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Dealer Turns Lemon Law Claims Into Lemonade

September 9, 2015 | Topics: Product Liability, Warranty

The Court of Appeal of California, Third Appellate District, held the alleged existence of a manufacturer’s warranty that transferred to the buyers of a used vehicle did not support the buyer’s lemon law claim against the dealership that sold them the used vehicle “as is” and without warranty.

In Leber v. DKD of Davis, Inc. 237 Cal. App. 4th 402 (2015), the plaintiffs sued DKD of Davis, Inc. (“DKD”) and General Motors Company (“General Motors”) (not a party on appeal) under the Song-Beverly Consumer Warranty Act after purchasing a used truck with an allegedly defective transmission.  The plaintiffs contended that the truck was “a new motor vehicle,” and that DKD and General Motors issued an express warranty.  DKD filed a motion for summary judgment, arguing that the truck was sold “as is” with no warranty from DKD.  In opposition, the plaintiffs argued that the General Motors warranty was transferable to them as subsequent owners of the vehicle.  DKD did not dispute that the General Motors warranty had not expired at the time of sale. 

The trial court granted summary judgment because the plaintiffs failed to produce evidence to disprove DKD’s evidence that it did not give the plaintiffs an express warranty.  The trial court also ruled that purchasing the vehicle “as is” precluded the existence of any implied warranty by DKD.  

The court of appeal affirmed, concluding that no implied warranty existed.  The court explained that a used, “as is” vehicle does not qualify as a “new” vehicle for purposes of triggering the implied warranties in Civil Code section 1791.1.  The court further held the dealership did not provide an express warranty.  And the warranty provided by General Motors did not apply to DKD, because at time of purchase, plaintiffs signed numerous documents including a “Buyers Guide” that states the vehicle was bought “used” and “AS IS-NO WARRANTY.”