Justia Consumer Law Opinion Summaries

Articles Posted in California Courts of Appeal
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The plaintiff alleged that after being treated at the defendant’s emergency room, he was billed an evaluation and management services (EMS) fee in addition to the charges for individual items of service and treatment. His total charges of $4,593 (before discounts) included the undisclosed EMS Fee of $2,811. He argued that the EMS Fee was charged to patients simply for being seen in the emergency room and is not visibly posted on signage in or around emergency rooms or at its registration windows/desks.The court of appeal affirmed the dismissal of his third amended complaint, alleging violation of the Consumers Legal Remedies Act (CLRA) (Civ. Code 1750). The court noted that another division of the court of appeals recently held that identical allegations do not state a cause of action under the CLRA. The plaintiff acknowledged the hospital’s compliance with California’s “Payers’ Bill of Rights,” Health and Safety Code 1339.50, by listing the EMS Fee in its chargemaster, which is published on defendant’s website. There is no duty to make an additional disclosure of the EMS Fee in light of the public policy reflected in federal and state statutes that emergency room care be provided to patients without delay or questioning about their ability to pay. View "Saini v. Sutter Health" on Justia Law

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Plaintiff executed a 2007 note for over a million dollars. She defaulted on her payments and applied for a loan modification in 2017. After a 2018 foreclosure sale, Plaintiff brought a wrongful foreclosure action against a bank and Rushmore Loan Management Services, LLC. During discovery answered a key contention interrogatory with one word: “Unsure.” When later confronted with a defense summary judgment motion, however, Plaintiff developed belated clarity and finally specified the type of wrongdoing she was accusing Defendant of committing.   The Second Appellate District affirmed the trial court’s grant of summary judgment in favor of Defendants. The court explained that Code of Civil Procedure section 2030.310 provides a mechanism for parties to amend responses to interrogatories under certain circumstances, yet Plaintiff did not attempt to amend. Thus, Plaintiff's untimely and contradictory effort cannot support any attack on this grant of summary judgment, which was proper. View "Field v. U.S. Bank Nat. Assn." on Justia Law

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Plaintiff appealed a summary judgment entered in favor of Defendant in her lawsuit for damages against Defendant based on his alter ego liability for a $157,370 judgment against a corporation. Plaintiff claimed that Magnolia Funding, Inc., the subject of a prior lawsuit that provided the original loan, and Magnolia Home Loans, Inc. “were the same company”; and that Defendant was “the sole owner, officer, and director of each.” Magnolia Funding closed when Magnolia Home Loans got up and running.   The Second Appellate district concluded, among other things, that (1) the trial court erred by granting summary judgment in favor of the corporation; there are triable issues of fact concerning Defendant’s alter ego liability, and (2) Plaintiff’s civil action does not violate Defendant’s right to due process.   The court explained that under the alter ego doctrine, the corporate veil may be lifted to show the corporate form is fiction and determine who controls the corporate entity and who is liable for its debts. Courts look to the totality of circumstances to determine who actually owns or controls the corporate entity and who is using it as “a mere shell or conduit” for his or her own personal interests. When Magnolia Funding, Inc. dissolved, Magnolia Home Loans, Inc. received its remaining physical assets. At the end of the fiscal year 2009, Magnolia Home Loans, Inc. held cash and all that money was paid to Defendant. This is a triable issue of fact concerning Escamilla’s alter ego liability. View "Lopez v. Escamilla" on Justia Law

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Vicki Hebert filed a putative class action against Barnes & Noble, Inc. (Barnes & Noble), alleging it willfully violated the Fair Credit Reporting Act (FCRA). According to Hebert, Barnes & Noble willfully violated the FCRA by providing job applicants with a disclosure that included extraneous language unrelated to the topic of consumer reports. The Act required employers like Barnes & Noble provide a job applicant like Herbert a standalone disclosure stating that the employer may obtain the applicant’s consumer report when making a hiring decision. Barnes & Noble moved for summary judgment, arguing that no reasonable jury could find its alleged FCRA violation was willful. The company asserted it included the extraneous information in its disclosure due to an inadvertent drafting error. The trial court agreed with Barnes & Noble, granted the company’s motion, and entered judgment in the company’s favor. The Court of Appeal disagreed with the trial court, determining a reasonable jury could have found that Barnes & Noble acted willfully because it violated an unambiguous provision of the FCRA, at least one of the company’s employees was aware of the extraneous information in the disclosure before the disclosure was displayed to job applicants, the company may not have adequately trained its employees on FCRA compliance, and/or the company may not have had a monitoring system in place to ensure its disclosure complied with the FCRA. Judgment was reversed and the matter remanded for further proceedings. View "Hebert v. Barnes & Noble, Inc." on Justia Law

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Ralph and Heidi Bowser bought a 2006 Ford F-250 Super Duty truck, with a 6.0-liter diesel engine (6.0L engine). They had owned a 2004 model of the same truck; that turned out to be a lemon. The dealership, however, assured them that Ford had “fixed” the problems. After the purchase, the truck required repair after repair. After the truck had about 100,000 miles on it, the Bowsers largely stopped driving it; it mostly sat in their driveway. The Bowsers’ expert testified that, in his opinion, the 6.0L engine had defective fuel delivery and air management systems. Over Ford’s objections, the Bowsers introduced a number of internal Ford emails and presentations showing that Ford was aware that certain parts of the 6.0L engine, including fuel injectors, turbochargers, and EGR valves, were failing at excessive rates, and that Ford was struggling to find the root cause of some of these failures. Ford conceded liability under the Song-Beverly Act. A jury found for the Bowsers on all causes of action, and awarded compensatory and punitive damages. Ford appealed, raising a number of alleged evidentiary errors at trial, and challenged the jury’s award of damages. Finding no reversible error, the Court of Appeal affirmed. View "Bowser v. Ford Motor Company" on Justia Law

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A judgment creditor seeking to seize funds in bank accounts held by the judgment debtor’s spouse served a notice of levy on the bank’s agent for service of process. The agent misread the form and rejected it. The agent informed the bank of its mistake and the bank then froze the funds, however, the spouse had all but drained the accounts. Plaintiff filed a motion for a court order imposing third-party liability on Defendant for its noncompliance with the notice of levy, which the trial court denied.   The Second Appellate District reversed the trial court’s ruling in the bank’s favor and held that the bank is liable for its agent’s negligence in misreading the service of process form. The court further held that the bank is liable for some of the funds withdrawn. The court reasoned that a third person’s “fail[ure] or refus[al]” to deliver property subject to a levy “without good cause” renders the third person “liable to the judgment creditor” for the amounts withdrawn and covered by the levy. Further, the principal’s failure to deliver property subject to a levy is excused when an agent’s mistake constitutes “good cause.” Here, because the agent, in this case, was negligent in misreading the standardized form it was served with, the agent for service of process—and hence its principal, the bank—had reason to know of the levy, such that the bank is liable to the judgment creditor for some of the withdrawn funds. View "Bergstrom v. Zions Bancorporation" on Justia Law

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In 2008, Morris defaulted on her home mortgage. After negotiating a loan modification, she again defaulted in 2009. Morris and her husband, Mazhari, then filed two bankruptcy proceedings. Mazhari died while the second bankruptcy was pending. Morris unsuccessfully tried to obtain another loan modification. Following the 2016 lifting of the automatic stay in her third bankruptcy, Morris’s home was sold at public auction to Chase, the deed of trust beneficiary and successor to the original lender. Morris claims that the trustee’s sale occurred without notice to her because Chase and then Rushmore, the loan servicer, pursued foreclosure secretly while giving her false assurances that loan modification terms were forthcoming and shuttling her between uninformed representatives who gave her inconsistent information about her modification request.Morris sought post-foreclosure relief, including damages, an order setting aside the trustee’s sale, and a declaration quieting title under the California Homeowner Bill of Rights (HBOR) (Civ. Code 2923.6, 2923.7) and other theories. In 2018, the trial court dismissed all claims. After another delay occasioned by another bankruptcy, Morris appealed. The court of appeal reversed in part, with respect to claims alleging failure to appoint a single point of contact (HBOR 2923.7), dual tracking (2923.6), and failure to mail upon request a notice of default and notice of trustee’s sale 2924b). The court otherwise affirmed. View "Morris v. JPMorgan Chase Bank N.A." on Justia Law

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Plaintiff sued Adventist Health System/West and Hanford Community Hospital (collectively, Hospital), for a violation of the Consumer Legal Remedies Act (CLRA; Civ. Code, Sec. 1750 et seq.) and declaratory relief.Plaintiff received emergency treatment and services at Hospital’s emergency room in Hanford. The emergency room did not contain a posted notice or warning that a substantial EMS Fee would be added to Plaintiff’s bill on top of the individual charges for each item of treatment and services provided to her. Plaintiff alleged Hospital engaged in a deceptive practice when it did not disclose its intent to charge her a substantial emergency room EMS Fee.Hospital moved for judgment on the pleadings, which the trial court granted. The court found that although Plaintiff’s pleading adequately alleges Hospital failed to disclose facts that were known exclusively by Hospital and were not reasonably accessible to Plaintiff, the court concluded Plaintiff’s conclusory allegation that she relied on the failure to disclose the EMS Fee and thereafter received treatment at the Hospital does not plead the element of reliance with sufficient particularity.In an unpublished part of the opinion, the court concluded Plaintiff has not carried her burden of demonstrating the trial court erred when it denied her leave to file a third amended complaint. Thus, the court affirmed the judgment. View "Torres v. Adventist Health System/West" on Justia Law

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Johnson & Johnson, Ethicon, Inc., and Ethicon US, LLC (collectively, Ethicon) appealed after a trial court levied nearly $344 million in civil penalties against Ethicon for willfully circulating misleading medical device instructions and marketing communications that misstated, minimized, and/or omitted the health risks of Ethicon’s surgically-implantable transvaginal pelvic mesh products. The court found Ethicon committed 153,351 violations of the Unfair Competition Law (UCL), and 121,844 violations of the False Advertising Law (FAL). The court imposed a $1,250 civil penalty for each violation. The Court of Appeal concluded the trial court erred in just one respect: in addition to penalizing Ethicon for its medical device instructions and printed marketing communications, the court penalized Ethicon for its oral marketing communications, specifically, for deceptive statements Ethicon purportedly made during one-on-one conversations with doctors, at Ethicon-sponsored lunch events, and at health fair events. However, there was no evidence of what Ethicon’s employees and agents actually said in any of these oral marketing communications. Therefore, the Court of Appeal concluded substantial evidence did not support the trial court’s factual finding that Ethicon’s oral marketing communications were likely to deceive doctors. Judgment was amended to strike the nearly $42 million in civil penalties that were imposed for these communications. View "California v. Johnson & Johnson" on Justia Law

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The Song-Beverly Consumer Warranty Act (also known as California’s “Lemon Law”) defined “new motor vehicle” as a new vehicle purchased primarily for personal (nonbusiness) purposes, but also specified that the term included “a dealer-owned vehicle and a ‘demonstrator’ or other motor vehicle sold with a manufacturer’s new car warranty.” The remedy at issue here, known as the “refund-or-replace” provision, required a manufacturer to replace a defective “new motor vehicle” or make restitution if, after a reasonable number of attempts, the manufacturer (or its representative) was unable to repair the vehicle to conform to the applicable express warranty. Plaintiffs Everardo Rodriguez and Judith Arellano purchased a two-year-old Dodge truck from a used car dealership. The truck had over 55,000 miles on it and, though the manufacturer’s basic warranty had expired, the limited powertrain warranty had not. After experiencing electrical defects with the truck, plaintiffs sued the manufacturer, FCA US, LLC (Chrysler), for violation of the refund-or-replace provision. FCA moved for summary judgment, arguing the truck was not a “new motor vehicle,” and the trial judge agreed. The sole issue in this case was whether the phrase “other motor vehicle sold with a manufacturer’s new car warranty” covered sales of previously owned vehicles with some balance remaining on the manufacturer’s express warranty. The Court of Appeal concluded it did not, and that the phrase functioned instead as a catchall for sales of essentially new vehicles where the applicable warranty was issued with the sale. Judgment was therefore affirmed. View "Rodriguez v. FCA US, LLC" on Justia Law