Searle v. Wyndham Internat., Inc.

Decision Date15 October 2002
Docket NumberNo. D039145.,D039145.
CourtCalifornia Court of Appeals Court of Appeals
PartiesLinda SEARLE, Plaintiff and Appellant, v. WYNDHAM INTERNATIONAL, INC., Defendant and Respondent.

Baker & McKenzie, Charles H. Dick, Jr., Katherine A. Bacal and Scott W. Sigman, San Diego, for Defendant and Respondent.

BENKE, J.

In the end, we find that how and what a hotel pays its room service servers is a matter between the hotel and the servers. Accordingly, we affirm the judgment entered on an order sustaining without leave a hotel's demurrer to an unfair business practice complaint brought by a hotel patron. The patron alleged a 17 percent service charge the hotel adds to its room service bills is paid directly to room service servers and that, in failing to expressly advise patrons about this aspect of the server's compensation, the hotel is engaging in a deceptive practice which induces patrons to pay gratuities patrons would not otherwise feel obligated to provide. Because there is no allegation the hotel deceives its guests about the costs of its room service meals and because patrons are free to both obtain meals outside their rooms and to provide as small or as large a gratuity as they wish, the hotel's billing practice is not actionable.

SUMMARY

According to the allegations of the complaint, which we accept as true,1 on July 10, 2001, plaintiff and appellant Linda Searle stayed with her husband at the Wyndham Plaza Hotel in San Diego, which is operated by defendant Wyndham International, Inc. (Wyndham.) The Searles ordered room service from a room service menu, which in pertinent part stated: "A 17% service Charge and Applicable State Tax will be added. In Room Delivery Charge $3." When their room service meal arrived, in addition to the service charge and room delivery charge, the bill they received included a blank line for a tip or gratuity. Searle further alleges, based on information and belief, that the 17 percent service charge included a gratuity paid to the server.

According to Searle the hotel's room service billing practice is deceptive because guests are not advised the service charge is in fact a gratuity paid to the server. Searle also contends the service charge is unfair because it compels guests to pay a gratuity, which Searle believes should be entirely voluntary. Thus Searle alleges the hotel's room service practices violate the unfair competition law (UCL), Business and Professions Code2 section 17200, as well as the more specific advertising provisions of section 17500. Finally, Searle alleges that because other hotel patrons were subjected to the same practice, her claims would support class treatment under Code of Civil Procedure section 382 and Civil Code section 1781, subdivision (a).

Wyndham filed a demurrer to the complaint and the trial court sustained the demurrer without leave to amend and dismissed the action. Searle filed a timely notice of appeal.

DISCUSSION
I

Before we reach the merits of Searle's claims, some background on the subject of tipping is useful. Although it has been subjected to vigorous criticism and attempts to regulate and even prohibit it since its advent in this country in the latter half of the 19th century, the practice of tipping the providers of personal service has endured and is now a well-accepted part of our day-to-day lives. (See Segrave, Tipping (1998) McFarland & Company, Inc., p. vii (Segrave).) Its acceptance however has not left the subject without controversy. Because a tip is entirely gratuitous, entirely subjective and very personal, it has been the repeated subject of pundits, advice columnists and entertainers. Eleanor Roosevelt offered the following to Americans travelling abroad: "`a fair tip, or one a little on the generous side, will leave a pleasant feeling and respect for you in the one who receives it. A lavish one will create a secret disrespect and add to the reputation Americans have for trying to buy their way into everything.' " (Segrave, supra, pp. 53-54.) In A Night at the Opera, Groucho Marx offered a different perspective:

"`Groucho: Do they allow tipping on the boat?

"`Steward: Oh, yes sir!

"`Groucho: Have you got two fives?

"`Steward: Yes, sir!

"`Groucho: Well, then, you won't need the 10 cents I was going to give you!'"

(Segrave, supra, p. 146.)

On a more academic level, "Scholarly papers on the custom [have] studied every aspect of tipping imaginable." (Segrave, supra, p. 138.) The impact of large parties, the impact of waitresses wearing flowers in their hair, the impact of the attractiveness of waitresses, the impact of credit cards, the impact of being touched by a waitress, the impact of alcohol consumption by patrons, the impact of squatting to make direct eye contact with the customer have all been studied, as have the perceptions of servers and customers themselves about factors associated with tipping. (Id. at pp. 138-144.) One recurring theory and fundamental criticism of tipping attributes its resiliency to the desire of the tipper to feel, if not better than the server, better about himself or herself in an otherwise awkward social situation. (Id. at p. 146.)

Eleanor Roosevelt, Groucho Marx and the host of scholars notwithstanding, tips are an important part of many service employees' income and, for those who must travel to earn a living, a substantial expense. (Segrave, supra, pp. 56, 138-139.) Indeed, given its role in the compensation of so many workers, tipping is the express subject of Labor Code section 351, which prevents employers from deducting from servers' wages any amount they receive by way of tips or gratuities.3 "The purpose of section 351, as spelled out in the language of the statute, is to prevent an employer from collecting, taking, or receiving gratuity income or any part thereof, as his own part of his daily gross receipts, from deducting from an employee's wages any amount on account of such gratuity, and from requiring an employer to credit the amount of the gratuity or any part thereof against or as a part of his wages. And the legislative intent reflected in the history of the statute, was to ensure that employees, not employers, receive the full benefit of gratuities that patrons intend for the sole benefit of those employees who serve them." (Leighton v. Old Heidelberg, Ltd. (1990) 219 Cal.App.3d 1062, 1068, 268 Cal.Rptr. 647; see also Henning v. Industrial Welfare Com. (1988) 46 Cal.3d 1262, 1265, 252 Cal.Rptr. 278, 762 P.2d 442; Industrial Welfare Com. v. Superior Court (1980) 27 Cal.3d 690, 730, 166 Cal.Rptr. 331, 613 P.2d 579.)

With this brief background in mind, we turn to a fundamental source of consumer protection in this state, the UCL.

II

The UCL defines "unfair competition" to "mean and include any unlawful, unfair or fraudulent business act or practice and unfair, deceptive untrue or misleading advertising" and any act prohibited by section 17500. (§ 17200.) Section 17500 in turn prohibits advertising "which is untrue or misleading, and which is known, or which by the exercise of reasonable care should be known, to be untrue or misleading." "Section 17200 `is not confined to anticompetitive business practices, but is also directed toward the public's right to protection from fraud, deceit, and unlawful conduct. [Citation.] Thus, California courts have consistently interpreted the language of section 17200 broadly.' [Citation.]" (South Bay Chevrolet v. General Motors Acceptance Corp. (1999) 72 Cal.App.4th 861, 877-878, 85 Cal. Rptr.2d 301.) The statute prohibits "wrongful business conduct in whatever context such activity might occur." (Barquis v. Merchants Collection Assn. (1972) 7 Cal.3d 94, 111, 101 Cal.Rptr. 745, 496 P.2d 817, fn. omitted.) In Barquis the court found the statute covered a collection agency's practice of filing complaints against debtors in improper venues. In contrast, in Hewlett v. Squaw Valley Ski Corp. (1997) 54 Cal.App.4th 499, 519, 63 Cal.Rptr.2d 118, the court applied the statute to a ski resort operator who had unlawfully cut down 1,800 trees on land it controlled.

"`"The statute imposes strict liability. It is not necessary to show that the defendant intended to injure anyone."' [Citation.] To state a claim under section 17200, a plaintiff `need not plead and prove the elements of a tort. Instead, one need only show that "members of the public are likely to be deceived."` [Citations.] 'Allegations of actual deception, reasonable reliance, and damage are unnecessary.' [Citations.] Further, the statute authorizes `courts to order restitution without individualized proof of deception, reliance, and injury if necessary to prevent the use or employment of an unfair practice.' [Citations.] Because section 17200's definition is `disjunctive,' the statute is violated where a defendant's act or practice is unlawful, unfair, fraudulent or in violation of section 17500. [Citation.]" (South Bay Chevrolet v. General Motors Acceptance Corp., supra, 72 Cal.App.4th at pp. 877-878, 85 Cal.Rptr.2d 301, fn. omitted.)

Given the role gratuities play in so many transactions and in the livelihoods of so many workers, we have no doubt that any business practice which substantially impacts tipping must meet the broad requirements of the UCL, as well as the closely related provisions of section 17500.

III

Searle has not cited any law which Wyndham's room service practice violates. Indeed, other than Labor Code section 351, we are not aware of any express regulation of tipping on room service billing. Because Wyndham's practice is alleged to cause servers to receive more in the way of tips than would otherwise occur, it plainly does not violate the spirit or letter of Labor Code section 351. In sum, the complaint cannot be maintained on the basis Wyndham has engaged in an "unl...

To continue reading

Request your trial
44 cases
  • Doe v. CVS Pharmacy, Inc.
    • United States
    • U.S. District Court — Northern District of California
    • December 12, 2018
    ...... coverage fee that constituted a 100% markup on its cost of obtaining the coverage); Searle v. Wyndham International, Inc. , 102 Cal. App. 4th 1327, 1333, 126 Cal.Rptr.2d 231 (2002) (not ......
  • O'Grady v. Merch. Exch. Prods., Inc., A148513
    • United States
    • California Court of Appeals
    • October 31, 2019
    ...... explained its objection to each of plaintiff's causes of action as follows: By reason of Searle v. Wyndham Internat., Inc . (2002) 102 Cal.App.4th 1327, 126 Cal.Rptr.2d 231 ( Searle ) and ......
  • Wayne v. Staples, Inc.
    • United States
    • California Court of Appeals
    • January 4, 2006
    ......(See Searle v. Wyndham Internat., Inc. (2002) 102 Cal.App.4th 1327, 1334-1335, 126 Cal.Rptr.2d 231 [failure to ......
  • Sisemore v. Master Financial, Inc.
    • United States
    • California Court of Appeals
    • June 12, 2007
    ...... this court accepts as true for purposes of evaluating the trial court's ruling on demurrer ( Searle v. Wyndham Internal, Inc. (2002) 102 Cal.App.4th 1327, 1330, fn. 1, 126 Cal. Rptr.2d 231)—are ...(See, e.g., Webster's . 60 Cal.Rptr.3d 730 . Third New Internat. Diet. (1993) p. 1172, cols. 1-2: "instrument .. a legal document (as a deed, will, bond, lease, ......
  • Request a trial to view additional results
3 books & journal articles
  • Chapter § 4.04 LIABILITY OF HOTELS AND RESORTS FOR COMMON TRAVEL PROBLEMS
    • United States
    • Full Court Press Travel Law
    • Invalid date
    ...to prove they suffered a cognizable injury under GBL 349]"). See Segrave, Tipping (1998). Searle v. Wyndham International, Inc., 102 Cal. App. 4th 1327, 1331, 126 Cal. Rptr. 2d 231 (2002). Id.[580] See Abid v. Kbus Holdings, LLC, 2005 WL 2249906 (Cal. App. 2005) ("The complaint alleges that......
  • Chapter § 3.04 RENTAL CARS
    • United States
    • Full Court Press Travel Law
    • Invalid date
    ...v. Uber Technologies, Inc., 2014 WL 4640170 (N.D. Cal. 2014).[714] Id.[715] Distinguishing Searle v. Wyndham International, Inc., 102 Cal. App. 4th 1327 (Cal. App. 2002) (17% service charge for room service actually a gratuity paid to server but no misrepresentations made about the nature o......
  • Wage and Hour Case Notes
    • United States
    • California Lawyers Association California Labor & Employment Law Review (CLA) No. 34-1, January 2020
    • Invalid date
    ...with its statement that: "[A] promise to conduct a statistical analysis in the future is not a trial plan."[Page 22]--------Notes:1. 102 Cal. App. 4th 1327 (2002).2. 188 Cal. App. 4th 364 (2010).3. 34 Cal. 4th 319 (2004).4. 181 Cal. App. 4th 1286...

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT