Court Opinion

ID: 9405281
Source: CourtListenerOpinion
Date Created: 2023-06-27 21:03:57.272383+00
Date Added: 2024-06-11T17:20:20.558156
License: Public Domain

Filed 6/27/23

                         CERTIFIED FOR PUBLICATION

                COURT OF APPEAL, FOURTH APPELLATE DISTRICT

                                     DIVISION ONE

                             STATE OF CALIFORNIA

 DEREK RHEINHART,                             D079940

          Plaintiff and Appellant,

          v.                                  (Super. Ct. No.
                                               37-2020-00015737-CU-CO-CTL)
 NISSAN NORTH AMERICA, INC.,
 et al.,

          Defendants and Respondents.

        APPEAL from a judgment of the Superior Court of San Diego County,
Timothy B. Taylor, Judge. Reversed.
        Law Offices of Robert B. Mobasseri, Robert B. Mobasseri and David
Alan Cooper for Plaintiff and Appellant.
        Wilson Turner Kosmo, Robert Allen Shields and Hang Alexandra Do
for Defendants and Respondents.

        Civil Code1 section 1790.1 of the Song-Beverly Consumer Warranty Act
(Song-Beverly Act or at times the Act; § 1790 et seq.) provides that “[a]ny
waiver by the buyer of consumer goods of the provisions of this chapter,
except as expressly provided in this chapter, shall be deemed contrary to

1       Undesignated statutory references are to the Civil Code.
public policy and shall be unenforceable and void.” (§ 1790.1.) This appeal
involves the effect of this antiwaiver provision on a release executed as part
of a pre-litigation settlement between plaintiff and appellant Derek
Rheinhart and defendants and respondents Nissan North America, Inc. and

Mossy Nissan, Inc. (collectively Nissan)2 over issues that had arisen with
Rheinhart’s leased Nissan vehicle. After Rheinhart entered into the
settlement agreement and release, he filed a lawsuit alleging violations of the
Act and seeking repurchase of his vehicle as well as other statutory remedies.
Nissan moved for summary judgment on grounds the settlement agreement
and release, which Rheinhart admitted he read and had an opportunity to
review before signing, extinguished his claims. The trial court granted the
motion, finding section 1790.1 applies to waivers of consumer warranties in
connection with a product purchase, not to releases negotiated to end
disputes about those warranties, and thus rejected Rheinhart’s argument
that the settlement was unenforceable under section 1790.1.
      Rheinhart contends the court erred. He argues the settlement
agreement and release violates section 1790.1 and is unenforceable as a
matter of law. Rheinhart maintains the court’s ruling is contrary to the
remedial purpose of the Act and bad public policy in that it defeats the
statute’s purpose to remove defective vehicles from the road and marketplace.
Rheinhart further contends the release is unconscionable given he was not
represented by counsel.
      Though we reject the trial court’s reading of section 1790.1, we do not
interpret the Act’s antiwaiver provision to categorically prohibit all
settlement agreements. However, we conclude under the circumstances of

2    Rheinhart had also sued the lender, Nissan Motor Acceptance
Corporation, but he does not challenge the judgment as to that defendant.
                                        2
this case the settlement agreement and release contravenes Rheinhart’s
substantive rights under the Act and is void and unenforceable as against
public policy. We reverse the summary judgment.
              FACTUAL AND PROCEDURAL BACKGROUND
      The material facts are undisputed. In June 2019, Rheinhart leased a

new Nissan vehicle3 from Mossy Nissan, paying $6,000 at signing and
agreeing to monthly payments of $214.36. Twice in July and once in August
2019 (when the vehicle had only 1,603 miles), he brought the vehicle back to
Mossy Nissan, complaining about several issues, including on all three
occasions malfunctioning of the rear-view camera screen. Between his first
and second visits in July 2019, Rheinhart asked Nissan to repurchase the
vehicle. Nissan declined to do so. Before Rheinhart’s third visit in August
2019, Nissan offered to pay Rheinhart $2,000, then $2,500 as a compromise.
When on August 20, 2019, Rheinhart counteroffered with a demand for
$3,548.40, Nissan accepted it. Rheinhart retained the vehicle.
      Nissan thereafter sent Rheinhart a written settlement agreement and
release (the Release), which Rheinhart reviewed, asking questions about
some of its language. In response, Nissan referred him to the Release’s
language that he “agrees he was given the opportunity to review this Release
with a lawyer of his choice and acting on his behalf, and that he has read this
Settlement Agreement and Release and fully understand [sic] it.” Rheinhart,
who elected not to consult counsel, signed the Release on October 16, 2019.
That same month, he received the settlement check from Nissan.

3     Nissan’s separate statement on this basic point does not state the
vehicle is new. However, to support this fact, Nissan referred to Rheinhart’s
complaint, in which Rheinhart alleged the vehicle was new.
                                       3
      In part, the Release states that in consideration for Nissan’s cash
payment, Rheinhart “hereby release[s] and forever discharge[s] Nissan North
America, Inc., and all its associated or affiliated companies . . . from any and
all claims, lawsuits, liens, debts, dues, damages, judgments. executions and
demands of every kind, whether currently known or unknown, and whether
arising in the past or present . . . which relate to [Rheinhart’s vehicle].” It
further provides that Rheinhart “does not waive any unrelated personal
injury or breach of warranty claims or causes of action, which may arise after
the execution of this Release.” In the Release, Rheinhart agreed that in the
event Nissan later repurchased his vehicle from him, the repurchase amount
would be offset or reduced by the amount Nissan paid in consideration for the
Release. The Release states that Nissan North America, Inc. would continue
to honor the terms of the car’s new vehicle limited warranty.
      In May 2020, Rheinhart sued Nissan for violations of the Act. He
alleged the vehicle he leased suffered from repeated malfunctions of its
dashboard media and safety camera system that had not been repaired, and
Nissan “failed in [its] affirmative obligation to repurchase or replace the

Vehicle.”4 Among other relief, he sought rescission and restitution of all
payments for the vehicle, reimbursement, imposition of civil penalties,
attorney fees, and other litigation costs under sections 1793.2, subdivision (d)
and 1794.

4       As discussed below, this affirmative obligation (Kirzhner v. Mercedes-
Benz USA, LLC (2020) 9 Cal.5th 966, 971) of the Song-Beverly Act requires a
manufacturer to “ ‘promptly’ repurchase or replace a defective vehicle” (ibid.)
if, after a reasonable number of attempts, the manufacturer or its
representative is unable to repair the vehicle to conform to the applicable
express warranty. (§ 1793.2, subd. (d)(2).)

                                        4
      Nissan moved for summary judgment or alternatively summary
adjudication of issues. In part, it argued all of the vehicle’s nonconformities
arising before October 16, 2019, were barred by the Release, which no facts
showed was obtained by fraud, deception, misrepresentation, duress or undue
influence. Nissan presented evidence that Rheinhart admitted he had read
the Release and understood all of its provisions, that he was given an
opportunity to review it with an attorney of his choice but did not, and that

by signing the Release, he agreed to be bound by it.5
      In opposition, Rheinhart argued the Release was void as a matter of
law under section 1790.1, which deems contrary to public policy,
unenforceable and void “[a]ny waiver by the buyer of consumer goods of the
provisions of this chapter, except as expressly provided in this chapter . . . .”
He cited to federal authorities involving manufacturers’ attempted
disclaimers of Song-Beverly Act rights (Gusse v. Damon Corporation
(C.D.Cal. 2007) 470 F.Supp.2d 1110; Clark v. LG Electronics U.S.A., Inc.
(S.D.Cal., June 7, 2013, No. 13-cv-485) 2013 WL 2476145, as well as cases in
the Proposition 65 context (Consumer Defense Group v. Rental Housing
Industry Members (2006) 137 Cal.App.4th 1185; Consumer Advocacy Group,

5     Nissan also argued there was no evidence that Rheinhart sought to
have post-October 16, 2019 nonconformities repaired more than once. It
asked the court to “exclude as issues of fact any concerns (in addition to the
pre-October 16, 2019 issues which are barred) that were presented to the
dealer for repair on just one occasion.” Rheinhart responded that he did not
rely on any presentations after October 16, 2019, as part of his express
warranty claim. His evidence showed that in 2019, before entering into the
settlement agreement, he brought his vehicle in at least three times for the
same complaint (regarding the asserted backup-camera malfunction), among
others. In reply, Nissan did not dispute this evidence; it reiterated its
position that any pre-October 16, 2019 alleged defects were barred as a
matter of law by the Release.
                                        5
Inc. v. Kintetsu Enterprises of America (2006) 141 Cal.App.4th 46) in which
courts reversed settlements or consent judgments reached by the parties due
to lack of adequate corrective action. Rheinhart maintained Nissan could not
attempt a similar strategy by settling the case and thereby avoiding its
affirmative statutory duty under section 1793.2 to offer him a repurchase or
replacement of his vehicle. According to Rheinhart, Nissan’s failure to abide
by its statutory obligations endangered vehicle owners and the public by
allowing a malfunctioning and unsafe vehicle to remain on the road. In
reply, Nissan objected to some of Rheinhart’s evidence.
      Overruling Nissan’s objections, the trial court granted Nissan’s motion.
Observing there was no California authority applying the Act’s antiwaiver
provision, the court ruled “a reasonable and commonsense interpretation of
section 1790.1 is that it[ ] applies to waivers of consumer warranties sought
on the front end, in connection with the purchase of a product—not to
releases negotiated to end disputes about those warranties. Indeed, if a
lemon law plaintiff is prohibited from waiving the provisions of the Song-
Beverly Act in order to settle, no settlement would ever be possible. That
would contradict the well-established public policy in California that favors
and encourages settlement of litigation. [Citations.] [¶] Accordingly, the
Release bars plaintiff’s express warranty claim—which is based on the
presentations made in June, July, and August 2019—as a matter of law.”
      Rheinhart filed this appeal from the ensuing judgment.
                                DISCUSSION
                            I. Standard of Review
      The applicable review standards are settled: A motion for summary
judgment “shall be granted if all the papers submitted show that there is no
triable issue as to any material fact and that the moving party is entitled to a

                                       6
judgment as a matter of law.” (Code Civ. Proc., § 437c, subd. (c).) “[F]rom
commencement to conclusion, the party moving for summary judgment bears
the burden of persuasion that there is no triable issue of material fact and
that he is entitled to judgment as a matter of law. . . . There is a triable
issue of material fact if, and only if, the evidence would allow a reasonable
trier of the fact to find the underlying fact in favor of the party opposing the
motion in accordance with the applicable standard of proof.” (Aguilar v.
Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850.) The moving party bears
the initial burden of production to show the nonexistence of a triable factual
issue, and if that party does so, the burden switches to the opposing party to
make a prima facie showing that such an issue exists. (Ibid.)
      “[T]he placement and quantum of the burden of proof at trial [are]
crucial for purposes of summary judgment.” (Aguilar v. Atlantic Richfield
Co., supra, 25 Cal.4th at p. 851.) How the parties moving for and opposing
summary judgment may each carry their burden of persuasion and/or
production depends on “which [party] would bear what burden of proof at
trial.” (Ibid.; Pollock v. Tri-Modal Distribution Services, Inc. (2021) 11
Cal.5th 918, 946.) Thus, a defendant moving for summary judgment on an
affirmative defense has an initial burden of producing evidence to establish a
prima facie showing of the nonexistence of any triable issue of material fact
as to each element of that defense. (Aguilar, at p. 850; Code Civ. Proc.,
§ 437c, subds. (o)(2), (p)(2); Dagher v. Ford Motor Co. (2015) 238 Cal.App.4th
905, 914.) If the defendant makes this showing, the burden shifts to the
plaintiff to show with admissible evidence that a triable issue of material fact
exists. (Code Civ. Proc., § 437c, subd. (p)(2); Aguilar, at p. 850; Dagher, at pp.
914-915.)

                                        7
      We independently review the record and the trial court’s
determination, applying the same legal standard as the trial court to
determine if there are genuine issues of material fact. (Kahn v. East Side
Union High School Dist. (2003) 31 Cal.4th 990, 1003; Quidel Corporation v.
Superior Court of San Diego County (2020) 57 Cal.App.5th 155, 164.) We are
not bound by the trial court’s stated reasoning or rationales. (County of San
Diego v. Superior Court (2015) 242 Cal.App.4th 460, 467.) “ ‘[W]e view the
evidence in a light favorable to the losing party . . . , liberally construing [the]
evidentiary submission while strictly scrutinizing the moving party’s own
showing . . . .’ ” (Quidel, at p 164.) “[A]ny doubts as to the propriety of
granting a summary judgment motion should be resolved in favor of the party
opposing the motion.” (Reid v. Google, Inc. (2010) 50 Cal.4th 512, 535;
Quidel, at p. 164.)
          II. The Act, Manufacturer Obligations and Buyer Remedies
      The Act “was enacted to address the difficulties faced by consumers in
enforcing express warranties. Consumers frequently were frustrated by the
inconvenience of having to return goods to the manufacturer for repairs and
by repeated unsuccessful attempts to remedy the problem. [Citation.] The
Act protects purchasers of consumer goods by requiring specified implied
warranties, placing strict limitations on how and when a manufacturer may
disclaim those implied warranties, and providing mechanisms to ensure that
manufacturers live up to the terms of any express warranty.” (Cummins, Inc.
v. Superior Court (2005) 36 Cal.4th 478, 484.) For example, it requires
manufacturers to make service and repair facilities available to carry out
terms of express warranties, and time frames within which repairs under an
express warranty must be provided. (Id. at pp. 484-485.)

                                         8
      “In those instances when the goods cannot be repaired to conform to an
express warranty after a ‘reasonable number of attempts,’ the Act specifies a
remedy, in what has been referred to as the ‘refund-or-replace’ provisions.”
(Cummins Inc. v. Superior Court, supra, 36 Cal.4th at p. 485, citing in part
§ 1793.2., subd. (d)(1) & (2).) In the case of new motor vehicles under
warranty with defects, “[t]he Act allows buyer or lessees . . . of [such vehicles]
the manufacturer is unable to repair after a reasonable number of attempts
to elect one of two remedies: Consumers may choose either a replacement
vehicle or restitution ‘in an amount equal to the actual price paid or payable
by the buyer.’ ” (Kirzhner v. Mercedes-Benz USA, LLC, supra, 9 Cal.5th at

p. 969.)6

6       “ ‘A defect or nonconformity for purposes of Song-Beverly is defined as
“a nonconformity which substantially impairs the use, value, or safety of the
new motor vehicle to the buyer or lessee.” ’ ” (Anderson v. Ford Motor Co.
(2022) 74 Cal.App.5th 946, 959, fn. 3; see § 1793.22, subd. (e)(1).) “The
reasonableness of the number of repair attempts is a question of fact to be
determined in light of the circumstances, but at a minimum there must be
more than one opportunity to fix the nonconformity. . . . Each occasion that
an opportunity for repairs is provided counts as an attempt, even if no repairs
are actually undertaken.” (Robertson v. Fleetwood Travel Trailers of
California, Inc. (2006) 144 Cal.App.4th 785, 799.) Section 1793.22,
subdivision (b) gives rise to a rebuttable presumption as to the reasonable
number of repair attempts under various circumstances including, if, in the
first 18 months or 18,000 miles, the same defect/nonconformity “results in a
condition that is likely to cause death or serious bodily injury if the vehicle is
driven and the nonconformity has been subject to repair two or more times by
the manufacturer . . . .” (§ 1793.22, subd. (b)(1).) In situations not involving
a condition causing death or serious bodily injury, the presumption will arise
if “[t]he same nonconformity has been subject to repair four or more times by
the manufacturer . . . .” (§ 1793.22, subd. (b)(2).) This presumption affects
the burden of proof. (§ 1793.22, subd. (b)(2); Jiagbogu v. Mercedes-Benz USA
(2004) 118 Cal.App.4th 1235, 1244-1245.) In its reply brief, Nissan did not
dispute Rheinhart’s characterization of the backup camera malfunctioning as
a “serious safety issue.”
                                        9
      Specifically, “[s]ection 1793.2, subdivision (d)(2) sets forth the
manufacturer’s affirmative obligation to ‘promptly’ repurchase or replace a
defective vehicle it is unable to repair . . . .” (Kirzhner v. Mercedes-Benz USA,
LLC, supra, 9 Cal.5th at p. 971.) Under that section, “if a manufacturer is
‘unable to service or repair a new motor vehicle . . . to conform to the
applicable express warranties after a reasonable number of attempts, the
manufacturer shall either promptly replace the new motor vehicle in
accordance with subparagraph (A) or promptly make restitution to the buyer
in accordance with subparagraph (B).’ In turn, the restitution remedy in
section 1793.2, subdivision (d)(2)(B) states that ‘the manufacturer shall make
restitution in an amount equal to the actual price paid or payable by the
buyer, . . . including any collateral charges such as sales or use tax, license
fees, registration fees, and other official fees, plus any incidental damages to
which the buyer is entitled under [s]ection 1794, including, but not limited to,
reasonable repair, towing, and rental car costs actually incurred by the
buyer.’ Finally, section 1794 is the Act’s general damages provision,
providing that a buyer may seek damages for a manufacturer’s ‘failure to
comply with any obligation under this chapter or under an implied or express
warranty,’ the measure of which includes the restitution and replacement
remedies as well as the remedies allowed by the California Uniform
Commercial Code, including incidental damages.” (Kirzhner v. Mercedes-
Benz USA, LLC, supra, 9 Cal.5th at pp. 971-972.) The buyer is “free to elect
restitution in lieu of replacement, and in no event shall the buyer be required

                                        10
by the manufacturer to accept a replacement vehicle.” (§ 1793.2, subd.

(d)(2).)7
      Once the duty to offer replacement or restitution arises, a
manufacturer must “promptly” comply regardless of whether a buyer
requests those remedies. (See Krotin v. Porsche Cars North America, Inc.
(1995) 38 Cal.App.4th 294, 300, 302-303 [Song-Beverly Act “does not require
consumers to take any affirmative steps to secure relief for the failure of a
manufacturer to service or repair a vehicle to conform to applicable
warranties—other than . . . permitting the manufacturer a reasonable
opportunity to repair the vehicle”; “[T]he consumer’s request [for replacement
or restitution] is not mandated by any provision in the Act”].) Indeed, once
the manufacturer’s duty to promptly provide a replacement vehicle or
restitution arises after a reasonable number of repair attempts, “the buyer no
longer has the same ownership interest in the vehicle since the manufacturer
can (and should) replace or repurchase it at any moment.” (Kirzhner v.
Mercedes-Benz USA, LLC, supra, 9 Cal.5th at p. 980.) A buyer’s unequivocal
request for a “vehicle repurchase” is sufficient to trigger a manufacturer’s
duty to promptly make restitution. (Lukather v. General Motors, LLC (2010)
181 Cal.App.4th 1041, 1050.)
      “[A] manufacturer’s willful failure to promptly provide restitution or a
replacement vehicle may result in an award of civil penalties pursuant to

7      A buyer who “prevails in an action” under the Act may recover “costs
and expenses, including attorney’s fees based on actual time expended,
determined by the court to have been reasonably incurred by the buyer in
connection with the commencement and prosecution of such action.” (§ 1794,
subd. (d).) Permitting a prevailing buyer to recover attorney fees is designed
to “ ‘provide[ ] injured consumers strong encouragement to seek legal redress
in a situation in which a lawsuit might not otherwise have been economically
feasible.’ ” (Wohlgemuth v. Caterpillar (2012) 207 Cal.App.4th 1252, 1262.)
                                       11
section 1794. [Citations.] But section 1794 also allows buyers to recover
damages for nonwillful violations of the Act. [Citation.] Subdivision (a) of
section 1794 allows a buyer ‘who is damaged by a failure to comply with any
obligation under [the Act] or under an implied or express warranty or service
contract’ to ‘bring an action for the recovery of damages.’ ” (Kirzhner v.
Mercedes-Benz USA, LLC, supra, 9 Cal.5th at p. 984.)
      The Act is “ ‘ “manifestly a remedial measure, intended for the
protection of the consumer [and] should be given a construction calculated to
bring its benefits into action.” ’ ” (Kirzhner v. Mercedes-Benz USA, LLC,
supra, 9 Cal.5th at p. 972.)
             III. Public Policies Concerning Settlement Agreements
      California has a strong public policy favoring the voluntary settlement
of disputes. (Monster Energy Co. v. Schechter (2019) 7 Cal.5th 781, 793;
Zamora v. Clayborn Contracting Group, Inc. (2002) 28 Cal.4th 249, 260 [“the
law favors settlements”]; Kaufman v. Goldman (2011) 195 Cal.App.4th 734,
745 (Kaufman); Osumi v. Sutton (2007) 151 Cal.App.4th 1355, 1359 [“[i]t is,
of course, the strong public policy of this state to encourage the voluntary
settlement of litigation”].) Settlement agreements “are highly favored as
productive of peace and good will in the community, and reducing the
expense and persistency of litigation.” (McClure v. McClure (1893) 100 Cal.
339, 343.)
      Notwithstanding that policy, courts can declare settlement agreements
and releases, which the law treats like any other contracts (Timney v. Lin
(2003) 106 Cal.App.4th 1121, 1127), void and unenforceable on the basis of
other public policies, illegality or unfairness. (City of Santa Barbara v.
Superior Court (2007) 41 Cal.4th 747, 777 & fn. 53 [agreement purporting to
release liability for future gross negligence against disabled child violates

                                       12
public policy and is unenforceable]; California State Auto. Assn. Inter-Ins.
Bureau v. Superior Court (1990) 50 Cal.3d 658, 664 [court may reject a
stipulated settlement that is contrary to public policy or that incorporates an
erroneous rule of law]; Kaufman, supra, 195 Cal.App.4th at p. 746; Graylee v.
Castro (2020) 52 Cal.App.5th 1107, 1114-1115 [courts cannot “ ‘endorse or
enforce a provision in a settlement agreement or stipulation which is illegal,
contrary to public policy, or unjust’ ”], quoting Timney, at p. 1127; see
generally Vitatech Internat., Inc. v. Sporn (2017) 16 Cal.App.5th 796, 807
[“ ‘[A] court cannot validly enter a judgment or order which is void even if the
parties agree to it’ ”]; § 3513 [“[A] law established for a public reason cannot
be contravened by a private agreement”]; Azteca Construction, Inc. v. ADR
Consulting, Inc. (2004) 121 Cal.App.4th 1156, 1166 [“[A] party may waive a
statutory right where its ‘ “public benefit . . . is merely incidental to [its]
primary purpose,” ’ but a waiver is unenforceable where it would ‘ “seriously
compromise any public purpose that [the statute was] intended to serve” ’ ”].)
      These principles apply to other types of favored contracts or contractual
provisions. (See Verdugo v. Alliantgroup, L.P. (2015) 237 Cal.App.4th 141,
146-147 (Verdugo) [California courts will not give effect to a contractual
forum selection clause, normally favored under California law, “ ‘if to do so
would substantially diminish the rights of California residents in a way that
violates our state’s public policy’ ”; citing cases]; Wimsatt v. Beverly Hills
Weight etc. Internat., Inc. (1995) 32 Cal.App.4th 1511, 1522 (Wimsatt); Hall v.
Superior Court (1983) 150 Cal.App.3d 411, 417-418 [choice of forum clause in
private securities agreement unenforceable as violating public policy].) “ ‘ “A
promise or other term of an agreement is unenforceable on grounds of public
policy if legislation provides that it is unenforceable or the interest in its
enforcement is clearly outweighed in the circumstances by a public policy

                                         13
against the enforcement of such terms.” ’ ” (Dunkin v. Boskey (2000) 82
Cal.App.4th 171, 183.)
      To invalidate a contract on this ground, the public policy violation must
be “ ‘ “entirely plain . . . .” ’ ” (City of Santa Barbara v. Superior Court, supra,
41 Cal.4th at p. 777, fn. 53.) “ ‘ “ ‘The power of the courts to declare a
contract void for being in contravention of sound public policy . . . should be
exercised only in cases free from doubt’ ” ’ ” (ibid.; Kaufman, supra, 195
Cal.App.4th at p. 746) and where the contract is “ ‘clearly injurious to the
interests of society.’ ” (City of Santa Barbara, at p. 777, fn. 53.)
      The court in Timney v. Lin, supra, 106 Cal.App.4th 1121 invalidated an
otherwise illegal forfeiture clause despite the parties inclusion of it in a
settlement agreement. (Id. at p. 1123 [“we hold that an illegal forfeiture
provision is unenforceable, even if the illegal provision is included in a
settlement agreement”].) The lower court had enforced the settlement
agreement under Code of Civil Procedure section 664.6, but Timney, pointing
to case law involving stipulated judgments, held that statute “does not allow
a court to endorse or enforce a provision in a settlement agreement or
stipulation which is illegal, contrary to public policy, or unjust.” (Id. at p.
1127, citing California State Auto. Assn. Inter–Ins. Bureau v. Superior Court,
supra, 50 Cal.3d at p. 664 [involving a stipulated judgment; “ ‘the court
cannot surrender its duty to see that the judgment to be entered is a just
one’ ”] & Plaza Hollister Ltd. Partnership v. County of San Benito (1999) 72
Cal.App.4th 1, 12-13 [“court cannot validly enter a judgment or order which
is void even if the parties agree to it”].)
      Timney held “even though there is a strong public policy favoring the
settlement of litigation, this policy does not excuse a contractual clause that
is otherwise illegal or unjust.” (Timney v. Lin, supra, 106 Cal.App.4th at p.

                                         14
1127.) “[O]ur Supreme Court and other California courts have rejected the
notion that a settlement judge may properly act to ‘approve’ an illegal
contract and thereby shield it from invalidation. [Citations.] We have found
no case, and the parties have cited none, holding an illegal forfeiture
provision may be enforced by the courts, even as part of a settlement
agreement. Applying legal principles pertinent to all contracts, the deposit
forfeiture provision in issue is invalid as constituting a forbidden forfeiture.”
(Id. at p. 1129.)
               IV. The Effect of Statutory Antiwaiver Provisions
      “A public policy that cannot be waived qualifies as fundamental.” (G
Companies Management, LLC v. LREP Arizona, LLC (2023) 88 Cal.App.5th
342, 353.) Statutory antiwaiver provisions intended to promote consumer
and other public protections, like section 1790.1 here, reflect competing
important public policies that can impact the enforceability of a contractual
provision. (See Crosno Construction, Inc. v. Travelers Casualty and Surety
Company of America (2020) 47 Cal.App.5th 940, 951 [section 8122 antiwaiver
provision in statutory scheme to resolve payment disputes in construction
contracts]; Verdugo, supra, 237 Cal.App.4th 141 [Labor Code section 219,
subdivision (a) antiwaiver provision covering rights and remedies relating to
employee compensation, providing “no provision of this article can in any way
be contravened or set aside by a private agreement, whether written, oral, or
implied”]; 1-800-Got Junk? LLC v. Superior Court (2010) 189 Cal.App.4th
500, 517-518 [California Franchise Relations Act (CFRA) section 20010,
providing: “Any condition, stipulation or provision purporting to bind any
person to waive compliance with any provision of this law is contrary to
public policy and void”; but holding antiwaiver statute did not invalidate
parties’ choice of Washington law provision because Washington afforded

                                        15
franchisee “far greater protection from summary termination of a franchise”
than California law, and was not a waiver of compliance with the CFRA];
America Online, Inc. v. Superior Court (2001) 90 Cal.App.4th 1, 11
[Consumer Legal Remedies Act (CLRA) antiwaiver provision providing that
“[a]ny waiver by a consumer of the provisions of this title is contrary to public
policy and shall be unenforceable and void”]; Wimsatt, supra, 32 Cal.App.4th
at pp. 1513, 1520-1522 [antiwaiver provision in California Franchise
Investment Law (Corp. Code, § 31512) providing: “Any condition, stipulation
or provision purporting to bind any person acquiring any franchise to waive
compliance with any provision of this law or any rule or order hereunder is
void”]; Hall v. Superior Court, supra, 150 Cal.App.3d at pp. 417-418
[antiwaiver provision in Corporate Securities Law voiding “ ‘[a]ny condition,
stipulation or provision purporting to bind any person acquiring any security

to waive compliance with any provision of this law’ ”];8 Kaufman, supra, 195

8     Our sister division in Hall v. Superior Court relied on Wilko v. Swan
(1953) 346 U.S. 427 to invalidate on public policy grounds the choice of forum
clause in a private securities agreement based on this antiwaiver statute.
(Hall v. Superior Court, supra, 150 Cal.App.3d at p. 418.) The United States
Supreme Court overruled Wilko in Rodriguez de Quijas v. Shearson/
                                       16
Cal.App.4th at p. 744 [antiwaiver provision in city rent stabilization
ordinance, providing: “Any waiver by a tenant of rights under this Chapter
shall be void as contrary to public policy”, italics omitted]; accord, G
Companies Management, LLC v. LREP Arizona, LLC, supra, 88 Cal.App.5th
at p. 352 [usury law provision (§ 1916-2) specifying that if an agreement or
contract contains a provision requiring interest in excess of the allowable
rate, it “ ‘shall be null and void as to any agreement or stipulation therein
contained to pay interest . . . .’ ”].)
      Such antiwaiver provisions in consumer protection laws are “[o]ne of
the most important protections California offers its . . . citizens . . . .”
(Wimsatt, supra, 32 Cal.App.4th at p. 1520; see also Verdugo, supra, 237

American Exp., Inc. (1989) 490 U.S. 477, finding Wilko to be “pervaded by . . .
‘the old judicial hostility to arbitration . . . .’ ” (Rodriguez, at p. 480.) In
Rodriguez, the court declined to interpret an antiwaiver provision in section
14 of the Securities Act of 1933 (15 U.S.C. § 77n, prohibiting a binding
stipulation “to waive compliance with any provision” of the Act; Rodriguez, at
p. 477) to prohibit agreements to arbitrate future disputes relating to the
purchase of securities. The court observed that “ ‘[b]y agreeing to arbitrate a
statutory claim, a party does not forgo the substantive rights afforded by the
statute; it only submits to their resolution in an arbitral, rather than a
judicial, forum.’ ” (Id. at p. 481.) Further, Rodriguez stated the right to
select the judicial forum and wider choice of courts were “not such essential
features” of the Securities Act that the antiwaiver clause was properly
construed to bar any waiver of those provisions. (Id. at p. 481.) “Nor are they
so critical that they cannot be waived under the rationale that the Securities
Act was intended to place buyers of securities on an equal footing with
sellers.” (Ibid.) It found “no sound basis for construing the prohibition in
[section] 14 . . . to apply to these procedural provisions.” (Id. at p. 482.) The
court in Rodriguez, however, left open a party’s ability to demonstrate that
the arbitration agreement resulted from “ ‘the sort of fraud or overwhelming
economic power that would provide grounds “for the revocation of any
contract.” ’ ” (Id. at pp. 483-484.) Here, the Act’s remedies for buyers are not
mere procedural provisions but are critical, essential features of the Act.

                                          17
Cal.App.4th at p. 149.) In Wimsatt, involving California’s Franchise
Investment Law, the court held as a matter of first impression that when
“determining the ‘validity and enforceability’ of forum selection provisions in
franchise agreements,” a different set of burdens apply. (Id. at pp. 1521-
1522.) Given legislative recognition of franchisees’ need for special
protection, as well as the need to prevent easy circumvention of the
antiwaiver statute, Wimsatt decided the law put the burden on the franchisor
to show that litigation in the contract forum will not diminish in any way the
substantive rights afforded California franchisees under California law. (Id.
at p. 1522.)
      It is useful to consider decisions assessing the impact of antiwaiver
statutes on contractual provisions or contracts. This court in Crosno
Construction, Inc. v. Travelers Casualty and Surety Company of America,
supra, 47 Cal.App.5th 940 decided the issue in a summary judgment context,
affirming a lower court’s ruling invalidating a provision in a construction
subcontract. The antiwaiver statute there, section 8122, was included
in a statutory scheme to resolve payment disputes in construction projects,
what we described as “expansive remedial legislation to protect
subcontractors . . . .” (Id. at pp. 950, 961.) Crosno declined to enforce a “pay-
when-paid” subcontract provision as doing so would “postpone [the cross-
complainant’s] right to recover under the payment bond for an indefinite time
period until” certain litigation concluded, and that result would

                                       18
“unreasonably affect or impair [the cross-complainant’s] statutory payment

bond remedy . . . .” (Id. at p. 946.)9
      Verdugo, supra, 237 Cal.App.4th 141 involved a mandatory forum
selection clause in a plaintiff’s employment agreement designating Texas as
the exclusive forum for employment and other disputes. (Id. at pp. 144, 146.)
Forum selection clauses are favored in California if voluntarily entered into
and their enforcement is not unreasonable. (Handoush v. Lease Finance
Group, LLC (2019) 41 Cal.App.5th 729, 734, quoting America Online Inc. v.
Superior Court, supra, 90 Cal.App.4th at p. 11; Verdugo, at p. 147.) The
plaintiff in Verdugo brought a class action, and the defendant successfully
moved to stay or dismiss it under the forum selection clause, which the trial
court found was enforceable. (Id. at p. 146.)
      The appellate court reversed, holding the forum selection clause
unenforceable as against public policy. (Verdugo, supra, 237 Cal.App.4th at
pp. 144, 162, fn. 10.) Verdugo adopted Wimsatt’s shifting burden rationale,

9     Unlike section 1790.1 here, the antiwaiver clause in Crosno expressly
permitted a written waiver and release, providing: “ ‘An owner, direct
contractor, or subcontractor may not, by contract or otherwise, waive, affect,
or impair any other claimant’s rights under this part, whether with or
without notice, and any term of a contract that purports to do so is void and
unenforceable unless and until the claimant executes and delivers a waiver
and release under this article.’ ” (Crosno Construction, Inc. v. Travelers
Casualty and Surety Company of America, supra, 47 Cal.App.5th at p. 951.)
And Crosno made clear it was not invalidating all pay-when-paid provisions:
“We do not suggest that every pay-when-paid provision is unenforceable as an
impairment of payment bond rights under section 8122. Instead, we conclude
that this one is unenforceable because it unreasonably forestalls accrual of
Crosno’s payment bond rights for an indefinite period of time while the direct
contractor pursues litigation against the owner.” (Id. at p. 960.)

                                         19
explaining that ordinarily the party opposing enforcement of a forum
selection clause bears the burden of proving why it should not be enforced.
(Verdugo, at pp. 144, 147.) But that burden is reversed “when the claims at
issue are based on unwaivable rights created by California statutes. In that
situation, the party seeking to enforce the forum selection clause bears the
burden to show litigating the claims in the contractually-designated forum
‘will not diminish in any way the substantive rights afforded . . . under
California law.’ ” (Verdugo, supra, at p. 147; see also America Online, Inc. v.
Superior Court, supra, 90 Cal.App.4th at p. 10 [party seeking enforcement
must “prove that enforcement of the forum selection clause would not result
in a significant diminution of rights”].)
      The court observed all of the plaintiff’s claims were based on Labor
Code statutory rights (pertaining to when and how employers must (1) pay
overtime and other forms of compensation, (2) provide meal and rest breaks,
and (3) provide accurate wage statements), which were “important statutory
rights the Legislature made unwaivable through an express antiwaiver
provision.” (Verdugo, supra, 237 Cal.App.4th at p. 156; see Lab. Code, § 219,
subd. (a) [declaring such rights cannot “in any way be contravened or set
aside by a private agreement, whether written, oral, or implied” (italics

added)].)10 The statutory provisions “further[ed] California’s fundamental
public policy of requiring California employers to fully and promptly pay all
wages due their employees.” (Id. at p. 156.) They also established specific

10    Verdugo found it irrelevant that the Labor Code antiwaiver provision
did not include the words “waiver” or “void”; the appellate court found the
statute had the same legal effect as the antiwaiver provisions in the
Franchise Investment Law and CLRA. (Verdugo, supra, 237 Cal.App.4th at
p. 152.) “[C]ase law uniformly recognizes these statutory provisions make the
rights unwaivable.” (Ibid.)
                                        20
remedies for an employer’s violation of these provisions, including recovery of
unpaid wages, interest, civil penalties, and attorney fees. (Id. at p. 145.)
      Verdugo explained that putting the burden of proof on the defendant
was intended “to prevent the forum selection clause from operating as a
waiver of [plaintiff’s] unwaivable Labor Code rights . . . .” (Verdugo, supra,
237 Cal.App.4th at p. 151.) The court stated the forum selection clause at
issue “has the potential to contravene an antiwaiver statute designed to
protect California residents from business practices that do not meet Labor
Code standards. If enforced, the forum selection clause would require [the
plaintiff] to litigate her Labor Code wage claims in Texas, where the
Employment Agreement’s choice-of-law clause would require the court to
apply Texas law unless a Texas court decides not to enforce the choice-of-law
clause.” (Ibid.) Although the defendant contended that the Texas court
would “ ‘most likely’ ” apply California law to employee’s claims (id. at p.
158), it preserved its ability to argue to the Texas court that Texas law should
apply. (Ibid.) Further, its arguments constituted “conclusory speculation”
that did not satisfy its burden of proof. (Ibid.) “As explained above, [the
defendant] must show enforcing the forum selection clause ‘will not diminish
in any way’ [the plaintiff’s] statutory rights.” (Ibid, quoting Wimsatt, supra,
32 Cal.App.4th at p. 1522 & America Online, supra, 90 Cal.App.4th at pp. 10-
11.) The defendant “carefully avoid[ed] making any specific and definitive
argument that Texas courts either have applied or will apply California wage
and hour laws despite a choice-of-law clause designating Texas law.”
(Verdugo, at p. 158.) Because the defendant declined the opportunity to
eliminate uncertainty by refusing to stipulate that California law applied, the
Court of Appeal held the forum-selection clause was unenforceable as against
public policy. (Id. at pp. 160, 162, fn. 10.)

                                         21
      Reaching a different conclusion in landlord/tenant contexts, the First
District, Division One Court of Appeal in Kaufman, supra, 195 Cal.App.4th
734 and Geraghty v. Shalizi (2017) 8 Cal.App.5th 593 (Geraghty) declined to
invalidate settlement/lease buyout agreements despite an antiwaiver
provision in a city rent ordinance providing “[a]ny waiver by a tenant of
rights under this Chapter [except as provided in San Francisco
Administrative Code section 37.10A, subdivision (g),] shall be void as
contrary to public policy.” (Kaufman, at p. 744, italics omitted; S.F. Admin.
Code, § 37.9, subd. (e); Geraghty, at p. 599.) Kaufman involved settlement of
a landlord’s unlawful detainer action against a tenant. (Kaufman, at pp. 737-
738.) As part of the settlement, the tenant agreed to move out after seven
years. (Id. at p. 738.) She also acknowledged she was waiving any future
possession rights, including rights she might have under the ordinance.
(Ibid.) Years later, in 2008, when the tenant would not leave, the landlord
sued to enforce their settlement agreement. (Id. at pp. 738-739.) On the
parties’ cross-motions, the trial court granted summary adjudication in the
landlord’s favor. (Id. at p. 739.)
      On appeal, the tenant argued the settlement agreement’s move-out
provision was a void waiver of her rights under the rent ordinance, and
enforcing the agreement would violate public policy. (Kaufman, supra, 195
Cal.App.4th at pp. 743-744.) The appellate court rejected the arguments and
affirmed the order granting summary adjudication, holding the ordinance,
which only voided waivers “in the context of an eviction or an owner move-
in,” did not apply “to the settlement of a legal claim that was made for
valuable consideration in return for termination of litigation.” (Id. at p. 745.)
It continued: “Parties frequently settle landlord-tenant disputes, and move-
out provisions are not uncommon. If [the antiwaiver provision] were deemed

                                       22
to apply to such move-out provisions, this would have a chilling effect on
future settlements of unlawful detainer actions as landlords would have little
incentive to enter into prelitigation negotiations.” (Ibid., fn. omitted.) The
court concluded: “[W]e agree that the public policy in favor of protecting
tenants is important. But the time to raise this issue is when a settlement
agreement is negotiated with advice of counsel, not seven years after a tenant
has enjoyed the benefits of the bargain.” (Id. at p. 746.)
      Kaufman relied on the strong public policy favoring settlement of
disputes, recognizing a contract should be voided only when the situation is
free from doubt: “ ‘Freedom of contract is an important principle, and courts
should not blithely apply public policy reasons to void contract provisions.’ ”
(Kaufman, supra, 195 Cal.App.4th at p. 745.) In reaching its holding, the
Kaufman court found Timney v. Lin, supra, 106 Cal.App.4th 1121
inapplicable, as Timney involved an illegal forfeiture clause that was not
present in the settlement agreement before it. (Kaufman, at p. 746.)
Kaufman also rejected reliance on Consumer Advocacy Group, Inc. v. Kintetsu
Enterprises of America, supra, 141 Cal.App.4th 46, stating only it “concerns a
Proposition 65 consent judgment.” (Kaufman, at p. 746, fn. 7.) Geraghty
relied on Kaufman to affirm a summary judgment for a landlord based on a
pre-litigation lease buy-out agreement he had reached with his tenant.
(Geraghty, supra, 8 Cal.App.5th at p. 595 [rejecting tenant’s claim the release
was void; “For the same reasons expressed in Kaufman, we conclude the
parties should be held to the terms of their negotiated disposition, which
afforded benefits to both and avoided burdening the court with a lawsuit”].)
             V. The Release Here Is Void as Against Public Policy
      We apply Wimsatt and Verdugo to the circumstances here. That the
Act is “strongly pro-consumer” (Murillo v. Fleetwood Enterprises, Inc. (1998)

                                       23
17 Cal.4th 985, 990) is reflected in its above-referenced antiwaiver provision,
which deems “contrary to public policy” and “unenforceable and void” “[a]ny
waiver by the buyer of consumer goods of the provisions of this chapter,
except as expressly provided in this chapter . . . .” (§ 1790.1; see Murillo, at p.
972; Duff v. Jaguar Land Rover North America, LLC (2022) 74 Cal.App.5th
491, 500; Martinez v. Kia Motors America, Inc. (2011) 193 Cal.App.4th 187,
195.) The Act’s antiwaiver provision is extremely broad; it is not limited to
warranties or any particular time frame during the purchase process, but
encompasses all mandated remedies afforded to buyers. Such an
interpretation follows the directive to give the Act a “ ‘ “construction
calculated to bring its benefits into action.” ’ ” (Kirzhner v. Mercedes-Benz
USA, LLC, supra, 9 Cal.5th at p. 972.) We are not bound by the lower court’s

interpretation of the law, which in our view is overly restrictive.11
      Here, Rheinhart’s right to remedies under the Act are substantive
rights that the Legislature has declared unwaivable. Given the nature of
those rights, Nissan’s summary judgment burden was not just to establish
the existence of the Release and its validity, but to show that enforcing the
Release would “ ‘not diminish in any way [Rheinhart’s] substantive rights

11     To reiterate, section 1790.1 deems contrary to public policy and void
“[a]ny waiver by the buyer of consumer goods of the provisions of this chapter”
(italics added) unless the Act expressly provides otherwise. When statutory
language is unambiguous, “ ‘then the Legislature is presumed to have meant
what it said, and the plain meaning of the language governs.’ ” (Kirzhner v.
Mercedes-Benz USA, LLC, supra, 9 Cal.5th at p. 972.) But as stated below,
we do not hold the antiwaiver provision bars parties in Song-Beverly Act
cases from ever settling disputes. We may reject a literal construction that
would lead to absurd results. (Simpson Strong-Tie Co., Inc. v. Gore (2010) 49
Cal.4th 12, 27.) This appeal gives us no occasion to enumerate the
circumstances validating settlements of Song-Beverly Act claims, we simply
hold that the Release here contravened Rheinhart’s rights to elect the Act’s
substantive remedies.
                                        24
afforded . . . under California law’ ” (Verdugo, supra, 237 Cal.App.4th at p.
147) or “would not result in a significant diminution of [those] rights.”
(America Online, Inc. v. Superior Court, supra, 90 Cal.App.4th at p. 10; see
also G Companies Management, LLC v. LREP Arizona, LLC, supra, 88
Cal.App.5th at p. 350.) Applying this standard gives effect to the Act’s
manifestly remedial and consumer protection purposes.
      Under the principles discussed above, and the factual circumstances of

this case, Nissan cannot meet this burden.12 It is undisputed that Rheinhart
presented the rear-view camera issue to Nissan on three occasions, and that
thereafter Nissan agreed to pay him $3,548.40 in compromise. There is no
evidence that before Nissan presented Rheinhart with the settlement
agreement that it advised him of the Act’s replacement or restitution

12     Nissan’s motion did not mention, much less discuss, the Act’s
antiwaiver provision or its impact on Rheinhart’s release. Understandably,
Nissan did not address whether Rheinhart’s decision to settle for $3,548.40
diminished his substantive rights under the Act, including his entitlement to
“prompt” replacement or restitution, damages, civil penalties and attorney
fees. After Rheinhart raised the Act’s antiwaiver provision in his summary
judgment opposition, Nissan argued his cited authorities, including the
Proposition 65 cases, were inapposite; that they had “no bearing on the issues
here.” This treatment is akin to the cursory remark by Kaufman rejecting
reliance on Consumer Advocacy Group, Inc. v. Kintetsu Enterprises of
America, supra, 141 Cal.App.4th 46. (Kaufman, supra, 195 Cal.App.4th at p.
746, fn. 7.) The court in Consumer Advocacy acknowledged the “general rule
that a trial court should not approve an agreement contrary to law or to
public policy” as well as the “specific rule that ‘ “the court cannot surrender
its duty to see that the judgment to be entered [on a settlement] is a just one,
nor is the court to act as a mere puppet in the matter.’ ” (Consumer
Advocacy, at pp. 61-62.) These principles apply here. Nissan also asserted
that “bargained-for releases are permitted under the Song-Beverly Act.” But
the authority it cited for that proposition—Dorman v. International Harvester
Co. (1975) 46 Cal.App.3d 11, 19—does not discuss or mention the Song-
Beverly Act.

                                       25
remedies or the fact Nissan had an affirmative obligation to offer those
remedies once it engaged in a reasonable number of repair efforts. There is
no indication Nissan’s $3,548.40 settlement payment endeavored to
approximate the vehicle’s purchase price or other sums owed under the Act
for reimbursement. There is no evidence otherwise that Rheinhart, who was
unrepresented by counsel, was aware of his rights under the Act or its
antiwaiver provision. He did not expressly waive his rights under the Act.
The circumstances suggest unequal bargaining strength between a consumer
unaware of his rights and a manufacturer seeking to circumvent its statutory
obligations.
      And Rheinhart is unlike the plaintiff in Kaufman, who was apparently
represented by counsel at the time she entered into the settlement and
release, which expressly acknowledged her rights under the rent ordinance.
(Kaufman, supra, 195 Cal.App.4th at pp. 738, 746.) We decline to extend
Kaufman (or Geraghty, which followed Kaufman) to these circumstances. In
addition to the distinguishing aspects above, Kaufman involved unique facts
and circumstances in that the tenant waited seven years after entering into
the settlement and the court interpreted the antiwaiver provision as only
voiding waivers “in the context of an eviction or an owner move-in.” (Id. at p.
745.) Kaufman did not acknowledge a defendant’s burden to prove a
settlement does not diminish substantive rights when dealing with
antiwaiver provisions in the consumer protection context.
      On this summary judgment record, the Release contravened
Rheinhart’s right to elect the Act’s substantive remedies of replacement or
restitution. On that basis, it is void as against public policy, and Nissan is
not entitled to summary judgment on grounds the Release bars Rheinhart’s
claims as a matter of law.

                                       26
       We emphasize that our holding is not that section 1790.1 precludes
settlement and release of claims under the Act. To be sure, there are many
instances where parties have settled disputes over a claimed breach of the
Act. (See Madrigal v. Hyundai Motor America (2023) 90 Cal.App.5th 385
[stipulated settlement on first day of trial].) In this respect, we do not
disagree with the observations of McLaren Automotive Inc. v. Shaoo (C.D.Cal.
2021) 2021 WL 4707001, that a buyer is not precluded from agreeing to settle
his claim for a lesser amount than the full purchase price of the vehicle (id. at
p. *10) and In re Volkswagen “Clean Diesel” Marketing, Sales Practices, and
Product Liability Litigation (N.D.Cal. Sept. 8, 2020) 2020 WL 5371404, which
generally declined to apply section 1790.1 to settlements or else “no
settlement releasing any Song-Beverly Act . . . claim would be enforceable.”
(Id. at p. *6.)
                  VI. Rheinhart’s Unconscionability Argument
       In view of our holding, we need not address Rheinhart’s argument that
the Release is unconscionable due to his unrepresented status.

                                       27
                              DISPOSITION
     The judgment is reversed. Rheinhart shall recover his costs on appeal.

                                                             O’ROURKE, J.

WE CONCUR:

HUFFMAN, Acting P. J.

DO, J.

                                    28