Judge Ronald F. Frank, Case Number: 23TRCV00445, Date: 2024-11-12 Tentative Ruling

Judge: Ronald F. Frank, Case: 23TRCV00445, Date: 2024-11-12 Tentative Ruling

Case Number: 23TRCV00445 Hearing Date: November 12, 2024 Dept: 8

Tentative Ruling¿

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HEARING DATE: November 12, 2024

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CASE NUMBER: 23TRCV00445

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CASE NAME: Gabriella Morgan v. American Honda Motor Co., Inc., et al.

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MOVING PARTY: Plaintiff, Gabriella Morgan

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RESPONDING PARTY: Defendant, American Honda Motor Co., Inc.

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TRIAL DATE: May 5, 2025

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MOTION:¿ (1) Plaintiff’s Motion for Summary Adjudication

Tentative Rulings: (1) DENIED.

I. BACKGROUND¿¿

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A. Factual¿¿

On February 15, 2023, Plaintiff, Gabriella Morgan (“Plaintiff”) filed a Complaint against Defendant, American Honda Motor Co., Inc., and DOES 1 through 10. The Complaint alleges causes of action for: (1) Violation of Song-Beverly Act – Breach of Express Warranty; and (2) Fraudulent Inducement – Concealment. Plaintiff’s suit alleges that Honda’s collision mitigation system contains a defect covered by the express new motor vehicle warranty that was not repaired even after three specific repair attempts alleged in the Complaint. Plaintiff does not allege that the facts give rise to the so-called Lemon Presumption because the allegations of the Complaint do not assert that the three repair visits occurred within the first 18 months or 18,000 miles, nor does the Complaint allege the before filing suit Plaintiff notified Honda itself in writing of the failure to repair what she calls a Sensing Defect. But in a suit filed before January 1, 2025, a plaintiff need not allege pre-suit notification if she is not relying on the Lemon Presumption.

With the case having progressed in discovery and trial approaching next year, Plaintiff has filed a Motion for Summary Adjudication to seek to eliminate Honda’s asserted defenses to one of the Song-Beverly Act’s two alternative species of civil penalties. The MSA is made on the following grounds: (1) Plaintiff is entitled to summary adjudication as to Defendant’s Fifth Affirmative Defense, because defendant does not have a qualified third-party dispute resolution process; (2) Plaintiff is entitled to summary adjudication as to Defendant’s Eighth Affirmative Defense, because defendant does not have a qualified third-party dispute resolution process; and (3) Plaintiff is entitled to summary adjudication as to Defendant’s Eighth Affirmative Defense because willful civil penalties are not barred by the existence of a qualified third-party dispute resolution process.

B. Procedural

On August 20, 2024, Plaintiff filed this Motion for Summary Adjudication. On October 29, 2024, American Honda Motors Co., Inc. (“AHM”) filed an opposition brief. To date, no reply brief has been filed.

II. REQUEST FOR JUDICIAL NOTICE

Filed concurrently with the opposition papers, AHM also filed a request for judicial notice, seeking this Court judicially notice the following:

1. The National Center for Dispute Settlement’s Automotive Warranty Disputes FAQs, located at https://www.ncdsusa.org/consumers/automotive-warranty-disputes/auto-faq.html [last accessed, October 29, 2024], a print out of which is attached at Exhibit C to the Declaration of Christian P. Foote in support of AHM’s Opposition to Plaintiff’s Motion for Summary Adjudication.

The Court GRANTS this request and takes judicial notice of the above pursuant to Evidence Code section 452.

III. ANALYSIS¿

A. Legal Standard

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 moving party, here the Plaintiff, has met its initial burden, the burden shifts to the opposing party, here the Defendant, 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.)

B. Discussion

Here, Plaintiff seeks summary adjudication on AHM’s fifth and eighth affirmative defenses, which invoke protections against the potential award of a non-willful civil penalty based on AHM’s third-party dispute resolution process. These defenses are asserted pursuant to the Song-Beverly Consumer Warranty Act, Civil Code section 1793.22 and 1794, subdivision (e). Plaintiff argues that AHM failed to maintain a “qualified third-party dispute resolution process.” As such, Plaintiff moves for summary adjudication as to AHM’s fifth and eighth affirmative defense as Plaintiff argues they have no merit because AHM does not maintain a qualified third-party dispute resolution process. AHM is one of only a handful of manufacturers doing business in the lucrative California new motor vehicle market to have elected not to maintain a California-certified Lemon Arbitration program. Accordingly, the issue of a non-willful civil penalty rarely arises in a Song-Beverly Act case because the overwhelming majority of manufacturers have chosen to certify and thereby immunize themselves from the secondary species of civil penalty available under Song-Beverly’s subdivision 1794 subdivision (e). “Subdivision (e) of section 1794, which pertains only to suits involving violations of the “replacement or reimbursement” provisions for new motor vehicles . . . , also gives the trier of fact discretion to award civil penalties of up to two times the amount of the plaintiff's damages.” (Suman v. Superior Court (1995) 39 Cal.App.4th 1309, 1315.) “The overall thrust of subdivision (e) is the Legislature's preference for using alternative forms of dispute resolution when a new motor vehicle buyer has repeated difficulties getting his or her nonconforming vehicle repaired properly. The intent of the Legislature vis-à-vis subdivision (e) is encouragement of both the new motor vehicle manufacturer and the new motor vehicle buyer to work out their problems without resort to court intervention.” (Suman, supra, 39 Cal.App.4th at p. 1318.) But the Legislature did not require the alternative form of dispute resolution to be CERTIFIED by the State; rather, it only required that the program “substantially comply” with Section 1793.22's formula for a qualified third-party dispute resolution process. (Id.) The Second District indicated that on instructing the jury as to the potential award of a non-willful civil penalty, they “may take into consideration the nature of the defendant's conduct, including the extent to which the defendant did or did not act reasonably or in good faith, in (1) failing to honor plaintiff's demand for replacement of the defective vehicle or restitution, and (2) failing to establish a third party dispute resolution process which could have resolved this matter without litigation.” (Suman, supra, at p. 1323.) Under Suman, a defendant in a Lemon Law case may still defend against a non-willful civil penalty even if it has no Lemon Arbitration program, if it has a good faith basis for failing to establish a qualified program. Thus, in the Court’s view, the issue of whether Honda’s national program is not California-certified would not preclude Honda from raising a good faith defense to a non-willful civil penalty. Plaintiff’s motion does not address this issue.

Plaintiff’s evidence supporting its MSA here establishes the undisputed fact that Honda does not have a program certified by the California Department of Consumer Affairs, and Honda does not quarrel with that proposition. Plaintiff’s evidence also establishes that the only state agency with authority to certify a manufacturer’s program is the California Department of Consumer Affairs. AHM’s evidence establishes that it has a Lemon Arbitration program called NCDS, the National Center for Dispute Settlement. AHM’s evidence also establishes that AHM identifies that program in its warranty booklet, and that the parameters of the NCDS appear to contain at least some of the elements required by the Legislature in Section 1793.22. A qualified third-party dispute resolution process is one that meets the nine parameters listed under Civ. Code, § 1793.22, subdivision (d). One of those parameters, contained in subdivision (d)(9), is that the Lemon Arbitration program “Obtains and maintains certification by the Department of Consumer Affairs.” Plaintiff’s evidence shows that Honda’s NCDS program does not meet this 9^th parameter, but does not speak to the other 8 parameters. There is a triable issue of fact as to whether the NCDS program meets all of the other 8 parameters of Section 1793.22, at least on the record presented here. Neither side addresses the other 8 parameters in its evidence supporting or opposing this MSA, but it is Plaintiff who carries the initial burden of proof on a dispositive motion.

Civil Code section 1794, subdivision (e)(2) does not mandate that a manufacturer’s Lemon Arbitration program contain all 9 of the listed parameters to substantially comply with the Tanner Consumer Protection Act, Section 1793.22, subdivision (d). The Legislature’s use of the term “substantially complies” implies that less than 100% of the nine listed requirements for certification need not be met under Civil Code 1794. Plaintiff has not carried it burden of proof on this motion to show that Honda’s national Lemon Arbitration program as a matter of law does not substantially comply, i.e., by proof that that more than half of those requirements are unmet by AHM’s program. Second, pursuant to the recent Court of Appeal decision in Valdvinos v. Kia Motors America, Inc. (2024) 104 Cal.App.5th 732, the Fourth District rejected the definition of willful adopted by some California courts which define “willful” as “intentional” because such a definition “would entitle a consumer to a civil penalty whenever a manufacturer’s noncompliance with the Act is merely nonaccidental. Because the decision whether to replace or repurchase a vehicle is necessarily intentional, this standard would make the Act’s civil penalty available whenever the Act is simply violated. This would obliterate the two tiers of penalties under the Act, and eliminate the punitive purpose of the civil penalty.” (Valdovinos v. Kia Motors America, Inc. (2024) 104 Cal.App.5th 732, 762.)

Plaintiff may pursue a willful civil penalty pursuant to Section 1794(c) in this matter regardless of Honda’s national Lemon Arbitration program because the existence of a substantially-compliant program is not a defense to a willful violation. The Section 1794(e)(2) defense only applies to a non-willful civil penalty as the literal language of the statutory defense pertains only to the penalty sought “pursuant to this subdivision,” i.e., subdivision (e) of Civil Code section 1794. A willful civil penalty may be sought pursuant to subdivision (c) regardless of whether a manufacturer has a qualifying or a certified Lemon Arbitration program. (Suman v. BMW of North America, Inc. (1994) 23 Cal.App.4th 1, 11.)

IV. CONCLUSION

Based on the foregoing, this Court finds Plaintiff has failed to carry her initial burden on a motion for summary adjudication. Her Motion for Summary Adjudication is DENIED. AHM is ordered to provide notice.