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2 3 4 5 6 7 United States District Court 8 Central District of California 9 10
11 EBBY BAKHTIAR, individually and Case № 2:20-cv-06522-ODW (JEMx) 12 on behalf of all others similarly situated, 13 ORDER GRANTING IN PART AND 14 Plaintiff, DENYING IN PART DEFENDANT FCA US LLC’S MOTION TO DISMISS 15 v. THIRD AMENDED COMPLAINT [53] 16 17 FCA US LLC; SANTA MONICA CHRYSLER JEEP DODGE AND RAM; 18 and MOPAR MOTORS, 19 Defendants. 20 21 I. INTRODUCTION 22 Plaintiff Ebby Bakhtiar filed this putative class action in the Superior Court of 23 California, County of Los Angeles against Defendants FCA US, LLC; Santa Monica 24 Chrysler Jeep Dodge and Ram (“SaMo Chrysler”); and Mopar Motors. Defendants 25 removed the case to this Court under the Class Action Fairness Act (“CAFA”), 26 28 U.S.C. § 1332(d)(2). (Notice of Removal, ECF No. 1.) FCA, the only remaining 27 Defendant, now moves to dismiss all claims asserted against it in Bakhtiar’s Third 28 Amended Complaint (“TAC”). (Mot. Dismiss TAC (“Mot.”), ECF No. 53.) The 1 Motion is fully briefed. (Id.; Opp’n, ECF No. 54; Reply, ECF No. 55.) For the 2 following reasons, FCA’s Motion is GRANTED IN PART and DENIED IN 3 PART.1 4 II. FACTUAL AND PROCEDURAL BACKGROUND2 5 On May 21, 2015, Bakhtiar purchased a 2015 Dodge Viper from a nonparty 6 dealership. (TAC ¶ 7.) FCA is the manufacturer of the Dodge Viper. (TAC ¶ 2.) On 7 June 28, 2017, before his original warranty lapsed, Bakhtiar purchased a vehicle 8 warranty extension plan from FCA called the Mopar Vehicle Protection Plan (the 9 “Plan”) for $2,600. (TAC ¶¶ 8–9; Id. Ex. A (“Plan”), ECF No. 52-1.) “FCA 10 marketed the . . . Plan as an extension of the manufacturer’s warranty and another way 11 for Viper owners to essentially receive wrap around protection of their vehicle.” 12 (TAC ¶ 8.) Under the Plan, FCA agreed to “pay the total costs (parts and labor) less a 13 deductible per visit, to correct [certain] mechanical failures” that might arise with 14 Bakhtiar’s vehicle. (Plan 2.3) This case centers around the following Plan provision: 15 OBTAINING PLAN SERVICE: To obtain service under this Plan, you should return and present this contract to the Dealer who sold you the 16 Plan. In the event you cannot return the Vehicle to the selling Dealer for 17 service, you may request service from any Dealer within the United States, Canada, Guam, Puerto Rico or Mexico. 18 19 (Id. at 3.) The Plan also defines the term “Dealer” as follows: 20 “Dealer – means ‘authorized FCA US LLC franchise dealer’, which 21 includes dealers of the Chrysler, Dodge, Jeep, Ram, SRT, FIAT and ALFA ROMEO vehicle lines.” 22 23 1 After considering the papers filed in connection with the Motion, the Court deemed the matter 24 appropriate for decision without oral argument. (See ECF No. 30); Fed. R. Civ. P. 78(b); C.D. Cal. 25 L.R. 7-15.
26 2 For purposes of this Rule 12(b)(6) Motion, the Court takes all of Plaintiff’s well-pleaded allegations as true. See Lee v. City of Los Angeles, 250 F.3d 668, 688 (9th Cir. 2001). 27
28 3 The Court disregards the Plan’s original pagination and instead numbers the filed pages of Exhibit A to the Complaint sequentially, starting with the cover letter as Page 1. 1 (Id. at 2.) 2 Sometime in 2019, Bakhtiar contacted SaMo Chrysler regarding three issues 3 with his 2015 Viper. (TAC ¶ 11.) SaMo Chrysler told Bakhtiar it “would not honor 4 the . . . Plan because [it] would not receive any compensation for the work from FCA, 5 and even if [it] wanted to, [SaMo Chrysler] could not do the service because it did not 6 have ‘Certified Viper Techs’ that could work on repairs.” (Id.) Bakhtiar then “spent 7 numerous hours speaking with [SaMo Chrysler] as well as making inquiries to other 8 Dodge dealerships to locate a ‘Certified Viper Dealer’ and/or ‘Viper Techs’ in the 9 greater Los Angeles area.” (Id. ¶ 13.) “Because FCA imposed a requirement that 10 only Certified Viper Techs could service Plaintiff’s vehicle and did not require its 11 FCA Dealers to employ the services of Certified Viper Techs to honor the terms of the 12 Service Contract, the repairs to Plaintiff’s vehicle were never made . . . .” (Id. ¶ 16.) 13 The approximate cost of all necessary repairs is $3,100, (see id.), and Bakhtiar alleges 14 he has been harmed in this amount due to SaMo Chrysler’s refusal to service the 15 vehicle, (id. ¶ 17). In the alternative, Bakhtiar alleges his damages are the $2,600 he 16 paid for the Plan. (Id.) 17 Based on these allegations, Bakhtiar proposes a class action with a plaintiff 18 class consisting of all those who purchased a Mopar Vehicle Protection Plan for a 19 Dodge Viper from January 1, 2010, to the present. (TAC ¶ 19.) On behalf of himself 20 and this class, Bakhtiar asserts four causes of action against FCA and the other 21 Defendants for: (1) breach of contract, (2) breach of express warranty under the 22 Song-Beverly Consumer Warranty Act, (3) violation of California’s Unfair 23 Competition Law, California Business & Professions Code sections 17200–17210, 24 and (4) violation of the Consumer Legal Remedies Act, California Civil Code 25 sections 1750–1784. 26 The Court dismissed SaMo Chrysler from the action with prejudice pursuant to 27 its unopposed motion to dismiss. (Min. Order, ECF No. 32.) Upon FCA’s motion, 28 the Court dismissed the Second Amended Complaint (“SAC”), dismissing Bakhtiar’s 1 tort causes of action without leave to amend and granting leave to amend the others. 2 (Order Granting Mot. Dismiss SAC (“Dismissal Order”), ECF No. 34.) Bakhtiar 3 thereafter filed the operative TAC. Most recently, the Court dismissed Mopar Motors 4 pursuant to Federal Rule of Civil Procedure (“Rule”) 4(m), leaving FCA as the sole 5 Defendant. (Min. Order, ECF No. 57.) 6 FCA now moves to dismiss each claim in the TAC under Rule 12(b)(6). FCA 7 also moves to dismiss all nationwide class allegations on the grounds that Bakhtiar 8 included the nationwide class in error and that the proposed class is intended to be 9 limited to California residents. 10 III. LEGAL STANDARD 11 A court may dismiss a complaint under Rule 12(b)(6) for lack of a cognizable 12 legal theory or insufficient facts pleaded to support an otherwise cognizable legal 13 theory. Balistreri v. Pacifica Police Dep’t, 901 F.2d 696, 699 (9th Cir. 1988). To 14 survive a dismissal motion, a complaint need only satisfy the “minimal notice 15 pleading requirements” of Rule 8(a)(2). Porter v. Jones, 319 F.3d 483, 494 (9th Cir. 16 2003). Rule 8(a)(2) requires “a short and plain statement of the claim showing that 17 the pleader is entitled to relief.” The factual “allegations must be enough to raise a 18 right to relief above the speculative level.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 19 555 (2007); Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (holding that a claim must be 20 “plausible on its face” to avoid dismissal). 21 The determination of whether a complaint satisfies the plausibility standard is a 22 “context-specific task that requires the reviewing court to draw on its judicial 23 experience and common sense.” Iqbal, 556 U.S. at 679. A court is generally limited 24 to the pleadings and must construe all “factual allegations set forth in the 25 complaint . . .
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2 3 4 5 6 7 United States District Court 8 Central District of California 9 10
11 EBBY BAKHTIAR, individually and Case № 2:20-cv-06522-ODW (JEMx) 12 on behalf of all others similarly situated, 13 ORDER GRANTING IN PART AND 14 Plaintiff, DENYING IN PART DEFENDANT FCA US LLC’S MOTION TO DISMISS 15 v. THIRD AMENDED COMPLAINT [53] 16 17 FCA US LLC; SANTA MONICA CHRYSLER JEEP DODGE AND RAM; 18 and MOPAR MOTORS, 19 Defendants. 20 21 I. INTRODUCTION 22 Plaintiff Ebby Bakhtiar filed this putative class action in the Superior Court of 23 California, County of Los Angeles against Defendants FCA US, LLC; Santa Monica 24 Chrysler Jeep Dodge and Ram (“SaMo Chrysler”); and Mopar Motors. Defendants 25 removed the case to this Court under the Class Action Fairness Act (“CAFA”), 26 28 U.S.C. § 1332(d)(2). (Notice of Removal, ECF No. 1.) FCA, the only remaining 27 Defendant, now moves to dismiss all claims asserted against it in Bakhtiar’s Third 28 Amended Complaint (“TAC”). (Mot. Dismiss TAC (“Mot.”), ECF No. 53.) The 1 Motion is fully briefed. (Id.; Opp’n, ECF No. 54; Reply, ECF No. 55.) For the 2 following reasons, FCA’s Motion is GRANTED IN PART and DENIED IN 3 PART.1 4 II. FACTUAL AND PROCEDURAL BACKGROUND2 5 On May 21, 2015, Bakhtiar purchased a 2015 Dodge Viper from a nonparty 6 dealership. (TAC ¶ 7.) FCA is the manufacturer of the Dodge Viper. (TAC ¶ 2.) On 7 June 28, 2017, before his original warranty lapsed, Bakhtiar purchased a vehicle 8 warranty extension plan from FCA called the Mopar Vehicle Protection Plan (the 9 “Plan”) for $2,600. (TAC ¶¶ 8–9; Id. Ex. A (“Plan”), ECF No. 52-1.) “FCA 10 marketed the . . . Plan as an extension of the manufacturer’s warranty and another way 11 for Viper owners to essentially receive wrap around protection of their vehicle.” 12 (TAC ¶ 8.) Under the Plan, FCA agreed to “pay the total costs (parts and labor) less a 13 deductible per visit, to correct [certain] mechanical failures” that might arise with 14 Bakhtiar’s vehicle. (Plan 2.3) This case centers around the following Plan provision: 15 OBTAINING PLAN SERVICE: To obtain service under this Plan, you should return and present this contract to the Dealer who sold you the 16 Plan. In the event you cannot return the Vehicle to the selling Dealer for 17 service, you may request service from any Dealer within the United States, Canada, Guam, Puerto Rico or Mexico. 18 19 (Id. at 3.) The Plan also defines the term “Dealer” as follows: 20 “Dealer – means ‘authorized FCA US LLC franchise dealer’, which 21 includes dealers of the Chrysler, Dodge, Jeep, Ram, SRT, FIAT and ALFA ROMEO vehicle lines.” 22 23 1 After considering the papers filed in connection with the Motion, the Court deemed the matter 24 appropriate for decision without oral argument. (See ECF No. 30); Fed. R. Civ. P. 78(b); C.D. Cal. 25 L.R. 7-15.
26 2 For purposes of this Rule 12(b)(6) Motion, the Court takes all of Plaintiff’s well-pleaded allegations as true. See Lee v. City of Los Angeles, 250 F.3d 668, 688 (9th Cir. 2001). 27
28 3 The Court disregards the Plan’s original pagination and instead numbers the filed pages of Exhibit A to the Complaint sequentially, starting with the cover letter as Page 1. 1 (Id. at 2.) 2 Sometime in 2019, Bakhtiar contacted SaMo Chrysler regarding three issues 3 with his 2015 Viper. (TAC ¶ 11.) SaMo Chrysler told Bakhtiar it “would not honor 4 the . . . Plan because [it] would not receive any compensation for the work from FCA, 5 and even if [it] wanted to, [SaMo Chrysler] could not do the service because it did not 6 have ‘Certified Viper Techs’ that could work on repairs.” (Id.) Bakhtiar then “spent 7 numerous hours speaking with [SaMo Chrysler] as well as making inquiries to other 8 Dodge dealerships to locate a ‘Certified Viper Dealer’ and/or ‘Viper Techs’ in the 9 greater Los Angeles area.” (Id. ¶ 13.) “Because FCA imposed a requirement that 10 only Certified Viper Techs could service Plaintiff’s vehicle and did not require its 11 FCA Dealers to employ the services of Certified Viper Techs to honor the terms of the 12 Service Contract, the repairs to Plaintiff’s vehicle were never made . . . .” (Id. ¶ 16.) 13 The approximate cost of all necessary repairs is $3,100, (see id.), and Bakhtiar alleges 14 he has been harmed in this amount due to SaMo Chrysler’s refusal to service the 15 vehicle, (id. ¶ 17). In the alternative, Bakhtiar alleges his damages are the $2,600 he 16 paid for the Plan. (Id.) 17 Based on these allegations, Bakhtiar proposes a class action with a plaintiff 18 class consisting of all those who purchased a Mopar Vehicle Protection Plan for a 19 Dodge Viper from January 1, 2010, to the present. (TAC ¶ 19.) On behalf of himself 20 and this class, Bakhtiar asserts four causes of action against FCA and the other 21 Defendants for: (1) breach of contract, (2) breach of express warranty under the 22 Song-Beverly Consumer Warranty Act, (3) violation of California’s Unfair 23 Competition Law, California Business & Professions Code sections 17200–17210, 24 and (4) violation of the Consumer Legal Remedies Act, California Civil Code 25 sections 1750–1784. 26 The Court dismissed SaMo Chrysler from the action with prejudice pursuant to 27 its unopposed motion to dismiss. (Min. Order, ECF No. 32.) Upon FCA’s motion, 28 the Court dismissed the Second Amended Complaint (“SAC”), dismissing Bakhtiar’s 1 tort causes of action without leave to amend and granting leave to amend the others. 2 (Order Granting Mot. Dismiss SAC (“Dismissal Order”), ECF No. 34.) Bakhtiar 3 thereafter filed the operative TAC. Most recently, the Court dismissed Mopar Motors 4 pursuant to Federal Rule of Civil Procedure (“Rule”) 4(m), leaving FCA as the sole 5 Defendant. (Min. Order, ECF No. 57.) 6 FCA now moves to dismiss each claim in the TAC under Rule 12(b)(6). FCA 7 also moves to dismiss all nationwide class allegations on the grounds that Bakhtiar 8 included the nationwide class in error and that the proposed class is intended to be 9 limited to California residents. 10 III. LEGAL STANDARD 11 A court may dismiss a complaint under Rule 12(b)(6) for lack of a cognizable 12 legal theory or insufficient facts pleaded to support an otherwise cognizable legal 13 theory. Balistreri v. Pacifica Police Dep’t, 901 F.2d 696, 699 (9th Cir. 1988). To 14 survive a dismissal motion, a complaint need only satisfy the “minimal notice 15 pleading requirements” of Rule 8(a)(2). Porter v. Jones, 319 F.3d 483, 494 (9th Cir. 16 2003). Rule 8(a)(2) requires “a short and plain statement of the claim showing that 17 the pleader is entitled to relief.” The factual “allegations must be enough to raise a 18 right to relief above the speculative level.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 19 555 (2007); Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (holding that a claim must be 20 “plausible on its face” to avoid dismissal). 21 The determination of whether a complaint satisfies the plausibility standard is a 22 “context-specific task that requires the reviewing court to draw on its judicial 23 experience and common sense.” Iqbal, 556 U.S. at 679. A court is generally limited 24 to the pleadings and must construe all “factual allegations set forth in the 25 complaint . . . as true and . . . in the light most favorable” to the plaintiff. Lee, 26 250 F.3d at 679. However, a court need not blindly accept conclusory allegations, 27 unwarranted deductions of fact, and unreasonable inferences. Sprewell v. Golden 28 State Warriors, 266 F.3d 979, 988 (9th Cir. 2001). Ultimately, there must be 1 sufficient factual allegations “to give fair notice and to enable the opposing party to 2 defend itself effectively,” and the “allegations that are taken as true must plausibly 3 suggest an entitlement to relief, such that it is not unfair to require the opposing party 4 to be subjected to the expense of discovery and continued litigation.” Starr v. Baca, 5 652 F.3d 1202, 1216 (9th Cir. 2011). 6 IV. DISCUSSION 7 The Court addresses Bakhtiar’s four claims in turn. 8 A. Breach of Contract 9 FCA moves to dismiss Bakhtiar’s first claim for breach of contract. A breach of 10 contract claim consists of “(1) the existence of the contract, (2) plaintiff’s performance 11 or excuse for nonperformance, (3) defendant’s breach, and (4) the resulting damages 12 to the plaintiff.” Oasis W. Realty, LLC v. Goldman, 51 Cal. 4th 811, 821 (2011). FCA 13 contends, as before, that Bakhtiar’s breach of contract claim fails because he alleges 14 neither breach nor damages. (Mot. 4–6.) 15 Preliminary, the TAC satisfactorily addresses certain deficiencies the Court 16 previously described in dismissing the breach of contract claim from the SAC. The 17 Court previously noted that, in the SAC, Bakhtiar had “merely allege[d] that he 18 contacted SaMo Chrysler sometime in 2019 ‘regarding certain complaints he had 19 concerning his 2015 Viper.’” (Dismissal Order 7 (quoting SAC ¶ 13).) This was 20 insufficient to state a claim because Bakhtiar failed to allege facts showing “for 21 instance, that the repairs he sought should have been covered under the Plan.” (Id.) 22 Bakhtiar has cured this deficiency by alleging the specific repairs he sought and that 23 those repairs would be covered under the Plan. (See TAC ¶ 16.) 24 1. Breach 25 No one disputes that Bakhtiar and FCA are the contracting parties, and the Plan 26 confirms that Bakhtiar purchased the contract and that FCA LLC is “the entity 27 obligated to perform the obligations of [the] contract.” (Plan 1–2.) It is less clear 28 whether the damages were caused by FCA’s actions, that is, whether FCA committed 1 a breach. The TAC indicates that it was SaMo Chrysler that did not honor the Plan 2 when asked. (TAC ¶ 11.) FCA’s role in this failure is not so clear. SaMo Chrysler 3 and FCA are not the same entity, and SaMo Chrysler’s refusal to service the vehicle 4 does not necessarily imply a breach on FCA’s part. 5 With regard to FCA’s role, Bakhtiar alleges that he ultimately contacted FCA’s 6 customer assistance department, which “failed to resolve Plaintiff’s concerns.” (TAC 7 ¶ 15.) This allegation, taken along with the remaining allegations regarding FCA’s 8 promises and the general characteristics of the manufacturer-authorized dealer 9 relationship, is sufficient to plausibly implicate FCA in the breach. 10 2. Damages 11 The next issue is that of damages, an issue “briefly note[d]” by the Court in its 12 prior order. (Dismissal Order 7.) “For the breach of an obligation arising from 13 contract, the measure of damages . . . is the amount which will compensate the party 14 aggrieved for all the detriment proximately caused thereby, or which, in the ordinary 15 course of things, would be likely to result therefrom.” Cal. Civ. Code § 3300. 16 “Breach of contract actions seeking recovery of damages are focused on placing 17 plaintiffs in the same position they would have been in had defendants performed their 18 contractual obligations.” Ehret v. Uber Techs. Inc., 68 F. Supp. 3d 1121, 1141 19 (N.D. Cal. 2014). At the same time, “to be actionable, harm must constitute 20 something more than nominal damages, speculative harm, or the threat of future 21 harm . . . not yet realized.” Buttram v. Owens-Corning Fiberglas Corp., 16 Cal. 4th 22 520, 531 n.4 (1997). 23 The damages issue in this case turns on the interpretation of the written terms of 24 the Plan. Dismissal pursuant to Rule 12(b)(6) is inappropriate when a contract is 25 susceptible to multiple reasonable interpretations, one or more of which favors the 26 plaintiff. Monaco v. Bear Stearns Residential Mortg. Corp., 554 F. Supp. 2d 1034, 27 1040 (C.D. Cal. 2008). In dismissing the breach of contract claim from the SAC, the 28 Court examined the Plan and concluded that, by way of the Plan, FCA “promised 1 Bakhtiar he could obtain servicing of his vehicle, for any repairs covered under the 2 Plan, from any authorized FCA dealership in the countries listed.” (Dismissal Order 3 6.) This finding was, of course, limited to the allegations and the context of the now- 4 inoperative SAC. For the purpose of the TAC and the present Motion, the Court goes 5 this far and no further: there is a reasonable reading of the Plan under which FCA 6 promised Bakhtiar he would be able to receive service at any authorized FCA 7 dealership in the countries listed. 8 Thus, the Plan may be reasonably read as requiring FCA to ensure all its 9 authorized repair facilities had a way of accepting covered vehicles for repair. Under 10 this reading, FCA breached the Plan by failing to ensure that the vehicle was accepted 11 for repairs at SaMo Chrysler, either by ensuring that a Certified Viper Tech was 12 available or through other courses of action. As a result of this breach, and as alleged, 13 Bakhtiar is currently in possession of a vehicle with a fuel economy issue, a defective 14 gas cap latch, and a failing passenger-side power window. (TAC ¶ 11.) Under 15 Bakhtiar’s theory as alleged, had FCA performed on the contract as required, he 16 would currently have a vehicle that does not have these issues. Moreover, it is a 17 natural, plausible assumption that the presence of these issues decreases the value of 18 Bakhtiar’s vehicle by some dollar amount. This dollar amount—the difference 19 between the value of the vehicle had the repairs been performed versus had they not 20 been performed—is Bakhtiar’s measure of contract damages. This amount is 21 plausibly greater than zero, which is to say that Bakhtiar has sufficiently alleged 22 damages. 23 To the extent FCA argues or suggests that Bakhtiar could have avoided 24 damages with reasonable effort or expenditure by taking the vehicle to a different 25 authorized dealer who may have had a Certified Viper Technician, (Mot. 6), this is an 26 issue for later in the proceedings, after development of an evidentiary record. See 27 McKinzy v. Nat’l R.R. Passenger Corp., 836 F. Supp. 2d 1014, 1025 (N.D. Cal. 2011) 28 (“Under the avoidable consequences doctrine as recognized in California, a person 1 injured by another’s wrongful conduct will not be compensated for damages that the 2 injured person could have avoided by reasonable effort or expenditure.” (citing State 3 Dept. of Health Servs. v. Superior Court, 31 Cal. 4th 1026, 1043 (2003))). 4 Bakhtiar plausibly alleges that FCA breached the Plan’s terms, and the Motion 5 is accordingly DENIED as to the breach of contract claim. 6 B. Breach of Express Warranty under Song-Beverly Consumer Warranty Act 7 FCA moves to dismiss Bakhtiar’s second claim for breach of express warranty 8 under California’s Song-Beverly Act. The Song-Beverly Act provides in relevant part 9 that “[a]ny buyer of consumer goods who is damaged by a failure to comply with any 10 obligation under . . . [a] service contract” may bring suit. Cal. Civ. Code § 1794(a). 11 In Gavaldon v. DaimlerChrysler Corp., 32 Cal. 4th 1246 (2004), a consumer 12 had purchased a new vehicle from the defendant manufacturer along with a separate 13 service contract from the manufacturer. A defect manifested in the vehicle after the 14 original manufacturer warranty expired but while the vehicle was still under the 15 service contract. The consumer asserted a Song-Beverly claim based on the service 16 contract alone, and the trial court awarded vehicle replacement/restitution damages 17 under the Song-Beverly Act. 32 Cal. 4th at 1250. The Supreme Court reversed the 18 replacement/restitution award, observing that the text of the Song-Beverly Act made a 19 systematic distinction between express warranties and service contracts. Under 20 Gavaldon, as long as a manufacturer has not used the terms “warrant” or “guarantee” 21 in a service contract, “the breach of its service contract does not make it subject to the 22 replacement/restitution remedy reserved in [Civil Code] section 1793.2, subdivision 23 (d) for purchasers of motor vehicles sold with ‘express warranties.” Gavaldon, 24 32 Cal. 4th at 1259. 25 Here, the Plan is very specific about its being a service contract. Bakhtiar 26 purchased the Plan separately from the purchase of the Vehicle itself. (TAC ¶ 8.) The 27 Plan document states that the Plan is a service contract, and expressly states that it “is 28 not insurance and is not part of the manufacturer’s warranty.” (Plan 2.) The Plan 1 clearly and unambiguously indicates that FCA disclaimed any warranty or guarantee 2 in extending the Plan to Bakhtiar. Thus, under Gavaldon, Bakhtiar cannot obtain 3 replacement or restitution under Song-Beverly. Accordingly, the Court GRANTS 4 FCA’s Motion IN PART and DISMISSES the Song-Beverly Act claim to the extent it 5 is predicated on replacement or restitution under the Song-Beverly Act. 6 Even after this partial dismissal of the contract claim, however, compensatory 7 and other damages are still available. Kwan v. Mercedes-Benz of N. Am., 44 Cal. App. 8 4th 750, 755 (1996) (“The clear mandate of [Civil Code] section 1794 . . . is that the 9 compensatory damages recoverable for breach of the [Song-Beverly] Act are those 10 available to a buyer for a seller’s breach of a sales contract.”). When, as here, the 11 buyer has accepted the goods, these damages “include the cost of repairs necessary to 12 make the goods conform.” Cal. Civ. Code § 1794(b)(2). Also included are other 13 categories of compensatory, incidental, and consequential damages. See Cal. Comm. 14 Code §§ 2714–2715. 15 Without the replacement/restitution remedy, the remedies available for the 16 alleged Song-Beverly Act violation are largely duplicative of those available for 17 breach of contract. But the Song-Beverly Act provides additional remedies a state-law 18 breach of contract claim does not, such as attorneys’ fees, making dismissal at this 19 stage inappropriate. Cal. Civ. Code § 1792(d). Accordingly, the Motion is DENIED 20 as to the third claim inasmuch as Bakhtiar seeks damages other than the Song-Beverly 21 Act’s replacement/restitution remedy. 22 C. UCL 23 California’s Unfair Competition Law (“UCL”), codified at Business and 24 Professions Code section 17200–17210, prohibits “any unlawful, unfair, or fraudulent 25 business act or practice.” Cal. Bus. & Prof. Code § 17200; see Clark v. Superior 26 Court, 50 Cal. 4th 605, 610 (2010). The Court previously dismissed Bakhtiar’s UCL 27 claim on the overlapping grounds of damages and standing. (Dismissal Order 9.) For 28 the reasons discussed above, Bakhtiar has sufficiently alleged damages in the form of 1 diminution to the value of his vehicle resulting from FCA’s failure to ensure the 2 vehicle could be repaired at authorized service centers. The remaining issues are 3 (1) UCL standing and (2) whether Bakhtiar has alleged unfair, unlawful, or fraudulent 4 practices on FCA’s part. 5 1. UCL Standing 6 Pursuant to Business and Professions Code section 17204, a private party 7 bringing suit for unfair business practices under the UCL must have “suffered injury 8 in fact and ha[ve] lost money or property as a result of the unfair competition.” 9 Kwikset Corp. v. Superior Court, 51 Cal. 4th 310, 322 (2011); Cholakyan v. 10 Mercedes-Benz USA, LLC, 796 F. Supp. 2d 1220, 1228 (C.D. Cal. 2011). “There are 11 innumerable ways in which economic injury from unfair competition may be shown,” 12 including “surrender[ing] in a transaction more, or acquir[ing] in a transaction less, 13 than he or she otherwise would have” and “hav[ing] a present or future property 14 interest diminished.” Kwikset, 51 Cal. 4th at 323. 15 Here, Bakhtiar has sufficiently alleged that, in purchasing the Plan, he 16 surrendered more or acquired less than he otherwise would have. Bakhtiar paid a 17 certain amount for the Plan, and there is a reasonable reading of the Plan under which 18 Bakhtiar did not receive all the benefits he was promised. Thus, Bakhtiar received a 19 Plan that was less valuable than the Plan he was promised. The difference between 20 the value of the Plan as promised and the value of the Plan as received is Bakhtiar’s 21 “lost money,” which gives him standing under the UCL. Cal. Bus. & Prof. Code 22 § 17204. 23 In the alternative, Bakhtiar sufficiently alleged that a present property interest 24 was diminished. His vehicle currently has issues which it would not have if FCA had 25 ensured its dealerships were able to accept his Viper for repairs as promised. As a 26 result, his vehicle’s value is lower than it otherwise would be, a form of diminished 27 property interest. 28 1 Accordingly, Bakhtiar’s allegations are sufficient to establish standing under 2 the UCL. 3 2. “Unfair” prong 4 Aside from standing, Bakhtiar has pled, at minimum, a UCL claim under the 5 “unfair” prong. Courts’ decisions since the adoption of the current form of the UCL 6 in 1972 have repeatedly affirmed that the UCL covers a wide variety of wrongful 7 business conduct. See, e.g., Sybersound Recs., Inc. v. UAV Corp., 517 F.3d 1137, 8 1151–52 (9th Cir. 2008). Remarking on the statutory predecessor to the UCL, the 9 California Supreme Court observed that the Legislature intended by its “sweeping 10 language to permit tribunals to enjoin on-going wrongful business conduct in 11 whatever context such activity might occur.” Barquis v. Merch. Collection Ass’n, 12 7 Cal. 3d 94, 111 (1972); id. at 112 (observing UCL enables courts to redress the 13 “innumerable ‘new schemes which the fertility of man’s invention would contrive’” 14 (quoting Am. Philatelic Soc. v. Claibourne, 3 Cal. 2d 689, 698 (1935))). 15 Given this standard, Bakhtiar has plausibly alleged that FCA engaged in unfair 16 behavior by inducing him into a service contract that (under one reasonable reading) 17 promised repairs at any authorized dealer, and then later failing to deliver on that 18 promise. For FCA to accept a fee from consumers and not provide them with the 19 services promised is “unfair” behavior—both to the consumers who are harmed by the 20 practice and to other competing manufacturers and service providers who provide 21 vehicle owners with the full set of benefits promised by their service contracts. The 22 Court need go no further at this stage and DENIES FCA’s Motion as to the UCL 23 claim. 24 D. CLRA 25 FCA moves to dismiss Bakhtiar’s fourth claim for violation of the California 26 Consumers Legal Remedies Act (“CLRA”). The CLRA “declares unlawful a variety 27 of unfair methods of competition and unfair or deceptive acts or practices used in the 28 sale or lease of goods or services to a consumer.” Bower v. AT&T Mobility, LLC, 1 196 Cal. App. 4th 1545, 1556 (2011) (internal quotation marks omitted); Cal. Civ. 2 Code §§ 1750–1784. 3 Under the CLRA, to sue for money damages, a plaintiff must first provide the 4 defendant with notice and a 30-day opportunity to cure the issue. Cal. Civ. Code 5 § 1782(a). This is a substantive requirement, not a procedural one, and it applies in 6 federal court. In re Nexus 6P Prods. Liab. Litig., 293 F. Supp. 3d 888, 928–29 7 (N.D. Cal. 2018). As the TAC does not indicate the Bakhtiar gave such notice, the 8 relief Plaintiff may seek under the CLRA is limited to injunctive relief alone. See Cal. 9 Civ. Code § 1782(d). Bakhtiar seeks an injunction under the CLRA, (TAC ¶ 57), 10 which is sufficient to avoid dismissal of the claim. However, the Court GRANTS the 11 Motion IN PART by DISMISSING the CLRA claim to the extent it is predicated on 12 any remedy but an injunction. 13 Bakhtiar seeks relief under the CLRA pursuant to two specific categories of 14 prohibited conduct: advertising goods or services with intent not to sell them as 15 advertised, Cal. Civ. Code § 1770(a)(9), and representing that a transaction confers or 16 involves rights, remedies, or obligations which it does not have or involve, or which 17 are prohibited by law, id. § 1770(a)(14). At minimum, Bakhtiar sufficiently alleges a 18 CLRA claim under the latter. There is a reasonable reading of the Plan under which 19 FCA, by way of the written terms of the Plan, represented to Bakhtiar that he could 20 present his vehicle to any authorized service center for covered repairs. As alleged, 21 FCA failed to ensure that SaMo Chrysler took in the vehicle for the requested repairs. 22 In other words, as alleged, FCA’s failure deprived Bakhtiar of a right FCA promised 23 Bakhtiar’s purchase would provide him. The allegations therefore plausibly support a 24 CLRA violation, and the Court DENIES the Motion as to the portion of Bakhtiar’s 25 CLRA claim seeking injunctive relief. 26 Bakhtiar avoids dismissal of this claim because his allegations of a section 27 1770(a)(14) violation are well pleaded. Thus, the Court need not determine at this 28 time whether Bakhtiar has also stated a CLRA claim under section 1770(a)(9). 1 E. Claims by Nationwide Class 2 Finally, in the moving papers, FCA represents that Bakhtiar erroneously 3 included nationwide class allegations in the TAC, and that Bakhtiar has conceded that 4 the class in this matter is limited to California residents. (Mot. 13.) This 5 representation comports with the TAC, and Bakhtiar failed to address it in any way in 6 his Opposition. Accordingly, the Court DISMISSES the TAC without leave to 7 amend and without prejudice to the extent its allegations are made on behalf of a 8 nationwide class. 9 V. CONCLUSION 10 FCA’s Motion is GRANTED IN PART and DENIED IN PART. (ECF 11 No. 53.) Bakhtiar’s Song-Beverly Act claim is DISMISSED without leave to 12 amend to the extent it is predicated on replacement or restitution under the Song- 13 Beverly Act. Bakhtiar’s CLRA claim is DISMISSED with leave to amend to the 14 extent it is predicated on any remedy other than an injunction. The entire TAC is 15 DISMISSED without leave to amend and without prejudice to the extent its 16 allegations are made on behalf of a nationwide class. The Motion is otherwise 17 DENIED. 18 The leave granted by the Court as to the CLRA claim is narrow; Bakhtiar either 19 did or did not provide pre-suit notice before asserting his CLRA claim. Accordingly, 20 Bakhtiar must file a Fourth Amended Complaint, if any, within seven (7) days of the 21 date of this Order. The only change permitted is to add allegations regarding pre-suit 22 notice under the CLRA. 23 /// 24 /// 25 /// 26 /// 27 /// 28 /// 1 If Bakhtiar timely files an amended complaint, FCA must file its response in 2 || accordance with Rule 15(a)(3). If Bakhtiar does not timely amend, then FCA shall 3 || file its Answer within fourteen (14) days of the date the Fourth Amended Complaint 4|| would have been due. 5 6 IT IS SO ORDERED. 7 8 October 13, 2021 Af Géed 10 OTIS D. WRIGHT, I UNITED STATES DISTRICT JUDGE
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