Margie Daniel v. Ford Motor Company
806 F.3d 1217
| 9th Cir. | 2015Background
- Plaintiffs (Daniel, Hauser, Glass, Duarte) bought 2005–2011 Ford Focus vehicles in California and allege a rear-suspension alignment/geometry defect causing premature tire wear and safety risks.
- Each purchaser received Ford’s New Vehicle Limited Warranty; plaintiffs did not read pre-purchase brochures or warranty booklets but spoke with dealership salespeople.
- Plaintiffs asserted CLRA and UCL omission claims, breach of implied warranty under the Song-Beverly Act, breach of express warranty (Cal. Com. Code § 2313), and Magnuson-Moss claims; class certification was sought.
- District court granted summary judgment for Ford on CLRA/UCL (no reliance), Song-Beverly implied-warranty claims (vehicles didn’t become unmerchantable within warranty period), express-warranty claims (warranty covered only manufacturing defects), and thus Magnuson-Moss; denied class certification.
- Ninth Circuit reversed: (1) followed Mexia and held latent defects need not be discovered within Song-Beverly’s one-year durational period; (2) found Ford’s express warranty ambiguous and construed it against Ford to cover design defects; (3) found triable issues on reliance for CLRA/UCL; and remanded (including reconsideration of class certification).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether latent defects must be discovered within Song-Beverly’s one-year implied-warranty durational period | Mexia rule applies: latent defects can breach implied warranty even if discovered after the durational limit | §1791.1’s one-year duration creates a deadline for claimability/discovery | Followed Mexia: no discovery deadline; reversed summary judgment on Song-Beverly claims for Hauser, Glass, Duarte |
| Whether Ford’s New Vehicle Limited Warranty excludes design defects (express warranty scope) | Warranty language referencing defects introduced during the “design” process means design defects are covered | First paragraph limits coverage to defects in factory-supplied materials and workmanship (manufacturing defects only) | Warranty ambiguous; construed against Ford (drafter) to cover design and manufacturing defects; reversed summary judgment for Daniel and Duarte |
| Whether plaintiffs can show actual reliance on Ford’s omissions for CLRA and UCL claims | Plaintiffs would have learned of defect via dealerships and would have acted differently; omission was material given safety risks | Plaintiffs didn’t read Ford materials; no evidence dealerships would have relayed disclosures; reliance not established | Triable issues of fact on both awareness and materiality/reliance exist; reversed summary judgment on CLRA/UCL claims |
| Whether Magnuson-Moss claims survive if state warranty claims fail | Magnuson-Moss depends on state warranty claims | Same—if state warranty claims fail, Magnuson-Moss fails | Because state implied and express warranty claims were reversed, Magnuson-Moss claims also reversed (survive on remand) |
Key Cases Cited
- Mexia v. Rinker Boat Co., 95 Cal. Rptr. 3d 285 (Ct. App. 2009) (latent defects need not be discovered within Song-Beverly one-year durational period)
- In re Tobacco II Cases, 207 P.3d 20 (Cal. 2009) (actual reliance required for UCL and CLRA omissions; materiality standard for omissions)
- Clemens v. DaimlerChrysler Corp., 534 F.3d 1017 (9th Cir. 2008) (Magnuson-Moss claims rise or fall with state-law warranty claims)
- In re Schwarzkopf, 626 F.3d 1032 (9th Cir. 2010) (federal courts sitting in diversity must follow intermediate state appellate decisions absent convincing evidence the state supreme court would rule otherwise)
- Producers Dairy Delivery Co. v. Sentry Ins. Co., 718 P.2d 920 (Cal. 1986) (contract ambiguity defined; ambiguity is a question of law)