Opinion
D051018
6-24-2008
DWIGHT DEACON BROWN, Plaintiff and Respondent, v. EDGEWATER POWERBOATS, LLC, Defendant and Appellant.
Not to be Published
Edgewater Powerboats, LLC (Edgewater) appeals from a judgment after a jury trial in favor of Dwight Deacon Brown in Browns lawsuit alleging that he bought a defective Edgewater powerboat. Edgewater contends that the trial court improperly awarded consequential loss of use damages under the Song-Beverly Consumer Warranty Act (Civ. Code, § 1790 et seq.) (Song-Beverly Act) based on what it would have cost Brown to rent a replacement boat while his boat was unusable. Edgewater further contends (1) that the jurys award of a penalty under the Song-Beverly Act and the trial courts award of attorney fees must be reversed because they were tainted by the improper consequential damages award; and (2) that the trial court improperly awarded duplicative damages.
Unless otherwise specified, all further statutory references are to the Civil Code.
We conclude that the trial court improperly awarded $108,000 in loss of use damages under the Song-Beverly Act and that the jurys award of a penalty in the amount of $240,500 under the Song-Beverly Act is unsupportable without the erroneous loss of use award. We affirm the portion of the judgment finding liability against Edgewater, but we vacate the award of damages and attorney fees and costs, and we remand for a new trial on the issue of damages.
I
FACTUAL AND PROCEDURAL BACKGROUND
In May 2004, Brown bought a powerboat manufactured by Edgewater for $58,872.79. Brown made the purchase through Edgewaters authorized dealer, Boat Depot. Starting in October 2004, Brown used the boat for personal recreation approximately three to five times a week. In March 2005, the boat developed a leak and took on water. Boat Depot repaired the leak and the resulting damage to the boat at no charge to Brown, and in May 2005, Brown put the boat back into use. In July 2005, the boat again took on water, and Boat Depot again brought the boat back to its repair shop.
The specific model that Brown purchased was the Edgewater 225 EX.
Approximately a week later, Brown wrote to Boat Depot stating that due to defects in the boat, he was requesting a refund of his purchase price, minus depreciation. After receiving no response to his letter, Brown filed suit against Boat Depot and Edgewater. Browns complaint alleged causes of action against both Boat Depot and Edgewater for (1) violation of the Consumer Legal Remedies Act (§ 1750 et seq.) (CLRA); (2) violation of the Song-Beverly Act; (3) fraud and deceit; and (4) negligence. Edgewater and Boat Depot filed cross-complaints against each other seeking indemnity and other relief.
"A manufacturer, distributor or retailer of consumer goods may violate the [Song-Beverly Act] by attempting to limit or disclaim an implied warranty while giving an express warranty (§ 1793); by failing to disclose warranty terms or to include certain information on repair invoices and work orders (§ 1793.1); by failing to maintain or contract for sufficient service and repair facilities (§ 1793.2, subd. (a)(1)); by failing to commence repairs within a reasonable time or complete them within 30 days (§ 1793.2, subd. (b)); by failing to replace the goods or reimburse the buyer if the goods cannot be conformed to warranty after a reasonable number of attempts (§ 1793.2, subd. (d)); and by various other acts and omissions (e.g., §§ 1793.3, subd. (a), 1795.8)." (Kwan v. Mercedes-Benz of North America, Inc. (1994) 23 Cal.App.4th 174, 184 (Kwan).)
Edgewater made Brown an offer to comprise pursuant to Code of Civil Procedure section 998 in the amount of $10,000, which Brown apparently rejected.
Before trial, Brown entered into a settlement with Boat Depot under which Boat Depot agreed to pay $150,000 to Brown and to assign him its cross-complaint against Edgewater, and Brown agreed to transfer title of the boat to Boat Depot. The settlement agreement allocated Boat Depots $150,000 payment as follows: (1) $10,000 for Boat Depots repurchase of the boat; (2) $10,000 for Browns expert costs; (3) $40,000 for Browns attorney fees; and (4) $90,000 for Browns loss of use of the boat. The trial court granted Boat Depots motion for determination of good faith settlement.
A jury trial was held on Browns claims against Edgewater. On the fraud and deceit cause of action, the jury found in favor of Edgewater. On the causes of action for negligence, violation of the CLRA and violation of the Song-Beverly Act, the jury found in favor of Brown. The jury filled out 13 separate special verdict forms, some of which called for the jury to make overlapping findings. The relevant content of the special verdicts finding in favor of Brown are as follows:
1. "Special Verdict: VF-3203 Breach of Express Warranty—Song-Beverly Warranty Act—Civil Penalty Sought" (Verdict Form 3203).
$160,500 damages awarded, calculated as follows:
(a) $54,000 purchase price,
(b) $5,000 options and accessories,
(c) $5,000 sales tax, license, registration etc.,
(d) $7,000 for other incidental damages,
(e) $108,000 for consequential damages,
(f) subtract $18,500 for value of use.
In addition, $240,500 imposed as a penalty, which the jury was instructed could not exceed two times the total damages. The total award on this verdict form was, therefore, $401,000.
The penalty award was based on the Song-Beverly Act provision stating that "[i]f the buyer establishes that the failure to comply was willful, the judgment may include, in addition to the amounts recovered . . ., a civil penalty which shall not exceed two times the amount of actual damages. . . ." (§ 1794, subd. (c).)
2. "Special Verdict: Violation of Song-Beverly Consumer Warranty Act—CACI VF 3200" (Verdict Form 3200).
$52,500 in damages found, calculated as follows:
(a) $59,000 purchase price of boat,
(b) $5,000 accessories and upgrades,
(c) subtract $18,500 for value of use,
(d) $7,000 for incidental damages.
3. "Special Verdict: Violation of Song-Beverly Act Consumer Warranty Act: Consequential Damages—CACI VF 3201" (Verdict Form 3201).
$50,000 in damages found.
4. "Special Verdict: VF-1206—Express Warranty—Affirmative Defense—Not `Basis of Bargain " (Verdict Form 1206).
$10,000 in damages found.
5. "Special Verdict: VF-1207—Implied Warranty of Merchantability—Affirmative Defense—Exclusion of Implied Warranties" (Verdict Form 1207).
$10,000 in damages found.
6. "Special Verdict: VF-3204 Breach of Implied Warranty of Merchantability" (Verdict Form 3204).
$10,000 in damages found.
7. "Special Verdict: VF-402 Negligence—Fault of Plaintiff and Others at Issue" (Verdict Form 402).
$71,000 in damages found.
The jury allocated responsibility 45 percent to Edgewater and 55 percent to Boat Depot.
8. "Special Verdict: VF-3700 Negligence—Vicarious Liability" (Verdict Form 3700).
$10,000 in vicarious liability for Boat Depots negligence.
9. "Special Verdict: Violation of Consumer Legal Remedies Act (CLRA Verdict Form).
$18,500 in damages found.
10. "Special Verdict: Statutory Indemnity (Civ. Code Section 1792)" (Statutory Indemnity Verdict Form).
The jury found that 5 percent of Boat Depots settlement with Brown was based on a violation of the Song-Beverly Act.
This Statutory Indemnity Verdict Form was given to determine the amount that Brown could recover as an assignee of Boat Depots cross-complaint against Edgewater.
After holding a hearing and receiving briefing from the parties, the trial court awarded $357,000 to Brown, not including attorney fees and costs. The trial court arrived at that figure by the following calculations.
First, it used the $401,000 figure identified in Verdict Form 3203 and subtracted $5,000 because the $5,000 represented dealer-installed upgrades that it could not award under the Song-Beverly Act.
The Song-Beverly Act provides that "[i]n the case of restitution, the manufacturer shall make restitution in an amount equal to the actual price paid or payable by the buyer, including any charges for transportation and manufacturer-installed options, but excluding nonmanufacturer items installed by a dealer or the buyer . . . ." (§ 1793.2, subd. (d)(2)(B).)
Second, the trial court concluded that certain amounts indicated on other verdict forms were duplicative of the $401,000 figure identified in Verdict Form 3203, and thus it did not include those amounts as separate items in its award. Specifically, the trial court did not include (1) the $52,500 figure indicated in Verdict Form 3200 for Song-Beverly Act damages, (2) the $50,000 figure indicated in Verdict Form 3201 for Song-Beverly Act damages, and (3) the $71,000 figure indicated in Verdict Form 402 as damages for negligence.
Third, the trial court added $5,000 for the cost of the dealer-installed upgrades, concluding that even though those upgrades were not a permissible basis for an award under the Song-Beverly Act, they were a permissible basis for an award under the negligence cause of action and had been included in the $71,000 of damages that the jury had indicated for the negligence cause of action.
It is possible that the jury arrived at the damages figure of $71,000 in Verdict Form 402 (for negligence), by adding the $54,000 purchase price, the $5,000 for options and accessories, the $5,000 for sales tax, license, registration, etc. and the $7,000 for other incidental damages that are indicated in Verdict Form 3203, and that the jury did not include any amount for loss of use of the boat. However, we cannot be sure how the jury arrived at the finding of $71,000 for the negligence cause of action.
Fourth, the trial court added $10,000 from Verdict Form 1206, for breach of express warranty, and another $10,000 from Verdict Form 3204 for breach of implied warranty.
Fifth, the trial court added $18,500 from the CLRA Verdict Form.
Sixth, the trial court added $7,500 premised on the finding in the Statutory Indemnity Verdict Form that 5 percent of the $150,000 settlement with Boat Depot was based on a violation of the Song-Beverly Act. The trial court calculated that 5 percent of $150,000 is $7,500, and added that amount to the award, citing section 1792.
Section 1792 provides that under the Song-Beverly Act, "[t]he retail seller shall have a right of indemnity against the manufacturer in the amount of any liability under this section." The amount of $7,500 was awarded to Brown based on this provision and the fact that Boat Depot had assigned its cross-complaint for indemnity against Edgewater to Brown.
Seventh, the trial court added $10,000 based on the finding in Verdict Form 3700 that Edgewater was vicariously liable for $10,000 of Boat Depots negligence.
Finally, the trial court subtracted an offset of $100,000 from the award based on the amounts that Brown already recovered in its settlement with Boat Depot. Specifically, the trial court subtracted (1) the amount of $10,000, which Boat Depot paid to Brown to compensate him for the value of the boat, and (2) the amount of $90,000, which Boat Depot paid to Brown to compensate him for his loss of use of the boat.
Altogether, the trial courts calculations resulted in an award of $357,000.
In addition to the award of $357,000, the trial court ruled that Edgewater was liable for $305,935 in attorney fees and $38,460.99 in costs pursuant to statutory provisions in the CLRA (§ 1780, subd. (d)) and the Song-Beverly Act (§ 1794, subd. (d)) that provide for an award of attorney fees to a prevailing plaintiff. In awarding the attorney fees to Brown, the trial court declined to apply a multiplier as requested by Brown, and instead awarded the actual fees incurred. The trial court offset the fee and cost award with the $10,000 in costs and $40,000 in attorney fees paid by Boat Depot, for a total award of $28,460.99 in costs and $265,935 in attorney fees.
Based on all of the above calculations, the trial court entered judgment in favor of Brown in the amount of $651,395.99. Edgewater appealed from the judgment.
II
DISCUSSION
A. Edgewaters Challenge to the $108,000 Award for Loss of Use of the Boat
Edgewaters first argument focuses on the trial courts decision to award $108,000 for Browns loss of use of the boat. Edgewater contends that the trial court erred in including this amount in the judgment because Brown did not incur a monetary loss of $108,000 in renting a replacement boat while his boat was unusable, and damages for loss of use under the Song-Beverly Act must be based on actual monetary losses.
1. Background
Before we discuss the legal merits of Edgewaters argument, we pause to review some preliminary matters.
First, we consider the basis of Edgewaters statement that the trial court awarded $108,000 for loss of use of the boat. Edgewaters statement is based on a finding in Verdict Form 3203. There, the jury found that Brown incurred $108,000 in "[c]onsequential damages." Although Verdict Form 3203 does not specify that the award of $108,000 in consequential damages was based on Browns loss of use of the boat, the single instruction that the jury received concerning consequential damages states only that Brown seeks consequential damages for loss of use of the boat. Thus, as do the parties, we conclude that the special verdict identifying $108,000 in consequential damages was based on Browns damages for loss of use of the boat.
The relevant jury instruction, bearing the heading "CACI 3243: Consequential Damages," was based on Judicial Council of California Civil Jury Instruction (2007), CACI No. 3243. It stated,
"[Brown] also claims additional amounts for loss of use of the fishing boat. [¶] To recover these damages, [Brown] must prove all of the following:
1. That [Edgewaters] and its representative Boat Depot, Inc.s breach of warranty or other violation of the [Song-Beverly Act] was a substantial factor in causing damages to plaintiff;
2. That the damages resulted from plaintiffs requirements and needs;
3. That [Edgewater] and its representative Boat Depot, Inc. had reason to know of those requirements and needs at the time of the sale to plaintiff;
4. That plaintiff could not reasonably have prevented the damages; and
5. The amount of the damages."
The jury was instructed that the items of economic damages claimed by Brown were "1. The purchase price of the boat; [¶] 2. The cost of the accessories installed on the boat; [¶] 3. the incidental costs of mooring, insuring and maintaining the boat[;] [¶] 4. The losses of use incurred in not being able to use the boat while it sat unrepaired or until [Edgewater] and/or Boat Depot, Inc. reimbursed [Brown] for the cost of the boat." Each of these items of damage were expressly reflected on Verdict Form 3203, with the entry for consequential damages representing the damages incurred by Brown for loss of use of the boat.
Second, we consider the evidence relating to Browns damages for loss of use of the boat. At trial, Brown testified that while his boat was unusable, he rented a small skiff from Seaforth Boat Rentals to fish in the bay, which rents for approximately $65 per day, but that he did not rent a boat comparable to his own because there were none available. There was no evidence at trial to indicate how many times Brown had rented a skiff. A witness from Seaforth Boat Rentals testified that in 2005 and 2006 a boat approximately as large as Browns Edgewater 225 EX, such as a 21-foot or 26-foot Sea Ray, would rent for between $445 to $625 per half day, with each additional hour priced at between $85 and $125, but there was no evidence at trial that Brown had ever rented such a boat. During closing argument, counsel for Brown argued that the jury should award loss of use damages based on what it would have cost Brown to rent a replacement boat for three to five days a week during the time his boat was unusable, based on Seaforth Boat Rentals rates for the 21-foot or 26-foot Sea Ray boats.
In his appellate brief, Brown contends that the record shows that he rented a skiff approximately 12 times. In support of this assertion, Brown relies on trial exhibit No. 114, which is a list of the damages claimed by Brown, including "Out of Pocket rental expenses for SKIFF (12 times at $50 half day)." However, as Edgewater correctly points out, this exhibit is a demonstrative chart and was not entered into evidence. Despite the statement on the chart, the record contains no evidence establishing how many times Brown rented a skiff while his boat was unusable.
According to a demonstrative chart in the record that counsel for Brown may have referred to during closing argument, Brown contended that the boat was unusable for 93 weeks. This figure appears to include the period of repair after the first leak, and the period that elapsed from the second leak to the date of trial.
Thus, although the trial court awarded $108,000 for loss of use of the boat based on the jurys finding in Verdict Form 3203, Brown never actually incurred expenses of $108,000 to rent a replacement boat. Instead that award was necessarily based on what it would have cost Brown to rent a replacement boat.
Although no evidence at trial established how many times Brown rented a skiff when his boat was unusable, Brown asserts on appeal that he rented a skiff 12 times. Using this figure as an approximate guideline, it is clear that Browns actual rental costs for the skiffs were far less than the $108,000 awarded for loss of use.
2. Availability of Loss of Use Damages Under the Song-Beverly Act Without Actual Monetary Expense
Edgewater argues on appeal and repeatedly argued in the trial court that under the Song-Beverly Act, Browns recovery for loss of use of the boat may not exceed his actual costs to rent a replacement boat while his boat was unusable. The trial court, however, rejected that position and instructed the jury that "[t]o recover damages for loss of use, [Brown] must prove the reasonable cost to rent a similar Edgewater Powerboat 225 EX for the amount of time reasonably necessary to repair or replace the Edgewater Powerboat 225 EX."
In the trial court, for example, Edgewater proposed its own jury instruction (which the trial court refused), stating that for any Song-Beverly Act violation "[p]laintiff may only recover damages for monetary losses actually incurred."
Edgewater contends that the award of $108,000 was improper because loss of use damages may only be awarded under the Song-Beverly Act based on actual monetary loss and that it is not permissible to base such damages on the amount that it would have cost the plaintiff to rent a replacement if he did not in fact do so.
To determine the circumstances under which loss of use damages may be awarded under the Song-Beverly Act, we first consider the language of the statute. The Song-Beverly Act provides that in addition to receiving replacement or reimbursement as a remedy, a plaintiff may obtain the remedies set forth in certain provisions of the Commercial Code. Specifically applicable in this case, in which Brown sought to receive a refund of his purchase price, section 1794, subdivision (b)(1) states: "Where the buyer has rightfully rejected or justifiably revoked acceptance of the goods or has exercised any right to cancel the sale, Sections 2711, 2712, and 2713 of the Commercial Code shall apply." Commercial Code sections 2712 and 2713 expressly refer to the availability of incidental and consequential damages as set forth in Commercial Code section 2715. (Com. Code, §§ 2712, subd. (2), 2713, subd. (1).)
Thus, we must look to Commercial Code section 2715 to determine the measure of consequential damages in this case. That provision states: "Consequential damages resulting from the sellers breach include [¶] (a) Any loss resulting from general or particular requirements and needs of which the seller at the time of contracting had reason to know and which could not reasonably be prevented by cover or otherwise; and [¶] (b) Injury to person or property proximately resulting from any breach of warranty." (Com. Code, § 2715, subd. (2).)
In applying Commercial Code section 2715, subdivision (2) to the facts in this case, we are guided by Bishop v. Hyundai Motor America (1996) 44 Cal.App.4th 750 (Bishop ), which addressed a similar situation. In Bishop, the plaintiff prevailed in her Song-Beverly Act claim concerning a defective automobile and was awarded loss of use damages measured by what it would have cost her to rent a replacement vehicle. (Bishop, at pp. 754-756.) Bishop struck the portion of the award that was based on loss of use, concluding that the plaintiff was "not entitled to `loss of use damages not actually incurred." (Bishop, at p. 758.)
In reaching this conclusion, Bishop acknowledged that Commercial Code section 2715 controls whether loss of use damages are available under the Song-Beverly Act absent an actual monetary loss. (Bishop, supra, 44 Cal.App.4th at p. 755.) Concluding that Commercial Code section 2715s "reference to losses must be construed and applied in the context of monetary losses actually incurred" (id. at p. 756), Bishop relied on three main factors.
The first factor was the legislative history of Commercial Code section 2715 and the case law applying it. With respect to the legislative history, Bishop noted that the concept of consequential damages had been significantly narrowed in Commercial Code section 2715, "`refusing to permit recovery unless the buyer could not reasonably have prevented the loss by cover or otherwise " and "`modify[ing] the rule by requiring first that the buyer attempt to minimize his damages in good faith, either by cover or otherwise. " (Bishop, supra, 44 Cal.App.4th at p. 756.) With respect to case law, Bishop stated that "[t]he only decisions applying [Commercial Code section 2715], other than those relating to injury to person or property, are those which relate to commercial transactions in which there were lost profits because of buyers inability to resell or otherwise commercially use property of which the sellers breach deprived them. There is no such issue in this case." (Bishop, supra, 44 Cal.App.4th at p. 756.) Bishop also noted that the plaintiff cited "no cases in which consequential damages as defined in the California Uniform Commercial Code section 2715 have been determined to include noncommercial situations involving `loss of use of personal vehicles." (Bishop, at p. 756.)
Bishop explained, "[T]he commentary following California Uniform Commercial Code section 2715 discusses the legislative intent regarding the type of consequential damages available . . . . Examples of consequential damages recoverable under prior California law are the recovery of lost resale profits contemplated at the time of the contract, and recovery of damages for time and money spent in efforts to make goods conform to warranty under which they were sold. The purposes, changes and new material added at the time California Uniform Commercial Code section 2715 was enacted in 1963, show the consequential damage provision was legislatively limited by this enactment." (Bishop, supra, 44 Cal.App.4th at pp. 755-756.)
Second, Bishop relied on Kwan, supra, 23 Cal.App.4th 174, which held that damages for emotional distress are not available under the Song-Beverly Act. Bishop concluded that loss of use damages were not available without an actual monetary expense because "claim for damages for `loss of use expenses not actually incurred is akin to one for aggravation or distress, similar to that rejected in Kwan" (Bishop, supra, 44 Cal.App.4th at pp. 756-757) and is a remedy "drawn from the law of torts" rather than from the law of contract. (Id. at p. 757.) According to Kwan, "[t]he Legislature has made it clear the compensatory damages available to a buyer under the [Song-Beverly] Act are limited to the same categories, and measured in the same manner, as those normally available to a buyer for a sellers breach of a contract for sale of goods." (Kwan, at p. 187, italics added.)
As Kwan explained, "Section 1794, subdivision (b) clearly equates the compensatory damages for a failure to replace or refund with those available to a buyer for a sellers breach of a contract for sale of goods (in addition, of course, to replacement or refund). We are not free to ignore this unambiguous indication of intent and supplement the statutory remedies with additional ones drawn from the field of torts." (Kwan, supra, 23 Cal.App.4th at p. 192.)
Third, Bishop focused specifically on a provision in the Song-Beverly Act concerning the recovery of rental car expenses when the defective product at issue is an automobile. That provision states that in addition to restitution, the plaintiff may recover incidental damage "including, but not limited to, reasonable repair, towing, and rental car costs actually incurred by the buyer." (§ 1793.2, subd. (d)(2)(B), italics added.) Bishop read this language as a limitation on the type of damages available, concluding that "in the specific category of `rental car costs, the Legislature has placed a limiting term, one which is undeniably logical and would not otherwise have been recoverable under a contract theory of damages (except perhaps in a commercial context under the concept of `cover). The limitation is consistent with all other statutory provisions and authorities referring to breach of contract damages in that it permits a buyer to recover monetary losses, but not be `compensated for `losses resulting in no monetary deprivation." (Bishop, supra, 44 Cal.App.4th at p. 757.)
Edgewater argues that Bishop controls here and that we should follow Bishop to conclude that the loss of use damages available to Brown under the Song-Beverly Act are limited to those that Brown actually incurred. Brown disagrees. He contends that Bishop is inapplicable because it relied on the statutory provision, applicable only to cases concerning automobiles, that a plaintiff may recover "rental car costs actually incurred." (§ 1793.2, subd. (d)(2)(B).)
We reject Browns attempt to distinguish Bishop. Although one of the factors cited by Bishop was the statutory language limiting recovery to "rental car costs actually incurred." (§ 1793.2, subd. (d)(2)(B)), the persuasive force of Bishops analysis is not dependent on that factor. Instead, Bishops conclusion is well supported by its review of the legislative history and reliance on Kwan, supra, 23 Cal.App.4th 174. Indeed, Bishop makes clear that the statutory language limiting a plaintiffs recovery to "`rental car costs actually incurred " is consistent with the general rule of contract damages that a plaintiff may not be "be `compensated for `losses resulting in no monetary deprivation." (Bishop, supra, 44 Cal.App.4th at p. 757.) That general rule of contract damages applies here and bars Brown from recovering for loss of use unless he incurred actual monetary expense.
Here, the record contains no evidence establishing any actual monetary expense incurred by Brown as a result of his loss of use of the boat. Accordingly, we conclude that the trial court improperly awarded $108,000 in damages for loss of use under the Song-Beverly Act.
The evidence regarding Browns expense in renting a small skiff while his boat was unusable is not sufficient to support an award of damages for loss of use, as the record contains no evidence as to the number of times that Brown rented a skiff or the amount that he actually paid for the rental.
3. Loss of Use Damages Under Other Causes of Action
Brown argues that even if we conclude that the $108,000 in loss of use damages was not proper under the Song-Beverly Act, the causes of action for negligence and violation of the CLRA serve as a basis for that award. We reject Browns attempt to salvage the loss of use award by relying on the verdicts in his favor on the negligence and CLRA causes of action. The jurys special verdicts do not support an award under those causes of action of $108,000 in loss of use damages.
On Verdict Form 402, the special verdict form for negligence, the jury did not award $108,000. Instead, it awarded only $71,000, and Verdict Form 402 did not require the jury to specify whether any of that amount was intended to compensate Brown for loss of use of the boat. On the CLRA Verdict Form, the jury awarded $18,500. Thus, we cannot rely on the special verdict for the negligence cause of action or the special verdict for the CLRA cause of action to affirm an award of $108,000 to Brown for loss of use of the boat, because neither of those verdicts are in that amount. Further, the special verdict forms for those causes of action provide no indication that the jury intended any of the amounts indicated on those forms to compensate Brown for loss of use, as opposed to other types of damage.
We express no opinion as to whether, under the CLRA, a plaintiff may recover damages for loss of use without incurring any monetary loss. As for the negligence cause of action, Edgewater conceded in the trial court that, as a remedy for negligence, a plaintiff may recover loss of use damages if it "prove[s] the reasonable cost to rent a similar item of personal property for the amount of time reasonably necessary to repair or replace the item."
B. Edgewaters Challenge to the Penalty Award and the Award of Attorney Fees and Costs
Edgewater contends that we should reverse additional portions of the trial courts award, namely, the attorney fee and costs award and the $240,500 penalty under the Song-Beverly Act, because they were allegedly tainted by the improper award of $108,000 for loss of use damages.
1. Penalty Award
We first consider whether the penalty should be reversed. As we have explained, the judgment included an award of $240,500 as a penalty under the Song-Beverly Act, based on the jurys finding in Verdict Form 3203. The penalty was imposed pursuant to section 1794, which provides that "[i]f the buyer establishes that the failure to comply was willful, the judgment may include, in addition to the amounts recovered . . ., a civil penalty which shall not exceed two times the amount of actual damages." (§ 1794, subd. (c).) The jury was instructed that the penalty it imposed could not exceed two times the total damages that it filled in on another portion of the special verdict form. The total damages amount that it filled in on Verdict Form 3203 was $179,000, which included $108,000 in loss of use damages. The jury chose not to impose a penalty of two times that amount (which would have been $358,000), but instead found that the penalty should be $240,500.
As we have concluded, the award of $108,000 for loss of use was improper. When we subtract the amount of $108,000 from the total damages of $179,000 indicated on Verdict Form 3203, the result is $71,000. A penalty of $240,500 is more than two times $71,000. Accordingly, the penalty award of $240,500 is not permitted under the Song-Beverly Acts provision that "a civil penalty . . . shall not exceed two times the amount of actual damages." (§ 1794, subd. (c).)
We agree with Edgewater that it is not possible to know what penalty the jury might have awarded had the total damages amount not included the improper award of $108,000 for loss of use. Hypothetically, the jury could have concluded that it should impose the maximum penalty (double the amount of total damages) because the total damages amount was lower, or conversely the jury could have noted the relatively low amount of total damages and concluded that because the harm was not great, a lower penalty was warranted.
Because of the error in the instruction as to the nature of loss of use damages that may be awarded, and because we are unable to know what penalty, if any, the jury would have awarded based on a different damages amount, we will vacate the portion of the judgment awarding damages to Brown, and we will remand this matter for a retrial on the issue of damages only.
We note that when the issue of damages is retried in this action, the jury may find that loss of use damages should be awarded under the negligence cause of action. As we have explained, Edgewater conceded in its trial brief that as remedy for negligence a plaintiff may recover loss of use damages if it "prove[s] the reasonable cost to rent a similar item of personal property for the amount of time reasonably necessary to repair or replace the item." From our review of the record, it appears that the availability of loss of use damages under the negligence cause of action was not made clear to the jury, and the special verdict form for that cause of action (Verdict Form 402) did not prompt the jury to make a finding regarding loss of use.
2. Award of Attorney Fees and Costs
As we will explain, because we are remanding for a retrial on the issue of damages, we also vacate the portion of the judgment awarding attorney fees and costs to Brown.
As Edgewater correctly points out, after a retrial on the issue of damages, an award of attorneys fees and costs may not be available under Code of Civil Procedure section 998 if the award to Brown is less than Edgewaters pretrial offer to compromise. "The language of [Code of Civil Procedure] section 998 `on its face prevents a plaintiff who rejects a settlement offer that is greater than the recovery it ultimately obtains at trial from recovering `postoffer costs and attorney fees. [Citation.] Such a plaintiff may only `recover its preoffer costs to which it would otherwise be entitled, including preoffer attorney fees in cases like this one . . . . " (Duale v. Mercedes-Benz USA, LLC (2007) 148 Cal.App.4th 718, 726.) Because of the offsets available by virtue of Browns settlement with Boat Depot, it is possible that the amount to be recovered by Brown upon retrial could be less than Edgewaters $10,000 offer to compromise, and that Brown will thus not be entitled to the $28,460.99 in costs and $265,935 in attorney fees awarded by the trial court.
Moreover, because the parties will now be incurring additional fees in connection with the retrial on the issue of damages, the trial court must, in any event, consider a renewed motion for an award of attorney fees and costs.
Accordingly, we will vacate the award of attorney fees and costs, and the trial court shall consider Browns entitlement to attorney fees and costs after retrying the issue of damages.
C. Edgewaters Challenge to the Award of Duplicative Damages
Edgewater contends that several other items included in the damages award were improper because they were duplicative of the amounts awarded in Verdict Form 3203. Although we are remanding this action for a retrial on the issue of damages, we will address the issues raised by Edgewater, as our opinion may be helpful to the parties on remand.
As we have explained, the trial court included the following items in the total amount of damages awarded: (1) $10,000 from Verdict Form 1206, for breach of express warranty; (2) $10,000 from Verdict Form 3204, for breach of implied warranty; (3) $18,500 from the CLRA Verdict Form; (4) $10,000 based on the finding in Verdict Form 3700 that Edgewater was vicariously liable for $10,000 of Boat Depots negligence; and (5) $7,500 premised on the finding in the Statutory Indemnity Verdict Form that 5 percent of the $150,000 settlement with Boat Depot was based on a violation of the Song-Beverly Act. Edgewater argues (1) that these damages are duplicative of the award in Verdict Form 3203, which reflected "the full purchase price of the boat plus all of the other sums [Brown] had spent related to the boat (upgrades, mooring fees, gas and the like . . .)" and (2) that "[t]here is no evidence in the record of a single item of damages not contained in [the award in Verdict Form 3203]."
Edgewater relies on the legal principle prohibiting duplicative recovery for the same items of damage. "Regardless of the nature or number of legal theories advanced by the plaintiff, he is not entitled to more than a single recovery for each distinct item of compensable damage supported by the evidence. [Citation.] Double or duplicative recovery for the same items of damage amounts to overcompensation and is therefore prohibited." (Tavaglione v. Billings (1993) 4 Cal.4th 1150, 1158-1159.) Brown does not address the issue in his appellate briefing. He makes no attempt to establish that the items of damages, which Edgewater claims to be duplicative, are premised on items of compensable damage that are distinct from the items reflected in Verdict Form 3203, i.e., the purchase price of the boat and the other expenses associated with Browns ownership of the boat. Our review of the record reveals no items of compensable damage reflected in Verdict Form 1206, Verdict Form 3204, the CLRA Verdict Form, or Verdict Form 3700 that are not also reflected in Verdict Form 3203.
However, the award of $7,500 in damages in the Statutory Indemnity Verdict Form is not duplicative. The award in the Statutory Indemnity Verdict Form was based on the fact that in the Boat Depot settlement, Brown had been assigned Boat Depots right to indemnity against Edgewater, as asserted in Boat Depots cross-complaint. Accordingly, the award of $7,500 in the Statutory Indemnity Verdict Form was based on the injury to Boat Depot that it incurred by paying an amount in settlement to Brown. The award does not compensate Brown for his own injuries (i.e., the purchase price of the boat and other costs associated with it), and thus is not duplicative of the amounts in Verdict Form 3203.
DISPOSITION
The judgment is affirmed on the issue of Edgewaters liability, but reversed on the issue of damages and attorney fees and costs. This matter is remanded for a retrial on the issue of damages, including any civil penalty to which Brown is entitled and, thereafter, for consideration of an award of attorney fees and costs. Edgewater is to recover its costs on appeal.
WE CONCUR:
NARES, Acting P. J.
McDONALD, J.