Opinion
E065225
07-06-2017
MICHELLE R. KELLEY et al., Plaintiffs and Appellants, v. ADAMS SERVICE CENTER, INC. et al., Defendants and Respondents.
Rosner, Barry & Babbitt, Christopher P. Barry and Lacee B. Smith for Plaintiffs and Appellants. Hickey & Associates, Cedar Adams, P.C. and Adam K. Obeid for Defendant and Respondent, Adams Service Center, Inc. dba J&M Auto Sales. Coleman & Horowitt, Darryl J. Horowitt and Jennifer T. Poochigian for Defendant and Respondent Wells Fargo Dealer Services.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Super.Ct.No. RIC1402555) OPINION APPEAL from the Superior Court of Riverside County. Sunshine S. Sykes, Judge. Affirmed. Rosner, Barry & Babbitt, Christopher P. Barry and Lacee B. Smith for Plaintiffs and Appellants. Hickey & Associates, Cedar Adams, P.C. and Adam K. Obeid for Defendant and Respondent, Adams Service Center, Inc. dba J&M Auto Sales. Coleman & Horowitt, Darryl J. Horowitt and Jennifer T. Poochigian for Defendant and Respondent Wells Fargo Dealer Services.
I
INTRODUCTION
Plaintiffs and appellants Michael D. Kelley and Michelle R. Kelley purchased a used vehicle, not realizing that it had frame damage. They filed suit against defendants—Adams Service, Inc., doing business as J&M Auto Sales (J&M), and Wells Fargo Dealer Services, a division of Wells Fargo Bank Center, Inc. (Wells Fargo). The complaint asserted four causes of action for violation of the Consumers Legal Remedies Act (CLRA) (Civ. Code, § 1750 et seq.); unfair competition law (UCL) (Bus. & Prof. Code, § 17200 et seq.); and intentional and negligent misrepresentation. It is undisputed that, at the time of sale, J&M had provided plaintiffs with an AutoCheck Vehicle History Report, disclosing on pages 2 and 4 that the vehicle had frame damage. The trial court granted summary judgment in favor of defendants. Based on our independent review, we affirm the judgment.
J&M assigned the sales contract for the vehicle to Wells Fargo.
We treat this appeal as being from an order granting a motion for summary judgment, not summary adjudication, because the parties agree they have resolved a collateral issue.
II
FACTUAL AND PROCEDURAL BCKGROUND
We derive our statement of the undisputed material facts from plaintiffs' response to the separate statement of facts supporting defendant J&M's motion for summary judgment. The subject vehicle is a used 2008 Mercedes-Benz C300. J&M had purchased the Mercedes from a third party before selling the vehicle to plaintiffs in October 2011.
We summarize the material facts and not the collateral matters concerning plaintiffs' purchase of another vehicle, a 2006 Scion, and an arbitration about that vehicle.
J&M gave plaintiffs a copy of the AutoCheck report at the time of their purchase. Plaintiffs signed the front page stating "Reported accidents: 0" but they did not read the second page, which noted "Problem Reported" and indicated "serious past damage or other significant problems," specifically "Frame/unibody damage record(s)." Plaintiffs also did not notice the reference to "frame damage" in bold language on the fourth page of the AutoCheck report.
The only representation that the J&M salesman made to plaintiffs about the condition of the Mercedes was that it had not been in an accident, a fact which was also stated in the AutoCheck report. Nothing was said expressly about frame damage, although it was listed in the report.
In their complaint, plaintiffs allege that J&M violated the CLRA or the UCL by not disclosing frame damage and by misrepresenting the condition of the Mercedes. At the hearing on the motion, the trial court ruled as follows: "[T]he evidence that has been presented in this case . . . is, in fact, that the plaintiffs were provided a copy of the Autocheck report. [¶] As counsel for the defendant has stated, there was no misrepresentation that was made. There was no admission that was in contradiction to fact or statement that was made to the plaintiffs. [¶] . . . [¶] In this case, there was no representation that the car did not have frame damage or there's a specific duty to disclose. . . . [¶] . . . the Autocheck report was given to them, and there was no actual misrepresentation made in regards to the frame damage. [¶] . . . there was no misrepresentation or omission made by the dealership by virtue of them providing the Autocheck report in its entirety to the plaintiffs. [¶] There's no evidence they weren't able to review the report or that they were told not to look at the additional pages in the report. They simply chose not to."
The trial court then granted summary judgment in favor of plaintiffs. In the minute order, the court stated: "[T]here are no triable issues of material fact. There was no concealment or misrepresentation regarding the frame damage to the vehicle as the undisputed facts demonstrate that Plaintiffs received a copy of a vehicle condition report by AutoCheck which disclosed the frame damage and were not prevented or unable to review the report prior to purchase. . . . The report indicated on pages [2] and 4 that there was a report of frame damage in the vehicle history for the car." Plaintiffs filed a timely notice of appeal.
III
DISCUSSION
The appellate court independently reviews an order granting summary judgment. (Guz v. Bechtel National, Inc. (2000) 24 Cal.4th 317, 334.) "In ruling on the motion, the court must 'consider all of the evidence' and 'all' of the 'inferences' reasonably drawn therefrom [citation], and must view such evidence [citations] and such inferences [citations], in the light most favorable to the opposing party." (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 843.)
A defendant moving for summary judgment bears the burden of showing that one or more elements of the cause of action cannot be established by the plaintiff to the degree of proof that would be required at trial, or that there is a complete defense to it. (Habitat Trust for Wildlife, Inc. v. City of Rancho Cucamonga (2009) 175 Cal.App.4th 1306, 1331; Code Civ. Proc., §437c, subd. (o)(2).) To be "material" for summary judgment purposes, the fact must relate to some claim or defense and it must be essential to the judgment in that, if proved, it could change the outcome of the case. (Zavala v. Arce (1997) 58 Cal.App.4th 915, 926; Kelly v. First Astri Corp. (1999) 72 Cal.App.4th 462, 470.)
Plaintiffs' claims are all premised upon a purported misrepresentation by J&M in not expressly disclosing the existence of frame damage for the Mercedes. However, it is undisputed that plaintiffs received from J&M and signed the AutoCheck report disclosing the frame damage. A person is bound by an instrument he or she signs even without having read it: "'. . . one who signs an instrument may not avoid the impact of its terms on the ground that he failed to read the instrument before signing it.' [Citations.]" (Stewart v. Preston Pipeline Inc. (2005) 134 Cal.App.4th 1565, 1588-1589; Upton v. Tribilcock (1875) 91 U.S. 45, 50, 23 L.Ed. 203.) As recognized by the trial court, the evidence unequivocally established that plaintiffs had the opportunity to review the AutoCheck report but did not do so. Plaintiffs failed to establish a triable issue of fact to avoid summary judgment.
CLRA Claim
The CLRA provides individual consumers with a remedy against deceptive practices in connection with the sale of goods or services. (Nelson v. Pearson Ford Co. (2010) 186 Cal.App.4th 983, 1021.) In relevant part, Civil Code section 1770, subdivision (a) provides:
"(a) The following unfair methods of competition and unfair or deceptive acts or practices undertaken by any person in a transaction intended to result or that results in the sale or lease of goods or services to any consumer are unlawful: [¶] . . . [¶]
"(5) Representing that goods or services have sponsorship, approval, characteristics, ingredients, uses, benefits, or quantities that they do not have . . . . [¶] . . . [¶]
"(7) Representing that goods or services are of a particular standard, quality, or grade, . . . , if they are of another."
In the present case, plaintiffs alleged that J&M violated the CLRA by not disclosing the frame damage and misrepresenting the quality of the vehicle. However, to be actionable an omission must be contrary to a representation actually made by the defendant, or an omission of a fact the defendant was obliged to disclose. (Daugherty v. American Honda Motor Co., Inc. (2006) 144 Cal.App.4th 824, 835.) Plaintiffs made no showing that defendants misrepresented the condition of the vehicle. Instead, J&M provided plaintiffs with all pertinent information in the AutoCheck report. There is no evidence that defendants either omitted or misrepresented a material fact. Instead, J&M met its statutory obligations as a car dealer to make truthful and accurate disclosures and to provide a report on any used car it sells. (Veh. Code, §§ 11713, subd. (a), and 11713.26.) Under these circumstances, a reasonable person could not find that J&M made false or misleading statements in violation of the CLRA or the UCL. (Paduano v. American Honda Motor Co., Inc. (2009) 169 Cal.App.4th 1453, 1471-1472.)
UCL Claims
Plaintiffs also allege that defendants violated the UCL by not disclosing the frame damage. Conduct violating the UCL includes "any unlawful, unfair or fraudulent business act or practice . . . ." (Bus. & Prof. Code, § 17200.) The elements of fraud are commonly stated as (1) a false representation or concealment of a material fact (2) made with knowledge of its falsity or without sufficient knowledge on the subject to warrant such a representation (3) with the intent to induce the person to whom it is made to act on it (4) and an act by the person in justifiable reliance on the representation, and (5) damage to that person. (South Tahoe Gas Company v. Hoffman Land Improvement Company (1972) 25 Cal.App.3d 750, 765.) Fraud is never presumed and must be specifically pleaded. (Mason v. Drug, Inc. (1939) 31 Cal.App.2d 697, 703.)
As a preliminary concern, plaintiffs' third cause of action for fraud does not even satisfy the minimum pleading requirements. Plaintiffs do not allege (1) the identities of the person who allegedly engaged in fraudulent conduct, (2) the knowledge of falsity, (3) intent, (4) damages, (5) the authority of said persons to speak, (6) the recipient of purported fraudulent statements, and (7) how, when, and where the alleged fraud was committed. (Citizens of Humanity, LLC v. Costco Wholesale Corp. (2009) 171 Cal.App.4th 1, 20.) Plaintiffs have failed to state a cause of action for fraud.
Furthermore, the undisputed facts refute plaintiffs' allegations as a matter of law: "A cause of action 'cannot be established' if the undisputed facts presented by the defendant prove the contrary of the plaintiff's allegations as a matter of law." (Brantley v. Pisaro (1996) 42 Cal.App.4th 1591, 1597.) Here the fraud claim is based upon the undeveloped allegations that J&M misrepresented the condition of the Mercedes and concealed the frame damage. However, J&M provided plaintiffs with the AutoCheck report, which plaintiffs signed and which clearly disclosed the vehicle had frame damage. Plaintiffs did not and cannot establish any of the elements of fraud, and thus the third cause of action fails as a matter of law.
Intentional or Negligent Misrepresentation
The gist of plaintiffs' remaining misrepresentation claims is that J&M had the duty to disclose the "whole truth," meaning that J&M should have focused plaintiffs' attention on pages 2 and 4 of the AutoCheck report and emphasized the references to frame damage. Plaintiffs contend that J&M had a policy and practice—a "partial disclosure system"—of offering half-truths to mislead customers. Plaintiffs offer no evidence of such a scheme. Instead, they rely on Michael Kelley's deposition testimony in which he stated that he subjectively interpreted "no accidents" to mean the vehicle had no damage, focusing his attention on this information "as J&M wanted him to do." However, plaintiffs were given all the pertinent information about the vehicle in the AutoCheck report, even if they did not read it. There is no evidence that defendants intentionally, actively, or passively concealed or omitted facts or prevented plaintiffs from reviewing the full AutoCheck report, which plaintiffs admit they did not review. Again, there is no evidence to establish any of plaintiffs' claims of intentional misrepresentation.
Plaintiffs' effort to contradict this deposition testimony in a subsequent declaration violates D'Amico v. Board of Medical Examiners (1974) 11 Cal.3d 1, 21. --------
Similarly, there is no evidence of negligent misrepresentation. Negligent misrepresentation encompasses the assertion of a fact which is not true by one who has no reasonable ground for believing it to be true, made in a manner not warranted by the information of the person making it, although he believes it to be true. (Small v. Fritz Companies, Inc. (2003) 30 Cal.4th 167, 173-174.) The elements of negligent misrepresentation are: (1) misrepresentation of a material fact, (2) without reasonable grounds for believing it to be true, (3) with the intent to induce another's reliance, (4) justifiable reliance, and (5) resulting damage. (Apollo Capital Fund LLC v. Roth Capital Partners, LLC (2007) 158 Cal.App.4th 226, 243.) Once more, it is undisputed that plaintiffs were provided with a copy of the AutoCheck report that disclosed the reported condition of the Mercedes, including multiple references to frame damage. There is no evidence the report was wrong or misleading or that J&M was not justified in relying upon the report. No material facts are in dispute regarding negligent misrepresentation about frame damage.
IV
DISPOSITION
Plaintiffs did not meet their burden to refute defendants' showing there was no material fact in dispute. Based on our independent review, we agree with the trial court's ruling granting summary judgment in favor of defendants. We affirm the judgment. As prevailing parties, defendants shall recover their costs on appeal.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
CODRINGTON
J. We concur: McKINSTER
Acting P. J. FIELDS
J.