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C.A.: Statutory Penalty, Punitive Damages Didn’t Constitute Impermissible Double Punishment
By a MetNews Staff Writer
The Third District Court of Appeal yesterday rejected the contention of Ford Motor Company that it violated the “no-double-punitives rule” to impose on it a $30,000 civil penalty under the Song-Beverly Act, the “lemon law,” as well as $150,000 in punitive damages.
Retired Justice William J. Murray Jr., sitting on assignment, wrote the opinion which affirms a judgment by San Joaquin Superior Court Judge W. Stephen Scott against Ford and in favor of Shelby and Tammy Anderson, purchasers in 2004 of a diesel pickup truck. Efforts to fix the vehicle, which had a defective engine, failed; it became a “driveway ornament.”
The Andersons sued under the lemon law, as well as the Consumers Legal Remedies Act (“CLRA”) and for fraud in the inducement/concealment based on failing to disclose the engine’s defects prior to the purchase.
Actual Value $0
A jury awarded the Andersons, in addition to the statutory penalty and punitive damages, $47,715.60 in actual damages—the purchase price of the truck, which it reckoned to be actually worth $0. Scott granted an award of attorney fees in the amount of $643,615.
Murray said, in a published portion of his opinion, that the two penalties did not, as Ford contended, punish it twice for what was “substantially” the same conduct. He explained:
“[T]he punitive damages and statutory penalties were based on different conduct that took place at different times. The punitive damages were based on conduct underlying the fraud/CLRA causes of action and took place before the sale. The civil penalty was based on defendant’s post-sale failure to comply with its Song-Beverly Act obligations to replace the vehicle or make restitution when reasonable attempts to repair had failed.”
No Decisional Conflict
The affirmance, he wrote, does not conflict with the holding of the First District Court of Appeal in its Dec. 4, 1985 decision in Troensegaard v. Silvercrest Industries, Inc., involving a defective mobile home. In the opinion in that case, it was observed that if the Legislature had “intended a double recovery of punitive and penal damages for the same willful, oppressive, malicious, and oppressive acts, it would in some appropriate manner have said so,” declaring that the plaintiff, in seeking a “civil penalty,” impliedly waived punitive damages.
Murray said in yesterday’s opinion:
“Our reading of Troensegaard is that the court’s holding was based on conduct that was the same, i.e., identical, not just ‘substantially’ the same. And that conduct took place at the same time, post-sale during the warranty repair process.”
The case is Anderson v. Ford Motor Company, 2022 S.O.S. 550.
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