In Gonzalez v. Ford Motor Co., No. LA CV 19-00652 PA (ASx), 2019 U.S. Dist. LEXIS 185279 (C.D. Cal. Oct. 23, 2019), Judge Anderson held that a vehicle manufacturer need not reimburse the consumer for negative equity financed into the RISC.

Finally, Plaintiff argues Ford’s repurchase offer was “less than 50% the amounts he had paid for the vehicle.” (P. Opp. 1.) Plaintiff argues Ford “wrongly deducted” $5,041.55, or the “negative equity” from Plaintiff’s prior [*20] lease, from Plaintiff’s offer, and that the “Song-Beverly Act does not permit a reduction of negative equity from the statutory restitution amount.” (Id. 1, 17.) Plaintiff claims that “at the time of the offer, [Plaintiff] had paid $5,000 down on the vehicle and made 15 additional monthly payments of $455.98 each, making restitution for the amounts paid for the vehicle $11,839.70.” (Id. 5.) According to Plaintiff, Ford “was entitled to a mileage deduction for 11,104 miles, or $2,784.60 . . . such that the restitution owed to [Plaintiff] for the vehicle . . . as of the date of the repurchase offer would have been $9,055.10 – more than twice the amount offered by Ford.” (Id.) Plaintiff argues “Ford’s attempt to deprive [Plaintiff] of $5,041.55 and failure to include the amounts he paid for registration and insurance made its restitution offer defective.”2 (Id. 17-18.) As support for his argument that negative equity cannot be deducted from a repurchase offer under the Song-Beverly Act, Plaintiff cites to a 1997 letter from the Department of Consumer Affairs Arbitration Review Program. (P. Opp. Ex. 16). In this letter, Peter Brightbill (then-Chief of the Arbitration Review Program) and John Lamb of the Legal Services Unit advised that “any negative equity is part of the actual price payable by the buyer, and that the manufacturer therefore is required to reimburse it as part of a repurchase decision.” (Id. 1.) Plaintiff cites no case law holding that a lessee can recover the amount of negative equity debt the lessor paid off for a lessee’s trade in vehicle that exceeded the value of the trade. Moreover, the 1997 Department of Consumer Affairs letter is not legal authority the Court is bound to follow. The Song-Beverly Act states the manufacturer “shall make restitution in an amount equal to the actual price paid or payable to the buyer” Cal. Civ. Code § 1793.2(d)(2)(B). Therefore, the starting point for a restitution calculation is the “purchase price” of the vehicle. The itemized list of additional add-on charges does not include the amount to pay off prior debt owed on a trade-in vehicle that exceeded the value of the trade-in. Further, the purpose of restitution is to “restore the status quo by returning to the plaintiff funds in which he or she has an ownership interest.” Francisco v. Emeritus Corp., No. CV 17-02871, 2017 U.S. Dist. LEXIS 220843, 2017 WL 7790038, at *5 (C.D. Cal. July 14, 2017). Restoring the status quo prior to the lease transaction does not reasonably include Ford paying off debt [*22] for a trade-in that Plaintiff was responsible to pay. Restoring the status quo requires placing Plaintiff in the same debt position he was in at the time he entered into the lease agreement, which was that he owed $5,041.00 more than the value of his trade-in vehicle. To require Ford to pay an additional $5,041.00 to Plaintiff would place Plaintiff in a better position than he was in at the time he entered into the lease. See, e.g., Daimler Chrysler Corp. v. Victoria, 153 N.H. 664, 668, 917 A.2d 209 (S. Ct. N. H. 2006) (finding on summary judgment that “purchase price” under New Hampshire’s similar lemon law statute does not include negative equity); Holzhauer-Mosher v. Ford Motor Co., 772 So. 2d 7, 10 (Fl. Ct. App. 2000) (finding on summary judgment that “purchase price” does not include negative equity under Florida’s similar lemon law statute. “Customers should know that the return of a ‘lemon’ to the manufacturer may result in the return to the customer of any debt owed on a trade-in vehicle that exceeds its . . . value.”). Because this Court finds Plaintiff was not entitled to a reimbursement of his negative equity, the undisputed facts demonstrate that Ford’s offer complied with the Song-Beverly Act as a matter of law. Summary judgment in favor of Ford is warranted here, as Plaintiff cannot prove a claim under the Song-Beverly Act where [*23] Ford made a compliant offer to repurchase or replace Plaintiff’s vehicle. See, e.g., Rupay v. Volkswagen Group of America Inc., CV 12-44478, 2012 U.S. Dist. LEXIS 180404, 2012 WL 10634428, at *6 (C.D. Cal. Nov. 15. 2012) (finding summary judgment appropriate where “the undisputed facts demonstrated [Volkswagen’s] Repurchase Offer complied with the Song-Beverly Act as a matter of law”); Dominguez, 160 Cal. App. 4th at 60 (reversing lower court’s denial of summary judgment, and granting summary judgment in favor of manufacturer where manufacturer offered to repurchase or replace the plaintiff’s vehicle).