Anderson v. Ford Motor Co.

• Citation: 290 Cal.Rptr.3d 89,74 Cal.App.5th 946
• Decision Date: 08 February 2022
• Docket Number: C089603
• Parties: Shelby ANDERSON et al., Plaintiffs and Appellants, v. FORD MOTOR COMPANY, Defendant and Appellant.
• Court: California Court of Appeals

74 Cal.App.5th 946

290 Cal.Rptr.3d 89

Shelby ANDERSON et al., Plaintiffs and Appellants,

v.FORD MOTOR COMPANY, Defendant and Appellant.

C089603

Court of Appeal, Third District, California.

Filed February 8, 2022

Certified for Partial Publication.^*

Knight Law Group, Lauren A. Ungs, Los Angeles, and Roger Kirnos; The Altman Law Group, Bryan C. Altman and Christopher Urner, Los Angeles; Greines, Martin, Stein & Richland, Cynthia E. Tobisman and Gary J. Wax, Los Angeles, for Plaintiffs and Appellants.

Greenberg Traurig and Jeff Eric Scott, Los Angeles; Jones Day, Nathaniel P. Garrett, San Francisco, David J. Feder, Los Angeles, Emily F. Knox, San Francisco, and Margaret A. Maloy, San Diego, for Defendant and Appellant.

MURRAY, J.^**

In October 2004, plaintiff Shelby Anderson (individually, plaintiff) and his wife, plaintiff Tammy Anderson (Tammy), bought a Ford Super Duty F-250 6.0 liter diesel pickup truck containing an engine sourced from nonparty ITEC, also known as Navistar (Navistar). Plaintiff intended to use the truck into his retirement for hunting and fishing trips as well as camping trips with his wife. He intended to tow a camping trailer, a horse trailer, and his boat. Plaintiff chose the Ford for its power, towing capacity, and other qualities as represented by defendant Ford Motor Company (Ford) in brochures and advertisements and by Ford dealership sales agents. Unbeknownst to plaintiffs, prior to and following launch, the vehicle line containing the 6.0 liter Navistar diesel engine was plagued with numerous problems with its air management system including the turbo, fuel injectors, and other components. Plaintiff began experiencing issues with the truck during his second year of ownership. After numerous attempts to have the vehicle repaired so it could perform the functions for which they purchased it, plaintiffs effectively gave up, rendering the truck a "driveway ornament."

After opting out as putative members of a class action involving the 6.0 liter diesel engine, plaintiffs sued Ford. The jury found in favor of plaintiffs on their cause of action pursuant to the Song-Beverly Consumer Warranty Act (Song-Beverly Act), popularly known as the "lemon law" ( Civ. Code, § 1790 et seq. ),¹ their cause of action pursuant to the Consumers Legal Remedies Act (CLRA) (§ 1750 et seq.), and their fraud in the inducement–concealment cause of action. The jury awarded plaintiffs $47,715.60 in actual damages, which was the original purchase price of the truck, $30,000 in statutory civil penalties under the Song-Beverly Act, and $150,000 in punitive damages. The trial court granted plaintiffs’ motion for attorney fees in the amount of $643,615.00.

Ford appeals, asserting (1) plaintiffs’ compensatory damages award must be reversed because they failed to produce any evidence to establish the actual value of the truck at the time of purchase, (2) plaintiffs cannot recover both a statutory civil penalty under the Song-Beverly Act and punitive damages for what Ford maintains was "substantially the same conduct," and (3) the trial court's attorney fee award "falls with the judgment."

Plaintiffs filed a cross-appeal raising three issues, although they note that, if we affirm the judgment, we need not reach the issues raised in their cross-appeal.

We affirm the judgment and damages awards. Because we do so, we do not reach the issues raised in plaintiffs’ cross-appeal. Accordingly, we dismiss the cross-appeal as moot.

FACTUAL AND PROCEDURAL BACKGROUND

Plaintiffs asserted six causes of action in the operative complaint: fraud in the inducement—intentional misrepresentation; fraud in the inducement—concealment; negligent misrepresentation;² fraud in the performance of a contract—intentional misrepresentation; violation of the CLRA; and violation of the Song-Beverly Act.

Plaintiffs’ Experiences with the Ford Truck and Attempts to Repair

Planning for his retirement, plaintiff decided he was going to buy a new vehicle. Being an "outdoor kind of guy" who enjoyed fishing and hunting, he wanted a new truck. Based on his needs, as well as a bad experience he had with a smaller vehicle, plaintiff decided he "needed something big." Plaintiff wanted a "big strong powerful truck." He wanted something that could tow whatever camping trailer he acquired. He also intended to use the truck to tow his boat and a horse trailer.

Considering different vehicles, he focused on "basic towing capacity, how strong and how powerful these vehicles were." Plaintiff was drawn to the Ford truck, as it was touted as "best in class. It had the most horsepower at that time and the best towing capacity and the most torque." Plaintiff collected most of the information he used in making his decision from a brochure and from television commercials. He believed the information in the brochure. As for the Ford commercials: "Their advertisements really showed the vehicle pulling and towing and the power and the torque and they would show a horse trailer. They would show a camping trailer. They would show it going through the mud over rough terrain in the dirt and it's like, ‘That's—that's what I'm looking for.’ "

Plaintiff also spoke to Ford salespeople, who verified information in the brochure. They reassured him the Ford truck was the best in its class, the best and most dependable truck on the market. Plaintiff had no doubt the Ford was capable of towing, and the Ford salespeople confirmed as much. Plaintiff relied on all of the information provided by Ford and Ford salespeople.

Plaintiff considered a Chevy, but, "when it came down to ... putting them side-by-side the Ford was best in class, strongest motor, most horsepower, most torque, longevity. This motor, you know, with the knowledge that I had at that particular time I was expecting a very long time of ownership of this truck." He was drawn to the diesel version because it had a stronger motor, more power, more torque, and was more economical and long-lasting.

On October 21, 2004, plaintiffs agreed to purchase a new 2005 Ford F-250 "Super Duty" truck from Big Valley Ford in Stockton. The total sale price was $47,715.60. The truck came with limited warranties, including a limited three-year/36,000 mile bumper-to-bumper warranty, a limited five-year/100,000 mile 6.0L Powerstroke Diesel Engine warranty, and an additional limited emissions warranty of "three years, 50,000 miles or seven years, 70,000 miles ... depending on the causal part that the failure is related to." Other than the home he shared with his wife, the Ford truck "was the most expensive thing [plaintiff] had ever bought."

Initially, plaintiff loved his new truck. "It was like a dream come true. It was like ‘Wow, this is really mine’. [He] was just very, very excited." However, during the second year that plaintiff owned the truck, the check engine light began to come on intermittently. Plaintiff contacted Ford and was told that, if it happened again, he should bring it in. Eventually, plaintiff brought the truck to the dealership. By this time, the truck had been driven 44,067 miles. When plaintiff saw the repair order upon picking up the truck, he was surprised about how much work had been performed. The repair invoice (exhibit 10), dated August 2007, indicated that technicians replaced the turbo. Anthony Micale, plaintiffs’ automotive forensic expert, characterized the turbo as the "heart" of the engine and the "core of what makes this engine what it is." Pursuant to a recall, technicians changed the exhaust pressure sensor, which is one of the parts of the air management system. Technicians also had to steam clean the engine, a necessary measure when oil leaks result in "a lot of oil around the area" of the engine. Technicians also recalibrated the engine software.

The first time plaintiff tried to tow anything heavy was in September 2007. He and his wife rented a camping trailer to go to Gualala. As they drove on the coastal highway, they started up a steep grade when "all of a sudden this truck started making a—like it was barking at me like woof, woof, woof, woof ...." It also started shimmying. Believing the truck was going to stall, plaintiff looked for a place to pull off the road. He could not step on the gas; "[i]t couldn't go anymore." The truck just coasted. Plaintiff kept the truck "going forward so that I wouldn't cause an accident or I wouldn't disrupt the flow of traffic on the highway there and I tried to find a safe spot to pull this thing off so that I can get an idea of what just happened." Plaintiff's wife was "extremely scared." At the top of the grade, there was a pullout, so plaintiff pulled over and parked.

Plaintiff called the dealership after this experience. The dealership asked if the check engine light was on, and, when plaintiff responded that it was not, the dealership replied, "if it happens again, give us a call and we'll take a look at it."

Plaintiff brought the truck to the dealership in October 2008. At that time, the truck had 51,860 miles. The repair invoice (exhibit 13) indicated an oil leak from the bed plate gaskets. Additionally, the dealership again had to steam clean. Technicians installed a new bed plate gasket, a new front and rear cover gasket and seal. The invoice indicated plaintiff complained of a loud "chirp squeal" under the hood while towing a trailer. However, other than a road test, the invoice did not indicate technicians did anything to determine what the nature of the problem was. The invoice also did not indicate the road test entailed going up a grade or pulling a load.

Plaintiffs brought the truck in again approximately two months later, in December 2008. The truck had 52,404 miles on it. The repair invoice indicated technicians thought there was an oil leak at the rear of the engine. Additionally, there appeared to have been a coolant leak. A leak was coming from the top of the oil cooler, and, again, they had to replace gaskets. The mileage out, meaning the mileage when the vehicle...