Translated Contracts Required for Spanish, Chinese, Tagalog, Vietnamese, Korean Customers
We’ve blogged before about the importance of translating contracts into a customer’s native language and the legal issues that can arise when a business fails to do so. The case below discusses a California state law requiring that contracts to be translated into Spanish, Chinese, Korean, Vietnamese, and Tagalog when business negotiations are not conducted in English.
Plaintiff Negotiates Vehicle Lease in Spanish
On August 15, 2014, the plaintiff and his wife signed an agreement with the Defendant, a Toyota dealership, to lease a 2014 Toyota Camry. The plaintiff had originally wanted to purchase the car outright, but the defendant’s salesperson told the plaintiff and his wife that they lacked sufficient credit to qualify for a purchase of the vehicle. The defendant’s salesperson allegedly told the plaintiff that he could refinance the contract after making 10 car payments. The negotiations for the lease of the vehicle were conducted in Spanish. However, the defendant did not provide the plaintiff with a copy of the lease agreement translated into Spanish.
10 months later, the plaintiff returned to the dealership wanting to refinance the car as he and the dealership had previously discussed. However, the plaintiff was informed that he could not refinance the car at the original purchase price and the purchase would cost more than the cost of the vehicle under the lease. In addition, the plaintiff was denied for credit refinancing by four banks.
Plaintiff Sends CLRA Notice
Shortly thereafter, on August 11, 2015, the plaintiff sent the defendant a “notice of rescission and demand for rectification” under the Consumer Legal Remedies Act (“CLRA.”) The CLRA proscribes “unfair methods of competition and unfair or deceptive acts or practices undertaken by any person in a transaction intended to result or that results in the sale or lease of goods or services to any consumer,” including, as alleged by Valdez: “Representing that goods or services have sponsorship, approval, characteristics, ingredients, uses, benefits, or quantities that they do not have . . . . Representing that a transaction confers or involves rights, remedies, or obligations that it does not have or involve, or that are prohibited by law. . . .Representing that the consumer will receive a rebate, discount, or other economic benefit, if the earning of the benefit is contingent on an event to occur subsequent to the consummation of the transaction…Misrepresenting the authority of a salesperson, representative, or agent to negotiate the final terms of a transaction with a consumer.”
The plaintiff’s CLRA notice alleged that the defendant’s actions violated California state law and constituted fraud. The plaintiff sought to have the transaction rescinded and removed from his credit report, his down payment refunded, and the reimbursement of other fees and costs. The defendant initially agreed to pay the plaintiff a sum of money to settle the dispute. However, during settlement negotiations, the defendant learned that the subject vehicle had been involved in an accident and needed repairs that could cost as much as $3,300. In turn, the defendant dealership requested that the dealership be allowed to inspect the vehicle as part of the settlement agreement. The plaintiff refused to allow an inspection and filed suit.
Plaintiff Files Lawsuit Against Defendant Dealership
After the settlement negotiations fizzled, the plaintiff filed a lawsuit against the defendant dealership in California state court for violations of the CLRA, the Unfair Competition Law (UCL), and for fraud. Specifically, the plaintiff alleged that the defendant violated Section 1632 of the CLRA because, although the sale negotiations were conducted in Spanish, the dealership had failed to provide him with a lease written in Spanish. CA civil code section 1632, provides, in relevant part, as follows:
“Any person engaged in a trade or business who negotiates primarily in Spanish, Chinese, Tagalog, Vietnamese, or Korean, orally or in writing, in the course of entering into [an agreement subject to the provisions of section 2985.7 (Vehicle Leasing Act)], shall deliver to the other party to the contract or agreement and prior to the execution thereof . . . a translation of every term and condition in that contract or agreement . . . .
The plaintiff also alleged that the defendant dealership violated the CLRA and engaged in fraud by representing that the plaintiff could refinance the vehicle in 10 months when in fact he could not.
Defendant Dealership Moves for Summary Judgment
In response to the lawsuit, the defendant dealership filed a motion for summary judgment alleging that the lawsuit was precluded from filing suit under section 1782(b) of the CLRA because it had offered an appropriate correction, including rescission, reimbursement, and a payoff of the lease.
The plaintiff opposed the motion on several grounds, including the fact that the settlement agreement was subject to an inspection of the vehicle and the dealership’s unilateral right to void the agreement entirely after assessing its condition. The plaintiff also alleged that the defendant dealership had failed to offer an appropriate remedy within 30 days of receiving the CLRA prelitigation notice.
After a hearing on the merits, the trial court granted the defendant dealership’s motion for summary judgment. The court found that the defendant had made a timely offer of correction under the CLRA and rejected plaintiff’s other claims accordingly. The plaintiff then filed an appeal.
California Court of Appeal Reverses Trial Court
On appeal, the California Court of Appeal determined that the defendant dealership was not entitled to summary judgment. While the Court of Appeal agreed that the dealership’s correction offer was timely under the CLRA, the Court found that the actual offer itself was not an appropriate correction offer. First, the Court found that the language in the release was overly broad and would have improperly precluded the plaintiff from his other state law claims.
The Court also found that the defendant dealership had failed to provide the plaintiff with a Spanish language translation of the contract per California Civil Code section 1632. Specifically, the Court held that “[Defendant’s] failure to provide a Spanish language translation of the lease agreement as required under section 1632 constituted a separate statutory violation, independent of the misrepresentations alleged as part of [plaintiff’s] CLRA claim.”
The Court also held that the defendant dealership’s settlement offer improperly allowed the dealership to void the settlement agreement if, upon inspection, it deemed the vehicle’s condition to be unacceptable. This, the Court held, was an illusory offer. Accordingly, the Court of Appeal reversed the decision of the trial court and remanded it with directions to enter an order denying the defendant’s motion for summary judgment.
The case is Refugio Valdez v. Seidner-Miller, Inc., Case No. B281003, decided on March 27, 2019 in the Court of Appeal of the State of California, Second Appellate District Division Seven.
Contact All Language Alliance, Inc. to order legal translation services from English to Spanish, Chinese, Vietnamese, Korean, Tagalog to comply with California Civil Code 1632, and to schedule a Spanish interpreter, a Filipino interpreter, a Mandarin Chinese interpreter, a Korean interpreter, a Vietnamese for a deposition or a client meeting.
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