Starost v Universal Auto Group Complaint

 

Filed March 27, 2013 – Los Angeles County Superior Court
(Note: the Court has not yet determined whether or not the allegations in this complaint are true)

 
LAW OFFICE OF MICHAEL R. VACHON, ESQ.
Michael R. Vachon, Esq. (SBN 206447)
17150 Via del Campo, Suite 204
San Diego, California 92127
Tel.: (858) 674-4100
Fax: (858) 674-4222
Attorney for Plaintiffs

SUPERIOR COURT OF THE STATE OF CALIFORNIA
COUNTY OF LOS ANGELES – NORTH CENTRAL DISTRICT
GLENDALE COURTHOUSE

SCOTT STAROST, an individual; and
JENNIFER STAROST, an individual,

              Plaintiffs,

v.

UNIVERSAL AUTO GROUP, a California corporation; and
DOES 1 through 75,

 
              Defendants.

Case No.: EC060357

COMPLAINT FOR:

1.   VIOLATION OF CONSUMERS LEGAL
      REMEDIES ACT (INJUNCTIVE RELIEF
      ONLY);
2.   INTENTIONAL MISREPRESENTATION;
3.   NEGLIGENT MISREPRESENTATION;
4.   BREACH OF IMPLIED WARRANTY;
      AND
5.   UNFAIR COMPETITION (BUS. & PROF.
      CODE SECTION 17200)



SUMMARY

     1.      This lawsuit arises out of Plaintiffs’ purchase of an accident-damaged used automobile. Plaintiffs bought a 2010 Mitsubishi Outlander from Defendant Universal Auto Group (a Glendale, California car dealership that does business under the fictitious business name “Subaru of Glendale”) in reliance upon the dealership’s advertisements and representations that the vehicle was in excellent condition, had no accident or frame damage, and came with the remainder of the manufacturer’s factory warranty. In reality however, the Mitsubishi Outlander had previously been in a severe collision that caused frame/unibody damage, the damage had never been properly repaired, and the accident damage effectively voided the remaining factory warranty with regard to the damaged components. Plaintiffs only found out about the prior accident when they went in to have a malfunctioning air conditioning unit repaired, and were told that the manufacturer’s warranty would not cover the repairs because of the prior accident damage.
     2.     Subaru of Glendale’s misrepresentations amount to common law fraud, violation of the Consumers Legal Remedies Act (Civil Code §1750 et seq.), are breaches of the implied warranty of merchantability under California’s “lemon law,” and amount to unfair competition under Business & Professions Code Section 17200 et seq. Plaintiffs are entitled to rescission of the purchase contract, restitution of the amounts they paid towards the Mitsubishi Outlander, compensatory and punitive damages, and their attorney’s fees, costs, and out-of-pocket litigation expenses.

PARTIES

     3.     Plaintiff Scott Starost is an individual residing in Escondido, California.
     4.     Plaintiff Jennifer Starost is an individual residing in Escondido, California.
     5.     Defendant Universal Auto Group is a California corporation that does business as a car dealership under the fictitious business names “Subaru of Glendale” (at 1308 S. Brand Boulevard, Glendale, California) and “Glendale Mitsubishi” (at 1235 S. Brand Boulevard, Glendale, California). Defendant Universal Auto Group is referred to herein as “Subaru of Glendale.”
     6.     Plaintiffs do not know the true names and capacities, whether corporate, partnership, associate, individual, or otherwise, of defendants sued herein as Does 1 through 75, inclusive, and thus name them under the provisions of Section 474 of the California Code of Civil Procedure. Defendants Does 1 through 75 are in some manner responsible for the acts set forth herein, and are legally liable to Plaintiffs. Plaintiffs will set forth the true names of the fictitiously-named defendants together with appropriate charging allegations when ascertained.
     7.     All acts of corporate employees were authorized or ratified by an officer, director, or managing agent of the corporate employer.

FACTS

     8.     Plaintiffs allege as follows, on information and belief, formed after an inquiry reasonable under the circumstances:
     9.     In and prior to April, 2012, Subaru of Glendale advertised for sale that certain Mitsubishi Outlander with vehicle identification number JA4JT5AX5AZ009563 (the “Mitsubishi Outlander”) in various media including, but not limited to, the Internet. At least one of Subaru of Glendale’s advertisements stated, without qualification, that the Mitsubishi Outlander had less than 20,000 miles on the odometer, had not been in any accidents, had not suffered any frame damage, and had never had its airbags deployed.
     10.     On or about April 16, 2012, Plaintiffs viewed advertisements for the Mitsubishi Outlander on the Internet, and then visited Subaru of Glendale at its dealership lot at 1308 South Brand Boulevard, Glendale, California. Consistent with Subaru of Glendale’s advertisements, the Subaru of Glendale representative who dealt with Plaintiffs told them that the Mitsubishi Outlander was in excellent mechanical condition, had only one prior owner, had never been in any accidents, and had a clean history. Subaru of Glendale also told Plaintiffs that the Mitsubishi Outlander had less than 20,000 miles and accordingly came with the remainder of the manufacturer’s bumper-to-bumper express warranty.
     11.     In reliance upon the above-stated representations by Subaru of Glendale, Plaintiffs purchased the Mitsubishi Outlander.
     12.     Plaintiffs subsequently learned that prior to their purchase of the Mitsubishi Outlander it had been in a serious collision that caused severe damage to the vehicle’s suspension, body, and frame/unibody structure. Moreover, the accident damage (particularly the damage to the vehicle’s frame/unibody structure) was never properly repaired.
     13.     Plaintiffs first discovered the damage when their air conditioning system failed, and they took the Mitsubishi Outlander in for repair. Although this repair typically would have (and should have) been covered by the manufacturer’s express warranty, Plaintiffs were told that the malfunctioning and inoperable air conditioning unit could not be repaired under the warranty because of the prior accident damage, and therefore Plaintiffs would have to pay for the repair. The Mitsubishi Outlander’s prior accident damage effectively voids the manufacturer’s express warranty for all components affected by the accident damage.
     14.     Subaru of Glendale’s representations to Plaintiffs and the general public that the Mitsubishi Outlander had less than 20,000 miles, came with the remainder of the manufacturer’s factory warranty, had no accident or frame damage, and had never had its airbags deployed were misleading and false.
     15.     Subaru of Glendale knew about Mitsubishi Outlander’s pre-existing damage, but deliberately concealed it from Plaintiffs and did not disclose it to them.
     16.     The Mitsubishi Outlander’s prior accident damage (including the frame/unibody damage) is a material fact that a reasonable consumer would consider in deciding whether or not to purchase the Mitsubishi Outlander. The accident damage materially decreases the utility, performance, safety, warranty coverage, and fair market value of the Mitsubishi Outlander.
     17.     Subaru of Glendale’s above-stated illegal conduct is fraudulent, malicious, and oppressive under Civil Code Section 3294. Subaru of Glendale acted with a willful and conscious disregard of Plaintiff’s rights and safety. Subaru of Glendale’s actions were also fraudulent under Civil Code Section 3294, in that it intentionally misrepresented and concealed the true condition, value, and warranty coverage of the Mitsubishi Outlander.

FIRST CAUSE OF ACTION
Consumers Legal Remedies Act – Injunctive Relief Only

     18.     Plaintiffs hereby incorporate by reference the allegations in Paragraphs 1 through 17.
     19.     The Mitsubishi Outlander is a “good” under the CLRA that was bought for use primarily for personal, family or household purposes.
     20.     Plaintiffs are “consumers” under the CLRA.
     21.     The advertisement and the sale of the Mitsubishi Outlander to Plaintiffs are “transactions” under the CLRA.
     22.     The CLRA prohibits numerous unlawful business acts, including: (i) representing that goods or services have sponsorship, approval, characteristics, ingredients, uses, benefits, or quantities which they do not have or that a person has sponsorship, approval, status, affiliation, or connection which he or she does not have; (ii) representing 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 another; (iii) misrepresenting the source, sponsorship, approval, or certification of goods; (iv) advertising goods or services with intent not to sell them as advertised; and (v) representing that a transaction confers or involves rights, remedies, or obligations which it does not have or involve, or which are prohibited by law. The CLRA also prohibits the omission of statements in situations where a party is otherwise obligated to make a statement or disclosure.
     23.     Subaru of Glendale had a duty to disclose the known accident damage because (1) such disclosure was necessary in order to make its other statements not misleading; (2) it was a known material fact; (3) Subaru of Glendale knew that it had exclusive knowledge that was not accessible to Plaintiffs; and (4) it was reasonable for Plaintiffs to expect disclosure of such facts.
     24.     Subaru of Glendale violated the CLRA by: (i) misrepresenting the mechanical condition of the Mitsubishi Outlander; (ii) concealing and failing to disclose that the Mitsubishi Outlander had previously been involved in an accident resulting in material damage, including frame/unibody damage; (iii) misrepresenting the Mitsubishi Outlander’s applicable warranty coverage; and (iv) concealing and failing to disclose the true warranty coverage available under Mitsubishi’s express warranty.
     25.     Plaintiffs are concurrently serving Subaru of Glendale with a CLRA notification and demand letter via certified mail, return receipt requested. The notice letter sets forth the relevant facts, notifies Subaru of Glendale of its CLRA violations, and requests that Subaru of Glendale promptly remedy those violations.
     26.     Under the CLRA, a plaintiff may without prior notification file a complaint alleging violations of the CLRA that seeks injunctive relief only. Then, if the defendant does not remedy the CLRA violations within 30 days of notification, the plaintiff may amend her or his CLRA causes of action without leave of court to add claims for
damages. Plaintiffs will amend this complaint to add damages claims if Subaru of Glendale does not remedy its violations within the statutory period.
     27.     Under the CLRA, Plaintiffs are entitled to a permanent injunction prohibiting practices that violate the CLRA.
     28.     Subaru of Glendale has an illegal pattern and practice of: (i) misrepresenting the mechanical condition of automobiles that it sells to the public; (ii) concealing and failing to disclose material accident damage, including frame/unibody damage; (iii) misrepresenting the applicable warranty coverage of vehicles that it sells to the public; and (iv) concealing and failing to disclose the true warranty coverage available for automobiles that it sells.
     29.     Plaintiffs are entitled to a permanent injunction that compels Subaru of Glendale to notify all consumers who have been victims of the above-described illegal conduct, and enjoining Subaru of Glendale from such further acts of illegal conduct.
     30.     Plaintiffs are also entitled to recover their attorneys’ fees, costs, and expenses.

SECOND CAUSE OF ACTION
Intentional Misrepresentation

     31.     Plaintiffs incorporate by reference the allegations in Paragraphs 1 through 30.
     32.     At the time of purchase, as well as before and afterwards, Subaru of Glendale made the misrepresentations as set forth above. These misrepresentations include, but are not limited to, Subaru of Glendale’s statements that: (i) the Mitsubishi Outlander was in excellent condition; (ii) the Mitsubishi Outlander had under 20,000 miles on its odometer, and came with the remainder of the manufacturer’s express factory warranty; (iii) the Mitsubishi Outlander had not been in any accidents; and (iv) the Mitsubishi Outlander had not suffered any frame damage.
     33.     Subaru of Glendale omitted from the statements that it made material facts, the disclosure of which were necessary: (1) in order to make its other statements not misleading; (2) because they were known materials facts; (3) because Subaru of Glendale knew that it had exclusive knowledge that was not accessible to Plaintiffs; and (4) because it was reasonable for Plaintiffs to expect disclosure of such facts. These omissions include, but are not limited to the following: (i) that the Mitsubishi Outlander had previously been in a severe accident; (ii) that the Mitsubishi Outlander was not in excellent condition; (iii) that the Mitsubishi Outlander had suffered frame/unibody damage; and (iv) that the factory warranty would not provide comprehensive coverage for the Mitsubishi Outlander because of the prior accident damage.
     34.     At all times Subaru of Glendale either had actual or constructive notice of the true facts, but nonetheless intentionally or recklessly concealed these facts from Plaintiffs.
     35.     Subaru of Glendale made these representations and omitted material facts with the intent to defraud Plaintiffs, to induce Plaintiffs to purchase the Mitsubishi Outlander, and to trick Plaintiffs into paying an inflated sales price. At the time Plaintiffs purchased the Mitsubishi Outlander they did not know, or have reason to know, that Subaru of Glendale was making false and misleading representations and had omitted material facts. Plaintiffs acted in justifiable reliance upon the truth of the representations which misled them as to the nature and extent of the facts concealed. Plaintiffs were justified in their reliance, as Subaru of Glendale held itself out as professionals in the automotive sales industry, and Plaintiffs had no reason to doubt such representations.
     36.     As a direct and proximate result of Subaru of Glendale’s fraudulent representations and omissions of material facts, Plaintiffs suffered damages, including actual, general, consequential and incidental damages according to proof at trial.
     37.     Plaintiffs are also entitled to punitive damages.
     38.     Subaru of Glendale committed fraud in the inducement of the purchase contract for the Mitsubishi Outlander, and Plaintiffs are therefore entitled to rescission and restitution in an amount according to proof at trial.

THIRD CAUSE OF ACTION
Negligent Misrepresentation

     39.     Plaintiffs incorporate by reference the allegations in paragraphs 1 through 38.
     40.     As an alternative to Plaintiffs’ cause of action for Intentional Misrepresentation, Plaintiffs allege that Subaru of Glendale’s misrepresentations were made negligently, if not intentionally.
     41.     The representations made by Subaru of Glendale were not true.
     42.     Regardless of its actual belief, Subaru of Glendale made the representations without any reasonable grounds for believing them to be true.
     43.     Subaru of Glendale failed to exercise due care in ascertaining the accuracy of the representations made to Plaintiffs.
     44.     Subaru of Glendale made the representations for the purpose of inducing Plaintiffs to rely upon them, and to act or refrain from acting in reliance thereon.
     45.     Plaintiffs were unaware of the falsity of the representations and acted in reliance upon the truth of those representations, and were justified in relying upon those representations.
     46.     As a direct and proximate result of Subaru of Glendale’s negligent misrepresentations of material fact, Plaintiffs suffered damages, including actual, consequential, and incidental damages according to proof of trial.
     47.     Plaintiffs are also entitled to punitive damages.
     48.     Plaintiffs hereby allege fraud in the inducement to enter into the sales contract, and therefore are entitled to rescission and restitution in an amount according to proof at trial.

FOURTH CAUSE OF ACTION
Breach of Implied Warranty

     49.     Plaintiffs incorporate by reference the allegations in paragraphs 1 through 48.
     50.     Plaintiffs’ purchase of the Mitsubishi Outlander was accompanied by an express warranty and Subaru of Glendale’s “implied warranty of merchantability” (as that term is defined in California’s Song-Beverly Consumer Warranty Act (Civil Code § 1791 et seq.) (the “California Lemon Law”)).
     51.     Under the California Lemon Law, the implied warranty of merchantability means and includes that the goods will comply with each of the following requirements: (1) they would pass without objection in the trade under the contract description; (2) they are fit for the ordinary purposes for which such goods are used; (3) they are adequately contained, packaged, and labeled; and (4) they conform to the promises or affirmations of fact made on the container or label.
     52.     The facts that (1) the Mitsubishi Outlander was previously involved in a severe accident that caused massive structural damage, and (2) the Mitsubishi Outlander’s otherwise applicable factory warranty coverage is partially voided by the prior accident damage, constitute breaches of the implied warranty of merchantability under the California Lemon Law because the Mitsubishi Outlander (i) would not pass without objection in the trade under the contract description, (ii) was not fit for the ordinary purposes for which such goods are used, (iii) was not adequately contained, packaged, and labeled, and (iv) did not conform to the promises or affirmations of fact made on the container or label.
     53.     Plaintiffs have rightfully rejected and/or justifiably revoked acceptance of the Mitsubishi Outlander, and are entitled under the California Lemon Law to rescind the purchase contract and to restitution of all money paid towards the purchase contract. This Complaint also, again, hereby rejects and revokes acceptance of the Mitsubishi Outlander.
     54.     Plaintiffs have been proximately damaged by Subaru of Glendale’s violations of the California Lemon Law, including its failure to comply with its obligations under the implied warranty of merchantability.
     55.     Plaintiffs are entitled to the remedies provided by the California Lemon Law, including the remedies set forth in Civil Code Section 1794, and including their attorney’s fees, costs, and expenses.

FIFTH CAUSE OF ACTION
Unfair Competition

     56.     Plaintiffs hereby incorporate by reference the allegations in Paragraphs 1 through 55.
     57.     Subaru of Glendale’s acts, omissions, misrepresentations, practices, and non-disclosures constitute unlawful, unfair, and fraudulent business acts and practices within the meaning of California Business & Professions Code Section 17200 et seq.
     58.     Subaru of Glendale has engaged in “unlawful” business acts and practices by: (1) misrepresenting the mechanical condition of automobiles that it sells to the public; (2) concealing and failing to disclose material accident damage, including frame damage; (3) misrepresenting the applicable warranty coverage of vehicles that it sells to the public; and (4) concealing and failing to disclose the true warranty coverage available for automobiles that it sells. These acts and practices were intended to, and did, violate Civil Code Section 1709 et seq., the CLRA, Vehicle Code Section 11713(a), and the California Lemon Law.
     59.     Subaru of Glendale has also engaged in “fraudulent” business acts or practices in that the representations and omissions of material fact described above have a tendency and likelihood to deceive automobile purchasers and the general public.
     60.     Subaru of Glendale has also engaged in “unfair” business acts or practices in that the justification for selling automobiles based on the misrepresentations and omissions of material fact delineated above is outweighed by the gravity of the resulting harm, particularly considering the available alternatives, and offends public policy, is immoral, unscrupulous, unethical, and offensive, or causes substantial injury to consumers.
     61.     The above described unlawful, fraudulent, or unfair business acts and practices conducted by Subaru of Glendale continue to this day and present a threat to Plaintiffs and the general public in that Subaru of Glendale has failed to publicly acknowledge the wrongfulness of its actions and provide full equitable injunctive and monetary relief as required by California law.
     62.     Pursuant to California Business & Professions Code Section 17203, Plaintiffs seek an order of this Court requiring Subaru of Glendale to immediately cease such acts of unfair competition and enjoining Subaru of Glendale from continuing to conduct business via the unlawful, fraudulent, and/or unfair business acts and practices set forth in this Complaint and from failing to fully disclose the true nature of their misrepresentations, and ordering Subaru of Glendale to engage in a corrective notice and advertising campaign. Plaintiffs additionally requests an order from the Court requiring that Subaru of Glendale provide complete equitable monetary relief so as to prevent Subaru of Glendale from benefitting from the practices that constitute unfair competition or the use or employment of any monies resulting from the sale of these vehicles, including requiring the payment of restitution of any monies as may be necessary to restore to any member of the general public any money or property which may have been acquired by means of such acts of unfair competition.

PRAYER FOR RELIEF

     Plaintiffs pray for judgment as follows as appropriate for the particular causes of action:
1.     For the declaratory, equitable, and/or injunctive relief as requested above;
2.     For rescission, and restitution of $29,686.80;
3.     For general damages of $4,000;
4.     For punitive damages;
5.      For pre judgment interest at the legal rate;
6.      For reasonable attorneys’ fees, costs of suit, and out of pocket litigation expenses; and
7.      For such other and further relief as the Court deems just and proper under the circumstances.

                                                                      LAW OFFICE OF MICHAEL R. VACHON, ESQ.
                                                                      Attorney for Plaintiffs Scott & Jennifer Starost
Date: March 18, 2013                                 Michael R. Vachon, Esq.

 

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