Filed 12/17/14
                            CERTIFIED FOR PUBLICATION


                 COURT OF APPEAL, FOURTH APPELLATE DISTRICT

                                      DIVISION ONE

                                   STATE OF CALIFORNIA



JOYCE FLANNERY,                                    D063937

        Plaintiff and Appellant,

        v.                                         (Super. Ct. No. 37-2012-00102894-
                                                   CU-MC-CTL)
VW CREDIT, INC.,

        Defendant and Respondent.


        APPEAL from a judgment of the Superior Court of San Diego County, Timothy

Taylor, Judge. Reversed.



        Law Office of Barry D. Mills, Barry D. Mills; Law Office of Michael Doukas and

Michael Ernest Doukas for Plaintiff and Appellant.

        Reed Smith, Jesse L. Miller, Lisa B. Kim and Anne M. Grignon for Defendant and

Respondent.

        Plaintiff and appellant Joyce Flannery filed a complaint which alleges that by

virtue of defendant and respondent VW Credit, Inc.'s (VW) failure to comply with

provisions of California's Vehicle Leasing Act (VLA) (Civ. Code, § 2985.7 et seq.), VW
violated California's Fair Debt Collection Practices Act (Civ. Code, § 1788 et seq.) (the

Rosenthal Act) and California's Unfair Competition Law (Bus. & Prof. Code, § 17200 et

seq.) (the UCL). VW filed a demurrer to the complaint, which the trial court sustained

without leave to amend. On appeal, Flannery contends the court erred by applying the

doctrine of substantial compliance to consumer protection laws.

       VW has moved to dismiss the appeal as untimely. We deny the motion to dismiss

and reverse the dismissal. Following the trial court's ruling on its demurrer, VW sought

and received entry of an order dismissing the complaint and provided Flannery with

notice of entry of the order; however, before the time in which to appeal from the

dismissal expired, VW asked the trial court to vacate the dismissal and enter a new

dismissal that included VW's costs. The trial court granted VW's request and entered an

order vacating the first dismissal and ordering entry of a second dismissal, which

included VW's costs. VW then served Flannery with notice of entry of the second

dismissal. Thereafter, Flannery filed a notice of appeal from the second dismissal. VW

argues that the notice of appeal was untimely because it was not filed within 60 days after

service of notice of entry of the first dismissal; VW contends that, notwithstanding the

literal meaning of the trial court's order vacating the first dismissal, we should interpret

the order as simply amending the first judgment to add VW's costs and thereby render

Flannery's notice of appeal untimely. We decline to do so. We interpret the trial court's

order literally; the first dismissal was vacated by the terms of the trial court's order, and a

second dismissal was entered from which Flannery filed a timely notice of appeal.



                                               2
       With respect to the merits, we reverse. Although the doctrine of substantial

compliance has been employed when doing so avoids injustice and is consistent with the

purposes of a particular statute, those considerations are not present here, where VW

failed to provide consumers with notice of their right to an appraisal upon early

termination of their automobile leases in the language prescribed by Civil Code section

2987. As we explain, the Legislature has expressed its intent that the VLA provisions in

dispute here be strictly enforced. In addition to the Legislature's evident preference, strict

enforcement encourages greater care on the part of lessors when providing statutory

notices and avoids repeated resort to judicial construction with respect to which part of a

verbatim notice prescribed by the Legislature is material and which is not. Importantly,

strict enforcement of the VLA does not provide consumers with any unfair advantage or

benefit but only relieves them of liability for any deficiency.

       Because the parties' briefing here has been directed solely to VW's obligations

under the VLA, we do not reach the question of whether VW's alleged violation of the

VLA will support any relief under provisions of the Rosenthal Act and the UCL.

                                              I

                   FACTUAL AND PROCEDURAL BACKGROUND

       In 2011, Flannery was the lessee of a Volkswagen Jetta. VW was the lessor and,

in the middle of 2011, VW repossessed the Jetta. Following the repossession, VW sent

Flannery a notice that attempted to comply with the requirements of Civil Code section




                                              3
2987, subdivision (d)(2)(B).1 By its terms, subdivision (d)(2)(B) of section 2987

requires that lessors of vehicles which have been repossessed give the lessees a notice

that contains the following statement: "'The amount you owe for early termination will

be no more than the difference between the Gross Early Termination Amount stated

above and (1) the appraised value of the vehicle or (2) if there is no appraisal, either the

price received for the vehicle upon disposition or a greater amount established by the

lessor or the lease contract.

       "'You have the right to get a professional appraisal to establish the value of the

vehicle for the purpose of figuring how much you owe on the lease. If you want an

appraisal, you will have to arrange for it to be completed at least three days before the

scheduled sale date of the vehicle. The appraiser has to be an independent person

acceptable to the holder of the lease. You will have to pay for the appraiser. The

appraised value will be considered final and binding on you and the holder of the

lease.'"2 (Italics added.)



1       All further statutory references are to the Civil Code unless otherwise indicated.
2       In the alternative, the lessor's notice may, if the lessor is willing to be bound by the
wholesale value of a recognized used vehicle value guide, contain the following
statement: "'The amount you owe for early termination will be no more than the
difference between the Gross Early Termination Amount stated above and (1) the
appraised value of the vehicle or (2) if there is no appraisal, the wholesale value specified
in a recognized used vehicle value guide.
        "'You have the right to get a professional appraisal to establish the value of the
vehicle for the purpose of figuring how much you owe on the lease. If you want an
appraisal, you will have to arrange for it to be completed at least three days before the
scheduled valuation date. The appraiser has to be an independent person acceptable to
the holder of the lease. You will have to pay for the appraiser. The appraised value will
be considered final and binding on you and the holder of the lease.'"
                                               4
       If a lessor fails to provide a notice that complies with section 2987, subdivision

(d)(2), a lessee is not liable for any deficiency. (§ 2987, subd. (d)(3).)

       The notice VW sent Flannery did not contain all of the language required by the

statute. VW's notice deleted the phrase "to establish the value of the vehicle for the

purpose of figuring how much you owe on the lease." Thus, VW's notice read: "The

amount you owe for early termination will be no more than the difference between the

Gross Early Termination Amount stated in this notice and (1) the appraised value of the

vehicle or (2) if there is no appraisal, either the price received for the vehicle upon

disposition or a greater amount established by the lessor or the lease contract. You have

the right to get a professional appraisal; you will have to arrange for it to be completed at

least three days before the scheduled sale date of the vehicle. The appraiser has to be an

independent person acceptable to the holder of the lease. You will have to pay for the

appraiser. The appraised value will be considered final and binding on you and the

holder of the lease."

       Relying on VW's failure to send her a notice that complied with the requirements

of section 2987, Flannery filed a complaint against VW, which alleged she represented an

unknown class of lessees to whom VW had sent the defective notice and from whom VW

had thereafter collected or attempted to collect unauthorized deficiencies. She alleged

VW's collection or attempts to collect the deficiencies violated the Rosenthal Act and the

UCL and had damaged her and other class members.




                                              5
       VW demurred to the complaint. VW argued that its notice substantially complied

with the requirements of section 2987, subdivision (d)(2), and, therefore, it was

authorized to collect deficiencies from lessees to whom it had sent the notice.

       After a hearing on November 16, 2012, the trial court sustained VW's demurrer

without leave to amend. On January 10, 2013, the trial court entered an order of

dismissal with prejudice. VW served Flannery with notice of entry of the dismissal on

January 11, 2013.

       At the request of VW, the trial court set aside the January 10 dismissal and entered

a judgment of dismissal with costs on February 26, 2013. On March 19, 2013, VW

served Flannery with notice of entry of the order setting aside the January 10 dismissal

and entering judgment of dismissal with costs.

       On May 15, 2013, Flannery filed a notice of appeal from the February 26

judgment.

                                       DISCUSSION

                                              I

       VW has moved to dismiss Flannery's appeal. VW contends: (1) entry of the

January 10 order of dismissal commenced the time for appeal; and (2) the February 26

order merely amended the January 10 order and, therefore, did not restart the time to file

an appeal. We disagree.

       A notice of appeal from a judgment must be filed on or before the earliest of: (1)

60 days after the trial court's mailing of the notice of entry of judgment, (2) 60 days after

a party's service of the notice of entry of judgment, or (3) 180 days after the entry of

                                              6
judgment. (Cal. Rules of Court, rule 8.104(a)(1)-(3).) When a judgment is vacated and

then reinstated, the time to appeal the judgment begins to run after reinstatement. (Lantz

v. Vai (1926) 199 Cal. 190, 193 (Lantz); Matera v. McLeod (2006) 145 Cal.App.4th 44,

58 (Matera).) In Lantz, a judgment in a quiet title action was entered on August 19,

1925, finding that neither party was the owner of a disputed parcel of real property; the

judgment was thereafter vacated and a substitute judgment, finding the plaintiff was not

the owner, was entered on October 14, 1925. In finding that the time for appeal ran from

the reinstated judgment, and not the vacated judgment, the court stated: "[W]e are of the

opinion that no appeal lies from the judgment of August 19. The effect of the order

vacating and setting aside the judgment was to destroy it." (Lantz, at p. 193.) Similarly,

in Matera, the trial court vacated a default judgment but then concluded that the

defendants were not entitled relief from the judgment and reinstated the judgment.

(Matera, at pp. 54-55.) The court rejected the plaintiff's argument that the defendant's

time to appeal was tied to entry of the vacated judgment. Rather, the court held that the

defendant's time to appeal commenced after the judgment was reinstated. (Id. at p. 58.)

The court stated: "Defendants had no right to appeal from the vacated judgment." (Ibid.)

       Here, the trial court's February 26 order states: "It is hereby ordered that: [¶] 1.

The Order of Dismissal entered on or about January 9, 2013 be set aside; [¶] 2. A

Judgment of Dismissal be entered in its place; [¶] 3. Defendant VW Credit, Inc. be

awarded costs in the amount of $517.75." (Italics added.) As in Lantz and Matera,

following entry of the trial court's February 26 order, defendants could not appeal from



                                              7
the January 10 order of dismissal. (Lantz, supra, 199 Cal. at p. 193; Matera, supra, 145

Cal.App.4th at p. 58.) It had been destroyed. (Ibid.)

       VW contends the February 26 judgment is an amended judgment that merely adds

attorney fees and costs and thus did not restart the time to appeal. (See, e.g., Torres v.

City of San Diego (2007) 154 Cal.App.4th 214, 220-223; Laraway v. Pasadena Unified

School Dist. (2002) 98 Cal.App.4th 579, 583.) Unlike Torres and Laraway, where fees

and costs were added to final judgments previously entered and there was no dispute the

subsequent judgments merely made amendments to the original judgments, here, by the

express terms of the order VW itself drafted, the January 10 dismissal was set aside.

Neither the express language of the order VW itself prepared nor the general rule

favoring preservation of the right to appeal (see Lippert v. AVCO Community Developers,

Inc. (1976) 60 Cal.App.3d 775, 779) permit us to interpret the order as a mere

amendment to the January 10 judgment.

       VW also relies on Kimball Avenue v. Franco (2008) 162 Cal.App.4th 1224 for the

proposition that vacating and reentering a judgment does not restart the time for appeal.

Kimball is plainly distinguishable. There, the court's order vacating the prior judgment

was itself void, and, hence, the earlier judgment was never vacated. (See Id. at pp. 1227-

1228.) Here, the court had jurisdiction to set aside the judgment since no appeal had been

filed and less than 60 days had elapsed since notice of entry of judgment. (See 2 Witkin,

Cal. Procedure (5th ed. 2008) Jurisdiction, § 95, pp. 667-668 [trial courts retain

jurisdiction over a cause until notice of appeal is filed or lapse of time].)



                                               8
       In sum, because VW served notice of entry of the new judgment of dismissal on

Flannery on March 19, 2013, Flannery's May 15, 2013 notice of appeal was timely.

                                             II

       "In reviewing the sufficiency of a complaint against a general demurrer, we are

guided by long-settled rules. 'We treat the demurrer as admitting all material facts

properly pleaded, but not contentions, deductions or conclusions of fact or law.

[Citation.] We also consider matters which may be judicially noticed.' [Citation.]

Further, we give the complaint a reasonable interpretation, reading it as a whole and its

parts in their context. [Citation.] When a demurrer is sustained, we determine whether

the complaint states facts sufficient to constitute a cause of action. [Citation.] And when

it is sustained without leave to amend, we decide whether there is a reasonable possibility

that the defect can be cured by amendment: if it can be, the trial court has abused its

discretion and we reverse; if not, there has been no abuse of discretion and we affirm.

[Citations.] The burden of proving such reasonable possibility is squarely on the

plaintiff. [Citation.]" (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.)

                                             III

       "'"Substantial compliance, as the phrase is used in the decisions, means actual

compliance in respect to the substance essential to every reasonable objective of the

statute." [Citation.] Where there is compliance as to all matters of substance technical

deviations are not to be given the stature of noncompliance. [Citation.] Substance

prevails over form. When the plaintiff embarks [on a course of substantial compliance],

every reasonable objective of [the statute at issue] has been satisfied.' [Citation.]" (Cal-

                                              9
Air Conditioning, Inc. v. Auburn Union School Dist. (1993) 21 Cal.App.4th 655, 668.)

Importantly, in considering application of the doctrine, "[o]ur primary concern is the

objective of the statute." (Malek v. Blue Cross of California (2004) 121 Cal.App.4th 44,

72 (Malek).)

       As we indicated at the outset, we have concluded that the doctrine of substantial

compliance does not apply to the appraisal statement vehicle lessors are required to

provide to lessees of repossessed vehicles by section 2987, subdivision (d)(2). We rely in

the main on the court's opinion in Rojas v. Platinum Auto Group, Inc. (2013) 212

Cal.App.4th 997 (Rojas) as well as the opinions in Malek and Imbler v. PacifiCare of

Cal., Inc. (2002) 103 Cal.App.4th 567 (Imbler).

       Rojas is the most directly pertinent authority with respect to whether the doctrine

of substantial compliance applies to the requirements of the VLA. In Rojas, the court

considered related provisions of the Rees-Levering Motor Vehicle Sales and Finance Act

(Rees-Levering) (Civ. Code, §§ 2981 et seq., 2981.9). The plaintiff in Rojas purchased a

car from the defendant and planned to make a down payment totaling $2,000: a $1,000

payment three weeks after he took delivery of the car, a $500 payment two weeks later,

and two $250 payments thereafter. Under the sales finance form required by Rees-

Levering, $1,750 of these payments should have been listed as "Deferred Down

Payment" and $250 accounted for elsewhere. Instead of complying with the

requirements of Rees-Levering, the seller inaccurately listed the $2,000 as a simple down

payment made at the time of sale. The plaintiff sued the seller of the car and the lender

who had been assigned the sales contract and alleged the erroneous characterization of

                                            10
the down payment violated Rees-Levering and supported claims under the Consumer

Legal Remedies Act (Civ. Code, § 1750 et seq.) and Business and Professions Code

section 17200. The defendants filed a demurrer to the complaint and argued that the

seller had substantially complied with Rees-Levering. The trial court sustained the

demurrer without leave to amend, finding that the alleged violation of Rees-Levering was

"trivial." (Rojas, supra, 212 Cal.App.4th at pp. 1000-1001.) The Court of Appeal

reversed and found that Rees-Levering required strict compliance with its prescribed

sales finance form and that the seller's error entitled the buyer to rescission. (Rojas, at p.

1005.)

         The Court of Appeal noted that under Rees-Levering a vehicle sales finance

agreement which does not meet its requirements is unenforceable, but that the Legislature

had recently made an exception for errors by the seller in setting forth government fees.

The court found that the recent amendments which eliminated the right of rescission for

mislabeling of government fees implicitly reinforced the mandatory nature of the statute's

other requirements: "Under the long-standing statutory interpretation principle 'expressio

unius exlcusius alterius est' (to express one thing is to exclude others), the Legislature's

declaration that a sales contract remains enforceable if its only erroneous nondisclosure

involves certain governmental fees [citation], means that rescission remains available for

the contract's noncompliance with other disclosure requirements—for example, truthful

and accurate disclosure of the downpayment." (Rojas, supra, 212 Cal.App.4th at p.

1005.) The court concluded that an interpretation of an earlier version of the statute,

which permitted application of the doctrine of substantial compliance (see Stasher v.

                                              11
Harder-Haldeman (1962) 58 Cal.2d 23, 28-29 (Stasher)), was no longer controlling in

light of the more recent amendments. (Rojas, at p. 1005.) Rather, the plaintiff "could

state a claim for relief under the act based on [the seller's] misstatements about [the]

downpayment even if the trial court deemed the misstatements 'trivial.'" (Ibid.)

       Provisions of the VLA give rise to a very similar statutory interpretation. By its

terms section 2987 requires that, in addition to providing a lessee with the verbatim

statement prescribed in section 2987, subdivision (d)(2), a repossessing seller must also

provide a number of calculations with respect to amounts owed on the lease. (See

§ 2987, subd. (d)(2)(B).) Under section 2987, subdivision (d)(3), a lessee has no liability

to a lessor for any deficiency if the lessor has not complied with the notice requirements

of section 2987, subdivision (d), except if noncompliance involves a bona fide error in the

calculations required by subdivision (d)(2)(B). A deficiency is enforceable,

notwithstanding an erroneous calculation, if the lessee receives or gives notice of the

erroneous calculations before the vehicle is sold. (§ 2987, subd. (d)(3)(A)-(D).) Thus, as

in Rojas, here the express exception to strict enforcement of one part of the statute gives

rise to the inference that the Legislature intended that the remaining requirements of the

statute are to be strictly enforced. (Rojas, supra, 212 Cal.App.4th at p. 1005.)

       In addition to the legislative inference that the notice requirements of the VLA,

including the specified appraisal statement, are to be strictly enforced, practical

jurisprudential considerations counsel against application of substantial compliance here.

Our review of the legislative history of the VLA does not disclose any expressed goal in

requiring use of the specific language required by the statute. Rather, we can only infer

                                             12
that the Legislature chose language which it believed would effectively convey to lessees

their right to an independent appraisal. Plainly, as a consequence of employing

prescribed language, the Legislature has relieved all vehicle lessors of the burden and risk

of determining what is an appropriate notice to lessees of their appraisal rights. In this

context, application of the doctrine of substantial compliance would shift that burden and

the risk of interpretative error to us and to any other court confronted with a similar

abbreviation of the prescribed statement. We see no need to take on that burden or risk or

to create precedent for imposing them on other courts throughout the state. Our

unwillingness to do so grows out of the fact that taking steps to assure the required text

appears in the required notice is not, in our view, in any manner burdensome. Indeed,

requiring strict compliance has the benefit of encouraging all lessors to take due care in

assuring that their notices meet the straightforward requirements of the statute.

       Moreover, the consequences to lessors of strict enforcement of the VLA are not

unfair and provide no undue benefit to lessees. The failure to provide notice simply

prevents lessors who have repossessed and sold vehicles from also recovering a

deficiency from lessees. (See § 2987, subd. (d)(3).) This is in marked contrast to the

equitable considerations that in some measure led the court in Stasher, supra, to employ

substantial compliance in applying an earlier and superseded version of Rees-Levering.

In Stasher, the seller made a down payment error similar to the one considered in Rojas,

but the buyers did not assert the defect for two and a half years, after they had paid

almost the entire $4,600 purchase price and after they had driven the car a total of 63,000

miles. The court found that, in these circumstances, permitting rescission and the return

                                             13
of the purchase price would "give plaintiff an undeserved windfall at defendant's expense

and in disregard of the true intent of the Legislature." (Stasher, supra, 58 Cal.2d at p.

33.) A lessor's inability to recover a deficiency following the sale of a repossessed

vehicle provides lessee's with no such undue windfall.

       Strict enforcement of the appraisal statement required by the VLA is also

consistent with the holdings in Malek and Imbler. In Malek and Imbler, the courts held

that arbitration provisions in health care service plans were not enforceable because they

did not comply with a statutory requirement that the provisions be prominently displayed

"immediately before the signature line." (See Health & Saf. Code, § 1363.1.) In Malek,

the court found that, although "in the appropriate case" substantial compliance with the

statute might permit enforcement of an arbitration provision which did not meet all the

requirements of the statute, the defendant's arbitration clause did not, in any event,

substantially comply because it did not assure a knowing waiver of the right to a jury

trial. (Malek, supra, 121 Cal.App.4th at pp. 72-73.) The court found that such a knowing

waiver was one of the statutory goals of the governing statute.

       Most of the other cases that VW relies on in asserting application of the doctrine

of substantial compliance involve markedly different statutory requirements with

markedly different legislative goals. (See, e.g., Costa v. Superior Court (2006) 37

Cal.4th 986, 1014 [substantial compliance applies to constitutional and statutory

provisions related to elections]; Cal-Air Conditioning, Inc. v. Auburn Union School

District, supra, 21 Cal.App.4th at p. 662; Downtown Palo Alto Com. for Fair Assessment

v. City Council (1986) 180 Cal.App.3d 384 [substantial compliance applies in public

                                             14
work and public contracting setting]; ABBA Rubber Co. v. Seaquist (1991) 235

Cal.App.3d 1, 11 [procedures governing objections to undertaking and bonds subject to

substantial compliance].) None involve a statutory notice procedure that attempts to

protect consumers by requiring that businesses give consumers a prescribed statement.

       The only case that supports VW's contention is the unreported memorandum in

Eger v. VW Credit, Inc. (S.D.Cal. 2007, No. 05-CV-2224-L(WMc)) 2007 U.S.Dist. Lexis

6812. There, the court, with little analysis and without the benefit of Rojas, concluded

that VW's failure to accurately provide the appraisal statement required by the VLA was

subject to the doctrine of substantial compliance. For the reasons we have discussed, we

decline to follow Eger.

       In sum then, contrary to the trial court's ruling, Flannery has alleged a violation of

the VLA and VW's demurrer should have been overruled.

                                              IV

       The parties have not briefed and we have not determined whether, and to what

extent, such a violation of the VLA will support Flannery's claims under the Rosenthal

Act or the UCL. For the guidance of the parties and the trial court on remand however,

we nonetheless note that the Rosenthal Act limits the remedies available to consumers.

In particular, section 1788.30 states in pertinent part: "(a) Any debt collector who

violates this title with respect to any debtor shall be liable to that debtor only in an

individual action, and his liability therein to that debtor shall be in an amount equal to the

sum of any actual damages sustained by the debtor as a result of the violation. [¶] . . . [¶]



                                              15
       "(e) A debt collector shall have no civil liability to which such debt collector

might otherwise be subject for a violation of this title, if the debt collector shows by a

preponderance of evidence that the violation was not intentional and resulted

notwithstanding the maintenance of procedures reasonably adapted to avoid any such

violation."

       We also note that under the UCL a private plaintiff's remedies are "generally

limited to injunctive relief and restitution." (Cel-Tech Communications, Inc. v. Los

Angeles Cellular Telephone Co. (1999) 20 Cal.4th 163, 179; see Bus. & Prof. Code,

§§ 17203, 17206.)

                                       DISPOSITION

       VW's motion to dismiss the appeal is denied. The judgment is reversed and

remanded for further proceedings consistent with the views we have expressed. Flannery

to recover her costs of appeal.



                                                                        BENKE, Acting P. J.

WE CONCUR:



                        NARES, J.



                        AARON, J.




                                              16
