Hanna v Karz Plus Demand Letter

Demand letter sent to Karz Plus on June 15, 2011
(Note: this letter is posted solely to illustrate the types of cases handled by the Law Office of Michael R. Vachon, Esq. Karz Plus denied the allegations, and there was never a court finding of whether they are true.)


                                                                    June 15, 2011

Via Certified Mail, Return Receipt Requested

Karz Plus R/V
Attn.: President and General Manager
502 W. Mission Ave.
Escondido, CA 92025

Dear Karz Plus R/V.:

     Ms. Erin Hanna has retained my law firm to prosecute her legal claims against you relating to the 2003 Mitsubishi Eclipse that she purchased on February 25, 2011. I am writing to set forth the facts, to cite the applicable law, and to request that you voluntarily comply with your obligations under California’s consumer protection laws.


      On February 25, 2011, Ms. Hanna visited Karz Plus R/V (hereafter “Karz Plus”) shopping for a used car. Karz Plus showed her a 2003 Mitsubishi Eclipse with vehicle identification number 4A3AC74H33K024799 (hereafter the “Mitsubishi Eclipse “). Karz Plus told Ms. Hanna that the Mitsubishi Eclipse was a quality, reliable, and dependable vehicle.

     Ms. Hanna inquired about service contracts for the Mitsubishi Eclipse and Karz Plus told her that if she purchased the Mitsubishi Eclipse Karz Plus would sell her a service contract that would provide comprehensive coverage for the vehicle. In reliance upon Karz Plus’s representations, Ms. Hanna agreed to purchase the vehicle.

After Ms. Hanna’s purchase of the Mitsubishi Eclipse, and within the applicable implied warranty period, Ms. Hanna discovered that the Mitsubishi Eclipse suffers from serious mechanical defects and malfunctions. As a result of these defects and malfunctions, the Mitsubishi Eclipse has been rendered immobile and cannot be driven. It will require thousands of dollars’ worth of repair in order to be put into safe operating condition.

Ms. Hanna has also recently learned that the Mitsubishi Eclipse had previously been in a collision that caused material damage to the vehicle. Karz Plus either knew or should have known this fact. However, Karz Plus concealed this fact and failed to disclose it to Ms. Hanna. The pre-existing accident damage was a material fact that a reasonable consumer would consider in deciding whether or not to purchase the Mitsubishi Eclipse. The accident damage materially decreases the utility, performance, safety, and fair market value of the Mitsubishi Eclipse. In addition, because of the prior accident, the service contract that Ms. Hanna purchased does not provide the “comprehensive” coverage that Karz Plus promised (i.e., the accident damage effectively voids material coverage otherwise available under the service contract). Again, Karz Plus either knew or should have known this fact.

Applicable Law

     California’s Consumers Legal Remedies Act (Civil Code Section 1750 et seq.) (the “CLRA”) prohibits numerous unlawful business acts, including: (i) misrepresenting that goods or services have sponsorship, approval, characteristics, ingredients, uses, benefits, or quantities which they do not have or that a person has a sponsorship, approval, status, affiliation, or connection which he or she does not have; (ii) misrepresenting that goods or services are of a particular standard, quality, or grade, or that goods are of a particular style or model, if they are of another; (iii) misrepresenting that a transaction confers or involves rights, remedies, or obligations which it does not have or involve, or which are prohibited by law; (iv) Representing that the subject of a transaction has been supplied in accordance with a previous representation when it has not; and (v) inserting an unconscionable provision in the contract.

     Karz Plus violated the CLRA by: (i) misrepresenting the Mitsubishi Eclipse’s mechanical condition and fitness; (ii) concealing and failing to disclose the prior accident damage; and (iii) misrepresenting that the service contract Ms. Hanna purchased would provide comprehensive coverage, when it would not due to the prior accident damage.

     Karz Plus also appears to have an illegal pattern and practice of: (i) misrepresenting the mechanical condition and fitness of vehicles that it offers for sale; (ii) concealing prior accident damage, and (iii) misrepresenting the coverage provided by service contracts that it sells to consumers.

     California law also imposed the “implied warranty of merchantability” on Ms. Hanna’s purchase of the Mitsubishi Eclipse. The implied warranty of merchantability means and includes that the Mitsubishi Eclipse must comply with each of the following requirements: (1) it would pass without objection in the trade under the contract description; (2) it is fit for the ordinary purposes for which such goods are used; (3) it was adequately contained, packaged, and labeled; and (4) it conforms to the promises or affirmations of fact made on the container or label. However, during the period in which the implied warranty of merchantability was in effect, the Mitsubishi Eclipse had and developed defects and non-conformities to warranty that rendered the Mitsubishi Eclipse unsafe to drive and inoperable. Accordingly, the Mitsubishi Eclipse does not provide reliable, safe transportation. Because of the defects that rendered the vehicle inoperable and unsafe to drive and because of the undisclosed prior accident damage the Mitsubishi Eclipse would not pass without objection in the trade for sale under the contract description, it is not fit for its ordinary purpose, and it was not adequately contained, packaged, and labeled. Accordingly, Karz Plus has breached the implied warranty of merchantability.


     On Ms. Hanna’s behalf, I request that you voluntarily remedy the violations detailed above, both for Ms. Hanna and all other similarly situated consumers in California within 30 days. Specifically, Karz Plus should provide Ms. Hanna (and all other consumers who purchased accident-damaged vehicle and/or vehicles that became inoperable within the implied warranty of merchantability period) the option of rescinding their purchase contracts, in addition to paying all incidental and consequential damages suffered. In Ms. Hanna’s case, she has incurred $1,202 in repair bills, and the inoperable vehicle has resulted in her foregoing $800 in wages because the Mitsubishi Eclipse failed to provide her transportation to her employment. You are also legally responsible to pay the legal fees and costs that Ms. Hanna incurred in enforcing her legal rights.

     On behalf of Ms. Hanna, I also demand that you consent to the entry of a specific injunction preventing any further predatory acts against the public. The proposed injunction would prohibit Karz Plus R/V from: (i) misrepresenting the mechanical condition and fitness of vehicles that it offers for sale; (ii) concealing prior accident damage, and (iii) misrepresenting the coverage provided by service contracts that it sells to consumers.

     Please be advised that under applicable law, to completely resolve Ms. Hanna’s CLRA claims you must satisfy the requirements of California Civil Code §1782(c) by:

1.     identifying or making a reasonable attempt to identify all consumers similarly situated;

2.     notifying all persons so identified that, upon their request, you will offer an appropriate correction, replacement, or other remedy for your wrongful conduct;

3.     undertaking (or promising to undertake within a reasonable time) the actions described above for all affected persons who so request;

4.     ceasing the unlawful methods, acts, or practices set forth above through the above specified actions; and

5.     paying all of Ms. Hanna’s legal fees and costs incurred to date.

     Finally, because Ms. Hanna has turned her matter over to my Law Office please do not under any circumstances attempt to contact her directly. Instead, forward all further correspondence regarding her matter to me at the address listed above.

     Thank you for your anticipated prompt attention to her matter.


                                                                 Michael R. Vachon, Esq.


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