Tun v. Wells Fargo Dealer Services, Inc.
5 Cal. App. 5th 309
| Cal. Ct. App. | 2016Background
- Plaintiff Michael Tun bought a used 2007 BMW from CA Beemers/California Beemers and financed it under a retail installment sales contract (RISC) later assigned to Wells Fargo Dealer Services.
- Tun alleged the dealer sold him a vehicle with undisclosed frame/unibody collision damage, bringing claims for fraud, breach, CLRA, ASFA, UCL, FAL, and related causes of action; a jury trial returned defense verdicts for dealer and Wells Fargo.
- Before trial Wells Fargo deposited $15,070 with the court pursuant to Civil Code § 2983.4 (a statutory tender that can make a defendant the prevailing party for attorney-fee purposes if the allegation is found true).
- The trial court excluded evidence and argument about Wells Fargo’s § 2983.4 tender as inadmissible; after the defense verdicts the court nevertheless granted Tun a new trial as to Wells Fargo only, finding it had erred by precluding mention of the tender.
- Wells Fargo appealed the new-trial order; Tun cross‑appealed challenging denial of new trial/JNOV as to dealer and seeking to treat the tender as a judicial admission entitling him to the $15,070.
- The Court of Appeal reversed the new-trial order as to Wells Fargo, affirmed denial of JNOV and new trial as to dealer, and directed entry of judgment for Wells Fargo.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a § 2983.4 tender is a judicial admission of liability | Tun: the tender was an unconditional admission entitling him to judgment for $15,070 and to fees as prevailing party | Wells Fargo: the tender is not an admission or an offer to compromise; it is a statutory mechanism tied to prevailing‑party fee awards | Held: Tender under § 2983.4 is not a judicial admission or CCP § 998 offer; it’s one way (not the only way) to show entitlement to prevailing‑party fees when the allegation is proven. |
| Whether excluding mention of the § 2983.4 tender was legal error warranting a new trial | Tun: exclusion prejudiced his trial rights and justified a new trial as to Wells Fargo | Wells Fargo: exclusion was correct; any error was not prejudicial and Wells Fargo’s liability was derivative of dealer’s verdict | Held: No legal error; court abused discretion in granting new trial as to Wells Fargo. |
| Whether Wells Fargo could be liable independent of dealer after dealer was found not liable (holder rule/derivative liability) | Tun: court’s new trial as to Wells Fargo but not dealer produced inconsistent relief; Wells Fargo still should be retried | Wells Fargo: liability as holder is derivative of dealer; defense verdict for dealer forecloses holder liability | Held: Wells Fargo’s liability (if any) is derivative; dealer’s defense verdict bars recovery against Wells Fargo—court erred to grant a separate new trial for Wells Fargo. |
| Admissibility and prejudice of excluded evidence (dealer website ad / other-vehicles evidence) | Tun: excluded evidence showing pattern of nondisclosure and a specific web ad was relevant to CLRA/FAL and UCL claims | Defendants: evidence was irrelevant or not shown to have been relied upon by Tun; some evidence was cross‑examined in other ways | Held: Exclusion of those items was not reversible error; Tun failed to show reliance or prejudice. |
| Whether JNOV should be entered for Tun on ASFA/CLRA/UCL/FAL claims | Tun: entitled to judgment as matter of law (esp. on ASFA via tender; CLRA and related claims lacked defenses) | Defendants: substantial evidence supported jury findings; tender not a basis for JNOV | Held: JNOV denied; substantial evidence supported jury verdicts and tender did not convert into judgment. |
| Attorney‑fee award apportionment to dealer | Tun: fee award to dealer should be reversed or apportioned differently because of claims he prevailed on or new trial error | Dealer: provided apportionment evidence; court limited award to 30% recognizing work on nonrecoverable claims | Held: Fee award and apportionment were within the trial court’s discretion and affirmed. |
Key Cases Cited
- Aguilar v. Atlantic Richfield Co., 25 Cal.4th 826 (examining review standards and error of law vs. discretion)
- Hart v. Autowest Dodge, 147 Cal.App.4th 1258 (construing similar tender language in vehicle‑leasing statute; tender is one method to become prevailing party but not an admission)
- Pineda v. Williams‑Sonoma Stores, Inc., 51 Cal.4th 524 (statutory construction principles; review de novo)
- Lafferty v. Wells Fargo Bank, 213 Cal.App.4th 545 (holder rule: assignee is subject to seller’s claims/defenses but holds derivative liability)
- Joseph Magnin Co. v. Schmidt, 89 Cal.App.3d Supp. 7 (interpretation of similar fee/tender language; context for tender mechanics)
- Music Acceptance Corp. v. Lofing, 32 Cal.App.4th 610 (holder “stands in the shoes” of seller; scope of derivative liability)
- Kwikset Corp. v. Superior Court, 51 Cal.4th 310 (reliance requirement for certain consumer protection claims)