Judge Michael P. Linfield, Case Number: 22STCV10154, Date: 2024-02-09 Tentative Ruling

Judge: Michael P. Linfield, Case: 22STCV10154, Date: 2024-02-09 Tentative Ruling

The Court often posts its tentative several days in advance of the hearing. Please re-check the tentative rulings the day before the hearing to be sure that the Court has not revised the ruling since the time it was posted.

Please call the clerk at (213) 633-0154 by 4:00 pm. the court day before the hearing if you wish to submit on the tentative.

On March 23, 2022, Plaintiffs Celina Rabago and Jaime Flores filed their Complaint against Defendant American Honda Motor Co., Inc. on causes of action for alleged violations of the Song-Beverly Consumer Warranty Act and fraudulent inducement by concealment.

On December 2, 2022, the Court struck paragraph 39 (regarding complaints filed with the National Highway Traffic Safety Administration against Defendant by individuals who are not the Plaintiffs in this matter) from the Complaint.

On November 22, 2023, Defendant filed its Motion for Summary Adjudication. In support of its Motion, Defendant concurrently filed: (1) Declaration of Jennifer Pacheco; (2) Separate Statement; and (3) Proposed Order.

On January 26, 2024, Plaintiffs filed their Opposition. In support of their Opposition, Plaintiffs concurrently filed: (1) Appendix of Documentary Evidence; (2) Declaration of Timothy Lupinek; and (3) Separate Statement.

On February 2, 2024, Defendant filed its Reply. Defendant concurrently filed: (1) Response to Plaintiffs’ Separate Statement; and (2) Evidentiary Objections to Declaration of Timothy Lupinek.

Defendant filed evidentiary objections to Plaintiffs’ evidence. The following are the Court’s rulings on these objections.

Objection
1		OVERRULED
2		OVERRULED
3		OVERRULED
4		OVERRULED
5		OVERRULED
6		OVERRULED

“A party may move for summary judgment in an action or proceeding if it is contended that the action has no merit or that there is no defense to the action or proceeding. The motion may be made at any time after 60 days have elapsed since the general appearance in the action or proceeding of each party against whom the motion is directed or at any earlier time after the general appearance that the court, with or without notice and upon good cause shown, may direct.” (Code Civ. Proc., § 437c, subd. (1)(a).)

“[T]he party moving for summary judgment bears the burden of persuasion that there is no triable issue of fact and that he is entitled to judgment as a matter of law. That is because of the general principle that a party who seeks a court’s action in his favor bears the burden of persuasion thereon. 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, citation omitted.)

“[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.” (Aguilar, supra, at p. 850; Smith v. Wells Fargo Bank, N.A. (2005) 135 Cal.App.4th 1463, 1474, [applying the summary judgment standards in Aguilar to motions for summary adjudication].)

“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, citation omitted.)

“The trial court may not weigh the evidence in the manner of a fact finder to determine whose version is more likely true. Nor may the trial court grant summary judgment based on the court's evaluation of credibility.” (Binder, supra, at p. 840, citations omitted; 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”].)

“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, citation omitted.)

Defendant moves the Court to grant summary adjudication on each of the causes of action in the Complaint. (Motion, p. 15:12–21.)

Defendant argues: (1) that Plaintiffs’ claims under the Song-Beverly Consumer Warranty Act are barred as a matter of law because the subject vehicle was purchased used; (2) that Plaintiffs cannot present triable issues of material fact proving breach of express warranty; (3) that Plaintiff Jaime Flores is not a retail buyer and therefore may not maintain an action under the Song-Beverly Consumer Warranty Act; (4) that Plaintiffs cannot prove their fraud cause of action because Defendant does not owe them a duty; (5) that Plaintiffs’ fraud claim is barred by the economic loss rule; (6) that Plaintiffs’ fraud claim is barred by the statute of limitations; and (7) that summary adjudication is appropriate as to punitive damages. (Motion, pp. 4:19–20, 5:18–19, 7:1–2, 7:19, 8:1, 10:11, 11:23, 14:1.)

Plaintiffs disagree, arguing: (1) that vehicles sold as manufacturer’s “certified pre-owned” are equally protected by the Song-Beverly Consumer Warranty Act; (2) that Defendant provided written warranties with the vehicle; (3) that the Song-Beverly Consumer Warranty Act was created to enhance consumer protections; (4) that Plaintiff Jaime Flores is a buyer within the meaning of the Song-Beverly Consumer Warranty Act; (5) that the economic loss rule does not bar fraudulent inducement as a matter of law; (6) that Defendant has not met its initial burden and the evidence shows triable issues of material fact; (7) that the statute of limitations for each of Plaintiffs’ claims are tolled; and (8) that Defendant has not met its burden regarding the issue of punitive damages. (Opposition, pp. 4:6–7, 5:12, 8:26, 9:19, 12:6–7, 12:12, 14:8–9, 16:7–8, 17:14, 19:25.)

Defendant argues that the claims under the Song-Beverly Consumer Warranty Act are barred as a matter of law because the subject vehicle was purchased used and the law “only applies to new vehicles.” (Motion, p. 4:19–22, italics omitted.)

“Every manufacturer of consumer goods sold in this state and for which the manufacturer has made an express warranty shall: (1) (A) Maintain in this state sufficient service and repair facilities reasonably close to all areas where its consumer goods are sold to carry out the terms of those warranties or designate and authorize in this state as service and repair facilities independent repair or service facilities reasonably close to all areas where its consumer goods are sold to carry out the terms of the warranties.” (Civ. Code, § 1793.2, subd. (a)(1)(A).)

“Except as provided in paragraph (2), if the manufacturer or its representative in this state does not service or repair the goods to conform to the applicable express warranties after a reasonable number of attempts, the manufacturer shall either replace the goods or reimburse the buyer in an amount equal to the purchase price paid by the buyer, less that amount directly attributable to use by the buyer prior to the discovery of the nonconformity.” (Civ. Code, § 1793.2, subd. (d)(1).)

“If the manufacturer or its representative in this state is unable to service or repair a new motor vehicle, as that term is defined in paragraph (2) of subdivision (e) of Section 1793.22, to conform to the applicable express warranties after a reasonable number of attempts, the manufacturer shall either promptly replace the new motor vehicle in accordance with subparagraph (A) or promptly make restitution to the buyer in accordance with subparagraph (B). However, the buyer shall be free to elect restitution in lieu of replacement, and in no event shall the buyer be required by the manufacturer to accept a replacement vehicle.” (Civ. Code, § 1793.2, subd. (d)(2).)

“For the purposes of subdivision (d) of Section 1793.2 and this section, the following terms have the following meanings: . . . (2) ‘New motor vehicle’ means a new motor vehicle that is bought or used primarily for personal, family, or household purposes. . . .” (Civ. Code, § 1793.22, subd. (e)(2).)

“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.’” (Jensen v. BMW of N. Am., Inc. (1995) 35 Cal.App.4th 112, 123.)

“Notwithstanding the provisions of subdivision (a) of Section 1791 defining consumer goods to mean ‘new’ goods, the obligation of a distributor or retail seller of used consumer goods in a sale in which an express warranty is given shall be the same as that imposed on manufacturers under this chapter except: (a) It shall be the obligation of the distributor or retail seller making express warranties with respect to used consumer goods (and not the original manufacturer, distributor, or retail seller making express warranties with respect to such goods when new) to maintain sufficient service and repair facilities within this state to carry out the terms of such express warranties.” (Civ. Code, § 1795.5, subd. (a).)

“Although the Song-Beverly Act generally binds only distributors and retail sellers in the sale of used goods, we conclude [a manufacturer] stepped into that role by issuing an express warranty on the sale of a used vehicle.” (Kiluk v. Mercedes-Benz USA, LLC (2019) 43 Cal.App.5th 334, 337.)

In summary, the law recognizes two ways a manufacturer could be liable for these violations of the Song-Beverly Consumer Warranty Act as to used cars: a balance remained on the used car’s original warranty, and/or the manufacturer stepped into the role of a distributor and/or retailer by issuing an express warranty on the sale of a used vehicle.

Here, Plaintiffs submit to the Court evidence that on July 13, 2018, Plaintiffs purchased a “certified pre-owned vehicle” from Defendant that included “certified pre-owned vehicle warranty coverage.” (Decl. Lupinek, Exh. 2, p. 4 [actual page 51 of 252].) This coverage included:

o 1 year/12,000 miles starting from the date of Certified Pre-Owned Vehicle delivery to buyer

In addition, Plaintiffs submit evidence that the 2016 car originally had a 3 year/36,000 miles for non-powertrain issues and a 5 year/60,000 miles warranty from Defendant. (Decl. Lupinek, Exh. 1, pp. 8–9 [actual pages 15–16 of 252].)

Thus, there are multiple triable questions of material fact on this issue, including: (1) whether the original warranty had expired by the time Plaintiffs purchased the vehicle; and (2) whether Defendant sold the vehicle to Plaintiffs with an additional warranty.

Defendant argues that Plaintiffs cannot present triable issues of material fact proving breach of express warranty. (Motion, p. 5:18–19.) Yet rather than claim there has not been a breach, Defendant specifically argues that “Plaintiffs do not have standing as they do not fit the Song-Beverly Act’s definition of ‘the consumer.’ . . . This definition unequivocally applies to a new vehicle purchase, not a used vehicle purchase.” (Id. at p. 6:14–22.)

As stated before, if a balance remained on the used car’s original warranty when Plaintiffs bought the vehicle, and/or Defendant stepped into the role of a distributor and/or retailer by issuing an express warranty on the sale of the used vehicle to Plaintiffs, then there could be a breach of an express warranty. Furthermore, Plaintiffs would have standing as a consumer under the relevant definitions of the relevant statutes.

Whether a breach of the express warranty occurred involves multiple triable questions of material fact, including whether there were actually issues with the vehicle that needed repair. Plaintiff submits evidence that there were such issues. (Decl. Lupinek, Exh. 7.)

Defendant argues that Plaintiff Jaime Flores does not have a claim here because: (1) he was not the co-purchaser of the vehicle as he did not sign the Retail Installment Sales Contract (RISC); (2) he is not the titleholder to the vehicle; and (3) the vehicle is not registered in his name. (Motion, p. 7:13–18.)

Plaintiffs disagree, pointing to multiple cases for the proposition that “there is no authority on point to support [Defendant’s] position that an individual must be expressly named in the purchase agreement to be considered a ‘buyer’ under the Song-Beverly Act.” (Opposition, pp. 10:12–12:5.)

In its Reply, Defendant argues that the plain language of the statute is clear and that each of the cases Plaintiffs cite are inapposite. (Reply, p. 2:15–3:24.)

“As used in this chapter: . . . (b) ‘Buyer’ or ‘retail buyer’ means any individual who buys consumer goods from a person engaged in the business of manufacturing, distributing, or selling consumer goods at retail. As used in this subdivision, ‘person’ means any individual, partnership, corporation, limited liability company, association, or other legal entity that engages in any of these businesses.” (Civ. Code, § 1791, subd. (b).)

In Bishop v. Hyundai Motor America (1996) 44 Cal.App.4th 750, 753–754, the plaintiff’s parents signed a purchase contract when plaintiff was 17 years old. Plaintiff “made all ensuing payments” and “was the primary driver of the vehicle.” (Ibid.)

In Krieger v. Nick Alexander Imports, Inc. (1991) 234 Cal.App.3d 205, 209, the plaintiff’s father purchased a car for plaintiff. Both the plaintiff and his father’s estate (the father was deceased by the time the opinion issued) sued the dealership. (Ibid.)

In Martinez v. Kia Motors America, Inc. (2011) 193 Cal.App.4th 187, 190–191, the plaintiff purchased the vehicle at issue. The Court of Appeal reversed the trial court when it ruled that plaintiff could not seek replacement or reimbursement because she no longer possessed the vehicle.” (Ibid.)

The statute 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).) However, the cases cited by Plaintiffs and discussed above seem to indicate that the question of who qualifies as a “buyer” in this context is either more general than that suggested by text or has not always been closely scrutinized in various prior lemon law cases.

However, the cases do not make individuals who were irrelevant to the purchase a “buyer.” In each of these cases, the plaintiffs either bought a vehicle themselves or had someone else buy it for them. While the types of documentary evidence that Defendant points out are often important to figure out who is the “buyer,” they do not seem to be dispositive.

Here, the RISC only has the name of Plaintiff Celina Rabago, not the name of Jaime Flores. Further, Defendant correctly points out that Plaintiffs have not provided a registration or title with the name of Plaintiff Jaime Flores. That would indicate that only Plaintiff Celina Rabago is the buyer, not Plaintiff Jaime Flores. However, Plaintiffs’ respective depositions indicate that they purchased the vehicle together for their joint use. (See, for example, Decl. Lupinek, Exh. 5, pp. 19–22 [actual pages 133–136].)

Ultimately, the Court need not, and does not, decide at this time the boundaries of the definition of “buyer” in the Song-Beverly Consumer Warranty Act. It suffices to say that whether Plaintiff Jaime Flores is actually a co-buyer of the vehicle along with Plaintiff Celina Rabago is a triable issue of material fact that is not amenable to resolution on a motion for summary adjudication.

Defendant argues that Plaintiffs cannot prove their fraud cause of action because Defendant does not owe a duty to Plaintiffs. (Motion, pp. 7:19, 8:1.)

According to Defendant, “Plaintiffs’ claims fail because there were no ‘direct dealings’ between [Defendant] as a distributor and Plaintiffs as an end consumer. Plaintiffs purchased the subject vehicle from a dealership, not from [Defendant]. The dealer is not [Defendant’s] agent. . . . Plaintiffs cannot point to any fraudulent representation allegedly made by [Defendant].” (Motion, p. 9:1–10, emphases omitted.) Further, Defendant argues that “Plaintiffs have no evidence that [Defendant] ‘actively concealed’ any material facts from them” and “Plaintiffs cannot prove concealment as there is no evidence [Defendant] had exclusive knowledge of material fact at the time of sale that it failed to disclose to them and that they could not have discovered”. (Id. at p. 9:11–12, 9:22–24.)

There are multiple triable issues of material facts here, including: (1) whether the dealership was Defendant’s agent for the sale of the vehicle to Plaintiffs under the certified pre-owned vehicle program; (2) whether Defendant had knowledge of the material facts at the time of the sale; and (3) whether Defendant did not disclose the material facts that it knew at the time of the sale. If Plaintiffs are able to prove the answers to these questions in their favor, it is possible that Defendant could be liable under a theory of fraudulent concealment.

Furthermore, Defendant incorrectly flips the logic of fraudulent concealment. If something has been concealed, actively or not, there is often no representation. That does not mean there was no fraud; it merely means that other acts aside from representations need to be considered to determine if there was fraud. If there were a false representation, then presumably a fraudulent misrepresentation theory would be presented.

Defendant argues that the fraud claim is barred by the economic loss rule. (Motion, p. 10:11.)

“[F]or the reasons we have discussed above, we conclude that, under California law, the economic loss rule does not bar plaintiffs’ claim here for fraudulent inducement by concealment. Fraudulent inducement claims fall within an exception to the economic loss rule recognized by our Supreme Court, and plaintiffs allege fraudulent conduct that is independent of [a car manufacturer’s] alleged warranty breaches.” (Dhital v. Nissan N. Am., Inc. (2022) 84 Cal.App.5th 828, 840, 843, citing Robinson Helicopter Co., Inc. v. Dana Corp. (2004) 34 Cal.4th 979, 989–990.)

Defendant argues in its Reply that Dhital is distinguishable because it involved a demurrer, not summary judgment, and that the Court of Appeal noted that summary judgment is different. (Reply, pp. 3:25–4:28; Dhital, supra, at p. 842, n. 5 [“We do not preclude the possibility that, depending on the evidentiary record developed at summary judgment or trial, a fraudulent inducement claim could be found not to be independent of a plaintiff’s contract or warranty claims.”].)

The conduct alleged by Plaintiffs is different in their fraud cause of action than in their other two causes of action. Furthermore, as discussed above, the evidence submitted by Plaintiffs is sufficient for there to be multiple triable issues of material fact regarding the fraudulent concealment claim. Thus, summary adjudication of this cause of action is not appropriate at this time based on the economic loss rule.

Defendant argues that the fraud claim is time-barred by the statute of limitations. (Motion, p. 11:23.)

“The limitations period for fraud is three years. (Code Civ. Proc., § 338, subd. (c).) The limitations period for breach of fiduciary duty is at most four years. (Code Civ. Proc., § 343.) The limitations period for unfair and unlawful business practices is four years. (Bus. & Prof. Code, § 17208.)” (Vaca v. Wachovia Mortgage Corp. (2011) 198 Cal.App.4th 737, 744, fn. 4.)

“The statute of limitations usually commences when a cause of action accrues, and it is generally said that an action accrues on the date of injury. Alternatively, it is often stated that the statute commences upon the occurrence of the last element essential to the cause of action. These general principles have been significantly modified by the common law ‘discovery rule,’ which provides that the accrual date may be delayed until the plaintiff is aware of her injury and its negligent cause.” (Bernson v. Browning-Ferris Indus. (1994) 7 Cal.4th 926, 931 [cleaned up].)

“A close cousin of the discovery rule is the well accepted principle of fraudulent concealment. It has long been established that the defendant's fraud in concealing a cause of action against him tolls the applicable statute of limitations, but only for that period during which the claim is undiscovered by plaintiff or until such time as plaintiff, by the exercise of reasonable diligence, should have discovered it. Like the discovery rule, the rule of fraudulent concealment is an equitable principle designed to effect substantial justice between the parties; its rationale is that the culpable defendant should be estopped from profiting by his own wrong to the extent that it hindered an otherwise diligent plaintiff in discovering his cause of action.” (Bernson, supra, at p. 931 [cleaned up].)

“While ignorance of the existence of an injury or cause of action may delay the running of the statute of limitations until the date of discovery, the general rule in California has been that ignorance of the identity of the defendant is not essential to a claim and therefore will not toll the statute. As we have observed, the statute of limitations begins to run when the plaintiff suspects or should suspect that her injury was caused by wrongdoing, that someone has done something wrong to her. Aggrieved parties generally need not know the exact manner in which their injuries were effected, nor the identities of all parties who may have played a role therein.” (Bernson, supra, at p. 932 [cleaned up].)

Here, the Parties do not dispute that Plaintiffs purchased the vehicle on July 25, 2018. Three years from that date is July 25, 2021. The Complaint was filed on March 23, 2022. Thus, it is possible that there is a statute of limitations issue here.

Plaintiffs argue that they “could not have discovered Plaintiffs’ fraud claims prior to the latest repair order presentation on September 20, 2021. Plaintiffs could not, even with reasonable and diligent investigation, have discovered Plaintiffs’ claims on an earlier date because of [Defendant’s] concealment of the defects in Plaintiffs’ vehicle and the fact that the service technicians represented to Plaintiffs that the Subject Vehicle had been repaired and was safe to drive after each prior repair attempt.” (Opposition, p. 19:4–9.) Plaintiffs point to the repair orders as evidence of these claims. (Decl. Lupinek, Exh. 7.)

The date upon which Plaintiffs suspected there was fraudulent conduct (which in turn determines when the statute of limitations was no longer tolled and began to run) is a triable issue of material fact. Thus, summary adjudication of this cause of action is not appropriate at this time based on the statute of limitations.

Defendant argues that punitive damages are not appropriate here because the dealership and its employees were not agents of Defendant, and thus no officer, director, or managing agent of Defendant committed, authorized, or ratified the allegedly fraudulent conduct that would give rise to a punitive damages claim. (Motion, 15:4–10.)

As previously discussed, whether the dealership is Defendant’s agent in this matter is a triable issue of material fact. Furthermore, whether Plaintiff has shown enough evidence to meet the clear and convincing evidence standard for punitive damages is inappropriate for resolution on a motion for summary adjudication.

In summary, Defendant has met its initial burden to bring up these various arguments, and Plaintiffs have met their subsequent burden to show that all of these various arguments involve triable issues of material facts that warrant trial.