Opinion ID: 2634622
Heading Depth: 3
Heading Rank: 3

Heading: The Reveles Case

Text: Gavaldon argues that the above conclusion conflicts with the Court of Appeal's holding in Reveles, supra, 57 Cal.App.4th 1139, 67 Cal.Rptr.2d 543. The Court of Appeal in the present case usefully summarized Reveles: In that case, the plaintiff purchased a used vehicle from a dealership. The sale was `as is,' i.e., without an express warranty, so he also purchased a `vehicle service agreement' covering `repair of mechanical failures' of various parts for two years or 24,000 miles. Two months later, the front end of the car suddenly dropped, and the dealer's mechanic told the plaintiff the vehicle had significant preexisting frame damage and could not be repaired. Nonetheless, the dealer refused the plaintiff's demand it replace the vehicle or refund his purchase price, insisting repairs would be made. ([ Reveles, ] at p. 1145, 67 Cal.Rptr.2d 543.) The plaintiff sued the dealer for breach of contract, rescission and restitution, negligent and intentional misrepresentation, breach of the Consumers Legal Remedies Act (§ 1750 et seq.) and breach of the Song-Beverly Act. After rejecting the plaintiff's repeated offers to settle for $9,300, on the morning of trial the dealer announced it would settle for that amount. The plaintiff settled but reserved his right to move for attorney fees and costs to which he argued he was entitled under various statutes, including the Song-Beverly Act. The trial court eventually found the plaintiff was the prevailing party and awarded him $19,000 in attorney fees, plus expert witness fees and costs. ( Reveles, supra, 57 Cal.App.4th at pp. 1146-1148, 67 Cal.Rptr.2d 543.) The Court of Appeal affirmed the award, concluding in part that the plaintiff was the prevailing party under the Song-Beverly Act, and was therefore entitled to costs and attorney fees pursuant to section 1794, subdivision (d). ( Reveles, supra, 57 Cal.App.4th at pp. 1149, 1158, 67 Cal.Rptr.2d 543.) In so deciding, the court had to address the argument that the Act's remedies do not apply to used vehicles sold as is. As discussed ante, the Act generally applies to the purchase of consumer goods which are generally defined as being new goods. (§ 1791, subd. (a).) Notwithstanding that definition, section 1795.5 provides, as noted ante, that the Act also applies to used consumer goods in a sale in which an express warranty is given. The plaintiff's used car was sold as is, but he had purchased a service contract. The court was faced with the issue of whether that service contract was an express warranty, in which case the used car purchaser would be afforded the Act's protection under section 1795.5. In addressing the problem, the Reveles court reviewed the patchwork of relevant amendments to the Act. As noted above, the Act as originally passed in 1970 hardly mentioned service contracts, but subsequent amendments have increased protection for service contract purchasers. Section 1796.5, added in 1978, provides that any entity which engages in the business of providing service or repair to new or used consumer goods has a duty to the purchaser to perform those services in a good and workmanlike manner. (Stats.1978, ch. 991, § 13, p. 3066.) Subdivision (b) of section 1794.4, added in 1988, states that [e]xcept as otherwise expressly provided in the service contract, every service contract shall obligate the service contract seller to provide to the buyer of the product all of the services and functional parts that may be necessary to maintain proper operation of the entire product under normal operation and service for the duration of the service contract and without additional charge. (Stats.1988, ch. 581, § 2, p. 2136, as amended by Stats.1993, ch. 1265, § 13, pp. 7422-7423, italics added.) Additionally, section 1794.4, subdivision (c), added at the same time, requires the service contract to contain substantial information, including a step-by-step explanation of the procedure which the buyer should follow in order to obtain performance of any obligation under the service contract.... (See § 1794.4, subd. (c)(5); Stats.1988, ch. 581, § 2, p. 2137.) Subdivision (d) was also added to section 1794.4, providing: Subdivisions (b) and (c) of this section are applicable to service contracts on new or used home appliances and home electronic products entered into on or after July 1, 1989. They are applicable to service contracts on all other new or used products entered into on and after July 1, 1991. (Stats.1988, ch. 581, § 2, p. 2137, as amended by Stats.1990, ch. 127, § 1, p. 1141, italics added.) Section 1794 was added in 1982, enumerating the remedies available to a consumer for breach of the Act. It states in part: Any buyer of consumer goods who is damaged by a failure to comply with any obligation under this chapter or under an implied or express warranty or service contract may bring an action for the recovery of damages and other legal and equitable relief. (§ 1794, subd. (a); Stats.1982, ch. 385, § 2, p. 1716, as amended by Stats.1987, ch. 1280, § 4, p. 4562, italics added.) The Reveles court therefore confronted an apparent statutory anomaly, in which, under sections 1794.4 and 1796.5, buyers of any service contract, for either a new or used good, were entitled to the proper enforcement of the contract as well as various statutory protections, but the remedies provided under the Act, in sections 1794, and 1795.5, seemed not to include remedies for breaches of service contracts for used goods. The Reveles court reasoned that [i]f `express warranty' under section 1795.5 is interpreted to exclude the vehicle service agreement, Reveles has no Song-Beverly Act remedy for [the dealership's] breach of sections 1794.4, subdivisions (b) and (d) and 1796.5, and they would thus be rendered meaningless. ( Reveles, supra, 57 Cal.App. 4th at p. 1157, 67 Cal.Rptr.2d 543.) But the fact that equating express warranty and service contract would solve an apparent statutory anomaly does not free us to so interpret the statute, when such interpretation would be at variance with the statutory language and the legislative history reviewed above. Although we will not interpret a statute literally if it leads to an absurd result, we cannot say that the statute's failure to explicitly provide a remedy under the Act for breaches of service contracts on used vehicles is an absurd result. We need not decide whether the result in Reveles  that attorney fees under the Act may be awarded for breach of a service contract on a used vehicle  is correct under a different rationale. But we disapprove of its conclusion that a service contract is a type of express warranty under the Song-Beverly Act. For all the above reasons, we conclude that the service contract in the present case, which was sold for an additional cost and which does not use the words warrant or guarantee, is not an express warranty for purposes of the Act.