Contracts | Chapman, Glucksman, Dean & Roeb

California Court Of Appeal Holds Plaintiff’s Rejection Of Settlement Requiring Waiver Of Claims Is Reasonable In Goglin v. BMW of North America, LLC (2016) 4 Cal.App.5th 462

May 25 2017

By: Gregory K. Sabo and Chelsea L. Zwart
May 25, 2017

In Goglin v. BMW of North America, LLC (2016) 4 Cal.App.5th 462, the Fourth District California Court of Appeal held that a plaintiff’s rejection of a pre-litigation offer including extraneous non-financial terms is reasonable and therefore does not preclude the plaintiff from recovering attorneys’ fees under California’s Song-Beverly Consumer Warranty Act (California Civil Code §§1790 et seq.) upon prevailing in the action.

Prior to initiating litigation in Goglin, the plaintiff notified BMW of her claims, asserting the dealer violated the Consumer’s Legal Remedies Act (“CLRA”) by selling her a used vehicle with undisclosed prior collision damage and an extensive history of mechanical failure. To resolve the issue, BMW offered to repurchase the vehicle, pay off her loan, and reimburse her for the down payment and loan payments made less an offset for depreciation and reimburse her for reasonable attorneys’ fees. The offer was contingent upon the plaintiff signing a settlement and release agreement including terms for a general release, waiver of California Civil Code §1542, dismissal with prejudice of any lawsuit she may have filed against BMW, and a confidentiality and nondisparagement clause.

Ninth Circuit Requires Increased Disclosures Related To The Sale Of “Certified” Pre-Owned Vehicles In Gonzales v. Carmax Auto Superstores, LLC (2016) 840 F.3d 644

May 25 2017

By: Gregory K. Sabo and Chelsea L. Zwart
May 25, 2017

In Gonzales v. CarMax Auto Superstores, LLC (2016) 840 F.3d 644, the Ninth Circuit Court of Appeals held that to comply with California’s Car Buyer’s Bill of Rights, Unfair Competition Law (“UCL”), and Consumer’s Legal Remedies Act (“CLRA”), a dealer selling a “certified” pre-owed vehicle must indicate the pass/fail result of each component inspected, not simply provide the buyer with a completed inspection form listing which parts were inspected.

In Gonzales, the plaintiff brought suit claiming violations of the UCL and CLRA after purchasing a “certified” used vehicle from CarMax, and alleging that the deal failed to comply with California Vehicle Code §11713.18(a)(6), which requires a dealer to provide consumers with a “completed inspection report” prior to the sale of a “certified” used vehicle.

Viability of Contractor’s Express Indemnity Claims are Not Dependent on Allegations In Underlying Third Party Actions

Sep 30 2016

By: Chelsea L. Zwart
September 30, 2016

On August 16, 2016, the First District California Court of Appeal held in Aluma Systems Concrete Construction of California v. Nibbi Bros. Inc. (2016) 2 Cal.App. 5th 620 that a general contractor’s demurrer to a subcontractor’s indemnity claim was erroneously sustained because (1) the allegations of underlying third-party lawsuits were not determinative of liability and (2) the subcontractor’s underlying claim for a worker’s compensation offset did not obviate the subcontractor’s indemnity claim.

Category - Contracts