The Protections of the Unruh Act Governing Consumer Retail Installment Sales
Do the Protections of the Unruh Act Governing Consumer Retail Installment Sales Extend to a Contract for the Purchase of Three Small Aircrafts Not Meant for Household Purposes ?
In Cessna Finance Corp. v. Pivo (1976) 58 Cal. App. 3d 281 129 Cal. Rptr. 888, the court held that the protections of the Unruh Act ( Civ. Code, 1801 et seq.) governing consumer retail installment sales did not extend to a contract for the purchase of three small aircraft because the aircraft were not " ' "goods" . . . for use primarily for personal, family or household purposes . . . .' " (Cessna, supra, at p. 285, fn. 1; see also Civ. Code, 1802.1.)
The aircraft were purchased on conditional sales contracts by three brothers, without a down payment, and leased to a flying club with the expectation the monthly payments would be satisfied from the lease revenue.
In determining whether the aircraft were goods for use primarily for personal or business purposes, the court concluded the parties' intent at the entry of the contract, rather than the actual use of the aircraft over the life of the contract, was controlling. ( Cessna, supra, 58 Cal. App. 3d at pp. 286287.)
It reasoned the Unruh Act was designed to protect consumers from abusive credit practices and not competent businessmen engaged in armslength transactions.
The court found persuasive the reasoning of a Washington decision (Commercial Credit Equipment Corporation v. Carter (1973) 83 Wash.2d 136 516 P.2d 767, 77 A.L.R.3d 1218, that " 'it is inconsistent with . . . the policy to simplify, clarify and modernize the law governing commercial transactions to require a creditor to monitor use of the collateral in order to ascertain its proper classification.
The uncertainty caused by the potentially shifting status of the goods is not desirable in the commercial world. ... . . for our purposes, the manner in which a product is classified is determined at the time of agreement between the parties giving rise to the security interest, and, as to them, the categorization remains unaffected by a later transfer of the product in question." (Cessna, at pp. 287-288).