Judge Kerry Bensinger, Case Number: 21STCV34914, Date: 2024-02-29 Tentative Ruling

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This is a “lemon law” case. On September 22, 2021, Plaintiff, Tamieul Baxter, filed a Complaint against Defendants, Volkswagen Group of America, Inc. (“VGA”) and Antelope Valley Volkswagen, for various violations of the Song-Beverly Act. Plaintiff leased a 2019 Volkswagen Tiguan (the “Vehicle”) which included a bumper to bumper warranty. During the warranty period, the Vehicle contained or developed defects. Plaintiff presented the Vehicle for repair, but Defendants were unable to repair the Vehicle after a reasonable number of opportunities. Plaintiff leased the vehicle on March 20, 2019 for a lease term of 48 months.

On October 14, 2021, VGA sent a letter to Plaintiff’s counsel which included an “Evidence Preservation Demand.” Plaintiff did not respond to the demand.

On October 25, 2021, VGA served a Notice of Vehicle Inspection, with an inspection date of January 25, 2022.

On January 21, 2022, Plaintiff served an objection to the October 25, 2021 notice stating Plaintiff would not be producing the Vehicle. No alternative date was provided.

On September 28, 2023, VGA served an Amended Notice of Vehicle Inspection (“Amended Notice”), with an inspection date of November 2, 2023.

On November 17, 2023, VGA filed a Motion to Compel Production of Plaintiff’s Vehicle for Inspection.

On December 28, 2023, during meet and confer efforts for VGA’s motion to compel, Plaintiff’s counsel notified VGA for the first time that Plaintiff had returned the Vehicle due to the maturity of the lease term.

On January 30, 2024, VGA filed this Motion for Terminating Sanctions based on Plaintiff’s alleged spoliation of evidence. VGA also requests monetary sanctions against Plaintiff and her counsel. Alternatively, VGA requests imposition of issue or evidence sanctions.

VGA requests terminating sanctions based on Plaintiff’s spoliation of the Vehicle.

“Spoliation of evidence means the destruction or significant alteration of evidence or the failure to preserve evidence for another’s use in pending or future litigation.” (Williams v. Russ (2008) 167 Cal.App.4th 1215, 1223.) “Such conduct is condemned because it ‘can destroy fairness and justice, for it increases the risk of an erroneous decision on the merits of the underlying cause of action. Destroying evidence can also increase the costs of litigation as parties attempt to reconstruct the destroyed evidence or to develop other evidence, which may be less accessible, less persuasive, or both.’” (Id.) Where there is evidence of willful suppression, the court may instruct the jury: “You may consider whether one party intentionally concealed or destroyed evidence. If you decide that a party did so, you may decide that evidence would have been unfavorable to that party.” (CACI No. 204; see also BAJI 2.03; see Cedars-Sinai Med. Ctr. v. Superior Court (1998) 18 Cal.4th 1, 11-12.)

“[A] party moving for discovery sanctions based on the spoliation of evidence must make an initial prima facie showing that the responding party in fact had destroyed evidence that had a substantial probability of damaging the moving party’s ability to establish an essential element of his claim or defense.” (Williams, supra, 167 Cal.App.4th at p. 1227.) Once the moving party meets that burden, the burden shifts to the responding party to prove the moving party did not suffer prejudice from the loss of the evidence. (Id. at pp. 1226-27.) Discovery sanctions “should be appropriate to the dereliction, and should not exceed that which is required to protect the interests of the party entitled to but denied discovery.” (Deyo v. Kilbourne (1978) 84 Cal.App.3d 771, 793.)

VGA does not make an initial prima facie showing that Plaintiff destroyed or failed to preserve the Vehicle. First, there is no evidence Plaintiff destroyed the Vehicle. Instead, Plaintiff returned the vehicle when the leased expired. VGA claims it had no way of knowing that the vehicle had been returned. However, VGA was well aware the lease was for 48 months – hence an expiration date of 3/20/23. VGA makes much of Plaintiff’s conduct prior to and after returning the Vehicle. Properly so. Specifically, VGA details Plaintiff’s efforts to resist production of the Vehicle for inspection, her “intentional” return of the Vehicle towards the end of the lease term, and Plaintiff’s counsel notifying VGA for the first time that Plaintiff no longer possessed the Vehicle only after VGA filed a motion to compel production of the Vehicle for inspection.

However, VGA ignores several countervailing facts. Chief among those are: (1) VGA served only one Notice of Vehicle Inspection—on October 25, 2021—prior to Plaintiff returning the Vehicle on February 18, 2023; (2) after Plaintiff served an objection to the Notice on January 21, 2022, VGA did not take any action to inspect the Vehicle until September 28, 2023, which is when VGA served the Amended Notice of Vehicle Inspection; and (3) VGA knew through discovery that Plaintiff leased the Vehicle on March 19, 2019 for a lease term of 48 months (Kumar Decl., Ex. B). On this last point, VGA contends Plaintiff returned the Vehicle earlier than was required under the lease agreement. But this is a distinction of little moment given that VGA knew or should have known the maturity date was approaching. VGA also had access to the Vehicle while it was on the lot in Antelope Valley.[1]

True, the Vehicle is the key evidence in this case. But it is unclear what evidence has been “spoiled”?[2] And the Vehicle was in Volkswagen’s possession for five months before it was sold. True, Plaintiff should have made the vehicle available and similarly should have notified counsel of the return of the vehicle. However, terminating sanctions is a drastic remedy. A terminating sanction is a “drastic measure which should be employed with caution.”¿ (Deyo, 84 Cal.App.3d at p. 793.)¿ Awarding VGA terminating sanctions for spoliation of evidence is not an appropriate remedy where there is no evidence of destruction – perhaps delay, but not destruction. Moreover, VGA delayed in bringing the motion until eight months after the end of the lease term. VGA does not demonstrate having taken any action to inspect the Vehicle between January 21, 2022 (when Plaintiff objected to the Notice of Vehicle Inspection) and February 18, 2023 (when Plaintiff returned the Vehicle). VGA does not show the court should arrive at a different outcome.

Alternatively, VGA requests imposition of issue or evidence sanctions, or a sanction pursuant to Evidence Code section 413 permitting the trier of fact to infer that an inspection of the Vehicle would have elicited evidence supporting VGA’s case.

When a party engages in misuse of the discovery process, “[t]he court may impose an issue sanction ordering that designated facts shall be taken as established in the action in accordance with the claim of the party adversely affected by the misuse of the discovery process. The court may also impose an issue sanction by an order prohibiting any party engaging in the misuse of the discovery process from supporting or opposing designated claims or defenses. . . . The court may impose an evidence sanction by an order prohibiting any party engaging in the misuse of the discovery process from introducing designated matters in evidence.” (Code Civ. Proc., §§ 2023.030, subds. (b), (c).) Evidence or issue sanctions may be imposed only after parties violated discovery orders, except in sufficiently egregious exceptional circumstances when the offending party engages in a pattern of willful discovery abuse. (New Albertsons, Inc. v. Superior Court (2008) 168 Cal.App.4th 1403, 1426.) The imposition of specific sanctions typically depends on the severity of the party’s transgression. “The trial court cannot impose sanctions for misuse of the discovery process as a punishment.” (Doppes v. Bentley Motors, Inc. (2009) 174 Cal.App.4th 967, 992.) Rather, any given sanction must be “tailor[ed] to the harm caused by the withheld discovery.” (Do It Urself Moving & Storage, Inc. v. Brown, Leifer, Slatkin & Berns (1992) 7 Cal.App.4th 27, 36, superseded by statute on other grounds.) This is because “the purpose of discovery sanctions is not to provide a weapon for punishment, forfeiture and the avoidance of a trial on the merits, but to prevent abuse of the discovery process and correct the problem presented.” (Parker v. Wolters Kluwer U.S., Inc. (2007) 149 Cal.App.4th 285, 301.)

Here, any issue or evidentiary sanction may be considered at the time of trial. Plaintiff was entitled to return the Vehicle at the end of the lease. VGA should have pressed the issue of inspection before the end of the lease. Plaintiff should have made the Vehicle available for inspection before surrender. The court will have to balance the equities at the time of trial when evaluating Defendant’s motions in limine.

The motion for terminating sanctions is DENIED. The alternative motion for issue or evidence sanctions, or inferences pursuant Evidence Code section 413, is DENIED. Because the court is reserving ruling on Defendant’s potential motions in limine, the court will hear from the parties regarding sanctions.

[1] Plaintiff cites Martinez v. Kia Motors America, Inc. (2011) 193 Cal.App.4th 187 for the proposition she was not required to retain the Vehicle throughout the pendency of the litigation to obtain replacement or restitution pursuant to the Song-Beverly Act. Maybe so, but Martinez does not address the argument advanced by Defendant. Martinez brought a Song-Beverly action against Kia. During the pendency of the litigation, Martinez’s vehicle was repossessed for failure to make payments on the vehicle. Kia filed, and the trial court granted, a summary judgment motion based on Martinez’s lack of possession of the vehicle. The Court of Appeal reversed, stating, “To require the consumer to maintain the nonconforming vehicle throughout the litigation is simply not part of the statute.” (Martinez, at p. 195.) Here, VGA does not argue Plaintiff could not return her vehicle when the lease expired, but rather that (1) Plaintiff refused to comply with the inspection demands and (2) surrendered the vehicle without notifying Defendant, frustrating, if not eliminating, Defendant’s ability to inspect the vehicle. The issue is one of frustration and evidence, not of standing to seek relief under the Act. On the other hand, Plaintiff had every right and indeed an obligation to return her vehicle at the end of the lease. The volume on the Defendant’s complaint that they did not know the car was being surrendered comes in a bit too loud because Defendant was well aware of the lease term. Moreover, Plaintiff’s conduct made clear she would not willingly produce the Vehicle for inspection yet VGA did not move to compel production until well after the lease term had ended. Plaintiff may have engaged in discovery abuse by not making the vehicle available, but VGA delayed significantly in pursuing its remedy. VGA does not make an initial prima facie showing to shift the burden to Plaintiff.

[2] It is unclear if either party can locate the Vehicle or if located whether either party may be able to establish the condition of the Vehicle at the relevant time. Plaintiff points out that the Vehicle was returned to Antelope Valley Volkswagen and then sold 5 months later. Having been sold, the Vehicle’s evidentiary value may be severely compromised.