California Assembly Bill AB238 Amended / Bill

 BILL NUMBER: AB 238AMENDED BILL TEXT AMENDED IN SENATE AUGUST 29, 2011 AMENDED IN ASSEMBLY APRIL 4, 2011 INTRODUCED BY Assembly Member Huber  (   Coauthor:   Senator   Fuller   )  FEBRUARY 3, 2011  An act to amend Section 2031.240 of the Code of Civil Procedure, relating to discovery.   An act to amend Sections 2983 and 2983.1 of the Civil Code, relating to motor vehicle sales, and declaring the urgency thereof, to take effect immediately.  LEGISLATIVE COUNSEL'S DIGEST AB 238, as amended, Huber.  Civil procedure: discovery: objections.   Motor vehicle conditional sale contracts.   The Rees-Levering Motor Vehicle Sales and Finance Act regulates motor vehicle conditional sale contracts, and, among other things, requires a person selling or leasing a motor vehicle under a conditional sale contract to disclose certain information to a buyer. A violation of those disclosure requirements makes a conditional sale contract unenforceable, except as specified.   This bill would provide that a conditional sale contract shall not be made unenforceable for a violation of specified disclosure requirements, relating to the amount financed, regarding the amount of governmental fees, including vehicle license fees, registration fees, and California tire fees.   This bill would declare that it is to take effect immediately as an urgency statute.   The Civil Discovery Act permits a party to a civil action to obtain discovery, as specified, by inspecting documents, tangible things, and land or other property in the possession of any other party to the action. The act provides for procedures that must be followed when the responding party objects to part or all of an inspection demand.   This bill would require the responding party, when that party objects to a demand on the basis of privilege or work product, to provide sufficient factual information in its response for other parties to evaluate the merits of that claim, including, if necessary, a privilege log.  Vote:  majority   2/3  . Appropriation: no. Fiscal committee:  no   yes  . State-mandated local program: no. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:  SECTION 1.   The Legislature finds and declares as follows:   (a) The Rees-Levering Motor Vehicle Sales and Finance Act (Chapter 2b (commencing with Section 2981) of Title 14 of Part 4 of Division 3 of the Civil Code) sets forth a statutory scheme to regulate the retail sale and financing of motor vehicles. The act contains detailed disclosure requirements intended to protect the consuming public and includes provisions that render a conditional sale contract unenforceable if any of those disclosure requirements are violated, regardless of the nature of the disclosure violation or any consumer harm.   (b) It is the intent of the Legislature in enacting this act to limit the contract unenforceability remedies of the Rees-Levering Motor Vehicle Sales and Finance Act for certain disclosure violations that involve fees paid by a vehicle purchaser to the state. It is not the intent of the Legislature in enacting this act to relieve a seller from making full and accurate contract disclosures, or to limit other consumer remedies for any disclosure violation.   SEC. 2.   Section 2983 of the   Civil Code   is amended to read:  2983.  If   (a)     Except as provided in subdivision (b), if  the seller, except as the result of an accidental or bona fide error in computation, violates any provision of Section 2981.9, or of subdivision (a), (j), or (k) of Section 2982, the conditional sale contract shall not be enforceable, except by a bona fide purchaser, assignee or pledgee for value or until after the violation is corrected as provided in Section 2984, and  ,  if the violation is not corrected  ,  the buyer may recover from the seller the total amount paid, pursuant to the terms of the contract, by the buyer to the seller or his assignee. The amount recoverable for property traded in as all or part of the downpayment shall be equal to the agreed cash value of such property as the value appears on the conditional sale contract or the fair market value of such property as of the time the contract is made, whichever is greater.  (b) A conditional sale contract executed or entered into on or after January 1, 2012, shall not be made unenforceable solely because of a violation by the seller of paragraph (2) or (5) of subdivision (a) of Section 2982. In addition to any other remedies that may be available, the buyer is entitled to any actual damages sustained as a result of a violation of those provisions. Nothing in this subdivision affects any legal rights, claims, or remedies otherwise available under law.   SEC. 3.   Section 2983.1 of the   Civil Code   is amended to read:  2983.1.  If   (a)     Except as provided in subdivision (e), if  the seller or holder of a conditional sale contract, except as the result of an accidental or bona fide error of computation, violates any provision of  subdivision   l   )   subdivision (l)  of Section 2982, the buyer may recover from  such   the  person three times the amount of any finance charge paid to that person.  If   (b)     If  a holder acquires a conditional sale contract without actual knowledge of the violation by the seller of Section 2981.9  ,  or of subdivision (a), (j), or (k) of Section 2982, the contract shall be valid and enforceable by  such   the  holder except  (unless the violation is corrected as provided in Section 2984)  the buyer is excused from payment of the unpaid finance charge  , unless the violation is corrected as provided in Section 2984  .  If   (c)     If  a holder acquires a conditional sale contract with knowledge of  such   a  violation of Section 2981.9  ,  or of subdivision (a), (j), or (k) of Section 2982, the conditional sale contract shall not be enforceable except by a bona fide purchaser, assignee  ,  or pledgee for value  ,  or unless the violation is corrected as provided in Section 2984, and  ,  if the violation is not corrected  ,  the buyer may recover  the amounts specified in Section 2983  from the person to whom payment was made  the amounts specified in Section 2983  .  When   (d)     When  a conditional sale contract is not enforceable under Section 2983 or 2983. 1, the buyer may elect to retain the motor vehicle and continue the contract in force  ,  or may, with reasonable diligence, elect to rescind the contract and return the motor vehicle. The value of the motor vehicle  so  returned shall be credited as restitution by the buyer without any decrease  which   that  results from the passage of time in the cash price of the motor vehicle as such   the  price appears on the conditional sale contract.  (e) A conditional sale contract executed or entered into on or after January 1, 2012, shall not be made unenforceable, and the buyer shall not be excused from payment of any finance charge, solely because of a violation by the seller of paragraph (2) or (5) of subdivision (a) of Section 2982. In addition to any other remedies that may be available, the buyer is entitled to any actual damages sustained as a result of a violation of those provisions. Nothing in this subdivision affects any legal rights, claims, or remedies otherwise available under law.   SEC. 4.   This act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the Constitution and shall go into immediate effect. The facts constituting the necessity are:   In order to provide, as soon as possible, that the contract unenforceability remedies in the Rees-Levering Motor Vehicle Sales and Finance Act should not apply to fees paid by a vehicle purchaser to the state, while preserving all other available remedies, it is necessary that this act take effect immediately.   SECTION 1.   Section 2031.240 of the Code of Civil Procedure is amended to read: 2031.240. (a) If only part of an item or category of item in a demand for inspection, copying, testing, or sampling is objectionable, the response shall contain a statement of compliance, or a representation of inability to comply with respect to the remainder of that item or category. (b) If the responding party objects to the demand for inspection, copying, testing, or sampling of an item or category of item, the response shall do both of the following: (1) Identify with particularity any document, tangible thing, land, or electronically stored information falling within any category of item in the demand to which an objection is being made. (2) Set forth clearly the extent of, and the specific ground for, the objection. If an objection is based on a claim of privilege, the particular privilege invoked shall be stated. If an objection is based on a claim that the information sought is protected work product under Chapter 4 (commencing with Section 2018.010), that claim shall be expressly asserted. (c) If an objection is based on a claim of privilege or a claim that the information sought is protected work product, the response shall provide sufficient factual information for other parties to evaluate the merits of that claim, including, if necessary, a privilege log.