R & B Auto Center, Inc. v. Farmers Group, Inc.

I concur in the majority’s affirmance of the trial court’s decisions in favor of defendants on the causes of action for breach of contract, breach of the implied covenant of good faith and fair dealing, and breach of fiduciary duty. I respectfully dissent from the remainder of the majority opinion. Thus, the majority and I agree the contract between these two businesses provided insurance coverage for new cars, not used cars. We also agree that the insurer is not liable for any violation of the implied covenant or for breach of fiduciary duty. We part company because I believe the trial court’s other decisions were also correct and supported by the evidentiary record and the law.

The majority violates one of the fundamental general rules of appellate review—on appeal, in considering whether the trial court erred, the appellate court cannot consider evidence that was not before the trial court. (Doers v. Golden Gate Bridge etc. Dist. (1979) 23 Cal.3d 180, 184, fn. 1 [ 151 Cal.Rptr. 837 , 588 P.2d 1261 ]; Pulver v. Avco Financial Services (1986) 182 Cal.App.3d 622, 632 [ 227 Cal.Rptr. 491 ].) In support of the conclusion that the trial court could not grant the nonsuit on the…

One might reasonably assume new car dealerships and used car dealerships are apples and oranges. But when a lemon is added to the mix, the lines can become blurred. When the Department of Motor Vehicles (DMV) classifies a used vehicle with a “title brand,” a purchaser of that used vehicle may sometimes bring suit under the lemon law, a procedure usually associated with defective new cars. (See the Song-Beverly Consumer Warranty Act, Civ. Code, § 1790 et seq.) Here, a car dealership licensed to sell only used cars sent out a bid for lemon law insurance, including coverage for liability arising in connection with the sale of “title branded” lemon law buyback vehicles. (See Civ. Code, §§ 1793.23, 1793.24.) It was furnished a policy containing lemon law coverage. To its chagrin, when sued under the lemon law, the dealership discovered the coverage only applied to the sale of new vehicles. The insurance carrier would not agree to either defend or indemnify the dealership in connection with the lemon law suit.

The dealership sued the insurance carrier and related parties on negligent and intentional misrepresentation, breach of contract, reformation, bad faith, breach of…

I have signed the main opinion as I believe it to be the correct resolution of this procedurally mismanaged case. But I write separately to address some of the issues raised in the dissenting opinion. I respectfully disagree with many of the statements made and the conclusions reached by our dissenting colleague.

*371 This case, which is rather simple, has turned into an ungainly monster. The primary issues of fact are whether defendant’s agent negligently or intentionally misrepresented the scope of the insurance coverage provided to plaintiff and whether defendants engaged in a scheme to defraud used car dealers. The other significant issue, a mixed question of law and fact, is whether defendants are liable for the conduct of their agents under the doctrine of respondeat superior.

The complexity into which this essentially simple case was transmogrified results primarily from three circumstances. First, plaintiff managed to throw every conceivable cause of action against the wall hoping that something might stick. Second, defendants successfully litigated the issues largely through motions in limine, a useful procedural tool but one that may not be used to resolve factual…

One might reasonably assume new car dealerships and used car dealerships are apples and oranges. But when a lemon is added to the mix, the lines can become blurred. When the Department of Motor Vehicles classifies a used vehicle with a "title brand," a purchaser of that used vehicle may sometimes bring suit under the lemon law, a procedure usually associated with defective new cars. (See the Song-Beverly Consumer Warranty Act, Civ.Code, § 1790 et seq.). Here, a car dealership licensed to sell only used cars sent out a bid for lemon law insurance, including coverage for liability arising in connection with the sale of "title branded" lemon law buyback vehicles. (See Civ. Code, §§ 1793.23, 1793.24.) It was furnished a policy containing lemon law coverage. To its chagrin, when sued under the lemon law, the dealership discovered the coverage only applied to the sale of new vehicles. The insurance carrier would not agree to either defend or indemnify the dealership in connection with the lemon law suit.

The dealership sued the insurance carrier and related parties on negligent and intentional misrepresentation, breach of contract, reformation, bad faith, breach of fiduciary…