Daugherty v. American Honda Motor Co. Inc

In Daugherty v. American Honda Motor Co. Inc. (2006) 144 Cal.App.4th 824, the court affirmed the grant of a demurrer with respect to a class action complaint that "alleged an automobile manufacturer breached its express warranties and violated federal and state consumer protection laws, by failing to disclose an engine defect that did not cause malfunctions in the automobiles until long after the warranty expired." (Id. at p. 827.) In Daugherty, the vehicle engine was alleged to have a defect that caused eventual oil loss and engine damage. (Ibid.) Several of the named plaintiffs' vehicles had not experienced the problem, and those that had did not begin to malfunction until well after the covered period in the express warranty. (Id. at pp. 828-829, 830.) Regarding the California Consumer Legal Remedies Act (CLRA), Daugherty explained that the statute "proscribes specified 'unfair methods of competition and unfair or deceptive acts or practices' in transactions for the sale or lease of goods to consumers. (Civ. Code, 1770, subd. (a).) The unlawful acts or practices include: P--'Representing that goods . . . have . . . characteristics . . . which they do not have . . . ." (Civ. Code, 1770, subd. (a)(5)); and P--'Representing that goods . . . are of a particular standard, quality, or grade, . . . if they are of another.' (Civ. Code, 1770, subd. (a)(7).)" (Daugherty, supra, 144 Cal.App.4th at p. 833.) The Daugherty plaintiffs contended that the manufacturer violated the CLRA by failing to disclose the potential oil loss, despite its knowledge of the problem, and continuing to sell cars with the defect. The court rejected the claim, reasoning that "the complaint fails to identify any representation by Honda that its automobiles had any characteristic they do not have, or are of a standard or quality they are not. All of plaintiffs' automobiles functioned as represented throughout their warranty periods, and indeed many still have experienced no malfunction." (Daugherty, at p. 834.) Daugherty also addressed the scope of warranty coverage, an issue plaintiffs do not raise on appeal. The court noted the general rule that an express warranty does not cover repairs made after the time or mileage established by the warranty and rejected the suggestion that such warranties also cover a latent defect that emerged after expiration of the warranty period. (Daugherty, supra, 144 Cal.App.4th at p. 830.) BR> The court held the plaintiff could not properly plead a state cause of action for breach of express warranty, which had expired, and without such a viable state claim, the Magnuson-Moss claim likewise failed. (Daugherty, supra, at pp. 832-833.) The court explained, "Magnuson-Moss 'calls for the application of state written and implied warranty law, not the creation of additional federal law,' except in specific instances in which it expressly prescribes a regulating rule." (Daugherty, supra, at pp. 832-833.) Accordingly, that plaintiff's "failure to state a warranty claim under state law necessarily constituted a failure to state a claim under Magnuson-Moss." (Daugherty, supra, at p. 833.)