Recent Case

Huge Appellate Win for Consumers: Valdez v. Seidner-Miller, Inc.

At least 30 days before bringing an action for damages under the Consumers Legal Remedies Act (the “CLRA”), the consumer must “[n]otify the person alleged to have employed or committed methods, acts, or practices declared unlawful by Section 1770 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.” (Civ. Code § 1782(a).) “[N]o 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.” (Id. § 1782(b).)

In accordance with these provisions, Mr. Valdez notified Seidner-Miller, Inc., dba Toyota of Glendora, of its alleged violations of the CLRA. (Valdez v. Seidner-Miller, Inc. (Mar. 27, 2019, No. B281003) ___ Cal.Rptr.3d ___ [2019 WL 13575261], at *1-2 (Valdez).) Toyota of Glendora responded, denying all allegations but nonetheless agreeing to provide a correction under the CLRA contingent upon the subject vehicle’s being “‘without damage or vandalism’” and upon Mr. Valdez’ acceptance of a confidentiality clause and “a release of all known and unknown claims and a covenant not to sue.” (Id. at *2.) The ultimate result was Mr. Valdez filing suit against Toyota of Glendora, alleging fraud as well as violations of the CLRA, the Unfair Competition Law, and Civil Code section 1632 for Toyota of Glendora’s failure to give him a Spanish-language contract. (Id. at *3.)

Thereafter, Toyota of Glendora filed a motion for summary judgment, arguing the entire “lawsuit was barred under section 1782, subdivision (b), because [it] timely offered an appropriate correction.” (Valdez, supra, 2019 WL 13575261, at *3.) The trial court granted Toyota of Glendora’s motion, relying on Benson v. Southern California Auto Sales, Inc. (2015) 239 Cal.App.4th 1198, 1205 (Benson), in holding “Valdez’s non-CLRA causes of action were ‘in essence, covered and succumbed by the CLRA in that they are “inextricably intertwined” with the CLRA claim and based upon the same conduct,’ and [Toyota of Glendora] offered an appropriate correction including settlement and release of all claims.” (Id. at *4.)

Rosner, Barry & Babbitt’s Appellate Department represented Mr. Valdez on appeal of the trial court’s order. The dispositive issue was whether Toyota of Glendora had provided an appropriate correction so as to preclude Mr. Valdez from seeking damages on his claim for violation of the CLRA. The Court of Appeal for the Second District held it was not, reversing the order granting Toyotoa of Glendora’s motion for summary judgment and reinstating Mr. Valdez’ lawsuit. (Valdez, supra, 2019 WL 13575261, at *7-11.)

In concluding Toyota of Glendora had not made an appropriate correction offer under the CLRA, the Court agreed with the Court of Appeal in Flores v. Southcoast Automotive Liquidators, Inc. (2017) 17 Cal.App.5th 841, recognizing the right of the consumer to maintain causes of action other than one for damages under the CLRA even where the defendant has provided a timely and appropriate correction. (Valdez, supra, 2019 WL 13575261, at *8.) As with the Flores Court, the Court in Valdez cited Civil Code section 1752, which provides:

The provisions of this title are not exclusive. The remedies provided for herein for any violation or conduct proscribed by any section of this title shall be in addition to any procedures or remedies for any violation or conduct provided for in any other law.

. . . If any act or practice proscribed under this title also constitutes a cause of action in common law or a violation of another statute, the consumer may assert such common law or statutory cause of action under the procedures and with the remedies provided for in such law.

On Benson, the Court wrote that, to the extent it “may be read to hold that a business may condition its correction offer on a release of claims other than a claim for damages under the CLRA, we conclude otherwise.” (Valdez, supra, 2019 WL 13575261, at *10.) The Court explicitly held, “[A] correction offer made under the CLRA does not bar a consumer from seeking remedies for violations of other statutes or under the common law based on conduct that violates those laws. . . . [¶] A correction offer cannot require the consumer to release claims that would not otherwise be barred under section 1782, subdivision (b).” (Ibid.)

As an alternative basis for the inappropriateness of Toyota of Glendora’s correction offer, the Court held, “[C]onditioning CLRA remedies on [Toyota of Glendora]’s subjective determination whether the vehicle was in an acceptable condition rendered [Toyota of Glendora]’s offer illusory.” (Valdez, supra, 2019 WL 13575261, at *11.)

Most importantly, the Court then outlined what is permissible with respect to CLRA corrections:

[Toyota of Glendora]could have made an appropriate correction offer had it simply offered 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 [Toyota of Glendora] from attempting to negotiate a separate settlement of those claims. But [Toyota of Glendora]’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.

(Valdez, supra, 2019 WL 13575261, at *11.)

The foregoing is just one example of the outstanding results of Rosner, Barry & Babbitt, LLP’s Appellate Department. In addition to handling appeals for other firms in consumer cases, we also assist with law and motion in such cases. If your firm is interested in our services, contact us today at appeals@rbblawgroup.com.