Williams v. FCA US LLC (2023) 88 Cal.App.5th 44

Seeking restitution for their defective truck, consumers sued vehicle manufacturer FCA US LLC for violating the Song-Beverly Consumer Warranty Act, popularly known as the lemon law.  Meanwhile, after the FCA-affiliated dealership servicing their truck refused to accept a trade-in, the consumers traded in the defective truck for another vehicle at an unrelated dealership.  At trial, the jury found that the manufacturer breached its express written warranty to the consumers when it (or its authorized repair facility) failed to repair the defects in the consumers’ truck “to match the written warranty after a reasonable number of opportunities to do so.”  But it deducted from the verdict the $29,500 that the consumers had received for trading in their vehicle.

The parties disputed whether the manufacturer was entitled to a credit for the consumers’ trade-in under the lemon law’s restitution provision.  The consumers moved for a new trial, arguing that the damages awarded by the jury were inadequate as a matter of law.  The trial court disagreed with the consumers, and denied their new trial motion.

On appeal, the principal question was whether the jury impermissibly deducted the trade-in credit.  The court held that even though it may, at first blush, seem reasonable that a consumer’s restitution under the lemon law should exclude a credit that the consumer received for trading in the defective vehicle, “the language of the restitution provision, our Supreme Court’s prior interpretation of the term ‘price’ in the restitution provision, and the legislative history indicate otherwise.”

In a published opinion, the Court of Appeal reversed the judgment and the order denying the new trial motion and remanded for further proceedings.  In doing so, it disagreed with Niedermeier v. FCA US LLC (2020) 56 Cal.App.5th 1052, currently bring reviewed by the California Supreme Court, and built upon the analysis of Figueroa v. FCA US, LLC (2022) 84 Cal.App.5th 708 to reach the same conclusion as that case:  “Crediting the manufacturer with the trade-in value of or sale proceeds received for the defective vehicle to reduce the buyer’s remedy under the restitution provision would create a disincentive to reacquire or promptly replace or provide restitution for a defective vehicle.  Such an interpretation would, in essence, reward manufacturer for declining or not offering to reacquire the vehicle.  We decline to interpret the Act in that manner.”

To read the Court of Appeal opinion, click HERE.

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