In Peterson v. Mazda Motor of America, Inc., — F.Supp.3d —-, 2014 WL 4494872 (C.D.Cal. 2014), Judge Carter applied a narrow intepretation of the California Court of Appeal’s Mexia decision that had expanded the time during which a consumer can bring a breach of implied warranty claim.
Mazda argues that Ms. Peterson’s Song– Beverly claims fails because the allegation that her vehicle had a latent defect at the time of sale is not a sufficiently allegation of breach of implied warranty without further allegations that the VVT assembly defect manifested itself before the Song– Beverly implied warranty period expired. Motion to Dismiss at 10–11. Plaintiff argues that her allegation that the defect was present at the point of purchase is sufficient. Motion to Dismiss Opp’n at 3. ¶ The issue is whether the phrase “but in no event” in the Song– Beverly Act means that consumers are not due protections under Song– Beverly unless some symptom of the defect surfaces in a new consumer good and the defect renders the good unmerchantable within one year of purchase. (For simplicity’s sake, the Court assumes for purposes of this discussion that Ms. Peterson purchased a new vehicle and the one-year maximum duration applies. The Court notes that the analysis should be the same for used goods which are subject to a three-month durational period under Song– Beverly.) ¶ The federal district courts in California appear to be divided into two camps on this issue. In the Court’s previous order, this Court held that a warranty can be breached by a latent defect undiscoverable at the time of sale, relying on two cases: Keegan v. Am. Honda Motor Co., Inc., 838 F.Supp.2d 929, 948 (C.D.Cal.2012) (Morrow, J.) and Ehrlich v. BMW of North Am., LLC, 801 F.Supp.2d 908, 922 (C.D.Cal.2010) (Collins, J.). In Keegan, plaintiff alleged that the too-short rear control arms of his Honda Civic led to premature tire wear. In his complaint, he alleged that the tires of his vehicles had worn out unevenly and prematurely, but that he did not discover that the root of the problem was the rear control arms until over a year after purchase. In Erlich, the plaintiff bought a BMW in December 2004. In March 2008, his windshield cracked when he used the sponge portion of a squeegee on it. In November 2008, the replacement windshield cracked while the car was parked overnight in Plaintiff’s garage. Plaintiff alleged that BMW had sold the car with a latent defect that caused the windshield to have an abnormally high propensity to crack or chip, but did not allege that the windshield had any problems within a year of purchase. In Keegan and Ehrlich, defendants argued that the plaintiffs’ Song– Beverly claim should be dismissed because the plaintiffs failed to allege that their vehicles were unmerchantable during the one-year period. In both cases, the courts rejected these arguments, citing a California Court of Appeals, Fourth Appellate District case, Mexia v. Rinker Boat Co., Inc., 174 Cal.App. 4th 1297 (2009). ¶ *5 In Mexia, the plaintiff purchased a boat in April 2003 that contained a latent defect that caused its engine to corrode. Repairs to the boat were needed by July 2005 and the boat dealer refused to repair the boat. The plaintiff brought suit in November 2006. It is unclear from the opinion when the boat first started exhibiting problems or when the latent defect was discovered as the cause, but Mexia held that there is no requirement in Song– Beverly that a latent defect be discovered within a year of purchase. ¶ Mexia itself relied heavily on Moore v. Hubbard Johnson Lumber Co., 149 Cal.App.2d 236 (1957), an implied warranty of merchantability case that pre-dates SongBeverly. In Moore, plaintiff purchased lumber from defendants to build a roof. The lumber turned out to have been infested with beetles that could not have been discovered through visual inspection. Moore, 149 Cal.App.2d at 241. Mexia cited Moore for the proposition that “although a defect may not be discovered for months or years after a sale, merchantability is evaluated as if the defect were known.” Mexia, 174 Cal.App. 4th at 1305. ¶ Mazda has cited to a number of cases that have looked at Mexia, most of which characterize Mexia and Moore as limited to situations where the product is unmerchantable at the point of purchase. See Reply at 4. In Grodzitsky v. Am. Honda Motor Co., Inc., the court distinguished its case, which, according to plaintiffs’ allegations, involved windows that worked perfectly well for years after purchase, from the beetle-infested lumber at issue in Moore, which was unusable from the start. 2013 U.S. Dist. LEXIS 82746, at *35–36 (C.D. Cal. June 12, 2013) (Wilson, J.). In Elias v. Hewlett–Packard Co., the court distinguished computers that did not have any issues until 17 months after purchase from the lumber in Moore, 903 F.Supp.2d 843, 852–53 (N.D.Cal.2012) (Koh, J.). In Marchante v. Sony Corp. of Am., the same analysis was used to distinguish television sets that did not have any issues until after years of use from the lumber. 801 F.Supp.2d 1013, 1021–22 (S.D.Cal.2011) (Sammartino, J .). ¶ Also running through the cases cited by Mazda is the concern that if Mexia were not limited, Mexia would render the duration provision of the Song– Beverly Act meaningless because “[e]very defect that arises could conceivably be tied to an imperfection existing during the implied warranty period.” Marchante, 801 F.Supp. at 1022; see also Grodzitsky, 2013 U.S. Dist. LEXIS 82746, at *33–34. ¶ Having reconsidered the case law as well as the text of the statute, the Court now is persuaded that a limited reading of Mexia is the more well-reasoned one. The Court holds that Ms. Peterson must allege more facts to show that her vehicle was unmerchantable within the implied warranty period set by the Song– Beverly Act in order to adequately plead a claim under the Song– Beverly Act. Ms. Peterson need not allege that she discovered the VVT assembly defect within that time, but there should at least be allegations that symptoms of the defect manifested during the warranty period. ¶ Therefore, the Court DISMISSES Ms. Peterson’s Song– Beverly claim WITHOUT PREJUDICE.