Judge Bruce G. Iwasaki, Case 21STCV30549 2022-08-01 Tentative Ruling

This is an action under the Song-Beverly Act in which Plaintiffs Mayra Cruz Mendoza and Alejandra Diaz allege defects with their 2017 Hyundai Santa Fe against Defendant Hyundai Motor America. The Complaint asserts causes of action for (1) breach of express warranty, (2) breach of implied warranty, and (3) failure to begin repairs within a reasonable time under Civil Code section 1793.2.

Defendant Hyundai moves to strike Paragraphs 47 through 51 of the Complaint, and the Prayer for Relief insofar as it relates to the third cause of action. It contends that applicable law does not allow for recovery of the entire purchase price of the vehicle, diminution in value, or civil penalties for a violation of Civil Code section 1793.2, subdivision (b).

Plaintiffs oppose, asserting that they have sufficiently pled the third cause of action and that the issue of the unavailability of damages is inappropriate at the pleading stage.

In Reply, Hyundai repeats that Plaintiffs are not entitled to restitution or replacement under section 1793.2, subdivision (b).

Because Plaintiffs sufficiently plead a basis for the remedies Hyundai seeks to strike, and because the authorities Hyundai relies on are inapplicable, the motion to strike is denied.

“The court may, upon a motion made pursuant to Section 435, or at any time in its discretion, and upon terms it deems proper: (a) Strike out any irrelevant, false, or improper matter inserted in any pleading. (b) Strike out all or any part of any pleading not drawn or filed in conformity with the laws of this state, a court rule, or an order of the court.”¿ (Code Civ. Proc., § 436.) The grounds for a motion to strike must “appear on the face of the challenged pleading or from any matter of which the court is required to take judicial notice.”¿ (Code Civ. Proc., § 437.)¿¿¿

Hyundai argues that restitution and civil penalties are only recoverable in connection with a violation of Civil Code section 1793.2, subdivision (d)(2).

Hyundai is correct in asserting that section 1794, subdivision (b) limits the replacement-restitution remedy “ ‘as set forth in subdivision (d) of section 1793.2.’ ” (Gavaldon v. DaimlerChrysler Corp. (2004) 32 Cal.4th 1246, 1262 (Gavaldon). But Hyundai’s reliance on that case for its motion to strike is misplaced.

In Gavaldon, the vehicle defect arose after the express warranty expired, but the buyer purchased a separate service warranty. (Id. at 1250.) After a bench trial, the trial court ruled in favor of the buyer and awarded the purchase price of the vehicle minus a deduction for actual use. The California Supreme Court affirmed the reversal by the Court of Appeal, holding that service contracts are distinct from express warranties, and that “the legislative history confirms that the only reasonable reading of section 1794, subdivision (b) is that the replacement/restitution remedy applies only if the conditions of section 1793.2(d) are met.” (Id. at p. 1263.) Gavalodon concerned a case without an express warranty. Here, Plaintiff pleaded the existence of an express warranty.

Gavaldon was cited in Ramos v. Mercedes-Benz USA (2020) 55 Cal.App.5th 220, 222 (Ramos), another case that Hyundai relies on. In Ramos, the buyer sought restitution for the full price of a new vehicle when the manufacturer failed to complete repairs to a defect within 30 days. A jury verdict found that the vehicle did not have a defect that substantially impaired its use, value, or safety. (Ramos, supra, 55 Cal.App.5th at p. 223.) The Court of Appeal affirmed the judgment for minor incidental and consequential damages only, finding that the conditions of section 1793.2(d) “were not met.” (Id. at p. 226; original italics.) Because the jury expressly found no qualifying defect, section 1793.2(d) was not triggered. Here, in contrast, Plaintiff alleged that the vehicle’s nonconformities “substantially impaired [its] use, value, and/or safety.” (Complaint, ¶ 16.) This allegation was incorporated into the third cause of action.

Because both Gavaldon and Ramos were appeals from trials on the merits, not from rulings on the sufficiency of pleadings, Hyundai’s reliance on them is misplaced.

In addition, even if Plaintiffs are not entitled to replacement or restitution for a single violation of section 1793.2, subdivision (b), they have also alleged a violation of section 1793.2, subdivision (d)(2). That cause of action does entitle them to restitution damages and civil penalties under section 1794, subdivision (c). (Complaint, ¶ 18.)

As to Paragraphs 48-50 in the Complaint, section 1794, subdivisions (b)(1) and (b)(2) provides for such requested remedies:

(1) Where the buyer has rightfully rejected or justifiably revoked acceptance of the goods or has exercised any right to cancel the sale, Sections 2711, 2712, and 2713 of the Commercial Code shall apply.

(2) Where the buyer has accepted the goods, Sections 2714 and 2715 of the Commercial Code shall apply, and the measure of damages shall include the cost of repairs necessary to make the goods conform.

Sections 2711 through 2715 of the Commercial Code allow for recovery of damages for cover, nonconformity of tender, or the loss resulting in the ordinary course of events from the seller’s breach, as well as incidental and consequential damages.

Similarly, Hyundai’s assertion that civil penalties are not available for violations of section 1793.2, subdivision (b) is incorrect. Section 1794, subdivision (c) provides that “[i]f the buyer establishes that the failure to comply was willful, the judgment may include, in addition to the amounts recovered under subdivision (a), a civil penalty which shall not exceed two times the amount of actual damages.”

To the extent that Plaintiffs’ third cause of action may be duplicative if based on the same underlying warranty contract as the first cause of action, a party may plead alternative theories of recovery on the same facts. (Mendoza v. Continental Sales Co. (2006) 140 Cal.App.4th 1395, 1402 [“the modern practice allows [a] party to plead in the alternative and make inconsistent allegations”].)[1]

[1] Hyundai argues that a “violation of section 1793.2(b) is not a separate actionable cause of action action,” but failed to file a demurrer to challenge the sufficiency of the claim.

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