New UCL opinion teaches pleading lesson: Hutton v. Fidelity National Title Co.
In Hutton v. Fidelity National Title Co., ___ Cal.App.4th ___ (Jan. 31, 2012), the Court of Appeal (Fifth Appellate District) affirmed summary judgment in a UCL case predicated on the defendant's alleged violation of a Government Code provision capping notary fees.
After holding that the defendant had not violated that provision, thereby eliminating the UCL "unlawful" prong claim, the Court of Appeal refused to consider whether the plaintiff could proceed under the UCL's "unfair" or "frauduent" prongs because those prongs had not been adequately pleaded in the complaint:
In arguing that defendant did not address certain other potential causes of action, plaintiff’s appeal emphasizesthat the UCL has three separate grounds of liability. That is a correct statement of the law. (See Bus. & Prof. Code, § 17200.) “Since section 17200 is in thedisjunctive, it establishes three separate types of unfair competition. The statute prohibits practices thatare either ‘unfair,’ or ‘unlawful,’ or ‘fraudulent.’ [Citation.]” (Pastoria v. Nationwide Ins.(2003) 112 Cal.App.4th 1490, 1496.) Plaintiff argues that it stated a cause of action for potential unfair or fraudulent practices .... Whatever we may think about the viability of such theories, the problemfor plaintiff at this stage is that no such claim or cause of action was everalleged.
In an effort to persuade us that these theories weresomehow pled, plaintiff notes that the first cause of action included astatement that defendant’s conduct was “unlawful, unfair or fraudulent.” But that was a bare conclusion, not thefactual basis of a cause of action. Moreover, we cannot ignore that the next sentence of the complaint madeit unmistakably clear that the first cause of action was based solely on“unlawful” conduct. It stated, as wepreviously noted above, as follows: “Namely, [Defendant] overcharged Plaintiff … by assessing and collecting set Notary Feesin each Real Estate Transaction irrespective of the number of signaturesactually notarized. Plaintiff … [was] charged more than California law allowed,and thus lost money due to [Defendant’s] unlawfulbusiness practices.” (Italicsadded.) .... Plainly then, the actionable wrongdoing for which relief was sought inthe complaint was not a failure to disclose or itemize, nor a notary’sunauthorized practice of law, but that of overcharging plaintiff by exceedingthe amount permitted under section 8211.
....
What we said at the outset of our discussionbears repeating here: For purposes of asummary judgment motion, the pleadings set the boundaries of the issues to beresolved. (Conroy, supra, 45 Cal.4that p. 1250.) Defendant, therefore,met its burden as the moving party when it negated the sole basis ofplaintiff’s claims—namely, the alleged excessive notary fee under section8211. It was not incumbent on defendantto refute liability on some theoretical possibilities not included in thepleadings. (Conroy, supra, atp. 1254; County of Santa Clara v.Atlantic Richfield Co., supra, 137 Cal.App.4th atp. 332.) Each of the suggested other grounds for liability argued byplaintiff were simply theoretical possibilities that were not included in thepleadings. Finally, plaintiff cannot usehis opposition papers as a substitute for an amended pleading, and his failureto seek an amendment below forfeits the issue. (Conroy, supra, at p. 1254; Countyof Santa Clara v. Atlantic Richfield Co., supra, at pp. 333; Lacknerv. North, supra, 135 Cal.App.4that pp. 1201-1202, fn. 5.)
Slip op. at 15-17 (italics in original; bold added).
This case illustrates why the better way to plead a UCL claim in most cases will be to assert each prong as a separate, independent cause of action. At a minimum, each prong should be pleaded in a separate paragraph or subparagraph specifically tailored to the elements of that prong. The process of drafting separate allegations for each independent prong will force you to focus in on precisely how the defendant's conduct ran afoul of each prong.