Articles Posted in California Courts of Appeal

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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

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Petitioners were companies or wholly-owned subsidiaries involved in the manufacture, distribution or sale of pharmaceuticals or generic prescription drugs, including the prescription drug Niaspan. In October 2016, the Orange County District Attorney, representing "the People of the State of California" in association with private counsel, filed a complaint for violations of the California Unfair Competition Law (UCL), alleging that petitioners either entered into agreements or otherwise engaged in conduct that prevented other generic manufacturers from launching their own Niaspan equivalent, causing purchasers and others in California to overpay for the drug. In this writ proceeding, petitioners asked the Court of Appeal to resolve a single issue: whether section 17204 of the UCL "permit[s] a county district attorney to bring a claim that seeks relief for alleged injuries to residents of California counties whom he or she does not represent, based on conduct occurring outside the county he or she serves . . . ." Petitioners argued district attorneys have no authority to prosecute civil actions absent specific legislative authorization, and neither the Government Code, nor Business and Professions Code section 17204, authorized the district attorney of a single county to seek statewide penalties for alleged UCL violations. The Court granted the petition: "[t]hough section 17204 confers standing on district attorneys to sue in the name of the people of the State of California, it cannot constitutionally or reasonably be interpreted to grant the District Attorney power to seek and recover restitution and civil penalty relief for violations occurring outside the jurisdiction of the county in which he was elected. A contrary conclusion would permit the District Attorney to usurp the Attorney General's statewide authority and impermissibly bind his sister district attorneys, precluding them from pursuing their own relief. Thus, in the absence of written consent by the Attorney General and other county district attorneys, the District Attorney must confine such monetary recovery to violations occurring within the county he serves." View "Abbott Laboratories v. Super. Ct." on Justia Law

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D.C. Randall, Jr., the dismissal of his operative second amended complaint against Ditech Financial, LLC (Ditech) after the trial court sustained Ditech's demurrer to the complaint without leave to amend. Randall contended the court erred in its ruling as to his causes of action for violation of the federal Fair Debt Collection Practices Act (FDCPA) and for violation of the state unfair competition law (UCL) because these causes of action stated or can be amended to state viable claims. The Court of Appeal concluded the complaint stated a claim under section 1692f(1) of the FDCPA and could be amended to state a claim under section 1692f(6). Consequently, the complaint could also be amended to state a claim under the UCL. Therefore, the Court reversed the trial court and remanded the matter with directions to conduct further proceedings. View "Randall v. Ditech Financial, LLC" on Justia Law

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Lujan had a Chase credit card account, governed by an agreement with a provision stating “federal law and the law of Delaware” govern the agreement and a provision for attorney’s fees. When Lujan’s account had an unpaid balance in 2007, Chase assigned its claim to interim assignees. In 2011, PCC filed suit, alleging a debt of $8,831.90. PCC Vice President Shields verified the complaint. Lujan cross-complained against PCC, Shields, and interim assignees seeking damages under the Fair Debt Collection Practices Act, 15 U.S. C. 1692, and the Rosenthal Fair Debt Collection Practices. The court granted Lujan summary judgment as to PCC, applying Delaware’s three-year statute of limitations. On the cross-complaint, the court granted the other defendants summary judgment, finding that none met the statutory definition of a debt collector. The judgment is silent om statutory damages, leaving Lujan with only “attorney fees and costs" as provided by statute. The court awarded Lujan $140,550.51 in fees against PCC but denied the other defendants fees because the cross-complaint was not an action “on a contract” under Civil Code 1717. The appeals court affirmed Lujan’s summary judgment against PCC, Lujan’s award of attorney’s fees, and the interim assignees’ summary judgment and denial of fees. The court reversed summary judgment in favor of Shields and PCC’s attorney. View "Professional Collection Consultants v. Lujan" on Justia Law

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A buyer is not a prevailing party entitled to recover attorney's fees under the Song-Beverly Consumer Warranty Act if, through settlement with the manufacturer, all she obtains by litigating is the payment of dealer add-ons for which the manufacturer is not responsible and the payment of attorney’s fees. The Court of Appeal affirmed the denial of attorney's fees in this case where the parties entered into a confidential settlement leaving attorney's fees and costs unresolved. The court modified the judgment to award costs because the buyer obtained a net monetary recovery by virtue of the settlement. View "Garcia v. Mercedes-Benz USA" on Justia Law

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At issue in this appeal was whether a mortgage servicer could be considered a "debt collector" under California's Rosenthal Fair Debt Collection Practices Act (the Rosenthal Act; Civ. Code,1 sec. 1788 et seq.). There was a split of authority among the many federal district courts that have considered the issue, and there was “a paucity of California authority addressing the question.” In this case, plaintiff Edward Davidson brought a putative class action against Seterus and its parent company, International Business Machines, Inc. (IBM), alleging that the defendants violated the Act and the Unfair Competition Law (UCL). The defendants demurred to Davidson's complaint, arguing that neither of them was a " 'debt collector' " who engages in " 'debt collection' " under the Act. The trial court sustained the defendants' demurrer, concluding that the defendants "are not 'debt collectors' because servicing a mortgage is not a form of collecting 'consumer debts.' " On appeal, Davidson contended the trial court erred in determining that mortgage servicers were not "debt collectors" under the Rosenthal Act. The Court of Appeal ultimately agreed with Davidson's contention, in no small part due to the Court’s adherence to "the general rule that civil statutes for the protection of the public are, generally, broadly construed in favor of that protective purpose." The Court therefore reversed the trial court and remanded this case for further proceedings. View "Davidson v. Seterus, Inc." on Justia Law

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A wine dealer sold millions of dollars’ worth of counterfeit wine to an unsuspecting wine collector. When the collector discovered the fraud, he filed an insurance claim based on his “Valuable Possessions” property insurance policy. The insurance company denied the claim. The collector sued for breach of contract. The trial court ruled in favor of the insurance company, sustaining its demurrer. The Court of Appeal concurred with the trial court: the collector suffered a financial loss, but there was no loss to property that was covered by the property insurance policy. View "Doyle v. Fireman's Fund Insurance Co." on Justia Law