Krotin v. Porsche Cars North America, Inc., B079295

• Decision Date: 18 August 1995
• Docket Number: No. B079295,B079295
• Citation: 45 Cal.Rptr.2d 10,38 Cal.App.4th 294
• Court: California Court of Appeals Court of Appeals
• Parties: , 95 Daily Journal D.A.R. 12,485 Mikhail KROTIN, et al., Cross-Complainants and Appellants, v. PORSCHE CARS NORTH AMERICA, INC., Cross-Defendant and Respondent.

Page 10

45 Cal.Rptr.2d 10

38 Cal.App.4th 294, 95 Daily Journal D.A.R. 12,485

Mikhail KROTIN, et al., Cross-Complainants and Appellants, v. PORSCHE CARS NORTH AMERICA, INC., Cross-Defendant and Respondent.

No. B079295.

Court of Appeal, Second District, Division 2, California.

Aug. 18, 1995.

As Modified on Denial of Rehearing

Sept. 14, 1995.

Taylor & Hodges, A. Clifton Hodges and Berta Peterson-Smith, Glendale for cross-complainants and appellants.

Law Offices of Robert W. Beck, A Professional Corporation, Robert W. Beck and Kristine J. Exton, Torrance, for cross-defendant and respondent.

Lewis, D'Amato, Brisbois & Bisgaard, Jonathon Kaplan, Russell G. Weiss, Los Angeles, Carroll, Burdick & McDonough, James W. Henderson, Jr., Geoffrey O. Evers and

Joanna R. Mendoza, Sacramento, for amici curiae on behalf of cross-defendant and respondent.

BOREN, Presiding Justice.

This is an action arising under the Song-Beverly Consumer Warranty Act, Civil Code sections 1790, et seq., commonly referred to as California's "lemon law" (hereinafter, the Act). The sole issue on appeal is whether the trial court prejudicially erred in instructing the jury that the lessee of a vehicle "who justifiably rejects or revokes acceptance of a vehicle must do so within a reasonable time after the lessee discovers the grounds for rejection or revocation." We find that to establish breach of warranty obligations under the Act, a formal rejection or revocation of acceptance of the vehicle after discovery of defects or nonconformities is not required, as distinguished from the manufacturer failing to offer restitution or replacement of the vehicle, on its own initiative or upon prompting by the consumer, after a reasonable number of attempts by the manufacturer to remedy the defects at any time during the warranty period. Nonetheless, the erroneous instruction does not warrant reversal, as it was unlikely to have misled the jury and become a factor in its verdict.

FACTS

Since the only contention on appeal relates to a jury instruction, "[i]n assessing an instruction's prejudicial impact, we cannot use the view of the evidence and inferences most favorable to the [prevailing party]. [Citations.] Instead, we must assume the jury might have believed [appellant's] evidence and, if properly instructed, might have decided in [appellant's] favor. [Citations.]" (Shell Oil Co. v. Winterthur Swiss Ins. Co. (1993) 12 Cal.App.4th 715, 773, 15 Cal.Rptr.2d 815.) Accordingly, we state the facts most favorably to the party appealing the instructional error alleged, in accordance with the customary rule of appellate review. (Sills v. Los Angeles Transit Lines (1953) 40 Cal.2d 630, 633, 255 P.2d 795.)

On October 3, 1987, Mikhail Krotin and Maya Krotin (hereinafter, the Krotins), signed a 60-month lease for a new 1987 Porsche 944. At the outset, the Krotins experienced problems driving the car in the morning after a cold start. After the car was initially started, it immediately died, and had to be restarted, sometimes several times. The car then proceeded very slowly even if accelerator was floored. In fact, acceleration after a cold start caused the car to shake. The problem subsided only after driving the car for 10 to 15 minutes. During the first two months of the lease, the Krotins brought the car into the dealership four times for repair of the problem. The dealership kept the car several days for service on each occasion. However, the cold-start problem persisted. As time passed, other problems developed. In November, a metallic sound began emanating from the engine on the front passenger side of the vehicle. Thereafter, the idle speed jumped up and down.

In February of 1988, the Krotins took the car to a different dealership for service regarding the same cold-start problems, as well as engine noise and the failure of the turbo feature to activate properly. The cold-start problems persisted, and the turbo problem still appeared intermittently. In March of 1988, the Krotins brought the car back to the original dealership, complaining again about the cold-start problem and the metallic sound. In April, the car was at the dealership for 11 days. The metallic sound was determined to be a heat shield rattle. But the cold-start problem persisted. In early May, an engineer from Porsche Cars of North America (hereinafter, Porsche) recommended replacing the computer, and the manufacturer's corporate headquarters recommended service at a third dealership. The car was at the dealership for five days. Mr. Krotin went to get the car, turned on the ignition with his key, and the engine died. The cold-start problems persisted. In May of 1988, the Krotins orally requested "a buy-back," which the corporate office rejected. At the 30,000 mile scheduled service check in October of 1989, the Krotins again complained of the cold-start problems, as well as a defective windshield washer, fog light and climate control. For another year, through October of 1990, the Krotins had the car in for service eleven times. The Krotins In January of 1991, the Krotins wrote to Porsche's corporate headquarters, indicated that the car was a lemon and requested their money back. At that time, the car was 39 months old and had approximately 60,000 miles on it. On February 4, 1991, the Krotins also wrote to Porsche Financial Services, with whom they had the lease agreement, and declared "this will be our last payment, and we revoke acceptance of this vehicle because this vehicle is a lemon." Also in February, the Krotins retained the services of an independent automotive expert, Louis Nanos, who inspected the car at a Porsche dealership and determined, based upon his assessment of a problem with the wiring harness and its relationship to the engine coolant temperature sensor, that the car was "[n]ot driveable." Thereafter, the Krotins kept the car at their house but did not drive it. Approximately nine months later, Porsche Financial Services repossessed the car.

brought the car to several different dealerships over years, but the cold-start problems were never repaired. ¹

Meanwhile, on March 16, 1991, Porsche Financial Services filed a complaint against the Krotins for recovery of the vehicle and breach of contract. On June 5, 1991, the Krotins filed a cross-complaint against Porsche for, inter alia, breach of express and implied warranty and violation of the Song-Beverly Consumer Warranty Act. On the allegations in the complaint, a stipulated judgment was entered at the time of trial in favor of Porsche Financial Services for $18,293.17, plus costs. As to the cross-complaint, the jury returned a special verdict by a vote of 11 to 1 in favor of Porsche, and judgment was entered against the Krotins. The Krotins appeal.

DISCUSSION

I. Instructional Error

The Krotins correctly contend that the trial court erred in instructing the jury that "[a] lessee who justifiably rejects or revokes acceptance of a vehicle must do so within a reasonable time after the lessee discovers the grounds for rejection or revocation." The instruction accurately states general principles of commercial law set forth in the California Uniform Commercial Code (hereinafter, Commercial Code). ² However, the Act, which specifically sets forth procedures when a manufacturer or its representative is unable to service or repair a new vehicle to conform to applicable warranties after a reasonable number of attempts (Civ.Code, § 1793.2, subd. (d)), is unlike the Commercial Code in that it contains no provision which requires rejection or revocation of acceptance The relationship between the Commercial Code and the Act was discussed in Krieger v. Nick Alexander Imports, Inc. (1991) 234 Cal.App.3d 205, 285 Cal.Rptr. 717. In 1963, the Legislature enacted the California version of the Uniform Commercial Code, which defined the types of warranties available for consumer purchases and the remedies for breach of warranty. (Id. at p. 212, 285 Cal.Rptr. 717.) Remedies for breach of warranty in the Commercial Code include rejecting nonconforming goods, revoking acceptance, and covering by purchase of substitute goods (Com.Code, §§ 2711-2721); but punitive damages are unavailable, and limitations of liability and disclaimers or modifications of warranties are permitted (Com.Code, § 2316). (See Krieger, supra, 234 Cal.App.3d at pp. 212-213, 285 Cal.Rptr. 717.) "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. [Citation.]." (Id. at p. 213, 285 Cal.Rptr. 717.)

of the vehicle within a reasonable time, or any time at all. ³

On the other hand, the Song-Beverly Consumer Warranty Act (Civ.Code, §§ 1790-1795.8), enacted in 1970, provides more extensive consumer protections. "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. [Citations.] ... [p] In 1982, the Legislature added a provision designed to give recourse to the buyer of a new automobile that suffers from the same defect repeatedly, or is out of service for cumulative repairs for an extended period. [Citations.]" (Krieger, supra, 234 Cal.App.3d at p. 213, 285 Cal.Rptr. 717.) In 1992, the statutory scheme was structurally modified (Stats.1992, ch. 1232 (S.B. 1762), §§ 6, 7), but it reaffirmed criteria for determining when there has been a "reasonable number of attempts" to repair a new vehicle, and to submit disputes, under certain circumstances, to a "qualified third-party dispute resolution process." (Civ.Code, § 1793.22, subds. (b), (c), (d).)

As to the relationship...