Bivens v. Gallery Corp.

36 Cal.Rptr.3d 541

134 Cal.App.4th 847

Webster BIVENS, Plaintiff and Appellant, v. GALLERY CORPORATION, Defendant and Respondent.

No. D045557.

Court of Appeal, Fourth District, Division 1.

November 22, 2005.

The McMillan Law Firm, Alvin Kalmanson, David J. Lola and Scott A. McMillan, La Mesa, CA, for Plaintiff and Appellant.

Steven Dale Allison, Christopher Lee Humphreys, Dorsey & Whitney LLP, Irvine, CA, for Defendant and Respondent.

HUFFMAN, Acting P.J.

Plaintiff Webster Bivens appeals the judgment of dismissal entered against him after a demurrer to his complaint for declaratory and equitable relief based on causes of action for false advertising and unfair business practices under Business and Professions Code¹ sections 17200, 17500, and 17504, brought by defendant Gallery Corporation, dba Mattress Gallery, a Delaware corporation (Gallery or defendant), was sustained without leave to amend.² In addition to contending the trial court erred in sustaining Gallery's demurrer on the three causes of action he alleged under provisions of California's Unfair Competition Law (§ 17200 et seq., UCL) and the False Advertising Act (§ 17500 et seq.), Bivens asserts Proposition 64 (Prop. 64), which was passed by the voters of California on November 2, 2004, shortly before the court ruled on the demurrer and which narrowed the class of persons who can maintain actions under the UCL and the False Advertising Act, should not be applied retroactively to preclude him from bringing his causes of action. Recognizing this court has previously held Prop. 64 applies to UCL and false advertising actions filed before its effective date of November 3, 2004, which are not yet final on appeal and the issue of Prop. 64's retroactivity is pending before our Supreme Court in those cases³ as well as in other court of appeal cases,⁴ Bivens requests we grant him leave to amend his complaint to meet the new standing requirements if we maintain our view that Prop. 64 applies to such existing causes of action.

We conclude, consistent with our previous positions, that Prop. 64 applies to this action and, as a result, Bivens lacks standing under sections 17204 and 17535, which were amended by Prop. 64, to pursue this action as pled. We deny Bivens's request to amend his complaint to try to satisfy the requirements of Prop. 64 because the trial court correctly determined as a matter of law no cause of action under sections 17200, 17500, or 17504 had been or could be pled.⁵ We, therefore, find the court properly sustained Gallery's demurrer to Bivens's complaint without leave to amend and affirm the judgment of dismissal.

FACTUAL AND PROCEDURAL HISTORY

According to the pleadings, Bivens is a senior citizen residing in San Diego entitled to calendar preference (§ 17206.1, subd. (b)(1); Civ.Code, § 1761, subd. (f); Code Civ. Proc., § 36) who is "unaffected by [Gallery's] conduct" and bringing this action under the UCL "on behalf of the general public pursuant to ... §§ 17204 and 17535." Bivens alleges that on or about December 7, 2003, February 15 and 21, 2004, and June 27, 2004, Gallery "published an advertising supplement in the Los Angeles Times depicting an image of a woman on a mattress and an advertisement for mattresses to the right of the image. The advertisement states `PRICING STARTING AS LOW AS ... $48' in large type. In smaller print it states `TWIN EA. PC.' In substantially smaller type, in parenthesis, it states `SOLD IN SETS ONLY.'" Bivens alleges the failure to give the total price for twin sets, when read in conjunction with the unit price, is likely to mislead consumers. In addition, he alleges the failure to define what constitutes a "set" is likely to mislead consumers. Copies of the advertisements are attached to the complaint as Exhibits A, B, C, and D.⁶ Bivens alleged Gallery "refused to sell to their retail customers any single twin mattress or box spring referred to herein for the advertised unit price."

In his first cause of action, Bivens alleged a violation of section 17504, incorporating the above allegations and further claiming "[o]n one or more occasions, defendants advertised the unit price for merchandise that defendants sold, at that unit price, only in multiple units, without stating the price that the consumer must pay for the minimum quantity of merchandise sold as a multiple unit offer."

In his second cause of action, Bivens alleged a violation of section 17500, incorporating all earlier allegations and further claiming "[o]n one or more occasions defendants advertised merchandise, including mattresses, in a manner that would lead an average reasonable consumer to believe that one could purchase a unit of merchandise at the unit price stated in the advertisements. It was untrue, and therefore misleading, e.g., that defendants would sell a single twin size mattress or box spring at the advertised one-piece price." Bivens additionally alleged that "[a]s part of a plan or scheme, on one or more occasions defendants advertised merchandise, specifically mattresses, in a manner that would lead an average reasonable consumer to believe that he could purchase a unit of the items offered in the advertisements, with the intent not to sell such merchandise at the prices stated therein."

In his third cause of action, Bivens alleged a violation of section 17200, incorporating all the above allegations and further claimed "[D]efendants have engaged in unfair competition ... in that they have engaged in (1) acts or practices that are unlawful; (2) acts or practices that are unfair; (3) acts or practices that violate Chapter 1 (commencing with § 17500) of Part 3, of Division 7, of the Business and Professions Code; and (4) have utilized unfair, deceptive, untrue or misleading advertising. This conduct is actionable, and thereby unlawful pursuant to ... § 17203."

Bivens then specifically alleged that the unlawful acts and practices by Gallery were:

"A. Defendants violated ... section 17504, as explained fully above in the First Cause of Action; [¶] B. [I]n order to obtain the mattresses at the advertised unit price, a consumer must purchase a set of mattresses, which contains two pieces. The advertising of the single mattress is false or otherwise untrue, in that defendants will not sell a single twin mattress at the advertised per-piece price, thereby constituting unfair, deceptive, untrue or misleading advertising that is likely to mislead a reasonable member of the consuming public; [¶] C. Defendants utilized the advertising techniques throughout California, exemplified by Exhibits A through D, which are likely to mislead and confuse the consuming public as to the price of the advertised product payable at the store; and [¶] D. Defendants published the advertisement stating the sale price for mattresses at a single unit price, while intending to not sell the advertised merchandise as advertised, to wit: individually at the per-piece price for twin size mattresses, in violation of the Consumer Legal Remedies Act, Civil Code § 1750, et seq., at § 1770(a)(9) and Business and Professions Code § 17500."

Bivens prayed for a declaratory judgment that Gallery was using unlawful advertising techniques and that such unlawful advertising provided Gallery with an unfair competitive advantage over its law-abiding competitors. Bivens also asked for the appointment of a receiver to conduct an accounting of amounts Gallery had received due to its unlawful advertising and to supervise restitution to any identifiable customers who had paid more than "the advertised prices for one-mattress purchases of the advertised mattresses," for preliminary and permanent injunctive relief, for attorney fees under the "substantial benefit doctrine," as well as costs and investigative expenses.

Gallery demurred to Bivens's complaint on grounds there was no violation of section 17504 as alleged in the first cause of action and with regard to the second and third causes of action there was no violation of any other statute and nothing false and misleading about the advertisements which would confuse a reasonable consumer who would know exactly what he or she was able to buy and for what price. Gallery asserted the complaint should be dismissed in its entirety without leave to amend because Bivens could not amend it to allege facts to support the UCL or false advertising causes of action based on the advertisements which were proper as a matter of law. Gallery also filed a request the court take judicial notice of the legislative history of section 17504. Bivens opposed the motion and request for judicial notice.

On November 5, 2004, the trial court issued a tentative ruling, stating:

"Defendant Gallery['s] Demurrer is sustained without leave to amend as to all three (3) causes of action alleged in the complaint based on violations of ... [sections] 17504, 17500, & 17200. As a matter of law, the subject advertisement gives adequate notice of the price of the sets available for purchase. A `set' as advertised for sale does not constitute `multiple units' within the meaning of [section] 17504. The subject advertisement does not contain any false or misleading statements in violation of [section] 17500. The subject advertisement does not contain any unfair, deceptive, untrue, or misleading advertising in violation of [section] 17200 because the advertisement states the minimum price per piece and notifies reasonable consumers that the sale price only applies to `sets.'"

After hearing oral argument, the court took the matter under submission. On November 9, 2004, the court confirmed its earlier tentative as the final ruling on Gallery's demurrer. On February 23, 2005, the court issued a final order and judgment of dismissal in favor of Gallery.

DISCUSSION

I STANDARD OF REVIEW

Because a demurrer tests the sufficiency of a complaint by raising questions of law (Rader Co. v. Stone (1986) 178 Cal.App.3d 10, 20, 223 Cal.Rptr. 806), for purposes...