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Drum v. San Fernando Valley Bar Association

February 24, 2010

JOEL DRUM, PLAINTIFF AND APPELLANT,
v.
SAN FERNANDO VALLEY BAR ASSOCIATION DEFENDANT AND RESPONDENT.



APPEAL from a judgment of the Superior Court of Los Angeles County, James A. Kaddo, Judge. Affirmed. (Los Angeles County Super. Ct. No. LC084102).

The opinion of the court was delivered by: Mosk, J.

CERTIFIED FOR PUBLICATION

INTRODUCTION

We hold that a voluntary bar association did not engage in an unfair business practice in violation of the California Unfair Competition Law (Bus. & Prof. Code, § 17200 et seq.)*fn1 (UCL) when, allegedly, it unilaterally refused to sell its membership mailing list to a person who intended to offer low-priced mediation services in competition with higher-priced mediation services offered by some of the association's members. We therefore affirm the judgment of dismissal, entered after the trial court sustained the association's demurrer.

BACKGROUND

Plaintiff and appellant Joel Drum (plaintiff) alleged that he was a disbarred attorney who intended to offer his services as a mediator at relatively low prices. He wished to solicit members of defendant and respondent San Fernando Valley Bar Association (Association), a voluntary bar association, to engage his mediation services. Plaintiff attempted to purchase from the Association its membership mailing list, which the Association sells to businesses that offer products or services of interest to its members. The Association refused to sell the list to plaintiff, ostensibly on the ground that plaintiff had been disbarred. Plaintiff alleged that this reason was a pretext, and that the Association's true reason for refusing to sell him the list was to protect its members who were mediators from price competition. Plaintiff alleged that this was an unfair business practice in violation of the UCL, and sought a mandatory injunction requiring the Association to sell its mailing list to him.

The Association demurred. The trial court sustained the demurrer with leave to amend on the ground that plaintiff had failed to allege facts sufficient to state a claim. Plaintiff elected not to amend. The trial court entered a judgment of dismissal and plaintiff timely appealed.

DISCUSSION

In reviewing the sufficiency of a complaint against a demurrer, we accept as true all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) When, as here, "a plaintiff is given the opportunity to amend his complaint and elects not to do so, strict construction of the complaint is required and it must be presumed that the plaintiff has stated as strong a case as he can." (Gonzales v. State of California (1977) 68 Cal.App.3d 621, 635, disapproved on another ground in City of Stockton v. Superior Court (2007) 42 Cal.4th 730, 740; see also Reynolds v. Bement (2005) 36 Cal.4th 1075, 1091; Alfaro v. Community Housing Improvement System & Planning Assn., Inc. (2009) 171 Cal.App.4th 1356 , 1372.) In these circumstances, we will affirm the judgment if the complaint is objectionable on any ground raised in the demurrer. (Gutkin v. University of Southern California (2002) 101 Cal.App.4th 967, 981; Soliz v. Williams (1999) 74 Cal.App.4th 577, 585.)

The purpose of the UCL "is to protect both consumers and competitors by promoting fair competition in commercial markets for goods and services. [Citation.]" (Kasky v. Nike, Inc. (2002) 27 Cal.4th 939, 949 (Kasky); McKell v. Washington Mutual, Inc. (2006) 142 Cal.App.4th 1457, 1470.) The UCL "defines `unfair competition' to mean and include `any unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising and any act prohibited by [the false advertising law (§ 17500 et seq.) ].' (§ 17200.)" (Kasky, supra, 27 Cal.4th at p. 949.) Whether a plaintiff has standing to sue under the UCL and whether an alleged business practice violated the UCL both may be resolved at the demurrer stage in appropriate cases. (See, e.g., Citizens of Humanity, LLC v. Costco Wholesale Corp. (2009) 171 Cal.App.4th 1, 22 [failure to plead standing]; Davis v. Ford Motor Credit Co. (2009) 179 Cal.App.4th 581, 598 (Davis) [failure to allege unfair business practice]; Gregory v. Albertson's, Inc. (2002) 104 Cal.App.4th 845, 857 (Gregory) [failure to allege substantive UCL violation].)

A. Standing

In his reply brief on appeal, plaintiff conceded that he had failed to allege adequately damages-that is, that he "suffered an injury in fact and has lost money or property as a result of the unfair competition." (§ 17204.) Plaintiff did not allege that he lost or expended or was denied any money or property as the result of the Association's refusal to sell him its membership mailing list. Plaintiff thus failed to allege facts showing his standing under section 17204 to prosecute an action under the UCL. (Amalgamated Transit Union, Local 1756, AFL-CIO v. Superior Court (2009) 46 Cal.4th 993, 1000; Californians for Disability Rights v. Mervyn's, LLC (2006) 39 Cal.4th 223, 228-229; Hall v. Time Inc. (2008) 158 Cal.App.4th 847, 852-855 [injury in fact may not be "conjectural" or "hypothetical"; injury occurs when the plaintiff expends money, loses money or property, or is denied money to which has cognizable claim]; see also Buckland v. Threshold Enterprises, Ltd. (2007) 155 Cal.App.4th 798, 817 [remedies for a person under the UCL "are restricted to injunctive relief and restitution"]; Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1151 ["`Compensation for a lost business opportunity is a measure of damages and not restitution to the alleged victims'"]; Stern, Business & Professions Code § 17200 Practice (The Rutter Group 2009) ch. 7C., pp. 7-23 to 7-28 (rev. #1, 2009).) Although the standing issue was not raised in defendant's notice of demurrer*fn2 or addressed by the trial court, a plaintiff's standing to sue is a threshold issue to be resolved before reaching the merits and may be raised at any time in the proceedings, including on appeal. (Buckland v. Threshold Enterprises, Ltd., supra, 155 Cal.App.4th at p. 813.)

Plaintiff has requested of this Court that he be allowed to amend his complaint to plead facts sufficient to establish his standing, although he has not stated what he would allege. (See Medina v. Safe- Guard Products (2008) 164 Cal.App.4th 105, 112, fn. 8 [burden on plaintiff to show how complaint would be amended to state a cause of action].) But because plaintiff also failed to plead a substantive violation of ...


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