In Doppes v. Bentley Motors, Inc. — Cal.Rptr.3d —-, 2009 WL 1578400 (2009), the Court of Appeal for the Fourth District held that the Song-Beverly Act did not preclude an award of pre-judgment interest. The Court of Appeal explained:
Civil Code section 3287 is the statutory basis for pre-judgment interest. Subdivision (a) of section 3287 states, in part: “Every person who is entitled to recover damages certain, or capable of being made certain by calculation, and the right to recover which is vested in him upon a particular day, is entitled also to recover interest thereon from that day.”Section 3287, subdivision (a) is not limited to particular claims or causes of action; to the contrary, it states, “[t]his section is applicable to recovery of damages and interest from any such debtor.”Prejudgment interest may be awarded under section 3287 “even if it is not specifi-cally authorized by the statute underlying the plaintiff’s claims.”(County of Solano v. Lionsgate Corp. (2005) 126 Cal.App.4th 741, 752.) [P] Nothing in the Song-Beverly Consumer Warranty Act bars recovery of prejudgment interest. Civil Code section 1794 provides that a consumer who is damaged by any failure to comply with the Song-Beverly Consumer Warranty Act may bring an action to recover damages, costs, expenses, reasonable attorney fees, and, in some cases, civil penalties. (Civ.Code, § 1794, subds.(a)-(e).) Civil Code section 1790.4 states: “The remedies provided by this chapter are cumulative and shall not be construed as restricting any remedy that is otherwise available, and, in par-ticular, shall not be construed to supplant the provi-sions of the Unfair Practices Act.”
In a companion decision, Doppes v. Bentley Motors, Inc. — Cal.Rptr.3d —-, 2009 WL 1578384 (2009), the Court of Appeal held that “we make the extraordinary, yet justified, determination that the trial court abused its discretion by failing to impose terminating sanctions against defendant for misuse of the discovery process. The record demonstrates defendant engaged in repeated and egregious violations of the discovery laws that not only impaired plaintiff’s rights, but threatened the integrity of the judicial process.”
This lemon law case arose because of an alleged obnoxious odor that emanated from the Bentley’s interior. Bentley’s employee testified that at a BBB hearing that, as of that date, he knew of only three cars with odor problems and that Bentley addressed the problem by placing foam blocks in the body cavities of the cars to obstruct the flow of cold air. The employee also testified he instructed the dealer not to provide Plaintiff with internal documentation of the odor problem. The Better Business Bureau hearing officer ruled in Bentley’s favor. Documents produced later showed that defendant knew of at least 11 odor complaints by March 2004, and knew the problem was not cold airflow but odor emanating from corrosion protection wax.
After a discovery motion, an appointment of a discovery referee, and two motions for terminating sanctions, and a denial of a sanctions motion mid-trial, the jury found that Bentley violated the Song-Beverly Consumer Warranty Act and concealed a material fact, but that neither the violation nor the concealment was intentional, and found that Bentley breached express and implied warranties. The jury awarded Doppes $214,300 as reimbursement for a new vehicle and $100,000 for breach of express and implied warranties. The Plaintiff appealed the denial of the statutory penalty.
By the time trial started, Bentley had violated four discovery orders or directives: (1) the July 20, 2005 order compelling Bentley to produce documents by August 9, 2005; (2) the December 15, 2005 order; (3) the discovery referee’s January 31, 2006 directive; and (4) the June 6, 2006 order. It is also clear that Ham lied during the Better Business Bureau hearing and was not forthcoming in his deposition. The discovery referee found Bentley had stonewalled in producing highly relevant documents and Doppes had suffered severe prejudice as a result. In the June 5, 2006 report and recommendation, the discovery referee had given Bentley a chance to “ ‘cure’ ” the problems it had created. Bentley failed to do so. [P] Monetary sanctions had not deterred Bentley from misusing the discovery process. Severe issue and/or evidence sanctions would have been warranted by the time of the discovery referee’s June 5, 2006 report and recommendation, and terminating sanctions would have been warranted by the time of the discovery referee’s August 23, 2006 report and recommendation. We cannot say, however, the trial court abused its discretion initially in approving the discovery referee’s recommendation in the August 2006 report of imposing the “more narrow” sanction of giving the jury instruction. [P] But Doppes’s request for additional sanctions during trial revealed Bentley’s conduct was worse than originally known. Despite monetary and issue sanctions, Bentley had flagrantly engaged in such further discovery abuses so as to compel the trial court to impose the next level of sanctions-terminating sanctions.
Accordingly, the Court of Appeal ruled as follows:
Accordingly, we affirm the judgment on the Song-Beverly Consumer Warranty Act cause of action and the breach of warranty causes of action in Doppes’s favor, and direct the trial court to make an express finding that Bentley intentionally violated the Song-Beverly Consumer Warranty Act. We reverse the judgment on the fraud cause of action, with directions to the trial court to strike Bentley’s answer, enter a default and default judgment against Bentley on that cause of action, and to conduct further proceedings consistent with Greenup v. Rodman (1986) 42 Cal.3d 822, 826-829. Any fraud damages and statutory penalties must be established by a prove-up hearing.