A quarterly newsletter from The Scali Law Firm, designed to keep our clients and friends ahead of the compliance curve.
The Scali Law Firm, Ahead of the Curve: navigating dealer compliance in a changing industry

California Supreme Court hands important victory to dealers in the Raceway Ford cases

On December 15th, the California Supreme Court delivered its much-anticipated decision in the Raceway Ford Cases, holding that the practice of backdating second or subsequent contracts did not violate the Automobile Sales Finance Act (Cal. Civil Code §§ 2981, et seq. known as “ASFA”) and that the disclosure of inaccurate smog fees did not entitle buyers to the remedy of rescission under ASFA where the error was an accidental or bona fide error in computation. In so doing, the Supreme Court specifically overturned the Court of Appeal’s decision in the 2010 case of Nelson v. Pearson Ford, which held that the backdating of contracts violated ASFA because it resulted in an illegal finance charge, and also violated ASFA’s “single document rule.” Importantly, the Court also affirmed the large award of attorney’s fees to Raceway Ford on the backdating claims.


Court of appeal’s favorable ruling on dealership’s informal hold check agreement will stand

In August of this year, the California Court of Appeal in Nichols v. Century West, LLC. et al. held that a dealer’s informal agreement with a customer to delay depositing her down payment checks did not constitute an undisclosed deferred down payment on the sales contract, nor did it violate the single document rule. The challenges to this decision were resolved earlier this month and the remittitur issued last Monday. So, this is the law of the land. Nonetheless, Nichols leaves some unanswered questions and we strongly recommend consulting with an automotive attorney before changing your polices concerning deferred down payments.



New Laws for 2017

As we come to the end of 2016 and get ready for 2017, this alert will provide you with a run-down of the new laws affecting your business. This is not a substitute for the in-depth presentation of these new laws provided by the CNCDA. We encourage all of our clients and friends to attend the CNCDA’s various New Laws seminars hosted at locations around the state. Check out www.cncda.org for news on where you can attend one of these valuable seminars.



More new Laws for 2017

Here are a few more laws that did not make it into our original New Laws Alert, but we think they are important for our dealer clients to know. We also included an update on the IRS mileage reimbursement rate for 2017.



This newsletter is no substitute for contacting and working with your own dealer attorney to determine what compliance solutions are best for your dealership.  It does not constitute legal advice and any question or comment you send to us in response to anything you read in our newsletter does not create an attorney-client relationship where none otherwise exists.
Copyright © 2016
Scali Rasmussen, PC, All rights reserved.

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