Judge: Stephen P. Pfahler, Case: 23STCV16951, Date: 2024-10-24 Tentative Ruling

Case Number: 23STCV16951    Hearing Date: October 24, 2024    Dept: 68

Dept. 68

Date: 10-24-24

Case # 23STCV16951

Trial Date: 8-18-25 c/f 11-12-24

 

SUMMARY JUDGMENT

 

MOVING PARTY: Defendant, Volkswagen Group of America, Inc.

RESPONDING PARTY: Plaintiff, John Murillo

 

RELIEF REQUESTED

Motion for Summary Judgment/Summary Adjudication

·         1st Cause of Action: Song-Beverly Consumer Warranty Act – Breach of Express Warranty

·         2nd Cause of Action: Song-Beverly Consumer Warranty Act – Breach of Implied Warranty

·         3rd Cause of Action: Violation of Civil Code section 1793.2

 

SUMMARY OF ACTION & PROCEDURAL HISTORY

On February 5, 2022, Plaintiff John Murillo “acquired” a 2022 Audi A4 vehicle. Plaintiff alleges the vehicle suffers from unspecified defects.

 

On July 19, 2023, Plaintiff filed a complaint for Song-Beverly Consumer Warranty Act – breach of express warranty, Song-Beverly Consumer Warranty Act – breach of implied warranty, and violation of Civil Code section 1793.2. Defendant answered on November 26, 2018.

 

On October 23, 2020, the court entered the parties’ stipulation to file a first amended complaint. On January 29, 2021, Plaintiff filed the first amended complaint for reach of express warranty – Song-Beverly Consumer Warranty Act, breach of implied warranty - Song-Beverly Consumer Warranty Act, and violation of Civil Code section 1793.2. Defendant answered on August 24, 2023.

 

RULING: Denied.

Request for Judicial Notice: Granted.

 

Evidentiary Objections to the Declaration of Guy Mizrahi: Overruled.

 

Evidentiary Objections to the Declaration of Melanie Cockrum: Overruled.

·         The court accepts the existence of the discovery responses, but will not consider any content to the extent the responses lack verification and consideration of the content would violate hearsay rules.

·         Exhibit G: Not Relied Upon (Code Civil Proc. § 437c, subd. (q).)

 

Evidentiary Objections to the Declaration of Erin Johnson: Overruled.

 

The court declines to rely on and will not cite unpublished material, including District Court rulings. (Cal. Rules of Court, rule 8.1115(a); Rittiman v. Public Utilities Com. (2022) 80 Cal.App.5th 1018, 1043 (footnote 18).)

 

Defendant Volkswagen Group of America, Inc. (Volkswagen) moves for summary judgment and alternatively summary adjudication on the three individual causes of action for Song-Beverly Consumer Warranty Act – Breach of Express Warranty, Violation of Civil Code section 1793.2, and the civil penalties claim. Volkswagen moves for relief on grounds that Volkswagen offered to repurchase in compliance with the Song-Beverly Act; Plaintiff accepted the offer; and, the vehicle was both returned and agreed upon amount paid (after the filing of the complaint). Plaintiff in opposition challenges the motion on the basis that the promptness of the purchase offer, and process in responding to the demand, establishes triable issues of material fact under Civil Code section 1793.2. Plaintiff also challenges the right to seek summary adjudication of the civil penalties claim. Volkswagen in reply reiterates the repurchase of the vehicle, and maintains the process complied with Song-Beverly. Volkswagen also emphasizes the right to seek summary adjudication on the civil penalties claim based on an analogy of civil penalties as the functional equivalent to punitive damages.

 

The subject action involves a new vehicle nonconformity, failure to repair and repurchase. “(d)(1) Except as provided in paragraph (2), if the manufacturer or its representative in this state does not service or repair the goods to conform to the applicable express warranties after a reasonable number of attempts, the manufacturer shall either replace the goods or reimburse the buyer in an amount equal to the purchase price paid by the buyer, less that amount directly attributable to use by the buyer prior to the discovery of the nonconformity.

(2) If the manufacturer or its representative in this state is unable to service or repair a new motor vehicle, as that term is defined in paragraph (2) of subdivision (e) of Section 1793.22, to conform to the applicable express warranties after a reasonable number of attempts, the manufacturer shall either promptly replace the new motor vehicle in accordance with subparagraph (A) or promptly make restitution to the buyer in accordance with subparagraph (B). However, the buyer shall be free to elect restitution in lieu of replacement, and in no event shall the buyer be required by the manufacturer to accept a replacement vehicle.

(A) In the case of replacement, the manufacturer shall replace the buyer's vehicle with a new motor vehicle substantially identical to the vehicle replaced. The replacement vehicle shall be accompanied by all express and implied warranties that normally accompany new motor vehicles of that specific kind. The manufacturer also shall pay for, or to, the buyer the amount of any sales or use tax, license fees, registration fees, and other official fees which the buyer is obligated to pay in connection with the replacement, plus any incidental damages to which the buyer is entitled under Section 1794, including, but not limited to, reasonable repair, towing, and rental car costs actually incurred by the buyer.

(B) In the case of restitution, the manufacturer shall make restitution in an amount equal to the actual price paid or payable by the buyer, including any charges for transportation and manufacturer-installed options, but excluding nonmanufacturer items installed by a dealer or the buyer, and including any collateral charges such as sales or use tax, license fees, registration fees, and other official fees, plus any incidental damages to which the buyer is entitled under Section 1794, including, but not limited to, reasonable repair, towing, and rental car costs actually incurred by the buyer.” (Civ. Code, § 1793.2, subd. (d).)

 

The plain language of the statute lacks any specific time frame. Plaintiff suggests the third party dispute resolution language definition of 30 days provides a timeframe, but no published authority adopts this suggested timeline. (Civ. Code, § 1793.22, subd. (d)(3).) Two leading cases on the subject differ on a finding of reasonableness. One case in the Second Appellate District found where the circumstances allow for a finding of knowledge of defects with the vehicle, and further delays occur, said conduct demonstrates willful delay and a lack of good faith. (Lukather v. General Motors, LLC (2010) 181 Cal.App.4th 1041, 1051-1052.) In contrast, the Fourth Appellate District found no evidence of willful conduct following an offer letter issued six weeks after the demand letter from plaintiff’s counsel. (Dominguez v. American Suzuki Motor Corp. (2008) 160 Cal.App.4th 53, 59.)  The Dominguez court specifically noted no prior demand for repurchase or replacement until after the hiring of counsel and the demand letter. (Id. at p. 60.)

 

The California Supreme Court also considered the issue of willful delay in context of reasonableness. The court offers no definitive guidelines, but consistent with appellate district cases, the court stated: “If the buyer succeeds in proving that the duty arose well before filing suit, it should not be difficult for the buyer to also prove that the manufacturer failed to act promptly since the buyer had to resort to a lawsuit in order to get the manufacturer to finally comply with its duty.” (Kirzhner v. Mercedes-Benz USA, LLC (2020) 9 Cal.5th 966, 987.)

 

Plaintiff leased the vehicle in February 2022. [Declaration of Melania Cockrum, Ex. F.] Following a period of attempted repairs, on June 8, 2023, Plaintiff requested replacement of the vehicle. [Declarations of Erin Johnson, Ex. A & Guy Mizrahi.] Volkswagen responded on June 12, 2023, requesting information, which was provided. [Johnson Decl. & Cockrum Decl.] On July 19, 2023, Plaintiff filed the complaint. On July 31, 2023, Volkswagen agreed to repurchase the vehicle. Additional documentation was subsequently provided, and a revised repurchase offer issued on August 8, 2023. [Johnson Decl.] A further revised purchase offer was made on August 17, 2023. [Johnson Decl.] The offer was accepted on August 21, 2023. [Johnson Decl.] The vehicle was surrendered on September 5, 2023. [Johnson Decl.]

 

Volkswagen depends on a finding that the course of conduct supports a finding of compliance as a matter of law for purposes of summary judgment, and Plaintiff only challenges the motion in order to increase attorney fees and recover civil penalties. It’s not clear from the interim period starting with the date information was first provided on June 12, 2023, to the first offer on July 31, 2023, whether counsel filed the complaint in the interim order to preserve and enhance potential recovery, or whether the delays in the period genuinely necessitated the filing of the complaint based on willful delay. Both scenarios are possible.

 

Given the difference in appellate district views and limited California Supreme Court guidance on factually disputed circumstances, the court declines to find as a matter of law to both full compliance with the Song-Beverly Act and lack of willful conduct in negotiating the repurchase and surrender of the vehicle. The implicit incentive of counsel to increase recovery constitutes a factor in determining the reasonableness of the parties’ conduct, but the court in no way finds clear cut evidence to declare the course of conduct by Volkswagen strictly constituted action in good faith. The court therefore finds triable issues of material fact from the course and conduct for purposes of ruling on the subject motion for summary judgment and summary adjudication on the three individual causes of action regarding Song-Beverly Act compliance and potential civil penalties. [Johnson Decl., Cockrum Decl., Mizrahi Decl.] (Kwan v. Mercedes-Benz of North America, Inc. (1994) 23 Cal.App.4th 174, 186-187; Ramos v. FCA US LLC (E.D. Cal. 2019) 385 F.Supp.3d 1056, 1071-1072.) The motion for summary judgment is DENIED.

 

Summary Adjudication on Civil Penalty Claim

“A party may move for summary adjudication as to one or more causes of action within an action... 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, as specified in Section 3294 of the Civil Code, or that one or more defendants either owed or did not owe a duty to the plaintiff or plaintiffs. 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.” (Code Civ. Proc., § 437c, subd. (f)(1).) With the exception of punitive damages claims, a court is categorically barred from granting “summary adjudication of a single item of compensatory damage which does not dispose of an entire cause of action.” (DeCastro West Chodorow & Burns, Inc. v. Superior Court (1996) 47 Cal.App.4th 410, 422.) The court appreciates the analogy to punitive damages, thereby distinguishing civil penalties from compensatory damages in that said penalties exist as a form of punishment or deterrence, and only become available upon a showing of a willful violation. (Kwan v. Mercedes-Benz of North America, Inc., supra, 23 Cal.App.4th at p. 187.)


The plain language of the statute rejects such an interpretation notwithstanding the case interpretation on the nature of the penalties. While an argument can be made for potential inclusion, the court declines to consider the procedural propriety of the motion. The court already finds triable issues of material fact on the issue on the issue of compliance and willful conduct, thereby subsuming any necessity for separate consideration. The motion for summary adjudication is therefore DENIED. [See Decl. Mizrahi, Cockrum, Johnson.]

 

Finally, the court declines to address the existence of the third party dispute program addressed in the reply. While the subject matter potentially reflects on the willfulness issues, the program in no way appears to insulate Volkswagen from the liability claim brought under the Song-Beverly Act in the instant action.

 

The motion is therefore DENIED in its entirety.

 

Motion to compel further discovery scheduled for January 14, 2025. August 18, 2025, trial date remains set.

 

Volkswagen to give notice.