Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca9-13-16476/USCOURTS-ca9-13-16476-0/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 

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FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

MARGIE DANIEL; MARY HAUSER;

DONNA GLASS; ANDREA DUARTE,

individually and on behalf of a class

of similarly situated individuals,

Plaintiffs-Appellants,

v.

FORD MOTOR COMPANY, a Delaware

corporation,

Defendant-Appellee.

No. 13-16476

D.C. No.

2:11-cv-02890-

WBS-EFB

OPINION

Appeal from the United States District Court

for the Eastern District of California

William B. Shubb, Senior District Judge, Presiding

Argued and Submitted

October 22, 2015—San Francisco, California

Filed December 2, 2015

Before: Stephen Reinhardt and Michael Daly Hawkins,

Circuit Judges and Donald W. Molloy,

*

 Senior District

Judge.

Opinion by Judge Molloy

* The Honorable Donald W. Molloy, Senior District Judge for the U.S.

District Court for the District of Montana, sitting by designation.

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2 DANIEL V. FORD MOTOR CO.

SUMMARY**

Warranty

The panel reversed the district court’s summary judgment

in favor of Ford Motor Company in a putative class action in

which plaintiffs alleged that Ford breached implied and

express warranties and committed fraud in the sale of model

year 2005 to 2011 Ford Focus vehicles containing rear

suspension defects.

The panel held that the district court erred when it

declined to follow a California appellate decision, Mexia v.

Rinker Boat Co., 95 Cal. Rptr. 3d 285, 295 (Ct. App. 2009)

(holding that “latent defects” may breach the implied

warranty even when they are not discovered within the

implied warranty’s duration), and reversed the summary

judgment as to the California Song-Beverly Consumer

Warranty Act claims of plaintiffs Hauser, Glass, and Duarte. 

Concerning plaintiffs’ claim of breach of express

warranty under the California Commercial Code, the panel

held that given the ambiguous terms of Ford’s express

warranty, the warranty must be construed to guarantee both

manufacturing and design defects. The panel reversed the

district court’s order granting summary judgment as the

breach of express warranty claims of plaintiffs Daniel and

Duarte.

** This summary constitutes no part of the opinion of the court. It has

been prepared by court staff for the convenience of the reader.

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DANIEL V. FORD MOTOR CO. 3

The panel held that plaintiffs created a genuine issue of

material fact as to whether they actually relied on Ford’s

omissions in purchasing the Focus, and reversed the district

court’s summary judgment on their claims under California’s

Consumer Legal Remedies Act and Unfair Competition Law.

Finally, the panel declined to address issues not addressed

by the district court. Because the panel reversed plaintiffs’

implied and express warranty claims, the panel also reversed

the district court’s order granting summary judgment as to the

Magnuson-Moss Warranty Act claims. In light of the

reversal, the panel instructed the district court to reconsider

its denial of plaintiffs’ motion for class certification.

COUNSEL

Eric Grant (argued), John B. Thomas, and Kelsey McDowell,

Hicks Thomas LLP, Sacramento, California; J. Allen Carney

and Tiffany Wyatt Oldham, Carney Bates & Pulliam PLLC,

Little Rock, Arkansas, for Plaintiffs-Appellants.

John M. Thomas (argued) and Krista L. Lenart, Dykema

Gossett PLLC, Ann Arbor, Michigan, for DefendantAppellee.

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4 DANIEL V. FORD MOTOR CO.

OPINION

MOLLOY, Senior District Judge:

The focus of this case is whether Ford Motor Company

sold the plaintiffs a pig in the poke1 when each of them

purchased a Ford Focus. The answer to that question is

complicated by a dispute over the interpretation of the SongBeverly Consumer Warranty Act by the California Court of

Appeal and whether that court’s decision is binding on

federal courts in diversity cases. If it is, the consequence

negatively impacts the trial court’s determination of the

Magnuson-Moss Warranty Act in this case. There is also a

concern about the warranties, focused on whether the

language written by Ford is ambiguous. Finally, there is the

question of whether the record here can be construed to show

reliance in favor of the plaintiffs when they admittedly did

not read available materials about the Ford Focus. The

district court granted summary judgment in favor of Ford. 

We reverse.

I. Background

The plaintiffs, Margie Daniel, MaryHauser, Donna Glass,

and Andrea Duarte2(collectively “Plaintiffs”), brought this

class action against Ford, alleging that Ford breached implied

1 The English colloquialisms such as “turn out to be a pig in a poke” or

“buy a pig in a poke” mean that something is sold or bought without the

buyer knowing its true nature or value, especially when buying without

inspecting the item beforehand.

2 A fifth plaintiff, Robert McCabe, withdrew as a named plaintiff, and

Plaintiffs are not pursuing his claims.

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DANIEL V. FORD MOTOR CO. 5

and express warranties and committed fraud in the sale of

model year 2005 to 2011 Ford Focus vehicles containing rear

suspension defects. Plaintiffs purchased their Ford Focus

vehicles from authorized Ford dealerships in California. 

With each purchase, Plaintiffs received a New Vehicle

Limited Warranty. Prior to purchase, they did not research

the Focus or view brochures, websites, or advertisements

about the Focus. Nor did they read the warranty,

maintenance, or owner’s guides that came with the new

vehicles prior to purchasing them. However, Plaintiffs did

speak to authorized Ford dealership sales representatives

about the Focus when they made their purchases. After

purchase, Plaintiffs’ Focuses required new rear tires for the

first time between 12,086 and 20,723 miles.

Plaintiffs allege that the Focus has a rear suspension

“alignment/geometry” defect that leads to premature tire

wear, which in turn leads to safety hazards such as decreased

control in handling, steering, stability, and braking, the threat

of catastrophic tire failure, and drifting while driving on wet

or snow-covered roads. Ford allegedly knew or should have

known about the defect through pre-release testing data,

consumer complaints to Ford dealerships, testing conducted

in response to those complaints, aggregate data from Ford’s

dealerships, and from other internal sources. Plaintiffs allege

Ford had a duty to disclose the defect but failed to do so at the

time of sale. Plaintiffs further allege that, had they known

about the defect, they would not have purchased the Focus.

Plaintiffs instituted this putative class action against Ford

on November 2, 2011, asserting five claims: (1) violation of

California’s Consumers Legal Remedies Act, Cal Civ. Code

§§ 1750–1784; (2) violation of California’s Unfair

Competition Law, Cal. Bus. & Prof. Code §§ 17200–17210;

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6 DANIEL V. FORD MOTOR CO.

(3) breach of implied warranty under California’s SongBeverly Consumer Warranty Act, Cal. Civ. Code

§§ 1790–1795.8; (4) breach of warranty under the MagnusonMoss Warranty Act, 15 U.S.C. §§ 2301–2312; and (5) breach

of express warranty under Cal. Com. Code § 2313.

After Plaintiffs moved to certify a class defined as “[a]ll

individuals who purchased or leased any 2005 through 2011

Ford Focus vehicle in California and who currently reside in

the United States,” Ford moved for summaryjudgment. First,

the district court granted summary judgment on Plaintiffs’

Consumers Legal Remedies Act and Unfair Competition Law

claims because the court concluded that Plaintiffs failed to

show reliance. Second, the district court granted summary

judgment on the Song-Beverly Consumer Warranty Act

claims of Plaintiffs Hauser, Glass, and Duarte because the

court concluded that they failed to present evidence that their

vehicles became unmerchantable within the duration of the

implied warranty. Third, the district court granted summary

judgment on the breach of express warranty claims of

Plaintiffs Daniel and Duarte because the court concluded that

the New Vehicle Limited Warranty did not cover the alleged

design defect. Finally, the district court granted summary

judgment on Plaintiffs’ Magnuson-Moss WarrantyAct claims

because those claims depend on Plaintiffs’ warranty claims. 

The district court also denied Plaintiffs’ motion for class

certification. In accordance with Federal Rule of Civil

Procedure 54(b), the district court entered final judgment. 

Plaintiffs timely appealed.

II. Discussion

We have jurisdiction pursuant to 28 U.S.C. § 1291. “We

review orders granting summary judgment de novo.” Clevo

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DANIEL V. FORD MOTOR CO. 7

Co. v. Hecny Transp., Inc., 715 F.3d 1189, 1193 (9th Cir.

2013). We apply “the same principles as the district court:

whether, with the evidence viewed in the light most favorable

to the non-moving party, there are no genuine issues of

material fact, so that the moving party is entitled to a

judgment as a matter of law.” Id. (quoting Bamonte v. City

of Mesa, 598 F.3d 1217, 1220 (9th Cir. 2010)).

Plaintiffs raise three issues on appeal: (1) whether

summary judgment was improper because the district court

declined to follow a California appellate court decision that

held that “latent defects” may breach the implied warranty

even when they are not discovered within the implied

warranty’s duration; (2) whether summary judgment was

improper because the district court interpreted the language

in Ford’s express warrantythat specificallyreferences defects

“introduced into vehicles during the design . . . process[]” to

exclude design defects; and (3) whether summary judgment

was improper because the district court did not credit

dealership omission evidence that Plaintiffs submitted to

establish reliance. We address each in turn.

A. Breach of Implied Warranty under the Song-Beverly

Consumer Warranty Act

Pursuant to the Song-Beverly Consumer Warranty Act,

“every sale of consumer goods that are sold at retail in this

state shall be accompanied by the manufacturer’s and the

retail seller’s implied warranty that the goods are

merchantable.” Cal. Civ. Code § 1792. Pertinent to this

appeal, the Act contains a one-year durational limitation:

The duration of the implied warranty of

merchantabilityand where present the implied

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8 DANIEL V. FORD MOTOR CO.

warranty of fitness shall be coextensive in

duration with an express warranty which

accompanies the consumer goods, provided

the duration of the express warranty is

reasonable; but in no event shall such implied

warranty have a duration of less than 60 days

nor more than one year following the sale of

new consumer goods to a retail buyer. Where

no duration for an express warranty is stated

with respect to consumer goods, or parts

thereof, the duration of the implied warranty

shall be the maximum period prescribed

above.

Cal. Civ. Code § 1791.1(c) (emphasis added). Yet the

California Court of Appeal held in Mexia v. Rinker Boat Co.

that “[t]here is nothing that suggests a requirement that the

purchaser discover and report to the seller a latent defect

within that time period.” 95 Cal. Rptr. 3d 285, 295 (Ct. App.

2009) (emphasis added).

“We ‘must follow the decision of the intermediate

appellate courts of the state unless there is convincing

evidence that the highest court of the state would decide

differently.’” In re Schwarzkopf, 626 F.3d 1032, 1038 (9th

Cir. 2010) (quoting Owen ex. rel Owen v. United States,

713 F.2d 1461, 1464 (9th Cir. 1983)). Here, there is not

convincing evidence that theCalifornia Supreme Court would

decide the latent defect discovery issue that was presented in

Mexia differently. The California Supreme Court denied the

Mexia defendants’ petition for review and denied a nonparty’s request for “depublication” of the opinion. See

Appellate Courts Case Information, The Judicial Branch of

California, http://appellatecases.courtinfo.ca.gov/search/case/

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DANIEL V. FORD MOTOR CO. 9

disposition.cfm?dist=0&doc_id=1914874&doc_no=S174901

(last visited Oct. 28, 2015). No published California Court of

Appeal opinion has addressed or rejected the Mexia holding. 

Two unpublished decisions reiterated the one-year duration

set forth in § 1791.1, but neither cited Mexia. Balakian v.

Mercedes-Benz USA, LLC, No. F060461, 2011 WL6826723,

at *7 n.8 (Cal. Ct. App. Dec. 29, 2011) (unpublished); Larsen

v. Nissan N. Am., Inc., No. A121838, 2009 WL 1766797, at

*6 (Cal. Ct. App. June 23, 2009) (unpublished). The two

unpublished decisions that have referenced the Mexia rule did

so without disapproval. Clark v. BMW of N. Am., LLC,

B248593, 2014 WL 3907922, at *6 (Cal. Ct. App. Aug. 12,

2014) (unpublished); Lugo v. Good Guys Auto Sales, Inc.,

D061620, 2013 WL 5411650, at *7 (Cal. Ct. App. Sept. 27,

2013) (unpublished).3 While California federal district courts

have given Mexia mixed treatment, see, e.g., Valencia v.

Volkswagen Grp. of Am. Inc., __ F. Supp. 3d __, No.

15–cv–00887–HSG, 2015 WL 4747533, at *6–7 (N.D. Cal.

Aug. 11, 2015) (discussing cases on both sides and

distinguishing Mexia based on a reading that limits the

holding to cases involving products thatwere unmerchantable

at the time of purchase); Rossi v. Whirlpool Corp., No.

12–CV–125–JAM–JFM, 2013 WL1312105, at *5 (E.D. Cal.

Mar. 28, 2013) (rejecting Mexia); Keegan v. Am. Honda

Motor Co., 284 F.R.D. 504, 537 (C.D. Cal. 2012) (following

Mexia), we must adhere to state court decisions—not federal

3

“Even though unpublished California Courts of Appeal decisions have

no precedential value under California law, the Ninth Circuit is ‘not

precluded’ from considering such decisions ‘as a possible reflection of

California law.’” Roberts v. McAfee, Inc., 660 F.3d 1156, 1167 n.6 (9th

Cir. 2011) (quoting Emp’rs Ins. of Wausau v. Granite State Ins. Co.,

330 F.3d 1214, 1220 n.8 (9th Cir. 2003)).

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10 DANIEL V. FORD MOTOR CO.

court decisions—as the authoritative interpretation of state

law. W. v. Am. Tel. &Tel. Co., 311 U.S. 223, 237–38 (1940).

Ford argues that Mexia conflicts with the earlier decision

in Atkinson v. Elk Corp. of Texas, 48 Cal. Rptr. 3d 247 (Ct.

App. 2006). But Mexia and Atkinson are not in “plain

conflict.” Cf. Owen ex. rel Owen, 713 F.2d at 1465. In

Atkinson, the pertinent issue was “what is the duration of

implied warrantyof merchantabilityunder Magnuson-Moss,”

and the court concluded that § 1791.1 controls. 48 Cal. Rptr.

3d at 257–59. The precise issue of whether § 1791.1

“create[s] a deadline for discovering latent defects,” which

was addressed in Mexia, 95 Cal. Rptr. 3d at 288, was not at

issue in Atkinson. Additionally, the Mexia court relied on

Atkinson approvingly without noting any inconsistency, id. at

295 n.10, and Mexia is consistent with an earlier case, Hicks

v. Kaufman &Broad Home Corp., 107 Cal. Rptr. 2d 761, 768

(Ct. App. 2001) (holding that “proof of breach of warranty

does not require proof the product has malfunctioned but only

that it contains an inherent defect which is substantially

certain to result in malfunction during the useful life of the

product”). Further, the Mexia decision is in line with “the

policy repeatedly expressed by California courts of the need

to construe the Song-Beverly Act so as to implement the

legislative intent to expand consumer protection and

remedies.” Mexia, 95 Cal. Rptr. 3d at 296.

Absent convincing evidence that the California Supreme

Court would decide the issue in Mexia differently, its rule that

§ 1791.1 “does not create a deadline for discovering latent

defects or for giving notice to the seller,” 95 Cal. Rptr. 3d at

288, must be followed. Accordingly, the district court’s order

granting summary judgment as to the Song-Beverly

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DANIEL V. FORD MOTOR CO. 11

Consumer Warranty Act claims of Plaintiffs Hauser, Glass,

and Duarte is reversed.4

B. Breach of Express Warranty under the California

Commercial Code

California Commercial Code § 2313 governs express

warranties by the seller. Ford provided Plaintiffs a New

Vehicle Limited Warrantywith the purchase of their Focuses. 

The express warranty states:

WHAT IS COVERED?

Your NEW VEHICLE LIMITED

WARRANTY gives you specific legal rights. 

You may have other rights that vary from

state to state. Under your New Vehicle

Limited Warranty if:

– your Ford vehicle is properly operated and

maintained, and

– was taken to a Ford dealership for a

warranted repair during the warranty period,

then authorized Ford Motor Company dealers

will, without charge, repair, replace, or adjust

all parts on your vehicle that malfunction or

fail during normal use during the applicable

coverage period due to a manufacturing defect

4 The district court denied summary judgment as to Plaintiff Daniel’s

Song-Beverly Consumer Warranty Act claim.

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12 DANIEL V. FORD MOTOR CO.

in factory-supplied materials or factory

workmanship.

This warranty does not mean that each Ford

vehicle is defect free. Defects may be

unintentionally introduced into vehicles

during the design and manufacturing

processes and such defects could result in the

need for repairs. For this reason, Ford

provides the New Vehicle Limited Warranty

in order to remedy any such defects that result

in vehicle part malfunction or failure during

the warranty period.

Ford relies on the first paragraph to argue that the warranty

only guarantees against manufacturing defects. Plaintiffs rely

on the second paragraph to argue that the defects that are

guaranteed against include design defects.

“In relation to express warranties, the rules for

interpreting them do not differ from those applied to other

contracts.” Miller v. Germain Seed & Plant Co., 222 P. 817,

829 (Cal. 1924) (Seawell, J., dissenting) (internal quotation

marks omitted). Where a contract provision is “clear and

unambiguous,” it is “not subject to questions of construction

or interpretation.” Neal v. State Farm Ins. Cos., 10 Cal. Rptr.

781, 783 (Ct. App. 1961) (internal quotation marks omitted). 

“A . . . provision is ambiguous when it is capable of two or

more constructions, both of which are reasonable.” 

Producers Dairy Delivery Co. v. Sentry Ins. Co., 718 P.2d

920, 924–25 (Cal. 1986) (quoting Delgado v. Heritage Life

Ins. Co., 203 Cal. Rptr. 672, 677 (Ct. App. 1984)). “The rule

that any ambiguities caused by the draftsman of the contract

must be resolved against that party applies with peculiar force

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DANIEL V. FORD MOTOR CO. 13

in the case of the contract of adhesion.” Neal, 10 Cal. Rptr.

at 784 (internal citations omitted). “Whether language in a

contract is ambiguous is a question of law.” Producers Dairy

Delivery Co., 718 P.2d at 925.

Ford argues that the “materials and workmanship”

language in the first paragraph excludes guarantees against

design defects. See Rice v. Sunbeam Prods., Inc., No. CV

12–7923–CAS–(AJWx), 2013 WL146270, at *12 (C.D. Cal.

Jan. 27, 2013) (considering the phrase “free from defects in

material and workmanship” in defendant’s warranty); In re

Toyota Motor Corp. Unintended Acceleration Mktg., Sales

Practices, & Prods. Liab. Litig. (Toyota Motor Corp. Litig.),

754 F. Supp. 2d 1145, 1177–78 (C.D. Cal. 2010) (considering

defendant’s warranty language that stated, “This warranty

covers repairs and adjustments needed to correct defects in

material or workmanship of any part supplied by Toyota.”);

Brothers v. Hewlett-Packard Co., No. C-06-02254 RMW,

2007 WL 485979, at *2 (N.D. Cal. Feb. 12, 2007)

(considering language in defendant’s warranty that stated,

“HP warrants that the HP hardware product and all internal

components of the product that you have purchased or leased

from HP are free from defects in materials and workmanship

under normal use during the Limited Warranty Period.”).

However, unlike the warranties in the cases cited by Ford,

Ford’s express warranty is not simply a “materials and

workmanship” warranty, as it references defects that are

introduced during the “design” process. Ford’s express

warranty is ambiguous. The warranty can reasonably be

interpreted to either guarantee against only manufacturing

defects (where the second paragraph is a general explanation

and not a guarantee) or guarantee against both manufacturing

and design defects (where the second paragraph expands the

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14 DANIEL V. FORD MOTOR CO.

guarantee to design defects). The ambiguity, which is

without question within a contract of adhesion, must be

resolved against the draftsman, Ford. Neal, 10 Cal. Rptr. at

784. The warranty must be construed to guarantee against

both manufacturing and design defects.

Given the ambiguous terms of Ford’s express warranty,

the district court’s order granting summary judgment as to the

breach of express warranty claims of Plaintiffs Daniel and

Duarte is reversed.5

C. Consumers Legal Remedies Act and Unfair

Competition Law

The Consumers Legal Remedies Act prohibits “unfair

methods of competition and unfair or deceptive acts or

practices undertaken by any person in a transaction intended

to result or which results in the sale or lease of goods or

services.” Cal. Civ. Code § 1770(a). The Act proscribes

“[r]epresenting that goods or services have . . . characteristics

. . . uses, benefits, or quantities which they do not have,” id.

§ 1770(a)(5), and “[r]epresenting that goods or services are of

a particular standard, quality, or grade,” id. § 1770(a)(7). The

Unfair Competition Law proscribes “any unlawful, unfair or

fraudulent business act or practice and unfair, deceptive,

untrue or misleading advertising.” Cal. Bus. & Prof. Code

§ 17200. Fraudulent omissions are actionable under both

consumer statutes. Klein v. Chevron U.S.A., Inc., 137 Cal.

Rptr. 3d 293, 324–26 (Ct. App. 2012).

5 Plaintiff Hauser did not oppose summary judgment on her express

warranty claim, and Plaintiff Glass does not challenge the district court’s

ruling on appeal.

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DANIEL V. FORD MOTOR CO. 15

An essential element for a fraudulent omission claim is

actual reliance. Cohen v. DIRECTV, Inc., 101 Cal. Rptr. 3d

37, 47–48 (Ct. App. 2009) (Consumers Legal Remedies Act);

In re Tobacco II Cases (Tobacco II), 207 P.3d 20, 39 (Cal.

2009) (Unfair Competition Law). To prove reliance on an

omission, a plaintiff must show that the defendant’s

nondisclosure was an immediate cause of the plaintiff’s

injury-producing conduct. A plaintiff need not prove that the

omission was the only cause or even the predominant cause,

only that it was a substantial factor in his decision. Tobacco

II, 207 P.3d at 39. A plaintiff may do so by simply proving

“that, had the omitted information been disclosed, one would

have been aware of it and behaved differently.” Mirkin v.

Wasserman, 858 P.2d 568, 574 (Cal. 1993).

That one would have behaved differently can be

presumed, or at least inferred, when the omission is material. 

Tobacco II, 207 P.3d at 39. An omission is material if a

reasonable consumer “would attach importance to its

existence or nonexistence in determining his choice of action

in the transaction in question.” Id. (quoting Engalla v.

Permanente Med. Grp., Inc., 938 P.2d 903, 919 (Cal. 1997)).

Alleged defects that create “unreasonable safety risks” are

considered material. See Ehrlich v. BMW of N. Am., LLC,

801 F. Supp. 2d 908, 917–19 (C.D. Cal. 2010) (windshield

with high propensity to crack or chip); Falk v. Gen. Motors

Corp., 496 F. Supp. 2d 1088, 1095–96, 1096 n.* (N.D. Cal.

2007) (defective speedometer); see also Wilson v. HewlettPackard Co., 668 F.3d 1136, 1141–43 (9th Cir. 2012)

(holding in the duty-to-disclose context that an omission must

pose safety concerns to be material). Materiality is judged

from the perspective of a “reasonable consumer,” Ehrlich,

801 F. Supp. 2d at 916, and it is generally a question of fact,

Tobacco II, 207 P.3d at 39.

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16 DANIEL V. FORD MOTOR CO.

Here, Plaintiffs have offered sufficient evidence to create

a genuine issue of material fact as to the second sub-element

of reliance—whether they would have behaved differently if

Ford had disclosed the alleged defect. A reasonable fact

finder could infer that a vehicle that experiences premature

and more frequent tire wear would pose an unreasonable

safety risk, such that it can be presumed that the

nondisclosure of the safety risk impacted Plaintiffs’

purchasing decision. Plaintiffs have put forth sufficient

evidence, when viewed in a light most favorable to them, that

the Focus experienced premature and more frequent tire wear,

and that Ford circulated special service messages to its

authorized dealerships informing them that “some 2005–2011

Focus vehicles may exhibit premature front/rear tire wear

and/or a vehicle drift condition when driving on wet or snow

packed roads.” Plaintiffs’ experts opined that worn tires can

pose a safety hazard in terms of road and weather conditions

and potential blowouts. Even Ford acknowledges that “it can

be dangerous to let the tires on any vehicle become

excessively worn before replacing them.” Brief for Appellee

at 25. Ford’s evidence that routine monitoring of the tires

would have prevented safety problems and that excessive tire

wear is not uniquely attributable to the Focus does not

conclusively rebut the presumption of reliance. See Engalla,

938 P.2d at 919.

Whether Plaintiffs have created a genuine issue of

material fact as to the first sub-element—that they would

have been aware of a disclosure by Ford—is a closer

question, but we ultimately conclude that they did. There are,

of course, various ways in which a plaintiff can demonstrate

that she would have been aware of a defect, had disclosure

been made. Here, Plaintiffs chose to do so by showing that

they would have been aware of the defect had Ford disclosed

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DANIEL V. FORD MOTOR CO. 17

it to its dealerships. Ford presented evidence that

conclusively establishes that Plaintiffs did not view any

advertising materials produced by Ford prior to purchase.6

But Plaintiffs presented evidence that theyinteracted with and

received information from sales representatives at authorized

Ford dealerships prior to purchasing their Focuses. This is

sufficient to sustain a factual finding that Plaintiffs would

have been aware of the disclosure if it had been made through

Ford’s authorized dealerships. Mirkin, 858 P.2d at 575.

Ford argues that Plaintiffs need to show more than that it

was hypothetically possible for Ford to disseminate

information through its dealerships. Ford suggests that

Plaintiffs should be required to show that the dealerships

were contractually obligated to pass on disclosures to

consumers or that dealerships would voluntarily do so. 

Plaintiffs do not have such evidence. However, Plaintiffs do

have evidence that Ford communicates indirectly through its

authorized dealerships. Plaintiffs received information about

the “characteristics,” “benefits,” and “quality,” Cal. Civ.

Code § 1770(a)(5), (7), of the Ford Focus from Ford’s

dealerships, which is also where they could obtain certain

brochures and booklets about Ford’s vehicles. Under the

terms of Ford’s express warranty, Plaintiffs needed to return

6

It would have been unlikely for Plaintiffs to review warranty,

maintenance, and owner’s booklets that came with the new vehicles prior

to purchase. Consequently, those materials cannot be considered in

determining whether Plaintiffs would have been aware of a disclosure. Cf.

Moore v. Apple, Inc., 73 F. Supp. 3d 1191, 1200–01 (N.D. Cal. 2014)

(concluding reliance cannot be based on representations or omissionsthat

took place after sale occurred); In re Sony Gaming Networks &Customer

Data Sec. Breach Litig., 903 F. Supp. 2d 942, 969–70 (S.D. Cal. 2012)

(concluding it was impossible to establish reliance on information in

Terms of Service received after purchase).

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18 DANIEL V. FORD MOTOR CO.

to Ford dealerships to perform warranty repairs. And it is

through its dealership network that Ford circulated its special

service messages and technical service bulletins when issues

arose with the Focus. Based on this evidence, a reasonable

fact finder could conclude that Ford knew that its consumers

depended at least in part on its authorized dealerships for

information about its vehicles and that Ford’s authorized

dealerships would have disclosed the alleged rear suspension

defect to consumers if Ford had required it. Since Plaintiffs

have sufficient evidence to establish a plausible method of

disclosure and to establish that they would have been aware

of information disclosed using that method, there is a genuine

issue of material fact as to whether they in fact relied on

Ford’s omissions in purchasing the Focus.

Because Plaintiffs have raised a genuine issue of fact as

to reliance, the district court’s order granting summary

judgment on their Consumers Legal Remedies Act and Unfair

Competition Law claims is reversed.

D. Additional Issues Raised by Ford

Because the district court did not address duty to disclose,

actual damages, statutorily-required notice, statute of

limitations, equitable restitution, and sufficiency of the

evidence of tire wear, we decline to do so on appeal. 

Peterson v. Boeing Co., 715 F.3d 276, 283 (9th Cir. 2013)

(declining to reach the “alternate, fact-intensive bases for

affirming” when not first addressed by the district court).

E. Magnuson-Moss Warranty Act

Claims under the Magnuson-Moss Warranty Act “stand

or fall with . . . express and implied warranty claims under

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DANIEL V. FORD MOTOR CO. 19

state law.” Clemens v. DaimlerChrysler Corp., 534 F.3d

1017, 1022 (9th Cir. 2008). Because we reverse on Plaintiffs’

implied and express warranty claims, the district court order

granting summary judgment as to the Magnuson-Moss

Warranty Act claims is also reversed.

III. Conclusion

We reverse the district court’s summary judgment order

and remand for further proceedings consistent with this

opinion. In light of our reversal, we also instruct the district

court to reconsider its denial of Plaintiffs’ motion for class

certification.

REVERSED and REMANDED with instruction.

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