SHERMAN v. GENERAL MOTORS CORPORATION

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Court of Appeal, Second District, Division 1, California.

Neil J. SHERMAN, Plaintiff and Appellant, v. GENERAL MOTORS CORPORATION, Defendant and Respondent.

No. B065854.*

Decided: July 15, 1993

Taylor & Hodges and A. Clifton Hodges, Glendale, for plaintiff and appellant. Wilson & Becks and Ronald N. Wilson, Los Angeles, for defendant and respondent.

We affirm the trial court's order sustaining a demurrer without leave to amend and dismissing the action against defendant General Motors.

BACKGROUND

In March of 1988 plaintiff Neil Sherman bought a used 1987 Cadillac from a dealer for over $41,000.   The previous owner had put 3,731 miles on the car and returned it to the dealer before Sherman bought it.   The original new car warranty provided for 12 months or 12,000 miles basic coverage and 60 months or 60,000 miles for electrical components.   The unexpired portion of the warranty went with the car when Sherman bought it.

At 6,000 miles, Sherman began having problems with the car, which, in spite of numerous attempts, the dealer could not fix.   Eventually, Sherman brought an action alleging numerous causes of action against General Motors and the dealer.   General Motors was named in the first three causes, all grounded on the Song–Beverly Consumer Warranty Act (Civ.Code, § 1790 et seq.), popularly known as the “lemon law.”   After sustaining several demurrers with leave to amend, the trial court sustained a demurrer without such leave as to Sherman's second amended complaint, and dismissed the action against General Motors.

Sherman appeals.   The question is whether the vehicle qualifies as a new car under the lemon law.   The dealer is not a party to this appeal.

STANDARD OF REVIEW

“In reviewing the sufficiency of a complaint against a ․ demurrer, we are guided by long-settled rules.  ‘We treat the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law․   We also consider matters which may be judicially noticed.’  [Citation.]   Further, we give the complaint a reasonable interpretation, reading it as a whole and its parts in their context.  [Citation.]   When a demurrer is sustained, we determine whether the complaint states facts sufficient to constitute a cause of action.  [Citation.]   And when it is sustained without leave to amend, we decide whether there is a reasonable possibility that the defect can be cured by amendment:  if it can be, the trial court has abused its discretion and we reverse;  if not, there has been no abuse of discretion and we affirm.  [Citations.]   The burden of proving such reasonable possibility is squarely on the plaintiff.  [Citation.]”   (Blank v. Kirwan (1985) 39 Cal.3d 311, 318, 216 Cal.Rptr. 718, 703 P.2d 58.)

DISCUSSION

Section 1793.2, subdivision (d)(2) of the Civil Code 1 provides, in part, that “[i]f the manufacturer or its representative ․ is unable to service or repair a new motor vehicle ․ after a reasonable number of attempts” the customer is to be given his option of either a replacement vehicle or restitution.

Chapter 1280 of the Statutes of 1987 amended section 1793.2.   The 1986 version of the section previously provided, “ ‘New motor vehicle’ means a new motor vehicle which is used or bought for use primarily for personal, family, or household purposes, but does not include motorcycles, motorhomes, or off-road vehicles.”  (Former § 1793.2, subd. (e)(4)(B).)

The 1987 amendment expanded the definition to include “a dealer-owned vehicle and a ‘demonstrator’ or other motor vehicle sold with a manufacturer's new car warranty․”  (Former § 1793.2, subd. (e)(4)(B), italics added.)   The 1987 amendment became effective January 1, 1988, several months before Sherman bought his car.2

Does a used car sold by a dealer with an unexpired manufacturer's warranty come within the statutory definition of a new motor vehicle?   We conclude that it does not.

There are numerous rules guiding appellate courts in statutory interpretation.  “One of the cardinal rules of construction requires that words be given such interpretation as will promote rather than defeat the general purpose and policy of the law.  [Citation.]   A statute should be interpreted so as to produce a result that is reasonable.  [Citation.]   If two constructions are possible, that which leads to the more reasonable result should be adopted.  [Citation.]”  (Alford v. Pierno (1972) 27 Cal.App.3d 682, 688, 104 Cal.Rptr. 110.)

“The words of a statute will not be literally construed if this would cause an absurd result․”  (Granberry v. Islay Investments (1984) 161 Cal.App.3d 382, 388, 207 Cal.Rptr. 652.  “The apparent purpose of a statute will not be sacrificed to a literal construction.  [Citations.]”  (Alford v. Pierno, supra, 27 Cal.App.3d at p. 688, 104 Cal.Rptr. 110.)

At first blush, the words “a dealer-owned vehicle and a ‘demonstrator’ or other motor vehicle sold with a manufacturer's new car warranty” (former § 1793.2, subd. (e)(4)(B), presently codified at § 1793.22, subd. (e)(2)) would seem to include a car taken back by a dealer, either as a trade-in or by virtue of the lemon law, and then sold anew with part of the original warranty in effect.   But the mischief such an interpretation would cause becomes readily apparent.   As anyone who has shopped for a new car knows, there is no standard length of the warranty period.   Some models carry a 12,000 mile or 12–month warranty.   Others go substantially higher.   A warranty of 36,000 miles, with a comparable time period, for example, could find a car going through several owners before the warranty expires.

Sherman's interpretation of the statute could cover a third or fourth owner buying a car carrying a few remaining miles on the original warranty.   If the car were bought from a dealer, this buyer would be given the same protection as the original buyer.   The potential impact on a manufacturer could be enormous.

How much of the warranty would have to remain to qualify the car as new?   If it only had five miles left, the dealer could not possibly have “a reasonable number of attempts” to fix the car.  (§ 1793.2, subd. (d)(2).)   Would the statute thus give the owner of that vehicle no relief?   Could the owner piggyback onto previous owners' attempts to get the car fixed, thus showing the dealer has had enough tries to fix the car?   If so, does that mean someone can buy an abused car for a few bucks and immediately parlay it into a brand new vehicle?   Under the circumstances, should the statute apply only to a car that has at least 75 percent of the warranty left?   50 percent?   25 percent?   Where should the line be drawn?   Should the statutory protection be cut off after the second buyer, or the third?   Should it apply to a car that goes through a private sale before coming back to the dealer?   Would the manufacturer be better off taking a lemon from the first owner and junking it rather than risking the above possibilities?   What impact would this have on the used car market?   These are questions appropriately debated in the Legislature, not by a judicial panel on appeal.

No informed consumer would buy a car with a significant portion of the warranty gone and think it came with a “new car warranty.”   There is a significant difference between a new car warranty and a partially unexpired original warranty.   Imagine the look on an informed consumer's face if a dealer tried to persuade him or her that a car with 1,000 miles remaining on the original warranty carried a “new car warranty.”   The Legislature did not intend to include a used car with an unexpired original warranty in its definition of a new motor vehicle under the Song–Beverly Consumer Warranty Act.

The trial court put it best:  “In a nutshell, counsel, it's not a new car.   It'll never be a new car.   If you want to change the law go see the Legislature.   You know, this gentleman bought this 1987 car on March the 22nd, 1988.   It had 3,731 miles on it.   It's not a new car and it never will be a new car․”

If there is to be such a thing as a “used car lemon law,” it should come not by judicial fiat, but from the Legislature.

DISPOSITION

The judgment (order) is affirmed.

FOOTNOTES

1.   Unless otherwise indicated, all further statutory references are to the Civil Code.

2.   General Motors erroneously assumes the amendment was effective July 1, 1988.   Sections 1 and 8 of chapter 1280 became effective on that date.   The expanded definition of a new motor vehicle was contained in section 2, which became effective January 1, 1988.  (The statute has been since renumbered by 1992 legislation as section 1793.22, subdivision (e)(2), and expanded to include “the chassis, chassis cab, and [with certain exceptions] that portion of a motor home devoted to its propulsion[.]”)

ORTEGA, Acting Presiding Justice.

MIRIAM A. VOGEL and MASTERSON, JJ., concur.