In Fladeboe v. American Isuzu Motors, Inc., ___ Cal.App.4th ___ (Apr. 23, 2007) (modified Apr. 24, 2007), cross-complainant American Isuzu Motors, Inc. prevailed at trial on its individual UCL claim against a company that fraudulently posed as an authorized Isuzu dealership. The UCL claim was tried to the judge, while a jury separately found the defendant liable for fraud and negligent misrepresentation. The jury awarded $114,642.87 in damages, and the judge awarded $214,300 in restitution. Judgment was entered for "a total of $214,300 in damages and restitution." Slip op. at 8-10. (Given the facts of this case, that result sounds right, but damages and restitution do not always overlap as they did here. In some cases, the two sums would be added together.)
On appeal, the defendant raised a Cel-Tech "safe harbor" argument. The Court of Appeal (Fourth Appellate District, Division Three) rejected it:
[Cross-defendant] Fladeboe AG argues Vehicle Code section 11713.3, subdivision (d) and Corporations Code section 2010, subdivision (a) gave it a “safe harbor” for its conduct. In Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Co. (1999) 20 Cal.4th 163, 184, the California Supreme Court concluded “a plaintiff may not bring an action under the unfair competition law if some other provision bars it.” This statutory safe harbor must “actually bar” the action, and not “merely fail to allow it.” (Ibid.) “Acts that the Legislature has determined to be lawful may not form the basis for an action under the unfair competition law, but acts may, if otherwise unfair, be challenged under the unfair competition law even if the Legislature failed to proscribe them in some other provision.” (Id. at p. 183.)
Fladeboe AG argues Vehicle Code section 11713.3, subdivision (d) provided it a safe harbor by permitting a motor vehicle dealer to transfer its dealership, subject to the manufacturer’s consent. “[I]t is evident,” Fladeboe AG argues, “that attempts to consummate a transfer do not have the quality of wrongfulness that [Business and Professions Code] section 17200 was designed to redress.” But Isuzu did not assert, and the trial court did not find, wrongful conduct based on the attempt to transfer RFLM’s Isuzu dealership. The trial court found Fladeboe AG engaged in wrongful conduct by fraudulently representing itself as an authorized Isuzu dealer—both to the public and to Isuzu—without obtaining Isuzu’s consent and without the requisite form .... Vehicle Code section 11713.3 does not provide a safe harbor for such conduct; to the contrary, subdivision (f)(1) of section 11713.1 prohibits it.
Slip op. at 29-30.
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