Plaintiff homeowner’s home was sold at a nonjudicial foreclosure sale. Seeking to set aside the trustee’s sale, the homeowner filed an action against defendant lender, defendant loan servicer, and others. The homeowner claimed that he was a victim of predatory lending. The San Benito County Superior Court, California, granted summary judgment to the lender and loan servicer. The homeowner appealed. The parties were counseled by a corporate attorneys for the civil litigation.
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Overview
The homeowner claimed the transaction was invalid because the loan broker ignored his inability to repay the loan, and, as a person with limited English fluency, little education, and modest income, he did not understand many of the details of the transaction which was conducted entirely in English. The court concluded the lender and the loan servicer failed to meet their burden on summary judgment because their motion failed to address all of the allegations of the homeowner’s complaint. The loan documents appeared to be on standard, pre-printed forms in English and there was no evidence the homeowner had any role in negotiating the terms of the loan. This was sufficient evidence of unequal bargaining power, oppression or surprise to raise a triable issue regarding procedural unconscionability. Given the extreme disparity between the amount of the monthly loan payments and the homeowner’s income, this was sufficient to create a triable issue regarding whether the loans were overly harsh and one-sided and thus substantively unconscionable. In addition, the motion did not address a pertinent exception to the tender requirement, which the homeowner had raised in his complaint.
Outcome
The summary judgment was reversed.
Procedural Posture
Defendant insecticide manufacturer appealed from a judgment of the Superior Court of Kings County (California) on a jury verdict finding defendant liable for crop damage as a result of alleged negligence and breach of warranty. Defendant contended that no instructions should have been given on res ipsa loquitur and that those given on that doctrine and on implied warranties were erroneous.
Overview
Plaintiff cotton farmer suffered crop damage when an insecticide was applied to his cotton crop, adversely affecting production. In a products liability action, the jury found for plaintiff on his negligence and breach of warranty claims. Defendant insecticide manufacturer appealed, challenging the jury instructions on res ipsa loquitur and implied warranty. The court reversed, finding a miscarriage of justice due to erroneous jury instructions on essential matters. The court held that it was not erroneous to have instructed that defendant was required to rebut the inference of negligence based on res ipsa loquitur. However, the instructions erred in failing to advise that plaintiff had the burden to show that the insecticide was not mishandled or that its condition otherwise changed after defendant relinquished control. The court held that defendant’s disclaimer barred the claim for breach of the implied warranty of fitness for a particular purpose, Cal. Civ. Code § 1735(1), but not the claim for breach of the implied warranty of merchantable quality, Cal. Civ. Code § 1735(2). It was also improper to have instructed that privity was not an element of breach of implied warranty.
Outcome
The court reversed, holding that the jury instructions erroneously defined res ipsa loquitur without including an essential condition, stated that privity was not required to find defendant insecticide manufacturer liable for breach of statutory implied warranties, and allowed recovery for breach of implied warranty of fitness for a particular purpose. Because the errors related to essential matters, a miscarriage of justice occurred.