Justia Consumer Law Opinion Summaries

Jeremiah Smith filed a class action complaint against LoanMe, Inc., alleging that LoanMe violated the California Invasion of Privacy Act. Smith alleged that LoanMe violated Penal Code section 632.7 by recording a phone call with Smith without his consent while he was using a cordless telephone, and he claimed that a “beep tone” at the beginning of the call did not constitute sufficient notice that LoanMe was recording the call. In a bifurcated trial about the beep tone issue, the trial court concluded that: (1) the beep tone provided sufficient notice to Smith that the call was being recorded; and (2) Smith implicitly consented to being recorded by remaining on the call. The Court of Appeal concluded section 632.7 prohibited only third party eavesdroppers from intentionally recording telephonic communications involving at least one cellular or cordless telephone. Conversely, section 632.7 did not prohibit the participants in a phone call from intentionally recording it. Consequently, Smith failed to state a claim against LoanMe under section 632.7. The Court therefore affirmed dismissal of Smith’s lawsuit. View "Smith v. LoanMe, Inc." on Justia Law

If the principal secured by a mortgage or deed of trust becomes due because of the borrower’s default in making payments Civil Code 2924c allows the borrower to reinstate the loan and avoid foreclosure by paying the amount in default, plus specified fees and expenses. Under section 2953, the right of reinstatement cannot be waived in any agreement “at the time of or in connection with the making of or renewing of any loan secured by a deed of trust, mortgage or other instrument creating a lien on real property.” The borrowers missed four monthly payments on a mortgage loan that had been modified after an earlier default. The modification deferred amounts due on the original loan and provided that any default would allow the lender to void the modification and enforce the original loan. The borrowers sought to reinstate the modified loan by paying the four missed payments, plus fees and expenses. The lender argued that section 2953 does not apply to the modified loan and that the borrowers may reinstate the original loan by paying the amount of the earlier default on the original loan plus the missed modified payments.The court of appeal ruled in favor of the borrowers. Modification is appropriately viewed as the making or renewal of a loan secured by a deed of trust and is subject to the anti-waiver provisions. Section 2924c gives the borrows the opportunity to cure their precipitating default (the missed modified monthly payments) by making up those missed payments and paying the associated late charges and fees, to avoid the consequences of default on the modified loan. View "Taniguchi v. Restoration Homes LLC" on Justia Law

This case involved the sale of a certified preowned Mercedes Benz that still had a portion of the new vehicle warranty remaining, and which was accompanied by an additional used vehicle warranty issued by the manufacturer. An uncurable defect manifested after the expiration of the new vehicle warranty, but during the duration of the used vehicle warranty. Mercedes Benz refused to repurchase the vehicle, and the plaintiff sued. A jury found Mercedes Benz liable under the Song-Beverly Consumer Warranty Act for breach of both the express warranty and the implied warranty of merchantability, and, pursuant to the stipulation of the parties as to the amount of damage, awarded the same compensatory damages on both causes of action. The court entered judgment on the jury’s special verdict after striking the damages for breach of the implied warranty, presumably to avoid a double recovery. Mercedes Benz appealed. The Court of Appeal affirmed the jury's verdict on the breach of express warranty claim. "Although the Song-Beverly Act generally binds only distributors and retail sellers in the sale of used goods, we conclude Mercedes Benz stepped into that role by issuing an express warranty on the sale of a used vehicle." Accordingly, judgment was affirmed. View "Kiluk v. Mercedes-Benz USA, LLC" on Justia Law

Renovate America, Inc. (Renovate) appealed an order denying its petition to compel arbitration of Rosa Fabian's claims related to the financing and installation of a solar energy system in her home. Fabian filed a complaint against Renovate alleging that solar panels she purchased for her home were improperly installed. Fabian alleged that, in early 2017, Renovate made an unsolicited telephone call to her home about financing the solar panels and "signed" her name on a financial agreement. All communications between Fabian and Renovate's representative occurred telephonically and she was never presented with any documents to sign. Fabian claims she did not sign a financial agreement with Renovate; nevertheless, Renovate incorporated the solar panel payments set forth in the financial agreement into her mortgage loan payments. Fabian thus alleged that Renovate violated: (1) the Consumers Legal Remedies Act; (2) the Unfair Competition Law; and (3) the California Contract Translation Act. Renovate petitioned to compel arbitration of Fabian's claims and stay judicial proceedings pending arbitration, supported by an Assessment Contract (Contract) that Renovate claimed Fabian had signed electronically. Renovate contended the trial court erred in ruling that the company failed to prove by a preponderance of the evidence that Fabian electronically signed the subject contract. The Court of Appeal found that by not providing any specific details about the circumstances surrounding the Contract's execution, Renovate offered little more than a bare statement that Fabian "entered into" the Contract without offering any facts to support that assertion. "This left a critical gap in the evidence supporting Renovate's petition." The Court therefore affirmed denial of the petition to compel arbitration. View "Fabian v. Renovate America, Inc." on Justia Law

Defendant Sara Salcido was in the business of providing immigration services — typically, obtaining visas for her clients that would allow them to stay in the United States legally. Defendant failed to comply with the consumer protection requirements outlined in the Immigration Consultant Act, and was ultimately convicted on one count of misdemeanor unlawfully engaging in the business of an immigration consultant. The State argued, however, that each time defendant took money from a client in exchange for providing immigration services, she was committing theft by false pretenses, because she was not a legally qualified immigration consultant under state law. The trial court agreed; thus, it also convicted her on six counts of grand theft, and two counts of petty theft. It dismissed two additional counts of grand theft as time-barred. Defendant was placed on probation for five years. In the published portion of its opinion, the Court of Appeal held federal law did not preempt the application of the Act to defendant. In the unpublished portion, the Court held one of defendant’s probation conditions had to be stricken. Accordingly, judgment was affirmed as modified. View "California v. Salcido" on Justia Law

Plaintiffs filed suit against the storage company, demanding to be paid for their losses after water damaged their property. In this case, the contract the customers signed specified that the company was not responsible for water damage, and that customers storing property with it did so at their own risk. The contract offered insurance options to the customers, but the customers declined insurance.The Court of Appeal affirmed the trial court's judgment in favor of the company on the customers' breach of contract claim, holding that one may not contract to accept risk, decide to be self-insured, and then retroactively demand to be paid by the other side after there is a loss. Finally, the court held that the customers forfeited their claim under the Consumer Legal Remedies Act. View "Kanovsky v. At Your Door Self Storage" on Justia Law

The Court of Appeal affirmed a jury verdict in favor of plaintiff on his claim against defendant for violation of the Consumers Legal Remedies Act (CLRA). Plaintiff filed suit against defendant, alleging violation of the CLRA based on misrepresentations made during the sale of a used truck. The court found substantial evidence that plaintiff was a consumer within the meaning of the CLRA, and therefore held that he had standing to sue. Furthermore, defendant cited no case, and the court has found none, that holds the consumer must pay for the goods out of his own pocket rather than through a commercial entity to have standing under the CLRA. View "Kalta v. Fleets 101, Inc." on Justia Law

The Song-Beverly Credit Card Act (Civ. Code 1747) makes it unlawful for merchants to request or require customers to provide “personal identification information” as a condition to accepting a credit card for payment. In 2015, the court of appeal held (Harrold) the Act does not prohibit merchants from requesting such information unless the request is made under circumstances that would lead a reasonable person to believe the information is required to complete the transaction. The trial court decertified a class of plaintiffs who alleged that retailer Williams-Sonoma violated the Act by requesting their zip codes or email addresses because any violation would depend on the circumstances of the specific transaction. Zip codes and emails were requested regardless of the form of payment. If the customer declined, the sales clerk bypassed the request. Employees had discretion not to solicit the information at all and could explain that the information was not required and was only being collected for marketing purposes. Williams-Sonoma neither rewards its employees for collecting the information nor disciplines them if they do not. Williams-Sonoma required each of its California stores to post signs at the cash registers stating that zip codes and email addresses were requested solely for marketing purposes and were not required. The court of appeal affirmed, finding that the court correctly applied the Harrold legal standard and its ruling is supported by substantial evidence. View "Williams-Sonoma Song-Beverly Act Cases" on Justia Law

In 2012, California enacted legislation known as the California Homeowner Bill of Rights, or HBOR, which imposed specific limitations regarding the nonjudicial foreclosure of owner-occupied residential real property. The trial court granted Rosana Bustos’ ex parte application for a temporary restraining order (TRO) and order to show cause regarding preliminary injunction, which sought to prevent a trustee’s sale of her home due to several alleged violations of the HBOR related to her submission of a loan modification application. Central to Bustos’ application was a “blatant violation” of the HBOR’s prohibition against dual tracking--when a mortgage servicer continues foreclosure proceedings while reviewing a homeowner’s application for a loan modification. After the trial court denied Bustos’ request for a preliminary injunction and vacated the TRO, it awarded her $4,260 in attorney fees and costs, finding Bustos was a “prevailing borrower” under the HBOR because she obtained injunctive relief in the form of a TRO against her mortgage servicer, Wells Fargo Bank, N.A. On appeal, Wells Fargo argued the trial court erred in interpreting Civ. Code section 2924.12 as authorizing an award of attorney fees and costs to a borrower who obtains a TRO enjoining a trustee’s sale of his or her residence. Wells Fargo alternatively contended the trial court abused its discretion in awarding attorney fees and costs to Bustos under the circumstances of this case. Finding no reversible error, the Court of Appeal affirmed the trial court. View "Bustos v. Wells Fargo Bank, N.A." on Justia Law

Plaintiff Gregory Moore contacted defendant Wells Fargo, N.A. to discuss possible assistance programs while he was unemployed. Wells Fargo recommended the forbearance plan (Plan) under the Home Affordable Unemployment Program (Unemployment Program) outlined in the United States Department of the Treasury’s Home Affordable Mortgage Program (HAMP) supplemental directive 10-04, May 11, 2010 (Directive 10-04). Wells Fargo explained the Plan would allow Moore to make reduced monthly payments for a period of time and said there was “no downside” to the Plan -- if Moore qualified for a permanent loan modification at the conclusion of the Plan, the arrears would be added to the modified loan balance and, if Moore did not qualify for a permanent loan modification, he would return to making his normal monthly payments. Moore applied for and was accepted to participate in the Plan. Moore made the Plan payments and later applied for a permanent loan modification. Three days after receiving a denial of his permanent loan modification application, Moore received a letter from Wells Fargo stating he was in default on his loan, demanding immediate payment of his normal mortgage payment and the arrears consisting principally of the difference between his normal mortgage payments and the reduced Plan payments (i.e., a balloon payment), and threatening foreclosure. Moore sued to stop the foreclosure and asserted the following causes of action: (1) declaratory relief; (2) negligence; (3) breach of the covenant of good faith and fair dealing; (4) fraud; and (5) violation of Business and Professions Code section 17200, the unfair competition law. In pretrial rulings, the trial court, among other things, adjudicated Moore’s declaratory relief cause of action in favor of Wells Fargo’s contractual interpretation permitting it to demand the balloon payment and dismissed Moore’s negligence cause of action in response to Wells Fargo’s motion for judgment on the pleadings. After Moore rested his case at trial, the trial court granted Wells Fargo’s motion for nonsuit as to Moore’s breach of the implied covenant of good faith and fair dealing cause of action. The trial court further granted Wells Fargo’s motion for judgment notwithstanding the verdict after the jury found Wells Fargo had committed fraud. The trial court also adjudicated the unfair competition law cause of action posttrial, finding in favor of Wells Fargo, and granted Wells Fargo’s motion for costs and attorney fees. The Court of Appeal reversed the trial court's rulings in favor of Wells Fargo, and the jury's verdict in favor of Moore on the intentional misrepresentation cause of action was reinstated. View "Moore v. Wells Fargo Bank, N.A." on Justia Law