Chapter 11Consumer Recovery Fund

Section § 12200

Explanation

This law section defines terms related to the Consumer Motor Vehicle Recovery Corporation in California. It explains what an 'application' is when seeking a payment from the recovery fund for an eligible claim. A 'consumer' refers to anyone who buys, leases, or consigns a vehicle for personal use from a licensed dealer. An 'eligible claim' involves losses caused by a dealer's failure to handle fees or payments properly, such as not remitting registration fees, failing to settle trade-in balances, providing a clear vehicle title, or not paying for services and insurance. 'Participant' describes a licensed dealer or lessor-retailer. The 'recovery corporation' and 'recovery fund' relate to the organization and fund created to handle these claims.

The following definitions apply to this chapter:
(a)CA Vehicle Code § 12200(a) “Application” means an application to the recovery corporation for the payment of an eligible claim from the recovery fund that is filed with the recovery corporation after January 1, 2009.
(b)CA Vehicle Code § 12200(b) “Consumer” means a person who either (1) purchased or leased, or became obligated to purchase or lease, a motor vehicle to be used primarily for personal, family, or household purposes from a dealer or lessor-retailer licensed under this code, or (2) consigned for sale a motor vehicle that was used primarily for personal, family, or household purposes to a dealer licensed under this code.
(c)CA Vehicle Code § 12200(c) “Eligible claim” means an unsatisfied claim for economic loss, not barred by the statutes of limitation, that accrues after July 1, 2008, as a result of the failure of a dealer licensed under this code, or, if applicable, a lessor-retailer licensed under this code, to do any of the following:
(1)CA Vehicle Code § 12200(c)(1) Remit license or registration fees received or contractually obligated to be paid from a consumer to the department.
(2)CA Vehicle Code § 12200(c)(2) Pay to the legal owner of a vehicle transferred as a trade-in by a consumer to the dealer or lessor-retailer the amount necessary to discharge the prior credit balance owed to the legal owner.
(3)CA Vehicle Code § 12200(c)(3) Pay to the lessor registered in accordance with Section 4453.5 of a vehicle transferred as a trade-in by a consumer to the dealer or lessor-retailer the amount the dealer or lessor-retailer agreed to pay to the lessor.
(4)CA Vehicle Code § 12200(c)(4) Pay the amount specified in a consignment agreement to a consumer after the sale of a consigned vehicle.
(5)CA Vehicle Code § 12200(c)(5) Provide a consumer who purchased a vehicle from the dealer or lessor-retailer with good title to the vehicle, free from any security interest or other lien, encumbrance, or claim, unless otherwise clearly and conspicuously provided for by the written sale agreement.
(6)CA Vehicle Code § 12200(c)(6) Pay to a third party any amount received from, or contractually obligated to be paid by, a consumer for insurance, service contracts, or goods or services purchased through the dealer or lessor-retailer and to be provided by the third party.
(d)CA Vehicle Code § 12200(d) “Participant” means a dealer licensed under this code or a lessor-retailer licensed under this code.
(e)CA Vehicle Code § 12200(e) “Recovery corporation” means the Consumer Motor Vehicle Recovery Corporation.
(f)CA Vehicle Code § 12200(f) “Recovery fund” means the consumer recovery fund established by the recovery corporation pursuant to Section 12203 for the payment of eligible claims.
Consumer Motor Vehicle Recovery Corporation eligible claim vehicle purchase dealer obligations license fees vehicle trade-in consignment agreement vehicle title security interest recovery fund economic loss lessor-retailer trade-in balance insurance payments service contracts
(Amended by Stats. 2013, Ch. 392, Sec. 3. (AB 501) Effective January 1, 2014.)

Section § 12201

Explanation

This section mandates that participants must create and sustain a nonprofit corporation called the Consumer Motor Vehicle Recovery Corporation. This corporation's purpose is to pay eligible claims to consumers.

Importantly, participants can't charge consumers extra fees to cover what they paid under a specific section. Also, the state and its officials aren't responsible for the actions or failures of this corporation or its staff.

(a)CA Vehicle Code § 12201(a) Participants shall maintain a corporation under the Nonprofit Mutual Benefit Corporation Law (Part 3 (commencing with Section 7110) of Division 2 of Title 1 of the Corporations Code) that shall operate under the name “Consumer Motor Vehicle Recovery Corporation.”
(b)CA Vehicle Code § 12201(b) The purpose of the Consumer Motor Vehicle Recovery Corporation is to provide payments to consumers on eligible claims subject to the requirements and limitations set forth in this chapter.
(c)CA Vehicle Code § 12201(c) A participant may not charge or collect from a consumer a separate fee or charge to recoup the fee paid by the participant pursuant to Section 4456.3.
(d)CA Vehicle Code § 12201(d) The State of California and its officers, agents, or employees shall not be liable for any act or omission of the recovery corporation or its directors, officers, agents, or employees.
Consumer Motor Vehicle Recovery Corporation nonprofit mutual benefit corporation eligible claims no additional consumer fees Section 4456.3 California State liability participant obligations nonprofit governance corporate liability consumer protection motor vehicle recovery claims payment corporation directors liability fee recoupment restriction corporation operation rules
(Added by Stats. 2007, Ch. 437, Sec. 6. Effective January 1, 2008.)

Section § 12202

Explanation

This section outlines the structure and requirements for the board of directors of the recovery corporation. The board consists of six directors: a public consumer representative appointed by the Director of Consumer Affairs; a representative of the Attorney General as a non-voting member; one member of the public appointed by the Senate Committee on Rules; one public member appointed by the Speaker of the Assembly; and two participants appointed by the Governor.

The consumer representative needs experience in consumer law enforcement. Participant directors must be owners or managers of licensed dealers or lessor-retailers and meet criteria such as having no criminal convictions or pending legal actions. A director who can no longer meet these qualifications cannot remain on the board.

(a)CA Vehicle Code § 12202(a) The recovery corporation shall have a board of directors composed of six directors, as follows:
(1)CA Vehicle Code § 12202(a)(1) One public consumer representative member appointed by the Director of Consumer Affairs who shall serve until the appointment is revoked, another appointment is made, or until the appointed director resigns. The consumer representative shall be either of the following:
(A)CA Vehicle Code § 12202(a)(1)(A) A current or former prosecutor with at least two years of direct experience in the civil or criminal enforcement of consumer protection laws, including laws prohibiting deceptive advertising and unlawful and fraudulent practices.
(B)CA Vehicle Code § 12202(a)(1)(B) A current or former employee of a government agency who has at least two years of direct experience in one of the following:
(i)CA Vehicle Code § 12202(a)(1)(B)(i) The investigation, mediation, and resolution of consumer complaints.
(ii)CA Vehicle Code § 12202(a)(1)(B)(ii) Providing counseling, information, education, or referral services to consumers.
(iii)CA Vehicle Code § 12202(a)(1)(B)(iii) Administering a consumer protection program that provides any of the services described in clause (i) or (ii).
(2)CA Vehicle Code § 12202(a)(2)  A representative of the Attorney General, who shall serve as an ex officio, nonvoting member.
(3)CA Vehicle Code § 12202(a)(3) One member of the general public appointed by the Senate Committee on Rules to a two-year term.
(4)CA Vehicle Code § 12202(a)(4) One member of the general public appointed by the Speaker of the Assembly to a two-year term, except that the initial appointment to the board of directors shall be for a one-year term.
(5)CA Vehicle Code § 12202(a)(5) Two participants, who shall be appointed by the Governor for two-year terms, except that the initial term of the position of one of the participant directors shall be for a one-year term.
(b)CA Vehicle Code § 12202(b) A person is eligible to be nominated and to serve as a participant director if the person satisfies all of the following conditions:
(1)CA Vehicle Code § 12202(b)(1) The person’s primary occupation, at the time of nomination and continuously during the previous three years, has been as an owner or general manager of a licensed dealer or lessor-retailer.
(2)CA Vehicle Code § 12202(b)(2) The person has not been convicted of a crime, including a plea or verdict of guilty or a conviction following a plea of nolo contendere.
(3)CA Vehicle Code § 12202(b)(3) The person is not subject to a judgment or administrative order, whether entered after adjudication or stipulation, predicated on that person’s commission of an act of dishonesty, fraud, deceit, or violation of this chapter or Chapter 5 (commencing with Section 17200) of Part 2 of Division 7 of the Business and Professions Code.
(4)CA Vehicle Code § 12202(b)(4) The person is not a defendant in a pending criminal or civil law enforcement action brought by a public prosecutor.
(5)CA Vehicle Code § 12202(b)(5) The person has not served as a participant director of the recovery corporation at any time during the previous 18 months.
(c)CA Vehicle Code § 12202(c) A director who does not qualify to be a participant director, whose term has lapsed, or who otherwise becomes unable to serve shall not continue to serve as a director.
recovery corporation board of directors public consumer representative Director of Consumer Affairs Attorney General general public member participant director licensed dealer lessor-retailer criminal convictions consumer protection Governor appointments Senate Committee on Rules Speaker of the Assembly non-voting member
(Added by Stats. 2007, Ch. 437, Sec. 6. Effective January 1, 2008.)

Section § 12203

Explanation

This section explains how a recovery corporation should manage a consumer recovery fund to pay claims. The corporation receives funds from a department, keeps the funds in a safe investment, and uses the money only for the chapter's purposes. It can’t spend more than $250,000 annually on running costs, and it must plan a yearly budget ahead of time. The corporation must track and report all payments and claims, providing quarterly reports to the Attorney General's office. They can create rules and procedures to fulfill these responsibilities, with input from the Attorney General's representative.

(a)CA Vehicle Code § 12203(a) The recovery corporation shall establish a consumer recovery fund for the payment of claims as provided in this chapter. The recovery corporation shall receive funds from the department as provided in Section 4456.3 and shall promptly notify the department when the recovery fund balance reaches the amounts specified in subdivision (b) of Section 4456.3.
(b)CA Vehicle Code § 12203(b) The recovery corporation shall establish and maintain an operations account within the recovery fund for the payment of costs of operations and administration. The recovery corporation shall prepare, before its fiscal year end, an estimated annual operational budget projecting the costs of operations and administration for the succeeding fiscal year, excluding the amount paid for claims. The recovery corporation shall not expend more than two hundred fifty thousand dollars ($250,000) each fiscal year from the operations account for the administration of this chapter.
(c)CA Vehicle Code § 12203(c) The recovery corporation shall invest all funds received from the department pursuant to Section 4456.3, and interest earned on those funds, deposited in the recovery fund, in a federally insured account or in federally insured certificates of deposit at a California state or federally chartered bank or savings bank.
(d)CA Vehicle Code § 12203(d) The recovery corporation holds all money in the recovery fund in trust for the purposes provided in this chapter and shall disburse funds only as provided in this chapter.
(e)CA Vehicle Code § 12203(e) The recovery corporation shall separately account for disbursements and collections. The accounting shall include a record of each claim paid that indicates the name, address, and phone number of each claimant receiving payment, the amount of the payment, and the name of the participant for which a claim was paid. Quarterly reports shall be provided to the office of the Attorney General, Consumer Protection Section, commencing on or before October 31, 2008, and within 30 days after the end of each quarter thereafter.
(f)CA Vehicle Code § 12203(f) The recovery corporation may adopt reasonable written bylaws, rules, and procedures to carry out the purposes of this chapter. The representative of the Attorney General may vote on the adoption of bylaws, rules, and procedures notwithstanding paragraph (2) of subdivision (a) of Section 12202.
consumer recovery fund claims payment fund management operations account annual budget investment of funds trust account disbursement tracking quarterly reports Attorney General reporting bylaws adoption administrative costs federally insured account claimant information California bank investment
(Amended by Stats. 2024, Ch. 853, Sec. 30. (AB 3281) Effective January 1, 2025.)

Section § 12204

Explanation

If a car dealer or lessor-retailer stops selling or leasing vehicles to the public or goes bankrupt, a consumer can apply for payment of an eligible claim through a recovery corporation. To do this, the consumer must fill out an application with specific details like their contact information, the amount claimed, and the situation that led to the claim. The application also needs details about efforts to recover the claim amount and confirmation that the claim hasn't been paid through the dealer's bond.

The application must include a copy of the agreement with the dealer, unless it's not needed to prove the claim. If the claim involves unpaid fees or money from consignment sales, the application should include evidence of these unpaid amounts. Also, there are limits on how much can be claimed, based on specific scenarios like unpaid fees or trade-in balances.

Claims must be filed within certain timeframes, depending on when they began. The recovery corporation may request more information to help process valid claims.

(a)CA Vehicle Code § 12204(a) A consumer may file an application with the recovery corporation for the payment of the consumer’s eligible claim if a dealer or lessor-retailer against whom the claim is asserted has ceased selling and leasing motor vehicles to the general public or has become subject to a petition in bankruptcy.
(b)Copy CA Vehicle Code § 12204(b)
(1)Copy CA Vehicle Code § 12204(b)(1) The application shall be verified and shall set forth all of the following information:
(A)CA Vehicle Code § 12204(b)(1)(A) The consumer’s name, address, and telephone number.
(B)CA Vehicle Code § 12204(b)(1)(B) The amount of the eligible claim.
(C)CA Vehicle Code § 12204(b)(1)(C) A description of the circumstances demonstrating an eligible claim.
(D)CA Vehicle Code § 12204(b)(1)(D) A statement indicating the consumer’s belief that the dealer or lessor-retailer has ceased selling and leasing motor vehicles to the general public or has become subject to a petition in bankruptcy and the reasons for this belief.
(E)CA Vehicle Code § 12204(b)(1)(E) A statement indicating what action, if any, the applicant has taken to recover the amount of the eligible claim.
(F)CA Vehicle Code § 12204(b)(1)(F) A statement indicating that the consumer’s application for payment does not include any amount for which the consumer has obtained recovery under the dealer’s bond required by Section 11710.
(2)CA Vehicle Code § 12204(b)(2) Nothing in this chapter shall be construed to require a consumer to bring a civil action to obtain recovery, file a bankruptcy claim, or file a crime report with a law enforcement agency in order to obtain payment of an eligible claim submitted to the recovery corporation.
(c)CA Vehicle Code § 12204(c) The application shall be accompanied by a copy of the agreement between the consumer and the dealer or lessor-retailer, unless the agreement is unnecessary to the recovery corporation’s determination of the validity of the claim.
(d)CA Vehicle Code § 12204(d) If the eligible claim is based on the failure to remit license or registration fees, the application shall be accompanied by evidence demonstrating that the consumer paid money or other consideration for the fees, or became obligated to pay the fees, and that the fees had not been remitted. The eligible claim shall be limited to the dollar amount of the license or registration fees not remitted and a late charge or penalty.
(e)CA Vehicle Code § 12204(e) If the eligible claim is based on the failure to pay the proceeds of a consignment sale, the application shall be accompanied by the consignment agreement, evidence that the consigned vehicle was sold, and by the consumer’s verified statement that the consumer did not receive the portion of the proceeds of the sale to which the consumer was entitled. The eligible claim is limited to the dollar amount specified in a written consignment agreement to be paid to the consignor.
(f)CA Vehicle Code § 12204(f) If the eligible claim is based on the failure to pay the legal owner of the consumer’s trade-in vehicle, the application shall be accompanied by a statement from the legal owner of the amount, if any, that he or she received from the dealer or lessor-retailer. The eligible claim is limited to the dollar amount necessary to discharge the credit balance owing on the trade-in vehicle.
(g)CA Vehicle Code § 12204(g) If the eligible claim is based on the failure to pay the lessor of the consumer’s trade-in vehicle, the application shall be accompanied by a statement from the lessor of the amount, if any, that the lessor received from the dealer or lessor-retailer. The eligible claim is limited to the dollar amount necessary to pay the lessor the total amount that the dealer or lessor-retailer agreed with the consumer to pay the lessor.
(h)CA Vehicle Code § 12204(h) If the eligible claim is based on the failure to provide good title, the application shall be accompanied by a statement from the legal owner or other claimant of the amount, if any, that he or she received from the dealer or lessor-retailer. The eligible claim is limited to the remaining dollar amount necessary to discharge the valid security interest, lien, encumbrance, or other claim clouding title to the vehicle.
(i)CA Vehicle Code § 12204(i) If the eligible claim is based on the failure to pay third parties for insurance, service contracts, or goods or services, the application shall be accompanied by a statement from the third party of the amount, if any, that he or she received from the dealer or lessor-retailer. The eligible claim is limited to the difference between the dollar amount the consumer paid or was contractually obligated to pay to the dealer or lessor-retailer for the insurance, service contracts, or goods or services purchased through the dealer or lessor-retailer and to be provided by the third party and the dollar amount actually received by the third party from the dealer or lessor-retailer for the insurance, service contracts, or goods or services.
(j)CA Vehicle Code § 12204(j) The recovery corporation may require reasonable additional information designed to facilitate payment of eligible claims.
(k)Copy CA Vehicle Code § 12204(k)
(1)Copy CA Vehicle Code § 12204(k)(1) For claims that have accrued on or after July 1, 2008, and before January 1, 2009, the application shall be filed within 18 months of the date upon which the dealer or lessor-retailer ceased selling or leasing motor vehicles to the general public or became subject to a petition in bankruptcy.
(2)CA Vehicle Code § 12204(k)(2) For claims that have accrued on or after January 1, 2009, the application shall be filed within one year of the date upon which the dealer or lessor-retailer ceased selling or leasing motor vehicles to the general public or became subject to a petition in bankruptcy.
consumer application dealer bankruptcy eligible claim recovery corporation license fees consignment sale trade-in vehicle good title insurance payment service contracts unpaid third parties claim deadlines verification requirements financial recovery process vehicle sale issues
(Amended by Stats. 2013, Ch. 392, Sec. 4. (AB 501) Effective January 1, 2014.)

Section § 12205

Explanation

This law requires a recovery corporation to create and provide materials that explain a consumer's right to claim from the fund. These materials must include a notice, an application form, and instructions on filling out the application. These resources must be available in both English and Spanish and should be given to anyone who asks for them.

The recovery corporation shall develop a notice fully explaining a consumer’s right to make a claim from the fund, an application form, and an explanation of how to complete the application. The notice, application, and explanation shall be in English and Spanish and shall be provided to a person upon request.
consumer rights claim fund bilingual application English and Spanish recovery corporation application form fund application consumer claim notice explanation fund notice claim instructions bilingual notice request for materials application process language accessibility
(Added by Stats. 2007, Ch. 437, Sec. 6. Effective January 1, 2008.)

Section § 12206

Explanation

If you apply to the recovery corporation for a claim, they'll let you know within 30 days whether your application is complete or if more details are needed. Once your application is marked as complete, they'll decide to pay or deny your claim within 60 days. If they don't specifically deny it, your claim will be approved. They can take an extra 90 days to review your claim if necessary. Any director who has a personal or financial stake in the claim isn't allowed to make decisions about it.

(a)CA Vehicle Code § 12206(a) Within 30 days of receiving an application, the recovery corporation shall notify the applicant, in writing, that the application is complete or, if the application is incomplete, what additional information is required.
(b)Copy CA Vehicle Code § 12206(b)
(1)Copy CA Vehicle Code § 12206(b)(1) Within 60 days of the recovery corporation providing notice to the applicant of a complete application, the recovery corporation shall either pay the eligible claim from the fund as prescribed in this chapter or deny the claim. A claim shall be deemed granted unless the directors affirmatively vote to deny the claim.
(2)CA Vehicle Code § 12206(b)(2) The recovery corporation, for good cause, may extend the 60-day period not more than an additional 90 days to investigate the accuracy of the application or evidence submitted by a dealer or lessor-retailer.
(c)CA Vehicle Code § 12206(c) A director shall not be involved in the decision of a claim if the director has a financial interest in the outcome of the decision; has a financial interest in or is employed by the participant that is the subject of the claim; or has a familial or close personal relationship with the claimant or an owner, officer, director, or manager of the participant.
recovery corporation application review claim approval claim denial eligible claim financial interest application completeness notification period investigation extension director disqualification familial relationship personal interest dealer evidence lessor-retailer evidence good cause extension
(Added by Stats. 2007, Ch. 437, Sec. 6. Effective January 1, 2008.)

Section § 12207

Explanation

This section requires the Consumer Motor Vehicle Recovery Corporation to notify car dealers or lessor-retailers if a claim against them has been received, within 15 days. The notification includes a notice informing the dealer they can contest the claim by submitting evidence. It also warns that unresolved claims could lead to suspension or revocation of their license, and repayments with interest may be required. This notice must be delivered in person or by certified mail to the dealer's official address.

(a)CA Vehicle Code § 12207(a) Within 15 days of receiving a complete application, the recovery corporation shall serve a copy of the complete application and the following notice on the dealer or lessor-retailer that is the subject of the claim:
“The attached application has been made to the Consumer Motor Vehicle Recovery Corporation for payment of a claim allegedly arising out of your conduct or omission. If you wish to contest payment, you must file a written response to the application that describes any evidence that you have showing that the application is inaccurate or that payment from the fund is not authorized under Section 12200 and following of the Vehicle Code, a copy of which is provided.
“The allegations stated in the attached application may constitute grounds on which disciplinary action may be taken to suspend or revoke your license. In addition, the Department of Motor Vehicles may suspend your license until you have repaid in full the amount paid by the Consumer Motor Vehicle Recovery Corporation on the attached application, plus interest at the rate of 10 percent per annum.”
(b)CA Vehicle Code § 12207(b) The notice prescribed by subdivision (a), a copy of the application for payment, and a copy of this chapter shall be served on the dealer or lessor-retailer by personal service or certified mail, return receipt requested, at the department’s mailing address of record for that licensee.
Consumer Motor Vehicle Recovery Corporation car dealer notification contest payment license suspension dealer's response disciplinary action repayment with interest certified mail personal service claim against dealer motor vehicle recovery dealer or lessor-retailer DMV mailing address
(Added by Stats. 2007, Ch. 437, Sec. 6. Effective January 1, 2008.)

Section § 12208

Explanation

This law states that if a recovery corporation decides to pay a claim, the payment will cover the whole eligible amount of the claim. However, the payment cannot be more than $35,000 for any single transaction.

If the recovery corporation pays the claim, the amount of the payment shall be the total of the amount of the eligible claim, but in no event may the payment exceed thirty-five thousand dollars ($35,000) for a transaction.
recovery corporation claim payment eligible claim payment limit transaction cap $35 000 maximum claim restriction financial compensation payout ceiling claim eligibility transaction limit single transaction payment restriction maximum payout eligibility criteria
(Added by Stats. 2007, Ch. 437, Sec. 6. Effective January 1, 2008.)

Section § 12209

Explanation

If a claim is denied by the recovery corporation, they must inform you in writing, explaining why and how to contest it. If you don't challenge the denial within 60 days, or a longer time if reasonably requested, the decision is final. If you do contest, the corporation has 30 days to respond. If your claim is still denied, you can request a review in a California superior court in certain counties. The court will only consider the original record and any new, relevant evidence you couldn't present earlier. The court will uphold the denial if it’s backed by solid evidence.

If the recovery corporation denies the claim, the recovery corporation shall notify the applicant in writing of the denial, the legal and factual bases for the denial, and the applicant’s right to contest the denial in writing within 60 days or any longer period permitted by the recovery corporation. If the applicant does not contest the denial within 60 days or an additional period reasonably requested by the consumer, the decision shall be final. The recovery corporation shall act on the applicant’s objection within 30 days. If the claim is denied in whole or in part, the applicant may seek review in the superior court of any of the following counties in which the office of the Attorney General maintains an office: Sacramento, San Francisco, Los Angeles, or San Diego. Review shall be limited to the written record before the recovery corporation and any relevant evidence that could not have been previously presented to the recovery corporation despite the applicant’s reasonable diligence. The superior court shall affirm the decision of the recovery corporation if it is supported by substantial evidence.
claim denial process contesting claim denial written notification legal and factual bases superior court review substantial evidence recovery corporation objection handling applicant rights evidence submission county selection Attorney General office locations claim process timeline final decision court affirmation
(Added by Stats. 2007, Ch. 437, Sec. 6. Effective January 1, 2008.)

Section § 12210

Explanation

This law outlines what happens after the recovery corporation either pays or rejects a consumer's claim related to a dealer or lessor-retailer. When the corporation pays the claim, it takes over the consumer's rights to pursue the dealer for the amount paid. They can also sue the dealer to recover the payment amount plus interest and claim legal costs. Within 10 days of making a payment, the corporation must inform the department about the payment details and provide documents if requested. Within 15 days, they must notify the dealer about the claim's outcome. Once the consumer is paid, they cannot seek the same amount from the dealer’s bond, although other rights under Section 12217 remain unaffected.

After the recovery corporation pays or rejects a claim, all of the following apply:
(a)CA Vehicle Code § 12210(a) Immediately upon payment, the recovery corporation shall be subrogated to all of the consumer’s rights against the dealer or lessor-retailer to the extent of the amount of the payment.
(b)CA Vehicle Code § 12210(b) The recovery corporation may bring an action to recover the amount of the payment plus interest at the rate of 10 percent per annum and shall be entitled to recover costs and reasonable attorney’s fees.
(c)CA Vehicle Code § 12210(c) Within 10 days of paying the claim, the recovery corporation shall inform the department of the payment of the claim, the amount of the payment, and the name and address of the dealer or lessor-retailer that is the subject of the claim. Upon the department’s request, the recovery corporation shall provide the department with a copy of the claim application and other documents received by the recovery corporation in connection with the claim.
(d)CA Vehicle Code § 12210(d) Within 15 days of paying or rejecting the claim, the recovery corporation shall serve the dealer or lessor-retailer that is the subject of the claim with notice of the recovery corporation’s disposition of the claim in the manner provided for service in subdivision (b) of Section 12207.
(e)CA Vehicle Code § 12210(e) After the consumer receives payment of the eligible claim from the recovery corporation, the consumer shall not seek to recover the amount received from the recovery corporation for the eligible claim from the dealer’s bond required by Section 11710. Nothing in this subdivision affects any other rights the consumer may have as provided in Section 12217.
recovery corporation subrogation consumer rights dealer claim lessor-retailer claim payment process interest rate 10% attorney's fees recovery department notification claim application dealer bond Section 11710 Section 12217
(Added by Stats. 2007, Ch. 437, Sec. 6. Effective January 1, 2008.)

Section § 12211

Explanation

If the recovery corporation doesn't have enough money to pay everyone who has a valid claim, they will pay the claims in the order they were received. Any claims that can't be paid right away will wait until more funds are available.

If the recovery corporation has insufficient funds to pay all eligible claims, the recovery corporation shall pay eligible claims in the order that the claim applications were received and shall hold the remaining claims until funds are available to pay those claims.
recovery corporation insufficient funds eligible claims claim applications order received hold claims available funds payment order financial insufficiency claim processing fund distribution claim prioritization pending claims insurance claims compensation delay
(Added by Stats. 2007, Ch. 437, Sec. 6. Effective January 1, 2008.)

Section § 12212

Explanation

This law requires a recovery corporation to make certain financial information from the most recent fiscal year public within 30 days after its close. They must disclose details like the number and amount of claims received and paid, claims denied or abandoned, the balance of the recovery fund, fees received, and administrative costs.

Additionally, within 15 days of approval by the board, they must also release approved board meeting minutes, an estimated budget for the next year, and updated corporate bylaws.

All this information can be shared via a website or email upon request.

(a)CA Vehicle Code § 12212(a) Within 30 days after the close of the fiscal year or other reasonable period established by the board of directors, the recovery corporation shall make publicly available a statement of the following information concerning the most recently concluded fiscal year:
(1)CA Vehicle Code § 12212(a)(1) The number of claims and approximate dollar amount of the claims received.
(2)CA Vehicle Code § 12212(a)(2) The total number of claims and total dollar amount of claims paid.
(3)CA Vehicle Code § 12212(a)(3) The approximate number and dollar amount of claims denied or abandoned.
(4)CA Vehicle Code § 12212(a)(4) The dollar balance in the recovery fund.
(5)CA Vehicle Code § 12212(a)(5) The dollar amount of fees received pursuant to Section 4456.3.
(6)CA Vehicle Code § 12212(a)(6) The administrative costs and expenses of the recovery corporation.
(b)CA Vehicle Code § 12212(b) The recovery corporation shall make publicly available within 15 days of approval by the board of directors or other reasonable period established by the board of directors, the following information:
(1)CA Vehicle Code § 12212(b)(1) The approved minutes of meetings of the board of directors.
(2)CA Vehicle Code § 12212(b)(2) The approved estimated annual operational budget projecting the costs of operations and administration for the succeeding fiscal year, excluding the amount to be paid for claims.
(3)CA Vehicle Code § 12212(b)(3) The approved bylaws, as amended, of the recovery corporation.
(c)CA Vehicle Code § 12212(c) Information may be made publicly available as required by this section by disseminating the information on an Internet Web site or providing the information by electronic mail to a person who has requested the information and provided a valid electronic mail address.
recovery corporation financial disclosure fiscal year end claims information recovery fund balance fees received Section 4456.3 administrative costs board of directors meetings annual operational budget corporate bylaws public availability online dissemination email information requests claims denied abandoned
(Added by Stats. 2007, Ch. 437, Sec. 6. Effective January 1, 2008.)

Section § 12213

Explanation

This law states that the recovery corporation can be examined and reviewed by the Attorney General and their team at any time. They can investigate and go through all the corporation's books, accounts, records, and files. The Attorney General’s team can freely access and copy any documents found within the corporation's premises, including safes and vaults.

The operation of the recovery corporation shall at all times be subject to the examination and review of the Attorney General and the Attorney General’s representatives. The Attorney General and his or her representatives may at any time investigate the affairs and examine the books, accounts, records, and files used by the recovery corporation. The Attorney General and his or her representatives shall have free access to the offices, books, accounts, papers, records, files, safes, and vaults of the recovery corporation and may copy any documents of, or in the possession of, the recovery corporation.
recovery corporation Attorney General examination records access document inspection corporate investigation books and accounts review records examination free access investigative authority office inspection corporate compliance file review safes and vaults access corporate transparency
(Added by Stats. 2007, Ch. 437, Sec. 6. Effective January 1, 2008.)

Section § 12214

Explanation

This section outlines the circumstances under which the Attorney General can decide that a recovery corporation has failed or stopped operating. The Attorney General can make this decision if the recovery corporation wasn't created, is dissolved, has stopped operating, is insolvent, failed to pay operating costs, didn't pay claims or judgments promptly, violated its incorporation articles or state laws, mismanaged funds, didn't process claims diligently, violated this chapter's rules, or refused inspection by the Attorney General.

The Attorney General or his or her representative may determine that the recovery corporation has failed or ceased to operate upon a finding that any one of the following has occurred with respect to the recovery corporation:
(a)CA Vehicle Code § 12214(a) The recovery corporation was not created.
(b)CA Vehicle Code § 12214(b) The recovery corporation is dissolved.
(c)CA Vehicle Code § 12214(c) The recovery corporation ceased to operate.
(d)CA Vehicle Code § 12214(d) The recovery corporation is insolvent or bankrupt.
(e)CA Vehicle Code § 12214(e) The recovery corporation failed to pay its operating costs.
(f)CA Vehicle Code § 12214(f) The recovery corporation failed to pay any claim or judgment in a timely manner.
(g)CA Vehicle Code § 12214(g) The recovery corporation violated its articles of incorporation or any law of this state.
(h)CA Vehicle Code § 12214(h) The recovery corporation invested its funds in violation of this chapter.
(i)CA Vehicle Code § 12214(i) The recovery corporation has not diligently made a decision upon a claim made by a person aggrieved.
(j)CA Vehicle Code § 12214(j) The recovery corporation violated any section of this chapter.
(k)CA Vehicle Code § 12214(k) The recovery corporation neglected or refused to submit its books, papers, and affairs to the inspection of the Attorney General or his or her representatives.
recovery corporation failure to operate dissolution insolvency bankruptcy operating costs unpaid unpaid claims violation of incorporation articles misuse of funds claims processing delays inspection refusal Attorney General determination corporate compliance state law violations financial management issues
(Added by Stats. 2007, Ch. 437, Sec. 6. Effective January 1, 2008.)

Section § 12215

Explanation

This law section explains what happens if a recovery corporation shuts down or stops operating. First, all debts and obligations, such as money owed for services, must be paid from any remaining assets, including a recovery fund. After those payments, any leftover assets are distributed to participants, minus distribution costs.

If the recovery corporation is dissolved or ceases to exist, or if the Attorney General or his or her representative makes a determination, pursuant to Section 12214, that the recovery corporation has failed or ceased to operate, all outstanding debts, obligations of the recovery corporation, and amounts due for services rendered shall first be paid from the remaining assets, including the recovery fund. The assets remaining, after settling those liabilities, shall be distributed to the participants, less the costs of that distribution.
recovery corporation dissolution outstanding debts obligations remaining assets recovery fund participant distribution distribution costs corporation shutdown assets settlement Attorney General determination
(Added by Stats. 2007, Ch. 437, Sec. 6. Effective January 1, 2008.)

Section § 12216

Explanation

This law section states that any costs or expenses that the Department of Justice incurs while managing a specific chapter must be paid by the recovery corporation. If needed, the Department of Justice can take legal action in court to receive these payments for their expenses.

All costs and expenses incurred by the Department of Justice in the administration of this chapter shall be paid to the Department of Justice by the recovery corporation. The Department of Justice may institute an action for the recovery of costs and expenses incurred in the administration of this article in any court of competent jurisdiction.
Department of Justice expenses recovery corporation payment administration costs legal action for expenses court recovery of costs reimbursement by recovery corporation Department of Justice financial recovery administration cost recovery legal cost recoupment court jurisdiction for cost recovery
(Added by Stats. 2007, Ch. 437, Sec. 6. Effective January 1, 2008.)

Section § 12217

Explanation

This law section clarifies that it doesn't restrict or limit any actions, remedies, penalties, or procedures that are available under other laws. Essentially, it ensures that the rules in this chapter don't interfere with legal options available elsewhere.

Nothing in this chapter is intended to limit or restrict actions, remedies, penalties, or procedures otherwise available pursuant to any other provision of law.
actions remedies penalties procedures available under other laws limit restrictions legal options interference with laws pursuant to other provision non-restrictive clause chapter rules statutory interpretation legal safeguards additional remedies
(Added by Stats. 2007, Ch. 437, Sec. 6. Effective January 1, 2008.)