California Appeals Court Holds No Actual Damages Necessary To Sustain Claims Against Dealer, Finance Company Under State Auto Finance Act


On January 15, the California Court of Appeal for the Second Appellate District held that an auto buyer need not plead actual damages to sustain a claim under the state’s auto finance act, and that there is no statutory protection from contract rescission afforded a dealer or its assignee for substantial compliance with the act. Rojas v. Platinum Auto Group, Inc. No. B235956, 2013 WL 156561 (Cal. App. Ct. Jan. 15, 2013). The plaintiff bought and financed a car with a dealer, agreeing to a deferred down payment schedule, which he claims the dealer failed to properly reflect on the retail installment sales contract. The dealer and the finance company to which it had assigned the loan, succeeded on demurrers in the trial court, obtaining dismissal of the buyer’s claims that the dealer’s mischaracterization of the down payment violated the state’s Rees-Levering Act, which requires a detailed and truthful itemization of a buyer’s down payment, and allegations that the mischaracterization violated the state Consumer Legal Remedies Act and constituted an unfair business practice. On appeal, the court held that “the purpose and history of Rees-Levering establish that [buyer] need not have suffered actual damage from [the dealer’s] violation of the statute’s disclosure requirements,” and that a common law substantial compliance rule has been statutorily removed. As such, the buyer could state a claim for relief under the act even for apparently “trivial” misstatements. The court also held that while the buyer’s allegations of injury are vague and do not support the assertions made regarding violations of the Consumer Legal Remedies Act and unfair business practices, the buyer should have the right to amend his claims. The court reversed the district court and remanded for further proceedings.


Written by:

Published In:

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© BuckleySandler LLP | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »

All the intelligence you need, in one easy email:

Great! Your first step to building an email digest of JD Supra authors and topics. Log in with LinkedIn so we can start sending your digest...

Sign up for your custom alerts now, using LinkedIn ›

* With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name.