California Auto Dealer

December 2019

Over 30 Years of Handling Buy/Sells for New Car Dealers
   December 2019 
Buyers Beware: Signing Your Dealer Agreement Without Reading It Could Be Costly
If you are not in the habit of reading documents the manufacturer puts in front of you to sign, it is time you started. Whether you are signing new documents because you are buying a dealership, or renewing your Dealer Sales and Service Agreement, what you find if you read it carefully may surprise you. Manufacturers have been asking buyers to agree to assume obligations and giving themselves rights to change the deal, leaving you stuck if you decide to sell.
Consumer Privacy Laws: Keeping Up With The Changes 
The new Consumer Privacy Act goes into effect January 1, 2020. California auto dealers should be well on their way to becoming compliant. We have provided a checklist for compliance. If you have not read about the california consumer privacy act yet, it is best to do so, to see how it may affect you.
Thought You Didn’t Have PAGA Coverage? Think Again.
Although EPLI coverage carriers will typically tell you they do not provide any coverage for PAGA claims, a recent Court of Appeals ruling, Southern California Pizza Co. LLC v. Certain Underwriters at Lloyds, G052643 8/27/19 modified 9/20/19, held that an exclusion for wage and hour claims in an Employment Practice Liability (EPL) policy was ambiguous. Specifically, the Court interpreted wage and hours laws to mean laws concerning duration worked and/or remuneration received in exchange for work, but not for claims for reimbursement of expenses incurred, such as failure to reimburse employees for use of their own tools. So there was a duty to defend under the EPLI coverage. In that case, the Court ruled that the $250,000 defense cost cap for wage and hour claims did not apply. If you were involved in a PAGA claim over the last four years (unless your policy has its own statute of limitations) and either did not have coverage for wage and hour claims, or had only limited coverage, you may be entitled to payment by your insurance company. Case law also provides that if part of a claim is covered, the insurance company has a duty to defend the entire claim.

Timothy M. Thornton, Jr. is a partner with Gray·Duffy, LLP whose expertise is in interpretation of insurance policies to provide the broadest coverage available for all claims. He may be contacted at (818) 907-4023 or with any questions.

February 14 – 17, 2020 in Las Vegas

Erin Tenner will be attending the NADA Show in February 2020. If you are interested in meeting, please contact Erin at (818) 907-4071 or to schedule a time.

Erin K. Tenner is a partner with Gray·Duffy, LLP and has been legal counsel representing auto dealers in buying and selling auto dealerships for more than 30 years. 

Please Note: 
These articles are necessarily general in nature and do not substitute for legal advice with respect to any particular matter. Readers should consult with an attorney before taking any action affecting their interests.

California Auto Dealer is a registered trademark. The content of this Newsletter may not be duplicated without permission. If you know someone who would like to receive this newsletter, have them email Erin Tenner:

Please Note: This article is necessarily general in nature and is not a substitute for legal advice with respect to any particular case. Readers should consult with an attorney before taking any action affecting their interests.