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Aryeh v. Canon Business Solutions

June 22, 2010

JAMSHID ARYEH, PLAINTIFF AND APPELLANT,
v.
CANON BUSINESS SOLUTIONS, INC., DEFENDANT AND RESPONDENT.



APPEAL from a judgment of the Superior Court of Los Angeles County, Robert L. Hess, Judge. Affirmed. (Los Angeles County Super. Ct. No. BC 384674).

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

CERTIFIED FOR PUBLICATION

Jamshid Aryeh appeals from the order (judgment) of dismissal of his second amended complaint brought under the Unfair Competition Law (UCL), Business and Professions Code section 17200 et seq.*fn1 The trial court sustained respondent Canon Business Solutions, Inc.'s (Canon) general demurrer without leave to amend, ruling that the allegations failed to state a cause of action and that the claim is barred by laches, the applicable statute of limitations set forth in section 17208,*fn2 and the doctrines of res judicata and collateral estoppel. Appellant contends the continuing violations doctrine extended the statute of limitations, his action is not barred by laches, he adequately pleaded a UCL claim, and neither res judicata nor collateral estoppel applies. We hold the action is barred by limitations, and we therefore affirm.

FACTS*fn3

Canon sells and leases copiers, scanners, printers and other products to customers. In November 2001, appellant, as an individual and doing business as ABC Copy & Print, entered into an agreement with Canon to lease a black and white copier. Under the agreement, appellant agreed to pay a monthly fee in return for a monthly copy allowance, and also agreed to pay an additional excess copy charge for each additional copy beyond the monthly allotment. In February 2002, appellant entered into a second lease agreement with Canon to lease a color copier under similar terms.

Shortly after entering into the copy rental agreements, appellant began noticing that meter readings taken by Canon's field service personnel did not appear to accurately reflect the number of copies actually made on appellant's leased copiers. Appellant asked Canon numerous times, orally and in writing, to repair the copiers and to take accurate readings, to no avail. Consequently, appellant began keeping his own records of the number of copies made on each machine and determined he was being charged for "test" copies made when Canon service personnel repaired or serviced the machines. Despite appellant's attempts to have Canon correct the "excessive" copying charges, Canon failed to reimburse appellant for such overcharges and also charged him late fees.

PROCEDURAL HISTORY

On January 31, 2008, appellant filed this suit on behalf of himself and similarly situated persons residing in the State of California who entered into copy rental agreements with Canon and who were overcharged for copies from four years preceding the action to the date of judgment. The complaint essentially alleged the foregoing facts and contained a single cause of action for unfair competition under the UCL. Appellant alleged that Canon knew or should have known it was charging appellant for excessive copies on the leased machines. Appellant sought injunctive relief, restitution and attorney fees.

Canon generally demurred to the complaint and asserted that the action was barred on various grounds, including the four-year statute of limitations under section 17208.

The trial court sustained the general demurrer. The court ruled appellant had notice of the problem in at least 2002, after the second lease, about six years before he filed this action and well after the four-year statute of limitations had expired. Although the court did not believe appellant could plead around the limitations, the court granted appellant leave to amend.

Appellant filed a first amended complaint, adding an allegation that on various dates between February 2002 and November 2004, Canon's service personnel ran "test copies" during service or maintenance calls.

The first amended complaint omitted the reference to the time appellant discovered the alleged overcharging. Specifically, in paragraph 14, the original complaint alleged, "Shortly after entering into the copy rental agreements with [Canon], [appellant] began to notice that the meter readings taken by [Canon's] field servicemen did not appear to reflect the accurate number of copies . . . ." (Italics added.) The first amended complaint substituted a new paragraph 14 that, among other things, omitted the word "shortly" and changed the allegation to read, "After entering into the copy rental agreements with [Canon], the products leased by [appellant] required service and/or maintenance." (Italics added.)

Appellant further alleged that the test copies run by Canon's service personnel caused appellant to exceed the total allowable copies and required appellant to pay additional fees to Canon. Appellant asserted that, from time to time during the four-year period prior to the filing of his complaint, Canon's service personnel "made from 50 to 900 Test Copies during various service and/or maintenance calls." The amended complaint listed 17 instances during the period commencing February 6, 2002, and ending November 16, 2004, in which Canon's service personnel made test copies. Appellant alleged, "Each time [Canon's] servicemen ran Test Copies . . . was independent of any prior occasions when [Canon's] servicemen ran Test Copies" and each date "resulted in a separate and distinct violation giving rise to separate and distinct damage."

Canon generally demurred to the amended pleading. The trial court again sustained the demurrer and granted appellant leave to amend a second time on counsel for appellant's representations that the payments obtained by Canon violated the written agreements between the parties. The court stated, "[t]he statute of limitations and standing to seek injunctive relief are issues, and I want to know if [appellant] is now a lessee of these Canon products." The court directed appellant's counsel to "put in whatever you think you can do, and we'll address this squarely when we come back."

Appellant filed a second amended complaint, in which he alleged that "[a]s of the date of the filing of this second amended complaint, [appellant] is not now a lessee of Canon products." For the first time, appellant attached copies of the November 2001 and February 2002 contracts. He asserted that neither contract authorized a charge for test copies.

Canon interposed a general demurrer on numerous grounds, including the statute of limitations, and requested that the court sustain the demurrer without leave to amend. Canon argued that the second amended complaint revealed even more defects in appellant's claim. For example, the written agreements appellant attached as exhibits established for the first time that no provision in the contracts required Canon to provide a credit for test copies. The attached agreements also showed that each agreement expired after 60 months. Thus, no injunctive relief would lie as neither agreement was currently in effect. Because appellant took no action to halt the alleged violation of his rights while the agreements were in effect, Canon also argued his claims were barred by laches.

The trial court determined the second amended complaint failed to dispel Canon's objections based on the statute of limitations. The court stated, "[t]here is no continuing practices doctrine that applies here" and "no equitable tolling that I can see that could possibly apply[;] [under section] 17200[,] when the act occurs the clock starts, and here we have an allegation that there was actual knowledge in February of 2002 in an earlier pleading . . . , and you have been given the chance to amend to address this if it was possible."

After further argument by both sides, the court indicated it had not changed its mind. Appellant's counsel requested that "[i]f the court is inclined to sustain the demurrer without leave [to amend], I would ask the court to do it on the statute of limitations ground because . . . there needs to be some clarity, and I would like the opportunity to pursue that." The court concluded appellant was "concededly" aware of his claim "almost six years in advance of the suit being filed" and sustained the demurrer without leave to amend.

This timely appeal followed.

STANDARD OF REVIEW

When a demurrer is sustained, we ascertain whether the complaint states facts sufficient to constitute a cause of action. (Blank, supra, 39 Cal.3d at p. 318.) "[W]hen [a demurrer] is sustained without leave to amend, we decide whether there is a reasonable possibility that the defect can be cured by amendment: if it can be, the trial court has abused its discretion and we reverse; if not, there has been no abuse of discretion and we affirm." (Ibid.) The burden of proving such reasonable ...


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