In Frengel v. McLaren Auto., Inc., No. 3:22-cv-0664 W (RBB), 2022 U.S. Dist. LEXIS 220983, at *7-9 (S.D. Cal. Dec. 7, 2022), Judge Whelan dismissed, with leave to amend, a Song-Beverly claim because the vehicle was not leased in California, despite Plaintiff’s claims that it was delivered to them in California.

The Court finds that the Lease Agreement can be incorporated by reference and treated as part of the SAC because the Frengels refer extensively to the document and the document forms the basis of the claims in this case. The Frengels allege that they “purchased/leased” the Vehicle. Each of the claims brought under the Song-Beverly Act is based on the lease of the Vehicle, which was memorialized by the Lease Agreement. And the SAC refers extensively to the “express written warranty” and the “implied warranty,” which are both creatures of the Lease Agreement. (See, e.g., SAC ¶¶ 7, 25, 26, 28, 32, 33.) Taking into consideration the allegations in the SAC and the Lease Agreement, the Court finds that the Frengels have not stated a claim under the Song-Beverly Act for the first, second, third, or fourth causes of action. Though the Frengels allege that the “Vehicle was purchased and delivered to Plaintiffs in the State of California” (SAC ¶ 6), this fact is not dispositive of whether the Vehicle was “sold” in California for purposes of the Song-Beverly Act. Under Cal. Com. Code § 2401(2), the Frengels must allege that title passed from McLaren Charlotte to them in California. They do not do so. The Frengels contend that that the “agreement my father and I with (sic) the leasing dealership at the time of lease required McLaren Charlotte to deliver the Vehicle to the place of purchase: 394 poplar Street, Laguna Beach, CA 92651.” (Frengel Decl. [Doc. 26-1], ¶ 4.) But this statement is contradicted by the Lease Agreement, which does not require Charlotte McLaren to deliver the Vehicle in California and says nothing about shipment or delivery of the Vehicle. And the existence of such an agreement is at odds with the Lease Agreement, which states, “THIS IS THE ENTIRE AGREEMENT.”  All of this establishes that the Lease Agreement is a shipment contract. Cal. Com. Code § 2503, official cmt. 5. As a result of the shipment contract, McLaren Charlotte passed title to the Frengels at the time and place of shipment. Cal. Com. Code § 2401(2)(a). The Frengels do not allege any facts as to the time or place of shipment of the Vehicle. The Frengels do allege (and McLaren agrees) that McLaren Charlotte is located in Charlotte, North Carolina, but neither the SAC nor the Lease Agreement say anything about when or where the Vehicle was shipped. The Frengels failure to allege facts that show that title passed to them in California is fatal to their Song-Beverly Act Claims. Accordingly, the Court GRANTS McLaren’s motion to dismiss the first, second, third, and fourth causes of action and DISMISSES those claims WITH LEAVE TO AMEND.