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Kiluk v. Mercedes-Benz USA, LLC

California Court of Appeals, Fourth District, Third Division

December 12, 2019

JUSTIN KILUK, Plaintiff and Respondent,
v.
MERCEDES-BENZ USA, LLC, Defendant and Appellant,

          Appeal from a judgment of the Superior Court of Orange County No. 30-2016-00866822, Melissa R. McCormick, Judge. Affirmed.

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

          Rosner Barry & Babbitt, Hallen D. Rosner and Arlyn L. Escalante; Consumer Law Experts, Jessica Anvar and Michael M. Ouziel for Plaintiff and Respondent.

          OPONION

          IKOLA, J.

         The Song-Beverly Consumer Warranty Act (Civ. Code, § 1790 et seq.; the Song-Beverly Act) provides enhanced remedies to consumers who buy new consumer goods accompanied by a manufacturer's express warranty.[1] (§ 1793.2.) It also provides for an implied warranty of merchantability. (§§ 1791.1, subd. (c), 1792.) The same protections generally apply to sale of used goods accompanied by an express warranty, except that the distributor or retail seller is bound, as opposed to the manufacturer, and the duration of the implied warranty of merchantability is much shorter. (§ 1795.5.)

         This case involves the sale of a certified preowned Mercedes Benz that still had a portion of the new vehicle warranty remaining, and which was accompanied by an additional used vehicle warranty issued by the manufacturer. An uncurable defect manifested after the expiration of the new vehicle warranty, but during the duration of the used vehicle warranty. Mercedes Benz refused to repurchase the vehicle, and the plaintiff sued. A jury found Mercedes Benz liable under the Song-Beverly Act for breach of both the express warranty and the implied warranty of merchantability, and, pursuant to the stipulation of the parties as to the amount of damage, awarded the same compensatory damages on both causes of action. The court entered judgment on the jury's special verdict after striking the damages for breach of the implied warranty, presumably to avoid a double recovery.[2] Mercedes Benz appealed.

         We conclude the jury's verdict on the breach of express warranty was sound. Although the Song-Beverly Act generally binds only distributors and retail sellers in the sale of used goods, we conclude Mercedes Benz stepped into that role by issuing an express warranty on the sale of a used vehicle. Accordingly, we affirm the judgment.

         FACTS

         In May 2014 plaintiff Justin Kiluk bought a certified pre-owned Mercedes-Benz vehicle for an out-the-door price of $121, 922.23. The vehicle had 9, 568 miles on it. It was purchased from Fletcher Jones Motorcars (which is not a party to this lawsuit).

         The vehicle had originally been sold new in either August 2011 or October 2011 with a 4-year or 50, 000 mile new car warranty.[3] Because plaintiff purchased the vehicle prior to the expiration of the new car warranty, he was entitled to its benefits until it expired in either August 2015 or October 2015. Additionally, defendant Mercedes-Benz USA, LLC (Mercedes Benz) issued a certified pre-owned warranty that would last for one year from the end of the new car warranty (either August 2015 or October 2015 through either August 2016 or October 2016).

         Starting in December 2015, which was during the period of the certified pre-owned warranty, the vehicle began making a loud screeching noise every time plaintiff turned the steering wheel. Plaintiff brought the vehicle in for repairs multiple times, but the problem was never fixed, and ultimately Mercedes Benz took the position that the noise was “normal.” Mercedes Benz refused to repurchase the car.

         In August 2016 plaintiff filed the present lawsuit for breach of warranty and a violation of the Song-Beverly Act. This appeal principally concerns four motions in limine, one by plaintiff and three by Mercedes Benz. The court accurately described the three Mercedes Benz motions as essentially “untimely motions for summary adjudication.” The one by plaintiff is entitled “Plaintiff's Motion in Limine No. 10 to Exclude Any Statement, Argument, or Testimony that The Mercedes-Benz Certified Pre-Owned Warranty is Not an ‘Applicable Express Warranty.'” Mercedes Benz filed a reciprocal motion entitled, “Motion in Limine No. 10 By Defendant Mercedes-Benz USA, LLC to Exclude Repairs or Customer Concerns After the Expiration of the Express Warranty” (by which it meant the express new vehicle warranty). In a similar vein, Mercedes Benz filed a motion targeting evidence of damages: “Motion in Limine No. 7 By Defendant to Restrict Plaintiff's Damages to the Remedies Available Under Commercial Code § 2-714” (the gist of which was that plaintiff's only remedy was for breach of contract, not the remedies available under the Song-Beverly Act). These motions all turned on Mercedes Benz's legal position that the Song-Beverly Act does not apply to an express warranty issued by a manufacturer with respect to a used vehicle. Mercedes Benz also filed a motion in limine targeting plaintiff's claim for breach of implied warranty based on Mercedes Benz's claim that the implied warranty expired over a year before plaintiff started experiencing the steering wheel defect. We need not address the court's ruling on the implied warranty motion in light of our resolution of the express warranty issue. (See fn. 2, ante.)

         The court found in plaintiff's favor on the express warranty issue, finding that the Song-Beverly Act applied to the used car warranty issued by Mercedes Benz and thus granted plaintiff's motion, and denied Mercedes Benz's two motions. The court also found in favor of plaintiff on the implied warranty motion.

         A jury found in favor of plaintiff on his causes of action for breach of express warranty and breach of the implied warranty of merchantability. It awarded $112, 149.86 in stipulated damages, plus a penalty of $25, 000 on the breach of express warranty. It awarded the same damages (without the penalty) on the breach of implied warranty claim. The court entered judgment on the jury's special verdict after striking the damages for ...


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