Judge Michael E. Whitaker, Case Number: 23SMCV01262, Date: 2024-03-05 Tentative Ruling

Judge: Michael E. Whitaker, Case: 23SMCV01262, Date: 2024-03-05 Tentative Ruling

Plaintiff Richard Azucena (“Plaintiff”) sued Defendant Subaru of America, Inc. (“Defendant”); alleging violations of the Song-Beverly Act (“Song-Beverly) in connection with Plaintiff’s purchase of a Subaru vehicle. Defendant moves for summary judgment or adjudication as to the following issues:

1. Plaintiff’s first cause of action for violation of Civil Code section 1793.2, subdivision (d) fails because Plaintiff bought a used vehicle with a balance remaining on the new vehicle limited warranty and Song-Beverly does not apply to sales of used vehicles with a balance remaining on the new vehicle limited warranty per Rodriguez v. FCA US, LLC (2022) 77 Cal.App.5th 209, 222-223 (hereafter Rodriguez).

2. Plaintiff’s second cause of action for violation of Civil Code section 1793.2, subdivision (b) fails because Plaintiff bought a used vehicle with a balance remaining on the new vehicle limited warranty and Song-Beverly does not apply to sales of used vehicles with a balance remaining on the new vehicle limited warranty per Rodriguez.

3. Plaintiff’s third cause of action for violation of Civil Code section 1793.2, subdivision (a)(3) fails because Plaintiff bought a used vehicle with a balance remaining on the new vehicle limited warranty and Song-Beverly does not apply to sale of used vehicles with a balance remaining on the new vehicle limited warranty per Rodriguez.

4. Plaintiff’s fourth cause of action for breach of the express written warranty in violation of Civil Code sections 1791.2, subdivision (a) and 1794 under Song-Beverly is without merit because Plaintiff bought a vehicle with a balance remaining on the new vehicle limited warranty and Song-Beverly does not apply to sales of used vehicles with a balance remaining on the new vehicle limited warranty per Rodriguez.

5. Plaintiff’s fifth cause of action for breach of the implied warranty of merchantability in violation of Civil Code sections 1791.1 and 1794 under Song-Beverly fails because:

a. Plaintiff bought a used vehicle with a balance remaining on the new vehicle limited warranty and Song-Beverly does not apply to sales of used vehicles with a balance remaining on the new vehicle limited warranty per Rodriguez.

b. Civil Code section 1795.5 only imposes liability for breach of the implied warranty in connection with the sale or lease of a used vehicle on a distributor who makes an express warranty in connection with the sale or lease of the used vehicle, rather than on a distributor, like Defendant, who only made express warranties with respect to the vehicle when it was new.

The Court notes that in the Opposition Separate Statement of Disputed and Undisputed Material Facts, Plaintiff purports to object to various pieces of evidence on the grounds of foundation/personal knowledge. 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 Plaintiff’s evidentiary objections do not satisfy these procedural requirements, the Court declines to rule on the objections.

“[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.)

“On a summary judgment motion, the court must therefore consider what inferences favoring the opposing party a factfinder could reasonably draw from the evidence. While viewing the evidence in this manner, the court must bear in mind that its primary function is to identify issues rather than to determine issues. Only when the inferences are indisputable may the court decide the issues as a matter of law. If the evidence is in conflict, the factual issues must be resolved by trial.” (Binder v. Aetna Life Ins. Co. (1999) 75 Cal.App.4th 832, 839 [cleaned up].) Further, “the trial court may not weigh the evidence in the manner of a factfinder to determine whose version is more likely true. Nor may the trial court grant summary judgment based on the court's evaluation of credibility.” (Id. at p. 840 [cleaned up]; see also Weiss v. People ex rel. Department of Transportation (2020) 9 Cal.5th 840, 864 [“Courts deciding motions for summary judgment or summary adjudication may not weigh the evidence but must instead view it in the light most favorable to the opposing party and draw all reasonable inferences in favor of that party”].)

A party may move for summary adjudication as to one or more causes of action, affirmative defenses, claims for damages, or issues of duty if that party contends that there is no merit to the cause of action, defense, or claim for damages, or if the party contends that there is no duty owed. (See Code Civ. Proc., § 437c, subd. (f)(1).) “A motion for summary adjudication shall be granted only if it completely disposes of a cause of action, an affirmative defense, a claim for damages, or an issue of duty.” (Ibid.) A cause of action has no merit if: (1) one or more elements of the cause of action cannot be separately established, even if that element is separately pleaded, or (2) a defendant establishes an affirmative defense to that cause of action. (See Code Civ. Proc., § 437c, subd. (n); Union Bank v. Superior Court (1995) 31 Cal.App.4th 573, 583.) Once the defendant has shown that a cause of action has no merit, the burden shifts to the plaintiff to show that a triable issue of material fact exists as to that cause of action. (See Code Civ. Proc., § 437c, subd. (o)(2); Union Bank v. Superior Court, supra, 31 Cal.App.4th at p. 583.)

Defendant primarily argues that, pursuant to Rodriguez, Song-Beverly does not apply to the sales of used vehicles with a balance remaining on the original new vehicle limited warranty. Defendant also argues that the Certified Preowned Service Agreement is a not a warranty and Plaintiff’s fifth cause of action for breach of the implied warranty of merchantability fails because Song-Beverly only imposes liability for implied warranties for the sale of used vehicles when an express warranty was made in connection with the sale of the used vehicle.

Defendant first contends that Plaintiffs’ causes of action under Song-Beverly Consumer fail because Plaintiff purchased a used vehicle with some balance remaining on the new vehicle limited warranty, which does not constitute a “new motor vehicle” as that term is defined under Song-Beverly.

“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.)

Song-Beverly 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).) Song-Beverly also 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, Song-Beverly 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 the Magnuson-Moss Act. 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 Song-Beverly “includes [used] cars sold with a balance remaining on the new motor vehicle warranty.” (Id. at p. 126.)

In 2007, the legislature expanded Song-Beverly 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 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, and do not apply to “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 basis 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 the Rodriguez analysis did not address 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 Plaintiff relies on Jensen. As an initial matter, “resort to legislative history is appropriate only where statutory language is ambiguous.” (Kaufman & Broad Communities, Inc. v. Performance Plastering, Inc. (2005) 133 Cal.App.4th 26, 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 Song-Beverly 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.]” (California Bill Analysis, S.B. 234 Sen., 3/27/2007.) 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 Judgment or Adjudication as to all causes of action on the basis that the “new motor vehicle” provisions of Song-Beverly do not apply to used vehicles with a balance remaining on the original new vehicle warranty.

Under Song-Beverly, “only distributors or sellers of used goods—not manufacturers of new goods—have implied warranty obligations in the sale of used goods.” (Nunez v. FCA US LLC (2021) 61 Cal.App.5th 385, 399 [emphasis original].) “Where the manufacturer sells directly to the public, however, it takes on the role of a retailer.” (Ibid.) When a manufacturer “partner[s] with a dealership to sell used vehicles directly to the public by offering an express warranty as part of the sales package, […] the manufacturer step[s] into the role of a retailer and [is] subject to the obligations of a retailer.” (Kiluk v. Mercedes-Benz USA, LLC (2019) 43 Cal.App.5th 334, 340.)

Plaintiff argues that Defendant did just that, by offering an express warranty on the certified pre-owned vehicle Defendant purchased.

Defendant argues that the Certified Pre-Owned Service Agreement and Registration Application, upon which Plaintiff relies is not an express warranty because the acknowledgment at the bottom states, “I understand that this Certified Pre-Owned Service Agreement is a service contract, and not an insurance policy, warranty, or guarantee[.]” (Ex. B to Boktor Decl.)

However, the top of the Agreement indicates: “Point of Sale Mileage 2203 | Subaru Limited Warranty Start Date 08/22/2020 subject to verification by Subaru of America, Inc. | Vehicle Purchase Date 08/22/2020” (Ibid.) Thus, the face of the Agreement makes clear that Subaru provided a limited warranty on the vehicle with 2,203 miles as of the August 22, 2020 purchase date. Therefore, Defendant has not met its burden of production and persuasion that it did not provide an express warranty in connection with the sale.

For the reasons stated above, the Court denies Defendant’s motion for summary judgment or adjudication in its entirety.

[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	March 5, 2024
CASE NUMBER	23SMCV01262
MOTION	Motion for Summary Judgment or Summary Adjudication
MOVING PARTY	Defendant Subaru of America, Inc.
OPPOSING PARTY	Plaintiff Richard Azucena