Judge: Bruce G. Iwasaki, Case: 20STCV12160, Date: 2023-03-03 Tentative Ruling

Case Number: 20STCV12160    Hearing Date: March 3, 2023    Dept: 58

Judge Bruce G. Iwasaki

Department 58

Hearing Date:             March 3, 2023

Case Name:                 Jaime Martinez et al. v. Cerritos Ford, Inc. et al.

Case No.:                    20STCV12160

Motion:                       Motion for Summary Judgment/Adjudication

Moving Party:             Defendants Ford Motor Company and Cerritos Ford Lincoln

Responding Party:       Plaintiffs Jaime Martinez and Phyllis Martinez

Background

This is an action under the Song-Beverly Act in which Jaime and Phyllis Martinez (Plaintiffs) alleged defects in a 2013 Ford Escape (Vehicle).  Plaintiffs sued Cerritos Ford, Inc. and Ford Motor Company (Defendants) for breach of express and implied warranties.  The Vehicle was purchased certified pre-owned on May 11, 2013 from Cerritos Ford Lincoln and received a 1-year/48,000 mile basic warranty and a 7-year/100,000 miles powertrain warranty.  Plaintiff Jaime is listed on the Retail Installment Sale Contract, but Phyllis is the primary driver.

Plaintiffs brought the Vehicle in for repair on at least seven occasions.  The first visit was on February 10, 2014 for a recall relating to the engine cylinder.  On January 9, 2015, the Vehicle began to idle high, and the check engine light turned on.  A month later, Plaintiffs claimed the Vehicle “idles rough when accelerating from a stop.”  On May 1, 2015, the check engine light came on again and Plaintiffs complained that the Vehicle “did not crank over two days.”  On December 30, 2016, the check engine light came on again and there was coolant leaking.  One year later, Plaintiffs complained of a loud chirping from the engine and coolant leakage.  Finally, on February 5, 2018, there was a reported “major fuel leak in engine compartment,” but Plaintiffs declined the repair.

Defendants now move for summary judgment on all causes of action.  They argue that the claims are barred by the statute of limitations and that Plaintiff Phyllis has no standing because she was not listed as a buyer in the sales contract.

In opposition, Plaintiffs contend that statute of limitations are generally questions of fact, the delayed discovery rule applies to toll the deadline, and that Phyllis has standing under the broader provisions of the Song-Beverly Act.  Defendants reiterated their arguments in reply.  

Legal Standard

A party may move for summary judgment “if it is contended that the action has no merit or that there is no defense to the action or proceeding.”  (Code Civ. Proc., § 437c,¿subd. (a).)  “[I]f all the evidence submitted, and all inferences reasonably deducible from the evidence and uncontradicted by other inferences or evidence, show that there is no triable issue as to any material fact and that the moving party is entitled to judgment as a matter of law,” the moving party will be entitled to summary judgment.  (Adler v. Manor Healthcare Corp.¿(1992) 7 Cal.App.4th 1110, 1119.)

The moving party has the initial burden of production to make¿a prima facie¿showing of the nonexistence of any triable issue of material fact, and if he does so, the burden shifts to the opposing party to make¿a prima facie¿showing of the existence of a triable issue of material fact.  (Aguilar v. Atlantic Richfield Co.¿(2001) 25 Cal.4th 826, 850; accord Code Civ. Proc., § 437c,¿subd. (p)(2).)  A Defendant moving for summary judgment may meet its initial burden by proving that for each cause of action alleged, plaintiff cannot establish at least one element of the cause of action.  (Code Civ. Proc., § 437c(p)(2).)

Discussion

Phyllis may have standing because she is the primary driver and brought the Vehicle in for most of the repair visits.

            Defendants argue that summary judgment against Plaintiff Phyllis is appropriate because she is “not on the sales contract and did not purchase the Vehicle at the time Jaime Martinez purchased the vehicle.”  They rely primarily on Boyd v. Jaguar Land Rover North America, LLC (S.D. Cal., Sept. 20, 2012, No. 11CV1580 JLS (WMC)) 2012 WL 12868253 (Boyd).

            Boyd is a federal trial court case and is not binding on this Court.  (Rubin v. Ross (2021) 65 Cal.App.5th 153, 163.)  Moreover, the facts in that case are distinguishable.

            In Boyd, the plaintiff spouse acquired title to the vehicle as part of a community property settlement with her husband in a divorce proceeding.  (Boyd, supra, 2012 WL 12868253 at *1.)  Only the ex-husband was listed on the sale contract.  The trial court dismissed the spouse’s claims under the Song-Beverly Act against the vehicle manufacturer, finding that she “conflate[d] her property rights in the Range Rover with her contractual rights that give rise to a Song-Beverly Act claim.”  (Id. at *2, original italics.)  The trial court analogized its facts to the insurance context, noting that only the insured could maintain claims for breach of the duty of good faith and fair dealing.  (Id. at *3.)

            At least one other federal case has disagreed with Boyd in its analogy to insurance claims, stating that actions under the Song-Beverly Act are “not simply a common law breach of contract claim . . . [but] a statutory claim.”  (Islas v. Ford Motor Company (C.D. Cal., July 29, 2019, No. EDCV 18-2221-GW(SPX)) 2019 WL 10855294, *5.)  Furthermore, it is unclear whether Boyd was discussing standing under the Article III “case or controversy” requirement, which is different from California law.  (Reycraft v. Lee (2009) 177 Cal.App.4th 1211, 1217; Jasmine Networks, Inc. v. Superior Court (2009) 180 Cal.App.4th 980, 990.)  Therefore, the Court does not find that Boyd is persuasive.

            Defendants also cite to Dagher v. Ford Motor Co. (2015) 238 Cal.App.4th 905, 911, but the issue in that case dealt with whether an unexpired express warranty that transferred from a private seller afforded the subsequent buyer standing to sue under the Song-Beverly Act.  There is no similar sale here.

            ¿¿¿Patel v. Mercedes-Benz USA, LLC (2019) 43 Cal.App.5th 1007¿ (Patel) is instructive here.  In that case, plaintiff Patel leased the vehicle from defendant and sued under the Song-Beverly Act due to problems with the navigation system.  However, it was later revealed that Patel leased the vehicle for a friend, Fayaz, who was the primary driver and who reimbursed Patel for the payments.  (43 Cal.App.5th at p. 1010.)  During the trial, defendant manufacturer moved for nonsuit, arguing that Patel suffered no damages because he was reimbursed by Fayaz.  The trial court denied the motion and ordered Fayaz to be added as a plaintiff.  (Id. at p. 1012.)

            Patel involved entitlement to attorney’s fees:  the trial court granted fees only from the time the second plaintiff, Fayaz, was added in because he was the injured party in interest.  The appellate court reversed the limitation on fees, finding that both plaintiffs were prevailing parties.  (Id. at pp. 1014-1016.)  The Court of Appeal reasoned that “[a]rguably, Fayaz could have bene included as a plaintiff earlier in the litigation, as he was the party affected by the breach and the efforts to have the vehicle repaired.”  (Id. at p. 1018, italics added.)  That is, Fayaz, though not a party to the lease, could be a plaintiff.  Similar to Fayaz here, Phyllis was the primary driver and brought the Vehicle to the repair facilities.  (Defendants’ Separate Statement 4, 5, 7, 8, 9; Plaintiff’s Separate Statement 2-4.) 

Defendant has not met its burden on summary adjudication.  Whether Phyllis, as the undisputed owner and primary driver of the Vehicle, and the one who brought it in for repair, has standing under the Song-Beverly Act is a triable issue of fact.  (See Martinez v. Kia Motors America, Inc. (2011) 193 Cal.App.4th 187, 194 [“All the Act requires of the buyer is that the buyer ‘deliver [the] nonconforming goods to the manufacturer’s service and repair facility’ for the purpose of allowing the manufacturer a reasonable number of attempts to cure the problem”].)  Summary adjudication is denied as to standing.

Whether the manufacturer was given a reasonable number of attempts to substantially conform the Vehicle to the applicable warranties is a question of fact.

Defendants contend that because Plaintiffs were on “inquiry notice of their express warranty claims no later than May 2015,” their claims are time-barred. 

The statute of limitations for breach of warranty is four years.  (Krieger v. Nick Alexander Imports, Inc. (1991) 234 Cal.App.3d 205, 215.)  A statute of limitations begins to run “at ‘the time when the cause of action is complete with all of its elements.’ ”  (Fox v. Ethicon Endo-Surgery, Inc. (2005) 35 Cal.4th 797, 806.)  However, under a delayed discovery rule, “a cause of action accrues and the statute of limitations begins to run when the plaintiff has reason to suspect an injury and some wrongful cause, unless the plaintiff pleads and proves that a reasonable investigation at that time would not have revealed a factual basis for that particular cause of action. In that case, the statute of limitations for that cause of action will be tolled until such time as a reasonable investigation would have revealed its factual basis.” (Id. at p. 803.)

Under an affirmative defense of the statute of limitations, the burden is on the Defendants to prove that Plaintiffs knew of the facts giving rise to a cause of action.  (See Fuller v. Tucker (2000) 84 Cal.App.4th 1163, 1173.)  The burden on a defendant to establish an affirmative defense “is heavier than the burden to show one or more elements of the plaintiff’s cause of action cannot be established. Instead of merely submitting evidence to negate a single element of the plaintiff’s cause of action, or offering evidence, such as vague or insufficient discovery responses, that the plaintiff does not have evidence to create an issue of fact as to one or more elements of his or her case [citation], ‘the defendant has the initial burden to show that undisputed facts support each element of the affirmative defense.’ ”  (Anderson v. Metalclad Insulation Corp. (1999) 72 Cal.App.4th 284, 289.)

“ ‘A plaintiff pursuing an action under the [Song-Beverly] Act has the burden to prove that (1) the vehicle had a nonconformity covered by the express warranty that substantially impaired the use, value or safety of the vehicle (the nonconformity element); (2) the vehicle was presented to an authorized representative of the manufacturer of the vehicle for repair (the presentation element); and (3) the manufacturer or his representative did not repair the nonconformity after a reasonable number of repair attempts (the failure to repair element).’ ”  (Donlen v. Ford Motor Co. (2013) 217 Cal.App.4th 138, 152.)

If the manufacturer is unable to repair the vehicle to conform to the applicable express warranty after a reasonable number of attempts, “the manufacturer shall either promptly replace the new motor vehicle in accordance with subparagraph (A) or promptly make restitution to the buyer in accordance with subparagraph (B).  Thus, a plaintiff must prove that “(1) his vehicle had defects that affected the use, value or safety of the vehicle that [the manufacturer] could not repair to conform to the applicable warranty after a reasonable number of repair attempts, and (2) assuming Plaintiff can prove his vehicle was not repaired after a reasonable number of repair attempts, that [the manufacturer] did not promptly offer to repurchase or replace Plaintiff's vehicle.”  (Gonzalez v. Ford Motor Co. (C.D.Cal., Oct. 23, 2019, LA CV 19-00652 PA (ASx)) 2019 U.S. Dist. Lexis 185279 at *16; See generally Civ. Code §§ 1793.2(d)(2)(A)–(C).)

Civil Code section 1793.2, subdivision (d)’s reference to “a reasonable number of repair attempts” in plural requires a plaintiff to prove the manufacturer had more than one attempt to repair the product to a conforming state. (See, e.g., Silvio v. Ford Motor Co. (2003) 109 Cal.App.4th 1205, 1208 [“The statute does not require the manufacturer to make restitution or replace a vehicle if it has had only one opportunity to repair that vehicle.”].) 

Defendants offer no evidence as to why February 10, 2015 should be the operative date for when Plaintiffs had inquiry notice.  On that date, Plaintiffs complained that the Vehicle “idles rough when accelerating from a stop feels like it lunges.”  (Scott Decl., Ex. 7.)  Defendant overlooks the fact that in that same repair order, the technician indicates that Vehicle was found “with [sic] in specs” and “shifting [was] OK at this time.”  (Ibid.)  In other words, the repair facility represented to Plaintiffs that the issue was resolved.  There was no reason why Plaintiffs should have known at that time that the defect would persist.  Each subsequent visit after that ended with the technician representing that the issues were resolved.  (See Id. at Exs. 8 [“found purge valve at fault. Replace purge valve and retest system.  Evap system Pass”]; 9 [“replaced coolant valve”].)  

Furthermore, it is not clear that each repair visit was for the same issue.  While Defendants argue that the “check engine light” was a constant factor in all visits, there were varying complaints.  At the February 10, 2015 repair, there were issues with the Vehicle lunging and idling roughly.  (Scott Decl., Ex. 7.)  At the May 1, 2015 visit, Plaintiffs complained that the Vehicle “did not crank.”  (Scott Decl. Ex. 8.)  In the final visits between December 2016 and February 2018, there were issues with the coolant and fuel leaking.  (Id. at Exs. 9, 10, 11.)  A reasonable jury could find that the Vehicle’s problems progressively worsened.  The Court disagrees that a check engine light should have given Plaintiffs notice that this would ultimately lead to coolant and major fuel leaks.

Therefore, the number of attempts to constitute a “reasonable number” and whether Plaintiffs should have been on inquiry notice are triable questions of fact.  (See Silvio v. Ford Motor Co., supra, 109 Cal.App.4th at pp. 1208-1209 [“the reasonableness of the number of attempts is a question of fact for the trier of fact”]; see Lundy v. Ford Motor Co. (2001) 87 Cal.App.4th 472, 478 [assessment of nonconformity and whether a defect is “substantial’ are based on “what a reasonable person would understand to be a defect” and for a jury to decide]; Paredes v. Credit Consulting Services, Inc. (2022) 82 Cal.App.5th 410, 427 [“ ‘Resolution of the statute of limitations issue is normally a question of fact’ ”].)  Accordingly, summary adjudication is denied on the first and third causes of action.

Plaintiffs failed to meet their burden to show that the delayed discovery doctrine applies to the breach of implied warranty.

            Defendants contend that the breach of implied warranty accrues at the time of sale, which would be May 11, 2013, and a four-year statute of limitations apply to bar this claim.  Plaintiffs argue that the warranty is “prospective in nature” and that the delayed discovery rule applies to toll the period of limitations.

Under Civil Code section 1795.5, subdivision (c), implied warranties for used goods exist for up to three months following the sale.

The Song-Beverly Act “supplements, rather than supersedes, the provisions of the California Uniform Commercial Code.”  (Krieger v. Nick Alexander Imports, Inc., supra, 234 Cal.App.3d at p. 213.)  “The Act itself contains no express limitations period for a civil action.  Section 2725 of the California Uniform Commercial Code provides for a four-year limitations period for breach of warranty.” (Id. at pp. 213-214.)  Under this statute, “(1) An action for breach of any contract for sale must be commenced within four years after the cause of action has accrued. … [¶] (2) A cause of action accrues when the breach occurs, regardless of the aggrieved party’s lack of knowledge of the breach. A breach of warranty occurs when tender of delivery is made, except that where a warranty explicitly extends to future performance of the goods and discovery of the breach must await the time of such performance the cause of action accrues when the breach is or should have been discovered.” (Com. Code, § 2725, subds. (1), (2), italics added.)

A defect may exist during the one-year warranty period, though discovery of the defect occurred outside that period: “The implied warranty of merchantability may be breached by a latent defect undiscoverable at the time of sale. . . . In the case of a latent defect, a product is rendered unmerchantable, and the warranty of merchantability is breached, by the existence of the unseen defect, not by its subsequent discovery.”  (Mexia v. Rinker Boat Co., Inc. (2009) 174 Cal.App.4th 1297, 1304-1305, italics added (Mexia).)  “Thus, although a defect may not be discovered for months or years after a sale, merchantability is evaluated as if the defect were known.”  (Id. at p. 1305.)

It follows that if a latent defect exists at any point during the implied one-year warranty period and the lawsuit is filed within the four-year statute of limitations period (which accrues when the defect comes into existence), then the breach of implied warranty claim is timely, even if the latent defect was discovered after the one-year implied warranty period.  The Court of Appeal in Mexia held as such, by explaining that “[t]he word ‘duration’ has a clear and readily understood meaning, viz., the period of time during which something exists or lasts. (Webster's 3d New Internat. Dict. (1993) p. 703; Black’s Law Dict. (7th ed. 1999) p. 520, col. 1.) In the duration provision, the ‘something’ that has a period of existence is the implied warranty of merchantability. (Civ. Code, § 1791.1, subd. (c).) According to its plain language, the implied warranty exists for at least 60 days and at most for one year after delivery of the product; after that time, the warranty ceases to exist.  [¶] To say that a warranty exists is to say that a cause of action can arise for its breach. Defining the time period during which the implied warranty exists, therefore, also defines the time period during which the warranty can be breached. Thus, by giving the implied warranty a limited prospective existence beyond the time of delivery, the Legislature created the possibility that the implied warranty could be breached after delivery.”  (174 Cal.App.4th at p. 1309, italics added.)

            In sum and applying this principle to a used good, this creates a four-year, three-month statute of limitations from the date of sale, assuming the defect was in existence on the last day of the three-month period that began on the date of sale.

            Here, it is undisputed that the Vehicle was purchased used on May 11, 2013.  Thus, an implied warranty would expire on August 11, 2013, and any cause of action must be filed by August 11, 2017.  Because Plaintiffs did not file their Complaint until March 26, 2020, Defendants have met their initial burden on summary adjudication in establishing there are no triable issues of fact.  This shifts the burden to Plaintiffs.

            In opposition, Plaintiffs present no evidence of delayed discovery and merely rely on the Complaint’s allegations.[1]  Assuming the delayed discovery rule applies, Plaintiffs carry the burden of showing a “ ‘triable issue of one or more material facts [that] exists as to that … defense … .’  The issue which must be shown to be triable is whether plaintiff exercised due diligence in discovering the breach.”  (Gryczman v. 4550 Pico Partners, Ltd. (2003) 107 Cal.App.4th 1, 6-7.)  The Complaint’s allegations are insufficient.  First, these allegations are directed only to “express written warranties.”  (Complaint, ¶ 27.)  Second, there is no discussion on any latent defect that may have arisen during the implied warranty period.  And again, even if there were, Plaintiffs must show that the defect “existed at the time the product was sold or delivered.”  (Mexia, supra, 174 Cal.App.4th at p. 1304.)  Because Plaintiffs do not dispute any of Defendants’ Separate Statement and fail to offer any of their own evidence in support of this defense, summary adjudication is granted on the third cause of action.

Conclusion

            The motion for summary judgment is denied.  Summary adjudication is granted only on the second cause of action for breach of implied warranty.