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Court of Appeal:
It’s Error to Consider on Demurrer Miles Car Was Driven
Opinion Says ‘Lemon Law’ Claim Survives Where Defect Is Alleged Despite Discovery 10 Months After Purchase
By Kimber Cooley, Staff Writer
A trial judge improperly sustained the demurrer by a used car dealer as to warranty claims filed by a plaintiff, who discovered defects in the coolant system and engine of the automobile after driving 15,000 miles, where the complaint alleges facts suggesting that the vehicle had been haphazardly repaired or inadequately inspected, Div. Three of the Fourth District Court of Appeal held Friday.
The court found that the trial court’s reliance on how far the car had been driven was improper in a ruling on a demurrer as it improperly took on the role of a trier of fact.
Justice William W. Bedsworth authored the unpublished opinion reversing a judgment of dismissal by Orange County Superior Court Judge Stephanie George as to causes of action arising under the Song-Beverly Act, also known as California’s “lemon law.” The dismissal followed the sustaining of the demurrer without leave to amend.
Presiding Justice Kathleen E. O’Leary and Joanne Motoike joined in the opinion.
Vehicle Purchase
Appealing the dismissal was Lindsay Clay, who purchased a 2013 Subaru Impreza from Carmax Auto Superstores California in January 2020. Clay was told the car was in excellent condition and Carmax sales staff provided her with a report indicating that it had been through a certified inspection process examining all of its major systems, including the cooling system and engine.
The vehicle also came with a Carmax warranty.
In November 2020, the car malfunctioned and Clay brought it to a mechanic for repairs. According to her complaint, Clay was advised that the intake manifold had a broken coolant port, which appeared to have been glued together previously, and the passenger side of the engine camshaft was bent and suffering from excessive wear.
Breach of Warranty
In February 2021, Clay sued Carmax, alleging breach of implied and express warranties under the Song-Beverly Act, and other causes of action.
George sustained Carmax’s demurrer without leave to amend as to the warranty causes of action, finding the fact that Clay had driven the car nearly 15,000 miles in the 10 months she had owned it—based on information provided in exhibits attached to the complaint—contradicted her allegation that the car was unsafe and not roadworthy at the time she purchased it.
After summary judgment was granted to the dealer on the remaining claims, George dismissed the action in March 2023.
Clay only disputes on appeal the dismissal of the warranty claims, contending that the judge erred as a matter of law by invalidating the protections under the act based on appellant’s driving habits or patterns.
Ruling on Demurrer
Bedsworth wrote:
“In ruling on demurrers, courts must not sit as triers of fact. Rather, they must assess the legal sufficiency of the complaint assuming the truth of all facts disclosed by the pleading, its attached exhibits, and any material of which the court may take judicial notice.”
Noting that the standard of review in assessing a demurrer ruling is twofold, he said that the court must first review the complaint to determine whether it alleges facts sufficient to state a cause of action under any legal theory, and then must determine whether the court abused its discretion by sustaining the demurrer without leave to amend.
He pointed out that an abuse of discretion is established if a plaintiff could cure the defect with an amendment.
Song-Beverly Act
The Song-Beverly Act, codified at Civil Code §1790 et seq., provides that every retail sale of consumer goods includes an implied warranty by the manufacturer and retail seller that the goods are “merchantable” unless the goods are expressly sold “as is.”
Bedsworth explained that goods are considered “merchantable” if they are fit for the ordinary purpose for which such goods are used and in a safe condition, substantially free of defects.
Clay alleges that Carmax certified, through its inspection report, that the car was “safe, in good condition and roadworthy.”
Implied Warranty
The justice said:
“The inspection report attached to the amended complaint shows all stated elements of the engine and cooling system met Carmax standards, or were repaired or replaced. However, based on the invoice attached to the amended complaint, it was discovered on or about November 9, 2020, that the vehicle had a broken coolant port which had been previously glued together as well as a bent camshaft. These allegations suggest the vehicle had been haphazardly repaired or inadequately inspected when appellant purchased it and did not conform to the affirmations of fact given in the inspection report accompanying the vehicle.”
Carmax argues that the implied warranty of merchantability for a used vehicle is only effective for three months following the sale pursuant to §1795.5. Because the defects were not discovered until ten months after the purchase, the car dealer asserts no claim for breach of implied warranty may survive.
Unpersuaded, Bedsworth said:
“First and foremost, the amended complaint alleges the vehicle malfunctioned and was presented for repairs ‘on numerous occasions[,]’ which could mean the vehicle malfunctioned well before November 2020 when the invoice attached to the amended complaint was prepared. This is at the very least a reasonable reading of the complaint which presents an issue of fact inappropriate for demurrer.”
Undisclosed Defects
Even setting that aside, he noted that undisclosed latent defects are the very evil that the implied warranty provisions of the act are meant to remedy.
He pointed to the 2009 decision in Mexia v. Rinker Boat Company, Inc., in which Div. Two of the Fourth District Court of Appeal held that interpreting a statute of limitations to prohibit a plaintiff from suing for a latent defect would be inconsistent with the intent in the Song-Beverly Act to expand consumer protection.
He reasoned that “[t]he court in Mexia was analyzing the warranty duration applicable to new consumer goods…but the logic is just as compelling when applied to section 1795.5 relating to used goods.”
In the present case, he remarked, “the defects identified after the car malfunctioned could very well have been present at the time of sale” or “could have been the result of improper use or maintenance,” opining:
“For this reason, the trial court should not have come to its conclusion based on the number of miles the vehicle had been driven in the time appellant had it. By so concluding, the trial court took on the role of trier of fact, which is inappropriate at the pleading stage….The vehicle must…be able to transport its passengers safely. Appellant has alleged sufficient facts to show the vehicle she purchased was not in such a condition. The resolution of those allegations is not proper subject matter for a demurrer.”
Breach of Express Warranty
In order to state a claim for a breach of an express warranty, a plaintiff must show that the defendant issued an express warranty which conforms to the definition provided in the act.
Sec. 1791.2 provides that express warranties include a “written statement arising out of a sale to the consumer of a consumer good pursuant to which the manufacturer, distributor, or retailer undertakes to preserve or maintain the utility or performance of the consumer good or provide compensation if there is a failure in utility or performance.”
Carmax contends that Clay’s allegation that it ““expressly warranted that the Subject Vehicle was merchantable, safely designed, assembled, and fit for the purpose it was intended” is not an actionable warranty under the section.
Disagreeing, Bedsworth noted that Clay “alleged Carmax ‘provided a written warranty relating to the Subject Vehicle’” and asserted that “Carmax failed to repair the vehicle after a reasonable number of attempts, and then refused to repurchase it.”
He commented:
“We agree with Carmax that these allegations are not particularly artful or specific, but they need not be. Appellant alleged the existence of a written warranty and further alleged Carmax failed to repair the vehicle. The demurrers to these causes of action should have been overruled, and Carmax’s factual arguments raised in later stages of the litigation.”
The case is Clay v. Carmax Auto Superstores California, LLC, G062497.
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