Sansoe et al v. Ford Motor Company
Filing
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ORDER by Judge Hamilton granting 70 Motion for Summary Judgment; denying 72 Motion for Partial Summary Judgment (pjhlc1, COURT STAFF) (Filed on 9/13/2017)
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UNITED STATES DISTRICT COURT
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NORTHERN DISTRICT OF CALIFORNIA
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MICHAEL J. SANSOE, et al.,
v.
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FORD MOTOR COMPANY,
Defendant.
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United States District Court
Northern District of California
Case No. 13-cv-5043-PJH
Plaintiffs,
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ORDER GRANTING DEFENDANT'S
MOTION FOR SUMMARY JUDGMENT
AND DENYING PLAINTIFF'S CROSSMOTION FOR SUMMARY JUDGMENT
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The motion of defendant Ford Motor Company (“Ford”) for summary judgment,
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and the cross-motion of plaintiffs Michael J. Sansoe (“Sansoe”) and Eric Frazer (“Frazer”)
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for summary judgment, came on for hearing before this court on May 10, 2017. Plaintiffs
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appeared by their counsel David J. Canty, Jeffrey A. Kaiser, and Joseph M. Makalusky,
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and Ford appeared by its counsel M. Kevin Underhill and Amir M. Nassihi. Having read
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the parties papers, including the supplemental briefing, and carefully considered their
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arguments and the relevant legal authority, the court hereby GRANTS Ford’s motion and
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DENIES plaintiffs’ cross-motion.1
This case presents a story of two individuals, Michael J. Sansoe and Eric Frazer,
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each of whom purchased a Ford truck in November 2007. Each claims that during the
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next few years, he brought the truck to the dealer’s repair facility on multiple occasions.
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At the same time that they filed their opposition to Ford’s motion, plaintiffs filed a onepage “cross-motion” without any evidence or legal argument apart from argument
concerning their right under Federal Rule of Civil Procedure 56(g) to file a cross-motion.
It is unclear whether plaintiffs intended their cross-motion as an independent motion, as
they did not seek leave to file it and did not notice a separate motion.
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Each retained a “Lemon Law” attorney, Jon Jacobs, who wrote letters to Ford in October
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and November 2012 threatening to sue for violation of the Song-Beverly Consumer
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Warranty Act, Cal. Civ. Code § 1790, et seq. (“Song-Beverly Act”), and the California
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Consumers Legal Remedies Act, Cal. Civ. Code § 1770, et seq. (“CLRA”), if Ford did not
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replace the trucks or reimburse the owners for the full purchase price.
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In each instance, following a period of negotiation, Ford offered a vehicle refund or
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a replacement vehicle, subject to conditions including that Sansoe and Frazer would be
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responsible for any missing equipment, abnormal wear, or collision damage. Sansoe and
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Frazer ultimately accepted Ford’s offer, and relinquished the trucks to Ford in exchange
for payment (which included payment of Mr. Jacob’s attorney’s fees). Each compensated
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United States District Court
Northern District of California
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Ford for the cost of repairs for the abnormal wear. Each also signed a release of all
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claims relating to the vehicle.
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In October 2013, almost a year after the settlement between Sansoe and Ford,
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and more than six months after the settlement between Frazer and Ford, Sansoe and
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Frazer – now represented by different counsel – filed the present action alleging violation
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of the Song-Beverly Act, the CLRA, and the Unfair Competition Law, Cal. Bus. & Prof.
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Code § 17200 (“UCL”).
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In the first amended complaint (“FAC”), filed December 10, 2013, plaintiffs allege
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that Ford violated the Song-Beverly Act by deducting the charges for repairs for abnormal
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wear and tear from the refunded amount, because the Song-Beverly Act allows for a
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statutory mileage deduction but not for a deduction for abnormal wear. They assert that
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the same actions constituted unfair and unlawful acts and practices under the CLRA and
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unfair competition under the UCL. Ford now seeks summary judgment, and plaintiffs
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have filed a cross-motion for summary judgment.
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A party may move for summary judgment on a “claim or defense” or “part of . . . a
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claim or defense.” Fed. R. Civ. P. 56(a). Summary judgment is appropriate when there
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is no genuine dispute as to any material fact and the moving party is entitled to judgment
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as a matter of law. Id. Material facts are those that might affect the outcome of the case.
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Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A dispute as to a material fact
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is “genuine” if there is sufficient evidence for a reasonable jury to return a verdict for the
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nonmoving party. Id.
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The court finds that Ford’s motion for summary judgment must be GRANTED, and
that plaintiffs’ motion must be DENIED. The CLRA claim fails because the challenged
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conduct occurred after the sale of the vehicles, and thus could not have constituted
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deceptive acts that were intended to or did result “in the sale or lease of goods or
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services to [a] consumer.” See Cal. Civ. Code § 1770(a); see also Moore v. Apple, Inc.,
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73 F.Supp. 3d 1191, 1200 (N.D. Cal. 2014); Harlan v. Roadtrek Motorhomes, Inc., 2009
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WL 928309 at *17 (S.D. Cal. Apr. 2, 2009); Daugherty v. Am. Honda Motor Co., Inc., 144
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United States District Court
Northern District of California
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Cal. App. 4th 824, 837 n.6 (2006).
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The UCL claim fails because it seeks restitution and injunctive relief, and plaintiffs
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have an adequate remedy at law. Apart from civil penalties, which are not at issue in this
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case, the UCL provides only the equitable remedies of restitution and injunctive relief.
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See Korea Supply Co. v. Lockheed Martin Corp., 29 Cal. 4th 1134, 1144 (2003); Madrid
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v. Perot Sys. Corp., 130 Cal. App. 4th 440, 452 (2005). However, there is no right to
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equitable relief or an equitable remedy where there is an adequate remedy at law.
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Duttweiler v. Triumph Motorcycles (Am.) Ltd., 2015 WL 4941780 at *8 (N.D. Cal. Aug. 19,
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2015); see also Collins v. eMachines, Inc., 202 Cal. App. 4th 249, 260 (2011). Here,
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plaintiffs have an adequate remedy at law under the Song-Beverly Act (even though, as
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explained herein, the court finds that Ford is entitled to summary judgment on all claims
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asserted in the FAC). The CLRA claim also fails for this same reason, to the extent it
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seeks equitable relief. See Nguyen v. Nissan N. Am., Inc., 2017 WL 1330602 at *4-6
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(N.D. Cal. Apr. 11, 2017)
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Finally, with regard to the Song-Beverly Act claim, it is undisputed that there were
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two fully executed and performed settlement agreements – one between Sansoe and
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Ford, and one between Frazer and Ford. Settlement agreements are presumptively
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valid. Village Northridge Homeowners Ass’n v. State Farm Fire & Cas. Co., 50 Cal. 4th
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913, 930 (2010). A party to a contract may rescind it if consent was “given by mistake” or
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“obtained through duress, menace, fraud, or undue influence;” if there is a failure of
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consideration; if the contract is unlawful; or if the public interest would be prejudiced by
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permitting the contract to stand. See Cal. Civ. Code § 1689. If there is a basis for
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rescinding a contract, the rescinding party must “[r]estore to the other party everything of
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value which he has received from him under the contract.” Cal. Civ. Code § 1691(b).
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Here, however, it is undisputed and clear from the parties’ papers that they do not
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want to rescind the settlement agreements in their entirety. In particular, plaintiffs have
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not explained how Ford would be able to locate and return the trucks that plaintiffs
previously turned into Ford as part of the settlements, and they also clearly have no
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United States District Court
Northern District of California
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interest in paying back the money they accepted from Ford ($65,800.50 in the case of Mr.
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Frazer, and $53,037.41 in the case of Mr. Sansoe). Instead, plaintiffs want the court to
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sever two portions of the fully executed agreements – the release, and the condition that
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plaintiffs pay the cost of repairs for abnormal wear and tear – and declare those portions
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unconscionable and unenforceable, pursuant to California Civil Code § 1670.5(a).
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However, plaintiffs have cited no cases in which a court has only partially enforced
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a settlement agreement, and the cases plaintiffs rely on in support of their argument
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regarding severance do not involve fully executed and performed settlement agreements,
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but rather arbitration provisions in employment contracts, which courts have found easily
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severable on the basis that they were “collateral agreements.” See McIntosh v. Adventist
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Health/W. St. Helena Hosp., 2013 WL 968293 at *8 (N.D. Cal. Mar. 12, 2013) (citing
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Armendariz v. Foundation Health Psychcare Servs., Inc., 24 Cal. 4th 83, 118 (2000));
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Roman v. Superior Ct., 172 Cal. App. 4th 1462, 1478 (2009) (citing Armendariz, 24 Cal.
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4th at 13, 124).
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In the arbitration context, numerous cases hold that under California law, courts
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have discretion to sever an unconscionable provision from a contract, or refuse to
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enforce the contract in its entirety. See, e.g., Armendariz, 24 Cal. 4th at 122 (citing Cal.
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Civ. Code § 1670.5(a)). However, severance presupposes two things – that the provision
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sought to be severed is both procedurally and substantively unconscionable, and that the
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provision is easily severable and does not permeate the entire agreement. See id. at
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114.
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Here, neither the settlement agreements themselves nor the challenged provisions
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are unconscionable. They are not procedurally unconscionable because both plaintiffs
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were represented by counsel during the negotiation of the settlements, and both had a
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meaningful choice as to whether to accept Ford’s settlement offer or refuse it and file a
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civil lawsuit to achieve the relief they were seeking. See id. at 113-14. They are not
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substantively unconscionable because they were freely-negotiated and did not lead to
“overly harsh” or “one-sided” results. Id. at 114. Nor have plaintiffs shown that there was
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United States District Court
Northern District of California
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any legal prohibition against settling, or that either the agreements as a whole or the
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challenged provisions were unlawful.
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More importantly, the challenged provisions are not severable from the fully
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executed settlement agreements, and plaintiffs cite no authority that would permit the
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court to sever portions of a fully executed and performed contract. Indeed, the court
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requested supplemental briefing following the hearing on the cross-motion, to give
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plaintiffs an opportunity to explain how the court could or should sever the two challenged
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provisions from the already-executed and performed settlement agreements. However,
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plaintiffs were unable to provide any clarification, and have raised no dispute of material
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fact sufficient to warrant denial of Ford’s motion.
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Accordingly, the court finds that Ford’s motion must be GRANTED and that
plaintiffs’ motion must be DENIED.
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IT IS SO ORDERED.
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Dated: September 13, 2017
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__________________________________
PHYLLIS J. HAMILTON
United States District Judge
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