Immigrant Rights Def. Council, LLC v. Hudson Ins. Co.

Decision Date18 October 2022
Docket NumberB313878
Citation84 Cal.App.5th 305,300 Cal.Rptr.3d 259
Parties IMMIGRANT RIGHTS DEFENSE COUNCIL, LLC, Plaintiff and Appellant, v. HUDSON INSURANCE COMPANY, Defendant and Respondent.
CourtCalifornia Court of Appeals Court of Appeals

Medvei Law Group and Sebastian M. Medvei for Plaintiff and Appellant.

Humphrey, Berger & Associates, Clark H. Cameron and Kenneth S. Humphrey, Calabasas, for Defendant and Respondent.

WILLHITE, Acting P. J.

The Immigration Consultant Act (ICA) ( Bus. & Prof. Code, § 22440 et seq. ), specifically, Business and Professions Code section 22443.11 requires an immigration consultant to procure and file a bond in the amount of $100,000. Any person who suffers damages by reason of the immigration consultant's fraud, misrepresentation, or failure to provide services has a right of action against the consultant and the surety on the ICA bond. ( §§ 22443.1, 22446.5, 22447.)

Appellant Immigrant Rights Defense Council, LLC (IRDC or appellant) is a self-described "watchdog association" that brings actions for injunctive relief against immigration consultants under section 22446.5. Under subdivision (b) of that section, any person who believes an ICA violation has been committed may bring a civil action "on behalf of the general public" seeking solely injunctive relief. In October of 2017, appellant brought over 90 such actions against immigration consultants, two of whom had bonds issued by respondent Hudson Insurance Company (respondent or "Hudson").

After appellant prevailed in its suit against the two Hudson-bonded consultants, appellant filed suit against respondent to recover its attorney fees and costs against the ICA bond. The trial court granted summary judgment in favor of Hudson, concluding that appellant was not entitled to recover these litigation costs against an ICA bond.

On appeal, appellant contends the trial court committed legal error, citing general principles of surety law which provide that a surety's liability is typically commensurate with the liability of its bond principal. However, as explained in our opinion, a surety issuing a statutory bond is liable only to the extent indicated in the code section under which the surety executes the bond. Under the plain language of the relevant bond statutes, a non-aggrieved person who suffers no damages is not entitled to recovery from an ICA bond. Because appellant does not fall within the class of persons who may recover against an ICA bond, the trial court properly granted summary judgment in favor of respondent. We therefore affirm the trial court's judgment.

BACKGROUND
I. The ICA

The ICA makes it "unlawful for any person, for compensation, other than persons authorized to practice law ... to engage in the business or act in the capacity of an immigration consultant within this state except as provided in this chapter." ( § 22440.) An immigration consultant can assist with certain immigration paperwork ( § 22441 ) but must first pass a background check and submit fingerprints to the Department of Justice ( §§ 22441.1, 22442.4 ).

In addition to limiting the services that can be provided by immigration consultants, the ICA contains various consumer protection regulations pertaining to advertising, bonding, and the manner in which immigration consultants can conduct their business. (See, e.g., §§ 22442 [requiring a written contract containing certain terms to be provided to each and every customer of an immigration consultant]; 22442.1 [requiring signed receipts for payments made by clients]; 22442.2, subd. (c)(1) [requiring that every advertisement of an immigration consultant clearly and conspicuously state that the immigration consultant is not an attorney]; 22443.1 [requiring that immigration consultant secure a $100,000 surety bond before engaging in the business].)

Section 22446.5, sets forth three classes of plaintiffs who may pursue actions against immigration consultants who violate the ICA: (1) "A person claiming to be aggrieved by a violation of this chapter by an immigration consultant may bring a civil action for injunctive relief or damages, or both" (subd. (a)); (2) "Any other party who, upon information and belief, claims a violation of this chapter has been committed by an immigration consultant may bring a civil action for injunctive relief on behalf of the general public" (subd. (b)); and (3) "The Attorney General, a district attorney, or a city attorney who claims a violation of this chapter has been committed by an immigration consultant, may bring a civil action for injunctive relief, restitution, and other equitable relief against the immigration consultant in the name of the people of the State of California" (subd. (c)).

The first two categories of plaintiffs who prevail in their actions are entitled to "reasonable attorneys’ fees and costs." ( § 22446.5.)2

Appellant, the IRDC, is a non-governmental organization ("watchdog association") that brings actions under the ICA solely for injunctive relief. Appellant's objective is to "shut down illegally operated immigration consultant businesses in California."

II. The Underlying Lawsuits Filed by Appellant Against Immigration Consultants3

Between October 6 and October 20, 2017, appellant, acting as a private attorney general,4 filed more than 90 lawsuits in Los Angeles County pursuant to section 22446.5, naming different immigration consultants as defendants. Two of the consultants sued by appellant had ICA bonds issued by respondent: John J. Lee [dba Union Trans. and Prof. Services] and Jonathan Licup [dba JS Connections Tax and Legal Services]. The pleadings against both defendants reflect that each unverified complaint was nearly identical, alleging the same list of 20 ICA violations believed to have been committed by each defendant.

Lee represented himself in pro. per. against the lawsuit and appellant ultimately obtained a default judgment against Lee wherein Lee is permanently enjoined from engaging in the business of an immigration consultant. The court awarded statutory attorney fees and court costs in favor of appellant and against Lee in the amount of $7,170.00.

Consultant Licup, represented by counsel, defended against the lawsuit for approximately one year. Ultimately, appellant and Licup entered into a stipulation for entry of final judgment. In that judgment, Licup agreed to be permanently enjoined from engaging in the business of an immigration consultant, but admitted to no wrongdoing. On motion, the court awarded statutory attorney fees and court costs in favor of appellant and against Licup in the amount of $17,167.65.

Respondent was not named as a defendant in either lawsuit and was not made aware of those lawsuits until after appellant had secured its judgments against Lee and Licup.

III. Appellant's Complaint Against Respondent Hudson Insurance Co.

On December 18, 2019, appellant filed its complaint for recovery from Hudson as the guarantor on the respective immigration bonds issued to Lee and Licup, seeking full recovery of its court awarded costs, including attorney fees. Appellant set forth one cause of action: payment by guarantor.

IV. The Cross-Motions for Summary Judgment

Appellant's motion for summary judgment asserted that the judgments against Lee and Licup were prima facie evidence of their liability and that because Hudson had no evidence to rebut that prima facie showing, appellant was entitled to recover from the judgment debtors’ immigration consultant bonds.

Hudson, on the other hand, argued that appellant could not recover from the immigration consultant bonds because the bonds were restricted to providing compensation to persons who have suffered damages as a result of ICA violations.5

In the partiescross-motions, the parties agreed on the material facts but presented conflicting interpretations of the ICA and the relevant bonds. Both parties presented prior unpublished opinions from other courts: appellant presented a federal district court opinion issued by a magistrate judge finding that another insurer, Hartford, was required to pay appellant's attorney fees and costs from the bond on another judgment for injunctive relief against an immigration consultant; respondent presented a Los Angeles superior court appellate division opinion finding in favor of Hartford in connection with a different judgment for injunctive relief against an immigration consultant.6

V. Trial Court's Decision

On May 6, 2021, the trial court issued a six-page, well-reasoned ruling in favor of respondent and against appellant on the competing summary judgment motions. In its ruling, the trial court found that in the case of statutory bonds, such as the ICA bonds at issue in this case, the surety's liability is limited to the express terms of the bond and any applicable statutes incorporated into the bond. The court proceeded to find that under the plain language of these terms, "only certain species of conduct (e.g., fraud and nonperformance) that causes [sic ] damages" qualify for bond recovery. Because appellant failed to show that "its recoveries against Lee and Licup were based on injurious conduct causing damages ... rather than just regulatory violations," appellant had failed to show a triable issue on its claim. Accordingly, respondent was entitled to summary judgment.

The trial court's ruling was subsequently reduced to a judgment in favor of respondent and against appellant on June 1, 2021. Appellant timely appealed.

DISCUSSION

Appealing from the order granting summary judgment in favor of respondent, appellant contends that, contrary to the trial court's ruling, the relevant statutory provisions of the ICA do not preclude appellant's recovery against an ICA bond. The trial court's order is subject to de novo review, because the relevant underlying facts are not in dispute and the issues before us are questions of statutory interpretation. ( MacIsaac v. Waste Management Collection & Recycling, Inc. (2005) 134 Cal.App.4th 1076,...

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