APPEAL from an order of the Superior Court of San Diego County, Ronald S. Prager, Judge. (Super. Ct. No. 37-2009-00092495- CU-CO-CTL)
The opinion of the court was delivered by: Benke, Acting P. J.
CERTIFIED FOR PUBLICATION
El Cajon Motors, Inc., dba El Cajon Ford (El Cajon) appeals from an order denying its petition to compel arbitration of an action brought by Yaube Roberts individually and on behalf of others similarly situated for violation of, inter alia, the Automobile Sales Finance Act (Civ. Code, § 2981 et seq. (ASFA)), the Consumers Legal Remedies Act (id. § 1750 et seq.) and the Unfair Competition Law (Bus. & Prof. Code, § 17200 et seq. (UCL)). Because we conclude substantial evidence in the record supports the finding of the trial court that El Cajon forfeited arbitration, we affirm the trial court's order.
FACTUAL AND PROCEDURAL BACKGROUND
In late June 2009, Roberts sued El Cajon and Crescent Bank & Trust (Crescent). Roberts's first and second causes of action against El Cajon are based on violations of the ASFA and the UCL, respectively, and are brought on her own behalf and on behalf of classes of similarly situated persons.*fn1
Roberts alleges she was one of many customers who, during the four years prior to the date she filed the complaint, purchased a vehicle from El Cajon using a retail installment sale contract (RISC). According to Roberts, she entered into more than one RISC for the same vehicle and the final RISC she signed was backdated by El Cajon to the date of the first RISC she executed. As a result of this alleged unlawful practice, Roberts contends El Cajon "failed to properly disclose the Annual Percentage Rate ('APR') and finance charges on the RISCs" and El Cajon charged consumers illegal interest "from the date of the initial RISC, rather than [from] the final RISC, resulting in undisclosed finance charges."
A. Class Action Allegations
Roberts's complaint includes the following two proposed classes of plaintiffs in connection with her first and second causes of action against El Cajon:
" 'Class 1': All persons who, in the four years prior to the filing this complaint, (1) purchased a vehicle from [El Cajon] for personal use, (2) on a later date rescinded their original [RISC], and (3) signed a subsequent or second RISC for the purchase of the same vehicle, which RISC was dated the date of the original RISC and [which] involved financing at an [APR] greater than 0.00%.
" 'Class 2': All persons who, in the four years prior to the filing of this complaint, (1) purchased a vehicle from [El Cajon] for personal use pursuant to a[n] RISC, (2) agreed to pay some or all of the down payment at a date after execution of the contract, and (3) whose RISC does not disclose that some portion of the down payment would be deferred until not later than the due date of the second regularly scheduled installment under the RISC and that was not subject to a finance charge."
B. El Cajon Answers the Complaint and Discovery Commences
El Cajon answered the complaint in mid-August 2009. In addition to its general denial of all allegations pursuant to Code of Civil Procedure section 431.30, El Cajon asserted 24 affirmative defenses. None of its affirmative defenses, however, alleged the existence of an arbitration provision that is the subject of this appeal.
Roberts served substantial written discovery on El Cajon in mid-October 2009. As we discuss post, this discovery focused primarily on Roberts's class action allegations including identification of putative class members, among other subject matters. El Cajon also served Roberts with written discovery, which El Cajon describes as "routine background discovery" including form and special interrogatories and document requests.
El Cajon responded to Roberts's written discovery in late January 2010, one day after it filed its motion to compel arbitration. Roberts responded to El Cajon's discovery and opposed El Cajon's motion to compel. In her opposition, Roberts claimed the arbitration provision in the new RISC was procedurally and substantively unconscionable.
C. El Cajon Contacts Putative Class Members and Offers to Settle the Proposed Class Action
In mid-February 2010, Roberts learned for the first time that El Cajon had made monetary settlement offers to putative class members. Roberts's counsel was contacted by Blanca Barajas, a putative class member, who received two letters from El Cajon on El Cajon letterhead.
In one letter, El Cajon enclosed a $50 check dated January 27, 2010, made payable to Blanca and Mario Barajas offering to settle any claim they might have against El Cajon arising out of this lawsuit. Specifically, this letter noted that El Cajon denied any wrongdoing in the "proposed class action lawsuit" and was "defending the lawsuit." However, the letter went on to say that as a result of "human error," El Cajon had "made a mistake when it did not notice the date of your second [RISC] was not changed to reflect the date you were signing it."
El Cajon stated in the letter it was offering the $50 check "to avoid expense and inconvenience to us both" and advised the Barajases that if they wished to settle and compromise any potential claims they might have against El Cajon that concern the dating of their RISC, "you can simply cash the check. By signing the back of the check, you will be releasing [El Cajon] from the potential claims involving the dating of your contract only. If you have any other claims against [El Cajon], those claims will not be affected. Therefore, if you do not wish to settle any potential claims you might have concerning the dating of your contract, or you are at all interested in participating in the class action lawsuit, do not cash the check--destroy and discard it." (Bold in orig. omitted.)
This letter also referenced an enclosed check for $2.16, which was the subject of the second letter sent by El Cajon to the Barajases. The first letter concluded with an apology for any inconvenience caused by El Cajon, provided a number to call if the Barajases had any questions and offered to provide a copy of the complaint in this action ...