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Munoz v. Express Auto Sales

Superior Court of California, Appellate Division, Los Angeles

January 14, 2014

MARCO A. MUNOZ et al., Plaintiffs and Appellants,
v.
EXPRESS AUTO SALES, Defendant and Respondent.

APPEAL from a judgment of the Superior Court of Los Angeles County, Central Trial Court No. 11K15600, Elizabeth R. Feffer, Judge.

Hallen D. Rosner of Rosner, Barry and Babbitt, LLP, for Plaintiffs and Appellants.

Ugo O. Asobie of the Law Offices of Ugo O. Asobie, for Defendant and Respondent.

OPINION

RICCIARDULLI, J.

I. INTRODUCTION

Appellants and plaintiffs Marco A. Munoz and Alejandra Orozco appeal the judgment in favor of respondent and defendant Express Auto Sales dba Express Credit, Inc. following a court trial based on defendant’s violation of the Automobile Sales Finance Act (ASFA) (Civ. Code, §§ 2981 et seq.). Plaintiffs contend that the judgment should be reversed for several reasons, including that the court erred in finding that defendant proved its affirmative defense under Civil Code section 2984 that it timely corrected the automobile sales contract that gave rise to the ASFA violation.

As discussed below, we reverse the judgment. Defendant presented insufficient evidence that its violation of the ASFA was not willful under Civil Code section 2984. Defendant thus failed to prove that its correction of the contract was timely because it did not make the correction within 30 days of the execution of the contract (Civ. Code, § 2984), and plaintiffs did not waive the requirement that the contract be corrected in a timely manner.

II. FACTUAL AND PROCEDURAL BACKGROUND

Pursuant to a second amended complaint filed November 1, 2012, plaintiffs alleged that defendant violated the ASFA by failing to properly itemize the sources of the down payment in the vehicle Retail Installment Sale Contract (RISC) between the parties. (Finance contract assignee U.S. Bank, N.A. was also named as a defendant, but is not a party to the appeal.) Plaintiffs further alleged that defendant violated the Consumer Legal Remedies Act (CLRA) (Civ. Code, §§ 1750 et seq.) by failing to disclose that the vehicle they purchased was previously used as a rental car. Plaintiffs sought rescission of the contract, general damages, statutory damages, punitive damages, restitution, injunctive relief, prejudgment interest, attorney fees, and costs.

Defendant filed an answer on November 21, 2012, which included both a general denial and numerous affirmative defenses. One of the affirmative defenses was that it had timely corrected the RISC under Civil Code section 2984.

At trial, plaintiffs testified that they purchased a 2006 Chevrolet Impala from defendant on May 14, 2011 for a total price of $11, 800. Plaintiffs were credited with a down payment totalling $3, 000, and the remainder was to be financed by U.S. Bank. The down payment consisted of $1, 500 paid by check at the time of the sale, $1, 000 for a 2000 Buick which defendant would later pick up from plaintiffs’ residence, and two $250 deferred cash payments which would be made by plaintiffs within a month.

A copy of RISC was admitted into evidence. Paragraph 6 of the RISC stated that the down payment consisted of $3, 000 in cash. Sections in paragraph 6 that allowed information regarding any trade-in vehicle, including the vehicle’s agreed trade-in value, its model and make, were left blank. The value of the trade-in, as well as the amount of any deferred down payment, was listed as “$0.00.”

Plaintiffs testified they became unsatisfied with the Impala when it developed problems after the sale, including the paint fading, a passenger door not opening, and the air conditioning not functioning. On September 28, 2011, plaintiffs’ lawyer sent a letter to defendant notifying it that the contract failed to properly itemize the down payment in violation of the ASFA, and that the violation entitled plaintiffs to rescind the RISC. The letter further informed defendant that it violated the CLRA by, among other things, improperly itemizing the down payment and failing to disclose that the Impala had been used as a rental vehicle prior to the sale. Under a section titled “Individual CLRA Demand, ” the letter requested that defendant “remedy the violations listed above within 30 days.”

Defendant presented evidence that it informed plaintiffs at the time of the sale that the vehicle was previously used as a rental. It also introduced into evidence a letter sent to plaintiffs by defendant’s lawyer mailed on October 10, 2011 which denied having violated the ASFA and the CLRA. The letter also stated that a corrected contract was enclosed pursuant to Civil Code section 2984. Defendant’s lawyer told the court that ...


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