Judge Michael E. Whitaker, Case Number: 22SMCV01439, Date: 2023-08-10 Tentative Ruling

Judge: Michael E. Whitaker, Case: 22SMCV01439, Date: 2023-08-10 Tentative Ruling

Plaintiffs Ana Wilkinson-Flores (“Flores”) and Michael Wilkinson-Koelzer (“Koelzer”) (collectively, “Plaintiffs”) sued Defendant Subaru of America, Inc. (“Subaru” or “Defendant”) bringing three causes of action (1) violation of the Song-Beverly Act; (2) violation of the Magnuson-Moss Act; and (3) Breach of Express Warranty.

Defendant moves for summary adjudication, challenging Plaintiff’s claims for breach of the express and implied warranty under the Song-Beverly Act and breach of the implied warranty under the Magnuson-Moss Warranty Act.

Plaintiffs oppose the motion and Defendant replies to the opposition. With respect to the material facts attendant to the issues subject to the motion, the Court does not find that there is material dispute -- the facts are largely uncontested.

“[T]he party moving for summary judgment bears the burden of persuasion that there is no triable issue of material fact and that he is entitled to judgment as a matter of law[.] There is a triable issue of material fact if, and only if, the evidence would allow a reasonable trier of fact to find the underlying fact in favor of the party opposing the motion in accordance with the applicable standard of proof.” (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850.) “[T]he party moving for summary judgment bears an initial burden of production to make a prima facie showing of the nonexistence of any triable issue of material fact; if he carries his burden of production, he causes a shift, and the opposing party is then subjected to a burden of production of his own to make a prima facie showing of the existence of a triable issue of material fact.” (Ibid.; Smith v. Wells Fargo Bank, N.A. (2005) 135 Cal.App.4th 1463, 1474 [summary judgment standards held by Aguilar apply to summary adjudication motions].) Further, in line with Aguilar v. Atlantic Richfield Co., “[o]n a motion for summary adjudication, the trial court has no discretion to exercise. If a triable issue of material fact exists as to the challenged causes of action, the motion must be denied. If there is no triable issue of fact, the motion must be granted.” (Fisherman's Wharf Bay Cruise Corp. v. Superior Court (2003) 114 Cal.App.4th 309, 320.)

A motion for summary judgment or summary adjudication may be supported by matters of which judicial notice may be taken. (Code Civ. Proc., § 437c, subd. (b)(1).)

Plaintiffs request the Court take Judicial Notice of portions of the legislative history regarding an amendment to the Song-Beverly Act. Specifically, Plaintiffs attach to their request for judicial notice:

(1) Senate Rules Committee Office of Senate Floor Analyses Report on Senate Bill No. 234 (2007-2008 Reg. Sess.) as amended June 5, 2007;

(2) Assembly Committee on Veterans Affairs, June 26, 2007 Hearing on Consumer warranties: Members of the Armed Forces, Senate Bill No. 234 (2007-2008 Reg. Sess.);

(3) Assembly Committee on Business and Professions, June 12, 2007 Hearing on Consumer warranties: Members of the Armed Forces, Senate Bill No. 234 (2007-2008 Reg. Sess.);

(4) Senate Rules Committee Office of the Senate Floor Analyses Report on Senate Bill No. 234 (2007-2008 Reg. Sess.) as amended April 10, 2007; and

(5) Senate Judiciary Committee March 27, 2007 Hearing on Motor Vehicle Consumer Warranties: Members of the Armed Forces, Senate Bill 234 (2007-2008 Reg. Sess.).

The Court grants Plaintiffs’ unopposed request. Legislative history materials are properly the subject of judicial notice, and courts have recognized that Senate Rules Committee analyses and Senate Judiciary Committee Reports in particular are properly the subject of judicial notice. (Kaufman & Broad Communities, Inc. v. Performance Plastering, Inc. (2005) 133 Cal.App.4th 26, 31, 35, 39.)

The Court notes that in their Separate Statement of Disputed and Undisputed Material Facts, Plaintiffs purport to object to various pieces of evidence on the ground of relevance. California Rules of Court, rule 3.1354(b) requires “[a]ll written objections to evidence must be served and filed separately from the other papers in support of or in opposition to the motion.” “Each written objection must be numbered consecutively and must: (1) Identify the name of the document in which the specific material objected to is located; (2) State the exhibit, title, page, and line number of the material objected to; (3) Quote or set forth the objectionable statement or material; and (4) State the grounds for each objection to that statement or material.” Because Plaintiffs’ evidentiary objections do not satisfy these procedural requirements, the Court declines to rule on the objections.

Defendant argues: (1) Plaintiffs’ cause of action for breach of express warranty under the Song-Beverly Consumer Warranty Act is without merit; (2) Plaintiffs’ cause of action for breach of the implied warranty of merchantability under the Song-Beverly Consumer Warranty Act is without merit; and (3) Plaintiffs’ cause of action for breach of the implied warranty of merchantability under the Magnuson-Moss Warranty Act is without merit. The Court discusses each in turn.

Defendant contends that Plaintiffs’ cause of action for breach of express warranty under the Song-Beverly Consumer Warranty Act is without merit because Plaintiffs purchased a used vehicle with some balance remaining on the new vehicle limited warranty. As such, per Defendant, Plaintiffs’ vehicle does not constitute a “new motor vehicle” as that term is defined under the Song-Beverly Act.

“The [Song-Beverly] Act regulates warranty terms, imposes service and repair obligations on manufacturers, distributors, and retailers who make express warranties, requires disclosure of specified information in express warranties, and broadens a buyer’s remedies to include costs, attorney’s fees, and civil penalties.” (Krieger v. Nick Alexander Imports, Inc. (1991) 234 Cal.App.3d 205, 213.)

The Song-Beverly Act defines “buyer” as “any individual who buys consumer goods from a person engaged in the business of manufacturing, distributing, or selling consumer goods at retail.” (Civ. Code, § 1791, subd. (b).) The Act defines “manufacturer” as “any individual, partnership, corporation, association, or other legal relationship that manufactures, assembles, or produces consumer goods.” (Civ. Code, § 1791, subd. (j).) In relevant portion, the Song-Beverly Act defines “consumer goods” as those goods “used or bought for use primarily for personal, family, or household purposes.” (Civ. Code, § 1791, subd. (a).)

“In the event of a breach of an express warranty, the Song–Beverly Act requires a manufacturer to repair, replace, or reimburse the buyer for the nonconforming goods.”

(Park City Services, Inc. v. Ford Motor Co., Inc. (2006) 144 Cal.App.4th 295, 302 (citing Civ. Code, § 1793.2).) The legislature amended the Song-Beverly Act in 1982 to clarify its application to motor vehicles, adding a definition for “new motor vehicle.” (Id. at p. 304.) In 1984, it was amended again to apply to car leases as well as sales. (Ibid.)

In 1987, the Legislature clarified the scope and expressly included within the definition of “New motor vehicle” a “dealer-owned vehicle and a ‘demonstrator’ or other motor vehicle sold with a manufacturer's new car warranty[.]” (Legislative Counsel’s Digest, Assembly Bill 2057, 1987-88, 1987 California Legislative Service 1280.) The 1987 amendment defines a demonstrator as “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.” (Ibid.)

In 1995, the case of Jensen v. BMW of North America, Inc. was decided. In that case, the plaintiff who had leased a low-mileage used vehicle (leased a 1988 vehicle in 1989) sued the manufacturer under Song-Beverly and Magnuson-Moss. The dealer’s sales representative mistakenly represented to the plaintiff that the car had been used as a demonstrator for the dealership and gave the plaintiff a 36,000-mile warranty on top of the 7,565 miles the car already had on it. (Jensen v. BMW of North America, Inc. (1995) 35 Cal.App.4th 112, 119 (hereafter Jensen).) Unbeknownst to both the plaintiff and the sales representative, the dealer had actually obtained the car at an auction, having previously been leased by a consumer in New Jersey. (Id. at p. 120.)

The dealer tried to use the fact that the car had not actually been a demonstrator to its advantage, and argued the language “or other motor vehicle sold with a manufacturer’s new car warranty” modified “demonstrator” and was not meant to apply to other used vehicles. (Jensen, supra, 35 Cal.App.4th at p. 122.) The appellate court rejected the dealer’s argument, holding that the Song-Beverly Act “includes [used] cars sold with a balance remaining on the new motor vehicle warranty.” (Id. at p. 126.)

In 2007, the legislature expanded the Song-Beverly Act to apply to the purchase of motor vehicles with a manufacturer’s express warranty from states outside of California by a member of the Armed Forces, so long as certain criteria are met. (Civ. Code, § 1795.8.) As part of the legislature’s discussion in 2007, it repeatedly acknowledged that “Existing case law holds that a used motor vehicle sold or leased with a balance of the manufacturer’s original warranty is a ‘new motor vehicle’ for purposes of California’s Lemon Law” and cited to Jensen. (See RJN Ex. 2, Senate Rules Committee Office of Senate Floor Analyses Report on Senate Bill No. 234 (2007-2008 Reg. Sess.) as amended June 5, 2007.)

In Dagher v. Ford Motor Co., the appellate court held that the purchaser of a used vehicle from a private sale was not “a retail buyer from a retail seller of a new consumer good” under the Song-Beverly Act and transfer of express warranty rights did not also transfer the seller’s right to sue the manufacturer under the Song-Beverly Act. (Dagher v. Ford Motor Co. (2015) 238 Cal.App.4th 905.) With respect to the former, the court of appeal held “The nature of the transfer is crucial. Where the seller is a retail seller engaged in the business of vehicle selling, the Act contemplates coverage. Where the sellers are private parties who are not routinely engaged in such a ‘retail’ business, the fact that a plaintiff bought a vehicle with its remaining written warranty rights is not alone dispositive under the Act.” (Id. at p. 923.) As to the latter, the appellate court analyzed the assignability of claims, as well as the statutory text, holding: “Whatever statutory rights the private party sellers of the vehicle originally had under the Act, because they purchased it from a dealer, the Act does not provide that their statutory rights, or standing to pursue those rights, were somehow transferred to Plaintiff when the vehicle was privately sold to him, even when the express warranty protections were transferred.” (Id. at p. 927.)

In Rodriguez v. FCA US, LLC, the appellate court held that a used truck with an unexpired express warranty sold by a third-party dealer was not a “new motor vehicle” subject to the refund-or-replace provision. Specifically, the court of appeal determined that the phrase “other motor vehicle sold with a manufacturer’s new car warranty” did not cover the sale of previously owned vehicles with some balance remaining on the manufacturer’s express warranty. In reaching its conclusion, the appellate court noted that Song-Beverly’s protections for used goods “are limited and bind the seller or distributor of the used product” making express warranties as to used consumer goods, not “the original manufacturer, distributor, or retail seller making express warranties with respect to such goods when new[.]” (Rodriguez v. FCA US, LLC (2022) 77 Cal.App.5th 209, 218 (citing Civ. Code, § 1795.5) (hereafter Rodriguez).)

The Rodriguez court acknowledged that the plain language of the phrase “other motor vehicle sold with a manufacturer’s new car warranty” could seemingly refer to a used car sold with a balance of the manufacturer’s new car warranty. (Rodriguez, supra, 77 Cal.App.5th at p. 220.) But the court opined that because the phrase appeared in the definition of “new” motor vehicles, and singled out dealer-owned vehicles and demonstrators, the context of the provision meant it only applies to this “specific and narrow class” of used vehicles that are “basically new vehicles.” (Ibid.) The Rodriguez court also noted that the Song-Beverly Act defines “express warranty” as any “written statement arising out of a sale to the consumer” and pointed out that in plaintiffs’ case, the warranty did not ‘arise out of the sale’ but rather ‘transferred to plaintiffs by operation of law along with title to the truck.’” (Ibid., emphasis in original.) Furthermore, the Rodriguez court noted that the Act defines “consumer” as “any person to whom the motor vehicle is transferred during the duration of an express warranty” and therefore the legislature knew how to distinguish between a sale and a consumer to whom a vehicle is transferred. (Ibid., emphasis in original.) Rodriguez also distinguished Jensen on the bases that it involved a lease by a manufacturer-affiliated dealer who issued a full new car warranty along with the lease. (Id. at pp. 223-224.) [1]

Yet this Court notes that neither Dagher nor Rodriguez mentioned in their respective analyses the legislature’s express statement that “Existing case law holds that a used motor vehicle sold or leased with a balance of the manufacturer’s original warranty is a ‘new motor vehicle’ for purposes of California’s Lemon Law” or its reference to Jensen.

Defendant relies on Rodriguez while Plaintiffs rely on Jensen. As an initial matter, “resort to legislative history is appropriate only where statutory language is ambiguous.” (Kaufman, supra, 133 Cal.App.4th at p. 29.) “In determining intent, we first look to the words of the statute, giving language its usual, ordinary meaning. If there is no ambiguity in the language, we presume the Legislature meant what it said, and the plain meaning of the statute governs.” (Ibid.) “Only when the language of a statute is susceptible to more than one reasonable construction is it appropriate to turn to extrinsic aids, including the legislative history of the measure, to ascertain its meaning.” (Id. at pp. 29-30.)

“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 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.

(Civ. Code, § 1793.22.) Also, in relevant part, the statute indicates that “‘New motor vehicle’ includes […] a dealer-owned vehicle and a ‘demonstrator’ or other motor vehicle sold with a manufacturer’s new car warranty[.]” As Rodriguez acknowledges, the phrase “other motor vehicle sold with a manufacturer’s new car warranty” appears on its face, to apply to “any car sold with a manufacturer’s warranty still in force.”

The analysis could end there. However, to the extent others have found ambiguity with the plain text of the statute, the legislative history confirms this interpretation. In enacting additional provisions of the Song-Beverly Act in 2007 that pertain to veterans, the Legislature noted “[e]xisting case law holds that a used motor vehicle sold or leased with a balance of the manufacturer’s original warranty is a ‘new motor vehicle’ for purposes of California’s Lemon Law. [Jensen v. BMW of North America, Inc. (1995) 35 Cal.App.4th 112.]” (Request for Judicial Notice, Ex. 2, p. 2.) Thus, at least as of 2007, the legislature was expressly aware of Jensen and understood Jensen to mean that Song-Beverly’s “new motor vehicle” provisions apply to used cars sold “with a balance of the manufacturer’s original warranty[.]”

Therefore, the Court denies Defendant’s Motion for Summary Adjudication on the first issue regarding Plaintiffs’ cause of action for Breach of Express Warranty/Failure to Promptly Repurchase New Motor Vehicle under Song-Beverly.

Defendant contends that to the extent Plaintiffs’ causes of action under Song-Beverly and Magnuson-Moss are premised on Breach of the Implied Warranty of Merchantability, such claims fail because Plaintiffs purchased their vehicle used from a third-party dealer, as opposed from a manufacturer, and the third-party dealer did not make any warranties in connection with the sale. The Court agrees with Defendant.

“In this case, plaintiff's implied warranty claim fails as a matter of law, because in the sale of used consumer goods, liability for breach of implied warranty lies with distributors and retailers, not the manufacturer, where there is no evidence the manufacturer played any role in the sale of the used car to plaintiff.” (Nunez v. FCA US LLC (2021) 61 Cal.App.5th 385, 398 (hereafter Nunez).)

Section 1795.5 governs the obligations of a distributor or retail seller of used consumer goods in a sale in which an express warranty is given. These obligations, with stated exceptions, are the same as that imposed on manufacturers under the Song-Beverly Act. One of the exceptions, for example, is the implied warranty for a used product is coextensive with an express warranty but lasts not less than 30 days and not more than three months after the sale of the used product. It is evident from these provisions that only distributors or sellers of used goods—not manufacturers of new goods—have implied warranty obligations in the sale of used goods. As one court has put it, the Song-Beverly Act provides similar remedies (to those available when a manufacturer sells new consumer goods) in the context of the sale of used goods, except that the manufacturer is generally off the hook.

(Nunez, supra, 61 Cal.App.5th at p. 399 [cleaned up].) Moreover, Magnuson-Moss requires the application of state law. (Orichian v. Subaru of America, Inc. (2014) 226 Cal.App.4th 1322, 1330.)

In light of Nunez, Plaintiffs tacitly concede that they cannot pursue claims for breach of implied warranties under Song-Beverly and Magnuson-Moss Acts (see Opposition, p. 2), and therefore, the Court grants Defendant’s Motion for Summary Adjudication as to the second and third issues concerning Plaintiffs’ first and second causes of action.

Defendant’s Motion for Summary Adjudication is denied as to Issue 1 (Plaintiff’s cause of action for breach of express warranty under Song-Beverly).

Defendant’s Motion for Summary Adjudication is granted as to Issues 2 and 3 (Plaintiff’s causes of action for breach of the implied warranty of merchantability under Song-Beverly and under Magnuson-Moss, respectively).

Defendant shall provide notice of the Court’s rulings and file a proof of service regarding the same.

[1] The Supreme Court has granted review of Rodriguez, but has not ordered that it be depublished. (Rodriguez v. FCA US (Cal. 2022) 295 Cal.Rptr.3d 351.)

DEPARTMENT	207
HEARING DATE	August 10, 2023
CASE NUMBER	22SMCV01439
MOTION	Motion for Summary Adjudication
MOVING PARTY	Defendant Subaru of America, Inc.
OPPOSING PARTIES	Plaintiffs Ana Wilkinson-Flores and Michael Wilkinson-Koelzer