Judge: Elaine W. Mandel, Case: 22SMCV01661, Date: 2024-04-04 Tentative Ruling
Case Number: 22SMCV01661 Hearing Date: April 4, 2024 Dept: P
Tentative
Ruling
Ferguson
v. Volkswagen Group of America, et al. Case No. 22SMCV01661
Hearing
date April 4, 2024
Defendants’
Motion for Summary Judgment or in the alternative Summary Adjudication
Plaintiff
sued Volkswagen Group of America, Inc. (VGA) and Sherman Oaks-A, Inc. d/b/a
Audi Van Nuys (AVN) alleging:
1. Violation of CIV § 1793.2(D) as
against VGA
2. Violation of CIV § 1793.2(B) as
against VGA
3. Violation of CIV § 1793.2(A)(3) as
against VGA
4. Breach of Implied Warranty of
Merchantability (Violation of CIV §§ 1791.1; 1794; and 1795.5) as against VGA
5. Violation of the Magnuson-Moss
Warranty Act as against VGA
6. Negligent Repair as against AVN
The first
four causes of action stem from alleged violations of the Song-Beverly Act (SBA).
Defendants move for summary judgment or in the alternative summary adjudication
on all claims.
On March 29,
2022, Plaintiff purchased a 2019 Audi A7 vehicle from VGA and entered into a
warranty contract with VGA (Complaint, ¶ 8). The vehicle was a used and came
with various unexpired warranties. Plaintiff alleges the vehicle developed
issues, and he brought the vehicle to VGA’s authorized repair facilities on at
least seven different occasions (Ferguson Decl., ¶¶ 9-17). Plaintiff alleges
the issues, including electrical and infotainment defects, continued, and VGA
failed to conform the vehicle to warranty (Ferguson Decl., ¶ 18-19).
Plaintiff
requests that this Court take judicial notice of the legislative history for
the 2007 addition to section 1795.8 of the California Civil Code. Pursuant to Cal.
Evid. Code § 452(c), judicial notice is granted.
Evidentiary
Objections
Defendants file evidentiary objections to the Ferguson
and Law declarations.
Ferguson Decl. Objections
1-18 are overruled. Objections 19-25 are sustained.
Law Decl. Objection
1 is overruled. Objection 2 is sustained.
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.) CCP Section 437c(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.)
As to each
claim, defendant must satisfy the initial burden of proof by presenting facts
to negate an essential element, or to establish a defense. (CCP § 437c(p)(2); Scalf v. D. B. Log Homes, Inc. (2005)
128 Cal.App.4th 1510, 1520.) 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.) Once defendant
has met that burden, the burden shifts to plaintiff to show 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, 166.)
Defendants
make three primary arguments: (1) the vehicle is not a “new vehicle” as defined
by the SBA, so the first four causes of action fail, (2) plaintiff failed to
exhaust the informal dispute resolution (IDR) mechanism, so the Magnuson-Moss
cause of action fails, and (3) the sixth cause of action is barred by the
economic loss rule.
In short,
the court finds the vehicle does fall under the definition of a “new vehicle” per
Jensen v. BMW North America, Inc. (1995) 35 Cal.App.4th 112,
so summary adjudication as to the first four causes of action is denied. The
IDR mechanism does not strictly comply with Magnuson-Moss’ disclosure
requirement, so plaintiff’s failure to exhaust the IDR does not bar the
Magnuson-Moss claim. The economic loss rule does bar the sixth cause of
action.
SBA Claims:
Defendants argue the vehicle does not qualify as a
“new motor vehicle” under the SBA. The SBA defines a “new motor vehicle” as: “
‘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…” (CIV § 1793.22(e)(2).)
Defendants argue a used vehicle accompanied by a
balance of the original warranty is not covered under the SBA as a new vehicle,
citing Dagher v. Ford Motor Co. (2015) 238 Cal.App.4th 905 and Rodriguez
v. FCA US, LLC (2022) 77 Cal.App.5th 209. However, that reliance
is misplaced.
Plaintiff Dagher purchased a used vehicle from a
private party, and when issues arose with the vehicle, attempted to seek
recourse under the SBA. The court granted summary judgment in favor of the
manufacturer. Dagher held plaintiff could not avail themselves to
protection of the SBA because the definition of “buyer” within the SBA was
construed to apply to only vehicles purchased in California. (Dagher, supra
at 919.) Plaintiff herein purchased the vehicle in California.
Rodriguez’s
facts are similar facts to the case at bar. Plaintiff purchased a used truck
from a dealership. The truck retained a balance on the warranty, so when the
plaintiff there began experiencing issues, they took it for repairs under the
warranty. (Rodriguez, supra, 215-216.) When issues continued, plaintiff sued
under the SBA. Rodriguez Court ruled plaintiff could not avail
themselves of the SBA because the truck was not a “new vehicle.” Much like defendants
ask the Court to do here, Rodriguez parsed the grammatical structure of
CIV § 1793.22(e)(2) and ruled the phrase “or other motor vehicle sold with a
manufacturer’s new car warranty…” was a catchall provision intended to cover a
narrow class of vehicles that were previously driven, but not previously sold.
(Rodriguez, supra, 220).
The Court declines to follow Rodriguez. Rodriguez
is not binding, as the Supreme Court granted review; although it may be cited
for its persuasive value, it also establishes the existence of a conflict in
authority, and pursuant to Auto Equity Sales, Inc., v. Superior Court (1962)
57 Cal.2d 450, 456 trial courts have discretion to choose between sides of any
such conflict. (See Rodriguez v. FCA US (2022) 512 P.3d 654.)
Defendants fail to sufficiently distinguish the
instant case from Jensen. Defendants argue that in Jensen
plaintiff who leased the “new vehicle” received a full new car warranty along
with the lease, while as here, plaintiff did not receive a new warranty, but
simply retained the balance left on the warranty after the initial purchase. This
alone, is not enough to combat Jensen’s holding that “…the words of
section 1793.22 are
reasonably free from ambiguity and cars sold with a balance remaining on the
manufacturer's new motor vehicle warranty are included within its definition of
‘new motor vehicle.’” (Jensen, supra, at 123.) Therefore, the
motion for summary judgment or in the alternative, summary adjudication as to
the first four causes of action based in the SBA is denied.
Magnuson-Moss Claim
The Magnuson-Moss Act provides that if a warrantor
establishes “an informal dispute settlement procedure which meets the
requirements of the [Federal Trade] Commission's rules” and “he incorporates
in a written warranty a requirement that the consumer resort to such
procedure before pursuing any legal remedy under this section respecting such
warranty, then (i) the consumer may not commence a civil action ... under ...
[the Act] unless he initially resorts to such procedure.” 15 U.S.C. § 2310(a)(3).
Defendant argues plaintiff failed to exhaust the
available IDR mechanism, a prerequisite to liability under Magnuson-Moss.
Plaintiff’s argues VGA’s IDR does not comply with federal law.
Magnuson-Moss governs warranties for consumer products
and requires certain disclosures in connection with these written warranties. (Orichian
v. BMW of North America, LLC (2014) 226 Cal.App.4th 1322, 1330.)
The disclosures required are outlined by 16 C.F.R. § 703.2(b)(1)-(b)(4) which
include:
(1) A statement of the availability of the informal
dispute settlement mechanism;
(2) The name and address of the Mechanism, or the name
and a telephone number of the Mechanism which consumers may use without charge;
(3) A statement of any requirement that the consumer
resort to the Mechanism before exercising rights or seeking remedies created by
Title I of the Act; together with the disclosure that if a consumer chooses to
seek redress by pursuing rights and remedies not created by Title I of the Act,
resort to the Mechanism would not be required by any provision of the Act; and
(4) A statement, if applicable, indicating where
further information on the Mechanism can be found in materials accompanying the
product…
On page seven of the warranty booklet, a consumer
would see all the requirements are met. (See, Weir Decl., Exh. B, pg. 7.) VGA
provides (1) a statement showing the availability of an IDR, (2) the name and
phone number of the mechanism consumers may use, (3) a statement indicating
that depending on state laws a consumer may or may not be required to use the
IDR before pursuing rights under the SBA, and (4) there is a statement noting
where to find further information on the IDR. Defendant argues this complies
with the requirements.
Plaintiff asks the Court to strictly construe that a
disclosure such as this be “on the face of” the warranty, citing Carrillo v.
BMW of North America, LLC (2021) 543 F.Supp.3d 856. In pertinent part, the
federal court supported its strict construction as follows: “The Court
acknowledges that the Booklet clearly outlines information about BBB Auto Line
and that the information is placed very close to the pages containing the
various warranties. But the statute clearly states that the disclosure must be
“[o]n the face of the warranty,” which is on “the page in such document on
which the warranty text begins.” 16 C.F.R. § 703.1(h)(2). That language is
unambiguous and BWW clearly does not comply. Carrillo was therefore not
required to exhaust the internal resolution procedure. Carrillo, supra at 862.
As in Carrillo, the statutory language was not
“on the face” of the warranty. Following the reasoning of Carillo, the motion
is denied.
Negligent Repair
The the
final cause of action for negligent repair is barred by the economic loss rule.
The rule stems from Seely v. White Motor Co. (1965) 63 Cal.2d 9. Dhital v. Nissan North America (2022) 84 Cal.App.5th 828, 837
states the rule: “The economic loss rule provides that, “[i]n general, there is
no recovery in tort for negligently inflicted ‘purely economic losses,’ meaning
financial harm unaccompanied by physical or property damage.”