Judge: Daniel S. Murphy, Case: 19STCV42416, Date: 2023-03-10 Tentative Ruling

Case Number: 19STCV42416    Hearing Date: March 10, 2023    Dept: 32

BACKGROUND

            On November 25, 2019, Plaintiff Rossy Ardon filed this lemon law action against Defendant Toyota Motor Sales USA, Inc., alleging violations of the Song-Beverly Act. The lawsuit stems from Plaintiff’s purchase of a 2018 Toyota Highlander. On January 27, 2023, the jury returned a verdict in favor of Plaintiff for breach of implied warranty.

            On February 15, 2023, Plaintiff filed the instant motion to recover prejudgment interest.

LEGAL STANDARD

“A person who is entitled to recover damages certain, or capable of being made certain by calculation, and the right to recover which is vested in the person upon a particular day, is entitled also to recover interest thereon from that day . . . .” (Civ. Code, § 3287.) Prejudgment interest is allowable as a matter of right when damages are fixed or readily ascertainable, but not when there is conflicting evidence over the amount owed which requires a judicial determination to resolve. (Thompson v. Asimos (2016) 6 Cal.App.5th 970, 991.) “The test for determining certainty under section 3287(a) is whether the defendant knew the amount of damages owed to the claimant or could have computed that amount from reasonably available information.” (Howard v. American National Fire Ins. Co. (2010) 187 Cal.App.4th 498, 535.)

DISCUSSION

            Prejudgment interest is properly denied where “[d]etermination of the award required the jury to determine (1) whether any of the many defects alleged in the complaint represented a nonconformity, (2) whether any such nonconformity ‘substantially impaired [the] use, value, or safety’ of the vehicle, and (3) then to determine—for any such nonconformity—the mileage at which plaintiffs first presented the car to defendant for repair.” (Duale v. Mercedes-Benz USA, LLC (2007) 148 Cal.App.4th 718, 729.) “[T]he lower court had properly disallowed prejudgment interest on the plaintiff's jury award under the Song-Beverly Act because the amount of the award was dependent upon the jury's resolution of several disputed warranty-related issues, and thus, the amount of the award could not have been determined before trial.” (Warren v. Kia Motors America, Inc. (2018) 30 Cal.App.5th 24, 44.)

            Prejudgment interest is inappropriate in this case because of disputes over issues similar to the ones in Duale. Plaintiff takes issue with Defendant’s reliance on Duale and insists that Duale has been limited by Doppes v. Bentley Motors, Inc. (2009) 174 Cal.App.4th 1004, 1010. However, Doppes did not discuss the certainty of damages under Section 3287. Rather, the issue in Doppes was whether the Song-Beverly Act allows recovery of prejudgment interest at all. (Id. at p. 1006.) The defendant in Doppes improperly relied on Duale for the proposition that Song-Beverly bars prejudgment interest. (Id. at p. 1010.) The court clarified that “[t]he Duale court did not hold prejudgment interest may never be recovered in a Song-Beverly Consumer Warranty Act case, but only that prejudgment interest was unrecoverable under section 3287 in that particular case . . . .” (Ibid.) The court in Doppes went no further and did not discuss what makes damages certain or uncertain.

Doppes did not limit Duale to its precise facts, nor did it undermine the legal reasoning in Duale, because the only issue in Doppes was whether Song-Beverly precluded prejudgment interest. Plaintiff does not deny that the damages issues disputed in Duale are similar to the ones disputed in this case. (See Duale, supra, 148 Cal.App.4th at p. 729.) Plaintiff misreads Defendant’s argument as: “any time a defendant disputes liability at trial, then prejudgment interest is not available.” (Reply 5:14-15.) Defendant makes no such argument, nor does Defendant rely on Duale for that proposition. Rather, Defendant argues that beyond liability, the amount of the award was also uncertain because various aspects of Plaintiff’s damages could not be ascertained until a jury verdict. (Opp. 2:20-3:7.)    

Plaintiff acknowledges in her own motion that “incidental or consequential damages, finance charges, or civil penalty . . . were unknown to Toyota until Plaintiff produced documents and evidence regarding those amounts, and those amounts were contested throughout trial.” (Mtn. 3:12-15.) Plaintiff concedes that “the mileage offset was in dispute through trial . . . .” (Ibid.) Plaintiff acknowledges that “the actual damages awarded in this case [were] significantly higher” than just the vehicle purchase price. (Mtn. 3:15-17.) In other words, “the award was dependent upon the jury's resolution of several disputed warranty-related issues, and thus, the amount of the award could not have been determined before trial.” (Warren, supra, 30 Cal.App.5th at p. 44.)

The court in Warren also rejected the argument that the “jury award was certain or capable of being made certain ‘by looking at the sale contract’” because the plaintiff “necessarily incurred her incidental and consequential damages after she purchased the vehicle . . . [which] could not be ascertained ‘by looking at the sale contract.’” (Warren, supra, 30 Cal.App.5th at pp. 43-45.) The court further explained that “[e]ven if Warren's breach-of-warranty damages were certain or capable of being made certain either from the sales contract or other information available to Kia before trial, Warren has not shown that her incidental and consequential damages of $2,707.10—a key component of her $17,455.57 jury award—were certain or capable of being made certain before trial—based on any information available to Kia.” (Id. at p. 45.) In this case, multiple key components of Plaintiff’s damages were similarly disputed, as Plaintiff herself acknowledges. (See Mtn. 3:12-17.) Therefore, damages were uncertain notwithstanding the sales contract.

As a result, the Court cannot award mandatory prejudgment interest under Section 3287. The Court declines to award discretionary prejudgment interest.

CONCLUSION

            Plaintiff’s motion for prejudgment interest is DENIED.