Preview
William J. Goines (SBN 61290) sumricr Courl of Calflomla
goinesw@gt1aw.com
F
County of Butte
—
Jordan D. Grotzinger (SBN 190166) l
grotzingerj@gtlaw.corn
UlTlr-—‘l'l
10/22/2018
10/22/2018 L
Karusha Y. Sharpe (Admitted Pro Hac Vice)
sharpek@gtlaw.com
E
Breeanna N. Brewer (SBN 312269)
brewerbgulgtlawxom
GREENBERG TRAURIG, LLP
E‘
"("1e
Eleclmnicnllv FJL ED
D
DEF! ut
1900 University Avenue, Fifth Floor
East Palo Alto, California 943 03
T: (650) 328-8500 F: (650)328-8508
Attorneys for Defendant
FORD MOTOR COMPANY
10 SUPERIOR COURT OF THE STATE OF CALIFORNIA
11 COUNTY 0F BUTTE
12
13 ROBERT BROWN and VALERIE Case No. 160060
BROWN,
14 Assigned to:
Plaintiffs; Hon. Tamara L. Mosbarger
15 Dept: 1
V.
16 DEFENDANTS MEMORANDUM OF
FORD MOTOR COMPANY, a Delaware POINTS AND AUTHORITIES IN
17 Corporation, and DOES 1 through 10, OPPOSITION TO PLAINTIFF ’S MOTION
inclusive, FOR PREJUDGMENT INTEREST
18
Defendants. Date: November 2, 2018
19 Time: 9:00 a.m.
Dept: TBA
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CASE N0. 160060
DEFENDANTS OPPOSITION TO PLAINTIFFS MOTION FOR PREJUDGMENT INTEREST
WDC 37379 7260V1
I. INTRODUCTION
Plaintiffs are claiming two forms of prejudgment interest: 1) prejudgment interest based on the
purchase price of their vehicle, as calculated from the date of purchase to verdict; and then 2)
prejudgment interest on the amount 0f the jury verdict to the date judgment was entered, despite the
fact that Defendant Ford Motor Company (“Ford”) has challenged the latter amount in post-trial
motions. As it currently stands, based on a ruling by the Court 0n October 19, prejudgment interest on
the latter component is undeniably moot: the Plaintiffs will either agree to a reduced punitive damages
verdict, or face a new trial on the issue of punitive damages, so the calculations set forth by Plaintiffs
are no longer valid (also proving why they are not, and were never, “certain” under Civ. Code. §
10 3287(a).
11 In general, Plaintiffs do not meet the procedural 0r statutory requirements necessary t0 claim
12 prejudgment interest, which is expressly intended to be limited to actions where damages are “certain”,
13 and calculable “upon a particular day”. Civ. Code, § 3287(a). Plaintiffs meet neither of these
14 requirements, as they did not sue t0 revoke or rescind the purchase contract, but rather brought suit
15 under the Song-Beverly Act. Rather, Plaintiffs attempt to expand and exploit this statute to apply to
16 their Song-Beverly and tort claims by invoking the “certainty” of the sum of the purchase contract. But
17 this contract was made with the dealership, not with Ford, and claims to revoke this contract were not
18 the subject of Plaintiffs’ claims in their First Amended Complaint or at trial.
19 Civ. Code § 3288 is the statute intended to address interest on damages “not 0n a contract”
20 based on “oppression, fraud or malice”, and places these damages “in the discretion of the jury”,
21 however, because Plaintiffs made the procedural mistake of not presenting their claim for prejudgment
22 interest at trial to the jury for consideration, Plaintiffs attempt to shoehorn their prejudgment interest
23 claim on the jury’s verdict through § 3287(a) instead. This is not the intended use of this statute.
24 Prejudgment interest is awarded only in limited circumstances, where permitted by statute.
25 (Civ. Code, §§ 3287-3288.) Plaintiffs cannot shoehorn their square Song-Beverly claims into a round
26 prejudgment interest hole by rewriting history: their damages were not limited to the purchase price of
27 the vehicle (indeed, they never sued to recind or revoke the purchase contract), and therefore not certain
28 prior to trial (Civ. Code, § 3287, subd. (a)); they did not bring any claims for breach of contract (id., §
l CASE NO. [60060
DEFENDANT’S OPPOSITION TO PLAINTIFF’S MOTION FOR PREJUDGMENT INTEREST
WDC 373797260V1
3287, subd. (b); and they did not seek prejudgment interest as an item of damages from the jury (id., §
3288). Their prejudgment interest request is made entirely in hindsight, improperly, and their request
should be denied.
Ford respectfully requests that the Court deny Plaintiffs request for prejudgment interest on the
purchase contract dating back to the vehicle purchase date, and on the verdict until judgment was
entered.
II. FACTS
This case went to trial 0n Plaintiffs’ First Amended Complaint 0n April 16, 2018. Over F 0rd’s
O\OOO\IO\
objections, plaintiffs were allowed t0 present six claims to the jury for decision: violation of the Song-
Beverly Act, breach of implied warranty, violation of the Consumer Legal Remedies Act based 0n
11 omissions, violation of the Consumer Legal Remedies Act, concealment, and intentional
12 misrepresentation. For each claim, the jury returned a verdict for Plaintiffs, including identical awards
13 0n each claim: $46,433‘74 for the price of the vehicle and $16,754.54 for amounts spent in connection
14 with the vehicle. On Plaintiffs’ Song-Beverly claim, the jury found that Ford willfully failed to
15 repurchase the plaintiffs’ truck, and awarded a civil penalty of $126,3 76.56. The jury also found that
16 Ford acted with malice, fraud, and/0r oppression, and after a punitive damages phase, awarded
17 plaintiffs $7.5 million in punitive damages. The Court ruled that Plaintiffs must elect either civil
18 penalties 0r punitive damages as they are both based upon the same wrongful conduct; Plaintiffs elected
19 punitive damages. At no time did Plaintiffs’ present any claims for rescission or revocation 0f the
20 purchase contract, or any claims for prejudgment interest to the jury.
21 After Plaintiffs filed this motion, the Court issued a tentative ruling on October 18 denying
22 Ford’s Motion for New Trial except on the issue of punitive damages; there the Court conditionally
23 denied the award if the Plaintiffs were willing t0 accept a remittitur, otherwise Plaintiffs face a new
24 trial on the issue of punitive damages. Should the tentative become the Order, the second half of
25 Plaintiffs motion becomes moot, as the calculations they request the Court to approve are n0 longer
26 valid.
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2 No. 160060 CASE
DEFENDANTS OPPOSITION TO PLAINTIFFS MOTION FOR PREJUDGMENT INTEREST
WDC 373797260v1
III. ARGUMENT
A. Preiudgment interest dating back to the gurchase date of the vehicle is not
available based 0n Plaintiffs’ claims, as [greiuclgment interest is on]! allowed
under specific circumstances set forth b! statute.
Prejudgment interest is not routinely available. (See Chesapeake Industries, Inc. v. Togova
Enterprises, Inc. (1983) 149 Cal.App.3d 901, 906 (Chesapeake) [“interest traditionally has been denied
on unliquidated claims because of the general equitable principle that a person who does not know
what sum is owed cannot be in default for failure t0 pay”] .) Prejudgment interest may be claimed under
Civil Code sections 3287 and 3288, but Plaintiffs invoked neither statute in their First Amended
Complaint, nor at trial, and are not entitled to recovery under either, as we explain below.
10
1. Plaintiffs are not entitled to preiudgmcnt interest under Sectinn 3287(a)j
because their damages were not certain prior to the iurv‘s findings.
11
12 Under Civil Code section 3287, subdivision (a) (“Section 3287(a)”), a party is entitled to
13 prejudgment interest where (a) the amount of damages was “certain or capable of being made certain
“ ‘does not
14 by calculation” prior to trial. (Civ. Code, § 3287, subd. (a).) By contrast, Section 3287(a)
15 authorize prejudgment interest where the amount of damage, as opposed to the determination of
16 liability, “depends upon a judicial determination based upon conflicting evidence and it is not
17 ascertainable from truthful data supplied by the claimant to his debtor.”
’ ” (Duale v. Mercedes-Benz
18 USA, LLC (2007) 148 Cal.App.4th 718, 729.) “ ‘ “Thus, where the amount 0f damages cannot be
’ ”
19 resolved except by verdict 0r judgment, prejudgment interest is not appropriate?’ (Ibid, emphasis
20 in original; see also County ofLos Angeles v. Southern California Edison C0. (2003) 112 Ca1.App.4th
21 1108, 1123 [“Damages that must be determined by the trier of fact based on conflicting evidence 0f
22 the property value do not satisfy this requirement”].)
23 Consistent with the plain language 0f the statute, prejudgment interest under Section 3287(a) is
24 not available where Song-Beverly damages are contested. In Duale, supra, 148 Cal.App.4th 718, 729,
25 the court recognized that the specific claims brought by Plaintiffs, Song-Beverly damages, required the
26 jury to “(1) determine whether any of the many defects alleged in the complaint represented a
27 nonconformity, (2) whether any such nonconformity “substantially impaired [the] use, value, or safety”
28 of the vehicle, and (3) then to dctermine—f0r any such nonconformity—the mileage at which plaintiffs
3 CASE N0. 160060
DEFENDANTS OPPOSITION TO PLAINTIFF’S MOTION FOR PREJUDGMENT INTEREST
WDC 373797260V1
“
first presented the car to defendant for repair.” And Where ‘[a]ll 0f these issues were contested at
trial,’ ” including the “mileage at which [the vehicle] was first presented for repair,” were in dispute,
“the amount 0f damages could not be resolved except by verdict, and prejudgment interest is not
appropriate.” (Ibid)
The same is true here. Ford disputed (and still does dispute) that any of the problems with
plaintiffs’ vehicle constituted a nonconformity that “substantially impaired” the use, value, or safety 0f
the vehicle. Plaintiffs claim that Ford cannot unilaterally claim damages are contested to defeat the
“certainty” requirement of the Civ. Code § 3287, but this argument demonstrates why they are missing
the point: this is precisely why the statute limits damages to an amount “certain”, to prevent
10 bootstrappers such as Plaintiffs with complex claims that straddle statutory and tort claims from
11 attempting to recover a form of damages not available to them.
12 The cases cited by Plaintiffs to support their contention that “prejudgment interest has been
13 found to be available in vehicle cases for over forty (40) years” are readily distinguishable (moving
14 papers, p. 3) because they involved different causes of action than those brought by Plaintiffs. The
15 case law cited by Plaintiffs, Leafv. Phil Rauch, Inc. (1975) 47 Cal.App.3d 908, 914 was not a Song-
16 Beverly Act case such as that brought by Plaintiffs, but instead was an action to rescind the contract
17 and obtain relief based on a breach of warranty action. The Leaf plaintiffs were permitted prejudgment
18 interest because their rescission claim came with a certain and fixed date from which to calculate
19 interest: “In an action based upon recession 0f a contract, the plaintiffs right to repayment of moneys
20 paid under the contract is fixed by the rescission, and interest on the moneys paid thus is recoverable
21 from the date of rescission.” Leaf v. Phil Rauch, Inc. (1975) 47 Cal.App.3d 371, 376)(emphasis added).
22 In an effort t0 maka their damages more “certain”, and comparable to the Leaf plaintiffs and
23 their contract claims, Plaintiffs take the position that they can parse out pieces of their damage claim,
24 post-Judgment, and claim prejudgment interest 0n the most “certain” chunks, such as the purchase
25 price of the vehicle. This is also not what the statute contemplates, or the language would specify that
26 “portions” of damages rather than “the amount of damages” be “certain or capable of being made
27 certain by calculation” prior to trial. (Civ. Code, § 3287, subd. (a).) Plaintiffs conveniently ignore all
28 of the damages they sought over and above the purchase price of the vehicle based on their six claims.
4 CASE N0. 160060
DEFENDANTS OPPOSITION TO PLAINTIFFS MOTION FOR PREJUDGMENT INTEREST
WDC 373797260V1
Civ. Code § 3287(a) further requires the right to prejudgrnent interest be certain “upon a
particular day”, and Plaintiffs claims additionally fail based on this requirement. Plaintiffs calculate
their prejudgment interest based on the purchase price of the vehicle the day it was purchased, even
though it is undisputed that no problems with the vehicle presented until later. The date at which
Plaintiffs first presented the vehicle to the Wittmeier Service Center for any nonconformity was
contested, and in fact, the jury found that plaintiffs’ first repair presentation occurred after plaintiffs
\IO\
had driven 985 miles (i.e., the first time plaintiffs brought the vehicle to Wittmeier, to address unknown
00 noises in the vehicle). Plaintiffs d0 not even attempt to match their prejudgment interest claim to the
actual findings 0f the jury, because it highlights the uncertainty of their damages required for a claim
10 to prejudgment interest. Instead they choose to link the start date of their prejudgment interest
11 calculation to the purchase date 0f the vehicle, even though the contested nature of the starting point of
12 the calculation for prejudgment interest suggests that the first repair presentation did not occur until
13 much later, given the evidence that:
14 0 the first time plaintiffs brought the vehicle in for service, in April 2006, Wittmeier’s service
technicians could not verify that the vehicle was making the noises plaintiffs complained
15 about, and made no repairs. The noises never recurred; [Trial Exhibit 2]
16 0 [he second time plaintiffs brought the vehicle in for service, 0n May 3 l , 2006, Wittnwicfs'
service technicians replaced a “water in the fuel light” sensor, a problem that never recurred:
17 [Trial Exhibit 3]
18 - the third time plaintiffs brought the vehicle in for service, on August 10, 2006, Wittmeier’s
service technicians could not verify that the vehicle’s transmission was slipping, and made
19 no repairs; [Trial Exhibit 3]
20 n the fourth time plaintiffs brought the vehicle in for service, on February l8, 2007,
Wittmeier’s service technicians solved a “check engine light” issue caused by plaintiffs’
21 aftermarket fuel tank, not by a nonconformity with the vehicle. [Trial Exhibit 5]
22 1 the fifth time plaintiffs brought the vehicle in for service, in July 2009, Wittrneier’s service
technicians fixed an oil leak by replacing a CKP Sensor O-ring, and cleaned the engine.
23 [Trial Exhibit 13]
24 These were not serious repairs, nor did Plaintiffs experience serious problems with the vehicle
25 as a result of the reported issues. It was not until afier the warranty period ended that plaintiffs reported
26 allegedly serious problems with the vehicle, which ended up requiring a turbo replacement. As a result,
27 the jury could have found that plaintiffs’ first repair presentation for a problem that Wittmeier failed
28 to correct was anywhere from 985 miles to well over 30,000 miles—meaning that the calculation of
5 CASE No, 160060
DEFENDANTS OPPOSITION TO PLAINTIFF’S MOTION FOR PREJUDGMENT INTEREST
WDC 373797260V1
Plaintiffs’ damages was not possible prior to trial. Prejudgment interest is therefore not proper here,
(Duale, supra, 148 Cal.App.4th at p. 729.)
Doppes v. Bentley Motors, Inc. (2009) 174 Cal.App.4th 1004 (Doppes) and Lukather v. General
Motors, LLC (2010) 181 Cal.App.4th 1041 (Lukarher) are not to the contrary. In Doppes, the defendant
failed to appeal the award of prejudgment interest on the plaintiffs Song-Beverly claim, and, eight
months after the judgment was entered, sought to vacate the judgment on the ground that the trial court
did not have jurisdiction to award prejudgment interest on the claim. (Doppes, supra, at pp. 1008,
1010.) The Court of Appeal’s opinion was thus limited to whether prejudgment interest could in theory
ever be awarded. (Id. at p. 1010.) As Doppes notes, this holding is not inconsistent with Duale’s
10 holding that prejudgment interest is unrecoverable under section 3287 0n Song-Beverly claims Where
11 “under the facts, the amount of damages could not be resolved except by verdict.” (Ibid.) Lukather’s
12 holding is similarly inapposite. There, the defendant challenged the prejudgment interest award on the
13 ground that the plaintiff prevented defendant from paying the debt, not 0n the ground that the damages
14 were uncertain and therefore not Within the ambit of Civil Code section 3287, subdivision (a).
15 (Lukather, supra, 181 Cal.App.4th at p. 1053.) With no legal support whatsoever (and contradicting
16 the findings of the jury), Plaintiffs deem ‘the date 0f injury’ from which prejudgment interest is
17 calculated t0 be February 15, 2006, the date 0f purchase. Thus, not only are Plaintiffs substantively not
18 entitled to prejudgment interest under section 3287, their calculations are flawed as including a time
19 period where it is undisputed the vehicle had no issues, as determined by the jury.
20 Duale requires the court t0 deny prejudgment interest on plaintiffs’ Song-Beverly claim, in light
21 of the uncenainty of plaintiffs’ damages up until the jury’s determination.
22 Plaintiffs’ remaining claims were also not based on contract and had no set formula for
23 determining damages, and so could not even in theory support an award under section 3287(a). The
24 jury had discretion t0 set the plaintiffs’ damages award, which, based on the court’s instructions, could
25 have been anywhere from the difference in market value and price paid for the vehicle (as urged by
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6 CASE NO. 160060
DEFENDANT’S OPPOSITION TO PLAINTIFF’S MOTION FOR PREJUDGMENT INTEREST
WDC 373797260V1
Ford, and which would have been minimal in light of the vehicle’s limited repair history) t0 the entire
price of the truck, plus all insurance and registration payments (as urged by plaintiffs).'
2. Plaintiffs are not entitled to re"ud ent interest under Sectiun 3287 b
because their damages were not based 0n a contract
Plaintiffs appear to have limited their request to prejudgment interest pursuant to Civil Code
section 3287(a); indeed because they did not bring contract claims, no prejudgment interest is available
under Civil Code 3287(b). Under Civil Code section 3287, subdivision (b) (“Section 3287(b)”), a
plaintiff is entitled to prejudgment interest for damages received on a “cause of action in contract.”
(Civ. Code, § 3287, subd. (b).). Plaintiffs undisputedly did not bring any action for breach of contract,
however.2
10
3. Plaintiffs are not entitled to preiudgment interest under any other
11 statutory lgrovision3 so the court should deny their regucst for
greiudgment interest
12
Under Civil Code section 3288 (“Section 3288”), a plaintiff may seek an award of prejudgment
13
interest as part of its damages award from the jury, if the jury finds that the defendant acted with
14
oppression, malice, or fraud. (Civ. Code, § 3288 [“In an action for the breach of an obligation not
15
arising from contract, and in every case of oppression, fraud, or malice, interest may be given, in the
16
discretion of the jury”].) If the plaintiff fails to seek prejudgment interest as an element of damages to
17
be awarded by the jury, the trial court may not add an award 0f prejudgment after the fact. (Barry v.
1s
Raskov (1991) 232 Ca1.App.3d 447, 457 (Barry); see also Stein v. Southern California Edison C0.
19
(1992) 7 Cal.App.4th 565, 572 (Stein) [trial court correctly rejected plaintiffs’ claim for prejudgment
20
interest under Section 3288, where plaintiffs did not present question to jury and defendants did not
21
stipulate that trial court could consider the matter along with costs].) Plaintiffs undisputedly did not
22
seek an award of prejudgment interest from the jury, eliminating their entitlement to prejudgment
23
24
'
Ford objected to plaintiffs’ ability to seek the entire price ofthe vehicle on their implied warranty, fraud, and CLRA
25
claims, on the basis that their damages on those claims were limited to out-of-pocket losses plus amounts expended in
reliance on the implied warranty or fraud. (See U, Com. Code, §§ 2714-2715 [damages for breach of implied warranty
26 where buyer accepted goods]; Civ. Code, § 1780 [CLRA damages], 3343, subd. (a) [damages for purchase induced by
fraud].) But because the court rejected this argument, the jury was given discretion to award anywhere from $0 to the total
27 amount sought by plaintiffs, based on thejurors’ determination of the value ofthe damage suffered by plaintiffs.
2
Of course, if plaintiffs’ claims were breach of contract claims, they would not be entitled to punitive damages on those
2s claims. (Civ. Code, § 3294, subd. (a) [punitive damages may be sought “[i]n an action for breach of an obligation not
arising from contract . .”].)
. .
7 CASE NO. 160060
DEFENDANTS OPPOSITION TO PLAINTIFFS MOTION FOR PREJUDGMENT INTEREST
WDC 373797260V1
interest under Section 3288. (Barry, supra, 232 Cal.App.3d at p. 457; Stein, supra, 7 Cal.App.4th at
p. 5 72.)
Because Plaintiffs have not undertaken to establish that they are entitled to prejudgrnent interest,
and could not do so if they tried, the court should deny any request for prejudgrnent interest.
B. Plaintiffs Prciudgment Interest Claims Based on the Jurv’s Verdict are Moot
Plaintiffs secondarily claim $244,508.55 in prejudgment interest based on the jury’s verdict,
including punitive damages, as calculated between the date of the jury verdict and the date of entry of
judgment. After Plaintiffs filed this motion, the Court issued a ruling on October 19 denying Ford’s
Motion for New Trial except 0n the issue of punitive damages; there the Court conditionally denied
10 the award if the Plaintiffs were willing t0 accept a remittitur, otherwise Plaintiffs face a new trial on
11 the issue of punitive damages.
12 Should the tentative become the Order, the second half of Plaintiffs motion becomes moot, as
13 the calculations they request the Court to approve are no longer valid because they were altered by the
14 post-trial motions filed by Ford. F 0rd’s filing of post-trial motions that effectively altered the verdict
15 also prove by Plaintiffs are not entitled 0n prejudgment interest based 0n the verdict, because this sum
16 was not, and is not, “certain” under under Civ. Code. § 3287(a).
17 IV. CONCLUSION
18 For the reasons set forth above, Ford requests that the Court deny Plaintiffs Motion for
19 Prejudgment Interest in its entirety.
20
21 Dated: October 22, 2018 GREENBERG TRAURIG, LLP
22
23 By: ‘M
William J. Goines
24 Attorneys for Defendant
FORD MOTOR COMPANY
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8 CASE No. 160060
DEFENDANTS OPPOSITION TO PLAINTIFF’S MOTION FOR PREJUDGMENT INTEREST
WDC 373797260V1
BROWN v. FORD MOTOR COMPANY Case N0. 160060
Butte County Superior Court
PROOF 0F SERVICE
I, Karen Leaver, declare that I am a citizen of the United States, over the age of eighteen years
and not a party to the Within action. I am an employee of GREENBERG TRAURIG, LLP, and my
business address is 1900 University Avenue, Fifth Floor, East Palo Alto, CA 94303. On the date set
forth below, I served the following documents:
0 DEFENDANTS MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION
TO PLAINTIFF’S MOTION FOR PREJUDGMENT INTEREST
0n the following:
Steve Mikhov Hallen D. Rosner, Esq.
Amy Morse ROSNER, BARRY & BABBIT, LLP
KNIGHT LAW GROUP, LLP 10085 Carroll Canyon Road, 1St Floor
10250 Constellation Blvd., Suite 2500 San Diego, CA 92131
Los Angeles, CA 90067 Tel: (858) 348-1005
11 T: (310) 552-2250 Attorneys for Plaintiffs
F: (310) 552-7973
12 Attorneys for Plaintiffs
13 Bryan C. Altman
THE ALTMAN LAW GROUP
14 10250 Constellation Blvd, Suite 2500
Los Angeles, CA 90067
15 T: (310) 277-8481
F: (310) 277-8483
16 Attorneys for Plaintiff?
17
E] (BY OVERNIGHT DELIVERY)
18 I enclosed the documents in an envelope or package provided by an overnight delivery
carrier and addressed to the persons above. I placed the envelope 0r package for
19 collection and overnight delivery at an office or a regularly utilized drop box of the
overnight delivery carrier.
20
21 I declare under penalty of perjury under the laws of the State 0f California that the foregoing is
22 true and correct. Executed 0n October 22, 2018 at East Palo Alto, California.
23
24 @AZW
Karen Le Ever
25
26
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2s
PROOF OF SERVICE
Case N0. 160060
\A/nn 010:4:4 40.44
Preview
William J. Goines (SBN 61290) sumricr Courl of Calflomla goinesw@gt1aw.com F County of Butte — Jordan D. Grotzinger (SBN 190166) l grotzingerj@gtlaw.corn UlTlr-—‘l'l 10/22/2018 10/22/2018 L Karusha Y. Sharpe (Admitted Pro Hac Vice) sharpek@gtlaw.com E Breeanna N. Brewer (SBN 312269) brewerbgulgtlawxom GREENBERG TRAURIG, LLP E‘ "("1e Eleclmnicnllv FJL ED D DEF! ut 1900 University Avenue, Fifth Floor East Palo Alto, California 943 03 T: (650) 328-8500 F: (650)328-8508 Attorneys for Defendant FORD MOTOR COMPANY 10 SUPERIOR COURT OF THE STATE OF CALIFORNIA 11 COUNTY 0F BUTTE 12 13 ROBERT BROWN and VALERIE Case No. 160060 BROWN, 14 Assigned to: Plaintiffs; Hon. Tamara L. Mosbarger 15 Dept: 1 V. 16 DEFENDANTS MEMORANDUM OF FORD MOTOR COMPANY, a Delaware POINTS AND AUTHORITIES IN 17 Corporation, and DOES 1 through 10, OPPOSITION TO PLAINTIFF ’S MOTION inclusive, FOR PREJUDGMENT INTEREST 18 Defendants. Date: November 2, 2018 19 Time: 9:00 a.m. Dept: TBA 20 21 22 23 24 25 26 27 28 CASE N0. 160060 DEFENDANTS OPPOSITION TO PLAINTIFFS MOTION FOR PREJUDGMENT INTEREST WDC 37379 7260V1 I. INTRODUCTION Plaintiffs are claiming two forms of prejudgment interest: 1) prejudgment interest based on the purchase price of their vehicle, as calculated from the date of purchase to verdict; and then 2) prejudgment interest on the amount 0f the jury verdict to the date judgment was entered, despite the fact that Defendant Ford Motor Company (“Ford”) has challenged the latter amount in post-trial motions. As it currently stands, based on a ruling by the Court 0n October 19, prejudgment interest on the latter component is undeniably moot: the Plaintiffs will either agree to a reduced punitive damages verdict, or face a new trial on the issue of punitive damages, so the calculations set forth by Plaintiffs are no longer valid (also proving why they are not, and were never, “certain” under Civ. Code. § 10 3287(a). 11 In general, Plaintiffs do not meet the procedural 0r statutory requirements necessary t0 claim 12 prejudgment interest, which is expressly intended to be limited to actions where damages are “certain”, 13 and calculable “upon a particular day”. Civ. Code, § 3287(a). Plaintiffs meet neither of these 14 requirements, as they did not sue t0 revoke or rescind the purchase contract, but rather brought suit 15 under the Song-Beverly Act. Rather, Plaintiffs attempt to expand and exploit this statute to apply to 16 their Song-Beverly and tort claims by invoking the “certainty” of the sum of the purchase contract. But 17 this contract was made with the dealership, not with Ford, and claims to revoke this contract were not 18 the subject of Plaintiffs’ claims in their First Amended Complaint or at trial. 19 Civ. Code § 3288 is the statute intended to address interest on damages “not 0n a contract” 20 based on “oppression, fraud or malice”, and places these damages “in the discretion of the jury”, 21 however, because Plaintiffs made the procedural mistake of not presenting their claim for prejudgment 22 interest at trial to the jury for consideration, Plaintiffs attempt to shoehorn their prejudgment interest 23 claim on the jury’s verdict through § 3287(a) instead. This is not the intended use of this statute. 24 Prejudgment interest is awarded only in limited circumstances, where permitted by statute. 25 (Civ. Code, §§ 3287-3288.) Plaintiffs cannot shoehorn their square Song-Beverly claims into a round 26 prejudgment interest hole by rewriting history: their damages were not limited to the purchase price of 27 the vehicle (indeed, they never sued to recind or revoke the purchase contract), and therefore not certain 28 prior to trial (Civ. Code, § 3287, subd. (a)); they did not bring any claims for breach of contract (id., § l CASE NO. [60060 DEFENDANT’S OPPOSITION TO PLAINTIFF’S MOTION FOR PREJUDGMENT INTEREST WDC 373797260V1 3287, subd. (b); and they did not seek prejudgment interest as an item of damages from the jury (id., § 3288). Their prejudgment interest request is made entirely in hindsight, improperly, and their request should be denied. Ford respectfully requests that the Court deny Plaintiffs request for prejudgment interest on the purchase contract dating back to the vehicle purchase date, and on the verdict until judgment was entered. II. FACTS This case went to trial 0n Plaintiffs’ First Amended Complaint 0n April 16, 2018. Over F 0rd’s O\OOO\IO\ objections, plaintiffs were allowed t0 present six claims to the jury for decision: violation of the Song- Beverly Act, breach of implied warranty, violation of the Consumer Legal Remedies Act based 0n 11 omissions, violation of the Consumer Legal Remedies Act, concealment, and intentional 12 misrepresentation. For each claim, the jury returned a verdict for Plaintiffs, including identical awards 13 0n each claim: $46,433‘74 for the price of the vehicle and $16,754.54 for amounts spent in connection 14 with the vehicle. On Plaintiffs’ Song-Beverly claim, the jury found that Ford willfully failed to 15 repurchase the plaintiffs’ truck, and awarded a civil penalty of $126,3 76.56. The jury also found that 16 Ford acted with malice, fraud, and/0r oppression, and after a punitive damages phase, awarded 17 plaintiffs $7.5 million in punitive damages. The Court ruled that Plaintiffs must elect either civil 18 penalties 0r punitive damages as they are both based upon the same wrongful conduct; Plaintiffs elected 19 punitive damages. At no time did Plaintiffs’ present any claims for rescission or revocation 0f the 20 purchase contract, or any claims for prejudgment interest to the jury. 21 After Plaintiffs filed this motion, the Court issued a tentative ruling on October 18 denying 22 Ford’s Motion for New Trial except on the issue of punitive damages; there the Court conditionally 23 denied the award if the Plaintiffs were willing t0 accept a remittitur, otherwise Plaintiffs face a new 24 trial on the issue of punitive damages. Should the tentative become the Order, the second half of 25 Plaintiffs motion becomes moot, as the calculations they request the Court to approve are n0 longer 26 valid. 27 28 2 No. 160060 CASE DEFENDANTS OPPOSITION TO PLAINTIFFS MOTION FOR PREJUDGMENT INTEREST WDC 373797260v1 III. ARGUMENT A. Preiudgment interest dating back to the gurchase date of the vehicle is not available based 0n Plaintiffs’ claims, as [greiuclgment interest is on]! allowed under specific circumstances set forth b! statute. Prejudgment interest is not routinely available. (See Chesapeake Industries, Inc. v. Togova Enterprises, Inc. (1983) 149 Cal.App.3d 901, 906 (Chesapeake) [“interest traditionally has been denied on unliquidated claims because of the general equitable principle that a person who does not know what sum is owed cannot be in default for failure t0 pay”] .) Prejudgment interest may be claimed under Civil Code sections 3287 and 3288, but Plaintiffs invoked neither statute in their First Amended Complaint, nor at trial, and are not entitled to recovery under either, as we explain below. 10 1. Plaintiffs are not entitled to preiudgmcnt interest under Sectinn 3287(a)j because their damages were not certain prior to the iurv‘s findings. 11 12 Under Civil Code section 3287, subdivision (a) (“Section 3287(a)”), a party is entitled to 13 prejudgment interest where (a) the amount of damages was “certain or capable of being made certain “ ‘does not 14 by calculation” prior to trial. (Civ. Code, § 3287, subd. (a).) By contrast, Section 3287(a) 15 authorize prejudgment interest where the amount of damage, as opposed to the determination of 16 liability, “depends upon a judicial determination based upon conflicting evidence and it is not 17 ascertainable from truthful data supplied by the claimant to his debtor.” ’ ” (Duale v. Mercedes-Benz 18 USA, LLC (2007) 148 Cal.App.4th 718, 729.) “ ‘ “Thus, where the amount 0f damages cannot be ’ ” 19 resolved except by verdict 0r judgment, prejudgment interest is not appropriate?’ (Ibid, emphasis 20 in original; see also County ofLos Angeles v. Southern California Edison C0. (2003) 112 Ca1.App.4th 21 1108, 1123 [“Damages that must be determined by the trier of fact based on conflicting evidence 0f 22 the property value do not satisfy this requirement”].) 23 Consistent with the plain language 0f the statute, prejudgment interest under Section 3287(a) is 24 not available where Song-Beverly damages are contested. In Duale, supra, 148 Cal.App.4th 718, 729, 25 the court recognized that the specific claims brought by Plaintiffs, Song-Beverly damages, required the 26 jury to “(1) determine whether any of the many defects alleged in the complaint represented a 27 nonconformity, (2) whether any such nonconformity “substantially impaired [the] use, value, or safety” 28 of the vehicle, and (3) then to dctermine—f0r any such nonconformity—the mileage at which plaintiffs 3 CASE N0. 160060 DEFENDANTS OPPOSITION TO PLAINTIFF’S MOTION FOR PREJUDGMENT INTEREST WDC 373797260V1 “ first presented the car to defendant for repair.” And Where ‘[a]ll 0f these issues were contested at trial,’ ” including the “mileage at which [the vehicle] was first presented for repair,” were in dispute, “the amount 0f damages could not be resolved except by verdict, and prejudgment interest is not appropriate.” (Ibid) The same is true here. Ford disputed (and still does dispute) that any of the problems with plaintiffs’ vehicle constituted a nonconformity that “substantially impaired” the use, value, or safety 0f the vehicle. Plaintiffs claim that Ford cannot unilaterally claim damages are contested to defeat the “certainty” requirement of the Civ. Code § 3287, but this argument demonstrates why they are missing the point: this is precisely why the statute limits damages to an amount “certain”, to prevent 10 bootstrappers such as Plaintiffs with complex claims that straddle statutory and tort claims from 11 attempting to recover a form of damages not available to them. 12 The cases cited by Plaintiffs to support their contention that “prejudgment interest has been 13 found to be available in vehicle cases for over forty (40) years” are readily distinguishable (moving 14 papers, p. 3) because they involved different causes of action than those brought by Plaintiffs. The 15 case law cited by Plaintiffs, Leafv. Phil Rauch, Inc. (1975) 47 Cal.App.3d 908, 914 was not a Song- 16 Beverly Act case such as that brought by Plaintiffs, but instead was an action to rescind the contract 17 and obtain relief based on a breach of warranty action. The Leaf plaintiffs were permitted prejudgment 18 interest because their rescission claim came with a certain and fixed date from which to calculate 19 interest: “In an action based upon recession 0f a contract, the plaintiffs right to repayment of moneys 20 paid under the contract is fixed by the rescission, and interest on the moneys paid thus is recoverable 21 from the date of rescission.” Leaf v. Phil Rauch, Inc. (1975) 47 Cal.App.3d 371, 376)(emphasis added). 22 In an effort t0 maka their damages more “certain”, and comparable to the Leaf plaintiffs and 23 their contract claims, Plaintiffs take the position that they can parse out pieces of their damage claim, 24 post-Judgment, and claim prejudgment interest 0n the most “certain” chunks, such as the purchase 25 price of the vehicle. This is also not what the statute contemplates, or the language would specify that 26 “portions” of damages rather than “the amount of damages” be “certain or capable of being made 27 certain by calculation” prior to trial. (Civ. Code, § 3287, subd. (a).) Plaintiffs conveniently ignore all 28 of the damages they sought over and above the purchase price of the vehicle based on their six claims. 4 CASE N0. 160060 DEFENDANTS OPPOSITION TO PLAINTIFFS MOTION FOR PREJUDGMENT INTEREST WDC 373797260V1 Civ. Code § 3287(a) further requires the right to prejudgrnent interest be certain “upon a particular day”, and Plaintiffs claims additionally fail based on this requirement. Plaintiffs calculate their prejudgment interest based on the purchase price of the vehicle the day it was purchased, even though it is undisputed that no problems with the vehicle presented until later. The date at which Plaintiffs first presented the vehicle to the Wittmeier Service Center for any nonconformity was contested, and in fact, the jury found that plaintiffs’ first repair presentation occurred after plaintiffs \IO\ had driven 985 miles (i.e., the first time plaintiffs brought the vehicle to Wittmeier, to address unknown 00 noises in the vehicle). Plaintiffs d0 not even attempt to match their prejudgment interest claim to the actual findings 0f the jury, because it highlights the uncertainty of their damages required for a claim 10 to prejudgment interest. Instead they choose to link the start date of their prejudgment interest 11 calculation to the purchase date 0f the vehicle, even though the contested nature of the starting point of 12 the calculation for prejudgment interest suggests that the first repair presentation did not occur until 13 much later, given the evidence that: 14 0 the first time plaintiffs brought the vehicle in for service, in April 2006, Wittmeier’s service technicians could not verify that the vehicle was making the noises plaintiffs complained 15 about, and made no repairs. The noises never recurred; [Trial Exhibit 2] 16 0 [he second time plaintiffs brought the vehicle in for service, 0n May 3 l , 2006, Wittnwicfs' service technicians replaced a “water in the fuel light” sensor, a problem that never recurred: 17 [Trial Exhibit 3] 18 - the third time plaintiffs brought the vehicle in for service, on August 10, 2006, Wittmeier’s service technicians could not verify that the vehicle’s transmission was slipping, and made 19 no repairs; [Trial Exhibit 3] 20 n the fourth time plaintiffs brought the vehicle in for service, on February l8, 2007, Wittmeier’s service technicians solved a “check engine light” issue caused by plaintiffs’ 21 aftermarket fuel tank, not by a nonconformity with the vehicle. [Trial Exhibit 5] 22 1 the fifth time plaintiffs brought the vehicle in for service, in July 2009, Wittrneier’s service technicians fixed an oil leak by replacing a CKP Sensor O-ring, and cleaned the engine. 23 [Trial Exhibit 13] 24 These were not serious repairs, nor did Plaintiffs experience serious problems with the vehicle 25 as a result of the reported issues. It was not until afier the warranty period ended that plaintiffs reported 26 allegedly serious problems with the vehicle, which ended up requiring a turbo replacement. As a result, 27 the jury could have found that plaintiffs’ first repair presentation for a problem that Wittmeier failed 28 to correct was anywhere from 985 miles to well over 30,000 miles—meaning that the calculation of 5 CASE No, 160060 DEFENDANTS OPPOSITION TO PLAINTIFF’S MOTION FOR PREJUDGMENT INTEREST WDC 373797260V1 Plaintiffs’ damages was not possible prior to trial. Prejudgment interest is therefore not proper here, (Duale, supra, 148 Cal.App.4th at p. 729.) Doppes v. Bentley Motors, Inc. (2009) 174 Cal.App.4th 1004 (Doppes) and Lukather v. General Motors, LLC (2010) 181 Cal.App.4th 1041 (Lukarher) are not to the contrary. In Doppes, the defendant failed to appeal the award of prejudgment interest on the plaintiffs Song-Beverly claim, and, eight months after the judgment was entered, sought to vacate the judgment on the ground that the trial court did not have jurisdiction to award prejudgment interest on the claim. (Doppes, supra, at pp. 1008, 1010.) The Court of Appeal’s opinion was thus limited to whether prejudgment interest could in theory ever be awarded. (Id. at p. 1010.) As Doppes notes, this holding is not inconsistent with Duale’s 10 holding that prejudgment interest is unrecoverable under section 3287 0n Song-Beverly claims Where 11 “under the facts, the amount of damages could not be resolved except by verdict.” (Ibid.) Lukather’s 12 holding is similarly inapposite. There, the defendant challenged the prejudgment interest award on the 13 ground that the plaintiff prevented defendant from paying the debt, not 0n the ground that the damages 14 were uncertain and therefore not Within the ambit of Civil Code section 3287, subdivision (a). 15 (Lukather, supra, 181 Cal.App.4th at p. 1053.) With no legal support whatsoever (and contradicting 16 the findings of the jury), Plaintiffs deem ‘the date 0f injury’ from which prejudgment interest is 17 calculated t0 be February 15, 2006, the date 0f purchase. Thus, not only are Plaintiffs substantively not 18 entitled to prejudgment interest under section 3287, their calculations are flawed as including a time 19 period where it is undisputed the vehicle had no issues, as determined by the jury. 20 Duale requires the court t0 deny prejudgment interest on plaintiffs’ Song-Beverly claim, in light 21 of the uncenainty of plaintiffs’ damages up until the jury’s determination. 22 Plaintiffs’ remaining claims were also not based on contract and had no set formula for 23 determining damages, and so could not even in theory support an award under section 3287(a). The 24 jury had discretion t0 set the plaintiffs’ damages award, which, based on the court’s instructions, could 25 have been anywhere from the difference in market value and price paid for the vehicle (as urged by 26 27 28 6 CASE NO. 160060 DEFENDANT’S OPPOSITION TO PLAINTIFF’S MOTION FOR PREJUDGMENT INTEREST WDC 373797260V1 Ford, and which would have been minimal in light of the vehicle’s limited repair history) t0 the entire price of the truck, plus all insurance and registration payments (as urged by plaintiffs).' 2. Plaintiffs are not entitled to re"ud ent interest under Sectiun 3287 b because their damages were not based 0n a contract Plaintiffs appear to have limited their request to prejudgment interest pursuant to Civil Code section 3287(a); indeed because they did not bring contract claims, no prejudgment interest is available under Civil Code 3287(b). Under Civil Code section 3287, subdivision (b) (“Section 3287(b)”), a plaintiff is entitled to prejudgment interest for damages received on a “cause of action in contract.” (Civ. Code, § 3287, subd. (b).). Plaintiffs undisputedly did not bring any action for breach of contract, however.2 10 3. Plaintiffs are not entitled to preiudgment interest under any other 11 statutory lgrovision3 so the court should deny their regucst for greiudgment interest 12 Under Civil Code section 3288 (“Section 3288”), a plaintiff may seek an award of prejudgment 13 interest as part of its damages award from the jury, if the jury finds that the defendant acted with 14 oppression, malice, or fraud. (Civ. Code, § 3288 [“In an action for the breach of an obligation not 15 arising from contract, and in every case of oppression, fraud, or malice, interest may be given, in the 16 discretion of the jury”].) If the plaintiff fails to seek prejudgment interest as an element of damages to 17 be awarded by the jury, the trial court may not add an award 0f prejudgment after the fact. (Barry v. 1s Raskov (1991) 232 Ca1.App.3d 447, 457 (Barry); see also Stein v. Southern California Edison C0. 19 (1992) 7 Cal.App.4th 565, 572 (Stein) [trial court correctly rejected plaintiffs’ claim for prejudgment 20 interest under Section 3288, where plaintiffs did not present question to jury and defendants did not 21 stipulate that trial court could consider the matter along with costs].) Plaintiffs undisputedly did not 22 seek an award of prejudgment interest from the jury, eliminating their entitlement to prejudgment 23 24 ' Ford objected to plaintiffs’ ability to seek the entire price ofthe vehicle on their implied warranty, fraud, and CLRA 25 claims, on the basis that their damages on those claims were limited to out-of-pocket losses plus amounts expended in reliance on the implied warranty or fraud. (See U, Com. Code, §§ 2714-2715 [damages for breach of implied warranty 26 where buyer accepted goods]; Civ. Code, § 1780 [CLRA damages], 3343, subd. (a) [damages for purchase induced by fraud].) But because the court rejected this argument, the jury was given discretion to award anywhere from $0 to the total 27 amount sought by plaintiffs, based on thejurors’ determination of the value ofthe damage suffered by plaintiffs. 2 Of course, if plaintiffs’ claims were breach of contract claims, they would not be entitled to punitive damages on those 2s claims. (Civ. Code, § 3294, subd. (a) [punitive damages may be sought “[i]n an action for breach of an obligation not arising from contract . .”].) . . 7 CASE NO. 160060 DEFENDANTS OPPOSITION TO PLAINTIFFS MOTION FOR PREJUDGMENT INTEREST WDC 373797260V1 interest under Section 3288. (Barry, supra, 232 Cal.App.3d at p. 457; Stein, supra, 7 Cal.App.4th at p. 5 72.) Because Plaintiffs have not undertaken to establish that they are entitled to prejudgrnent interest, and could not do so if they tried, the court should deny any request for prejudgrnent interest. B. Plaintiffs Prciudgment Interest Claims Based on the Jurv’s Verdict are Moot Plaintiffs secondarily claim $244,508.55 in prejudgment interest based on the jury’s verdict, including punitive damages, as calculated between the date of the jury verdict and the date of entry of judgment. After Plaintiffs filed this motion, the Court issued a ruling on October 19 denying Ford’s Motion for New Trial except 0n the issue of punitive damages; there the Court conditionally denied 10 the award if the Plaintiffs were willing t0 accept a remittitur, otherwise Plaintiffs face a new trial on 11 the issue of punitive damages. 12 Should the tentative become the Order, the second half of Plaintiffs motion becomes moot, as 13 the calculations they request the Court to approve are no longer valid because they were altered by the 14 post-trial motions filed by Ford. F 0rd’s filing of post-trial motions that effectively altered the verdict 15 also prove by Plaintiffs are not entitled 0n prejudgment interest based 0n the verdict, because this sum 16 was not, and is not, “certain” under under Civ. Code. § 3287(a). 17 IV. CONCLUSION 18 For the reasons set forth above, Ford requests that the Court deny Plaintiffs Motion for 19 Prejudgment Interest in its entirety. 20 21 Dated: October 22, 2018 GREENBERG TRAURIG, LLP 22 23 By: ‘M William J. Goines 24 Attorneys for Defendant FORD MOTOR COMPANY 25 26 27 28 8 CASE No. 160060 DEFENDANTS OPPOSITION TO PLAINTIFF’S MOTION FOR PREJUDGMENT INTEREST WDC 373797260V1 BROWN v. FORD MOTOR COMPANY Case N0. 160060 Butte County Superior Court PROOF 0F SERVICE I, Karen Leaver, declare that I am a citizen of the United States, over the age of eighteen years and not a party to the Within action. I am an employee of GREENBERG TRAURIG, LLP, and my business address is 1900 University Avenue, Fifth Floor, East Palo Alto, CA 94303. On the date set forth below, I served the following documents: 0 DEFENDANTS MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO PLAINTIFF’S MOTION FOR PREJUDGMENT INTEREST 0n the following: Steve Mikhov Hallen D. Rosner, Esq. Amy Morse ROSNER, BARRY & BABBIT, LLP KNIGHT LAW GROUP, LLP 10085 Carroll Canyon Road, 1St Floor 10250 Constellation Blvd., Suite 2500 San Diego, CA 92131 Los Angeles, CA 90067 Tel: (858) 348-1005 11 T: (310) 552-2250 Attorneys for Plaintiffs F: (310) 552-7973 12 Attorneys for Plaintiffs 13 Bryan C. Altman THE ALTMAN LAW GROUP 14 10250 Constellation Blvd, Suite 2500 Los Angeles, CA 90067 15 T: (310) 277-8481 F: (310) 277-8483 16 Attorneys for Plaintiff? 17 E] (BY OVERNIGHT DELIVERY) 18 I enclosed the documents in an envelope or package provided by an overnight delivery carrier and addressed to the persons above. I placed the envelope 0r package for 19 collection and overnight delivery at an office or a regularly utilized drop box of the overnight delivery carrier. 20 21 I declare under penalty of perjury under the laws of the State 0f California that the foregoing is 22 true and correct. Executed 0n October 22, 2018 at East Palo Alto, California. 23 24 @AZW Karen Le Ever 25 26 27 2s PROOF OF SERVICE Case N0. 160060 \A/nn 010:4:4 40.44