Jin vs. PCH Auto LLC

Summary of Undisputed Facts

Defendant Malex Housing, LLC (Malex) purchased the subject vehicle from Mercedez-Benz of West Covina on 6/21/22 pursuant to a Retail Installment Sale Contract (“RISC”). (Undisputed Material Fact [UMF] 1.) The RISC provided the vehicle could not be sold or transferred without Defendant’s permission. (UMF 4.) Moving Defendant was assigned the contract by the original dealer. (UMF 6.) Unknown to Defendant, at some point the subject vehicle came into possession of Defendant PCH Autos LLC, which Plaintiffs paid to purchase the vehicle. (UMFs 7-8.)

The Dealership never provided Plaintiffs with title to the vehicle. (UMF 15.)

Defendant asserts it never knew about or authorized the second sale from the Defendant Dealership to Plaintiffs. (UMFs 9-14.) Plaintiffs dispute these facts based on Plaintiff Jin’s declaration at paragraphs 27-33, which states Plaintiffs believe someone else was making payments to Defendant on the vehicle between December 2023 and June 2024 because Defendant’s loan did not go into default until six months after Plaintiffs paid the Defendant Dealership for the vehicle. Plaintiff believes Defendant Dealership may have been making loan payments to Defendant after Plaintiffs purchased the vehicle, but have not conducted discovery to support this assertion. (¶¶ 31, 32.)

Merits

Defendant claims it maintains an undisturbed perfected lienholder interest in the vehicle, it is the vehicle’s legal owner, and it never knew about or authorized the Dealership’s sale of the vehicle. Defendant contends that

under California’s Full Title Doctrine (Veh. Code, §§ 6300- 6303), its security interest survived the purported sale from the Dealership to Plaintiffs. Moving Defendant contends that if anyone is liable, it is the Dealership, which is responsible for ensuring title transfer under Vehicle Code section 5753.

Vehicle Code section 6301 states in part, “When the secured party, his or her successor, or his or her assignee, has deposited, either physically or by electronic transmission pursuant to Section 1801.1, with the department a properly endorsed certificate of ownership showing the secured party as legal owner or an application in usual form for an original registration, together with an application for registration of the secured party as legal owner, the deposit constitutes perfection of the security interest and the rights of all persons in the vehicle shall be subject to the provisions of the Uniform Commercial Code....”

“The general rule is that the seller of property can transfer to the buyer no better title than he has himself, and if at the time of the transfer he has no title, the purchaser, although buying in good faith and for full value obtains no title.” (Siebenhauer v. Bank of Cal. Nat. Ass'n (1930) 211 Cal. 239, 241.)

“The full title doctrine operates to defeat the claims of holders of an unlisted security interest as against the claims of good faith purchasers” because, “it should normally be impossible for a seller to present a buyer with a certificate of ownership which shows no security interest at a time when the DMV records show one.” (Suburban Motors, Inc. v. State Farm Mut. Auto. Ins. Co. (1990) 218 Cal.App.3d 1354, 1362 [cleaned up].) “Because this ‘full title’ system requires all security interests to be listed on the statutory certificate of ownership (see Veh. Code, §§ 370, 4451, 4453), a purchaser may rely on the certificate and is not expected to check a centralized set of records to determine whether a security interest has been recorded.” (Ibid.)

“Vehicle Code section 6300 provides the exclusive method for perfecting a security interest in a vehicle not constituting inventory....” (Quartz of Southern California, Inc. v. Mullen Bros., Inc. (2007) 151 Cal.App.4th 901, 908.) “The provisions of the Uniform Commercial Code do not come into play to determine the rights of competing parties until the security interest is perfected under the Vehicle Code.” (Ibid.)

In opposition, Plaintiffs do not deny Defendant remains the lienholder of record and Defendant Malex never paid off the loan under the original RISC. (UMFs 18, 21.) The title was never transferred to Plaintiffs’ name with the DMV. (UMF 22.) Rather, Plaintiffs argue they purchased the vehicle in good faith without any knowledge of Defendant Malex’s ownership or moving Defendant’s security interest in the vehicle. Plaintiffs did not know the Dealership lacked legal authority to sell the vehicle.

Plaintiffs contend Defendant has not met its burden to demonstrate its perfected security interest because the Court cannot take judicial notice of the Electronic Certificate of Title and Online Vehicle Reports. The court disagrees but even so, Defendant presents the declaration of its Collections Group Leader who declares, “MBFS received by assignment from the Dealer the Contract, and pursuant to its terms, MBFS’ lienholder and legal ownership interest in the Mercedes-Benz that was perfected with the California Department of Motor Vehicles (“DMV”) on July 6, 2022.” (¶¶10-15.)

Defendant has met its burden of demonstrating it holds title to the vehicle as reflected in the title certificate.

Plaintiffs assert there is a dispute as to whether (1) Defendant consented to or ratified the sale by accepting payments from the Dealership or another third party for six months after Plaintiffs’ purchase, (2) Malex authorized the Dealership to sell the vehicle, (3) Plaintiffs are bona fide purchasers, and (4) Defendant had actual or constructive notice of the sale. (Opp., p. 7.)

The only legal authority cited by Plaintiffs in support of their arguments is Civil Code section 2026, which provides that a “factor” is an agent employed by another to sell property and who is authorized to conduct a sale. (Civ. Code, §§ 2026-2030.) Plaintiffs assert the Dealership may have been acting as Malex’s agent to conduct a binding sale, with constructive knowledge of moving Defendant. However, Plaintiffs do not cite evidence in support of this theory other than their assertion Defendant did not place the loan in default until six months after Plaintiffs’ purported purchase of the vehicle.

Defendant has shown it holds a valid security interest in the vehicle listed on the title certificate. Plaintiffs do not dispute this but assert, without supporting evidence, Defendant Malex may have consented to the sale of the vehicle despite the terms of Malex’s RISC with moving

Defendant which prohibited Malex’s sale of the vehicle without Defendant’s consent. Plaintiffs further speculate Defendant may have ratified the sale by continuing to accept payment, possibly from the Dealership.

However, even if Plaintiffs presented evidence showing Malex authorized the Dealership to sell the vehicle and Defendant continued to accept payments from the Dealership, they fail to cite legal authority showing this would invalidate Defendant’s title to the vehicle or allow the Dealership to effectively transfer title to Plaintiffs. Moreover, they fail to rebut Defendant’s undisputed evidence it had no knowledge of the purported sale by the Dealership. Under the Full Title Doctrine, Plaintiffs have not shown they obtained title to the vehicle or extinguished Defendant’s right to the vehicle which was reflected on the certificate of title. Sale by the Dealership was invalid.

Defendant is ORDERED to submit a judgment for the court’s signature within 5 days.

Clerk to give notice.

14 Marek vs. E & S Motion for Summary Judgment Ring Defendants E&S Ring Management Corp. and ZMV Management Partnership d/b/a Mediterranean Village Costa Mesa’s Corp. 30-2024- motion for summary judgment as to plaintiff Marzena Marek’s Complaint is DENIED. 01446531-CU- PO-CJC Defendants’ Evidentiary Objections to the Declaration of Eris Barillas is SUSTAINED as to Objection No. 5 and OVERRULED as to the remaining.

Plaintiff’s Request for Judicial Notice is GRANTED.

There is a triable issue of material fact on the negligence and premises liability causes of action on whether the trivial defect doctrine applies. (See Cadam v. Somerset Gardens Townhouse HOA (2011) 200 Cal.App.4th 383, 388–389.) Plaintiff has submitted an expert declaration of Eris Barillas, CXLT, CPSI, who inspected the subject stairway and found the stairway violated section 3305 of the 1967 Uniform Building Code and ASTM F1637-21, section 7.1.2 (Plaintiff’s Additional Disputed Material Facts (“AMF”) No. 14-17.) It is the expert’s opinion, to a reasonable degree of professional certainty, that the code-violating variations created an unsafe condition that caused and/or contributed to Plaintiff’s fall. (AMF No. 20.) Plaintiff also consistently testified at the moment of the fall the staircase “felt kind of different,” she could not tell