Aquair Ventures, LLC et al v. Gulf Stream Coach, Inc.

Filing 38

ORDER by Judge Samuel Conti granting 25 Motion for Partial Summary Judgment (sclc1, COURT STAFF) (Filed on 1/21/2009)

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1 2 3 4 5 6 7 8 9 10 For the Northern District of California UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA AQUAIR VENTURES, LLC, ANTONIA CITRINO, and JOSEPH GEIGER, Plaintiffs, v. GULF STREAM COACH, INC., Defendant. ) ) ) ) ) ) ) ) ) ) ) ) No. C-08-2903 SC ORDER GRANTING DEFENDANT'S MOTION FOR PARTIAL SUMMARY JUDGMENT United States District Court 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 I. INTRODUCTION Aquair Ventures, LLC ("Plaintiff" or "Aquair") brought this suit against Gulf Stream Coach, Inc. ("Defendant" or "Gulf Stream") in the Sonoma County Superior Court. Removal, Docket No. 1, Ex. A ("Compl."). See Notice of Aquair seeks to recover damages for Gulf Stream's alleged willful violation of the SongBeverly Consumer Warranty Act, California Civil Code section 1790, et seq., violation of the Magnuson-Moss Warranty Act, 15 U.S.C. 2301, et seq., and negligence. See id. Gulf Stream invoked the Court's diversity jurisdiction and removed the action from the Superior Court on June 11, 2008. See Notice of Removal. Before the Court is Gulf Stream's Motion for Partial Summary Judgment. Docket No. 25. Aquair filed an Opposition and Gulf Having considered the Stream filed a Reply. Docket Nos. 29, 33. parties' arguments and supporting declarations thoroughly, the Court hereby GRANTS Gulf Stream's Motion for the reasons set forth 1 2 3 4 5 6 7 8 9 10 For the Northern District of California below. II. BACKGROUND In May 2006, Aquair purchased a new 2006 Gulf Stream Tour Master motor home ("the RV") from California RV Supercenter ("Dealer"), a Gulf Stream dealer, for $206,543.00. 8.1 Suddon Decl. At the time of purchase, Aquair and the Dealer executed a Id. Ex. A ("Contract"). Aquair Retail Installment Sale Contract. is the only name that appears in the "Buyer" section at the top of the Contract. Id. In seven different places on the Contract, Id. Each signature United States District Court 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Aquair signed as the buyer and guarantor. appears to have been executed by Citrino, in the form "Aquair Ventures, LLC by Antonia D. Citrino, Member." Id. Aquair indicated that the primary use for which the RV was purchased was "personal, family or household." Id. Citrino and her husband, Joseph Geiger, are the sole owners of Aquair, a Montana limited liability corporation. See Citrino Decl. 2-7.2 At the time of purchase, the RV was covered by a warranty. The warranty protected the floor, walls, and roof for the lesser of two years or 24,000 miles, and the construction of the RV and its original components for the lesser of one year or 12,000 Anthony Suddon, the Director of Consumer Affairs for Gulf Stream, filed a declaration in support of Gulf Stream's Motion. Docket No. 26. Antonia Citrino, a member of Aquair, submitted a declaration in opposition to Gulf Stream's Motion. Docket No. 30. Citrino and her husband, Joseph Geiger, were originally plaintiffs in this matter. See Compl. However, on Gulf Stream's prior motion, the Court dismissed Citrino and Geiger's claims because they lacked standing. See Docket No. 17. -22 1 1 2 3 4 5 6 7 8 9 10 For the Northern District of California miles. Compl. 7. The warranty included all repairs and Id. Aquair alleges that adjustments, including parts and labor. at the time of purchase, the RV was defective. The RV is a Gulf Stream Tour Master motor home, with the vehicle identification number 4UZAAB2CY46CW81682. 8. Suddon Decl. The gross vehicle weight of the chassis of the RV exceeds See id. 9, Ex. B 32,000 pounds, excluding cargo and passengers. (Tour Master brochure). Aquair and the dealer executed the Contract in Santa Rosa, California. Citrino Decl. 2. At the same time and place, they Id. 11, Ex. B. On United States District Court 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 also executed a Delayed Warranty Start Form. the warranty form, under the heading "Owner Acknowledgment," it states, "My signature on the line below represents acknowledgment of receipt of the vehicle herein described." Id. Ex. B. Id. Citrino signed the form for Aquair below that statement. However, Aquair received the keys to the RV on delivery in Boomtown, Nevada. See id. 12; Suddon Decl. 10. In an email to Suddon regarding the RV, Citrino stated, "On 5/18/06, we took possession, all cash of a Tour master 2006, 40 ft, Stock # 1151, Model 9392, Silver and Black, Out of State Delivery was taken in Nevada, just over border at Boom town [sic]." Suddon Decl., Ex. C. III. LEGAL STANDARD Entry of summary judgment is proper "if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." -3Fed. 1 2 3 4 5 6 7 8 9 10 For the Northern District of California R. Civ. P. 56(c). "Summary judgment should be granted where the evidence is such that it would require a directed verdict for the moving party." (1986). Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 Thus, "Rule 56(c) mandates the entry of summary judgment . . . against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). In addition, entry of summary judgment in a party's favor is appropriate when there are no material issues of fact as to the essential elements of the party's claim. 247-49. Anderson, 477 U.S. at United States District Court 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 IV. DISCUSSION Gulf Stream moves for summary judgment on Aquair's first cause of action, which alleges that Gulf Stream willfully violated the Song-Beverly Consumer Warranty Act ("the Act"). Gulf Stream contends that Aquair is not entitled to the Act's protections for two reasons: first, because Aquair took delivery of the RV outside of California, it is not entitled to the benefits the Act offers consumers in California; second, the RV does not qualify as a "new motor vehicle" as that term is defined in the Act. addresses each issue. A. Delivery in California The Court The protections offered in the Act "apply only to vehicles sold in California." (2005). Cummins, Inc. v. Super. Ct., 36 Cal. 4th 478 The parties do not dispute that Aquair signed the -4- 1 2 3 4 5 6 7 8 9 10 For the Northern District of California Contract in Santa Rosa, California, nor that Aquair took physical possession of the keys and the RV in Nevada. The dispute is whether, for the purposes of the Act, this constitutes delivery in California or in Nevada. Gulf Stream contends that the Act In response, Aquair focuses solely on the physical delivery. claims that unless the parties' agreement specifies out-of-state delivery, the Act still applies if the agreement was executed in California. Under the Act, "sale" means "(1) the passing of title from the seller to the buyer for a price, or (2) a consignment for sale." Cal. Civ. Code. 1791(n). "California law is clear that United States District Court 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 when title passes outside of California, the [Act] does not apply." Gusse v. Damon Corp., 470 F. Supp. 2d 1110, 1113 (C.D. Thus, as in Cal. 2007) (citing Cummins, 36 Cal. 4th at 478). Gusse, the dispositive question here is whether title passed in California or Nevada. See id. The Gusse court resolved this Id. Section issue by referencing the California Commercial Code. 2401 of the California Commercial Code provides: Unless otherwise explicitly agreed title passes to the buyer at the time and place at which the seller completes his performance with reference to the physical delivery of the goods, despite any reservation of a security interest and even though a document of title is to be delivered at a different time or place; and in particular and despite any reservation of a security interest by the bill of lading (a) If the contract requires or authorizes the seller to send the goods to the buyer but does not require him to deliver them at destination, title passes to the buyer at the time and place of shipment; but -5- 1 2 3 4 5 6 7 8 9 10 For the Northern District of California (b) If the contract requires delivery at destination, title passes on tender there. Cal. Com. Code 2401(2). The facts in Gusse are analogous to those before the Court now. The parties in that suit signed the contract and a "purchase 470 F. Supp. 2d at 1112; acceptance report" in California. Citrino Decl. 11, Exs. A, B. As Aquair did, the plaintiff in Gusse loaded the vehicle in California, but did not receive the keys until the dealer's agent drove the vehicle across state lines to avoid tax liability. Decl. 12. 470 F. Supp. 2d at 1113; see Citrino United States District Court 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 The court in Gusse held that because the contract did not explicitly require delivery in Arizona, the contract was a "shipment contract," falling under California Commercial Code 2401(2)(a), such that title passed at the time the contract was signed. 470 F. Supp. 2d. at 1113-14. The court noted that under California law, there is a presumption that a contract is a shipment contract, rather than a delivery contract. Id. at 1113; see also Wilson v. Brawn of Cal., Inc., 132 Cal. App. 4th 549, 556 (Ct. App. 2005). The contract at issue here does not require As such, it delivery in Nevada or any other specific destination. is a shipment contract, and title passed from the Dealer to Aquair at the time the Dealer shipped the RV from California. The RV therefore falls under the Act as a good purchased in California. Gulf Stream's attempts to distinguish Gusse fall short. First, Gulf Stream argues that the Gusse court failed to consider Cummins, supra, and Davis v. Newmar Corp., 136 Cal. App. 4th 275 (Ct. App. 2006). Reply at 4. Gulf Stream overlooks the relevant -6- 1 2 3 4 5 6 7 8 9 10 For the Northern District of California citations to both cases in the Gusse decision, as well as the discussion explicitly distinguishing the facts of Gusse from those of Davis on the grounds that the contract in the latter case had a provision requiring delivery in Nevada, while the former was silent on the issue. See Gusse, 470 F. Supp. 2d at 1113-14 & n.5. That distinction is critical, and is relevant here, as the subject Contract did not require the Dealer to deliver the RV to Aquair in Nevada. Gulf Stream also contends that the present facts are distinguishable from Gusse because in that case, "the owner directed a third party to transport the vehicle outside of California", while it was the Dealer who did that in the present matter. Reply at 5. The Court reads the facts of Gusse United States District Court 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 differently. The relevant portion of the discussion follows: Importantly, the contract does not provide for delivery to a specific location and it does not require that the Motorhome be tendered for Gusse's acceptance in Arizona. . . . La Mesa RV [the dealer] then hired a third party driver to take the Motorhome wherever Gusse wanted it transported, and Gusse directed the driver to transport the Motorhome to Arizona. Gusse, 470 F. Supp. 2d at 11114. Contrary to Gulf Stream's assertion, it was the dealer who arranged for transport out of state. The same scenario played out here. Despite the fact that the Contract does not mention delivery in Nevada, the Dealer arranged for the RV to be driven there after Aquair signed the Contract and warranty form acknowledging receipt of the RV in Santa Rosa, California. See Citrino Decl. 11-12. The Court finds that the facts here are more comparable to -7- 1 2 3 4 5 6 7 8 9 10 For the Northern District of California those in Gusse than Davis, and that the reasoning of Gusse is consistent with California law. The Court therefore concludes that title to the RV passed to Aquair in California and that Gulf Stream is not entitled to judgment on this issue. B. Whether Aquair May Bring Suit Under the Act The parties frame this issue as a question of whether or not the RV is a "new motor vehicle" as that term is defined in the Act. Gulf Stream contends that the RV is not a new motor vehicle Aquair and therefore falls outside the protection of the Act. disputes this. A more appropriate question is whether a business It may not. United States District Court 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 entity such as Aquair may bring suit under the Act. Aquair's first cause of action alleges that Gulf Stream willfully violated the Act. According to Aquair, the RV is a "consumer good" covered by an "express warranty," as those terms are defined in the Act, and Gulf Stream is the "manufacturer" of the RV. See Compl. 13-15; Cal. Civ. Code 1791(a), (j), What Aquair fails to demonstrate is that it is a 1791.2(a)(1). "buyer." The Act establishes a cause of action for a buyer for breach of an implied or express warranty: 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). The Act explicitly defines "buyer" to refer to individuals rather than to all persons: "Buyer" or "retail buyer" means any individual -8- 1 2 3 4 5 6 7 8 9 10 For the Northern District of California who buys consumer goods from a person engaged in the business of manufacturing, distributing, or selling consumer goods at retail. As used in this subdivision, "person" means any individual, partnership, corporation, limited liability company, association, or other legal entity that engages in any of these businesses. Id. 1791(b) (emphasis added). to protect individual consumers." The Act "was originally intended Park City Servs., Inc. v. Ford The Motor Co., 144 Cal. App. 4th 295, 306 (Ct. App. 2006). California Legislature subsequently expanded the Act to cover vehicles purchased for business purposes by including the following definition of "new motor vehicle": "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. "New motor vehicle" includes the chassis, chassis cab, and that portion of a motor home devoted to its propulsion, but does not include any portion designed, used, or maintained primarily for human habitation, a dealer-owned vehicle and a "demonstrator" or other motor vehicle sold with a manufacturer's new car warranty but does not include a motorcycle or a motor vehicle which is not registered under the Vehicle Code because it is to be operated or used exclusively off the highways. Id. 1793.22(e)(2). When this definition was adopted, however, See Park City Servs., The court in United States District Court 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 the definition of "buyer" was not changed. 111 Cal. App. 4th at 306; Cal. Civ. Code 1791(b). Park City Services concluded that the Act includes as "buyers" -9- 1 2 3 4 5 6 7 8 9 10 For the Northern District of California only those corporate purchasers "to whom not more than five motor vehicles are registered in the state." Id. There is no dispute that Aquair is a corporate entity rather than an individual, and that Aquair is the only purchaser of the RV. See Citrino Decl. 5, 8; Contract. However, Aquair asserts that it is a buyer under the Act despite not fitting the explicit statutory definition. See Opp'n at 4-5. Aquair relies on Park City Services for this contention, because the court there held that the amendment to the Act included corporate purchasers with fewer than five vehicles registered in California. Park City Servs., 144 Cal. App. 4th at 306. Id.; see also United States District Court 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 In Park City Services, however, the weight of the vehicle in suit was not at issue, so the court there did not address this aspect of the definition of "new motor vehicle." There is nothing in the decision to suggest that the Park City Services court read that limitation out of the statute, yet Aquair fails to address the weight of the RV in its briefing. Under the current version of (1) the Act, two categories of vehicles qualify for protection: vehicles purchased by individual buyers and used "primarily for personal, family, or household purposes" and (2) vehicles purchased by 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. See Cal. Civ. Code 1793.22(e)(2). Because Aquair is Aquair may not bring suit under the Act. not an individual, it is not a buyer for the purposes of the Act, and therefore may not bring suit over the RV, which it purchased -10- 1 2 3 4 5 6 7 8 9 10 For the Northern District of California for "personal, family, or household purposes."3 Thus, Aquair may only maintain this action if it has fewer than five vehicles registered in California and if the vehicle that is the subject of the suit weighs less than 10,000 pounds. the RV weighs over 32,000 pounds. It is not disputed that Suddon Decl. 9, Ex. B. Aquair is therefore not entitled to bring suit over the RV under the Act. V. CONCLUSION For the reasons described above, the Court concludes that the United States District Court 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 RV is not protected under the Song-Beverly Consumer Warranty Act, and that Aquair is not entitled to bring suit under that statute. The Court therefore GRANTS Gulf Stream's Motion for Partial Summary Judgment. Aquair's first cause of action is DISMISSED. IT IS SO ORDERED. Dated: January 21, 2009 UNITED STATES DISTRICT JUDGE Because Aquair is not an individual, its assertion that it purchased the vehicle for personal, family, or household purposes is immaterial, and the Court need not resolve the parties' dispute over this issue to rule on the Motion. -11- 3

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