Wins

Two consumers purchased a defective new car, and the manufacturer failed to repair it.  The consumers requested repurchase under the Song-Beverly Consumer Warranty Act, which establishes a precise statutory formula for repurchases and mandates prompt manufacturer compliance.  The manufacturer refused.  Then, an accident occurred.  The car was totaled, and the consumers’ insurer paid for the car’s value as a total loss.

The consumers sued, prevailed at trial, and recovered the full legally-mandated repurchase price.  But the trial court reduced their award by granting the manufacturer an offset for the insurance payments.

After the consumers appealed, the Court of Appeal reversed the offset by published opinion.  The court rejected the manufacturer’s attempt to limit the reach of the Supreme Court’s decision in Niedermeier v. FCA LLC (2024) 15 Cal.5th 792—a case GMSR won for vehicle consumers in 2024.  The Court of Appeal held that allowing unenumerated offsets contradicted the Song-Beverly Act’s text, legislative history, and pro-consumer purposes.  Adopting GMSR’s arguments, the Court reasoned that the Act’s repurchase remedy only allows for offsets expressly enumerated in the governing statutes, and that insurance proceeds are not among them.  The Court also agreed with GMSR that any windfall consumers received by rejecting offsets was immaterial, since allowing an offset would confer a windfall on the manufacturer and would reward its failure to promptly repurchase the vehicle, based on events occurring after the manufacturer’s impermissible refusal to repurchase.

To read the Court of Appeal’s opinion, click here:  Towns v. Hyundai Motor America (Dec. 22, 2025, B324360) 2025 WL 3707173 [Second District, Division Four].