Krieger v. Nick Alexander Imports, Inc.

• Citation: 234 Cal.App.3d 205,285 Cal.Rptr. 717
• Decision Date: 20 September 1991
• Docket Number: No. B053266,B053266
• Court: California Court of Appeals
• Parties: , 15 UCC Rep.Serv.2d 895 Ethel KRIEGER, et al., Plaintiffs and Appellants, v. NICK ALEXANDER IMPORTS, INC., Defendant and Respondent.

Page 717

285 Cal.Rptr. 717

234 Cal.App.3d 205, 15 UCC Rep.Serv.2d 895

Ethel KRIEGER, et al., Plaintiffs and Appellants, v. NICK ALEXANDER IMPORTS, INC., Defendant and Respondent.

No. B053266.

Court of Appeal, Second District, Division 4, California.

Sept. 20, 1991.

Daniel M. Shapiro and Susan P. Butler, for plaintiffs and appellants.

Marjorie E. Motooka, Schaffer & Lax, for defendant and respondent.

EPSTEIN, Associate Justice.

Ethel Krieger, as executrix of the Estate of Norman Krieger, and Robert Krieger (hereinafter appellants or the Kriegers) appeal from a judgment entered against them following the granting of a motion for summary judgment on their complaint for damages arising from the alleged defective performance of an automobile. The vehicle was purchased for Robert Krieger by Norman Krieger from respondent Nick Alexander Imports, Inc. (respondent). The trial court granted respondent's motion for summary judgment on causes of action for violation of the Song-Beverly Consumer Warranty Act (Civ.Code, § 1793.2); misrepresentation; breach of the covenant of good faith and fair dealing; breach of express warranty and negligence. The court concluded that each cause of action was barred by the applicable statute of limitations. On appeal, the Kriegers concede that their action for negligence is barred, but argue that the remaining actions are not barred. We conclude that based on the record before us appellants are entitled to proceed to trial on their causes of action under the Song-Beverly Act, for misrepresentation, and for breach of express warranty, and we reverse the judgment as to those counts. We affirm the judgment as to the cause of action for breach of covenant of good faith and fair dealing.

FACTUAL AND PROCEDURAL HISTORY

On December 31, 1983, Norman Krieger, now deceased, purchased a BMW automobile for his son Robert Krieger from respondent. Within 24 hours, a portion of the drive train fell out. During the following five months, the automobile was returned to respondent for servicing five times. The car was last serviced by respondent on May 30, 1984.

At that time, Robert Krieger determined that respondent could not repair his car, and took it to another BMW dealer. The new dealer was selected at the suggestion of BMW of North America. In October 1984, Robert Krieger filed a complaint against respondent with the Automotive Consumer Action Program (AUTOCAP), an entity sponsored by the Motor Car Dealers Association of Southern California. ¹

Appellants filed a verified complaint against BMW of North America, Inc., respondent, and two other BMW dealerships on February 5, 1988. ² The complaint alleged five causes of action: (1) breach of warranty (Civ.Code, §§ 1792-1795.5), (2) misrepresentation, (3) breach of the covenant of good faith and fair dealing, (4) breach of written warranty, and (5) negligence. Appellants sought general damages, replacement of the automobile with another, incidental and special damages, and on the causes of action for misrepresentation and breach of the covenant of good faith and fair dealing, damages for emotional distress and punitive damages.

In July 1990, respondent brought a motion for summary judgment, or in the alternative, for summary adjudication of the issues. The primary ground of the motion was that each cause of action was barred by the applicable statute of limitations. Following oral argument, the trial court ruled that "2. The motion for summary judgment in favor of defendant Nick Alexander Imports, Inc. against plaintiffs is granted on the time-bar theories advocated by the movant. Plaintiffs have not laid a foundation indicating applicability of the tolling provisions of Civ. C. 1793.2(e)(2) against movant. [p] 3. All the papers submitted, the admissible evidence, and the reasonable inferences from that evidence show that there is no triable issue as to any material fact, that the movant is entitled to a judgment as a matter of law, that the action has no merit as to movant, and that plaintiffs have presented no triable issue of material fact as to movant. CCP 437c(c)." Judgment was entered, and appellants filed a timely notice of appeal pursuant to Code of Civil Procedure section 437c, subdivision (l ).

DISCUSSION

I Breach of Warranty

Appellants' first cause of action alleges breach of the warranty provisions of the Song-Beverly Consumer Warranty Act ("the Act"). (Civ.Code, §§ 1792-1795.5.) The fourth cause of action alleges breach of a written warranty to repair the vehicle within 36 months of its purchase or during the first 36,000 miles of its use, whichever first occurs. We treat these causes of action together because of our conclusion, discussed below, that they are governed by the same statute of limitations, California Uniform Commercial Code section 2725.

Respondent moved for summary judgment on the ground that the first cause of action was barred either under the general three-year statute of limitations for a liability created by statute, or the four-year statute of limitations for breach of warranty under California Uniform Commercial Code section 2725. Respondent also argued that the fourth cause of action was barred by California Uniform Commercial Code section 2725. The trial court granted the motion on the ground that each cause of action was untimely, but did not indicate which limitation period it applied.

Relying on Civil Code section 1793.2, subdivision (e)(1), appellants argue that their first cause of action did not accrue until one year after delivery of the automobile, or until the odometer reached 12,000 miles. Alternatively, they contend that both the three-year and four-year limitations periods were tolled by the provision for alternative dispute resolution within the Act, or by the doctrine of equitable tolling. Appellants argue that their fourth cause of action accrued in May 1984, on discovery of the breach of warranty by respondent.

Respondent contends that the first cause of action accrued no later than December 1984, and therefore is barred by the three-year limitations period of Code of Civil Procedure section 338. It argues that the statutory tolling period for alternative dispute resolution does not apply and that appellants cannot raise the doctrine of equitable tolling for the first time on appeal. As to the fourth cause of action, respondent asserts that it accrued on delivery of the automobile on December 31, 1983, and is therefore barred under California Uniform Commercial Code section 2725.

The question of which limitations period applies to an action under the Act is a matter of first impression. As we shall explain, we conclude that the four-year limitations period of California Uniform Commercial Code section 2725 governs both the first cause of action for breach of the Act and the fourth cause of action for breach of warranty. Each cause of action accrued no later than May 1984, when appellants concluded that respondent was unable to adequately service the automobile and sought another repair agency. The action was timely since it was filed within four years.

A. Standard of Review

"Summary judgment is proper where the evidence in support of the moving party is sufficient to sustain a judgment in his favor and there are no triable issues of fact to be determined. [Citations.] The party moving for summary judgment has the burden initially to establish evidentiary facts of every element necessary to entitle him to judgment. [Citation.] Where, as here, defendant is the moving party, he must either negate a necessary element of plaintiff's case or establish a complete defense. [Citation.] That burden extends to matters which plaintiff would have to prove at trial. [Citation.] The reviewing court conducts a de novo examination to see whether the moving party is entitled to summary judgment as a matter of law or whether there are any genuine issues of material fact. [Citation.]" (Enterprise Leasing Corp. v. Shugart Corp. (1991) 231 Cal.App.3d 737, 744, 282 Cal.Rptr. 620.) ³

B. The Controlling Limitations Period

We begin with a review of the statutory schemes applicable to purchases of consumer goods. Sales of consumer goods are governed by two overlapping California statutory provisions.

In 1963, the Legislature enacted the California adaptation of the Uniform Commercial Code. (Stats.1963, ch. 819.) The new law became effective January 1, 1965. (Ibid.) The California Uniform Commercial Code defines three kinds of warranty relevant to consumer purchases: express warranty, the implied warranty of merchantability, and the implied warranty of fitness for a particular purpose. (Cal.U.Com.Code, §§ 2313, 2314, 2315.) The California Uniform Commercial Code remedies include the right to reject non-conforming goods, to revoke acceptance, to cover by purchasing substitute goods, and to recover damages for breach of warranty. (Cal.U.Com.Code, §§ 2711-2721.) Punitive damages are not available. A seller is permitted to limit its liability for defective goods by disclaiming or modifying a warranty. (Cal.U.Com.Code, § 2316.)

These provisions of the code are limited in providing effective recourse to a consumer dissatisfied with a purchase. They make no provision for punitive damages, attorney's fees, consequential damages beyond those attendant to a substitute purchase, or for court supervised performance of warranties. (See Mueller, Contracts of Frustration (1969) 78 Yale L.J. 576 discussing the California Uniform Commercial Code with respect to consumer, as opposed to commercial, sales.)

The Song-Beverly Consumer Warranty Act was enacted in 1970. (Stats.1970, ch. 1333.) The Act regulates warranty terms, imposes service and repair obligations on manufacturers, distributors, and retailers who make express warranties, requires disclosure of specified information in express warranties, and broadens a buyer's remedies to include costs, attorney's fees, and civil penalties. (Civ.Code, §§ 1790-1795.8; see ...