Judge: Michael P. Linfield, Case: 21STCV21608, Date: 2022-12-08 Tentative Ruling
Case Number: 21STCV21608 Hearing Date: December 8, 2022 Dept: 34
SUBJECT: Motion for Prejudgment Interest
Moving Party: Plaintiff Isaac Corona-Quiles
Resp. Party: Defendant
Toyota Motor Sales, U.S.A., Inc.
Plaintiff’s Motion for Prejudgment
Interest is GRANTED. The Court awards for Plaintiff and against Defendant
prejudgment interest in the amount of $3,889.41.
BACKGROUND:
On
June 9, 2021, Plaintiff Isaac Corona-Quiles filed his Complaint against
Defendant Toyota Motor Sales, U.S.A., Inc. on causes of action involving Civil
Code sections 1790, et seq., otherwise known as the Song-Beverly Consumer
Warranty Act.
On
July 21, 2021, Defendant filed its Answer.
On
October 28, 2022, after hearing the evidence and arguments at Trial, the Jury
returned the following Special Verdicts in favor of Plaintiff: (1) as to breach
of express warranty, finding damages of $28,388 and imposing no penalties; and
(2) as to breach of implied warranty, finding entitled restitution in the
amount of $28,065. The Jury returned a mixed Special Verdict as to breach of
express warranty. The Court ordered Plaintiff to prepare Judgment.
On
November 8, 2022, Plaintiff filed his Motion for Prejudgment Interest.
Plaintiff concurrently filed: (1) Declaration of Matthew Pardo; and (2)
Proposed Order.
On
November 23, 2022, Defendant filed its Opposition, which included the Declaration
of Thomas M. Murphy.
On
December 1, 2022, Plaintiff filed its Reply. Plaintiff concurrently filed a
Declaration of Payam Shahian.
ANALYSIS:
I.
Legal
Standard
“A person who is
entitled to recover damages certain, or capable of being made certain by
calculation, and the right to recover which is vested in the person upon a
particular day, is entitled also to recover interest thereon from that day,
except when the debtor is prevented by law, or by the act of the creditor from
paying the debt. . . .” (Civ. Code, § 3287, subd. (a).)
“Every person who is entitled under
any judgment to receive damages based upon a cause of action in contract where
the claim was unliquidated, may also recover interest thereon from a date prior
to the entry of judgment as the court may, in its discretion, fix, but in no
event earlier than the date the action was filed.” (Civ. Code, § 3287, subd.
(b).)
“Unless another
statute provides a different interest rate, in a tax or fee claim against a
public entity that results in a judgment against the public entity, interest
shall accrue at a rate equal to the weekly average one year constant maturity
United States Treasury yield, but shall not exceed 7 percent per annum. . . .”
(Civ. Code, § 3287, subd. (c).)
II.
Discussion
A. The
Parties’ Arguments
Plaintiff
moves the Court to award Plaintiff prejudgment interest for its cause of action
for breach of implied warranty in the amount of $4,490.38 pursuant to Civil
Code sections 3287, subdivision (a) and 3289, subdivision (b), or in the
alternative $3,975.21 pursuant to Civil Code sections 3287, subdivision (b) and
3289, subdivision (b). (Motion, pp. 1:2–6, 1:14–21, 9:2–5.)
Defendant
opposes the Motion, arguing: (1) that Plaintiff is not entitled to prejudgment
interest under Civil Code section 3287 subdivision (a); (2) that Plaintiff has
failed to prove the amount of prejudgment interest to which he is entitled and
when his right to recover vested; (3) that Plaintiff is not entitled to
prejudgment interest under Civil Code section 3287 subdivision (b); (4) that
the interest rate for prejudgment interest is 7%, not 10%; and (5) that
prejudgment interest must only consider payments actually made by Plaintiff.
(Opposition, pp. 3:3–4, 4:8–10, 11:1–2, 11:16, 12:3–4.)
B.
The Availability of Prejudgment Interest for Implied
Warranty Claims under the Song-Beverly Consumer Warranty Act
Here,
Plaintiff explicitly moves the Court for prejudgment interest “pursuant to his
breach of implied warranty claim” – and not pursuant to the express warranty
claim. (Reply, p. 2:9–10.) “Remedies for breach of express and implied
warranties are not identical.” (Mocek v. Alfa Leisure, Inc. (2003) 114
Cal.App.4th 402, 406, emphasis omitted.)
“Any buyer of
consumer goods injured by a breach of the implied warranty of merchantability
and where applicable by a breach of the implied warranty of fitness has the
remedies provided in Chapter 6 (commencing with Section 2601) and Chapter 7
(commencing with Section 2701) of Division 2 of the Commercial Code, and, in
any action brought under such provisions, Section 1794 of this chapter shall
apply.” (Civ. Code, § 1791.1, subd. (d).)
“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
Court of Appeal has clearly held that “the Song-Beverly Consumer Warranty Act
permits recovery of prejudgment interest under Civil Code section 3287.” (Doppes
v. Bentley Motors, Inc. (2009) 174 Cal.App.4th 1004, 1006.) This is because
“it is well established that prejudgment interest may be awarded under Civil
Code section 3287 even if it is not specifically authorized by the statute
underlying the plaintiff’s claims.” (County of Solano v. Lionsgate Corp. (2005)
126 Cal.App.4th 741, 752, citations omitted.)
Thus,
a judgment for implied warranty of merchantability under the Song-Beverly
Consumer Warranty Act may permit recovery of prejudgment interest under Civil
Code section 3287.
C. Which,
if Any, Subdivision of Section 3287 Applies
1. Subdivision
(a)
As
Plaintiff is the prevailing party and judgment will be entered in his favor,
the question of recovery under Civil Code section 3287, subdivision (a) is
whether damages were certain, or capable of being made certain, and vested in
Plaintiff upon a particular day. (Civ. Code § 3287, subd. (a).)
“Damages
are deemed certain or capable of being made certain within the provisions of
subdivision (a) of section 3287 where there is essentially no dispute between
the parties concerning the basis of computation of damages if any are
recoverable but where their dispute centers on the issue of liability giving
rise to damages. Thus, the test for recovery of prejudgment interest under Civil Code section 3287, subdivision (a) is whether defendant actually knows
the amount owed or from
reasonably available information could the defendant have computed that amount.
The statute does not authorize prejudgment interest where the amount of damage,
as opposed to the determination of liability, depends upon a judicial
determination based upon conflicting evidence and it is not ascertainable from truthful
data supplied by the claimant to his debtor. Thus, where the amount of damages cannot be resolved except by verdict
or judgment, prejudgment interest is not appropriate.”
(Duale
v. Mercedes-Benz USA, LLC (2007) 148 Cal.App.4th 718, 729 [cleaned up].)
Here,
the Jury submitted a Special Verdict Form for Breach of Implied Warranty that
found the Toyota Corolla XSE was not of the same quality as those generally
accepted in the trade. (Special Verdict Form for Cause of Action 5, Item 3.)
Thus, the issue in this matter was not merely of liability but also of the
amount of damages.
Therefore,
prejudgment interest is not applicable in this matter pursuant to Civil Code
section 3287, subdivision (a).
2. Subdivision
(b)
“Every person who is entitled under
any judgment to receive damages based upon a cause of action in contract where
the claim was unliquidated, may also recover interest thereon from a date prior
to the entry of judgment as the court may, in its discretion, fix, but in no
event earlier than the date the action was filed.” (Civ. Code, § 3287, subd.
(b).)
As Plaintiff is the prevailing
party, judgment will be entered in his favor, and he had unliquidated damages
based on a contract for the car at issue in this case, the Court finds that
Civil Code section 3287, subdivision (b) applies to Plaintiff’s situation.
The Court will award prejudgment
interest in favor of Plaintiff and against Defendant. Prejudgment interest will
be calculated from the date the action was filed until the date judgment is
entered.
The remaining arguments concern what
interest applies and what amount the interest rate applies to.
D.
The Interest Rate
The question of which interest
rate to us is a straightforward one.
The issue at hand regards breach
of implied warranty of merchantability as to a contract for a car. Neither
Party has claimed that the contract sets an interest rate. (Civ. Code, § 3289,
subd. (a).)
While the interest rate in the
absence of another statute is 7% (Civil Code § 3287, subd. (c)), Civil Code
section 3289, subdivision (b) provides for an interest rate of 10% per year
after a breach of contract entered into after January 1, 1986.
The contract at hand involves a
breach of contract entered into after January 1, 1986, therefore the Court sets
the prejudgment interest rate at 10%. (Civ. Code, § 3289, subd. (b).)
E.
The Amount the Interest Rate Applies To
Defendant cites Todd Shipyards Corporation v. City of Los
Angeles (1982) 130 Cal.App.3d 222, 226 for the proposition that “Plaintiff
can only be entitled to prejudgment interest on monies which were paid.”
(Opposition, 12:5–12.)
Plaintiff cites Canesco v. Ford Motor Company, 570
F.Supp.3d 872, 896 (S.D. Cal. Nov. 4, 2021) for the proposition that Plaintiff
is entitled to prejudgment interest for “the entire purchase price of the
Subject Vehicle, and not merely the loan amounts already paid by Plaintiff.”
(Reply, pp. 9:23–28, 10:1–10.)
While opinions by the United States District Court for the
Southern District of California are only persuasive authority upon this Court,
the Court does find the reasoning in Canesco to be persuasive. The
District Court in Canesco discussed how only providing a consumer with
the payments already made would not return them to status quo because they
would still owe money on their loan. (Canesco, supra, at 896.)
Furthermore, the facts in Todd Shipyards Corporation, which involved
business taxes that were overpaid, make the reasoning in that case inapposite
here because those taxes were levied in full at the time they were levied. (Todd
Shipyards Corp., supra, at 226.) That is different from the
situation at hand, where only payments were due on an entire loan.
Thus, the Court will apply the prejudgment interest rate of
10% to the entirety of the loan amount and not just the interest payments made.
F.
Calculation
of the Prejudgment Interest
Plaintiff filed this action on June
9, 2021. Plaintiff proposes that the Court use November 8, 2022 (the date on
which it filed its Motion for Prejudgment Interest) as the date Judgment should
be considered entered. (Motion, fn. 6.). This consists of 506 days. The base
damages for the implied warranty of merchantability claim are $28,065.00.
$28,056.00
x 10% interest ÷ 365 days x 506 days = $3,889.41
The Court GRANTS Plaintiff’s Motion
for Prejudgment Interest. Pursuant to Civil Code sections 3287, subdivision
(b) and 3289, the Court awards for Plaintiff and against Defendant prejudgment
interest in the amount of $3,889.41.
III.
Conclusion
Plaintiff’s Motion for Prejudgment
Interest is GRANTED. The Court awards for Plaintiff and against Defendant
prejudgment interest in the amount of $3,889.41.