Judge Michael P. Linfield, Case 21STCV03461 2023-02-23 Tentative Ruling

Judge: Michael P. Linfield, Case: 21STCV03461, Date: 2023-02-23 Tentative Ruling

Case Number: 21STCV03461 Hearing Date: February 23, 2023 Dept: 34

SUBJECT: Motion for Summary Judgment/Summary Adjudication

Moving Party: Defendant FCA US LLC

Resp. Party: Plaintiffs Maria Gutierrez, Jesus Gutierrez, and Jesus Gutierrez, Jr.

Defendant’s Motion for Summary Judgment is DENIED. Defendants’ Motion for Summary Adjudication is GRANTED in part. Summary adjudication is DENIED as to Plaintiffs’ sixth cause of action for violation of the Magnuson-Moss Warranty Act. Summary adjudication is GRANTED as to Plaintiffs’ prayer for punitive damages pursuant to Civil Code section 1794, subdivisions (c) or (e). Summary adjudication is GRANTED as to Plaintiffs’ general request for punitive damages.

BACKGROUND:

On January 28, 2021, Plaintiffs Maria Gutierrez, Jesus Gutierrez, and Jesus Gutierrez, Jr. filed their Complaint against Defendants FCA US, LLC, and Champion Chrysler Jeep Dodge Ram Fiat on causes of action regarding defects with Plaintiffs’ vehicle.

On March 30, 2021, Defendant FCA US LLC filed its Answer.

On March 30, 2021, Defendant Champion Dodge, LLC (erroneously sued as Champion Chrysler Jeep Dodge Ram Fiat) filed its Answer.

On February 9, 2022, by request of Plaintiffs, the Clerk’s Office dismissed without prejudice the first, second, third, fourth, and fifth causes of action in the Complaint.

On November 9, 2022, Defendant FCA US LLC (“Defendant”) filed its Motion for Summary Judgment/Summary Adjudication. Defendant concurrently filed: (1) Memorandum of Points and Authorities; (2) Appendix of Documentary Evidence; (3) Declaration of Katherine P. Vilchez; (4) Proposed Order; (5) Separate Statement; and (6) Request for Judicial Notice.

On January 25, 2023, Plaintiffs filed their Opposition. Plaintiffs concurrently filed: (1) Declaration of Maria Gutierrez, Jesus Gutierrez, and Jesus Gutierrez, Jr.; (2) Evidentiary Objections to the Declaration of Katherine P. Vilchez; (3) Statement of Genuine Disputes; and (4) Request for Judicial Notice.

On February 9, 2023, Defendant filed its Reply. Defendant concurrently filed: (1) Request for Judicial Notice; (2) Response to Plaintiffs’ Statement of Genuine Disputes; (3) Appendix of Documentary Evidence; (4) Objections to Plaintiffs’ Request for Judicial Notice; and (5) Evidentiary Objections to Plaintiffs’ Declaration. The Court notes that these documents were filed late. The Court will consider these late filings.

ANALYSIS:

I. Evidentiary Objections

A. Plaintiffs’ Evidentiary Objections

Plaintiffs filed an Evidentiary Objection to the Declaration of Katherine P. Vilchez. The Court overrules the evidentiary objection.

B. Defendant’s Evidentiary Objections

Defendant filed Evidentiary Objections to the Declaration of Maria Gutierrez, Jesus Gutierrez, and Jesus Gutierrez, Jr. The Court overrules all 17 evidentiary objections.

In addition, Defendant filed Evidentiary Objections to Plaintiffs’ Request for Judicial Notice. However, as discussed below, the Court is already denying the Request on their merits. The Court overrules as moot the Evidentiary Objections to Plaintiffs’ Request for Judicial Notice.

II. Requests for Judicial Notice

A. Defendant’s Request for Judicial Notice

Defendant requests that the Court take judicial notice of Defendant’s Form LLC-12, which was filed on June 18, 2021 with the Secretary of State of the State of California.

Judicial notice is GRANTED as to this item.

Defendant also requests that the Court take judicial notice of court opinions in:

(1) Bei v. Hyundai Motor America, Yolo Superior Court, Case No. CV-2015-1427;

(2) Escalona v. FCA US LLC, Los Angeles Superior Court, Case No. 20STCV15830; and

(3) Wilbert Roberts v. FCA US LLC, Los Angeles Superior Court, Case No. 21STCV19673.

Judicial notice is denied as irrelevant as to all 3 requests. “Although a court may judicially notice a variety of matters (Evid. Code, §¿450 et seq.), only relevant material may be noticed.” (Am. Cemwood Corp. v. Am. Home Assurance Co. (2001) 87 Cal.App.4th 431, 441, fn. 7.) “A written trial court ruling in another case has no precedential value.” (Budrow v. Dave & Buster’s of California (2009) 171 Cal.App.4th 875, 885; Bolanos v. Superior Court (2008) 169 Cal.App.4th 744, 761; In re Molz (2005) 127 Cal.App.4th 836, 845; Santa Ana Medical Hospital Center v. Belshé (1997) 56 Cal.App.4th 819, 831.)

B. Plaintiffs’ Request for Judicial Notice

Plaintiffs request that the Court take judicial notice of the following items:

(1) January 13, 2017 order on the Motion for Summary Judgment/Summary Adjudication in Townsend v. Ford Motor Company; and

(2) Legislative history for the 2007 addition of section 1795.8 of the California Civil Code.

Judicial notice is denied as irrelevant as to both of these items. “Although a court may judicially notice a variety of matters (Evid. Code, §¿450 et seq.), only relevant material may be noticed” (Am. Cemwood Corp. v. Am. Home Assurance Co. (2001) 87 Cal.App.4th 431, 441, fn. 7.) “A written trial court ruling in another case has no precedential value.” (Budrow v. Dave & Buster’s of California (2009) 171 Cal.App.4th 875, 885; Bolanos v. Superior Court (2008) 169 Cal.App.4th 744, 761; In re Molz (2005) 127 Cal.App.4th 836, 845; Santa Ana Medical Hospital Center v. Belshé (1997) 56 Cal.App.4th 819, 831.) Further, the Legislative history for 2007 is not relevant to the Court’s analysis.

III. Legal Standard

“[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. Atl. 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.” (Id.; 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].)

“On 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. Super. Ct. (2003) 114 Cal.App.4th 309, 320.)

“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. Dep’t of Transp. (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”].)

IV. Discussion

A. The Parties’ Arguments

Defendant moves for summary judgment, or, alternatively, summary adjudication as to the following:

(1) Summary adjudication of Plaintiffs’ sixth cause of action for violation of the Magnuson-Moss Warranty Act; and

(2) Summary adjudication of Plaintiffs’ prayer for punitive damages.

(Motion, p. 1:6–12.)

Defendant argues: (1) that the sixth cause of action fails under both the Song-Beverly Consumer Warranty Act and the California Commercial Code because the vehicle was not purchased (or taken possession of) in California; (2) that the sixth cause of action fails because the Subject Vehicle was purchased used and Plaintiffs have no valid implied warranty claims; and (3) that the prayer for punitive damages fails because it is not supported by a viable cause of action. (Memorandum of Points and Authorities, pp. 5:14–15, 6:8–9, 7:11–12, 8:4–5, 10:20, 11:25.)

Plaintiffs oppose the Motion, arguing: (1) that Defendant did not sign the purchase agreement and therefore cannot invoke the agreement’s choice-of-law clause; (2) that California remedies apply through the Magnuson-Moss Warranty Act by default; (3) that the Magnuson-Moss Warranty Act provides for its own rights and remedies; (4) that Plaintiffs can pursue Song-Beverly Consumer Warranty Act remedies through the Magnuson-Moss Warranty Act, even in the absence of a Song-Beverly Consumer Warranty Act claim; (5) that there exists a triable issue of fact regarding the state in which title passed; (6) that, for a variety of reasons, the Court should follow the Jensen line of cases and not the Rodriguez line of cases; and (7) that punitive damages are recoverable pursuant to the Song-Beverly Consumer Warranty Act. (Opposition, pp. 2:3–4, 2:23–25, 4:5–6, 7:3, 7:23–24, 8:27, 20:9.)

Defendant reiterates its arguments in its Reply.

B. The Sixth Cause of Action

1. Whether there is a Federal Cause of Action under the Magnuson-Moss Warranty Act

a. Legal Standard

“Subject to subsections (a)(3) and (e), a consumer who is damaged by the failure of a supplier, warrantor, or service contractor to comply with any obligation under this title [15 USCS §§ 2301 et seq.], or under a written warranty, implied warranty, or service contract, may bring suit for damages and other legal and equitable relief—

(A) “in any court of competent jurisdiction in any State or the District of Columbia; or

(B) “in an appropriate district court of the United States, subject to paragraph (3) of this subsection.”

(15 U.S.C. § 2310, subd. (d)(1)(A)–(B).)

b. Discussion

There is no dispute that the Subject Vehicle was purchased through a third party (Carvana) from that third party’s dealership in Georgia. (Memorandum of Points and Authorities, p. 1:1–3; Appendix of Documents, Ex. C, GUT 00001, GUT 00009; Appendix of Documents, Ex. D, p. 29:17–21; Statement of Genuine Disputes (which only disputes that Georgia remedies apply, rather than disputing the car was purchased from a dealership in Georgia).)

Further, given that the Court has taken judicial notice of Defendant’s filing with the California Secretary of State, there is no dispute that Defendant is organized in Delaware (and not in California).

Finally, neither Party has represented to the Court that there is a relevant, actionable Georgia law that implicates express or implicit warranty protections regarding the Subject Vehicle. Therefore, there is no dispute before the Court regarding any Georgia laws.

The Song-Beverly Consumer Warranty Act is not actionable here because the Subject Vehicle was not purchased in California. (Cummins, Inc. v. Super. Ct. (2005) 36 Cal.4th 478, 483, 493 (“We conclude that the [Song-Beverly Consumer Warranty Act] does not apply unless the vehicle was purchased in California.”)

The California Commercial Code is also not actionable here because the transaction (i.e., the purchase of the vehicle) neither bears a reasonable relation to this state nor falls under one of the statutorily-listed categories for jurisdiction. (Com. Code, § 1301, subds. (b) (“In the absence of an agreement effective under subdivision (a), and except as provided in subdivision (c), this code applies to transactions bearing an appropriate relation to this state.”) and (c) (listing sections of the Commercial Code that deal, respectively, with the rights of unsecured creditors, bank deposits and collections, letters of credit, bulk sales, investment securities, perfection and priority of secured transactions, leases of personal property, and transfer of funds).)

Lastly, none of the Parties have made the Court aware of any Georgia laws that are actionable here.

Without any state-based causes of action to rely on, the sole issue at hand is whether Plaintiffs can plead an actionable claim under the Magnuson-Moss Warranty Act without any actionable, state-based cause of action.

There appears to be a conflict between the Courts of Appeal on this point.

In one case, a Court of Appeal held that “the trial court correctly concluded that failure to state a warranty claim under state law necessarily constituted a failure to state a claim under Magnuson-Moss” and affirmed the trial court’s judgment of dismissal by sustaining the car manufacturer’s demurrer without leave to amend the complaint. (Daugherty v. Am. Honda Motor Co. (2006) 144 Cal.App.4th 824, 827, 832–33.)

However, another case held that the trial court acted in error when it concluded that California law supplanted the Magnuson-Moss Warranty Act, noting that “Magnuson-Moss supplements California law of warranty and establishes a cause of action under the federal act for breach of written warranty.” (Orichian v. BMW of N. Am. (2014) 226 Cal.App.4th 1322, 1332.)

The text of the federal statute appears to create a separate federal cause of action, and the reasoning of Orichian indicates that it is possible to have a separate, supplemental cause of action under federal law for breach of written warranty. (Orichian, supra, at 1332.) This Court believes that it would be both illogical and contrary to the statutory text to conclude that the Magnuson-Moss Warranty Act does not create a separate federal cause of action. If that were so, then the Magnuson-Moss act would be superfluous; it would only be applicable when it is not needed, that is, when there is already a state cause of action that could be invoked.

The Court believes that the more recent case of Orichian is better-reasoned that Daugherty. (See Auto Equity Sales, Inc. v. Super. Ct. (1962) 57 Cal.2d 450, 456.) The Court finds that a separate federal cause of action exists under the Magnuson-Moss Warranty Act for Plaintiffs’ claim. Thus, as there are no valid state-based claims and the only cause of action is a federal claim, arguments about choice of law are irrelevant.

2. Does the Magnuson-Moss Warranty Act Applies to Used Cars?

a. Legal Standard

The Parties disagree about whether the Magnuson-Moss Warranty Act applies to used cars.

Plaintiffs argue that it does, citing Jensen v. BMW of North America, Inc. (1995) 35 Cal.App.4th 112, 123 (“We conclude the words of section 1793.22 are reasonably free from ambiguity and cars sold with a balance remaining on the manufacturer's new motor vehicle warranty are included within its definition of ‘new motor vehicle.’”).

Defendant argues that it does not, citing Rodriguez v. FCA US, LLC (2022) 77 Cal.App.5th 209, 225 (“[W]e conclude the phrase ‘other motor vehicles sold with a manufacturer's new car warranty’ refers to cars sold with a full warranty, not to previously sold cars accompanied by some balance of the original warranty.”). Other cases cited include Dagher v. Ford Motor Co. (2015) 238 Cal.App.4th 905, Kiluk v. Mercedes-Benz USA, LLC (2019) 43 Cal.App.5th 334, and Nunez v. FCA US LLC (2021) 61 Cal.App.5th 385.

The Parties both note that Rodriguez has been certified for review by the Supreme Court of California, which ordered that, pending review, Rodriguez “may be cited, not only for its persuasive value, but also for the limited purpose of establishing the existence of a conflict in authority that would in turn allow trial courts to exercise discretion under Auto Equity Sales, Inc. v. Superior Court (1962) 57 Cal.2d 450, 456, to choose between sides of any such conflict.” (Rodriguez v. FCA US, LLC (2022) Cal. LEXIS 3829.)

b. Discussion

As discussed above, the sole cause of action left is a separate federal claim under the Magnuson-Moss Warranty Act. Both Jensen and Rodriguez analyze claims under the Song-Beverly Consumer Warranty Act; neither analyze claims under the Magnuson-Moss Warranty Act.

The text of the Magnuson-Moss Warranty Act states that “a consumer who is damaged by the failure of a supplier, warrantor, or service contractor to comply with any obligation under this title, or under a written warranty, implied warranty, or service contract, may bring suit for damages and other legal and equitable relief”. (15 U.S.C. § 2310, subd. (d)(1).)

Neither this section of the statute, nor any other section under the Magnuson-Moss Warranty Act, 15 U.S.C. § 2301, et seq., makes any distinction between new goods and used goods.

The Court finds that there is no distinction under the Magnuson-Moss Warranty Act between warranty coverage for new cars and used cars.

The Court DENIES summary adjudication as to the sixth cause of action.

C. Punitive Damages

Defendant moves for summary adjudication of Plaintiffs’ prayer for punitive damages on the grounds that the punitive damages claim is not supported by a viable cause of action. (Memorandum of Points and Authorities, p. 11:25.)

Plaintiffs disagree, arguing: (1) that the Magnuson-Moss Warranty Act provides for its own rights and remedies; and (2) that Plaintiffs can pursue Song-Beverly Consumer Warranty Act remedies through the Magnuson-Moss Warranty Act, even in the absence of any claims based in the Song-Beverly Consumer Warranty Act. (Opposition, pp. 4:5–6, 7:3.)

The Magnuson-Moss Warranty Act does not include any mention of punitive damages, much less provides them as a remedy. This is notable because the Magnuson-Moss Warranty Act does contain multiple remedies for the cause of action, such as informal consumer dispute procedures and class action suits. (15 U.S.C. § 2310, subds. (a), (e).) At least some persuasive federal authority holds that “punitive damages are not recoverable under the [Magnuson-Moss Warranty] Act.” (Kelly v. Fleetwood Enters. (9^th Cir., 2004) 377 F.3d 1034, 1039.)

Plaintiffs cite other federal authority for the proposition that an analysis of the Magnuson-Moss Warranty Act is different for remedies than it is for jurisdictional scope. (See Brilliant v. Tiffin Motor Homes, Inc. (2010) 2010 U.S. Dist. LEXIS 67408 (“Federal courts throughout the country, including the Ninth Circuit, have recognized that Magnuson-Moss itself provides consumers with a substantive right of action for breach of express warranty, while looking to state law to determine the remedies available.”); see also Richan v. Fleetwood Motor Homes (2010) 2010 WL 11507998 (“Magnuson-Moss, a statute creating a substantive right for a breach of limited warranty that is national scope and application, is not hindered by the jurisdictional limitations of state laws such as the Song-Beverly Act when courts are merely using such laws to determine the types of remedies available for a breach of a right created by Magnuson-Moss.”)

The Court’s own research indicates that earlier Circuit Courts of Appeal agree with Plaintiffs’ proposition. The earliest of these cases provides the clearest explanation for its reasoning in reaching this outcome:

“The Magnuson-Moss Warranty Act is virtually silent as to the amount and type of damages which may be awarded for breach of an express limited warranty. However, the statute provides that nothing in the Act ‘shall invalidate or restrict any right or remedy of any consumer under State law . . . .’ 15 U.S.C. § 2311(b)(1). Furthermore, the legislative history clearly implies that a resort to state law is proper in determining the applicable measure of damages under the Act.” Mackenzie v. Chrysler Corp. (5th Cir., 1979) 607 F.2d 1162, 1166. See also, Boyd v. Homes of Legend, Inc. (11^th Cir., 1999) 188 F.3d 1294, 1298–99; Saval v. BL, Ltd. (4^th Cir., 1983) 710 F.2d 1027, 1033.)

But not all of the persuasive authority concurs with this reasoning. The Ninth Circuit noted that “[s]tate law generally guides courts in determining whether punitive damages are available as a remedy for breach of warranty under the [Magnuson-Moss Warranty] Act” and declined to reverse the trial court’s dismissal of the case for failing to meet the amount in controversy requirement where the relevant Oregon state law would not sustain a punitive award for breach of warranty. (Kelly, supra, at 1039.) The panel then wrote:

“To hold otherwise would require us to read into the Act a punitive purpose at odds with Congress’s intent ‘to encourage warrantors to establish procedures whereby consumer disputes are fairly and expeditiously settled through informal dispute settlement mechanisms.’ The Act ‘is remedial in nature and is designed to facilitate relief which would otherwise not be available as a practical matter for individual consumers.’ . . . Because our role is to adjudicate, not legislate, we decline [the plaintiffs’] invitation to write a punitive damages provision into the Magnuson-Moss Warranty Act.”

(Id. at 1039–40, citing 15 U.S.C. § 2310, subd. (a)(1), Boelans v. Redman Homes, Inc. (1984) 748 F.2d 1058, 1067, and H.R. Rep. No. 1107, 93d Cong. (1974).)

The Court has no on-point controlling authority. Instead, there is conflicting persuasive authority. The Court therefore considers the text of the statute. The relevant section states: “Nothing in this title [15 U.S.C. §§ 2301 et seq.] shall invalidate or restrict any right or remedy of any consumer under State law or any other Federal law.” (15 U.S.C. § 2311, subd. (b)(1).) While the statute does not invalidate or restrict any right or remedy under state law, it also does not compel the use of such rights or remedies, much less allow their use when such laws would otherwise be limited in their jurisdictional scopes.

Here, there is no applicable remedy through either a Song-Beverly Consumer Warranty Act claim or a California Commercial Code claim because such claims are not viable here. There is no statutory support for allowing punitive damages pursuant to a claim under the Magnuson-Moss Warranty Act where there are no viable state-based claims.

Among other prayers for relief, Plaintiffs request a civil penalty (i.e., punitive damages) in the amount of two times Plaintiffs’ actual damages pursuant to Civil Code section 1794, subdivisions (c) or (e), which is a remedy based in the Song-Beverly Consumer Warranty Act. (Complaint, p. 9:20–21.) Plaintiffs also generally request punitive damages, despite not alleging fraud, malice, or oppression. (Complaint, p. 10:1.)

The Court GRANTS summary adjudication to Plaintiffs’ prayers for punitive damages pursuant to Civil Code section 1794, subdivision (c) and (e), and as to the general request for punitive damages.

V. Conclusion