Facts

On June 27, 2014, plaintiffs Steven and Patricia Keefer purchased a 2015 Hyundai Genesis equipped with a 5.0L engine from Rally Hyundai. The vehicle sales price was $57,200. With tax, license, and fees, the total sales price was $62,087.75. After a $10,000 down payment, plaintiffs financed the remainder at 2.9 percent over five years. The total amount paid or payable was $66,082.60.

The subject vehicle was accompanied by five-year/60,000 mile basic and 10-year/100,000 mile powertrain warranties. As a traveling salesman, Steven Keefer was the intended primary driver. He expected to drive it approximately 50,000 miles per year. He had previously owned a 2010 GMC Yukon that he had driven 186,000 miles.

Over the course of the first eight months/31,292 miles, Steven Keefer brought the subject vehicle to three separate Hyundai dealerships. He complained that it hesitated approximately three to five seconds on takeoff and that this condition was especially dangerous when he was making left turns in intersections.

Plaintiff claimed that an independent mechanic duplicated the concern. The mechanic wrote up a repair order indicating that he drove it 20 miles and that it looked like the vehicle went into limp mode. The independent later explained that he never duplicated the concern, but that he wrote his repair order to reflect the customer's complaint as an encouragement for plaintiff to take it back to a Hyundai dealership.

After taking it to various mechanics, plaintiffs received a lemon law advertisement. They decided to call Hyundai's 1-800 telephone number and ask for a refund. In response, Hyundai investigated plaintiffs' request and denied it because its dealerships had never duplicated the concern. Instead, Hyundai offered an inspection by a field representative and it apprised plaintiffs of their right to pursue arbitration with Hyundai's Better Business Bureau Auto Line state certified arbitration program.

In April of 2015, plaintiffs leased a 2015 Yukon and slowed down their usage of the Genesis.

PLAINTIFFS' CONTENTIONS:
Plaintiffs contended that the intermittent three to five-second hesitation on takeoff was caused by a defect that breached the implied warranty of merchantability. They also claimed that the hesitation was a substantially impairing nonconformity that Hyundai failed to repair under warranty after a reasonable number of repair attempts. Finally, they claimed that Hyundai's refusal to repurchase was a willful violation of Song Beverly entitling them to a two times civil penalty.

DEFENDANT'S CONTENTIONS:
None of the dealership technicians were able to duplicate plaintiff's concern. Nor were any diagnostic trouble codes ever retrieved that would explain the alleged delay. In one of the latter visits, the dealer service manager kept it a couple extra days and drove it 120 miles. He did not duplicate the concern either.

Hyundai contended that plaintiffs' concern was most likely caused by Steven Keefer's two-footed driving and not any defect. Furthermore, it contended that it acted in good faith at all times and that its refusal to repurchase was not a willful violation. Finally, it contended that plaintiff's Magnuson Moss claim failed because plaintiffs never participated in Hyundai's state certified Better Business Bureau Autoline arbitration program, a prerequisite to filing such a cause of action.

Settlement Discussions

Coincident to its answer, Hyundai served a CCP 998 offering statutory repurchase and fees by motion. In the alternative to plaintiffs submitting their documentation to support their statutory restitution amounts, Hyundai offered the sum certain of $66,082.60 to plaintiffs. The offer expired without any counter. Just before trial, during a settlement conference, plaintiff demanded $112,000 plus a fee motion to settle. Hyundai renewed its prior CCP 998 offer. During trial, plaintiffs increased their demand to $170,000 plus a fee motion. In response, Hyundai offered $65,000 restitution to plaintiffs and $30,000 in fees and costs. Plaintiffs rejected the offer without any counter.

Result

Defense verdict on Song Beverly cause of action. Voluntary dismissal of Magnuson Moss cause of action after close of plaintiffs' evidence.

Other Information

EXPERT TESTIMONY: Plaintiff's expert, Darrell Blasjo, opined that the intermittent three to five-second delay allegedly experienced when Steven Keefer drove the subject vehicle was excessive and dangerous. As a root cause, Blasjo opined that he was not required to prove the root cause. Nonetheless, he believed that either a faulty brake switch or two footed driving could have caused it. Even though he did not duplicate the concern during his test drives, he believed that the condition substantially impaired the use, value and safety of the vehicle. Defendant's expert, Gregory Webster, test drove the subject vehicle and took off over 200 times without any abnormal delay. He opined that there was no defect in the vehicle and that the manner in which plaintiff drove contributed to his concern. FILING DATE: May 5, 2015.

Deliberation

two hours

Poll

10-2 (no substantially impairing defect), 12-0 (no breach of implied warranty)

Length

seven days