Sc Manufactured Homes, Inc. v. Canyon View Estates, Inc.

• Citation: 56 Cal.Rptr.3d 79,148 Cal.App.4th 663
• Decision Date: 15 March 2007
• Docket Number: No. B182088.,B182088.
• Court: California Court of Appeals
• Parties: SC MANUFACTURED HOMES, INC., et al., Plaintiffs and Respondents, v. CANYON VIEW ESTATES, INC., et al., Defendants and Appellants.

56 Cal.Rptr.3d 79

148 Cal.App.4th 663

SC MANUFACTURED HOMES, INC., et al., Plaintiffs and Respondents, v. CANYON VIEW ESTATES, INC., et al., Defendants and Appellants.

No. B182088.

Court of Appeal, Second District, Division 3.

March 15, 2007.

Law Office of Anthony C. Rodriguez and Anthony C. Rodriguez, Oakland, for Charles Goldman, the Goldman Family No. III(G) LLC and Cal-Am Properties, Inc., Defendants and Appellants.

Norminton & Wiita, Thomas M. Norminton and Kathleen Dority Fuster, Beverly Hills, for Canyon View Sales, Inc., Mark Seidenglanz, Canyon View Estates, Inc. and Kerry T. Seidenglanz, Defendants and Appellants.

Sheppard, Mullin, Richter & Hampton, Carlton A. Varner and Anik Banerjee, Los Angeles, for Continental Mobile Housing, LTD., R & B Communities, Howard C. Brigham, and Myron M. Reichert, Defendants and Appellants.

Klinedinst PC, John D. KUnedinst and Frederick M. Heiser, Los Angeles, for Champion Home Builders and Western Homes Corporation, Defendants and Appellants.

Propocopio, Cory, Hargreaves & Savitch LLP, Richard A. Heller and Mary V.J. Cataldo, Carlsbad, for LINC Housing Corporation, Defendant and Appellant.

Greenwald, Pauly, Foster & Miller, Andrew S. Pauly and Maryann R. Marzano, Santa Monica, for Casa Blanca Homes, Inc., Defendant and Appellant.

Alston, Alston & Diebold, Elaine B. Alston and Vivienne J. Alston, for Polynesian Mobile Home Park LLC, George Kahabka, Emanuel Treitel, and Sierra Heights Co., LLC, Defendants and Appellants.

Stapke & Harris, Mark R. Stapke, Los Angeles, and Sandra J. Gamboa, for Alexander Keith and Canyon Country Mobile Home Park, LLC, Defendants and Appellants.

Michelizzi, Schwabacher, Ward, Bianchi and Thomas J. Ward, Lancaster, for Arena Mobile and Manufactured Housing Inc., Janice M. Romain and Kent Romain, Defendants and Appellants.

Freedman & Taitelman, and Michael A. Taitelman, Los Angeles, for The Richard B. Francis LLC, Francis Property Management, Inc., Richard B. Francis, Russell Francis, Cordova Associates, LTD., John R. Francis, Charles Hostmyer, Pat Hostmyer and Greenbriar Associates, LTD., Defendants and Appellants.

Law Office of William R. Ramsey and William R. Ramsey, Valencia, for Plaintiffs and Respondents.

ALDRICH, J.

INTRODUCTION

A dealer of mobilehomes alleged it was precluded from selling mobilehomes as a result of a kickback scheme. The dealer sued a number of other mobilehome dealers, as well as a number of mobilehome park managers and owners. After plaintiff dismissed most defendants, the dismissed defendants filed motions for attorney fees and costs pursuant to Civil Code section 798.85, the attorney fees and costs provision of the Mobilehome Residency Law (MRL). Section 798.85 permits such awards when the case "arises out of the provisions" of the MRL. We affirm the trial court's order denying attorney fees and costs.

FACTUAL AND PROCEDURAL BACKGROUND

1. The parties.

Plaintiff and respondent SC Manufactured Homes, Inc. (SC Homes) is a retail dealership of mobilehomes in Los Angeles County. Plaintiff and respondent Charles W. Redick, a licensed mobilehome dealer, appears to be the owner of SC Homes. (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. Thirty of these defendants and appellants appear jointly on appeal (joint defendants).¹ Three named defendants and appellants, collectively referred to as Parklane, are involved with the Parklane Mobile Estates a 435 space mobilehome park.²

2. The complaint.

After plaintiff filed its initial complaint, the case was referred to the Complex Litigation Project. Thereafter, plaintiff filed its first amended complaint, which is the pertinent complaint. This 123-page complaint consists of 319 paragraphs and 25 attached exhibits. 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.).

The substance of the complaint was that defendants were participants in a conspiracy by which mobilehome dealers paid kickbacks to park ovmers 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.

At the beginning of the first amended complaint, plaintiff summarized its allegations as follows: "This action is brought by ... a mobile home dealer, against the owners and operators of certain mobile home parks located in the City of Santa Clarita, ... who conspired with certain mobile home 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 up to $150,000 to the [defendant park operators] for the exclusive right to place and sell their homes on spaces within the park.... [¶] 7. [Defendant park operators] also demanded and received economic concessions, fees, or gratuities from [defendant dealers] for the privilege of being allowed to broker used mobile homes in the park. [¶] ... [¶] 8. These schemes ... prevent fair competition among mobile home dealers, unduly increase the price of mobile homes, and severely limit the choices of homes available to buyers.... [¶] 9. [Plaintiff] is a dealer of new and used mobile homes who refused to pay kickbacks ... and was ... damaged in being foreclosed from competing equally in the marketplace of new mobile homes because the sale of such a home is not possible without the availability of a desirable space upon which to locate the home. It is illegal to charge special `entry' fees to allow a mobile home owner to obtain a lease to locate his or her home in a park. It is also illegal for a park owner or operator to demand a fee or commission for the sale of a mobile home dealer either directly from the buyer (or seller), or indirectly from the mobile home dealer, unless the fee is disclosed and approved in advance and the park operator performs actual sales services commensurate with the fee. [¶] 10. [Plaintiff] was damaged due to lost mobile home sales through the actions of the [defendant park operators] who conspired with [defendant dealers] to restrain ... trade."

According to the allegations in the first amended complaint, 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 leasing of mobilehome park spaces to the sale of certain mobilehomes, was an illegal tying arrangement.³

Plaintiff alleged that the illegal acts of defendants, including the tying arrangements, and kickbacks, violated one or more provisions of the MRL, including, Civil Code sections 798.31, 798.37, 798.72, subdivisions (a) and (b) and 798.74, subdivision (a), and that the payment and non-disclosure of purportedly illegal fees to mobilehome buyers violated Health and Safety Code section 18035.3. In part, plaintiff alleged the MRL and the Health and Safety Code were violated because the "kickbacks" were "illegal `entry, installation, hook-up, and/or landscaping' fees," "illegal 'transfer or selling fees' charged to a homeowner or agent `as a condition of sale,'" and "illegal fees charged to a homeowner or agent `upon purchase of a mobile home ... as a condition for approval of tenancy'." It was further alleged that when plaintiff refused to pay a kickback, there was a resulting "illegal withholding of approval by [park operators] of a purchaser of a mobilehome that will remain in the park[.]" Allegedly, these and other acts also violated the UCL.

The bulk of the first amended complaint, paragraphs 82 through 286, described particular events, by individual defendants, that purportedly violated the Cartwright Act, the UCL, and intentionally interfered with plaintiffs prospective economic advantage.

Plaintiff made additional allegations targeting Parklane, including the following: Parklane and its attorney illegally evicted tenants so that mobilehomes of the evicted tenants could be pulled-out and replaced with new mobilehomes provided by other co-conspirators. Parklane collected a kickback from the sales proceeds. "Parklane acquired the mobilehomes of the evicted tenants through warehouseman's liens that superficially inflated the redemption price to include [the] unreasonable attorney's fee as a lien against the mobile home. [The inflated] redemption price ... assisted in the illegal eviction." The indirect charges, including the illegal fees and kickbacks, were prohibited by the MRL. Further, Parklane solicited kickbacks from defendants for the exclusive rights to place and develop mobilehomes on 29 new spaces in its existing park. Because plaintiff would not participate in the kickback scheme, it was damaged because it could not place mobilehomes on some of these 29 spaces.⁴

The first cause of action for violation of the Cartwright Act alleged that the kickback conspiracy, including the tying arrangements and lien auction sales, prevented competition and restricted commerce by forcing prospective homeowners to buy new mobilehomes only from those dealers who paid kickbacks. With regard to this cause of action, plaintiff sought more than $10 million for damages it incurred as a result of lost sales, as well as treble damages,...