Shvarts v. Budget Group
Decision Date | 29 June 2000 |
Citation | 97 Cal.Rptr.2d 722,81 Cal.App.4th 1153 |
Court | California Court of Appeals Court of Appeals |
Parties | (Cal.App. 2 Dist. 2000) LEV SHVARTS et al., Plaintiffs and Appellants, v. BUDGET GROUP, INC., Defendant and Respondent. B126504 Filed |
APPEAL from a judgment of the Superior Court of Los Angeles County, Bruce E. Mitchell, Temporary Judge. (Pursuant to Cal. Const., art. VI, 21.) Affirmed.
Tatro, Coffino, Zeavin & Bloomgarden and Robert A. Zeavin for Plaintiffs and Appellants.
Gibson, Dunn & Crutcher, Paul J. Collins and Dean J. Kitchens for Defendant and Respondent.
CERTIFIED FOR PUBLICATION
Plaintiffs Lev Shvarts and Michael Holtz appeal from an order of dismissal after the trial court sustained a demurrer without leave to amend their first amended complaint. Appellants sued Budget Group, Inc. (respondent), a car rental company, for unfair business practices based on refueling charges for rental cars returned without full gas tanks. We conclude that the trial court did not err, and we affirm.
For purposes of appeal, we accept the facts alleged in the pleadings as true. (O'Hara v. Western Seven Trees Corp. (1977) 75 Cal.App.3d 798, 802.)
Appellants assert four causes of action against respondent, the first for unlawful business practices (Bus. & Prof. Code, 17200 et seq.), the second for money had and received, the third for restitution and the fourth for violation of the Consumers Legal Remedies Act (Civ. Code, 1750 et seq.). The complaint alleges a class action which "seeks to redress one of the most exploitative practices of the car rental industry -- charging customers punitive fees for gasoline when the customers fail to comply with their obligation to return rented vehicles with the same level of fuel the car contained when originally delivered to them."
When appellants each rented a car from respondent, they executed respondent's uniform rental agreement which contains three options regarding fuel: (Bold in the original.) The first page of the agreement specifies the dollar-per-gallon rate of $3.58.
When appellants returned their rental cars, their tanks were not full. The complaint alleges that the fees were approximately triple the prevailing retail price of gasoline and were excessive in that the charges imposed by Budget vastly exceeded the amount of any actual damages suffered by Budget on occasions when customers returned their rental cars to Budget with less than the contractually agreed amount of fuel. It concludes that:
Respondent demurred to each cause of action on the ground that each failed to state facts sufficient to constitute a cause of action. It argued that the terms of its rental agreement were clear and unambiguous and offered three options to each renter, the first two of which were not challenged by appellants, and the third being in compliance with Civil Code section 1936, subdivision (m)(2), infra.1
On August 11, 1998, the trial court issued a minute order sustaining the demurrers to all the causes of action without leave to amend and which states: "Case is dismissed this date."2
(Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 966-967.)
The Unfair Competition Act (Bus. & Prof. Code, 17200 et seq.) prohibits unfair competition, which is defined as "any unlawful, unfair or fraudulent business act or practice. . . ." ( 17200.) "Because Business and Professions Code section 17200 is written in the disjunctive, it establishes three varieties of unfair competition--acts or practices which are unlawful, or unfair, or fraudulent." (Podolsky v. First Healthcare Corp. (1996) 50 Cal.App.4th 632, 647.)
The "unfairness" prong of the Unfair Competition Act is (Podolsky v. First Healthcare Corp., supra, 50 Cal.App.4th at p. 647.) However, the scope of the law (Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Co. (1999) 20 Cal.4th 163, 182.) The test of whether a business practice is unfair involves balancing the utility of the defendant's conduct against the gravity of the alleged victim's harm. (Id. at p. 182.)
At issue here is whether section 1936, subdivision (m)(2) prohibits the gas charge contested by appellants. The statute provides in pertinent part: (Italics added.)
This subdivision has been addressed recently in two cases, Lazar v. Hertz Corp. (1999) 69 Cal.App.4th 1494 (Lazar) and Schnall v. Hertz Corp. (2000) 78 Cal.App.4th 1144 (Schnall).
In Lazar, also an alleged class action, the plaintiffs alleged that four rental car companies either refused to rent automobiles to person under the age of 25 or charged an unreasonably high age-based surcharge which effectively restricted rentals to those under the age of 25. The appellate court affirmed the judgment against the plaintiff and concluded as follows:
(Lazar, supra, 69 Cal.App.4th at pp. 1508-1509.)
More recently, in Schnall, also a class action, the exact issue presented in this case was addressed. The Court of Appeal rejected plaintiff's claim of unfair business practices based on the amount of the refueling...
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