Court Opinion

ID: 8405358
Source: CourtListenerOpinion
Date Created: 2022-10-25 22:02:11.986643+00
Date Added: 2024-06-11T16:46:51.819780
License: Public Domain

Filed 10/25/22
                 CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                 SECOND APPELLATE DISTRICT

                           DIVISION SIX

RAUL B. FIGUEROA,                        2d Civ. No. B306275
                                       (Super. Ct. No. 56-2018-
     Plaintiff and Respondent,         00507038-CU-BC-VTA)
                                          (Ventura County)
v.

FCA US, LLC,

     Defendant and Appellant.

      A jury finds defendant manufacturer to be in willful
violation of the Song-Beverly Consumer Warranty Act (Song-
Beverly Act) (Civ. Code,1 § 1790, et seq.), when it refused to
repurchase or replace a defective truck. Plaintiff was forced to
sell the truck and received a little more than $3,000 than he
owed on the loan to purchase the truck.
      The jury awarded the truck owner $30,154 in damages.
The manufacturer contends it is entitled to a credit for the
$3,000 plaintiff received on the loan. We disagree with the
manufacturer and Niedermeier v. FCA US LLC (2020) 56

       All further statutory references are to the Civil Code
       1

unless otherwise indicated.
Cal.App.5th 1052, review granted February 10, 2021, S266034
(Niedermeier), which holds otherwise. We affirm.
                              FACTS
      In January 2014, Raul B. Figueroa purchased a new Dodge
Ram pickup truck for $33,824.88. FCA US LLC (FCA) is the
manufacturer of the truck. Within 900 miles the truck engine
overheated and the truck had to be towed to the dealership for
repair. The dealership replaced a defective radiator hose clamp,
and visually inspected the cylinder heads for cracks that are
often caused by overheating. The dealership did not undertake a
standard dye test for leaks. The engine continued to overheat
and after a few thousand miles the water pump failed. The
dealership replaced the water pump under warranty.
      Figueroa took his truck back to the dealership another six
to eight times complaining of overheating. Each time the service
representative took the truck away for about 30 minutes before
telling him it was fine.
      In desperation, Figueroa took his truck to a different
dealership. That dealership told him the thermostat housing
was leaking. The dealership refused to repair it under warranty,
however, because it was an after-market thermostat housing.
Figueroa did not install the after-market thermostat housing.
He took it back to the original dealership who installed a new
thermostat housing but charged him $199. The engine still
overheated.
      Fed-up with his unreliable truck, Figueroa asked the
dealership to buy it back. But the dealership offered only
$10,000 as a trade-in because of its poor condition. Figueroa
refused. He owed more on the truck than $10,000.

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      Finally, Figueroa asked his nephew to call FCA and ask it
to replace the truck. Figueroa was present when his nephew
made the call. FCA refused to repurchase the truck or even
assess whether it was a lemon.
      Figueroa sold the truck to CarMax for $17,000. He was
tired of taking the truck in for repairs and did not feel safe
driving his family in it. FCA never offered to repurchase the
truck before Figueroa filed suit.
                              Procedure
      Figueroa filed a complaint against FCA alleging causes of
action for breach of express warranty and breach of implied
warranty.
      FCA made an offer of settlement pursuant to Code of Civil
Procedure Section 998 of $30,000. Figueroa refused the offer,
and the matter went to jury trial.
      The jury found FCA breached its express warranty and
awarded $20,154 in compensatory damages plus a $10,000 civil
penalty, for a total of $30,154. The jury also found FCA
breached its implied warranty and awarded $30,154 in
compensatory damages. The trial court awarded Figueroa
$143,046.50 in attorney fees.
                            DISCUSSION
                                   I.
     FCA not entitled to net cash Figueroa received from sale
      FCA contends the judgment must be reduced because it is
entitled to a credit for the net cash back Figueroa received from
the sale to CarMax.
      Figueroa sold the truck to CarMax for $17,000. That is
$3,191.93 more than he owed on the loan he used to purchase
the truck.

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      Section 1793.2, subdivision (d)(2) provides in part: “If the
manufacturer or its representative in this state is unable to
service or repair a new motor vehicle, . . . to conform to the
applicable express warranties after a reasonable number of
attempts, the manufacturer shall either promptly replace the
new motor vehicle in accordance with subparagraph (A) or
promptly make restitution to the buyer in accordance with
subparagraph (B).”
      Subparagraph (B) of section 1793.2, subdivision (d)(2)
provides: “In the case of restitution, the manufacturer shall
make restitution in an amount equal to the actual price paid or
payable by the buyer, including any charges for transportation
and manufacturer-installed options, but excluding
nonmanufacturer items installed by a dealer or the buyer, and
including any collateral charges such as sales or use tax, license
fees, registration fees, and other official fees, plus any incidental
damages to which the buyer is entitled under Section 1794,
including, but not limited to, reasonable repair, towing, and
rental car costs actually incurred by the buyer.”
      Subparagraph (B) establishes the amount of restitution
FCA must pay. (§ 1793.2, subd. (d)(2)(B).) “[T]he manufacturer
shall make restitution in an amount equal to the actual price
paid or payable by the buyer . . . .” (Ibid.) The statute is clear
and unequivocal. Nowhere in section 1793.2. subdivision
(d)(2)(B), or elsewhere in the Song-Beverly Act, is there a
provision allowing cash back to the manufacturer. We cannot
add words to a clear and unequivocal statute. (Hudson v.
Superior Court (2017) 7 Cal.App.5th 1165, 1172.)
      FCA argues the word “restitution” in section 1793.2,
subdivision (d)(2) requires Figueroa to return the benefit he

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received from the transaction, in this case, the cash he received
from the truck’s sale. We might agree but for express definition
of restitution in subparagraph (B) of section 1793.2, subdivision
(b)(2).
      Undaunted by the lack of statutory authority, FCA argues
that public policy requires that it can be credited with the cash
Figueroa received from the sale. FCA’s position is that having
sold Figueroa a defective vehicle and having willfully violated
the Song-Beverly Act by refusing to promptly replace or
repurchase the vehicle, it is entitled to be benefitted with the
cash Figueroa received. FCA complains that Figueroa received a
windfall at FCA’s expense. What FCA refuses to acknowledge is
that any such windfall is the direct result of FCA’s willful
violation of the Song-Beverly Act. Had FCA fulfilled its duty
under the Act to promptly replace or repurchase the truck, there
would be no such windfall. We are aware of no public policy that
requires FCA be compensated for its own willful violation of the
law.
      FCA argues that if the owner of a defective vehicle is
encouraged by a windfall to sell a defective vehicle on the open
market, the purchaser of the vehicle will not receive the
protections afforded by the Song-Beverly Act. Under the act,
where a manufacturer has reacquired a defective vehicle, before
it can be resold, the manufacturer must repair the defect
(§ 1793.22, subd. (f)(1)); the vehicle must be retitled in the name
of the manufacturer, the title must be inscribed with the
notation “Lemon Law Buyback,” and a decal must be affixed to
the vehicle with the same notation (§ 1793.23, subd. (c), Veh.
Code § 11713.12, subd. (a)); the prospective buyer must be given
notice that the vehicle is a lemon law buyback (§ 1793.23,

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subd. (f)); and the buyer must be given a one year manufacturer
warranty that the vehicle is free from the defect (§ 1793.22
(f)(1)). FCA’s concern for those who purchase defective vehicles
on the open market without the protections afforded by the
Song-Beverly Act is admirable. But when confronted with the
duty to reacquire Figueroa’s defective vehicle and provide such
protections to a subsequent purchaser, it refused to do so.
       FCA’s reliance on Niedermeier is misplaced. There,
plaintiff purchased a new vehicle manufactured by FCA.
Plaintiff experienced numerous problems with the vehicle and
brought it in for repair multiple times. Plaintiff asked FCA to
buy the vehicle back. FCA refused, Plaintiff traded the vehicle
in for a new car, and received $19,000 off the purchase price.
Plaintiff sued FCA under the Song-Beverly Act and recovered
damages. The trial court denied FCA a set-off of $19,000 to
reflect the trade-in value of plaintiff’s vehicle. The Court of
Appeal reversed.
       In reversing, the court acknowledged “that section 1793.2,
subdivision (d)(2)(B) sets the amount of restitution at ‘the actual
purchase price paid or payable.’” (Niedermeier, supra, 56
Cal.App.5th at p. 1071) The appellate court stated that to read
the statute literally would disregard the Legislature’s choice of
the term “restitution” and provide plaintiff with an “unjustified
windfall.” (Ibid.) In addition, the court stated it does not
consider the language of section 1793.2, subdivision (d)(2)(B) in
isolation. To permit plaintiff to receive the trade-in value of her
vehicle and a full refund from FCA would undercut the
requirement that the manufacturer label the vehicle as a
“lemon” and notify the prospective buyer of that fact. (Id. at pp.
1071-1072.)

                                 6
      We disagree with Niedermeier. First, the Legislature used
the term “restitution,” but it defines what it means by restitution
in section 1793.2, subdivision (d)(2)(B). The definition does not
include a set-off for the cash received by the vehicle owner on
sale of the vehicle or the vehicle’s trade-in value. Second, FCA
cannot complain that the vehicle’s owner has received an
unjustified windfall when it could have avoided such a result by
complying with the Song-Beverly Act. Third, it is FCA, and not
the vehicle’s owner, who undercuts the act’s labeling and
notification requirements by refusing to repurchase the vehicle
as required by the act. The labeling and notification
requirements only apply where the manufacturer replaces or
repurchases the vehicle, something FCA has refused to do.
      As this case and Niedermeier show, FCA operates in open
defiance of the Song-Beverly Act. It considers promptly
repurchasing, repairing, labeling as a lemon and selling the
vehicle at a deep discount with a one-year warranty, a losing
proposition. It would much rather force the owner of a defective
vehicle to sell it on the open market, or trade it in without a label
or warning, and use the cash back on trade-value as an offset.
Niedermeier encourages FCA to do just that. We decline to
follow Niedermeier, although in some cases the owner of a
vehicle receives a windfall. FCA could have avoided this by
complying with the law.
                                  II.
              Registration renewal fees and insurance
      FCA contends the judgment must be reduced to the extent
it contains registration renewal fees and insurance premiums.
      FCA argues that the judgment includes an award for two
years of registration renewal fees in the amount of $600, and

                                 7
$3,420 for 36 months of car insurance premiums. FCA claims
there is no evidence Figueroa paid registration renewal fees or
insurance premiums.
      But FCA fails to show that any of the damages the jury
awarded included registration renewal fees or insurance
premiums. The jury simply awarded a lump sum of damages.
With such an undifferentiated award, there is no way to
determine what portion, if any, of the verdict was rewarded on
an improper basis. (Heiner v. Kmart Corporation (2000) 84
Cal.App.4th 335, 346.) FCA’s failure to seek a jury verdict form
segregating the elements of damages foreclosed any challenge to
a portion of the damages as improperly awarded. (English v. Lin
(1994) 26 Cal.App.4th 1358, 1369.)
                                  III.
                           Willful violation
      FCA contends there is no substantial evidence to support
the jury’s finding of willful violation of the Song-Beverly Act.
      In viewing the evidence, we look only to the evidence
supporting the prevailing party. (GHK Associates v. Mayer
Group, Inc. (1990) Cal.App.3d 856, 872.) We discard evidence
unfavorable to the prevailing party as not having sufficient
verity to be accepted by the trier of fact. (Ibid.) Where the trial
court or jury has drawn reasonable inferences from the evidence,
we have no power to draw different inferences, even though
different inferences may also be reasonable. (McIntyre v. Doe &
Roe (1954) 125 Cal.App.2d 285, 287.)
      Figueroa reported overheating to FCA’s dealer six to eight
times. If FCA has a policy that does not require its dealer to
report such repeated complaints, it is not Figueroa’s fault. FCA
cannot turn a blind eye to a problem and claim innocence. In

                                8
addition, Figueroa had his nephew call FCA directly. FCA
refused to repurchase the truck or even investigate whether it
was a lemon. That is more than sufficient to show a willful
violation.
                         DISPOSITION
      The judgment is affirmed. Costs on appeal are awarded to
respondent.
      CERTIFIED FOR PUBLICATION.

                                    GILBERT, P. J.

We concur:

      YEGAN, J.

      PERREN, J.*

*Retired Associate Justice of the Court of Appeal, Second
Appellate District, assigned by the Chief Justice pursuant to
article VI, section 6 of the California Constitution.

                                9
                    Henry J. Walsh, Judge

               Superior Court County of Ventura

               ______________________________

     Horvitz & Levy, Lisa Perrochet, John A. Taylor, Joshua C.
McDaniel; Hawkins Parnell & Young and Ryan K. Marden for
Defendant and Appellant.
     Knight Law Group, Steve Mikhov, Roger Kirnos; Century
Law Group, Edward O. Lear, Rizza Gonzales; Greines, Martin
Stein & Richland, Cynthia E. Tobisman and Joseph V. Bui for
Plaintiff and Respondent.

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