92 Cal.App.5th 1016
Cal. Ct. App.2023Background
- Rheinhart leased a new Nissan vehicle in 2019 and returned it at least three times for the same backup‑camera and dashboard media malfunctions; he asked Nissan to repurchase the vehicle and Nissan refused.
- Nissan offered and Rheinhart accepted a $3,548.40 pre‑litigation cash settlement; Nissan sent a broad written Release that discharged “any and all claims, whether currently known or unknown” relating to the vehicle.
- Rheinhart reviewed the Release, declined to consult counsel, signed it on October 16, 2019, and received the settlement check.
- In May 2020 Rheinhart sued under the Song‑Beverly Consumer Warranty Act (Civil Code § 1790 et seq.), seeking repurchase/restitution and other statutory remedies after assertedly unsuccessful repair attempts.
- The trial court granted Nissan summary judgment, concluding § 1790.1’s antiwaiver provision applies to front‑end waiver attempts, not to pre‑litigation releases of disputes; the Court of Appeal reversed, holding the Release here was void as contrary to Song‑Beverly’s remedial purpose.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does § 1790.1 void a pre‑litigation release of Song‑Beverly claims? | Rheinhart: the antiwaiver clause renders any buyer waiver of the Act void; release is unenforceable. | Nissan: § 1790.1 targets front‑end purchase disclaimers, not negotiated releases to settle disputes; settlements should be enforceable. | The appellate court: Release here violated § 1790.1 as applied because it diminished Rheinhart’s substantive Song‑Beverly rights and is void as against public policy. |
| Who bears the burden to show enforcement won’t diminish unwaivable statutory rights? | Rheinhart: Nissan must show enforcement won’t impair statutory remedies. | Nissan: invoked the Release and Rheinhart’s acknowledgment that he read and understood it. | Court applied Verdugo/Wimsatt logic: defendant (Nissan) had burden and failed to show the Release did not diminish statutory rights. |
| Can lack of counsel/unconscionability invalidate the Release? | Rheinhart: signing without counsel and unequal bargaining power makes the Release unconscionable. | Nissan: Rheinhart admitted he read and understood the Release. | Court: declined to decide unconscionability because it reversed on the § 1790.1/public‑policy ground. |
Key Cases Cited
- Kirzhner v. Mercedes‑Benz USA, LLC, 9 Cal.5th 966 (Cal. 2020) (describes Song‑Beverly’s prompt repurchase/replacement remedies and remedial purpose)
- Cummins, Inc. v. Superior Court, 36 Cal.4th 478 (Cal. 2005) (overview of Song‑Beverly Act and its consumer‑protective aims)
- Verdugo v. Alliantgroup, L.P., 237 Cal.App.4th 141 (Cal. Ct. App. 2015) (places burden on party seeking enforcement of forum/contract terms when antiwaiver statutes protect substantive rights)
- Timney v. Lin, 106 Cal.App.4th 1121 (Cal. Ct. App. 2003) (settlement provisions that are illegal or contrary to public policy are unenforceable)
- Wimsatt v. Beverly Hills Weight etc. Internat., Inc., 32 Cal.App.4th 1511 (Cal. Ct. App. 1995) (antiwaiver statutes can shift burdens and protect special‑status statutory rights)
- Crosno Construction, Inc. v. Travelers Cas. & Sur. Co. of Am., 47 Cal.App.5th 940 (Cal. Ct. App. 2020) (invalidating subcontract term that unreasonably impairs statutory payment remedies)
- Rodriguez de Quijas v. Shearson/American Express, Inc., 490 U.S. 477 (U.S. 1989) (distinguishes antiwaiver clauses that bar only procedural forum choices from those that would strip substantive protections)