TENTATIVE RULING

Calendar:    9

Date:          7/12/2024 

Case No: 23 GDCV01877 Trial Date: None Set 

Case Name: Savarani v. BMW of North America, LLC 

MOTION FOR JUDGMENT ON THE PLEADINGS

Moving Party:            Defendant BMW of North America, LLC      

Responding Party: Plaintiff Mambre Tahmasian Savarani      

RELIEF REQUESTED:

CAUSES OF ACTION:  from Complaint   

1) Breach Express Warranty (Song-Beverly Consumer Warranty Act) 

2) Breach of Written Warranty (Magnuson-Moss Warranty Act)

3) Breach of Implied Warranty (Song-Beverly Consumer Warranty Act) 

4) Breach of Implied Warranty (Magnuson-Moss Warranty Act)

SUMMARY OF FACTS:

Plaintiff Mambre Tahmasian Savarani alleges that in June of 2021 plaintiff leased a 2020 BMW 330i vehicle from an authorized BMW dealership, BMW of Riverside, which lease was accompanied by defendant BMW of North America, LLC’s (BMW’s) express and implied warranties.  In June of 2021, plaintiff began experiencing problems with the vehicle, and from that time to date the vehicle experienced problems exhibited by a loose, rattling, and creaking sunroof, faulty electrical components, failure to switch between drive modes, defective audio and sound systems, creaking steering, creaking steering wheel, defective HVAC system, and collapsed engine mounts.  Plaintiff alleges that the defects substantially impair the vehicle’s use, value and safety and were undiscoverable at the time of acceptance of the vehicle.

Plaintiff alleges that plaintiff presented the vehicle for repairs to BMW’s authorized dealership over six times, but BMW failed to repair the defects within a reasonable number of repair attempts, and has violated its warranty obligations. 

ANALYSIS:

CCP § 438 establishes the procedures for moving for judgment on the pleadings, and provides, in pertinent part:

“(c)(1) The motion provided for in this section may only be made on one of the following 

grounds:...

(B) If the moving party is a defendant, that either of the following conditions exist:

(i) The court has no jurisdiction of the subject of the cause of action alleged in the complaint.

(ii) The complaint does not state facts sufficient to constitute a cause of action against that defendant.”

Subdivision (d) provides that “The grounds for the motion provided for in this section shall appear on the face of the challenged pleading or from any matter of which the court is required to take judicial notice.”  

The motion may be granted with leave to file an amended complaint, or without leave to amend, in which case, judgment may be entered in favor of the moving defendant.   CCP § 438 (h).

Defendant relies on the court of appeal decision in Rodriguez v. FCA US, LLC  (2022) 77 Cal.App.5th 209, 223, arguing that the case holds that the Song-Beverly Act does not apply to motor vehicles which are used, not new, vehicles.   

Defendant does not disclose, however, that the California Supreme Court has granted a petition for review of the Rodriguez case.  This review was granted in July of 2022, so well before the motion was filed on May 31, 2024.   The pending review is pointed out in the opposition. 

Under CRC Rule 8.1105(e)(1)(B):

“(B) Grant of review by the Supreme Court of a decision by the Court of Appeal does not affect the appellate court's certification of the opinion for full or partial publication under rule 8.1105(b) or rule 8.1110, but any such Court of Appeal opinion, whether officially published in hard copy or electronically, must be accompanied by a prominent notation advising that review by the Supreme Court has been granted.”

Under CRC Rule 8.1115(e):

“(e) When review of published opinion has been granted

(1) While review is pending

Pending review and filing of the Supreme Court's opinion, unless otherwise ordered by the Supreme Court under (3), a published opinion of a Court of Appeal in the matter has no binding or precedential effect, and may be cited for potentially persuasive value only. Any citation to the Court of Appeal opinion must also note the grant of review and any subsequent action by the Supreme Court.”

(Emphasis added).

  

 CRC Rule 8.1115, subdivision (e)(3) provides:

“(3) Supreme Court order

At any time after granting review or after decision on review, the Supreme Court may order that all or part of an opinion covered by (1) or (2) is not citable or has a binding or precedential effect different from that specified in (1) or (2).”

“As provided in Standing Order Exercising Authority Under California Rules of Court, Rule 8.1115(e)(3), Upon Grant of Review or Transfer of a Matter with an Underlying Published Court of Appeal Opinion, Administrative Order 2021-04-21, under this subdivision, when the Supreme Court grants review of a published Court of Appeal opinion, the opinion 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 superior courts to exercise discretion under Auto Equity, supra, 57 Cal.2d at page 456, to choose between sides of any such conflict. Superior courts may, in the exercise of their discretion, choose to follow a published review-granted Court of Appeal opinion, even if that opinion conflicts with a published, precedential Court of Appeal opinion. Such a review-granted Court of Appeal opinion has only this limited and potential precedential effect, however; superior courts are not required to follow that opinion's holding on the issue in conflict. Nor does such a Court of Appeal opinion, during the time when review is pending, have any precedential effect regarding any aspect or holding of the Court of Appeal opinion outside the part(s) or holding(s) in conflict. Instead, it remains, in all other respects, “potentially persuasive only.”

(Italics in the original). 

“The petition for review is granted.

Pending review, the opinion of the Court of Appeal, which is currently published at 77 Cal.App.5th 209, 292 Cal.Rptr.3d 382, 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, 20 Cal.Rptr. 321, 369 P.2d 937, to choose between sides of any such conflict. (See Standing Order Exercising Authority Under California Rules of Court, Rule 8.1115(e)(3), Upon Grant of Review or Transfer of a Matter with an Underlying Published Court of Appeal Opinion, Administrative Order 2021-04-21; Cal. Rules of Court, rule 8.1115(e)(3) and corresponding Comment, par. 2.)

The requests for an order directing depublication of the opinion are denied.”

Rodriguez v. FCA US (July 13, 2022) 512 P.3d 654.  

The Supreme Court docket indicates that the Rodriguez appeal was “fully briefed” as of May 12, 2023. (California Supreme Court Case No. S274625).  The Court then received several applications to file amicus curiae briefs, and on June 23, 2023, granted permission to file amicus curiae briefs to seven applicants, which briefs were filed on the same date.  On July 14, 2023, the Court granted an application for an extension of time for appellant and respondent to respond to the amicus briefs to August 23, 2023.  The responses to amicus briefs were timely filed, and there has as yet been no disposition of the case.  

“Of course, the rule under discussion has no application where there is more than one appellate court decision, and such appellate decisions are in conflict. In such a situation, the court exercising inferior jurisdiction can and must make a choice between the conflicting decisions.”

Auto Equity Sales, at 456.  

In Rodriguez, the Fourth District court of appeal affirmed the trial court’s granting of summary judgment in favor of a manufacturer of a truck which plaintiffs had purchased from a used car dealership, after the manufacturer’s basic warranty had expired, but when a limited powertrain warranty had not.   

The court of appeal framed the issue and its conclusion as follows:

“The sole issue in this case is whether the phrase “other motor vehicle sold with a manufacturer's new car warranty” covers sales of previously owned vehicles with some balance remaining on the manufacturer's express warranty. We conclude it does not and that the phrase functions instead as a catchall for sales of essentially new vehicles where the applicable warranty was issued with the sale.”

Rodriguez, at 215, italics in the original. 

The court of appeal in Rodriguez considered the language of the Song-Beverly statute, and concluded that the definition of new vehicle does not extend to used vehicles, other than a narrow class of vehicles—those previously driven, but basically new, in effect, not previously sold.  Rodriguez, at 220.  The conclusion was based on an analysis of the language and the nature of demonstrator vehicles:

“Plaintiffs argue the phrase “other motor vehicle sold with a manufacturer's new car warranty” describes their truck because it still had a balance remaining on an express warranty from the manufacturer—the limited powertrain warranty—when Pacific Auto Center sold it to them. FCA argues the phrase qualifies dealer-owned cars and demonstrators and thus refers to vehicles that, like those two types of vehicles, have not been previously sold and are sold with new or full warranties. FCA argues plaintiffs' interpretation is at odds with the rest of the Act's definition of “new motor vehicles.” While we acknowledge that in isolation the phrase “other motor vehicle sold with a manufacturer's new car warranty” could arguably refer to any car sold with a manufacturer's warranty still in force, we agree with FCA that context clearly requires a more narrow interpretation. Context is a fundamental aspect of statutory interpretation, and here it's key to discerning the phrase's meaning. (Kirzhner, supra, 9 Cal.5th at p. 972, 266 Cal.Rptr.3d 346, 470 P.3d 56 [“We do not consider statutory language in isolation; instead, we examine the entire statute to construe the words in context”].)

To begin with, the phrase appears in a definition of new motor vehicles. That fact alone strongly suggests the Legislature did not intend the phrase to refer to used (i.e., previously sold) vehicles. But, more importantly, the phrase is preceded by “a dealer-owned vehicle and demonstrator,” which comprise a specific and narrow class of vehicles. Though they have not been previously sold to a consumer, demonstrators and dealer-owned cars are used in the sense that they will have been driven for various purposes before sale. As such, they will necessarily have more miles on their odometers than the typical vehicle in a dealer's new car inventory. What makes these vehicles unique is that even though they aren't technically new, manufacturers (or their dealer-representatives) treat them as such upon sale by providing the same type of manufacturer's warranty that accompanies new cars.

In other words, demonstrators and dealer-owned vehicles comprise a narrow category of basically new vehicles—they have never been previously sold to a consumer and they come with full express warranties. Given this context, we think the most natural interpretation of the phrase “other motor vehicle sold with a manufacturer's new car warranty” is that it, too, refers to vehicles that have never been previously sold to a consumer and come with full express warranties.

Rodriguez, at 219-220, italics in original.  

As noted in a more recent precedent, Stiles v. Kia Motors America, Inc.  (2024) 101 Cal.App.5th 913, discussed below, Rodriguez makes an analysis and reaches a conclusion which conflicts with that of another then existing court of appeal decision, Jensen v. BMW of North America, Inc. (1995) 35 Cal.App.4th 112, a long-standing decision out of the Third District.  

In Jensen, the court of appeal affirmed in part a judgment on a jury verdict in a suit for violation of the Song-Beverly Act in favor of a lessor of a vehicle which was obtained as a vehicle represented as a demonstrator from a dealership, which vehicle was subject to defendant manufacturer’s new car warranty.  

The court of appeal noted that “[t]he principal issue in BMW’s appeal is whether Jensen’s vehicle is a ‘new motor vehicle’ within the meaning of section 1793.22, subdivision (e)(2).”  Jensen, at 119. 

The court of appeal set forth the pertinent language of the section as follows:

“Section 1793.22, subdivision (e)(2), defines a “new motor vehicle” as “a new motor vehicle which is used or bought for use primarily for personal, family, or household purposes. ‘New motor vehicle’ includes the chassis, chassis cab, and that portion of a motor home devoted to its propulsion, but does not include any portion designed, used, or maintained primarily for human habitation, a dealer-owned vehicle and a ‘demonstrator’ or other motor vehicle sold with a manufacturer's new car warranty but does not include a motorcycle or a motor vehicle which is not registered under the Vehicle Code because it is to be operated or used exclusively off the highways. A ‘demonstrator’ is a vehicle assigned by a dealer for the purpose of demonstrating qualities and characteristics common to vehicles of the same or similar model and type.” (Emphasis added.)

Jensen, at 121-122, italics in original. 

“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.” The use of the word “or” in the statute indicates “demonstrator” and “other motor vehicle” are intended as alternative or separate categories of “new motor vehicle” if they are “sold with a manufacturer's new car warranty.” (White v. County of Sacramento (1982) 31 Cal.3d 676, 680, 183 Cal.Rptr. 520, 646 P.2d 191.)

Jensen, at 123. 

The court of appeal also reasoned that the interpretation of the definition to include cars sold with a balance remaining on the new motor vehicle warranty was consistent with the Act’s purposes, and with reason, practicality, and common sense:

“Our conclusion section 1793.22 includes cars sold with a balance remaining on the new motor vehicle warranty is consistent with the Act's purpose as a remedial measure. (Kwan v. Mercedes–Benz of North America, Inc. (1994) 23 Cal.App.4th 174, 184, 28 Cal.Rptr.2d 371.) It is also consistent with the Department of Consumer Affairs' regulations which interpret the Act to protect “any individual to whom the vehicle is transferred during the duration of a written warranty.” (Cal.Code Regs., tit. 16, § 3396.1, subd. (g).)

Addressing the final step in statutory construction which applies reason, practicality, and common sense to the language in question (Halbert's Lumber, Inc. v. Lucky Stores, Inc., supra, 6 Cal.App.4th at p. 1239, 8 Cal.Rptr.2d 298), BMW argues the Legislature could not have intended to grant protection to every used car with a balance remaining on the new car warranty because of the economic impact on consumers. Specifically, BMW maintains “[t]he subsequent owner would have the benefit of all of Song–Beverly's generous presumptions, without having undertaken the same risks as the purchaser of a really new car. Further, while the subsequent (perhaps third or fourth in the line of owners) will receive the benefit of these presumptions, the manufacturer will find it tremendously more difficult to raise defenses under Song–Beverly—such as the defense that the owner used the vehicle unreasonably—because it will be harder to trace multiple owners and determine their use or abuse of the vehicle.” BMW contends the increased costs will result in higher car prices or the shortening of warranties to the statutory minimum. It argues “[t]hese alternatives would inevitably result in a manifest decline in trade and commerce in this state, creating great inconvenience for consumers. It is impossible that the legislature intended this highly intractable result.”

 

We acknowledge manufacturers such as BMW incur costs in honoring express warranties to service and repair the cars they sell in this state. We also presume the decision to offer a warranty of a specified length involves weighing the benefit of increased sales against the cost of providing service and repair for the effective duration of the warranty. It may be the equation factors in the impact of resale during the warranty period. However, as noted by BMW, manufacturers are free to change the terms of express warranties they offer. The Act merely reflects the Legislature's intent to make car manufacturers live up to their express warranties, whatever the duration of coverage.

Jensen, at 126-127, footnote omitted.  

The opposition here primarily argues that there has been a more recent case decided by the Second District on this issue, which expressly rejected the Rodriguez holding.  Stiles v. Kia Motors America, Inc. (2024) 101 Cal.App.5th 913, was published on May 2, 2024, and modified on May 23, 2024.  This recent case was before this motion for judgment on the pleadings was filed, but perhaps before defendant had become aware of the case.  

In Stiles, the Second District reversed the trial court’s sustaining of a demurrer without leave to amend to a first amended complaint brought by a plaintiff who had purchased a used vehicle from a third party dealership with some balance remaining on the original manufacturer’s warranty, finding that the vehicle was not a “new motor vehicle” as defined in the Song-Beverly Act, section 1793.22, in reliance on Rodriguez.   The court of appeal rejected the argument, also made here, that a used car only qualifies as a “new motor vehicle” if at the time of purchase a “new or full” warranty accompanies the sale, rather than a balance remaining on an unexpired warranty.  

The Second District quoted the definition of “New motor vehicle” in the Song-Beverly Act to include “a dealer owned vehicle and ‘demonstrator’ or other motor vehicle sold with a manufacturer’s new car warranty,” and reasoned:

“Thus, Stiles is entitled to the replacement or refund remedy of section 1793.2, subdivision (d)(2) if the car she purchased was a ‘motor vehicle sold with a manufacturer’s new car warranty.’ Section 1793.22 subd. (e)(2).  Stiles so alleges.  That should be the end of the discussion. 

Kia, in its relentless attempt to avoid the clear meaning of section 1793.22, subdivision (e)(2), assumes a legislative role and tries to amend the statute. Kia claims we must add “new or full” prior to warranty. (§ 1793.22, subd. (e)(2).) Had the Legislature intended to qualify warranty with “new or full” it would have said so. We may not add words to a clear and unequivocal statute. (Hudson v. Superior Court (2017) 7 Cal.App.5th 1165, 1172, 213 Cal.Rptr.3d 277.)”

Stiles, at 917. 

Stiles went on to apply the following interpretation, pointing out irregularities in the interpretation applied by Rodriguez:

“The court stated that dealer-owned and demonstrator vehicles are “basically” new because “they have never been previously sold to a consumer and they come with full express warranties.” (Ibid.) The court interpreted the phrase “other motor vehicle sold with a manufacturer's new car warranty” to be limited to vehicles that have “never been previously sold to a consumer and come with full express warranties.” (Ibid.) The court stated the section describes only two types of vehicles— dealer-owned and demonstrator— not three. (Ibid.)

We cannot argue with the Rodriguez court's conclusion that the phrase “or other motor vehicle sold with a manufacturer's new car warranty” appears under the definition of a new motor vehicle. (§ 1793.22, subd. (e)(2).) That is why we conclude Stiles's car, in precisely meeting the definition as a “motor vehicle sold with a manufacturer's new car warranty,” is a new motor vehicle as defined by the statute. More importantly, the Rodriguez court adds words to the statute. The statute contains no such limitation as vehicles that have never been previously sold to a consumer and come with full express warranties. Section 1793.22, subdivision (e)(2) was enacted in 1992. (Stats. 1992, ch. 1232,  § 7.) In the more than 30 years since then, the Legislature has had ample opportunity to add such limiting language. It has not done so. It would be more than presumptuous for us to add what the Legislature has not. The court's assertion that section 1793.22, subdivision (e)(2) has only two categories— dealer-owned and demonstrator— defies the rules of English grammar and logic.

In section 1793.22, subdivision (e)(2), the dealer-owned and demonstrator categories are followed by the disjunctive “or” which precedes “other motor vehicle sold with a manufacturer's new car warranty.” The disjunctive is ordinarily used to distinguish that which precedes it from that which follows it. “[O]ther motor vehicles” is clearly a third separate category.

Stiles, at 919, italics in original, footnote omitted.  

The Stiles court concluded:

“We, like Jensen, but unlike Rodriguez, look to the plain words of the statute. If any legislative history is required, its most salient feature is that more than 30 years after section 1793.22 was enacted and almost 30 years after Jensen was decided, the Legislature has not amended the definition of “new motor vehicle” in section 1793.22. And neither will we.”

Stiles, at 920. 

As noted above, according to the Standing Order and the order of the Supreme Court granting review, pursuant to the current posture of Rodriguez being reviewed by the California Supreme Court, this court has discretion to consider Rodriguez persuasive, and to consider it conflicting precedent, and, to the extent there is a conflict, choose between the conflicting decisions, in this case, the authorities and rationales of Jensen and Stiles, on the one hand, and the rationale and decision in Rodriguez on the other hand, pursuant to Auto Equity Sales. 

As argued in the opposition, the court of appeal in Jensen rejected arguments similar to those raised by defendant here with respect to the warranties recognized in Song-Beverly Act actions.  Jensen, at 126 (“the more specific definition found in the current section 1793.22 governs the more general definition found in section 1791,” citation omitted); Jensen, at 128 (“the Act applies to new motor manufacturers who make express warranties. (§§ 1791.2 and 1793.2.)  There is no privity requirement.”) 

Under CCP section 438 (h)(2), on a motion for judgment on the pleadings, the court must grant 30 days leave to amend: 

“Where a motion is granted pursuant to this section with leave to file an amended complaint or answer, as the case may be, then the court shall grant 30 days to the party against whom the motion was granted to file an amended complaint or answer, as the case may be.”  

 

RULING:

Motion of BMW of North America, LLC for Judgment on the Pleadings:

Motion is GRANTED WITH LEAVE TO AMEND as to the third cause of action for breach of implied warranty (Song Beverly Consumer Act) under Civil Code section 1790 et seq., on the ground conceded in the opposition that plaintiff has failed to sufficiently allege defendant falls within the parties to which the implied warranty of merchantability applies under section 1791.1 of the Song-Beverly Act.  

Motion is DENIED as to all other causes of action and on all other grounds. 

Thirty days leave to amend.  CCP section 438 (h)(2).

 DEPARTMENT D IS CONTINUING TO CONDUCT AND ENCOURAGE 

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