Opinion
B195677
8-29-2008
ROBERT SCOTT SHTOFMAN, Plaintiff and Respondent, v. MERCEDES-BENZ OF NORTH AMERICA, INC. et al., Defendants and Appellants.
Bannan, Green, Frank & Terzian, C. Forrest Bannan and Mark P. Estrella for Defendants and Appellants. Law Offices of Andrew Krzemuski and Andrew Krzemuski; Law Offices of Robert Scott Shtofman and Richard J. Sullivan for Plaintiff and Respondent.
Not to be Published
More than seven years after he purchased a new car, and after he had driven it for over 132,000 miles, Robert Scott Shtofman sued Mercedes-Benz USA, LLC and Calstar Motors, Inc. (a Mercedes-Benz dealer) for breach of warranty and related causes of action. Broadly summarized, all of Shtofmans causes of action were based on his claim that his car had a defective brake light system which Mercedes-Benz and Calstar never corrected. In the procedural context of cross-motions for summary adjudication of issues, the trial court ruled that Mercedes-Benz and Calstar were liable for breach of warranty. Following the breach of warranty ruling, Shtofman dismissed his remaining causes of action, and the trial court entered a judgment awarding more than $200,000 to Shtofman.
We reverse the judgment, and remand the case to the trial court with directions to vacate its order granting Shtofmans motion for summary adjudication on his cause of action for breach of warranty, and to enter a new and different order denying his motion. We further direct the trial court to grant the motions by Mercedes-Benz and Calstar for summary adjudication of Shtofmans cause of action for breach of warranty. Finally, because Shtofman dismissed his remaining cause of action in reliance on the order which now must be vacated, we also direct the trial court to relieve Shtofman from his dismissal of those causes of action in the event he so chooses.
FACTS
I. The Vehicle and its Repair Problems
In January 1997, Shtofman purchased a new 1997 Mercedes-Benz S420 from Calstars dealership in Glendale for roughly $78,000. The written warranty on Shtofmans S420 provided: "Mercedes-Benz . . . warrants . . . that any authorized Mercedes-Benz dealer will make any repairs or replacements necessary, to correct defects in material or workmanship. . . . [¶] . . . This warranty is for 48 months or 50,000 miles, whichever comes first."
At the time Shtofman purchased his S420, he also purchased an extended warranty and service contract offered by DFS Automobile Extend (DFS). The DFS contract covered Shtofmans S420 for 84 months or 100,000 miles. The DFS contract is not at issue on this appeal. Nor could it be since the only warranty presented in the separate statements was the 48,000 mile warranty.
Between August 1997 and September 2001, Shtofman returned his S420 to Calstar 12 times for repairs of a recurrent brake light problem. Between January 1997, when Shtofman purchased his car, and the date of still more repairs in September 2003, Mercedes-Benz and Calstar gave Shtofman "different causes" for his cars brake light failure. According to Shtofman, Mercedes-Benz and Calstar told him in September 2003 that "they were unable to fix the problem" with his car. It was at that moment, claimed Shtofman, when he "realized" the problem with car would never be fixed permanently.
II. The Complaint
In August 2004, Shtofman sued Mercedes-Benz and Calstar. Shtofmans complaint alleged five causes of action: (1) breach of contract against Calstar for failing to repair his vehicle as promised; (2) breach of warranty against Mercedes-Benz and Calstar; (3) fraud against Mercedes-Benz and Calstar based upon misrepresentations about the nature of the problem with his S420; (4) negligent repair against Mercedes-Benz and Calstar; and (5) negligent hiring and training of service employees against Calstar.
III. The Motions for Summary Judgment or Summary Adjudication of Issues
On December 5, 2005, Calstar filed a motion for summary judgment or summary adjudication of issues. Broadly summarized, Calstars motion argued that Shtofmans contract and warranty claims were time-barred, and that he had no evidence in support of his remaining causes of action. On December 7, 2005, Mercedes-Benz filed a substantively similar motion for summary judgment or summary adjudication of issues.
On December 7, 2005, Shtofman filed a motion for summary adjudication of his second cause of action for breach of warranty, arguing that his S420 was a "`lemon as a matter of law" under the Song-Beverly Consumer Warranty Act. (See Civ. Code, § 1790 et seq.) The facts and evidence submitted in support of the cross-motions is discussed more fully below.
On February 28, 2006, the trial court heard argument on the parties competing motions, and took the matter under submission. On March 13, 2006, the court signed and entered a formal order granting Shtofmans motion for summary adjudication of his second cause of action for breach of warranty, and denying the motions filed by Mercedes-Benz and Calstar.
The trial courts order provides: "Plaintiff has established defendants gave plaintiff a written warranty . . . against defects to plaintiffs vehicle. Plaintiff delivered his vehicle to defendants to make repairs on a covered defect on over 12 occasions prior to the filing of this action. The court finds, as a matter of law, that defendants failed to properly service or repair the vehicle after a reasonable number of opportunities to do so. As such, the plaintiffs request for summary adjudication as to . . . [his] second cause of action for breach of warranty is granted. [¶] Because the court has summarily adjudicated the second cause of action in plaintiffs favor, it follows that the court grant[s] the summary adjudication as to . . . damages. Plaintiff is awarded $87,246.63 in damages consisting of the purchase price plus the costs incurred by plaintiff in attempting to have defendants make the required repairs."
The trial courts order does not expressly address the statute of limitations defense raised by Mercedes-Benz and Calstar, but, in granting summary adjudication in favor of Shtofman, the court implicitly and necessarily rejected their contention that Shtofmans cause of action for breach of warranty was time-barred.
Following the trial courts ruling on his cause of action for breach of warranty, Shtofman agreed to dismiss his remaining causes of action, and requested entry of judgment.
On July 25, 2006, Shtofman filed a motion for attorneys fees in which he requested an award totaling $181,910. On August 17, 2006, the trial court awarded attorneys fees to Shtofman in the amount of $136,800.
On October 2, 2006, the trial court signed and entered a final judgment. The judgment provides that Shtofman shall recover $ 87,246.63 in compensatory damages, plus attorneys fees in the amount of $136,800, and further provides that the total award in favor of Shtofman is payable by Mercedes-Benz and Calstar, jointly and severally. The judgment further provides that Shtofman shall return his S420 to Calstar, and that he shall execute all documents necessary to transfer title and ownership of the vehicle to Mercedes-Benz.
Mercedes-Benz and Calstar (hereafter collectively Mercedes-Benz) filed a timely notice of appeal.
DISCUSSION
I. The Trial Court Erred in Denying Mercedes-Benz Motion for Summary Adjudication
Mercedes-Benz contends the trial court erred in denying their motions for summary adjudication of Shtofmans cause of action for breach of warranty. More specifically, Mercedes-Benz argues the trial court was required to rule as a matter of law that Shtofmans cause of action for breach of warranty was time-barred by the statute of limitations prescribed by California Uniform Commercial Code section 2725. We agree.
A. The Applicable Statute of Limitations
A cause of action for breach of warranty under the Song-Beverly Consumer Warranty Act (Civ. Code, § 1790 et seq.) is subject to the four-year statute of limitations prescribed in California Uniform Commercial Code section 2725, subdivision (1). (See Krieger v. Nick Alexander Imports, Inc. (1991) 234 Cal.App.3d 205, 212-215 (Krieger).) California Uniform Commercial Code section 2725, subdivision (2), provides that a cause of action for breach of warranty accrues "when tender of delivery is made, except that where a warranty explicitly extends to future performance of the goods and discovery of the breach must await the time of such performance the cause of action accrues when the breach is or should have been discovered."
B. Mercedes-Benzs Contention
Mercedes-Benz argues Shtofmans cause of action was time-barred based on the following undisputed facts and undisputed chronology: Shtofman purchased his S420 in January 1997. Mercedes-Benzs warranty on Shtofmans S420 covered the vehicle for 48 months or 50,000 miles, whichever came first. By April 1999, Shtofman had driven his S420 more than 50,000 miles, meaning that the warranty on his vehicle expired no later than April 1999. From this foundation, Mercedes-Benz argues that, assuming it breached the warranty on Shtofmans S420 in the last day before the warranty expired, then Shtofman had until April 2003 to file his cause of action for breach of warranty. It necessarily follows, concludes Mercedes-Benz, that Shtofmans complaint against Mercedes-Benz — which he filed in August 2004 — was filed more than a year too late. In short, Mercedes-Benz essentially argues that a cause of action for breach of warranty can never accrue later than the last day of the warranty period.
Mercedes-Benzs evidence showed that Shtofman made a request for roadside assistance for a flat tire in April 1999, and that the repair records from the flat tire incident indicated his S420 had more than 50,000 on the odometer at that time. Shtofman did not dispute this evidence.
C. Shtofmans Contention
To avoid the result advocated by Mercedes-Benz, Shtofman cites Krieger, supra, 234 Cal.App.3d 205, and argues that he did not discover Mercedes-Benzs breach of warranty until September 2003, when Calstar advised him that his S420 might never be fixed permanently. Based on this, Shtofman argues he then had four years from the date of discovery, i.e., until September 2007, to file his cause of action for breach of warranty against Mercedes-Benz. It necessarily follows, concludes Shtofman, that his cause of action for breach of warranty — which he filed in August 2004 — was filed well within the statute of limitations period.
D. The Krieger Case
The arguments by Mercedes-Benz and Calstar require us to take a closer look at California Uniform Commercial Code section 2725, subdivision (2), as interpreted in Krieger, supra, 234 Cal.App.3d 205.
In Krieger, plaintiffs purchased a BMW from a dealer in December 1983, and, within a day, a portion of the drive train fell out. During the next five months, plaintiffs returned the vehicle to the dealer for servicing on five different occasions. The dealer last serviced the vehicle in May 1984, at which time plaintiffs determined the dealer could not repair the vehicle, and took it to another BMW dealer. In February 1988, plaintiffs filed an action against the dealer for breach of warranty. The trial court entered summary judgment in favor of the dealer on the ground that the plaintiffs warranty claim was barred by the statute of limitations. (Krieger, supra, 234 Cal.App.3d at pp. 209-210.) Division Four of our court reversed the judgment.
Regarding the issue of when plaintiffs cause of action for breach of warranty accrued, the court explained that a cause of action for breach of warranty generally accrues on the date that a product is delivered, but that an exception is made where a warranty "explicitly extends to future performance of the goods and discovery of the breach must await the time of such performance." (See Cal. U. Com. Code, § 2725, subd. (2).) Division Four then noted that the parties had not cited, and that it had not located, any California case that had interpreted the discovery provisions in California Uniform Commercial Code section 2725, subdivision (2).
In addressing the issue of first impression, the court rejected the dealers contention that the warranty at issue did not involve a promise of "future performance" as argued by plaintiffs, but merely promised to repair the vehicle, free of charge, during the warranty period. As explained by our colleagues in Division Four, a promise to repair defects that occur during a future period — i.e., during a warranty period which follows the date of sale — conforms with the definition of an express warranty under both the Song-Beverly Consumer Warranty Act (see Civ. Code, § 1791.2) and California Uniform Commercial Code section 2313.
The court then concluded that, based on the record that had been presented by the parties, plaintiffs had created a triable issue of material fact regarding the applicability of the discovery rule codified in California Uniform Commercial Code section 2725, subdivision (2). (Krieger, supra, 234 Cal.App.3d at pp. 215-218, fn. omitted.)
This is our understanding of Krieger. Summary judgment was improper in Krieger because there was a question of fact regarding when plaintiffs cause of action for breach of the warranty on his BMW accrued. On one hand, a reasonable trier of fact might find that plaintiffs discovered the breach of warranty in May 1984, when the dealer last serviced the vehicle, and plaintiffs determined that the dealer could not repair the vehicle, and plaintiffs took their vehicle to another BMW dealer. In the event a trier of fact found delayed discovery of a breach of warranty in May 1984, then plaintiffs had until May 1988 to file a breach of warranty action, and their complaint — which they filed in February 1988 — was timely. On the other hand, a reasonable trier of fact might find plaintiffs discovered the breach of warranty in December 1983, when the drive train fell out of their car, in which case plaintiffs had only until December 1987 to file their cause of action for breach of warranty, and their complaint — which they filed in February 1988 — was time-barred.
In either scenario, Krieger involved a situation where it was undisputed that the buyer had discovered the breach of warranty at some point in time during the warranty period . In other words, December 1983 and May 1984 were both within the warranty period. The issue in Krieger, therefore, was whether plaintiffs discovered the breach during the early part of the warranty period, in which case their breach of warranty claim was time-barred, or, alternatively, whether plaintiffs discovered the breach of warranty several months later, in which case their breach of warranty claim was timely. This, the court said, was for the trier of fact to determine.
Krieger did not involve a situation like that which is presented in Shtofmans current case. In Shtofmans current case, he alleges that he did not discover Mercedes-Benzs breach of warranty until after the warranty period had expired. Under either scenario, as we next explain, the breach of warranty claim here was untimely and time barred.
E. Application of Krieger
After examining the parties arguments, we reject Mercedes-Benzs contention that Krieger is "not analytically accurate." Based on the facts and circumstances in Krieger, we find Division Fours interpretation of California Uniform Code section 2725, subdivision (2), to be "accurate." The question then becomes whether Shtofman is correct that Krieger compels the conclusion that his cause of action for breach of warranty was timely. We answer this question, "no," because, in our view, a proper application of Kriegers discovery analysis does not save Shtofmans cause of action for breach of warranty.
The undisputed facts and evidence in Shtofmans current case tell the following story: Shtofman purchased his S420 in January 1997, and thereafter returned his S420 for repairs of a recurrent brake light problem in August 1997, October 1997, July 1998, and December 1998. In April 1999, the warranty on Shtofmans S420 expired because he had driven more than 50,000 as of that date. After the warranty expired, Shtofman returned his S420 for more repairs of the brake light problem in December 1999, February 2000, September 2000, December 2000, March 2001, August 2001, and September 2001. The undisputed facts and evidence also show that Shtofman returned his S420 for still more repairs in September 2003.
We find that these undisputed facts can support only one reasonable conclusion under California Uniform Commercial Code section 2725, subdivision (2) — Shtofmans cause of action for breach of warranty was time-barred. At best, the critical dates are April 1999, when the warranty on Shtofmans S420 expired, and December 1999, when he returned his vehicle for repairs of the same brake light problem that plagued him during the warranty period. In December 1999, when Shtofman returned his vehicle for a problem that should have been fixed during the warranty period, he was confronted with facts which suggested that Mercedes-Benz had not fulfilled its promise to repair his S420. Shtofman did not need any specialized mechanical acumen to understand that his brake light problem continued to exist; the breach "should have been discovered." (Cal. U. Com. Code, § 2725, subd. (2).) At that point — one which was after the warranty had expired — there is no question but that the four-year statute of limitations must necessarily have begun to run on Shtofmans claim for breach of warranty.
Consequently, Shtofman had four years from December 1999 to file his cause of action for breach of warranty — i.e., December 2003 — and his complaint which he filed in August 2004 was untimely by nearly a year. (Jolly v. Eli Lilly & Co. (1988) 44 Cal.3d 1103, 1112 [although the question of when a party should have discovered the facts giving rise to a cause of action is generally a question of fact, the issue become a matter of law when the undisputed facts can support only one reasonable conclusion].)
Were we to accept Shtofmans theory that the breach was not discovered until September 2003, when Calstar told him his S420 might never be fixed permanently, it would require us to ignore the fact that, after the warranty expired, Shtofman returned his S420 for more repairs of the brake light problem in December 1999, February 2000, September 2000, December 2000, March 2001, August 2001, and September 2001, and to find that none of these failed attempts to fix the brake light problem resulted in Shtofmans actual or constructive discovery of the breach of warranty. In essence, buying into Shtofmans analysis leads to the unacceptable conclusion that a breach of warranty cause of action may accrue at any point in time, without regard to whether or when the warranty had expired. This simply is not the law. Here, unlike in Krieger, Mercedes-Benz established a complete defense to the action. Mercedes-Benz met its burden of negating the applicability of the discovery exception for accrual of an action on a future warranty.
In the trial court, Shtofman argued that the warranty period on his S420 was extended past April 1999 under the Song-Beverly Consumer Warranty Act because Mercedes-Benz failed to correct a defect that occurred during the warranty period. (See Civ. Code, § 1795.6.) Shtofman does not repeat this argument on appeal, but assuming he had, it would not save his case. Under Civil Code section 1795.6, a warranty "shall automatically be tolled" during the time period between (i) the date the warranted product is delivered to the dealer for repairs, and (ii) the date the repaired product is returned to the buyer. For example, if a vehicle is sold with a three-year warranty, and the vehicle thereafter sits in the service department for repairs for a total of six months during the three-year warranty period, then the warranty will be deemed not to expire until three years and six months from the date of sale.
An extension of the warranty period on Shtofmans S420 pursuant to Civil Code section 1795.6 is irrelevant in Shtofmans current case because the warranty on his S420 expired by virtue of the number of miles that he drove the vehicle. In other words, the warranty on Shtofmans S420 expired in April 1999 because, as of that date, he had driven his S420 more than 50,000 miles. For this reason, there is no evidence in the record to show that any period of "tolling" of Mercedes-Benzs warranty under Civil Code section 1795.6 would have or could have salvaged Shtofmans cause of action for breach of warranty. In short, although we agree with the abstract proposition that the warranty period on Shtofmans S420 could have been extended beyond its 48-month term based upon the length of time that it sat in Calstars service department for repairs, we have not been pointed to any evidence in the record which suggests that an extension of the warranty period would make any difference in the outcome of his case.
II. The Trial Court Erred in Granting Shtofmans Motion for Summary Adjudication
Merecedes-Benz contends the trial court erred in granting Shtofmans motion for summary adjudication of his cause of action for breach of warranty because his warranty claim was time-barred. For the reasons explained above, we agree with Mercedes. We have already resolved the issue of when Shtofman should have discovered the breach of warranty on his S420 in favor of Mercedes-Benz.
III. The Attorneys Fees Award is Reversed
Mercedes-Benz contends that, if it is successful on appeal, then the attorneys fee award must be reversed. We agree. (Civ. Code, § 1794, subd. (d) [if a buyer "prevails" in an action brought under the Song-Beverly Consumer Warranty Act, the buyer shall be allowed to recover attorneys fees, determined by the trial court to have been reasonably incurred by the buyer].)
Mercedes-Benzs specific challenges to the amount of the attorneys fee award are moot.
DISPOSITION
The judgment is reversed, and the cause is remanded to the trial court with directions to vacate its order granting Shtofmans motion for summary adjudication of his cause of action for breach of warranty, and to enter a new a different order denying his motion, and granting Calstars cross-motion for summary adjudication on Shtofmans breach of warranty claim, and granting Mercedes-Benzs cross-motion for summary adjudication on Shtofmans breach of warranty claim. Because Shtofman dismissed his remaining cause of action in reliance on the order which now must be vacated, the trial court is further directed to relieve Shtofman from his dismissal of those causes of action in the event he so chooses. Mercedes-Benz and Calstar are awarded costs on appeal.
We concur:
RUBIN, Acting P. J.
FLIER, J.