Judge Randolph M. Hammock, Case 22STCV09660 2023-05-09 Tentative Ruling

This is a lemon law case. In 2019, Plaintiffs Lisbeth Burgos and Romel Burgos (“Plaintiffs”) purchased a 2015 Honda CR-V manufactured by Defendant American Honda Motor Co., Inc. (“American Honda”). Plaintiffs allege the vehicle has transmission defects. They bring Song-Beverly violations for (1) breach of express warranty and (2) breach of implied warranty.

Defendant’s Demurrer to the First Amended Complaint is SUSTAINED. Whether leave to amend is allowed will be determined at the hearing based upon any offer of proof made by the Plaintiff, consistent with this ruling.

The Declaration of Attorney Jonathan Kom, Counsel for Defendant, reflects that he attempted to effectuate a meet and confer but that Plaintiff was unresponsive. (CCP § 430.41.) While this demonstrates the lack of any meaningful meet and confer, in the interest of conserving judicial resources, the court will hear the motion on its merits. The parties are admonished to comply with all meet and confer obligations going forward.

A demurrer for sufficiency tests whether the complaint states a cause of action. (Hahn v. Mirda (2007) 147 Cal. App. 4th 740, 747.) When considering demurrers, courts read the allegations liberally and in context. (Taylor v. City of Los Angeles Dept. of Water and Power (2006) 144 Cal. App. 4th 1216, 1228.) In a demurrer proceeding, the defects must be apparent on the face of the pleading or by proper judicial notice. (CCP § 430.30(a).) A demurrer tests the pleadings alone and not the evidence or other extrinsic matters. (SKF Farms v. Superior Court (1984) 153 Cal. App. 3d 902, 905.) Therefore, it lies only where the defects appear on the face of the pleading or are judicially noticed. (Id.) The only issue involved in a demurrer hearing is whether the complaint, as it stands, unconnected with extraneous matters, states a cause of action. (Hahn, 147 Cal.App.4th at 747.)

The Complaint alleges that on June 7, 2019, Plaintiffs “purchased a used 2015 Honda CR-V,” that came with “an unexpired new car express written warranty and implied warranties.” (Compl. ¶ 14.) By operation of these warranties, Plaintiffs allege Defendant “undertook to preserve or maintain the utility or performance of Plaintiffs’ vehicle or to provide compensation if there was a failure in such utility or performance.” (Id.) Plaintiffs allege Defendant delivered the vehicle with transmission defects and that Defendant failed to repair the vehicle within a reasonable time. (Id. ¶ 16.) Despite being a used vehicle, Plaintiffs contend the vehicle is considered a “new motor vehicle” under the Song-Beverly Act. (Id. ¶ 17.)

As relied on by Plaintiffs, in Jensen, the plaintiff leased a dealer “demonstrator” vehicle with 7,565 miles. (Jensen v. BMW of N. Am., Inc. (1995) 35 Cal. App. 4th 112, 119.) But the dealer informed the plaintiff she would receive the “36,000-mile warranty on top of the miles already on the car.” (Id.) Once the car exhibited braking issues, the plaintiff filed an action under the Song-Beverly Act. Addressing whether the plaintiff’s vehicle qualified as a “new motor vehicle” under the Act, the Court concluded that “cars sold with a balance remaining on the manufacturer's new motor vehicle warranty are included within its definition of ‘new motor vehicle.’” (Id. at 123.)

Arguing that the Song-Beverly Act does not apply to used vehicles, Defendant relies on the recent case of Rodriguez v. FCA US LLC (2022) 77 Cal.App.5th 209. In Rodriguez, the plaintiffs purchased a two-year-old Dodge truck from a used car dealership. The truck’s limited powertrain warranty had not yet expired. After the truck experienced electrical defects, the plaintiffs sued the manufacturer for violation of section 1793.2, subdivision (d)(2), the Song-Beverly Act's “new motor vehicle” refund-or-replace provision. FCA moved for summary judgment, arguing the truck was not a “new motor vehicle” under the Act, and the trial judge agreed.

On appeal, the Court addressed the sole issue of “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.” (Id. at 215.) The Court concluded based on “the statutory provision, its place within the Act as a whole, and its legislative history,” that 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. (Id. at 225.)

The foregoing authorities are instructive here. In Rodriguez, the basic warranty had expired, and all that remained was an “unspecified” balance on the powertrain warranty. (Rodriguez, supra, 77 Cal.App.5th at 216.) In Jensen, on the other hand, the demonstrator vehicle received a brand new, 36,000-mile warranty “on top of the miles already on the car.” (Jensen, supra, 35 Cal. App. 4th at 119.) The Rodriguez court noted the difference between these two types of vehicles: what makes a demonstrator vehicle “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 accompany new cars.” (Rodriguez, supra, 77 Cal.App.5th at 220.) Thus, Rodriguez found Jensen “easily distinguishable” because it “involved a lease by a manufacturer-affiliated dealer who issued a full new car warranty along with the lease.” (Id. at 223 [italics in original].)

Here, the vehicle at issue is not a true “demonstrator” vehicle like the one in Jensen, which for all intents and purposes was treated as a new vehicle by the dealer. Instead, it was a “used” vehicle accompanied not with a full warranty that typically accompanies new vehicles, but rather, with “an unexpired new car express written warranty.” (FAC 14 [emphasis added].) This was precisely the vehicle at issue in Rodriguez found not to be a new motor vehicle under the Act.

It is therefore unnecessary to choose a side between Jensen and Rodriguez because the vehicles at issue in those respective cases are distinguishable. Moreover, the vehicle here resembles the one in Rodriguez—an opinion this court can and does find highly persuasive, although not binding by nature of the pending review by the state Supreme Court. (See Auto Equity Sales, Inc. v. Superior Court (1962) 57 Cal.2d 450, 456 [allowing trial courts to exercise discretion to choose between sides of a conflict in the Court of Appeal].)

Thus, considering the authorities and the vehicle at issue as alleged on the face of the FAC, this court concludes Plaintiffs’ vehicle is not a “new motor vehicle” under the Act. Their claims therefore fail as a matter of law.

Generally speaking, leave to amend must be allowed where there is a reasonable possibility of successful amendment. Goodman v. Kennedy (1976) 18 Cal.3d 335, 348. Plaintiff must demonstrate this possibility at the hearing consistent with this ruling. If Plaintiff doesn’t, no leave to amend will be given. [FN 1]

Additionally, this Court notes that on July 13, 2022, the Supreme Court of California granted review of the decision in Rodriguez. (See Case Number S274625.) The case is currently being briefed, with a reply to be filed on May 11, 2023; no date for oral argument has been set. [FN 2]

FN 1 - For example, the Plaintiff may still have and desire to pursue causes of action which are not in the Song-Beverly Act.

FN 2- The case not been de-published. In granting review, the Supreme Court stated: “Pending review, the opinion of the Court of Appeal, which is currently published at 77 Cal.App.5th 209, 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. (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.)”