Judge Michael T. Smyth, Case Number: 37-2022-00042205-CU-BC-CTL, Date: 2024-04-19 Tentative Ruling

Judge: Michael T. Smyth, Case: 37-2022-00042205-CU-BC-CTL, Date: 2024-04-19 Tentative Ruling

SUPERIOR COURT OF CALIFORNIA,

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HALL OF JUSTICE

TENTATIVE RULINGS - April 18, 2024

04/19/2024 09:00:00 AM C-67 COUNTY OF SAN DIEGO

JUDICIAL OFFICER:Michael T. Smyth

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Civil - Unlimited Breach of Contract/Warranty Summary Judgment / Summary Adjudication (Civil) 37-2022-00042205-CU-BC-CTL SANTIAGO VS SUBARU OF AMERICA INC [IMAGED] CAUSAL DOCUMENT/DATE FILED: Motion for Summary Judgment and/or Adjudication, 01/30/2024

Defendant Subaru of America, Inc.'s Motion for Summary Judgment is DENIED.

The moving party bears the initial burden of production to make a prima facie showing that there are no triable issues of material fact. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850.) A prima facie showing is one that is sufficient to support the position of the party in question; 'no more is called for.' (Id. at 851.) The moving party must show that the undisputed facts, when applied to the issues framed by the pleadings, entitle the moving party to judgment. (Juge v. County of Sacramento (1993) 12 Cal.App.4th 59, 66.) If the moving party carries this burden, it causes a shift, and the opposing party is then subject to its own burden of production to make a prima facie showing that a triable issue of material facts exists. (Aguilar, supra, 25 Cal.4th at 850.) Courts must view the evidence and inferences 'in the light most favorable to the opposing party.' (Id. at 843.) Defendant Subaru of America, Inc. argues that all causes of actions are barred because (1) the relevant portions of the Song-Beverly Act apply only to new vehicles, not used vehicles with an unexpired balance of original warranty such as the subject vehicle; and (2) the Certified Pre-Owned Service Agreement ('CPO') that was issued with the sale of the subject used vehicle was not a warranty.

On the first point, the court agrees with Defendant with respect to the holding in Rodriguez v. FCA US, LLC (2022) 77 Cal.App.5th 209. Rodriguez is well-reasoned and if there was no claim of a separate warranty issued at the time the subject used vehicle was sold, the analysis would end there. But Rodriguez is inapplicable if, as Plaintiff argues, Defendant issued a new express warranty as part of the sale of the subject vehicle. (E.g., Kiluk v. Mercedes-Benz USA, LLC (2019) 43 Cal.App.5th 334, 336 [Song-Beverly Act applies to express warranties issued on a used vehicle].) Accordingly, the court must decide whether the Certified Pre-Owned Service Agreement ('CPO') was a warranty for purposes of the Song-Beverly Act.

The court finds there is, at minimum, a triable controversy as to whether the CPO is a warranty.

Under the Act, warranties and service contracts are treated differently. An express warranty is defined as '[a] written statement arising out of a sale to the consumer good pursuant to which the manufacturer, distributor, or retailer undertakes to preserve or maintain the utility or performance of the consumer good or provide compensation if there is a failure in utility or performance[.]' (Civ. Code, � 1791.2(a)(1).) 'It is not necessary to the creation of an express warranty that formal words such as 'warrant' or 'guarantee' be used, but if such words are used then an express warranty is created.' (Id., � 1791.2(b).) Calendar No.: Event ID: TENTATIVE RULINGS

3092049 9 CASE NUMBER: CASE TITLE: SANTIAGO VS SUBARU OF AMERICA INC [IMAGED] 37-2022-00042205-CU-BC-CTL A service contract is defined as 'a contract in writing to perform, over a fixed period of time or for a specified duration, services relating to the maintenance or repair of a consumer product[.]' (Id., � 1791(o).) Gavaldon v. DaimlerChrysler Corp. (2004) 32 Cal.4th 1246 is instructive. The plaintiff bought her vehicle with a standard factory warranty and also purchased a service contract for an additional $890. The defects at issue in that case were covered by the service contract but not the warranty. The plaintiff argued that the service contract was a warranty for purposes of the Song-Beverly Act giving the court occasion to discuss the distinction between them: 'It is true that, functionally speaking, warranties and service contracts appear to have the same purpose-to guarantee the repair or replacement of certain products or parts of products for a specified period of time. But . . . the Legislature apparently conceived of an express warranty as being part of the purchase of a consumer product, and a representation of the fitness of that product that has particular meaning for consumers. In contrast, it apparently thought of the purchase of a service contract as distinct from the purchase of the product, and not as a representation of fitness but only an agreement to provide repair services, a kind of insurance. Hence, one difference between express warranties and service contracts is that the latter is generally purchased 'for an additional cost.' . . .

[T]he 'additional cost' factor appears to be an important, if not infallible, means of distinguishing between express warranties that are an integral part of the purchase of a product, and service contracts that are not.

. . .

[I]t appears that the Legislature thought of service contracts and express warranties as mutually exclusive categories, except when the manufacturer chooses to use the terms 'warrant' or 'guarantee' in a service contract.

. . .

For all of the above reasons, we conclude that the service contract in the present case, which was sold for an additional cost and which does not use the words 'warrant' or 'guarantee,' is not an express warranty for purposes of the Act.' (Gavaldon, supra, 32 Cal.4th at 1258, fn.3. 1259, 1261 [emphasis added].)[1] Here, both sides rely heavily on Gavaldon.

Defendant argues that, like in Gavaldon, the CPO does not use the words 'warrant' or 'guarantee' and instead disclaims those titles. Defendant states that '[t]he Certified Pre-Owned Service Agreement, attached as Exhibit B to the Declaration of Gloria Gutierrez, contains Plaintiff's signed acknowledgment that the 'Certified Pre-Owned Service Agreement is a service contract, and not an insurance policy, warranty, or guarantee.' (ROA 26, Memo. at 5:6-8.) Such a signed acknowledgment does not appear in Exhibit B. (ROA 29, Gutierrez Decl., Ex. B.) Indeed, the court has not found in the record any portion of the CPO signed by Plaintiff. Rather, the language cited by Defendant appears in Exhibit A to the Declaration of Patricia Mickel in an unsigned registration form that was later mailed to Plaintiff and was to be considered part of the CPO. (ROA 32, Mickel Decl., Ex. A.) Thus, it appears that at the time the CPO was issued to Plaintiff as part of the sale of the subject vehicle, it did not contain language stating that the CPO was not a warranty. On the other hand, the CPO did not state it is a warranty.

But that is not enough to eliminate a triable controversy. The CPO arose out of the sale of the subject used vehicle with the effect of extending the original warranty from the original 5 years/60,000 miles to 7 years/100,000 miles. (See ROA 32, Mickel Decl., Exs. A, C.) Plaintiff did not pay any additional cost for Calendar No.: Event ID: TENTATIVE RULINGS

3092049 9 CASE NUMBER: CASE TITLE: SANTIAGO VS SUBARU OF AMERICA INC [IMAGED] 37-2022-00042205-CU-BC-CTL the CPO. (See ROA 29, Gutierrez Decl., Ex. A.) Moreover, the Buyer Guide submitted as Exhibit 1 to the Declaration of Jordan Sannipoli indicates that a manufacturer's used vehicle warranty was provided with the car. (ROA 41, Sannipoli Decl., Ex. 1 ['MANUFACTURER'S USED VEHICLE WARRANTY APPLIES'].) Defendant never addresses or names the Buyer Guide directly or whether it was in error, instead relying on the rule that courts should generally not consider extrinsic evidence when construing a contract. But that rule generally applies to the 'execution of a contract in writing' (Civ. Code � 1625) or where 'the parties to a written contract have agreed to it as an 'integration'-a complete and final embodiment of the terms of an agreement' (Masterson v. Sine (1968) 68 Cal.2d 222, 225). Here, it is unclear that there was execution of a contract with respect to the CPO, let alone an integration. (See also Morey v. Vannucci (1998) 64 Cal.App.4th 904, 912, n. 4 [courts 'have long recognized that even when a contract is integrated-that is, intended to constitute the parties' final and complete understanding of the terms of the agreement-the meaning of the terms of the contract still must be ascertained.'].) Based on the above, the court finds that there is, at minimum, a triable issue of fact as to whether there was an express used vehicle warranty issued by Defendant upon the sale of the vehicle. As such, summary judgment is denied regardless of the holding in Rodriguez./n [1] Although the 'additional cost' language was deleted from the statutory definition of a service contract in 2008, this was known to the Gavaldon court at the time of its opinion and was further discussed in footnote 3. The distinction continues to be relevant in distinguishing between service contracts and warranties. (E.g., Jones v. Credit Auto Center (2015) 237 Cal.App.4th Supp. 1, 12 [citing Gavaldon and the 'additional cost' distinction in different context].) Calendar No.: Event ID: TENTATIVE RULINGS

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