Products Liability and Injury Lawyer Blog

Boschma v. Home Loan Center, Inc., (Fourth District, August 10, 2011) --- Cal.Rptr.
3d ----, 2011 WL 3486440, 11 Cal. Daily Op. Serv. 10, 237, 2011 Daily Journal D.A.R. 12,103

A couple who refinanced their existing home loan utilizing an "Option ARM" filed an action against the lender, alleging that the defendant's loan documents failed to adequately and accurately disclose the essential terms of the loan, and that the plaintiffs would suffer negative amortization if they made monthly payments according to the payment schedule provided prior to the closing of the loan. Asserting causes of action for fraud and violations of Business and Professions Code section 17200 et seq., the plaintiffs alleged that the defendant utilized a “teaser” interest rate of 1.25 percent for the first month of the 30 year loan which bore no relation to the actual cost of credit, and that the payment schedule did not clearly indicate it was based upon the teaser rate rather than the APR listed on the loan.

The trial court sustained the defendant's demurrer to the second amended complaint without leave to amend, finding that the loan documentation adequately described the nature of Option ARMs, and that the loan documents showed detailed, highlighted and repeated warnings regarding the interest rate changes, adequacy of payments to cover both principal and interest, and the prospect of the negative amortization. The court of appeal reversed, rejecting the defendant's contention that strict compliance with the federal Truth in Lending Act (TILA, 15 U.S.C. § 1601 et seq.) provides a safe-harbor from such claims:

Continue reading "LENDER FRAUD: NEGATIVE AMORTIZATION LOANS" »

Stewart v. Union Carbide Corporation (Second District, November 16, 2010) 190 Cal.App.4th 23, 117 Cal.Rptr.3d 791, 10 Cal. Daily Op. Serv. 14,363, 2010 Daily Journal D.A.R. 17,352

A plumber and his wife filed a products liability action against Union Carbide, an asbestos manufacturer, alleging that he had contracted mesothelioma as a result of exposure to asbestos in products used on commercial and residential construction projects. The plaintiffs further alleged that Union Carbide had been aware of the dangers of asbestos but had failed to adequately warn customers who purchased asbestos for use in their products, and had responded to their questions by downplaying concerns.

Following a jury verdict in favor of the plaintiffs, which included an award for punitive damages, the Defendant appealed, contending that the evidence showed that it had an “honest conviction” that the use of its product was safe when appropriate precautions were taken. However, the court of appeal affirmed the verdict, stating:

Continue reading "PRODUCTS LIABILITY: PUNITIVE DAMAGES" »

Komarova v. National Credit Acceptance, Inc., (First District, June 25, 2009) 175 Cal.App.4th 324, 95 Cal.Rptr.3d 880, 09 Cal. Daily Op. Serv. 8174, 2009 Daily Journal D.A.R. 9455

A woman filed an action against a debt collection agency, alleging that the defendant had engaged in abuses in violation of the Robbins-Rosenthal Fair Debt Collection Practices Act (Civil Code section 1788 et seq.). Asserting causes of action for statutory violations as well as intentional infliction of emotional distress, the plaintiff alleged that the defendant had not only mistakenly pursued the wrong individual, but had engaged in debt collection abuses such as harassing phone calls, calling without disclosure of identity, unreasonably frequent harassing communications and judicial proceedings without service of process.

Appealing from a jury verdict in favor of the plaintiff, the defendant contended that the plaintiff’s claims were barred by the litigation privilege of Civil Code section 47, which affords litigants and witnesses free access to the courts without fear of being harassed subsequently by derivative tort actions. The court of appeal affirmed in part and reversed in part, holding that the litigation privilege did not apply to the cause of action under the Rosenthal Act, but did apply to the cause of action for emotional distress:

Continue reading "FAIR DEBT COLLECTION PRACTICES: LITIGATION PRIVILEGE" »