Court of Appeal (Cal.) Reverses Trial Court’s Conclusion that Car Dealer Violated the CLRA Regarding “Safe-to-Drive” Vehicle and Plaintiff’s Claim that the Vehicle Had Been in an Accident

In Quillen v. Car City, No. B318046, 2023 Cal. App. Unpub. LEXIS 1759, at *10-13 (Mar. 27, 2023), the Court of Appeal in an unpublished decision reversed the trial court’s conclusion that a used vehicle sale violated the CLRA.

“The CLRA proscribes particular ‘unfair methods of competition and unfair or deceptive acts or practices’ in transactions for the sale or lease of goods or services to consumers. (Civ. Code, § 1770, subd. (a); see Daugherty v. American Honda Motor Co., Inc. (2006) 144 Cal.App.4th 824, 833.)” (Collins v. eMachines, Inc. (2011) 202 Cal.App.4th 249, 255 (Collins).) Deception is a necessary component of the conduct proscribed by the CLRA. (See Durell v. Sharp Healthcare (2010) 183 Cal.App.4th 1350, 1367 [“‘plaintiffs in a CLRA action [must] show not only that a defendant’s conduct was deceptive'”]; see Civ. Code, § 1760 [CLRA’s “underlying purposes . . . are to protect consumers against unfair and deceptive business practices and to provide efficient and economical procedures to secure such protection”].) Although there is no statutory or case law definition of a “deceptive practice” for these purposes, the statute lists numerous examples, including “[r]epresenting that goods . . . have . . . characteristics . . . [which] they do not have.” (Civ. Code, § 1770, subd. (a)(5).) Courts have also deemed “the concealment or suppression of material facts” to be deceptive, based on principles of fraud. (See Collins, supra, at p. 255.) It follows that, under the CLRA, even if a representation is true, it may still be deceptive [*11] because “‘[a] perfectly true statement couched in such a manner that it is likely to mislead or deceive the consumer, such as by failure to disclose other relevant information, is actionable.’ [Citation.]” (Consumer Advocates v. Echostar Satellite Corp. (2003) 113 Cal.App.4th 1351, 1362; see also Jones v. Credit Auto Center, Inc. (2015) 237 Cal.App.4th Supp. 1, 11.)  The deceptive practice on which Quillen based his CLRA claim were Oganesyan’s statements that the vehicle was safe to drive and in good condition, which the court found were false, and Oganesyan’s informing Quillen about the frame damage in a manner the court found was misleading because it “minimized” the effect of the damage on the car’s safety. But in order for these statements to be false and misleading, it must be true that, in December 2015 when Oganesyan made them, the vehicle was not safe to drive as Oganesyan claimed and/or that the frame damage was more extensive than Oganesyan led Quillen to believe. But no evidence in the record—not even the evidence Car City argues was excluded—supports either finding. Indeed, the only evidence in the record regarding the vehicle’s condition around December 2015 are the CARFAX report, AutoCheck report, and Steve’s Muffler inspection report, all of which indicate the vehicle was safe to drive. The estimates of repairs in the record and the hearsay testimony regarding what Big O Tires employees told Quillen speak to the condition of the vehicle in April 2017 or later. This is not substantial evidence establishing the condition of the vehicle two years and 14,000 miles earlier. Without substantial evidence that the vehicle was in any way unsafe to drive at the time Oganesyan made the challenged statements, the record does not support that Oganesyan’s statements to the contrary were false or misleading. (See Civ. Code, § 1770, subd. (a)(5) [deceptive business practice to “[r]epresent[ ] that goods . . . have . . . characteristics . . . [which] they do not have,” italics added].) Nor can Oganesyan be found to have concealed or suppressed a fact if there is no evidence in the record supporting that fact. (See Collins, supra, 202 Cal.App.4th at p. 255 [conduct proscribed by CLRA includes concealment of material fact “because fraud or deceit encompasses the suppression of a fact by one who is bound to disclose it, or the suppression of a fact that is contrary to a representation that was made,” italics added]; Gutierrez v. Carmax Auto Superstores California (2018) 19 Cal.App.5th 1234, 1258 [“an omission is actionable under the CLRA if the omitted fact is (1) ‘contrary to a [material] representation actually made by the defendant’ or (2) is ‘a fact the defendant was obliged to disclose,'” italics added].)  Substantial evidence thus does not support a deceptive practice prohibited by the CLRA, and does not support the court’s ruling in Quillen’s favor on the CLRA claim.