Judge: Joel R Wohlfeil, Case: 37-2022-00039256-CU-BC-CTL, Date: 2024-01-05 Tentative Ruling

SUPERIOR COURT OF CALIFORNIA,

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HALL OF JUSTICE

TENTATIVE RULINGS - January 04, 2024

01/05/2024  09:00:00 AM  C-73 COUNTY OF SAN DIEGO

JUDICIAL OFFICER:Joel R. Wohlfeil

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Civil - Unlimited  Breach of Contract/Warranty Summary Judgment / Summary Adjudication (Civil) 37-2022-00039256-CU-BC-CTL GUZMAN VS AMERICAN HONDA MOTOR CO INC [IMAGED] CAUSAL DOCUMENT/DATE FILED: Motion for Summary Judgment and/or Adjudication, 10/11/2023

The Motion (ROA # 47) of Defendant AMERICAN HONDA MOTOR CO., INC. ('Defendant') for summary judgment of the Complaint by Plaintiffs JOSE GUZMAN and CYNTHIA GUZMAN ('Plaintiffs'), is GRANTED.

This ruling completely disposes of this action and Defendant is entitled to a judgment in its favor.

Plaintiffs' evidentiary objections (ROA # 72) are OVERRULED.

Review has been granted for the recent appellate decision in Rodriguez v. FCA US, LLC (2022) 77 Cal. App. 5th 209. See Rodriguez v. FCA US (Cal. 2022) 295 Cal. Rptr. 3d 351. The grant of review recites the following proviso: 'Pending review, the opinion of the Court of Appeal, which is currently published at 77 Cal. App. 5th 209, 292 Cal. Rptr. 3d 382, may be cited, not only for its persuasive value, but also for the limited purpose of establishing the existence of a conflict in authority that would in turn allow trial courts to exercise discretion under Auto Equity Sales, Inc. v. Superior Court (1962) 57 Cal. 2d 450, 456, 20 Cal. Rptr. 321, 369 P. 2d 937, to choose between sides of any such conflict. (See Standing Order Exercising Authority Under California Rules of Court, Rule 8.1115(e)(3), Upon Grant of Review or Transfer of a Matter with an Underlying Published Court of Appeal Opinion, Administrative Order 2021-04-21; Cal. Rules of Court, rule 8.1115(e)(3) and corresponding Comment, par. 2.)' The Rodriguez v. FCA US, LLC opinion is directly on point. It also involved the sale of a used vehicle by an independent dealer with a portion of its original manufacturer's warranty still intact and transferred to the new owner (plaintiffs).

Rodriguez describes the applicable law as follows: 'The Song-Beverly Act is a remedial statute designed to protect consumers who have purchased products covered by an express warranty.' (Robertson v. Fleetwood Travel Trailers of California, Inc.

(2006) 144 Cal. App. 4th 785, 798.) To that end, it regulates warranty terms and imposes service and repair obligations on the parties who issue the warranties ....

The Act defines the parties who issue warranties as follows. A manufacturer is an entity 'that manufactures, assembles, or produces consumer goods.' (§ 1791, subd. (j).) A distributor is an entity 'that stands between the manufacturer and the retail seller in purchases, consignments, or contracts for sale of consumer goods.' (§ 1791, subd. (e).) A seller or retailer is an entity 'that engages in the business of selling or leasing consumer goods to retail buyers.' (§ 1791, subd. (l).) Calendar No.: Event ID:  TENTATIVE RULINGS

3035187  10 CASE NUMBER: CASE TITLE:  GUZMAN VS AMERICAN HONDA MOTOR CO INC [IMAGED]  37-2022-00039256-CU-BC-CTL The Act requires that where a manufacturer sells 'consumer goods' accompanied by an express warranty, it must maintain local repair facilities 'to carry out the terms of those warranties.' (§ 1793.2, subd. (a)(1)(A).) Importantly, 'consumer goods' are defined as 'any new product or part thereof that is used, bought, or leased for use primarily for personal, family, or household purposes, except for clothing and consumables.' (§ 1791, subd. (a), italics added.) If, 'after a reasonable number of attempts' the manufacturer is unable to conform the consumer goods to the applicable express warranty, the refund-or-replace provision kicks in, and 'the manufacturer shall either replace the goods or reimburse the buyer in an amount equal to the purchase price paid by the buyer.' (§ 1793.2, subd. (d)(1).) The Act also provides for implied warranties of merchantability and fitness for 'consumer goods' - i.e., new products. (§§ 1791.1, subd. (c), 1792.) These implied warranties may not last less than 60 days or more than one year after the sale of the consumer goods to which they apply, and liability for their breach lies with the manufacturer. (§§ 1791.1, subd. (c), 1792.) That's not to say the Act has no protections for used goods; it does, but the protections are limited and bind the seller or distributor of the used product. (§ 1795.5.) Section 1795.5 provides express warranty protections for used goods only where the entity selling the used product issues an express warranty at the time of sale. The provision states: 'Notwithstanding the provisions of subdivision (a) of Section 1791 defining consumer goods to mean 'new' goods, the obligation of a distributor or retail seller of used consumer goods in a sale in which an express warranty is given shall be the same as that imposed on manufacturers under this chapter.' (Italics added.) 'It shall be the obligation of the distributor or retail seller making express warranties with respect to used consumer goods (and not the original manufacturer, distributor, or retail seller making express warranties with respect to such goods when new) to maintain sufficient service and repair facilities within this state to carry out the terms of such express warranties.' (§ 1795.5, subd. (a), italics added.) The Act also provides implied warranties for used products. These are shorter than the implied warranties for new products; their maximum duration is three months. (§ 1795.5, subd. (c).) As is the case with liability for breach of express warranties, 'in the sale of used consumer goods, liability for breach of implied warranty lies with distributors and retailers, not the manufacturer,' unless the manufacturer issues a new warranty along with the sale of the used good. (Ruiz Nunez v. FCA US LLC (2021) 61 Cal. App. 5th 385, 398, italics added; see also ....) Thus, a hallmark of the Act is that its consumer protections apply against the party who sold the product to the buyer and issued the express warranty. With this framework in mind, we turn to the refund-or-replace provision at issue and the definition of 'new motor vehicle.' ....

In 1982, the Legislature amended the Act to include provisions specifically applicable to motor vehicles; this amendment became known as the Lemon Law .... The motor vehicle refund-or-replace provision - section 1793.2, subdivision (d)(2) - is similar to the general, consumer goods refund-or-replace provision, except that it requires the manufacturer to provide the remedy 'promptly' and contains vehicle-specific rules regarding both replacement and restitution .... Like its consumer goods counterpart, section 1793.2, subdivision (d)(2) applies to sales of new vehicles only; specifically, it applies to 'a new motor vehicle, as that term is defined in paragraph (2) of subdivision (e) of Section 1793.22.' Id. at 217 – 219 (emphasis added, some internal citations omitted).

Section 1793.22(d)(2), referenced above, states: ''New motor vehicle' means a new motor vehicle that is bought or used primarily for personal, family, or household purposes. 'New motor vehicle' also means a new motor vehicle with a gross vehicle weight under 10,000 pounds that is bought or used primarily for business purposes by a person .... 'New motor vehicle' includes the chassis, chassis cab, and that Calendar No.: Event ID:  TENTATIVE RULINGS

3035187  10 CASE NUMBER: CASE TITLE:  GUZMAN VS AMERICAN HONDA MOTOR CO INC [IMAGED]  37-2022-00039256-CU-BC-CTL 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 but does not include a motorcycle or a motor vehicle which is not registered under the Vehicle Code because it is to be operated or used exclusively off the highways. A demonstrator is a vehicle assigned by a dealer for the purpose of demonstrating qualities and characteristics common to vehicles of the same or similar model and type.' (emphasis added) There is 'nothing about the wording or structure of [section 1793.22(d)(2)] indicat[ing] the Legislature intended to expand the definition of 'new motor vehicle' to include used vehicles sold with some part of the manufacturer's warranty still in force.... We think if the Legislature intended to expand the definition of 'new motor vehicle' to include a potentially vast category of used cars it would have done so more clearly and explicitly than tucking it into a reference to demonstrators and dealer-owned vehicles.' Rodriguez v. FCA US, LLC, supra at 221.

'... [W]e conclude the phrase 'other motor vehicles sold with a manufacturer's new car warranty' refers to cars sold with a full warranty, not to previously sold cars accompanied by some balance of the original warranty. We therefore conclude the trial judge was correct to conclude plaintiffs' truck does not meet the definition of 'new motor vehicle' and to dismiss their claim against FCA as a result.' Id. at 225.

Plaintiffs argue the Rodriguez decision is not persuasive, and the Court should instead follow Jensen v. BMW of North America, Inc. (1995) 35 Cal. App. 4th 112. However, the Jensen opinion addressed a different situation, as explained by the following excerpt from Rodriguez v. FCA US, LLC: Plaintiffs argue Jensen is on point, but we find the case easily distinguishable. Jensen involved a lease by a manufacturer-affiliated dealer who issued a full new car warranty along with the lease. The issue was whether the leased car qualified as a 'new motor vehicle' under the Act. Plaintiff had learned of the car through a newspaper ad offering leases of 'BMW demonstrators.' (Jensen, supra, 35 Cal. App. 4th at p. 119.) When she arrived at the dealership - a BMW-authorized dealership - the car had 7,565 miles on its odometer. The salesperson told her this was because it had previously been used by BMW as a demonstrator. The plaintiff agreed to lease the car and the salesperson gave her BMW's 36,000-mile warranty 'on top' of the miles already on the odometer. (Ibid.) As it turned out, the salesperson was wrong and the car was not in fact a demonstrator; it had been previously owned by the BMW Leasing Corporation and registered in New Jersey.

BMW tried to use that fact to its advantage in court, arguing the car didn't qualify as a 'new motor vehicle' because it wasn't in fact a demonstrator. BMW argued that the car didn't qualify as 'other motor vehicle sold with a manufacturer's new car warranty' because the category 'clarifies the word 'demonstrator' and is not intended as a separate category.' (Jensen, supra, 35 Cal. App. 4th at p. 122.) The court rejected BMW's position and concluded the car qualified as a new vehicle because BMW's representative issued a new car warranty with the lease. (Ibid.) The court also rejected BMW's interpretation of the phrase 'other motor vehicle sold with a manufacturer's new car warranty,' reasoning that the phrase referred to 'cars sold with a balance remaining on the manufacturer's new motor vehicle warranty.' (Id. at p. 123.) Plaintiffs seize on this statement to argue their interpretation is correct.

Though we think Jensen was correctly decided, we agree with Dagher that its statement about 'the Act's coverage for subsequent purchasers of vehicles with a balance remaining on the express warranty must be read in light of the facts then before the court and are limited in that respect.' (Dagher v. Ford Motor Co. (2015) 238 Cal. App. 4th 905, 923.) Given that those facts included a car leased with a full manufacturer's warranty issued by the manufacturer's representative, the court was not asked to decide whether a used car with an unexpired warranty sold by a third party reseller qualifies as a 'new motor vehicle.' Dagher is not the only opinion to question Jensen's statement about express warranties. In Kiluk, the court expressed 'reservations' about the statement because it implied that 'a car accompanied by a 20-year warranty' would qualify as a 'new motor vehicle' if it were purchased used 'on year 18.' (Kiluk, Calendar No.: Event ID:  TENTATIVE RULINGS

3035187  10 CASE NUMBER: CASE TITLE:  GUZMAN VS AMERICAN HONDA MOTOR CO INC [IMAGED]  37-2022-00039256-CU-BC-CTL supra, 43 Cal. App. 5th at p. 340, fn. 4.) Kiluk questioned the wisdom of an approach that considered 'every car sold with any portion of a new-vehicle warranty remaining' to be a new motor vehicle, and stated it was more likely the phrase 'other motor vehicle sold with a manufacturer's new car warranty' refers to 'cars originally sold with a new motor vehicle warranty, not subsequent sales.' (Ibid.) We agree with Kiluk on this point. In other words, we agree with Jensen's holding but not all of its reasoning. And the holding hurts, not helps, plaintiffs' argument. BMW's attempt to avoid liability by claiming the vehicle wasn't actually a demonstrator exemplifies the need for a catchall provision covering any not-previously-sold car accompanied by a full new car warranty.' Rodriguez v. FCA US, LLC, supra at 223, 224 (emphasis added).

Jensen involved an almost new vehicle with a completely new manufacturer express warranty sold by a manufacturer-affiliated dealer that was represented to be a demonstrator vehicle. This action, in contrast, involves a separate entity dealer (see Separate Statement no. 7) selling a used vehicle with a remaining portion of the original manufacturer's express warranty still intact. No misrepresentation was made regarding the status of the used Honda Pilot. Given these differences, Jensen is distinguishable, and is not authority that can be followed and applied by this Court. This leaves Rodriguez v. FCA US, LLC as the only authority addressing this situation. As such, it is persuasive and will be followed by the Court.

The Court also elects to follow Rodriguez because it appears to apply the plain and express meaning of the statutory language. As discussed above, in the context of its application to express warranties, the Song-Beverly Act generally applies to 'consumer goods,' which are defined as a 'new product.' The statutory language specifically applicable to vehicles is limited to 'new' vehicles only. A two year old Honda Pilot with 31,187 miles on its odometer is not a 'new' motor vehicle.

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