In Niedermeier v. Fca Us Llc, No. B293960, 2020 Cal. App. LEXIS 1035 (Ct. App. Oct. 30, 2020), the Court of Appeal reduced a plaintiff’s lemon law verdict by the value the Plaintiff received for trading in the vehicle.
Defendant FCA US LLC, an automobile manufacturer,1 appeals from a judgment in favor of plaintiff Lisa Niedermeier. Plaintiff brought claims under the Song-Beverly Consumer Warranty Act (Civ. Code,2 § 1790 et seq.) (the Act), commonly known as the “lemon law.” (See Warren v. Kia Motors America, Inc. (2018) 30 Cal.App.5th 24, 28.) The jury awarded plaintiff the full purchase price of her defective vehicle, offset by mileage accrued before she first delivered it for repair, plus incidental and consequential damages and a civil penalty. Following the jury’s verdict, the trial court denied defendant’s motion to reduce plaintiff’s damages by the $19,000 credit plaintiff received towards the purchase price of a new vehicle when she traded in her defective vehicle to a GMC dealer. The trial court ruled that reducing the damages here would reward defendant for its delay in providing prompt restitution as required under the Act. On appeal, defendant challenges that ruling. As a matter of first impression, we hold that the Act’s restitution remedy, set at “an amount equal to the actual price paid or payable” for the vehicle (§ 1793.2, subd. (d)(2)(B)), does not include amounts a plaintiff has already recovered by trading in the vehicle at issue. The Legislature chose to call the Act’s refund remedy “restitution,” indicating an intent to restore a plaintiff to the financial position in which she would have been had she not purchased the vehicle. Granting plaintiff a full refund from defendant in addition to the proceeds of the trade-in would put her in a better position than had she never purchased the vehicle, a result inconsistent with “restitution.” Allowing plaintiff a full refund also would undercut other parts of the Act. The Act contains extensive provisions requiring manufacturers to label vehicles reacquired under the Act as “Lemon Law Buybacks,” and to notify potential purchasers of the reacquired vehicles of that designation as well as the vehicles’ history of deficiencies. These provisions apply only when the manufacturer reacquires or assists another in reacquiring the vehicle. Yet if a buyer could trade in a defective vehicle in exchange for a reduction in the price of a new car while still receiving a full refund from the manufacturer, few if any buyers would sacrifice the extra money by returning the vehicle. This would render the labeling and notification provisions largely meaningless, a consequence the Legislature could not have intended. Accordingly, we reduce the damage award to reflect the value of plaintiff’s trade-in, and also reduce the civil penalty, which is capped at twice the amount of actual damages. (§ 1794, subd. (c).)