30-2013-00625361
Motion by Defendant Lisenby for Summary Judgment/Summary Adjudication of Issues:

The motion is denied.
The Rees-Levering Act did not apply to the loan and does not govern the notice requirements for sale of the repossessed car.
In addition there is a triable issue of material fact as to whether the Notice substantially complies with Comm. Code § 9614.

(a) Application of Rees-Levering Act (Twenty-First Affirmative Defense):
(i) The Rees-Levering Motor Vehicle Sales and Finance Act, Civ. Code §§ 2981 through 2984.4, regulates the retail sales and financing of motor vehicles with the goal of protecting the consumer. [See Kuntert v. Mission Financial Services Corporation (2003) 110 Cal. App. 4th 242, 248; Statutory Note, Cal. Civ. Code D. 3, Pt. 4, T. 14 Ch. 2b, Refs & Annos. ] The formalities and requirements prescribed the by statute for conditional sale contracts are mandatory and substantial conformance is not sufficient. [See Kuntert v. Mission Financial Services Corporation, 110 Cal. App. 4th at 248.]
Under the Rees-Levering Act, upon the consumer’s default under a conditional sales contract, the consumer is liable for the deficiency between the amount owed and the amount recovered on sale of the repossessed car only if notice of the sale is provided as set forth in Civ. Code § 2983.2.
The Act and its provision do not apply when the loan that is secured by the car was between the consumer and “a supervised financial organization other than the seller” of the car. Civ. Code § 2983.2(a). This exemption only applies, though, to private financing obtained independently by the consumer – that is, where the dealer does not assist the consumer with obtaining the loan. El Dorado Bank v. Lytle (1983) 147 Cal. app. 3d Supp. 17, 20l Hernandez v. Atlantic Finance Company of Los Angeles (1980) 105 Cal. App. 3d 65, 77.

(ii) Defendant points to In re Catipon (9th Cir. BAP 2011) 2011 WL 6934449 for the proposition that the Rees-Levering Act applies even where the lending bank is a supervised financial institution who was not involved in the sale. First, there is no discussion in Catipon of what the lender’s role was in the car purchase transaction. Certainly, there is no finding that the lender had no dealings with the lender or that the loan was not dealer assisted. Indeed, there is some suggestion that the car dealer may have had role in the loan process insofar as the lender alleged the dealer and Catipon together schemed to alter her credit information so that she would get the loan. Id. at *1. Second, Catipon is not binding authority for this court and is, as read by Defendant, contrary to terms of the statute in issue and the California law on that point.

(iii) Here, Defendant does not contend, and has not presented any evidence, that his loan with AFCU was dealer assisted. Moreover, Plaintiff’s evidence affirmatively establishes that Defendant’s car seller had no role in Defendant obtaining the car loan form AFCU. [Shumake Decl., ¶ 3.]

(iv) Accordingly, for purposes of this motion, the Rees-Levering Act did not apply to the loan and does not govern the notice requirements for sale of the repossessed car. Moving Party has failed to meet his burden on this affirmative defense.

Defendant is therefore not entitled to summary judgment on the FAC by virtue of his twenty-first affirmative defense.

(b) Application of Comm. Code § 9614 (Twenty-Second Affirmative Defense):
(i) Division 9 of the Commercial Code governs secured transactions, with Chapter 6 prescribing obligations and rights upon a default. After default, the secured party can sell the property. Comm. Code § 9610. Prior to doing so, however, the secured party must send notice to the debtor. Comm. Code § 9611. The notice requirements vary slightly depending on whether it was a consumer goods transaction. See Comm. Code §§ 9613 (applying to transactions except consumer-goods transactions) and 9614 (applying to consumer-goods transactions). If the secured party complies with the notice requirements, it may obtain a deficiency judgment against the debtor. Comm. Code §§ 9615(d)(2), 9626(b)(2)(B). Such notice need not be precisely as prescribed but in substantial compliance. §§9613(3), (4); 9614(2), (4), & (5) (containing essentially the same terms as for section 9613, though not identical); Witkin, Summary of California Law (10th ed. 2005), Secured Transactions in Personal Property §182 (referring to language in § 9613 and stating that substantial compliance with the required notice is sufficient).

(ii) Here, there is no dispute about what notice Plaintiff/AFCU sent prior to sale of the car repossessed from Defendant.
The question is whether that notice complied, or substantially complied, with the requirements of Comm. Code § 9614.
The Notice informed Defendant there would be a public sale and informed him where it would be. The Notice did not state when the sale would be because that was unknown – the car was on consignment at the dealer’s and it could not be known when someone would decide to buy it.

Defendant points to the absence from the notice of any statement that he could get more information about the sale and the contact information for him to get that information. Plaintiff, on the other hand, points to the facts that (i) the information about location of the sale included the dealer’s name and address if Defendant wanted to inquire there, and (ii) the address and phone number of AFCU was provided for Defendant to contact AFCU with questions (albeit the potential questions noted in the notice were about the amount owed rather than the sale of the car).

On reply, Defendant argues the Notice is confusing because the portions of the form for public sale and private sale are both filled out.

The decision whether this notice was sufficient could go either way. This is for the jury to decide. If one bends toward the far end of consumer protection, the absence of express notice to the consumer that he is permitted to get more information about the sale, and information about where he can get it, can be deemed a significant deficiency impairing the consumer’s ability to protect himself. Further, while the entire section for public sale pursuant to Section 9614 is filled out appropriately, the following section for private sale has been partially filled out.

On the other hand, the notice accurately informed the consumer about the status of the car, the sale of the car, and the consumer’s debt – and gave him contact information if he wanted to follow up. And the fact that the Notice shows the car’s description in the private sale portion, but no sale information, is not misleading given that the portion of the form for public sale is entirely filled out. Read in context, the information clearly indicates there will be a public sale at J Star Motors. Arguably the Notice was sufficient to inform the consumer and permit him to protect his interests if he wished.

Given these conflicting interpretations of the basic facts, the court finds that the question of whether the Notice substantially complies with Comm. Code § 9614 is a triable issue of fact. [See Cline v. Yamaga (1979) 97 Cal. App. 3d 239, 248 (reversing summary judgment on finding that conflicting inferences from undisputed facts raised triable issue of fact whether there was substantial compliance).]

Defendant is therefore not entitled to summary judgment on the FAC by virtue of his twenty-second affirmative defense.

(c) Evidentiary Objections
(i) Plaintiff’s Objections to Defendant’s Evidence
Plaintiff has objected to portions of Lisenby’s declaration and the deposition testimony submitted by Defendant (as an exhibit to the Kwang deposition). Defendant has filed responses.

Plaintiff has not complied with CRC 3.1352. The objections are not numbered and there is no proposed order. This requires the court [and presumably the opposing party] to try and mix and match the unnumbered objections with the pertinent evidence. Reference back and forth is required, constant, and unreasonable. This defeats the whole purpose of California Rule of Court 1354 (b) and (c). The objections are overruled on this basis.

(ii) Defendant’s Objections to Plaintiff’s Evidence
Defendant too as failed to comply with CRC 3.1352 or to number his objections for easy reference. They are similarly overruled.

Responding Party shall give Notice.