Judge John J. Kralik, Case Number: 23BBCV01656, Date: 2024-03-01 Tentative Ruling

Plaintiff Anita Thomas (“Plaintiff”) alleges that on April 25, 2022, she purchased a used 2017 Nissan Juke from Defendant CarMax Auto Superstores, Inc. (“Defendant”). Plaintiff alleges that since the delivery of the vehicle, the vehicle has not been in a merchantable, safe condition, and does not confirm to the quality and safety guidelines reasonably expected of motor vehicles. Plaintiff alleges that the vehicle contained multiple manufacturer defects, including: “defects in assembly, design defects, and other defects, rendering the vehicle unsafe and making it impossible for Plaintiff to use the vehicle without inconvenience, failure, and mechanical breakdown.” (Compl., ¶12.) Plaintiff alleges that Defendant failed to properly repair the vehicle within a reasonable time frame and failed bring it into conformity with express warranties after a reasonable number of repair attempts.

The complaint, filed July 21, 2023, alleges causes of action for: (1) breach of implied warranty; (2) breach of express warranty; and (3) violation of the Song Beverly Consumer Warranty Act.

On October 6, 2023, Defendant filed a motion for summary judgment in its favor against Plaintiff. In the alternative, Defendant moves for summary adjudication on the following issues:

· Issue No. 1: On the 1^st cause of action for Breach of Implied Warranty on the grounds that Plaintiff cannot establish each element of this cause of action.

· Issue No. 2: On the 2^nd cause of action for Breach of Express Warranty on the grounds that Plaintiff cannot establish each element of this cause of action.

· Issue No. 3: On the 3^rd cause of action for Violation of the Song Beverly Consumer Warranty Act on the grounds that Plaintiff cannot establish each element of this cause of action.

Defendant moves for summary judgment or, alternatively, summary adjudication on Plaintiff’s complaint in this action.

Defendant provides the following material facts, which are undisputed by Plaintiff. Defendant is a retailer of used vehicles. (Fact 1.) On April 25, 2022, Plaintiff purchased a used 2017 Nissan Juke from Defendant. (Id. at 2.) Plaintiff’s counsel, Lior Sagdan, mailed Defendant a certified letter dated June 9, 2023, which stated, “At this time, my client demands that Carmax repurchase the vehicle in compliance with the aforementioned California Lemon Law” and “If my client is not offered restitution by July 10, 2023, a Complaint for Damages will be filed against Carmax without further notice, and a civil penalty will be demanded pursuant to California Civil Code Section 1794”; however, the letter did not mention payment of attorney’s fees. (Id. at 4.) On June 22, 2023, Daniel G. Bloor, Esq., Defendant’s Assistant Vice President and Associate General Counsel, responded to the letter by sending Mr. Sadgan correspondence via Federal Express. (Id. at 5.) Mr. Bloor’s letter stated:

In the interest of resolving this matter, and without admitting any liability, CarMax agrees to buy the Vehicle back from your client as a correction under the CLRA and the Song-Beverly Act. The correction offer includes the following:

• CarMax will pay any other allowable documented out of pocket losses or costs. CarMax requests documentation of any other losses or out-of-pocket expenses incurred by your client.

Your client is not entitled to fees as part of a prelitigation correction under the CLRA and Song-Beverly. Additionally, attorney’s fees are not considered damages under California Law. Please forward to me your client’s financing pay-off, record of the amount of payments made to date, and documentation of any other out of pocket expenses he has incurred related to the Vehicle. Then we can make arrangements for CarMax to pay the appropriate sum and for your client to return the Vehicle. This agreement to buy back the Vehicle is intended to meet the requirements of a correction under the CLRA and Song-Beverly Act.

If your client wishes to accept this offer, please email me the financing and out-of-pocket expenses information requested above….

(Id. at 6, 8, 9.) Mr. Bloom’s letter did not require Plaintiff to execute a release of claims against Defendant. (Id. at 7.)

On July 21, 2023, Plaintiff filed this instant lawsuit, alleging incidental and consequential damages, civil penalties, and reasonable attorney’s fees. (Id. at 10-11.) On August 3, 2023, Mr. Sagdan sent an email to Mr. Bloor attaching a courtesy copy of the lawsuit, stating:

I am in receipt of your June 22, 2023 correspondence in which you offer to repurchase my client's vehicle, but refuse to pay for fees and costs. As a result, we filed and served a lawsuit against Carmax (courtesy copy attached).

Contrary to your position, California Law does allow for plaintiff's recovery of attorneys' fees and costs. At this time we can proceed with the repurchase of my client's vehicle, and set aside our fees/costs dispute for resolution by motion. As such, this email also serves as my meet and confer prior to bringing a motion for fees and costs.

(Id. at 12.) In response, on August 8, 2023, defense counsel Kurt Schlichter, Esq., emailed a letter to Mr. Sagdan stating his position that Defendant was only required to make an offer to repurchase the vehicle but there was no requirement to pay prelitigation fees as Ms. Thomas was not the prevailing party and therefore not entitled to fees. (Id. at 13.) On August 8, 2023, Mr. Sagdan responded by stating that Ms. Thomas prevailed on her claim even if a lawsuit had not been filed because Defendant offered to repurchase the vehicle and that she had not rejected the repurchase offer. (Id. at 14.) As of the date of the motion, Plaintiff has not accepted Defendant’s offer in Mr. Bloor’s June 22, 2023 letter. (Id. at 15.)

With the opposition papers, Plaintiff provides the following additional material facts (“AMF”). Between April 25, 2022 (date of purchase) to May 5, 2023, Plaintiff brought the car to Defendant for repairs on at least 4 different occasions. (Pl.’s AMF 1.) The mechanical issues with the car stemmed from nonconformities in the engine. (Id. at 2.) The check engine light of the vehicle Defendant sold to Plaintiff turned on within the first 2 days of purchase. Plaintiff informed Defendant’s representatives that she no longer wanted the car as it was a lemon. Defendant refused to refund Plaintiff’s money and instead did an appraisal to determine how much Plaintiff would need to pay to get another car. An employee named Kobe at Defendant is witness to these facts. (Id. at 3.)

(d)(1) Except as provided in paragraph (2), if the manufacturer or its representative in this state does not service or repair the goods to conform to the applicable express warranties after a reasonable number of attempts, the manufacturer shall either replace the goods or reimburse the buyer in an amount equal to the purchase price paid by the buyer, less that amount directly attributable to use by the buyer prior to the discovery of the nonconformity.

(a) Any buyer of consumer goods who is damaged by a failure to comply with any obligation under this chapter or under an implied or express warranty or service contract may bring an action for the recovery of damages and other legal and equitable relief.

(d) If the buyer prevails in an action under this section, the buyer shall be allowed by the court to recover as part of the judgment a sum equal to the aggregate amount of costs and expenses, including attorney's fees based on actual time expended, determined by the court to have been reasonably incurred by the buyer in connection with the commencement and prosecution of such action.

In support of the motion, Defendant relies on Dominguez v. American Suzuki Motor Corp. (2008) 160 Cal.App.4th 53. In Dominguez, the trial court had denied Suzuki’s motion for summary judgment/adjudication, but the Court of Appeal reversed. The timeline of events was summarized as follows: “[On November 16, 2004], Dominguez purchased the Motorcycle. Over the course of the next six months, he submitted it for repair on at least five occasions. On June 13, 2005, Dominguez's counsel requested Suzuki repurchase or replace the Motorcycle. One week later [on June 21, 2005], Suzuki informed counsel, among other things, it was unable to duplicate the problem, and requested he submit the Motorcycle to an authorized dealer for repair. Five weeks later [on July 28, 2005], Suzuki offered to repurchase the Motorcycle for the total purchase price. Four weeks later [on August 25, 2005], Suzuki sent counsel a letter detailing its previous offers, acknowledging counsel's request for $2,500 in attorney fees, and offering $750 in attorney fees, an amount based on what it estimated was a one-hour consultation and the drafting of one form letter, the June 13, 2005, letters to Suzuki and Pacific. After failing to agree on attorney fees and costs, Dominguez filed suit approximately six weeks after Suzuki offered to repurchase the Motorcycle.” (Dominguez, supra, 160 Cal.App.4th at 58-59.)

Approximately six weeks after Dominguez's counsel demanded Suzuki repurchase or replace the Motorcycle, Suzuki offered to repurchase the Motorcycle. But that was not good enough—counsel construed Suzuki's previous June 21, 2005, letter as a “willful” refusal to comply with Song–Beverly, which by its plain language it was not, and demanded a civil penalty two times the actual damages as permitted by section 1794, subdivision (c).[] Dominguez did not file suit to require Suzuki to comply with Song–Beverly. It filed suit to recover the civil penalty and/or attorney fees.

There was no evidence Suzuki failed to comply, and certainly no evidence it “willfully” failed to comply, with Song–Beverly.

(Id. at 59.) The Court of Appeal observed that there was a total of 6 weeks from plaintiff’s first demand for repurchase or replacement of the motorcycle on June 13, 2005 and Suzuki’s letter indicating that it intended to repurchase the motorcycle. (Id. at 60.) The Court of Appeal stated: “Dominguez points to nothing in section 1793.2, subdivision (d)(1), which requires a manufacturer to offer to repurchase consumer goods within a specified time. And, there is nothing in the record on appeal to support the conclusion that prior to Dominguez's June 13, 2005, letter demanding repurchase or replacement of the Motorcycle that Suzuki refused to comply with Song–Beverly necessitating Dominguez hire counsel. He conceded as much in his complaint when he stated his first attempt to contact Suzuki concerning repurchase or replacement was June 13, 2005.” (Id.) The Court of Appeal stated at the end if its opinion:

Finally, Dominguez states: “It is only logical that if the Legislature did not intend for consumers to be forced to pay attorneys fees when they prevail in [an] action that they would likewise not want [c]onsumers who were successful in resolving their claim on [a] prelitigation basis to be forced to pay attorneys fees out of their own pocket.” We assume “the Legislature knew what it was doing and meant the words to be applied as they were written. [Citation.]” (Southern Cal. Edison Co. v. Public Utilities Com. (2002) 101 Cal.App.4th 982, 994, 125 Cal.Rptr.2d 211.) Otherwise, the Legislature would have provided for an attorney fees award in section 1793.2, subdivision (d)(1), which it did not, or it would not have conditioned an attorney fees award on prevailing in an action, which it did in section 1794, subdivision (d).[] Based on a plain reading of the applicable statutory provisions, we cannot conclude the Legislature intended that every time a manufacturer repurchases or replaces consumer goods, a consumer is entitled to attorney fees, regardless of whether it was pre- or post-commencement of litigation.

The Court of Appeal in Duff v. Jaguar Land Rover North America, LLC (2022) 74 Cal.App.5^th 491 stated: “Therefore, the trial court appears to have interpreted the phrase ‘buyer prevails in an action’ to mean that a plaintiff need only prove a single claim under Song-Beverly (regardless of any net recovery or achievement of litigation objectives) and the court must award reasonable attorney fees. Such a mechanical approach to section 1794, subdivision (d) would make attorney fees almost automatic in any case where a buyer proved his claim even if he was not harmed and proved no damages. Yet, Song-Beverly's purpose is not inevitably awarding attorney fees to buyers.” (Duff v. Jaguar Land Rover North America, LLC (2022) 74 Cal.App.5th 491, 503.)[1]

Based on the facts and evidence provided by Defendant, Defendant has upheld its initial burden in showing that after making several attempts to service/repair the vehicle, it offered to repurchase the vehicle pursuant to Civil Code, § 1793.2(d). Defendant’s offer to repurchase the vehicle was made through Mr. Bloor’s letter dated June 22, 2023, which was before the July 10, 2023 response date requested by Mr. Sagdan. As such, Defendant complied with its obligation under the Song Beverly Act by offering restitution—i.e., buying back the vehicle and reimbursing Plaintiff for any payments and out-of-pocket losses. At least on the face of the statute, there is no requirement to pay for attorney’s fees and costs.

In opposition, Plaintiff argues that the Dominguez case is distinguishable because there was at least an offer by the defendant to pay prelitigation attorney’s fees in the Dominguez case but no offer to pay attorney’s fees here. Plaintiff argues that neither Dominguez nor Duff explicitly stated that consumers are never entitled to pre-commencement attorney’s fees.

“Song-Beverly is colloquially known as California's ‘lemon law,’ and is a ‘strongly pro-consumer’ law aimed at protecting, among others, new car buyers.” (Duff v. Jaguar Land Rover North America, LLC (2022) 74 Cal.App.5th 491, 500.) As stated in Duff, the Act’s purpose “is not inevitably awarding attorney fees to buyers.” (Id. at 503.) Here, Defendant made an offer to repurchase the vehicle and reimburse out-of-pocket costs associated with the vehicle prior to the filing of the lawsuit, in compliance with the Act’s provisions. According to Civil Code, § 1794(d), if the buyer prevails in an action pursuant to the Act, then the buyer/Plaintiff shall be allowed to recover reasonably attorney’s fees and costs. However, Plaintiff has not prevailed in this lawsuit as the lawsuit is still ongoing—there has been no adjudication in Plaintiff’s favor through law and motion practice or through trial. The mere fact that Defendant offered to repurchase the vehicle and reimburse Plaintiff does not equate to finding that Plaintiff prevailed in this lawsuit. There has been no determination that Plaintiff is the prevailing party. Further, Mr. Bloor’s letter stated that Defendant would repurchase the vehicle without admitting any liability in order to informally resolve the issue.

Plaintiff also argues: “Denying Plaintiff recovery of attorneys’ fees and costs just because Carmax offered to buyback Plaintiff’s vehicle at the pre-litigation stage of the case only means that Plaintiff’s counsel should have filed a lawsuit without offering Carmax an opportunity to buyback the vehicle before filing the instant lawsuit.” (Opp. at p.5.) However, under the Act at Civil Code, § 1793.2(d), Defendant is afforded an opportunity to promptly refund or replace the vehicle. While the statute provides Plaintiff with a remedy to compensate her for purchasing a “lemon,” it also provides Defendant with various options to informally resolve the issue regarding the vehicle prior to resorting to litigation. Section 1793.2(d)(1) discusses what restitution must be made (i.e., reimbursement “in an amount equal to the purchase price paid by the buyer, less that amount directly attributable to use by the buyer prior to the discovery of the nonconformity”) and this subsection does not require restitution in the form of payment of Plaintiff’s pre-litigation attorney’s fees and costs.

Defendant CarMax Auto Superstores, Inc.’s motion for summary judgment granted.

Defendant is ordered to lodge with the Court and serve on Plaintiff a proposed judgment within ten (10) days and to provide notice of this order.

[1] By way of example, CCP § 22 defines “action” as follows: “An action is an ordinary proceeding in a court of justice by which one party prosecutes another for the declaration, enforcement, or protection of a right, the redress or prevention of a wrong, or the punishment of a public offense.”

Superior Court of California

County of Los Angeles

Department B