Judge Ronald F. Frank, Case Number: 22TRCV00901, Date: 2024-01-24 Tentative Ruling

On October 2, 2022, Plaintiffs Benjamin R. Murti and Ashika Devi (collectively, “Plaintiffs”) filed this action against THOR Motor Coach, Giant RV Colton, and DOES 1 through 10. The Complaint alleges a cause of action based on violation of Song-Beverly Consumer Warranty Act. On June 12, 2023, Plaintiffs filed their First Amended Complaint (“FAC”) alleging causes of action for: (1) Violation of Song-Beverly Consumer Warranty Act; and (2) Violation of the Consumer Legal Remedies Act, Civil Code § 1770, et seq.

Now, Plaintiffs file a Motion for Summary Adjudication on the grounds that Plaintiffs argue there are no triable issues of material fact as to the unconscionability of the choice of law, forum selection, and statute of limitations terms in the Thor Limited Warranty, that there is no defense that can be raised to the unconscionability of these terms, and that there is no merit to Defendants’ thirty-first affirmative defense claiming venue is proper only in an Indiana court.

On September 29, 2023, Plaintiffs filed a Motion for Summary Adjudication. On December 22, 2024, Defendants, Thor Motor Coach, Inc. and Giant Inland Empie RV Center, Inc. filed an opposition. On January 18, 2024, Plaintiff filed a reply brief.

The function of a motion for summary judgment or adjudication is to allow a determination as to whether an opposing party cannot show evidentiary support for a pleading or claim and to enable an order of summary dismissal without the need for trial. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 843.) CCP Section 437(c) “requires the trial judge to grant summary judgment if all the evidence submitted, and ‘all inferences reasonably deducible from the evidence’ and uncontradicted by other inferences or evidence, show that there is no triable issue as to any material fact and that the moving party is entitled to judgment as a matter of law.”¿ (Adler v. Manor Healthcare Corp. (1992) 7 Cal.App.4th 1110, 1119.)¿ “The function of the pleadings in a motion for summary judgment is to delimit the scope of the issues; the function of the affidavits or declarations is to disclose whether there is any triable issue of fact within the issues delimited by the pleadings.”¿ (Juge v. County of Sacramento (1993) 12 Cal.App.4th 59, 67, citing FPI Development, Inc. v. Nakashima (1991) 231 Cal. App. 3d 367, 381-382.)

As to each claim as framed by the complaint, the defendant moving for summary judgment must satisfy the initial burden of proof by presenting facts to negate an essential element, or to establish a defense. (CCP § 437c(p)(2); Scalf v. D. B. Log Homes, Inc. (2005) 128 Cal.App.4th 1510, 1520.) Courts “liberally construe the evidence in support of the party opposing summary judgment and resolve doubts concerning the evidence in favor of that party.”¿ (Dore v. Arnold Worldwide, Inc.¿(2006) 39 Cal.4th 384, 389.)

Once the defendant has met that burden, the burden shifts to the plaintiff to show that a triable issue of one or more material facts exists as to that cause of action or a defense thereto.

To establish a triable issue of material fact, the party opposing the motion must produce substantial responsive evidence. (Sangster v. Paetkau (1998) 68 Cal.App.4th 151, 166.)

Here, Plaintiffs seek summary adjudication on their request for injunctive relief to prevent Thor from inserting unconscionable terms in their warranty. Plaintiffs indicate that this request is made pursuant to Plaintiffs’ second cause of action under the Consumer Legal Remedies Act (“CLRA”). Plaintiffs argue that Thor’s warranty contains incurably unconscionable terms that violate California law, including, among other things, the Indiana choice of law and forum selection clauses, and the statute of limitations provision. Plaintiff contends that the CLRA prohibits the insertion of such unconscionable terms in a contract, and thus, Plaintiffs assert that Defendants cannot present a defense to Plaintiffs’ allegation of unconscionability in the second cause of action that would constitute a triable issue as to any material fact and Plaintiffs are entitled to injunctive relief as a matter of law.

Preliminarily, it is not clear as to whether Plaintiffs have filed this Motion for Summary Adjudication as to Defendant Thor’s Thirty-First affirmative defense, or for the Court to find summary adjudication that there is no triable issue of fact as to the CLRA cause of action.

Injunctive Relief under the Consumer Legal Remedies Act (“CLRA”)

The Consumer Legal Remedies Act (“CLRA”) makes unlawful various “unfair methods of competition and unfair or deceptive acts or practices undertaken by any person in a transaction intended to result or which results in the sale or lease of goods or services to any consumer.” Civil Code § 1770. “CLRA actions may be brought only by a consumer who suffers any damage as a result of the use or employment of a proscribed method, act, or practice.” (Durell v. Sharp Healthcare (2010) 183 Cal.App.4th 1350, 1366) (internal quotations omitted) (emphasis in original). “Relief under the CLRA is specifically limited to those who suffer damage, making causation a necessary element of proof.” (Id. at 1367.) “Accordingly, plaintiffs in a CLRA action must show not only that a defendant's conduct was deceptive but that the deception caused them harm.” (Id. (internal quotations and citations omitted).) “A misrepresentation is material for a plaintiff only if there is reliance—that is, without the misrepresentation, the plaintiff would not have acted as he did.” (internal quotations and citations omitted).

In order for Plaintiffs to prevail on a Motion for Summary Adjudication, they must show that there is no triable issue of fact as to any element of their CLRA cause of action. This Court notes that the CLRA prohibits certain “unfair methods of competition and unfair or deceptive acts or practices undertaken by any person in a transaction intended to result or which results in the sale or lease of goods or services.” (Civ. Code, §1770.) In order to bring an action under the CLRA, “not only must a consumer be exposed to an unlawful practice, but some kind of damage must result.” (Meyer v. Sprint Spectrum L.P. (2009) 45 Cal.4th 634, 641.)

Plaintiff asserts this CLRA cause of action asserting that Defendant has committed violations of Civil Code §§ 1770(a)(2), (3), (5), (7), (9), (14), (16), and (19). Specifically, the violation in this motion appears to stem from Defendants alleged violation of Civil Code § 1770(a)(19): Inserting an unconscionable provision in the contract. Under the CLRA, it is illegal even to offer to enter into an unconscionable contract. Plaintiffs here argue that Defendant has violated this Code section by inserting the following into their arbitration agreement:

EXCLUSIVE JURISDICTION FOR DECIDING LEGAL DISPUTES RELATING TO ALLEGED BREACH OF EXPRESS WARRANTY AND BREACH OF IMPLIED WARRANTIES ARISING BY OPERATION OF LAW AS WELL AS THOSE RELATING TO REPRESENTATIONS OF ANY NATURE MUST BE FILED IN A STATE OR FEDERAL COURT WITHIN THE STATE OF MANUFACTURE, WHICH IS INDIANA. ALSO THIS LIMITED WARRANTY SHALL BE INTERPRETED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF INDIANA. ANY AND ALL CLAIMS, CONTROVERSIES AND CAUSES OF ACTION ARISING OUT OF OR RELATING TO THIS LIMITED WARRANTY, WHETHER SOUNDING IN CONTRACT, TORT, OR STATUTE, SHALL BE GOVERNED BY THE LAWS OF THE STATE OF INDIANA, INCLUDING ITS STATUTE OF LIMITATIONS, WITHOUT GIVING EFFECT TO ANY CONFLICT-OF-LAW RULE THAT WOULD RESULT IN THE APPLICATION OF THE LAWS OF A DIFFERENT JURISDICTION.

Here, the question of whether a contract provision is unconscionable is generally a question of law for the Court to resolve. (Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 122.) It therefore falls on the Court to decide Plaintiff’s CLRA claim, i.e., whether Defendant Thor inserted an unconscionable provision in a contract in violation of California Civil Code § 1770(a)(19). Under California law, the doctrine of unconscionability has two elements, procedural and substantive. (A & M Produce Co. v. FMC Corp. (1982) 135 Cal.App.3d 473, 486.) While both elements must be present before a court will hold that a contract is unenforceable, they need not be present to the same degree. (Armendariz, supra, 24 Cal.4th at 114.) Instead, the Court utilizes a sliding scale relationship between the two concepts. (Ibid.)

This Court notes that the main evidence relied upon by Plaintiffs is this Court’s tentative and final ruling on a motion for stay of proceedings, which has a different legal standard than a motion for summary adjudication. Moreover, this Court’s analysis was with respect to Plaintiffs’ current case facts, claims, and allegations, not with respect to any contract into which Thor enters with other consumers in California, Indiana, or any other state. By basing the requested relief of this motion on an injunction to bar Thor from including the choice of law, forum selection, and statute of limitation terms in its future contracts, Plaintiffs would have needed to provide evidence that in all circumstances, this contract language is unconscionable. Plaintiffs do not do that here. Would the ambit of Plaintiffs’ proposed injunction preclude Thor from including the forum selection, choice of law, and statute of limitations provisions for a motor home sold in Indiana? What about a motor home sold in a state that has different standards than California for judging unconscionability?

Further, this Court also notes that historically, the doctrine of unconscionability has provided only a defense to enforcement of a contract, and generally is not used offensively to obtain mandatory injunctive relief. (California Grocers Assn. v. Bank of America (1994) 22 Cal.App.4th 205.) Although by statute (CLRA), injunctive relief may now be applied to unconscionability, Plaintiffs would be required to show evidence that – as they concede – the provisions in the arbitration agreement threaten future inquiry to the general public. By Plaintiffs only offering evidence via party filings and court rulings, and not with respect to a broader scope of the proposed injunction, Plaintiffs fail to meet their initial burden of proof on this issue. As such, the Motion for Summary Adjudication is DENIED.

Were Plaintiffs to be found to have met their initial burden on summary judgment, the Court would deny this motion on the grounds that Thor has raised genuine issues of material fact in in opposing papers and separate statement with reference to supporting evidence.