Judge: Theresa M. Traber, Case: 20STCV33808, Date: 2023-05-08 Tentative Ruling

Case Number: 20STCV33808    Hearing Date: May 8, 2023    Dept: 47

RULING ON CLAIMS AND DAMAGES ISSUES

1.       Plaintiff is entitled to assert a claim under section 17932.2(d) that Defendant failed to remedy a non-conforming defect within a reasonable number of attempts. 

Plaintiff’s testimony at trial is that he experienced acceleration problems throughout his ownership of the vehicle, that he reported the problem to the dealership on multiple occasions, and that the problem was not resolved even after Defendant replaced the turbocharger in April 2019.  Defendant contests the existence of the problem, that it was reported when the truck was presented for repairs, and that the problem is related to or part of the same problem that led to the turbocharger replacement under the warranty. 

The applicable legal standard is that an incomplete repair of a covered product is not sufficient for a manufacturer to meet its obligations under the Song-Beverly Act.  (Robertson v. Fleetwood Travel Trailers of California, Inc. (2006) 144 Cal. App. 4th 785.)  A covered product is not brought into conformity until all aspects of the “nonconformity” have been cured.  (Id., at p. 801.)  Whether the acceleration problem identified by Plaintiff is related to the defect that led to the powertrain replacement is a matter for expert testimony and, ultimately, for the jury.  Similarly, Plaintiff’s testimony that he repeatedly raised this issue during service visits without any repair being made is sufficient to create a jury question, despite the absence of such complaints recorded on the repair order.

2.       Plaintiff is entitled to seek restitution as a remedy for his claim under section 17932(b), but only if he can demonstrate compliance with the Commercial Code requirements for a justifiable revocation under the applicable statutes.

Both Gavaldon v. DaimlerChrysler Corp. (2004) 32 Cal. 4th 1246, 1263–64, and Ramos v. Mercedes-Benz USA, LLC (2020) 55 Cal. App. 5th 220, recognize that there are two alternative predicates for securing reimbursement of the costs of a vehicle under section 1794(b).  The first is “as set forth in subdivision (d) of section 1793.2,” and the second is “where the buyer has rightfully rejected or justifiably revoked acceptance of the goods or has exercised any right to cancel the sale” and “Sections 2711, 2712 and 2713 apply.”  (Civil Code section 1794(b).) As the Court in Ramos noted, Section 2711 of the Commercial Code “allows a buyer who ‘justifiably revokes acceptance’ to recover ‘so much of the price as has been paid,’ as well as ‘any expenses reasonably incurred in their inspection, receipt, transportation, care and custody.”  (Ramos, supra, at p. 227 [quoting Cal. U. Com. Code, § 2771(1), (3).)

In Gavladon, supra, the Supreme Court explained the proof needed to establish that a revocation under the Commercial Code is justified:

California Uniform Commercial Code section 2608 provides the grounds on which a buyer can revoke acceptance of goods. It states in pertinent part: “(1) The buyer may revoke his acceptance of a lot or commercial unit whose nonconformity substantially impairs its value to him if he has accepted it [¶] (a) On the reasonable assumption that its nonconformity would be cured and it has not been seasonably cured; or [¶] (b) Without discovery of such nonconformity if his acceptance was reasonably induced either by the difficulty of discovery before acceptance or by the seller's assurances. [¶] (2) Revocation of acceptance must occur within a reasonable time after the buyer discovers or should have discovered the ground for it and before any substantial change in condition of the goods which is not caused by their own defects. It is not effective until the buyer notifies the seller of it.”

(Galvadon, supra, at pp. 1263-1264.)  Thus, in addition to proving a nonconformity with the warranted standard that substantially impairs its value to the consumer, Plaintiff must show that is “has not been seasonably cured,” that revocation was sought “within a reasonable time” after discovery of the defect and “before any substantial change in condition of the goods” not caused by the defect itself, and notice to the seller.  While this is a slightly different standard than the one under Civil Code § 1793.2(d), the Commercial Code’s standard appears to be equivalent to or even higher than the burden imposed on the consumer seeking restitution under § 1793.2(d).

3. Damages that can be sought by Plaintiff include both restitution and incidental damages.

Under Civil Code § 1793.2(d)(2)(B), restitution includes “the actual price paid or payable to the buyer, including any charges for transportation and manufacturer-installed options, but excluding nonmanufacturer items installed by a dealer or buyer and including any collateral charges such as sales or use tax, license fees, registration fees and other official fees, plus any indicental 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.”  If restitution is awarded by the jury, it should be computed based on the price Plaintiff actually paid as reduced by the manufacturer’s rebate.  Further, there appears to be no basis under the statute for recovery of the service contract and gap insurance purchased by Plaintiff as they do not fall within any category of recoverable expenses listed in the statute.