Ilan Brand appeals from the trial court's entry of judgment in favor of defendants Hyundai Motor America and Allen Used Cars, LLC (doing business as Allen Hyundai; collectively hereafter Hyundai), after granting Hyundai's nonsuit motion on Brand's breach of implied warranty of merchantability lawsuit. (Civ. Code, § 1792; all subsequent statutory references are to this code unless noted.) Brand argues the trial court erred in granting the motion on grounds that no reasonable jury could conclude a new vehicle sunroof that spontaneously opens and closes while driving constitutes a safety hazard in violation of the implied warranty. As we explain, Brand is correct and we therefore reverse the judgment and remand the matter for further proceedings consistent with this opinion.
Brand leased a new Hyundai Genesis sedan from Allen Hyundai on January 2, 2012. Brand, a tax accountant, returned home in his old vehicle that day because he planned to sell it in Las Vegas, where he commuted regularly to the other office in his practice, especially during tax season between January and April. A dealer salesman drove the new Hyundai about 20 miles to Brand's home in Irvine the next day. Brand drove the salesman back to the dealership, and then continued without incident another 10 miles to his office, where he parked for the remainder of the day.
On his drive home on the 5 freeway, however, the Hyundai sunroof spontaneously and repeatedly began opening and closing. It moved "back and forth" without Brand pushing any buttons, and he was powerless to stop it. The odd, uncontrollable movement of the sunroof was itself distracting, but the inrush of wind also caused tax returns and other documents to suddenly swirl about the cabin. Brand tried to close the sunroof to no avail and while trying to catch and tamp down the various documents, he exited the freeway. He immediately returned the vehicle to the Hyundai dealership.
The next day the Hyundai dealership informed Brand it had diagnosed the problem as a defective sunroof switch assembly.
The next day, a Friday, the vehicle was not ready and Brand was referred to the dealership's general manager when he expressed frustration at Hyundai's inability to resolve the problem. The general manager assured him the vehicle would be ready on Monday.
Brand drove his old vehicle to his office in Las Vegas the next day, and arranged to have the car sold there.
On Monday, January 9, a week after he leased the new Hyundai, he received a call from the dealership informing him his vehicle was "ready to be picked up." Later that day, however, the dealership called to inform him the car was not ready. The dealership's attempt to repair the sunroof with a different switch assembly had failed. The dealership informed him it would attempt the repair with a new sunroof motor assembly. Brand was still in Las Vegas, with plans to return on a flight the next day and pick up his car.
The next day he received a call in the morning from the dealership informing him the new Hyundai was not ready. The dealership assured him a Hyundai factory technician specializing in sunroofs would be at the dealership that day to fix his vehicle. Brand flew back from Las Vegas and his wife drove him directly to the dealership in the evening. His car was not ready because the Hyundai technician had not shown up. The dealership assured him the technician would be there the next morning. The general manager promised to call him by 10:00 a.m.
The next day, Wednesday, January 11th, the dealership did not call by 10:00 a.m. Brand waited an hour. The dealership did not call by 11:00 a.m., and when Brand had not received a call by noon, he decided he wanted to return the defective Hyundai. He wrote the general manager the following e-mail, in pertinent part: "As you know, I delivered the car back to you on Tuesday January 3, after I had it for only a couple of hours since finalizing the transaction the prior day. The moonroof kept opening and closing on its own. [¶] Since then I have been informed by Steve Vargas, your service manager, that the problem was in the defective switch assembly. The part was ordered and installed but that did not solve the problem so a new motor assembly was ordered and installed. On Monday Jan[uary] 9[,] Mr. Vargas called to say the car was ready to be picked [up] only to call back the following morning to inform [me] that the moonroof was acting up again and that his technician was trying to resolve the problem, to no avail as of today. [¶] At this point I would like to rescind the contract and demand that you
Brand also called Hyundai's corporate toll-free customer service number to report his dissatisfaction and demand rescission. In an e-mail to the dealership's general manager the next day, January 12th, Brand noted that the service department "left a voice mail at 7:37 am saying that corporate is willing to pay my first lease payment due February 1. He also said that he would check with his manager to find out the status of the car. In other words, the problem has not been solved yet after 9 days! [¶] You called me at 10:14 am saying that the matter is now up to corporate ...." Two weeks later, on January 25, Brand received a letter from Hyundai's corporate office offering to waive his first two lease payments of approximately $450 each, but rejecting his rescission request.
Brand then filed this action, alleging the defective sunroof constituted a breach of the manufacturer's and retailer's implied warranty of merchantability. After discovery that included two inspections of the vehicle and numerous depositions, Hyundai moved for summary judgment, which the trial court denied. The trial court explained that "there is evidence that ... the Genesis purchased was not of the same quality as those generally accepted in the trade as testified to by Mr. Brewster [sic; according to Brand, the witness was an Allen Hyundai service manager, Stephen Blacker]." The trial court concluded: "[T]he defective sunroof is sufficient to establish triable issues as to the breach of the implied warranty of merchantability."
At trial in May 2013, Brand testified to the events and chronology recounted above. He also noted that while he never picked up the defective Hyundai and instead continued to drive his old vehicle, he faithfully made the Hyundai lease payments and maintained insurance on the vehicle because he did not want his credit to be adversely affected.
Brand also called Blacker, Allen Hyundai's service manager, as a witness under Evidence Code section 776 during his case-in-chief. (See Miller v. Dussault (1972) 26 Cal.App.3d 311, 318 [103 Cal.Rptr. 147] ["Although received during plaintiff's case, evidence elicited from an adverse party under section 776 is not treated as the plaintiff's evidence."]; see also Ashcraft v. King (1991) 228 Cal.App.3d 604, 611 [278 Cal.Rptr. 900] [in determining motion for nonsuit, testimony favorable to plaintiff adduced from an adverse witness under Evid. Code, § 776 must be taken as true and unfavorable portions disregarded].) Blacker testified the dealership never duplicated Brand's claim in his testimony that the sunroof closed by itself. He also testified that none of the dealership's service records reflected a problem in which the sunroof closed by itself.
When Brand's counsel asked Blacker whether "a 2012 Hyundai Genesis [should] have a problem at delivery with a sunroof where it randomly opens and closes," Hyundai's attorney objected that the question was argumentative. The trial court noted, "I think it is argumentative," but continued: "Of course not. It's a defect in the vehicle. It shouldn't have happened."
When Brand rested his case-in-chief after he and Blacker testified, Hyundai moved for a nonsuit, which the trial court granted. The court reasoned: "Well, I don't agree with the defense argument that the minimum standard is just getting from point `A' to point `B'. [¶] There has to be — the standard is higher than that.... [¶] However, the law of implied warranty does not require that a vehicle be defect free when it's delivered to a customer. [¶] There can be problems. There are often problems, and in my assessment this is a case where there really is no factual dispute. [¶] We all know what happened, what repair attempts were made, and in my assessment the malfunctioning of the sunroof does not rise to the level of a breach of the implied warranty of merchantability. [¶] So for that reason, I am going to grant the motion for non-suit. That's my ruling."
We review a grant of nonsuit de novo, applying the same standard governing the trial court. (Saunders v. Taylor (1996) 42 Cal.App.4th 1538, 1541-1542 [50 Cal.Rptr.2d 395].) As the Supreme Court has explained, "A defendant is entitled to a nonsuit if the trial court determines that, as a matter of law, the evidence presented by plaintiff is insufficient to permit a jury to find in his favor. [Citation.] `In determining whether plaintiff's evidence is sufficient, the court may not weigh the evidence or consider the credibility of
Accordingly, a "`"core test of merchantability is fitness for the ordinary purpose for which such goods are used."'" (Mexia v. Rinker Boat Co., Inc. (2009) 174 Cal.App.4th 1297, 1303 [95 Cal.Rptr.3d 285] (Mexia).) "Such fitness is shown if the product `is "in safe condition and substantially free of defects" ....' [Citation.]" (Ibid.; see American Suzuki, supra, 37 Cal.App.4th at page 1296 [implied warranty does not promise to fulfill buyer's expectations, but provides instead for minimum level of quality].) Thus, a new car need not "be perfect in every detail"; rather, its implied merchantability "requires only that a vehicle be reasonably suited for ordinary use." (Keegan v. American Honda Motor Co., Inc. (C.D.Cal. 2012) 838 F.Supp.2d 929, 945.)
Relying on American Suzuki, supra, 37 Cal.App.4th at page 1296, Hyundai suggests "the implied warranty of merchantability can be breached only if the vehicle manifests a defect that is so basic it renders the vehicle unfit for its ordinary purpose of providing transportation." As the trial court correctly recognized, however, a merchantable vehicle under the statute requires more than the mere capability of "just getting from point `A' to point `B.'"
The court in Isip v. Mercedes-Benz USA, LLC (2007) 155 Cal.App.4th 19, 25, 65 Cal.Rptr.3d 695 (Isip), aptly explained that "[t]he above quoted language in American Suzuki was from a much different context .... The issue in American Suzuki was whether the trial court had properly certified for class treatment the plaintiffs' claims that vehicles they had purchased were prone to rolling over and therefore breached the implied warranty of merchantability. [Citation.] However, because the majority of the plaintiffs' vehicles had not rolled over, the claim was too speculative to warrant class certification. It was in the context of discussing cases in which no damage had been suffered that the court wrote that a vehicle violates the implied warranty of merchantability only if the vehicle is unfit for its ordinary purpose of providing transportation. [Citation.]"
Consequently, the court in Isip rejected the defendant's suggestion there that a vehicle "necessarily does not violate the implied warranty of merchantability" if it can simply "provide[] transportation from point A to point B." (Isip, supra, 155 Cal.App.4th at p. 27, italics added.) We agree this notion misstates the law.
Isip, however, provides just one example of a breach of the implied warranty of merchantability, and does not purport to establish the only manner in which a seller violates the warranty. To the contrary, an important consideration under the implied warranty is consumer safety. (Mexia, supra, 174 Cal.App.4th at p. 1303.) As Isip explained, the implied warranty ensures not simply a product "`substantially free of defects,'" but in particular that "a vehicle ... is `in safe condition ....'" (Isip, supra, 155 Cal.App.4th at p. 27; see Carlson v. General Motors Corp. (4th Cir. 1989) 883 F.2d 287, 297 [a merchantable vehicle is "`substantially free of defects'" and "`can provide safe, reliable transportation'" (italics added)].)
Hyundai contends Brand's safety "argument is specious" because "[i]f open sunroofs rendered cars unfit for their ordinary purpose, then no cars would have sunroofs." The contention is itself specious, however, because it ignores the element of surprise and lack of control that differentiate a properly working sunroof and one that, as Brand describes it, spontaneously
Hyundai suggested for the first time at oral argument that its assertedly successful repair nullified Brand's rescission demand because Hyundai fixed the sunroof before Brand filed his lawsuit. As noted, however, we must view the record most favorably to the plaintiff, and nothing in Brand's evidence established the repair was successful. Hyundai cites no authority that it is entitled to deny rescission and enjoy an open-ended repair window until the plaintiff sues.
Hyundai insists it is entitled to at least 30 days to repair the vehicle, consistent with the period allowed by statute under express warranties. (§ 1793.2, subd. (b).) But clearly established law "reject[s] the ... argument" that express warranty provisions "concerning replacement or repair of defective goods should be applied" to implied warranty breaches. (Mocek, supra, 114 Cal.App.4th at p. 407; see Music Acceptance Corp. v. Lofing (1995) 32 Cal.App.4th 610, 620-621 [39 Cal.Rptr.2d 159] (Music Acceptance).) The Legislature drew the distinction between implied and express warranty remedies, and it is not our province to change it. (In re Marriage of Tavares (2007) 151 Cal.App.4th 620, 628 [60 Cal.Rptr.3d 39] ["The Legislature declares state public policy, not the courts."].)
Simply put, for fundamental defects triggering the statutory implied warranty, the buyer is not required to await a seller's attempt to make repairs (Mocek, supra, 114 Cal.App.4th at pp. 406-408), and this is particularly true where the seriousness of the defect reasonably undermines the buyer's confidence in the vehicle (cf. id. at p. 405 [after trailer appliances and breaker panel malfunctioned with "sparks and smoke," buyer testified "`there [was] no way that I would be comfortable that the thing was truly repaired as if it were a brand[]new trailer'"]).
At argument, Hyundai complained of potential unfairness in the year-long implied warranty term. (§ 1791.1, subd. (c); Atkinson v. Elk Corporation of Texas (2006) 142 Cal.App.4th 212, 229-231 [48 Cal.Rptr.3d 247] [breach of implied warranty of merchantability need not be present at delivery, but may occur any time within first year after the sale].) Again, however, the Legislature has established this policy for consumer protection and Hyundai may direct its concerns to that body. We note, in any event, that a buyer's measure of damages for a breach of warranty is calculated at the time the buyer learns of the breach. (See § 1794, subd. (b)(1), citing Cal. U. Com. Code, § 2713.) Accordingly, a buyer seeking to repudiate a contract for an asserted warranty breach arising well after sale or delivery is not likely entitled to a full refund and free use of the goods until that point, but rather a damages remedy consistent with the severity of the problem and when it arose, including perhaps a prorated return. These issues are not before us, however, given the defect in Brand's Hyundai was present at the outset and because damages are quintessentially for a jury to resolve, rather than by nonsuit.
Hyundai is also mistaken in relying on Allen's service records stating Brand's sunroof either would not open or sometimes opened randomly, but
The judgment is reversed and the matter is remanded for proceedings consistent with this opinion. Appellant is entitled to his costs on appeal.
Rylaarsdam, Acting P. J., and Ikola, J., concurred.