76 Cal.App.5th 371
Cal. Ct. App.2022Background:
- In June 2014 DeNike bought a 2014 Jeep Wrangler from Mathew Enterprise (Stevens Creek Jeep). He was told the hardtop was factory installed; the vehicle later was discovered to have left the factory as a soft top.
- After discovering the post‑factory hardtop and related issues, DeNike sent a CLRA demand; SCJ offered (within the 30‑day window) either to repair or to rescind and refund, including payment of "reasonable" attorney fees.
- DeNike sued under the CLRA, for intentional misrepresentation, and under the Song‑Beverly Act (implied warranty/labeling). A jury found for DeNike on CLRA (restitution/rescission), intentional misrepresentation, and Song‑Beverly; awarded restitution and incidental damages.
- The trial court later entered a permanent injunction requiring proper disclosure/addendum stickers and employee training; SCJ appealed.
- The Court of Appeal held SCJ’s pre‑suit correction offer was "reasonable and appropriate," reversing the restitution verdict under the CLRA (§ 1782(b)) but affirming the misrepresentation and Song‑Beverly verdicts and the injunction.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a reasonable pre‑suit CLRA correction offer bars a consumer's claim for restitution (i.e., is restitution an "action for damages" under §1782(b)). | DeNike proceeded to seek restitution despite SCJ’s offer; (he did not cross‑appeal the trial court’s finding that the offer was reasonable). | SCJ: §1782(b) bars any action for damages under §1780 (including restitution) if an appropriate correction is offered within 30 days. | Court: §1782(b) bars all §1780 remedies except injunctive relief; vacated judgment for CLRA restitution and ordered judgment for SCJ on that claim. |
| Exclusion of evidence of SCJ’s pre‑litigation correction efforts. | DeNike opposed admission or argued it did not undermine his claims. | SCJ sought to introduce evidence of its corrective offers to show no damages. | Moot on appeal because restitution claim is vacated; lower court’s exclusion not reached. |
| Sufficiency of evidence of reasonable reliance for intentional misrepresentation. | DeNike relied on SCJ’s representation that the hardtop was factory installed. | SCJ claimed DeNike was sophisticated and had a calendar note saying “dealer installed,” so reliance was unreasonable. | Substantial evidence supported the jury’s finding of reasonable reliance; misrepresentation verdict affirmed. |
| Whether a safety element must be proved for a Song‑Beverly mislabeling/"not conforming to label" claim. | DeNike based Song‑Beverly claim on mislabeling (sticker said no modification). | SCJ argued an implied safety requirement must be shown for any implied warranty breach. | Court: No separate safety element is required for labeling/label conformity claims under §1791.1(a)(3)–(4); instruction was proper; verdict affirmed. |
| Appropriateness of permanent injunction requiring addendum stickers/disclosure and training. | DeNike sought narrow injunctive relief to prevent recurrence and ensure disclosure. | SCJ argued injunction overbroad and not supported by evidence of likely recurrence or harm. | Trial court did not abuse discretion; injunction upheld given evidentiary gaps and risk of repeated CLRA violations. |
Key Cases Cited
- Meyer v. Sprint Spectrum L.P., 45 Cal.4th 634 (2009) (interpreting §1780/§1782 and treating "any damage" phrase as broad in CLRA notice context)
- Outboard Marine Corp. v. Superior Court, 52 Cal.App.3d 30 (1975) (CLRA purpose includes facilitating precomplaint settlement)
- Benson v. Southern California Auto Sales, Inc., 239 Cal.App.4th 1198 (2015) (trial court discretion to determine reasonableness of CLRA correction offers)
- Murillo v. Fleetwood Enterprises, Inc., 17 Cal.4th 985 (1998) (Song‑Beverly Act is remedial and should be construed pro‑consumer)
- Isip v. Mercedes‑Benz USA, LLC, 155 Cal.App.4th 19 (2007) (discussion of implied warranty of merchantability under Song‑Beverly)
- Simgel Co., Inc. v. Jaguar Land Rover N. Am., LLC, 55 Cal.App.5th 305 (2020) (distinguished; did not involve a pure mislabeling claim like here)