It’s not an automobile case, but is interesting for statements of law applied. In Galindo v. Financo Financial, Inc., 2008 WL 4452344 (N.D.Cal. 2008), Judge William Alsup required strict compliance with the CLRA’s pre-filing notice requirement:
California courts require “strict” compliance with Section 1782. Outboard Marine Corp. v. Superior Court, 52 Cal.App.3d 30, 40-41, 124 Cal.Rptr. 852 (1975). Plaintiffs filed the present action in state court on June 29, 2007. Plaintiffs admit that they filed no notice as required by Section 1782 until October 1, 2007–months after the state-court action was filed. According to plaintiffs, however, the notice requirements were met because notice was given thirty days before the second amended complaint in this action was filed. Plaintiffs cite to no support for this argument. Significantly, Section 1782 requires that notice be given thirty days before the “commencement of an action” (emphasis added). Notice, therefore, should have been given thirty days before June 29, 2007. This was not done. Defendants request that plaintiffs claim be dismissed with prejudice. The Court is aware that Magistrate Judge James Stiven of the Southern District has dismissed a CLRA claim with prejudice where a plaintiff has failed to satisfy the pre-litigation requirements of Section 1782. See Von Grabe v. Sprint, 312 F.Supp.2d 1285, 1394 (S.D.Cal.2003). The undersigned believes this draconian sanction is unwarranted here. There are other disciplinary ways to deal with any willful disregard of the law, such as attorney’s fees awards to name just one. Accordingly, plaintiffs’ CLRA claim is hereby DISMISSED WITHOUT PREJUDICE.
Judge Alsup also required the plaintiff to plead facts supporting the ‘consumer’ use of the collateral in order to trigger TILA.
Homecomings next contends that TILA does not apply to Galindo’s loan because it was made for business purposes. “The Truth-in-Lending Act specifically exempts from its scope extensions of credit for business or commercial purposes.” Poe v. First Nat. Bank of DeKalb County, 597 F.2d 895, 896 (5th Cir., 1979), citing 15 U.S.C. 1603(1) and 12 C.F.R. 226.3(a). In evaluating whether a certain loan was made for commercial purposes, the emphasis should be on the purpose of the transaction and not the categorization of the properties used to secure the loan. “Whether an investment loan is for a personal or a business purpose requires a case by case analysis.” Thorns v. Sundance Properties, 726 F.2d 1417, 1419 (9th Cir.1984). Notably, Galindo refinanced two properties. One was a fourplex investment property and the other was a home which she has not alleged she resides in. She used the proceeds of the refinance to build a home in Tracy. In a somewhat unexpected response, Galindo contends that there is no way to tell whether or not the loan was made for a business or personal purpose because she has not alleged any facts one way or the other in the complaint. That much is true. Without any such allegations detailing the purposes of the loan, Galindo has stated no claim. Her TILA claim is therefore Dismissed.