Opinion
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
APPEAL from a judgment of the Superior Court of San Diego County, William S. Cannon, Judge, Super. Ct. No. GIS16196.
AARON, J.
I.
INTRODUCTION
Appellant Vaneesa Sanders contends that she is a member of the certified class in the matter of Juarez v. Arcadia Financial, Ltd., which was the subject of a prior appeal in this court. (Juarez v. Arcadia Financial, Ltd. (2007) 152 Cal.App.4th 889 (Juarez).) Sanders filed a notice of appeal purporting to appeal from the judgment of the trial court granting summary judgment in favor of Arcadia Financial, Ltd. (Arcadia) in the Juarez matter. Sanders filed her notice of appeal before this court filed our opinion in Juarez. Sanders asks this court "to enter an order consistent with the Juarez opinion, reversing the trial court's order entering summary judgment against the certified class and denying the Juarezes' motion to compel discovery." We conclude that Sanders's appeal must be dismissed.
II.
FACTUAL AND PROCEDURAL BACKGROUND
Because Sanders is attempting to appeal the trial court's judgment in the Juarez matter, we begin by setting forth the procedural background related to both the trial court and appellate proceedings in Juarez.
In December 1999, the Juarezes purchased a used Isuzu Rodeo from Ron Baker Chevrolet under a conditional sales contract that obligated them to make monthly payments. After the Juarezes purchased the Isuzu, the dealer assigned its rights in the conditional sales contract to Arcadia. On July 10, 2003, Arcadia repossessed the Isuzu, based on Arcadia's belief that the Juarezes had failed to make two car payments. A few days after Arcadia repossessed the vehicle, the Juarezes received a notice of Arcadia's intent to dispose of the vehicle 20 days from the date of the letter, unless the Juarezes either redeemed the vehicle by paying the full balance due under the contract or reinstated their contract. After the Juarezes failed to ascertain and pay to Arcadia the amount necessary to reinstate the contract within the time frame identified in the letter, Arcadia sold the Juarezes' vehicle.
The Juarezes later filed an action against Arcadia in which they asserted both individual claims and claims brought on behalf of a class, pursuant to the unfair competition law (UCL) (Bus. & Prof. Code, § 17200 et seq.). The Juarezes alleged that Arcadia engaged in unlawful, unfair and fraudulent business practices by violating the requirements of the Rees-Levering Automobile Sales Finance Act (Rees-Levering or the Act) (Civ. Code, § 2983 et seq.).
Further statutory references are to the Civil Code unless otherwise indicated.
Rees-Levering provides a detailed framework that governs conditional sales contracts for motor vehicles. Under the Act, defaulting buyers whose cars have been repossessed by a creditor must be given the opportunity to redeem their vehicles by paying the full balance due under the contract. The Act also requires that defaulting buyers be given the opportunity, in many circumstances, to reinstate their contracts by curing the default and meeting certain other conditions set by the creditor. From the buyer's perspective, the option of reinstating a contract is often preferable to redemption because reinstatement allows the buyer to recover the car without having to pay the full balance due on the contract, which they must do to redeem the vehicle.
The Act requires that creditors provide a defaulting buyer with a notice of intention (NOI) to dispose of the repossessed vehicle. To ensure that a defaulting buyer is made aware of his or her right to redeem or reinstate prior to the creditor disposing of the vehicle, the Act requires that creditors include in the NOI information about the buyer's right to redeem or reinstate. The Act also requires that the NOI set forth "all the conditions precedent" to reinstatement. (§ 2983.2, subd. (a)(2).)
The Juarezes initially filed an individual action against Arcadia for conversion and related claims. On September 16, 2004, the Juarezes amended their complaint to add class claims pursuant to the UCL, as set forth in Business and Professions Code section 17200 et seq. In the class claims, the Juarezes alleged that Arcadia had violated the Unfair Competition Law by engaging in unlawful, unfair and fraudulent business practices with regard to the notice of intent (NOI) it sent to consumers after repossessing their vehicles. Specifically, the Juarezes alleged, on behalf of the class, that Arcadia's NOI failed to adequately inform consumers as to the conditions precedent to reinstatement of their contracts, as required by the Act.
On April 29, 2005, the trial court certified the proposed class in Juarez. The class was defined as "all California consumers to whom Arcadia sent post-repossession Notices that did not include the specific [dollar] figure necessary to cure the default dated November 1, 2002 through the present date, and against whom Arcadia sought a deficiency at any time, or who made post-repossession payments to Arcadia." (Juarez, supra, 152 Cal.App.4th at p. 898.) The class excluded those individuals who had redeemed their vehicles or whose contracts had been reinstated.
Arcadia moved for summary judgment on the class claims, asserting that the relevant facts were undisputed and that the class claims failed as a matter of law because Arcadia's NOI satisfies the requirements of Rees-Levering. The trial court agreed that there were no material facts in dispute, and concluded that Arcadia's NOI's complied with the requirements of section 2983.2, subdivision (a)(2), even though the notices did not include the dollar amounts required to reinstate the contracts.
The trial court granted Arcadia's motion for summary adjudication of the class claims on March 17, 2006. On May 12, the Juarezes appealed from the court's order granting summary adjudication of the class claims. In their appeal, the Juarezes sought review of that order as well as the trial court's order denying the Juarezes' motion to compel Arcadia to disclose the profits it had reaped from funds class members had paid to Arcadia.
On August 30, 2006, after the Juarezes had filed their notice of appeal, the trial court entered a final judgment on the class claims.
The Juarezes settled their dispute with Arcadia after they filed their notice of appeal. Because the Juarezes apparently agreed as part of the settlement to forgo further participation in the lawsuit, they moved jointly with Arcadia to dismiss their appeal of the summary judgment on the class claims. This court denied the request.
On October 24, 2006, Sanders filed her own notice of appeal from the trial court's final judgment on the class claims, asserting her status as a member of the certified class. Sanders also moved for an order to substitute herself as the representative plaintiff in the Juarez matter on appeal. Arcadia opposed Sanders's request to substitute in as the class representative in the Juarez appeal, and also moved to stay or dismiss that appeal. This court denied both Sanders's and Arcadia's motions.
On February 26, 2007, Sanders filed an opening brief in which she sought relief identical to the relief the Juarezes requested in their appeal from the trial court's grant of summary judgment. On the same date that Sanders filed her opening brief, Arcadia moved to dismiss Sanders's appeal. On March 8, this court ordered that Arcadia's motion to dismiss Sanders's appeal be considered with the appeal. Arcadia filed its respondent's brief the following month.
Before Sanders filed her reply brief, this court issued an opinion in Juarez in which the court addressed the Juarezes' contentions on their merits and reversed the trial court's judgment as to the class claims. (Juarez, supra, 152 Cal.App.4th at p. 918.) The court also reversed an order of the trial court relating to a discovery dispute. (Ibid.)
Sanders subsequently filed a reply brief in which she acknowledged this court's opinion in Juarez and asked the court to "enter an order consistent with the Juarez opinion" in her appeal.
III.
DISCUSSION
A. Sanders's appeal is moot and must be dismissed
Arcadia moves to dismiss Sanders's appeal because, it contends, she lacks standing to appeal, since she is not the named representative plaintiff. We agree that Sanders's appeal must be dismissed under the particular circumstances of this case, although our reasoning differs from Arcadia's argument for dismissal.
Specifically, we must dismiss Sanders's appeal because it is duplicative of, and identical to, the Juarezes' appeal. The Juarezes appealed from an order of the trial court granting summary judgment in favor of Arcadia. While the Juarezes filed their notice of appeal before the trial court entered final judgment, this court treated the notice of appeal as if it had been filed after the date on which the trial court entered final judgment on the class claims. Thus, this court has already considered the arguments Sanders raises in her appeal, and has issued an opinion reversing both the judgment of the trial court as to the class claims and a discovery order. This is the same relief Sanders seeks in her appeal. There is no basis for this court to consider a second, identical appeal on behalf of the same class and taken from the same judgment. The second appeal is moot, and must be dismissed. (MHC Operating Limited Partnership v. City of San Jose (2003) 106 Cal.App.4th 204, 214 ["'When no effective relief can be granted, an appeal is moot and will be dismissed' [Citations.]"].)
B. A second appeal from the judgment in Juarez is not necessary to preserve the rights of the members of the class
Plaintiffs' counsel apparently wished to substitute Sanders as the class representative for purposes of continuing the appeal for three reasons: (1) concern that the Juarezes' appeal was procedurally deficient because it was taken directly from the summary judgment order, and not the final judgment; (2) concern that the Juarezes might not be permitted to pursue the appeal on behalf of the class because they settled their personal claims with Arcadia; and (3) to protect the class's interest in the appeal after the Juarezes agreed to dismiss their appeal once they settled their claims against Arcadia. As Sanders notes in her reply brief, "Ms. Sanders' appeal was to ensure that the class's claims were decided on the merits, and not lost on a technicality."
With respect to the concern that the Juarezes' appeal was procedurally deficient because it was premature, this court treated the Juarezes' notice of appeal as if it had been filed immediately after the entry of judgment against the class. The court proceeded to consider the Juarezes' appeal on its merits. In Juarez, supra, 152 Cal.App.4th at page 899, footnote 6, this court stated, "The trial court entered a final judgment as to the class claims after the Juarezes filed their notice of appeal from the order granting summary judgment on the class claims. We exercise our discretion and treat the notice of appeal as having been filed immediately after entry of judgment. (Cal. Rules of Court, rule 8.104(e)(2) ['The reviewing court may treat a notice of appeal filed after the superior court has announced its intended ruling, but before it has rendered judgment, as filed immediately after entry of judgment'].)" There is thus no need for a different class member to pursue a duplicative appeal for the purpose of protecting against dismissal of the class representatives' appeal on the ground that the first appeal was filed prematurely.
As to the concern that the Juarezes may not be allowed to pursue the class claims because they have settled their personal claims against Arcadia, the fact that the Juarezes may have settled their own claims does not automatically render the Juarezes unable to adequately represent the class. (See La Sala v. American Sav. & Loan Assn. (1971) 5 Cal.3d 864, 871 (La Sala) [concluding that defendant's "waiver of acceleration of loan as to [the named plaintiffs] does not mechanically render those plaintiffs unfit per se to continue to represent the class"].) Rather, "[w]hether the named plaintiffs will fairly and adequately protect that class frames an issue that rests in the discretion of the trial court [citation]. In making that determination, the trial court may take into account that the named plaintiffs have already obtained their individual benefits from the action; plaintiffs who have nothing at stake often will not devote sufficient energy to the prosecution of the action; further, the receipt of benefits by the named plaintiffs may sometimes create a conflict of interest between the class and its would-be representatives. On the other hand, as in the cited cases, the court may find that the named plaintiffs will continue fairly to represent the class, and therefore permit them to continue the class litigation." (La Sala, supra, 5 Cal.3d at pp. 871-872.) Thus, although the trial court could conclude that the Juarezes can no longer adequately protect the class, it does not appear that the parties have made a request for substitution in the trial court.
There is also no basis for plaintiff counsel's concern that the Juarezes will be permitted to dismiss their appeal and/or that Arcadia will challenge the Juarezes' standing in a petition for review in the Supreme Court, thereby potentially leaving the class claims susceptible to dismissal for lack of a suitable a representative. Arcadia did not challenged the Juarezes' standing in its petition for review in the Supreme Court. Further, such a challenge would have little success. "Even if the named plaintiff receives all the benefits that he seeks in the complaint, such success does not divest him of the duty to continue the action for the benefit of others similarly situated." (La Sala, supra, 5 Cal.3d at p. 871.)
We take judicial notice of the documents filed by both parties in Juarez v. Arcadia Financial, Ltd. (review denied Sept. 25, 2007, S155139).
This does not mean that the Juarezes must continue to participate in the litigation against their will. If the Juarezes no longer wish to represent the class, they should seek relief from their fiduciary duty in the trial court. It is the trial court that has the discretion to determine whether a named plaintiff can no longer suitably represent the class. (La Sala, supra, 5 Cal.3d at p. 872; see also Daar v. Yellow Cab Co. (1967) 67 Cal.2d 695, 710 [the trial court has the discretion to determine, based on the facts and circumstances of the case, that an action should not be continued as a class action with the named party representatives].) If the trial court determines that the named plaintiff cannot adequately and fairly represent the class, the court should offer the plaintiff class an opportunity to amend the complaint to establish a suitable representative. (La Sala, supra, 5 Cal.3d at p. 872.) The fact that an appeal is pending does not deprive the trial court of its authority to determine whether the named plaintiff is a suitable representative of the class and to substitute a new named plaintiff if necessary. (Mallick v. Superior Court (1979) 89 Cal.App.3d 434, 437 [concluding that the superior court had jurisdiction to hear a motion to intervene and remove another party as class representative even though the action was on appeal].)
Arcadia suggests — as it did in response to the Juarezes' appeal from the trial court's judgment in favor of Arcadia on the class claims — that the Juarezes' decision to settle their own claims was intended to and did settle all claims against Arcadia in the action, including the class claims. We disagree with this contention. First, there is no reason to believe that the agreement between Arcadia and the Juarezes was intended to settle the class claims against Arcadia. Such an attempted settlement would conflict with the fiduciary duty a named plaintiff in a class action suit assumes. The named plaintiff in a class action "surrender[s] any right to compromise the group action in return for individual gain." (La Sala, supra, 5 Cal.3d at p. 871.) Further, the Juarezes settled with Arcadia only after the trial court had entered judgment in favor of Arcadia on the class claims. As a result, even though the Juarezes had appealed the trial court's decision, at the time the Juarezes and Arcadia agreed to settle the Juarezes' claims, the class claims had been dismissed. Thus, only the Juarezes' personal claims could have been the subject of a settlement between the parties.
Even if we were to assume that the Juarezes attempted to settle the class claims, this settlement would have been ineffective as to the entire class unless the class first received notice of the proposed settlement and an opportunity to object to the proposed settlement, and the trial court subsequently approved the settlement. (See Marcarelli v. Cabell (1976) 58 Cal.App.3d 51, 53 [a class action plaintiff may not dismiss the action without court approval]; see also La Sala, supra, 5 Cal.3d at p. 872 [dismissal of action where plaintiffs were no longer suitable representatives required prior notice to the class].) There is no evidence that any of these events has occurred.
IV.
DISPOSITION
Sanders's appeal is dismissed. The parties shall bear their own costs on appeal.
WE CONCUR: BENKE, Acting P. J., McINTYRE, J.