Judge: Armen Tamzarian, Case: 22STCV11789, Date: 2024-10-04 Tentative Ruling

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Case Number: 22STCV11789    Hearing Date: October 4, 2024    Dept: 52

Tentative Ruling:

            Defendant General Motors, LLC’s Motion for Summary Judgment

Defendant General Motors, LLC moves for summary judgment of this action by plaintiff Beth Gregorian.  In the alternative, defendant moves for summary adjudication of each of plaintiff’s five causes of action. 

Legal Standard

Summary judgment should be granted where no triable issues of fact exist and the moving party is entitled to judgment as a matter of law.  (Code Civ. Proc., § 437c, subd. (c); Villa v. McFerren (1995) 35 Cal.App.4th 733, 741.)  Courts use a three-step analysis: “(1) identify the issues framed by the pleadings; (2) determine whether the moving party has negated the opponent’s claims; and (3) determine whether the opposition has demonstrated the existence of a triable, material factual issue.”  (Hinesley v. Oakshade Town Center (2005) 135 Cal.App.4th 289, 294.) 

Summary of Facts

            On July 23, 2021, plaintiff Beth L. Gregorian entered into a Lease Assumption Agreement pursuant to which she assumed the lease of the subject vehicle from Joseph Sola.  (UMF 3, citing Jensen Decl., Ex. C.)  The agreement provides that it “is entered into between the original Lessee(s) …, the Assuming Party(s) …, and ACAR Leasing Ltd. (‘GM Financial Leasing’).  (Jensen Decl., Ex. C.)  Joseph R. Sola was the original lessee.  Plaintiff Gregorian was the assuming party.  The “description of lease” section provides: “Lessor/Assignee: [¶] CAMINO REAL CHEVROLET / ACAR Leasing Ltd.”  (Id., ¶ 3.)  Under the contract, plaintiff “agree[d] to pay GM Financial an Assumption Fee of $625.00 at signing.”  (Id., ¶ 4.)

The agreement’s section for additional terms and conditions provides: “Consent: Lessee asks GM Financial Leasing to consent to such transfer and assumption upon the terms and conditions of this Agreement. [¶] Vehicle Condition: Assuming Party accepts the Vehicle in its present, ‘AS IS’ condition.”  (Jensen Decl., Ex. C, ¶ 5.)  Under the space for Sola’s and plaintiff’s signatures, the lease provides: “Accepted By: [¶] ACAR Leasing Ltd. by: AmeriCredit Financial Services, Inc., as attorney-in-fact.”  (Id., ¶ 7.)  The signature on AmeriCredit’s behalf is by “Thomas Spurrier,” a “Supervisor.”  (Ibid.)   

In her response to defendant’s asserted fact No. 3, plaintiff stated, “Undisputed and incomplete.”  She contends it is incomplete because she “leased the Vehicle directly from Defendant GM” and that “AmeriCredit Financial Services, Inc. was acquired by Defendant GM in October, 2010.”

1st to 3rd Causes of Action: Claims Under Song-Beverly Consumer Warranty Act

            Plaintiff’s first three causes of action are based on Civil Code section 1793.2, a provision of the Song-Beverly Consumer Warranty Act (Song-Beverly Act): (1) failure repair or replace after a reasonable number of attempts (§ 1793.2, subd. (d)); (2) failure to commence repairs within a reasonable time (§ 1793.2, subd. (b)); and (3) failure to make available sufficient literature (§ 1793.2, subd. (a)(3).)

            Defendant argues plaintiff has no standing to bring these causes of action because she is not a “buyer” under Civil Code section 1791, subdivision (b).  That subdivision provides, “ ‘Buyer’ or ‘retail buyer’ means any individual who buys consumer goods from a person engaged in the business of manufacturing, distributing, or selling consumer goods at retail.”  Generally, under the Song-Beverly Act, lessors have the same warranty obligations as sellers and lessees have the same warranty rights as buyers.  (See Civ. Code, § 1795.4.)  A “lessor” means “a person who regularly leases consumer goods under a lease.”  (Civ. Code, § 1791, subd. (i).)  Defendant contends that the definition of “buyer” does not apply because plaintiff assumed the lease from Sola, the prior lessee, who was not a seller engaged in the business of manufacturing, distributing, or selling consumer goods at retail. 

            The court rejects this argument.  Under the Lease Assumption Agreement, plaintiff was obligated to make lease payments to GM Financial Leasing, not Sola.  There is no evidence in the record regarding whether GM Financial Leasing is in the business of manufacturing, distributing, or selling consumer goods at retail or whether it regularly leases consumer goods.  As the moving party, defendant has the initial burden of showing that plaintiff cannot prevail on its causes of action.  Defendant has not met its burden on this issue.

            Defendant also argues the subject vehicle was not a “consumer good” under Civil Code section 1791, subdivision (a).  That subdivision provides, “ ‘Consumer goods’ means any new product or part thereof that is used, bought, or leased for use primarily for personal, family, or household purposes, except for clothing and consumables.  ‘Consumer goods’ shall include new and used assistive devices sold at retail.”  (Italics added.)  Defendant contends that the subject vehicle was not a “new” car.

            With respect to plaintiff’s first cause of action for violation of Civil Code section 1793.2, subdivision (d), the more specific definition of “new” vehicle of Civil Code section 1793.22, subdivision (e)(2) applies.  (Jensen v. BMW of North America, Inc. (1995) 35 Cal.App.4th 112, 126 (Jensen); see also Civ. Code, § 1793.2, subd. (d)(2) [“defined in paragraph 2 of subdivision (e) of Section 1793.22”]; §1793.22, subd. (e) [“For purposes of subdivision (d) of Section 1793.3”].) 

            Civil Code section 1793.22, subdivision (e)(2) provides: “ ‘New motor vehicle’ means a new motor vehicle that is bought or used primarily for personal, family, or household purposes.  ‘New motor vehicle’ also means a new motor vehicle with a gross vehicle weight under 10,000 pounds that is bought or used primarily for business purposes by a person . . . to which not more than five motor vehicles are registered in this state.  ‘New motor vehicle’ includes the chassis, chassis cab, and that portion of a motor home devoted to its propulsion, but does not include any portion designed, used, or maintained primarily for human habitation, a dealer-owned vehicle and a “demonstrator” or other motor vehicle sold with a manufacturer’s new car warranty . . . .”  (Emphasis added.) 

            The Courts of Appeal are split regarding the meaning of the phrase “other motor vehicle sold with a manufacturer’s new car warranty.” 

            Jensen cites this phrase to support its conclusion that a “new motor vehicle” within the meaning of Civil Code section 1793.22 “includes cars sold with a balance remaining on the new motor vehicle warranty.”  (Jensen, supra, 35 Cal.App.4th at p. 126.)

Several later decisions have distinguished or criticized Jensen.  In Dagher v. Ford Motor Co. (2015) 238 Cal.App.4th 905, the court distinguished Jensen because there, “the subsequent purchaser had leased from the dealer, not from a private party.”  (Id. at p. 923.)  The court stated, “The statements in Jensen about the Act’s coverage for subsequent purchasers of vehicles with a balance remaining on the express warranty, must be read in light of the facts then before the court, and are limited in that respect.”  (Ibid.)  “In Jensen, the vehicle qualified as new because she acquired it from the dealer, at retail, under warranty.  [Citation.]  Here, however, Plaintiff acquired the used truck from private parties.”  (Ibid.)

More recently, Rodriguez v. FCA US, LLC (2022) 77 Cal.App.5th 209 (review granted July 13, 2022, S274625) (Rodriguez) held the Song-Beverly Act’s definition of “new motor vehicle” applies “to vehicles that have never been previously sold to a consumer and come with full express warranties” but not to “used vehicles sold with some part of the manufacturer’s warranty still in force.”  (Id. at pp. 220-221.)  The court distinguished Jensen on the basis that there, the vehicle was “leased with a full manufacturer’s warranty issued by the manufacturer’s representative” instead of “a used car with an unexpired warranty sold by a third party reseller.”  (Id. at p. 224.)

Finally, Stiles v. Kia Motors America, Inc. (2024) 101 Cal.App.5th 913 (review granted July 24, 2024, S285433) (Stiles) disagreed with Rodriguez and held, “[A] previously owned motor vehicle purchased with the manufacturer’s new car warranty still in effect is a ‘new motor vehicle’ as defined by section 1793.22, subdivision (e)(2).”  (Id. at p. 915.) 

Both Rodriguez and Stiles may be cited for their persuasive authority pending review by the California Supreme Court.  (Cal. Rules of Court, rule 8.1115(e)(1) [“Pending review and filing of the Supreme Court’s opinion, unless otherwise ordered by the Supreme Court under (3), a published opinion of a Court of Appeal in the matter has no binding or precedential effect, and may be cited for potentially persuasive value only. Any citation to the Court of Appeal opinion must also note the grant of review and any subsequent action by the Supreme Court.”].)  The Supreme Court’s orders granting review of both opinions did not prohibit citing them for persuasive value. 

The Supreme Court recently heard oral argument in Rodriguez.  Accordingly, to save judicial resources and to efficiently manage its docket, the court shall continue the hearing on this motion so that it can consider the Supreme Court’s ruling on Rodriguez before making a final decision on plaintiff’s first cause of action.

With respect to plaintiff’s second and third causes of action, the more specific definition Civil Code section 1793.22, subdivision (e)(2) does not apply.  Plaintiff thus must show the subject vehicle is a “new product” within the meaning of Civil Code section 1791, subdivision (a) to prevail on her claims.  Because the parties did not brief the issue, the court will abstain from ruling on it at this time.

4th Cause of Action: Breach of Implied Warranty of Merchantability

            Defendant is entitled to judgment as a matter of law on this cause of action.  The fourth cause of action alleges defendant breached the implied warranty of merchantability under Civil Code sections 1791.1, 1794, and 1795.5.  (FAC, ¶¶ 15-18.)  Civil Code section 1791.3 provides, “As used in this chapter, a sale ‘as is’ or ‘with all faults’ means that the manufacturer, distributor, and retailer disclaim all implied warranties that would otherwise attach to the sale of consumer goods under the provisions of this chapter.” 

It is undisputed that plaintiff acquired the subject vehicle via a Lease Assumption Agreement in 2021.  (Jensen Decl., Ex. C.)  The agreement provides, “Vehicle Condition: Assuming Party accepts the Vehicle in its present, ‘AS IS’ condition.”  (Ibid.)  Plaintiff’s opposition does not address this dispositive issue.  It instead only makes a generic argument about the implied warranty of merchantability. 

5th Cause of Action: Fraud

            Defendant does not meet its burden of showing it is entitled to summary adjudication of this cause of action.  Defendant contends plaintiff cannot establish the element of defendant’s duty to disclose because the parties had no fiduciary relationship or any direct transaction. 

Assuming defendant had no direct transaction with plaintiff, that does not mean plaintiff cannot establish the element of duty to disclose.  That duty does not always require a direct transaction or contract.  (Heliotis v. Schuman (1986) 181 Cal.App.3d 646, 651.)  A defendant can be liable for fraud by omission “when the defendant had exclusive knowledge of material facts not known to the plaintiff.”  (Ibid.; accord LiMandri v. Judkins (1997) 52 Cal.App.4th 326, 336.)  “[A] vendor has a duty to disclose material facts not only to the immediate purchasers, but also to subsequent purchasers when the vendor has reason to expect that the item will be resold.”  (OCM Principal Opportunities Fund, L.P. v. CIBC World Markets Corp. (2007) 157 Cal.App.4th 835, 859.)  Defendant does not meet its initial burden of presenting evidence that it did not have exclusive knowledge of the alleged defect.

In its reply brief, defendant contends it did not have exclusive knowledge of the defect because it “made information concerning the ‘Battery Defect’ available.”  (Reply, p. 8, citing plaintiff’s evidence.)  The court will not grant summary adjudication based on grounds raised for the first time in the reply brief.  (See Pereda v. Atos Jiu Jitsu LLC (2022) 85 Cal.App.5th 759, 766; San Diego Watercrafts, Inc. v. Wells Fargo Bank, N.A. (2002) 102 Cal.App.4th 308, 316.) 

Moreover, assuming a direct transaction or contract is required, the parties have one direct transaction.  The manufacturer’s express warranty for plaintiff’s vehicle may constitute a “contractual relationship or transaction” that “gives rise to a duty to disclose.”  (Scherer v. FCA US, LLC (S.D. Cal. 2021) 565 F.Supp.3d 1184, 1194.)

Code of Civil Procedure 437c(h)

Finally, plaintiff argues the court should deny this motion under Code of Civil Procedure section 437c, subdivision (h).  That provision permits a court to deny a motion for summary judgment when “it appears from the affidavits submitted in opposition to a motion for summary judgment or summary adjudication, or both, that facts essential to justify opposition may exist but cannot, for reasons stated, be presented.”  (Ibid.) 

Plaintiff makes no such showing.  Plaintiff makes only a conclusory assertion that facts essential to justify opposition may exist because plaintiff has yet to depose defendant’s person most qualified or discover various documents requested.  This motion relies almost exclusively on the single-page lease assumption agreement.  The court will only grant this motion as to the fourth cause of action based on the “as-is” provision in that agreement.  Plaintiff gives no explanation of how additional discovery from defendant could include any evidence that would justify opposing the motion.          

Disposition

            Defendant General Motors, LLC’s motion for summary judgment is denied.  Defendant’s motion for summary adjudication of plaintiff’s fifth cause of action is denied.  Defendant’s motion for summary adjudication of plaintiff’s fourth cause of action is granted.  The court shall continue the hearing on this motion with respect to plaintiff’s first, second, and third causes of action to February 20, 2025, at 9:00 a.m.  The parties may file further briefing plaintiff’s first, second, and third causes of action on or before February 12, 2025.

            The court, on its own motion, continues the trial to March 19, 2025, at 10:00 a.m., and the final status conference to March 12, 2025, at 9:00 a.m.  The joint trial documents required by the December 16, 2022, trial preparation order, shall be filed no later than March 4, 2025.