Justia Consumer Law Opinion Summaries

A debt buyer, Velocity Investments, LLC, purchased consumer debt from Citibank, N.A., which had been charged off as a loss. Velocity sent a written communication to David Chai regarding the debt but failed to include the required notice of Chai’s right to request records, as mandated by the Fair Debt Buying Practices Act. Chai filed a lawsuit individually and on behalf of a putative class, seeking statutory damages under the Act, while disclaiming any concrete injury from the violation.The Santa Clara County Superior Court certified a class of individuals who received similar communications from Velocity. Velocity moved for judgment on the pleadings, arguing that Chai lacked standing because he admitted to no concrete injury. The trial court granted the motion, ruling that the Act requires a consumer to have suffered actual damage to sue. Chai appealed the decision.The California Court of Appeal, Sixth Appellate District, reviewed the case. The court held that the Fair Debt Buying Practices Act does not condition a consumer’s claim for statutory damages on the existence of actual damages. The court found that the Act allows consumers to seek statutory damages for violations of their rights under the Act, regardless of whether they suffered actual damages. The court reversed the trial court’s judgment, allowing Chai to pursue his claim for statutory damages. View "Chai v. Velocity Investments, LLC" on Justia Law

Richard Martinez, a licensed plumber, contracted with Gayle Jelley to construct a pool in her backyard for $26,900. Jelley made several payments totaling $9,000, but Martinez abandoned the project after partially completing the excavation and rebar installation. It was later discovered that Martinez's contractor's license had expired before the project began. The Department of Consumer Affairs, Contractors State Licensing Board (CSLB) confirmed that Martinez had never held a valid contractor's license and had previously received three administrative citations for unlicensed contracting.The People charged Martinez with grand theft, acting as a contractor without a license, requiring an excessive downpayment, and unlawfully receiving payments exceeding the work performed. Martinez was arraigned on December 9, 2021, and later filed a motion to dismiss based on a violation of his speedy trial rights, citing a four-and-a-half-year delay in prosecution. He argued that the delay resulted in the loss of key witnesses and evidence, causing actual prejudice to his defense.The Superior Court of Riverside County granted Martinez's motion to dismiss, citing the prosecution's lack of effort to arrest Martinez after the complaint was filed. The People appealed the decision, arguing that the trial court applied an incorrect legal standard by not requiring Martinez to demonstrate actual prejudice.The California Court of Appeal, Fourth Appellate District, Division Two, reviewed the case. The court held that Martinez failed to affirmatively demonstrate actual prejudice resulting from the delay, as required under state constitutional law. The court also noted that the trial court did not conduct the necessary analysis of the four factors required to determine a federal speedy trial violation for the misdemeanor charges. The appellate court reversed the trial court's decision in part and remanded the case with directions to conduct the proper analysis for the federal speedy trial claim on the misdemeanor charges and to deny the motion to dismiss on the felony charge. View "People v. Martinez" on Justia Law

A California consumer entered into an agreement with an RV manufacturer that stipulated all legal disputes would be resolved in Indiana under Indiana law. The consumer later filed a lawsuit in California under the Song-Beverly Consumer Warranty Act, alleging the RV manufacturer failed to repair or replace a defective motorhome. The manufacturer moved to stay or dismiss the action based on forum non conveniens, arguing that the case should be heard in Indiana. To address concerns about the consumer's rights under the Song-Beverly Act, the manufacturer offered to stipulate that California law would apply to the warranty claims in Indiana.The Superior Court of Los Angeles County granted the manufacturer's motion, stating that the forum selection clause was not unconscionable and that the consumer's rights could be preserved by staying the California action while the Indiana case was pending. The court concluded that if the Indiana court declined to apply the Song-Beverly Act, the consumer could move to lift the stay in California.The California Court of Appeal, Second Appellate District, Division Two, reviewed the case and found that the lower court erred in its application of the legal standard. The appellate court held that the stipulation to apply California law in Indiana did not cure the unconscionability of the forum selection clause. The court emphasized that the agreement, as written, was void and against public policy because it attempted to waive unwaivable rights under the Song-Beverly Act. The appellate court concluded that severing the unconscionable terms would condone an illegal practice and that the lower court's solution violated California public policy.The Court of Appeal reversed and remanded the case, ordering the trial court to deny the motion to dismiss or stay. The appellate court's decision underscores the importance of protecting California consumers' unwaivable statutory rights and ensuring that forum selection clauses do not undermine those rights. View "Hardy v. Forest River, Inc." on Justia Law

The Coachella Valley Water District (Water District) appealed a judgment finding that the rates it charged for Coachella Canal water violated Article XIII C of the California Constitution. The Water District argued that the rates were lawful and that no refund remedy was authorized. The court rejected both arguments, finding the rates unlawful and that a refund remedy was constitutionally mandated.In the lower court, the Superior Court of Riverside County ruled that the Water District's Canal Water rates and the Irrigation Water Availability Assessment (IWAA) violated Proposition 218. The court found that the Water District's historical priority argument was not persuasive and that the Water District had made no attempt to show that the rates complied with the California Constitution. The court deferred ruling on remedies and later awarded Class 2 customers approximately $17.5 million in refunds and interest for invalid charges from March 2018 through June 2022.The California Court of Appeal, Fourth Appellate District, Division Two, reviewed the case. The court held that Howard Jarvis Taxpayers Association (Howard Jarvis) had standing to challenge the Class 2 rates because domestic customers paid the rates indirectly. The court found that the Class 2 rates were taxes under Article XIII C and did not fall under any exceptions. The court rejected the Water District's arguments that the rates were justified based on historical priority and that they were expenditures of funds. The court also found that the IWAA was an assessment under Proposition 218 and that the Water District failed to show it was proportional to the benefits conferred on the properties.The court affirmed the lower court's ruling on liability and the amount of refund relief awarded. However, the court found that the injunction in the judgment was overbroad and modified the judgment to strike the paragraph enjoining the Water District from imposing any future Canal Water rates and charges that did not comply with Proposition 218. As modified, the judgment was affirmed, and Howard Jarvis was awarded its costs on appeal. View "Howard Jarvis Taxpayers Assn. v. Coachella Valley Water Dist." on Justia Law

Plaintiff Jeanie Reese, acting as conservator for Leoma Musil, filed a lawsuit against Select Portfolio Servicing, Inc. (SPS) and other defendants, alleging violations of the Homeowner’s Bill of Rights (HBOR) and California’s Unfair Competition Law (UCL). The dispute arose when SPS recorded a notice of trustee’s sale while Reese’s loan modification application was pending. Reese claimed that SPS violated former section 2923.6 by proceeding with foreclosure actions during the loan modification process.The trial court initially granted summary judgment in favor of the defendants, but this decision was reversed on appeal, with the appellate court finding a triable issue of material fact regarding whether Reese had submitted a complete loan modification application. Upon remand, Reese amended her complaint, but the trial court sustained the defendants’ demurrer without leave to amend, ruling that SPS had not violated former section 2923.6 because it recorded a new notice of trustee’s sale and sold the property more than a year after denying the loan modification application and Reese’s subsequent appeal.The California Court of Appeal, First Appellate District, reviewed the case and affirmed the trial court’s judgment. The appellate court held that SPS’s actions did not constitute a violation of former section 2923.6, as the new notice of trustee’s sale recorded in May 2018 cured any previous violation. The court also found that the 18-month delay between the denial of the loan modification application and the new notice of trustee’s sale rendered the initial violation immaterial. Consequently, the court concluded that Reese’s complaint did not state a cause of action under former section 2923.6, and the trial court’s decision to sustain the demurrer without leave to amend was appropriate. View "Reese v. Select Portfolio Servicing, Inc." on Justia Law

A home improvement and solar panel salesperson visited the home of senior citizens Harold and Lucy West, who lived with their adult daughter Deon. The salesperson, Ilai Mitmiger, discussed a solar installation and bathroom renovation, leading to a loan agreement package being completed electronically with Harold’s signature. Harold and Lucy, both in their 90s and suffering from dementia, did not use email, computers, or mobile phones. Deon believed the renovations would be paid for by a government program, as suggested by Mitmiger. The loan documents were sent to Deon’s email, opened on a mobile device, and signed electronically in Harold’s name within seconds.The Superior Court of Los Angeles County denied Solar Mosaic LLC’s petition to compel arbitration based on the arbitration provisions in the loan agreement. The court found that Mosaic had not proven the existence of an agreement to arbitrate, specifically that Harold was the person who completed the loan documents or that Deon had the authority to bind Harold to an arbitration agreement.The California Court of Appeal, Second Appellate District, Division Eight, affirmed the trial court’s order. The appellate court held that the evidence strongly suggested Harold lacked the technical ability to execute the electronic signatures and demonstrated a factual dispute as to whether Harold actually signed the loan documents. The court also found that Mosaic had not proven Deon had the authority to bind Harold to the agreement or that Harold ratified the agreement through a recorded telephone call. The court concluded that the recorded call did not demonstrate Harold’s awareness or understanding of the loan agreement, and thus, there was no ratification. View "West v. Solar Mosaic, LLC" on Justia Law

In November 2014, Andre Pompey purchased a recreational vehicle (RV) from a dealership, with financing provided by the Bank of Stockton. Pompey later sued the dealership and the Bank, alleging that the retail installment sales contract did not include required disclosures under the Automobile Sales Finance Act (ASFA). Specifically, the contract failed to itemize the downpayment, showing $19,100 as a cash payment instead of $1,000 in cash and $18,100 in trade-in value. Pompey sought rescission of the contract and restitution of the amounts paid.The Superior Court of Fresno County ruled in favor of Pompey, concluding that the four-year statute of limitations for written contracts applied, rather than the one-year statute for statutory penalties. The court granted summary adjudication for Pompey against the dealership on the ASFA violation and, by stipulation, applied the judgment to the Bank under the Federal Trade Commission’s holder rule. The Bank appealed, arguing that the one-year statute of limitations for penalties should apply.The California Court of Appeal, Fifth Appellate District, reviewed the case. The court determined that the rescission and restitution remedy under the ASFA is a penalty because it is imposed without regard to fault or actual damages and significantly limits the court's discretion. The court noted that the legislative history of the ASFA indicated it was intended to be a penalty. Consequently, the court concluded that the one-year statute of limitations for statutory penalties under Code of Civil Procedure section 340 applies. The court reversed the trial court's decision and remanded the case for further proceedings consistent with this opinion. View "Pompey v. Bank of Stockton" on Justia Law

The People of the State of California, represented by the San Diego City Attorney, filed a complaint against Kaiser Foundation Health Plan, Inc. alleging violations of the unfair competition law (UCL) and false advertising law (FAL). The complaint claimed that Kaiser failed to maintain and update accurate health plan provider directories (PDs) as required by California Health and Safety Code section 1367.27, among other statutes. The inaccuracies in the PDs allegedly harmed consumers and competitors.The Superior Court of San Diego County granted Kaiser’s motion for summary judgment, exercising its discretion to abstain from adjudicating the action. The court concluded that the legislative framework did not impose an accuracy requirement on PDs and that adjudicating the case would require the court to assume the role of a regulator, which is better suited for the Department of Managed Health Care (DMHC).The Court of Appeal, Fourth Appellate District, Division One, State of California, reviewed the case and concluded that the trial court abused its discretion by applying the doctrine of judicial abstention. The appellate court found that section 1367.27 does impose clear mandates for PD accuracy, which the trial court can enforce through its ordinary judicial functions. The appellate court also determined that the People’s enforcement of section 1367.27 through a UCL cause of action is complementary to the DMHC’s regulatory authority and does not interfere with it. The appellate court reversed the judgment and remanded the matter with directions to the trial court to vacate its order granting Kaiser’s motion for summary judgment and to issue a new order denying the motion. View "People ex rel. Elliott v. Kaiser Foundation Health Plan" on Justia Law

Blake Wentworth, a former professor at the University of California, Berkeley, sued the Regents of the University of California for various claims, including failure to engage in the interactive process, failure to provide reasonable accommodations, and invasion of privacy. Wentworth alleged that the Regents did not accommodate his bipolar II disorder and disclosed confidential information about him.The trial court granted summary adjudication in favor of the Regents on Wentworth's claims for failure to engage in the interactive process, failure to provide reasonable accommodations, and invasion of privacy. The court found that the Regents had engaged in the interactive process and offered reasonable accommodations, such as stopping Wentworth's tenure clock. The court also ruled that the invasion of privacy claim failed because Wentworth did not demonstrate that the Regents disclosed any confidential information.The Court of Appeal of the State of California, First Appellate District, reviewed the case. The court affirmed the trial court's rulings on the interactive process and reasonable accommodations claims, finding that the Regents had acted appropriately. However, the appellate court reversed the summary adjudication of the invasion of privacy claim, concluding that there were triable issues of fact regarding whether the Regents disclosed Wentworth's personal information in violation of the Information Practices Act (IPA).The appellate court also reversed the trial court's denial of Wentworth's motion for attorney's fees and costs, remanding the case for further proceedings to determine whether Wentworth was entitled to fees under the catalyst theory or based on his success in obtaining his personnel file during the litigation. The court affirmed the trial court's denial of Wentworth's motion for a retrial on the personnel file cause of action, finding that Wentworth had forfeited his challenge by failing to object to the verdict form before the jury was discharged. View "Wentworth v. Regents of the University of California" on Justia Law

Plaintiffs filed two class action complaints against Experian Information Solutions, Inc. in Orange County Superior Court, alleging violations of the Fair Credit Reporting Act (FCRA). They claimed that Experian failed to include a required statement in the "Summary of Rights" portion of their consumer reports, which informs consumers of additional rights under state law. Plaintiffs sought actual, statutory, and punitive damages. Experian removed the cases to federal court, where Plaintiffs argued they lacked standing under Article III of the U.S. Constitution because they did not suffer concrete harm. The federal court agreed and remanded the cases back to state court.In state court, Experian moved for judgment on the pleadings, arguing that Plaintiffs lacked standing under Wisconsin law and that their FCRA claim did not fall within the "zone of interests" the FCRA is designed to protect. Plaintiffs contended that California law should apply and that they had standing under California law. The trial court granted Experian's motion, relying on the precedent set by Limon v. Circle K Stores Inc., which held that a plaintiff must allege a concrete injury to have standing in California state courts. Plaintiffs appealed the decision.The California Court of Appeal, Fourth Appellate District, reviewed the case and affirmed the trial court's judgment. The court found Limon persuasive and concluded that Plaintiffs lacked standing because they did not allege a concrete or particularized injury. The court held that an informational injury without adverse effects is insufficient to confer standing under California law. Therefore, the judgment in favor of Experian was affirmed. View "Muha v. Experian Information Solutions" on Justia Law