NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
BOREN, P.J.
Weber DeSiqueira filed suit individually and on behalf of California consumers who purchased Toyota vehicle service contracts: he claims that the service contracts cover the same items as the factory warranty, thereby violating the Song-Beverly Consumer Warranty Act (the Warranty Act), found in Civil Code section 1790 et seq. The Warranty Act allows a service contract to overlap a manufacturer's warranty if the contract "covers items or costs not covered by the express warranty." (Civ. Code, § 1794.41, subd. (a)(3).) It is undisputed that Toyota's service contract covers costs not covered by the manufacturer's warranty. Although DeSiqueira cannot state a claim under the Warranty Act, the trial court abused its discretion by not allowing DeSiqueira to amend his complaint to allege that Toyota used false advertising or made misrepresentations to consumers at dealerships to induce them to enter the service contracts.
FACTS1
DeSiqueira purchased a Toyota Tundra on December 16, 2007. His Tundra came with Toyota's new vehicle limited warranty (the Warranty). The Warranty "covers repairs and adjustments needed to correct defects in materials or workmanship" for three years or 36,000 miles, whichever occurs first. It also covers defects in the powertrain, restraint system and emission system, as well as corrosion, for varying periods of time.
When DeSiqueira purchased the Tundra, he contracted for a "Toyota Extra Care Vehicle Service Agreement" (the Contract). This is an extended service contract administered by Toyota Motor Insurance Services, Inc. Toyota Motor Sales, U.S.A., Inc., is the "obligor" under the Contract.2 DeSiqueira paid $1,145 for seven years of service or 75,000 miles, whichever occurs first. The cost is contingent upon length: the longer the service contract, the higher the price. The time on the Contract begins on the date the vehicle was first placed in service, and the covered mileage is "total vehicle odometer miles starting at zero . . . ."
DeSiqueira alleges that the Contract "covered the same items as the original factory warranty." Incorporated by reference into DeSiqueira's pleading are copies of the Warranty and the Contract. A comparison of the two documents shows that the benefits provided by the Contract are not identical to those listed in the Warranty. For example, if the vehicle becomes inoperable when the purchaser is over 150 miles from home, the Contract provides a "dislocation benefit" of $100 per day for up to five days to cover food and lodging. By contrast, the Warranty does not provide the purchaser with dislocation benefits.
PROCEDURAL HISTORY
DeSiqueira filed suit in May 2009, voluntarily amending his pleading as a matter of right in response to Toyota's demurrer. His first amended complaint asserts that Toyota violated the Warranty Act by selling service contracts that duplicate the manufacturer's express warranty. A second cause of action asserts unlawful business practices, based on Toyota's alleged violation of the Warranty Act.
Toyota demurred anew after DeSiqueira filed his first amended complaint. The trial court sustained Toyota's demurrers without leave to amend.3 The court determined that "a service agreement and a manufacturer's warranty may overlap, so long as the vehicle service agreement offers additional benefits." Because the challenged service agreement offers additional benefits to consumers, the court concluded that Toyota did not violate the Act. The court gave judgment to Toyota. The appeal is timely.
DISCUSSION
1. Appeal and Review
Appeal lies from the court's judgment in favor of Toyota. (Code Civ. Proc., § 904.1, subd. (a)(1).) We review de novo the ruling on the demurrer, exercising our independent judgment to determine whether a cause of action has been stated. (Desai v. Farmers Ins. Exchange (1996) 47 Cal.App.4th 1110, 1115.) The demurrer tests the sufficiency of the plaintiff's claims as a matter of law. The only ruling reviewed for an abuse of discretion is the trial court's refusal to grant leave to amend. (Traders Sports, Inc. v. City of San Leandro (2001) 93 Cal.App.4th 37, 43-44.)
2. Alleged Violation of the Song-Beverly Consumer Warranty Act
The Warranty Act describes the requirements for consumer service contracts. A service contract is an agreement "to perform, over a fixed period of time or for a specified duration, services relating to the maintenance or repair of a consumer product . . . ." (Civ. Code, § 1791, subd. (o).) Service contracts are sold in addition to or in lieu of express warranties. (Civ. Code, § 1794.4, subd. (a); Gavaldon v. DaimlerChrysler Corp. (2004) 32 Cal.4th 1246, 1256-1257.) Apart from covering repair or maintenance services for a specific duration, a vehicle service contract may provide "additional benefits" such as towing, substitute transportation, emergency road service, rental car reimbursement, reimbursement for deducible amounts under a manufacturer's warranty, and reimbursement for travel, lodging or meals. (Ins. Code, § 12800, subd. (c)(2).)
Under the Warranty Act, service contracts apply "only to items, costs, and time periods not covered by the express warranty. However, a service contract may run concurrently with or overlap an express warranty if (A) the contract covers items or costs not covered by the express warranty or (B) the contract provides relief to the purchaser not available under the express warranty, such as automatic replacement of a product where the express warranty only provides for repair." (Civ. Code, § 1794.41, subd. (a)(3), italics added.) The statute prevents a service contract from covering the same items as an express warranty. (Gavaldon v. DaimlerChrysler Corp., supra, 32 Cal.4th at p. 1256.)
The Contract in this case differs from the Warranty in three respects. First, the Contract provides reimbursement for food and lodging expenses when the purchaser is stranded by a mechanical breakdown. The Warranty does not provide dislocation benefits. Second, the Contract provides "substitute transportation expenses" of $50 per day for five days, any time the vehicle is undergoing repairs. By contrast, the Warranty offers a "transportation assistance policy," which makes a purchaser "eligible for transportation assistance if your Toyota must be kept overnight for warranty-covered repairs." The Warranty's transportation policy does not apply if repairs can be completed in one day but the vehicle is kept overnight due to dealer or owner scheduling conflicts. Third, the Contract entitles the purchaser to reimbursement for towing expenses if a covered component fails, "to the nearest dealership or authorized repair facility." Towing service under the Warranty is not permitted to a non-Toyota repair facility. The Contract provisions fall squarely within the "additional benefits" listed in Insurance Code section 12800.
DeSiqueira does not dispute that the Contract is broader than the Warranty. He acknowledges that the Contract "provide[s] some additional benefits" beyond the scope of the Warranty, but characterizes the benefits as "minor," "trivial" or "inconsequential." DeSiqueira theorizes that only the Contract's "additional benefits" run concurrently with the Warranty under the Act, and thus, "[t]he time period for coverage under a service contract for items, costs or relief which are the same as those found in a manufacturer's warranty may not run concurrently with or overlap the manufacturer's warranty." Under DeSiqueira's interpretation, he would receive 10 years of vehicle repairs: three years under the manufacturer's Warranty, followed by seven more years under the Contract.
DeSiqueira's interpretation contradicts the statutory language. On its face, Civil Code section 1794.41 allows a vehicle service contract to "run concurrently with or overlap" a warranty if the contract "covers items or costs not covered by the express warranty." The statute does not circumscribe the "items or costs" covered by the service contract, nor does the statute set a dollar amount on the value of the additional benefits conferred by the service contract. It is irrelevant that DeSiqueira has a dismal opinion of the importance or value of the Contract's additional benefits. Another purchaser—one who takes his Tundra outside the county to explore desolate areas—might find the expanded towing, rental car reimbursement and dislocation benefits to be very useful. Because the Contract indisputably covers costs beyond the scope of the Warranty for all seven years of its term, the Contract falls within the plain language of the statute.4
Legislative history need not be consulted when, as here, the statutory language is plain and unambiguous. (Miklosy v. Regents of University of California (2008) 44 Cal.4th 876, 888.) Even if we examine the legislative history, it does not affect our interpretation of the statute. The initial version Civil Code section 1794.41, subdivision (a)(3) first appeared in January 1990, in Assembly Bill 2226. The Assembly bill stated, without more, "The contract is applicable only to items, costs, and time periods not covered by express warranty." In other words, the initial legislation did not allow a service contract to run in the same time period as the manufacturer's warranty. Subsequent input from industry representatives and state administrative agencies prompted legislative redrafting, based on comments that service contracts sometimes offer expanded items or services not found in the warranty, or provide for automatic product replacement instead of mere warranty repairs; in these circumstances, the service contract may legitimately overlap or run concurrently with the express warranty. The law that was signed by the Governor in September 1990 included, almost verbatim, the qualifying language suggested in the comments, which appears as the second sentence of Civil Code section 1794.4, subdivision (a)(3).
3. Alleged Violation of the Unfair Competition Law
DeSiqueira's second cause of action alleges a violation of the Unfair Competition Law (UCL), which prohibits "any unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising . . . ." (Bus. & Prof. Code, § 17200.) The UCL "borrows" violations of other laws and treats them as independently actionable unlawful practices under the UCL. (California Consumer Health Care Council v. Kaiser Foundation Health Plan, Inc. (2006) 142 Cal.App.4th 21, 27; Walker v. Countrywide Home Loans, Inc. (2002) 98 Cal.App.4th 1158, 1169-1170.) DeSiqueira's UCL claim is based upon an alleged violation of the Warranty Act. As discussed in the preceding section, there was no violation of the Warranty Act.
4. Request for Leave to Amend
DeSiqueira seeks leave to amend his pleading. At the demurrer hearing, counsel asked the court to "allow me to file a brief as to why I believe I should be allowed leave to amend." After taking the matter under submission, the court sustained the demurrers without leave to amend. DeSiqueira now asks to amend his complaint to state claims under (1) the UCL's fraud and unfairness prongs, (2) the Consumer Legal Remedies Act (CLRA), and (3) the false advertising law. Toyota objects that DeSiqueira's proposed new claims are premised on facts and legal theories that were not pleaded in his complaint or argued in the trial court. Toyota relies on Sangster v. Paetkau (1998) 68 Cal.App.4th 151, 163, for the notion that we are limited to the facts considered by the trial court. Sangster is irrelevant because it involved a motion for summary judgment, not a demurrer.
A plaintiff's failure to request leave to amend in the trial court does not bar him from making that request for the first time on appeal. The propriety of an amendment to the complaint is an issue that is "open on appeal even though no request to amend such pleading was made" in the trial court. (Code Civ. Proc., § 472c, subd. (a); City of Stockton v. Superior Court (2007) 42 Cal.4th 730, 746; Mercury Ins. Co. v. Pearson (2008) 169 Cal.App.4th 1064, 1072.) "[L]eave to amend is properly granted where resolution of the legal issues does not foreclose the possibility that the plaintiff may supply necessary factual allegations. [Citations.] If the plaintiff has not had an opportunity to amend the complaint in response to the demurrer, leave to amend is liberally allowed as a matter of fairness, unless the complaint shows on its face that it is incapable of amendment." (City of Stockton v. Superior Court, supra, 42 Cal.4th at p. 747.) Plaintiff must spell out in his brief how an amendment can cure a defect or change the legal effect of the pleading. (Long v. Century Indemnity Co. (2008) 163 Cal.App.4th 1460, 1467-1468; People ex rel. Brown v. Powerex Corp. (2007) 153 Cal.App.4th 93, 112.)
DeSiqueira proposes to allege that Toyota—in its advertising and in the way its network of automobile dealers sell service contracts—engages in deceptive and misleading sales practices, deceiving or lulling consumers into believing they are receiving greater coverage under the service contract than is actually provided, at least as to those items covered by both the Warranty and the Contract.
DeSiqueira seeks to assert that Toyota engaged in "unfair or fraudulent" acts under the UCL, whereas he previously claimed that Toyota's acts were "unlawful" under the UCL. Specifically, he is claiming that deceptive advertisements or misrepresentations were made to consumers about the service contracts. To make such a claim, it is necessary only to show that members of the public are likely to be deceived; however, the plaintiff asserting such a claim is limited to equitable remedies, and restrictions are placed on class action suits. (In re Tobacco II Cases (2009) 46 Cal.4th 298, 311-329.) A violation of the UCL's fraud prong is also a violation of the false advertising law. (Id. at p. 312, fn. 8.) The CLRA (Civ. Code, § 1750 et seq.) applies to transactions intended to result in the sale of goods or services. It prohibits deceptive representations that goods or services have characteristics, uses, or benefits that they lack. (Civ. Code, § 1770, subd. (a)(5).)
At this stage in the proceeding, we cannot tell whether DeSiqueira will be able to state facts sufficient to constitute a cause of action under the fraud or unfairness prongs of the UCL, the CLRA, or the false advertising law. Given the judicial policy of liberality in allowing amendments to pleadings, DeSiqueira must be afforded an opportunity to amend to assert his new claims regarding Toyota's service contracts, and to allege facts showing that he (and other consumers) were deceived or misled by Toyota's advertising or by statements made at the Toyota dealership at the time of purchase. The trial court abused its discretion by refusing DeSiqueira's request to amend his pleading. If DeSiqueira chooses to amend, after remand, Toyota will have a new opportunity to demur to the amended pleading.
DISPOSITION
The judgment is reversed. The case is remanded to the trial court with directions to allow DeSiqueira to amend his complaint. The parties will bear their own costs on appeal.
We concur.
DOI TODD, J.
ASHMANN-GERST, J.
