Justia Contracts Opinion Summaries

Articles Posted in Consumer Law
by
In this case, Damien T. Davis and Johnetta H. Lane ("the plaintiffs") filed suit against Nissan North America, Inc. and Nissan of San Bernardino ("Nissan") after they allegedly bought a faulty Nissan vehicle with a defective transmission. Nissan attempted to compel arbitration as per the arbitration clause in the sale contract between plaintiffs and the dealership. However, the trial court denied the motion, ruling that Nissan, not being a party to the contract, could not invoke the clause based on the doctrine of equitable estoppel.Nissan appealed the decision, arguing that the trial court erred by refusing to compel arbitration based on equitable estoppel. However, the Court of Appeal, Fourth Appellate District Division One, State of California, agreed with the trial court's ruling reasoning that Nissan's reliance on the doctrine of equitable estoppel was misplaced. It explained that equitable estoppel applies when a party's claims against a non-signatory are dependent upon the underlying contractual obligations. Here, the plaintiffs' claims were not founded on the sale contract's terms, but rather on Nissan's statutory obligations under the Song-Beverly Act relating to manufacturer warranties. The court concluded that the plaintiffs are pursuing their statutory and tort claims in court, and there was no inequity in allowing them to do so.Therefore, Nissan's motion to compel arbitration was denied, and the trial court's order was affirmed. View "Davis v. Nissan North America, Inc." on Justia Law

by
Two individuals, Ronald and Karen White, bought a used car from Real Deal Auto Sales & Service Center, LLC. After experiencing issues with the car, the Whites asked Real Deal to either replace the car's catalytic converters or give them a refund, which Real Deal refused. Subsequently, the Whites repaired the car themselves and sued Real Deal in a small claims action. The District Court ordered Real Deal to pay the Whites $6,000 for the repairs, plus costs. Real Deal appealed this decision to the Superior Court, which reversed the District Court's decision. The Whites appealed this reversal to the Maine Supreme Judicial Court.The Maine Supreme Judicial Court ruled in favor of the Whites, agreeing that the Superior Court erred in reversing the original judgement. The case was therefore remanded for reinstatement of the small claims judgement in favor of the Whites.This decision was based on a Maine law which states that a dealer warrants that a vehicle has been inspected according to rules laid down by the state. Evidence presented by the Whites suggested that parts of the car's exhaust system were inadequate, which could have led the District Court to infer that the car did not meet state inspection standards at the time of sale. As such, the Maine Supreme Judicial Court concluded that the evidence could support a determination that Real Deal breached the warranty of inspectability, thereby violating the Unfair Trade Practices Act. The Court remanded the matter to the Superior Court to enter a judgment affirming the District Court’s small claims judgement in favor of the Whites. View "White v. Real Deal Auto Sales & Service Center, LLC" on Justia Law

by
In the case of Maryann Jones v. Solgen Construction, LLC and GoodLeap, LLC, the Court of Appeal of the State of California Fifth Appellate District affirmed the trial court's decision not to compel arbitration. The case concerned a business relationship involving the installation of home solar panels. The appellants, Solgen Construction and GoodLeap, had appealed the trial court's denial of their separate motions to compel arbitration, arguing that the court had erred in several ways, including by concluding that no valid agreement to arbitrate existed.Jones, the respondent, had filed a lawsuit alleging fraudulent misrepresentation, fraudulent concealment, negligence, and violations of various consumer protection laws. She contended that she had been misled into believing she was signing up for a free government program to lower her energy costs, not entering into a 25-year loan agreement for solar panels. The appellants argued that Jones had signed contracts containing arbitration clauses, but the court found that the appellants had failed to meet their burden of demonstrating the existence of a valid arbitration agreement. The court also held that the contract was unenforceable due to being unconscionable.The appellate court affirmed the trial court's decision, rejecting the appellants' arguments that an evidentiary hearing should have been held and that the court had erred in its interpretation of the evidence and the law. It found that the trial court had not abused its discretion and that its finding that the appellants failed to meet their burden of proof was not erroneous as a matter of law. View "Jones v. Solgen Construction" on Justia Law

by
This case involves a dispute between Melissa Sanchez, a tenant, and Chris and Jennifer Pickering, her landlords, over the terms of a lease agreement for a mobile home owned by the Pickerings. Sanchez believed the agreement was a lease-to-own contract, while the Pickerings asserted it was a lease with a purchase option contract. After the Pickerings initiated an eviction action due to Sanchez's alleged violations of the agreement, Sanchez caused extensive damage to the home.The Pickerings sued Sanchez for waste, claiming she caused $40,000 in damages and sought treble damages. Sanchez counterclaimed, alleging violation of the Idaho Consumer Protection Act (ICPA), breach of contract, unjust enrichment, and retaliatory eviction. The district court found Sanchez liable for damages to the residence and awarded treble damages. It also determined that there was no deception on the Pickerings' part to sustain Sanchez's ICPA claim, the agreement was unenforceable due to a lack of mutual understanding, and that the Pickerings were unjustly enriched by the $10,000 down payment and offset the Pickerings' damages award by this amount. The remaining claims were dismissed.On appeal, the Supreme Court of Idaho affirmed the district court's decision. The court found substantial and competent evidence supporting the district court's decision that the Pickerings did not engage in a deceptive act under the ICPA. The court also rejected Sanchez's contention that the district court's damages award should have been reduced to reflect an insurance payment received by the Pickerings as Sanchez failed to provide an adequate record for review. Finally, the court upheld the district court's unjust enrichment award, finding that Sanchez had not demonstrated an abuse of discretion. The Pickerings were awarded attorney fees for having to respond to the collateral source issue. View "Pickering v. Sanchez" on Justia Law

by
The plaintiff, SanJuana Andrade, filed a lawsuit against the Western Riverside Council of Governments (Council) on the basis that she had been fraudulently enrolled in a Property Assessed Clean Energy (PACE) program. She claimed that her signature was forged on the PACE loan agreements, resulting in a lien on her home and increased property tax assessments that she had not agreed to. Following an investigation by the state Department of Financial Protection and Innovation, which confirmed the contractors’ fraud, the Council released its assessment and the lien on Andrade’s home. In January 2022, Andrade filed a motion for attorney’s fees and costs under Civil Code section 1717, which provides for attorney’s fees in any action on a contract where the contract specifically provides for such fees. The trial court denied Andrade’s motion, concluding that the contractual fee provisions were limited in scope and did not entitle Andrade to attorney’s fees because they concerned fees for “a judicial foreclosure action.”On appeal, the California Court of Appeal, Fourth Appellate District, Division One, reversed the trial court's decision. It held that under section 1717, a fee provision must be construed as applying to the entire contract unless each party was represented by counsel in the negotiation and execution of the contract, and the fact of that representation is specified in the contract. The Court found that limiting the fee provisions to foreclosure proceedings would be the precise kind of lopsided arrangement that section 1717 prohibits. The Court remanded the case back to the trial court to determine whether Andrade is “the party prevailing on the contract” and therefore entitled to attorney's fees. View "Andrade v. Western Riverside Council of Governments" on Justia Law

by
In Virginia, Bryant McCants arranged for his 1970 Ford Mustang Mach 1 to be repaired at a shop operated by CD & PB Enterprises, LLC, doing business as Maaco Collision Repair & Auto Painting. The repair shop was managed by Hanson Butler, a part owner and employee of CD & PB Maaco. After the work was completed, McCants inspected the vehicle and was unsatisfied with the work, prompting Butler to agree to repaint it. However, due to various personal circumstances, McCants was unable to pick up the vehicle for several months. In the meantime, Butler initiated the Virginia Department of Motor Vehicles' abandoned-vehicle process, which resulted in him acquiring title to the vehicle, which he later sold.McCants sued Butler for conversion, fraud, unjust enrichment, breach of contract, and violation of the Virginia Consumer Protection Act. The jury found in favor of McCants on the conversion claim only and awarded him $78,500. The Court of Appeals reversed the trial court's decision, finding that Butler had properly followed the abandoned-vehicle process and had obtained legal title to the vehicle.The Supreme Court of Virginia disagreed with the Court of Appeals, holding that a rational jury could have found that Butler wrongfully used the DMV's abandoned-vehicle process as a pretext for severing McCants's ownership rights in the vehicle and thereafter claiming it for himself. The Supreme Court reversed the judgment of the Court of Appeals, reinstated the jury’s verdict, and affirmed the trial court’s confirmation order. View "McCants v. CD & PB Enterprises, LLC" on Justia Law

by
In this Connecticut case, the plaintiff, Erin C. Hassett, purchased a used motor vehicle from the defendant, Secor’s Auto Center, Inc., and experienced mechanical problems shortly after the purchase. The plaintiff claimed the defendant breached its warranty by refusing to make necessary repairs and, as a result, she revoked her acceptance of the vehicle. The plaintiff brought legal action against the defendant, alleging breach of warranty and revocation of acceptance under statute § 42a-2608. The jury found in favor of the plaintiff, including on her revocation of acceptance claim, awarding her $11,000 in damages.The plaintiff then moved for additur, requesting a refund of the full purchase price of the vehicle in addition to the $11,000 award. The trial court denied the motion, and the Appellate Court upheld the trial court’s decision. The plaintiff appealed to the Supreme Court of Connecticut, arguing that she was entitled to the $11,000 award plus a refund of the full purchase price because the jury found in her favor on her revocation of acceptance claim.The Supreme Court affirmed the Appellate Court’s decision, concluding that the trial court had not abused its discretion in denying the plaintiff’s motion for additur. The court found that the issue of revocation of acceptance damages had been submitted to the jury as a matter of disputed fact. The jury's award of $11,000 was determined to represent revocation of acceptance damages equivalent to its determination of "so much of the price as had been paid" in accordance with § 42a-2-711 (1). The plaintiff's argument that the court should have determined the proper measure of revocation of acceptance damages post-verdict was rejected. The court found that the plaintiff's dissatisfaction with the verdict did not constitute grounds to award her the full purchase price of the vehicle as a matter of law. View "Hassett v. Secor's Auto Center, Inc." on Justia Law

by
In a case before the Court of Appeal of the State of California Fourth Appellate District Division Two, the plaintiff, a minor identified as J.R., filed a putative class action against Electronic Arts Inc. (EA), alleging causes of action for unlawful and unfair business practices, violation of the Consumer Legal Remedies Act, and unjust enrichment. J.R. claimed that EA deceptively induced players, particularly minors, to purchase in-game currency for its game, Apex Legends. EA sought to compel arbitration under the terms of its user agreement, which J.R. had accepted to play Apex Legends. The lower court denied EA's motion to compel on the grounds that J.R. had exercised his power under Family Code section 6710 to disaffirm all of his contracts with EA, including the arbitration agreement. EA appealed, arguing that an arbitrator, not the court, should decide issues of arbitrability due to a delegation provision within the agreement. The appellate court rejected EA's arguments, affirming the lower court's decision. The court held that J.R.'s disaffirmance of "any... contract or agreement" accepted through his EA account was sufficient to challenge the validity of the delegation provision specifically, thereby authorizing the court to assess the validity of J.R.'s disaffirmance. View "J.R. v. Electronic Arts" on Justia Law

by
Randall Ewing and Yasmany Gomez entered into a contract with 1645 W. Farragut LLC (Farragut) to purchase a house. The house was in need of substantial renovations, but Ewing and Gomez proceeded with the contract based on Farragut's assurance that the house would be renovated and ready by closing time. Unbeknownst to Ewing and Gomez, the house was under a stop work order, which hindered their ability to secure a mortgage. When they requested their earnest money back, Farragut refused. They subsequently sued Farragut for breach of contract, common law fraud, and fraud under the Illinois Consumer Fraud Act. The United States District Court for the Northern District of Illinois found Farragut liable for fraud and breach of contract and awarded Ewing and Gomez $905,000 in damages. Farragut appealed the decision and Ewing and Gomez cross-appealed, seeking to add Farragut's principal, Erik Carrier, to the case. The United States Court of Appeals for the Seventh Circuit affirmed the District Court's decisions, finding that the record supported the damages awarded and that the District Court did not abuse its discretion in denying the motion for a new trial and the motions to amend. View "Ewing v. 1645 W. Farragut LLC" on Justia Law

by
In the state of California, an individual named Chad Grayot purchased a used vehicle from a car dealership with a contract that was later assigned to the Bank of Stockton. This contract included the Federal Trade Commission's 'Holder Rule' notice, which allows a consumer to assert against third party creditors all claims and defenses that could be asserted against the seller of a good or service. Grayot sought to hold the Bank responsible for refunding the money he paid under the contract based on the holder provision in the contract. The Bank argued that it could not be held responsible because it was no longer the holder of the contract as it had reassigned the contract back to the dealership. The trial court granted summary judgment in favor of the Bank, accepting its argument. Grayot appealed this decision.The Court of Appeal of the State of California Third Appellate District reversed the trial court's decision. The appellate court held that a creditor cannot avoid potential liability for claims that arose when it was the holder of the contract by later reassigning the contract. This interpretation of the Holder Rule is in line with the Federal Trade Commission's intent to reallocate any costs of seller misconduct to the creditor. The court sent the case back to the lower court for further proceedings consistent with its opinion. View "Grayot v. Bank of Stockton" on Justia Law