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D.L. Edmonson Selective Service Inc. v. LCW Automotive Corp.

January 26, 2010

D.L. EDMONSON SELECTIVE SERVICE INC. DBA SELECTIVE LIMOUSINE SERVICE, A CORPORATION, PLAINTIFF,
v.
LCW AUTOMOTIVE CORPORATION AND MODERN TECHNOLOGIES GROUP, INC. AND DOES 1-50, DEFENDANT.



The opinion of the court was delivered by: Christina A. Snyder United States District Judge

FINDINGS OF FACT AND CONCLUSIONS OF LAW

The case was tried to the Court on August 18, 19, and 20, 2009. Closing argument was heard on October 8, 2009. Robert F. Brennan, of Brennan, Wiener & Associates, APC, appeared as counsel on behalf of plaintiff. Michael T. Taurek, of Green & Hall, APC, appeared as counsel on behalf of defendant LCW.

I. INTRODUCTION

On March 15, 2007, David L. Edmonson ("Edmonson"), filed a suit in Los Angeles County Superior Court against defendants LCW Automotive Corp. ("LCW") and Modern Technologies Group, Inc. ("MTG"). The action was timely removed to this Court on May 18, 2007. On September 17, 2007, the Court granted defendants' motion to dismiss with leave to amend.

On December 13, 2007, D.L. Edmonson Selective Service Inc. d.b.a. A Selective Limousine Service ("plaintiff"), substituted in as the party plaintiff in place of Edmonson, and filed a first amended complaint ("FAC") against LCW, MTG, Distribution of Limousines, Inc. ("Distribution"), and Ford Motor Company ("Ford").*fn1

On March 10, 2008, the Court granted defendants LCW and MTG's motion to dismiss plaintiff's claims for (1) breach of implied warranty under the Song-Beverly Consumer Warranty Act, California Civil Code § 1790, et seq. ("the Song-Beverly Act"); (2) breach of express warranty under Cal. Comm. Code § 2313; and (3) breach of express warranty under the Magnuson-Moss Act.

On February 28, 2008, plaintiff filed a second amended complaint ("SAC") against defendants LCW, Distribution, Ford, MTG, and Does 1 through 50, alleging claims for: (1) violation of the Song-Beverly Act against LCW, Ford, and Does 1 through 50; and (2) breach of express warranties pursuant to California Commercial Code § 2313 against Ford, LCW and Does 1 through 50. The case proceeded to trial against LCW on plaintiff's claim for breach of the express warranty claim under the Song-Beverly Act, CaCivil Code § 1793.2.*fn2

II. FINDINGS OF FACT*fn3

In 2005, plaintiff leased a new motor vehicle, a passenger car that had been converted into a limousine, through Advantage Funding Commercial Capital Corp. ("Advantage"). Ford manufactured the vehicle and LCW and Distribution converted it into a limousine. Plaintiff alleges that the vehicle was defectively manufactured, designed, and/or assembled, and that defendants have breached express and implied warranties by failing to repair the vehicle.

LCW is a Texas Corporation that performs custom automotive and limousine conversions. In 2005, LCW converted a new 2006 Lincoln four-door sedan into a 120 inch limousine ("the limousine") at a LCW facility in Nuevo Laredo, Mexico, and customized the vehicle to plaintiff's specifications. Plaintiff intended to use the limousine as a commercial vehicle in its ground transportation business operating out of Lancaster, California.*fn4 After the conversion, the limousine was shipped to LCW's headquarters in San Antonio, Texas, where Edmonson, on behalf of plaintiff, took physical possession of the limousine on December 22, 2005. Before taking physical possession of the limousine at LCW's headquarters, Edmonson performed an inspection of the vehicle over at least a two day period. Edmonson testified that between December 20 and 22, 2005, he "spent several hours looking at," "going through," and "inspecting the vehicle at the LCW plant in San Antonio, Texas." 8/18/09 Trans. 133:14-25;134:16-25. He then signed a written "delivery receipt" confirming the limousine was "received in proper order." Ex. 152. The limousine came with a warranty from LCW.*fn5 Ex. 40.

Rather than purchasing the limousine, plaintiff opted to lease it through Advantage.*fn6 Plaintiff was required to execute multiple lease agreements with Advantage because of mistakes found in the lease forms, including an incorrect Vehicle Identification Number listed on one of the leases.*fn7 Edmonson testified that before he left LCW, he made a twenty percent down payment on the limousine, as required by the lessor Advantage. 8/18/09 Trans. 135:14-19. He then drove the limousine back to Los Angeles County, California, before receiving, and ultimately signing, the final corrected lease agreement, dated December 23, 2005 (the "Lease"), in January 2006.*fn8 See Ex. 3; Ex. 153. Edmonson testified that the purpose of picking up the limousine in Texas was to drive the limousine the roughly 1,600 miles and "identify in that road trip" if the vehicle was operating properly. 8/18/09 Trans. 55:7-18. During the trip from Texas to California, he did not discover any material non-conformities. However, he did prepare a list of mainly "cosmetic items" that needed correcting and submitted the list to LCW's chief financial officer and founder, Ken Boyar ("Boyar"), on January 3, 2006. Ex. 5. On LCW's recommendation, plaintiff took the limousine to Kitt Dickman ("Dickman") of LA Limo Repair, an authorized LCW repair facility in California, in January 2006. According to Edmonson, when he went to pick up the limousine about two weeks later, he observed that the entire interior of the passenger compartment of the vehicle was torn apart. 8/18/09 Trans. 62:2-22. Dickman advised Edmonson that LA Limo Repair would not be able to repair the limousine because some of his technicians had quit, and suggested that Edmonson take the vehicle back to LCW in Texas for further repairs. See Ex. 7; 8/18/09 Trans. 62:23-12.

On January 30, 2006, Edmonson contacted Boyar and arranged to bring the limousine back to Texas for further repairs. Ex. 10. He drove the limousine back to LCW in Texas, where it remained for some time between three days and a week. 8/18/09 Trans. 65:11-18. Edmonson testified that on driving the limousine back to Los Angeles, he noticed, for the first time, a "clicking" sound from the "LimoTouch" control board, manufactured by MTG. Id. 66:7-67:21. At the recommendation of Jim Kribbs ("Kribbs") of LCW, Edmonson took the limousine to Professional Auto Tech, an authorized LCW repair facility in California, on March 23, 2006. Id. 67:24-68:10; Ex. 12 (repair invoice). LCW paid Ricardo de la Espriella ("de la Espriella"), of Professional Auto Tech, to try and rectify the complaint with the LimoTouch control board. De la Espriella worked with MTG to get a board programmed from MTG that would not produce a "clicking" sound, and in the process had to replace or repair the control board on numerous occasions.*fn9 See Exs. 20, 23; 8/19/09 Trans. 12:3-8. At trial, Edmonson conceded that the LimoTouch system no longer makes the "clicking" sound and that this problem was ultimately repaired. 8/20/09 Trans. 18:22-25.

On September 18, 2006, Edmonson contacted Kribbs with a list of several problems and notified LCW that he would be taking the limousine back to Professional Auto Tech that week. Ex. 25. In the letter, Edmonson complained, for the first time to LCW, about dissatisfaction with the performance of the heating system in the passenger compartment of the limousine.*fn10 Edmonson took the limousine back to Professional Auto Tech, on September 22, 2006, to have the heating system inspected and to address other concerns.*fn11 Ex. 26. De la Espriella confirmed that there was a heating problem in the limousine and sent a fax to Kribbs, on October 12, 2006. Ex. 27. He noted, among other things, that

MTG keeps having problems programming the control unit the problem is that when heat is put on the left fan does not turn off, and ac still comes through on the right fan the heater valve does turn on and allows hot water through but ac still ...


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