Procedural Posture

[Saim Khan]

Plaintiff customer sued defendant car dealer, alleging that the dealer's billing practices violated the Rees-Levering Motor Vehicle Sales and Finance Act, Civ. Code, § 2981 et seq., and were actionable under the Unfair Competition Law (UCL), Bus. & Prof. Code, § 17200 et seq. The Superior Court of Los Angeles County, California, dismissed the claim and denied the dealer's motion for attorney fees. Both parties appealed.

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The customer challenged the dealer's practice of applying a customer's payment to an earlier missed installment, rather than to the current month's installment, leaving the current month's installment unpaid and triggering a new late fee for the current month. The court of appeal concluded that the alleged conduct of charging successive late fees for successive late payments did not violate the prohibition in Civ. Code, § 2982, subd. (k), against charging more than one late fee per delinquent installment. Because the customer failed to allege a statutory violation under Rees-Levering, he also failed to allege that the billing practice was unlawful under the UCL. The practice also was not "unfair," within the meaning of the UCL because the imposition of successive late fees for successive months reasonably could have been avoided had the customer made timely payments. Although the dealer was the prevailing party, it could not recover attorney fees under Civ. Code, § 2983.4, Rees-Levering's reciprocal attorney fee provision, because the alleged Rees-Levering violation was merely a predicate to the UCL claims, and a prevailing defendant could not recover attorney fees under the UCL.

Outcome

The court affirmed the judgment of dismissal and the postjudgment order denying the dealer's motion for attorney fees.