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Filed March 14, 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 Plaintiff

SUPERIOR COURT OF THE STATE OF CALIFORNIA
COUNTY OF LOS ANGELES – NORTHWEST DISTRICT
VAN NUYS COURTHOUSE EAST

SANDRA GONZALEZ, an individual,

              Plaintiff,

v.

MAGIC AUTO CENTER, a business entity, form unknown; and
DOES 1 through 75,

 
              Defendants.

Case No.: LC100049

COMPLAINT FOR:

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

SUMMARY

       1.        This lawsuit arises out of Plaintiff’s purchase of an accident-damaged, non-operable used automobile. Plaintiff purchased a used Lexus GS300 from Defendant Magic Auto Center (a Los Angeles, California used car dealership) in reliance upon Magic Auto Center’s promises that the vehicle was in “great shape.” However, notwithstanding Magic Auto Center’s claims, the Lexus GS300 had actually been in at least two major collisions, in which is sustained severe mechanical and structural damage. Magic Auto Center knew about the accident damage, but concealed it from and failed to disclose it to Plaintiff. Magic Auto Center’s misrepresentations amount to common law fraud and violations of the Consumers Legal Remedies Act (Civil Code §1750 et seq.) (the “CLRA”). Magic Auto Center breached the implied warranty of merchantability accompanying the Lexus GS300’s sale, and committed acts of unfair competition under Business & Professions Code Section 17200 et seq. (the “UCL”). Under these statutes, Plaintiff is entitled to rescind the purchase contract, recover damages, and be awarded her attorneys’ fees, costs, and out-of-pocket litigation expenses.

PARTIES

       2.       Plaintiff Sandra Gonzalez is an individual residing in Arleta, California.
       3.       Defendant Magic Auto Center, Inc. is a business entity, form unknown, that does business as a used-car dealership at multiple locations, including at 13755 Roscoe Boulevard, Panorama City, California.
       4.       Plaintiff 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 names 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 Plaintiff. Plaintiff will set forth the true names of the fictitiously-named defendants together with appropriate charging allegations when ascertained.
       5.       All acts of corporate employees were authorized or ratified by an officer, director, or managing agent of the corporate employer.

FACTS

       6.       Plaintiff alleges as follows, on information and belief, formed after an inquiry reasonable under the circumstances:
       7.       On or about September 22, 2012, Plaintiff visited Magic Auto Center and while there was shown that certain Lexus GS300 with vehicle identification number JT8BD68S7W0004494. The Magic Auto Center employee who dealt with Plaintiff represented that the Lexus GS300 had been inspected and was in great condition.
       8.       In reliance upon the above-stated representations by Magic Auto Center and its salesperson, Plaintiff purchased the Lexus GS300.
       9.       In executing the purchase documentation, Magic Auto Center prepared and presented to Plaintiff a form that it said she had to sign in order to purchase the Lexus GS300. That form stated that in the event that Plaintiff subsequently declared bankruptcy she must either reaffirm her purchase contract for the Lexus GS300 or let Magic Auto Center repossess the vehicle. Magic Auto Center represented to Plaintiff that this was a binding, enforceable agreement limiting her rights, when in fact it is unenforceable and without effect.
       10.       Plaintiff’s purchase of the Lexus GS300 was accompanied by Magic Auto Center’s 30-day/1,000 mile express warranty, and the implied warranty of merchantability.
       11.       Within one week of purchasing the Lexus GS300, its check engine warning light illuminated. It also subsequently manifested a pre-existing suspension defect that causes the vehicle to bounce in a severe and dangerous manner when it is being driven.
       12.       Within 30 days after the purchase of the Lexus GS300, Plaintiff took the vehicle back to Magic Auto Center, and requested that they repair the check engine light problem and the suspension defect. However, Magic Auto Center was either unable or unwilling to properly diagnose and repair these defects.
       13.       Plaintiff subsequently learned that the Lexus GS300 was previously in at least two serious collisions that caused massive mechanical and structural damage that was never properly repaired.
       14.       Magic Auto Center knew about this pre-existing damage, the check engine light defect, and the suspension defect, but deliberately concealed these facts from Plaintiff and did not disclose them to her.
       15.       The prior accident damage, the check engine light defect, and the suspension defect are all material facts that a reasonable consumer would consider in deciding whether or not to purchase the Lexus GS300. The accident damage, the check engine light defect, and the suspension defect each individually and collectively materially decrease the utility, performance, safety, and fair market value of the Lexus GS300.
       16.       Magic Auto Center’s above-stated illegal conduct is fraudulent, malicious, and oppressive under Civil Code Section 3294. Magic Auto Center acted with a willful and conscious disregard of Plaintiff’s rights and safety. Magic Auto Center’s actions were also fraudulent under Civil Code Section 3294, in that it intentionally misrepresented and concealed the true condition of the Lexus GS300.

FIRST CAUSE OF ACTION
Breach of Implied Warranty – Song-Beverly Consumer Warranty Act

       17.       Plaintiff incorporates by reference the allegations in paragraphs 1 through 16.
       18.       Plaintiff’s purchase of the Lexus GS300 was accompanied by Magic Auto Center’s implied warranty of merchantability.
       19.       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.
       20.       The facts that the Lexus GS300 was previously involved in multiple severe accidents, that it suffered from a check engine light defect, and that it suffered from a suspension defect constitute breaches of the implied warranty of merchantability because the Lexus GS300 (1) would not pass without objection in the trade under the contract description, (2) was not fit for the ordinary purposes for which such goods are used, (3) was not adequately contained, packaged, and labeled, and (4) did not conform to the promises or affirmations of fact made on the container or label.
       21.       Plaintiff has rightfully rejected and/or justifiably revoked acceptance of the Lexus GS300, and is entitled to rescind the purchase contract and to restitution of all money paid towards the purchase contract.
       22.       Plaintiff has been proximately damaged by Magic Auto Center’s failure to comply with its obligations under the implied warranty.
       23.       Plaintiff is entitled to the remedies provided in California Civil Code section 1794, including her attorney’s fees, costs, and expenses.

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

       24.       Plaintiff hereby incorporates by reference the allegations in Paragraphs 1 through 23.
       25.       The Lexus GS300 is a “good” under the CLRA that was bought for use primarily for personal, family or household purposes.
       26.       Plaintiff is a “consumer” under the CLRA.
       27.       The advertisement and the sale of the Lexus GS300 to Plaintiff are “transactions” under the CLRA.
       28.       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, where there exists a duty to make a statement or disclosure.
       29.       Magic Auto Center had a duty to disclose the known accident damage, check engine light defect, and suspension defect because (1) such disclosures were necessary in order to make its other statements not misleading; (2) they were known material facts; (3) Magic Auto Center knew that it had exclusive knowledge that was not accessible to Plaintiff; and (4) it was reasonable for Plaintiff to expect disclosure of such facts.
       30.       Magic Auto Center violated the CLRA by misrepresenting the mechanical condition of the Lexus GS300, concealing and failing to disclose that it had previously been involved in an accident resulting in material damage, concealing and failing to disclose the check engine light defect, concealing and failing to disclose the suspension defect, and misrepresenting that the Lexus GS300 transaction required her to reaffirm her contract for that vehicle in the even she filed for bankruptcy.
       31.       Plaintiff is concurrently serving Magic Auto Center with a CLRA notification and demand letter via certified mail, return receipt requested. The notice letter sets forth the relevant facts, notifies Magic Auto Center of its CLRA violations, and requests that Magic Auto Center promptly remedy those violations.
       32.       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. Plaintiff will amend this complaint to add damages claims if Magic Auto Center does not remedy its violations within the statutory period.
       33.       Under the CLRA, Plaintiff is entitled to a permanent injunction prohibiting practices that violate the CLRA.
       34.       Magic Auto Center has an illegal pattern and practice of: (1) misrepresenting that consumers are obligated to reaffirm their auto purchase contracts if they file for bankruptcy; (2) selling accident-damaged vehicles to the public while misrepresenting their mechanical condition; (3) concealing and failing to disclose known material accident damage; and (4) concealing and failing to disclose known material defects.
       35.       Plaintiff is entitled to a permanent injunction that compels Magic Auto Center to notify all consumers who have been victims of the above-described illegal conduct, and enjoining Magic Auto Center from such further acts of illegal conduct.
       36.       Plaintiff is also entitled to recover her attorneys’ fees, costs, and expenses.

THIRD CAUSE OF ACTION
Intentional Misrepresentation

       37.       Plaintiff incorporates by reference the allegations in Paragraphs 1 through 36.
       38.       At the time of purchase, and afterwards, Magic Auto Center made the misrepresentations as set forth above. These misrepresentations included, but are not limited to its representation that the Lexus GS300 had been inspected and was in great condition.
       39.       Magic Auto Center omitted from the statements it made material facts, the disclosure of which was necessary, (1) in order to make its other statements not misleading; (2) because they were known materials facts; (3) because Magic Auto Center knew that it had exclusive knowledge that was not accessible to Plaintiff; and (4) because it was reasonable for Plaintiff to expect disclosure of such facts. These omissions include, but are not limited to the following: (1) that the Lexus GS300 had previously been in a material accident; (2) that the Lexus GS300 was not in great condition; (3) that the Lexus GS300 suffered from a check engine light defect; and (4) that the Lexus GS300 suffered from a suspension defect.       
40.       At all times Magic Auto Center either had actual or constructive notice of the true facts but nonetheless intentionally or recklessly concealed these facts from Plaintiff.
       41.       Magic Auto Center made these representations and omitted material facts with the intent to defraud Plaintiff and to induce Plaintiff to purchase the Lexus GS300 and pay an inflated sales price. At the time Plaintiff purchased the Lexus GS300 she did not know, or have reason to know, that Magic Auto Center was making false and misleading representations and had omitted material facts. Plaintiff acted in justifiable reliance upon the truth of the representations which misled her as to the nature and extent of the facts concealed. Plaintiff was justified in her reliance, as Magic Auto Center held itself out as professionals in the automotive sales industry, and Plaintiff had no reason to doubt such representations.
       42.       As a direct and proximate result of Magic Auto Center’s fraudulent representations and omissions of material facts, Plaintiff suffered damages, including actual, general, consequential and incidental damages according to proof at trial.
       43.       Plaintiff is also entitled to punitive damages.
       44.       Magic Auto Center committed fraud in the inducement of the purchase contract for the Lexus GS300, and Plaintiff is therefore entitled to rescission and restitution in an amount according to proof at trial.

FOURTH CAUSE OF ACTION
Negligent Misrepresentation

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

FIFTH CAUSE OF ACTION
Unfair Competition

       55.       Plaintiff hereby incorporates by reference the allegations in Paragraphs 1 through 54.
       56.       Magic Auto Center’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 Sections 17200 et seq.
       57.       Magic Auto Center has engaged in “unlawful” business acts and practices by: (1) misrepresenting that consumers are obligated to reaffirm their auto purchase contracts if they file for bankruptcy; (2) selling accident-damaged vehicles to the public while misrepresenting their mechanical condition; (3) concealing and failing to disclose known material accident damage; and (4) concealing and failing to disclose known material defects. These acts and practices were intended to and did violate California Civil Code Section 1709 et seq., the CLRA, and the Song-Beverly Consumer Warranty Act.
       58.       Magic Auto Center 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 lessees of these vehicles and the general public.
       59.       Magic Auto Center has also engaged in “unfair” business acts or practices in that the justification for selling and leasing vehicles 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.
       60.       The above described unlawful, fraudulent, or unfair business acts and practices conducted by Magic Auto Center continue to this day and present a threat to Plaintiff and the general public in that Magic Auto Center has failed to publicly acknowledge the wrongfulness of its actions and provide full equitable injunctive and monetary relief as required by the statute.
       61.       Pursuant to California Business & Professions Code Section 17203, Plaintiff seek an order of this Court requiring Magic Auto Center to immediately cease such acts of unfair competition and enjoining Magic Auto Center 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 Magic Auto Center to engage in a corrective notice and advertising campaign. Plaintiff additionally request an order from the Court requiring that Magic Auto Center provide complete equitable monetary relief so as to prevent Magic Auto Center from benefitting from the practices that constitute unfair competition or the use or employment of any monies resulting from the lease 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

       Plaintiff prays 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 $14,211.92;
3.        For general damages of $7,500 (for the non-CLRA causes of action);
4.        For punitive damages (for the non-CLRA causes of action);
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 Plaintiff Sandra Gonzalez

Date: March 6, 2013                                     Michael R. Vachon, Esq.