Justia California Court of Appeals Opinion Summaries

Articles Posted in Consumer Law
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In a putative class action, plaintiffs Joe Maldonado, Alfredo Mendez, J. Peter Tuma, Jonabette Michelle Tuma, and Roberto Mateos Salmeron (collectively referred to as “the Customers”), claimed Fast Auto Loans, Inc., (Lender) charged unconscionable interest rates on loans in violation of California Financial Code sections 22302 and 22303. Lender filed a motion to compel arbitration and stay the action pursuant to an arbitration clause contained within the Customers’ loan agreements. The court denied the motion on the grounds the provision was invalid and unenforceable because it required consumers to waive their right to pursue public injunctive relief, a rule described in McGill v. Citibank, N.A., 2 Cal.5th 945 (2017). On appeal, Lender argued the “McGill Rule” did not apply, but even if it did, other claims were subject to arbitration. Alternatively, Lender contended the McGill Rule was preempted by the Federal Arbitration Act . Finding Lender’s contentions on appeal lacked merit, the Court of Appeal affirmed the trial court’s order. View "Maldonado v. Fast Auto Loans" on Justia Law

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The plaintiffs are a non-profit organization “dedicated to improving the care, quality of life, and choices for California’s long-term care customers,” residents and former residents of facilities managed by CVSC, and the estates of formers residents at the defendant's facility. The defendant is licensed by the California Department of Public Health (CDPH) to operate or manage a skilled nursing facility (SNF). The defendant had an agreement with CVSC, a corporation engaged in the nursing home business as a management company, to operate the SNF. This Management Services Agreement is allegedly representative of similar agreements executed by CVSC to operate other California SNFs. The plaintiffs asserted that state law requires that an SNF be operated and managed by the entity that holds the license to operate the SNF, not by a management company.The trial court held that approval of unlicensed management companies to operate licensed SNFs does not violate state or federal law. The court of appeal affirmed, rejecting an argument that the management agreements are illegal because the licensee (not an unlicensed management company) must operate and manage the SNF. The operation of a SNF by an unlicensed management company does not diminish the continuing responsibility of a licensee to its SNF. View "California Advocates for Nursing Home Reform v. Aragon" on Justia Law

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After plaintiff filed suit under the Song-Beverly Consumer Warranty Act, commonly known as the "lemon law," the jury awarded her the full purchase price of her defective vehicle, offset by mileage accrued before she first delivered it for repair, plus incidental and consequential damages and a civil penalty. The trial court subsequently denied defendant's motion to reduce plaintiff's damages by the credit she received towards the purchase price of a new vehicle when she traded in her defective vehicle to a GMC dealer.As a matter of first impression, the Court of Appeal held that the Act's restitution remedy, set at "an amount equal to the actual price paid or payable" for the vehicle, does not include amounts a plaintiff has already recovered by trading in the vehicle at issue. The court stated that the Legislature chose to call the Act's refund remedy "restitution," indicating an intent to restore a plaintiff to the financial position in which she would have been had she not purchased the vehicle. Therefore, granting plaintiff a full refund from defendant in addition to the proceeds of the trade-in would put her in a better position than had she never purchased the vehicle, a result inconsistent with "restitution." The court also held that allowing plaintiff a full refund also would undercut other parts of the Act. Therefore, the court reduced the damage award to reflect the value of plaintiff's trade-in and reduced the civil penalty. The court affirmed the judgment as modified. View "Niedermeier v. FCA US LLC" on Justia Law

Posted in: Consumer Law
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A jury held defendant FCA US, LLC (Chrysler) liable on three causes of action arising from plaintiff Jose Santana’s defective vehicle: breach of the express and implied warranty under the Song-Beverly Consumer Warranty Act, and fraudulent concealment. After an award of fees and costs, the total judgment amounted to $1,740,169.58. Chrysler contended most of those damages should have been vacated because there was no substantial evidence of fraudulent concealment. To this, the Court of Appeal agreed: Santana’s fraud theory was that Chrysler concealed an electrical defect in Santana’s vehicle. But the Court found there was no evidence Chrysler was aware of the defect until after Santana purchased his vehicle, and thus no evidence that Chrysler concealed it. Because the fraud judgment could not be supported, the separate award of economic damages, the noneconomic damages, and the punitive damages fell with it. In addition, Chrysler contended there was no evidence of a willful violation of the Song-Beverly Act. To this the Court disagreed, finding that by the time Chrysler’s duty to repurchase arose, it was aware of the electrical defect in Santana’s vehicle, which it chose not to repair adequately. The Court affirmed the trial court in all other respects, and remanded the case for the trial court to enter judgment in favor of Chrysler on the fraud cause of action, striking the additional economic damages of $33,839.91, the noneconomic damages of $100,000, and the punitive damages of $1 million. View "Santana v. FCA US, LLC" on Justia Law

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Yelp publishes crowdsourced business reviews and allows businesses to advertise on its Website and mobile app. Yelp employs over 2,000 sales representatives to solicit advertising sales. Gruber, a solo attorney practitioner, was contacted by phone several times by Yelp sales representatives. During these calls, in which the sales representatives’ voices were recorded, Gruber discussed confidential and financial information regarding his law firm. When conversing with one representative, who happened to be his friend, Gruber sometimes joked, discussed private topics, and used profanity. Gruber did not recall that any Yelp sales representative notified him that the conversations were being recorded. Gruber sued under the California Invasion of Privacy Act (CIPA) Pen. Code 630, alleging unlawful recording and intercepting of communications; unlawful recording of and eavesdropping upon confidential communications; and unlawful wiretapping.The trial court granted Yelp summary judgment. The court of appeal reversed. While Gruber was not recorded during any calls (only Yelp’s representatives were recorded), CIPA is violated if a defendant records any portion of a conversation between two or more individuals. When the Yelp salespeople spoke during the one-sided recordings of their conversations with Gruber, the recordings revealed firsthand and in real-time their understanding of or reaction to Gruber’s words. Yelp failed to meet its burden of production regarding whether its use of VoIP technology precludes CIPA's application. View "Gruber v. Yelp Inc." on Justia Law

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In this Song-Beverly Consumer Warranty Act (the "lemon law") suit, the jury answered special verdict questions determining that Jaguar had no liability for breach of express warranty or for breach of the implied warranty of merchantability. However, there was a mistake in the special verdict form that neither counsel nor the trial court detected until long after the jury was discharged. In this case, the verdict form did not tell the jury if they found no breach of warranty, they should stop and answer no further questions. Judgment was subsequently entered on the special verdict and damages were awarded to plaintiffs. The trial court then granted Jaguar's motion to vacate the judgment and enter a different judgment in its favor.The Court of Appeal affirmed, holding that Jaguar's motion to vacate was timely; the original judgment rests on an erroneous legal basis, and is not consistent with the facts found by the jury; and plaintiffs did not propose the question they now say should have been asked, and on this record, there was no evidence or law to support the questions they did propose. The court explained that since the verdict form did not instruct the jurors to stop, they continued, answering the questions directed at determining damages. But there can be no damages where there is no liability. The court also held that the trial court's alternative judgment not withstanding the verdict ruling was correct where the defect in the one-touch mechanism did not occur until two years after plaintiffs leased the car, and there is no evidence it was caused by some other defect present when the car was manufactured. View "Simgel Co., Inc. v. Jaguar Land Rover North America, LLC" on Justia Law

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The Court of Appeal modified the opinion, thus changing the judgment, by adding at the end of the disposition that no costs are awarded.The court held that, under the Song-Beverly Consumer Warranty Act, popularly known as the "lemon law," a buyer may not obtain restitution of the full price he paid for a new motor vehicle, where the manufacturer failed to complete repairs to a defect within 30 days, but the defect did not substantially impair the vehicle's use, value or safety.In this case, the jury trial resulted in a special verdict finding the car did not have a defect covered by the warranty that substantially impaired the vehicle's use, value or safety, and the car was fit for ordinary purposes, but defendants failed to complete warranted repairs within 30 days. The court held that plaintiff was only entitled to recover damages caused by the delay in repairing a nonconformity that did not substantially impair the car's use, value or safety. Therefore, the trial court correctly concluded such damages do not include the replacement-restitution remedy under Civil Code section 1793.2(d) nor do they include damages that are available when a buyer justifiably revokes acceptance of goods under section 1794, subdivision (b)(1). The court affirmed the trial court's judgment entered on the jury's verdict. View "Ramos v. Mercedes-Benz USA, LLC" on Justia Law

Posted in: Consumer Law
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The Court of Appeal held that, under the Song-Beverly Consumer Warranty Act, popularly known as the "lemon law," a buyer may not obtain restitution of the full price he paid for a new motor vehicle, where the manufacturer failed to complete repairs to a defect within 30 days, but the defect did not substantially impair the vehicle's use, value or safety.In this case, the jury trial resulted in a special verdict finding the car did not have a defect covered by the warranty that substantially impaired the vehicle's use, value or safety, and the car was fit for ordinary purposes, but defendants failed to complete warranted repairs within 30 days. The court held that plaintiff was only entitled to recover damages caused by the delay in repairing a nonconformity that did not substantially impair the car's use, value or safety. Therefore, the trial court correctly concluded such damages do not include the replacement-restitution remedy under Civil Code section 1793.2(d) nor do they include damages that are available when a buyer justifiably revokes acceptance of goods under section 1794, subdivision (b)(1). The court affirmed the trial court's judgment entered on the jury's verdict. View "Ramos v. Mercedes-Benz USA, LLC" on Justia Law

Posted in: Consumer Law
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The California Contractors’ State License Board (CSLB) sought revocation or suspension of Sieg’s contractor’s license and restitution. The Accusation alleged that Sieg failed to follow spacing and fastening requirements when installing a hardwood floor, departing from trade standards in violation of Business & Professions Code 7109(a), and failed to complete a construction project for the agreed contract price in violation of section 7113. Sieg filed a Defense and filed a civil lawsuit against the homeowners, which was subsequently dismissed. After a hearing, the ALJ issued a proposed decision recommending a 65-day suspension and a three-year probation term including payment of $27,884.21 restitution. The Registrar adopted the ALJ’s proposed decision but eliminated the 65-day suspension term and required Sieg to obtain a disciplinary bond of $30,000.00 (section 7071.8), for three years.The trial court denied Sief relief. The court of appeal affirmed the decision as supported by substantial evidence, rejecting a due process claim. Sieg had the opportunity to cross-examine each of the CSLB’s witnesses, to present witnesses of his own, and to testify on his own behalf. The court noted that private agreements to depart from statutorily imposed workmanship standards provide no defense to an alleged violation of section 7109(a), in disciplinary enforcement proceedings. View "Sieg v. Fogt" on Justia Law

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In May 2017, plaintiff Joseph Mejia bought a used motorcycle from Defendant DACM, Inc. (Del Amo) for $5,500. Mejia paid $500 cash and financed the remainder of the purchase price with a WebBank-issued Yamaha credit card he obtained through the dealership purchasing the motorcycle. In applying for the credit card, Mejia signed a credit application acknowledging he had received and read WebBank’s Yamaha Credit Card Account Customer Agreement (the credit card agreement), which contained an arbitration provision. Sometime after his purchase, Mejia filed a complaint against Del Amo on behalf of himself and other similarly situated consumers alleging Del Amo “has violated and continues to violate” the Rees-Levering Automobile Sales Finance Act by failing to provide its customers with a single document setting forth all the financing terms for motor vehicle purchases made with a conditional sale contract. The trial court denied Del Amo’s petition to compel arbitration, finding the arbitration provision was unenforceable under McGill v. Citibank, N.A., 2 Cal.5th 945 (2017) because it barred the customer from pursuing “in any forum” his claim for a public injunction to stop Del Amo’s allegedly illegal practices. Del Amo contended the trial court erred in ruling the arbitration provision was unenforceable under McGill, arguing: (1) McGill did not apply because, due to a choice-of-law provision in the contract, Utah law rather than California law governed the dispute; (2) if California law applied, the arbitration provision “does not run afoul of McGill” because Mejia did not seek a public injunction; (3) the arbitration clause was not unenforceable under McGill because the provision did not prevent a plaintiff from seeking public injunctive relief in all fora; and (4) if the arbitration provision was unenforceable under McGill, the Federal Arbitration Act (FAA) preempted McGill and required enforcement of the clause. The Court of Appeal found no merit to any of Del Amo's contentions and affirmed the district court's order. View "Mejia v. DACM Inc." on Justia Law