Judge: Jon R. Takasugi, Case: 20STCV26644, Date: 2023-02-10 Tentative Ruling
Case Number: 20STCV26644 Hearing Date: February 10, 2023 Dept: 17
Superior Court of California
County of Los Angeles
DEPARTMENT
17
TENTATIVE RULING
MARTA PADILLA, et al.
DCH THOUSAND |
Case
Hearing Date: February 10, 2023 |
Defendant’s
motion for summary judgment is DENIED.
Defendant’s
motion for summary adjudication is GRANTED as to the negligent repair cause of
action. Defendant’s motion is DENIED as to the Song-Beverly Act causes of
action.
On
7/15/2020, Plaintiff Marta and Gabriel Padilla (collectively, Plaintiffs) filed
suit against DCH Thousand Oaks-F, Inc. d/b/a DCH Ford of Thousand Oaks, and
Ford Motor Company (collectively, Defendants), alleging: (1) breach of express
warranty; (2) breach of implied warranty; (3) violation of the Song-Beverly Act
section 1793.2; and (4) negligent repair.
Now,
Defendants move for summary judgment of Plaintiff’s Complaint.
Discussion
I.
Song-Beverly Claims
Defendants
argue that Plaintiffs cannot establish these claims because it fully complied
with its obligations under the Song-Beverly Act, and promptly offered to
repurchase the Vehicle prior to the commencement of litigation.
The
Song-Beverly Act provides in pertinent part:
If the
manufacture or its representative in this state is unable to service or repair
a new motor vehicle . . . to conform to the applicable express warranties after
a reasonable number of repair 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). However, the
buyer shall be free to elect restitution in lieu of replacement, and in no
event shall the buyer be required by the manufacturer to accept a replacement
vehicle.
(A) In the case of replacement, the
manufacturer shall replace the buyer’s vehicle with a new motor vehicle
substantially identical to the vehicle replaced. The replacement vehicle shall
be accompanied by all express and implied warranties that normally accompany
new motor vehicles of that specific kind. The manufacturer also shall pay for,
or to, the buyer the amount of any sales or use tax, license fees, registration
fees, and other official fees for which the buyer is obligated to pay in
connection with the replacement, 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.
(B) 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 installed 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.
(C) . . .
When restitution is made pursuant to subparagraph (B), the amount to be paid by
the manufacturer to the buyer may be reduced by the manufacturer by that amount
directly attributable to use by the buyer prior to the time the buyer first
delivered the vehicle to the manufacturer or distributor, or its authorized
service and repair facility for correction of the problem that gave rise to the
nonconformity.
(Civ.
Code § 1793.2 (d)(2)(A)-(C).)
Where a
manufacturer has made a compliant offer to repurchase or replace a plaintiff’s
vehicle after the vehicle could not be repaired, the manufacturer is deemed to
have complied with the Song-Beverly Act. (Dominguez v. American Suzuki Motor
Corp. (2008) 160 Cal.App.4th 53, 57.)
Thus,
in order to prevail on his Song-Beverly Act claims against Defendants,
Plaintiffs must prove that (1) the vehicle had defects that affected the use,
value or safety of the vehicle that Ford could not repair to conform to the
applicable warranty after a reasonable number of repair attempts, and (2)
assuming Plaintiffs can prove the vehicle was not repaired after a reasonable
number of repair attempts, that Ford did not promptly made a compliant offer to
repurchase or replace Plaintiffs’ vehicle.
To
show that it complied with the requirements of Song-Beverly, Defendants
submitted the following evidence:
-
On June 8, 2019, Plaintiff Marta
Padilla purchased a new 2019 Ford F-150 (the “Vehicle”) from Sunrise Ford in
North Hollywood, California. (SS ¶ 1.)
-
On October 2, 2019, Plaintiff Gabriel
Padilla presented the Vehicle to Sunrise Ford concerning an issue with the
vehicle. (SS ¶ 6.)
-
On October 31, 2019, Plaintiff Gabriel
Padilla presented the Vehicle to DCH Ford of Thousand Oaks concerning an issue
with the vehicle. (SS ¶ 7.)
-
On November 12, 2019, Plaintiff Gabriel
Padilla presented the vehicle to DCH Ford of Thousand Oaks concerning an issue
with the vehicle. (SS ¶ 8.)
-
In or around November of 2019,
Plaintiffs called Ford and requested that Ford repurchase the Vehicle. (SS ¶
9.)
-
On November 29, 2019, Ford sent
Plaintiff Marta Padilla a letter offering to repurchase or replace the Vehicle.
(SS ¶ 10.)
-
On December 11, 2019, Ford sent
Plaintiff Marta Padilla a second letter detailing the repurchase offer amount
for the Vehicle. (SS ¶ 11.)
-
Under the statutory formula, Ford
offered to repurchase the vehicle for $44,264.72, and it detailed exactly how
it calculated the repurchase offer. (SS ¶ 12.)
-
After receiving Ford’s Offer on
December 11, 2019, Plaintiffs rejected the offer. (SS ¶ 13.)
Taken
together, Defendants’ evidence supports a reasonable inference that Ford
promptly offered to repurchase the vehicle with a legally compliant offer just
five months after it was purchased, within two weeks from the date Plaintiffs
brought in the vehicle for the third time, and immediately after Plaintiff
called Ford. Rather than accept Ford’s offer or identify any supposed
deficiency with the offer, Plaintiff rejected the offer and initiated this
action.
In
opposition, Plaintiffs argue that Defendants’ offer was not legally compliant
because it contained deductions for extended services contracts, GAP insurance,
and negative equity that were added to the total sale price of the vehicle.
(RSS ¶ 4-6; AMF ¶ 14-16.) In support, Plaintiffs cite caselaw wherein Courts
interpreting the Song-Beverly Act have held that only enumerated deductions and
offsets identified in the statute can be permitted. Under the Act’s statutory
scheme, restitution is only subject to two statutorily-defined offsets:
-
for “nonmanufacturer items installed by
a dealer or the buyer” (Civ. Code § 1793.2(d)(2)(B)); and
-
for the buyer’s use of the vehicle
before it was first brought for repairs, calculated by a specific formula based
on the purchase price and the mileage before the vehicle was first delivered
for repairs. (Civ. Code § 1793.2(d)(2)(C)).
In Landa
v. FCA US LLC (C.D. Cal., Mar. 23, 2021, No. CV199862PSGGJSX) 2021 WL
1565800, at *4, the central district found that a manufacturer cannot deduct
service contracts and GAP insurance from a repurchase offer. The Court
explained, “[u]nder California Civil Code § 1793.2(d)(2)(B), the amount owed to
a vehicle purchaser as restitution has only one exclusion: “nonmanufacturer
items installed by a dealer or the buyer.” (Ibid.) The Court noted that
“Defendant has not offered any persuasive argument why Plaintiffs’ service
contract and GAP insurance qualify as ‘nonmanufacturer items installed by a
dealer or the buyer,’” and denied defendant’s motion for summary judgment. (Ibid.)
Similarly
here, Ford has failed to show how the service contracts, GAP insurance, or
negative equity are a nonmanufacturer items installed by anyone. Moreover, Plaintiffs
submitted opinions offered by the DCA to show that Defendant’s deductions
regarding negative equity were improper. More specifically, the DCA, which
regulates and certifies Ford’s BBB Auto Line Program, has explained that
negative equity is recoverable under the Act. (RJN ¶ 1-6, Exhibit 1-6.) While
not binding law, it is persuasive and relevant.
In
opposition, Defendants also cite case law wherein substantially similar offers
were found to be legally compliant offers. (See Reply, 2: 26-3:8.)
However, this “battle of the string citations” indicates a split in authority
as to what constitutes legally permissible deductions. In light of this, the
Court finds these claims are not properly disposed of at the summary judgment
stage.
Taken
together, the Court concludes Plaintiffs’ evidence supports a reasonable
inference that the offer was not legally compliant, and thus summary judgment
is not appropriate on the Song-Beverly Act causes of action.
II.
Implied Warranty
Defendants argue
that they are entitled to summary judgment on this cause of action because
Plaintiffs cannot present evidence of damages and because it offered
restitution as required.
However, as
noted above, the Court has concluded there is a triable issue of material fact
as to whether or not the offer complied with its obligations under the
Song-Beverly Act.
Moreover, the
Song-Beverly Act “provides for both express and implied warranties, and while
under a manufacturer’s express warranty the buyer must allow for a reasonable
number of repair attempts within 30 days before seeking rescission . . . that
is not the case for the implied warranty of merchantability’s bulwark against
fundamental defects.” (Brand v. Hyundai Motor America (2014) 226
Cal.App.4th 1538, 1545.) Given Plaintiffs’ evidence that the car was presented
for alleged defects, there is a triable issue of material fact as to whether or
not there was a breach of the implied warranty based on these alleged defects.
III.
Negligent Repair
Defendants
argue that Plaintiffs’ negligent repair claim is barred by the economic loss
rule.
The economic loss doctrine precludes
recovery in tort where a plaintiff’s damages consist solely of alleged economic
losses. (Seely v. White Motor Co. (1965) 63 Cal.2d 9,
17-18.) The rule “prevents the law of contract and the
law of tort from dissolving one into the other” by preventing
recovery in tort for the breach of a contract when there has not been the
breach of a duty other than the duties arising from the contractual
obligations. (Robinson Helicopter Co., Inc. v. Dana Corp. (2004) 34
Cal.4th 979, 988.) Examples of damages that go beyond economic loss – and to
which the economic loss rule therefore does not apply – include personal
injuries and damage to other property that result from the defective product. (Sacramento
Regional Transit Dist. v. Grumman Flxible (1984) 158 Cal.App.3d
289, 295.) However, consequential damages such as lost profits or income that
flow from the damage to the product itself are considered economic
losses, and a plaintiff therefore cannot recover for them in tort. (East
River Steamship Corporation v. Transamerica Delaval, Inc. (1986)
476 U.S. 858, 872-873.)
Here,
Defendants submitted evidence that Plaintiff has not claimed any personal
injury, but only seeks to recover the costs to repair the Vehicle. (SS ¶ 14.)
In
opposition, Plaintiffs did not submit evidence showing any harm other than
economic losses arising from a broken contractual promise. To take itself
out of the economic loss rule, a plaintiff must “demonstrate harm above
and beyond a broken contractual promise.” (Food Safety
Net Services v. Eco
Safe Systems USA, Inc. (2012) 209
Cal.App.4th 1118, 1130.)
Thus, the
Court agrees this claim is barred by the economic loss rule.
Conclusion
Based on the
foregoing, Defendants’ motion for summary judgment is denied. Defendants’
motion for summary adjudication is granted as to the negligent repair cause of
action. Defendants’ motion is denied as to the Song-Beverly Act causes of
action.
It is so ordered.
Dated: February
, 2023
Hon. Jon R.
Takasugi
Judge of the
Superior Court
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