On appeal, Valdez contends Seidner's correction offer was not timely or appropriate under the CLRA. Although we conclude Seidner's correction offer was timely, it was not appropriate. To the extent Benson reached a contrary conclusion, we disagree with it. Where a business conditions its offer to remedy a violation of the CLRA on the consumer waiving his or her right to injunctive relief and remedies under other statutes and common law, the offer is not an appropriate correction offer as contemplated by section 1782, subdivision (b), and does not bar a lawsuit by the consumer.
A. Valdez's CLRA Notice
On August 11, 2015 Valdez sent Seidner a "notice of rescission and demand for rectification" under the CLRA. The CLRA notice alleged on August 15, 2014 Valdez and his wife, Bertha Valdez, entered into an agreement with Seidner, doing business as Toyota of Glendora, to lease a 2014 Toyota Camry. Valdez wanted to purchase the car, but a Seidner salesperson told Valdez and his wife they did not have sufficient credit to qualify for a purchase. The salesperson represented they could lease the car and refinance the contract after 10 payments. The salesperson also stated GAP insurance
When Valdez returned to the dealership approximately 10 months later, he learned he could not refinance the car at the initial price. Rather, the purchase would cost more than the vehicle's price under the lease. Moreover, Valdez applied for and was denied credit for refinancing by four banks. The CLRA notice alleged Seidner's actions violated the CLRA and the UCL, and constituted fraud.
The CLRA notice sought rescission of the transaction; removal of the transaction from Valdez's credit report; a refund of $ 1,500 for the down payment, $ 4,626 for the monthly payments, and $ 1,500 for insurance; and payment of $ 2,750 for attorney's fees and costs. The CLRA notice also requested Seidner "[i]dentify and make whole all similarly situated consumers." The CLRA notice stated Seidner's
B. Seidner's Settlement Offer
On September 14, 2015 Seidner's attorney, Andrew Stearns, sent an e-mail to Valdez's attorney, David Valdez, with an attached draft "settlement agreement and release of claims." Under the draft settlement agreement, Seidner
The draft settlement agreement required the parties to keep confidential the facts relating to Valdez's CLRA notice and the terms of the agreement. It also contained a release of all known and unknown claims and a covenant not to sue. In addition, the draft agreement provided Valdez would dismiss any actions he had filed with prejudice within five days of receipt of Seidner's consideration.
C. The Settlement Negotiations
The parties engaged in settlement negotiations through their attorneys from September to early December 2015. During the negotiations, Valdez disclosed the vehicle had been in an accident in October 2014 and the repair costs were approximately $ 3,300. According to Seidner, the vehicle history report showed the vehicle was also in an accident on July 6, 2015.
On October 9, 2015 Stearns sent a letter to David Valdez confirming the parties had agreed to "all items except the manner in which the vehicle was to be surrendered." Seidner requested inspection of the vehicle before it would provide Valdez with the settlement funds. David Valdez responded that "making the settlement subject to an inspection is ... not acceptable." He added in a followup e-mail, "There is no way this agreement can be based upon your client's subjective review of the car's condition."
Stearns responded that Seidner was prepared to remove the covenant not to sue language and confidentiality provision, but not the requirement the vehicle be inspected prior to release of the settlement funds. Although Valdez indicated he would agree to an inspection if Seidner paid the costs of his attorney and expert to be present, Seidner did not agree to this modification. Valdez did not respond to Seidner's final settlement letter sent on December 4, 2015, which reiterated the inspection requirement.
D. The Complaint
On January 22, 2016 Valdez filed a complaint against Seidner and Toyota Motor Credit Corporation, alleging causes of action for violations of the
Valdez further alleged Seidner's business practices violated the UCL based on the CLRA and section 1632 violations. He sought rescission of the lease, restitution, and injunctive relief ( Bus. & Prof. Code, § 17203 ), as well as attorney's fees and costs under the lease. Finally, Valdez alleged a fraud claim based on the same alleged misrepresentations, including that Seidner "made the promise of refinancing the [lease] without any intention of performing" and "willfully deceived [Valdez] with the intent to induce him to enter into the [lease]." Valdez alleged he reasonably relied on the representations and would not have signed the lease but for the representations. He sought $ 15,342.50 in damages, rescission, restitution, punitive damages under section 3294, and attorney's fees and costs under the lease.
E. Seidner's Motion for Summary Judgment
On September 14, 2016 Seidner filed a motion for summary judgment, or in the alternative, summary adjudication.
Seidner responded in its reply that the offer of correction was timely because Seidner
F. The Summary Judgment Ruling and Judgment
At the January 23, 2017 hearing, the trial court heard argument on whether the correction offer was timely and appropriate, then took the matter under submission. On January 25 the trial court granted Seidner's motion for summary judgment.
On February 21, 2017 the trial court signed an order for entry of summary judgment.
On February 23, 2017 Valdez filed a notice of appeal of the February 21, 2017 order. However, the trial court did not enter the judgment until March 28, 2017.
DISCUSSION
A. Standard of Review
Summary judgment is appropriate only if there are no triable issues of material fact and the moving party is entitled to judgment as a matter of law. ( Code Civ. Proc., § 437c, subd. (c) ;
We independently review the trial court's grant of summary judgment, considering all the evidence set forth in the moving and opposing papers
Likewise, "[w]e review questions of statutory construction de novo. Our primary task 'in interpreting a statute is to determine the Legislature's intent, giving effect to the law's purpose. [Citation.] We consider first the words of a statute, as the most reliable indicator of legislative intent. [Citation.]' [Citation.] We construe the statute's words in context, harmonizing statutory provisions to avoid absurd results. [Citation.] If the statutory text is susceptible to more than one reasonable construction, we may consider extrinsic aids such as legislative history to facilitate our interpretative analysis." ( California Building Industry Assn. v. State Water ResourcesControl Bd. (2018)
B. The CLRA
The CLRA proscribes "unfair methods of competition and unfair or deceptive acts or practices undertaken by any person in a transaction intended to result or that results
"The Legislature enacted the CLRA 'to protect consumers against unfair and deceptive business practices and to provide efficient and economical procedures to secure such protection.' (... § 1760.) 'To promote' these purposes, the Legislature directed that the CLRA 'be liberally construed and applied.' (Ibid. )" ( McGill v. Citibank, N.A. (2017)
Section 1780, subdivision (a), provides, "Any consumer who suffers any damage as a result of the use or employment by any person of a method, act, or practice declared to be unlawful by Section 1770 may bring an action against that person to recover or obtain any of the following: [¶] (1) Actual damages. ... [¶] (2) An order enjoining the methods, acts, or practices. [¶] (3) Restitution of property. [¶] (4) Punitive damages. [¶] (5) Any other relief that the court deems proper." In addition, a prevailing plaintiff is entitled to attorney's fees and costs. (§ 1780, subd. (e) ["The court shall award court costs and attorney's fees to a prevailing plaintiff in litigation filed pursuant to this section."].)
At least 30 days "prior to the commencement of an action for damages" under the CLRA, the consumer must provide written notice "of the particular alleged violations of Section 1770" and "[d]emand that the person correct, repair, replace, or otherwise rectify the goods or services alleged to be in violation of Section 1770." (§ 1782, subd. (a).) Further, "no action for damages may be maintained under Section 1780 if an appropriate correction, repair, replacement, or other remedy is given, or agreed to be given within a reasonable time, to the consumer within 30 days after receipt of the notice." (§ 1782, subd. (b).)
Valdez contends Seidner's correction offer was not timely because it was sent 32 days after Seidner received the CLRA notice.
It is undisputed Valdez sent his CLRA notice by certified mail on August 11, 2015, and Seidner received it on August 13. Pursuant to section 1782, subdivision (b), Seidner had to make a correction offer "within 30 days after receipt of the notice." The 30th day was September 12, 2015, which was a Saturday. Code of Civil Procedure section 12a, subdivision (a), provides that "[i]f the last day for the performance of any act provided or required by law to be performed within a specified period of time is a holiday, then that period is hereby extended to and including the next day that is not a holiday."
Contrary to Valdez's contention, nothing in Code of Civil Procedure section 12a limits its application to business institutions and government offices that would be inaccessible on weekends. (See DeLeon v. Bay Area Rapid Transit Dist. (1983)
Accordingly, Seidner made a timely correction offer under section 1782, subdivision (b), when its attorney sent the draft settlement agreement to Valdez's attorney on Monday, September 14, 2015.
Valdez contends that by conditioning relief on release of claims not subject to the CLRA's prelitigation notice requirements and on compliance with other settlement terms, including Seidner's subjective approval of the vehicle's condition, Seidner's settlement offer was not an appropriate correction offer as contemplated by section 1782, subdivision (b). We agree.
Seidner's draft settlement agreement contained a broad release of known and unknown claims, including an agreement that the parties release each other "from any and all past, present, and future claims, demands, causes of action, obligations, damages, injuries, liens, and liabilities, of any nature whatsoever, relating to or arising out of the Action."
This broad release language and covenant not to sue would have prohibited Valdez from asserting his section 1632, UCL, and fraud claims and his claim for injunctive relief under the CLRA. Yet Valdez had a right to bring those claims without first providing notice under the CLRA. As to a CLRA claim, a timely and appropriate correction under section 1782, subdivision (b), only bars a claim for damages, not injunctive relief. (§ 1782, subd. (b) ["no action for damages may be maintained under Section 1780" if an appropriate correction offer is made (italics added) ] & subd. (d) ["An action for injunctive relief brought under the specific provisions of Section 1770 may be commenced without compliance with subdivision (a)."];
Here, Valdez sought injunctive relief under the CLRA and UCL, prohibiting Seidner "from entering into lease agreements without providing appropriate translations, prior to execution, when negotiations are conducted primarily in a language other than English ...." Injunctive relief is available under both the CLRA and the UCL. (See McGill,
Valdez presented evidence the negotiations occurred in Spanish, but Seidner did not provide him with a Spanish language translation of the terms and conditions of the lease agreement. In response to Valdez's request for admissions, Seidner admitted "a Spanish translation of the subject contact was orally made to plaintiff before the plaintiff signed the document but inadvertently no written translated document or written Spanish language contract was provided to [Valdez]." Seidner's failure to provide a Spanish language translation of the lease agreement as required under section 1632 constituted a separate statutory violation, independent of the misrepresentations alleged as part of Valdez's CLRA claim.
In addition, Valdez's UCL claim-based on violations of the CLRA
Relying on the Fourth Appellate District's decision in Benson , Seidner contends its correction offer barred Valdez's section 1632, UCL, and fraud claims because they were "inextricably intertwined" with his CLRA damages claim and added no value. (See Benson, supra ,
As an initial matter, the court in Benson applied a deferential substantial evidence standard of review in the context of the plaintiff's request for attorney's fees. ( Benson, supra , 239 Cal.App.4th at pp. 1207, 1210,
Although Flores was decided in the context of an appeal of a judgment awarding the consumer damages for fraud and injunctive relief under the UCL following a CLRA correction offer, the same reasoning applies to the analysis of whether a correction offer is appropriate under section 1782, subdivision (b). A correction offer cannot require the consumer to release claims that would not otherwise be barred under section 1782, subdivision (b). That is precisely what Seidner's proposed settlement agreement required by demanding Valdez release his section 1632, UCL, and fraud claims.
To hold otherwise would lead to incongruous results. If Valdez had not asserted a CLRA claim for damages, he could have maintained his section 1632, UCL, and fraud claims because the claims were not subject to the notice requirement and provision for a voluntary correction under section 1782, subdivisions (a) and (b). Yet under Seidner's reasoning, once Valdez joined these claims with a CLRA claim for damages, all his claims were barred by a correction offer under section 1782, subdivision (b). This broad reading of the preclusive effect of section 1782, subdivision (b), is inconsistent with the Legislature's intent that the CLRA "be liberally construed and applied." (§ 1760; accord, McGill v. Citibank N.A.,
Finally, Seidner's correction offer improperly allowed Seidner unilaterally to void the proposed settlement agreement if it determined after an inspection that the vehicle was in an unacceptable condition.
Seidner could have made an appropriate correction offer had it offered simply to refund Valdez's down payment and monthly payments, pay off the outstanding loan balance, and pay attorney's fees and costs. Although Valdez would still have been able to pursue his other claims, nothing would have prevented Seidner from attempting to negotiate a separate settlement of those claims. But Seidner's effort to exact additional concessions from Valdez as part of a global settlement ran afoul of sections 1752 and 1782, subdivisions (b) and (d), of the CLRA. Because Seidner did not make an appropriate correction offer, it failed to meet its burden of showing a complete defense to Valdez's claims to support the grant of summary judgment.
DISPOSITION
The judgment is reversed, and the matter remanded with directions to enter a new order denying Seidner's motion for summary judgment. Valdez is entitled to recover his costs on appeal.
WE CONCUR:
PERLUSS, P. J.
SEGAL, J.
Notes
Further statutory references are to the Civil Code unless otherwise indicated.
Section 1782, subdivision (b), provides that a consumer may not bring an "action for damages" for violation of the CLRA if, after giving the business 30 days' advance notice of the alleged violations, the business provides a timely and "appropriate correction, repair, replacement, or other remedy."
" 'Guaranteed asset protection' (GAP) insurance means insurance in which a person agrees to indemnify a vehicle purchaser or lessee for some or all of the amount owed on the vehicle at the time of an unrecovered theft or total loss, after credit for money received from the purchaser's or lessee's physical damage insurer, pursuant to the terms of a loan, lease agreement, or conditional sales contract used to purchase or lease the vehicle." (Ins. Code., § 1758.992, subd. (h)(1).) Under California law, lease agreements must include a notice that " '[o]ptional coverage for the GAP amount may be offered for an additional price.' " (Civ. Code, § 2985.8, subd. (j).)
Although Valdez's CLRA notice sought $ 1,500 for the down payment, it is undisputed Valdez only paid $ 500.
Although Seidner in its notice sought summary adjudication, it did not seek to adjudicate specific causes of action, instead arguing that its offer of correction barred the entire action.
The CLRA does not specifically provide for rescission as a remedy for a violation, instead referring generally to "other relief deemed proper." (§ 1780, subd. (a)(5).) In his opposition Valdez referred to his right to rescission under the CLRA, but at the hearing David Valdez also argued Valdez's right to obtain injunctive relief without prelitigation notice.
The trial court denied the motion for summary judgment without prejudice as to Toyota Motor Credit Corporation, which had filed a joinder in Seidner's motion, because Toyota did not include a separate statement or any evidence in support of its joinder.
The order was signed by Judge Robert B. Broadbelt; however, Judge Hammock signed the final judgment.
On our own motion we augment the record to include the March 28, 2017 "judgment by court under CCP § 437c." (See Cal. Rules of Court, rule 8.155(a)(1)(A).)
Seidner contends the trial court's finding the settlement offer was an appropriate correction offer is reviewed for an abuse of discretion, relying on the statement in Benson that "the determination of appropriateness of a correction offer under the CLRA should be left to the trial court's discretion." (Benson, supra ,
Valdez also alleged additional violations of section 1770, subdivision (a): "(2) Misrepresenting the source, sponsorship, approval, or certification of goods or services. [¶] (3) Misrepresenting the affiliation, connection, or association with, or certification by, another .... [¶] (7) Representing that goods or services are of a particular standard, quality, or grade, or that goods are of a particular style or model, if they are of another. [¶] (16) Representing that the subject of a transaction has been supplied in accordance with a previous representation when it has not."
Valdez also contends the draft settlement agreement was not a correction offer under the CLRA because it was labeled a draft settlement agreement, not a correction offer. But there is no requirement in section 1782, subdivision (b), that a response to the required notice be identified as a correction, as long as the response provides "an appropriate correction, repair, replacement, or other remedy."
Code of Civil Procedure section 12a, subdivision (b), provides further, "This section applies to [all] provisions of law providing or requiring an act to be performed on a particular day or within a specified period of time, whether expressed in this or any other code or statute, ordinance, rule, or regulation." Valdez's reliance on Steele v. Bartlett (1941)
The draft settlement agreement defined "Action" as Valdez's "demand" in its CLRA notice to Seidner.
If a consumer files an action under section 1780 seeking only injunctive relief, he or she may amend the complaint without leave of court to seek damages after complying with the requirements for notice and a correction offer under section 1782, subdivisions (a) and (b). (§ 1782, subd. (d).)
Contrary to Seidner's contention, the holding in Benson is not to the contrary. The court there declined to address whether the plaintiff could maintain an action for injunctive relief notwithstanding a CLRA correction offer because the parties did not brief the issue. (Benson, supra ,
Indeed, as Valdez conceded at the hearing, it does not appear the CLRA would have required a Spanish language translation. However, Valdez could seek injunctive relief under the CLRA as to the other alleged misrepresentations.
Although Valdez's fraud claims were based on the same misrepresentations alleged in his CLRA cause of action, the fraud claims were also separately actionable.
We recognize many of the remedies available to Valdez under section 1632, the UCL, and for fraud were duplicative of the remedies available for violation of the CLRA. We do not suggest Valdez will be entitled to double recovery at trial; rather, he can pursue his claims under multiple statutes and common law, leaving the determination of appropriate remedies to the trial court at trial.
The draft agreement provided, "[Valdez] shall return the Vehicle to [Seidner] as is, without damage or vandalism, save normal wear and tear and the alleged nonconformities. ... If [Seidner] determines that the Vehicle is in unacceptable condition, it may void this Agreement in its entirety."
Because we conclude Seidner's draft settlement agreement was not an appropriate correction offer, we do not reach whether the agreement's provisions requiring confidentiality and denying liability independently rendered the offer inappropriate.