In Gutierrez v. State Farm Mut. Ins. Co.,  2012 WL 398828 (N.D.Cal. 2012), Judge Davila addressed the rights of a non-contracting spouse to sue under an automobile RISC and under the Rosenthal Act. 



Plaintiffs are husband and wife.  Husband purchased a limited edition 2007 Pontiac Solstice (the “vehicle”), financed by defendant finance company.  Husband contracted with Defendant State Farm Insurance Company for automobile insurance, and also purchased a Guaranteed Auto Protection policy (the “GAP contract”) from the finance company.  The vehicle was stolen.  Plaintiffs reported the theft to State Farm, who did not pay.  Plaintiffs reported the theft to the police and to the finance company.  Plaintiff stopped paying, purportedly, they claim, at the instruction of the finance company.  The vehicle was recovered. Although it had been destroyed, State Farm did not pay, and commenced a fraud investigation.  The finance company repossessed the vehicle.  Plaintiffs sued. 


Defendants claimed that the non-contracting wife lacked standing to sue for breach of contract and as a ‘consumer’ under the Rosenthal Act.  The District Court agreed with the former, but disagreed with the latter.   

Plaintiffs argue Veronica’s standing stems from her community interest in marital property and debts. Both parties are correct and incorrect in certain aspects. The court agrees . . . that Veronica lacks standing as to the contract-based claims, but also agrees with Plaintiffs that Veronica’s status as Joel’s spouse is sufficient for standing as to the other claims. ¶  Next, short reference must be made to this state’s community property law. In California, all property acquired by either spouse during a valid marriage is presumptively community property. Cal. Fam.Code § 760. In addition, “the community estate is liable for a debt incurred by either spouse before or during marriage, regardless of which spouse has the management and control of the property and regard-less of whether one or both spouses are parties to the debt or to a judgment for the debt.” Cal. Fam.Code § 910(a).     These statutory presumptions are the general starting point for the division of marital property and obligations. See Marriage of Benson, 36 Cal.4th 1096, 1103, 32 Cal.Rptr.3d 471, 116 P.3d 1152 (2005). They do not, however, confer standing on a non-contracting spouse. See Austero v. Nat’l Cas. Co., 62 Cal.App.3d 511, 133 Cal.Rptr. 107 (1976); see also Hatchwell v. Blue Shield, 198 Cal.App.3d 1027, 244 Cal.Rptr. 249 (1988). In rejecting an argument similar to that posed by Plaintiffs here, the Austero court stated: “Whatever [Wife’s] property rights with respect to the policies and their proceeds may be, the fact remains that she is not a party to the contracts.”   Austero, 62 Cal.App.3d at 517, 133 Cal.Rptr. 107. Building upon that concept, the Hatchwell court found “inappropriate” the enforcement of contract rights based solely on an indirect interest in community property since “the community interest would seem sufficiently protected by the rights of the covered spouse.” Hatchwell, 198 Cal.App.3d at 1036, 244 Cal.Rptr. 249.     Here, Plaintiffs potentially seek to enforce two contracts against Ally, and it is undisputed that neither were signed by Veronica. Pursuant Austero and Hatchwell, Veronica cannot, as a matter of law rely, on either her community interest in the object of the contracts—in this case the vehicle—or the community nature of the debt associated with that asset in order to enforce these contracts against [the finance company]. See id. at 1033, 244 Cal.Rptr. 249 (“Someone who is not a party to the contract has no standing to enforce the contract or to recover extra-contract damages for wrongful withholding of benefits to the contracting party.”). It therefore follows that, under a constitu-tional standing analysis, Veronica has not experienced an “injury in fact” as to the RISC or GAP contracts. Moreover, her inclusion in the contract-based claims against Ally violates the prudential limitation on standing since she is raising the rights of another, namely her husband Joel.    Since Veronica cannot maintain the claims for breach of contract, breach of the implied covenant of good faith and fair dealing, or bad faith against Ally, she is dismissed with prejudice from those claims to the extent they are so asserted.    However, the same analysis does not apply to the claim for conversion or those brought under the FDCPA and the Rosenthal Act because enforcement of the . . .  contracts is not directly implicated by those claims. Veronica’s interest in the vehicle as community property is sufficient to confer standing for a conversion claim. See Cal. Fam.Code § 751 (“The respective interests of the husband and wife in community property during continuance of the marriage relation are present, existing, and equal interests.”); see also Vick v. DaCorsi, 110 Cal.App.4th 206, 212, 1 Cal.Rptr.3d 626 (2003). In addition, since the allegations in the Complaint are that [the finance company] made certain representations to both spouses (see Compl., at ¶¶ 5, 19), Veronica may have standing under the FDCPA pursuant to 15 U.S.C. § 1692c(d) (“For the purpose of this section, the term ‘consumer’ includes the consumer’s spouse, parent [if the consumer is a minor], guardian, executor, or administrator.”) and the RFDCPA, which incorporates the same federal provision. Cal. Civ.Code § 1788.17.