Sc Manufactured Homes, Inc. v. Liebert

• Decision Date: 21 April 2008
• Docket Number: No. B192342.,B192342.
• Citation: 76 Cal.Rptr.3d 73,162 Cal.App.4th 68
• Court: California Court of Appeals Court of Appeals
• Parties: SC MANUFACTURED HOMES, INC. et al., Plaintiffs and Appellants, v. Norman Scott LIEBERT et al., Defendants and Respondents.

76 Cal.Rptr.3d 73

162 Cal.App.4th 68

SC MANUFACTURED HOMES, INC. et al., Plaintiffs and Appellants, v. Norman Scott LIEBERT et al., Defendants and Respondents.

No. B192342.

Court of Appeal, Second District, Division 3.

April 21, 2008.

Law Office of Anthony C. Rodriguez and Anthony C. Rodriguez, Oakland, for Defendants and Respondents Norman Scott Liebert, Pacific Mobile III, L.P., Seals III, LLC, and the Liebert Corporation ("the Parklane Defendants").

Klinedinst PC, G. Dale Britton, San Diego, John D. Klinedinst, Los Angeles, and Gregor A. Hensrude, Los Angeles; Miller, Canfield, Paddock & Stone and Frederick R. Juckniess, Ann Arbor, MI, and Gregory L. Curtner, pro hac vice, for Defendants and Respondents San Jose Advantage Homes, Inc. and Glenn Gilliam.

Law Offices of Samuel M. Huestis and Samuel M. Huestis, Ventura, for Defendants and Respondents Hermitage Mobile Homes Sales, Inc. and Joseph DeBoard.

McGarrigle, Kenney & Zampiello, APC, Patrick C. McGarrigle and Philip A. Zampiello, Los Angeles, for Defendants and Respondents L.C. Manufactured Housing, Inc. and Neil Landes.

Laughlin, Falbo, Levy & Moresi and Peter C. Flanderka, for Defendants and Respondents Macy Homes, Inc., Robert E. Durant and David Durant.

Eric B. Kaminsky, Tustin, for Defendants and Respondents Maple Ridge Mobile Homes/CA, Inc. and Sam Silverman.

Law Offices of William R. Ramsey and William R. Ramsey, Valencia, for Plaintiffs and Appellants.

ALDRICH, J.

I. INTRODUCTION

This appeal involves allegations that a mobilehome park and a number of mobilehome dealers were involved in an illegal tying arrangement per se whereby prospective park tenants were forced to buy a mobilehome from one of the dealers in order to secure a space in the park. We hold that plaintiff has not stated causes of action for violating the Cartwright Act, the Unfair Competition Law, or interference with prospective economic advantage. Thus, we affirm the judgment of dismissal entered after the trial court sustained two demurrers without leave to amend.

II. FACTUAL AND PROCEDURAL BACKGROUND

1. The initial pleadings and proceedings.

Plaintiff and appellant SC Manufactured Homes, Inc. (SC Homes) is a retail dealership of mobilehomes in Los Angeles County. Plaintiff and appellant Charles W. Redick, a licensed mobilehome dealer, owns SC Homes jointly with his wife. Redick is also the general manager of SC Homes and is a licensed mobilehome salesman. (We refer to SC Homes and Redick collectively as plaintiff.)

Plaintiff sued a large number of mobilehome dealers, mobilehome park managers, and mobilehome park owners. The substance of the original complaint was that defendants were involved in a conspiracy by which mobilehome dealers paid kickbacks to park owners and operators for the exclusive right and privilege of marketing and selling their mobilehomes in the parks, thereby restraining trade, preventing competition, increasing the cost of the mobilehomes in those parks, and interfering with plaintiffs contracts and potential contracts. Allegedly, the conspiratorial conduct denied plaintiff the ability to sell and lease mobilehomes in the Santa Clarita Valley.

As part of this conspiracy, plaintiff alleged he was denied the ability to model mobilehomes in the parks. This allegation arises because, as the parties agree, the term "mobilehome" can viewed as a misnomer. Once mobilehomes are in a park, they are difficult to relocate. When park tenants leave a park, either willingly or for other reasons such as eviction, they usually do not take their mobilehomes with them. (See People ex rel. Kennedy v. Beaumont Investment, Ltd. (2003) 111 Cal. App.4th 102, 109, 3 Cal.Rptr.3d 429; SC Manufactured Homes, Inc. v. Canyon View Estates, Inc. (2007) 148 Cal.App.4th 663, 673, 56 Cal.Rptr.3d 79.) In such situations, mobilehome dealers may make arrangements to buy and pull out the old mobilehome and replace it with another, hoping the new tenant will purchase the "modeled home" (or "pullout").

The original complaint was filed on March 5, 2004. It named more than 70 defendants, including the owners and managers of 13 mobilehome parks, numerous mobilehome dealers, and one attorney. Thereafter, plaintiff filed a first amended complaint.

The attorney defendant was accused, among other allegations, of illegally evicting tenants. He filed an anti-SLAPP motion (Code Civ. Proa, § 425.16), which was granted by the trial court. In an unpublished opinion, Case No. B180299, we reversed.

Plaintiff dismissed 33 defendants, representing 12 of the 13 mobilehome parks, and many dealers, park owners, and park managers. The dismissed defendants then sought attorney fees and costs pursuant to the Mobilehome Residency Law (Civ.Code, 798 et seq., the MRL). In SC Manufactured Homes, Inc. v. Canyon View Estates, Inc., supra, 148 Cal.App.4th 663, 56 Cal.Rptr.3d 79, we held that the trial court correctly denied the attorney fee and costs request because the case did not arise under the MRL.¹

2. The pertinent complaint.

a. The parties.

On December 3, 2004, plaintiff filed his second amended complaint. In the second amended complaint, only 17 defendants remained. These defendants represented six mobilehome dealers and only one park, defendant and respondent Parklane Mobile Estates. All but two of the 17 defendants appear on appeal as respondents.

The four defendants and respondents associated with Parklane Mobile Estates are referred to collectively as Parklane. They are: Norman Scott Liebert, Pacific Mobile III, L.P., Seals III, LLC, and the Liebert Corporation.²

The defendant dealers are: (1) San Jose Advantage Homes, Inc., and its owner, president, and managing agent Glenn Gilliam; (2) Hermitage Mobile Home Sales, Inc., and its owner and president Joseph DeBoard; (3) L.C. Manufactured Housing, Inc., and its owner and president Neil Landes; (4) Macy Homes, Inc., its owner and president Robert E. Durant, and its general manager David Durant; (5) Maple Ridge Mobile Homes/CA, Inc., and its owner and president Sam Silverman; and (6) Stanley Affordable Homes, Inc., and its owner and president Stanley Wactler.³

b. The substantive allegations.

The second amended complaint is the pertinent pleading. It alleges three causes of action: (1) violation of the Cartwright Act (Bus. & Prof.Code, § 16700 et seq.); (2) intentional interference with prospective economic advantage; and (3) violation of the Unfair Competition Law (UCL, Bus. & Prof.Code, § 17200 et seq.).

(1) The conspiracy allegations.

At the beginning of the second amended complaint, plaintiff summarized his allegations as follows: "This action is brought by ... a [mobilehome] dealer, against the owners and operators of [certain mobilehome parks] located in the City of Santa Clarita, ... who conspired with certain mobilehome dealers ... to restrain trade and increase profits by refusing to allow buyers of new homes to locate in the park unless they bought particular homes from the [defendant dealers] who provided kickbacks of $30,000 or more to the [defendant park operators] for the exclusive right to place and sell their homes on spaces within the park. These kickback arrangements have sometimes been confirmed in writing, thinly disguised as various business ventures. See, e.g. Exhibit 1, a [February 11, 2003,] letter to [plaintiff] from [Parklane's attorney] describing how only dealers who enter into a so-called `joint venture' arrangement with [Parklane] to pay [it] $30,000 per space will be allowed to sell homes on those spaces.... [¶] 8. These schemes ... prevent open and fair competition among [mobilehome] dealers, unduly increase the price of mobilehomes, and deprive mobilehome buyers of their freedom of choice regarding which home they may buy and choice of dealer from which they may purchase that home. [¶] 9. [Plaintiff] is a [mobilehome dealer] who refused to pay kickbacks ... and was thus damaged in having been foreclosed from competing equally in the marketplace of new mobilehomes because his customers were denied tenancy in the park of their choice if they purchased from him, and the sale of mobilehome is not possible without the availability of a desirable space upon which to locate that home. [It is illegal to charge tenants entry fees in order to obtain a lease.] It is also illegal for a park owner or operator to demand a fee or commission for the sale of a mobilehome, either directly from the buyer (or seller), or indirectly from the mobilehome dealer, unless the fee is disclosed and approved in advance and the park operator performs actual sales services commensurate with the fee."

Plaintiff also alleged that the conspiracy resulted in "closed parks," i.e., parks that "`reserve[]' all (or virtually all) of the available spaces in the park to one or more specific dealers for the placement of new model homes until they are sold, leaving none for a potential tenant to lease and place on it a new [mobilehome] purchased from a dealer of his own choice."

Plaintiff further alleged that the conspiratorial acts of connecting the lease of a mobilehome park space to the sale of certain mobilehomes was an illegal tying arrangement per se. Plaintiff alleged that "[t]he act of tying the purchase of one product (e.g. the rental of a mobilehome space) to the purchase of another product (e.g. a mobilehome) [was] considered illegal per se...." Plaintiff alleged that the "arrangements between the [defendants] were created for the purpose and objective of preventing competition and restricting trade or commerce in the selling of mobilehomes in the Santa Clarita Valley market as a whole and in their own [mobilehome] parks, each [of] which represents its own separate and distinct market."

Plaintiff also alleged he was illegally refused opportunities to "model" and sell mobilehomes. Thus, for example, plaintiff alleged that after he purchased a mobilehome from a tenant residing on space No. 355 in Parklane, he was precluded from pulling...