Judge Thomas D. Long, Case Number: 22STCV17795, Date: 2023-12-12 Tentative Ruling

On May 27, 2022, Plaintiffs Richard C. Gallegos and Christina L. Gallegos filed this action against Defendant General Motors LLC, arising from Plaintiffs’ purchase of an allegedly defective vehicle.

On November 27, 2023, Plaintiffs filed a motion for leave to file a first amended complaint (“FAC”).

The Court may, in its discretion and after notice to the adverse party, allow an amendment to any pleading. (Code Civ. Proc., § 473, subd. (a)(1).) A motion to amend a pleading must include a copy of the proposed amendment or amended pleading which must be serially numbered to differentiate it from previous pleadings or amendments and must state what allegations in the previous pleading are proposed to be deleted or added, if any, and where, by page, paragraph, and line number, the allegations are located. (California Rules of Court, rule 3.1324(a).) The motion shall also be accompanied by a declaration attesting to the effect of the amendment, why the amendment is necessary and proper, when the facts giving rise to the amended allegations were discovered, and why the request for amendment was not made earlier. (California Rules of Court, rule 3.1324(b).)

Plaintiffs identify the proposed amendments and provide a copy of the FAC. (Yang Decl. ¶ 3 & Ex. 1.) The FAC adds allegations about Plaintiffs’ lease of the vehicle and their exercise of the purchase option, which they allege to be part of the same transaction. (See Yang Decl. ¶ 4 & Ex. 1, ¶¶ 5-6.) Plaintiffs also seek to add allegations about Defendant’s business structure and agency relationships. (Yang Decl. ¶ 4.)

Defendant argues that it will be prejudiced by amendment due to discovery closing and the January 16, 2024 trial date. (See Opposition at pp. 2-3.) This case is not ready for trial. The only trial materials submitted by counsel are motions in limine. The Final Status Conference and Jury Trial will be continued.

Defendant’s other arguments are primarily about the merits of the amendment. (See Opposition at pp. 4-5.) However, the Court does not ordinarily consider the validity of the proposed amended pleading when determining whether to grant leave to amend. (Kittredge Sports Co. v. Superior Court (1989) 213 Cal.App.3d 1045, 1048.)

Because there is no showing of prejudice, the motion for leave to file an amended complaint is GRANTED. Plaintiffs are ordered to file and serve the FAC within five days.

For each claim in the complaint, the defendant moving for adjudication must satisfy the initial burden of proof by showing that one or more elements of a cause of action cannot be established or that there is a complete defense to a cause of action. (Code Civ. Proc., § 437c, subd. (p)(2); Scalf v. D. B. Log Homes, Inc. (2005) 128 Cal.App.4th 1510, 1520 (Scalf).) Then the burden shifts to the plaintiff to show that a triable issue of material fact exists as to that cause of action or a defense. (Code Civ. Proc., § 437c, subd. (p)(2); Scalf, supra, 128 Cal.App.4th at p. 1520.) 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, 162-163.)

The vehicle at issue is a model year 2018 Chevrolet Traverse, VIN 1GNERFKW7JJ225552. (Undisputed Material Facts “UMF” 1.) When the vehicle was first delivered, Defendant issued a New Vehicle Limited Warranty with bumper-to-bumper coverage for the earlier of three years or 36,000 miles and powertrain coverage for the earlier of five years or 60,000 miles. (UMF 4.)

Plaintiffs leased the vehicle on April 20, 2018. (Additional Material Facts “AMF” 7.) Section 23(e) of the lease provides that Plaintiffs can purchase the vehicle. (AMF 9.) Plaintiffs purchased the vehicle on May 20, 2021, with 36,160 miles, from Premier Chevrolet of Buena Park. (UMF 2; AMF 7.)

Defendant moves for summary judgment, or in the alternative, summary adjudication of each cause of action.

A. Defendant Has Not Met Its Burden on the First, Third, and Fourth Causes of Action (Breach of Express Warranty).

The first and third causes of action are for violations of the Song-Beverly Act, arising from Defendant’s failure to repair the vehicle to conform to express warranties. The fourth cause of action is for violation of the Magnuson-Moss Warranty Act. “Magnuson-Moss ‘calls for the application of state written and implied warranty law, not the creation of additional federal law,’ except in specific instances in which it expressly prescribes a regulating rule.” (Daugherty v. American Honda Motor Co., Inc. (2006) 144 Cal.App.4th 824, 833.) Therefore, “failure to state a warranty claim under state law necessarily constitute[s] a failure to state a claim under Magnuson-Moss.” (Ibid.)

Defendant argues that the Song-Beverly Act’s express warranty provisions apply only to “new motor vehicles,” not Plaintiffs’ used vehicle. (Motion at pp. 6-8.) Defendant primarily relies on Rodriguez v. FCA US, LLC (2022) 77 Cal.App.5th 209 (Rodriguez). The California Supreme Court has granted review of Rodriguez and, when doing so, stated that the Court of Appeal opinion “may be cited, not only for its persuasive value, but also for the limited purpose of establishing the existence of a conflict in authority that would in turn allow trial courts to exercise discretion under Auto Equity Sales, Inc. v. Superior Court [citation], to choose between sides of any such conflict.” (Rodriguez v. FCA US (Cal. 2022) 295 Cal.Rptr.3d 351.)

A “new motor vehicle” includes “a dealer-owned vehicle and a ‘demonstrator’ or other motor vehicle sold with a manufacturer’s new car warranty.” (Civ. Code, § 1793.22, subd. (e)(2).) The Rodriguez court “acknowledge[d] that in isolation the phrase ‘other motor vehicle sold with a manufacturer’s new car warranty’ could arguably refer to any car sold with a manufacturer’s warranty still in force,” but it agreed “that context clearly requires a more narrow interpretation.” (Rodriguez, supra, 77 Cal.App.5th at p. 220.) The court noted that “the phrase appears in a definition of new motor vehicles,” strongly suggesting that “the Legislature did not intend the phrase to refer to used (i.e., previously sold) vehicles.” (Ibid.) The court also noted that “more importantly, the phrase is preceded by ‘a dealer-owned vehicle and demonstrator,’ which comprise a specific and narrow class of vehicles.” (Ibid.) The Rodriguez court therefore concluded that “the phrase ‘other motor vehicles sold with a manufacturer’s new car warranty’ refers to cars sold with a full warranty, not to previously sold cars accompanied by some balance of the original warranty.” (Id. at p. 225.)

On the other hand, the Court of Appeal in Jensen v. BMW of North America, Inc. (1995) 35 Cal.App.4th 112 (Jensen) previously concluded that “cars sold with a balance remaining on the manufacturer’s new motor vehicle warranty are included within its definition of ‘new motor vehicle.’” (Id. at p. 123.) The court determined that “the words of section 1793.22 are reasonably free from ambiguity” because “[t]he use of the word ‘or’ in the statute indicates ‘demonstrator’ and ‘other motor vehicle’ are intended as alternative or separate categories of ‘new motor vehicle’ if they are ‘sold with a manufacturer’s new car warranty.’” (Ibid.) The court also considered the legislative history of the statute due to the “peculiar grammatical structure” of the section. (Ibid.) After reviewing the amendments to former section 1793.2, documents relating to those legislative proceedings, and the statutory scheme as a whole, the court “conclude[d] the plain meaning and the legislative intent are one and the same.” (Ibid.)

The Rodriguez court distinguished Jensen as involving a lease by a manufacturer-affiliated dealer who issued a full new car warranty along with the lease. (Rodriguez, supra, 77 Cal.App.5th at p. 223.) Defendant similarly attempts to distinguish the cases. (Reply at pp. 6-7.) However, those facts were not relevant to the Jensen court’s interpretation of the statute based on the statute’s plain meaning and legislative intent. (See Jensen, supra, 35 Cal.App.4th at pp. 122-127.)

The Court finds the reasoning and holding of Jensen more persuasive and more consistent with the plain language and legislative history of the statute. Accordingly, Plaintiffs’ used vehicle with a balance of coverage remaining under the Warranty is not excluded from the Song-Beverly Act’s express warranty provisions, and Defendant has not met its burden on the first and third causes of action.

With respect to Defendant’s argument that the May 20, 2021 purchase was made outside the remaining warranty period (Opposition at pp. 6-7), the Court is concurrently granting Plaintiffs leave to amend to allege privity of contract between the lease and the purchase, and therefore there remain triable issues regarding whether the defects arose within the warranty period. Moreover, Plaintiffs allege that the vehicle had defects including suspension, electrical, engine, emission, and transmission system defects, and it is undisputed that the vehicle had powertrain coverage for the earlier of five years or 60,000 miles. (Complaint ¶ 10; UMF 4.)

Summary adjudication of the first, third, and fourth causes of action is denied.

B. Plaintiffs’ Proposed Amendments May Make the Second Cause of Action Viable (Breach of Implied Warranties).

Defendant argues that the second cause of action for breach of implied warranty fails as a matter of law because Defendant is only the manufacturer, not the seller. (Motion at pp. 9-10.)

The Song-Beverly Act defines the implied warranties that accompany the sale of consumer goods, and it permits a buyer to bring an action for damages and other relief when the implied warranties are breached. (See Civ. Code, §§ 1791.1, 1794.) “[I]n the sale of used consumer goods, liability for breach of implied warranty lies with distributors and retailers, not the manufacturer, where there is no evidence the manufacturer played any role in the sale of the used car to plaintiff.” (Nunez v. FCA US LLC (2021) 61 Cal.App.5th 385, 398.) “[O]nly distributors or sellers of used goods—not manufacturers of new goods—have implied warranty obligations in the sale of used goods.” (Id. at p. 399.)

Plaintiff purchased the vehicle from Premiere Chevrolet, not directly from Defendant. (UMF 2; AMF 7.) However, Plaintiffs’ proposed amendments include allegations about Defendant’s agency relationships with dealerships. If the dealership is an agent of Defendant, then the sale may be also attributed to Defendant.

In light of the Court’s grant of leave to amend and the forthcoming FAC, summary adjudication of the second cause of action is denied.

The motion for summary judgment, or in the alternative, summary adjudication is DENIED.

Parties who intend to submit on this tentative must send an email to the Court at SMCDEPT48@lacourt.org indicating intention to submit. If all parties in the case submit on the tentative ruling, no appearances before the Court are required unless a companion hearing (for example, a Case Management Conference) is also on calendar.

Hon. Thomas D. Long

Judge of the Superior Court