Wiseman Park, LLC v. S. Glazer's Wine & Spirits, LLC

16 Cal.App.5th 110

223 Cal.Rptr.3d 802

WISEMAN PARK, LLC, Plaintiff and Appellant,

v.SOUTHERN GLAZER'S WINE AND SPIRITS, LLC, Defendant and Respondent.

B266118

Court of Appeal, Second District, Division 2, California.

Filed October 12, 2017

Matthew E. Hess, Beverly Hills; Green & Noblin, James Robert Noblin, Larkspur, for Plaintiff and Appellant.

Korshak, Kracoff, Kong & Sugano, Keith R. Thorell, Los Angeles, Clement Jon Kong, Sacramento, for Defendant and Respondent.

GOODMAN, J.^*

Wiseman Park, LLC (appellant) appeals from the judgment entered following the trial court sustaining the demurrer of Southern Glazer's Wine and Spirits, LLC (respondent)¹ to appellant's complaint without leave to amend. Appellant, the holder of a license to sell alcoholic beverages in its restaurant, purchased alcoholic beverages from respondent, a licensed wholesale distributor of alcoholic beverages. In this action, appellant seeks to recover "carrying charges" it paid respondent on the theory that those charges were not permitted by the Alcoholic Beverage Control Act (ABC Act).² The trial court ruled that the California Department of Alcoholic Beverage Control (Department) has exclusive jurisdiction over appellant's claims because appellant's allegations "directly implicate the sale of alcohol."

The Department does have exclusive jurisdiction to issue, deny, suspend and revoke alcoholic beverage licenses according to terms of the ABC Act and regulations adopted pursuant to it. We hold, however, that the consequences of committing a violation of the ABC Act by imposing charges of the type collected by respondent from appellant in this case are not limited to those which the Department may impose on its licensees and do not bar the contract, unfair competition and declaratory relief claims alleged in appellant's complaint. Accordingly, we reverse the trial court's order sustaining respondent's demurrer and remand this matter for further proceedings.

BACKGROUND³

Appellant is a dissolved California limited liability company which operated a restaurant in Los Angeles, California, from approximately November 2003 through December 2010.⁴ During that time, appellant held an "eating place" alcoholic beverage license issued by the Department. This license permitted appellant to purchase alcoholic beverages at wholesale and resell them at retail to patrons of its restaurant.

Respondent is a Florida corporation, authorized to transact business in California, which holds importer and/or wholesale distributor alcoholic beverage licenses issued by the Department.

In November 2003, appellant entered a credit agreement with respondent to facilitate the purchase of alcoholic beverages. Paragraph 2 of the standardized form used by respondent, which appellant signed, stated, "All sales are made in accordance with state law, including provisions of the Alcoholic Beverage Law mandating a one-percent (1%) penalty on all past-due invoices from the forty-third (43rd) day from the date of delivery and each thirty (30) days thereafter." Paragraph 3 of the credit agreement stated, "In addition to the state-mandated penalty charge, a one percent (1%) carrying charge will be charged on all past-due invoices from the forty-third (43rd) day from the date of delivery and each thirty (30) days thereafter."

The terms of paragraph 2 of the credit agreement are virtually identical to text within section 25509, with the exception that the statute does not use the word "penalty." Section 25509 provides in pertinent part that a wholesaler who sells alcoholic beverages to a retailer and who does not receive payment "by the expiration of the 42nd day from the date of delivery shall charge the retailer 1 percent of the unpaid balance for [the alcoholic beverages] on the 43rd day from the date of delivery and an additional 1 percent for each 30 days thereafter." There is no mention of a carrying charge in section 25509.

After entering the credit agreement with respondent, appellant purchased alcoholic beverages on credit from respondent from time to time. When respondent delivered alcoholic beverages to appellant, respondent presented appellant with its standard invoice. The invoice included the following terms of payment: "This invoice is payable in thirty (30) days. A one percent (1%) carrying charge will be added to the current statutory charges of one percent (1%) ( CA B&P Code 25509 ) on all balances unpaid after forty-two (42) days and each thirty (30) days thereafter."

On occasion, appellant paid invoices more than 42 days after their due dates. Respondent then charged appellant both the 1 percent "penalty" and the 1 percent "carrying charge." Appellant paid both charges.

In June 2014, appellant filed this lawsuit seeking recovery of the "carrying charges" it had paid to respondent; also seeking similar recovery on behalf of all others similarly situated. Appellant's complaint alleges that section 25509 limits wholesalers to collecting the 1 percent statutory charge on accounts not paid in full by the 42nd day (and collecting a similar charge each 30 days thereafter) and that respondent's "carrying charges" are not permitted by section 25509. Appellant alleges five causes of action: declaratory relief, breach of contract, money had and received, open book account and violation of section 17200.

The trial court sustained without leave to amend respondent's demurrer to the complaint, accepting respondent's contention that the Department has exclusive jurisdiction over all matters relating to the sale of alcohol.

CONTENTION

Appellant contends the Department's exclusive jurisdiction does not extend to encompass this contract dispute between businesses; and, in any event, California's unfair competition statute affords appellant a remedy.⁵

DISCUSSION⁶

In sustaining respondent's demurrer to appellant's complaint without leave to amend, the trial court ruled: "... because the allegations of the Complaint directly implicate the sale of alcohol, and since the Department has exclusive jurisdiction in this area, the Complaint cannot go forward in this court. See B&P Code § 23090.5 (noting that ‘[n]o Court of this state, except the Supreme Court, and the courts of appeal to the extent specified in this article, shall have jurisdiction to review, affirm, reverse, correct, or annul any order, rule or decision of the department or suspend, stay or delay the operation or execution thereof, or restrain, enjoin, or interfere with the department in the performance of its duties ....’) (Emphasis added.)" The trial court concluded, "Plaintiff's remedy, if any, would be before the ABC, with the right to seek redress before the Court of Appeal and California Supreme Court under § 23090.5."

I. Standards of Review

On appeal from a judgment dismissing an action after sustaining a demurrer without leave to amend, the standard of review is well settled. The reviewing court gives the complaint a reasonable interpretation, and treats the demurrer as admitting all material facts properly pleaded. ( Blank v. Kirwan (1985) 39 Cal.3d 311, 318, 216 Cal.Rptr. 718, 703 P.2d 58 ; Buckaloo v. Johnson (1975) 14 Cal.3d 815, 828, 122 Cal.Rptr. 745, 537 P.2d 865.) The appellate court does not, however, assume the truth of contentions, deductions or conclusions of law. ( Moore v. Regents of University of California (1990) 51 Cal.3d 120, 125, 271 Cal.Rptr. 146, 793 P.2d 479.) The judgment must be affirmed "if any one of the several grounds of demurrer is well taken. [Citations.]" ( Longshore v. County of Ventura (1979) 25 Cal.3d 14, 21, 157 Cal.Rptr. 706, 598 P.2d 866.) However, it is error for a trial court to sustain a demurrer when the plaintiff has stated a cause of action under any possible legal theory. ( Barquis v. Merchants Collection Assn. (1972) 7 Cal.3d 94, 103, 101 Cal.Rptr. 745, 496 P.2d 817.) And it is an abuse of discretion to sustain a demurrer without leave to amend if the plaintiff shows there is a reasonable possibility any defect identified by the defendant can be cured by amendment. ( Blank v. Kirwan, supra, 39 Cal.3d at p. 318, 216 Cal.Rptr. 718, 703 P.2d 58 ; Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 966–967, 9 Cal.Rptr.2d 92, 831 P.2d 317.)

Review of the trial court's judgment in this case will require us to construe provisions of both our state Constitution and state statutes. The applicable principles of construction are similar. Whether construing a constitutional or statutory provision, our paramount task is to ascertain the intent of those who enacted it. ( Davis v. City of Berkeley (1990) 51 Cal.3d 227, 234, 272 Cal.Rptr. 139, 794 P.2d 897 ; Thompson v. Department of Corrections (2001) 25 Cal.4th 117, 122, 105 Cal.Rptr.2d 46, 18 P.3d 1198 ; Bighorn-Desert View Water Agency v. Verjil (2006) 39 Cal.4th 205, 212, 46 Cal.Rptr.3d 73, 138 P.3d 220 ; Richmond v. Shasta Community Services Dist . (2004) 32 Cal.4th 409, 418, 9 Cal.Rptr.3d 121, 83 P.3d 518.) To determine the voters' intent, courts look first to the constitutional text, giving words their ordinary meanings. ( Bighorn-Desert View Water Agency, at p. 212, 46 Cal.Rptr.3d 73, 138 P.3d 220 ; Richmond, at p. 418, 9 Cal.Rptr.3d 121, 83 P.3d 518.) And, when a provision of the Constitution is ambiguous, a court ordinarily must adopt the interpretation which carries out the intent and objective of the drafters of the provision and of the people by whose vote it was enacted. ( Mosk v. Superior Court (1979) 25 Cal.3d 474, 495, 159 Cal.Rptr. 494, 601 P.2d 1030, superseded on other grounds in Adams v. Commission on Judicial Performance (1994) 8 Cal.4th 630, 650, 34 Cal.Rptr.2d 641, 882 P.2d 358.) New provisions of the Constitution must be considered with reference to the situation intended to be remedied or provided for. ( The Recorder v. Commission on Judicial Performance (1999) 72 Cal.App.4th 258, 269, 85 Cal.Rptr.2d 56 ; In re Quinn (1973) 35 Cal.App.3d 473, 483, 110 Cal.Rptr. 881.)⁷

The same principles guide our review of enactments of...