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Horvitz & Levy obtained a unanimous decision for automotive manufacturer FCA affirming that used vehicles are not “new motor vehicles” under the Song-Beverly Act even when sold with a balance remaining on the manufacturer’s “new car warranty.” Relying on the statutory construction and legislative history presented by Horvitz & Levy, the California Supreme Court disapproved Jensen v. BMW, a 1995 Court of Appeal opinion which held that the enhanced statutory refund-or-replace remedy for new car buyers also applies to buyers of used cars sold with some portion of the original warranty.
Plaintiffs purchased a two-year-old Dodge truck from a used car dealership. After seeking repairs under the original warranty that carried over from the used truck’s original sale, plaintiffs sued the manufacturer, FCA, asserting claims under the Song-Beverly Act seeking the truck’s repurchase or replacement. The trial court entered summary judgment for FCA on the ground that the truck was not a “new motor vehicle” under the Act, and therefore did not qualify for its special refund or replacement remedies. Plaintiffs appealed, arguing that the phrase “other motor vehicle sold with a manufacturer’s new car warranty” in the Act’s definition of “new motor vehicle” includes previously owned vehicles with some balance remaining under the manufacturer’s express warranty. After initial briefing was completed in the Court of Appeal, Horvitz & Levy prepared supplemental briefing and presented oral argument.
The Court of Appeal affirmed the trial court’s decision, and the California Supreme Court granted plaintiffs’ petition for review. Horvitz & Levy handled FCA’s briefing in the Supreme Court and presented oral argument. The Supreme Court ultimately agreed with FCA’s argument to preserve the Act’s limited definition of “new motor vehicle.” The Supreme Court examined Song-Beverly’s legislative history and its statutory language as a whole to conclude that the phrase “other motor vehicle sold with a manufacturer’s new car warranty” functions as a catchall for sales of essentially new vehicles, such as dealer-owned demonstrators or cars used by a manufacturer for marketing purposes, where an original warranty is issued with the sale. The opinion thus affirms that a vehicle sold as a used car does not fall within the definition of “new motor vehicle.”
