Coelho v. Hyundai Motor Am.

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NADIA COELHO, Plaintiff, v. HYUNDAI MOTOR AMERICA, Defendant.

No. 22-cv-07670-BLF

United States District Court, N.D. California, San Jose Division

May 31, 2023

ORDER GRANTING IN PART AND DENYING IN PART MOTION TO DISMISS; DENYING MOTION TO STRIKE [RE: ECF NO. 6]

BETH LABSON FREEMAN, United States District Judge.

This is a lemon law case involving an allegedly defective 2017 Hyundai Sonata that Plaintiff Nadia Coelho purchased in 2021. Coelho asserts claims under state and federal law against Defendant Hyundai Motor America (“HMA”) for alleged breaches of express and implied warranties. HMA moves under Federal Rule of Civil Procedure 12(b)(6) to dismiss Coelho's claims and moves under Federal Rule of Civil Procedure 12(f) to strike Coelho's requests for rescission and attorney's fees in relation to her claim under the Magnuson-Moss Warranty Act. Mot., ECF No. 6; see also Reply, ECF No. 14. Coelho opposes HMA's motion. Opp'n, ECF No. 13.

This matter is suitable for determination without oral argument. See Civ. L.R. 7-1(b). For the following reasons, the motion to dismiss is GRANTED IN PART and DENIED IN PART. The motion to strike is DENIED.

I. BACKGROUND

Plaintiff Nadia Coelho purchased a 2017 Hyundai Sonata on June 6, 2021. Compl. ¶ 5, ECF No. 1-1. Coelho alleges that she received written warranties and other express and implied warranties when she purchased the vehicle, including a warranty that the vehicle would be free from all defects in material and workmanship. Id. ¶ 7. She also alleges that she was provided Hyundai's New Vehicle Limited Warranty, which includes basic warranty coverage with a term of 5 years or 60,000 miles and powertrain coverage with a term of 10 years or 100,000 miles. Id. ¶ 8.

On December 1, 2021, Coelho delivered the vehicle to a repair facility authorized by HMA or one of its agents. Id. ¶¶ 4, 11. Coelho notified HMA or one of its agents that the vehicle was facing complications related to several recalls, the illumination of the “HEV” warning light, the “Check Engine” warning light, and battery failure. Id. Coelho alleges that HMA has not repaired the vehicle. Id. ¶ 11.

Coelho brings claims against HMA for: (1) breach of express warranty under the Song-Beverly Act; (2) breach of implied warranty of merchantability under the Song-Beverly Act; (2) breach of express warranty under California Commercial Code Section 2313; and (4) violation of the Magnuson-Moss Warranty Act.

II. REQUEST FOR JUDICIAL NOTICE

HMA asks the Court to take judicial notice of three district court opinions: (1) Fish v. Tesla, 2022 WL 1552137 (C.D. Cal. May 12, 2022); (2) Neyra v. Mercedes-Benz USA, LLC, No. 2:22-cv-00950-JFW-JEM (C.D. Cal. May 24, 2022); and (3) Edwards v. Mercedes-Benz USA, LLC, No. 2:21-cv-02671-RSWL-JC (C.D. Cal. Oct. 5, 2022). See RJN, ECF No. 7. The opinions are attached to HMA's request for judicial notice as Exhibits A, B, and C, respectively. Coelho does not object to the request or question the authenticity of the opinions.

Documents in the public record and documents filed in other courts are proper subjects of judicial notice. Reyn's Pasta Bella, LLC v. Visa USA, Inc., 442 F.3d 741, 746 n.6 (9th Cir. 2006). Accordingly, the Court takes judicial notice of the three district court opinions submitted with HMA's request for judicial notice. The Court does not, however, take judicial notice of any of the facts found in the opinions. HMA's request for judicial notice is GRANTED.

III. MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM

A. Legal Standard

Under Federal Rule of Civil Procedure 12(b)(6), a court must dismiss a complaint if it fails to state a claim upon which relief can be granted. To survive a Rule 12(b)(6) motion, the plaintiff must allege “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). A claim is facially plausible when the plaintiff pleads facts that allow the court to “draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citation omitted). There must be “more than a sheer possibility that a defendant has acted unlawfully.” Id. While courts do not require “heightened fact pleading of specifics,” a plaintiff must allege facts sufficient to “raise a right to relief above the speculative level.” See Twombly, 550 U.S. at 555, 570.

When determining whether a claim has been stated, the Court accepts as true all well-pled factual allegations and construes them in the light most favorable to the plaintiff. Reese v. BP Expl. (Alaska) Inc., 643 F.3d 681, 690 (9th Cir. 2011). However, the Court need not “accept as true allegations that contradict matters properly subject to judicial notice” or “allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences.” In re Gilead Scis. Sec. Litig., 536 F.3d 1049, 1055 (9th Cir. 2008) (internal quotation marks and citations omitted). On a motion to dismiss, the Court's review is limited to the face of the complaint and matters judicially noticeable. MGIC Indem. Corp. v. Weisman, 803 F.2d 500, 504 (9th Cir. 1986); N. Star Int'l v. Ariz. Corp. Comm'n, 720 F.2d 578, 581 (9th Cir. 1983).

B. Discussion

1. Breach of Express Warranty Under the Song-Beverly Act (Claim 2)

Coelho asserts a claim for breach of express warranty under the Song-Beverly Act (“SBA”). “The Song-Beverly Act is a remedial statute designed to protect consumers who have purchased products covered by an express warranty.” Rodriguez v. FCA US, LLC, 77 Cal.App. 5th 209, 217 (2022) (quoting Robertson v. Fleetwood Travel Trailers of California, Inc., 144 Cal.App.4th 785, 798 (2006)). “To that end, it regulates warranty terms and imposes service and repair obligations on the parties who issue the warranties.” Id. (citing Joyce v. Ford Motor Co., 198 Cal.App.4th 1478, 1486 (2011)). A buyer “who is damaged by a failure to comply with any obligation under [the Act] . . . may bring an action for the recovery of damages and other legal and equitable relief.” Cal. Civ. Code § 1794(a).

Coelho seeks relief under the “refund or replace” provision of the SBA, California Civil Code section 1793.2(d)(2). See Compl. ¶¶ 29-30. That provision states that “[i]f the manufacturer or its representative in this state is unable to service or repair a new motor vehicle, as that term is defined in paragraph (2) of subdivision (e) of Section 1793.22, to conform to the applicable express warranties after a reasonable number of attempts, the manufacturer shall either promptly replace the new motor vehicle . . . or promptly make restitution to the buyer.” Cal. Civ. Code § 1793.2(d)(2). The statute defines “new motor vehicle” in relevant part as “a new motor vehicle that is bought or used primarily for personal, family, or household purposes,” and specifies that the definition includes “a dealer-owned vehicle and a ‘demonstrator' or other motor vehicle sold with a manufacturer's new car warranty.” Cal. Civ. Code § 1793.22(e)(2).

HMA argues that Coelho has failed to state a claim for breach of express warranty under the SBA because her vehicle is not a “new motor vehicle.” See Mot. 9. HMA contends that Coelho cannot allege that her vehicle is a “new motor vehicle” under the SBA because she purchased it used and cannot allege that it came with a full new car warranty from HMA. Id. Coelho concedes that she bought her vehicle used but argues that the vehicle qualifies as a “new motor vehicle” because the dealer who sold it to her provided “written warranties including express warranties from [HMA]” and “gave [her] a copy of [HMA's] warranty.” Opp'n 2-3.

Two key decisions from the California Court of Appeal bear on the Court's analysis. In the first, Jensen v. BMW of North America, Inc., the plaintiff sued a car manufacturer after the manufacturer could not repair certain defects in the car she leased. 35 Cal.App.4th 112, 119 (1995). When the plaintiff leased the car, the salesperson had “told [her] that the car had been used as a demonstrator for the dealership,” “said she would get the 36,000-mile warranty on top of the miles already on the car,” “gave her the warranty booklet,” and “wrote ‘factory demo' on the credit application.” Id. at 119-20. Unknown to the plaintiff, however, the defendant had obtained the car in an out-of-state auto action, and the car had been previously owned by a different entity. Id. at 120. On appeal, the manufacturer challenged the trial court's pretrial ruling that the car was a “new motor vehicle” under the SBA. Id. at 122. Analyzing Section 1793.22(e)(2), the Court of Appeal concluded that “cars sold with a balance remaining on the manufacturer's new motor vehicle warranty are included within [the SBA's] definition of ‘new motor vehicle'” and held that the plaintiff's car qualified as new motor vehicle. Id. at 121, 123, 126.

In Rodriguez v. FCA US, LLC, a different division of the California Court of Appeal revisited the definition of “new motor vehicle.” 77 Cal.App. 5th at 225.^[1] Contrary to the conclusion articulated in Jensen, the Rodriguez court held that definition does not include “previously sold cars accompanied by some balance of the original warranty.” Id. The court distinguished Jensen, noting that “Jensen involved a lease by a manufacturer-affiliated dealer who issued a full new car warranty along with the lease.” Id. at 223 (emphasis in original). The Rodriguez court also noted that other California Court of Appeal decisions had limited Jensen to its facts and expressed “reservations” about its seemingly broad holding. Id. at 224 (citing Dagher v. Ford Motor Co., 238 Cal.App.4th 905 (2015) and Kiluk v. Mercedes-Benz USA, LLC, 43 Cal.App. 5th 334 (2019)).

With...