Opinion
Case No.: 18-cv-1465 W (JLB)
2019-08-14
LAW FIRM OF KING AMINPOUR, Plaintiff, v. ROLLS-ROYCE MOTOR CARS NA, LLC, Defendant.
Daniel Max Kalinowski, Mitchell E. Rosensweig, Russell W. Higgins, Steve Mikhov, Knight Law Group, LLP, Kevin Yaghoubzadeh, Hackler Daghighian Martino & Novak, Los Angeles, Sepehr Daghighian, Law Offices of Sepehr Daghighian PC, Erik Kronholm Schmitt, Hackler Daghighian Martino & Novak, Beverly Hills, CA, for Plaintiff. Ian Gordon Schuler, Bowman and Brooke LLP, Shelby Kathryn Kroeger, Dillon Danehy Jones, Dinsmore & Shohl, LLP, San Diego, CA, for Defendant.
Daniel Max Kalinowski, Mitchell E. Rosensweig, Russell W. Higgins, Steve Mikhov, Knight Law Group, LLP, Kevin Yaghoubzadeh, Hackler Daghighian Martino & Novak, Los Angeles, Sepehr Daghighian, Law Offices of Sepehr Daghighian PC, Erik Kronholm Schmitt, Hackler Daghighian Martino & Novak, Beverly Hills, CA, for Plaintiff.
Ian Gordon Schuler, Bowman and Brooke LLP, Shelby Kathryn Kroeger, Dillon Danehy Jones, Dinsmore & Shohl, LLP, San Diego, CA, for Defendant.
ORDER GRANTING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT
Hon. Thomas J. Whelan, United States District Judge
Pending before the Court is Defendant Rolls-Royce Motor Cars NA, LLC's summary-judgment motion. Plaintiff Law Firm of King Aminpour opposes.
The Court decides the matter on the papers submitted and without oral argument. See Civ. L.R. 7.1(d)(1). For the following reasons, the Court GRANTS Defendant's motion [Doc. 36].
I. BACKGROUND
On June 10, 2014, the Law Firm of King Aminpour (the "Law Firm") entered into a 4-year lease with Westlake Coach Company, LLC, for a 2014 Rolls-Royce Phantom. (Schuler Decl. [Doc. 36-2] ¶ 5, Ex. D [Doc. 36-6] p. 2. ) Ashkan King Aminpour owns the Law Firm, which is a corporation. (Id. ¶ 4, Ex. C at p. 22.) According to the Lease Agreement, the vehicle's "primary use" was for "Business, Commercial, or Agricultural" purposes. (Id. ¶ 5, Ex. D. p.2) The Law Firm paid the vehicle's $30,000 down-payment, as well as all lease payments. (Id. ¶¶ 4, 6–8, Ex. C [Doc. 36-5] at pp. 30–32, Ex. E [Doc. 36-7], Ex. F [Doc. 36-8], Ex. G [Doc. 36-9].) The lease ended on June 10, 2018. (Id. Ex. D at p. 2.)
Page references for exhibits are to the CMECF page stamp.
The Law Firm contends that during the term of the lease, the Rolls Royce had "serious defects and nonconformities to warranty and developed other serious defects and nonconformities to warranty including, but not limited to, steering, electrical, engine and HVAC defects." (Compl. ¶ 9. ) Accordingly, on February 20, 2018, Aminpour, acting for the Law Firm, filed this lawsuit in the San Diego Superior Court against Defendant Rolls-Royce Motor Cars NA, LLC. (See Compl. ) The Complaint asserts three causes of action against Defendant Rolls-Royce, each of which is premised on a violation of the California Song-Beverly Act. (See id. )
The Complaint is attached as Exhibit A [Doc. 1-3] to the Notice of Removal [Doc. 1].
The Complaint also asserted one cause of action for negligent repair against Defendant O'Gara Coach Company – San Diego, LLC. (See Compl. ) Before the case was removed, the State Court entered a Judgment of Dismissal After Sustaining of Demurrer to Complaint Without Leave to Amend. (Notice of Removal ¶¶ 5–8, Ex. D [Doc. 1-6].) Rolls Royce is, therefore, the only remaining defendant.
On June 26, 2018, Rolls Royce removed the case to this Court. (See Notice of Removal. ) It now seeks summary judgment on the basis that the Law Firm lacks standing under the Song-Beverly Act.
II. LEGAL STANDARD
Summary judgment is appropriate under Rule 56(c) where the moving party demonstrates the absence of a genuine issue of material fact and entitlement to judgment as a matter of law. See Fed.R.Civ.P. 56(c) ; Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). A fact is material when, under the governing substantive law, it could affect the outcome of the case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A dispute about a material fact is genuine if "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Id. at 248, 106 S.Ct. 2505.
A party seeking summary judgment always bears the initial burden of establishing the absence of a genuine issue of material fact. Celotex, 477 U.S. at 323, 106 S.Ct. 2548. The moving party can satisfy this burden in two ways: (1) by presenting evidence that negates an essential element of the nonmoving party's case; or (2) by demonstrating that the nonmoving party failed to make a showing sufficient to establish an element essential to that party's case on which that party will bear the burden of proof at trial. Id. at 322–23, 106 S.Ct. 2548. "Disputes over irrelevant or unnecessary facts will not preclude a grant of summary judgment." T.W. Elec. Serv., Inc. v. Pac. Elec. Contractors Ass'n, 809 F.2d 626, 630 (9th Cir. 1987). If the moving party fails to discharge this initial burden, summary judgment must be denied and the court need not consider the nonmoving party's evidence. Adickes v. S.H. Kress & Co., 398 U.S. 144, 159–60, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970).
If the moving party meets this initial burden, the nonmoving party cannot avoid summary judgment merely by demonstrating "that there is some metaphysical doubt as to the material facts." In re Citric Acid Litig., 191 F.3d 1090, 1094 (9th Cir. 1999) (citing Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) ; Triton Energy Corp. v. Square D Co., 68 F.3d 1216, 1221 (9th Cir. 1995) (citing Anderson, 477 U.S. at 252, 106 S.Ct. 2505 ) ("The mere existence of a scintilla of evidence in support of the nonmoving party's position is not sufficient."). Rather, the nonmoving party must "go beyond the pleadings and by her own affidavits, or by ‘the depositions, answers to interrogatories, and admissions on file,’ designate ‘specific facts showing that there is a genuine issue for trial.’ " Ford Motor Credit Co. v. Daugherty, 270 Fed. Appx. 500, 501 (9th Cir. 2008) (citing Celotex, 477 U.S. at 324, 106 S.Ct. 2548 ). Additionally, the court must view all inferences drawn from the underlying facts in the light most favorable to the nonmoving party. See Matsushita, 475 U.S. at 587, 106 S.Ct. 1348.
III. DISCUSSION
Defendant Rolls Royce contends the Law Firm lacks standing under the Song-Beverly Act for two reasons. First, it contends the Law Firm is not a "buyer" under the statute, and thus not subject to its protections. Second, Rolls Royce argues that even if the Law Firm is considered a "buyer," it may not sue under the Act because it has more than five vehicles registered in California.
A. The Law Firm is considered a buyer under the Song Beverly Act.
Rolls Royce's argument that the Law Firm is not a "buyer" under the Song Beverly Act stems from two of the statute's provisions. First, section 1794(a) provides:
Any buyer of consumer goods who is damaged by a failure to comply with any obligation under this chapter or under an implied or express warranty or service contract may bring an action for the recovery of damages and other legal and equitable relief.
Cal. Civ. Code § 1794(a) (emphasis added). Second, the statute's definition of a "buyer" provides that it is "any individual who buys consumer goods from a person engaged in the business of manufacturing, distributing, or selling consumer goods at retail." Id. § 1791(b) (emphasis added). While these provisions reflect the statute's original intent to protect individual consumers, the California Court of Appeal has held that subsequent amendments have necessarily expanded the definition of a "buyer" to include small corporations.
In Park City Services, Inc. v. Ford Motor Co., Inc., 144 Cal. App. 4th 295, 306, 50 Cal.Rptr.3d 373 (2006), the California Court of Appeal was tasked with determining if a corporate plaintiff could sue under the Song-Beverly Act despite not having registered the vehicle—which was purchased primarily for business purposes—in California. In interpreting the statute, the court explained that the Act was originally intended to protect individual consumers. Id. at 306, 50 Cal.Rptr.3d 373. But "starting in 1999, the Legislature began to extend the Act to new motor vehicles used for business purposes" that were purchased or leased by a "person, including a partnership, limited liability company, corporation, association, or any other legal entity." Id. This extension was affected by amending the definition of a "new motor vehicle" to add the following language:
‘New motor vehicle’ also means a new motor vehicle with a gross vehicle weight under 10,000 pounds that is bought or used primarily for business purposes by a person, including a partnership, limited liability company, corporation, association, or any other legal entity, to which not more than five motor vehicles are registered in this state.
Park City recognized, however, that in bringing about this substantive change, the Legislature failed to amend the definition of a "buyer," which "is still defined, in part, as an ‘individual who buys consumer goods....’ " Id. at 306, 50 Cal.Rptr.3d 373 (citing Civ. Code § 1791(b) ). Thus, while the definition of a "new motor vehicle" includes vehicles used for business purposes that are purchased by a corporation, the rights and remedies under the Act were for a "buyer," meaning an "individual who buys consumer goods...." Id. To avoid this "absurdity," the court held,
even though "buyer" is still defined as an individual purchaser of goods for personal use, it must be deemed to include some corporate purchasers of new motor vehicles for business use—namely, those to whom "not more than five motor vehicles are registered in this state."
Id. (emphasis in original).
Rolls Royce has not cited any California authority that contradicts Park City's holding. Accordingly, the Court finds that under existing California law, the Law Firm has standing to sue under the Song Beverly Act as long as it does not have more than five motor vehicles registered in California.
B. Rolls Royce has established the Law Firm had more than five vehicles registered in California during the lease.
Rolls Royce contends that even if the Law Firm is considered a "buyer" under the Song-Beverly Act, it nevertheless lacks standing because the Law Firm has more than five vehicles registered in California. In support of this argument, Rolls Royce provides evidence demonstrating that during the term of the Subject Vehicle's lease, the Law Firm also had the following five vehicles registered in California:
1. 2014 Rolls-Royce Drophead, VIN SCA682D50EUX752812014, registered in California from 5/22/17 to 5/22/18. (Schuler Decl. ¶ 11, Ex. J [Doc. 36-12].)
2. 1990 Mitsubishi Truck, VIN JW6CEG1D8LL002087, registered in California from 12/31/17 to 12/31/18. (Id. ¶ 16, Ex. O [Doc. 36-17].)
3. 2013 Nissan Van, VIN 1N6BF0KY6DN101401, registered in California from 5/31/18 to 5/31/19. (Id. ¶ 17, Ex. P [Doc. 36-18].)
4. 2015 Rolls-Royce, VIN SCA681L53FUX72081, registered in California from 3/24/18 to 3/24/19. (Id. ¶ 21, Ex. T [Doc. 36-22].)
5. 2008 Rolls-Royce, VIN SCA1S68529UX08961, registered in California from 1/2/18 to 1/2/19. (Id. ¶ 22, Ex. U [Doc. 36-23]. )
The registration identifies the vehicle as a 2009.
Thus, including the Subject Vehicle, the evidence establishes that the Law Firm had six vehicles registered in California during the Subject Vehicle's lease.
The Law Firm nevertheless argues that Rolls Royce is not entitled to summary judgment for two reasons. First, it contends that under the Song-Beverly Act, only vehicles that were already registered in California on the day the Law Firm leased the Subject Vehicle count toward the five-vehicle limit. Because none of the vehicles listed above were registered when the Law Firm leased the Subject Vehicle, the Law Firm argues the five-vehicle limit was not met and it has standing. Second, the Law Firm argues that summary judgment is not appropriate because a disputed issue of material fact exists regarding whether the Subject Vehicle was leased primarily for business or personal use. For the reasons that follow, Court disagrees with both arguments.
1. The five-vehicle limit is met once the corporation have five vehicles registered in California.
The Song-Beverly Act's five-vehicle limit is found in the statutory definition of a "new motor vehicle," which includes vehicles with,
a gross vehicle weight under 10,000 pounds that is bought or used primarily for business purposes by a person, including a partnership, limited liability company, corporation, association, or any other legal entity, to which not more than five motor vehicles are registered in this state.
Civ. Code § 1793.22(e)(2) (emphasis added). According to the Law Firm, because neither this nor any other statutory provision identifies when the five-vehicle limit applies, an ambiguity exists. (Opp'n [Doc. 40] 11:19–12:17.) The Law Firm further contends that the ambiguity should be resolved in favor of finding the five-vehicle limit applies as of the time the Subject Vehicle was leased or purchased, not after the vehicle was leased or purchased. (Id. 13:20–14:27.)
"In construing statutes, the courts read their provisions in context, seeking to ascertain the intent of the Legislature and effectuate the purpose of the law." Dagher v. Ford Motor Co., 238 Cal.App.4th 905, 915, 190 Cal.Rptr.3d 261 (2015) (citations omitted). In doing so, courts "must look to the statute's words and give them ‘their usual and ordinary meaning.’ The statute's plain meaning controls the court's interpretation unless its words are ambiguous." Id. If more than one reasonable interpretation exists, "courts may consider other aids, such as the statute's purpose, legislative history, and public policy." Park City, 144 Cal.App.4th at 305, 50 Cal.Rptr.3d 373.
Contrary to the Law Firm's argument, the statute is not ambiguous regarding when the five-vehicle limit applies. Under a plain reading of the relevant language, the Song-Beverly Act's protections stop applying once a corporation has more than five vehicles registered in California. There is simply nothing in the definition of a "new motor vehicle" that supports the Law Firm's interpretation that the limit only applies at the time the vehicle is leased or purchased, and not thereafter. However, assuming for the sake of argument that the statute is ambiguous, the legislative history also contradicts the Law Firm's argument.
As explained in Park City, the legislative history makes clear that the Legislature's intent was to " ‘expand [ ] the definition of new motor vehicle to include vehicles used for commercial purposes, up to a limit of five motor vehicles registered in California to a person." Id. at 308, 50 Cal.Rptr.3d 373 (italics and bracket added) (citing Assem. Com. on Consumer Protection, Analysis of Sen. Bill No. 289 (1997–1998 Reg. Sess.), as amended June 17, 1997, p.7)). Accordingly, when the Legislature was considering amending the definition of a "new motor vehicle" to add the five-vehicle limit, the Legislature was "repeatedly informed" that,
[t]he author's intention... is to simply include small business vehicle purchases under the auspices of California's lemon law. Currently, small businesses are not included under the lemon law; only vehicles used primarily for personal, family, or household purposes. The author believes that small business should be afforded the same protections as individual consumers.... Finally, the author indicates that businesses with more than five vehicles have sufficient market strength that they do not necessarily need lemon law presumptions.
Id. at 307, 50 Cal.Rptr.3d 373 (emphasis added) (citing Assem. Com. on Consumer Protection, 3d reading analysis of Assem. Bill No. 1848 (1997–1998 Reg. Sess.) p. 2; Assem. Com. on Consumer Protection, 3d reading analysis of Assem. Bill No 1848 (1997–1998 Reg. Sess.) as amended May 7, 1998, p. 2; Sen. Rules Com., Off. of Sen. Floor Analyses, 3d reading analysis of Assem. Bill No. 1848 (1997–1998 Reg. Sess.) as amended June 11, 1998, pp. 1–2; Sen. Rules Com., Off. of Sen. Floor Analyses, 3d reading analysis of Assem Bill No. 1848 (1997–1998 Reg. Sess.) as amended July 2, 1998, p. 3)).
The legislative history confirms the intent in amending the definition of a "new motor vehicle" was to protect businesses with five or fewer vehicles registered in California. Under the Law Firm's interpretation, however, the Act would continue to provide protection even though the Law Firm had more than five vehicles registered in the state. As the Law Firm recognizes, modifying the limit by even one vehicle "is significant." (Opp'n 18 f.n. 7.) For these reasons, the Court finds the Law Firm's interpretation lacks merit.
2. The Law Firm's alleged disputed fact is insufficient.
The Law Firm also argues that summary judgment is not appropriate because a disputed issue of material fact exists regarding whether the Subject Vehicle was leased primarily for business or personal use. (Opp'n 17:2–3, 24:24–27.) This argument is unavailing for two reasons.
First, in support of its argument that a disputed issue of fact exists, the Law Firm relies on Aminpour's declaration, wherein he states that the Law Firm leased the Subject Vehicle so that he could use it for his "own personal purposes[,]" such as "running personal errands around town; going out to dinner with my family; and attending non business social events." (Opp'n. 4:26–5:15, citing Aminpour Decl. [Doc. 40-3] ¶¶ 7–9.) The problem with this argument is that it indicates Aminpour's purpose in using the Subject Vehicle, not the Law Firm's purpose in leasing the vehicle. There is no dispute that the Law Firm, not Aminpour, leased the Subject Vehicle and made all lease payments. (Schuler Decl. ¶¶ 4–8, Ex. C pp. 30–32, Ex. D. p.2, Exs. E, F, G.) There is also no dispute the Lease Agreement states that the Law Firm's "primary use" in leasing the Subject Vehicle was "Business, Commercial or Agricultural." (Id. ¶ 5, Ex. D p.2.)
Notably, the other choice on the lease was that the Law Firm's "primary use" of the vehicle would be "Personal, Family or Household." (Schuler Decl. ¶ 5, Ex. D p. 2.) Given that the Law Firm is a corporation, whose very purpose is to conduct business, it seems counterintuitive that the Law Firm could lease or purchase a vehicle for "Personal, Family or Household" use. And the Law Firm has not cited any authority for the proposition that a corporation may lease or purchase a vehicle for "personal, family or household" purposes.
Aminpour states, however, that the "salesperson assisting me never asked for what purposes I planned on using the vehicle, and further never informed me that she would be designation the Subject Vehicle for ‘Business, Commercial, or Agricultural’ purposes." (Aminpour Decl. ¶ 7, emphasis added.) Again, how Aminpour planned to use the vehicle is not material; the issue is the Law Firm's purpose in leasing the vehicle. Moreover, assuming Aminpour's statements are true, there is no dispute that he—an experienced attorney—was notified about the "primary use" designation of the Subject Vehicle when he signed the Lease Agreement. (See id. ¶¶ 6, 7; Schuler Decl. Ex. D p.3.) For these reasons, the Law Firm have failed to establish a disputed issue of material fact. Second, regardless of whether a disputed factual issue exists, the Law Firm's argument is based on the erroneous contention that (1) the Song-Beverly Act protects a corporation's lease of a vehicle for "personal purposes" and (2) the five-vehicle limit only applies to a corporation's lease of vehicles for business purposes. (Opp'n 19:10–24:23.) But as Rolls Royce correctly points out, the Law Firm's theory contradicts the statute's five-vehicle limit because it would afford protection to a corporation with 25 "new motor vehicles," as long as only five were "designated" for business purposes, and the remaining 20 were "designated" as personal use vehicles. This interpretation is contrary to the Legislative intent of providing coverage to businesses with five or fewer vehicles because such businesses do not have sufficient market power. Park City, 144 Cal.App.4th at 307, 50 Cal.Rptr.3d 373 (quoting the legislative history stating: "the author indicates that businesses with more than five vehicles have sufficient market strength that they do not necessarily need lemon law presumptions. [Citations omitted].").
Additionally, the Law Firm's theory is not supported by the Legislative history. As originally enacted, a "new motor vehicle" was defined as follows: " ‘[n]ew motor vehicle’ means a new motor vehicle which is used or bought for use primarily for personal, family, or household purposes." Park City, 144 Cal.App.4th at 304, 50 Cal.Rptr.3d 373 (citing former Civ. Code § 1793.2, subd. (e)(4)(B), Stats. 1982, ch. 388, § 1, p. 1723). According to the California Court of Appeal, this definition reflected the Legislature's original intent "to protect individual consumers...." Id. at 306, 50 Cal.Rptr.3d 373 (citing Civ. Code, § 1791, subd. (a) ; former Civ. Code, § 1793.2, subd. (e)(4)(B), Stats. 1982, ch. 388, § 1, p. 1723).
As discussed above, however, the Legislature subsequently amended the "new motor vehicle" definition to extend coverage to small businesses with no more than five motor vehicles registered in California. The change was affected by adding a second sentence to the definition so that it now reads as follows:
‘New motor vehicle’ means a new motor vehicle that is bought or used primarily for personal, family, or household purposes. ‘New motor vehicle’ also means a new motor vehicle with a gross vehicle weight under 10,000 pounds that is bought or used primarily for business purposes by a person, including a partnership, limited liability company, corporation, association, or any other legal entity, to which not more than five motor vehicles are registered in this state.
Civ. Code § 1793.22(e)(2) (emphasis added). The second sentence is not ambiguous; it covers only vehicles "bought or used primarily for business purposes." Aminpour therefore argues that the first sentence covers a corporation's purchase of a vehicle for "persona, family, or household purposes." (Opp'n 21:3–23.)
As discussed above, however, the first sentence of the definition reflects the Legislature's original intent "to protect individual consumers." Park City, at 306, 50 Cal.Rptr.3d 373 (citations omitted). And since its enactment, there have been no substantive changes to the first sentence that would suggest it is now intended to cover corporations. For this reason, the Court agrees with the district court's observation in Aquair Ventures, LLC v. Gulf Stream Coach, Inc., 2009 WL 150963 (N.D. Cal. 2009) that the current version of the Act protects two categories of vehicles:
(1) [under the first sentence of the definition,] vehicles purchased by individual buyers and used "primarily for personal, family, or household purposes" and (2)
[under the second sentence], vehicles purchased bay any buyer, individual or corporate, used for business purposes, provided that the vehicle weighs less than 10,000 pounds and that the purchaser has fewer than five vehicles registered in the state.
Id. *5 (citing Cal. Civ. Code § 1793.22(e)(2) ).
Because the Song-Beverly Act covers only vehicles purchased or leased by a corporation for business purposes, the Law Firm's contention that the Subject Vehicle was leased for personal purposes in unavailing.
IV. CONCLUSION & ORDER
For the foregoing reasons, the Court GRANTS Defendant Rolls Royce's summary-judgment motion [Doc. 36].