Daniel v. Ford Motor Co.

The Consumers Legal Remedies Act prohibits “unfair methods of competition and unfair or deceptive acts or practices undertaken by any person in a transaction intended to result or which results in the sale or lease of goods or services.”

The plaintiffs brought this class action against Ford Motor Company alleging a breach of implied and express warranties, and committing fraud in selling the 2005 to 2011 Ford Focus. Before purchase, the plaintiffs did not research about the Ford Focuses, and only spoke with ford sales representatives, who did not inform them about the replacement of the tires after purchase. Upon purchase of the vehicle, plaintiffs received a New Vehicle Limited Warranty. Later, the plaintiffs complained that the Focus had a rear suspension defect that led to premature tire wear, which would cause severe safety hazards, and that Ford knew or should have known about these defects through its pre-release data testing. The plaintiffs allege that Ford had a duty to disclose the defect, and said that had they known that the Focus contained such defects, they would not have bought the vehicle. The class action asserted that Ford breached an implied warranty under California’s Song-Beverly Consumer Warranty Act, violated California’s Consumer Legal Remedies Act and Unfair Competition Law, and breached an express warranty. On appeal, the Ninth Circuit followed a decision from Mexia v. Rinker Boat Co., which held that “latent defects” may breach an implied warranty, even if they are not discovered until after the duration of the warranty. The panel also held that the plaintiffs created an issue of material fact as to their reliance on Ford’s omission of the defect, which violated California’s Consumer Legal Remedies Act prohibiting “unfair or deceptive acts or practices undertaken in a transaction intended to result or which results in the sale or lease of goods or services.” Finally, the panel held that because of Ford’s ambiguous language in its express warranty, summary judgment should not have been granted as to the breach of the express warranty. REVERSED.