Wednesday, June 23, 2010
C.A. Declines to Apply ‘Continuing Violations’ Rule to UCL Claims
By STEVEN M. ELLIS, Staff Writer
A split panel of this district’s Court of Appeal yesterday threw out a West Los Angeles copy shop owner’s Unfair Competition Law action alleging Canon Business Services routinely overcharged copy machine renters for “test” copies made by Canon service personnel.
Upholding a trial court’s dismissal order, Div. Eight said the claim accrued when Jamshid Aryeh first learned of the alleged overcharges nearly six years before filing suit, and that the “continuing violations” doctrine did not extend the law’s four-year statute of limitations period.
Justice Madeleine Flier, joined by Los Angeles Superior Court Judge Peter D. Lichtman, sitting by assignment, rejected Aryeh’s claim that the clock on filing suit restarted every time Canon made an overcharge. Pointing to the doctrine’s traditional application in employment cases, he wrote that Canon’s actions were not the type of “harassing and egregious conduct the…doctrine is designed to deter.”
Justice Laurence D. Rubin dissented that the “similarly named but conceptually distinct ‘continuous accrual’ doctrine” applied, opining that each breach of the rental agreement between Aryeh and Canon gave rise to a new cause of action.
A cause of action generally arises when the defendant’s conduct occurs. The continuing violations doctrine, however, delays accrual of certain causes of action until the plaintiff has actual or constructive knowledge of facts giving rise to the claim.
Canon sells and leases copiers, scanners, printers and other products to customers. In November 2001, Aryeh, doing business as ABC Copy & Print, entered into a lease agreement with Canon for a copier in which he agreed to pay a monthly fee for a monthly copy allowance, and an additional charge for further copies.
Aryeh entered into a second, similar lease for another machine the following February, but began noticing that the meter readings taken by Canon’s filed service personnel did not match the number of copies actually made on the leased copiers. He claimed that when Canon ignored his repeated requests to repair the copiers and take accurate readings, he began keeping his own records of copies, and determined that he was being charged for test copies made by Canon personnel when the machines were repaired or serviced.
Despite his requests, Aryeh alleged, Canon never reimbursed him for the overcharges, and also charged him late fees.
Aryeh filed a putative class action in 2008, but Canon demurred and Los Angeles Superior Court Judge Robert L. Hess ruled that Aryeh failed to state a cause of action. Hess also concluded that Aryeh’s claim was barred by Business and Professions Code Sec. 17208’s four-year statute of limitations.
On appeal, Flier—pointing to the 2002 decision by the Fourth District Court of Appeal in Snapp & Associates Ins. Services, Inc. v. Robertson 96 Cal.App.4th 884—wrote that both cases involved “the allegedly wrongful collection of fees on a recurring basis,” and said that the Snapp court’s decision that a claim accrued at the time of the first alleged overcharge was controlling.
She also opined that the continuing violations doctrine did not apply to UCL claims, and declined to expand the doctrine’s application beyond employment cases involving “on-going accumulative harassment…or a broad and longstanding corporate policy of discrimination,” or cases involving a creditor’s harassment of a debtor.
Rubin, however, contended that the majority’s focus on the continuing violation rule was unnecessary, and he opined that Snapp did not support Hess’ ruling.
Writing that the rule only came into play when a plaintiff sought recovery for conduct falling both within the limitations period and outside of it, the justice noted that Aryeh’s suit only implicated overcharges within the limitations period. He wrote that Aryeh was alleging a breach of his agreement with Canon, and that when a contract is breached on multiple occasions, each breach gives rise to a new cause of action.
“The injunctive relief authorized by the UCL should not be automatically unavailable following recent misconduct merely because the first unfair practice took place several years earlier,” he commented.
Rubin also rejected Snapp’s application, writing that the case involved only equitable tolling and delayed discovery, neither of which were implicated in Aryeh’s case. Instead, he said, the court should have applied Suh v. Yang (1997) 987 F.Supp. 783, where the U.S. District Court for the Northern District of California distinguished the continuing violation and continuous accrual rules in the context of a UCL claim, and rejected a similar statute of limitations argument.
Aryeh was represented by Long Beach firms Westrup Klick and Krieger & Krieger, while Canon was represented by Dorsey & Whitney.
The case is Aryeh v. Canon Business Solutions, Inc., B213104.
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