District Court (Cal.) Finds No Song-Beverly Claim for Vehicle Delivered Out-of-State

In D.L. Edmonson Selective Service Inc. v. LCW Automotive Corp. 2010 WL 309018 (C.D.Cal. 2010), the Court found the Song-Beverly Act not applicable to a vehicle delivered out-of-state, explaining:

As a threshold issue, LCW contends that the Song-Beverly Act does not apply to this case because the limousine was delivered to and accepted by plaintiff in Texas, not California.FN29 “[F]or the Song-Beverly Act to apply, the subject vehicle must at least have been bought or leased in California.” Park City Services, Inc. v. Ford Motor Co., Inc., 144 Cal.App.4th 295, 308, 50 Cal.Rptr.3d 373 (2006). Although the Court in its order dated July 27, 2009, found that Song-Beverly appeared to apply, so that there was cause to try this action, the additional evidence submitted at trial and recent case law leads to the conclusion that the Song-Beverly Act does not apply to plaintiff’s claims. California law is clear that when title passes outside of California, the Song-Beverly Act does not apply. See Gaynor v. W. Rec. Vehicles, Inc., 473 F.Supp.2d 1060, 1062 (C.D.Cal.2007) (citing Cummins, Inc. v. Superior Ct., 36 Cal.4th 478, 487-90, 30 Cal.Rptr.3d 823, 115 P.3d 98 (2005) (Song-Beverly Act did not apply to motorhome sold in Idaho and subsequently brought into California); Davis v. Newmar Corp., 136 Cal.App.4th 275, 278, 38 Cal.Rptr.3d 690 (2006) (Song-Beverly Act did not apply to sale of motorhome negotiated in California where contract required delivery in Arizona); Cal. State Elecs. Ass’n v. Zeos Int’l Ltd., 41 Cal.App.4th 1270, 1278, 49 Cal.Rptr.2d 127 (1996) (Song-Beverly Act did not apply to goods where title passed in Minnesota upon shipment of goods from seller to buyer in California)). California Commercial Code § 2401(2) provides that “[u]nless otherwise explicitly agreed title passes to the buyer at the time and place at which the seller completes his performance with reference to the physical delivery of the goods.” “Thus, when the parties agree to or contemplate shipment by the seller, title passes to the buyer upon that shipment, unless the agreement specifically requires the seller to make delivery at the destination .” FN30 Zeos Int’l Ltd., 41 Cal.App.4th at 1277, 49 Cal.Rptr.2d 127. In the instant case, Advantage purchased the limousine and then leased the vehicle to Edmonson. The bill of sale to Advantage indicates that the “shipping terms” for the limousine were “pickup.” Accordingly, under California law, it appears that title passed to Advantage in San Antonio, Texas, where Edmonson took physical possession of the car, as agreed upon by the parties. See Cal. Com.Code § 2401(2). However, the relevant question in the instant case is whether the limousine was nevertheless leased in California, for purposes of the Song-Beverly Act. The Act provides that the lessee has the same rights against the manufacturer that the lessee would have had “if the goods had been purchased by the lessee.” Cal. Civ.Code § 1791(a). The Court finds that even though the record indicates that Edmonson signed the final lease document in California, that he signified acceptance of the limousine when he took physical possession of the limousine in Texas, after having inspected the vehicle for two days, signed the “delivery receipt,” and making a twenty percent down payment on the limousine. See Cal. Com.Code § 10515 (“Acceptance of goods occurs after the lessee has had a reasonable opportunity to inspect the goods ….”); Newmar Corp., 136 Cal.App.4th at 278, 38 Cal.Rptr.3d 690. The record does not indicate that Edmonson only conditionally accepted the limousine when he left LCW’s headquarters in Texas. Moreover, under California law, if Edmonson had purchased the limousine, title would clearly have passed outside of California. Although Edmonson registered the limousine in California and the lease payments included payment of California taxes, the Court finds that case law does not treat these factors as necessarily dispositive of the issue at hand. See, e.g., Cummins, 36 Cal.4th at 493 n. 12, 30 Cal.Rptr.3d 823, 115 P.3d 98 (finding that the Act did not apply to vehicles purchased outside of California, and comparing the Act with other state lemon laws which are not limited to vehicles sold in the state and which have alternatively required that the vehicles be licensed or registered in the state); Gusee v. Damon Corp., 470 F.Supp.2d 1110, 1115 (C.D.Cal.2007) (finding that protection under the Song-Beverly Act and exemption from California taxes are “not mutually exclusive” because they are governed by entirely different California laws, such that “a consumer good that is sold and shipped from California to another state pursuant to a shipment contract is ‘sold in California’ for purposes of the Song-Beverly Act, but is exempt from California sales tax”). Therefore, the Court concludes that the Song-Beverly Act does not apply to plaintiff’s claims.  However, because it is a close question and there appears to be no case law directly on point, the Court alternatively assumes that the Song-Beverly Act applies and determines whether LCW is liable to plaintiff under the Song-Beverly Act. The Court concludes that even if it could be said that the Song-Beverly Act applies, plaintiff has not demonstrated by a preponderance of the evidence that LCW breached its obligations under the express warranty provision, pursuant to California Civil Code § 1793.2(d). Although Edmonson first complained about a “clicking” sound from the LimoTouch control board, he conceded at trial that this problem has since been satisfactorily repaired at LCW’s expense. The Court finds that plaintiff has not established that the subsequent and allegedly persistent problem with the heating system constitutes a nonconformity covered by the warranty that “substantially impaired the use, value, or the safety” of the limousine.FN31 See Cal. Civ.Code § 1793.22(e) (provides that “nonconformity” for purposes of section 1793.2(d), means a nonconformity that substantially impairs the use, value, or safety of the vehicle). Whether the impairment is substantial is determined by an objective test, based on what a reasonable person would understand to be a defect. Lundy v. Ford Motor Co., 87 Cal.App.4th 472, 478, 104 Cal.Rptr.2d 545 (2001). Plaintiff has failed to demonstrate that the heating problem, namely a lack of heat in the rear compartment when the air conditioning was turned on in the front, was a defect in the material or workmanship of the limousine. However, even assuming that the heating problem was covered by the express warranty, and that it substantially impaired Edmonson’s use of the vehicle, the Court finds that LCW’s attempt to fix the problem in December 2006, did not trigger any obligation under the Song-Beverly Act to replace or buy back the vehicle. See Silvio v. Ford Motor Co., 109 Cal.App.4th 1205, 1208-09, 135 Cal.Rptr.2d 846 (2003) (acknowledging that the reasonableness of the number of attempts is generally a question of fact but that a single attempt is in sufficient as a matter of law). This is especially true, given that the record indicates that LCW was willing to perform further repairs, and potentially even replace the limousine, and that Edmonson did not give LCW another opportunity after December 2006, to cure the heating problem. Thus, for all these reasons, the Court concludes that plaintiff did not demonstrate that LCW breached its obligations under the Song-Beverly Act.