Under state vehicle leasing law, all agreements between auto dealer and customer must be in single document

Law Reporter, May 2000

Kroupa V. Sunrise Ford, C7.Cal.Rptr.,2d 42 (Ct.,App. 1999).

A California appellate court held that under state law, all agreements between an auto dealer and a customer should have been contained in a single document.

Here, a couple leased a vehicle from an auto dealer. They signed the lease and, allegedly, additional forms covering trade-in information on the couple's other vehicles. Subsequently, when they sought to terminate the lease, they found that the amount necessary to pay it off was greater than the original list price of the vehicle. They sued the auto dealer and others, alleging, among other claims, that all agreements between the parties were required to be disclosed in the lease. Defendants argued that the trade-in agreements and lease were separate transactions that required separate documentation. The trial court found for defendants.

Reversing, the court found that at the time plaintiffs signed the lease, California's Vehicle Leasing Act, Cal. Civ. Code 2985.8, required that every lease contract "shall contain in a single document all of the agreements" of the parties regarding their obligations. The court noted that, in this case-although there was a single transaction-there was not a single document that contained all of the agreements of the parties. For example, the lease did not mention several items the parties had agreed upon, such as a rebate on the new vehicle, money the plaintiffs paid in connection with their trade-ins, and the intent to apply proceeds from the trade-ins to the new lease.

Moreover, the court rejected defendants' argument that the act did not specifically require inclusion of the proceeds provision in the lease form. The act, the court explained, required all agreements to appear in a single document and, at the time of the transaction, required that every contract contain 18 specific items. Because a point of agreement between parties was not one of those items, however, does not mean it can be omitted from the lease. If that were the case, the court reasoned, there would be no need for the single document requirement.

Accordingly, the court remanded.

Plaintiffs Counsel

Aurora Dawn Harris, Orange, Cal.