Santos vs. Ford Motor Company

“Summary judgment shall be granted if all the papers submitted show that there is no triable issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” (Civil Proc. Code, § 437c, subd. (c).)

“A party may move for summary adjudication as to one or more causes of action within an action, one or more affirmative defenses, one or more claims for damages, or one or more issues of duty, if the party contends that the cause of action has no merit, that there is no affirmative defense to the cause of action, that there is no merit to an affirmative defense as to any cause of action, that there is no merit to a claim for damages, . . . or that one or more defendants either owed or did not owe a duty to the plaintiff or plaintiffs. (Civil Proc. Code, § 437c, subd. (f)(1).)

A “party moving for summary judgment bears an initial burden of production to make a prima facie showing of the nonexistence of any triable issue of material fact . . . .” (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850.) “A prima facie showing is one that is sufficient to support the position of the party in question.” (Id. at 851.)

A defendant moving for summary judgment satisfies the initial burden by submitting undisputed evidence “showing that a cause of action has no merit [because] one or more elements of the cause of action, even if not separately pleaded, cannot be established, or that there is a complete defense to the cause of action.” (Civil Proc. Code § 437c, subd. (p)(2); Aguilar v. Atlantic Richfield Co., supra, 25 Cal.4th at pp. 850-51.) However, “[t]he defendant must indeed present evidence.” (Aguilar v. Atlantic Richfield Co., supra, 25 Cal.4th at p. 855, italics original.)

If a defendant fails to meet this initial burden, the plaintiff need not oppose the motion and the motion must be denied. (Binder v. Aetna Life Ins. Co. (1999) 75 Cal.App.4th 832, 840.) If the moving party meets its burden, the burden then shifts to the party opposing summary judgment to show, by reference to specific facts, the existence of a triable, material issue as to a cause of action or an affirmative defense. (Aguilar v. Atlantic Richfield Co., supra, 25 Cal.4th at p. 855; Villacres v. ABM Industries, Inc. (2010) 189 Cal.App.4th 562, 575.)

On July 1, 2022, the lease for the Subject Vehicle, a 2020 Ford Explorer, VIN No.: 1FM5K8GC5LGB11813, was transferred from the original lessee, Michael D. Hadley, to Plaintiff Adam S. Santos with the consent of Ford Motor Credit Company. (Biemann Decl. ¶ 4, Exh. 3 [ROA 128]; Plaintiffs Additional Facts No. 1 [and evidence cited therein].) Plaintiffs purchased the vehicle out of the lease agreement on December 16, 2022. (Ford Separate Statement No. 2 [and evidence cited therein].) The Subject Vehicle had approximately 21,152 miles at the time of Plaintiffs’ purchase. (Id.)

In the Complaint, Plaintiffs allege they entered into a warranty contract with Defendant Ford Motor Company (“Ford”) for a 2020 Ford Explorer. (Compl. ¶ 9.) The warranty contract contained various warranties, including but not limited to the bumper-bumper warranty, powertrain warranty, emission warranty, etc. (Id. at ¶ 10, Exh. A.)

The Complaint alleges defects and nonconformities to warranty manifested themselves within the applicable express warranty period, including but not limited to, transmission defects, engine defects, electrical defects, body defects; among other defects and non-conformities. (Compl. ¶ 14.) The Complaint further alleges Ford is a “manufacturer” and/or “distributor” under the Song-Beverly Act and asserts causes of action against Ford for: (1) violation of Civil Code section 1793.2(d); (2) violation of Civil Code section 1793.2(b); (3) violation of Civil Code section 1793.2(A)(3); (4) breach of the implied warranty of merchantability; and (5) fraudulent inducement—concealment. (See Compl. and ¶ 11.)

Plaintiffs seek general, special, and actual damages according to proof, restitution, consequential and incidental damages, damages for diminution in value, a civil penalty of two times Plaintiff’s actual damages, prejudgment interest, attorneys’ fees and costs, and other unspecified relief. (Compl., Prayer for Relief.)

“The Song-Beverly Act is a remedial statute designed to protect consumers who have purchased products covered by an express warranty.” (Robertson v. Fleetwood Travel Trailers of California, Inc. (2006) 144 Cal.App.4th 785, 798.) The Act “provides enhanced remedies to consumers who buy new consumer

goods accompanied by a manufacturer's express warranty .... (§ 1793.2.) ... The same protections generally apply to the sale of used goods accompanied by an expressed warranty, except that the distributor or retail seller is bound, as opposed to the manufacturer ....” (Kiluk v. Mercede-Benz USA, LLC (2019) 43 Cal.App.5th 334, 336 [footnote omitted].)

First Cause of Action for Violation of Subdivision (d) of Civil Code Section 1793.2; Second Cause of Action for Violation of Subdivision (b) of Civil Code Section 1793.2; and Third Cause of Action for Violation of Subdivision (a)(3) of Civil Code Section 1793.2

Ford contends Plaintiffs cannot establish a cause of action against Ford under the Song-Beverly Act, because Plaintiffs took over the lease of a used Subject Vehicle on July 1, 2022 and subsequently purchased the used vehicle on December 22, 2022. Ford did not provide a new warranty for the Subject Vehicle in the transactions in which Plaintiffs took title to the Subject Vehicle.

The first cause of action alleges Ford violated Civil Code section 1793.2, subdivision (d) by failing to either “promptly replace the Vehicle or make restitution.” (Compl. ¶ 38.) The second cause of action alleges Ford failed to commence service or repairs within a reasonable time and failed to service or repair the Subject Vehicle so as to confirm to the applicable warranties within 30 days, in violation of section 1793.2, subdivision (b). (Compl. ¶ 44.) The third cause of action alleges Ford violated section 1793.2, subdivision (a)(3) by failing to make available to its authorized service and repair facilities sufficient service literature and replacement parts to effect repairs during the express warranty period. (Compl. ¶ 49.)

Section 1793.2 of the Song-Beverly Act is titled “Consumer good manufacturers; express warranties; service and repair facilities.” (Civ. Code, § 1793.2.) Subsection (b) requires a manufacturer to “service[] or repair[] goods” in conformance with “the applicable warranties within 30 days.” (Id. at 1793.2, subd. (b).) Subdivision (a)(3) requires “manufacturer[s] of consumer goods ... for which the manufacture has made an express warranty” to “[m]ake available to authorized service and repair facilities sufficient service literature and replacement parts to effect repairs during the express warranty period.” (Id. at § 1793.2, subd. (a)(3).)

Section 1793.2, subdivision (e)(2) defines “ ‘new motor vehicle’ ” to include “a new vehicle ‘bought or used primarily for personal purposes’ as well as ‘a dealer-owned vehicle and a “demonstrator” or other motor vehicle sold with a manufacturer’s new car warranty.’ ” (Rodriguez v. FCA US LLC (2024) 17 Cal.5th 189, 195.)

The Song-Beverly Act defines the parties who issue warranties as follows. A manufacturer is an entity “that manufactures, assembles, or produces consumer goods.” (Civ. Code, § 1791, subd. (j).) A distributor is an entity “that stands between the manufacturer and the retail seller in purchases, consignments, or contracts for sale of consumer goods.” (Id. at § 1791, subd. (e).) A seller or retailer is an entity “that engages in the business of selling or leasing consumer goods to retail buyers.” (Id. at § 1791, subd. (l).)

In Rodriguez v. FCA US LLC, the California Supreme Court resolved an issue of statutory construction and concluded that, “a motor vehicle purchased with an unexpired manufacturer’s new car warranty does not qualify as a ‘motor vehicle sold with a manufacturer’s new car warranty’ ... unless the new car warranty was issued with the sale.” (Id. at p. 196.) Thus, under Rodriguez, the buyer of a previously-owned, used vehicle that is not sold with a manufacturer’s new car

warranty is not entitled to the Song-Beverly Act’s enhanced refund-or-replace remedy. Rodriguez made clear that an unexpired manufacturer’s new car warranty does not qualify as a new car warranty under the Song-Beverly Act unless it was issued at the time of the sale of the Subject Vehicle. (See Rodriguez, supra, 17 Cal.5th at pp. 195-96.)

Undisputed evidence shows Plaintiff took over the lease of the Subject Vehicle from Michael Hadley and converted the lease to a purchase when the lease term expired. (Ford Separate Statement Nos. 1-2 [and evidence cited therein]; Plaintiffs Additional Facts No. 1 [and evidence cited therein].) Ford has submitted evidence that the Subject Vehicle was not a certified pre-owned vehicle or that a new warranty was issued to Plaintiffs. (Ford Separate Statement Nos. 5-7 [and evidence cited therein].)

Under Rodriguez, Plaintiffs cannot establish their first cause of action against Ford for a refund of the purchase price or a replacement of the used Subject Vehicle. Similarly, Rodriguez applies to Plaintiffs’ second and third causes of action, which also were brought under the Song-Beverly Act. The “overall framework of the Song-Beverly Act ... distinguishes between new and used products and calibrates manufacturers’ and sellers’ obligations accordingly.” (Rodriguez, supra, 17 Cal.5th, at p. 200.) “ ‘ “Consumer goods” means any new product or part thereof that is used, bought, or leased for use primarily for personal, family, or household purposes, except for clothing and consumables.’ (§ 1791, subd. (a).)” (Rodriguez, supra, at p. 200.)

The Subject Vehicle is not a “new motor vehicle” for purposes of the Song-Beverly Act because it was not leased or sold to Plaintiffs with a new car manufacturer’s warranty. Ford has met its initial burden to show Plaintiffs cannot establish a necessary element of their first, second, and third causes of action.

Plaintiffs assert that they received the same warranties as the original lessee because they assumed the original lease. (See Plaintiffs Additional Facts No. 2 [and evidence cited therein].) Thus, Plaintiffs argue, Plaintiffs inherited the original lessee’s right to sue under the Song-Beverly Act through the transfer of the lease.

In Dagher v. Ford Motor Co. (2015) 238 Cal.App.4th 905, the plaintiff bought a pre-owned truck manufactured by Ford Motor Company (“Ford”) in a private sale, which came with the transferable, unexpired express warranty issued to the private party sellers upon their purchase of the truck, new, from a Ford dealer. (Id. at pp. 910-911.) The plaintiff later had trouble with the vehicle’s engine and brought it in for warranty repairs numerous times. (Id. at p. 912.) The plaintiff was not satisfied with the repair attempts and sued Ford under the Song-Beverly Act. (Id.)

The Court of Appeal affirmed the trial court’s grant of summary judgment in favor of Ford. (Id.) The Dagher court concluded the plaintiff was “not entitled to ... coverage by the Act” (id. at p. 922) as a “buyer” under section 1791, subdivision (b) because he “acquired the used truck from private parties” who were “not routinely engaged in ... a ‘retail’ business ....” (Id. at p. 923.)

After determining the plaintiff was not a buyer within the meaning of the Song- Beverly Act, the Dagher court rejected the plaintiff’s argument that the Act’s statutory remedies were transferred to him along with the express warranty rights. (Dagher, supra, 238 Cal.App.4th at p. 925-927.) The court concluded, “Even though assignability of a claim is the rule, highly personalized rights of recovery are not assignable. [Citation.] Likewise, the Act specifies in great detail those types of buyers and sellers who are subject to its provisions, and only those buyers and sellers can properly assert its protections.” (Id. at p. 926.) Therefore,

the court reasoned, the “transfer of a written warranty did not effectively also transfer the original buyers’ right to sue under the Act, because the Act defines standing to obtain the additional protections that it provides in a different manner, by restricting the types of sellers and goods, as well as buyers, that qualify for its protection.” (Ibid.)

Plaintiffs contend the right to sue under the Song-Beverly Act was transferred to them because the Plaintiffs assumed the lease and converted the lease to purchase. As the Dagher court observed, however, the rights Plaintiffs seek to enforce are statutory. Thus, Michael Hadley’s transfer of his interests in the lease to Plaintiff “did not effectively also transfer [his] right to sue under the Act.” (Dagher, supra, 238 Cal.App.4th at p. 926.)

In Rodriguez v. FCA US LLC, (2024) 17 Cal.5th 189, the California Supreme Court confirmed that: “[A] motor vehicle purchased with an unexpired manufacturer’s new car warranty does not qualify as a ‘motor vehicle sold with a manufacturer’s new car warranty’ under section 1793.22, subdivision (e)(2)’s definition of ‘new motor vehicle’ unless the new car warranty was issued with the sale.” (Id. at p. 196.) Here, Plaintiffs agreed to lease the Subject Vehicle pursuant to Mr. Hadley’s original terms with Ford’s express consent. The record before the court does not reflect that a new warranty of any kind was issued in the lease transfer. Thus, applying Dagher and Rodriguez, Plaintiffs are not the lessees or purchasers of “new motor vehicle” within the meaning of the Song- Beverly Act. (Dagher, supra, 238 Cal.App.4th at p. 925-927; Rodriguez, supra, 17 Cal.5th at p. 196.)

Fourth Cause of Action for Breach of the Implied Warranty of Merchantability

“[E]very sale of consumer goods that are sold at retail in this state shall be accompanied by the manufacturer's and the retail seller's implied warranty that the goods are merchantable.” (Civ. Code, § 1792; see also Civ. Code, § 1791.1.) “ “‘Consumer goods” means any new product or part thereof that is used, bought, or leased for use primarily for personal, family, or household purposes, except for clothing and consumables.”’ (Civ. Code § 1791.)” (Kiluk v. Mercedes-Benz USA, LLC (2019) 43 Cal.App.5th 334, 339.)

“The Song-Beverly Act provides similar remedies in the context of the sale of used goods, except that the manufacturer is generally off the hook: ‘Notwithstanding the provisions of subdivision (a) of Section 1791 defining consumer goods to mean “new” goods, the obligation of a distributor or retail seller of used consumer goods in a sale in which an express warranty is given shall be the same as that imposed on manufacturers under this chapter except: [¶] (a) It shall be the obligation of the distributor or retail seller making express warranties with respect to used consumer goods (and not the original manufacturer, distributor, or retail seller making express warranties with respect to such goods when new) to maintain sufficient service and repair facilities within this state to carry out the terms of such express warranties.’ (§ 1795.5, subd. (a).)” (Kiluk, supra, at p. 339.) “[T]he assumption baked into section 1795.5 is that the manufacturer and the distributor/retailer are distinct entities.

Where the manufacturer sells directly to the public, however, it takes on the role of a retailer.” (Id., at p. 340.) Thus, “in the sale of used consumer goods, liability for breach of implied warranty lies with distributors and retailers, not the manufacturer, where there is no evidence the manufacturer played any role in the sale of the used car to plaintiff.” (Nunez v. FCA US LLC (2021) 61 Cal.App.5th 385, 398.)

The undisputed facts discussed above establish that the Subject Vehicle is a used vehicle and Ford, the manufacturer, cannot be liable for a breach of the implied warranty. The Complaint does not allege Ford is a retail seller. The pleadings “set the boundaries of the issues to be resolved at summary judgment.” (Oakland Raiders v. National Football League (2005) 131 Cal.App.4th 621, 648; see generally Ann M. v. Pacific Plaza Shopping Center (1993) 6 Cal.4th 666, 673 [“pleadings serve as the outer measure of materiality in a summary judgment proceeding”].) “The materiality of a disputed fact is measured by the pleadings [citations]....” (Conroy v. Regents of University of Cal. (2009) 45 Cal.4th 1244, 1250.) Plaintiffs have not met their burden to show a triable issue of material fact that Ford is a distributor.

The motion for summary judgment is GRANTED.

Defendant Ford Motor Company to give notice and file a proposed judgment.