Articles Posted in California Courts of Appeal

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Plaintiffs-appellants Jamie and Kelly Etcheson brought an action under the Song-Beverly Consumer Warranty Act (commonly known as the "lemon law") against defendant and respondent FCA US LLC (FCA) after experiencing problems with a vehicle they had purchased new for about $40,000. After admitting the vehicle qualified for repurchase under the Act, FCA made two offers to compromise under Code of Civil Procedure section 998: one in March 2015, to which plaintiffs objected and the trial court found was impermissibly vague, and a second in June 2016, offering to pay plaintiffs $65,000 in exchange for the vehicle's return. Following the second offer, the parties negotiated a settlement in which FCA agreed to pay plaintiffs $76,000 and deem them the prevailing parties for purposes of seeking an award of attorney fees. Plaintiffs moved for an award of $89,445 in lodestar attorney fees with a 1.5 enhancement of $44,722.50 for a total of $134,167.50 in fees, plus $5,059.05 in costs. Finding the hourly rates and amount of counsels' time spent on services on plaintiffs' behalf to be reasonable, the trial court tentatively ruled plaintiffs were entitled to recover $81,745 in attorney fees and $5,059.05 in costs. However, in its final order the court substantially reduced its award, concluding plaintiffs should not have continued to litigate the matter at all after FCA's March 2015 section 998 offer. It found their sought-after attorney fees after the March 2015 offer were not "reasonably incurred," and cut off fees from that point, awarding plaintiffs a total of $2,636.90 in attorney fees and costs. Pointing out their ultimate recovery was double the estimated value of FCA's invalid March 2015 section 998 offer, which they had no duty to counter or accept, plaintiffs contended the trial court abused its discretion by cutting off all attorney fees and costs incurred after that offer. The Court of Appeal agreed and reversed the order and remanded back to the trial court with directions to award plaintiffs reasonable attorney fees for their counsels' services, including those performed after FCA's March 2015 offer, as well as reasonable fees for services in pursuing their motion for fees and costs. View "Etcheson v. FCA US LLC" on Justia Law

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A jury awarded plaintiff-appellant Shirlean Warren $17,455.57 in damages pursuant to California's “lemon law.” In this appeal, Warren challenges her attorney fee award and her costs and expenses award. Warren claims the court abused its discretion in applying a 33% negative multiplier to her requested lodestar attorney fees. Warren argues that, by applying the negative multiplier, the court erroneously limited her attorney fee award to a proportion of her $17,455.57 damages award, and thus used a prohibited means of determining reasonable attorney fees. She also claimed she was entitled to recover prejudgment interest on her damages award and that the court erroneously struck the $5,882 expense for trial transcripts from her cost bill. The Court of Appeal concluded Warren did not show she was entitled to prejudgment interest on her jury award as a matter of right. Nor did Warren show the court abused its discretion in refusing to award any prejudgment interest. The Court agreed, however, that Warren was entitled to recover the $5,882 expense that her attorneys incurred for trial transcripts. View "Warren v. Kia Motors America, Inc." on Justia Law

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Class actions are not allowed under the Right to Repair Act except in one limited context: to assert claims that address solely the incorporation into a residence of a defective component, unless that component is a product that is completely manufactured offsite. The Court of Appeal held that, because the claim here involved allegedly defective products that were completely manufactured offsite, the claim alleged under the Act could not be litigated as a class action. In this case, homeowners could not bring a class action asserting a claim under the Act against Kohler, the manufacturer of an allegedly defective plumbing fixture used in the construction of class members' homes. Therefore, the court granted Kohler's writ petition and issued a writ of mandate directing the trial court to vacate its order to the extent it denied in part Kohler's anti-class certification motion and to enter a new order granting the motion in its entirety. View "Kohler Co. v. Superior Court of Los Angeles County" on Justia Law

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Villanueva and the class (Plaintiffs) alleged that Fidelity, an underwritten title company that handled Plaintiffs’ escrow accounts, engaged in unlawful conduct under the Unfair Competition Law (UCL) (Bus. & Prof. Code, 17200) in charging overnight mail delivery fees, courier fees, and document preparation or “draw deed” fees that were not listed in its schedule of rates filed with the Department of Insurance in violation of Insurance Code 12401–12410.10, 12414.27. Fidelity argued that the lawsuit was barred by the statutory immunity in section 12414.26 for matters related to rate-making. The trial court rejected Fidelity’s immunity claim and granted Plaintiffs injunctive relief under the UCL, but denied their restitution claims. The court of appeal reversed. Fidelity’s immunity defense is not subject to the forfeiture doctrine because it implicates the court’s subject matter jurisdiction; this claim is subject to the exclusive original jurisdiction of the Insurance Commissioner because it challenges Fidelity’s activity related to rate-making. The court directed the trial court to enter a new order awarding costs to Fidelity. View "Villanueva v. Fidelity National Title Co." on Justia Law

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Bayer AG, maker and marketer of One A Day brand vitamins, was sued in California Superior Court for alleged violations of California’s Consumer Legal Remedies Act, Unfair Competition Law and express warranty law. Plaintiff William Brady’s theory was that Bayer’s packaging of its “Vitacraves Adult Multivitamin” line of gummies was misleading. Brady argued that despite the One A Day brand name, these particular vitamins require a daily dosage of two gummies to get the recommended daily values. Thus buyers end up receiving only half the daily vitamin coverage they think they are getting. The initial complaint was filed as a class action in March 2016, followed by an amended complaint in April, followed by a demurrer in May. The trial court, relying on the unpublished Howard v. Bayer Corp., E. D. Ark. July 22, 2011 (2011 U. S. Dist. LEXIS 161583) involving the supposedly misleading packaging of Bayer’s One A Day gummies, sustained Bayer’s demurrer without leave to amend. The Court of Appeal concluded Bayer failed to appreciate the degree to which their trade name One a Day has inspired reliance in consumers, and held an action alleging they violated California’s Consumer Legal Remedies Act, Unfair Competition Law and express warranty law should have survived demurrer. View "Brady v. Bayer Corp." on Justia Law

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Plaintiff Alfredo Fuentes entered into a written agreement with defendant TMCSF, Inc., doing business as Riverside Harley-Davidson (Riverside), to buy a motorcycle. At the same time, he entered into a written agreement with Eaglemark Savings Bank (Eaglemark) to finance the purchase. The loan agreement included an arbitration clause; the purchase agreement did not. Fuentes then filed suit against Riverside, alleging that Riverside made various misrepresentations and violated various statutes in connection with the sale of the motorcycle. Riverside petitioned to compel arbitration. The trial court denied the petition. The Court of Appeal held Riverside was not entitled to compel arbitration because it was not a party to the arbitration clause, it was not acting in the capacity of an agent of a party to the arbitration clause, and it was not a third party beneficiary of the arbitration clause. Moreover, Fuentes was not equitably estopped to deny Riverside’s claimed right to compel arbitration. View "Fuentes v. TMCSF, Inc." on Justia Law

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Plaintiff filed suit against electronic retailer Newegg.com, alleging claims of false advertising under the (UCL), false advertising law (FAL), and Consumers Legal Remedies Act (CLRA). Plaintiff contended that Newegg.com used fictitious former price information in its advertisements that mislead customers to believe they were receiving merchandise at a discounted price. The Court of Appeal reversed the trial court's judgment sustaining Newegg's demurrer without leave to amend, holding that plaintiff had standing to pursue his claims. In this case, plaintiff satisfied the UCL and FAL's standing requirements by alleging that Newegg advertised that its products were being offered at a discount from their former or original price; these representations were false or misleading; plaintiff saw and relied on the former price representations when purchasing the products; and he would not have purchased the products but for the false former price representations. Because the court concluded that plaintiff adequately alleged an economic injury for purposes of UCL standing, he likewise had standing to pursue his CLRA claim. View "Hansen v. Newegg.com Americas, Inc." on Justia Law

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This is the third appeal that comes to us in this case, which arises out of Patrick and Mary Lafferty’s purchase of a defective motor home from Geweke Auto & RV Group (Geweke) with an installment loan funded by Wells Fargo Bank, N.A. In Lafferty v. Wells Fargo Bank, 213 Cal.App.4th 545 (2013: "Lafferty I"), the Court of Appeal affirmed in part and reversed in part the action brought by the Laffertys against Wells Fargo. Lafferty I awarded costs on appeal to the Laffertys. On remand, the Laffertys moved for costs and attorney fees. The trial court granted costs in part but denied the Laffertys’ request for attorney fees as premature because some causes of action remained to be tried. The Laffertys appealed. In "Lafferty II," the Court of Appeal held the award of costs on appeal did not include an award of attorney fees. Lafferty II also held the Laffertys’ request for attorney fees was prematurely filed. After issuance of the remittitur in Lafferty II, the parties stipulated to a judgment that contained two key components: (1) their agreement the Laffertys had paid $68,000 to Wells Fargo under the loan for the motor home; and (2) Wells Fargo repaid $68,000 to the Laffertys. After entry of the stipulated judgment, the trial court awarded the Laffertys $40,596.93 in prejudgment interest and $8,384.33 in costs. The trial court denied the Laffertys’ motion for $1,980,070 in post-trial attorney fees, $464,220 in post-appeal attorney fees, and $16,816.15 in non-statutory costs. Wells Fargo appealed the award of prejudgment interest and costs, and the Laffertys cross-appealed the denial of their requests for attorney fees and nonstatutory costs. The Court of Appeal concluded resolution of this appeal and cross-appeal turned on the meaning of title 16, section 433.2 of the Code of Federal Regulations, or the "Holder Rule." The Court found the Laffertys were limited under the plain meaning of the Holder Rule to recovering no more than the $68,000 they paid under terms of the loan with Wells Fargo. Consequently, the trial court properly denied the Laffertys’ request for attorney fees and nonstatutory costs in excess of their recovery of the amount they actually paid under the loan to Wells Fargo. In holding the Laffertys were limited in their recovery against Wells Fargo, the Court of Appeal rejected the Laffertys’ claims the Holder Rule violated the First Amendment, due process, or equal protection guarantees of the federal Constitution. However, the Court concluded the trial court did not err in awarding costs of suit and prejudgment interest to the Laffertys. View "Lafferty v. Wells Fargo Bank, N.A." on Justia Law

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Littlejohn sought to sue Costco, the California Board of Equalization, and Abbott to recover sales tax on purchases of Abbott’s product Ensure. Littlejohn alleged that Ensure is properly categorized as a food; no sales tax was actually due on his purchases; Costco was under no obligation to pay and should not have paid sales tax on its sales of Ensure. The complaint alleged that during the period in question Ensure was classified as a food product exempt from sales tax, not a nutritional supplement. Littlejohn based his claim on a 1974 California Supreme Court decision, Javor. The trial court concluded that the judicially noticed documents in the record showed the Board had not resolved the question of whether Ensure was nontaxable during the relevant period.. The court held that the documents were entitled to deference, but did not have the same force of law as Board regulations and were not binding. The court of appeal affirmed, reasoning that the case does not involve allegations of unique circumstances showing the Board has concluded consumers are owed refunds for taxes paid on sales of Ensure. A Javor remedy should be limited to the unique circumstances where the plaintiff shows that the state has been unjustly enriched by the overpayment of sales tax, and the Board concurs that the circumstances warrant refunds. View "Littlejohn v. Costco Wholesale Corp." on Justia Law

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Nationwide, its principal and sole shareholder, and Loan Payment (collectively, petitioners) operate a debt payment service that claims to reduce the amount of interest owed by accelerating debt repayment via an extra annual payment. The California Department of Business Oversight and the District Attorneys of four counties (the People) challenged petitioners’ business practices, seeking civil penalties under Business and Professions Code sections 17200 and 17500, and Financial Code section 12105(d), plus injunctive relief, restitution, disgorgement, the voiding of petitioners’ allegedly unlawful contracts, costs and attorney fees. Petitioners demanded a jury trial, which the People successfully moved to strike. The California Supreme Court transferred the matter back to the court of appeals, with directions to issue an order to show cause why petitioners do not have a right to a jury trial. The court of appeal then partially granted the petitioners’ request, concluding the “gist” of the statutory causes of action asserted against them are legal, giving rise to a right to jury trial. The court held that that right to jury trial extends only to the issue of liability; the amount of statutory penalties, and whether any equitable relief is appropriate, is properly determined by the trial court. View "Nationwide Biweekly Administration, Inc. v. Superior Court" on Justia Law