Judge Thomas D. Long, Case Number: 23STCV07959, Date: 2024-02-20 Tentative Ruling

On April 11, 2023, Plaintiffs Ivan Salazar Villa (erroneously named as Ivan Salzar Villa) and Jose Salazar field this action against Defendants LAD-V LLC (“LAD-V”) and Volkswagen Group of America Inc. (“VW”), arising from Plaintiffs’ purchase of an allegedly defective vehicle.

A demurrer for sufficiency tests whether the complaint states a cause of action. (Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747.) When considering demurrers, courts read the allegations liberally and in context, accepting the alleged facts as true. (Nolte v. Cedars-Sinai Medical Center (2015) 236 Cal.App.4th 1401, 1406.) “Because a demurrer challenges defects on the face of the complaint, it can only refer to matters outside the pleading that are subject to judicial notice.” (Arce ex rel. Arce v. Kaiser Found. Health Plan, Inc. (2010) 181 Cal.App.4th 471, 556.)

Defendants argue that the Song-Beverly Act’s express warranty provisions apply only to “new motor vehicles,” not Plaintiffs’ used vehicle. (Demurrer at pp.4-5.) Defendants rely on Rodriguez v. FCA US, LLC (2022) 77 Cal.App.5th 209 (Rodriguez). The California Supreme Court 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.) Rodriguez has been fully briefed, but no oral argument date has been set.

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.) Defendants similarly attempt to distinguish the cases. (Reply at pp. 3-4.) 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.)

As Plaintiffs note, the Complaint does not allege whether the vehicle was purchased new or used. (Opposition at p. 4.) At this stage, and for Defendants’ argument, that does not matter. The Court finds the reasoning and holding of Jensen more persuasive and more consistent with the plain language and legislative history of the statute. Under this authority, a used vehicle with a balance of coverage remaining under the Warranty is not excluded from the Song-Beverly Act’s express warranty provisions. Accordingly, regardless whether the vehicle was new or used, Plaintiffs have sufficiently alleged a claim for breach of express warranty.

Defendants argue that Plaintiffs do not allege sufficient facts for negligent repair. (Demurrer at pp. 6-7.) Specifically, they contend that Plaintiffs plead only conclusory allegations devoid of facts. A cause of action for negligence requires (1) a legal duty owed to the plaintiff to use due care, (2) breach of that duty, (3) causation, and (4) damage to the plaintiff. (County of Santa Clara v. Atlantic Richfield Co. (2006) 137 Cal. App. 4th 292, 318.) Here, Plaintiffs allege that LAD-V owed Plaintiffs a duty to use ordinary care and skill in storage, preparation, and repair of the vehicle, it breached that duty, and caused Plaintiffs’ damages. (Complaint ¶¶ 28-31.) This is sufficient.

With respect to Defendants’ argument that Plaintiffs must plead an exact dollar value of damages, their authority does not support this at demurrer. (See Demurrer at p. 7.) Van Sickle v. Gilbert (2011) 196 Cal.App.4th 1495, 1520-1521 and Becker v. S.P.V. Construction Co. (1980) 27 Cal.3d 489, 493-494 both considered whether defaulting defendants had notice of the amount of damages sought. Both cases discussed section 425.10’s requirements in the context of due process at default judgment—not in the context of the sufficiently of a pleading on demurrer.

Code of Civil Procedure section 425.10, subdivision (a)(2) does state that a complaint “shall contain” a demand for relief, and “[i]f the recovery of money or damages is demanded, the amount demanded shall be stated.” Here, Plaintiffs pray for “damages according to proof at trial.” By filing this action in Unlimited Jurisdiction, Plaintiffs have represented that at the time of filing, the amount in controversy exceeded $25,000.00. (Code Civ. Proc., § 85 [effective January 1, 2016 to December 31, 2023].)[1] That is sufficient at this stage.

Defendants also argue that this cause of action is barred by the economic loss rule. (Demurrer at pp. 7-8.) U der the economic loss rule, “[w]here a purchaser’s expectations in a sale are frustrated because the product he bought is not working properly, his remedy is said to be in contract alone, for he has suffered only ‘economic’ losses.” (Robinson Helicopter Co., Inc. v. Dana Corp. (2004) 34 Cal.4th 979, 988, quotation marks omitted.)

Plaintiffs’ tort claim for negligence by LAD-V is independent from their action against VW arising under the Song-Beverly Act. Specifically, Plaintiffs allege that LAD-V failed to “properly store, prepare and repair” the vehicle. (Complaint ¶ 30.) These are separate allegations against a defendant who was not a party to Plaintiffs’ warranty contract. Therefore, the economic loss rule does not bar Plaintiffs’ negligence cause of action.

The demurrer is OVERRULED. Defendants are ordered to file an answer within 10 days. (California Rules of Court, rule 3.1320(j)(1).)

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

[1] As of January 1, 2024, Unlimited Jurisdiction was amended to an amount in controversy exceeding $35,000.00. (Code Civ. Proc., § 85 [current version].)