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Garcia v. Mercedes-Benz USA, LLC

California Court of Appeals, Second District, Second Division

May 4, 2018

EFIGENIA GARCIA, Plaintiff and Appellant,
v.
MERCEDES-BENZ USA, LLC, Defendant and Respondent.

          Order Filed Date 5/3/18

          APPEAL from a judgment of the Superior Court of Los Angeles County No. BC588535. Mel Red Recana, Judge. Affirmed as modified.

          Law Offices of René Korper, René Korper and Thomas E. Solmer for Plaintiff and Appellant.

          Universal & Shannon, Jon D. Universal and James P. Mayo for Defendant and Respondent.

         THE COURT:[*]

         It is ordered that the opinion filed herein on April 5, 2018, be modified as follows:

         1. On page 11, the sentence beginning on line 11 with “Lastly, ” and ending on line 14 with “an express warranty” is modified to read as follows:

         Lastly, the Act affirmatively states that manufacturers are not required to refund buyers for the cost of “nonmanufacturer items installed by a dealer” (that is, dealer add-ons) when the buyer sues for breach of an express warranty.

         2. On page 11, the sentence beginning on line 15 with “This statutory carve-out” and ending on line 19 with “implied warranty claim” is modified to read as follows:

         This statutory carve-out for dealer add-ons would be largely nullified if we were to conclude that buyers had a right to make manufacturers pay for dealer add-ons under an implied warranty theory; all a buyer would have to do is restate her breach of express warranty claim as a breach of implied warranty claim, something that could be done in every case in which the defect is one that renders the new car “[un]fit for the ordinary purposes for which [cars] are used” (thereby breaching the implied warranty) (§ 1791.1, subd. (a)(2)) because such a defect necessarily renders the car “nonconforming” (thereby breaching any express warranty) (§ 1793.2, subd. (c)).

         3. On page 11, line 20, the words “in whole or in part” are to be inserted after the word “statutes” so the sentence reads as follows:

         We must avoid rulings that nullify statutes in whole or in part.

         4. In the first sentence on page 13, the word “all” is changed to “many” so the sentence reads:

         It does not speak to-or in any way undermine-our concern that many express warranty claims can be restated as implied warranty claims, thereby sidestepping and negating our Legislature's explicit limitation on express warranty claims.

         There is no change in the judgment.

         Appellant's petition for rehearing is denied.

          HOFFSTADT J.

         After the engine of a brand new Mercedes-Benz died, the car's manufacturer offered to repurchase the car for the full amount less the $3, 090 the buyer paid the dealer for additional products and services (“dealer add-ons”). After the buyer sued the manufacturer for breach of the implied warranty of merchantability under the Song-Beverly Consumer Warranty Act (the Act) (Civ. Code, § 1790 et seq.), [1] the parties entered into a confidential settlement leaving attorney's fees and costs unresolved, and the buyer moved for attorney's fees as the “prevailing party” under the Act. This appeal chiefly presents the question: Is a buyer a prevailing party entitled to recover attorney's fees under the Act if, through settlement with the manufacturer, all she obtains by litigating is the payment of dealer add-ons for which the manufacturer is not responsible and the payment of attorney's fees? We conclude the answer is “no.” For these reasons and others, we affirm the denial of attorney's fees but modify the judgment to award costs because the buyer obtained a net monetary recovery by virtue of the settlement.

         FACTS AND PROCEDURAL BACKGROUND

         In April 2015, plaintiff Efigenia Garcia (Garcia) bought a Mercedes-Benz GLA250W4 at Keyes European, an authorized Mercedes-Benz dealer. Garcia paid $46, 593.97, comprised of a $8, 540 down payment and a loan for the balance.[2] The $46, 593.97 amount included the cost of the car and $3, 090 in dealer add-ons (namely, $1, 700 for Mercedes-Benz tires ...


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