Judge: Daniel S. Murphy, Case: 20STCV08729, Date: 2024-11-13 Tentative Ruling

Case Number: 20STCV08729    Hearing Date: November 13, 2024    Dept: 32

BACKGROUND

            On March 2, 2020, Plaintiffs Caroline Contreras and Robert C. Anaya filed this “lemon law” action against Defendant Kia Motors America, Inc. The complaint asserts five causes of action based on various provisions of the Song-Beverly Act.

            On July 11, 2024, Defendant filed the instant motion for summary judgment or adjudication in the alternative. Plaintiffs filed their opposition on October 22, 2024. Defendant filed its reply on October 30, 2024.  

LEGAL STANDARD

 The function of a motion for summary judgment or adjudication is to allow a determination as to whether an opposing party cannot show evidentiary support for a pleading or claim and to enable an order of summary dismissal without the need for trial. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 843.) Code of Civil Procedure section 437c, subdivision (c) “requires the trial judge to grant summary judgment if 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.” (Adler v. Manor Healthcare Corp. (1992) 7 Cal.App.4th 1110, 1119.) “The function of the pleadings in a motion for summary judgment is to delimit the scope of the issues; the function of the affidavits or declarations is to disclose whether there is any triable issue of fact within the issues delimited by the pleadings.” (Juge v. County of Sacramento (1993) 12 Cal.App.4th 59, 67, citing FPI Development, Inc. v. Nakashima (1991) 231 Cal. App. 3d 367, 381-382.)

As to each claim as framed by the complaint, the defendant moving for summary judgment must satisfy the initial burden of proof by presenting facts to negate an essential element, or to establish a defense. (Code Civ. Proc., § 437c, subd. (p)(2); Scalf v. D. B. Log Homes, Inc. (2005) 128 Cal.App.4th 1510, 1520.) Once the defendant has met that burden, the burden shifts to the plaintiff to show that a triable issue of one or more material facts exists as to that cause of action or a defense thereto. To establish a triable issue of material fact, the party opposing the motion must produce “substantial responsive evidence.” (Sangster v. Paetkau (1998) 68 Cal.App.4th 151, 163.) Courts “liberally construe the evidence in support of the party opposing summary judgment and resolve doubts concerning the evidence in favor of that party.” (Dore v. Arnold Worldwide, Inc. (2006) 39 Cal.4th 384, 389.)

EVIDENTIARY OBJECTIONS

            Defendant’s objections are overruled.

DISCUSSION

I. Repurchase Offer

            a. Manufacturer’s Obligations

“If the manufacturer . . . is unable to service or repair a new motor vehicle . . . to conform to the applicable express warranties 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).” (Civ. Code, § 1793.2(d)(2).) “In the case of restitution, the manufacturer shall make restitution in an amount equal to the actual price paid or payable by the buyer, including any charges for transportation and manufacturer-installed options, but excluding nonmanufacturer items installed by a dealer or the buyer, and including any collateral charges such as sales or use tax, license fees, registration fees, and other official fees, plus any incidental damages to which the buyer is entitled under Section 1794, including, but not limited to, reasonable repair, towing, and rental car costs actually incurred by the buyer.” (Id., § 1793.2(d)(2)(B).)

            b. Defendant’s Purported Offer

Defendant argues that the claims fail because Defendant promptly offered to repurchase the subject vehicle after Plaintiff Contreras’ repurchase demand, thus satisfying its obligations under the Act. According to Defendant, Ms. Contreras began corresponding with Defendant about the defects in the subject vehicle in December 2019, and Defendant offered to repurchase the vehicle on February 11, 2020. (Def.’s Stmt. of Undisputed Facts (UF) 2-3.) Defendant contends that the 40-day period between Ms. Contreras’ demand and Defendant’s offer should be considered “prompt” under the Act. (See Civ. Code, § 1793.2(d)(2).)

            The February 11, 2020 email from Defendant stated the following:

“Your case was escalated to my attention due to your request for a buyback. After review, KMA would like to extend an offer for the repurchase/replacement of your 2014 Kia Cadenza. Please allow me some time to draft and email an offer for your review. If you have any questions in the mean time please let me know.”

(Orquiola Decl., Ex. A (Contreras Depo.), Ex. 35 therein.) 

            c. Whether the Email Constituted an Offer

First, there is a factual issue over whether this email constituted an offer to repurchase the vehicle. The email states that Defendant “would like to” extend an offer but that Defendant needed “some time to draft and email an offer.” A reasonable trier of fact may find that the email itself was not an offer because Defendant’s representative simply wrote to inform Ms. Contreras that Defendant intended to make an offer. Defendant presents no evidence of any further communication beyond the February 11, 2020 email that could be considered an offer. Ms. Contreras also denies receiving any offer to repurchase the vehicle. (Contreras Decl. ¶ 22.)

Furthermore, restitution under the Act must be in a specific amount, including and excluding certain items. (See Civ. Code, § 1793.2(d)(2)(B).) Defendant’s February 11, 2020 email contained no amounts or calculations. A reasonable trier of fact may infer from the absence of an amount that the email was not an offer.

Defendant argues that “[t]he statute provides no further guidance on the form, method, or specific requirements of how an offer is to be made, nor have the courts chosen to comment on how an offer should be made to a buyer.” (Reply 5:18-21.) This is precisely why the Court cannot determine as a matter of law that Defendant’s email constituted an offer. Because there is no brightline rule on what constitutes an offer, the issue must be decided by the trier of fact. 

            d. Whether the Offer was Timely

Second, even if the February 11, 2020 email constituted an offer, there is a factual issue over whether Defendant “promptly” made the offer. Under the Act, a manufacturer’s obligation to “promptly make restitution to the buyer” arises as soon as “the manufacturer . . . is unable to service or repair a new motor vehicle . . . to conform to the applicable express warranties after a reasonable number of attempts.” (Civ. Code, § 1793.2(d)(2).) “A manufacturer's duty to repurchase a vehicle does not depend on a consumer's request, but instead arises as soon as the manufacturer fails to comply with the warranty within a reasonable time.” (Santana v. FCA US, LLC (2020) 56 Cal.App.5th 334, 347.) The Act does not require a consumer to make a repurchase request at all. (Krotin v. Porsche Cars North America, Inc. (1995) 38 Cal.App.4th 294, 303.)

Here, Plaintiffs presented the vehicle for repair at least nine times between March 2015 and December 2019. (Contreras Decl. ¶¶ 7-15, Ex. 3.) “The reasonableness of the number of repair attempts is a question of fact to be determined in light of the circumstances.” (Robertson v. Fleetwood Travel Trailers of California, Inc. (2006) 144 Cal.App.4th 785, 799.) Thus, the trier of fact must determine at what point Defendant had made a reasonable number of unsuccessful repair attempts so as to trigger its obligation to replace or provide restitution. A reasonable trier of fact may find that the trigger date was long before December 2019, thus making Defendant’s February 2020 “offer” untimely. (See Santana, supra, 56 Cal.App.5th at p. 347 [“A manufacturer's duty to repurchase a vehicle does not depend on a consumer's request, but instead arises as soon as the manufacturer fails to comply with the warranty within a reasonable time”].)

Even if Defendant’s obligation was only triggered upon Plaintiffs’ buyback request, Ms. Contreras made the request on December 2, 2019 (Contreras Decl. ¶ 18), meaning 71 days elapsed before the February 11, 2020 email, not 40 days as Defendant claims. A reasonable trier of fact may conclude that a 71-day delay was not “prompt.” Defendant cites to Dominguez v. American Suzuki Motor Corp. (2008) 160 Cal.App.4th 53, 60, which noted that “nothing in section 1793.2, subdivision (d)(1) . . . requires a manufacturer to offer to repurchase consumer goods within a specified time.” This is true, as the statute does not provide a precise timeline (e.g., 30 days, 60 days). But the statute still requires the replacement or repurchase to occur “promptly.” Dominguez does not suggest that the term “promptly” is meaningless and that a car company is entitled to wait as long as it desires before offering to replace or repurchase. The 71-day delay here is significantly longer than the six-week delay in Dominguez. Thus, it remains a triable issue whether Defendant made the offer “promptly.” 

In sum, Defendant’s email from February 11, 2020 does not defeat the claims as a matter of law. Triable issues exist as to whether Defendant made an offer at all and whether the offer was made “promptly.”

II. Excused Performance

            Defendant argues that it was excused from its obligations under the Act because Plaintiffs failed to cooperate in good faith. In particular, Defendant claims that it asked Plaintiffs to provide the sales contract to complete the repurchase but that Plaintiffs failed to do so. (See LaBeet Decl. ¶¶ 13-14.) However, Ms. Contreras avers that a Kia representative told her the opposite, that Kia would contact the dealerships itself to obtain the necessary documents. (Contreras Decl. ¶¶ 19-21.) Ms. Contreras then emailed the representative a list of the dealerships where she had brought the vehicle for repairs. (Ibid.)

This conflicting evidence raises a factual dispute as to what Plaintiffs were told in relation to their buyback request, and whether Plaintiffs cooperated with Defendant to effectuate a buyback. A reasonable trier of fact may find that Defendant informed Plaintiffs it would obtain the documents itself, or at least gave Plaintiffs conflicting information. The evidence supports a reasonable inference that Plaintiffs cooperated with Defendant and that Defendant was not excused from its obligations.

III. Civil Penalties

            “If 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.” (Civ. Code, § 1794(c).) A manufacturer acts willfully if it “knew of its obligations but intentionally declined to fulfill them.” (Schreidel v. American Honda Motor Co. (1995) 34 Cal.App.4th 1242, 1250.) “There is no requirement of blame, malice or moral delinquency.” (Ibid.) However, “a violation is not willful if the defendant's failure to replace or refund was the result of a good faith and reasonable belief the facts imposing the statutory obligation were not present.” (Ibid.)

            Defendant argues that Plaintiffs’ claim for civil penalties fails because Defendant made a prompt repurchase offer. However, as discussed above, there are triable issues regarding whether an offer was made and whether it was made promptly. A reasonable trier of fact may find that Defendant failed to satisfy its obligations under the Act because it never made a repurchase offer despite a reasonable number of unsuccessful repair attempts. It is then a factual issue whether Defendant did so willfully. Defendant cites no evidence indicating that it had a good faith and reasonable belief that the facts did not give rise to a statutory obligation. (See Schreidel, supra, 34 Cal.App.4th at p. 1250.) To the contrary, Defendant expressed an intent to make a repurchase offer, indicating acknowledgment of its statutory obligation. The fact that Defendant did not make the offer or repurchase the vehicle suggests that Defendant knowingly failed to fulfill its obligations.    

            Thus, there are triable issues of material fact preventing summary adjudication of the claim for civil penalties.

IV. Implied Warranty

            a. Statute of Limitations

            “[T]he statute of limitations for an action for breach of warranty under the Song-Beverly Act is four years pursuant to section 2725 of the California Uniform Commercial Code.” (Mexia v. Rinker Boat Co., Inc. (2009) 174 Cal.App.4th 1297, 1306.) “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(2).)  

The implied warranty of merchantability under the Song-Beverly Act explicitly extends to future performance. (See Civ. Code, § 1791.1(c) [“The duration of the implied warranty of merchantability . . . shall be coextensive in duration with an express warranty . . . but in no event shall such implied warranty have a duration of less than 60 days nor more than one year following the sale of new consumer goods to a retail buyer”].) “[B]y 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.” (Mexia v. Rinker Boat Co., Inc. (2009) 174 Cal.App.4th 1297, 1309.) “[T]his is a change from the California Uniform Commercial Code, under which the implied warranty could be breached only at the time of delivery.” (Ibid.; see also Yeager v. Ford Motor Co. (N.D.Cal. Jan. 8, 2020) 2020 U.S.Dist.LEXIS 3805, at *9 [“The Song-Beverly Act, in a departure from the Commercial Code, writes in a prospective existence for implied warranties governed by the Act, allowing for the claim to accrue later, upon discovery”].) Therefore, the discovery exception applies to the implied warranty claim.   

“A defendant who moves for summary judgment bears the burden of negating the applicability of the discovery exception for accrual of an action on a future warranty.” (Krieger, supra, 234 Cal.App.3d at p. 216.) Defendant makes no attempt to negate the discovery exception. Defendant merely argues that Plaintiffs filed their complaint more than four years after delivery of the vehicle. However, as established above, a breach of the implied warranty can accrue after delivery. Defendant provides no evidence that Plaintiffs discovered or should have discovered the defects more than four years before the complaint was filed. Therefore, Defendant has not met its initial burden of showing that the implied warranty claim is time-barred as a matter of law.

Moreover, Plaintiffs’ evidence suggests that they did not discover the vehicle’s defects until a date within four years of the complaint because Defendant’s repair centers indicated after each visit that the vehicle had been repaired and would function normally. (See Contreras Decl. ¶¶ 7-15.) In Krieger, the court held that “a reasonable trier of fact could conclude that the cause of action accrued in May 1984,” the date of the last repair attempt on the plaintiff’s vehicle. (Krieger, supra, 234 Cal.App.3d at p. 218.) The same applies here: a reasonable trier of fact may find that Plaintiffs did not discover their cause of action until December 2019. (See Contreras Decl. ¶ 15.)

Therefore, the statute of limitations does not defeat the implied warranty claim as a matter of law.

            b. Distributor Liability

“[E]very sale of consumer goods that are sold at retail in this state shall be accompanied by the manufacturer’s and the retail seller’s implied warranty that the goods are merchantable.” (Civ. Code, § 1792.) A distributor is not included in this obligation. The Act defines “distributor,” “manufacturer,” and “retailer seller” separately. (Id., § 1791(e), (j), (l).) The Act expressly imposes an obligation on distributors for the implied warranty of fitness for a particular purpose. (See Civ. Code, § 1792.2.) Thus, the exclusion of distributors from section 1792 indicates that distributors are not liable for the implied warranty of merchantability. (See Dyna-Med, Inc. v. Fair Employment & Housing Com. (1987) 43 Cal.3d 1379, 1391, fn. 13 [“the expression of certain things in a statute necessarily involves exclusion of other things not expressed”].)

Here, it is undisputed that Defendant is not a manufacturer or retail seller. (UF 8-10.) Plaintiffs do not attempt to factually challenge Defendant’s evidence that Defendant is only a distributor of new vehicles. Nor do Plaintiffs dispute that section 1792 only applies to manufacturers and retail sellers.

Plaintiffs instead rely on Civil Code section 1795, which provides that “[i]f express warranties are made by persons other than the manufacturer of the goods, the obligation of the person making such warranties shall be the same as that imposed on the manufacturer under this chapter.” Plaintiffs argue that because Defendant issued an express warranty with the subject vehicle (Contreras Decl., Ex. 2), Defendant took on the same obligations as manufacturers. However, section 1795 refers to liability on an express warranty. Plaintiff cites no authority suggesting that section 1795 applies to implied warranties. 

Plaintiff also cites to Kiluk v. Mercedes-Benz USA, LLC (2019) 43 Cal.App.5th 334, 340, where the court held that because “Mercedes Benz partnered with a dealership to sell used vehicles directly to the public . . . Mercedes Benz stepped into the role of a retailer and was subject to the obligations of a retailer under section 1795.5.” However, that refers to a manufacturer’s liability for used goods under section 1795.5. Here, the issue is a distributor’s liability for new goods under section 1792. Thus, Kiluk is not on point.

The implied warranty claim fails as a matter of law because Defendant is indisputably a distributor, and distributors are not liable for the implied warranty of merchantability.

CONCLUSION

            Defendant’s motion for summary judgment is DENIED. Defendant’s alternative motion for summary adjudication is GRANTED as to the fifth cause of action and DENIED in all other respects.