Lemon Law California New Car
Section 1793.2 is part of a statutory scheme similar to laws enacted in many other states, commonly called "lemon laws." (See Murillo v. Fleetwood Enterprises, Inc. (1998) 17 Cal. 4th 985, 989-990 [73 Cal. Rptr. 2d 682, 953 P.2d 858]; Annot., Validity, Construction, and Effect of State Motor Vehicle Warranty Legislation (Lemon Laws) (1987) 51 A.L.R.4th 872, 876-879, 2(a).)
We must decide an issue of first impression under California's version of the lemon law: Whether the buyer of a new motor vehicle may recover paid finance charges from the manufacturer when electing the statute's refund remedy.
In part, section 1793.2 declares a "manufacturer or its representative" who "is unable to service or repair a new motor vehicle . . . to conform to the applicable express warranties after a reasonable number of attempts, . . . shall either promptly replace the new motor vehicle . . . or promptly make restitution to the buyer in accordance with subparagraph (B). . . ." ( 1793.2(d)(2).)
The latter subparagraph states, "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 tax, license fees, registration fees, and other official fees, plus any incidental damages to which the buyer is entitled under Section 1794, including, but not limited to, reasonable repair, towing, and rental car costs actually incurred by the buyer." ( 1793.2(d)(2)(B).)
In addition, section 1793.2(d)(2) expressly characterizes the refund remedy as "restitution." ( 1793.2(d)(2)(B).)
This remedy is intended to restore "the status quo ante as far as is practicable . . . ." (Alder v. Drudis (1947) 30 Cal. 2d 372, 384 [182 P.2d 195].)
Section 1692 declares that in an action to rescind a contract, "[t]he aggrieved party shall be awarded complete relief, including restitution of benefits, if any, conferred by him as a result of the transaction and any consequential damages to which he is entitled . . . ." (See also Leaf v. Phil Rauch, Inc. (1975) 47 Cal. App. 3d 371, 376-377 [120 Cal. Rptr. 749] [in pre-lemon-law rescission action, motor vehicle purchasers were entitled to recover prejudgment interest on monthly payments which included both principal and finance charge].)