Figiel v. Hyundai Motor America

Filed 8/22/06 Figiel v. Hyundai Motor America CA4/1

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COURT OF APPEAL, FOURTH APPELLATE DISTRICT

DIVISION ONE

STATE OF CALIFORNIA

APPEAL from a judgment of the Superior Court of San Diego County, Charles R. Hayes, Judge. Reversed.

Walter Figiel sued Hyundai Motor America (Hyundai) alleging he purchased a new car manufactured by Hyundai that was a "lemon" under the Song-Beverly Consumer Warranty Act (the Act). (Civ. Code, § 1790 et seq.) The jury found that the car suffered from a nonconformity covered by an express warranty that substantially impaired its use, value, or safety and that Hyundai willfully violated its obligations under the Act. The trial court denied Hyundai's motions for judgment not withstanding the verdict (JNOV) and new trial and entered a judgment in Figiel's favor.

Hyundai appeals, contending (1) the jury's verdict is not supported by substantial evidence, (2) the trial court erroneously instructed the jury, and (3) the jury committed misconduct by awarding Figiel a civil penalty to compensate him for his attorney's fees. We conclude that the record does not contain substantial evidence to support the jury's finding that the nonconformity substantially impaired the use, safety or value of the car. Accordingly, we reverse the judgment, which moots Hyundai's remaining arguments.

FACTUAL AND PROCEDURAL BACKGROUND

In October 2002, Figiel purchased a new 2003 Hyundai Santa Fe (the car) for $19,694.69 because he previously owned a 2001 Santa Fe that he liked. Figiel received Hyundai's express warranty to correct any vehicle defects in "material or workmanship," but provided it had no duty to correct "slight irregularities" such as a "slight noise or vibration, or items considered characteristic of the vehicle."

A few months after the purchase Figiel began to hear a noise in the car which he described as a muffled thump or bump and a sensation in his buttocks, like a "little jerk," but not a jolt. Figiel defined "little" as "just a normal tap on the side" or "underneath your seat," and never noticed his body jerking. The noise stayed exactly the same over time and Figiel only heard it when putting his foot on the accelerator after coasting at slow speeds in heavy or stop-and-go traffic. He never heard the noise at any other time, including when accelerating or decelerating or accelerating from a stoplight.

Although Figiel, who restored cars as a hobby, described the noise as sounding like a worn universal joint, he was aware that the car did not have such a joint. Figiel stated that thump, clunk, harsh engagement or bump all meant the same thing and explained that "engaging" means that when he put his foot on the accelerator to make the car go, it engaged and made a thumping noise. Figiel described the noise as abnormal and believed there was something wrong with the car because an automatic transmission should not thump, stating the car should go smoothly like all his other cars. Other than the thump, Figiel did not feel or sense anything abnormal with the car, considered it "a good vehicle" and was happy with it. Figiel's friends also heard the noise while he drove and generally stated that Figiel did not pump the accelerator and had no similar problem with his other cars.

After driving 2,907 miles, Figiel took the car to the dealer complaining of a "thump/clunk" from under the vehicle upon acceleration after coasting. Figiel test drove the car with the technician and demonstrated the thump, but the technician determined the car was operating according to the manufacturer's specifications. Between March 2003 and April 2004, Figiel brought the car to the dealer or another dealership an additional six times complaining about the noise or harsh engagement of the transmission.

During the second visit, Figiel again test drove the car with the technician and demonstrated the thump. The repair order for the visit noted that the transmission engaged hard when accelerating from cruise speed, but there was nothing wrong with the mounts or subframe and that the technician had called the "tech hotline." During the third visit, Figiel complained about harsh engagement of the transmission upon acceleration from cruising speed and test drove the car with the technician to demonstrate the thump. The technician test drove the car after "reset[ting] [the] adaptive lear[n]ing" and noted that the "harsh engagement [was] gone."

Before his fourth visit to a dealership, Figiel took his car to Rapid Transmissions for a free check. He drove the car in his usual manner with the owner of Rapid Transmissions and verified the existence of the thump. The owner found no defect and told Figiel there was nothing wrong. At his fourth visit to a dealership, Figiel demonstrated the thump and the technician replaced the transmission mounts because they had "slight excess movement." During his fifth, sixth and seventh visits, the dealership attempted no repairs because it contended the car operated according to the manufacturer's specifications. At one point, Figiel also called Hyundai's "800 number" and was told that Hyundai was waiting for a software update for a "software problem."

During one visit, Figiel went on a 30-minute test drive with Robert J. Lesko, Hyundai's district parts and service manager. Lesko stated that Figiel drove the car in a "very unusual manner" by rapidly pumping the accelerator, which increased the normal noise made by engagement and disengagement of the transmission gears. Lesko admitted hearing a noise when Figiel drove, but stated it was not a defect. Lesko then drove the car using steady pressure on the accelerator and could not duplicate the sound. Although Lesko concluded that Figiel's driving manner caused the noise, he did not consider Figiel's driving to be dangerous or illegal and did not report Figiel's driving manner to anyone.

Lesko contacted the technical service line after the visit to confirm that he had not missed anything and that there were no similar complaints on record for comparable vehicles. After discussing the matter with the two technicians that had worked on Figiel's car, Lesko believed the perceived problem was a normal condition of the vehicle amplified by Figiel's driving habits. Lesko did not recommend repurchasing the car because it did not have a problem.

Although Lesko explained his findings to Figiel, Figiel was not fully satisfied and continued to believe there was something wrong with his car. In fact, Figiel drove three other 2003 Hyundai Santa Fes at different dealerships and could not duplicate the noise he experienced with his car. Figiel became disgusted at the dealers because they would not do anything to repair the thump and brought this action because he believed Hyundai was lying to him about the car not having a problem.

At trial, a jury heard testimony from Figiel, Lesko, the two technicians who worked on Figiel's car and others. Hyundai also presented Steve Robert Johnson, its national manager of engineering and design analysis, as an expert witness regarding the operation characteristics of the transmission or transaxle of Figiel's car. After reading Figiel's and Lesko's depositions, Johnson inspected the car, but found no diagnostic trouble codes stored in its computer or loose components that could cause a noise.

Johnson explained that the transmission has a feature called "variable shifting" that changes the gear shift points in response to the driver's driving habits. This feature is different from adaptive learning, which is just a calibration procedure. Johnson, however, found nothing unusual in the transmission shifting that reflected any of Figiel's driving habits, did not believe Figiel drove the car pumping the accelerator all the time and, in any event, did not consider pumping the accelerator to be abusive to the vehicle.

Johnson stated that the "feel" of Figiel's transmission was the same as a similar Santa Fe he had driven for about a year and, although the thump occurred when Figiel stepped on the accelerator, it took one to two seconds for the transmission to change gears after pressing the accelerator.

Johnson concluded that Figiel's transmission operated within Hyundai's specifications, the car operated normally and the symptom Figiel experienced was normal gear engagement at specific speeds. In his opinion, most customers taking a ride in Figiel's car would not have any complaints, but a reasonable customer could possibly find the noise objectionable. Johnson reviewed all the technical service bulletins issued by Hyundai that applied to Figiel's car and concluded that none of them involved Figiel's complaint. He checked for software updates about two weeks after his inspection of Figiel's car and believed the customer service representative mistakenly assumed that Figiel was talking about a four-wheel-drive car when the representative told Figiel that Hyundai was looking for software to solve the problem; however, he did not talk to anyone at the customer service line and had no documents reflecting a mistake about the software update.

The jury awarded Figiel $19,694.69 in damages after finding that the car suffered from a defect covered by a warranty that substantially impaired its use, value or safety and Hyundai was unable to fix the car to conform to the warranty after a reasonable number of attempts. The jury also found Hyundai's decision to not repurchase the car was willful and awarded Figiel $7,877.87 as a civil penalty. Hyundai moved for JNOV or for a new trial on the ground that the verdict was not supported by the evidence, the jury committed misconduct by using a civil penalty to award attorney fees and attorney misconduct prevented it from having a fair trial. The trial court denied the motions and Hyundai appeals.

DISCUSSION

A. Standard of Review

We review the sufficiency of the evidence under the substantial evidence test, viewing the whole record in the light most favorable to the prevailing party, giving it the benefit of every reasonable inference and resolving all conflicts in its favor. (Oregel v. American Isuzu Motors, Inc. (2001) 90 Cal.App.4th 1094, 1100 (Oregel).) Evidence is substantial if it is of "ponderable legal significance, evidence that is reasonable, credible and of solid value." (Roddenberry v. Roddenberry (1996) 44 Cal.App.4th 634, 651.) While inferences may support a judgment, "the inference must be a reasonable conclusion from the evidence and cannot be based upon suspicion, imagination, speculation, surmise, conjecture or guesswork. [Citation.]" (Beck Development Co. v. Southern Pacific Transportation Co. (1996) 44 Cal.App.4th 1160, 1204.) A reviewing court cannot "blindly seize any evidence in support of the respondent in order to affirm the judgment" and "'[a] decision supported by a mere scintilla of evidence need not be affirmed on review.' [Citation.]" (Kuhn v. Department of General Services (1994) 22 Cal.App.4th 1627, 1633.)

B. The Law

The Act requires the manufacturer of a new motor vehicle to either replace the vehicle or make restitution to the buyer if, after a reasonable number of attempts, it is unable to service or repair the vehicle to conform to an express warranty. (Civ. Code, § 1793.2, subd. (d)(2); Lundy v. Ford Motor Co. (2001) 87 Cal.App.4th 472, 475-476.) To show that Hyundai violated its duties under the Act, Figiel bore the burden of proving, by a preponderance of the evidence, that: (1) the car contained a nonconformity which substantially impaired its use, value or safety to him; (2) the vehicle was presented to an authorized representative of the manufacturer for repair; and (3) the manufacturer or its representative did not repair the nonconformity after a reasonable number of repair attempts. (Oregel, supra, 90 Cal.App.4th at p. 1100.)

The buyer must prove that the product did not conform to the manufacturer's express warranty, but need not prove the cause of the nonconformity or introduce expert testimony to prove a nonconformity when it is within the realm of common knowledge that the product does not conform to its warranty. (Oregel, supra, 90 Cal.App.4th at p. 1102, fn. 8.) Whether the impairment is substantial presents a question of fact for the jury and is determined by an objective test based on what a reasonable person would understand to be a defect. (Lundy v. Ford Motor Co., supra, 87 Cal.App.4th at p. 478.) Nevertheless, the statutory requirement that the nonconformity or defect "substantially impair[]" the use, value or safety of the goods adds an element of degree and "the requirement is not satisfied by any impairment, however insignificant, that affects use, value, or safety." (Ibid.)

C. Analysis

Hyundai contends that Figiel failed to prove that the car suffered a nonconformity and argues that even if the car suffered a nonconformity, Figiel failed to prove that its use, value, or safety was substantially impaired. We agree with the latter point and only briefly discuss the former.

Viewing the record in a light most favorable to Figiel, there is evidence from which a jury could infer that the car suffered from a nonconformity covered by the express warranty. The car made a clunking noise when Figiel stepped on the accelerator after coasting in stop-and-go traffic; however, other similar vehicles that Figiel test drove did not make this noise. Figiel's friends heard the noise and Figiel demonstrated the noise for the technicians that worked on his car.

The two technicians that worked on the car had no independent recollection of it and had to rely on the repair orders. The repair orders, however, did not state that the noise did not exist or that Figiel drove in an unusual way. In fact, the technicians attempted to correct the noise by replacing the transmission mounts and resetting the adaptive learning. Even though the evidence presented by Hyundai could support a contrary finding on the nonconformity issue, we are required to resolve all conflicts in support of the verdict. (Oregel, supra, 90 Cal.App.4th at p. 1100.) Based on the information contained in the repair orders and the testimony presented at trial, the jury could reasonably find that the noise was a nonconformity uncharacteristic of the vehicle and thus within the terms of the express warranty.

The mere existence of a nonconformity, however, is insufficient to sustain the verdict. Figiel also needed to present evidence showing that the nonconformity substantially impaired the car's use, value or safety to him. (Oregel, supra, 90 Cal.App.4th at p. 1100.) Figiel presented no substantial evidence on these three factors and, after reviewing the record, we conclude there is no evidence from which the jury could reasonably infer that the use, value or safety of the car was substantially impaired.

The noise has stayed exactly the same over time and only manifested itself when Figiel placed his foot on the accelerator after coasting. Figiel clearly believed the noise was abnormal, but never testified that it annoyed him, caused him to lose confidence in the car, fear for his safety or curtail his use of the car. Rather, Figiel testified there was "nothing wrong with the vehicle except for the shifting," it had more power on acceleration, ran well and he considered it "a good vehicle." The transmission never failed, Figiel never needed to have the car towed and it never left him stranded.

There is absolutely no evidence in the record establishing that the noise was potentially dangerous or unsafe or impaired Figiel's use of the car in any way. Nor did Figiel present any evidence showing that the noise substantially lessened the resale value of the car. Although Figiel stated he did not feel like he had the "full value" of the car since he owned it because Hyundai would not fix it, this "scintilla of evidence" is insufficient to prove that the car suffered a substantial impairment in value. (Kuhn v. Department of General Services, supra, 22 Cal.App.4th at p. 1633.) Similarly, the fact Figiel took the car in for repairs and filed this action shows his belief that the car suffered from a defect, but does not prove a defect existed that substantially impaired its use, value or safety. Because Figiel had the burden of proving substantial impairment by a preponderance of the evidence, it is of no moment that Hyundai failed to present evidence showing the noise did not diminish the value of his car.

The judgment must be reversed because the record contains no substantial evidence supporting the jury's finding that the noise substantially impaired the use, value or safety of the car.

DISPOSITION

The judgment is reversed and remanded with instructions to enter judgment for the defendant. Hyundai is entitled to recover its costs on appeal.

McINTYRE, J.

WE CONCUR:

McDONALD, Acting P. J.

O'ROURKE, J.

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