Harbaugh v. Yamaha of Santa Cruz

Filed 2/7/08 Harbaugh v. Yamaha of Santa Cruz CA6

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SIXTH APPELLATE DISTRICT

I. INTRODUCTION

Plaintiff Gary Harbaugh appeals from a judgment following a bench trial, as well as a post-judgment order awarding attorneys fees to defendants Yamaha of Santa Cruz County and Yamaha Motor Corporation USA (Yamaha Motor Corporation).[1] In his complaint, Harbaugh alleged that his motorcycle wobbled and that neither defendant properly repaired the motorcycle despite notice of the condition. Harbaughs causes of action included violation of the Consumers Legal Remedies Act (CLRA) (Civ. Code,  1750 et seq.)[2] and breaches of express and implied warranties under the Song-Beverly Consumer Warranty Act ( 1790 et seq.) and the Magnuson-Moss Warranty Act (15 U.S.C. 2301 et seq.).

The trial court found in favor of defendants on all causes of action. Defendants subsequently filed a motion for attorneys fees and costs pursuant to section 1780, subdivision (d) of the CLRA, which authorizes an award of attorneys fees to the prevailing defendant if the court finds the plaintiff did not prosecute the action in good faith. The trial court concluded that Harbaughs action was not prosecuted in good faith and awarded Yamaha of Santa Cruz County $39,024 in attorneys fees and $5,338.05 for costs, and awarded Yamaha Motor Corporation $71,220 in attorneys fees and $4,020 for costs.

On appeal, Harbaugh contends the court erred in awarding attorneys fees. Harbaugh argues that Yamaha Motor Corporation, the manufacturer, is not entitled to fees pursuant to the CLRA, because Harbaugh did not pursue a CLRA claim against it. Second, as to both defendants, Harbaugh contends he must be deemed to have litigated the CLRA claim in good faith, because he prevailed against a defense summary judgment motion, and thus neither defendant is entitled to attorneys fees.

We affirm the judgment, because Harbaughs appeal does not raise any issue contained within the judgment. Regarding the post-judgment order awarding attorneys fees, we find that Yamaha Motor Corporation was not entitled to such fees, because a CLRA claim was not alleged nor prosecuted against it. We find no abuse of discretion in the award of attorneys fees to Yamaha of Santa Cruz County. We therefore modify the post-judgment order by striking the award of attorneys fees to Yamaha Motor Corporation. As so modified, we affirm the post-judgment order.

II. FACTUAL AND PROCEDURAL BACKGROUND

The Yamaha Motorcycle

Harbaugh purchased a new Yamaha Royal Star Venture motorcycle on July 24, 2002, for $19,497.40 from Yamaha of Santa Cruz County. Harbaugh took delivery of the motorcycle on July 30, 2002, after Yamaha of Santa Cruz County obtained the motorcycle from another dealership. The fender on the motorcycle was damaged prior to Harbaugh taking possession of the bike. Yamaha of Santa Cruz County replaced the fender when Harbaugh later returned with the motorcycle for a service visit.

In connection with this purchase, Harbaugh traded in another motorcycle that he had owned since February 2002, because he determined the Royal Star Venture better suited his needs in traveling or touring. Harbaugh purchased the Royal Star Venture for going out and having fun. He owned other vehicles and did not use the motorcycle for commuting purposes.

Prior to February 2002, Harbaugh had not owned or ridden a motorcycle for a period of approximately 17 years. Harbaugh first started riding motorcycles when he was 13 years old and has owned at least 42 motorcycles over the years.

The Warranty

Yamaha Motor Corporation warranted that the Royal Star Venture motorcycle will be free from defects in material or workmanship . . . subject to certain stated limitations. The warranty period was five (5) years from the date of purchase, regardless of mileage. Under the warranty, Yamaha Motor Corporation promised to repair or replace for free any part adjudged defective by Yamaha due to faulty workmanship or material from the factory. Routine maintenance costs, such as oil changes, were excluded from the warranty. The warranty required the customer to give an authorized Yamaha motorcycle dealer notice of any and all apparent defects and to make the motorcycle available at that time for inspection and repairs at such dealers place of business.

An authorized Yamaha service facility may perform warranty work on a Yamaha motorcycle. Yamaha Motor Corporation has customer relations representatives, regional technical advisors, and regional service representatives available to assist dealers who may have questions concerning a customer or a motorcycle.

In addition to selling motorcycles, Yamaha of Santa Cruz County sells service. Its primary customer is Yamaha Motor Corporation, to whom it sells warranty repairs. Yamaha of Santa Cruz County makes money through warranty repairs, and thus there is no incentive for it to refuse to repair a motorcycle. Yamaha Motor Corporation has never denied a verifiable warranty repair by Yamaha of Santa Cruz County.

The Front End Wobble

Harbaugh testified at trial that [a]lmost immediately after purchasing the Yamaha Royal Star Venture motorcycle, he noticed a wobble in the front end of the motorcycle. Harbaugh explained the handlebars would wobble from side to side. Harbaugh testified that the wobbling occurred every time he rode the motorcycle and at all speeds. He further testified that the wobble was greater at slower speeds, and the greatest wobble occurred between 25 and 40 miles per hour. At trial, Harbaugh characterized the wobbling condition as being constant, consistent, and obvious to anyone who rode the motorcycle. Harbaugh testified that he controlled the wobble by holding onto the handlebars with a tight grip instead of having relaxed hands on the bars, and this kept the bars from noticeably moving back and forth.

At trial, Harbaugh acknowledged he had earlier testified in his deposition that he became progressively more scared to death as he rode his motorcycle and he was scared to death every time he rode it. At trial, however, he indicated that scared to death was the wrong terminology and he attributed it to being tired at the deposition. Nonetheless, he admitted at trial that he did not comment on the scared to death terminology used at the deposition, even though his attorney corrected opposing counsel by telling him not to use the term terrified, but to use the phrase scared to death.

Harbaugh attempted to clarify at trial that he first became scared to death of riding the motorcycle in August 2004, at which point he stopped riding it. He testified that he was scared to death at that point because he had done everything he could to remove the problem with the motorcycle but it had not been removed, and he was not going to take any gamble with it. Harbaugh nonetheless testified that he always felt scared on the motorcycle and never really felt comfortable riding it.

Use of the Motorcycle

Notwithstanding the wobbling problem and his fears, Harbaugh rode the motorcycle approximately 29,000 miles in the two years following its purchase in July 2002. Harbaugh acknowledged that some days he rode better than a hundred miles per day on the motorcycle.

Harbaughs wife was a passenger on the motorcycle for approximately 10 or 12 trips. Harbaugh testified that these trips for pleasure were anywhere from a hundred to 200 miles. When asked why he took his wife on a motorcycle that wobbled and scared him, Harbaugh testified: I enjoyed riding it, she enjoyed riding with me.

Harbaugh also purchased numerous accessories for the motorcycle, including the following: Yamaha trunk rack, leather grab rail bags, chrome front fender trim, chrome saddle bag, trim rails, travel cover, Cordura trunk rack bag, saddle bag liners, trunk liner, leather tank panel, chrome luggage rack, side arms, adjustable tubular back rest, back plate chrome, subsonic tachometer, Dyna 3000 ignition, J.C. Whitney chrome gas tank top cover, chrome oil filter cap, chrome rear brake reservoir cover, tinted windshield, Dooley ISO highway pegs, Lone Star 4T bag, Tucker Rocker, hidden FM antenna, chrome radiator cover and accent grille, K and N filter kit, custom-made leather riders, and back rest. The purchase of a back rest and sissy bar for the motorcycle in May 2004 was to keep his wife from coming off the back end of the motorcycle when she was a passenger. When asked why he bought accessories for a motorcycle that he did not feel comfortable riding, Harbaugh testified he was hoping that the problem would be . . . rectified on the bike and it would become sound.

Harbaugh admitted he never suffered physical injury from riding the motorcycle, and he did not suffer any financial loss due to the motorcycle, other than the cost of the motorcycle itself.

The Service Visits to Yamaha of Santa CruzCounty

Harbaugh testified that he went to Yamaha of Santa Cruz County at least once a week and continually complained about the wobble. Harbaugh testified that between July 30, 2002, when he obtained the motorcycle, and July 11, 2003, his last service visit to the dealership, he mentioned the wobble at least 50 times to Yamaha of Santa Cruz County. Harbaugh testified that every time he saw Joe Borges, the service manager at Yamaha of Santa Cruz County, he talked to [Borges] about the wobbling.

Harbaugh also testified that he complained about the wobble to Borges during each of the nine times he took the motorcycle in for service between August 2002 and July 2003. By the time Harbaugh brought the motorcycle in for a service visit in July 2003, he had ridden the motorcycle 13,000 miles.

Borges testified that Harbaugh did not complain to him on a weekly basis about a handling problem with the motorcycle. Further, Borges testified it was his custom and practice to write on the repair order the work wanted by the customer or things the customer asked to be checked out. None of the repair orders from Harbaughs nine service visits to Yamaha of Santa Cruz County specifically refer to the consistent, front-end wobbling at all speeds, as particularly described by Harbaugh at trial.

At trial, Harbaugh identified three repair orders from service visits in August 2002, early September 2002, and January 2003 as referring to the wobble. However, the repair documents,[3] many of which Harbaugh signed, do not specifically refer to the constant, front-end wobble at all speeds that Harbaugh described at trial. Rather, the August 2002 documentation only refers to rear alignment; and the early September 2002 documentation variously refers to fairing vibration in 5th gear, popping + shaking loss of power in 5th, and poor perf in 5th and excess vibration when accel from 70 mph in 5th. Borges testified that after each of these visits by Harbaugh, he never heard that Harbaugh was dissatisfied with the dealerships service. Similarly, the documentation for the January 2003 service visit only states that the front end wobbles when using rear brake. Borges testified that he believed this wobble was fixed during the service visit, because after an adjustment was made to the steering head bearings, the difference in riding the motorcycle from before and after the repair was a night and day difference.

Although Harbaugh testified that the front end wobbling continued to occur after each service visit, he did not immediately return to the dealership to complain, because, according to Harbaugh, he usually picked up his motorcycle late in the day before closing.

Harbaugh admitted at trial that he never asked Borges to ride with him, either together or on separate bikes, so that he could explain the problem. Harbaugh also never asked anyone at any of the other dealerships he subsequently visited to ride with him.

The Service Visits to Other Dealerships

Between August 2003 and May 2004, Harbaugh took the motorcycle to a Yamaha dealership in Redwood City three times, and once each to a dealership in Seaside and a dealership in San Jose. Harbaugh testified that he complained about wobbling or handling problems on four of these five service visits. Repair orders for only two visits reflect handling or shaking complaints by Harbaugh, while documentation for a third visit refers to a tracking problem. Other than Harbaughs testimony, there was no evidence that any dealership was able to replicate the problem of front-end wobbling while riding with hands on the handlebars, which is the specific problem described by Harbaugh at trial.

Parking of the Motorcycle, the CLRA Letter, and the Inspections

In July 2004, Harbaugh sought legal advice regarding his motorcycle, and in August 2004 he retained an attorney.

During the latter part of August 2004, Harbaugh parked his motorcycle in his garage and essentially stopped riding it. He testified that he got to a point [he] couldnt trust it.

On August 16, 2004, Harbaughs counsel provided notice to defendants of the alleged wobble and alleged violations under the CLRA, including misrepresentations pertaining to the characteristics or qualities and standard, quality, and grade of the motorcycle, and demanded rectification.

After receiving the letter, Yamaha Motor Corporation obtained Harbaughs approval, through his attorney, to inspect the motorcycle in order to ascertain the condition of the motorcycle. The inspection occurred at a Yamaha dealership in Gilroy on September 14, 2004. By this time, there were 29,106 miles on the motorcycle. A regional service representative from Yamaha Motor Corporation was permitted to inspect and ride the motorcycle, but Harbaugh, who was not present for the inspection, and his attorney refused to allow disassembly or repair of the motorcycle. The regional service representative was unable to replicate the wobble while riding the motorcycle, and was unable to find anything wrong with the motorcycle, other than a loose handlebar grip.

During the course of the litigation, Yamaha of Santa Cruz County made a video recording of two experienced riders separately riding Harbaughs motorcycle for a total of 25 or 30 miles. Neither rider was able to replicate the wobble.

The Litigation

Harbaugh filed a complaint against defendants on October 29, 2004. Harbaugh later filed first and second amended complaints in response to the granting of motions filed by Yamaha Motor Corporation to strike certain allegations. After the second amended complaint was filed, Yamaha Motor Corporation filed a motion to strike, which was denied by the court.

In the operative second amended complaint, Harbaugh alleged nine causes of action. Regarding Yamaha of Santa Cruz County, Harbaugh alleged causes of action for violation of the CLRA ( 1750 et seq.), fraud intentional misrepresentation, fraud concealment, negligent misrepresentation, and violation of Business and Professions Code section 17200. Regarding both defendants, Harbaugh alleged causes of action for breaches of express and implied warranties under the Song-Beverly Consumer Warranty Act ( 1790 et seq.) and the Magnuson-Moss Warranty Act (15 U.S.C. 2301 et seq.). Harbaughs pleading also included agency allegations regarding defendants.

The Motion for Summary Judgment

Yamaha of Santa Cruz County filed a motion for summary judgment, which the trial court denied. The court ruled there was a triable issue of material fact as to whether Yamaha of Santa Cruz County was given a reasonable number of chances to make repairs. The court also found that the fraud claims were sufficiently pleaded.

The parties appeared before the court ten days later, and the ruling was vacated. After advising the parties of its tentative ruling and then hearing argument from the parties, the court again denied the motion.

The Trial

The jury trial commenced in March 2006. After several days of witness testimony, a mistrial was declared. The parties subsequently agreed to a court trial. The parties also agreed that the court would consider the testimony and evidence that had been presented to the jury prior to the mistrial. The court trial began in May 2006. After hearing additional testimony and closing arguments, the court found in favor of defendants.

At the request of Harbaugh, the court issued a statement of decision on September 7, 2006. In the statement of decision, the court indicated that with respect to warranties, All that is necessary for the consumer is to notify the company or corporation of a problem and give them a reasonable opportunity to remedy it. Regarding the case before it, the court explained: The product in this action is a Yamaha motorcycle. The issue according to the Plaintiff is that the front end of the unit wobbled from the very first ride. [] MR. HARBAUGH claims to have notified the defendants YAMAHA OF SANTA CRUZ and YAMAHA CORPORATION of this issue from the start. [] The motorcycle in question was ridden by the Plaintiff 29,000 miles before he parked it and made his demand. [] Based upon my review of the testimony and evidence presented at trial, along with a review of the law that applies to these facts and causes of action[], the only creditable notice given to either Defendant was on August 16, 2004. At that point Plaintiff indicated that he was finished with the motorcycle and wasnt going to allow a repair. [] Plaintiff[]s position of constant complaints (weekly) and constant fear of death is not supported by his evidence or his actions as depicted by his testimony. [] The court finds Defendants[] evidence creditable and consistent. This evidence supports the court[]s finding as to lack of notice and therefore a lack of an opportunity to repair. [] Judgment is for the Defendants.

The statement of decision also included the courts answers to questions posed by Harbaugh in a written request for a statement of decision regarding the causes of action for (1) violation of the CLRA, (2) breach of express warranty Song-Beverly Consumer Warranty Act, (3) breach of implied warranty Song-Beverly Consumer Warranty Act, and (4) breach of express and implied warranties Magnuson-Moss Warranty Act.[4]

The Motion for Attorneys Fees

On September 19, 2006, defendants filed a single motion for attorneys fees and costs pursuant to section 1780, subdivision (d). According to declarations filed with the motion, Yamaha of Santa Cruz County had incurred $39,024 in attorneys fees and $5,338.05 for costs, and Yamaha Motor Corporation had incurred $71,220 in attorneys fees and $4,020 for costs.

After a hearing on the motion, by order filed December 12, 2006, the court found that Harbaugh did not prosecute this action in good faith and awarded the fees and costs requested by defendants.[5]

III. DISCUSSION

Harbaughs appeal is based on two contentions. First, Yamaha Motor Corporation is not entitled to attorneys fees under the CLRA, because Harbaugh did not pursue a CLRA claim against it. Second, neither Yamaha Motor Corporation nor Yamaha of Santa Cruz County is entitled to attorneys fees under the CLRA, because Harbaugh necessarily litigated the CLRA claim in good faith in light of the denial of a defense summary judgment motion.

A.Whether Yamaha Motor Corporation Was a Prevailing Defendant Under the CLRA

Harbaugh contends that while he alleged a CLRA claim against Yamaha of Santa Cruz County, he neither alleged nor pursued such a claim against Yamaha Motor Corporation. Consequently, Harbaugh argues Yamaha Motor Corporation may not be deemed a prevailing defendant for purposes of awarding attorneys fees under section 1780, subdivision (d). Further, to the extent Yamaha Motor Corporation points to agency allegations in his pleadings, Harbaugh contends that they are merely boilerplate allegations, which are an insufficient basis upon which to award fees to Yamaha Motor Corporation under the CLRA.

In response, Yamaha Motor Corporation contends that Harbaugh failed to distinguish between the two defendants in his pleadings or at trial, and that both defendants were compelled to defend the . . . case jointly, on all causes of action. In particular, Yamaha Motor Corporation points to allegations in the initial complaint regarding the agency relationship among defendants and regarding aiding and abetting by defendants; allegations in the first amended complaint regarding agency, aiding and abetting, and conspiracy; and allegations in the second amended complaint (the operative pleading for trial) regarding agency.

Prevailing Defendant Under the CLRA and the Standard of Review

The CLRA provides for an award of attorneys fees as follows: The court shall award court costs and attorneys fees to a prevailing plaintiff in litigation filed pursuant to this section. Reasonable attorneys fees may be awarded to a prevailing defendant upon a finding by the court that the plaintiffs prosecution of the action was not in good faith. ( 1780, subd. (d).) As to the issue of whether Yamaha Motor Corporation is a prevailing defendant under section 1780, subdivision (d), the parties dispute the proper standard of review. Harbaugh contends de novo review is appropriate, while defendants contend an abuse of discretion standard applies in this case.

On review of an award of attorney fees after trial, the normal standard of review is abuse of discretion. However, de novo review of such a trial court order is warranted where the determination of whether the criteria for an award of attorney fees and costs in this context have been satisfied amounts to statutory construction and a question of law.  (Connerly v. State Personnel Bd. (2006) 37 Cal.4th 1169, 1175, quoting Carver v. Chevron U.S.A., Inc. (2002) 97 Cal.App.4th 132, 142; see also Corbett v. Hayward Dodge, Inc. (2004) 119 Cal.App.4th 915, 921.)

In this case, whether Yamaha Motor Corporation may recover attorneys fees as a prevailing defendant under the CLRA involves the application of law to undisputed facts. The content of certain documents filed by Harbaugh and pertinent statements made by his attorney are undisputed. Consequently, we review de novo the question of whether Yamaha Motor Corporation is a prevailing defendant for purposes of recovering attorneys fees under the CLRA. (See Connerly v. State Personnel Bd., supra, 37 Cal.4th at pp. 1175-1176.)

Analysis

In the initial complaint, first amended complaint, and second amended complaint, Harbaugh alleged that the Dealer (which the pleadings defined as Yamaha of Santa Cruz County) violated the CLRA by misrepresenting the condition of the Vehicle, and that shaking and wobbling were normal characteristics of the Vehicle . . . . Harbaugh further alleged that the Dealer violated the CLRA when it represented that the goods and services had characteristics and benefits which they did not have; that the vehicle and the services were of a particular standard, quality, or grade when they were not; that the transaction conferred or involved rights, remedies, and obligations which they did not have or involve; and that the subject of the transaction had been supplied in accordance with a previous representation when it had not. . . .

The CLRA cause of action in each of the pleadings only makes reference to the Dealer, which was Yamaha of Santa Cruz County. There is no specific reference to Yamaha Motor Corporation in the body of the CLRA cause of action in the initial complaint or amended complaints.

At the outset of Harbaughs initial complaint and amended complaints, however, there are allegations regarding agency, among other theories of secondary liability. For example, the initial complaint contains allegations regarding agency and aiding and abetting.[6] The first amended complaint contains similar allegations regarding agency and aiding and abetting, as well as allegations regarding a conspiracy.[7]

The allegations in the second amended complaint are more limited. However, that pleading still includes allegations concerning an agency relationship in paragraphs six and seven as follows: 6.  When reference in this complaint is made to any act or transaction of a defendant corporation, company, association, business entity, or partnership, such allegation shall be deemed to mean that said defendant and its owners, officers, directors, agents, employees, or representatives did or authorized such acts while engaged in the management, direction, or control of the affairs of defendants and while acting within the scope and course of their duties. [] 7. When reference in this complaint is made to any act of any individual defendant, such allegation shall be deemed to mean that said defendant is and was acting (a) as a principal, (b) under express or implied agency, and/or (c) with actual or ostensible authority to perform the acts so alleged on behalf of every other defendant herein.

While the CLRA cause of action in the second amended complaint incorporates by reference these allegations from paragraphs six and seven (among others), this incorporation does not result in a CLRA claim being asserted or prosecuted against Yamaha Motor Corporation. There is repeated limiting language in the CLRA cause of action that it is the Dealer, defined as Yamaha of Santa Cruz County, that engaged in certain representations in violation of the CLRA. Thus, even assuming the dealer was acting as an agent of Yamaha Motor Corporation when it engaged in various

representations,[8] the pleading nevertheless makes clear that the violation of the CLRA was by the dealer only. In other words, while the second amended complaint might be read as alleging that Yamaha of Santa Cruz County acted as an agent of Yamaha Motor Corporation when certain representations were made, the pleading is nonetheless limited to Yamaha of Santa Cruz County in the prosecution of liability for a CLRA violation.

Further supporting this construction of the second amended complaint is the heading to the CLRA cause of action, which includes the phrase As to Dealer. While the allegations contained within a cause of action, rather than the label the pleader assigns to the cause of action, control the nature of a pleading (see Jaffe v. Carroll (1973) 35 Cal.App.3d 53, 57), the heading to the CLRA cause of action is nonetheless consistent with our interpretation of the allegations in that cause of action. (See Cal. Rules of Court, rule 2.112(4) [each separate cause of action must state [t]he party or parties to whom it is directed (e.g., against defendant Smith)] [formerly rule 312(g)].) In contrast, Harbaughs warranty-related causes of action under the Song-Beverly Consumer Warranty Act and the Magnuson-Moss Warranty Act (fifth through eighth causes of action) are headed with the phrase As to Dealer and Yamaha, with Yamaha defined as Yamaha Motor Corporation. In these warranty-related causes of action, Harbaugh alleges the warranties were breached or pertinent statutes were violated by the dealer and Yamaha Motor Corporation.

Subsequent documents filed by Harbaugh also support our conclusion that the CLRA cause of action is alleged against the dealer only. For example, in opposition to Yamaha Motor Corporations motion to strike certain allegations in the first amended complaint, Harbaugh clarified that Yamaha Motor Corporation was only being sued under the warranty-related causes of action, while the CLRA, fraud, and Business and Professions Code section 17200 causes of action only targeted Yamaha of Santa Cruz County. Indeed, Yamaha Motor Corporation, in its reply in support of the motion to strike, acknowledged this distinction: This defendant appreciates the clarification that it is only a party to four of Plaintiffs nine causes of action . . . . On initial reading it had appeared that each defendant was alleged to be acting with every other defendant and therefore potentially responsible for all claims of Plaintiff . . . .

Harbaughs position in opposition to Yamaha Motor Corporations motion to strike certain allegations in the second amended complaint was more equivocal. As to the import of the agency allegations and Yamaha Motor Corporations liability on any given cause of action, Harbaugh may have been trying to keep his options open by arguing that his agency allegations were merely boilerplate and in any event were subject to proof.[9] Of course, whether Harbaugh believed he could pursue CLRA liability against Yamaha Motor Corporation based on the existing allegations in the second amended complaint is a different question than whether such a claim had actually been alleged against Yamaha Motor Corporation. As we have explained, the allegations do not support a conclusion that a CLRA claim was being asserted or prosecuted against Yamaha Motor Corporation.

Other evidence in the record also supports our conclusion. For example, Harbaughs counsel specifically indicated during her opening statement at trial that a misrepresentation claim was being asserted against Yamaha of Santa Cruz County only. Thereafter, Harbaugh filed a supplemental trial brief and a request for a statement of decision. In each of these documents, Harbaugh identified only Yamaha of Santa Cruz County in connection with the CLRA cause of action.

While Yamaha Motor Corporation contends it was compelled to defend the underlying case jointly, on all causes of action with Yamaha of Santa Cruz County, it fails to provide any citation to the record to support this contention. In fact, its contention that [c]ross and direct exam of witnesses, as well as opening and closing arguments, were combined, with both Respondents acting as a single defendant to defend is not entirely accurate. The record reflects that counsel for each defendant gave separate opening and closing statements. The record also reflects that Yamaha Motor Corporation separately questioned several witnesses and, in most instances in which it did not separately question the witness, the witnesses were employees or agents of Yamaha of Santa Cruz County. Given the overlapping factual issues raised by the warranty-related causes of action in which both defendants were named, the defense by one defendant may have facilitated the defense by the other, thereby reducing the need for each defendant to separately question each witness. However, the fact that mutual cooperation furthered the defense against claims in which both defendants were indisputably named, such as the warranty-related claims, does not establish that a joint defense was either utilized or was necessary as against the CLRA claim, particularly where no such claim was alleged against Yamaha Motor Corporation.

Moreover, it appears from the record that Harbaughs evidence on the CLRA cause of actionat trial and in opposition to the summary judgment motion by Yamaha of Santa Cruz Countywas limited to representations made by employees of Yamaha of Santa Cruz County, and there was no evidence that Yamaha of Santa Cruz County or its employees were acting as agents of Yamaha Motor Corporation at the time of the representations.

In sum, we find that the CLRA cause of action was not alleged against Yamaha Motor Corporation nor prosecuted against it. Therefore, Yamaha Motor Corporation was not entitled to recover attorneys fees from Harbaugh as a prevailing defendant under the CLRA.

B. Whether Harbaugh Prosecuted the Action in Good Faith

Harbaugh contends that his litigation of the CLRA claim must be deemed to be in good faith, because he prevailed against a defense summary judgment motion. Harbaugh also contends that to the extent Yamaha of Santa Cruz County relies on certain letters by his attorney to establish bad faith, those letters are inadmissible under Evidence Code sections 1152, subdivision (a),[10] and 1154,[11] which pertain to settlement discussions.

Yamaha of Santa Cruz County contends that there was sufficient evidence to support the trial courts finding that Harbaugh lacked good faith in prosecuting the CLRA claim. Yamaha of Santa Cruz County also contends that the trial courts denial of the summary judgment motion does not conclusively establish that Harbaughs action was litigated in good faith, because the summary judgment rule cited by Harbaugh pertains to actions for malicious prosecution, and not a motion for attorneys fees under section 1780. Further, even if the rule is utilized in this case, Yamaha of Santa Cruz County contends that Harbaugh presented false evidence in opposition to the defense summary judgment motion, and thus a court may still conclude that Harbaugh litigated the action in bad faith.

In reply, Harbaugh argues that much of the evidence cited by Yamaha of Santa Cruz County to support the finding of a lack of good faith simply shows that he did not prove his case, without rising to the level of showing that he prosecuted the CLRA action in bad faith. Harbaugh argues that unless a high standard is used in determining whether a defendant should be awarded fees under the CLRA, trial courts may tend to equate a plaintiffs lack of success with a lack of good faith in pursuing a CLRA claim. According to Harbaugh, [a] low threshold for a section 1780(d) fee award to a defendant . . . would have a chilling effect on the average persons use of this valuable consumer protection device [i.e. the CLRA].

Lack of Good Faith Prosecution

Section 1770 of the CLRA prohibits a variety of deceptive practices against consumers, including [r]epresenting that goods . . . have . . . characteristics . . . [or] benefits . . . which they do not have or [r]epresenting that goods . . . are of a particular standard, quality, or grade, . . . if they are of another. ( 1770, subd. (a)(5) & (7).) The CLRA is designed to protect consumers against unfair and deceptive business practices and to provide efficient and economical procedures to secure such protection. ( 1760.)

Prior to bringing an action for damages under the CLRA, a consumer must serve a written notice of the statutory violation and include a demand that the goods be corrected, repaired, replaced, or otherwise rectified. ( 1782, subd. (a).) The purpose of the notice requirement of section 1782 is to give the manufacturer or vendor sufficient notice of alleged defects to permit appropriate corrections or replacements. The notice requirement commences the running of certain time constraints upon the manufacturer or vendor within which to comply with the corrective provisions. The clear intent of the act is to provide and facilitate precomplaint settlements of consumer actions wherever possible and to establish a limited period during which such settlement may be accomplished. (Outboard Marine Corp. v. Superior Court (1975) 52 Cal.App.3d 30, 40-41, fn. omitted.)

As stated previously, section 1780, subdivision (d) permits a court to award attorneys fees to the prevailing defendant if the court finds the plaintiffs prosecution of the action was not in good faith. In Corbett v. Hayward Dodge, Inc., supra, 119 Cal.App.4th at page 924, the Court of Appeal interpreted this subdivision as requiring a finding of subjective bad faith. In rejecting defendants argument for an objective standard, the Court of Appeal explained: Courts have uniformly constructed this language as requiring a subjective test. Moreover, we note that this construction comports most closely with the apparent intent of the Legislature. Civil Code section 1760 provides: This title shall be liberally construed and applied to promote its underlying purposes, which are to protect consumers against unfair and deceptive business practices and to provide efficient and economical procedures to secure such protection. Accordingly, the statute is to be interpreted to encourage such prosecutions. The definition urged by [defendant] and supported by no authority would chill such lawsuits. (Id. at p. 924.) Corbett also held that a defendant moving for attorneys fees under section 1780, subdivision (d) has the burden of proving plaintiff did not prosecute the action in good faith. (Id. at p. 926.)

Standard of Review

An award of attorneys fees to a prevailing defendant under section 1780, subdivision (d) is discretionary. (See 1780, subd. (d) [[r]easonable attorneys fees may be awarded to a prevailing defendant . . .].) On appeal, the trial courts order is presumed correct, and the standard of review is abuse of discretion. (Corbett v. Hayward Dodge, Inc., supra, 119 Cal.App.4th at p. 927.)

Under the abuse of discretion standard, there may be a substantial evidence component if the court makes factual findings. We defer to the trial courts factual findings so long as they are supported by substantial evidence, and determine whether, under those facts, the court abused its discretion. If there is no evidence to support the courts findings, then an abuse of discretion has occurred. [Citation.] (Tire Distributors, Inc. v. Cobrae (2005) 132 Cal.App.4th 538, 544.)

In this case, the order awarding attorneys fees was based on a finding that the action was not prosecuted in good faith. As this court observed in Knight v. City of Capitola (1992) 4 Cal.App.4th 918, 932 in the context of an attorney fee award under Code of Civil Procedure section 1038,[12] Good faith, or its absence, involves a factual inquiry into the plaintiffs subjective state of mind (citations): Did he or she believe the action was valid? What was his or her intent or purpose in pursuing it? A subjective state of mind will rarely be susceptible of direct proof; usually the trial court will be required to infer it from circumstantial evidence. Because the good faith issue is factual, the question on appeal will be whether the evidence of record was sufficient to sustain the trial courts finding. (Knight v. City of Capitola, supra, 4 Cal.App.4th at p. 932.)

When a trial courts factual determination is attacked on the ground that there is no substantial evidence to sustain it, the power of an appellate court begins and ends with the determination as to whether, on the entire record, there is substantial evidence, contradicted or uncontradicted, which will support the determination, and when two or more inferences can reasonably be deduced from the facts, a reviewing court is without power to substitute its deductions for those of the trial court. (Bowers v. Bernards (1984) 150 Cal.App.3d 870, 873-874, italics omitted.) In other words, if substantial evidence exists to support the trial courts determination, the appellate court must affirm, even if the reviewing justices would have ruled differently if they had presided over the proceedings below and even if other substantial evidence would have supported a different result. (Id. at p. 874.) In reviewing the sufficiency of the evidence to support the trial courts factual finding, we view the evidence in the light most favorable to the respondents and indulge all reasonable inferences in support of the judgment. (In reMarriage of Mix (1975) 14 Cal.3d 604, 614.)

Analysis

A review of the entire record persuades us that there was substantial evidence to support the trial courts finding that Harbaugh did not prosecute the action in good faith. First, Harbaugh failed to prevail on the CLRA claim, along with the warranty-related claims. In the statement of decision, the trial court found that Harbaugh did not provide notice to defendants of the specific wobbling problem in the front end of the motorcycle, and therefore failed to provide an opportunity to repair. Given this factual finding that Harbaugh never notified defendants about the front-end wobbling, and the lack of evidence in the record establishing that defendants otherwise knew about the particular problem (such as from a source other than Harbaugh), the trial court necessarily concluded that Yamaha of Santa Cruz County did not make misrepresentations related to the purported wobbling under the CLRA. In particular, the trial court in the statement of decision answered no to the following questions posed by Harbaughs written request for a statement of decision: 1. Did [Yamaha of Santa Cruz County] represent that the motorcycle had characteristics and benefits which it did not have, in violation of Civ. Code  1770(a)(5). [] 2. Did [Yamaha of Santa Cruz County] represent that the motorcycle was of a particular standard, quality, or grade which it was not, in violation of Civ. Code  1770(a)(7).

Due to Harbaughs failure to establish that defendants knew about the particular front-end wobbling, the trial court could have reasonably concluded that Harbaughs CLRA claim, which was based on alleged misrepresentations concerning the front-end wobbling, was completely without merit. The trial courts finding that Harbaughs CLRA claim lacked merit may support a finding of bad faith. When a tactic or action utterly lacks merit, a court is entitled to infer the party knew it lacked merit yet pursued the action for some ulterior motive. (Corbett v. Hayward Dodge, Inc., supra, 119 Cal.App.4th at p. 928, citingSummers v. City of Cathedral City (1990) 225 Cal.App.3d 1047, 1073.)

Second, there was considerable circumstantial evidence supporting the trial courts inference of bad faith. For example, while Harbaugh testified that the wobbling occurred consistently and at all speeds while holding onto the handlebars and that he complained weekly for almost one year to Yamaha of Santa Cruz County, there was a lack of evidence from any other source, either written or oral, indicating that any dealership visited by Harbaugh was specifically notified about or successfully replicated the problem.

Besides Harbaugh, the only other witnesses who testified that they had experienced the wobble on Harbaughs motorcycle, as particularly described by Harbaugh at trial, were his friend and his expert witness. However, both of these individuals admitted that they only rode Harbaughs motorcycle before or during the bench trial, which took place approximately two and one-half months after the jury mistrial (during which Harbaugh had presented most of his case). By this point, however, Harbaugh had apparently disassembled and reassembled parts of his motorcycle.[13]

Harbaugh also claimed to be scared every time he rode the motorcycle, even suggesting at his deposition that he became progressively more scared to death. However, his overt conduct was inconsistent with such testimony. For instance, he rode the motorcycle thousands of miles in a two-year period, rode more than 100 miles per day when traveling between his home in Santa Cruz County and San Jose, took numerous long distance trips with his wife as a passenger, and purchased a substantial number of accessories for the motorcycle. Even after he stopped riding the motorcycle in August 2004 due to his fear of the condition of the motorcycle, he nevertheless rode it from Santa Cruz County to Napa in January 2006, so that his expert witness could examine the motorcycle. The court could reasonably conclude that all of these actions by Harbaugh were inconsistent with Harbaughs expressed apprehension in riding the motorcycle due to a purported wobbling problem.

Harbaugh also testified that he had a wobbling problem with a Honda motorcycle he previously owned. However, unlike the Yamaha motorcycle at issue in this case, which he continued to ride extensively and for which he repeatedly purchased accessories, Harbaugh immediately sold the other motorcycle after experiencing the wobble once. In attempting to explain the difference in his behavior after the wobbling on the Honda as compared to the Yamaha, Harbaugh testified that he thoroughly liked the Yamaha whereas the Honda he did not.

Finally, Harbaugh indicated that he understood and took care of the maintenance necessary for the motorcycle, yet he did not ensure the motorcycle received all the recommended maintenance at the requisite mileage or time intervals. He also testified that he always checked the tire pressure before riding, yet the individuals servicing or inspecting his motorcycle frequently found the tire pressure not in accordance with the owners manual. Harbaugh further testified that he believed Yamaha Motor Corporation would not continue to honor the motorcycles five year warranty after January 2003, while nevertheless acknowledging that Yamaha dealerships continued to provide free service on his motorcycle and repair orders indicated that the dealerships had done warranty work in May, August and October 2003.

Harbaugh acknowledged at trial that at the time of his deposition, he was seeking reimbursement for every penny he spent on the motorcycle, including all of the accessories he purchased, and, if possible, all the gasoline he purchased. At trial, however, he backed away from seeking reimbursement for the accessories and gas. He also admitted at trial that he was not interested in defendants fixing the wobble or replacing the frame after he retained an attorney. When asked at his deposition why a repair would not be satisfactory, Harbaugh replied: Because I dont like the company its behind and I dont like the way I have been dealt with. When reminded about this deposition testimony at trial and asked whether he had a vendetta against Yamaha, Harbaugh denied having a vendetta.

As with the other testimony presented during trial, the court had an opportunity to assess Harbaughs credibility, including his broad assertions of wobbling and repeated complaints to Yamaha of Santa Cruz County, combined with his refusal to accept repair or replacement and a desire to be reimbursed for all costs associated with the motorcycle, to determine whether Harbaughs testimony was believable, or indicative of some other ulterior motive. We reiterate that [c]redibility is an issue for the fact finder. . . . [W]e do not reweigh evidence or reassess the credibility of witnesses. [Citation.] We have no power to judge . . . the effect or value of the evidence, to weigh the evidence, to consider the credibility of the witnesses, or to resolve conflicts in the evidence or in the reasonable inferences that may be drawn therefrom. [Citations.] [Citation.] When, as here, the evidence gives rise to conflicting reasonable inferences, one of which supports the findings of the trial court, the trial courts finding is conclusive on appeal. [Citations.] [Citation.] (Johnson v. Pratt & Whitney Canada, Inc. (1994) 28 Cal.App.4th 613, 622-623.) In this case, there was a considerable amount of evidence from which the trial court could reasonably infer that the case was without merit, that Harbaugh knew his claim was without merit, and that he prosecuted it for some ulterior motive.

For these reasons, we conclude that the trial courts finding that Harbaugh did not prosecute the action in good faith was supported by substantial evidence.[14] Given the substantial evidence supporting the trial courts finding that Harbaugh did not pursue the action in good faith, we find that the court did not abuse its discretion when it awarded attorneys fees to Yamaha of Santa Cruz County pursuant to section 1780, subdivision (d).

Harbaugh contends that because he prevailed against a defense summary judgment motion, the trial court necessarily should have found that he prosecuted the CLRA claim in good faith. In support of this argument, Harbaugh relies on malicious prosecution cases in which courts have held that the denial of defendants summary judgment in an earlier case normally establishes there was probable cause to sue, thus barring a later malicious prosecution suit. (Roberts v. Sentry Life Insurance (1999) 76 Cal.App.4th 375, 384.) The rule does not apply if, for example, the denial of summary judgment was induced by materially false facts submitted in opposition . . . . In such a case, equating denial with probable cause might be wrong. Summary judgment might have been granted but for the false evidence. (Ibid.)

In opposition to defendants motion for attorneys fees, Harbaugh never raised this issue regarding the courts prior denial of summary judgment and the effect it might have on a finding of good faith under the CLRA. It is well established that issues or theories not properly raised or presented in the trial court may not be asserted on appeal, and will not be considered by an appellate tribunal. A party who fails to raise an issue in the trial court has therefore waived the right to do so on appeal. [Citations.] (In re Marriage of Eben-King & King (2000) 80 Cal.App.4th 92, 117.) This rule does not apply if the arguments raised pertain only to questions of law on undisputed facts. Although a party may ordinarily not change his theory on appeal, the rule does not apply when the facts are not disputed and the party merely raises a new question of law. (UFITEC, S.A. v. Carter (1977) 20 Cal.3d 238, 249, fn. 2.)

In this case, Harbaughs argument that the denial of the defense summary judgment motion necessitates a finding that he litigated the CLRA claim in good faith is an issue that raises disputed facts. Specifically, there is a factual question as to whether Harbaughs evidence in opposition to the summary judgment motion was false or misleading when compared to the evidence presented at trial. Thus, the issue is one that should have been raised in the trial court, and we find that Harbaugh has waived it on appeal.

IV. DISPOSITION

The judgment in favor of Yamaha of Santa Cruz County and Yamaha Motor Corporation in Case No. H030880 is affirmed. Defendants are awarded their costs on appeal.

The post-judgment order of December 12, 2006 in Case No. H031195 is modified by striking the award of attorneys fees to Yamaha Motor Corporation. As so modified, the post-judgment order is affirmed. Each party shall bear its own costs on appeal.

___________________________________________________

Bamattre-Manoukian, ACTING P.J.

WE CONCUR:

__________________________

MIHARA, J.

_________________________

duffy, J.

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Analysis and review provided by La Mesa Property line attorney.

[1] We ordered the appeal from the judgment (case No. H030880) and the appeal from the post-judgment order awarding attorneys fees (case No. H031195) to be considered together for purposes of briefing, oral argument, and decision.

[2] All further statutory references are to the Civil Code unless otherwise indicated.

[3] The documents include records from Yamaha Motor Corporations Call Management System which reflect incoming and outgoing calls at Yamaha Motor Corporation with customers or dealers.

[4] It is not clear from the record when the fraud-related claims and the claim for violation of Business and Professions Code section 17200, which are alleged in the second amended complaint, were dismissed.

[5] On appeal, Harbaugh does not challenge the award of costs in the December 12, 2006 order.

[6] The initial complaint alleges: 7. When reference in this complaint is made to any act of any individual defendant, such allegation shall be deemed to mean that said defendant is and was acting (a) as a principal, (b) under express or implied agency, and/or (c) with actual or ostensible authority to perform the acts so alleged on behalf of every other defendant herein. [] 8. Whenever in this complaint reference is made to any act of defendants, such allegation shall be deemed to mean the act of each defendant acting individually and jointly with the other defendants named in that cause of action. [] 9. At all relevant times, each defendant knew or realized that the other defendants were engaging in, or planned to engage in, the violations of law alleged in this complaint. Knowing or realizing that other defendants were engaging in such unlawful conduct, each defendant nevertheless facilitated the commission of those unlawful acts. Each defendant intended to, and did, encourage, facilitate, or assist in the commission of the unlawful acts, and thereby aided and abetted the other defendants in the unlawful conduct. [] 10. At all relevant times, each Defendant, whether actually or fictitiously named in the Complaint, was the agent (actual or ostensible), or the employee of Yamaha. Yamaha is defined earlier in the pleading as Yamaha Motor Corporation and Doe defendants six through ten.

[7] The first amended complaint alleges: 7. When reference in this complaint is made to any act of any individual defendant, such allegation shall be deemed to mean that such defendant is and was acting (a) as a principal, (b) under express or implied agency, and/or (c) with actual or ostensible authority to perform the acts so alleged on behalf of every other defendant herein. [] 8. Whenever in this complaint reference is made to any act of defendants, such allegation shall be deemed to mean the act of each defendant acting individually and jointly with the other defendants named in that cause of action. [] 9. Plaintiff is informed and believes, and based thereon alleges, that at all relevant times, each of the defendants, whether named or fictitiously named as DOE (collectively referred to as Defendants), was the merging entity, merged entity, subsidiary, acquiring corporation, agent and/or employee of each of the remaining Defendants and, in doing the things hereinafter alleged, was acting within the course and scope of such agency and/or employment with the knowledge, advice, permission and consent of each other. [] 10. At all relevant times, each of the defendants was an agent, co-conspirator, joint tortfeasor, joint venturer, independent contractor, and/or alter ego of each of the other defendants. In doing the things alleged herein, each of the defendants was acting within the course and scope of such agency, conspiracy, contract, and/or joint venture, with the direction, advance knowledge, authorization, acquiescence, and/or subsequent ratification of each and every remaining defendant. Each defendant was put in a position and so enabled by the remaining defendants to do the things hereinafter alleged. Each defendant had the knowledge of and agreed to the objective and course of action hereinafter alleged, and each defendant conspired with a