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Front Line Motor Cars v. Webb

Court of Appeal of California, Fourth Appellate District, Division Three

May 13, 2019, Opinion Filed



 [**33]  IKOLA, J.—In two unrelated transactions, Front Line Motor Cars (Dealer), a used car dealer licensed by the Department of Motor  [**34]  Vehicles (DMV), repossessed cars after the buyers failed to obtain financing.1 Dealer then refused to return the buyers' downpayments. The buyers complained to DMV. DMV instructed Dealer to refund the buyers' downpayments. Dealer refused, asserting its actions were proper under the Rees-Levering Motor Vehicle Sales [*156]  and Finance Act (Civ. Code, § 2981 et seq.; the Act) and that DMV lacked the power to sanction Dealer.2

DMV then brought a disciplinary action against Dealer. DMV accused Dealer of violating sections 2982.5, 2982.7, and 2982.9, which are the only sections of the Act which require a seller to refund a buyer's  [***2] downpayment upon the buyer's failure to obtain financing. After an administrative hearing, DMV adopted the administrative law judge's proposed order that Dealer's license be conditionally revoked for two years due to Dealer's violation of the Act. Dealer petitioned the superior court for a writ of administrative mandate, which the superior court denied.

On appeal Dealer repeats the same arguments it made below. Dealer is wrong. The Act does not sanction Dealer's predatory conduct nor does it leave DMV powerless to stop such abuse. As we shall explain, under the unique facts in this case (which reveal Dealer lacked a good faith intent to enter into bona fide credit sales with the buyers), the transactions involved seller-assisted loans subject to section 2982.5 of the Act, which expressly required Dealer to return the buyers' downpayments.3

Accordingly, we affirm the judgment.4

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35 Cal. App. 5th 153 *; 247 Cal. Rptr. 3d 32 **; 2019 Cal. App. LEXIS 430 ***

FRONT LINE MOTOR CARS, Plaintiff and Appellant, v. KATHLEEN K. WEBB, as Acting Director, etc., Defendant and Respondent.

Prior History:  [***1] Appeal from a judgment of the Superior Court of Orange County, No. 30-2017-00928836, Derek W. Hunt, Judge.

Disposition: Affirmed.


Dealer, buyer, financing, seller, downpayment, credit sale, transactions, loans, conditional sales contract, refund, repossessed, bona fide, seller-assisted, contracts, assign, sales, subdivision, customers, consumer, automobile dealer, right to cancel, superior court, sections, license, accusation, parties, lender, motor vehicle, contractual, default

Banking Law, Banking & Finance, Consumer Protection, Unfair & Deceptive Credit Practices, Transportation Law, Private Vehicles, Administrative Law, Judicial Review, Remedies, Mandamus, Standards of Review, Civil Procedure, Appeals, Reviewability of Lower Court Decisions, Preservation for Review, Criminal Law & Procedure, Reviewability, Forfeitures