OPINION
JACK R. GOLDBERG, COMMISSIONER.
The claimant has petitioned for review from the August 25, 2009 Finding and Dismissal of the Commissioner acting for the First District. We find error and accordingly reverse the decision of the trial commissioner.
The trier made the following factual findings which are pertinent to our review. The claimant testified that she was employed by the City of Hartford as a teacher and guidance counselor for more than thirty years. In 1985, she sustained injuries to her knees, shoulders, back, wrist and elbow for which Gordon A. Zimmerman, M.D., is her treating physician. In 1988, she sustained ankle injuries for which her treating physician is Michael S. Aronow, M.D. In 1990, the claimant injured her neck, thoracic spine, lumbar spine, shoulders, wrist and elbow; Gerald J. Becker, M.D., is her treating physician for those injuries. The claimant testified that as a result of her injuries, all three of her treating physicians prescribed a motorized wheelchair for her, and respondents eventually provided a chair in 2003 or 2004. However, the claimant also testified that the first chair she received was unsuitable, in that it was designed primarily for indoor use and the claimant was required to use the chair to attend medical appointments and do errands. The chair eventually developed mechanical problems and the motors were replaced at least twice by the respondents' then wheelchair vendor, Hudson Health.
The claimant testified that in 2007, she met with Brian Rossi, a representative from Connecticut Rehab (now ATG Rehab), the respondents' new wheelchair vendor, for the purposes of obtaining a new wheelchair. On June 12, 2007, Connecticut Rehab delivered to the claimant a "Quantum 600," whereupon the claimant immediately discovered that the chair lacked the tiedown straps necessary for transportation in a wheelchair van. Although Rossi was able to arrange for tie-down straps to be installed on the chair, the claimant also felt the chair was too big for her and testified that by July 2007, "[t]he chair was rattling, the seat was moving, and it was killing my back." October 7, 2008 Transcript, p. 33. The claimant continued to complain of back pain associated with her use of the Quantum 600, and Rossi made three attempts to correct the problem, first with duct tape and then with two different lumbar support pads. The claimant testified that she experienced ongoing difficulties with the Quantum 600 because of its lack of lumbar support, which she attributes to the gap between the back of the chair and the seat and the concave shape of the seat which prevents her from sitting up straight.
There was a great deal of testimony adduced in this matter regarding the circumstances and events leading up to the claimant's acquisition of the Quantum 600. While we recognize the implicit right of litigants to conduct their trial in a manner they deem most appropriate, we respectfully submit that the events subsequent to the claimant's acquisition of the wheelchair are more germane to the inquiry at bar.
Unable to rectify the problem himself, Rossi advised the claimant to consult a physical therapist. On September 27, 2007, the claimant met with Paul Zelinsky, P.T., M.S., a physical therapist at Eastern Connecticut Health Network, Inc., the facility where the claimant received her physical therapy. In his report of November 15, 2007, Zelinsky recommended modifications to the Quantum 600 which would cost $18,955.00. See Claimant's Exhibits E, F. Dr. Becker reviewed this report and, in correspondence dated December 11, 2007, concurred with the recommendations provided by Zelinsky. See Claimant's Exhibit D. However, at trial, Rossi testified that in his opinion, Zelinsky did not possess the necessary qualifications to match patients with wheelchair specifications. January 6, 2009 Transcript, p. 51. Prior to this matter proceeding to trial, the claimant was given the opportunity to undergo a wheelchair assessment at Gaylord Hospital in Wallingford, Connecticut in order to obtain a medical necessity evaluation as to what, if any, modifications to the Quantum 600 were required. The claimant declined to attend this evaluation.
Brian Rossi testified that he did not initially consult a physical therapist regarding the specifications for the claimant's wheelchair because her clinical diagnoses qualify her for a "Group 2 Chair," per the Medicare classification, which is the type of chair that was provided to the claimant. January 6, 2009 Transcript, pp. 78-79.
The report also indicates that Paul Zelinsky is the manager of rehabilitative services at the Evergreen Walk facility.
The record indicates that the original cost of the chair was $8,369.00. Claimant's Exhibit B (Delivery Receipt of June 12, 2007).
The record also contains prescription scripts issued by Dr. Becker on September 11, 2000 and November 1, 2000 reflecting his opinion that the claimant required a chair with lumbar support. See Claimant's Exhibit B. However, it does not appear that these scripts were reviewed by Connecticut Rehab personnel prior to providing the claimant with the Quantum 600; Brian Rossi testified that the claimant never proffered the scripts, January 6, 2009 Transcript, p. 40, and the claimant testified that she proffered the scripts when she met with Mr. Rossi at her home in February 2007 but he told her he would only need the scripts if the chair were denied. October 7, 2008 Transcript, p. 64.
Based on the foregoing, the trial commissioner determined that the record was devoid of evidence "as to Mr. Zelinsky's qualifications to render medical necessity opinions regarding wheelchair equipment." Findings, ¶ D. The trial commissioner also found the record similarly lacking evidence that either Dr. Becker or Dr. Zimmermann possessed "any specialized knowledge as to what specific wheelchair equipment is medically necessary for the Claimant." Findings, ¶ E. As such, the trial commissioner did not find the medical necessity opinion of Paul Zelinsky credible or persuasive and, likewise, did not find the medical necessity opinions of Dr. Becker or Dr. Zimmermann "credible or persuasive, given their reliance on Mr. Zelinsky's recommendations, whose qualifications are unknown." Findings, ¶ G. Noting that the claimant had declined the opportunity to undergo an objective evaluation at Gaylord Hospital, the trial commissioner dismissed the claim, concluding that the claimant failed to meet her burden of showing that the modifications to her Quantum 600 chair recommended by Paul Zelinsky and adopted by Dr. Becker were either reasonable or medically necessary. The trial commissioner also dismissed the claim of undue delay in the respondents' administration of the claimant's request for modifications or replacement of her Quantum 600 wheelchair.
The record indicates that Dr. Zimmermann signed a letter of medical necessity on February 28, 2007 for a wheelchair which was denied by the respondents and a second letter of medical necessity on March 9, 2007 for the wheelchair which the claimant ultimately received. However, Lori LaVallee, Sales and Funding Coordinator of Connecticut Rehab (now ATG Rehab) testified that both letters were prepared without the doctor's input and sent to him for his review and signature. See January 6, 2009 Transcript, p. 13.
The claimant hand-delivered to the Workers' Compensation Commission a timely Petition for Review on September 14, 2009 and submitted on the same date a faxed document identifying the claimant's reasons for appeal and individually rebutting a number of the trial commissioner's findings. On September 17, 2009, the claimant faxed to the commission an additional document (received on September 18, 2009) attempting to introduce into the record information relating to the claimant's communications with the Attorney General's office and reiterating the claimant's argument that the evidentiary record did not support the trial commissioner's findings. The September 17, 2009 document was the subject of a Motion to Strike on the part of the respondents, who contended that the document "constitute[d] an improper pleading" and "addresse[d] evidence which is outside of the record and should not be considered." Appellees' Motion to Strike from File, p. 1.
We note that the claimant did not file a separate Motion to Correct; as such, we would therefore ordinarily be bound by the "validity of the facts found by the trial commissioner and … limited to reviewing how the commissioner applied the law." Corcoran v. Amgraph Packaging, Inc., 4819 CRB-2-04-6, 4948 CRB-2-05-5 (July 26, 2006). However, given that the faxed document of September 14, 2009 directly addresses a number of the trial commissioner's findings in great detail, we are inclined to extend some latitude to the claimant on this procedural point on the premise that "it is the policy of Connecticut courts and this board to accommodate pro se claimants as much as possible by liberally construing procedural rules where doing so does not interfere with the rights of other parties." Walter v. Bridgeport, 5092 CRB-4-06-5 (May 16, 2007), citing Ferrin v. Glen Orne Leasing/Webster Trucking, 4802 CRB-8-04-4 (March 28, 2005). See also Vanguard Engineering, Inc. v. Anderson, 83 Conn. App. 62, 65 (2004). Indeed, while we are generally confronted with a paucity of documentation from pro se claimants, in this case, the claimant has made a strong effort to furnish this board with a detailed and substantive narrative in support of her contentions regarding her claims of error.
The claimant filed an objection to the respondents' Motion to Strike.
On September 17, 2009, the claimant also provided to the commission a Motion to Submit Additional Evidence (received on September 18, 2009) relative to her request to submit information pertaining to the qualifications of Paul Zelinsky. The claimant, noting that the respondents never disputed Zelinsky's qualifications at trial, also stated that "[t]he Commissioner needs to see the evidence the chair was prescribed by more than one physician due to her multiple injuries and mobility restrictions." Appellant's Motion to Submit Additional Evidence, p. 2. The claimant also desired the opportunity to elaborate upon her rationale for declining to attend the evaluation at Gaylord Hospital. The respondents filed a motion objecting to the claimant's Motion to Submit Additional Evidence on the basis that the claimant's submission did not comport with the standards for admission articulated in Administrative Regulation § 31-301-9. Finally, at oral argument held on March 26, 2010, the claimant again attempted to introduce additional evidence into the record, the submission of which was again objected to by the respondents.
Administrative Regulation § 31-301-9 (Rev. to 1985) states: "If any party to an appeal shall allege that additional evidence or testimony is material and that there were good reasons for failure to present it in the proceedings before the commissioner, he shall by written motion request an opportunity to present such evidence or testimony to the compensation review division, indicating in such motion the nature of such evidence or testimony, the basis of the claim of materiality, and the reasons why it was not presented in the proceedings before the commissioner. The compensation review division may act on such motion with or without a hearing, and if justice so requires may order a certified copy of the evidence for the use of the employer, the employee or both, and such certified copy shall be made a part of the record on such appeal.
The claimant ultimately provided a lengthy appellate brief consisting of a detailed narrative of the events surrounding her acquisition of the Quantum 600 and a reiteration of her rebuttal of a number of the trial commissioner's findings. The claimant attached to her brief excerpts of the transcripts from the proceedings below, several Connecticut Rehab forms, a number of miscellaneous medical reports, and a copy of photographs of her two wheelchairs. Most of the claimant's narrative pertains to the circumstances leading up to the delivery of the Quantum 600; as previously mentioned herein, we do not consider those events germane to this appeal. Moreover, while much of the claimant's narrative and many of the submitted exhibits reproduce evidence already admitted into the record, the claimant also introduced evidence regarding a number of issues which were not the subject of litigation at the formal hearings. Given that we are prohibited from considering such evidence, any extraneous information included in the claimant's narrative must be disregarded. "Where an issue has been fairly litigated, with proof offered by both parties, a claimant should not be entitled to a further hearing to introduce cumulative evidence, unless its character or force be such that it would be likely to produce a different result." (Internal quotation marks omitted.) Dengler v. Special Attention Health Svcs., Inc., 62 Conn. App. 440, 456 (2001), citing Tutsky v. YMCA of Greenwich, 28 Conn. App. 536, 542 (1992).
The claimant also attached transcript excerpts taken from a deposition of Dr. Zimmermann on August 16, 2004. Given that this transcript was neither proffered nor admitted into the evidentiary record for this appeal, we are prohibited from considering this submission in our review.
The claimant also put forward a number of contentions concerning the severity of her injuries and whether those injuries warrant the use of a wheelchair. We note that the numerous voluntary agreements in the file and voluminous medical record clearly attest to the extent of the claimant's injuries; moreover, given that the respondents have accepted the claimant's need for a wheelchair, we regard that issue as the law of the case and therefore moot. As such, we hold that the trial commissioner's statement that "[b]ased upon personal observations of the undersigned, together with credible testimony of Mr. Rossi, the Claimant has the ability to ambulate. Her complaints of discomfort are subjective and exaggerated," is improper and should be stricken. See Findings, ¶ M.
We begin our analysis of the merits of this appeal with a recitation of the wellsettled standard of deference we are obliged to apply to a trial commissioner's findings and legal conclusions.
. . . the role of this board on appeal is not to substitute its own findings for those of the trier of fact. Dengler v. Special Attention Health Services, Inc.,
62 Conn. App. 440, 451 (2001). The trial commissioner's role as factfinder encompasses the authority to determine the credibility of the evidence, including the testimony of witnesses and the documents introduced into the record as exhibits. Burse v. American International Airways, Inc.,
262 Conn. 31, 37 (2002); Tartaglino v. Dept. of Correction,
55 Conn. App. 190, 195 (1999), cert. denied,
251 Conn. 929 (1999). If there is evidence in the record to support the factual findings of the trial commissioner, the findings will be upheld on appeal.
Duddy v. Filene's (May Department Stores Co.), 4484 CRB-7-02-1 (October 23, 2002);
Phaiah v.
Danielson Curtain (C.C. Industries), 4409 CRB-2-01-6 (June 7, 2002). This board may disturb only those findings that are found without evidence, and may also intervene where material facts that are admitted and undisputed have been omitted from the findings. Burse, supra;
Duddy, supra. We will also overturn a trier's legal conclusions when they result from an incorrect application of the law to the subordinate facts, or where they are the product of an inference illegally or unreasonably drawn from the facts. Burse, supra;
Pallotto v. Blakeslee Prestress, Inc., 3651 CRB-3-97-7 (July 17, 1998).
McMahon v. Emsar, Inc., 5049 CRB-4-06-1 (January 16, 2007).
Having reviewed the voluminous submissions of the claimant, we find that insofar as the claimant is contending that the trier drew unreasonable and impermissible inferences from the facts presented, the claimant has provided a rationale for appellate review. The gravamen of the claimant's appeal appears to lie in the allegation that the trial commissioner failed to appropriately consider the testimony of certain material witnesses and erroneously credited the testimony of others. Specifically, the claimant contends that the trier erred in finding persuasive the testimony of the Connecticut Rehab personnel called by the respondents (Brian Rossi, Lori LaVallee and Brian Dyson) and in failing to credit the written submissions of Paul Zelinsky and Dr. Becker. The claimant states that "the Commissioner erred in finding Mr. Rossi [credible], who was not certified, and finding two board certified physicians, and a certified physical therapist not credible, regarding an issue of medical necessity." Appellant's Brief, p. 7. We agree.
Brian Rossi testified that when he first met with the claimant in February 2007, he had not yet received his certification as an Assistive Technologies Practitioner. January 6, 2009 Transcript, p. 57.
As previously discussed herein, the claimant submitted an extensive report prepared by Paul Zelinsky who, in addition to being a licensed physical therapist, holds a Master of Science degree and was, as of the date the report was issued (November 15, 2007), the Manager of Rehabilitation Services at ECHN's Evergreen Walk facility. See Claimant's Exhibit E. Our review of this report indicates that Zelinsky began by identifying the claimant's numerous orthopedic injuries and then proceeded to itemize the deficiencies present in the claimant's current chair. Zelinsky concluded his report by reciting a number of modifications necessary to directly address the claimant's complaints regarding the chair.
We note that Zelinsky indicated the chair analysis was done in consultation with a representative from Connecticut Rehab, although he does not specifically identify with which individual he conducted the analysis. Claimant's Exhibit E, p. 1.
The claimant also submitted Dr. Becker's report of December 11, 2007 wherein Dr. Becker indicated he had reviewed Zelinsky's report and essentially concurred with the recommendations suggested. Claimant's Exhibit D. In addition, the record contains notes from Dr. Becker dated October 5, 2007, December 14, 2007, April 4, 2008, and July 30, 2008, all of which reference the claimant's need for seating modifications. Id. These reports are in addition to the scripts dated September 11, 2000 and November 1, 2000 wherein Dr. Becker specifically stated that the claimant required lumbar support. Claimant's Exhibit B.
It is of course axiomatic that an appellate board must defer to the factual findings of the trier. "The trial commissioner's factual findings and conclusions must stand unless they are without evidence, contrary to law or based on unreasonable or impermissible factual inferences." Bowman v. Jack's Auto Sales, 13 Conn. Workers' Comp. Rev. Op. 192, 196, 1721 CRB-2-93-5 (March 22, 1995); aff'd, 54 Conn. App. 296 (1999), citing Fair v. People's Savings Bank, 207 Conn. 535, 539 (1988). Moreover, "[i]t is . . . immaterial that the facts permit the drawing of diverse inferences. The [commissioner] alone is charged with the duty of initially selecting the inference which seems most reasonable and his choice, if otherwise sustainable, may not be disturbed by a reviewing court." Fair v. People's Savings Bank, 207 Conn. 535, 540 (1988), quoting Del Vecchio v. Bowers, 296 U.S. 280, 287 (1935). Alternatively, however, if the trier appears to have drawn inferences which, based on an examination of the record, are improper or unreasonable, a reviewing body cannot sustain the conclusions reached on the basis of such inferences. Our review of the instant record suggests that this matter represents such an instance.
As previously noted herein, Brian Rossi, at trial, did offer the essentially unchallenged observation that in his opinion, Zelinsky was not qualified to render an opinion relative to matching patients with wheelchairs. At first blush, this remark would certainly seem to buttress the trier's conclusion to disregard Zelinsky's report. However, on closer examination, nowhere in the record do we find a basis for this statement. On the contrary, the entirety of the record supports the inference that Zelinsky was perfectly qualified to render such an opinion. For instance, Rossi did not testify that he ever advised the claimant to seek out a physical therapist with certain qualifications; rather, Rossi "just suggested a therapist that — whoever she's seeing as the therapist." January 6, 2009 Transcript, p. 72. Rossi also conceded that although it was his general practice to work with a patient's physical therapist in designing a suitable wheelchair, such collaboration did not occur in this instance. It was not until the second chair had been delivered to the claimant and she immediately registered complaints regarding the chair's shortcomings that Rossi recommended the claimant consult a physical therapist "[b]ecause I recognized that she may be having some more further medical issues than, you know, I think the seat that she's currently in may have — the seat that she's currently in may not be meeting her needs." Id., at 76-77. Rossi then stated that after the claimant involved Paul Zelinsky in the process, Rossi met with Zelinsky twice, accompanied by the claimant. Id., at 77. At no point in his testimony did Rossi indicate that he had any misgivings with Zelinsky's qualifications prior to Zelinsky issuing his report.
The statement is doubly perplexing in light of Rossi's admission that he himself was not yet certified when he originally evaluated the claimant in February 2007. See footnote 12, supra.
The witness testified as follows:
Q: And you did indicate that a lot of times you when you [sic] meet with someone you also coordinate the chair selection with their physical therapist if they have one and/or their doctors, isn't that correct?
A: Generally that is correct, yes.
Q: Okay. But you didn't do that in this case, did you?
A: Correct. I would like to add —
Q: No question's pending.
January 6, 2009 Transcript, p. 57.
The claimant indicated that she and Rossi met with Zelinsky on only one occasion. Appellant's Brief, p. 6.
As such, we can discern no reasonable basis for Rossi's statement at trial that Zelinsky was unqualified to render an opinion regarding modifications to the claimant's wheelchair. Rather, the record indicates that Rossi willingly cooperated with Zelinsky in evaluating the claimant's medical condition and her associated wheelchair requirements. Moreover, in his correspondence of December 11, 2007, Dr. Becker indicated he had carefully reviewed Zelinsky's report and concurred with the recommendations therein. Claimant's Exhibit D. As noted previously herein, Dr. Becker's other reports entered into the record also support the claimant's oft-repeated testimony at trial that the second chair simply failed from the beginning to provide sufficient lumbar support. Having reviewed the record in its entirety, we can discern no reasonable basis for the trier's conclusion that the claimant failed to meet her burden of proof with regard to the medical necessity for wheelchair modifications.
Although the role of Dr. Becker as the claimant's treating physician was much discussed at trial, we can find no satisfactory explanation in the record for the omission of his input into the design of the claimant's wheelchair. At trial, Lori LaVallee testified that she could not remember whether the claimant had ever instructed her to contact Dr. Becker directly regarding the wheelchair specifications. January 6, 2009 Transcript, p. 17.
That being said, however, we would offer a note of caution regarding the claimant's refusal to attend the recommended evaluation at Gaylord Hospital. The claimant testified at trial that she had had a "bad experience" with the insurance company and she felt it was wrong. January 6, 2009 Transcript, p. 108. Similarly, in her appellate brief, the claimant indicated that she was "exasperated" with the respondents' "continued game playing" and that logistically, the trip would be a "painful hardship." Appellant's Brief, p. 18. We recognize that this claim has had a long and difficult history of protracted litigation. We also are cognizant of the fact that for claimants and respondents alike navigating the workers' compensation forum can seem arduous.
Responding to a query from the trial commissioner as to why she had refused to attend an evaluation at Gaylord, the claimant stated, "Oh, no, I would have gone along with your suggestion, but my objection was it would be above and beyond what my physicians, who have treated for me 25 years, would have no value, and I didn't feel that was appropriate. There's something in my gut that told me that that was wrong." January 6, 2009 Transcript, p. 108.
Nevertheless, we would be remiss if we failed to draw the claimant's attention to the provisions contained in § 31-294f C.G.S., which requires that a claimant "submit himself to examination by a reputable practicing physician or surgeon, at any time while claiming or receiving compensation, upon the reasonable request of the employer or at the direction of the commissioner." Given the extenuating circumstances of this particular matter, we are willing to give the claimant "the benefit of the doubt" on this issue. However, we would respectfully suggest that had the claimant availed herself of the opportunity to undergo the suggested evaluation at Gaylord, the recommendations generated by that evaluation might have succeeded in paving the way for her to receive a replacement wheelchair far more quickly and efficiently than has resulted from the claimant's decision to litigate the commissioner's recommendation.
Insofar as the claimant's claims of error may be construed as including the allegation that the trier erred in failing to find the respondents liable for undue delay relative to the administration of the claimant's request for modifications to her Quantum 600 wheelchair, we do not think the claimant has provided the necessary legal support for such a claim other than her own general sense of frustration. Furthermore, we would be hard-pressed to find in accordance with the claimant's wishes given her own failure to avail herself of the opportunity for an assessment at Gaylord Hospital which arguably would have expedited the determination as to the medical necessity for the modifications. While the claimant may have had very valid reasons for not attending an assessment at Gaylord, it does not appear those reasons were articulated sufficiently in the proceedings before the trial commissioner.
As noted above, the claimant on three different occasions has sought the admission of additional evidence into the file. It is well-settled that our decision to admit such evidence is governed by the provisions of Administrative Regulation § 31-301-9, which sets forth the rationale for filing a Motion to Submit Additional Evidence. However, "[s]uch a motion cannot be granted unless the new evidence is material to the case, and the party submitting it has good reasons for not having made it available at trial." Krajewski v. Atlantic Machine Tool Works, 4500 CRB-6-02-3 (March 7, 2003), citing Drew v. Sears, Roebuck Co., 4400 CRB-7-01-5 (May 2, 2002), appeal dismissed, A.C. 23094 (August 21, 2002). Our review of the claimant's various submissions does not suggest that the additional materials she seeks to introduce comport with the standards set forth in Admin. Reg. 31-301-9. Similarly, although we have chosen to rely on the record in support of our conclusion that Paul Zelinsky possessed the necessary qualifications to proffer an opinion regarding the medical necessity for certain modifications to the claimant's wheelchair, there is no reason why additional evidence relative to those qualifications could not have been presented in the proceedings before the trial commissioner.
See footnote 9, supra.
The respondents have filed a Motion to Strike from File correspondence which the claimant faxed directly to Chairman Mastropietro on September 17, 2009 on the grounds that "it constitutes an improper pleading and not one that is acceptable as a letter addressed directly to the Chairman." Respondents' Motion to Strike from File, p. 1. The respondents also argue that "the Claimant addresses evidence which is outside of the record and should not be considered." Id. Having reviewed the claimant's contentions relative to an alleged agreement reached between the respondents and the Attorney General's office to secure for the claimant a replacement wheelchair, we hold that an inquiry into the instant parties' negotiations with a sister state agency is well outside the scope of this appeal. Accordingly, the respondents' Motion to Strike the portions of the correspondence which addressed that issue is granted and the claimant's objection to same is denied. The remaining items addressed in the faxed correspondence appear to be duplicative of evidence already contained in the record; however, insofar as any of the claimant's contentions contained therein purport to constitute a motion to introduce additional evidence, that motion is likewise denied.
Having found error, the August 25, 2009 Finding and Dismissal of the Commissioner acting for the First District is hereby reversed.
Commissioners Amado J. Vargas and Christine L. Engel concur in this opinion.
Ignition Lock Failure
Plaintiffs' claim under the CRLA is based in part on Ford's not having disclosed the risk that ignition locks in its Focus vehicles would fail. (See TAC ¶ 98 (citing Cal. Civ. Code § 1770(a)(5), (a)(7)).)
As discussed below, plaintiffs' CLRA claim is also based on an allegation that Ford "limit[ed] the warranties applicable to Focus ignition locks in an unconscionable manner." (See TAC ¶ 99 (citing Cal. Civ. Code § 1770(a)(19)).)
"The CLRA proscribes specified "unfair methods of competition and unfair or deceptive acts or practices' in transactions for the sale or lease of goods to consumers." Daugherty v. American Honda Motor Co., 144 Cal.App.4th 824, 833 (2006) (quoting Cal. Civ. Code § 1770(a)). Such acts and practices include "[r]epresenting that goods . . . have characteristics . . . which they do not have," Cal. Civ. Code § 1770(a)(5), and [r]epresenting that goods . . . are of a particular standard, quality, or grade, . . . if they are of another," id. § 1170(a)(7).
Here, as noted, plaintiffs allege Ford failed to disclose, and was under an obligation to disclose, the risk that the subject ignition locks would fail after the expiration of the warranty period. The California Court of Appeal has held that a manufacturer cannot be found liable under the CLRA for failure to disclose a defect that manifests itself after expiration of the warranty period unless such omission (1) is "contrary to a representation actually made by the defendant" or (2) pertains to a "fact the defendant was obligated to disclose." See Daugherty, 144 Cal.App.4th at 835-36.
Under California law, there are four circumstances in which an obligation to disclose may arise:
(1) when the defendant is in a fiduciary relationship with the plaintiff; (2) when the defendant had exclusive knowledge of material facts not known to the plaintiff; (3) when the defendant actively conceals a material fact from the plaintiff; and (4) when the defendant makes partial representations but also suppresses some material facts.
See Limandri v. Judkins,
52 Cal.App.4th 326, 337 (1997). As plaintiffs do not allege the existence of a fiduciary relationship or that Ford made any representations about its ignition locks, only the second and third of the above-referenced circumstances are implicated here, and, as set forth above, both require a finding of "materiality."
See,
e.g.,
Ostreicher v. Alienware Corp.,
544 F. Supp. 2d 964, 970-71 (N.D. Cal. 2008), (holding "[t]he first condition is not at issue here . . . [a]ll of the other situations require materiality"), aff'd
Ostreicher v. Alienware Corp.,
322 Fed.Appx. 489 (9th Cir. 2009).
Further, where, as here, a plaintiff's claim is predicated on a manufacturer's failure to inform its customers of a product's likelihood of failing outside the warranty period, the risk posed by such asserted defect cannot be "merely" the cost of the product's repair, see Daugherty, 144 Cal.App.4th at 836; rather, for the omission to be material, the failure must pose "safety concerns," see id. at 835-838. In other words, under California law, and as recently described by the Ninth Circuit: "A manufacturer's duty to consumers is limited to its warranty obligations absent either an affirmative misrepresentation or a safety issue." See Oestriecher v. Alienware Corp., 322 Fed.Appx. at 493 (affirming dismissal of CLRA, UCL and fraudulent concealment claims where plaintiff failed to allege defendant had "affirmatively misrepresented its products" or that the alleged defect "posed a threat to his own safety or the safety of others").
Such rule is consistent with the policies underlying California warranty law. As noted in Daugherty:
`[V]irtually all product failures discovered in automobiles after expiration of the warranty can be attributed to a `latent defect' that existed at the time of sale or during the term of the warranty. All parts will wear out sooner or later and thus have a limited effective life. Manufacturers always have knowledge regarding the effective life of particular parts and the likelihood of their failing within a particular period of time. . . . [M]anufacturers . . . can always be said to `know' that many parts will fail after the warranty period has expired. A rule that would make failure of a part actionable based on such `knowledge' would render meaningless time/mileage limitations on warranty coverage.'
See Daugherty,
144 Cal.App.4th at 830-31 (alterations in original) (quoting
Abraham v. Volkswagen of America, Inc.,
795 F.2d 238, 250 (2d Cir. 1986)). Indeed, as noted by the district court in
Oestreicher, "the purpose of a warranty is to contractually mark the point in time during the useful life of a product when the risk of paying for repairs shifts from the manufacturer to the consumer."
See Oestreicher,
544 F.Supp.2d at 972 (citing
Abraham,
795 F.2d at 250). Further, the rule set forth in
Daugherty is consistent with the general policy stated by the California Supreme Court that although "[a] consumer should not be charged at the will of the manufacturer with bearing the risk of physical injury when he buys a product on the market," the consumer nevertheless "can . . . be fairly charged with the risk that the product will not match his economic expectations unless the manufacturer agrees that it will."
See Seely v. White Motor Co.,
63 Cal.2d 9, 18 (1965);
see,
e.g.,
Berenblat v. Apple Inc.,
2009 WL 2591366, *5-7 (N.D. Cal. 2009) (dismissing claims based on allegedly defective computer component; stating "[t]he failure to disclose a defect that
might, or might not, shorten the effective life span of [a product] that functions precisely as warranted throughout the terms of the express warranty" is not actionable);
Morgan v. Harmonix Music Systems, Inc.,
2009 WL 2031765, *4 (N.D. Cal. 2009) (dismissing claims based on allegedly defective video game drum pedals; noting that "[a]ccording to all of the relevant case law, defendants are only under a duty to disclose a known defect in a consumer product when there are safety concerns associated with the product's use");
Wilson v. Hewlett Packard Co.,
2009 WL 3021240, *1 (N.D. Cal. 2009) (dismissing CLRA claim based on manufacturer's alleged duty to disclose omitted fact where safety concerns not implicated);
Hoey v. Sony Electronics, Inc.,
515 F. Supp. 2d 1099, 1105 (N.D. Cal. 2007) (holding "[t]here is no authority that provides that the mere sale of a consumer electronics product in California can create a duty to disclose any defect that may occur during the useful life of the product").
Accordingly, because plaintiffs' CLRA claim is not based on any misrepresentation made by Ford, but rather is based on an allegation that Ford had a duty to disclose the risk its ignition locks would fail, plaintiffs' claim, absent evidence of a safety concern, cannot succeed. See Daugherty, 144 Cal.App.4th at 835-838.
Plaintiffs' reliance on cases assertedly holding to the contrary, see Falk v. General Motors Corp., 496 F.Supp.2d 1088, 1096 (N.D. Cal. 2007); Chamberlan v. Ford Motor Co., 369 F.Supp.2d 1138, 1145 (N.D. Cal. 2005), is unavailing as the defects alleged in those cases were found to raise safety concerns. See Oestreicher, 544 F.Supp.2d at 971 (distinguishingFalk; noting "safety consideration" presented by defective speedometer was "integral" to district court's finding of materiality); Daugherty, 144 Cal.App.4th at 839 n. 8 (distinguishing Chamberlain as involving "dangerous manifold defect").
2. Safety Issue
As a threshold matter, Ford argues the Court should follow the reasoning of Iannacchino v. Ford Motor Co., 888 N.E. 2d 879, 888 (Mass. 2008), by finding Ford had no duty to disclose the failure rate of its ignition locks unless plaintiffs have offered evidence Ford violated a "legally required" safety standard. InIannacchino, the Massachusetts Supreme Court held:
Where, as in this case, there is no allegation that the plaintiffs — or indeed anyone else — have suffered personal injury or property damage, the
complaint must identify a legally required standard that vehicles were at least implicitly represented as meeting, but allegedly did not. When the standard that a product allegedly fails to meet is not one legally required by and enforced by the government, a claim of economic injury based on overpayment lacks the premise that the purchase price entitled the plaintiffs to a product that met that standard.
See Iannachino 888 N.E. 2d at 888.
As the relevant "legally required" standard, Ford points to the National Highway Traffic Safety Act ("Safety Act"), 49 U.S.C. § 3010, et seq. (See Def.'s Smith Mot. at 13:28-14:7.) In response, plaintiffs argue their CLRA claim is not dependent on a violation of the Safety Act because the rule expressed inIannacchino does not reflect California law and because, unlike in Iannacchino, the plaintiffs here have suffered property damage. (See Pls.' Opp'n at 30:9-31:4.)
The Court declines to follow Iannacchino. Ford cites to no case authority, and the Court is aware of none, in which a court, applying California law in deciding whether to impose a duty to disclose a safety-related defect, has required a plaintiff to offer evidence of a violation of a standard legally required by and enforced by the government. See, e.g., Ostreicher I, 544 F. Supp. 2d at 971 (striking plaintiff's CLRA claim without reference to safety standard); see also Daugherty, 144 Cal. App. 4th at 836 (finding, without reference to Safety Act or other safety standard, "complaint [was] devoid of factual allegations showing any instance of physical injury or any safety concerns").
Accordingly, the Court finds Smith and Klein may demonstrate a duty to disclose without showing the alleged ignition-lock defect violates a standard legally required by and enforced by the government under the Safety Act or other statute or regulation. The Court does, however, find the standards set forth under the Safety Act to be relevant to a determination of whether an alleged defect in an automotive part presents a safety concern.
Indeed, plaintiffs agree the Safety Act "is among the legal standards against which ignition-lock failure may be measured." (See Pls.' Opp'n at 31:4-6.)
Here, plaintiffs argue, the subject ignition locks present "safety/security risks" because such locks can (1) prevent drivers from starting their vehicles, and (2) prevent drivers from shutting off their vehicles' engines. (See Pls.' Opp'n at 29:17-19.)
a. Inability to Start Vehicle
Ford argues "there are no reports that anyone has ever been injured" by the failure of an ignition lock, and that the dangers described by plaintiffs are too speculative to amount to a safety issue giving rise to a duty of disclosure. (See Def.'s Mot. (Smith) at 14:13-25.) Ford further argues, by reference to the Safety Act, that "motor vehicle safety" does not include "any conceivable safety hazard, no matter how insignificant" (see id. at 14:26-15:4) (citing United States v. General Motors Corp., 656 F. Supp. 1555, 1579 (D.D.C. 1987)), but, rather, means "the performance of motor vehicles in such a manner that the public is protected against unreasonable risk of accidents" (see id. at 14:27-15:1) (citing 49 U.S.C. § 30102(a)(8)) (internal quotation omitted). Additionally, Ford argues, the National Highway Transportation Safety Authority ("NHTSA"), which sets and enforces safety performance standards for motor vehicles and motor vehicle equipment, has denied petitions for defect investigations where the alleged defect theoretically could create a safety problem but the risk is small, and, in particular, "has consistently denied defect petitions under circumstances where the risk of not being able to start the vehicle was accompanied by other, even more serious risks." (See id. at 15) (citing NHTSA denials of defect petitions).
As defined in 49 U.S.C. § 30102, "`motor vehicle safety' means the performance of a motor vehicle or motor vehicle equipment in a way that protects the public against unreasonable risk of accidents occurring because of the design, construction, or performance of a motor vehicle, and against unreasonable risk of death or injury in an accident, and includes nonoperational safety of a motor vehicle." 49 U.S.C. § 30102(a)(8).
See Denial of Petition, NHTSA notice, 71 Fed. Reg. 14988 (Mar. 24, 2006) (denying petition where, inter alia, "shifter could not be shifted out of the `Park' position"; stating "petitioner has not provided any evidence of a safety-related defect"); Denial of Petition, NHTSA notice, 67 Fed. Reg. 61375 (Sept. 30, 2002) (denying petition where, malfunction reportedly caused, inter alia, "no start"; stating "the . . . defect alleged in the petition does not appear to be related to motor vehicle safety within the meaning of our statute"); Denial of Petition, NHTSA notice, 66 Fed. Reg. 55243 (Nov. 1, 2001) (denying petition where, inter alia, reported defect "caus[ed] engine to stall or fail to start").
In response, plaintiffs argue that "being unexpectedly stranded" raises safety concerns sufficient to require disclosure. Plaintiffs point, for example, to a complaint by a diabetic who reported that when her ignition lock failed, preventing her from starting the vehicle, she was "not able to get to her medicine." (See Fazio Decl. Ex. H at 27.) Plaintiffs also point to what appears to be an in-house document, titled "Launch Brand Plan," in which Ford listed its "battery saver technology" and "fail-safe coolant" under the heading "safety/security." (See Fazio Decl. Ex. S at 45, 47.) "Security" concerns, however, are distinguishable from "safety" concerns and, in any event, a marketing plan for batteries is not, contrary to plaintiffs' argument, a concession that the defect at issue herein requires disclosure. Lastly, relying on cases decided under the Safety Act, plaintiffs argue that a part that fails in large numbers is more likely to pose a safety concern than a part that fails only on isolated occasions. (See Pls.' Opp'n at 31:7-10.) As defendants point out, however, the cases on which plaintiffs rely concerned a "severe risk of injury while the vehicle was in motion." (See Def's Reply at 9:1-19); see, e.g., United States v. General Motors Corp., 561 F.2d 923, 929 (D.C. Cir. 1977 (dissenting opinion) (discussing "sudden loss of steering" caused by defective steering system); United States v. General Motors Corp., 518 F.2d 420, 438, (D.C. Cir. 1975) (discussing wheel failures).
Plaintiffs also offer evidence that in 1983 Alfa Romeo recalled its GTV6 and Spider models due to an electrical problem that "intermittent[ly]" prevented the vehicles from starting. (See Fazio Decl. ¶ 26, Ex. V (stating "inability to start and move the vehicle from the roadway could result in an accident").) The reason for the recall, however, is not reflected in the document submitted, nor is there any evidence that the recall was required under the Safety Act or otherwise.
Having considered the parties' respective evidentiary showings and the applicable law, the Court agrees with Ford that the dangers envisioned by plaintiffs are speculative in nature, deriving in each instance from the particular location at which the driver initially has parked the vehicle and/or the driver's individual circumstances. Plaintiffs offer no evidence that the ignition-lock defect causes engines to shut off unexpectedly or causes individuals to stop their vehicles under dangerous conditions. Nor do plaintiffs offer any legal authority for their argument that a failure to start a vehicle poses a safety concern requiring disclosure. Moreover, to impose such a duty based on risks of the nature cited by plaintiffs, would effectively require auto manufacturers to disclose the failure rate of every part that potentially could immobilize a vehicle. In the absence of authority to such effect, the Court declines to do so.
Accordingly, the Court finds plaintiffs have not offered evidence sufficient to support a finding that the failure to start resulting from the ignition-lock defect presents a risk to safety such that the nondisclosure of such defect constitutes a material omission.
b. Inability to Shut off Engine
Plaintiffs also assert that the ignition-lock defect can prevent the engine from being turned off. Ford argues to the contrary. In support thereof, Ford submits the affidavit of Paul Taylor, Ph.D. ("Dr. Taylor"), an expert in the field of mechanical engineering who specializes in the analysis and prevention of failures and accidents. (See Affidavit of Paul Taylor ("Taylor Aff.") ¶ 2. Dr. Taylor describes his evaluation of the subject ignition locks and concludes there are "two separate circumstances where [the subject ignition locks] do not operate correctly . . . [and] neither of these conditions will result in a circumstance where . . . the engine cannot be turned off." (See id. ¶ 5.) As Dr. Taylor further explains, the subject ignition-lock defect cannot result in an inability to turn off the engine because the key cannot become stuck in the "Start" or "Run" positions. (See id. ¶¶ 6, 7, 9.) Plaintiffs offer no expert opinion to the contrary.
Plaintiffs' objection to the above opinion under Rule 702 of the Federal Rules of Evidence and Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579, 590-91 (1993) is hereby overruled. Contrary to plaintiff's objection, the Court finds Dr. Taylor's opinion to be the "product of reliable principles and methods." See id.; (see also Taylor Aff. ¶¶ 5-9) (describing procedure by which ignition lock components were placed in clear plastic housing and actions of components were observed when "dislodged and displaced to the limit that geometry allows"; providing detailed diagrams and photographs).
Further, Dr. Taylor reports, he searched the warranty records in Ford's AWS database, and "[i]n no instance was a warranty record found where the key was jammed" in those positions (See id. ¶ 10.)
Indeed, the TAC contains no allegation to the effect that the ignition-lock failure can result in an inability to shut off the engine.
Rather, plaintiffs offer records from Ford's AWS database and Ford's Customer Quality Indicator System ("CQIS') database, which records, plaintiffs argue, are evidence that ignition-lock failures have prevented some Focus drivers from shutting off their engines. (See Fazio Decl. ¶ 3; Micheletti Decl. Exs. 25, 26.) Ford objects that such complaints are inadmissible hearsay. (See Def.'s Reply at 8 n. 4.) The Court agrees. Plaintiffs make no argument, let alone submit evidence to lay a foundation to show, the customers' complaints, comments by any mechanic, or any other remarks contained therein qualify under any exception to the hearsay rule. Nor is any such exception apparent from the documents themselves. (See, e.g., Micheletti Decl. Ex. A (Bonnici Dep.) at 287:24-288:2) (testifying, in response to question as to source of entry in CQIS database: "I have no idea where this recommendation came from.");id. at 304:4-305:22 (testifying in response to question regarding AWS documents shown to him: "I've never seen data in this format."; also testifying AWS database contains complaints irrespective of whether deemed erroneous because "it's just all thrown in there").)
Accordingly, Ford's objection to said evidence is hereby sustained.
Even if the records were admissible, however, the undisputed evidence demonstrates the vast majority of the reports clearly do not reflect an ignition-lock problem, but, rather, an ignition-switch problem, i.e., an electrical problem, which is not the subject of plaintiffs' complaint, and the remaining one or two are more consistent with an electrical problem than an ignition-lock problem. (See Micheletti Decl. Ex. A (Bonnici Dep.) at 287-306 (explaining content of each report; distinguishing inability to shut off "engine" as opposed to "ignition").)
The court also notes that although one might speculate as to how an inability to shut off a vehicle's engine potentially could, in some instances, pose a safety risk, none of the reports suggests the customer encountered any danger, nor do plaintiffs offer any other evidence in that regard. To the extent plaintiffs cite to St. Phard v. Ira Olds Toyota Co., Inc., 1997 WL 1366845, *1-2 (Mass. Super. 1997) in an effort to make such a showing, plaintiffs' reliance is misplaced; the vehicle in that case had smoke "com[ing] through the dashboard" before the owner unsuccessfully tried to turn off the engine. See id.
Accordingly, the Court finds plaintiffs have not offered evidence sufficient to support a finding that the ignition-lock defect results in an inability to shut off the vehicle's engine.
3. Replacement Lock Claims
Plaintiffs argue Ford failed to move for summary judgment on plaintiffs "replacement" lock claims and thus is not entitled to summary judgment thereon. (See Pls.' Opp'n at 24:8-11.) As discussed above, however, because plaintiffs have offered no evidence of any misrepresentation made by Ford as to the risk of failure of its ignition locks, nor offered evidence sufficient to support a finding that the ignition locks posed a safety concern, Ford was under no duty to disclose the risk that its ignition locks would fail after the expiration of the warranty period. See Oestriecher II, 322 Fed.Appx. at 493. Such reasoning applies equally to plaintiffs' replacement lock claims. (See TAC ¶ 85 b. (alleging ignition-lock failure after expiration of limited warranty provided with replacement locks).)
4. Conclusion as to CLRA
Because plaintiffs have failed to offer evidence sufficient to support a finding that the ignition-lock defect posed or poses a risk to safety, to the extent plaintiffs' claims under the CLRA are based on Ford's alleged duty to disclose the risk that its original and replacement ignition locks would fail, Ford is entitled to summary judgment.
As discussed below, to the extent plaintiffs' claims under the CLRA are based on an allegation that Ford's standard warranty is unconscionable, such claims likewise fail.
B. Fraudulent Concealment
"The elements of an action for fraud and deceit based on concealment are (1) the defendant must have concealed or suppressed a material fact, (2) the defendant must have been under a duty to disclose the fact to the plaintiff, (3) the defendant must have intentionally concealed or suppressed the fact with the intent to defraud the plaintiff, (4) the plaintiff must have been unaware of the fact and would not have acted as he did if he had known of the concealed or suppressed fact, and (5) as a result of the concealment or suppression of the fact, the plaintiff must have sustained damage." See Hahn v. Mirda, 147 Cal.App.4th 740, 748 (2007).
Here, because Ford, as discussed above, owed plaintiffs no duty to disclose the risk that its ignition locks would fail, Ford is entitled to summary judgment on plaintiffs' fraudulent concealment claim. See Oestriecher II, 322 Fed.Appx. at 493 (holding, because plaintiff had not alleged defendant made a misrepresentation or that the alleged defect posed a safety risk, the "district court . . . properly dismissed [plaintiff's] . . . fraudulent concealment claim").
Accordingly, to the extent plaintiffs' fraudulent concealment claim is based on Ford's alleged duty to disclose the risk of failure of the subject ignition locks, Ford is entitled to summary judgment.
As discussed below, to the extent plaintiffs' fraudulent concealment claim is based on an alleged duty to disclose a secret warranty program, such claim likewise fails.
C. Ford's Standard Warranty
Ford argues it is entitled to summary judgment because its standard three-year, 36,000 mile warranty is not unconscionable. Smith contends Ford's warranty, as applied to the ignition lock, is unconscionable because the warranty is presented in the form of a nonnegotiable contract and contains a durational limitation that Ford enforces with respect to a known, latent defect. (See Pls.' Opp'n at 46:18-21.)
As noted above, Klein purchased her Focus vehicle "as-is" from a third party. (See Klein Dep. 55:19-21.)
"Unconscionability is ultimately a question of law for the court." See Am. Software v. Ali, 46 Cal. App. 4th 1386, 1391 (1996). "Unconscionability has both a procedural and a substantive element." See Aron v. U-Haul Co. of California, 143 Cal.App.4th 796, 808 (2006). "Both elements must be present for a court to invalidate a contract or clause[.]" Id. (emphasis added). "The procedural element of unconscionability focuses on two factors: oppression and surprise." Id. at 808. "Oppression arises from an inequality of bargaining power which results in no real negotiation and an absence of meaningful choice." Id. (internal quotation and citation omitted). "Surprise involves the extent to which the supposedly agreed-upon terms of the bargain are hidden in a prolix printed form drafted by the party seeking to enforce the disputed terms." Id. (internal quotation and citation omitted). "The substantive element of unconscionability focuses on the actual terms of the agreement and evaluates whether they create overly harsh or one-sided results that shock the conscience." See id. (internal quotations and citations omitted).
Here, Smith fails to offer evidence sufficient to support a finding that the procedural element of unconscionability has been met. In particular, Smith offers no evidence to show he lacked other options for purchasing vehicles from other manufacturers or for obtaining additional warranty protection from Ford.See Dean Witter Reynolds, Inc. v. Super Ct., 211 Cal. App.3d 758, 768 (1989) (finding "claim of oppression may be defeated if the complaining party had reasonably available alternative sources of supply from which to obtain the desired goods . . . free of the terms claimed to be unconscionable"). Indeed, Smith acknowledges extended warranty options were available from Ford and that he chose not to purchase any such extended warranty. (See Smith Dep. at 20:15-21:18, 51:14-52:18);see also Berenblat v. Apple, Inc., 2010 WL 1460297, *4-5 (N.D. Cal. 2010) (holding, on motion to dismiss, plaintiffs failed to allege "oppression" where, despite nonnegotiability of warranty terms, plaintiffs did not allege "they lacked other options for purchasing laptop computers or for obtaining additional warranty protections from [defendant] itself"). Nor does Smith offer any evidence to show he was "surprised" by the terms of Ford's standard warranty. To the contrary, Smith admits he was aware of the durational limits at the time he purchased the warranty. (See Smith Dep. 20:15-21:3); see also Aron, 143 Cal.App.4th at 809 (finding plaintiff failed to plead claim based on procedural unconscionability where only "surprise" allegedly "arose from his discovery that the fuel gauge was an imprecise means of measurement" and "actual obligations imposed on him by the contract were clear").
Smith likewise fails to offer evidence sufficient to support a finding in his favor as to the substantive element of unconscionability. Relying on Carlson v. General Motors Corp., 883 F.2d 287 (4th Cir. 1989), Smith argues the durational limitation in his warranty is unconscionable because Ford knew of a latent defect at the time of sale. Carlson, however, was not based on California law, and concerned claims based on an implied, rather than express, warranty. See id. at 290. Moreover,Carlson, was decided on a motion to dismiss, not a motion for summary judgment, and, consequently, the Fourth Circuit held, it was premature to resolve the issue of unconscionability without allowing the parties to "present evidence of the circumstances surrounding the original consummation of their contractual relationship," including the existence of meaningful alternatives. See Carlson 883 F.2d at 292-93 (observing, "unconscionability generally . . . include[s] an absence of meaningful choice") (internal quotation and citation omitted) (alteration in original). As discussed, plaintiffs have submitted no evidence to support a finding that Smith lack a reasonable alternative, or any other evidence to support a finding of procedural unconscionability. See Aron, 143 Cal.App. 4th at 808 (holding claim of unconscionability requires showing of both procedural and substantive elements).
Similarly, Smith's reliance on Maniscalco v. Brother Int'l Corp., 627 F.Supp. 2d 494 (D. N.J. 2009) and Bussian v. Daimler Chrysler Corp., 411 F.Supp. 2d 614 (M.D. N.C. 2006), is unavailing. Again, both cases were decided on motions to dismiss, neither case was decided under California law, and to the extent either such opinion is inconsistent therewith, see, e.g.,Daugherty, 144 Cal.App. 4th 830-31, has no bearing on the Court's analysis herein. Lastly, Bussian is distinguishable for the additional reason that the plaintiffs therein had alleged a lack of meaningful choice due to a lack of warranty competition. See Bussian 411 F.Supp. 2d at 622.
Accordingly, to the extent plaintiffs' CLRA and other claims are based on the asserted unconscionability of Ford's standard warranty, Ford is entitled to summary judgment.
D. Secret Warranty Law
Under California's Secret Warranty Law: "[a] manufacturer shall, within 90 days of the adoption of an adjustment program, subject to priority for safety or emission-related recalls, notify by first-class mail all owners or lessees of motor vehicles eligible under the program of the condition giving rise to and the principal terms and conditions of the program." See Cal. Civ. Code § 1795.92(a). "Adjustment program" is defined as follows:
"Adjustment program" means any program or policy that expands or
extends the consumer's warranty beyond its stated limit or under which a manufacturer offers to pay for all or any part of the cost of repairing, or to reimburse consumers for all or any part of the cost of repairing, any condition that may substantially affect vehicle durability, reliability, or performance, other than service provided under a safety or emission-related recall campaign. "Adjustment program" does not include ad hoc adjustments made by a manufacturer on a case-by-case basis.
See Cal. Civ. Code § 1790(d).
Here, plaintiffs allege that Ford's After-Warranty Assistance ("AWA") was an "adjustment program" as defined under California's Secret Warranty Law (see TAC ¶¶ 87, 91, 105(a)); see also, Cal. Civ. Code § 1795.90 et seq., and, consequently, that Ford had a duty to disclose such program to owners and lessees of its vehicles. Ford moves for summary judgment, arguing AWA is not an "adjustment program" as defined under the Secret Warranty Law, but rather falls within the statute's exception for "ad hoc" adjustments. See Cal. Civ. Code § 1795.90(d).
In Morris v. BMW of North America, LLC, 2007 WL 3342612 (N.D. Cal. 2007) the court found plaintiffs had adequately pleaded a violation of the Secret Warranty Law where BMW was alleged to have failed to disclose its "plan to reimburse purchasers of 3 Series automobiles for replacement tires." See Morris, 2007 WL 3342612 at *2. By contrast, in Cirulli v. Hyundai Motor Co., 2009 WL 5788762 (C.D. Cal. 2009), the complaint therein was found insufficient to plead an adjustment program where the plaintiff alleged the defendant "reflexively denied warranty claims for [some] repairs as untimely, while quietly paying for repairs for the most vocal [c]lass members on a case-by-case basis," and that defendant "repaired or replaced certain customers' sub-frames free of charge due to corrosion outside the warranty period, purportedly as a gesture of `goodwill.'" See Cirulli, 2009 WL 5788762 at *6 (emphasis in original omitted) (further holding "paying for repairs for the most vocal [c]lass members" while "reflexively" denying claims for others is not, without more, a violation of the Secret Warranty Law).
Here, plaintiffs argue that an "ad hoc" or "case-by-case" adjustments must be "standardless" and that the questions contained in Ford's materials describing the AWA constitute "eligibility requirements"; thus, plaintiffs conclude, the AWA provides for "more than ad hoc judgments." (See Pls.' Opp'n at 50:6-9; see also Bradley Decl. Ex. 3 (Warranty Policy Manual) at 6 (suggesting questions for dealers to consider before offering "afterwarranty assistance").) Plaintiffs further point to Ford's replacement thereunder of a large number of locks as further support for their argument that AWA adjustments are not "ad hoc" or "case-by-case." (See Pls.' Opp'n at 50:9-10 (noting Ford replaced more than 16,000 Focus ignition locks in its 2000-2006 model years Focus vehicles). The Court finds plaintiffs' arguments unpersuasive.
First, as Ford points out, the documents on which plaintiffs rely show AWA applies generally to all customers who incur after-warranty repair costs, and that the adjustments are not specific to customers with ignition-lock problems. In Morris, by contrast, BMW had adopted a plan specifically to reimburse "purchasers of 3 Series automobiles for replacement tires." See Morris, 2007 WL 3342612 at *2.) Ford's AWA thus is distinguishable from the program addressed inMorris and, instead, is analogous to the adjustments before the court in Cirulli, in that it expressly requires dealers to make decisions on a "case-by-case" basis, upon consideration of the circumstances pertaining at the time the customer makes a complaint. See Cirulli, 2009 WL 5788762 at *6; Bradley Decl. Ex. 3 at 6 (providing "[AWA] is a payment made on a case-by-case basis. . . . AWA may be offered when a [Ford] vehicle is not performing to customer expectation and there is an opportunity for increased customer satisfaction and owner loyalty"; further providing "AWA decisions should be made on a case-by-case basis considering all factors, including past loyalty and the likelihood of favorably influencing the customer's satisfaction and future sales and service intentions") (emphasis added).
Moreover, plaintiff's contention that an "ad hoc" decision must be "standardless" is unsupported by any citation to case or statutory authority. As defined by Black's Law dictionary, "ad hoc" means "[f]ormed for a particular purpose." See Blacks Law Dictionary 46 (9th ed. 2009). Nothing in Ford's AWA materials is inconsistent with this definition. (See Bradley Decl. Ex. 3 at 6-7 (suggesting matters for consideration that may "help" with determination as to whether customer "may or may not deserve an AWA," such as: (1) "Has this person been a long-time customer?"; (2) "Has the vehicle been properly maintained?"; (3) "Does the customer like his/her vehicle aside from the present concern?"; (4) "Was this an especially upset customer?"; (5) "Do you believe AWA would favorably influence this customer's future new car purchase decision?").)
Accordingly, because plaintiffs have failed to offer evidence sufficient to support a finding that Ford's AWA is an "adjustment program," to the extent plaintiffs' claims are based on an alleged violation of the Secret Warranty Law, Ford is entitled to summary judgment.
E. UCL
Plaintiffs allege Ford violated California's Unfair Competition Law by engaging in the conduct on which plaintiffs' other causes of action are based. The UCL prohibits business acts or practices that are (1) fraudulent, (2) unfair, or (3) unlawful. See Cal. Bus. Prof. Code § 17200; see also Daugherty, 144 Cal.App.4th at 837-839 (describing "three prongs" of UCL).
1. Fraudulent Conduct
In order to state a claim under the UCL for fraudulent business practices, a plaintiff must show that "members of the public are likely to be deceived" by the practices alleged. See Bardin, 136 Cal.App.4th at 1261. As applicable to plaintiffs' UCL claims in the instant action, the Court finds the reasoning of the California Court of Appeal in Daugherty to be persuasive and dispositive:
We cannot agree that a failure to disclose a fact one has no affirmative duty to disclose is likely to deceive anyone within the meaning of the UCL. . . . [I]n order to be deceived, members of the public must have had an expectation or an assumption about the matter in question. . . . The only expectation buyers could have had about the [defective] engine was that it would function properly for the length of Honda's express warranty, and it did. Honda did nothing that was likely to deceive the general
public by failing to disclose that [the] engine might, in the fullness of time, eventually dislodge the front balancer shaft oil seal and cause an oil leak.
See Daugherty,
144 Cal.App.4th at 838.
Here, as discussed above, plaintiffs have failed to show an affirmative duty to disclose the risk of post-warranty failure of the ignition locks; consequently, plaintiffs have not shown that a reasonable customer could have been deceived, because, as a matter of law, the only expectation customers could have had about the subject ignition locks was that they would function for the length of Ford's express warranty. Further, as discussed above, plaintiffs have not shown Ford was required to publicize its AWA.
2. Unfair Conduct
Similarly, to the extent plaintiffs' UCL claim is brought under the "unfair prong," such claim is unavailing because, as stated in Daugherty, "the failure to disclose a defect that might, or might not, shorten the effective life span of an automobile part that functions precisely as warranted throughout the term of its express warranty cannot be characterized as causing a substantial injury to consumers, and accordingly does not constitute an unfair practice under the UCL." See id. at 839. Likewise, plaintiff's failure to show Ford's AWA constituted a secret warranty precludes plaintiffs' claim that any lack of publication thereof constituted an unfair business practice under the UCL.
3. Unlawful Conduct
Lastly, as brought under the "unlawful prong" of the UCL, plaintiffs' claim is derivative of plaintiffs' CLRA, fraudulent concealment, and Secret Warranty Law claims, and, consequently, fails as well.
4. Conclusion as to UCL Claims
Accordingly, Ford is entitled to summary judgment on plaintiffs' UCL claims.
F. Unjust Enrichment
Plaintiffs bring a separate cause of action titled Unjust Enrichment. Unjust enrichment, however, "is not a separate cause of action," but, rather, must rely on some other claim that is cognizable. See Jogani v. Superior Court, 165 Cal.App.4th 901, 911 (2008) ("[U]njust enrichment is not a cause of action[;] [r]ather it is a general principle underlying various doctrines and remedies [.]"); see also IB Melchior v. New Line Prods., Inc. 106 Cal.App.4th 779, 793 (2003) ("[T]here is no cause of action in California for unjust enrichment[;] [t]he phrase `Unjust Enrichment' does not describe a theory of recovery, but an effect: the result of a failure to make restitution under circumstances where it is equitable to do so.") (internal quotation and citation omitted). As described above, Ford is entitled to summary judgment on each of plaintiffs' other claims.
Accordingly, Ford is entitled to summary judgment on plaintiffs' claim for unjust enrichment.
In light of the above rulings, the Court does not address herein Ford's additional arguments in support of summary judgment.
CONCLUSION
For the reasons stated above:
1. Ford's Motion for Summary Judgment as to plaintiff Richard Smith is hereby GRANTED.
2. Ford's Motion for Summary Judgment as to plaintiff Rebecca Klein is hereby GRANTED.
IT IS SO ORDERED.