Crayton v. FCA US LLC ( 2021 )

Filed 3/30/21
CERTIFIED FOR PARTIAL PUBLICATION*
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION FIVE
BRANDON CRAYTON, B294528, B296241
Plaintiff and Appellant, (Los Angeles County
Super. Ct. No. BC654811)
v.
FCA US LLC,
Defendant and
Respondent.
APPEALS from a judgment and postjudgment order of the
Superior Court of the County of Los Angeles, Michael P. Linfield,
Judge. Affirmed in part, reversed in part, and remanded with
directions.
Rosner, Barry & Babbitt, Halen D. Rosner and Michelle A.
Cook; Strategic Legal Practices, Payam Shahian and Jacob
Cutler, for Plaintiff and Appellant.
* Certified for publication, with the exception of parts II.E.,
III.A.3.d. and e., and III.B.
Gibson, Dunn & Crutcher, Thomas H. Dupree, Jr. and Matt
Gregory; Gates, Gonter, Guy, Proudfoot & Muench, Matthew M.
Proudfoot, for Defendant and Respondent.
___________________________________
I. INTRODUCTION
Plaintiff and appellant Brandon Crayton leased a new
vehicle manufactured by defendant and respondent FCA US LLC
that developed unrepairable defects. He sued defendant, alleging
violations of the Song-Beverly Consumer Warranty Act (Civ.
Code, § 1790 et seq.).1 The trial court entered a judgment
awarding plaintiff restitution and civil penalties under the Act,
followed by an order awarding him attorney fees.
On appeal from the judgment and order, plaintiff contends
that the trial court erred by not including in the award
restitution based on the residual value of the leased vehicle and
incidental damages for the amounts he paid for annual
registration renewal fees and insurance premiums. Plaintiff also
contends that the court abused its discretion by arbitrarily
reducing the amount of attorney fees awarded for the legal
1 “[P]opularly known as the ‘lemon law’” (Kirzhner v.
Mercedes-Benz USA, LLC (2020) 9 Cal.5th 966, 969 (Kirzhner)), it
will be referred to in this opinion as the Act. As explained below,
the Act entitles buyers and lessees of new vehicles with
unrepairable defects to either a replacement vehicle or
restitution. (Ibid.) All further statutory references are to the
Act, unless otherwise indicated.
2
services rendered after defendant admitted liability. We affirm
in part, reverse in part, and remand with directions.
II. FACTUAL AND PROCEDURAL BACKGROUND
A. Vehicle Lease
In July 2015, plaintiff leased a new 2016 Dodge Charger
from a dealership, which then assigned the lease and sold the
vehicle to Ally Financial Trust (Ally). Under the terms of the
lease, plaintiff paid at signing $5,055.31, a first monthly lease
payment of $500.12, and sales tax, as well as title, registration,
and other fees, for a total of $6,750. He also agreed to pay an
additional 47 monthly lease payments of $500.12 each, for a total
amount of future monthly lease payments of $23,505.64. The
lease defined “[r]esidual value” as “[t]he value of the vehicle at
the end of the lease” and included a purchase option under which
plaintiff could “buy the vehicle at the end of the lease term for
[the residual value of] $24,458.60 . . . .”
B. Complaint and Amended Answer Admitting Liability
Approximately eight months after plaintiff leased the
Charger, he filed an action against defendant asserting six causes
of action for statutory violations, including violations of the Act.
Plaintiff alleged that, soon after he leased the Charger, it
developed a number of defects that defendant was unable to
service or repair after a reasonable number of opportunities.
Plaintiff further alleged that defendant failed to replace promptly
3
the Charger or provide restitution under sections 1793.1,
subdivision (a)(2) and 1793.2, subdivision (d). And plaintiff
alleged that defendant’s failure to replace promptly the Charger
or provide restitution was willful, entitling him to civil penalties
of two times his actual damages pursuant to section 1794,
subdivision (c).
Defendant initially answered the complaint and denied
liability. The parties then stipulated that defendant would file
an amended answer that admitted liability and offered to
compensate plaintiff for the actual damages he was entitled to
receive, including incidental damages but excluding the residual
value of the Charger. Defendant also offered to pay plaintiff a
civil penalty under the Act in the amount of two times his actual
damages.
C. Bench Trial on Damages
Following defendant’s admission, the parties proceeded to a
bench trial on damages. Prior to trial, the parties stipulated,
among other things, that plaintiff was “entitled to recover his
actual damages pursuant to . . . section 1793.2[, subdivision]
(d)(2)(B) and 1794[, subdivision] (b) . . . [¶] . . . [and] a civil
penalty of two times his actual damages pursuant to . . . section
1794[, subdivision] (c).”
Plaintiff submitted for trial his declaration authenticating
a copy of his lease and a copy of a March 9, 2018, letter he
received from his lessor, Ally, advising him of the amount he
would be required to pay to terminate his lease early and
purchase the Charger. According to Ally, plaintiff and “any co-
lessee” could buy back the vehicle for $29,997.64, but if plaintiff
4
“want[ed] to arrange for someone else to buy the vehicle, [he]
must first buy it from [Ally].” Plaintiff also requested judicial
notice of an excerpt from a transcript of a deposition in which a
representative of the California Department of Consumer Affairs
confirmed that vehicle manufacturers must comply with the
replacement and repurchase calculations under section 1793.2,
subdivision (d)(2) and that purchase and lease transactions were
treated the same for purposes of such calculations.
In his trial brief, plaintiff argued that he was entitled to
recover, among other amounts, the amount necessary for
defendant to reacquire the vehicle, i.e., the residual value, as
restitution. According to plaintiff, “the only way [defendant
could] reacquire the [v]ehicle from [p]laintiff [was] if [p]laintiff
terminat[ed] the [l]ease by paying the lease payoff amount
assessed by [Ally].” Plaintiff conceded that he “had no obligation
to make such payment as of [the] lease signing,” but argued that
he thereafter became “‘obligated to return the vehicle to
[defendant] in order to recover restitution pursuant to [the Act].’”
In its trial brief, defendant argued that plaintiff was only
entitled to recover the amounts he actually paid, or which were
payable, under the lease. According to defendant, because
plaintiff was not obligated to pay the residual value at the time
he entered into the lease, that amount should not be included in
the restitution to which he was entitled under the Act.
Defendant also maintained that the title branding and disclosure
requirements of the Act did not require plaintiff to acquire title to
the vehicle from Ally; instead, it was defendant’s obligation to
acquire the vehicle by paying the residual value directly to Ally.
Finally, defendant asserted that registration renewal fees,
5
insurance premiums, and amounts paid for dealer options were
not recoverable as damages under the Act.
The trial court conducted a bench trial, noting at the outset
that the parties had stipulated there were no factual disputes
and that the case involved a legal issue: the amount of
restitution to which plaintiff was entitled under the Act. After
hearing argument, the court accepted defendant’s position that
“‘actual price paid or payable by the buyer,’” as set forth in
section 1793.2, subdivision (d)(2)(B), did not include the residual
value of the vehicle or the amounts paid by plaintiff for
registration renewal fees or insurance premiums.
D. Judgment
The trial court entered a judgment that provided, as
relevant to this appeal, as follows: “1. The civil penalty
provisions of the . . . Act . . . do not extend to cover the residual
value of [p]laintiff’s vehicle after the lease period is completed.
[¶] 2. Plaintiff may not recover any amount for registration
renewal fees or insurance premiums. [¶] . . . [¶] 5. The [c]ourt
declined to make any ruling regarding the ‘branding’ of
[p]laintiff’s vehicle. [¶] 6. Defendant shall [pay off] the current
loan on the vehicle and be given possession of the vehicle after it
pays all sums due under this judgment. [¶] On the basis of these
findings and [d]efendant’s [a]mended [a]nswer . . . IT IS
ORDERED that defendant shall pay the amounts stated below:
[¶] a. To plaintiff, the amount of $30,255.64 minus a mileage
offset of $1,271.04 for a total of $28,984.60, with a two-time civil
penalty in the amount of $57,969.20, for a total of $86,953.80; [¶]
b. Attorneys’ fees, costs and pre-judgment interest (if any), per
6
agreement of the parties, or alternatively, by way of a single
noticed [m]otion, absent an agreement; [¶] c. The vehicle loan
payoff shall be made directly to the lender.”
E. Motion for Attorney Fees
On November 15, 2018, plaintiff filed a motion for an award
of attorney fees and costs. The motion included a request for
attorney fees based on the billing statements of plaintiff’s two law
firms in the amount of $105,321.50, plus a multiplier of .35, that
is, an additional $36,862, for a total fee request of $142,183.50.
Defendant opposed the motion, arguing that plaintiff should not
be awarded fees for services expended by his attorneys after
defendant admitted liability. Defendant calculated that the
reasonable fees incurred by plaintiff prior to defendant’s
admission of liability was $11,688.
In his reply, plaintiff argued that the fees he incurred after
defendant’s admission of liability were reasonable because
defendant engaged in conduct that forced him to continue to
litigate damages.
At the hearing on the fee motion, the trial court found that
the hourly rates of plaintiff’s attorneys were reasonable and
awarded him $11,688.50 in fees for the time expended by his first
law firm litigating the matter through defendant’s admission of
liability. In denying plaintiff the amount of attorney fees
requested for the time expended after defendant admitted
liability, the court concluded that plaintiff’s “post-amended
answer litigation conduct was neither necessary nor useful.” On
the issue of whether additional restitution was recoverable, “the
[c]ourt found in favor of defendant’s position.” In the court’s
7
view, “it would be inequitable to award [p]laintiff the more than
$100,000 in attorney’s fees he is requesting for arguments he
consistently lost.” The court therefore awarded plaintiff only
$15,000 in fees for the time expended by plaintiff’s two law firms
after the admission of liability, to be divided equally between
each firm. And the court awarded a 1.1 multiplier on the fee
awards, for a total award based on the time expended by the first
firm of $21,107.35 and on the time expended by the second firm
of $8,250, for a total fee award of $29,357.35.
III. DISCUSSION
A. Restitution Award
1. The Act
“The Act allows buyers or lessees of new motor vehicles
that are under warranty and have defects the manufacturer is
unable to repair after a reasonable number of attempts to elect
one of two remedies: [replacement of the vehicle or restitution].”
(Kirzhner, supra, 9 Cal.5th at p. 969.) “Section 1793.2,
subdivision (d)(2) sets forth the manufacturer’s affirmative
obligation to ‘promptly’ repurchase or replace a defective vehicle
it is unable to repair, providing that if a manufacturer is ‘unable
to service or repair a new motor vehicle . . . to conform to the
applicable express warranties after a reasonable number of
attempts, the manufacturer shall either promptly replace the
new motor vehicle in accordance with subparagraph (A) or
promptly make restitution to the buyer in accordance with
subparagraph (B).’ In turn, the restitution remedy in subdivision
8
(d)(2)(B) states that ‘the manufacturer shall make restitution in
an amount equal to the actual price paid or payable by the buyer,
. . . including any collateral charges . . . , plus any incidental
damages to which the buyer is entitled under [s]ection 1794 . . . .’
Finally, section 1794 is the Act’s general damages provision,
providing that a buyer may seek damages for a manufacturer’s
‘failure to comply with any obligation under this chapter or under
an implied or express warranty,’ the measure of which includes
the restitution and replacement remedies as well as the remedies
allowed by the California Uniform Commercial Code, including
incidental damages.” (Id. at pp. 971–972, italics added.)
2. Standard of Review and Statutory Construction
Defendant’s contentions concerning the trial court’s
restitution award require us to interpret the language of the Act’s
replacement and restitution remedies, a legal issue governed by
an independent standard of review. (City of Alhambra v. County
of Los Angeles (2012) 55 Cal.4th 707, 718.) “To determine the
Legislature’s intent in interpreting these statutory provisions,
‘[w]e first examine the statutory language, giving it a plain and
commonsense meaning.’ (Coalition of Concerned Communities,
Inc. v. City of Los Angeles (2004) 34 Cal.4th 733, 737 . . .
[(Concerned Communities)].) We do not consider statutory
language in isolation; instead, we examine the entire statute to
construe the words in context. (West Pico Furniture Co. v. Pacific
Finance Loans (1970) 2 Cal.3d 594, 608 . . . .) If the language is
unambiguous, ‘then the Legislature is presumed to have meant
what it said, and the plain meaning of the language governs.’
(Kizer v. Hanna (1989) 48 Cal.3d 1, 8 . . . .) ‘If the statutory
9
language permits more than one reasonable interpretation,
courts may consider other aids, such as the statute’s purpose,
legislative history, and public policy.’ (Concerned Communities,
[supra, 34 Cal.4th] at p. 737.) We keep in mind that the Act is
‘“manifestly a remedial measure, intended for the protection of
the consumer; it should be given a construction calculated to
bring its benefits into action.”’ (Murillo v. Fleetwood Enterprises,
Inc. (1998) 17 Cal.4th 985, 990 . . . .)” (Kirzhner, supra, 9 Cal.5th
at p. 972.)
3. Residual Value
Plaintiff contends that the trial court erred by refusing to
include in its restitution award the residual value of the Charger
under the lease. We disagree.
a. Statutory Language
As we discuss above, under section 1793.2, subdivision
(b)(2), if a manufacturer is unable to repair a vehicle after a
reasonable number of attempts, then it must either replace the
vehicle in accordance with subparagraph (A) or make restitution
in accordance with subparagraph (B). In the case of restitution,
subparagraph (B) of section 1793.2, subdivision (d)(2) provides
that “the manufacturer shall make restitution in an amount
equal to the actual price paid or payable by the buyer, including
any charges for transportation and manufacturer-installed
options, but excluding nonmanufacturer items installed by a
dealer or the buyer, and including any collateral charges such as
sales or use tax, license fees, registration fees, and other official
10
fees, plus any incidental damages to which the buyer is entitled
under [s]ection 1794, including, but not limited to, reasonable
repair, towing, and rental car costs actually incurred by the
buyer.” (Italics added.)
“[T]he phrase ‘actual price paid or payable,’ includes all
amounts [the plaintiff] became legally obligated to pay when [he]
agreed to [lease] the [vehicle] . . . .” (Mitchell v. Blue Bird Body
Co. (2020) 80 Cal.App.4th 32, 38 (Mitchell).) In a lease
transaction, unlike a purchase, the lessee acquires the limited
right to use and possess the vehicle for a specified term. In
return for that limited right, a lessee makes certain payments at
signing—just as plaintiff did here in the amount of $6,750—and
agrees to make a specified number of future monthly payments,
in this case the 47 monthly payments of $500.12 each for a total
of $23,505.64. Both the payments at signing and the future
monthly payments are part of the actual price payable under the
lease.
But the lease here did not require plaintiff to acquire title
to the vehicle at the end of the lease; instead, plaintiff acquired at
signing the option to purchase the vehicle for an agreed-upon
sum certain, in this case the residual value of $24,458.60.
(C. Robert Nattress & Assocs. v. Cidco (1986) 184 Cal.App.3d 55,
66 [“‘[An] option is a contract by which the owner of property
invests another with the exclusive right to purchase said
property at a stipulated sum within a limited or reasonable time
in the future’”]; see also Langberg v. Langberg (1972) 24
Cal.App.3d 742, 751 [“‘an option agreement is a contract distinct
from the contract to which the option relates, since it does not
bind the optionee to perform or enter into the contract upon the
terms specified in the option’”].) Because plaintiff was not under
11
a legal obligation at the time of the lease signing to purchase the
vehicle for the residual value, that amount is not part of the
“‘actual price . . . payable’” by plaintiff under section 1793.2,
subdivision (d)(2). (Mitchell, supra, 80 Cal.App.4th at p. 38.)
Our conclusion is consistent with the Act’s use of the term
“restitution.” As the court in Niedermeier v. FCA US LLC (2020)
56 Cal.App.5th 1052 (Niedermeier) observed: “[W]e think it
significant that the Legislature chose the term ‘restitution’ to
define the Act’s refund remedy in section 1793.2, subdivision
(d)(2). The [court in Mitchell, supra, 80 Cal.App.4th 32]
interpreted that choice to mean that the Legislature intended
that remedy ‘to restore “the status quo ante as far as is
practicable . . . ” in other words, to place the buyer in the position
he or she would have been in had he or she not purchased the
defective vehicle. ([Id.] at p. 36.) . . . [¶] Just as the Mitchell
court concluded that ‘restitution’ under the Act cannot leave a
plaintiff in a worse position than when he or she purchased the
vehicle, it similarly would be inimical to the concept of restitution
to leave a plaintiff in a better position, rather than merely
restoring her to the status quo ante.” (Niedermeirer, supra, 56
Cal.App.5th at p. 1071.)
Here, awarding plaintiff the residual value of the
Charger—an amount he admits he did not pay and was not
obligated to pay under the terms of the lease—would leave him in
a better position than he was in at the time he leased the
Charger. It would therefore be contrary to the Legislature’s
intent in using the term restitution to describe a lessee’s damages
remedy under the Act.
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b. Equal Treatment of Lease Transactions
We are unpersuaded by plaintiff’s assertion that excluding
the residual value from the restitution award would result in
unequal treatment of lease transactions, as compared to purchase
transactions, in violation of the Act.2 Plaintiff’s equal treatment
argument ignores the basic legal and economic differences
between a vehicle purchase and lease transaction. In a purchase,
the terms of the sales agreement, including the terms of any loan
the buyer takes out to complete the transaction, define and limit
the amounts the buyer becomes obligated to pay at signing.
Similarly, when a vehicle is leased, the terms of the lease govern
the amounts the lessee is obligated to pay in exchange for
possession of the vehicle. And, under the express language of
section 1793.2, a lessee’s right to restitution is limited to the
“actual price” the lessee became obligated to pay upon signing the
lease, which in this case was the total of the future monthly
payments that plaintiff agreed to pay under the lease.
2 Section 1793.2, subdivision (d)(2)(D) provides that
“[p]ursuant to [s]ection 1795.4, a buyer of a new motor vehicle
shall also include a lessee of a new motor vehicle.” Section
1795.4, subdivision (b) provides: “The lessee of goods has the
same rights under this chapter against the manufacturer and
any person making express warranties that the lessee would
have had under this chapter if the goods had been purchased by
the lessee, and the manufacturer and any person making express
warranties have the same duties and obligations under this
chapter with respect to the goods that such manufacturer and
other person would have had under this chapter if the goods had
been sold to the lessee.”
13
Thus, contrary to plaintiff’s assertion, the trial court’s
restitution award, which was limited to the amounts plaintiff
either paid or became legally obligated to pay at signing under
the terms of the lease, treated that transaction the same as a
purchase in which the buyer recovers the down payment and any
amounts paid or payable under the loan. The restitution award
therefore did not violate the equal treatment mandate of the Act.
c. Plaintiff’s Duty to Exercise Purchase Option
Recognizing that, under the express terms of his lease, he
was under no legal obligation to purchase the Charger upon
termination of the lease, plaintiff maintains that he nevertheless
became obligated to terminate the lease and purchase the vehicle
when he sought restitution under the Act. As plaintiff interprets
the branding and disclosure requirements of the Act, his right to
restitution was conditioned upon his ability to provide a clean
title to defendant so that it could, in turn, reacquire title to the
Charger and discharge its branding and disclosure obligations.
We disagree with plaintiff’s characterization of the Act’s
branding provisions. Under section 1793.22, subdivision (f)(1), a
manufacturer that reacquires a vehicle pursuant to section
1793.2 is prohibited from reselling the vehicle unless it discloses
to the prospective buyer the nature and extent of the defects in
the vehicle experienced by the original buyer. And, as noted,
section 1793.23, subdivision (b) specifies the disclosures the
manufacturer is required to make. Neither section, however,
requires a buyer or lessee seeking restitution to take any action
in connection with a manufacturer’s branding obligations.
14
In Martinez v. Kia Motors America, Inc. (2011) 193
Cal.App.4th 187 (Martinez), the court rejected the assertion that
the Act required a buyer to maintain possession of the defective
vehicle to obtain restitution under the Act. “The plain language
of [sections 1793.2 and 1794] does not support [the plaintiff’s]
construction. Significantly, nowhere does the Act provide that
the consumer must own or possess the vehicle at all times in
order to avail himself or herself of these remedies. All the Act
requires of the buyer is that the buyer ‘deliver [the]
nonconforming goods to the manufacturer’s service and repair
facility’ for the purpose of allowing the manufacturer a
reasonable number of attempts to cure the problem. (§ 1793.2,
subds. (c), (d); [citation].) Once this delivery occurs and the
manufacturer fails to cure the problem, the ‘manufacturer shall’
replace the vehicle or reimburse (make restitution to) the buyer.
(§§ 1794, subd. (b), 1793.2, subd. (d)(2).) The Act says nothing
about the buyer having to retain the vehicle after the
manufacturer fails to comply with its obligations under its
warranty and the Act. If the Legislature intended to impose such
a requirement, it could have easily included language to that
effect. It did not. ‘We may not rewrite the section to conform to
that unexpressed, supposed intent.’ [Citation.]” (Martinez,
supra, 193 Cal.App.4th at p. 194, fns. omitted.)
We agree with the reasoning of Martinez, supra, 193
Cal.App.4th 187, and conclude there is no provision in the Act
that required plaintiff to acquire ownership of the vehicle in order
to obtain restitution. If the Legislature had intended to impose
such a burden on lessees seeking restitution, it would have
included language expressly requiring them to purchase the
vehicle prior to obtaining restitution. Contrary to plaintiff’s
15
construction of the Act, we do not infer such a duty; instead, we
read the Act as expressly imposing reacquisition, branding, and
disclosure requirements solely on manufacturers who cannot
repair a vehicle after a reasonable number of attempts.
d. Judicial Estoppel
Following the entry of judgment and the filing of plaintiff’s
appeals, defendant took a position in opposition to a motion in a
case pending in the Superior Court of Ventura County (Ventura
action). Plaintiff contends that position is “totally inconsistent”
with one of defendant’s current positions on appeal, i.e., plaintiff
is not required under the Act to purchase the Charger from Ally
and transfer the title to defendant; rather, defendant can acquire
the title directly from Ally. According to plaintiff, defendant
should be judicially estopped in this appeal from arguing that
inconsistent position.
i. Background
The plaintiff in the Ventura action accepted defendant’s
offer to settle under Code of Civil Procedure section 998 for a sum
certain. A dispute subsequently arose between the parties over
the interpretation of the offer. The plaintiff claimed that the
offer did not include any amount that was earmarked for
purchasing the leased vehicle from the lessor under the terms of
the lease. Defendant insisted that the offer included the amount
necessary for the plaintiff to acquire the vehicle from the lessor.
The plaintiff therefore filed a motion to enforce the settlement,
16
according to his understanding of its terms, under Code of Civil
Procedure section 664.6.
Defendant opposed the motion, arguing that its settlement
offer must be construed to include an amount for the purchase of
the leased vehicle from the lessor. According to defendant, that
specific amount was included in the settlement offer to enable the
plaintiff to facilitate the transfer of title to defendant so that it
could, in turn, satisfy its title-branding obligations under the Act.
Defendant emphasized that the plaintiff’s obligation to purchase
the vehicle from the lessor was “reflected in the written terms of
the settlement agreement and the settlement amount,” but added
that the contractual obligation was “reinforced by [defendant’s]
duty under [the Act] to repurchase the vehicle and provide
subsequent transferees with notice of the vehicle’s issues.”
(Italics added.)
The trial court in the Ventura action found the Code of
Civil Procedure section 998 offer was “not valid” and refused to
enforce the settlement.
ii. Legal Principles
“‘“Judicial estoppel precludes a party from gaining an
advantage by taking one position, and then seeking a second
advantage by taking an incompatible position. [Citations.] The
doctrine’s dual goals are to maintain the integrity of the judicial
system and to protect parties from opponents’ unfair strategies.
[Citation.] Application of the doctrine is discretionary.”’
[Citation.] The doctrine applies when ‘(1) the same party has
taken two positions; (2) the positions were taken in judicial or
quasi-judicial administrative proceedings; (3) the party was
17
successful in asserting the first position (i.e., the tribunal adopted
the position or accepted it as true); (4) the two positions are
totally inconsistent; and (5) the first position was not taken as a
result of ignorance, fraud, or mistake.’ [Citations.]” (Aguilar v.
Lerner (2004) 32 Cal.4th 974, 986–987 (Aguilar).)
“‘“‘The doctrine’s dual goals are to maintain the integrity of
the judicial system and to protect parties from opponents’ unfair
strategies. [Citation.]’”’” (Aguilar, supra, 32 Cal.4th [at p.] 986.)
Consistent with these purposes, numerous decisions have made
clear that judicial estoppel is an equitable doctrine, and its
application, even where all necessary elements are present, is
discretionary. [Citations.]” (MW Erectors, Inc. v. Niederhauser
Ornamental & Metal Works Co., Inc. (2005) 36 Cal.4th 412, 422.)
iii. Analysis
We do not ordinarily consider arguments raised for the first
time on appeal. (Ochoa v. Pacific Gas & Electric Co. (1998) 61
Cal.App.4th 1480, 1488, fn. 3.) But even if we were to exercise
our discretion to consider the merits of plaintiff’s judicial estoppel
argument, we would reject it because, among other things,
defendant’s challenged position on appeal is not totally
inconsistent with its position in the Ventura action. Defendant
opposed the motion to enforce a settlement in the Ventura action
on the grounds that the parties mutually intended their
settlement agreement to obligate the plaintiff to use part of the
settlement proceeds to purchase the vehicle. Although defendant
maintained that its interpretation of the agreement was
consistent with its duty to reacquire the vehicle for title branding
purposes under the Act, defendant did not state or imply that it
18
could not purchase the vehicle directly from the lessor. Thus, its
position on appeal—that it can purchase the Charger directly
from Ally, thereby obviating the need for plaintiff to purchase
it—is not completely inconsistent with its position on the
settlement.
Further, plaintiff cannot demonstrate that the trial court in
the Ventura action adopted defendant’s position or treated it as
true in making its decision. The only evidence in our record on
that issue—the court’s minute order denying the motion—does
not provide a reason for finding the Code of Civil Procedure
section 998 offer invalid, much less expressly state that the trial
court accepted defendant’s position as true or otherwise adopted
it. Thus, plaintiff has failed to establish that judicial estoppel
applies on appeal.
e. Enforceability of Judgment
Plaintiff maintains that without an award of the residual
value of the Charger, the trial court’s judgment is
“unenforceable.” According to plaintiff, as written, the judgment
orders: (i) Ally, a nonparty, to breach its lease with plaintiff and
to sell the Charger directly to defendant, which order the court
had no jurisdiction to make; and (ii) plaintiff to breach his lease
by surrendering the Charger to defendant, an order the court
again had no authority to enter. Due to these purported
jurisdictional issues with enforceability, plaintiff concludes that
the judgment is void or voidable.
19
Plaintiff’s enforceability argument misconstrues the trial
court’s judgment,3 which ordered defendant to make restitution
to plaintiff and to “[pay off] the current loan on the vehicle,”4
orders that the court clearly had jurisdiction to enter. Contrary
to plaintiff’s assertion, the judgment does not purport to order
Ally to do anything. And, although the judgment also provides
that after defendant pays all sums due under the judgment, it
shall “be given possession of the vehicle,” it does not order Ally to
surrender such possession or order plaintiff to breach his lease.
Rather, under the judgment, plaintiff would be required to
surrender the Charger to defendant only after defendant had paid
Ally in full and acquired title, and only after plaintiff had been
paid the amounts necessary to satisfy any remaining obligation
he may have to Ally under the lease. Under those circumstances,
plaintiff would receive exactly what he prayed for in his
complaint, namely, restitution and civil penalties. And because
he would be under no further obligations under the lease, he
3 “The meaning and effect of a judgment is determined
according to the rules governing the interpretation of writings
generally. [Citations.] ‘“[T]he entire document is to be taken by
its four corners and construed as a whole to effectuate the
obvious intention.”’ [Citations.] ‘“No particular part or clause in
the judgment is to be seized upon and given the power to destroy
the remainder if such effect can be avoided.”’ [Citations.]”
(People v. Landon White Bail Bonds (1991) 234 Cal.App.3d 66,
76.)
4 Plaintiff drafted the judgment and apparently intended the
term “current loan” to refer to the amount necessary to purchase
the Charger from Ally as calculated under the terms of the lease.
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would be free to surrender the Charger without breaching any
obligation to Ally.
4. Registration Renewal Fees and Insurance Premiums
Plaintiff next challenges the trial court’s decision not to
award damages for the annual registration renewal fees and
insurance premiums that he paid after defendant’s statutory
obligation to replace the Charger or provide restitution arose.
Defendant, in its supplemental brief, agrees that under Kirzhner,
supra, 9 Cal.5th 966, plaintiff may be entitled to amounts paid
for registration renewal fees, if he incurred those fees due to
defendant’s failure to discharge promptly its replacement and
restitution obligations under the Act.
The parties disagree, however, on whether Kirzhner, supra,
9 Cal.5th 966, which did not specifically address the issue,
applies to insurance premiums. They also disagree on whether
remand is necessary on the issue of the recovery of registration
renewal fees. According to defendant, we can simply estimate the
additional amount of damages for registration renewal fees to
which plaintiff is entitled, amend the judgment accordingly, and
then affirm without remanding for further proceedings.
In Kirzhner, supra, 9 Cal.5th 966, the court held that
registration renewal and nonoperation fees may be recoverable as
incidental damages pursuant to section 1793.2, subdivision
(d)(2)(B) if such fees were “incurred after the manufacturer’s duty
to promptly provide a replacement vehicle or restitution arises.”
(Kirzhner, supra, 9 Cal.5th at p. 980.) “At this point in time, the
fees are no longer simply a standard cost of ownership. They
instead closely resemble the types of postrevocation preservation
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and maintenance costs courts have awarded as incidental
damages reasonably incurred in the care and custody of
nonconforming goods pending their return to the seller.” (Ibid.)
We thus consider whether insurance premiums incurred
after a manufacturer’s duties under the Act have arisen are
sufficiently analogous to registration renewal fees to be
recoverable under the rationale of Kirzhner, supra, 9 Cal.5th 966.
According to the court in Kirzhner, in determining whether
certain costs incurred are recoverable as incidental damages, we
focus on two interrelated inquires under the California Uniform
Commercial Code: “First, [were] such [costs] incurred in the
‘inspection, receipt, transportation and care and custody’ of a
vehicle? [Citation.] Second, [did] such [costs] ‘[result] from’ or
[were] they incurred ‘incident to’ a manufacturer’s breach of
warranty or other violation of the Act? [Citation.]” (Kirzhner,
supra, 9 Cal.5th at p. 979.)
As to the first inquiry, insurance premiums can be incurred
for the care and custody of a vehicle if, for example, the buyer
continues to maintain a policy covering property damage to the
vehicle after the manufacturer’s duty to replace or provide
restitution has arisen. At that point in time, “the buyer no longer
has the same ownership interest in the vehicle since the
manufacturer can (and should) replace or repurchase it at any
moment.” (Kirzhner, supra, 9 Cal.5th at p. 980.) The buyer’s
continued payment of policy premiums therefore would inure, at
least in part, to the manufacturer’s benefit because they would
operate to safeguard the vehicle from damage due to a collision,
theft, vandalism, fire, and similar risks, the occurrence of which
would otherwise reduce the value of the manufacturer’s interest
in the vehicle. These payments thus would no longer be a
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standard cost of ownership, but rather would closely resemble
preservation and maintenance costs.
As to the second inquiry, premiums insuring against
property damage could “result from” or be incurred “incident to” a
manufacturer’s breach of its replacement or restitution duties,
depending on the circumstances. For example, a buyer may stop
driving the vehicle—because the defects render it either
inoperable or unsafe—and park it on the street or in a garage
while the buyer waits for the manufacturer to replace or pay the
value of the vehicle. Under such circumstances, the buyer may
choose to keep in force a policy insuring the vehicle against
property damage because of a continuing obligation to the lessor
to return the vehicle in good condition. Those continued
payments of property damage premiums—which the buyer would
not have incurred if the vehicle had been timely replaced or paid
off—would be the direct result of the manufacturer’s breach of its
duty to replace or pay value for the vehicle and would therefore
be recoverable by the buyer as incidental damages. Because the
restitution award in this case was rendered before a record on
this causation issue could be developed, we are unable to
determine, as a factual matter, whether the claimed insurance
premiums “result[ed] from” defendant’s breach of its duties under
the Act or were otherwise “incidental to” those breaches.
Accordingly, absent an agreement on appeal as to the
causation issue and the amount of premiums and registration
renewal fees to which plaintiff is entitled, reversal and remand
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for further proceedings under Kirzhner, supra, 9 Cal.5th 966 is
necessary.5
B. Attorney Fees
Plaintiff additionally challenges as arbitrary the trial
court’s reduction of his requested attorney fees. In his reply and
supplemental briefs, filed after the Supreme Court’s decision in
Kirzhner, supra, 9 Cal.5th 966, he further contends that the
entire fee award must be reversed because it was based on the
damages award which must be reversed for further proceedings
and potential modification below.
Because we have concluded that reversal and limited
remand is necessary on the issues of registration renewal fees
and insurance premiums, reversal of the fee award is also
required because the trial court’s challenged reduction in the
amount of fees claimed was based, in part, on the court’s view
that, following the admission of liability, plaintiff did not prevail
on most of his arguments regarding the calculation of restitution
5 In his opening brief—filed before our Supreme Court’s
decision in Kirzhner, supra, 9 Cal.5th 966—plaintiff argued that
if we determine he is entitled to additional damages for
registration renewal fees or insurance premiums, we should also
hold that he is entitled to a civil penalty of two times those
additional amounts. We have made no determination as to
whether plaintiff is entitled to additional damages. On remand,
if the trial court awards additional amounts for incidental
damages, it may also determine whether plaintiff is entitled to a
corresponding increase in his civil penalties pursuant to section
1794, subdivision (c) and the parties’ stipulation.
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and damages. On remand, the court should also consider
whether, if the damages award increases, plaintiff would be
entitled to additional attorney fees. (See, e.g., Greenwich S.F.,
LLC v. Wong (2010) 190 Cal.App.4th 739, 768 [reversal of a
portion of damages award required reversal of attorney fee award
to allow trial court to reconsider that award].)
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IV. DISPOSITION
The parts of the judgment concerning registration renewal
fees, insurance premiums, and attorney fees are reversed and
remanded with directions to conduct further proceedings for the
limited purpose of determining: (1) whether plaintiff is entitled
to recover incidental damages for amounts paid, if any, for
registration renewal fees and insurance premiums after
defendant’s duty to replace the Charger or provide restitution
arose; and (2) if any such incidental damages are awarded,
whether (a) to assess additional civil penalties under the parties’
stipulation and (b) to reconsider the amount of the attorney fees
award in light of any increased total recovery. In all other
respects, the judgment is affirmed. No costs are awarded on
appeal.
CERTIFIED FOR PARTIAL PUBLICATION
KIM, J.
We concur:
RUBIN, P. J. BAKER, J.
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