Filed 8/29/24

CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION TWO

LUIS VALDOVINOS et al.,

Plaintiffs and Appellants,

v.

KIA MOTORS AMERICA, 

INC.,

Defendant and Appellant.

 B324418

 (Los Angeles County

 Super. Ct. No. BC633283)

APPEALS from a judgment of the Superior Court of Los 

Angeles County, Steven J. Kleifield, Judge. Affirmed in part, 

reversed in part, and remanded with directions.

Gupta Wessler, Jessica E. Garland, Jennifer D. Bennett; 

Knight Law Group and Radomir Roger Kirnos for Plaintiffs and 

Appellants.

Horvitz & Levy, Lisa Perrochet, Shane H. McKenzie, John 

B. Sprangers; Lehrman, Villegas, Chinery & Douglas, Kate S. 
2

Lehrman and Jacqueline Bruce-Chinery for Defendant and 

Appellant.

* * * * * *

California’s Song-Beverly Consumer Warranty Act (Civ. 

Code, § 1790 et seq.)

1 (the Act) spells out the procedures and 

remedies available to California consumers when the new motor 

vehicle they purchase is a so-called “lemon.” Among other things, 

the Act obligates the manufacturer, distributor, or retailer of 

such a vehicle to buy back the defective vehicle as long as the 

consumer grants it a “reasonable” opportunity to fix the defect,

and, if the defect persists, empowers the consumer to sue for 

breach of any express warranty to obtain “restitution” and, if the 

violation of the Act is “willful,” a civil penalty up to twice the 

amount of the “restitution” award. (§§ 1793.2, subd. (d), 1794, 

subd. (c).) The Act is “strongly pro-consumer” (Murillo v. 

Fleetwood Enterprises, Inc. (1998) 17 Cal.4th 985, 990 (Murillo), 

superseded on other grounds by Code Civ. Proc., § 998), so 

restitution under the Act is not the “‘plain vanilla common law 

kind’” that aims to make an injured party whole (Williams v. FCA 

US LLC (2023) 88 Cal.App.5th 765, 780 (Williams)); instead, the 

Act’s definition of “restitution” is more like vanilla topped with a 

generous scoop of pro-consumer sprinkles that can go so far as to 

entitle consumers to be made more than whole and thereby to 

obtain a windfall from buying a “lemon” (Niedermeier v. FCA US, 

LLC (2024) 15 Cal.5th 792, 801 (Niedermeier)). 

This appeal presents three questions regarding the breadth 

of the Act’s pro-consumer remedies. First, is a consumer entitled 

1 All further statutory references are to the Civil Code unless 

otherwise indicated.
3

to recover as “restitution” amounts paid to a third party for a 

service contract on the vehicle? Second, is a consumer entitled to 

recover as “restitution” all insurance premiums paid on the 

vehicle should the consumer continue to drive it (as opposed to 

only those premiums attributable to coverage against property 

damage)? Third, is a manufacturer’s, distributor’s, or retailer’s 

violation of the Act willful as a matter of law if the violation was 

negligent or if it adequately investigated but could not confirm 

the existence of a defect yet nevertheless offered to buy back the 

vehicle on terms that were reasonable at the time the offer was 

made? We hold that the answer to all three questions is “no.” 

We accordingly (1) reverse the trial court’s posttrial orders

declining to strike from the “restitution” award the amounts of 

the service contract and certain amounts of insurance premiums, 

(2) reverse the trial court’s posttrial order striking the civil 

penalty for insufficient evidence, but (3) affirm the trial court’s 

posttrial order granting a new trial on the civil penalty. We 

direct the trial court to amend the judgment consistent with this 

opinion and we remand for a new trial on the civil penalty.

FACTS AND PROCEDURAL BACKGROUND

I. Facts

A. Plaintiff buys a 2014 Kia Optima

On May 10, 2014, Luis Valdovinos (plaintiff) purchased a 

new 2014 Kia Optima with just 19 miles on it. 

The sales contract listed the “Total Sale Price” as $30,127, 

which included (1) $299 for an “(Optional) Theft Deterrence 

Device” paid to a third-party company called Security Etch, and 

(2) $2,298 for an “(Optional) Service Contract” paid to a thirdparty company called American Financial. Plaintiff made a down 
4

payment of $8,000 in cash and received a $2,000 “Manufacturer’s 

Rebate”; he financed the remaining balance of $19,171. 

Plaintiff purchased the vehicle from Kia of Cerritos, which 

is a franchise Kia dealership not owned by Kia Motors America, 

Inc. (Kia).

2 Kia is a distributor of Kia vehicles. 

Plaintiff’s Optima had a basic warranty that expired after 

five years or 60,000 miles, and a drive train warranty that 

expired after 10 years or 100,000 miles. 

B. Plaintiff starts having problems with his 

Optima

1. August 5, 2014 visit

In early August 2014, plaintiff had his Optima towed to Kia 

of Cerritos, and reported that the vehicle would not “go into 

reverse [gear] intermittently.” The dealership mechanics were 

unable to replicate the problem, and thus were unable to do 

anything to fix it.

After the dealership forwarded its paperwork to Kia, Kia 

tried to call plaintiff three times on the days immediately 

following his August 5, 2014 visit. Plaintiff did not return any of 

the calls. Although plaintiff later testified he did not remember 

the voicemails Kia left for him, he did not deny that Kia had tried 

to reach him. 

When Kia received no response from plaintiff, it closed his 

case. 

2. December 20, 2014 visit

In mid-December 2014, plaintiff noticed that (1) one of the 

windows of his Optima was not properly rolling up, and (2) the 

Optima was still sometimes “not go[ing] in reverse when in the

2 At some point, Kia’s corporate name became Kia America, 

Inc.
5

reverse gear.” Plaintiff brought the vehicle into the dealership on 

December 20, 2014. The dealership mechanics repaired the 

window, but “could not duplicate” the gear-shifting problem and 

found “no codes in [the] system” after hooking the car up to 

diagnostic computers; the dealership consequently concluded the 

“vehicle [was] working as designed.” 

Although the dealership’s paperwork contained no 

contemporaneous notation, plaintiff testified at trial that his 

Optima would not go into reverse when he was leaving the 

dealership during his December 2014 visit, that plaintiff 

summoned an unknown “individual” who had given him “all the 

paperwork,” that the individual then summoned his “supervisor,” 

that the three of them pushed the vehicle back to the service

garage, and that no mechanic could find any problem. 

C. Plaintiff’s first buyback request

On January 12, 2015, plaintiff called Kia to inform the 

distributor that he took his Optima to the dealership because it 

had “not go[ne] into reverse,” that the dealership had been

“unable to duplicate” the issue and thus “cannot find what is 

wrong,” and demanded that Kia buy back his car. Although Kia’s 

paperwork contains no contemporaneous notation, plaintiff 

testified at trial that he also told Kia on that call that two 

dealership employees had witnessed the defect as plaintiff was 

leaving the December 2014 appointment. 

In response to plaintiff’s calls, Kia re-opened plaintiff’s case 

and arranged for a Kia field technician to examine his Optima at 

the dealership. The technician examined plaintiff’s Optima on 

February 16, 2015. Unable to duplicate the concern, the 

technician installed a “flight recorder” to plaintiff’s Optima to 

record its transmission’s operation. The technician removed the 
6

flight recorder in late March 2015, and reviewed the data. The 

data “indicate[d] that [the] transmission is operating correctly.” 

In light of its inability to verify any defect with plaintiff’s 

Optima, Kia denied plaintiff’s request for a buyback. 

D. Plaintiff’s further visits to the dealership prior 

to Kia’s first offer

Between April 2015 and December 2015, plaintiff brought 

his Optima to the dealership three more times. During an

October 14, 2015 visit, plaintiff did not mention anything about 

the car’s intermittent failure to go in reverse. During a

November 10, 2015 visit, plaintiff reported that his Optima would 

“los[e] power” and would “not go into reverse sometimes.” The 

dealership mechanics were unable to duplicate that issue after 

driving the car for two miles. The dealership recommended that 

plaintiff install the flight recorder again, but he declined. During 

a December 9, 2015 visit, plaintiff again reported that the car 

would “intermittently” not go into reverse. The dealership

mechanics were unable to duplicate the issue, even after 

updating the software governing the Optima’s transmission. 

In early February 2016, Kia offered to refund plaintiff five 

of his monthly car payments for his inconvenience. Plaintiff 

rejected the offer. 

E. Kia’s formal offer to replace or repurchase 

plaintiff’s Optima

On February 9, 2016, Kia sent plaintiff an offer letter that 

presented him with three options—namely, Kia offered to (1) 

replace plaintiff’s vehicle with a “comparable” Optima; (2) 

repurchase plaintiff’s vehicle by (a) paying him $11,800.36, and 

(b) paying off the outstanding balance of his loan on the Optima;

or (3) send a field technician “for the purpose of inspecting and 
7

repairing the vehicle” along with paying plaintiff $10,000 “as a 

one-time goodwill gesture” for plaintiff to accept as a full 

settlement. The $11,800.36 repurchase amount in the second 

option was calculated as the sum of plaintiff’s $8,000 down 

payment plus $6,709 in monthly payments plaintiff had already 

made, less a $299 deduction for the third-party security device, a 

$2,299 deduction for the third-party service contract, and a

$310.64 deduction for the 1,533 miles on the Optima at the time 

of plaintiff’s first visit to the dealership reporting the problem in 

August 2014. The offer letter explained that the first and second 

options were “contingent on [a] physical inspection of the vehicle 

for damage and/or excessive wear and tear,” and that plaintiff 

would be “required” to provide a cashier’s check for any 

diminution in value. (The Optima had no damage at this time.)

The offer letter also explained that plaintiff would be “require[d]” 

to “sign[] [a] settlement release agreement” but did not provide 

further details on the content of that agreement. The offer letter 

asked plaintiff to select which option he preferred and to sign the 

letter, but contemplated that it would take “45-60 days” to 

“complet[e] . . . this process.” 

The letter declared the “[o]ffer [v]alid” for one week. 

The offer lapsed without any response from plaintiff. 

F. Postoffer visits to the dealership

Other than bringing his Optima into the dealership for an 

oil change in late August 2016, plaintiff’s next action was to sue 

Kia under the Act.

Plaintiff nevertheless continued to use the car, albeit on a 

more “limited” basis, through March 2022. During the five and a 

half years between plaintiff’s initiation of his lawsuit and his 

decision to stop driving the car, plaintiff brought the Optima into 
8

Kia dealerships 10 more times—in October 2017, in January 

2018, in April 2018, in August 2018, in October 2018, in 

November 2018, in May 2019, in September 2019, in July 2020, 

and in August 2021. Plaintiff mentioned issues with his 

transmission during four of those visits (in April 2018, October 

2018, November 2018, and May 2019), including the one visit (in 

April 2018) to conduct an inspection as part of the discovery for 

this lawsuit. The dealership mechanics were unable to replicate 

the defect plaintiff reported, despite test driving the car for 

extended periods during these visits. However, plaintiff’s expert 

witness later testified that he personally experienced a 

transmission defect while driving the Optima to the April 2018 

inspection. 

II. Procedural Background

A. Complaint

On September 8, 2016, plaintiff sued Kia for violating the 

Act.3

B. Trial

The matter did not proceed to trial until May 2022. 

At trial, plaintiff introduced a video that was filmed in 2019

showing the problems with his Optima’s reverse gear. Plaintiff 

also (1) introduced insurance bills from three policy years (half of 

2014, 2015-2016, and 2021-2022); and (2) testified that he paid 

approximately $1,364 in premiums each year to insure the 

Optima between 2015 and March 2022.

Kia did not put on any defense witnesses or evidence.

After just two hours of deliberations, the jury returned a 

special verdict finding that Kia violated the Act by breaching the 

3 The suit was also brought by plaintiff’s son, Luis J. 

Valdovinos. 
9

express warranty as well as the implied warranty of 

merchantability. The jury awarded plaintiff restitution of 

$42,568.90 comprised of the $30,127 “purchase price of the 

vehicle” plus $12,912 in “incidental and consequential damages” 

minus $380.10 for mileage. The jury also found that Kia’s 

violation of the Act was “willful[]” and awarded twice the 

restitution amount—$85,317.80—as a civil penalty. The total 

verdict for plaintiff was $127,976.70. 

C. Postverdict litigation

1. First round of postjudgment motions

Following entry of judgment, Kia filed a motion for 

judgment notwithstanding the verdict (JNOV) and a motion for 

new trial. As pertinent to this appeal, Kia argued that (1) 

restitution should not include the amounts for (a) the 

manufacturer’s rebate, (b) the third-party theft deterrent device, 

(c) the third-party service contract, and (d) any insurance 

premiums paid prior to the second time plaintiff brought his 

Optima to the dealership; and (2) there was insufficient evidence 

that Kia “willfully” violated the Act for purposes of the civil 

penalty. After full briefing and a hearing on August 29, 2022, the 

trial court accepted plaintiff’s election to receive damages only for 

breach of the express warranty and issued a written order 

denying the JNOV and new trial motions on the first ground

regarding restitution but granting the JNOV and new trial 

motions on the second ground regarding the civil penalty. With 

respect to its grant of relief on the JNOV motion, the court 

explained that a distributor does not “willfully” violate the Act if 

it has a “good faith and reasonable belief” that it has not violated

the Act, and found “no substantial evidence that Kia knew that 

the [Optima] had a defect that it could not repair” because “Kia 
10

could not confirm that there was a defect.” With respect to its 

grant of relief on the new trial motion, the court explained that it 

“sits as a ‘thirteenth juror’” and that, if the JNOV ruling is 

“reversed on appeal,” it “concurrently grants a partial new trial 

solely on the claim for civil penalties.” 

2. Second round of posttrial motions

After the trial court issued an amended judgment that 

struck the civil penalty, Kia filed another motion for a partial 

JNOV on the same grounds regarding amounts that should be 

excluded as restitution, but further specified that any premiums 

pertinent to insurance for using the car (as opposed to premiums 

for coverage that preserved its value as property) were not 

recoverable. Following a full round of briefing, the trial court 

issued a minute order summarily denying the motion. 

D. Appeals

Plaintiff filed a notice of appeal challenging the trial court’s 

amended judgment, and Kia thereafter filed a notice of crossappeal.

DISCUSSION

I. The Law, Generally

A. The Act

The Act, which is also known as California’s “lemon law,” is 

a “strongly pro-consumer” and “‘remedial’” statutory scheme

meant to grant additional remedies to California consumers 

saddled with defective products and, in particular and as 

pertinent here, defective new vehicles. (Murillo, supra, 17 

Cal.4th at p. 990; Niedermeier, supra, 15 Cal.5th at p. 804; §§ 

1790.3, 1790.4; Anderson v. Ford Motor Co. (2022) 74 Cal.App.5th 

946, 970-971 (Anderson).) 
11

1. Liability, generally

To achieve its ends, and as pertinent here, the Act (1) 

requires all manufacturers, distributors, and retailers of 

“consumer goods” to extend an implied warranty of 

merchantability to consumers that assures that goods are “fit for 

the ordinary purposes for which [they] are used” (§§ 1791.1, 

subds. (a)(2) & (b), 1792, 1792.2, 1793); and (2) regulates how any 

express warranties are created and enforced (§§ 1793.1, 1793.2, 

1793.3, 1795). Breaches of implied and express warranties are 

distinct, and each has its own remedies. (Brand v. Hyundai 

Motor America (2014) 226 Cal.App.4th 1538, 1548.)

2. Breach of an express warranty4

Although the Act regulates “consumer goods” generally (see 

§§ 1793.2, subds. (a), (c) & (d)(1), 1793.3, 1795), the Act has a 

provision—namely, section 1793.2, subdivision (d)(2)—that 

specifically regulates express warranties on “new motor 

vehicle[s].” (Niedermeier, supra, 15 Cal.5th at p. 807, fn. 4 

[noting how this provision differs from the general provisions 

regarding express warranties]; Cummins, Inc. v. Superior Court 

(2005) 36 Cal.4th 478, 485 [“new motor vehicle” provision added 

in 1982]; § 1793.22, subd. (e)(2) [defining “new motor vehicle”]) 

Specifically, a “manufacturer” of a “new motor vehicle” or “its 

4 Because plaintiff affirmatively elected to recover only the 

Act’s remedies for breach of an express warranty, the Act’s 

provisions on implied warranties (see generally §§ 1794, subd. 

(a), 1791.1, subd. (d); Cal. U. Comm. Code §§ 2711-2715; Music 

Acceptance Corp. v. Lofing (1995) 32 Cal.App.4th 610, 620-621) 

are no longer at issue in this case. We will not discuss them 

further.
12

representative in this state”5 breaches an express warranty 

under the Act if (1) the consumer (which includes buyers or 

lessees) “deliver[s]” the “nonconforming” vehicle to an authorized 

“service and repair facility” (§ 1793.2, subds. (c) & (d)(2); 

Niedermeier, at p. 818); (2) the manufacturer is given a 

“reasonable number of attempts”—that is, a reasonable number 

of opportunities—to “service or repair [the vehicle] . . . to conform 

to the applicable express warrant[y]” (§ 1793.2, subd. (d)(2); 

Robertson v. Fleetwood Travel Trailers of California, Inc. (2006) 

144 Cal.App.4th 785, 799 (Robertson) [only a “‘reasonable 

opportunity’” is required, “even if no repairs are actually 

undertaken”]); and (3) there is still a nonconformity that 

“substantially impairs the use, value, or safety of the new motor 

vehicle” to the consumer (§ 1793.22, subd. (e)(1); Ramos v. 

Mercedes-Benz USA, LLC (2020) 55 Cal.App.5th 220, 222 [no 

breach where “defect [does] not substantially impair the vehicle’s 

use, value or safety”]). Where a “new motor vehicle” has less 

than 18,000 miles on its odometer or the consumer took delivery 

less than 18 months prior, the Act defines a “reasonable number

of attempts” as (1) “two or more” if the “nonconformity results in 

a condition that is likely to cause death or serious bodily injury” 

and “the [consumer] has at least once directly notified the 

manufacturer of the need for the repair,” or (2) “four or more” in 

any other case if “the [consumer] has at least once directly 

notified the manufacturer of the need for the repair.” (§ 1793.22, 

subd. (b).) 

5 While Kia is a distributor, we will use the term 

“manufacturer” for the sake of simplicity and for consistency with 

the language of the Act. 
13

Upon a breach, the manufacturer has an “affirmative duty”

to either (1) “replace the [consumer’s] vehicle with a new motor 

vehicle substantially identical to the vehicle replaced” (along with 

providing the same warranties and covering all taxes and fees 

attendant to new cars) (§ 1793.2, subd. (d)(2)(A)); or (2) “promptly 

make restitution to the [consumer]” (id., subd. (d)(2), italics 

added). (Krotin v. Porsche Cars North America, Inc. (1995) 38 

Cal.App.4th 294, 303.) This duty exists even if the consumer

never requests it (Santana v. FCA US, LLC (2020) 56 

Cal.App.5th 334, 347 (Santana); Krotin, at p. 303), even if the 

consumer no longer possesses the vehicle (Martinez v. Kia Motors 

America, Inc. (2011) 193 Cal.App.4th 187, 194), and even if the 

“cause of the purported defect” is not “establish[ed]” 

(Mikhaeilpoor v. BMW of North America, LLC (2020) 48 

Cal.App.5th 240, 255 (Mikhaeilpoor)). The choice of remedies is 

the consumer’s to make. (§ 1793.2, subd. (d)(2).) 

If a manufacturer does not comply with the Act, the 

consumer may sue. (§ 1794, subd. (a).) 

a. Restitution 

In the ensuing lawsuit, a consumer may recover 

“restitution” for the breach of the express warranty as to a new 

motor vehicle. (§ 1793.2, subd. (d)(2).) For these purposes, the 

Act specially defines “restitution” as (1) “the actual price paid or 

payable by the [consumer], including any charges for 

transportation and manufacturer-installed options,” as 

“determined at the time of the vehicle’s purchase”; plus (2) 

“collateral charges,” “such as sales or use tax, license fees, 

registration fees, and other official fees”; plus (3) “incidental 

damages.” (Id., subd. (d)(2)(B); Niedermeier, supra, 15 Cal.5th at 

p. 808; see generally Niedermeier, at p. 809 [“restitution” under 
14

the Act is a “term of art separate from the evolving common law 

concept that shares the name”].) The Act permits a 

manufacturer to subtract from the amount of “restitution” (1) the 

cost of any “nonmanufacturer items installed by a dealer or the 

[consumer]” (§ 1793.2, subd. (d)(2)(B)); and (2) any “amount[s] 

directly attributable to use by the [consumer]”—chiefly, use 

attributable to mileage—prior to the consumer “first deliver[ing] 

the vehicle to the manufacturer or distributor, or its authorized 

service and repair facility[,] for correction of the problem” based 

on a statutorily prescribed formula (§ 1793.2, subd. (d)(2)(C)). 

Because these are the sole authorized deductions, a manufacturer 

may not subtract any other deductions, including money a 

consumer receives for trading in the vehicle, even if that ends up 

giving the consumer a “windfall” of a total recoupment in excess 

of the actual price paid for the car. (Niedermeier, at p. 801; 

Williams, supra, 88 Cal.App.5th at pp. 785-786 [the Act permits 

consumer to “receive a financial windfall”].)

b. Civil penalty

If the manufacturer’s “failure to comply [with the Act] was 

willful,” the consumer may also obtain a “civil penalty” up to “two 

times the amount of” the “restitution” award. (§ 1794, subd. (c), 

italics added.)6 

6 The Act has a separate provision barring the award of a 

civil penalty if the manufacturer “maintains a qualified thirdparty dispute resolution process” and the consumer invokes that 

process in writing. (§ 1794, subd. (e)(2).) Because this provision 

was not invoked here, and because this provision is cumulative to 

the general civil penalty provision (Jernigan v. Ford Motor Co.

(1994) 24 Cal.App.4th 488, 491-492), we need not discuss this 

alternative further.
15

c. Reasonable costs

If the consumer prevails in a lawsuit under the Act, the 

consumer may also recover “costs and expenses,” which include 

“attorney’s fees based on actual time expended, determined by 

the court to have been reasonably incurred by the [consumer] in 

connection with the commencement and prosecution” of the 

lawsuit. (§ 1794, subd. (d).)

B. Posttrial motions

1. JNOVs

A motion for JNOV may be granted if the verdict (1) is not 

supported by substantial evidence, or (2) is incompatible with the 

law. (Code Civ. Proc., § 629.) 

Where the challenge to the verdict raises questions 

regarding the substantiality of the evidence, the trial court’s role 

is “severely limited.” (Teitel v. First Los Angeles Bank (1991) 231 

Cal.App.3d 1593, 1603 (Teitel).) That is because relief may be 

granted only if it appears from the record—viewed in the light 

most favorable to the party securing the verdict and without any 

reweighing of the evidence or judging of witness credibility—that 

there is no substantial evidence to support the verdict. (Teitel, at 

pp. 1602-1603.) On appeal, we independently examine whether a

trial court granting relief on this ground correctly concluded that 

no substantial evidence supports the jury’s findings. (Hirst v. 

City of Oceanside (2015) 236 Cal.App.4th 774, 782 (Hirst).) 

Where the challenge to the verdict raises purely legal 

questions, we independently review a trial court’s JNOV ruling. 

(Hirst, supra, 236 Cal.App.4th at p. 782.) Such questions include 

the legal viability of a category of damages (Hensley v. San Diego 

Gas & Electric Co. (2017) 7 Cal.App.5th 1337, 1346), as well as 

the attendant interpretation of any statutes (Niedermeier, supra, 
16

15 Cal.5th at p. 804).

7 “As with all cases of statutory 

interpretation, ‘“[w]e first examine the statutory language, giving 

it a plain and commonsense meaning”’” and examining it in 

context. (Niedermeier, at p. 804.) If that statutory language is 

unambiguous, “‘there is no need . . . to resort to indicia of the 

intent of the Legislature’ to interpret the statute.” (Ibid.) 

2. New trial

A motion for new trial may be granted where, as pertinent 

here, there is “[i]nsufficien[t]” evidence “to justify the verdict.” 

(Code Civ. Proc., § 657, subd. (6).) When a party seeks a new 

trial on this ground, the trial court sits as a thirteenth juror who 

is empowered to reweigh the evidence and to decide whether, in 

its view, the weight of the evidence supports a different finding 

than the jury’s and hence justifies a new trial. On appeal, we 

generally review the grant of a new trial for an abuse of 

discretion but specifically review whether substantial evidence 

supports the trial court’s different finding. (Oakland Raiders v. 

National Football League (2007) 41 Cal.4th 624, 636 (Oakland 

Raiders); Johnson & Johnson Talcum Powder Cases (2019) 37 

Cal.App.5th 292, 335-336 (Johnson & Johnson).) In so doing, we 

presume the trial court’s finding is correct, and that presumption 

is overcome only if the opposing party demonstrates that no 

reasonable finder of fact—viewing the evidence in the light most 

favorable to the trial court’s finding—could have found for the 

7 We accordingly reject plaintiff’s assertion that Kia’s 

challenge to the “restitution” award may be reviewed only under 

the “[e]xcessive or inadequate damages” ground of the new trial 

statute. (Code Civ. Proc., § 657, subd. (5).) This assertion ignores 

that Kia is challenging the legal validity of the damages award, 

not its factual sufficiency. 
17

moving party on the trial court’s theory. (Lane v. Hughes Aircraft 

Co. (2000) 22 Cal.4th 405, 412 (Lane).) Where, as here, the trial 

court’s finding is made against the party bearing the burden of 

proof, this standard is met only where the evidence compels a 

finding contrary to the trial court’s as a matter of law. (Estate of 

Berger (2023) 91 Cal.App.5th 1293, 1307.)

We may separately analyze a new trial order if we 

determine that an order granting a JNOV must be reversed. 

(Johnson & Johnson, supra, 37 Cal.App.5th at p. 336.) 

II. The “Restitution” Award

Kia argues that the trial court erred in denying its posttrial 

motions seeking to reduce the jury’s “restitution” award by the 

amount of (1) the $2,000 manufacturer’s rebate; (2) the two 

optional items supplied by third parties—namely, (a) the $299 

theft deterrent device, and (b) the $2,298 optional service 

contract—and (3) the insurance premiums plaintiff incurred (a) 

for coverage prior to December 2014, and (b) for any coverage 

other than property damage. Plaintiff concedes on appeal that 

the $2,000 manufacturer’s rebate, the $299 theft deterrent 

device, and insurance premiums incurred for coverage prior to 

December 2014 are not recoverable under the Act. Thus, we need 

only decide whether the optional service contract and the full 

amount of the post-December 2014 insurance premiums are 

properly awarded as “restitution” under the Act as (1) part of the 

“actual price paid or payable by the [consumer],” (2) collateral 

charges, or (3) incidental damages.

A. Optional service contract

1. Actual price paid

As pertinent here, the Act provides that a consumer may 

recover as “restitution” from a manufacturer “the actual price 
18

paid or payable by the [consumer],” and goes on to specify that 

this amount “includ[es] any . . . manufacturer-installed options” 

but “exclud[es] nonmanufacturer items installed by a dealer or 

the [consumer].” (§ 1793.2, subd. (d)(2)(B).) Because the optional 

service contract for plaintiff’s Optima was supplied by American 

Financial, it is not a “manufacturer-installed option[]” and is 

instead a “nonmanufacturer item installed by” someone else; 

under the plain text of the Act, the optional service contract is not 

part of the “actual price paid” by plaintiff for his Optima. 

Although no published California decision has come to this 

conclusion, the federal courts applying the Act have uniformly 

come to this conclusion for this very reason. (Hernandez v. FCA 

US LLC (C.D. Cal., March 18, 2022, 1:21-cv-0745) 2022 U.S. Dist. 

LEXIS 49190, *10-*11; Herrera v. Ford Motor Co. (C.D. Cal., Feb. 

24, 2022, CV 21-4731) 2022 U.S. Dist. LEXIS 33002, *14; Carillo 

v. FCA USA, LLC (C.D. Cal. 2021) 546 F. Supp. 3d 995, 1002; 

Rupay v. Volkswagen Group of America, Inc. (C.D. Cal., Nov. 15, 

2012, CV 12-4478) 2012 U.S. Dist. LEXIS 180404, *17.)

Plaintiff resists this conclusion, asserting that the Act’s 

language only refers to physical items that can be “installed” in a 

vehicle, that a service contract is not a physical item, and that 

excluding nonphysical items like service contracts from the 

“actual price paid” would impermissibly rewrite the Act. We 

disagree. Textually, the Act defines two sides of the same coin—

that “the actual price paid” includes “manufacturer-installed 

options” but excludes “nonmanufacturer-installed items”—yet the 

terms “options” and “items” can refer to physical or nonphysical 

things and are not otherwise expressly limited to only those 

options and items that have tangible corporeality. The Act’s use 

of the term “installed” cannot bear the weight plaintiff ascribes to 
19

it. (Accord, CACI No. 3241 [excluding from the “purchase price” 

“any charges for items supplied by someone other than [the 

manufacturer]”], italics added.) Contextually, the “actual price 

paid” is consideration for the vehicle; the service contract is not

paid in exchange for the vehicle, it is instead an add-on supplied 

by someone else. (See Kirzhner v. Mercedes-Benz USA, LLC 

(2020) 9 Cal.5th 966, 972-973 (Kirzhner) [defining 

“consideration”].) Practically, plaintiff’s construction would 

obligate manufacturers to pay restitution for any nonphysical 

items purchased from third parties, such as satellite radio 

subscriptions. Although the Act’s definition of “restitution” tosses 

on some pro-consumer sprinkles, plaintiff’s broad construction 

would convert that definition into a full-blown pro-consumer 

sundae without any textual mandate for doing so. (Nunez v. FCA 

US LLC (2021) 61 Cal.App.5th 385, 397 [despite the Act’s 

“‘“manifestly”’” pro-consumer purpose, courts “may [not]

disregard ‘“‘the actual words of the statute,’”’ or fail to give them 

‘“‘a plain and commonsense meaning’”’”].)

2. Collateral charges

“Restitution” under the Act also includes “collateral 

charges.” (§ 1793.2, subd. (d)(2)(B).) As the name suggests, these 

are charges collateral to—and thus, part and parcel with—the 

purchase of the new vehicle itself. (Kirzhner, supra, 9 Cal.5th at 

p. 973 [“collateral charges” reach “charges and expenses” that are 

“part of” and that “accompany the price of the vehicle”].) Thus, 

the Act expressly defines “collateral charges” to include “sales or 

use tax, license fees, registration fees, or other official fees” paid 

as part of, and at the time of, the sale. (§ 1793.2, subd. (d)(2)(B).) 

Courts have further defined the term to include finance charges 

on any purchase loan for the car. (Kirzhner, at p. 973; Robertson, 
20

supra, 144 Cal.App.4th at p. 814.) But “collateral charges” do not 

include “all charges and expenses that may later be incurred in 

connection with the ownership or use of [a] vehicle.” (Kirzhner, 

at p. 973.) Thus, collateral charges do not include the fees a 

buyer pays to renew the car’s registration after the purchase. (Id.

at p. 977.) Here, plaintiff’s purchase of an optional service 

contract is not a charge collateral to the sale because it is not part 

and parcel with the purchase of the vehicle itself, as consumers 

have the option of forgoing such service contracts.

3. Incidental damages

“Restitution” under the Act also includes “incidental 

damages.” (§ 1793.2, subd. (d)(2)(B).) Although the Act defines 

“incidental damages” as “including, but not limited to, reasonable 

repair, towing, and rental car costs actually incurred by the 

[consumer]” (ibid.), the Act also cross-references—and hence 

incorporates—the Commercial Code’s definition, which reaches 

costs “incurred in inspection, receipt, transportation and care and 

custody” of the vehicle (ibid.; § 1794, subd. (b)(2); Cal. U. Com. 

Code, § 2715, subd. (1); Kirzhner, supra, 9 Cal.5th at pp. 974-975, 

979). In Kirzhner, our Supreme Court held that costs that 

qualify as recoverable “incidental damages” must (1) be “incurred 

in the ‘inspection, receipt, transportation and care and custody’ of 

[the] vehicle”; (2) “‘result[] from’ or [be] incurred ‘incident to’ a 

manufacturer’s breach of warranty or other violation of the Act”;

and (3) be “‘reasonably incurred.’” (Kirzhner, at p. 979, italics 

added.) In determining which costs qualify as those incurred for 

the “care and custody” of a vehicle, Kirzhner drew a distinction 

between costs incurred for the manufacturer’s benefit (defined as 

costs incurred to “preserv[e] and maintain” the vehicle and 

“protect [it] from damage or theft” “pending [its] return to the 
21

[manufacturer]” while the consumer acts as a sort of bailee) and 

costs incurred for the consumer’s benefit (defined as costs incurred 

to make it possible to “drive the vehicle and keep it operational” 

pending its return); the former are recoverable as incidental 

damages under the Act, but the latter are not. (Id. at pp. 979-

982; Lanners v. Whitney (1967) 428 P.2d 398, 404 [drawing 

distinction between costs to maintain nonconforming airplanes 

from costs incurred to fly the airplanes, which is discussed 

favorably in Kirzhner].) Because an optional service contract 

functions as a prospective payment for the costs of keeping a 

vehicle serviced—and hence operational and able to be driven—it 

is for the consumer’s benefit (not the manufacturer’s), and 

accordingly does not satisfy Kirzhner’s prerequisites for recovery 

as “incidental damages” under the Act. 

B. Insurance premiums

Because plaintiff’s payments for insurance premiums were 

by definition incurred after he purchased the Optima, they are 

neither part of the “actual price paid” nor “collateral charges.” 

(See Kirzhner, supra, 9 Cal.5th at p. 977 [legally required 

registration renewal fees are “not recoverable as collateral 

charges”].) Thus, the issue comes down to whether the full 

amount of insurance premiums plaintiff paid between Kia’s 

conceded violation of the Act in December 2014 (after the second 

opportunity to repair the defect) and March 2022 (when plaintiff 

stopped driving the car) qualify as “incidental damages.”

The full amount of the insurance premiums are not

“incidental damages.” Consistent with Kirzhner’s distinction 

between postviolation costs incurred for the manufacturer’s 

benefit and postviolation costs incurred for the consumer’s 

benefit, consumers may recover as “incidental damages” only 
22

those insurance premiums incurred to “safeguard the vehicle 

from damage due to a collision, theft, vandalism, fire, and similar 

risks” because those would “reduce the value of the 

manufacturer’s interest in the vehicle.” (Crayton v. FCA US LLC

(2021) 63 Cal.App.5th 194, 209 (Crayton).) Thus, only “payments 

of property damage premiums” are recoverable as “incidental 

damages” (ibid.); payments for liability insurance attendant to 

the use of the vehicle are not recoverable. The trial court 

therefore erred in not striking from the “restitution” award 

amounts that plaintiff paid for liability-related insurance

premiums.

Plaintiff responds with three arguments. First, he argues 

that Kia waived its right to object to the award of insurance 

premiums paid for liability-related insurance by not raising this 

distinction until its second posttrial motion. Although the failure 

to raise the issue during trial necessitates further proceedings to 

nail down how the distinction applies to the facts of this case, the 

chief question raised by Kia’s appeal—were these premiums 

improperly awarded?—is a question of law raised below and that 

we may consider for the first time on appeal even if it was not. 

(Meridian Financial Services, Inc. v. Phan (2021) 67 Cal.App.5th 

657, 699-700.) Second, plaintiff argues that California law 

requires drivers to maintain liability insurance and 

uninsured/underinsured driver’s insurance. (Ins. Code, § 

11580.1, subds. (a) & (b)(1).) That may be so, but that 

requirement only kicks in if a consumer elects to drive the vehicle, 

which is up to the consumer (since a car can be garaged without 

insurance) and in no way benefits the manufacturer. Third, and 

citing Mai v. HKT Cal, Inc. (2021) 66 Cal.App.5th 504, 519-520, 

plaintiff argues that his presentation of some insurance bills 
23

along with his trial testimony establish a prima facie case of 

entitlement to recover the entirety of his insurance premiums. 

But the issue here is whether plaintiff carried his burden of proof 

(not merely his burden of production to establish a prima facie 

case) on the full amount of his recoverable insurance premiums; 

because the bills submitted include some liability insurance, the 

jury’s “restitution” award overcompensates plaintiff.

Although the line between insurance premiums incurred to 

protect against damage to the vehicle and premiums incurred to 

enable use of the vehicle was clear at the time Crayton was 

decided, the evidence plaintiff adduced at trial does not enable us 

to parse apart the recoverable premiums from the nonrecoverable 

premiums for the period from December 2014 to March 2022. 

Accordingly, plaintiff’s recovery of insurance premiums as 

incidental damages is limited to only those property damage 

premiums he specifically established, which is $1,595 for the 

2015-2016 and 2021-2022 policy periods. (See Teitel, supra, 231 

Cal.App.3d at p. 1605, fn. 6 [JNOV “for an amount less than the 

jury verdict” only appropriate “where there can be no dispute as 

to the amount”]; Cardinal Health 301 Inc. v. Tyco Electronics 

Corp. (2008) 169 Cal.App.4th 116, 153 [“If the plaintiff had a ‘full 

and fair opportunity’ to present the supporting evidence, and the 

evidence was insufficient as a matter of law to support a damage 

award, a reviewing court may strike the award without ordering

a retrial”]; Licudine v. Cedars-Sina Medical Center (2016) 3 

Cal.App.5th 881, 889-900 [“a trial ‘is not a practice run’” so “[i]f 

the plaintiff did not adduce sufficient evidence in the first trial,”

they should not “be given a second bite at the apple”]; Gillan v. 

City of San Marino (20076) 147 Cal.App.4th 1033, 1053 [rule that 

“a defendant who fails to request a special verdict segregating the 
24

elements of damages forfeits the right to challenge a separate 

element of damages on appeal” not applicable where the 

defendant asserts the award of damages necessarily exceeds 

what is recoverable under the plaintiff’s claims], disapproved on 

other grounds by Leon v. County of Riverside (2023) 14 Cal.5th 

910, 931.)

C. Remedy

The trial court is accordingly directed to further amend the

judgment for plaintiff by striking the following amounts from the 

“restitution” award: 

– $2,000 (based on plaintiff’s concession to eliminate 

the cost of the manufacturer’s rebate);

– $299 (based on plaintiff’s concession to eliminate the 

cost of the theft deterrent device);

– $2,298 (based on our holding that the cost of the 

optional service contract is not recoverable); and 

– All but $1,595 for the recoverable insurance premium 

payments (based on plaintiff’s concession to eliminate the cost of 

premiums paid prior to Kia’s breach and based on our holding 

that plaintiff can recover only the cost of property damage 

premiums plaintiff proved).

III. The Civil Penalty

Plaintiff argues that the trial court erred in striking the 

civil penalty from the jury verdict. As noted above, the Act 

authorizes a civil penalty if the “failure to comply [with the Act] 

was willful.” (§ 1794, subd. (c), italics added.)

A. Willfulness

1. The standard

The term “willful” is a chameleon, a “slipper[y]” term of art 

that changes to suit the context in which it is used. (Kwan v. 
25

Mercedes-Benz of North America, Inc. (1994) 23 Cal.App.4th 174, 

183 (Kwan).) Because a “willful” violation of the Act is what

triggers the Act’s civil penalty, the term “willful” necessarily 

draws its meaning from the purposes of that civil penalty. The 

courts have identified three such purposes. First, the Act’s civil 

penalty is intended to function as an “important” “deterrent to 

deliberate violations” of the Act. (Kwan, at p. 184; cf. Jiagbogu v. 

Mercedez-Benz USA (2004) 118 Cal.App.4th 1235, 1244 

(Jiagbogu) [“Interpretations that would significantly vitiate a 

manufacturer’s incentive to comply with the Act should be 

avoided”]; Niedermeier, supra, 15 Cal.5th at p. 821 [same].) 

Second, the Act “establishes a two-tier system of damages for 

willful and nonwillful violations” of the Act that must remain 

distinct and not be blurred. (Kwan, at p. 184; Kirzhner, supra, 9 

Cal.5th at p. 984 [so noting].) Lastly, the Act’s civil penalty is 

“akin to punitive damages” and hence meant to be “imposed as 

punishment” in addition to “[to] deter[].” (Kwan, at pp. 184-185; 

see Naranjo v. Spectrum Security Services, Inc. (2024) 15 Cal.5th 

1056, 1075 (Naranjo) [“the purpose of imposing civil penalties is 

typically, as with punitive damages, not primarily to compensate, 

but to deter and punish”].)

The courts have articulated and examined several possible 

definitions of what it means for a manufacturer to “willful[ly]” 

violate the Act. Those definitions exist along a spectrum from 

most to least onerous. 

a. Deliberate violations of the Act

While a deliberate violation of the Act—that is, where the 

party sued maliciously and in a blameworthy manner failed to 

comply with the Act—certainly constitutes a “willful” violation,

such moustache-twirling malevolence is not required to show 
26

“willfulness.” (Suman v. BMW of North America, Inc. (1994) 23 

Cal.App.4th 1, 12 (Suman); Ibrahim v. Ford Motor Co. (1989) 214 

Cal.App.3d 878, 894 (Ibrahim); Kwan, supra, 23 Cal.App.4th at p. 

181.)

b. Knowing violations of the Act

As with deliberate violations, a knowing violation of the 

Act—that is, where the manufacturer is subjectively aware that 

it is violating the Act—also constitutes a “willful” violation (see 

Hatheway v. Industrial Acc. Com. of Cal. (1939) 13 Cal.2d 377, 

380-381), but such knowledge is not required to show 

“willfulness” (Kwan, supra, 23 Cal.App.4th at p. 185).

c. Unknowing violations of the Act, where

manufacturer has a reasonable, good faith belief that it is

complying

A manufacturer does not act “willfully” if its failure to 

comply with the Act is an “honest mistake” because it “acted with 

a good faith and reasonable belief” that it was complying. (Kwan, 

supra, 23 Cal.App.4th at p. 185; Oregel v. American Isuzu Motors, 

Inc. (2001) 90 Cal.App.4th 1094, 1104 (Oregel); Jensen v. BMW of 

North America, Inc. (1995) 35 Cal.App.4th 112, 136 (Jensen); 

accord, Lusardi Construction Co. v. Aubry (1992) 1 Cal.4th 976, 

996-997 [“courts refuse to impose civil penalties against a party 

who acted with a good faith and reasonable belief in the legality 

of his or her actions”].) Immunizing such manufacturers from 

liability for the Act’s civil penalty makes sense because “[t]hose 

who proceed on a reasonable, good faith belief that they have 

conformed their conduct to the law’s requirements do not need to 

be deterred from repeating their mistake, nor do they reflect the 

sort of disregard of the requirements of the law and respect for 

others’ rights that penalty provisions are frequently designed to 
27

punish.” (Naranjo, supra, 15 Cal.5th at p. 1075.) Under this 

standard, a manufacturer is not acting with a good faith and

“reasonable” belief if it is acting like an ostrich by refusing to “use 

. . . reasonably available information germane to [its] decision” 

and thus is remaining deliberately ignorant. (Kwan, at p. 186; 

Figueroa v. FCA US, LLC (2022) 84 Cal.App.5th 708, 715 

(Figueroa) [manufacturer who “turn[s] a blind eye to a problem” 

cannot “claim innocence” and avoid the Act’s civil penalty 

premised on willfulness].)

Applying this standard, “a violation [of the Act] is not 

willful if the [manufacturer’s] failure to replace or refund was the 

result of a good faith and reasonable belief the facts imposing the 

statutory obligation were not present,” such as when “the 

manufacturer reasonably believed the product did conform to the 

warranty, or a reasonable number of repair attempts had not 

been made, or the [consumer] desired further repair rather than 

replacement or refund.” (Kwan, supra, 23 Cal.App.4th at p. 185.)

d. Negligent violations of the Act

A manufacturer’s negligent failure to comply with the Act is 

not “willful.” (Kirzhner, supra, 9 Cal.5th at p. 984 [“the Act 

creates a ‘two-tier system of damages’ for willful and negligent

violations of any of the Act’s affirmative obligations”], italics 

added.)

Plaintiff resists this conclusion, urging that negligent 

violations of the Act are willful violations because violations 

committed “with a good faith and reasonable belief” are not

willful, such that unreasonable violations are willful. 

We reject this argument for what boils down to two

reasons. 
28

First, the net effect of plaintiff’s argument is to substitute 

the word “willful” in section 1794, subdivision (c), with 

“negligent.” Yet these two concepts are antithetical to one 

another. (Donnelly v. Southern Pacific Co. (1941) 18 Cal.2d 863, 

869 [“Willfulness and negligence are contradictory terms”]; J. C. 

Penney Casualty Ins. Co. v. M.K. (1991) 52 Cal.3d 1009, 1021 [“‘It 

is settled that “willful act” [under the statute at issue] means 

“something more than the mere intentional doing of an act 

constituting [ordinary] negligence”’”]; McLaughlin v. Richland 

Shoe Co. (1988) 486 U.S. 128, 133 [willfulness “is generally 

understood to refer to conduct that is not merely negligent”].) We 

decline to treat them as synonymous, where doing so would 

impermissibly blur the two tiers of remedies under the Act. 

Instead, we honor our Legislature’s choice to use the word 

“willful” instead of “negligent” in section 1794, subdivision (c).

Second, plaintiff’s argument rests on an erroneous premise. 

He plucks the word “reasonable” out of a phrase used to describe 

when conduct is not willful (namely, when the manufacturer acts 

“with a good faith and reasonable belief”), and then asserts that 

un-“reasonable” conduct is therefore willful. But this ignores the 

context in which the word “reasonable” appears. (Cf. Skidgel v. 

Cal. Unemployment Ins. Appeals Bd. (2021) 12 Cal.5th 1, 14 

[when interpreting a statute, “‘we construe the words in question 

in context, keeping in mind the statute’s nature and obvious 

purposes’”].) This is fallacious. A murder of crows is not 

necessarily homicidal, and an unkindness of ravens is not 

necessarily hurtful or mean. Context matters. In defining 

willfulness to exclude a manufacturer who harbors “a good faith 

and reasonable belief” that it is complying with the Act, the word 

“reasonable” qualifies the nature of the manufacturer’s “good 
29

faith” “belief”; “reasonableness” separate and apart from the 

manufacturer’s subjective belief is not a requirement of the 

exclusion, so objective unreasonableness separate and apart from 

the manufacturer’s subjective belief is not a basis for finding 

conduct to be willful. This is why the definition of willfulness 

always looks to the party’s subjective state of mind (Robertson, 

supra, 144 Cal.App.4th at p. 815 [error not to admit evidence of 

the manufacturer’s “belief” in its compliance]; Jensen, supra, 35 

Cal.App.4th at p. 136 [looking to the manufacturer’s subjective 

state of mind]), which would not be the case if objective 

unreasonableness alone were relevant. And, more to the point, it 

is why a party can “act[] in good faith and with a reasonable 

belief . . . even where [it] was negligent or committed some error.” 

(Plate v. Sun-Diamond Growers (1990) 225 Cal.App.3d 1115, 

1124; People v. Harris (2015) 234 Cal.App.4th 671, 700 [same]; 

Kwan, supra, 23 Cal.App.4th at pp. 184-185 [violation of the Act 

due to an “honest mistake” is not willful].) 

e. Nonaccidental violations of the Act

According to some California courts, a manufacturer acts 

willfully whenever it acts “intentionally”—that is, as long as the 

manufacturer “‘knows what [it] is doing, intends to do what [it] is 

doing, and is a free agent.’” (Suman, supra, 23 Cal.App.4th at p. 

12; Ibrahim, supra, 214 Cal.App.3d at p. 894; Santana, supra, 56 

Cal.App.5th at p. 346.) We reject this standard, as it would 

entitle a consumer to a civil penalty whenever a manufacturer’s 

noncompliance with the Act is merely nonaccidental. Because 

the decision whether to replace or repurchase a vehicle is 

necessarily intentional, this standard would make the Act’s civil 

penalty available whenever the Act is simply violated. This 

would obliterate the two tiers of penalties under the Act, and 
30

eliminate the punitive purpose of the civil penalty. At least one 

court has likewise rejected this overly permissive definition of 

willfulness. (Kwan, supra, 23 Cal.App.4th at p. 185 [“equat[ing] . 

. . willfulness with volition . . . would render ‘willful’ virtually all 

cases of refusal to replace or refund”].) We join Kwan in rejecting 

it.

2. The pertinent window of time 

The inquiry into whether a manufacturer’s conduct in 

“fail[ing] to comply” with the Act was “willful” necessarily focuses 

on a specific window of time.

The pertinent window starts once the consumer has 

presented a sufficiently nonconforming vehicle to an authorized 

“service or repair” facility and provided the manufacturer a 

“reasonable number of attempts” to fix that nonconformity (§ 

1793.2, subd. (d)(2)), because only after the consumer has taken 

these steps is the manufacturer’s duty under the Act to replace or 

repurchase triggered, and therefore, only then could there be a 

willful violation of the Act. This starting point also is dictated by 

the plain text of the Act itself: The Act’s civil penalty provision 

focuses on whether the manufacturer’s violation of the Act was 

willful (§ 1794, subd. (c)); conduct occurring before there was any 

violation is accordingly irrelevant.

The pertinent window ends once the consumer has invoked 

the right to sue under the Act. This end point is implied from the 

function of the Act’s civil penalty—that is, to deter dilatory 

conduct by manufacturers and thereby to encourage the prompt 

replacement or repurchase of defective vehicles. (Kwan, supra, 

23 Cal.App.4th at p. 185.) At the moment a consumer files suit, 

the deterrence and encouragement functions of the civil penalty 

provision have obviously failed. More to the point, allowing juries 
31

to examine a manufacturer’s conduct after litigation has 

commenced would undoubtedly place pressure on manufacturers 

to settle on terms favorable to the consumer, for settlement offers 

that fell short of what the consumer wants would end up in front 

of the jury as evidence of the manufacturer’s willfulness. Only by 

recognizing an end point to the inquiry into willfulness is it 

possible to avoid turning the civil penalty into a Sword of 

Damocles that browbeats manufacturers into offering settlements 

containing every term on the consumer’s litigation wishlist or 

else risk having the consumer’s restitution award trebled. (See 

generally Cowan v. Superior Court (1996) 14 Cal.4th 367, 392

(conc. & dis. opn. of Brown, J.) [“A rule that creates . . . a perverse 

set of incentives is untenable”]; accord, Bishop v. Hyundai Motor 

Am. (1996) 44 Cal.App.4th 750, 760 (Bishop) [noting trial court’s 

initial ruling excluding evidence of settlement offers made after 

litigation commenced].)

B. Analysis

In light of these principles, the pertinent question 

regarding the propriety of the civil penalty against Kia is 

whether Kia’s violation of the Act was “willful”—that is, whether 

it was deliberate, knowing, or not based on a good faith and

reasonable belief that it was complying with the Act during the 

21-month window between Kia’s second opportunity to repair the 

Optima in December 2014 and plaintiff’s filing of his lawsuit in 

September 2016.

1. Grant of JNOV motion

The trial court’s order granting Kia’s JNOV motion on the 

ground that the jury’s willfulness finding was not supported by 

the evidence may be upheld only if there is no substantial

evidence in the record that Kia’s failure to comply with the Act 
32

was deliberate, knowing, or not based on a good faith and 

reasonable belief that it was complying with the Act. After 

independently reviewing the evidence, we cannot uphold the trial 

court’s order because there is substantial evidence to support the

jury’s finding that Kia knowingly violated the Act or did not 

perform under a good faith and reasonable belief that it was 

complying with the Act.

8 Admittedly, the evidence as to whether 

Kia knew that plaintiff’s Optima had a qualifying nonconformity 

was conflicting: Plaintiff testified that the dealership mechanics 

personally witnessed the Optima’s inability to move in reverse as 

plaintiff’s December 2014 visit to the dealership was wrapping 

up, but the dealership’s contemporaneous records reflect no such 

interaction with or revelation to the mechanics. However, 

because we must presume that the jury resolved this conflict in 

plaintiff’s favor, there is substantial evidence that the 

dealership—and hence Kia—had verified the defect in plaintiff’s 

Optima in December 2014 and yet did not offer to replace or 

repurchase his vehicle for another 14 months. This is why we 

disagree with the trial court’s finding that there was “no 

substantial evidence that Kia knew that the [Optima] had a 

defect that it could not repair.” 

Kia makes three arguments in response.

First, Kia argues that it is improper to impute the 

dealership’s knowledge of the defect to Kia because the 

dealership here is an independent franchisee and hence not an 

agent of Kia’s from whom knowledge may be imputed. Citing 

8 Because there is substantial evidence to support liability 

for the civil penalty on these bases, we need not examine whether 

there is substantial evidence to support a finding that Kia 

deliberately violated the Act.
33

Ibrahim, supra, 214 Cal.App.3d 878, plaintiff responds that a 

dealership’s knowledge is always imputed to a manufacturer or 

distributor under the Act. Both parties are wrong. Ibrahim held 

it was appropriate to aggregate the number of opportunities to 

repair a vehicle no matter whether the facilities were owned by 

the manufacturer or by a dealer; it did not speak to the 

imputation of knowledge. (Id. at p. 889.) And while Kia is 

correct that the Act treats manufacturers, distributors, and 

retailers as distinct entities (compare § 1791, subd. (j) [defining 

“manufacturer”] with id., subd. (e) [defining “distributor”] and 

with id., subd. (l) [defining “retailer”]; Kiluk v. Mercedes-Benz 

USA, LLC (2019) 43 Cal.App.5th 334, 340 [noting “assumption 

baked into [the Act] is that the manufacturer and the 

distributor/retailer are distinct entities”]), and is correct that 

imputation of knowledge runs chiefly from agents to their 

principals (§ 2332 [“[a]s against a principal, both principal and 

agent are deemed to have notice of whatever either has notice 

of”]; Tsasu LLC v. U.S. Bank Trust, N.A. (2021) 62 Cal.App.5th

704, 724), these distinctions are not dispositive here because a 

manufacturer is not acting with a good faith and reasonable 

belief that it is complying with the Act—and hence it remains

liable for the Act’s civil penalty—if the manufacturer ignores 

“reasonably available information germane to [its] decision,” 

which would include information available from the dealership 

that services vehicles on its behalf (Kwan, supra, 23 Cal.App.4th

at pp. 185-186).

Second, Kia argues that there is no evidence that anyone, 

including the dealership mechanics, ever identified the cause of 

the defect with plaintiff’s Optima. But this is not an element of a 

violation (Mikhaeilpoor, supra, 48 Cal.App.5th at p. 255), and for 
34

good reason: In cases like this one, where there is a proverbial 

“ghost in the machine” that cannot be exorcized, the Act declares 

that the consumer is entitled to relief and places the onus on the 

manufacturer to replace or refund the accursed vehicle. The 

failure to do so violates the Act, and the “willful” failure to do so 

renders a manufacturer liable for the Act’s civil penalty.

Third, Kia argues that it started to investigate the defect 

with plaintiff’s vehicle soon after the December 2014 visit. But 

Kia’s acquisition of knowledge of the defect after plaintiff 

previously reported that defect and gave Kia’s authorized dealer 

two opportunities to repair it triggered its duty to replace or 

make restitution, not merely a duty to investigate. (§ 1793.2, 

subd. (d)(2)(A).)

2. Grant of new trial motion

The trial court’s order granting a new trial on the issue of 

the civil penalty must be upheld as long as there is substantial 

evidence to support the trial court’s finding that Kia did not 

“willfully” fail to comply with the Act or, put differently, as long 

as the record does not compel a finding that Kia’s violation of the 

Act was willful. A manufacturer does not act willfully under the 

Act if it “reasonably believed the product did conform to the 

[express] warranty.” (Kwan, supra, 23 Cal.App.4th at p. 185.) 

Here, and as noted above, the evidence as to whether Kia knew

that plaintiff’s Optima was defective was conflicting: Kia’s 

contemporaneous records indicated that none of the dealership’s 

mechanics had witnessed the vehicle’s problems shifting into 

reverse, while plaintiff testified that they had. Acting as a 

thirteenth juror, the trial court was within its rights to resolve 

that conflict differently than the jury and thus to disbelieve 

plaintiff’s testimony and to conclude that Kia did not ever verify 
35

the existence of any defect with plaintiff’s vehicle. This supports 

the trial court’s finding that Kia harbored a good faith and 

reasonable belief that the Optima was not defective and hence 

conformed to the warranty, and that Kia’s refusal to make a 

timely offer to repurchase the vehicle was not a willful violation 

of the Act. (Accord, Dominguez v. American Suzuki Motor Corp.

(2008) 160 Cal.App.4th 53, 59 [manufacturer’s refusal to offer to 

repurchase a motorcycle was not willful when it was “unable to 

replicate the [reported] problem”].) 

What is more, there is substantial evidence supporting the 

trial court’s implicit finding that Kia’s good faith belief was 

reasonable because Kia adequately investigated the defect

plaintiff reported: Kia’s local repair facility (that is, the 

dealership) looked at the Optima once without finding a defect; 

Kia immediately thereafter called plaintiff three times to gather 

more information, but he ignored the calls; the dealership looked 

at the Optima a second time without finding a defect; when 

plaintiff called in January 2015 to demand a buyback, Kia 

arranged for one of its field technicians to examine the vehicle; 

the Kia field technician installed a flight recorder to collect data 

on the Optima’s transmission for more than a month; Kia 

declined plaintiff’s demand for a buyback only after examining 

the month’s worth of data that indicated no malfunction; the 

dealership looked at the Optima two more times in late 2015, and 

both times could not replicate the problem; and Kia ultimately 

offered to buy back the Optima two months after the last 

attempt. This is not ostrich-like conduct.

Plaintiff raises a stampede of arguments that we have 

wrestled into five corrals.
36

First, plaintiff argues that the trial court’s new trial order 

is procedurally defective and thus is void. To be sure, the statute 

governing the granting of new trials obligates a trial court to 

“specify” the statutory ground(s) for granting a new trial as well 

as the “reasons” for granting relief on those grounds (Code Civ. 

Proc., § 657), and the court’s “reasons must refer to evidence, not 

ultimate facts” (Oakland Raiders, supra, 41 Cal.4th at pp. 633-

635). Although “strict compliance” is required (id. at p. 634), 

unnecessary duplication is not: Trial courts are not required to 

“reiterat[e] what [they] ha[ve] already said at length” elsewhere 

in their posttrial orders, so a trial court’s new trial ruling may 

“borrow” the findings the court made in support of its JNOV 

ruling. (Lane, supra, 22 Cal.4th at pp. 413, 415.) That is what 

happened here. The trial court’s posttrial ruling set forth the 

correct thirteenth juror standard for assessing evidence on a new 

trial motion and, by granting a new trial in the alternative, 

borrowed from the court’s earlier discussion in that same order of 

why it felt a JNOV was appropriate—namely, an absence of any 

evidence that Kia could confirm any defect with plaintiff’s 

vehicle. Although that reason was not supported by the record 

using the prism applicable to granting JNOV motions, it was 

supported using the prism applicable to granting new trial 

motions.

Second, plaintiff makes several arguments that all suffer 

from the same underlying flaw—namely, they apply the wrong 

legal standard. Plaintiff asserts that Kia acted willfully as a 

matter of law because Kia “should have been able” to verify that 

the Optima was defective (and was negligent for not doing so), 

and because the 2019-made video provides that verification. But 

these assertions ignore that the correct definition of “willful”
37

conduct under the Act is not tied to the manufacturer’s 

negligence and does not look at evidence of the manufacturer’s 

conduct after litigation commences (which in this case was years 

before the video was created). Plaintiff asserts that the evidence 

at trial supports a finding that Kia was deliberately ignorant of 

any defect with the vehicle. But this assertion ignores that the 

pertinent question under our standard of review of an order 

granting a new trial is whether the evidence compels such a 

finding, and here it does not. Plaintiff asserts that Kia’s inability 

to replicate the Optima’s defect is not an automatic defense to a 

violation of the Act. This assertion is correct, but ignores that the 

inability to replicate can still support a finding that a violation 

was not willful because that inability can support a good faith 

and reasonable belief that there was no defect and hence no duty 

under the Act to replace or repurchase the seemingly 

nondefective vehicle. 

Third, plaintiff argues that Kia’s “endless” investigation 

into the defect with his Optima in the 21 months between its 

violation of the Act in December 2014 and plaintiff’s lawsuit in 

September 2016 renders Kia’s violation willful as a matter of law. 

It does not. If it did, manufacturers would be placed in the 

impossible position of being “damned if they do, and damned if 

they don’t” because active investigation of a reported defect and

the failure to actively investigate a reported defect would both

constitute willful conduct subjecting a manufacturer to the Act’s 

civil penalty. Because the civil penalty was not meant to be 

awarded for every violation, we reject a construction of the Act 

that would lead to that impermissible outcome.

Fourth, plaintiff argues that precedent mandates a ruling 

in his favor. It does not, as all the cases he cites are 
38

distinguishable. The courts in Schreidel v. American Honda 

Motor Co. (1995) 34 Cal.App.4th 1242; Figueroa, supra, 84 

Cal.App.5th 708; and Jensen, supra, 35 Cal.App.4th 112 all 

upheld a finding of a willful violation of the Act after the 

manufacturer was unable to duplicate the defect in the 

consumer’s vehicle, but in each case the manufacturer made 

either “minimal” attempts to duplicate the defect, outright 

refused to investigate the defect at all, or had independent 

corroboration of the defect’s existence. (Schreidel, at p. 1254 

[“minimal” “attempt[s]” to duplicate]; Figueroa, at p. 715 

[outright refusal]; Jensen, at pp. 136-137 [manufacturer issued 

“technical bulletin” alerting dealerships that the vehicle had 

specific defect at issue].) The courts in Lukather v. General 

Motors, LLC (2010) 181 Cal.App.4th 1041 and Anderson, supra, 

74 Cal.App.5th 946 upheld a finding of a willful violation of the 

Act after the manufacturer had confirmed the defect in the 

vehicle but was unable to fix it. (Lukather, at pp. 1051-1052; 

Anderson, at pp. 953-954.) The court in Oregel, supra, 90 

Cal.App.4th 1094 upheld a finding of a willful violation of the Act

when the manufacturer’s refusal to offer a replacement or 

repurchase was based on its “internal policies that erected hidden 

obstacles to the ability of an unwary consumer to obtain redress 

under the Act.” (Id. at p. 1105.) In this case, the trial court 

sitting as a thirteenth juror had substantial evidence upon which 

to find that Kia had not independently corroborated the existence 

of a defect, that Kia had not otherwise confirmed the existence of 

a defect, and that Kia’s decision to wait until February 2016 to 

offer to repurchase plaintiff’s Optima was based on the facts of 

plaintiff’s case rather than any internal policy aimed at 

confounding consumers’ rights under the Act. 
39

Fifth and lastly, plaintiff argues that the terms of Kia’s 

February 2016 offer to repurchase his vehicle—which plaintiff 

pejoratively characterizes as “predatory”—establish the 

willfulness of Kia’s violation of the Act as a matter of law. More 

particularly, plaintiff offers a two-part argument: He criticizes 

six specific terms of Kia’s offer, and then he cites case law 

establishing that at least some of those terms are “unreasonable.” 

We reject plaintiff’s arguments for several reasons.

For starters, the cases he cites in support of the second step 

of his argument—chiefly, Goglin v. BMW of North America, LLC

(2016) 4 Cal.App.5th 462 (Goglin); McKenzie v. Ford Motor Co.

(2015) 238 Cal.App.4th 695 (McKenzie); Gezalyan v. BMW of 

North America, LLC (C.D. Cal. 2010) 697 F.Supp.2d 1168 

(Gezalyan); and Etcheson v. FCA US LLC (2018) 30 Cal.App.5th

831 (Etcheson)—all arise in a different context, and do not 

support his argument that Kia’s violation of the Act was willful. 

All of these cases address whether a consumer can recover 

attorney fees under the Act when those fees were incurred after 

the consumer’s attorney rejected the manufacturer’s offer to 

repurchase and when that offer contained, as proposed terms, 

either a release of liability or a confidentiality clause. (Goglin, at 

p. 472; McKenzie, at pp. 705-707; Gezalyan, at p. 1170; Etcheson, 

at pp. 845-846.) This is a different question than whether a 

manufacturer’s inclusion of specific terms in an offer to 

repurchase a vehicle is itself evidence of that manufacturer’s 

willful violation of the Act. Indeed, under the line of precedent 

plaintiff cites, a consumer can still recover attorney fees after 

their attorney rejects an offer to repurchase due to the offer’s 

failure to include an extra payment akin to the Act’s civil penalty. 

(Etcheson, at pp. 847-848.) If, as plaintiff urges, this line of 
40

precedent applied here, a manufacturer’s failure to offer to pay 

the Act’s civil penalty in any repurchase offer would itself be 

evidence of willfulness that would, in turn, justify the imposition 

of the Act’s civil penalty in subsequent litigation. Such sophistry 

is impressive but, for obvious reasons, is unpersuasive.

Next, we reject plaintiff’s general premise that a 

manufacturer’s offer to repurchase itself constitutes evidence of 

willfulness. Plaintiff asks: Why would a manufacturer offer to 

repurchase a vehicle unless it had done something wrong? This 

question completely ignores that the Act places an affirmative 

duty on manufacturers to make such offers and that this duty 

exists whether or not the manufacturer has done anything wrong. 

We therefore decline to construe a mandatory obligation imposed 

by the Act as conclusive evidence of willfulness entitling 

consumers to what effectively amounts to treble damages. 

The six specific terms in Kia’s February 2016 offer to 

repurchase that plaintiff finds offensive are neither sufficient nor 

compelling evidence of willfulness.

9

The first three specific terms plaintiff attacks—namely, 

that Kia did not offer to pay plaintiff for (1) the $2,000 

manufacturer’s rebate, (2) the optional security device and 

optional service plan supplied by third parties, or (3) the full 

amount of his insurance premiums—are terms that plaintiff has 

conceded or that we have concluded are entirely proper under the 

Act, and hence cannot be considered evidence of a willful 

violation of the Act. 

The fourth term plaintiff attacks is the offer’s condition 

that plaintiff “sign[] [a] settlement release agreement.” Plaintiff 

9 Thus, the fact that Kia’s 2016 offer may have been a 

standard offer is not evidence of willfulness.
41

urges that no such agreement was attached to the February 2016 

offer letter, and that it was inappropriate to ask plaintiff to sign a

release without knowing its content. As between construing the 

offer letter as a demand that plaintiff agree to a release of 

liability sight unseen and construing the offer letter as the first 

step in a multistep settlement process that would include 

plaintiff having the opportunity to review a settlement 

agreement given to him in the future, the latter construction is 

more reasonable. More to the point, that latter construction is in 

no way inappropriate because one contract may anticipate the 

execution of future contracts (e.g., City of Galt v. Cohen (2017) 12 

Cal.App.5th 367, 381) and because there is no reason to assume 

that the release Kia would propose would be unlawfully 

overbroad (Covert v. FCA USA, LLC (2022) 73 Cal.App.5th 821, 

839 [rejecting notion an anticipated release would reach 

impermissibly broader than the claims at issue under the Act]; 

Goodstein v. Bank of San Pedro (1994) 27 Cal.App.4th 899, 907 

[presuming that release would only permissibly reach the claims 

at issue in that case]; cf. Valdez v. Seidner-Miller, Inc. (2019) 33 

Cal.App.5th 600, 615-616 (Valdez) [terms of release violated the 

Consumer Legal Remedies Act]; Rheinhart v. Nissan North 

America, Inc. (2023) 92 Cal.App.5th 1016, 1035-1036 [terms of 

release impermissibly sought to cover future rights under the 

Act]; McKenzie, supra, 238 Cal.App.4th at pp. 705-707 [release 

was “breathtakingly broad”]; Goglin, supra, 4 Cal.App.5th at pp. 

471-472 [release was a “general release” covering all future 

litigation]; Gezalyan, supra, 697 F.Supp.2d at p. 1170 [same]; 

Etcheson, supra, 30 Cal.App.5th at pp. 845-846 [requirement of 

release in first offer replaced with an “insufficiently specific” 

release in second offer]). 
42

The fifth term plaintiff attacks is the requirement that Kia 

conduct a “physical inspection of the vehicle” for “excessive wear 

and tear” and that plaintiff provide a blank cashier’s check by 

which Kia could offset the amount of any such excessive wear and 

tear. The offset for excessive wear and tear is not problematic, 

let alone evidence of willfulness. Although a consumer acts as a 

bailee of sorts for the manufacturer once the manufacturer has 

failed to comply with the Act (which is why postbreach insurance 

premiums protecting against property damage are recoverable as 

“incidental damages”), the consumer may still use the vehicle and 

the consumer is accordingly not liable for diminution in value due 

to normal wear and tear. However, excessive wear and tear goes 

beyond such ordinary use of the asset in the consumer’s care and 

may therefore be offset. (Accord, Jiagbogu, supra, 118 

Cal.App.4th at p. 1244 [“deliberate vandalism by a [consumer] . . . 

may well justify a defense to the [consumer’s] claim”]; cf. Valdez,

supra, 33 Cal.App.5th at pp. 615-616 [offset for “normal wear and 

tear” not permitted under the Consumer Legal Remedies Act]; 

MacQuiddy v. Mercedes-Benz USA, LLC (2015) 233 Cal.App.4th

1036, 1049-1050 [offer that required offset for “normal wear and 

tear” is too “uncertain[]” to constitute a firm offer under Code of 

Civil Procedure section 998].) The mechanism in Kia’s offer for 

providing the offset, through the use of a cashier’s check, is also 

not problematic, especially where, as here, the record indicates 

that the vehicle had no dents or dings or damage in February 

2016.

The sixth term plaintiff attacks is that Kia’s offset for 1,533 

miles on the odometer prior to plaintiff’s first August 2014 visit to 

the dealership impermissibly included the 19 miles on the 

odometer at the time plaintiff first purchased the Optima. Even 
43

if we assume this was an error under the Act (although the Act 

does not expressly provide for this carve out (§ 1793.2, subd. 

(d)(2)), any such error translates to a $7.79 overcharge which is 

too de minimis to support, let alone compel, a finding that Kia 

willfully violated the Act.

3. Scope of new trial

The new trial on the issue of whether Kia willfully violated 

the Act should be conducted on remand subject to the guardrails 

clarified in this opinion. Specifically, the scope of evidence 

relevant to willfulness does not include Kia’s conduct outside the 

pertinent window of time identified in this opinion (that is, the 

relevant scope includes only the 21 months between Kia’s 

violation in December 2014 and plaintiff’s lawsuit in September 

2016),

10 and in assessing the evidence adduced at the new trial, 

the jury should be instructed, consistent with this opinion, that 

Kia’s violation of the Act was “willful” for purposes of the civil 

penalty only if Kia’s failure to comply was deliberate, knowing, or 

not based on a good faith and reasonable belief that it was 

complying with the Act. In the event the jury makes the 

necessary willfulness finding, the civil penalty imposed “shall not 

exceed two times” the amount of the “restitution” award as 

amended consistent with this opinion. 

10 We further note that while plaintiff testified at the first 

trial to his personal feelings about how Kia’s conduct affected 

plaintiff or his family, such evidence would not be relevant at the 

new trial on willfulness as such testimony injects emotional 

distress-type damages into the dispute, which are not recoverable 

under the Act. (Kwan, supra, 23 Cal.App.4th at p. 192; Bishop, 

supra, 44 Cal.App.4th at pp. 757-758; Erlich v. Menezes (1999) 21 

Cal.4th 543, 558.) 
44

DISPOSITION

The judgment is affirmed in part and reversed in part, and 

the trial court is directed to strike from plaintiff’s “restitution” 

award the amounts set forth in this opinion and to conduct a new 

trial consistent with this opinion on the issue of the civil penalty. 

The parties are to bear their own costs on appeal. 

CERTIFIED FOR PUBLICATION.

______________________, J.

HOFFSTADT

We concur:

_________________________, Acting P. J.

ASHMANN-GERST

_________________________, J.

CHAVEZ