Outboard Marine Corp. v. Superior Court

• Decision Date: 09 October 1975
• Citation: 124 Cal.Rptr. 852,52 Cal.App.3d 30
• Court: California Court of Appeals Court of Appeals
• Parties: OUTBOARD MARINE CORPORATION and William France, Petitioners, v. The SUPERIOR COURT of the State of California IN AND FOR the COUNTY OF SACRAMENTO, Respondent; Roy HOWARTH and all others similarly situated, Real Parties in Interest. Civ. 15179.

Page 852

124 Cal.Rptr. 852

52 Cal.App.3d 30

OUTBOARD MARINE CORPORATION and William France, Petitioners, v. The SUPERIOR COURT of the State of California IN AND FOR the COUNTY OF SACRAMENTO, Respondent Roy HOWARTH and all others similarly situated, Real Parties in Interest.

Civ. 15179.

Court of Appeal, Third District, California.

Oct. 9, 1975.

Diepenbrock, Wulff, Plant & Hannegan by David A. Riegels and James T. Freeman, Sacramento, for petitioners.

Rust and Armenis by David C. Rust and David Brown, Sacramento, for respondent.

EVANS, Associate Justice.

Petitioners Outboard Marine Corporation and William France (hereafter OMC) seek a writ of mandate directing the respondent superior court to vacate its order overruling petitioners' demurrer to the first amended complaint and to sustain the demurrer with leave to amend.

We are called upon to construe both the substantive and procedural provisions of the California Consumers Legal Remedies Act (Civ.Code, § 1750 et seq.) which proscribes certain unfair or deceptive practices and provides for damages. Petitioner OMC manufactures an off-road vehicle known as a Cushman Trackster. Petitioner France is a regional sales representative of OMC. Real party in interest Roy Howarth (hereafter Howarth) and all others similarly situated are alleged purchasers of the trackster.

Howarth filed a class action pursuant to Code of Civil Procedure section 382 ¹ against petitioners alleging in one cause of action fraudulent concealment of dangerous defects and false representation as to the capabilities of the vehicle.

Petitioners' demurrer to the original complaint asserted the Consumers Legal Remedies Act provided the exclusive remedy in an action involving deceptive representation, and required an allegation of compliance with the procedural requisites of the act. The respondent court sustained the demurrer and granted 30 days leave to amend. The first amended complaint separated into two causes of action the allegations of the original complaint. The first cause of action was brought pursuant to Code of Civil Procedure section 382 for 'Fraudulent Concealment of Defective Design.' It alleged that petitioners owed a duty to purchasers to disclose and not suppress the fact that the trackster was defectively designed; that petitioners knew the vehicle was unstable and would roll over forward on a downgrade and that its braking system was totally defective; that petitioners deliberately and fraudulently concealed the defects from Howarth; and finally, although petitioners knew the trackster would not operate within 'its design criteria,' knew Howarth, as a purchaser, would attempt to operate the machine within its purported design capabilities.

The second cause of action was brought under the Consumers Legal Remedies Act alleging fraudulent misrepresentation. It stated that petitioners deceitfully and falsely represented to Howarth and others similarly situated that the trackster was designed to operate within the parameters of the following specifications:

(1) Gradeability: 100% Grade or 45 plus;

(2) Side hill ability: 45 ;

(3) Literally makes the impassable possible;

(4) '(P)rovide the traction to get . . . up grades as steep as 100 percent and even greater;'

(5) The vehicle runs smoothly over rocks, stones and rough places;

(6) 'The nature of an all-terrain vehicle is such that it is often driven into wild, hitherto inaccessible country. . . . Here it is at last--the most reliable all-terrain vehicle ever produced--the one that takes you in and brings you back!'

Petitioners' demurrer to the first amended complaint again contended that the first cause of action was covered by the Consumers Legal Remedies Act and that compliance with the act must be alleged in order to plead a cause of action. It was asserted with respect to the second cause of action that compliance with the pre-complaint notice procedures of the act had not been adequately alleged. The respondent court overruled petitioners' demurrer to the first amended complaint, both as to the first and second causes of action.

I

We initially consider whether the first cause of action in the first amended complaint entitled, 'Class Action Pursuant to Code of Civil Procedure § 382; Cause of Action for Fraudulent Concealment of Defective Design' is covered by the Consumers Legal Remedies Act. The Logislature provided in Civil Code section 1751 a statement of public policy making any attempted waiver by a consumer of the provisions of the Consumers Legal Remedies Act contrary to public policy unenforceable and void. Civil Code section 1770 sets forth the proscribed practices, and in part provides as follows:

'The following . . . unfair or deceptive acts or practices undertaken by any person in a transaction intended to result or which results in the sale or lease of goods or services to any consumer are unlawful:

'. . .

'(e) Representing that goods or services have . . . characteristics, . . . uses, (or) benefits, . . . which they do not have . . ..

'. . .

'(g) Representing that goods or services are of a particular standard, quality, or grade, . . . if they are of another.

'. . .

'(i) Advertising goods or services with intent not to sell them as advertised.

'. . .

'(n) Representing that the subject of a transaction has been supplied in accordance with a previous representation when it has not.'

The parties here do not dispute that for complaints, including class actions, alleging conduct described in Civil Code section 1770, filed after January 1, 1971, the effective date of the Consumers Legal Remedies Act, the procedures specified in the act must be utilized and alleged. The act provides the exclusive remedy for conduct falling within its purview. (Vasquez v. Superior Court (1971) 4 Cal.3d 800, 94 Cal.Rptr. 796, 484 P.2d 964.)

The real parties in interest argue that the Consumers Legal Remedies Act is the exclusive remedy only for conduct which is alleged in terms specified by the statute. Petitioners argue the act provides the exclusive remedy for conduct which is reasonably described or encompassed by the language of the act even though pleaded in terms not specified in the statute.

We conclude the Consumers Legal Remedies Act provides the exclusive remedy for conduct encompassed by the act, regardless of the language utilized in the pleading. To hold otherwise would allow avoidance of the coverage of the act merely by pleading in language not specified by the statute. In Vasquez, the Supreme Court was presented with the argument that since the act contains important protective procedures for defendants, if consumers were allowed to bring class actions under Code of Civil Procedure section 382 as an alternative to the act, 'no plaintiff will choose to sue under the act . . ..' (P. 818, 94 Cal.Rptr. p. 807, 484 P.2d p. 975.)

The purpose and intent of the Legislature in passing the statute must be considered. (Cooper v. Swoap (1974) 11 Cal.3d 856, 115 Cal.Rptr. 1, 524 P.2d 97.) The Supreme Court has made it clear in Vasquez that the legislative intent was not to grant consumers the unfettered discretion whether or not to sue under the act. The court pointed out that consumers have no choice if the defendant's conduct falls within the purview of the act, for it provides the exclusive remedy.

As we view the applicable statutory provisions, the unreasonableness of Howarth's assertion is obvious. Substance must prevail over form, and the provisions of the Consumers Legal Remedies Act must not be technically confined to pleading allegations couched only in the language of the statute. As this court stated in Lampley v. Alvares (1975) 50 Cal.App.3d 124, 128, 123 Cal.Rptr. 181, 184, 'Where a statute is susceptible of two constructions, one leading to mischief or absurdity, and the other consistent with justice and common sense, the latter must be adopted.'

The conduct described in the first amended complaint reasonably and unquestionably falls within the activities proscribed by Civil Code section 1770.

It is fundamental that every affirmative misrepresentation of fact works a concealment of the true fact. The first cause of action of the first amended complaint is a semantical attempt to evade the requirement of the act by pleading the converse of the conduct specified in the act. A comparison of the allegations contained in the second cause of action with the concealment allegations of the first cause of action reveals that the two causes of action allege, in different language, identical conduct. The second cause of action alleges, among other things, that the Cushman Trackster has 'Great ability: 100% Grade or 45 plus' while the first cause of action stated that it was conceded that the trackster did not have that capability; to say that the hydrastatic transmission provides 'positive braking' as alleged in the second cause of action, necessarily conceals that the braking system is 'totally defective.' The allegation that the trackster's 'maneuverability is unsurpassed' because of the t-bar control as alleged in the second cause of action necessarily conceals that '(t)he control handle (t-bar) aggravates the latent instability of the machine' as alleged in the first cause of action.

Fraud or deceit may consist of the suppression of a fact by one who is bound to disclose it or who gives information of other facts which are likely to mislead for want of communication of that fact. (Moe v. Transamerica Title Ins. Co. (1971) 21 Cal.App.3d 289, 306, 98 Cal.Rptr. 547.)

In General Acc. etc. Corp. v. Indus. Acc. Com. (1925) 196 Cal. 179, 237 P. 33, in reviewing an award made by the Industrial Accident Commission, the Supreme Court at page 190 stated: 'Respondent Commission attempts to point out a distinction between a concealment of a material fact and a misrepresentation as to such fact. The legal effect in each instance amounts to the same thing, fraud.'

'Where failure to disclose a...