Justia California Court of Appeals Opinion Summaries

Plaintiff Antoinette Rossetta appealed the dismissal of her second amended complaint after the trial court sustained a demurrer by defendants CitiMortgage, Inc. (CitiMortgage) and U.S. Bank National Association as Trustee for Citicorp Residential Trust Series 2006-1 (2006-1 Trust). The complaint asserted multiple causes of action sounding in tort, and unlawful business practices in violation of the Unfair Competition Law arising from loan modification negotiations spanning more than two years. Rossetta also appealed the trial court’s dismissal of a cause of action for conversion that appeared in an earlier iteration of the complaint to which CitiMortgage and the 2006-1 Trust (collectively, CitiMortgage, unless otherwise indicated) also successfully demurred. After review, the Court of Appeal concluded: (1) the trial court erred in sustaining the demurrer to the causes of action for negligence and violations of the Unfair Competition Law; (2) the trial court properly sustained the demurrer to the causes of action for intentional misrepresentation and promissory estoppel, but should have granted leave to amend to give Rossetta an opportunity to state a viable cause of action based on an alleged oral promise to provide her with a Trial Period Plan (TPP) under the Home Affordable Mortgage Program (HAMP) in April 2012; and (3) the trial court properly sustained the demurrer to the causes of action for negligent misrepresentation, breach of contract, intentional infliction of emotional distress and conversion without leave to amend. View "Rossetta v. CitiMortgage, Inc." on Justia Law

In June 2012, plaintiff-appellant Allen Krizhner leased a Mercedes-Benz from defendant Mercedes-Benz USA, LLC for personal use. The complaint alleged the car came with an express written warranty covering repairs for any defects. During the warranty period, the car allegedly exhibited a variety of defects which caused the navigation system and key fob to malfunction, the steering column adjustment mechanism and power seats to be inoperative, the coolant level warning light to illuminate, and smoke to emanate from the cigarette lighter. After bringing the issues to defendant’s attention, and frustrated with defendant’s supposed failure to abide by its warranty obligations, plaintiff filed suit under the Song-Beverly Consumer Warranty Act. Plaintiff accepted an offer of compromise pursuant to Code of Civil Procedure section 998, including a restitution provision identical to Civil Code section 1793.2 (d)(2)(B). The court awarded plaintiff over $47,000 in accordance with the 998 offer. Plaintiff appealed, arguing the trial court erred because it denied him recovery of approximately $680 in vehicle registration renewal and certificate of nonoperation fees which he incurred in the years after he first leased the car. The Court of Appeal concluded the court properly determined section 1793.2(b)(2)(B) did not require payment of vehicle registration renewal fees and related costs incurred after the initial purchase or lease. View "Kirzhner v. Mercedes-Benz USA, LLC" on Justia Law

Noel purchased an inflatable Kids Stuff Ready Set Pool for $59.99, based on a photograph on the packaging, depicting a group of three adults and two children sitting and playing in the pool. The box also prominently displayed the pool’s actual dimensions: “8FT X 25IN.” Once Noel inflated his pool, it was “materially smaller” than shown on the packaging and was capable of fitting only one adult and four small children. Noel sued on behalf of himself and similarly situated individuals, alleging violation of the Consumers Legal Remedies Act (Civ. Code 1750) (CLRA), Unfair Competition Law (Bus. & Prof. Code 17200) (UCL), and False Advertising Law (Bus. & Prof. Code 17500) (FAL). The court denied class certification on the UCL and FAL claims, finding Noel’s proposed class of more than 20,000 potential members was not ascertainable (Code of Civil Procedure 382) and refused to certify a class on Noel’s CLRA claim because it determined common questions of law or fact did not predominate over individual questions of reliance and causation. The court of appeal affirmed. The certification motion was filed without first conducting sufficient discovery to meet plaintiff’s burden of demonstrating there are means of identifying putative class members so that they might be notified of the litigation, which jeopardizes the due process rights of absent class members. View "Noel v. Thrifty Payless, Inc." on Justia Law

A third party can not sue a merchant for negligence in breaching duties when the merchant sells a high-end sports car to its customer and the customer pays for most of the car with two checks the third party made out to the merchant. A customer's payment with a check not in the customer's own name, by itself, is not a red flag. Accordingly, the Court of Appeal affirmed the trial court's grant of summary adjudication dismissing the third party's negligence and related claims against the merchant. View "QDOS, Inc. v. Signature Financial, LLC" on Justia Law

In the published portion of the opinion, the Court of Appeal held that an appropriate correction offer under the Consumers Legal Remedies Act does not prevent a consumer from pursuing causes of action for fraud and violation of the Unfair Competition Law (UCL) based on the same conduct, because the remedies are cumulative. In this case, plaintiff filed suit against Dealer and Lender, alleging several causes of action stemming from her purchase of a used car. The court affirmed an award of damages to plaintiff for fraud and imposing an injunction on dealer's advertising under the UCL. View "Flores v. Southcoast Automotive Liquidators, Inc." on Justia Law

Artur Hefczyc appealed an order denying his motion for class certification in his lawsuit against Rady Children's Hospital-San Diego (Rady). On behalf of a proposed class, Hefczyc sought declaratory relief to establish that Rady's form contract, signed by patients or guarantors of patients who receive emergency room care, authorized Rady to charge only for the reasonable value of its services, and that Rady therefore was not authorized to bill self-pay patients based on its master list of itemized charge rates, commonly referred to as the "Chargemaster" schedule of rates, which Hefczyc alleged was "artificial" and "grossly inflated." The trial court denied Hefczyc's motion for class certification, concluding that the class was not ascertainable, that common issues did not predominate, and that class action litigation was not a superior means of proceeding. Hefczyc contends that the trial court erred in denying class certification because, as the complaint sought only declaratory relief, the motion for class certification was brought under the equivalent of Federal Rules of Civil Procedure, rule 23(b)(1)(A) or (b)(2) (28 U.S.C.), for which he was not required to establish the ascertainability of the class, that common issues predominated and that class action litigation was a superior means of proceeding. Hefczyc also contended that even if the trial court properly imposed those three requirements in this action, the trial court abused its discretion in concluding that those requirements were not met. After review, the Court of Appeal concluded that Hefczyc's arguments lacked merit, and accordingly affirmed the order denying class certification. View "Hefczyz v. Rady Children's Hosp." on Justia Law

In 2013, plaintiff-respondent Gerardo Medina purchased a used car from defendant-appellant South Coast Car Company, Inc. The sales contract was eventually assigned to Veros Credit, LLC, and plaintiff sued on nine causes of action stemming from that contract. The parties settled the suit on the eve of trial. Relevant to this appeal, defendants also agreed that they would not "dispute [Medina's] underlying entitlement to attorneys' fees based upon the claims brought in the [underlying a]ction"; that Medina "shall be deemed the prevailing party on all causes of action for purposes of the motion" for attorney fees; that defendants "reserve the right to dispute the reasonableness of the attorneys' fees, costs, and prejudgment interest claimed to have been incurred" by Medina; and that defendants "maintain all defenses as to the limitations on the amount of attorneys' fees, costs, and prejudgment interest." On appeal (and despite the Settlement), defendants contend the court erred when it awarded Medina attorney fees, costs and prejudgment interest. Specifically, defendants contended that, although Medina was the prevailing party as provided under the settlement, Veros was not liable to pay any portion of his fees and costs because it was merely the "holder" of the sales contract and thus, its liability was limited to the amounts paid by Medina, or about $8,600, and that Medina, in any event, was not entitled to any such award because he previously had rejected SCCC's offer to rescind the sales contract. The Court of Appeal disagreed with defendants’ contentions, finding the record showed defendants recognized in connection with their summary judgment/adjudication motion that their settlement offer went to the " 'determination of the legal basis' " for an award of attorney fees: it would have made little sense for the parties to enter into the Settlement and not resolve what was and the overarching issue in the case, in light of the parties' extensive litigation of this issue up to the time of the settlement. View "Medina v. South Coast Car Company" on Justia Law

Plaintiff filed suit against the Gap, alleging that she was misled about the quality and authenticity of Gap and Banana Republic factory store clothing. Plaintiff alleged causes of action under the Unfair Competition Law (UCL), False Advertising Law (FAL), and Consumers Legal Remedies Act (CLRA). The Court of Appeal sustained the Gap's demurrer without leave to amend, holding that the second amended complaint (SAC) failed to state a FAL claim where it alleged no advertising or promotional materials or any other statements disseminated by Gap to consumers that its factory store clothing items were previously for sale in traditional Gap stores or were of a certain quality; the SAC failed to state a claim for violation of the UCL where selling nonidentical brand name clothing in a factory store was not fraudulent, unlawful nor unfair; the SAC failed to state a claim under the CLRA where it alleged no advertising or representation of any kind that Gap made about the characteristics or quality of its factory store merchandise; and the trial court acted within its discretion in denying leave to amend. View "Rubenstein v. The Gap" on Justia Law

In the mid-1990s Martha (now 79) and Fred (now 86) purchased life insurance policies, with $1,000,000 death benefits for a $14,000 annual premium, naming their children as beneficiaries. The policies were held by a revocable trust. The couple put money in the Trust; it was self-sustaining. In 2013, Fred, at the end of his career as a lawyer, was suffering from cognitive decline; Martha had been diagnosed with Alzheimer’s disease. The defendants provided life insurance advisory services to the couple; they allegedly carried out a scheme that involved arranging the surrender of one policy and the replacement of the other with a policy providing less coverage. Premiums for the new coverage, spread over its term, totaled $800,000; they also paid $100,000 in commissions. The couple and their trustee sued under the Elder Abuse and Dependent Adult Civil Protection Act, Welfare and Institutions Code 15600. Defendants responded that the Trust has always owned the policies and that the commissions were paid by the Trust so that the only proper plaintiff is the Trust, which does not have a “because [it] is not 65 years old.” The court of appeal reversed dismissal of the claims. Defendants deprived the couple of property indirectly, using the Trust as an instrument of their scheme. View "Mahan v. Charles W. Chan Ins. Agency, Inc." on Justia Law

In 2005, Nicholas and Mary Conroy refinanced their home with a mortgage loan secured by a deed of trust on the property. Five years later, the Conroys stopped making payments and defaulted on their loan. In an effort to avoid foreclosure, the Conroys filed suit against defendants Wells Fargo Bank, N.A., successor by merger to Wells Fargo Home Mortgage, Inc.; Fidelity National Title Insurance Company aka Default Resolution Network, LLC; and HSBC Bank USA, N.A. as trustee for Merrill Lynch Mortgage Backed Securities Trust, Series 2007-2 (Wells Fargo). The trial court sustained Wells Fargo’s demurrer without leave to amend and entered a judgment of dismissal. On appeal, the Conroys contended the trial court erroneously dismissed their claims. After review, the Court of Appeal found the Conroys’ operative complaint did not state valid causes of action for intentional or negligent misrepresentation because they did not properly plead actual reliance or damages proximately caused by Wells Fargo. The trial court properly determined the Conroys could not assert a tort claim for negligence arising out of a contract with Well Fargo. For lack of detrimental reliance on any of Wells Fargo’s alleged promises, the Conroys did not set forth a viable cause of action for promissory estoppel even under a liberal construction of the operative complaint. Because Wells Fargo considered and rejected a loan modification for the Conroys before that date, section 2923.6 does not apply to them. The plain language of section 2923.7 requires a borrower to expressly request a single point of contact with the loan servicer. The Conroys’ operative complaint did not allege they ever requested a single point of contact, and the Conroys did not state they could amend their cause of action to allege they actually requested one. The trial court properly dismissed the Conroys’ Unfair Competition Law claim because it was merely derivative of other causes of action that were properly dismissed. View "Conroy v. Wells Fargo Bank" on Justia Law