Albrecht v. American Contractors Indemnity Co.

important in determining how to act in the transaction at issue.” (Id. at p. 256, citation omitted.) “In other words, a defendant has a duty to disclose when the fact is known to the defendant and the failure to disclose it is ‘“misleading in light of other facts ... that [the defendant] did disclose.”’” (Gutierrez, supra, at p.1258, citations omitted.) However, “[n]ot every omission or nondisclosure of fact is actionable. ... [W]e conclude an omission is actionable under the CLRA if the omitted fact is (1) ‘contrary to a [material] representation actually made by the defendant’ or (2) is ‘a fact the defendant was obliged to disclose.’” (Ibid, citations omitted.)

On the other hand, “[a] duty to disclose cannot exist if the defendant was not aware of the facts that were not disclosed.” (Id. at p. 1262.) Here, defendants argue that they had no duty to disclose the rental history of the subject vehicle because they had no actual or constructive knowledge of the fact that the car had previously been a rental. (Defendants’ Issue 1 in Separate Statement.) However, defendants have not provided any evidence that shows that they lacked either actual knowledge or constructive knowledge of the car’s rental history.

They have not submitted any declarations from employees or representatives of Prieto, Flagship, or American Contractors Indemnity stating that they were not aware of the fact that the vehicle had previously been a rental car. They point to the fact that the Carfax report provided to plaintiff at the time of the sale did not show that the car had been a rental vehicle. (Defendants’ UMF Nos. 4-6; see also Exhibit 5 to defendants’ evidence in support of summary judgment.) They also allege that Prieto never saw the AutoCheck report that showed the car’s rental history, so they conclude that Prieto had no knowledge of the fact that the car had been a rental.

However, the fact that the Carfax report does not state that the car was a rental does not establish that Prieto had no actual knowledge of the fact that the car had been a rental; it only shows that the rental history was not reflected in the Carfax report. Prieto may have had actual knowledge from other sources, such as a vehicle history report from another company. Plaintiff was able to obtain a report from Equifax AutoCheck after the sale that showed the car was a rental (UMF No. 7), so Prieto could presumably have obtained a report from AutoCheck or a different company that would have alerted it to the fact that the car had been a rental.

Prieto claims in its memo of points and authorities that it did not see the AutoCheck report before the sale, but it presents no evidence showing that it never conducted any checks beyond the Carfax report to determine the vehicle’s history. Statements in a points and authorities brief are not evidence and are insufficient to meet the defendants’ burden on summary judgment. Without a declaration or other evidence from Prieto stating that it had no actual knowledge of the vehicle’s rental history, Prieto has not met its burden of showing that it had no actual knowledge that the car had been a rental vehicle.

Also, while Prieto claims that it had no constructive knowledge of the vehicle’s prior use as a rental car, again Prieto has not presented any evidence to prove this alleged fact. “Typically, to charge an individual with constructive notice, he must have, ‘actual notice of facts or circumstances which are sufficient to put a prudent person on inquiry as to the existence of the fact with respect to which he is charged with constructive notice.’” (Jones v. Awad (2019) 39 Cal.App.5th 1200, 1209, citation omitted.)

Here, defendants’ evidence only shows that the Carfax report did not list the vehicle as having been a rental, not that Prieto had no knowledge of any other facts that might have put it on constructive notice that the car had been used as a rental. For example, plaintiff testified in her deposition that the car had a “No Smoking” sticker in the driver’s window that was clearly visible. (Plaintiff’s Evidence, Plaintiff’s depo., pp. 18:1- 17; 19:1-13.) After she bought the car, plaintiff’s friend noticed the window sticker and told her that it meant that the car was a rental. (Ibid.)

If plaintiff’s friend was able to see the sticker and determine that it meant that the car used to be a rental vehicle, then a reasonable finder of fact could infer that Prieto, a professional car dealership, might have seen it as well and reached the same conclusion. It is common knowledge that car rental companies often put “No Smoking” stickers on their cars, so a reasonable finder of fact could conclude that the presence of a “No Smoking” sticker in the subject car’s window placed Prieto on notice of the fact that it might be a former rental car.

In other words, a finder of fact could conclude that Prieto had constructive knowledge of the vehicle’s history as a rental car. Thus, plaintiff’s evidence that there was a “No Smoking” sticker on the car window is enough to raise a triable issue of material fact with regard to whether Prieto had constructive notice of the vehicle’s history. Defendants have also claimed that they made no misrepresentations about the car’s history to plaintiff, and in fact she admitted that Prieto’s employees never made any statements to her about the car not being a rental before she bought it. (UMF Nos. 2, 3.)

However, there is a triable issue of material fact with regard to whether Prieto made misrepresentations or misleading partial disclosures of material fact to plaintiff when it provided her with a Used Vehicle Disclosure form that stated “N/A” on the lines regarding the vehicle’s possible status as a former rental vehicle, and by providing her with a Carfax report that said nothing about the vehicle being a former rental. (Defendants’ UMF Nos. 4-6, 8, and Defendants’ Exhibits 5 and 7.) A reasonable finder of fact could conclude that Prieto’s statements were false or misleading, as they gave the impression that the car had never been used a rental car, when in fact it had.

Prieto argues that the Used Vehicle Disclosure form included a disclaimer that stated that the report was being provided “for your information only”, that the report was obtained from a third party, and that the “Dealer is not responsible for any errors or omissions in this Report.” (UMF No. 8 and Defendants’ Exhibit 7.) However, defendants have not cited to any authorities holding that including a disclaimer in a Used Vehicle Disclosure form automatically means that the dealership is not liable for any alleged misrepresentations in the disclosure form.

The question of whether defendant’s statements in the form were false or misleading must be resolved by the trier of fact, not on summary judgment. Finally, since defendants have not shown that they are entitled to summary adjudication of the CLRA claim against Prieto, they have also failed to show that they are entitled to summary adjudication of the derivative claims against Flagship and American Contractors Indemnity Company. Therefore, the court intends to deny the motion for summary judgment or adjudication in its entirety.

Pursuant to California Rules of Court, rule 3.1312(a), and Code of Civil Procedure section 1019.5, subdivision (a), no further written order is necessary. The minute order

adopting this tentative ruling will serve as the order of the court and service by the clerk will constitute notice of the order.

Tentative Ruling

Issued By: JS on 5/17/2027. (Judge’s initials) (Date)

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