We review legal cases so we can appraise you of what is happening. On March 27, 2019, a California Appeals Court published a Decision on the case of Valdez v. Seidner-Miller (Toyota of Glendora). This case is of extreme importance for several reasons and requires your attention and possible changes in your policies and procedures.
It should be noted that the lawsuit was mainly based upon oral representations: On August 15, 2014 Valdez and his wife, Bertha Valdez, entered into an agreement with Toyota of Glendora, to lease a 2014 Toyota Camry. Valdez wanted to purchase the car, but a Seidner salesperson told Valdez and his wife they did not have sufficient credit to qualify for a purchase. The salesperson represented they could lease the car and refinance the contract after 10 payments. The salesperson also stated GAP insurance and an alarm were required by law to be included in the lease agreement. The negotiations were conducted in Spanish, but Seidner did not provide Valdez and his wife a Spanish translation of the lease agreement.
The Court’s Decision:
- A dealer can be held liable for oral representation of its salespersons.
- You must respond within 30 days to a Plaintiff’s Demand letter to take advantage of some protections in the law. Even if you are one day late, you cannot protect yourself.
- A dealer cannot require the customer to sign a settlement agreement to release all their claims in exchange for return of the automobile. Page 18
- A dealer cannot require an inspection of the vehicle prior to acceptance of return of the vehicle. Page 24
- Only after return of the vehicle, if the vehicle is damaged, the dealer can pursue the customer for damages. Page 24
- Even after return of the vehicle, the customer can still sue the dealer for an injunction under the CLRA and can still sue under other causes of action such as fraud. If the dealer wants settlement, then the dealer can pay more for release of those claims. Page 24
What does this mean for you?
- It is important that you protect yourself against claims of “oral misrepresentations.” If you are not using DealerXT’s protection system, your written disclosure system is most likely incomplete, and insufficient to protect you against claims of “oral misrepresentation.” Plaintiff’s lawyers are too quick and creative and form companies are too slow to keep up with Plaintiff’s lawyers’ new strategies.
- Even if you accept the return of the vehicle, the customer can still sue you for an injunction. This means that you still have to fight the case.
- One of the protections against an injunction is if you have training and company procedures for your staff. If the Plaintiff is unable to win their injunction, they cannot get attorney’s fees from you for bringing an injunction. We would like you to remind you that DealerXT includes an entire suite of training and company procedures sections. DealerXT’s videos are each only 2 minutes long and easy to watch.
- You must respond in writing to a CLRA demand letter in 30 days. Not even a day late, otherwise you will not be able to take advantage of certain protections.
- Even if you accept the return of the vehicle, and if the customer does not sign a full release, they can sue you for other causes of action. Therefore, it is important that you have a relationship with attorneys who can aid in fighting a case regardless of whether the customer returns a vehicle. On this point, please look out for future emails regarding Auto Legal Group, LLP or visit their site at www.autolegalgroup.com
Please note that this is not legal advice as we are unfamiliar with your special circumstances.
