Carmax’s “Limitation of Warranties” in Contract Fails to Get Case Tossed


In this case, Plaintiff Tammy Gutierrez sued defendant CarMax Auto Superstores California,
LLC (CarMax) alleging breaches of express and implied warranties, intentional and negligent misrepresentation, breach of contract, unfair competition under Business and Professions Code section 17200 (UCL), and a violation of the Consumer Legal Remedies Act (CLRA; Civ. Code, § 1750 et seq.). CarMax demurred to Gutierrez’s third amended complaint and the trial court sustained the demurrer without leave to amend. Gutierrez appealed, contending her allegations about an undisclosed safety recall adequately stated causes of action for breach of an implied warranty of merchantability and violations of the UCL and CLRA.

On May 6, 2013, Gutierrez purchased a 2008 Hyundai Elantra from defendant
CarMax at its dealership in Bakersfield. The vehicle came with a 30-day limited
warranty. The vehicle’s purchase agreement stated:

The CarMax Warranty Brochure contains the details of the Limited Warranty.


Before Gutierrez purchased the vehicle, she was advised by CarMax sales staff
that the Hyundai was in excellent condition because it had passed a rigorous 125-point
quality inspection. Gutierrez also received a document with the heading “CQI CarMax”
that stated: “This vehicle has passed the rigorous CarMax 125-Point Quality Inspection”
and listed the 125 points.

The following sentence appeared at the top of the document:

“Your signed CQI certificate can be found in your vehicle’s glove compartment.”

At the time of the sale, the Hyundai was subject to a national recall relating to the
stop lamp switch, which Gutierrez alleges was a critical safety-related component of the
vehicle’s braking system that materially affects a person’s ability to operate the vehicle
safely. She further alleges it is unsafe to operate a vehicle with a defective stop lamp
switch, but has not alleged the switch on her vehicle malfunctioned or was actually

The Court held:

“On the question whether Gutierrez pleaded sufficient facts to establish CarMax
had a duty to disclose the safety recall, we conclude her allegations are sufficient.
Gutierrez contends the duty to disclose existed because CarMax (1) had actual knowledge of the recall before the sale of the vehicle and (2) made partial representations about the vehicle that were misleading because the existence of the recall, a material fact, had not been disclosed. We conclude her allegations are sufficient to establish for pleading purposes the existence of the safety recall was a material fact and, by reasonable inference, the existence of CarMax’s knowledge of the recall before the sale. As the stop lamp switch is related to the vehicle’s braking and lighting systems, Gutierrez’s allegations about the rigorous inspection of the vehicle’s braking and lighting systems, and its misleading character in the absence of a disclosure about the safety recall, are sufficient to plead the remaining factual element of a duty to disclose. Therefore, we conclude she has alleged sufficient facts to state a claim for a deceptive practice actionable under the CLRA.”

The Court went on to hold:

“Gutierrez also has stated a cause of action under the UCL. We conclude the
violation of the CLRA serves as the predicate violation of law necessary to establish the
unlawful practice variety of unfair competition that is actionable under the UCL.”

So, despite the “Limitation of Warranties” in Carmax’s contract, the court found that the plaintiff had stated a cause of action for her seventh (UCL) and eighth (CLRA) causes of action and reversed the trial court’s dismissal of her case for those two causes of action.  The plaintiff lives to fight another day and Carmax may just face a jury regarding its business practices.

Eric Papp, Esq.

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Employee Not Bound by Employer’s Arbitration Agreement with U-Haul

u-haul truckIn VIRGIL JENSEN v. U-HAUL CO. OF CALIFORNIA, the Appellate Court upheld the Trial Court’s denial of U-Haul’s motion to compel arbitration with the Plaintiff, Jensen.

In Jensen, it was undisputed that Jensen’s boss (who was also the owner, CEO, CFO, Secretary and sole director of the company that employed Jensen) rented the U-Haul truck in question and signed the rental contract that contained the arbitration agreement.  It was also undisputed that Jensen was driving the U-Haul truck in the course and scope of his duties as an employee when a tire blew and Jensen was injured.  Continue reading

Tinder Doesn’t Like “Older” Folks and The Appellate Court “Swipes Left.”

Tinder No Old Guys“Swipe Left”


Tinder, Inc. owns and operates the smartphone-based dating application, Tinder. The original app began, and is still offered, as a free online dating service. It presents users with photos of potential dates. The user can swipe right to express approval, or swipe left to express disapproval. In March 2015, Tinder released a premium service called “Tinder Plus,” which allows users to access additional features of the app for a monthly fee. Continue reading

Legal Zoom Sued for Offering Legal Services without a Law License

Legal Zoom Sued for offering legal services without a law licenseComplaint Alleges LegalZoom engages in the Unauthorized Practice of Law

In this lawsuit, filed on December 19, 2017, the plaintiffs, a law firm and attorneys that offer United States Patent and Trademark (USPTO) searches and services for its clients alleges that Legal Zoom, an entity not licensed to practice law anywhere in the United States, is, in fact, practicing law without a license.  Continue reading

When Youtube takes down your video, it’s not necessarily defaming you.

youtube violationBARTHOLOMEW v. YOUTUBE

In this case, the appellate court was  asked to decide whether a musician stated a claim for libel per quod against the popular video viewing Web site, YouTube. When YouTube decided to block access to Joyce Bartholomew’s video, it posted a statement that the video had violated YouTube’s terms of service, a statement which also provided a hyperlink to a list of examples and tips, a list YouTube called its “Community Guideline Tips.” In her complaint, Bartholomew alleged that both the statement notifying users that her video had been taken down and the Community Guideline Tips subsection harmed her reputation. Continue reading

Facebook Not Required to Remove Negative Posts about Celebrity Country Artist

facebook suit

If it is True and a Matter of Public Interest, Facebook Does not have to Remove the Post

JASON CROSS et al., Plaintiffs and Appellants, v. FACEBOOK, INC.,

Plaintiffs are Jason Cross, also known as Mikel Knight, a country rap artist, and two entities affiliated with him. Defendant is Facebook, Inc. (Facebook). The dispute arises out of a Facebook page called ―Families Against Mikel Knight,‖ which page, plaintiffs claimed, incited violence and generated death threats against Knight and his team. Plaintiffs sought to have the page removed, Facebook refused, and plaintiffs sued, in a complaint that alleged six causes of action. Continue reading

Spokeo Needs to Get it Right

spokeo emojiIt May Be Free, But the Info on Spokeo Still Needs to be Accurate

Robins v. Spokeo (Spokeo III) (8/15/2017)

Spokeo, Inc., operates a website by the same name that compiles consumer data and builds individual consumer-information profiles. At no cost, consumers can use to view a report containing an array of details about a person’s life, such as the person’s age, contact information, marital status, occupation, hobbies, economic health, and wealth. More detailed information is available for users who pay subscription fees. Continue reading

Private Facebook information Remains “Private” – So Far

Quiet Court in Session“Private” Facebook Posts are “Private” 

FACEBOOK, INC., Petitioner, v. THE SUPERIOR COURT OF SAN DIEGO COUNTY, Respondent; LANCE TOUCHSTONE, Real Party in Interest – (9/26/17)

Here, in Facebook v. Touchstone, a subpoena seeking to obtain “private” Facebook information is at stake. In this regard, real party in interest Lance Touchstone is awaiting trial in respondent San Diego County Superior Court (the trial court) on a charge of attempting to murder Jeffrey R. (the victim). (Pen. Code, §§ 664/187, subd. (a).) After the shooting incident, the victim has been active on his personal Facebook, Inc., (Facebook) account. Continue reading

Yelp Ordered to Produce Documents Identifying Anonymous Negative Poster

Orange County Court House

Be Careful When Posting Negative Yelp Reviews to “Get Even.” It May Just Land YOU in a World of Legal Trouble.

In this case, Montagna filed a lawsuit against Sandra Jo Nunis and several Doe defendants alleging a single cause of action for trade libel. According to the first amended complaint, Montagna, an accountant, prepared a tax return for Nunis in 2015. Montagna initially quoted Nunis a “minimum” fee of $200 for the preparation of her return, based on her representation that her income was comprised exclusively of wages reported on a W-2 form, and she would require only a simple return. However, both Nunis’ income and the resulting tax return were allegedly more complicated than she had represented. Continue reading