Tammy Gutierrez, a resident of Bakersfield, has won a significant victory against CarMax after arguing successfully that CarMax had acted illegally when it sold her a car with an unrepaired safety recall. According to a U.S. PIRG press release, the modified ruling was issued by the Fifth District Court of Appeal in Fresno on Feb. 22 and is widely considered to be the first decision challenging the lawfulness of car dealers selling off unrepaired recalled used cars.
Misleading Consumers About Vehicle Safety
The three-judge panel issued a 2-1 ruling that Gutierrez’s complaint stated that CarMax violated California’s Consumer Legal Remedies Act and the state’s Unfair Competition Law that prohibits unfair and deceptive practices by selling her a 2008 Hyundai Elantra with an unrepaired safety recall. The court’s ruling overturned a decision by a lower court and awarded Gutierrez costs for the appeal. It also sent the case back to the lower court so the lawsuit can proceed.
This new rule is important because it opens up a path for consumers who are victimized by such practices to allege that recalled vehicles fail to comply with the “implied warranty of merchantability” and therefore are not fit for sale to the public. CarMax widely advertises that it puts each vehicle through rigorous inspection after which it certifies them.
Gutierrez purchased the dangerously defective Hyundai at a CarMax in Bakersfield. CarMax had advertised that her vehicle had passed a “rigorous 125-point inspection.” While the checklist included brake lights, it did not include the recall repair. Just before the sale, Hyundai had recalled the vehicle for a faulty brake light switch that could increase the risk of a crash.
Protecting the Public from Defective Vehicles
As California auto defect attorneys, we are pleased that the court made this decision in the best interest of consumers. Vehicles are recalled because they have a defect that could endanger the safety of consumers or because they have been manufactured in violation of federal safety regulations. A recent study found that nearly 25 percent of vehicles sold by CarMax have been recalled for safety issues, but not repaired. It is unacceptable for auto dealers like CarMax to put consumers in harm’s way by selling unrepaired recalled cars.