Judge Michael P. Linfield, Case 20STCV00294 2023-03-29 Tentative Ruling

Judge: Michael P. Linfield, Case: 20STCV00294, Date: 2023-03-29 Tentative Ruling

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Case Number: 20STCV00294 Hearing Date: March 29, 2023 Dept: 34

SUBJECT: Motion for Judgment Notwithstanding the Verdict on Plaintiff’s Cause of Action for Violation of Civil Code Section 1793.2, Subdivision (b)

Moving Party: Defendant Kia Motors America, Inc.

Resp. Party: Plaintiff Daryl White

Defendant’s Motion for Judgment Notwithstanding the Verdict is GRANTED as follows:

Plaintiff shall have 30 days from the date of the issuance of this Order in which he may consent to the reduction of damages to $10,000.00. If Plaintiff chooses to accept the reduction of damages, Plaintiff shall concurrently serve and submit to the Court a proposed amended judgment reflecting the modified judgment amount. The modified judgment amount shall include the modified amount for both damages and the civil penalty. The civil penalty amount shall remain a 1.75 multiple of the damages amount, and judgment shall remain the addition of the civil penalty amount to the damages amount. The total judgment for Plaintiff, including both damages and a civil penalty, would thus be $27,500.00.

Failure to respond shall be deemed a rejection of the reduction of damages, and a new trial limited to the issue of damages shall be granted automatically.

BACKGROUND:

On January 6, 2020, Plaintiff Daryl White filed Complaint against Defendant Kia Motors America on causes of action regarding the defects with his car. The causes of action were:

(1) Breach of express warranty in violation of the Song-Beverly Consumer Warranty Act;

(2) Breach of implied warranty in violation of the Song-Beverly Consumer Warranty Act;

(3) Violation of Civil Code section 1793.2;

(4) Fraudulent inducement by concealment; and

(5) Fraudulent inducement by intentional misrepresentation.

On October 22, 2020, Defendant Kia Motors America, Inc. (sued as Kia Motors America) filed its Answer.

On October 1, 2021, the Court granted summary adjudication in favor of Defendant as to the fourth and fifth causes of action in Plaintiff’s Complaint, as well as summary adjudication in favor of Defendant as to Plaintiff’s claim for punitive damages.

On January 3, 2023, Trial began in this case.

On January 6, 2023, after Plaintiff and Defendant rested, Plaintiff and Defendant each made a Motion for Directed Verdict, both of which were heard, argued, and denied.

On January 9, 2023, after five days of Trial, the Jury found: (1) for Defendant and against Plaintiff on the cause of action for breach of express warranty; and (2) for Plaintiff and against Defendant on the cause of action for breach of the Song-Beverly Consumer Warranty Act. Pursuant to the second finding, the Jury found damages of $42,264.34, found that damages after accounting for the value of the use of the car before it was brought in for repair was $28,376.62, and imposed a civil penalty of $49,659.09 (which was 1.75 times the value of damages less the value of the car before it was brought in for repair).

On February 8, 2023, Defendant filed its Motion for Judgment Notwithstanding the Verdict on Plaintiff’s Cause of Action for Violation of Civil Code Section 1793.2, Subdivision (b). Defendant concurrently filed its Proposed Order.

On February 17, 2023, Plaintiff filed his Opposition. Plaintiff concurrently filed: (1) Declaration of Theodore Swanson; and (2) Proof of Service.

On February 24, 2023, Defendant filed its Reply.

ANALYSIS:

I. Legal Standard

“The court, before the expiration of its power to rule on a motion for a new trial, either of its own motion, after five days’ notice, or on motion of a party against whom a verdict has been rendered, shall render judgment in favor of the aggrieved party notwithstanding the verdict whenever a motion for a directed verdict for the aggrieved party should have been granted had a previous motion been made.” (Code Civ. Proc., § 629, subd. (a).)

“The trial judge’s power to grant a judgment notwithstanding the verdict is identical to his power to grant a directed verdict. The trial judge cannot weigh the evidence, or judge the credibility of witnesses. If the evidence is conflicting or if several reasonable inferences may be drawn, the motion for judgment notwithstanding the verdict should be denied.” (Hauter v. Zogarts (1975) 14 Cal.3d 104, 110, citations omitted, scrivener’s error corrected.)

“A motion for judgment notwithstanding the verdict of a jury may properly be granted only if it appears from the evidence, viewed in the light most favorable to the party securing the verdict, that there is no substantial evidence to support the verdict. If there is any substantial evidence, or reasonable inferences to be drawn therefrom, in support of the verdict, the motion should be denied.” (Brandenburg v. Pac. Gas & Elec. Co. (1946) 28 Cal.2d 282, 284, citations omitted.)

II. Discussion

A. The Parties’ Arguments

Pursuant to Code of Civil Procedure section 629, Defendant moves the Court to: (1) vacate the Jury’s award of damages and a civil penalty against Defendant; and (2) enter judgment in favor of Defendant. (Motion, p. 13:3–6.) Defendant argues that judgment notwithstanding the verdict should be awarded to Defendant because: (1) Plaintiff was not entitled to have his vehicle repurchased for a delay in repair; (2) Plaintiff did not prove revocation of acceptance, did not ask for an instruction or verdict on revocation of acceptance, and they jury was not instructed on and did not return a verdict on revocation of acceptance; and (3) Plaintiff did not prove that the delay in repair caused $28,376.62 in damages. (Motion, pp. 6:20–21, 8:2–5, 10:9–10.)

Plaintiff opposes the Motion, arguing: (1) the evidence presented was legally sufficient to prove Plaintiff’s 30-day claim because undisputed evidence establishes that Plaintiff satisfied any timely revocation requirement and there was sufficient evidence of substantial impairment to support justifiable revocation; (2) Plaintiff requested a comprehensive 30-day theory of damages, which was denied by the Court without objection by Defendant; and (3) Plaintiff is entitled to damages under Civil Code section 1794, subdivision (b)(1). (Opposition, pp. 4:1–3, 5:23–24, 6:7–8, 6:26–27, 8:27–28.)

(Plaintiff even goes further, arguing that a mileage deduction is improper under Civil Code section 1794.1, subdivision (b)(1), and thus Plaintiff’s award should be increased by $13,887.72. [Opposition, p. 9:21–27.] It is procedurally incorrect for Plaintiff to seek this relief in Defendant’s Motion for Judgment Notwithstanding the Verdict. The Court does not consider this argument, or Defendant’s estoppel argument on this point in Defendant’s Reply.)

In its Reply, Defendant argues: (1) Plaintiff did not plead or prove a cause of action for revocation of acceptance, and the Jury’s verdict in favor of Defendant on Plaintiff’s cause of action for breach of express warranty is fatal to a cause of action for revocation; (2) Plaintiff did not request a jury instruction on revocation of acceptance; (3) Plaintiff did not prove a cause of action for revocation of acceptance; and (4) there was no evidence that Defendant willfully failed to repair Plaintiff’s vehicle within 30 days, and Plaintiff did not request a jury instruction on that subject. (Reply, pp. 2:5–8, 2:20–21, 3:7–8, 5:2–4.)

B. Damages Pursuant to the Jury’s Verdict

1. Whether the Jury Submitted a General Verdict or a Special Verdict

a. Legal Standard

“The verdict of a jury is either general or special. A general verdict is that by which they pronounce generally upon all or any of the issues, either in favor of the plaintiff or defendant; a special verdict is that by which the jury find the facts only, leaving the judgment to the Court. The special verdict must present the conclusions of fact as established by the evidence, and not the evidence to prove them; and those conclusions of fact must be so presented as that nothing shall remain to the Court but to draw from them conclusions of law.” (Code Civ. Proc., § 624.)

“Unlike a general verdict (which merely implies findings on all issues in favor of the plaintiff or defendant), a special verdict presents to the jury each ultimate fact in the case. The jury must resolve all of the ultimate facts presented to it in the special verdict, so that ‘nothing shall remain to the court but to draw from them conclusions of law.’” (Falls v. Super. Ct. (1987) 194 Cal.App.3d 851, 854–55, emphasis in original, citing Code Civ. Proc., § 624.)

“A special verdict is ‘fatally defective’ if it does not allow the jury to resolve every controverted issue.” (Saxena v. Goffney (2008) 159 Cal.App.4th 316, 325, citations omitted.)

b. Discussion

On January 9, 2023, the Jury submitted to the Court a single verdict, titled “Jury Verdict.” The Verdict stated:

We, the jurors in the above-entitled action, find as follows:

1. On Plaintiff Daryl White’s cause of action for breach of the express warranty,

__ We find for Plaintiff Daryl While [sic] and against Defendant Kia Motors;

X We find for Defendant Kia Motors and against Plaintiff Daryl White

2. On Plaintiff Daryl White’s cause of action for breach of the Song-Beverly Act,

X We find for Plaintiff Daryl While [sic] and against Defendant Kia Motors;

__ We find for Defendant Kia Motors and against Plaintiff Daryl White

If you found for Plaintiff Daryl White on either Question nos. [sic] 1 or 2 above, answer Questions Nos. 3, 4 and 5. If you found for Defendant Kia Motors on both Questions Nos. 1 and 2 above, answer no further questions. Have your Presiding Juror sign and date the form and notify the Court Attendant.

3. What are Plaintiff Daryl White’s Damages?

$42,264.34

4. Please subtract from this amount the $13,887.72 that the parties have agreed is the value of the use of the car before it was brought in for repair, and write that number below:

$28,376.62

5. What amount, if any, do you impose on Defendant Kia Motors as a civil penalty?

$49,659.09

(You may impose a civil penalty of any amount between $0.00 and 2 times the amount you found in Question No. 4 above.)”

Although it is not titled “General Verdict,” the verdict the Jury submitted is clearly a general verdict and not a special verdict. This is because the Jury generally pronounced its verdict on the issues; the Jury did not leave the judgment to the Court, and the Jury only made specific findings on the issues of damages and civil penalties, which were subsequent to the Jury’s general verdict on the causes of action. (Code Civ. Proc., § 624.) Further, the trial transcript confirms that the judge chose to use a general verdict rather than a special verdict, which is what occurred. (Motion, Ex. 8, p. 103:1–13.)

The Court finds that the Jury submitted a general verdict and not a special verdict. Thus, Defendant’s arguments and citations that involve special verdicts are not relevant to this discussion.

2. Whether the Jury’s Verdict Included Revocation of Acceptance

a. Legal Standard

“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.” (Civ. Code, § 1794, subd. (a).)

“The measure of the buyer’s damages in an action under this section shall include the rights of replacement or reimbursement as set forth in subdivision (d) of Section 1793.2, and the following:

(1) “Where the buyer has rightfully rejected or justifiably revoked acceptance of the goods or has exercised any right to cancel the sale, Sections 2711, 2712, and 2713 of the Commercial Code shall apply.

(2) “Where the buyer has accepted the goods, Sections 2714 and 2715 of the Commercial Code shall apply, and the measure of damages shall include the cost of repairs necessary to make the goods conform.”

(Civ. Code, § 1794, subd. (b)(1)–(2).)

“Where the seller fails to make delivery or repudiates or the buyer rightfully rejects or justifiably revokes acceptance then with respect to any goods involved, and with respect to the whole if the breach goes to the whole contract (Section 2612), the buyer may cancel and whether or not he has done so may in addition to recovering so much of the price as has been paid.” (Com. Code, § 2711, subd. (1).)

“Where the buyer has accepted goods and given notification (subdivision (3) of Section 2607) he or she may recover, as damages for any nonconformity of tender, the loss resulting in the ordinary course of events from the seller’s breach as determined in any manner that is reasonable.” (Com. Code, § 2711, subd. (1).)

b. Discussion

After the Court granted summary adjudication to two of Plaintiff’s causes of action, the remaining causes of action at the start of Trial were: (1) breach of express warranty pursuant to the Song-Beverly Consumer Warranty Act; (2) breach of implied warranty pursuant to the Song-Beverly Consumer Warranty Act; and (3) breach of section 1793.2 of the Song-Beverly Consumer Warranty Act.

Yet the Jury’s verdict only addressed two causes of action, not three. Furthermore, while the Jury found for Defendant on the cause of action for breach of express warranty, the Jury found for Plaintiff on the cause of action for “breach of the Song-Beverly Act.” The Jury did not explicitly state whether this is for breach of the implied warranty provision, breach of section 1793.2, both, or some other provision of the Song-Beverly Consumer Warranty Act.

However, the trial transcript clarifies this matter. On January 4, 2023, Plaintiff dismissed the second cause of action for breach of implied warranty pursuant to the Song-Beverly Consumer Warranty Act. (Motion, Ex. 4, pp. 190:20–28, 191:1–3.) Thus, the remaining causes of action by the end of Trial were: (1) breach of express warranty pursuant to the Song-Beverly Consumer Warranty Act; and (2) breach of section 1793.2 of the Song-Beverly Consumer Warranty Act. That also means the Jury’s verdict on “breach of the Song-Beverly Act” refers to a violation of section 1793.2 of the law, and not to breach of any implied warranty.

The question of which causes of action remained is important because the Parties disagree about whether the Jury’s verdict included revocation of acceptance, which is a remedy pursuant to Civil Code section 1794, subdivisions (a) and (b)(1), and Commercial Code sections 2711 through 2713.

Given these remaining causes of action, Plaintiff cannot, as a matter of law, meet the statutory language for revocation of acceptance. The case of Ramos v. Mercedes-Benz USA, LLC (2020) 55 Cal.App.5th 220 is directly on point.

In Ramos, the Court of Appeal considered a lemon law case where a plaintiff pleaded several causes of action, “including failure to promptly replace the car or make restitution, after failing to repair the car to conform to express warranties after a reasonable number of attempts (§ 1793.2, subd. (d)); failure to commence repairs within a reasonable time and failure to repair the car so it conformed to the applicable warranties within 30 days (§ 1793.2, subd. (b)); and breach of the implied warranty of merchantability (§ 1791.1.).” (Ramos, supra, at 223.) The jury in that case submitted a special verdict that, among other things, found that the vehicle did not have a defect covered by the warranty that substantially impaired the vehicle’s use, value or safety to a reasonable buyer in that plaintiff’s situation.

The Court of Appeal in Ramos explained that the revocation remedy provided for in Civil Code section 1794, subdivision (b)(1) “requires the buyer’s revocation of acceptance be justifiable, and here, the jury’s verdict foreclosed a finding that revocation of acceptance would have been justifiable.” (Id. at 227, emphasis in original.) The Court of Appeal went on to discuss how the finding of no substantial nonconformity in the car made clear: (1) that “it would not have been justifiable for plaintiff to revoke acceptance”; (2) that the plaintiff “had no ‘right to cancel the sale’”; (3) that the plaintiff “was only entitled to recover damages caused by the delay in repairing a nonconformity that did not substantially impair the car’s use, value or safety”; (4) that “such damages do not include the replacement-restitution remedy under section 1793.2(d)”; and (5) that such damages do not include “damages that are available when a buyer justifiably revokes acceptance of goods under section 1794, subdivision (b)(1).” (Id. at 227–28, emphasis in original.)

In this case, the Jury found in its general verdict that Defendant did not breach the express warranty. Moreover, the Jury did not make a finding on an implied warranty, nor could they have made such a finding — Plaintiff dismissed that cause of action on the second day of Trial, and the trial transcript shows that there was no discussion of any implied warranty during Trial.

Ramos holds that there can be no relief pursuant to Civil Code section 1794, subdivision (b)(1) where there is no substantial nonconformity in the car (i.e., no breach of warranty, whether express and/or implied) because the lack of a substantial nonconformity means there could not be a rightful rejection, justifiable revocation, or right to cancel the sale. (Ramos, supra, at 227–28.) In this situation, there can also be no relief under Civil Code section 1793.2, subdivision (d). (Id.)

To sum up, the Jury’s verdict — which did not explicitly or impliedly find that there was either breach of express warranty or breach of implied warranty — precludes recovery pursuant to: (1) Civil Code section 1793.2, subdivision (d); (2) Civil Code section 1794, subdivision (b)(1); and (3) Commercial Code sections 2711 through 2713. However, the Jury’s verdict does allow Plaintiff to recover damages caused by the delay in repairing a nonconformity that did not substantially impair the car’s use, value or safety. (See Civ. Code, §§ 1793.2, subd. (b) and 1794, subd. (a).) Moreover, damages in support of this delay are supported by substantial evidence, including the testimony that the vehicle was being repaired for 90 days in the longest period it was in Defendant’s shop. (Motion, Ex. 5, p. 108:11–23.)

The Jury found that Plaintiff suffered $42,264.34 in damages. As discussed in the immediately preceding paragraph, some amount of damages for the delay in repair was permissible. But even viewed in the light most favorable to Plaintiff, there is no substantial evidence in support of a verdict for $42,264.34 in damages, and the only reasonable inference that may be drawn is that the Jury impermissibly considered damages that it was not permitted to consider. (Brandenburg, supra, at 284; Hauter, supra, at 110.)

The Court must, and does, GRANT the Motion for Judgment Notwithstanding the Verdict.

3. The Amount of Damages

a. Legal Standard

“In any civil action where after trial by jury an order granting a new trial limited to the issue of damages would be proper, the trial court may in its discretion: . . . (2) If the ground for granting a new trial is excessive damages, issue a conditional order granting the new trial unless the party in whose favor the verdict has been rendered consents to the reduction of so much thereof as the court in its independent judgment determines from the evidence to be fair and reasonable.” (Code Civ. Proc., § 662.5, subd. (a)(1)–(2).)

“If a deadline for acceptance or rejection of the addition or reduction of damages is not set forth in the conditional order, the deadline is 30 days from the date the conditional order is served by the clerk of the court. Failure to respond to the order in accordance with this section shall be deemed a rejection of the addition or reduction of damages and a new trial limited to the issue of damages shall be granted automatically.” (Code Civ. Proc., § 662.5, subd. (b).)

“A party filing and serving an acceptance of a conditionally ordered addition or reduction of damages shall concurrently serve and submit to the court a proposed amended judgment reflecting the modified judgment amount, as well as any other uncontested judgment awards.” (Code Civ. Proc., § 662.5, subd. (c).)

b. Discussion

Here, there has already been a trial by jury, yet it appears that granting a new trial limited to the issue of damages might be proper because the Jury awarded excessive damages.

In the Court’s independent judgment, the Court determines that, based on the evidence, a fair and reasonable amount of damages in this case would be $10,000.00. This figure is roughly based on the cost of $87.00 per day for 90 days, along with other minor damages, that were discussed at Trial regarding Plaintiff’s costs while the vehicle was being repaired. (Motion, Ex. 5, p. 108:11–23.)

Plaintiff shall have 30 days from the date of the issuance of this Order in which he may consent to the reduction of damages set forth above. Failure to respond shall be deemed a rejection of the reduction of damages, and a new trial limited to the issue of damages shall be granted automatically. (Code Civ. Proc., § 662.5, subd. (b).) If Plaintiff chooses to accept the reduction of damages, Plaintiff shall concurrently serve and submit to the Court a proposed amended judgment reflecting the modified judgment amount. (Code Civ. Proc., § 662.5, subd. (c).)

C. Civil Penalty Pursuant to the Jury’s Verdict

1. Legal Standard

“If the buyer establishes that the failure to comply was willful, the judgment may include, in addition to the amounts recovered under subdivision (a), a civil penalty which shall not exceed two times the amount of actual damages. This subdivision shall not apply in any class action under Section 382 of the Code of Civil Procedure or under Section 1781, or with respect to a claim based solely on a breach of an implied warranty.” (Civ. Code, § 1794, subd. (c).)

2. Discussion

The Jury awarded a civil penalty in addition to damages for a violation of Civil Code section 1793.2. (Civ. Code, § 1794, subd. (c); see also Kirzhner v. Mercedes-Benz USA, LLC (2020) 9 Cal.5th 966, 984–85.) The Jury’s general verdict implies a finding on all issues in favor of Plaintiff regarding a civil penalty, and substantial evidence (including the fact of the 90-day delay in repair) supports the Jury’s implied finding that the failure to comply was willful. (Falls, supra, at 854–55.)

The Jury found that Plaintiff’s damages were $42,264.34, that the damages minus the value of the use of the car before it was brought in for repair was $28,376.62, and that the civil penalty should be $49,659.09. Put differently, the Jury imposed a civil penalty of 1.75 times the amount of damages.

The civil penalty of 1.75 times the damages amount is supported by substantial evidence. But because the damages award must be reduced, the civil penalty must also be reduced. Thus, the Court GRANTS the Motion for Judgment Notwithstanding the Verdict regarding the civil penalty.

The Court has determined in its independent judgment and based on the evidence that a fair and reasonable amount of damages in this case would be $10,000.00. If Plaintiff consents to the reduction of damages to the amount of $10,000.00, then the civil penalty of 1.75 times that amount is $17,500.00. In this situation, Plaintiff would be awarded a total judgment of $27,500.00. If Plaintiff does not consent to the reduction of damages to the amount of $10,000.00, then the amount of damages found at the new trial will be the basis for the civil penalty of 1.75 times that amount of damages.

III. Conclusion

Defendant’s Motion for Judgment Notwithstanding the Verdict is GRANTED as follows:

Failure to respond shall be deemed a rejection of the reduction of damages, and a new trial limited to the issue of damages shall be granted automatically.