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Jan 29, 2018

Court of Appeals Limits Recovery of Damages Under Song Beverly

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On November 27, 2017, the Fourth District of the California Court of Appeal issued an unpublished opinion in Kirzhner v. Mercedes-Benz USA, LLC, (2017) 18 Cal. App. 5th 453. That opinion addressed the recoverability of registration fees and discussed what sort of expenses would be incidental damages under California’s Song Beverly Consumer Warranty Act.  Kirzhner v. Mercedes-Benz USA, LLC, (2017) 18 Cal. App. 5th 453.

In the underlying case, the appellant had sought to recover registration fees when he leased his car, as well as renewal registration fees and other fees incurred after the first year.  In its opinion,  the Court of Appeal affirmed the trial court’s determination that consumers may only recover the cost of the first year’s registration under 1793.2(d)(2)(B) and the fees paid in subsequent years were not recoverable. Appellant argued that the term “registration fees” under the statute are listed as collateral charges and should extend to all registration fees paid over the ownership of the vehicle. The Court disagreed.  While registration fees are collateral charges, the statute references the initial purchase and thus limits recovery to only those “fees paid in conjunction with the original purchase or lease transaction.”

Plaintiff next argued that the registration fees should be considered “incidental damages” under 1793.2(d)(2)(B). The Court again agreed with the trial court that renewal fees were not recoverable.  The Court held that renewal fees were not costs incurred “as a result” of the vehicle being defective. The Court said they “were more accurately characterized as a standard cost of owning any vehicle” and pointed out that plaintiff’s interpretation of incidental damages would “open up a ’Pandora’s box’ of potential costs” such as gas, car washes, oil changes. This opinion provides guidance as to the types of costs which might be considered incidental.

The issues addressed by the Court are frequently disputed in lemon law cases.  At trial, defendants often file motions in limine to exclude evidence of damages which are not recoverable, much like those described by the Kirzhner opinion.  

Bowman and Brooke Partners Larry Ramsey, on behalf of the Association of Southern California Defense Counsel, and Julian Senior, on behalf of the firm, asked the Court of Appeals to publish the decision.  Their request was joined by the Civil Justice Association of California. On December 13, 2017, the Court of Appeal granted the request for publication and the opinion may now be cited as authority. The case may be cited as 18 Cal. App. 5th 453. A copy of the opinion may be found at the following link.

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