Opinion
H050099
11-29-2023
BANK OF STOCKTON, Plaintiff and Respondent, v. GAYLE A. GRESHAM, Defendant and Appellant.
NOT TO BE PUBLISHED
(Santa Clara County Super. Ct. No. 18CV330989)
Greenwood, P. J.
Gayle Gresham appeals from a judgment entered after the trial court: (1) granted Bank of Stockton's (Bank) motion for summary judgment on its complaint against Gresham for breach of contract; (2) denied Gresham's motion for summary judgment on the same complaint; (3) granted Bank's motion for summary judgment on Gresham's cross-complaint against Bank for violations of the Rees-Levering Automobile Sales Finance Act (ASFA), the Rosenthal Fair Debt Collection Practices Act (RFDCPA), and for conversion; and (4) denied Gresham's motion for summary judgment on the crosscomplaint.
Bank's complaint arose out of Gresham's default on her automobile purchase contract. The claims set forth in Gresham's cross-complaint were premised on Bank's alleged violation of ASFA-specifically, Bank's alleged failure to provide Gresham with a Notice of Intent to Sell (NOI) that truthfully set forth "all the conditions precedent" to reinstating her contract, as required under Civil Code section 2983.2. (Civ. Code, § 2983.2, subd. (a)(2).) Gresham's affirmative defense to Bank's complaint was premised on the same alleged violation. In granting Bank's summary judgment motions and denying Gresham's, the trial court held that Gresham failed to establish the existence of a triable issue that Bank provided her with a deceptive NOI. The trial court further held that Bank's NOI complied with ASFA and truthfully set forth "all the conditions precedent" to reinstating the contract. (§ 2983.2, subd. (a)(2).) On appeal, Gresham contends that the trial court erred in finding that there was no triable issue of fact and in its interpretation of section 2983.2.
All statutory references are to the Civil Code unless otherwise indicated.
Concluding that the trial court correctly interpreted the statute and found no triable issue of fact, we affirm the judgment.
I. Factual and Procedural Background
Gresham entered into a contract with Capital Volkswagen to buy a car. The contract provided that if Gresham defaulted on her monthly payments, Capital Volkswagen could repossess and resell the car and recover the deficiency from Gresham. Capital Volkswagen later assigned the contract to Bank, along with the car's title.
A. Bank's Repossession of Car and NOI to Gresham
Gresham defaulted on her payments and surrendered the car to Bank at a mutually agreed upon location. Bank engaged Tri City Recovery (Tri City) to repossess the vehicle, and Tri City charged Bank $275 for the repossession. Tri City's fee was divided into two parts: $250 for voluntary repossession and $25 for Tri City's delivery of the car to Brasher's San Jose Auto Auction (Brasher's) after Gresham's surrender. On January 11, 2018, Bank sent Gresham a NOI, notifying Gresham of Bank's intention to re-sell the car after the expiration of the ASFA prescribed 15 days. The NOI stated that Gresham's contract was governed by ASFA. It contained ASFA-mandated disclosures, including the disclosure that Gresham had the right to redeem-that is, regain possession-of the car within 15 days by paying the full amount owed under the contract, or alternatively, a conditional right to reinstate the contract by paying "all Reinstatement Amounts itemized on pages 4 to 6 of the Additional Disclosures."
Brasher's was also known as Adesa and was sometimes referred to as such in the trial court's filings and in the order re: summary judgment. Because the NOI referred to this entity as Brasher's, we do the same for clarity.
The reinstatement amounts set forth in the NOI were divided into four categories: (1) "amounts currently due the bank"; (2) "amounts currently due to third parties"; (3) "amounts that will become due to the bank after 1/11/18, the date of the NOI"; and (4) "amounts that will become due to third parties after 1/11/18, the date of the NOI." Under the second category, "amounts currently due to third parties," Bank listed a $25 transportation fee and specified that the fee would be payable to Brasher's. This transportation fee was separate and distinct from the $275 repossession fee that Bank listed under its first category, "amounts currently due the bank." Under the fourth category, "amounts that will become due to third parties after 1/11/18," Bank listed a daily storage fee of $10, beginning on the date of the NOI and continuing until redemption or reinstatement. The NOI specified that this daily rate would be payable to Brasher's as well. Other third-party fees set forth in the NOI included a $15 law enforcement release fee payable to the San Jose Police Department, and redemption, administration, reconditioning, and DMV fees payable to Brasher's.
B. Bank's Complaint for Breach of Contract and Gresham's Cross-Complaint
Gresham did not attempt to reinstate the contract, and after the requisite 15 days, Bank resold the car for $10,800. After attendant expenses from the sale were paid and the remaining proceeds credited to Gresham's obligation to Bank, Gresham owed Bank a deficiency balance of $9,333.67, together with accrued interest. Gresham refused to pay and Bank sued for breach of contract and account stated. In her answer to the complaint, Gresham asserted Bank's failure to comply with section 2983.2 as an affirmative defense to Bank's claims.
Gresham subsequently filed a cross-complaint against Bank, seeking damages and a declaratory judgment that the contract was unenforceable. In her cross-complaint, Gresham alleged three causes of action. First, Gresham alleged that Bank violated ASFA because it failed to provide her with a NOI that complied with section 2983.2, subdivision (a)(2). Second, Gresham alleged that Bank violated the RFDCPA, because it attempted to collect an illegal consumer debt from her. Third, Gresham alleged that Bank was liable for conversion because it wrongfully disposed of the car without giving her an opportunity to reinstate her contract. All three causes of action were premised on the allegation that Bank failed to provide Gresham with a NOI that "truthfully and accurately set forth 'all the conditions precedent' to reinstatement of the contract," as required under section 2983.2 and Juarez v. Arcadia Financial, Ltd. (2007) 152 Cal.App.4th 889 (Juarez), which interpreted this statutory provision.
C. The Parties' Motions for Summary Judgment
Gresham filed a motion for summary judgment, seeking judgment as a matter of law on the three claims set forth in her cross-complaint. Gresham's motion also sought summary judgment on Bank's complaint against her, based on her affirmative defense that Bank violated ASFA. As to her first claim for violation of ASFA, Gresham argued that she was entitled to summary adjudication because Bank "fail[ed] to provide Gresham with a compliant NOI that truthfully and accurately set forth 'all conditions precedent,'" as required under section 2983.2, subdivision (a)(2). Specifically, Gresham argued in her motion that the NOI violated section 2983.2, subdivision (a)(2) because it included charges that Bank never incurred in its repossession and resell of the vehicle. Gresham also argued that the NOI was not truthful or accurate because the $25 transportation fee Bank listed under "amounts currently due to third parties" was duplicative of the repossession fee Bank had already included in its list of payments Gresham owed to Bank. As to her second claim for violation of the RFDCPA, Gresham argued that "if Bank's NOI is held to be in violation of Civil Code § 2983.2(a)(2), then Bank necessarily also violated the RFDCPA by attempting to collect a debt that is not owed by Gresham." Gresham's third claim for conversion was premised on Bank's alleged violation of section 2983.2 as well. As to Bank's claims against her for breach of contract and account stated, Gresham maintained that Bank's failure to comply with section 2983.2 provided her with a complete defense against performance on the contract.
Bank thereafter filed its own motion for summary judgment on its breach of contract and account stated claims, as well as each of the claims in Gresham's crosscomplaint. Bank's motion noted that all the claims in its complaint and in Gresham's cross-complaint hinged on one question: Did Bank provide Gresham with a NOI that contained "all conditions precedent" to reinstatement of the contract, in compliance with section 2983.2? Maintaining that the NOI complied with the statute, Bank contended that it was entitled to summary judgment on both the complaint and the cross-complaint.
D. The Trial Court's Order
Following a hearing, the trial court issued an order: (1) denying Gresham's motion for summary judgment on the cross-complaint; (2) granting Bank's motion for summary judgment on the cross-complaint; (3) denying Gresham's motion for summary judgment on Bank's complaint; and (4) granting Bank's motion for summary judgment on its own complaint.
1. No Triable Issue of Material Fact
As to the cross-complaint, the trial court held that Gresham failed to establish a triable issue of material fact as to her allegation that Bank attempted to charge her a duplicative transportation fee. The court held that Gresham did not offer any evidence to establish that the $25 transportation fee listed in the "amounts currently owed to third parties" section of the NOI was the same fee that Tri City charged Bank. In contrast, Bank submitted uncontroverted testimony from its former employees that the $25 transportation fee set by and owed to Brasher's was separate from the transportation fee Tri City charged Bank for Tri City's delivery of the car to Brasher's after Gresham's surrender. The court concluded that "[u]ltimately, the Court has before it nothing more than speculation by Gresham that the $25 fee claimed to be due to [Brasher's] is duplicative of the $25 fee included in the total $275 payable to the Bank for the Vehicle's repossession. Thus, Gresham has not established that these amounts are inaccurate or untruthful such that the NOI is in violation of ASFA."
2. Bank's NOI Complied with Section 2983.2
The trial court further held that Bank's NOI complied with section 2983.2 in that it truthfully and accurately set forth "all the conditions precedent" to reinstating the contract. In so holding, the court rejected Gresham's argument that the NOI's inclusion of the $10 daily storage fee and $25 transportation fee violated ASFA because Bank never incurred those fees in its repossession/resell of the vehicle. The court noted that to comply with section 2983.2 and Juarez, Bank was required to provide a NOI that included "any amount the buyer must pay to the creditor and/or third parties," which Bank did here. In addition, the NOI did not state that Gresham was required to reimburse Bank for the storage or transportation fees, but made clear that the fees were due to a third party. Because all three claims in Gresham's cross-complaint were premised on Bank's alleged violation of section 2983.2, the court denied Gresham's motion and granted summary judgment to Bank.
3. Bank's Complaint
The trial court granted Bank's summary judgment motion on its own complaint, and denied Gresham's motion for summary judgment, noting that because Bank had established each element of its breach of contract and account stated claims, the burden was on Gresham to "establish the existence of a complete defense." Because Gresham had elected to rely on the affirmative defense that Bank violated ASFA, which she had not shown, Gresham was not entitled to summary judgment, and Bank was.
The trial court entered judgment in favor of Bank on its complaint and on Gresham's cross-complaint on May 4, 2022. The judgment awarded Bank $12,814.42 in principal and accrued interest. The court also awarded Bank attorney's fees and costs. Gresham timely appealed the judgment.
II. Discussion
A. Standard of Review
On appeal, Gresham argues that in granting Bank's summary judgment motions and denying her summary judgment motions, the trial court erred in its interpretation of section 2983.2, subdivision (a)(2). Specifically, Gresham argues that contrary to the trial court's conclusion, Bank did not provide Gresham with a truthful and accurate NOI that set forth "all the conditions precedent" to reinstating her contract, as is required under the statute.
The grant and denial of summary judgment motions are subject to de novo review. (Herrington v. Superior Court (2003) 107 Cal.App.4th 1052, 1056.) "This court applies the same analysis as the trial court. We identify the issues framed by the pleadings, determine whether the moving part has negated the nonmoving party's claims, and determine whether the opposition has demonstrated the existence of a triable issue of material fact. [Citation.] Summary judgment is appropriate if all the papers submitted show there is no triable issue of fact and that the moving party is entitled to judgment as a matter of law. (Code Civ. Proc., § 437c, subd. (c).)" (Id. at pp. 1056-1057.)
In this case, the trial court's orders on the motions were based on its interpretation of ASFA. (See § 2983 et. seq.) We review issues of statutory construction de novo. (Juarez, supra, 152 Cal.App.4th at p. 900.)
B. The NOI Did Not Violate ASFA
1. Legal Principles
ASFA provides a framework that governs conditional sale contracts for motor vehicles. Pursuant to ASFA, "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." (Juarez, supra, 152 Cal.App.4th at p. 894.) ASFA also requires defaulting buyers to be given the opportunity, in many circumstances, "to reinstate their contracts by curing the default and meeting certain other conditions set by the creditor." (Ibid.) Specifically, section 2983.2, subdivision (a) requires creditors to provide a defaulting buyer with a notice of intention to dispose of the repossessed vehicle, which must set forth information about the buyer's right to reinstate the contract, including the timing of this right and "all the conditions precedent" to reinstatement. (§ 2983.2, subd. (a)(2).)
In Juarez, the court clarified the phrase "all the conditions precedent" to require a "level of specificity sufficient to inform the buyer exactly what he or she must do to reinstate the contract without the need for additional inquiry." (Juarez, supra, 152 Cal.App.4th at p. 894.) In that case, debtors received a NOI from the creditor that simply stated, in connection with their right of reinstatement, "You may reinstate the contract within 20 days of the date of this notice under the following conditions: [¶] Payment of all past due installments, late payment penalties, repossession costs, resale expenses and storage fees (if any), and payment of repossession fee to local law enforcement agency." (Id. at p. 901.)
The court concluded that this NOI was insufficient because it provided "virtually no useful information as to what [a defaulting buyer] would have to do to have their contract reinstated." (Juarez, supra, 152 Cal.App.4th at pp. 905-906.) Rather, "the burden is on the buyer to gather sufficient accurate information as to how he or she can fulfill the conditions of reinstatement." (Ibid.) The court held that to satisfy the "all the conditions precedent" requirement of section 2983.2, subdivision (a)(2), a NOI must include "any amounts the buyer must pay to the creditor and/or to third parties, and provide the buyer with the names and addresses of those who are to be paid." (Juarez at pp. 904-905.) On the issue of payments to third parties, Juarez acknowledged that there may be instances where the creditor does not possess information regarding the specific amounts a debtor may owe. (Id. at pp. 908-909.) But that "does not mean that creditors need not provide information about the amounts owed to the creditor or to third parties when the creditor does (or reasonably should) know those amounts." (Id. at p. 909.) In that instance, the creditor must provide the buyer with "all of the relevant information it possesses and/or information it has the ability to discern, concerning precisely what the buyer must do to reinstate his or her contract." (Ibid., italics in original.)
In this case, Bank sent Gresham a NOI pursuant to ASFA. The terms of the NOI are not in dispute. What is disputed is whether the NOI included "all the conditions precedent" to reinstatement, as required under section 2983.2, subdivision (a)(2). We conclude that it did. The NOI provided Gresham with notice that Bank intended to dispose of the repossessed vehicle after the statutorily prescribed 15 days and itemized what Gresham needed to do to reinstate the contract and regain possession of the vehicle. The NOI set forth the "amounts [Gresham] must pay to the creditor and/or to third parties" and included "the amounts due, to whom they are due, [and] the addresses and/or contact information for those parties." (See Juarez, supra, 152 Cal.App.4th at pp. 899, 904-905, italics added.) Among the list of payments owed to third parties, the NOI included a $25 transportation fee and a $10 daily storage fee. The NOI made clear that those two fees were payable to Brasher's.
2. Trial Court Correctly Held That There Was No Triable Issue of Material Fact on the Transportation Fee
On appeal, Gresham argues that Bank's inclusion of the $25 transportation fee in the NOI was improper because that fee was duplicative of the fee Tri City charged Bank for its repossession of the vehicle. But according to evidence Bank presented in the trial court, the transportation fee Tri City charged Bank was for Tri City's delivery of the vehicle to Brasher's after Gresham's surrender of the vehicle. It did not include any additional charge Brasher's may have incurred for moving the vehicle after the vehicle had arrived at its location, and Gresham did not present any evidence to show that such movement did not or could not have occurred. In contrast, Bank presented uncontroverted evidence, in the form of deposition testimony and declarations, that the $25 transportation fee payable to Brasher's was separate from the repossession fee Bank paid Tri City. Bank also presented evidence tending to show that movement of a vehicle after its arrival at an auction was not unusual. As the trial court noted in its summary judgment order, Gresham's assertion that the two transportation fees were necessarily duplicative of each other was based on "nothing more than pure conjecture . . . that once the Vehicle was delivered to the auction, there would never be any reason to move it from where is[sic] was initially placed." Such conjecture is not enough to create a triable issue on Gresham's allegation that the NOI was deceptive because it attempted to charge her a duplicative fee.
3. NOI Complied with Section 2983.2
Gresham next contends that the NOI's inclusion of both the $25 transportation fee and the $10 daily storage fee represented "a false statement to the consumer concerning the right to redeem the vehicle." For support, Gresham references section 2983.3, subdivision (d)(5), which provided in 2018 (the year Bank sent the NOI to Gresham): "[T]he buyer or any other person liable on the contract, shall, in all cases, reimburse the seller or holder for all reasonable and necessary collection and repossession costs and fees incurred . . . in retaking and holding the vehicle." (Stats. 1961, ch. 1626, § 4.) Gresham argues that because Bank did not incur the $25 transportation fee or the $10 daily storage fee, "payment by Gresham of such fees were not a valid 'condition precedent' to reinstatement of the contract." Effective January 1, 2022, the Legislature amended section 2983.3, subdivision (d)(5) to provide, "[T]he buyer or any other person liable on the contract shall, in all cases, reimburse the seller or holder for all reasonable and necessary collection and repossession costs and fees actually paid by the seller or holder . . . in retaking and holding the vehicle." (Stats. 2021, ch. 401, § 2, italics added.)Gresham further contends that the Legislature's 2022 amendment to section 2983.3, changing the word "incurred" to "actually paid," supports her contention that Bank acted deceptively by including the transportation and daily storage fees.
The Legislature amended section 2983.3 again effective January 1, 2023, but did not make substantive changes to subdivision (d)(5). (Stats. 2022, ch. 716, § 1.)
We construe sections 2983.2 and 2983.3 liberally as statutes generally designed to provide notice to consumers of the steps necessary to reclaim a vehicle. (See Cerra v. Blackstone (1985) 172 Cal.App.3d 604, 608 ["The legislative purpose in enacting [ASFA] was to provide more comprehensive protection for the unsophisticated motor vehicle consumer."].) As Gresham herself recognizes in her opening brief, the purpose of the 2022 amendment to 2983.3 was to discourage creditors from overestimating repossession costs and requiring "a more exact accounting of the costs related to the repossession, potentially making it easier for lower income Californians to regain access to their automobiles." We do not read the statutes to limit what the consumer must pay to redeem the vehicle solely to what is owed to the holder or seller, as opposed to any third party, but to provide an accurate tally of what is owed to recover the vehicle. Here, the NOI provided notice to Gresham that payment of specific fees to Bank and Brasher's was necessary to obtain physical possession of the vehicle after reinstatement. The NOI was thus compliant with section 2983.2.
Our position here is consistent with Juarez, which held that a NOI that complies with section 2983.2 must include "any amounts the buyer must pay to the creditor and/or to third parties." (Juarez, supra, 152 Cal.App.4th at pp. 899, 904-905, italics added.) And while a creditor may not always know the specific amounts a debtor owes to a third party, Juarez makes clear that a creditor must include such information "when the creditor does (or reasonably should) know those amounts." (Id. at p. 909.) Thus, in providing Gresham with a NOI that included payment amounts owed to both Bank and to third parties such as Brasher's, Bank was not making false statements or engaging in deceptive practices, but rather, following the court's directive in Juarez.
Gresham further contends, for the first time in her reply brief, that Brasher's had no independent basis to charge fees to Gresham because of the lack of a privity relationship between them. She argues that in repossessing the car, Brasher's was acting "purely in its capacity as Bank's agent." Gresham reiterated this position during oral argument, contending that because the sole privity relationship was between herself and Bank, the NOI could include only fees incurred by Bank. Gresham argues that since it is undisputed that Bank did not incur either the $25 transportation fee or the $10 daily storge fee, it could not then charge those fees to Gresham. As Gresham is raising this issue for the first time in her reply brief, it is not properly before us, and we respectfully decline to address it. (See Scott v. CIBA Vision Corp. (1995) 38 Cal.App.4th 307, 322 ["We do not entertain issues raised for the first time in a reply brief, in the absence of a showing of good cause why such issues were not raised in the opening brief."].)
In the reply brief, Gresham refers to the third-party entity at issue as Tri City Recovery, not Brasher's. However, as both of the disputed fees in this appeal were due to Brasher's and not Tri City, we interpret Gresham's arguments as directed to Brasher's.
In their briefs and during oral argument, both parties directed our attention to the unpublished case of Lobel Financial Corp. v. Guiam (Nov. 20, 2019, H044095). During oral argument, Gresham urged us to overrule Guiam as wrongly decided. Pursuant to California Rules of Court, Rule 8.1115, subdivision (a), an unpublished case "must not be cited or relied on by a court or a party in any other action." In observance of this rule, we neither rely upon Guiam, nor reassess its rationale and holding.
Based on our independent review of the evidence the parties presented in support of their summary judgment motions, we conclude that the trial court correctly found that Gresham failed to establish a triable issue of material fact on her assertion that the NOI deceptively attempted to charge her a duplicative transportation fee. We further conclude that the trial court correctly found that Bank's NOI complied with section 2983.2. The trial court properly entered judgment in favor of Bank.
Because we conclude that Bank did not violate section 2983.2, subdivision (a)(2), we reject Gresham's argument pursuant to the RFDCPA, which is premised on the existence of a section 2983.2 violation.
III. Disposition
The judgment is affirmed.
WE CONCUR: Grover, J. Bromberg, J.