Los Angeles County. Super. Ct. No. BC3211681. Ct.App. 2/7 B212512 Judge: Victoria G. Chaney.
The opinion of the court was delivered by: Kennard, J.
Review Granted XXX 174 Cal.App.4th 82
Under California's unfair competition law (Bus. & Prof. Code, § 17200 et seq.), plaintiffs, who are senior citizens, sued an insurance company, alleging deceptive business practices relating to the purchase and sale of annuity contracts. Plaintiffs sought a monetary award, and they asserted that statutory law entitled them to a trebling of the award.
Plaintiffs rely on Civil Code section 3345, which provides that in an action brought by senior citizens to redress unfair competition, a trier of fact may award up to three times the amount imposed as "a fine, or a civil penalty or other penalty, or any other remedy the purpose or effect of which is to punish or deter." (Id., § 3345, subd. (b).) At issue here is the applicability of that provision to the unfair competition law, which generally limits a private party's available remedies to injunctions and restitution. (Bus. & Prof. Code, § 17203.)
Weconclude that because Civil Code section 3345 authorizes the trebling of a remedy only when it is in the nature of a penalty, and because restitution under the unfair competition law is not a penalty, an award of restitution under the unfair competition law -- which plaintiffs seek here -- is not subject to section 3345's trebling provision.
Plaintiffs James A. Clark, Orville R. Camien, Mary F. Simms-Schmidt, and Carmen R. Armstrong filed this lawsuit against, among others, defendant National Western Life Insurance Company. Plaintiffs' complaint alleged that defendant violated California's unfair competition law (Bus. & Prof. Code, § 17200 et seq.) by using deceptive business practices to induce senior citizens to buy high-commission annuity contracts with large penalties for "early surrender." Plaintiffs sought an injunction, restitution, and under Civil Code section 3345 treble the amount of any monetary award.
The trial court granted plaintiffs' motion for class action certification of their unfair competition law claim. The class was certified as "All California residents who purchased National Western Life Insurance Company deferred annuities when they were age 65 or older" under specified certificate forms issued by defendant. The trial court then granted defendant insurer's motion for judgment on the pleadings (Code Civ. Proc., § 438) and ruled that Civil Code section 3345's trebled recovery provision did not apply to private actions brought under the unfair competition law.
Plaintiffs petitioned the Court of Appeal for a writ of mandate. That court granted the petition and directed the trial court to enter a new order denying defendant's motion for judgment on the pleadings. We granted defendant's petition for review.
Before we consider defendant insurer's challenge to the Court of Appeal's holding, we briefly summarize the relevant statutes and the Court of Appeal's conclusions.
Civil Code section 3345 applies "in actions brought by, on behalf of, or for the benefit of senior citizens or disabled persons, as those terms are defined in subdivisions (f) and (g) of Section 1761, to redress unfair or deceptive acts or practices or unfair methods of competition." (Civ. Code, § 3345, subd. (a).)*fn1 Subdivision (b) of Civil Code section 3345 allows for a recovery of up to three times the amount of a monetary award whenever "a trier of fact is authorized by a statute to impose either a fine, or a civil penalty or other penalty, or any other remedy the purpose or effect of which is to punish or deter," if the trier of fact finds any of the factors identified in the statute to exist.*fn2
The unfair competition law prohibits "any unlawful, unfair or fraudulent business act or practice" (Bus. & Prof. Code, § 17200); actions under this law may be brought by either private plaintiffs or public prosecutors (id., § 17204). In a private unfair competition law action, the remedies are " 'generally limited to injunctive relief and restitution.' " (Kasky v. Nike, Inc. (2002) 27 Cal.4th 939, 950; see Bus. & Prof. Code, § 17203.) When the action is brought by public prosecutors, the recovery may also include a civil penalty up to $2,500 for each violation. (Bus. & Prof. Code, § 17206.) Not recoverable are damages, including punitive damages and increased or enhanced damages. (Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1148; Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Co. (1999) 20 Cal.4th 163, 179.)
Here, the Court of Appeal held that under the plain meaning of Civil Code section 3345 its trebled recovery provision applied to plaintiffs' demand for a monetary award under the unfair competition law, because the action here was brought by senior citizens "to redress unfair or deceptive acts or practices or unfair methods of competition." (Civ. Code, § 3345, subd. (a), italics added; see id., subd. (b).) The Court of Appeal further concluded that an award of restitution -- the only monetary remedy available in a private action brought under the unfair competition law -- has a deterrent purpose and effect and therefore falls within the ...