BILL ANALYSIS
SENATE JUDICIARY COMMITTEE
Senator Ellen M. Corbett, Chair
2009-2010 Regular Session
SB 95 S
Senator Corbett B
As Amended March 16, 2009
Hearing Date: March 31, 2009 9
Civil Code; Vehicle Code 5
ADM:jd
SUBJECT
California Car Buyers' Protection Act of 2009
DESCRIPTION
This bill would increase from $50,000 to $100,000 the bond
required of a vehicle dealer for issuance or renewal of a
dealer's license by the Department of Motor Vehicles (DMV).
This bill would provide that a person who bought or leased a
vehicle or motorcycle and who suffers any loss or damage related
to the purchase or lease by reason of any fraud or contract or
statutory violation in connection with the purchase or lease
would have a right of action against the dealer and the dealer's
bond for actual damages plus any incidental and consequential
damages.
This bill would prioritize claims against a dealer's bond as
follows: first, DMV claims (unpaid license and registration fees
and sales taxes); second, claims of any person who purchased or
leased a vehicle or motorcycle; and third, claims by the
financing agency and any other persons or entities.
This bill would provide that, if a dealer acquires a used
vehicle with a balance due to a secured party (a financing
agency or lender), the dealer must submit to the DMV evidence in
the form of a notarized receipt from the secured party that the
dealer has paid off the entire balance prior to transferring the
vehicle, or prior to the date when payment is due, whichever
occurs first.
(more)
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This bill would make it unlawful for a dealer to sell or
transfer a used vehicle with a balance due to a secured party
prior to paying off the entire balance and submitting the
notarized receipt to the DMV.
This bill would make failure to comply with the above two
provisions regarding dealer pay offs unlawful under the Consumer
Legal Remedies Act (CLRA) as an unfair or deceptive act or
practice.
(This analysis reflects author's amendments to be offered in
committee.)
BACKGROUND
A recent Associated Press (AP) article reported, "About a
quarter of all car buyers are vulnerable because they still owe
money on their trade-in or lease when they buy another vehicle,
according to industry tracker Edmunds.com. It's become more
common for a driver to owe money on a trade-in as people stretch
their car payments over six or seven years to make them more
affordable." As reported by the AP, San Francisco Chronicle,
KOVR-TV, Los Angeles Times, KCRA-TV, KXTV, KGO-TV and other news
organizations, many car buyers are falling victim to auto
dealers who engage in unlawful activities prior to closing their
doors.
Nationwide auto dealerships are going out of business or are in
bankruptcy. California has been hit hard because it has the
nation's largest auto market, with more dealers going out of
business or declaring bankruptcy and more buyers who owe money
on their trade-ins. Since the beginning of 2009, approximately
two dozen dealers have closed their doors. Among the
dealerships that have gone out of business in California are
Fairfield Ford, Elk Grove Saturn, Superior Nissan of Fremont,
Superior Toyota of Oakland, and Great Valley
Chrysler-Jeep-Mazda-Isuzu. This trend is predicted to continue
for the foreseeable future.
According to the auto industry trade publication Automotive
News, "Peter Welch, president of the California [New] Car
Dealers Association ? said California lost 116 [new car]
dealerships in the first 11 months of 2008 ? He believes
closures will total 150 [new car dealerships] by year end and
predicts as many as 500 closings in 2009."
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According to a chart provided by the DMV to the news media, more
than 416 independent used car dealers also went out of business
during the first 11 months of 2008. Some of the individuals
associated with those dealerships then turned around and
re-opened under different names, sometimes at the same location.
The dilemma that car buyers face is that hundreds of dealerships
- including large franchised dealerships that have been in
business for years - are suddenly closing their doors without
any warning, taking hundreds of their customers down with them.
At the same time, some dealers are engaging in unfair,
deceptive, fraudulent, and unlawful practices, including failure
to pay off balances due on trade-ins. This bill is intended to
address the consumer problems that have arisen, particularly
from dealership closures.
Under current law, dealers are required to post a $50,000 bond
with the DMV. Some other states have bond requirements greater
than $100,000 (Hawaii, $200,000; Maryland, up to $300,000),
while others are lower.
CHANGES TO EXISTING LAW
1.Existing law provides that before any dealer's or
remanufacturer's license is issued or renewed by the DMV to
any applicant, the applicant must procure and file with the
DMV a bond executed by an admitted surety insurer, approved as
to form by the Attorney General, and with the condition that
the applicant is prohibited from practicing any fraud or
making any fraudulent representation that would cause a
monetary loss to a purchaser, seller, financing agency, or
governmental agency. (Vehicle Code (VC) section 11710(a).)
Existing law provides that a dealer's bond must be in the
amount of $50,000, except the bond of a dealer exclusively in
motorcycles or all-terrain vehicles must be in the amount of
$10,000. Before the license is renewed by the DMV, the
dealer, other than a dealer who deals exclusively in
motorcycles or all terrain vehicles, is required to procure
and file a bond in the amount of $50,000. A remanufacturer
bond must also be in the amount of $50,000. (VC section
11710(b).)
This bill would increase the dealer bond from $50,000 to
$100,000. The motorcycle or all-terrain dealer bond would
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remain at $10,000 and the remanufacturer bond would remain at
$50,000.
2.Existing law provides that, if any person (1) suffers any loss
or damage by reason of any fraud practiced on him by a
licensed dealer or one of the dealer's salesmen acting for the
dealer, in his behalf, or within the scope of employment of
such salesman and such person has possession of a written
instrument furnished by the licensee, containing stipulated
provisions and guarantees which the person believes have been
violated by the licensee, or (2) suffers any loss or damage by
reason of the violation of any of the registration provisions
of this code, or (3) is not paid for a vehicle sold to and
purchased by a licensee, than any such person has a right of
action against such dealer, his salesman, and the surety upon
the dealer's bond, in an amount not to exceed the value of the
vehicle purchased from or sold to the dealer. (VC section
11711.)
This bill would provide that, if a person who bought or leased
a motor vehicle or a motorcycle at retail suffers any loss or
damage related to the purchase or lease of that vehicle by
reason of any fraud or contract or statutory violation
practiced on him or her by a licensed dealer or one of the
dealer's salespersons acting for the dealer, on his or her
behalf, or within the scope of the employment of his or her
salesperson in connection with the purchase or lease of the
motor vehicle, then that person would have a right of action
against the dealer, his or her salesperson, and the surety
upon the dealer's bond for actual damages plus any incidental
and consequential damages.
3.Existing law provides that claims, against the surety upon a
dealer's bond, of a financing agency that has loaned money to
a licensee are allowed only to the extent that the claims of
any other person or entity with respect to the bond have been
satisfied first. Such claims are entitled to preference over
the claims of the financing agency. However, as to any
conditional sales contract, as defined, acquired by way of
purchase or pledge, a financing agency is entitled to
protection under the bond with the same preference as other
persons if the financing agency has been defrauded by a
licensee. (VC section 11722.)
This bill would provide that claims, against the surety upon a
dealer's bond, of a financing agency that has loaned money to
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a licensee, or claims based upon accepted assignments of
conditional sales agreements, or the purchase of conditional
sales agreements or of any other agreement entered into with a
licensee would be allowed only to the extent that the claims
of any persons who purchased or leased a motor vehicle or a
motorcycle at retail are satisfied first. Such claims would
be entitled to preference over the claims of the financing
agency and other persons or entities, except the DMV (for
unpaid license and registration fees and sales taxes).
4.Existing law , the CLRA, provides that 24 specified unfair
methods of competition and unfair or deceptive acts or
practices undertaken by a person in a transaction intended to
result or that results in the sale or lease of goods or
services to a consumer are unlawful. (Civil Code (CC) section
1770.)
This bill would provide that, if a dealer acquires a used
vehicle with a balance due to a secured party, the dealer must
submit to the DMV evidence in the form of a notarized receipt
from the secured party that the dealer has paid off the entire
balance prior to transferring the vehicle, or prior to the
date when payment is due, whichever occurs first.
This bill would make it unlawful for a dealer to sell or
transfer a used vehicle with a balance due to a secured party
prior to paying off the entire balance and submitting the
notarized receipt to the DMV.
This bill would make failure to comply with the above two
provisions regarding dealer pay offs unlawful under the CLRA
as an unfair or deceptive act or practice.
This bill would provide that nothing in this act may be
construed to limit, in any way, the existing rights, remedies,
or recourses available to any person who purchases or leases
vehicles at retail.
This bill makes certain legislative findings and declarations.
(See Comment 9.)
COMMENT
1.Stated need for the bill
The sponsor, Consumers for Auto Reliability and Safety (CARS),
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writes:
When dealerships go out of business they not only fail to pay
off liens, but also fail to honor warranties, service
contracts, and other services for which car buyers have paid
in advance, costing car buyers millions of dollars and eroding
consumer confidence. While SB 729 last year created a fund to
help consumers whose lives are destroyed by these
irresponsible car dealers, SB 729 did not address the problem.
Dealers still can sell vehicles without paying off the title.
In 2008, 120 new-car dealerships and over 416 used car
dealerships went out of business in California. Industry
analysts predict that even more dealerships will go out of
business in 2009. As dealerships close their doors, they are
leaving consumers with unpaid liens on vehicles they
traded-in, as well as a second loan on the newer vehicle they
purchased at the dealership. Too often the consequence is
destruction of consumer credit, repossession of the vehicles,
job losses due to the lack of transportation to get to work,
and bankruptcy.
2.Consumer protections in SB 95
The bill contains the following consumer protections:
Requires auto dealers to: 1) pay off the entire amount owed on
traded-in vehicles prior to transferring ownership or before
the first payment is due, whichever comes first; and 2)
provide a notarized receipt from the lienholder to the DMV
confirming that the lien has been satisfied.
Increases the dealer bond requirement for new and used car
dealers from $50,000 to
$100,000 -- on a par with Arizona, but still less than
Maryland (up to $300,000) and Hawaii (up to $200,000). This
is consistent with the $100,000 bond amount in legislation
sponsored by the California New Car Dealers Association (AB
1939, DeSaulnier, 2008) and would provide consumers greater
access to compensation for losses and damages related to the
purchase or lease of a vehicle.
Clarifies that wronged retail car buyers have
access to the bond, second only to the DMV.
Allows consumers to recover actual damages plus
incidental and consequential damages.
Eliminates restrictions that narrowed the
grounds for consumers to access the bond, so that more victims
of salvage fraud, predatory lending, and other illegal
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practices may be able to recoup their losses when a dealer
goes out of business.
Makes it unlawful under the CLRA to sell or transfer a used
vehicle with a balance due to a lender prior to paying off the
balance and submitting the notarized receipt to the DMV. This
would allow injured consumers access to remedies available
under the CLRA.
Clarifies that the new law will not limit
existing rights, remedies, or recourses available to consumer
victims under existing law.
1.Consumer complaints to the DMV
The DMV reports that the number of consumer complaints involving
a dealer's failure to pay off a trade-in has risen significantly
from prior years. As of the end of February 2009, the DMV
states that it is investigating 256 active cases where a dealer
has failed to pay off a consumer's trade-in and 564 additional
consumer complaints that the consumer had not yet received
verification that title to a vehicle bought from or sold to a
dealer had been transferred.
2.Existing bond requirements are insufficient; cost of bond
In 2002, SB 1458 (Romero, Chapter 303, Statutes of 2002)
increased the dealer bond requirement for new and used car
dealers from $10,000 to $50,000. When SB 729 (Padilla, Chapter
437, Statutes of 2007) (See Comment 7) was being considered, the
California District Attorneys Association stated that, even with
that increase,
[t]he existing [$50,000] bond is inadequate to address the
problem [when dealers go out of business] because (1) the
amount of the bond is too small to compensate for all losses;
(2) the bond covers various losses including the state's loss
of vehicle license and registration fees and sales taxes which
have a first priority claim on bond funds; (3) consumers may
have to institute costly litigation to enforce payment on the
bond; and (4) the surety insurer issuing the bond may file an
interpleader action allowing the surety insurer to deduct
litigation expenses thereby reducing the total amount of bond
funds available to pay claims.
Comment 7 provides details of a number of dealerships across
several counties that have gone out of business and left
consumers with losses, some in excess of $1 million (Vacaville
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Ford, 100 victims).
CARS writes:
Bonds are often the only recourse customers have when a dealer
goes out of business. Further, if bonds are designed and set
properly, they can play a role in weeding out shady dealers
who have bad credit, generate complaints, and enter into a
business such as selling cars with the knowledge that they can
engage in illegal practices and then go out of business,
leaving their customers holding the bag. Bonds can also help
address the problem of "revolving door" dealerships, where the
same cast of characters open up a business, stiff consumers
and the state, then turn around and get a license under a
relative's name and repeat the pattern of bad acts again and
again.
The DMV has suffered cutbacks and lacks the staff and
resources to adequately police the auto market. The DMV is
often slow to respond effectively to consumer complaints. The
bond requirement is a private backup to the DMV that can help
weed out dealers who are undercapitalized and/or engage in
unlawful acts and practices. In the current market, consumers
have no way of knowing whether a dealer is going to be in
business from one day to the next. The bond requirement can
help weed out the ones that are going to go under before they
take hundreds of consumers down with them.
CARS further writes:
When the bond was raised in 2002, many dealerships made dire
predictions that the sky would fall and California's car
market would collapse. However, the market continued to
thrive and many dealers made record profits for several years
after the measure was enacted. ? SB 95 would raise the bond
requirement from $50,000 to $100,000. According to a major
surety company that provides bonds for dealerships in all 50
states, the rates for dealers to obtain California's bond are
as follows: 1) $800 per year (Super Preferred); 2) $1000 per
year (Preferred); and 3) $1,500 per year (Standard).
3.Fraud standard in current law; addition of breach of contract
and statutory violations
Under current law a consumer who suffers any loss or damage
related to the purchase or lease of a vehicle due to fraud has a
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private right of action against the dealer, the dealer's
salespersons, and the surety on the dealer's bond in an amount
not to exceed the value of the vehicle purchased from or sold to
the dealer.
The elements of actionable fraud are a deceit (one who willfully
deceives another with intent to induce him or her to alter his
or her position to his or her injury or risk), which is either:
1) the suggestion, as a fact, of that which is not true by one
who does not believe it to be true; 2) the assertion, as a fact,
of that which is not true, by one who has no reasonable ground
for believing it to be true; 3) the suppression of a fact, by
one who is bound to disclose it, or who gives information of
other facts which are likely to mislead for want of
communication of that fact; or 4) a promise made without any
intention of performing it. (CC sections 1709, 1710.)
The author and sponsor, CARS, assert that, because fraud (an
intentional act) is often difficult to prove and breach of
contract and statutory violations are also of concern and appear
to be a growing problem as dealerships go out of business, SB 95
would add those violations to VC section 11711 (fraud and other
violations of law). In addition, SB 95 would provide for actual
damages plus any incidental and consequential damages, such as
auto rental costs.
4.Notarized receipt provision of SB 95
This bill would provide that, if a dealer acquires a used
vehicle with a balance due to a secured party (a financing
agency or lender), the dealer must submit to the DMV evidence
in the form of a notarized receipt from the secured party that
the dealer has paid off the entire balance due prior to
transferring the vehicle, or prior to the date when payment is
due, whichever occurs first. Some stakeholders have voiced
concern about the workability of a notarized receipt. The
author and sponsor have agreed to continue to work with
stakeholders to find the best way to verify that the dealer has
paid off any balance due on a trade-in.
5.Senate Bill 729 - Consumer Motor Vehicle Recovery Corporation
Senate Bill 729 (Padilla, Chapter 437, Statutes of 2007) created
the Consumer Motor Vehicle Recovery Corporation (CMVRC), a
nonprofit mutual benefit corporation, with a board of directors
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with certain powers and duties, in order to provide payments to
consumers on eligible claims, including a vehicle dealer or
lessor-retailer's failure to remit license or registration fees,
failure to pay off a trade-in's sale or lease balance owed, or
failure to pay proceeds of a consignment sale. A consumer may
file an application with the CMVRC for the payment of the
consumer's eligible claim if the dealer or lessor-retailer
against whom the claim is asserted has ceased selling and
leasing vehicles or is in bankruptcy.
The DMV is required to charge dealers and lessor-retailers a fee
of $1.00 for each vehicle sold by the dealers and
lessor-retailers, up to $2,500 per dealer per year. The fees
are continuously appropriated to the DMV for quarterly payment
to the CMVRC until the recovery fund has reached $5 million. To
date the DMV has collected approximately $720,000. Oversight
and review of the CMVRC is done by the Attorney General.
Although the CMVRC was to be implemented by July 1, 2008,
information provided to CARS indicates that the CMVRC is not yet
fully implemented. The information also indicates that all the
board members have been appointed; the board is in the process
of devising the claims forms and having them translated; the
CMVRC is close to the point where it may start accepting claims;
and it may be a matter of weeks before it is ready to begin
processing claims.
The sponsor, CARS, states that, based on information provided by
the California District Attorneys Association (CDAA) to the
Judiciary Committee in support of SB 729, when dealerships go
out of business they sometimes leave many victims holding the
bag, resulting in more than $1 million in losses at a single
dealership. Examples provided by the CDAA include:
Solano County dealership (Vacaville Ford); more than 100
victims, and more than $1 million in losses.
Alameda County dealership; 50 victims and losses in excess of
$1 million.
Riverside County dealership; 6 victims; $50,000 in losses.
Placer County dealership; 8 victims; $50,000 in losses.
Marin County dealership; losses of approximately $100,000.
Monterey County dealership; more than 80 victims; more than $1
million in losses.
CARS writes:
Even if it were funded at the maximum level allowed by law,
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based on prior history, the demise of five large new car
dealerships could deplete the entire fund. Meanwhile,
hundreds of new car dealerships are predicted to close this
year. The [CMVRC] also allows claims for only a narrow subset
of violations involving failures to pay off liens, failures to
provide clear title, or pocketing the proceeds from
consignment sales. In addition, due to various delays, to
date, the [fund] has not paid a single claim.
1.Requirements of and remedies and defenses available under the
CLRA
This bill would make failure to comply with the two provisions
of the bill that require a dealer to pay off the entire balance
due on a trade-in unlawful under the CLRA as an unfair or
deceptive act or practice. (CC section 1770.) As such, the
remedies available under the CLRA would be available to a
consumer who suffers damages as a result of a dealer's failure
to pay off the balance due on a trade-in. Those remedies
include: 1) actual damages; 2) an order enjoining the methods,
acts, or practices; 3) restitution of property; 4) punitive
damages; and 5) any other relief the court deems proper. (CC
section 1780.)
Civil Code section 1782 provides that 30 days or more prior to
the commencement of an action for damages under the CLRA, the
consumer must: 1) notify the person alleged to have employed or
committed methods, acts, or practices declared unlawful by
Section 1770 of the particular alleged violations of Section
1770; and 2) demand that the person correct, repair, replace, or
otherwise rectify goods or services alleged to be in violation
of Section 1770. This would provide the dealer the opportunity
to rectify the situation, without litigation, by paying off the
balance due on the vehicle.
Civil Code section 1784 provides that no award of damages may be
given in any action based on a method, act, or practice declared
to be unlawful by Section 1770 if the person alleged to have
employed or committed such method, act, or practice (a) proves
that such violation was not intentional and resulted from a bona
fide error notwithstanding the use of reasonable procedures
adopted to avoid any such error and (b) makes an appropriate
correction, repair, or replacement or other remedy of goods and
services.
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2.Legislative findings and declarations
This bill would make a number of legislative findings and
declarations, including:
During the past year at least 480 licensed new and used auto
dealerships have gone out of business in California and it is
projected that the numbers will continue to accelerate for the
foreseeable future.
Consumers who purchase vehicles from dealerships licensed by
the DMV have a reasonable expectation that the dealerships
have sufficient resources to honor their contractual
commitments.
When dealerships go out of business they often fail to pay off
liens and also fail to honor warranties, service contracts,
and other services for which car buyers have paid in advance,
costing thousands of car buyers millions of dollars in losses.
When dealerships go out of business without honoring their
obligations, car buyers often face ruinous consequences
through no fault of their own, resulting in harm to their
credit, repossessions, job losses, home foreclosures, and
bankruptcy.
The DMV projects that the current funding available for the
CMVRC will not be sufficient to meet demand.
1.Opposition
Opponent California New Car Dealers Association (CNCDA) makes a
number of arguments in opposition to the trade-in and bond
provisions of the bill.
a. Trade-ins
CNCDA argues that the provision in the bill that would make it
unlawful to sell or transfer a used vehicle with a balance due
to a lender prior to paying off the balance due is overly
broad and vague and would lead to "innumerable unintended
consequences."
The proposed statute is triggered and takes control in
every possible situation when a dealer "acquires" a used
vehicle "with a balance due to a secured party." This goes
well beyond acceptance of a trade-in with a prior credit or
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lease balance.
CNCDA lists a number of situations, which it argues the
provision would extend to, such as dealer acquisition of a
used vehicle with a clean title from another dealer, but where
the selling dealer's landlord claims its lease with the dealer
gives it a security interest in personal property located on
the premises.
CNCDA further argues that the provision requiring pay off of
the entire balance due before the earlier of either
transferring the vehicle or when payment is due is also overly
broad and would create harsh and unnecessary consequences.
A dealer would be required to make payment by the time
payment is due, even though the dealer was never a party to
the payment obligation and most likely was never informed
of payment due dates, let alone being provided with a copy
of the security agreement. ? It is unreasonable to impose
satisfaction of a contractual commitment upon a dealer who
never had an opportunity to negotiate or even read the
commitment. ? [T]he [provision] as drafted constitutes a
wholesale shift of risk to otherwise innocent purchasing
dealers and away from secured parties and vehicle sellers -
businesses who are in much better positions to protect
against such risk. The [provision] is not reasonably
limited to protecting used vehicle purchasers or trade-in
customers.
CNCDA is also opposed to the notarized receipt provision in
the bill:
The bill leaves to the imagination the form of such a
receipt, the time frame within which it would be returned
(keeping in mind that the secured party has the right to
payment in full of all charges up until the time the
receipt is returned to the dealer), the manner DMV would
want it submitted, and how the DMV would provide evidence
of submission back to the dealer.
CNCDA asserts that this would interfere with a dealer's
ability to gain working capital while the dealer waits for the
notarized receipt. "Used vehicle inventory is a wasting asset
that rapidly depreciates in value. Dealers need to be able to
sell trade-in vehicles as soon as they tender the pay off to a
lienholder." (See Comment 6 regarding the author's and
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sponsor's commitment to continue to work with stakeholders on
the notarized receipt provision.)
b. Dealer bond provisions
CNCDA argues that increasing the bond to $100,000 would force
many honest dealers out of business because no surety company
would issue them a bond. At the same time however, CNCDA has
told the author and sponsor that it is not opposed to the
increased bond.
CNCDA objects to eliminating the current limitation on
liability (the value of the vehicle) and replacing that limit
with a provision that would impose liability for actual
damages plus incidental and consequential damages. "Moreover,
the grounds for liability would be greatly expanded to cover
not only fraud, but contract or statutory violation related to
the purchase or lease of a vehicle." CNCDA asserts that
"these expansive new causes of action" against a dealer bond
would result in the following:
The bill would create a private right
of action for every state and federal statute to which a
dealer is subject during a sale; not only consumer
protection statutes, but all others as well, which would
amount to "a wholesale repeal of California law limiting
certain private rights of action ? ."
The bill is overbroad in that it would
allow expanded damages to include actual, incidental, and
consequential damages in every case.
The bill would allow damages for any
violation of contract (whether or not cured). This bill
thus "supports absurd results, such as damage claims for
contract violations that are not material or that result
from mistake or are otherwise made in good faith."
Dealer liability for the acts of
salespersons under the bill is overbroad and amounts to
"strict liability."
Removing the limit on the maximum claim
(the value of the vehicle) would "permit bond resources to
be exhausted in satisfaction of claims exceeding the value
of the vehicle for items such as lost income, lost profits,
value of the bargain, replacement transportation, etc."
The bill would "channel most disputes
with dealers toward the bonding company and away from
courts and administrative agencies."
Due to the "breadth and scope of causes
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of action that could be asserted against a dealer bond
under [the bill] and the amount of damages that could be
collected, it is doubtful that many bonding companies, if
any, would be willing to underwrite the risk of
indemnifying dealers under such a scheme."
The California Motorcycle Dealers Association (CMDA) also
opposes the bill "because of the overly severe provisions that
will have an extremely negative effect on the motor vehicle
dealers that remain in California. It will only serve to
exacerbate an already difficult economic environment with
regulations that punish all dealers ? . [Requiring] a
notarized release of liens will grind the resale process to a
halt, which is the only thing keeping many dealers in business
because the sale of new vehicles has been drastically reduced
by the economy and lack of consumer financing." The CMDA
argues that the CMVRC should be relied upon and this bill
should be dropped and should only be reconsidered if the CMVRC
does not provide results.
1.Author's amendments
The amendments on pages 4, 5, 9, and 10 remove the provisions
regarding the New Motor Vehicle Board and its authority and
duties under VC section 3050.
On page 3, line 11, delete the word "licensed" and insert the
word "new" in its place.
On page 3, line 11, insert the word "licensed" after the word
"used."
On page 4, delete lines 36 through 40.
On page 5, delete lines 1 through 12.
On page 8, line 26, delete "advertising the vehicle for sale
or."
On page 9, delete lines 15 through 40.
On page 10, delete lines 1 through 26.
On page 10, line 28, delete the word "acquires" and insert the
word "purchases."
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On page 10, lines 33-34, delete "offer for sale, advertise for
sale," and insert the word "sell" after "to."
On page 12, lines 37 to 40 and page 13, lines 1 to 10 are
amended to read as follows:
11711. (a) If a person who bought or leased a motor vehicle or
motorcycle at retail suffers any loss or damage related to the
purchase or lease of that vehicle by reason of any fraud or
contract or statutory violation practiced on him or her by a
licensed dealer or one of the dealer's salespersons acting for
the dealer, on his or her own behalf, or within the scope of the
employment of his or her salesperson in connection with the
purchase or lease of that motor vehicle, or by reason of the
violation by such dealer or salesperson of any of the provisions
of Division 3 (commencing with Section 4000) of this code, than
that person shall have a right of action against the dealer, his
or her salesperson, and the surety upon the dealer's bond for
actual damages plus any incidental and consequential damages.
Support : Congress of California Seniors; California Statewide
Law Enforcement Association; Consumer Federation of California;
Consumers Union; American Federation of State, County and
Municipal Employees; Consumer Watchdog; California Public
Interest Research Group; two individuals; Consumer Attorneys of
California; Teamsters
Opposition : California New Car Dealers Association; California
Motorcycle Dealers Association; Watt Automotive, Santa Rosa
HISTORY
Source : Consumers for Auto Reliability and Safety
Related Pending Legislation : None Known
Prior Legislation :
AB 1939 (DeSaulnier, 2008), among other things, would have
increased the amount of the dealer's and remanufacturer's bond
to $100,000. This bill died in the Senate Transportation and
Housing Committee.
SB 729 (Padilla, Chapter 437, Statutes of 2007) (See Comment 7
for details.)
SB 95 (Corbett)
Page 17 of ?
SB 1458 (Romero, Chapter 303, Statutes of 2002), among other
things, increased the amount of a vehicle dealer's bond and a
remanufacturer's bond to $50,000, except the amount of a dealer
who deals exclusively in motorcycles remains at $10,000.
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