail[s] to state a claim upon which relief can be granted.” To 6 survive a 12(b)(6) motion, “a complaint must contain sufficient factual matter, accepted as 7 true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 8 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A claim is 9 facially plausible when the facts pled “allow[] the court to draw the reasonable inference 10 that the defendant is liable for the misconduct alleged.” Id. That is not to say that the claim 11 must be probable, but there must be “more than a sheer possibility that a defendant has 12 acted unlawfully.” Id. Facts “‘merely consistent with’ a defendant’s liability” fall short of 13 a plausible entitlement to relief. Id. (quoting Twombly, 550 U.S. at 557). 14 Though this plausibility standard “does not require ‘detailed factual 15 allegations,’ . . . it [does] demand[] more than an unadorned, the-defendant-unlawfully- 16 harmed-me accusation.” Id. (quoting Twombly, 550 U.S. at 555). In other words, a 17 complaint will not suffice “if it tenders ‘naked assertion[s]’ devoid of ‘further factual 18 enhancement.’” Id. (alteration in original) (quoting Twombly, 550 U.S. at 557). Put 19 differently, “a formulaic recitation of the elements of a cause of action will not do.” 20 Twombly, 550 U.S. at 555. 21 Review under Rule 12(b)(6) requires a context-specific analysis involving the 22 Court’s “judicial experience and common sense.” Iqbal, 556 U.S. at 679. In performing 23 24 1 On January 31, 2024, Plaintiff received a Chapter 7 bankruptcy discharge in the United States Bankruptcy Court for the District of Utah, Case No. 23-24861. See ECF No. 14. Plaintiff subsequently 25 filed a Notice of Bankruptcy on the 2023 Sprinter Van in this action, asserting that the bankruptcy discharge bars Defendant from pursuing arbitration. See id. Plaintiff’s argument is unavailing. The 26 bankruptcy discharge released Plaintiff from personal liability for debts owed to creditors, it did not extinguish Plaintiff’s own affirmative tort and fraud claims against Defendant. Plaintiff’s five causes of 27 action are offensive claims seeking damages from Defendant, not defensive claims against a debt. The 28 discharge injunction under 11 U.S.C. § 524 accordingly does not bar the arbitration of Plaintiff’s claims. 1 that analysis, “a district court must accept as true all facts alleged in the complaint, and 2 draw all reasonable inferences in favor of the plaintiff.” Wi-LAN Inc. v. LG Elecs., Inc., 3 382 F. Supp. 3d 1012, 1020 (S.D. Cal. 2019). “[W]here the well-pleaded facts do not 4 permit the court to infer more than the mere possibility of misconduct, the complaint has 5 alleged—but it has not ‘show[n]’—‘that the pleader is entitled to relief.’” Iqbal, 556 U.S. 6 at 679 (second alternation in original). If a complaint does not survive Rule 12(b)(6), a 7 court grants leave to amend unless it determines that no modified contention “consistent 8 with the challenged pleading could . . . possibly cure the deficiency.” Schreiber Distrib. 9 Co. v. Serv-Well Furniture Co., 806 F.2d 1393, 1401 (9th Cir. 1986). 10 DISCUSSION 11 I. Colorado River Abstention 12 Defendant moves to dismiss or stay this action pursuant to the Colorado River 13 abstention doctrine, arguing that the pending state court proceedings warrant this Court 14 declining to exercise its jurisdiction. Mot. at 4–11. Plaintiff responds that Colorado River 15 does not apply because: (1) the NAM arbitration has been dismissed without prejudice, see 16 ECF No. 21 at 2; (2) the federal and state proceedings involve different vehicles, the 2021 17 and 2023 Sprinter Vans respectively, and are therefore not parallel, see Opp’n, ECF No. 18 13 at 3; and (3) Plaintiff’s bankruptcy discharge renders the federal forum the proper venue 19 for his claims, see ECF No. 21 at 1. 20 Under Colorado River, a federal court may, in exceptional circumstances, decline to 21 exercise its “virtually unflagging obligation” to exercise jurisdiction when there are 22 concurrent parallel state court proceedings involving the same matter. Colorado River 23 Water Conservation Dist. v. United States, 424 U.S. 800, 817 (1976). This doctrine applies 24 only in “exceedingly rare” circumstances, and any doubt as to whether an abstention factor 25 exists should be resolved against a stay, not in favor of one. Seneca Ins. Co. v. Strange 26 Land, Inc., 862 F.3d 835, 841–42 (9th Cir. 2017) (citation omitted). Courts weigh eight 27 factors to determine whether a Colorado River stay is justified: 28 / / / 1 (1) which court first assumed jurisdiction over any property at stake; (2) the inconvenience of the federal forum; (3) the desire 2 to avoid piecemeal litigation; (4) the order in which the forums 3 obtained jurisdiction; (5) whether federal law or state law provides the rule of decision on the merits; (6) whether the state 4 court proceedings can adequately protect the rights of the federal 5 litigants; (7) the desire to avoid forum shopping; and (8) whether the state court proceedings will resolve all issues before the 6 federal court. 7 8 Montanore Minerals Corp. v. Bakie, 867 F.3d 1160, 1166 (9th Cir. 2017). These “factors 9 are not a ‘mechanical checklist’” and must be applied “in a pragmatic, flexible manner” 10 with the balance heavily weighted in favor of exercising jurisdiction. Ernest Bock, LLC v. 11 Steelman, 76 F.4th 827, 836 (9th Cir. 2023) (citation omitted). “Any doubt as to whether 12 a factor exists should be resolved against a stay.” Seneca, 862 F.3d at 842 (internal 13 quotation marks and citation omitted). 14 The Court addresses each factor in turn. 15 (1) “Which court first assumed jurisdiction over any property at stake” is neutral. 16 Neither court has assumed jurisdiction over a specific res, and there is no risk of 17 inconsistent dispositions of property. Id. 18 (2) “Inconvenience of the federal forum” is neutral. Both the San Diego Superior 19 Court and this Court are located in San Diego County. Neither forum presents a meaningful 20 inconvenience to either party. 21 (3) “The desire to avoid piecemeal litigation” weighs in favor of a stay. Plaintiff 22 filed substantially similar claims in San Diego Superior Court on July 12, 2024, more than 23 a year before initiating this federal action. Both proceedings involve the same parties, the 24 same January 14, 2023, vehicle transaction, and the same California law claims. Allowing 25 both proceedings to continue simultaneously risks duplicating judicial efforts and reaching 26 inconsistent results. See Montanore, 867 F.3d at 1167. 27 (4) “The order in which the forums obtained jurisdiction” weighs strongly in favor 28 of a stay. Plaintiff filed in San Diego Superior Court on July 12, 2024. He did not file in 1 this Court until October 2, 2025, more than fourteen months later. By the time Plaintiff 2 initiated this federal action, the state court had already ruled on Defendant’s motion to 3 compel arbitration and stayed the state court proceedings pending arbitration. See Mot., 4 Exs. 3–4. The state court obtained jurisdiction first and made substantially more progress. 5 Montanore, 867 F.3d at 1168. 6 (5) “Whether federal or state law provides the rule of decision” is neutral. Plaintiff’s 7 claims arise entirely under California law. However, the presence of state law issues favors 8 abstention only in rare circumstances where the legal questions are complex and better 9 resolved by a state court. Seneca, 862 F.3d at 844. Plaintiff’s claims, brought under the 10 Consumer Legal Remedies Act, the Elderly and Dependent Adult Civil Protection Act, the 11 Unfair Competition Law, and common law fraud, while exclusively state law, present 12 routine consumer protection issues that this Court is fully capable of deciding. This factor 13 is therefore neutral. 14 (6) “Whether state court proceedings can adequately protect the rights of the federal 15 litigants” weighs in favor of a stay. Plaintiff asserts only California state law claims. 16 California courts and the NAM arbitration forum are fully competent to adjudicate those 17 claims and provide the relief Plaintiff seeks. Plaintiff has identified no federal right that 18 the state forum is incapable of protecting. See Montanore, 867 F.3d at 1169. 19 (7) “The desire to avoid forum shopping” weighs in favor of a stay. Plaintiff’s own 20 attorney filed this action in San Diego Superior Court in July 2024. After the state court 21 compelled his claims to arbitration, Plaintiff discharged his attorney and refiled in this 22 Court. Filing in federal court after an unfavorable ruling in state court is precisely the 23 conduct Colorado River is designed to discourage. Id. at 1170; Seneca, 862 F.3d at 846. 24 (8) “Whether the state court proceedings will resolve all issues before the federal 25 court” weighs in favor of a stay. This factor asks whether there is substantial doubt that 26 the parallel state proceedings will fully resolve the federal action. See Ernest Bock, 76 27 F.4th at 838. Exact parallelism is not required; it is enough that the proceedings are 28 substantially similar. Montanore, 867 F.3d at 1170. Here, the state and federal actions 1 || involve the same parties, the same transaction, and the same California law claims. Unlike 2 || Intel Corp. v. Advanced Micro Devices, Inc., 12 F.3d 908, 912-13 (9th Cir. 1993), where 3 federal copyright claims were legally distinct from the state court’s arbitration review 4 || proceedings such that substantial doubt existed, the state and federal actions here are based 5 || on identical claims arising from an identical transaction. The state court retains jurisdiction 6 || over the stayed proceeding and arbitration is ongoing. See Mot., Exs. 3-4. Accordingly, 7 || the Court finds no substantial doubt that the state proceedings will fully resolve this action. 8 On balance, five of the cight Colorado River factors favor a stay and three are 9 ||neutral. No factor weighs against a stay. The balance weighs in favor of a stay. See Ernest 10 || Bock, 76 F Ath at 836. When Colorado River abstention is appropriate, the Ninth Circuit 11 |/requires a stay rather than dismissal to ensure the federal forum remains available if the 12 ||state proceedings prove inadequate. See Montanore, 867 F.3d at 1170; Attwood v. 13 ||Mendocino Coast Dist. Hosp., 886 F.2d 241, 243 (9th Cir. 1989). Accordingly, 14 || Defendant’s request to stay is GRANTED and this action is STAYED pending completion 15 || of the state court and arbitration proceedings. Defendant’s request to dismiss is therefore 16 || DENIED. 17 CONCLUSION 18 In light of the foregoing, the Court GRANTS IN PART AND DENIES IN PART 19 || Defendant’s Motion (ECF No. 17). The Court GRANTS Defendant’s alternative request 20 || for a stay and DENIES WITHOUT PREJUDICE Defendant’s Motion to the extent it 21 ||seeks dismissal under Federal Rule of Civil Procedure 12(b)(6). This action is STAYED 22 pending completion of the parallel state court proceedings. The Parties SHALL FILE a 23 status report within twenty-one (21) days after the state court proceedings have 24 ||concluded. The joint status report SHALL INCLUDE specific proposals as to how the 25 || Parties wish to proceed with the case. 26 IT IS SO ORDERED. 27 Dated: July 24, 2026 (ee on. Janis L. Sammartino United States District Judge