Nolan v. Ford Motor Co.
| Decision Date | 13 May 2022 |
| Docket Number | E073850 |
| Parties | SHAWN NOLAN et al., Plaintiffs and Appellants, v. FORD MOTOR COMPANY, Defendant and Appellant. |
| Court | California Court of Appeals Court of Appeals |
SHAWN NOLAN et al., Plaintiffs and Appellants,
v.
FORD MOTOR COMPANY, Defendant and Appellant.
E073850
California Court of Appeals, Fourth District, Second Division
May 13, 2022
NOT TO BE PUBLISHED
APPEAL from the Superior Court of Riverside County No. RIC1307491 Daniel A. Ottolia, Judge. Affirmed in part, reversed in part, and remanded with directions.
Lewis Brisbois and Paul Efstratis; Sanders Roberts, Justin H. Sanders, and Sabrina C. Narain; and Jones Day, Nathaniel P. Garrett, David J. Feder, Margaret A. Maloy, and Emily F. Knox for Defendant and Appellant.
Rosner, Barry & Babbitt, Hallen D. Rosner, and Arlyn L. Escalante; Knight Law Group, Roger R. Kirnos, Lauren A. Ungs, and Christopher E. Swanson; the Altman Law Group and Bryan C. Altman; Greines, Martin, Stein & Richland, Cynthia E. Tobisman for Plaintiffs and Appellants.
OPINION
RAMIREZ, P. J.
Husband Jerry Nolan and wife Shawn Nolan bought a new Ford Excursion[1] from a Ford dealership. They chose to buy it with a 6.0-liter diesel engine (6.0L engine), because Ford and the dealership both represented that engine as higher-quality and longer-lasting. In fact, the truck - and especially the engine - required repair after repair. Several times, it lost power. Once, it broke down and left the Nolans and their children stranded halfway to Lake Havasu. By the time it had 120, 000 miles on it, it had massive oil leaks and was mostly inoperable.
The Nolans' expert testified that the 6.0L engine had a defective air management system. Stuck or mistimed fuel injectors caused incomplete combustion. Unburned hydrocarbons built up on and eventually clogged up the turbocharger and the exhaust gas recirculation (EGR) valve. This resulted in loss of power, oil leaks, and early part failures, among other things.
Over Ford's objections, the Nolans introduced a number of internal Ford emails and other internal Ford documents. These showed that Ford had learned that certain parts of the 6.0L engine, including fuel injectors, turbochargers, and EGR valves, were failing at excessive rates. Some emails said that this information should be kept secret.
The Nolans sued Ford, asserting causes of action premised on fraud (under common law and under the Consumers Legal Remedies Act [CLRA], Civ. Code, § 1750 et seq.) and on breach of warranty (under the Song-Beverly Consumer Warranty Act, Civ. Code, § 1790 et seq. [Song-Beverly or Song-Beverly Act].).
A jury found for the Nolans on all causes of action; it awarded $59, 634.91 in compensatory damages, an additional $59, 634.91 as a statutory penalty, and $8.125 million in punitive damages. The trial court reduced the punitive damages to $1 million. Ford appeals. It contends that:
(1) The trial court erred by admitting the internal Ford emails and other documents, because they were inadmissible hearsay.
(2) The trial court erred by admitting depositions of Ford employees taken in a former action, because they were inadmissible hearsay.
(3) The trial court erred by allowing an expert to testify about the "industry standard" punitive damages award.
(4) The jury's damages awards under the CLRA and for common-law fraud are inconsistent. (5) The jury's damages award under the CLRA is not supported by substantial evidence.
(6) The Nolans cannot recover both a statutory penalty and punitive damages.
(7) The $1 million punitive damages award is unconstitutionally excessive. The Nolans cross-appeal. They contend that:
(8) The trial court erred by denying preverdict interest and by basing its award of interest between the verdict and the entry of judgment on the wrong interest rate.
We will hold that the trial court erred by admitting the emails without a limiting instruction; however, the emails were admissible as evidence of Ford's knowledge, and the trial court's failure to give a limiting instruction was not prejudicial. We will also hold that the $1 million punitive damages award is unconstitutionally excessive and must be reduced to $536, 714.19. Otherwise, we find no error that has been preserved for appeal. Hence, we will modify and affirm.
I
STATEMENT OF FACTS
A. The Nolans' Problems with the Truck.
Mr. Nolan worked as an independent contractor delivering bakery products to stores. Ms. Nolan worked for Costco.[2] They had three children.
In March 2004, the Nolans bought a new 2004 Ford Excursion from a franchised Ford dealership in Riverside. The total purchase price was $56, 899.80. They made a $29, 350 down payment, traded in a Chevrolet Suburban, and financed the rest.
They were looking for a vehicle that would accommodate the whole family when they went on trips. They were also looking for "longevity."
The Excursion was offered in both gas and diesel versions. Initially, the Nolans intended to buy a truck with a gas engine. According to Ford dealership salespeople and Ford brochures, however, the 6.0L engine "was the newest, biggest, best thing out there, "
with "best in class performance," and it would last "twice, if not three times" as long as a gas engine. They therefore bought a truck with the 6.0L engine.
The truck came with a warranty for three years or 36, 000 miles, plus a powertrain warranty for five years or 100, 000 miles. The Nolans bought an extended warranty, with a $100 deductible, for $2, 900.
Ms. Nolan was the primary driver of the truck. At first, it "[r]an great."
In October 2004, however, when the truck had 8, 204 miles on it, the Nolans had it towed in to a dealership. According to them, there was a "complete failure of the power steering and the brake system." The truck would "go[] straight through" "a stoplight[] or a stop sign"; they had "no control over it." The dealership found and fixed a power steering fluid leak and replaced the brake booster assembly.
Starting in December 2004, the Nolans had a problem with the fit of the front doors. "When [they] went down the freeway, it sounded like a tornado going through the truck." They had to take it in to a dealership four times before the problem was fully fixed.
At some point, the Nolans were driving home from Laughlin, Nevada, towing jet skis, when the truck lost power. They "limped" home by driving slowly.
In October 2005, when there were 21, 751 miles on the truck, the Nolans took it in to a dealership because it lacked power. The dealership found that the EGR valve was sticking, due to carbon build-up; it replaced the EGR valve.
In April 2006, when the truck had 27, 827 miles on it, the Nolans took it in to a dealership in response to a recall (06E17 recall). The recall was to fix failures of the exhaust back pressure (EBP) sensor, which were leading to incomplete combustion. The Nolans' own EBP sensor had not failed.
In August 2007, when the truck had 43, 276 miles on it, the Nolans took it in to a dealership because the check engine light was on and the truck "d[id] not operate properly." The dealership found that the turbocharger was sticking because it was rusted. It replaced the turbocharger and a cracked charge air cooler (CAC) tube.
A week later, when the truck had 43, 456 miles on it, the Nolans took it back in to the dealership because the check engine light was on and the truck "lack[ed] power." The dealership replaced the manifold absolute pressure sensor and fixed an exhaust leak. The Nolans had to pay the $100 deductible under the extended warranty.
In April 2008, when the truck had 51, 396 miles on it, the Nolans took it in to a dealership because of "rough running." Ms. Nolan explained that, "[a]t least once a month," it would shake when stopped and idling. The dealership found that the injector control pressure (ICP) sensor was cracked and replaced it. Also, the sensor wiring harness was contaminated with oil. The Nolans had to pay the $100 deductible.
In May 2009, when the truck had 63, 857 miles on it, the Nolans were on a freeway, halfway to Lake Havasu, when the alternator and the battery died. They had the truck towed to a dealership in Lake Havasu City. The dealership found that the alternator
had failed and replaced it. The Nolans did not have the use of the truck (or a loaner) during their vacation. They had to pay the $100 deductible.
In August 2009, when the truck had 67, 661 miles on it, as the Nolans were on a trip with their children, the truck started alternately losing power and then lunging forward. A dealership replaced the transmission. The Nolans had to pay the $100 deductible.
In January 2011, when the truck had 95, 242 miles on it, the Nolans had it towed in to a dealership because it would not start. The dealership found that the fuel injection control module (FICM) had failed and replaced it. The Nolans had to pay the $100 deductible.
Around this time, Ms. Nolan phoned Ford to complain, but she never heard back.
In February 2012, when the truck had 104, 065 miles on it, the Nolans took it in to a dealership because the check engine light was on and they smelled oil burning. The dealership found that the oil pressure sender was leaking; also, a glow plug and a harness needed to be replaced. Rather than pay the $762 quoted for repairs, the Nolans said they would do the repairs themselves. They bought the necessary parts for $170.
In August 2012, when the truck had 107, 347 miles on it, it started making "loud clacking noises" and putting out "large clouds of black smoke." It had to be towed in to a dealership. The dealership found that one of the fuel injectors was stuck and needed to be replaced, the fuel injectors needed to be flushed, and the EGR cooler hose was
leaking. It fixed all these, which cost $1, 444. It also recommended replacing the glow plug controller. The Nolans agreed to do so, for another $776.
Ms. Nolan testified that there were times when she did not bring the truck in for repairs, even though it was not working properly,...
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