EVERARDO RODRIGUEZ et al., Plaintiffs and Appellants, v. FCA US, LLC, Defendant and Respondent.
E073766
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA, FOURTH APPELLATE DISTRICT, DIVISION TWO
Filed 4/7/22
CERTIFIED FOR PUBLICATION; (Super.Ct.No. RIC1807727)
Rosner, Barry & Babbitt, Hallen D. Rosner, Arlyn L. Escalante; Knight Law Group, Steve Mikhov, and Roger R. Kirnos for Plaintiffs and Appellants.
Clark Hill, David L. Brandon, Georges A. Haddad; Horvitz & Levy, Lisa Perrochet, and Shane H. McKenzie for Defendant and Respondent.
This appeal from a grant of summary judgment involves the Song-Beverly Consumer Warranty Act (the Act) (
Plaintiffs Everardo Rodriguez and Judith Arellano purchased a two-year-old Dodge truck from a used car dealership. The truck had over 55,000 miles on it and, though the manufacturer’s basic warranty had expired, the limited powertrain warranty had not. After experiencing electrical defects with the truck, plaintiffs sued the manufacturer, FCA US, LLC (Chrysler),2 for violation of the refund-or-replace provision. FCA moved for summary judgment, arguing the truck was not a “new motor vehicle,” and the trial judge agreed.
The sole issue in this case is whether the phrase “other motor vehicle sold with a manufacturer’s new car warranty” covers sales of previously owned vehicles with some balance remaining on the manufacturer’s express warranty. We conclude it does not and that the phrase functions instead as a catchall for sales of essentially new vehicles where the applicable warranty was issued with the sale. We therefore affirm.
I
FACTS
In 2013 plaintiffs purchased a 2011 Dodge Ram 2500 from the Pacific Auto Center in Fontana. The truck originally came with a basic three-year/36,000 mile bumper-to-bumper warranty and a five-year/100,000 mile limited powertrain warranty, which covers the engine, transmission, and drive system. At the time of the sale, the truck had over 55,000 miles on it and its basic warranty had expired, though an unspecified balance remained on the powertrain warranty.
A year later, the truck’s check engine light came on and plaintiffs took it to an authorized Chrysler dealer in Hemet for repair. The dealer appeared to fix the issue, but over the next year or so (through May 2015), the check engine light came on repeatedly, necessitating five additional trips to the same dealer for service.
On April 30, 2018, plaintiffs sued FCA alleging four causes of action, only one of which is at issue in this appeal—violation of
FCA filed a motion for summary judgment, arguing plaintiffs’ claim failed because the manufacturer’s refund-or-replace provision applies to new vehicles only, and it was undisputed plaintiffs purchased the truck used. FCA presented evidence that the Pacific Auto Center is an unaffiliated, third party reseller and therefore was not one of its representatives at the time of sale. It also presented evidence that no warranties were issued at the time of sale.
After a hearing on the motion, Riverside County Superior Court Judge Jackson Lucky concluded a previously owned vehicle sold with a balance remaining on one of the manufacturer’s express warranties does not qualify as a “new motor vehicle” under the Act. The judge entered judgment in favor of FCA, and plaintiffs timely appealed.
II
ANALYSIS
A. Standard of Review
A party moving for summary judgment bears an overall burden of persuasion to demonstrate there is no triable issue of material fact and they are entitled to judgment as a matter of law. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 845.) “In reviewing a defense summary judgment, we apply the traditional three-step analysis used by the trial court, that is, we (1) identify the pleaded issues, (2) determine if the defense has negated an element of the plaintiff’s case or established a complete defense, and if and only if so, (3) determine if the plaintiff has raised a triable issue of fact.” (Meddock v. County of Yolo (2013) 220 Cal.App.4th 170, 175.)
Where, as here, we are asked to answer a purely legal question of statutory interpretation based on undisputed facts, we independently construe the relevant statutory provisions. (Atkinson v. Elk Corp. (2003) 109 Cal.App.4th 739, 749-750.) Because the language of the provision is the most reliable indicator of legislative intent, we
B. The Song-Beverly Act
Because we do not read statutory provisions in isolation, we consider the broader statutory context in which the definition of “new motor vehicles” applies before turning to the definition itself.
1. Statutory framework
“The Song-Beverly Act is a remedial statute designed to protect consumers who have purchased products covered by an express warranty.” (Robertson v. Fleetwood Travel Trailers of California, Inc. (2006) 144 Cal.App.4th 785, 798.) To that end, it regulates warranty terms and imposes service and repair obligations on the parties who issue the warranties. (Joyce v. Ford Motor Co. (2011) 198 Cal.App.4th 1478, 1486.)
The Act defines the parties who issue warranties as follows. A manufacturer is an entity “that manufactures, assembles, or produces consumer goods.” (
The Act requires that where a manufacturer sells “consumer goods” accompanied by an express warranty, it must maintain local repair facilities “to carry out the terms of those warranties.” (
That’s not to say the Act has no protections for used goods; it does, but the protections are limited and bind the seller or distributor of the used product. (
The Act also provides implied warranties for used products. These are shorter than the implied warranties for new products; their maximum duration is three months. (
Thus, a hallmark of the Act is that its consumer protections apply against the party who sold the product to the buyer and issued the express warranty. With this framework in mind, we turn to the refund-or-replace provision at issue and the definition of “new motor vehicle.”
2. The “new motor vehicle” refund-or-replace provision
In 1982, the Legislature amended the Act to include provisions specifically applicable to motor vehicles; this amendment became known as
Initially, the Act’s definition of “new motor vehicle” consisted of a single sentence describing the term as any “new motor vehicle which is used or bought for use primarily for personal, family, or household purposes.” (Former § 1793.2, subd. (e)(4)(B), Stats. 1982, ch. 388, § 1, p. 1723; Park City Services, Inc. v. Ford Motor Co., Inc. (2006) 144 Cal.App.4th 295, 304.) But over the years, the definition underwent several amendments to include certain types of vehicles that didn’t obviously or technically satisfy the general definition.
The current definition, located in
C. Plaintiffs’ Truck Is Not a “New Motor Vehicle”
Plaintiffs argue the phrase “other motor vehicle sold with a manufacturer’s new car warranty” describes their truck because it still had a balance remaining on an express warranty from the manufacturer—the limited powertrain warranty—when Pacific Auto Center sold it to them. FCA argues the phrase qualifies dealer-owned cars and demonstrators and thus refers to vehicles that, like those two types of vehicles, have not been previously sold and are sold with new or full warranties. FCA argues plaintiffs’ interpretation is at odds with the rest of the Act’s definition of “new motor vehicles.” While
To begin with, the phrase appears in a definition of new motor vehicles. That fact alone strongly suggests the Legislature did not intend the phrase to refer to used (i.e., previously sold) vehicles. But, more importantly, the phrase is preceded by “a dealer-owned vehicle and demonstrator,” which comprise a specific and narrow class of vehicles. Though they have not been previously sold to a consumer, demonstrators and dealer-owned cars are used in the sense that they will have been driven for various purposes before sale. As such, they will necessarily have more miles on their odometers than the typical vehicle in a dealer’s new car inventory. What makes these vehicles unique is that even though they aren’t technically new, manufacturers (or their dealer-representatives) treat them as such upon sale by providing the same type of manufacturer’s warranty that accompany new cars.
In other words, demonstrators and dealer-owned vehicles comprise a narrow category of basically new vehicles—they have never been previously sold to a consumer and they come with full express warranties. Given this context, we think the most natural interpretation of the phrase “other motor vehicle sold with a manufacturer’s new car warranty” is that it, too, refers to vehicles that have never been previously sold to a consumer and come with full express warranties.
Plaintiffs urge us to construe the phrase “other motor vehicle sold with a manufacturer’s new car warranty” as a distinct item in a list of three types of vehicles—a standalone category of previously sold vehicles that are conceptually distinct from dealer-owned vehicles and demonstrators. But the provision’s grammatical structure signals the list contains two types of vehicles, not three. If the list contained three distinct types of vehicles, we would expect to see commas separating the types. Instead, the use of “and” and “or” to separate the three items indicates the Legislature structured the provision as a list of two vehicles (dealer-owned vehicles “and” demonstrators) followed by an adjectival clause qualifying or describing those vehicles. This organization reveals that, rather than create a new and different class of vehicles, the phrase was intended to function as a catchall provision to cover a narrow class vehicle—the previously driven, but basically new (i.e., not previously sold) car.
As we read the phrase, its clear purpose is to function as a catchall to ensure that manufacturers cannot evade liability under the Act by claiming a vehicle doesn’t qualify as new because the dealership hadn’t actually used it as a demonstrator. For example, the phrase would cover a car used by the manufacturer or dealer for any purpose (say, a service loaner), so long as the car was sold as if it were new—that is, with a full new car warranty.
We also note that plaintiffs’ interpretation raises more questions than it answers. For example, how would the Act treat a car that was sold by private seller before eventually ending up at a used car dealership? It’s clear the Act doesn’t cover products purchased in private sales (
Another question is whether a buyer who purchases a used car with only a few miles remaining on the original warranty would be entitled to the same protection as the original buyer. If so, what would constitute “a reasonable number of attempts” to repair the vehicle? (
The problems with plaintiffs’ interpretation only increase when we consider the phrase in the broader context of the Act as a whole. As we’ve
Our examination of the entire Act yields two additional reasons for concluding the phrase doesn’t cover subsequent sales of vehicles with unexpired manufacturer’s warranties. First, the Act defines “express warranty” as any “written statement arising out of a sale to the consumer of a consumer good pursuant to which the manufacturer . . . undertakes to preserve or maintain the utility or performance of the consumer good . . . .” (
Second, as part of the Motor Vehicle Warranty Adjustment Programs (
Based on all of these textual reasons, we conclude the phrase “other motor vehicle sold with a manufacturer’s new car warranty” unambiguously refers to cars that come with a new or full express warranty. But even if this meaning weren’t readily apparent from the statute, the Act’s legislative history would convince us the phrase refers to vehicles sold with full warranties. The phrase was added to the Act’s definition of “new motor vehicle” in 1987 with the enactment of Assembly Bill Number 2057. The enrolled bill report explains that our lawmakers deemed it necessary to add “dealer-owned vehicles and ‘demonstrator’ vehicles sold with a manufacturer’s new car warranty” to the definition of “new motor
As far as we’re aware, the issue before us is one of first impression; no California court has addressed whether a used car purchased from a retail seller unaffiliated with the manufacturer qualifies as a “new motor vehicle” simply because there is some balance remaining on the manufacturer’s warranty. There is, however, one federal case directly on point, and it reaches the same conclusion we do.
In Johnson v. Nissan N.Am., Inc. (N.D. Cal. 2017) 272 F.Supp.3d 1168, the plaintiff sued Nissan under the manufacturer’s refund-or-replace provision after the car she purchased from a used car dealership suffered alleged defects. She argued she was entitled to relief because her car was still under Nissan’s three-year or 36,000-mile basic warranty. The court disagreed and dismissed her claim on the ground her car was not a “new motor vehicle.” The court explained that because the plaintiff “purchased her car through CarMax, a third-party reseller” the only way she would be entitled to the Act’s express warranty protections was if CarMax “extended express and implied warranties to her.” (Id. at p. 1179.) Such is the case here. The record doesn’t indicate whether Pacific Auto Center issued any warranties to plaintiffs, but that would be the only way they could seek a refund or replacement under the Act.
Plaintiffs argue Jensen is on point, but we find the case easily distinguishable. Jensen involved a lease by a manufacturer-affiliated dealer who issued a full new car warranty along with the lease. The issue was whether the leased car qualified as a “new motor vehicle” under the Act. Plaintiff had learned of the car through a newspaper ad offering leases of “BMW demonstrators.” (Jensen, supra, 35 Cal.App.4th at p. 119.) When she arrived at the dealership—a BMW-authorized dealership—the car had 7,565 miles on its odometer. The salesperson told her this was because it had previously been used by BMW as a demonstrator. The plaintiff agreed to lease the car and the
BMW tried to use that fact to its advantage in court, arguing the car didn’t qualify as a “new motor vehicle” because it wasn’t in fact a demonstrator. BMW argued that the car didn’t qualify as “other motor vehicle sold with a manufacturer’s new car warranty” because the category “clarifies the word ‘demonstrator’ and is not intended as a separate category.” (Jensen, supra, 35 Cal.App.4th at p. 122.) The court rejected BMW’s position and concluded the car qualified as a new vehicle because BMW’s representative issued a new car warranty with the lease. (Ibid.) The court also rejected BMW’s interpretation of the phrase “other motor vehicle sold with a manufacturer’s new car warranty,” reasoning that the phrase referred to “cars sold with a balance remaining on the manufacturer’s new motor vehicle warranty.” (Id. at p. 123.) Plaintiffs seize on this statement to argue their interpretation is correct.
Though we think Jensen was correctly decided, we agree with Dagher that its statement about “the Act’s coverage for subsequent purchasers of vehicles with a balance remaining on the express warranty must be read in light of the facts then before the court and are limited in that respect.” (Dagher v. Ford Motor Co. (2015) 238 Cal.App.4th 905, 923.) Given that those facts included a car leased with a full manufacturer’s warranty issued by the manufacturer’s representative, the court was not asked to decide whether a used car with an unexpired warranty sold by a third party reseller qualifies as a “new motor vehicle.”
Dagher is not the only opinion to question Jensen’s statement about express warranties. In Kiluk, the court expressed “reservations” about the statement because it implied that “a car accompanied by a 20-year warranty” would qualify as a “new motor vehicle” if it were purchased used “on year 18.” (Kiluk, supra, 43 Cal.App.5th at p. 340, fn. 4.) Kiluk questioned the wisdom of an approach that considered “every car sold with any portion of a new-vehicle warranty remaining” to be a new motor vehicle, and stated it was more likely the phrase “other motor vehicle sold with a manufacturer’s new car warranty” refers to “cars originally sold with a new motor vehicle warranty, not subsequent sales.” (Ibid.)
We agree with Kiluk on this point. In other words, we agree with Jensen’s holding but not all of its reasoning. And the holding hurts, not helps, plaintiffs’ argument. BMW’s attempt to avoid liability by claiming the vehicle wasn’t actually a demonstrator exemplifies the need for a catchall provision covering any not-previously-sold car accompanied by a full new car warranty.
As a final point, we note our conclusion doesn’t mean that plaintiffs or others in their position have no legal recourse against a manufacturer who fails to conform a vehicle to an applicable, unexpired express warranty. Though not entitled to the Act’s refund-or-replace remedy, the beneficiary of a transferrable express warranty can sue a manufacturer for breach of an express warranty to repair defects under the California Uniform Commercial Code. (
III
DISPOSITION
We affirm the judgment. Appellants shall bear costs on appeal.
CERTIFIED FOR PUBLICATION
SLOUGH J.
We concur:
MILLER Acting P. J.
RAPAHEL J.