Judge: Anne Richardson, Case: 20STCV41519, Date: 2023-05-02 Tentative Ruling

Case Number: 20STCV41519    Hearing Date: May 2, 2023    Dept: 40

Background

Disputed and Undisputed Facts

In its motion, Defendant BMW of North America, LLC (BMW or BMW NA) argues several disputed points for background context in this motion. In whole, these are that:

Plaintiffs Ian Zachary Botnick and Candy Michele Botnick bought a used 2015 BMW i3 (the Vehicle) from CarMax Auto Superstore (CarMax) in Buena Park, CA on October 12, 2018.

CarMax is an independent third-party dealer, not owned by BMW NA and not an authorized BMW NA dealer.

BMW NA was the original distributor of the Vehicle when it was new. It made express warranties with respect to the Vehicle when it was new; it did not make any express warranties with respect to the sale of the Vehicle as a used vehicle.

Plaintiffs were given a loaner car during repairs and did not sustain any damages because of an alleged failure to complete repairs within 30 days or an alleged failure to provide sufficient parts and service literature.

In opposition, Plaintiffs object to the foregoing material facts presented by BMW on hearsay, authentication, and/or lack of foundation or personal knowledge grounds, but they do not present additional material facts of their own.

Procedural History

On October 29, 2020, Plaintiffs Ian Zachary Botnick, Candy Michelle Botnick, and Mary Jones sued BMW and Does 1 through 10 pursuant a Complaint alleging three causes of action: (1) Violation of the Song-Beverly Act – Breach of Express Warranty; (2) Violation of the Song-Beverly Act – Breach of Implied Warranty; and (3) Violation of the Song-Beverly Act Section 1793.2(b). The claims arise from allegations that on October 12, 2018, Plaintiffs purchased a used 2015 BMW i3, which was accompanied by express warranties from BMW, undertaking to preserve or maintain the utility or performance of the Vehicle or to provide compensation if there was a failure in such utility or performance, but where the Vehicle was delivered to Plaintiffs with serious defects and nonconformities to warranty and developed other serious defects and nonconformities to warranty including, but not limited to, electronics and electrical defects, defects in the fueling and fuel vent system, engine and engine electronics issues, and other serious nonconformities to warranty. The claims also arise from allegations that Plaintiffs delivered the Vehicle to BMW authorized service representatives on multiple occasions for repairs of defects, which they failed to conform to warranty within 30-days and/or commence repairs within a reasonable time, with BMW failing to tender the Vehicle back.

On February 16, 2023, BMW made a motion for summary judgment or adjudication of the Complaint’s three causes of action.

On April 18, 2023, Plaintiffs opposed the motion.

On April 27, 2023, BMW replied to Plaintiffs’ opposition.

The summary judgment or adjudication motion is now before the Court.

Evidentiary Objections

Plaintiffs’ Opposition Evidentiary Objections

Objections No. 1-2, 5-7 to Mark Declaration: OVERRULED.

Objections No. 3-4 to Mark Declaration: SUSTAINED.

Objection to Edel Declaration: OVERRULED.

Motion for Summary Judgment or Adjudication

Legal Standard

A motion for summary judgment shall be granted if all the papers submitted show that there is no triable issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. (Code of Civ. Proc., § 437c, subd. (c).) A party may also seek summary adjudication of an entire a cause of action or, under certain circumstances, parts thereof, which may be made by a standalone motion or as an alternative to a motion for summary judgment and proceeds in all procedural respects as a motion for summary judgment. (Code Civ. Proc., § 437c, subds. (f)(1)-(2), (t); see Lilienthal & Fowler v. Superior Court (1993) 12 Cal.App.4th 1848, 1854-1855; see also Public Utilities Com. v. Superior Court (2010) 181 Cal.App.4th 364, 380.) The moving party bears the initial burden of production to make prima facie showing no triable material fact issues. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850.) This burden on summary judgment “is more properly one of persuasion rather than proof, since he must persuade the court that there is no material fact for a reasonable trier of fact to find, and not to prove any such fact to the satisfaction of the court itself as though it were sitting as the trier of fact.” (Id. at p. 850, fn. 11.) If the moving party meets this burden, the burden shifts to the opposing party to make converse prima facie showing that a triable issue of material fact exists. (Ibid.) The evidence of the moving party is strictly construed, and the evidence of the opposing party liberally construed. (Crouse v. Brobeck, Phleger & Harrison (1988) 67 Cal.App.4th 1509, 1524.) Doubts as to the propriety of granting the motion must be resolved in favor of the party resisting the motion. (Stationers Corp. v. Dun & Bradstreet, Inc. (1965) 62 Cal.2d 412, 417.)

First Cause of Action, Violation of the Song-Beverly Act – Breach of Express Warranty: DENIED.

The Song-Beverly Consumer Warranty Act (Civil Code sections 1790 et seq.) (SBA) provides enhanced remedies to consumers who buy new consumer goods accompanied by a manufacturer’s express warranty. (Civ. Code, § 1793.2; see also Kiluk v. Mercedes-Benz USA, LLC (2019) 43 Cal.App.5th 334, 336 [same].) Used vehicles sold without a new or full warranty are not “new consumer goods” for the purpose of the Song-Beverly Act. (Rodriguez v. FAC US, LLC (2022) 77 Cal.App.5th 209, 219-224, review granted Jul. 13 2022, S274625, 512 P.3d 654.) However, express warranty protections generally apply to the sale of used goods accompanied by an express warranty insofar as the distributor or retail seller of the vehicle is bound by their warranty as opposed to the manufacturer. (Civ. Code, § 1795.5; Kiluk v. Mercedes-Benz USA, LLC, supra, at p. 336.) Nevertheless, manufacturers can be liable under SBA section 1795.5 where the manufacturer has “partnered with a dealership to sell used vehicles directly to the public by offering an express warranty as part of the sales package” such that the manufacturer has “stepped into the role of a [distributor or] retailer and [is] subject to the obligations of a [distributor or] retailer under section 1795.5.” (Kiluk v. Mercedes-Benz USA, LLC, supra, at pp. 339-340; see, e.g., Ruiz Nunez v. FCA US LLC (2021) 61 Cal.App.5th 385, 399 [“[P]laintiff presented no evidence that defendant was ‘a distributor or retail seller of used consumer goods’ (§ 1795.5), or in any way acted as such”].)

(The Court briefly notes that despite the fact that the Supreme Court of California has granted review on Rodriguez, the Supreme Court has directed that Rodriguez “may be cited, not only for its persuasive value, but also for the limited purpose of establishing the existence of a conflict in authority that would in turn allow trial courts to exercise discretion under Auto Equity Sales, Inc. v. Superior Court (1962) 57 Cal.2d 450, 456, 20 Cal.Rptr. 321, 369 P.2d 937, to choose between sides of any such conflict.” (See Rodriguez v. FCA US (Jul. 13 2022) 2022 WL 2720861, * 1.))

The first cause of action in the Complaint alleges that express manufacturer warranties accompanied Plaintiffs’ purchase of the Vehicle, i.e., warranties to preserve or maintain the utility or performance of Plaintiffs’ vehicle or to provide compensation if there was a failure in such utility or performance. (Complaint, ¶ 17 and ¶¶ 16-30.) The first cause of action does not specify if the Vehicle’s warranties are based on a new vehicle or used vehicle status under the SBA, instead citing generally to Civil Code sections 1790 et seq. (Complaint, ¶ 19; see Complaint, ¶¶ 16-30 generally.) The Complaint does, however, describe the Vehicle as used. (Complaint, ¶ 8.)

In their motion, BMW argues that the Vehicle does not benefit from manufacturer warranties under the SBA. The thrust of this argument is that the SBA does not apply to the sale of a used vehicle with only some balance remaining on its new vehicle limited warranty—like the Vehicle sold in this case—as opposed to a vehicle sold with a new or full express warranty. (Mot., p. 2.)

For legal support, BMW refers to Rodriguez v. FCA US, LLC for the proposition that the SBA’s express warranties for a new vehicle only apply to vehicles sold with a new or full manufacturer’s express warranty. (Mot., p. 2.)

For factual support, BMW refers to various pieces of evidence purporting to show that the Vehicle was used within the meaning of the SBA when purchased by Plaintiff from an allegedly independent third-party dealer not affiliated with BMW, i.e., CarMax. (Mot., p. 1.) These pieces of evidence are described as (1) paragraph 8 of the Complaint, (2) a copy of the sales contract for the Vehicle, and (3) a declaration from Mark Nicastro providing that the Vehicle was purchased in a used condition and that CarMax—the dealer from which the Vehicle was allegedly purchased—is not affiliated with BMW. (Mot., Separate Statement, UMFs Nos. 1-2.) Paragraph 8 of the Complaint provides that “[o]n October 12th 2018, Plaintiffs purchased a Used 2015 BMW i3.” (Mot., Edel Decl., Ex. A [copy of Complaint].) A review of the sales contract shows that the Vehicle was purchased as “Used.” (Mot., Edel Decl., Ex. B [copy of sales contract, which, at page 1, shows a Description of Vehicle You Are Purchasing section, in which the Vehicle is checked off as a “Used” vehicle].) However, no declaration from a Mark Nicastro accompanies this motion or is attached to the declarations of Dan Mark and Adam Edel. Neither is such a declaration attached to the reply filed on April 27, 2023. (See Reply generally [failing to mention Mark Nicastro altogether].)

The Court finds that even if it accepts BMW’s argument that the Vehicle is not a new consumer good for SBA purposes, BMW nevertheless does not carry its burden on summary adjudication. This is because even if the Court were to accept that under Rodriguez’s reasoning, the Vehicle does not fall into the meaning of a “new consumer good” entitled to enhanced remedies pursuant to Civil Code section 1793.2, there is insufficient evidence to convince a reasonable factfinder that no triable issues of material fact exist as to whether BMW had a relationship or agreement with CarMax to provide an express warranty for the Vehicle pursuant to Civil Code section 1795.5 at the time of its sale to Plaintiffs. Without such a showing, BMW cannot, on summary adjudication, show that the Vehicle was not sold in a used condition but with express manufacturer warranties. (See Kiluk v. Mercedes-Benz USA, LLC, supra, at pp. 339-340.)

The Court also finds it important to note that the first cause of action does not limit itself to express warranty relief pursuant to Civil Code section 1793.2, instead seeking relief pursuant to “Civil Code sections 1790 et seq.” (Complaint, ¶ 19, italics omitted.) Relief pursuant to Civil Code section 1795.5 is therefore within the scope of the first cause of action, a conclusion that is logically sound where the Complaint itself recognizes that the Vehicle was purchased used. (See Complaint, ¶ 8.)

Summary adjudication of the first cause of action is therefore DENIED.

Second Cause of Action, Violation of the Song-Beverly Act – Breach of Implied Warranty: GRANTED.

The SBA provides for implied warranties of merchantability and fitness for “consumer goods”—i.e., new products. (Civ. Code, §§ 1791.1, subd. (c), 1792; see also Rodriguez v. FCA US, LLC, supra, 77 Cal.App.5th at p. 218.) These implied warranties may not last less than 60 days or more than one year after the sale of the consumer goods to which they apply, and liability for their breach lies with the manufacturer. (Civ. Code, §§ 1791.1, subd. (c), 1792; see also Rodriguez v. FCA US, LLC, supra, at p. 218.)

The Act also provides implied warranties for used products, which are shorter than the implied warranties for new products; their maximum duration is three months. (Civ Code, § 1795.5, subd. (c); see also Rodriguez v. FCA US, LLC, supra, 77 Cal.App.5th at p. 218.) As is the case with liability for breach of express warranties, “in the sale of used consumer goods, liability for breach of implied warranty lies with distributors and retailers, not the manufacturer,” unless the manufacturer issues a new warranty along with the sale of the used good. (Rodriguez v. FCA US, LLC, supra, 77 Cal.App.5th at p. 218; see also Ruiz Nunez v. FCA US LLC, supra, 61 Cal.App.5th at p. 398; Kiluk v. Mercedes-Benz USA, LLC, supra, 43 Cal.App.5th at pp. 339-340 [“The Song-Beverly Act provides similar remedies in the context of the sale of used goods, except that the manufacturer is generally off the hook”].)

The second cause of action alleges that “the sale of the Subject Vehicle was accompanied by an implied warranty that the Subject Vehicle was merchantable pursuant to Civil Code section 1792” and that the warranty was breached because the “Subject Vehicle was not of the same quality as those generally acceptable in the trade because it was sold with one or more defective vehicle systems/components which manifest as electronics and electrical defects, defects in the fueling and fuel vent system, engine and engine electronics issues, and other serious nonconformities to warranty.” (Complaint, ¶¶ 33, 36; see Complaint, ¶¶ 31-42 generally.)

In their motion, BMW argues that the second cause of action fails on summary adjudication because implied manufacturer warranties for new consumer goods did not accompany the sale of the Vehicle insofar as it was purchased by Plaintiffs in a used condition. (Mot., pp. 6-8.)

For legal support, BMW cites Ruiz Nunez v. FCA US, LLC for the proposition that “‘only distributors or sellers of used goods—not manufacturers of new goods—have implied warranty obligations in the sale of used goods.’” (Mot., p. 7., italics omitted.)

For evidentiary support, BMW fails to cite any evidence in its motion. (Mot., pp. 6-8.) However, the Separate Statement cites to (1) paragraph 8 of the Complaint and (2) a copy of the sales contract for the Vehicle. (Mot., Separate Statement, UMFs No. 10.) Paragraph 8 of the Complaint provides that “[o]n October 12th 2018, Plaintiffs purchased a Used 2015 BMW i3.” (Mot., Edel Decl., Ex. A [copy of Complaint].) A review of the sales contract shows that Vehicle was purchased as “Used.” (Mot., Edel Decl., Ex. B [copy of sales contract, which, at page 1, shows a Description of Vehicle You Are Purchasing section, in which the Vehicle is checked off as a “Used” vehicle].)

The Court is persuaded that this legal argument and its supporting evidence carry BMW’s burden on summary adjudication as to the second cause of action. This is because the second cause of action is premised on a statutory section dealing with implied manufacturer warranties for new consumer goods (Complaint, ¶ 33 [relying on Civ. Code, § 1793.2]) and BMW’s evidence shows that the Vehicle was purchased used (Mot., Edel Decl., Ex. A, ¶ 8 & Ex. B, p. 1).

In opposition, Plaintiffs make several arguments.

I.

Plaintiffs first argue that pursuant to case law in Jensen v. BMW of N. Am., Inc. (1995) 35 Cal.App.4th 112, the Vehicle was a new consumer good when purchased. (See Opp’n, pp. 4-5.) The opposition also cites R & B Auto Ctr., Inc. v. Farmers Grp., Inc. (2006) 140 Cal.App.4th 327, 335 and Leber v. DKD of Davis, Inc., (2015) 237 Cal.App.4th 402, 408-409 for this proposition. (Opp’n, p. 5.)

A review of Jensen shows that it held that a vehicle leased to a consumer as a demonstrator was deemed a new motor vehicle for SBA purposes because the definition of new motor vehicle in Civil Code section 1793.22, subdivision (e) included demonstrator or other motor vehicles if they were “sold with a manufacturer’s new car warranty.” (Jensen v. BMW of N. Am., Inc. (1995) 35 Cal.App.4th 112, 123, emphasis added.) This holding has lent itself to confusion insofar as the Jensen court also stated that “the words of section 1793.22 are reasonably free from ambiguity and cars sold with a balance remaining on the manufacturer’s new motor vehicle warranty are included within its definition of ‘new motor vehicle.’” (Ibid.) However, the Court reads this latter statement within the framing provided by the courts in Rodriguez v. FCA US, LLC and Dagher v. Ford Motor Co. These cases comment that the “remaining balance” statement in Jensen should be limited to a reading that only demonstrators or other motor vehicles accompanied by new or full warranties upon sale—and not used vehicles sold with some balance remaining on their warranties—should be considered new motor vehicles under the SBA. (Rodriguez v. FCA US, LLC, supra, 77 Cal.App.5th at pp. 223-224, quoting to Dagher v. Ford Motor Co. (2015) 238 Cal.App.4th 905, 923.) The reasoning provided by Rodriguez v. FCA US, LLC and Dagher v. Ford Motor Co. is that Jensen’s holding “must be read in light of the facts then before the court and [should be] limited in that respect,” where “th[e] facts [before the Jensen court] included a car leased with a full manufacturer’s warranty issued by the manufacturer’s representative, [indicating that] the [Jensen] court was not asked to decide whether a used car with an unexpired warranty sold by a third party reseller qualifies as a ‘new motor vehicle.’” (Rodriguez v. FCA US, LLC, supra, 77 Cal.App.5th at pp. 223-224, quoting to Dagher v. Ford Motor Co. (2015) 238 Cal.App.4th 905, 923.)

Based on this reading, the Court finds that Jensen is distinguishable because the Vehicle here was sold used with some remaining balance left on its warranties. (See Complaint, ¶¶ 8, 33.) To this Court, this conclusion is readily apparent from the text of Jensen, which expressly provided that the definition of new motor vehicle in Civil Code section 1793.22, subdivision (e) included demonstrator or other motor vehicles if they were “sold with a manufacturer’s new car warranty” rather than with an express warranty covering a used vehicle generally. (Jensen v. BMW of N. Am., Inc., supra, 35 Cal.App.4th at p. 123, emphasis added.)

Importantly, the Court notes that the second cause of action limits itself to implied manufacturer warranties for new vehicles. (Complaint, ¶ 33 [citing to Civ. Code, § 1792].) As a result, the second cause of action cannot be supported by Civil Code section 1795.5, dealing with implied warranties for used motor vehicles. (See Opp’n, p. 9 [citing to section 1795.5 without acknowledging its lack of incorporation into the second cause of action].) As a result, the Court’s analysis above provides sufficient grounds for the Court to determine that the second cause of action is not properly supported by section 1792 of the Civil Code and that the second cause of action fails to cite to section 1795.5 in support thereof, thus providing no statutory grounds to support a claim for breach of implied warranties accompanying the sale of the Vehicle.

The Court also finds that the other cases cited by Plaintiffs are not applicable or not helpful. Leber v. DKD of Davis, Inc. expressly stated that it did not comment as to “new vehicle” status under Civil Code section 1793.22, subdivision (e), for which reason the case is not applicable to this discussion. (Leber v. DKD of Davis, Inc., supra, 237 Cal.App.4th at p. 409 [“[O]ur conclusion in Jensen that a used vehicle sold with a manufacturer’s warranty qualified as a new vehicle under that statute is inapplicable to this case, which does not involve manufacturer’s liability”].) R & B Auto Ctr., Inc. v. Farmers Grp., Inc. is not helpful because all it did was recite the above discussed sentence in Jensen stating that “[t]he Song–Beverly Consumer Warranty Act (Civ.Code, § 1790 et seq.) applies to ‘cars sold with a balance remaining on the manufacturer’s new motor vehicle warranty …,’” where the Court has already explained that this statement in Jensen should be limited to a reading that demonstrator or other motor vehicles qualify as new motor vehicles for SBA purposes only when sold with a new or full warranty. (R & B Auto Ctr., Inc. v. Farmers Grp., Inc., supra, 140 Cal.App.4th at p. 335, fn. 4.)

II.

Plaintiffs’ opposition next argues that legislative intent, as discussed in Jensen, and the plaint language of the SBA supports a finding that the Vehicle in this action, though purchased used, is a new motor vehicle for SBA purposes. (Opp’n, pp. 5-8.)

The Court adopts the discussion in Rodriguez v. FCA US, LLC to find the opposite: vehicles previously sold with some balance remaining on their warranty rather than a new or full warranty accompanying their sale are not new motor vehicles pursuant to the SBA. (See Rodriguez v. FCA US, LLC, supra, 77 Cal.App.5th at pp. 219-225 [interpreting Legislature’s intent in defining the scope of a new motor vehicle for SBA purposes].)

III.

Plaintiffs also argue that because the Legislature has not abrogated Jensen and has since twice amended the definition of motor vehicle without modifying the language at issue in Jensen, it is clear that the Legislature has adopted the construction of Jensen offered by Plaintiffs, i.e., that vehicles previously sold, sold anew to a new consumer with balancing remaining on their warranties are new motor vehicles for SBA purposes. (Opp’n, p. 8.)

Plaintiffs are incorrect. This is because Plaintiffs incorrectly read the scope of Jensen as discussed above. (See Second Cause of Action §§ 1, 2 discussions supra.) For this reason, it is immaterial whether the Legislature has acquiesced to the judicial determination in Jensen because even if the Legislature has so acquiesced, that acquiescence does not adopt Plaintiffs’ definition of new motor vehicle.

IV.

Last, Plaintiffs’ opposition notes that distributors of motor vehicles can be held liable for breach of implied warranties under Civil Code section 1795.5, though the Opposition does not elaborate whether Plaintiffs are arguing that BMW was a distributor rather than manufacturer within the meaning of the SBA. (Opp’n, pp. 8-9.)

The Court, however, points to the Complaint’s second cause of action, which exclusively relies on section 1792 of the Civil Code (see Complaint, ¶ 33), for which reason any argument premised on section 1795.5 fails.

V.

Under these circumstances, the Court finds that no proper grounds exist on summary adjudication to support the Complaint’s claim for breach of implied warranties under the SBA.

Summary adjudication is thus GRANTED as to the Complaint’s second cause of action.

Third Cause of Action, Violation of the Song-Beverly Act Section 1793.2(b): GRANTED.

The motor vehicle refund-or-replace provision—section 1793.2, subdivision (d)(2)—is similar to the general, consumer goods refund-or-replace provision, except that it requires the manufacturer to provide the remedy ‘promptly’ and contains vehicle-specific rules regarding both replacement and restitution. (Civ. Code, § 1793.2, subd. (d)(2); Rodriguez v. FCA US, LLC, supra, 77 Cal.App.5th at p. 219.) Like its consumer goods counterpart, section 1793.2, subdivision (d)(2) applies to sales of new vehicles only; specifically, it applies to a new motor vehicle, as that term is defined in paragraph (2) of subdivision (e) of Section 1793.22. (Rodriguez v. FCA US, LLC, supra, at p. 219.) Where a manufacturer “partner[s] with a dealership to sell used vehicles directly to the public by offering an express warranty as part of the sales package, the manufacturer “step[s] into the role of a retailer and [is] subject to the obligations of a retailer under section 1795.5,” including “obligations … the ‘same’ [as those imposed on a] manufacturer under section 1793.2].” (Kiluk v. Mercedes-Benz USA, LLC, supra, 43 Cal.App.5th at p. 340 [finding that “it was entirely proper to permit the jury to analyze [an automobile manufacturer’s] liability under section 1793.2” where “manufacturer “partnered with a dealership to sell used vehicles directly to the public by offering an express warranty as part of the sales package”].)

The third cause of action invokes the refund-or-replace provision of section 1793.2 for new motor vehicles to support a claim entitling Plaintiff to rescission of the Vehicle’s purchase contract and recovery of damages arising from its sale, as based on BMW’s failure to conform the Vehicle to warranty within a reasonable time. (Complaint, ¶¶ 43-56.)

The Court adopts its discussion as to the second cause of action to find that, on summary adjudication, no triable issues of material fact exist as to (1) whether the Vehicle was new when it was purchased by Plaintiffs—it was not—and (2) whether the Vehicle is entitled to remedies applicable to new motor vehicles, such as the refund-or-replace provision—it is not. (See Second Cause of Action discussion supra.) The Court also notes that because the third cause of action does not in any way rely on section 1795.5 of the Civil Code (see Complaint, ¶¶ 43-56 [claim arising solely from section 1793.2 protections]), no refund-or-replace provision arising therefrom can be cited to support the third cause of action.

Under these circumstances, the Court finds that no proper grounds exist on summary adjudication to support the Complaint’s refund-or-replace claim, carrying BMW’s burden on summary adjudication and fatally undercutting Plaintiffs’ ability to make a responsive showing.

Summary adjudication is thus GRANTED as to the Complaint’s third cause of action.

Conclusion

Defendant BMW of North America, LLC’s Motion for Summary Judgment or Adjudication is GRANTED in Part and DENIED in Part:

(1) GRANTED as to the Complaint’s second and third causes of action because BMW carried its burden in summary adjudication of these claims and Plaintiffs failed to make a responsive showing; and

(2) DENIED as to the Complaint’s first cause of action because BMW failed to carry its burden in summary adjudication of this claim.