88 Cal.App.5th 765
Cal. Ct. App.2023Background
- Buyers purchased a certified pre‑owned truck for $54,362.48 (cash price shown as $37,499) that proved defective and substantially impaired use, value, or safety.
- After multiple unsuccessful repair attempts, buyers traded the defective truck to an unrelated dealer before suing the manufacturer under the Song‑Beverly Consumer Warranty Act seeking restitution; the dealer credited $29,500 for the trade‑in and rolled $5,453.33 negative equity into a new loan.
- At trial the court altered the verdict form to ask the jury for the "actual price paid" (quoting the statute) and allowed counsel to argue whether the trade‑in credit should be excluded from that figure; the court declined the manufacturer’s proposed instruction that would have explicitly excluded trade‑in value.
- The jury found the manufacturer breached its warranty, willfully failed to repurchase or replace the truck, and calculated restitution by subtracting the $29,500 trade‑in credit, awarding $15,572.18 in damages and a $31,144.36 civil penalty (total judgment $46,716.54).
- Buyers moved for a new trial arguing the damages were legally inadequate because the jury impermissibly deducted the trade‑in credit; the trial court denied the motion and awarded limited prejudgment interest and attorney fees.
- The Court of Appeal reversed and remanded, holding the jury erred in deducting the trade‑in credit when computing restitution under section 1793.2(d)(2)(B), and that statutory interpretation should not have been delegated to the jury.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a buyer’s trade‑in credit or sale proceeds for a defective vehicle reduce the "actual price paid or payable" for restitution under §1793.2(d)(2)(B) | "Actual price paid or payable" means the purchase cost at origination; trade‑in credit is not part of that price and cannot be deducted | The trade‑in credit is an amount the buyer recovered post‑purchase and should offset restitution to avoid a double recovery/windfall | Reversed: trade‑in credit/sale proceeds cannot be deducted from the statute’s "actual price paid or payable"; restitution measures the cost to obtain the vehicle at purchase (subject only to statutorily specified offsets) |
| Whether the trial court properly left statutory interpretation of "actual price paid or payable" to the jury by revising the verdict form | Buyers: court must interpret the statute; parties may argue but the court should instruct on legal meaning | Manufacturer: allowing jury to decide was acceptable after framing question as "actual price paid" | Court criticized delegation; statutory interpretation is the court’s duty and here the jury applied an improper offset, so reversal was required |
Key Cases Cited
- Kirzhner v. Mercedes‑Benz USA, LLC, 9 Cal.5th 966 (2020) (defines "price" in §1793.2(d)(2)(B) as cost to obtain vehicle at time of purchase and distinguishes collateral charges recoverable as part of price)
- Niedermeier v. FCA US LLC, 56 Cal.App.5th 1052 (2020) (court below held trade‑in credit may reduce restitution; disagreed with here)
- Figueroa v. FCA US, LLC, 84 Cal.App.5th 708 (2022) (agrees that trade‑in/sale proceeds should not reduce restitution under the Act)
- Jiagbogu v. Mercedes‑Benz USA, 118 Cal.App.4th 1235 (2004) (statutory scheme comprehensively lists allowable offsets; omission of other offsets indicates legislative intent to exclude them)
- Mitchell v. Blue Bird Body Co., 80 Cal.App.4th 32 (2000) (finance charges recoverable where they are part of the purchase price/financing obtained at sale)
- Martinez v. Kia Motors America, Inc., 193 Cal.App.4th 187 (2011) (buyer need not return/own vehicle to seek remedies under California lemon law)
- Murillo v. Fleetwood Enterprises, Inc., 17 Cal.4th 985 (1998) (Song‑Beverly Act is remedial and pro‑consumer; interpret to effectuate consumer protections)