In Lukather v. General Motors, L.L.C. 2010 WL 377035 (2010), a vehicle manufacturer appealed following a bench trial and court award of damages, a civil penalty, prejudgment interest, and attorney fees and costs under the Song-Beverly Consumer Warranty Act (Act), Civil Code sections 1790 et seq., known as California’s “lemon law.” The Court of Appeal rejected the manufacturer’s contentions that (1) the evidence was insufficient to support the findings that the manufacturer violated Civil Code section 1793.2, subdivision (d)(2) (section 1793.2(d)(2)), and that it did so willfully so as to incur a civil penalty; (2) the court erred in rejecting the mitigation of damages defense; and (3) the court abused its discretion in awarding prejudgment interest and attorney fees and costs. As to damages, the Court of Appeal affirmed, explaining:
Here there was sufficient evidence to support the trial court’s willfulness finding. Lukather’s testimony and GM’s telephone logs permitted the trial court to make the following reasonable inferences: GM knew or reasonably should have known from information available from the dealer on March 8, 2007, that the Cadillac was a “lemon” and Lukather had selected the restitution option. Nevertheless, for the next two months GM did not act in good faith to provide Lukather with the restitution remedy; rather, GM actively discouraged Lukather from pursuing this remedy by telling him that the Cadillac was repaired and he should pick it up, that he should select another car at the dealer, that he would not get all of his money back, and that it would take several months for GM to act on his request for restitution. GM fails to persuade us that the evidence is insufficient to support the finding that its violation was willful so as to trigger the imposition of a civil penalty.
As to an offset relating to Plaintiff’s failure to mitigate, the Court of Appeal explained:
GM contends that the trial court erred in rejecting its mitigation of damages defense. Again, we disagree. GM maintains that it was Lukather’s refusal to re-spond to GM that caused him to incur rental car expenses of approximately $21,000 unnecessarily. GM asserts that after it stopped paying for Lukather’s rental car expenses on April 4, 2007, Lukather had an obligation either to buy another car or to accede to GM’s May 25, 2007 refund offer (which was less than the damages to which he was entitled). But GM fails to cite any legal authority showing that the Act affords such a defense under the circumstances of this case. ¶ What GM essentially seeks is an offset for Lukather’s use of a rental car. A similar claim was rejected in Jiagbogu v. Mercedes-Benz USA (2004) 118 Cal.App.4th 1235 (Jiagbogu ), where the manufacturer sought an equitable offset against the buyer’s damages because the buyer continued to use his car after he made a buyback request. ¶ . . . As in Jiagbogu, the imposition of a requirement that Lukather mitigate his damages so as to avoid rental car expenses-after GM had a duty to respond promptly to Lukather’s demand for restitution-would reward GM for its delay in refunding Lukather’s money. It is undisputed that GM did not refund Lukather’s money until August 2008, after the trial had concluded and during the period of posttrial motions. We thus conclude that GM provides neither legal authority nor any equitable ground to support its mitigation of damages defense.