Yousif v. McLaren Automotive, Inc.

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 HAYTHAM YOUSIF, Case No. 23-cv-0761-BAS-DDL 12 Plaintiff, ORDER GRANTING IN PART AND 13 v. DENYING IN PART DEFENDANT’S MOTION FOR SUMMARY 14 MCLAREN AUTOMOTIVE, INC., JUDGMENT 15 Defendant. (ECF No. 26) 16 17 18 Pending before the Court is Defendant McLaren Automotive Inc.’s (“McLaren”) 19 motion for summary judgment. (ECF No. 26.) Plaintiff Haytham Yousif Sr. opposes. 20 (ECF No. 28.) The Court finds Defendant’s motion suitable for determination on the 21 papers submitted, without oral argument. Civ. L.R. 7.1(d)(i). For the reasons herein, the 22 Court GRANTS IN PART AND DENIES IN PART Defendant’s motion for summary 23 judgment. (ECF No. 26.) 24 25 I. BACKGROUND 26 Plaintiff leased a new 2022 McLaren GT Coupe for his son Haytham Yousif Jr. from 27 O’Gara Coach Company San Diego, LLC on October 27, 2022. Plaintiff signed a 36- 28 1 month lease with his total payments equaling $117,425.10. Defendant issued a three-year 2 limited warranty for the vehicle beginning on that date. (ECF No. 29-1 at 2.) 3 Plaintiff’s son soon began having issues with the vehicle. On November 30, 2022, 4 Plaintiff’s son presented the car to the O’Gara Coach dealership complaining of a loud 5 metal noise coming from the rear of the vehicle on a cold start. (ECF No. 26-1 at 3.) 6 Defendant’s technician found screws and washers were missing and that the rear subframe 7 bolts were loose. Defendant replaced the missing components and addressed the concerns 8 with no cost to Plaintiff. This repair lasted eight days. Around February 7, 2023, Plaintiff’s 9 son again brought the vehicle in for repairs because the vehicle purportedly failed to start 10 due to the battery dying after sitting for five days. (Id. at 4.) Defendant’s technician 11 conducted testing but could not duplicate the issue. Defendant did not do any work to fix 12 the purported defect but did notice the seat control modules were not responding and 13 replaced them. (Id.) This repair lasted eighteen days. On March 17, 2023, Plaintiff’s son 14 again brought the vehicle in for repairs. He complained of the same loud noise coming 15 from the rear of the vehicle on cold starts, the top seal lifting, and a loud noise when 16 braking. (ECF No. 26-1 at 4.) Defendant’s technician claims the noise when starting was 17 due to an improperly installed license plate mounting bracket. He fixed the mounting plate 18 and also fixed the lifting roof seal. The technician also found the braking noise was not 19 unusual for the type of car. (Id. at 5.) This repair lasted thirteen days. It is disputed 20 whether these repairs corrected the purported issues with the vehicle. 21 On March 23, 2023, Plaintiff filed suit in the Superior Court of California alleging 22 violations of California’s Song-Beverly Consumer Warranty Act (“Song-Beverly Act”), 23 California Civil Code §§ 1790, et seq. (ECF No. 1-2.) On April 26, 2023, Defendant 24 removed the case to this Court under 28 U.S.C. § 1441(b). (ECF No. 1.) Defendant now 25 moves for summary judgment on Plaintiff’s claims. (ECF No. 26.) 26 II. LEGAL STANDARD 27 Summary judgment is proper on “each claim or defense” “or the part of each claim 28 or defense” when “there is no genuine dispute as to any material fact and the movant is 1 entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). A fact is “material” if it 2 might affect the outcome of the suit under the governing law, and a dispute is “genuine” if 3 there is sufficient evidence for a reasonable trier of fact to decide in favor of the nonmoving 4 party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). 5 When resolving a motion for summary judgment, the court must view all inferences 6 drawn from the underlying facts in the light most favorable to the nonmoving party. See 7 Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). The 8 court does not make credibility determinations or weigh conflicting evidence. See 9 Anderson, 477 U.S. at 255. The court’s role at summary judgment “is to isolate and dispose 10 of factually unsupported claims” so that they are “prevented from going to trial with the 11 attendant unwarranted consumption of public and private resources.” Celotex Corp. v. 12 Catrett, 477 U.S. 317, 323–24, 327 (1986). “Disputes over irrelevant or unnecessary facts 13 will not preclude a grant of summary judgment.” T.W. Elec. Serv., Inc. v. Pac. Elec. 14 Contractors Ass’n, 809 F.2d 626, 630 (9th Cir. 1987). 15 The party seeking summary judgment bears the initial burden of establishing the 16 absence of a genuine issue of material fact. Celotex Corp., 477 U.S. at 323. The moving 17 party can satisfy its burden in two ways: (1) by presenting evidence that negates an essential 18 element of the nonmoving party’s case or (2) by demonstrating that the nonmoving party 19 failed to make a showing sufficient to establish an element essential to that party’s case on 20 which that party will bear the burden of proof at trial. Id. at 322–23. If the moving party 21 fails to discharge this initial burden, summary judgment must be denied and the court need 22 not consider the nonmoving party’s evidence. Adickes v. S.H. Kress & Co., 398 U.S. 144, 23 159–60 (1970). 24 If the moving party meets its burden, the nonmoving party must go beyond the 25 pleadings and, by its own evidence or by citing appropriate materials in the record, show 26 by sufficient evidence that there is a genuine dispute for trial. Celotex Corp., 477 U.S. at 27 324. The party “must do more than simply show that there is some metaphysical doubt as 28 to the material facts . . . [w]here the record as a whole could not lead a rational trier of fact 1 to find for the non-moving party, there is no ‘genuine issue for trial.’” Matsushita, 475 2 U.S. at 587 (quoting First Nat. Bank of Ariz. v. Cities Serv. Co., 391 U.S. 253, 289 (1968)). 3 A “scintilla of evidence” in support of the nonmoving party’s position is insufficient; “there 4 must be evidence on which the jury could reasonably find for the [nonmoving party].” 5 Anderson, 477 U.S. at 252. See also Triton Energy Corp. v. Square D Co., 68 F.3d 1216, 6 1221 (9th Cir. 1995). 7 III. ANALYSIS 8 A. California Civil Code § 1793.2(d) 9 Defendant moves for summary judgment on Plaintiff’s violation of express warranty 10 claim under California Civil Code § 17932.2(d) because no issues with the vehicle required 11 more than one repair attempt. (ECF No. 26-1 at 6.) Defendant contends under the Song- 12 Beverly Act, plaintiffs can only recover if a particular nonconformity was unable to be 13 repaired after multiple attempts. Plaintiff argues the statutory provision allows for recovery 14 if a defendant is unable to repair a vehicle, not just a particular issue, after multiple repair 15 attempts. (ECF No. 28 at 9.) 16 California Civil Code § 1793.2(d)(2) provides: “If the manufacturer or its 17 representative in this state is unable to service or repair a new motor vehicle . . . to conform 18 to the applicable express warranties after a reasonable number of attempts, the 19 manufacturer shall either promptly replace the new motor vehicle” or make restitution. 20 Cal. Civ. Code § 1793.2. The question before the Court is whether a plaintiff must present 21 the same nonconformity for repair multiple times or whether a plaintiff need only present 22 the same vehicle for repair multiple times. Neither the Supreme Court of California nor 23 the Ninth Circuit have squarely addressed this question. Federal district courts within the 24 Ninth Circuit disagree as to this question. Compare Truehaft v. Mercedes-Benz USA, LLC, 25 No. 22-0-CV-11155-SVW-GJS, 2021 WL 2864877, at *3 (C.D. Cal. July 6, 2021) with 26 Arakelian v. Mercedes-Benz USA, LLC, No. CV-18-09420-DSF-FMX, 2020 WL 1969255, 27 at *1 (C.D. Cal. Feb. 25, 2020). 28 1 In statutory interpretation, the starting point is the statutory text. See Sanders v. 2 Cnty. of Ventura, 87 F.4th 434, 439 (9th Cir. 2023) (quoting Desire, LLC v. Manna Textiles, 3 Inc., 986 F.3d 1253, 1265 (9th Cir. 2021)). “[U]nless otherwise defined, words will be 4 interpreted as taking their ordinary, contemporary, common meaning.” Perrin v. United 5 States, 444 U.S. 37, 42 (1979) (citing Burns v. Alcala, 420 U.S. 575, 580–81 (1975)). A 6 court interprets a statute “to give effect, if possible, to every clause and word of a statute.” 7 Duncan v. Walker, 533 U.S. 167, 174 (2001) (citation omitted). This process of statutory 8 interpretation proceeds “with reference to the statutory context, ‘structure, history, and 9 purpose’ . . . not to mention common sense.’” Abramski v. United States, 573 U.S. 169, 10 179 (2014) (quoting Maracich v. Spears, 570 U.S. 48, 76 (2013)). 11 Looking to the text of California Civil Code § 1793.2(d)(2), the object of the phrase 12 “is unable to service or repair” is a “new motor vehicle.” By its plain meaning, 13 manufacturers then have an obligation to repair the “new motor vehicle.” This requirement 14 persists for a “reasonable number of attempts.” As follows, manufacturers have an 15 obligation to repair the “new motor vehicle” “for a reasonable number of attempts.” Based 16 on the plain meaning, contrary to Defendant’s interpretation of the text, manufacturers have 17 an obligation to repair a vehicle, not a particular issue on that vehicle, for a reasonable 18 number of attempts. 19 This reading is affirmed by the omitted-case canon of statutory of interpretation. 20 Under this canon of interpretation, nothing is to be added to what the text states or 21 reasonably implies. See Connell v. Lima Corporate, 988 F.3d 1089, 1107–08 (9th Cir. 22 2021) (citations omitted). Defendant would have the Court read “the issue” after the phrase 23 “reasonable attempts to repair.” The statutory text, however, does not contain the words 24 “issue” or “part.” Rather, the text reasonably implies that manufacturers’ obligation for 25 repair extends to the whole vehicle. 26 Further, the structure of the provision at issue supports Plaintiff’s reading of the 27 statute. Where the manufacturer is unable to meet its responsibilities of repair under the 28 statute, the “manufacturer shall either promptly replace the new motor vehicle” or make 1 restitution. The replacement section notes “the manufacturer shall replace the buyer’s 2 vehicle with a new motor vehicle substantially identical to the vehicle replaced” and that 3 the manufacturer must pay for the associated registration, license, and tax fees associated 4 with the replacement vehicle. Cal. Civ. Code § 1793.2(d)(2)(A). There would be a conflict 5 within the statute if a “new motor vehicle” in the context of the repair obligation meant a 6 particular issue with the vehicle when the same phrase is used to describe an entire vehicle 7 in another section. See Padash v. INS, 358 F.3d 1161, 1170–71 (9th Cir. 2004) (noting 8 courts “must make every effort not to interpret the provision at issue in a manner that 9 renders other provisions of the same statute inconsistent”) (internal quotation marks 10 omitted)). 11 This interpretation comports with the purpose and policy behind the statute. 12 California courts have stated the statute is a “remedial measure intended for protection of 13 consumers and should be given a [broad] construction.” Robertson v. Fleetwood Travel 14 Trailers of Cal., Inc., 144 Cal. App. 4th 785, 800–01 (2006). Defendant’s interpretation 15 would conflict with the stated purpose of the statute to protect consumers. Moreover, 16 Defendant’s reading could result in perverse outcomes. Under Defendant’s reading, a 17 manufacturer would only be liable if a single defect could not be repaired after a reasonable 18 number of attempts. Hypothetically, a manufacturer could produce a car riddled with 19 defects that were each capable of being repaired. A purchaser would have no recourse 20 under the statute for this vehicle even if she were forced to bring in this vehicle for repairs 21 over and over again, so long as each individual repair could be made after only a reasonable 22 number of attempts. This possibility does not square with the purpose and goals of the 23 statute. 24 Under this reading of the statute, summary judgment is inappropriate. Plaintiff 25 presented the vehicle for repairs on at least three occasions. (ECF No. 28 at 13–14.) It is 26 disputed whether this is a reasonable number of attempts to repair the vehicle. Moreover, 27 even accepting Defendant’s interpretation of this provision, there are still genuine disputes 28 of material fact. First, it is disputed whether the same issue arose on more than one 1 occasion. Defendant’s technician claims the loud noise when starting was due to an 2 improperly installed license plate frame; Plaintiff disagrees. (ECF No. 26-1 at 5; ECF No. 3 28 at 7.) Second, it is disputed whether the issue was actually repaired. Third, it is disputed 4 whether this repair required more than a reasonable number of repair attempts as Plaintiff 5 brought the car in on three separate occasions. 6 Accordingly, summary adjudication of Plaintiff’s violation of express warranty 7 claim under California Civil Code § 1793.2(d) is inappropriate. 8 B. California Civil Code § 1793.2(b) 9 Defendant argues summary judgment should be granted on Plaintiff’s claim under 10 California Civil Code § 1793.2(b) because, while Plaintiff’s vehicle was cumulatively in 11 the shop longer than thirty days, no single repair lasted longer than thirty days. (ECF No. 12 26-1 at 10–11.) Plaintiff argues the thirty-day limit for repairs runs cumulatively, and 13 Defendant has yet to repair the nonconformities at issue. (ECF No. 28 at 20–21.) 14 California Civil Code § 1793.2(b) provides: 15 Where those service and repair facilities are maintained in this state and 16 service or repair of the goods is necessary because they do not conform with 17 the applicable express warranties, service and repair shall be commenced 18 within a reasonable time by the manufacturer or its representative in this state. 19 Unless the buyer agrees in writing to the contrary, the goods shall be serviced 20 or repaired so as to conform to the applicable warranties within 30 days. 21 Cal. Civ. Code § 1793.2. The California Court of Appeal expressly declined to decide 22 whether the thirty-day clock runs cumulatively or for a single repair. See Ramos v. 23 Mercedes-Benz USA, LLC, 55 Cal. App. 5th 220, 226 n.2 (2020) (“We have not been asked 24 to decide whether the 30 days of failure to complete repairs must be 30 consecutive days. 25 For purposes of this appeal, we assume plaintiff proved the 30-day failure to repair 26 requirement without deciding the question.”). In an unpublished opinion, the Ninth Circuit 27 found “under any reasonable reading of the statute, § 1793.2(b) requires only that [a 28 manufacturer] complete any single repair attempt within 30 days.” Shick v. BMW of N. 1 Am., 801 Fed. App’x. 519, 521 (9th Cir. 2020). Nearly all federal district courts, in 2 assessing this question, have found the thirty-day requirement runs for a single repair. See 3 Brooks v. Mercedes-Benz USA, LLC, No. 23-CV-01214-BEN-BLM, 2023 WL 7117951, 4 at *2 (S.D. Cal. Oct. 27, 2023) (collecting cases). 5 The Court finds the Ninth Circuit and other district courts persuasive that California 6 Civil Code § 1793.2(b) only applies to a single repair lasting longer than thirty days. The 7 language of the statute supports these courts’ holdings. Under the statute, “service and 8 repair” must be commenced within a “reasonable time.” Because “service and repair” are 9 not plural, the text implies the statute contemplates a single instance of “service and repair.” 10 Under the harmonious-reading canon, the thirty-day timer would then apply to a single 11 instance of “service and repair.” See FDA v. Brown & Williamson Tobacco Corp., 529 12 U.S. 120, 133 (“A court must therefore interpret the statute as a symmetrical and coherent 13 regulatory scheme, and fit, if possible, all parts into an harmonious whole.”) (citations and 14 internal quotations omitted). 15 None of the repair attempts to Plaintiff’s vehicle exceeded thirty days. (ECF No. 16 26-1 at 3–5.) Plaintiff contends the nonconformities have not been repaired such that the 17 thirty-day clock has expired. However, no single instance of repair exceeded thirty days, 18 as required under the statute, and the clock has stopped because Plaintiff has possession of 19 the vehicle. Cf. Houston v. Country Coach, Inc., No. C-07-00859-HRL, 2008 WL 20 2783485, at *9 (N.D. Cal. July 17, 2008) (noting the plaintiff “frequently retook possession 21 of the coach,” which is a factor “beyond defendant’s control” extending the thirty-day 22 limit). 23 Accordingly, Defendant’s motion for summary judgment is granted with respect to 24 Plaintiff’s claims under California Civil Code § 1793.2(b). 25 C. California Civil Code § 1792 26 Defendant argues the Song-Beverly Act imposes obligations under an implied 27 warranty of merchantability only on manufacturers and retail sellers. Defendant contends 28 it is a distributor, and neither a manufacturer nor seller, such that summary judgment on 1 Plaintiff’s implied warranty claims is appropriate. (ECF No. 26-1 at 11–12.) Plaintiff 2 contends the statute is not so restrictive and urges Defendant should be considered a retail 3 seller because it “partnered with a dealership to sell New Motor Vehicles directly to the 4 public by offering an express warranty as part of the sales package, which is a crucial 5 incentive for buyers.” (ECF No. 28 at 22–23.) 6 Under California Civil Code § 1792, “every sale of consumer goods that are sold at 7 retail in this state shall be accompanied by the manufacturer’s and the retail seller’s implied 8 warranty that the goods are merchantable.” Cal. Civ. Code § 1792. This imposes certain 9 guarantees about the fitness and use of the goods. “Retail seller,” for the purposes of this 10 statute, is defined as “any individual, partnership, corporation, association, or other legal 11 relationship that engages in the business of selling or leasing consumer goods to retail 12 buyers.” Cal. Civ. Code § 1791. “Manufacturer” means “any individual, partnership, 13 corporation, association, or other legal relationship that manufactures, assembles, or 14 produces consumer goods.” Id. In contrast, a “distributor” is defined as “any individual, 15 partnership, corporation, association, or other legal relationship that stands between the 16 manufacturer and the retail seller in purchases, consignments, or contracts for sale of 17 consumer goods.” Id. 18 Neither California courts nor the Ninth Circuit have addressed whether distributors 19 have obligations for an implied warranty of merchantability under the Song-Beverly Act. 20 Looking to the plain text of the statute, however, the obligation only extends to 21 manufacturers and retail sellers. Plaintiff would have the Court read “distributors” into the 22 text, but the omitted-case canon cautions against doing so. Additionally, when it wants to, 23 the California legislature explicitly applies other warranties to distributors in addition to 24 retail sellers or manufacturers. See, e.g., Cal. Civ. Code § 1795.5 (extending implied 25 warranty obligations for used consumer goods to distributors). Accordingly, California 26 Civil Code § 1792 appears limited to only retail sellers and manufacturers. 27 28 1 Plaintiff has failed to present evidence Defendant is either a retail seller or 2 manufacturer. Defendant freely admits it is a distributor of motor vehicles.1 In its Answer 3 to Plaintiff’s Complaint, Defendant “admits that [Defendant] is a distributor of McLaren 4 vehicles.” (ECF No. 4 at ¶ 4.) And the parties’ joint statement of undisputed material facts 5 notes Defendant “is the distributor of the Subject Vehicle.” (ECF No. 29-1 at ¶ 12.) 6 Plaintiff alleges in his Complaint that “Defendant manufactures, assembles, or produces 7 new motor vehicles and/or consumer goods” and “Defendant is a ‘manufacturer’ under the 8 Act.” (ECF No. 1-2 at ¶ 6.) However, he fails to identify any evidence that Defendant is 9 more than a distributor. Defendant is not the retail seller because Plaintiff leased the 10 vehicle from O’Gara Coach Company San Diego, LLC. (ECF No. 29-1 at ¶ 1.) And 11 Plaintiff fails to provide any evidence Defendant manufactured the vehicle. 12 Plaintiff contends McLaren “provided an express warranty to Yousif and in turn has 13 the same obligations as the manufacturer” and that this express warranty was a crucial 14 incentive for consumers. (ECF No. 28 at 23.) Providing an express warranty, however, is 15 insufficient to assert a defendant stepped into the role of a manufacturer. Cf. Chiulli v. Am. 16 Honda Motor Co., 690 F. Supp. 3d 1038, 1055 (N.D. Cal. 2023) (noting a manufacturer 17 does not become a distributor merely by authorized dealerships selling its cars); Kuyawa 18 v. Mercedes-Benz USA, LLC, No. 23-CV-06712-WHO, 2024 WL 950164, at *7 (N.D. Cal. 19 Mar. 5, 2024) (holding extension of an express warranty does not mean the manufacturer 20 stepped into the role of a retailer). 21 22 23 1 In support of its motion for summary judgment, Defendant requests the Court take judicial notice of its Statement of Information with the California Secretary of State that lists the type of business for 24 Defendant as “AUTOMOTIVE DISTRIBUTION.” (ECF No. 27.) Judicial notice “permits a court to 25 notice an adjudicative fact if it is ‘not subject to reasonable dispute,’” meaning the fact is “‘generally known,’ or ‘can be accurately and readily determined from sources whose accuracy cannot reasonably be 26 questioned.’” Khoja v. Orexigen Therapeutics, Inc., 899 F.3d 988, 999 (9th Cir. 2018) (quoting Fed. R. Evid. 201(b)). For example, a court can take notice of a routine corporate filing with the Securities and 27 Exchange Commission. Id. The type of business listed on Defendant’s registration with the state of California is not subject to reasonable dispute. Accordingly, the Court takes note of this fact. This fact 28 I A party must be a retail seller or manufacturer to be liable for breach of implied 2 || warranty of merchantability under California Civil Code § 1792. Plaintiff has failed to 3 its burden of showing Defendant is either. Summary judgment is therefore 4 ||appropriate on Plaintiff's breach of implied warranty of merchantability claim. As such, 5 ||the Court need not reach Defendant’s additional arguments regarding the merchantability 6 || of the vehicle. 7 CONCLUSION 8 Based on the foregoing, the Court GRANTS IN PART AND DENIES IN PART 9 || Defendant’s motion for summary judgment. The Court grants Defendant’s motion for 10 ||summary judgment with respect to Plaintiff's claim for breach of express warranty under 11 California Civil Code § 1793.2(b) and with respect to Plaintiff's claim for breach of 12 ||implied warranty of merchantability under California Civil Code § 1792. This does not, 13 ||however, dispose of this case. Plaintiff maintains his claim for breach of express 14 || warranty under California Civil Code § 1793.2(d). 15 The Court orders the parties to contact the Magistrate Judge’s chambers within 16 fourteen days of today’s date to coordinate new trial and pretrial conference dates. 17 IT IS SO ORDERED. 18 / □□ 19 || DATED: August 13, 2024 (ypillg (Hiphan 6 20 United States District Judge 21 22 23 24 25 26 27 28 41.