Wednesday, November 29, 2017
Offer to Rectify Doesn’t Bar UCL Action--Court of Appeal
By a MetNews Staff Writer
An offer by a business to rectify its misdeeds precludes an action under the Consumer Legal Remedies Act but does not bar a suit under the Unfair Competition Law or for fraud, the Court of Appeal for this district has ruled in a case which depicts an automobile dealership in South Gate as a shady operation that preys on gullible consumers.
The opinion by Acting Presiding Justice Sandy Kriegler of Div. Five, filed Monday, affirms a judgment by Los Angeles Superior Court Judge Brian F. Gasdiar against Southcoast Automotive Liquidators, Inc., which does business on Firestone Boulevard as Discount Auto Plaza.
Following a bench trial, Gasdiar awarded general damages to Krystal Flores, who purchased a car from Discount, of $15,409.95, adding punitive damages in the same amount, plus $24,278.18 in attorney fees and costs of $3,922.50.
Gasdier found a financing company jointly liable for $12,491.52.
Car Dealer’s Ploys
The car Flores purchased, a 2009 Dodge Charger, was advertised on the Internet for $9,995. She printed out the ad and, when she went to went to Flores wanted to Discount the next day, was expecting to purchase the vehicle for that sum.
What she did not know was that the used car dealer stood by the prices it posted only for a period of about three hours; after that time, the ads were removed from the Internet and once that happened, anyone induced by the ad to come to Discount would be charged a higher price.
Also, printed advertisements were distributed on Wednesday with an advisement, in small type, that the prices were only valid until noon of that day. No such advisement appeared on the Internet.
Flores, who was buying her first car, did not realize a higher price was being charged than that she saw on the Internet. Although the loan documents reflected higher prices--one reciting a price of $16,995 and another stating it to be $17,401--Flores and her mother, who accompanied her, were assured the correct amount would be inserted later.
In addition to awarding damages, Gasdier granted an injunction prohibiting Discount from advertising automobiles without conspicuously stating when the offers expire.
He found that a cause of action could not be maintained under the Consumer Legal Remedies Act in light of the safe harbor provision under which a business may relieve itself of liability, under that act, through rectification. Discount responded to an attorney’s demand, on behalf of Flores, by offering to rescind the sale, with it returning the purchase price to Flores and her returning the car to Discount, with $1,500 going to Flores as recompense for her inconvenience.
Gasdier, on reconsideration, found that the “lemon law” does not apply because Flores only returned the vehicle for repairs once.
Damages were affirmed in a published portion of Kriegler’s opinion and the award of attorney fees was affirmed in an unpublished part.
The defendants argued that the conduct complained of came squarely under the Consumer Legal Remedies Act (“CLRA”) so that so that an action based on the same conduct may not be brought for fraud or violation of the Unfair Competition Law (“UCL”).
“This is incorrect,” Kriegler wrote.
“The remedies of the CLRA are cumulative of other rights. The CLRA expressly states: ‘The provisions of this title are not exclusive.’”
The defendants also argued that Flores cannot avoid the bar to a CLRA action created by the offer to rectify by simply recasting her claim as a UCL violation.
“This is incorrect,” Kriegler again declared, explaining:
“Flores’s UCL claim was based directly on evidence of fraudulent advertising practices and was not dependent on finding an underlying violation of the CLRA. The CLRA expressly states that the effect of a reasonable correction offer is to prevent the consumer from maintaining an action for damages under Civil Code section 1780, but the remedies of the CLRA are cumulative and the consumer may assert other common law or statutory causes of action under the procedures and with the remedies provided for in those laws.”
The case is Flores v. Southcoast Automotive Liquidators, Inc., 2017 S.O.S. 5799.
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