Plaintiff experienced intermittent issues with his Jeep, which he claimed were not fixed. The manufacturer, FCA, offered to repurchase the Jeep, less the $3,500 outstanding balance plaintiff owed on the prior car he traded-in when he bought the Jeep, if he returned the new car without excessive wear-and-tear and signed a release. Plaintiff did not accept the deal, and instead sued for enhanced statutory remedies available upon breach of new car auto warranties, claiming he was entitled to a refund of the full purchase price of the new car, along with the amount he owed on his prior car and a civil penalty for FCA’s willful violation of its duty to repurchase his car.
In a bench trial on the issue of the validity of the presuit repurchase offer, the trial court agreed that FCA’s offer satisfied its statutory obligations, and ordered FCA to repurchase the vehicle for the amount it had originally offered, which did not include any amount for the prior vehicle or any deduction for excessive damage. The plaintiff appealed and FCA retained Horvitz & Levy to take the lead on briefing and argument on appeal.
The Court of Appeal affirmed the judgment. The court held that (1) under Song-Beverly, the “negative equity” created when a trade-in vehicle’s prior loan is rolled over into a new vehicle purchase transaction is not part of the new vehicle’s “price paid or payable” under Civil Code section 1793.2; (2) a prelitigation repurchase offer complies with Civil Code section 1793.2, subdivision (d)(2)(B), even if it is conditioned on a narrowly-tailored, general release of the buyer’s claims; and (3) where published authorities have endorsed a manufacturer’s method of calculating restitution under the Act, subsequent binding authority rejecting that methodology does not support a finding that the manufacturer’s earlier repurchase offers willfully violated the Act.
