Justia California Court of Appeals Opinion Summaries

Robert Benson appealed the denial of his motion for attorney fees and costs from respondent Southern California Auto Sales, Inc. (SCAS), after he obtained a favorable judgment based on the Consumer Legal Remedies Act (CLRA). The court found that SCAS had offered Benson an appropriate correction upon receiving the statutorily required notice of problems with its used car. Benson contended the trial court erred in deciding SCAS had offered him an appropriate correction under the CLRA, and further that he was entitled to attorney fees as the prevailing party. After review, the Court of Appeal chose to defer to the trial court's determination of whether a correction offer was appropriate in this case. "Whether a plaintiff can recover attorney fees and costs incurred in an action for damages after being offered an appropriate correction is a matter of statutory interpretation, and we conclude CLRA fees and costs are not available under these circumstances." View "Benson v. Southern Cal. Auto Sales" on Justia Law

The Investigative Consumer Reporting Agencies Act (ICRAA), Civ. Code,1 1786 et seq., and the Consumer Credit Reporting Agencies Act (CCRAA), Civ. Code 1785.1 et seq., regulate agencies that gather information on consumers to provide to employers, landlords, and others for use by those persons in making employment, rental, and other decisions. This appeal involves investigative consumer reports – background checks – made on employees of First by HireRight. Plaintiff filed suit against First alleging violations of the ICRAA and the trial court dismissed the suit after granting First's motion for summary judgment based on the holding of Ortiz v. Lyon Management Group, Inc. In Ortiz, the appellate court held that the ICRAA was unconstitutionally vague as applied to tenant screening reports containing unlawful detainer information because unlawful detainer information relates to both creditworthiness and character. The court disagreed with the analysis in Ortiz, concluding that there is nothing in either the ICRAA or the CCRAA that precludes application of both acts to information that relates to both character and creditworthiness. Therefore, the court concluded that the ICRAA is not unconstitutionally vague as applied to such information and reversed the summary judgment. View "Connor v. First Student, Inc." on Justia Law

Purchasers of notebook computers, manufactured by HP, filed a class action, alleging that certain notebook computers manufactured by HP contained inverters that HP knew would likely fail and cause display screens to dim and darken at some point before the end of the notebook’s useful life. They claimed violation of the Unfair Competition Law (UCL), the Consumer Legal Remedies 2 Act (CLRA), unjust enrichment and breach of express warranty. After years of litigation, the trial court ultimately made a “no merits” determination as to the CLRA claim, and granted HP’s motion for summary judgment as to the remaining claims. The court of appeal affirmed class certification; reversed the summary adjudication of UCL claims and the no merits determination as to certain CLRA claims; and affirmed summary adjudication of some breach of express warranty claims, while reversing others. View "Rutledge v. Hewlett-Packard" on Justia Law

Plaintiff-appellant Greg Dagher sued defendant-respondent Ford Motor Company alleging violations of the Song-Beverly Consumer Warranty Act. In 2009, Plaintiff bought a used Ford 2006 vehicle in a private sale, then determined its engine needed substantial repairs. He obtained them by using Ford's transferable, unexpired express warranty that the private party sellers had originally been issued upon their purchase of the vehicle, new, from a Ford dealer. Plaintiff contends the warranty repairs attempted by the dealer were unsuccessful and he is entitled to the statutory remedies in the Act, the same as the original purchasers could have sought, including restitution, damages, and civil penalties. Ford sought summary judgment on the ground it had not failed to comply with any obligation owed to Plaintiff under the Act, because the available statutory remedies are restricted to aggrieved buyers of "consumer goods," chiefly new ones that are covered by express warranties. This was a used vehicle that was not sold to Plaintiff by a dealer, and even though the express warranty was transferable, Ford contended that Plaintiff lacked standing to sue for additional statutory remedies under the Act. The trial court granted summary judgment and denied leave to file an amended complaint. The Court of Appeal rejected Plaintiff's interpretations of the Act that would have allowed him standing to sue under it, and the Court affirmed the summary judgment order. Finding that the trial court did not properly exercise its discretion on the amendment issue, the Court reversed that order and the resulting judgment, with directions to the trial court to allow further proceedings on amendment of the complaint as proposed. View "Dagher v. Ford Motor Co." on Justia Law

Plaintiff-appellant James McKenzie appealed a trial court’s order awarding him only $28,350 of the nearly $48,000 in attorney fees he sought in this case, following the parties’ settlement of McKenzie’s claim under the automobile “lemon law” provisions of the Song-Beverly Consumer Warranty Act. The trial court refused to award McKenzie any of the attorney fees incurred in the wake of Ford’s initial offer because it viewed the compromise offer ultimately accepted by McKenzie as essentially identical to the offer he had initially rejected – distinguished only by his “demand that [he] be allowed to file [a fee] motion.” The court concluded McKenzie unreasonably delayed settlement for the sole purpose of ginning up his fee award. The Court of Appeal reversed. The Court found the trial court’s comparative assessment of Ford’s two settlement offers was erroneous as a matter of law. "Even Ford concedes its initial settlement offer incorporated numerous extraneous provisions – including broad releases of both Ford and nonparties, an illegal confidentiality clause characterized as 'material' to the settlement, and what amounted to an opt-out provision in Ford’s favor – all of which were excised from the offer McKenzie later accepted. These differences are significant, and thus McKenzie’s rejection of the initial offer was reasonable, requiring his counsel to continue working on the case." The Court held further that the trial court’s erroneous comparison of Ford’s initial compromise offer with the offer McKenzie later accepted fatally undermined its conclusion that the entire amount of hours billed by McKenzie’s counsel in the wake of that initial offer was unjustified. The court’s additional finding, that McKenzie’s two attorneys also engaged in instances of duplicative billing after Ford’s initial offer, did not support a complete denial of fees for that period. Consequently, the case was remanded back to the trial court with directions to reconsider the fee award. View "McKenzie v. Ford Motor Co." on Justia Law

Plaintiffs Eckler and Engel filed separate actions against Neutrogena, alleging that their sunscreen products were misleadingly labeled and marketed in violation of California consumer protection statutes. Plaintiffs alleged that Neutrogena misleadingly labeled its products with the descriptions “sunblock,” “waterproof,” and “sweatproof” (Labeling Terms), terms that the FDA prohibited; Engel contends that Neutrogena is liable for marketing products that bore the Labeling Terms before the December 17, 2012 compliance date; the Eckler matter raises an additional product labeling issue with respect to sunscreen with a sun protection factor (SPF) value greater than 50; and, although Eckler does not contend that the SPF values on Neutrogena’s products were inaccurate, she believes that consumers will be misled about their benefits and seeks an order that Neutrogena modify its labels and alter its advertising. The superior court sustained Neutrogena’s demurrer to Eckler’s complaint without leave to amend, and granted its motion for judgment on the pleadings as to Engel’s complaint. The court agreed with the district court's conclusion that plaintiffs' claims were preempted by the federal Food, Drug, and Cosmetic Act (FDCA), 21 U.S.C. 379r, and implementing FDA regulations. Accordingly, the court affirmed the judgment. View "Eckler v. Neutrogena Corp." on Justia Law

Plaintiff filed a class action against HCP, alleging causes of action for violation of the unfair competition law (UCL), Bus. & Prof. Code, 7200 et seq.; common law fraudulent concealment; and violation of the false advertising law (FAL), Bus. & Prof. Code, 17500. Plaintiff argued that, although HCP does not fall within the literal definition of a “health care service plan” as defined in Health and Safety Code section 1345, subdivision (f)(1), due to the level of risk it assumed, HCP operated as a health care service plan without obtaining the license required by the Knox-Keene Health Care Service Plan Act of 1975, Health and Safety Code section 1340 et seq., and without meeting the regulatory mandates required of health care service plans. The trial court sustained without leave to amend the demurrers filed by HCP and entered a judgment of dismissal. The court concluded that the trial court acted within its discretion in invoking the abstention doctrine as to the statutory causes of action but not as to the common law cause of action for fraudulent concealment. However, the court found that plaintiff failed to plead a claim for fraudulent concealment, and that she has failed to demonstrate how she could amend the operative complaint to cure the defect. Accordingly, the court affirmed the judgment. View "Hambrick v. Healthcare Partners Med. Grp." on Justia Law

In 2004, CashCall, a licensed lender, issued Montgomery a consumer credit account. In 2011, CashCall sold that debt to GCFS for collection. In 2012, GCFS sold the debt to Mountain Lion. Neither GCFS nor Mountain Lion is a licensed finance lender under the Finance Lenders Law. These entities are also not institutional investors within the meaning of section 22340. Mountain Lion subsequently sued Montgomery for payment on the debt. Montgomery filed a cross-complaint challenging the validity of her debt under Financial Code section 22340(a), which provides that “A licensee may sell promissory notes evidencing the obligation to repay loans made by the licensee pursuant to this division or evidencing the obligation to repay loans purchased from and made by another licensee pursuant to this division to institutional investors, and may make agreements with institutional investors for the collection of payments or the performance of services with respect to those notes.” The court of appeal affirmed dismissal of her cross-complaint. The legislative history indicates no intent to prohibit the sale of debt to noninstitutional investors. View "Montgomery v. GCFS, Inc." on Justia Law

Justin Leber and Katherine Neumann (collectively, Leber) sued DKD of Davis, Inc. and General Motors Company (not a party on appeal) under California's "lemon law" after buying a Silverado truck with an allegedly defective transmission. Leber alleged the Silverado was “a new motor vehicle,” and DKD and General Motors issued an ""express warranty.'" The Silverado had a defect, despite a reasonable number of repairs, and was not fit for ordinary purposes, but neither defendant replaced it or offered restitution. DKD denied the allegations, arguing Leber did not state a claim under the Act, no warranty was given, and the Silverado was sold "as is." DKD presented evidence the truck had previously been sold to another buyer, who traded it in nearly a year later. During the sale at issue here, Leber signed various documents, including a “Buyers Guide” which states the Silverado was bought “used,” “AS IS-NO WARRANTY,” and with over 10,000 miles on it. Leber opposed DKD’s motion with a combination of legal arguments and facts regarding a warranty by General Motors. Leber also proffered several opposing facts, including that the General Motors warranty was transferrable to subsequent owners, and General Motors had paid for the unsuccessful attempts to fix the alleged defect. The trial court sustained objections to some of Leber’s evidence including evidence showing how other dealers filled out the Buyers Guide to account for the transfer of a manufacturer’s warranty. Leber appealed when the trial court granted DKD's motion for summary judgment. Finding no reversible error, the Court of Appeal affirmed. View "Leber v. DKD of Davis" on Justia Law

Plaintiff claims that she entered into a credit card purchase from defendants, which did not involve mail order, shipping or cash advances, but that she “was asked for personal identification information, in the form of her email address, by defendants’ employee attending to the transaction.” Plaintiff provided the requested personal identification information, which was entered into the electronic sales register at the checkout counter adjacent to both defendants’ employee and plaintiff.” The amended complaint alleged violation of the Song-Beverly Credit Card Act, Civil Code 1747.08, which provides that: [N]o person, firm, partnership, association, or corporation that accepts credit cards for the transaction of business shall . . . request, or require as a condition to accepting the credit card as payment in full or in part for goods or services, the cardholder to provide personal identification information, which the person, firm, partnership, association, or corporation accepting the credit card writes, causes to be written, or otherwise records upon the credit card transaction form or otherwise.” The trial court declined to certify a class in plaintiff’s suit. The court of appeal affirmed, agreeing that does not prohibit the collection of personal identification information once a credit card transaction has been concluded. View "Harrold v. Levi Strauss & Co." on Justia Law