9th Circuit Finds Vehicle Service Contract Does Not Violate Song-Beverly Because It Conferred Additional Benefits Beyond Those Provided By Manufacturer

In Orue v. Ford Motor Service Co., 2011 WL 6176190 (9^th Cir. 2011), the Court of Appeals for the Ninth Circuit held that a service contract complied with Song-Beverly because it conferred benefits additional to the Manufacturer’s warranty: 

The district court correctly concluded that the service contract sold by Ford did not violate the Song–Beverly Consumer Warranty Act, Cal Civ.Code §§ 1790 et seq. , because it provided additional benefits not available under the manufacturer’s express warranty. Under Song–Beverly, a service contract may run concurrently with a manufacturer’s express warranty if “the contract covers items or costs not covered by the express warranty or … the contract provides relief to the purchaser not available under the express warranty.” Cal. Civ.Code § 1794.41(a)(3). We agree with the district court that the plain language of the statute permits a service contract to overlap or run concurrently with an express warranty so long as it provides some additional benefits not contained in the express warranty.  ¶  Here, Ford’s service contract provided three benefits not covered by the manufacturer’s warranty: (1) emergency travel expense reimbursement up to $500; (2) destination assistance of up to $75 in the event that the vehicle became disabled due to collision or failure; and (3) one additional annual fuel delivery service. Thus, the service contract did not violate Song–Beverly, and the district court correctly granted summary judgment in favor of Ford.