Judge: Sandy N. Leal, Case: 2020-01174532, Date: 2023-06-15 Tentative Ruling
Motion for Summary Judgement and/or Adjudication
Defendant Hyundai Motor America’s Motion for Summary Judgment is DENIED. Defendant’s alternative Motion for Summary Adjudication as to the fifth cause of action for breach of implied warranty is GRANTED, and DENIED as to all remaining causes of action.
Defendant’s Request for Judicial Notice is GRANTED.
Objections to Declaration of Fernando Vasquez Alcaraz (ROA 401), are SUSTAINED.
Objections to Declaration of Esthefany Escobar (ROA 400), are SUSTAINED.
“A party may move for summary judgment in an action or proceeding if it is contended that the action has no merit or that there is no defense to the action or proceeding.” (Code Civ. Proc. § 437c(a)(1).) “A party may move for summary adjudication as to one or more causes of action within an action, one or more affirmative defenses, one or more claims for damages, or one or more issues of duty, if the party contends that the cause of action has no merit, that there is no affirmative defense to the cause of action, that there is no merit to an affirmative defense as to any cause of action, that there is no merit to a claim for damages . . . , or that one or more defendants either owed or did not owe a duty to the plaintiff or plaintiffs.” (Code Civ. Proc. § 437c(f)(1).) “A motion for summary adjudication shall be granted only if it completely disposes of a cause of action, an affirmative defense, a claim for damages, or an issue of duty.” (Id.)
This is a lemon law case. In November 2015, Plaintiff Fernando Vasquez Alcaraz’s daughter, Esthefany Escobar (“Ms. Escobar”) signed paperwork to purchase a brand new Hyundai Sonata VIN number 5NPE34AE36H258291 (the “Vehicle”) from Hardin Hyundai. Ms. Escobar had possession of the Vehicle for approximately two months before she was informed by Hardin Hyundai that she did not qualify for the loan for the Vehicle. Ms. Escobar understood she would need to update the Vehicle’s paperwork with a qualified individual in order to obtain the necessary loan and maintain possession of the Vehicle. Ms. Escobar asked her father, Plaintiff Fernando Vasquez Alcaraz, to put his name on the Retail Installment Sales Contract (“Contract”) instead. Plaintiff agreed.
On January 6, 2016, Plaintiff executed the Contract from Hardin Hyundai that reflected 2,657 miles on the odometer. The Contract identified the Vehicle as “used” even though Ms. Escobar had taken possession of the Vehicle when the Vehicle was new. Plaintiff intended for the Vehicle to used by his daughter, who had retained possession of the Vehicle since she drove it off the lot in November 2015.
John Kiser, Controller of Hardin Automotive previously dba as Hardin Hyundai, testified that based on Ms. Escobar’s inability to obtain funding for the Vehicle, the sale was never “fully completed.” Ms. Kiser also produced a DMV document called “Statement of Facts” which states Ms. Escobar returned the Vehicle to Hardin Hyundai on January 21, 2016, due to “credit [being] unavailable.” Defendant has not presented any evidence that the Vehicle had a prior owner other than Ms. Escobar. Mr. Kiser did not produce at his deposition Ms. Escobar’s purchase contract for the Vehicle as the document was allegedly destroyed.
Issues to be Adjudicated
1. First and fourth causes of action for breach of express warranty on the basis that the subject vehicle is not a “new motor vehicle” as defined under Civ. Code Section 1793.22;
2. Second and third causes of action for violations of Civ. Code Section 1793.2 subdivisions (b) and (a)(3) on the basis that the vehicle is not a “consumer good” under Civ. Code Section 1791;
3. Fourth cause of action for violation of Civ. Code Section 1791.2 on the basis that the vehicle is not a “consumer good” under Civ. Code Section 1791 (to the extent Plaintiff is proceeding under that theory);
4. Fifth cause of action for breach of implied warranty on the basis that Defendant did not act as a distributor of this vehicle as a used good under Civ. Code Section 1795.5; and
5. Fifth cause of action for breach of implied warranty on the basis that Defendant has proven its defense on the basis of the statute of limitations.
First and Fourth Causes of Action
The crux of Defendant’s Motion is that Plaintiff’s claims under Civil Code §§ 1793.2(d) and 1791.2(2) (first and fourth causes of action) fail as a matter of law because Plaintiff purchased a used vehicle.
Under the Song-Beverly Act, there are remedies for “consumer goods” which are defined as new goods under Civ. Code § 1791 and “new motor vehicles” which are defined distinctly under Civ. Code § 1793.22. With regards to breach of express warranty with respect to “new motor vehicles” (the most commonly used provision of the Act and what is commonly referred to as the lemon law), a consumer may sue an automobile manufacturer or other original warrantor who does not repair a new motor vehicle to conform to an express warranty within a reasonable number of attempts. (Cal. Civ. Code § 1793.2.) A “new motor vehicle” includes “a dealer-owned vehicle and a ‘demonstrator’ or other motor vehicle sold with a manufacturer’s new car warranty.” (Cal. Civ. Code § 1793.22(e)(2).)
Defendant urges the Court to follow the rationale in Rodriguez v. FCA US, LLC, (Apr. 7, 2022) 77 Cal.App.5th 209, review granted July 13, 2022, S274625 (“Rodriguez”). Rodriguez is not binding authority on this Court and can only be cited for potentially persuasive value only. (Cal. Rules of Court, Rule 8.1115(e)(1).) The Court finds Jensen v. BMW of North America, Inc. (1995) 35 Cal.App.4th 112 to be controlling in this case.
The California Court of Appeal in Jensen found that “cars sold with a balance remaining on the manufacturer’s new motor vehicle warranty are included within [Civil Code section 1793.22’s] definition of ‘new motor vehicle.’” (Jensen v. BMW of North America, Inc. (1995) 35 Cal.App.4th 112, 123.) Such a conclusion is “consistent with the [Song-Beverly] Act’s purpose as a remedial measure.” (Id. at 126 (citing Kwan v. Mercedes-Benz of North America, Inc. (1994) 23 Cal.App.4th 174, 184.) “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.’” (Id. (citing Cal. Code Regs., tit. 16, § 3396.1(g)).)
The Rodriguez court even agreed that Jensen was correctly decided and stated that “the Act's coverage for subsequent purchasers of vehicles with a balance remaining on the express warranty must be read in light of the facts then before the court and are limited in that respect.” (Rodriguez, supra, 77 Cal.App.5th at 224.)
Here, through no fault of Plaintiff, Hardin Hyundai failed to confirm that Ms. Escobar qualified for the Vehicle’s loan before allowing her to take possession of the Vehicle for two months. Had Ms. Escobar been told at the time she took possession of the Vehicle that she did not qualify for the loan, she could have asked Plaintiff at that time to sign for the loan. In that situation, there would be no issue as to whether Plaintiff had purchased a “new motor vehicle.” But instead of rectifying the mistake to reflect the true facts of this unique case, Defendant’s authorized dealership identified the Vehicle as “used” rather than updating or amending Ms. Escobar’s paperwork to reflect that the Vehicle was new as when Ms. Escobar took possession of the Vehicle. If the car could not have been identified as “new” because of DMV regulations, as put forth by Defendant, then an addendum or some explanation should have been provided in the Contract to clarify the mishap.
Yet, even assuming the car is used, it was sold to Plaintiff with a balance remaining on the express warranty and therefore, under Jensen, qualifies as a new car under the Song-Beverly Act.
Accordingly, the motion for summary adjudication is denied as to the first and fourth causes of action.
Second, Third and Fourth Causes of Action
The Song-Beverly Act at Civil Code § 1793.2(a) states “[e]very manufacturer of consumer goods sold in this state and for which the manufacturer has made an express warranty shall…” and goes on to describe various obligations of the manufacturer with respect to the repair of those consumer goods for which a new warranty was made, including maintaining service and repair facilities for perform warranty repairs to the consumer goods as well as providing those service and repair facilities with adequate parts and literature to perform necessary warranty repairs. ((Cal. Civ. Code § 1793.2(a)(1)-(3)(emphasis added).) Likewise, Civil Code § 1793.2(b) provides that any single visit for repair of the consumer goods at the manufacturer’s service and repair facilities should be completed within 30 days of delivery of the goods for such service, unless the consumer agrees to in writing to extend the timeframe for repair/service or the delay is caused by circumstances outside the control of the manufacturer or its authorized service and repair facilities. (Cal. Civ. Code § 1793.2(b).)
Defendant argues that Plaintiff’s claims under Civ. Code § 1793.2(b) and (a)(3), and under Civ. Code § 1791.2 (to the extent that claim is based on the theory that the subject vehicle is a “consumer good”) fail because the subject vehicle is not a “consumer good.” “Consumer goods” are defined as brand new goods under Civil Code § 1791. Used goods are not considered “consumer goods” except in certain limited circumstances and only as it pertains to distributors of used goods and sellers of used goods, not the manufacturer/original warrantor. (Cal. Civ. Code § 1795.5.) Therefore, because the Vehicle was sold as used, Defendant concludes it is not a “consumer good” under Sections 1793.2(b), 1793.2(a)(3), and 1791.2.
Plaintiff’s opposition, however, raises a triable issue of material fact as to whether the Vehicle was a consumer good. As set forth in more detail above, Ms. Escobar took possession of the Vehicle when it was brand new. Plaintiff executed the Contract for the loan on the Vehicle two months later because Defendant’s authorized retailer failed to inform Ms. Escobar at the time she took possession of the car that she did not qualify for the loan. Therefore, the Vehicle was identified as “used” even though Plaintiff was technically the first purchaser of the Vehicle.
Accordingly, summary adjudication is denied as to the second, third and fourth causes of action.
Fifth Cause of Action
Defendant asserts that Plaintiff’s claim for breach of implied warranty is barred by the statute of limitations. The Court in Krieger v. Nick Alexander Imports (1991) 234 Cal.App.3d 205, 215, determined that the California Uniform Commercial Code governs the limitations period under the Song-Beverly Act. Pursuant to California Commercial Code § 2725, “implied warranty claims must be brought within four years of the date when the breach occurred.” The statute begins to run from the date of delivery, and the delayed discovery exception for future performance is not applicable to implied warranties - “Because an implied warranty is one that arises by operation of law rather than by an express agreement of the parties, courts have consistently held it is not a warranty that explicitly extends to future performance of the goods.” (Cardinal Health v. Tyco Electronics Corp. (2008) 169 Cal. App. 4th 116, 134.)
In this case, Plaintiff’s claims for breach of implied warranty accrued on January 6, 2016, the date of the sale to Plaintiff. Therefore, Plaintiff should have filed the Complaint on January 6, 2020. Plaintiff’s lawsuit was filed on February 4, 2020.
Plaintiff argues that the principles of equitable estoppel apply here. Equitable estoppel comes into play only after the limitations period has run and addresses the circumstances in which a party will be estopped from asserting the statute of limitations if the defendant’s conduct relied on by the plaintiff has induced the plaintiff to postpone filing the action until the statute has run. (Lantzy v. Centex Homes (2003) 31 Cal.4th 363, 383-84.)
Ms. Escobar first discovered the defects in the Vehicle when she first presented the Vehicle to Defendant’s authorized repair facility on or about December 30, 2016. (P’s ASSUMF 19; Escobar Decl., ¶14.) The authorized repair facility performed the repairs under warranty. It was not until May 1, 2018, when the check engine light came on that Plaintiff could have been aware of any defects in the Vehicle. Thus, the earliest Ms. Escobar could have been aware of any defects in the vehicle was May 1, 2018.
Defendant points out that Plaintiff has not submitted any evidence that either Ms. Escobar or Plaintiff relied on any statements or action by HMA that cause them to delay filing this suit. The Court agrees, and finds that the fifth cause of action is barred by the statute of limitations.
Moving party to give notice.