Dagher v. Ford Motor Co.
2015 Cal. App. LEXIS 618, 190 Cal. Rptr. 3d 261, 238 Cal. App. 4th 905 (2015)
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Rule of Law:
The enhanced remedies provided by California's Song-Beverly Consumer Warranty Act, such as replacement or restitution, are available only to a 'buyer' who purchases a consumer good from a 'retail seller' engaged in the business of selling such goods. These statutory rights do not transfer to a subsequent purchaser who acquires a used product through a private sale, even if the manufacturer's original express warranty is still in effect and was transferred with the product.
Facts:
- Ramon and Sandra Audelo purchased a new 2006 Ford F-350 truck from a Ford dealer, which came with a five-year express manufacturer's warranty.
- In 2009, the Audelos sold the used truck to Greg Dagher in a private sale.
- At the time of the sale, the truck had over 12,500 miles on it and approximately two years remaining on Ford's transferable warranty.
- Dagher relied on the remaining warranty coverage when deciding to purchase the truck.
- After the purchase, Dagher experienced significant engine problems with the truck.
- Dagher took the truck to Ford dealerships for numerous repairs under the express warranty.
- The repair attempts by the Ford dealers were unsuccessful in resolving the engine issues.
Procedural Posture:
- Greg Dagher sued Ford Motor Company in a California trial court, alleging violations of the Song-Beverly Consumer Warranty Act.
- Ford filed a motion for summary judgment, arguing Dagher was not a 'buyer' under the Act because he purchased the vehicle in a private sale.
- Dagher opposed the motion and separately filed a motion for leave to amend his complaint to add a federal Magnuson-Moss Warranty Act claim.
- The trial court granted Ford's motion for summary judgment and denied Dagher's motion to amend.
- Dagher, as appellant, appealed the trial court's judgment to the California Court of Appeal.
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Issue:
Does the Song-Beverly Consumer Warranty Act's protections and remedies extend to a subsequent purchaser who buys a used vehicle in a private sale from an individual, even though the original manufacturer's transferable express warranty was still in effect?
Opinions:
Majority - Huffman, Acting P. J.
No, the Song-Beverly Consumer Warranty Act's protections and remedies do not extend to a subsequent purchaser who acquires a vehicle through a private sale. The Act's definitions explicitly limit its application to transactions involving a 'retail seller.' To qualify for the Act's remedies, a plaintiff must be a 'buyer' who purchases consumer goods from a 'person engaged in the business of... selling consumer goods at retail.' Because Dagher bought the truck from the Audelos, who were private individuals and not in the business of selling vehicles, the transaction was not a retail sale. Therefore, Dagher does not meet the statutory definition of a 'buyer' and lacks standing to sue for the Act's special remedies, such as refund or replacement. While the contractual rights of the express warranty were transferred to Dagher and are enforceable under other laws like the Commercial Code, the original owners' statutory standing to sue under the Song-Beverly Act was not assignable through the private sale.
Analysis:
This decision clarifies a significant boundary of the Song-Beverly Act by establishing that the method of acquisition is critical for standing. It distinguishes the contractual right to enforce a transferred express warranty from the statutory right to access the Act's enhanced 'lemon law' remedies. The ruling confirms that the Act's powerful consumer protections are tied to the retail context of the sale, effectively excluding the large market of private used vehicle sales. Consequently, subsequent purchasers in private sales are relegated to traditional breach of warranty claims, which typically offer less comprehensive relief than the replacement or restitution remedies available under the Act.
