Monday, March 17, 2014
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Action by Attorney Who Didn’t Read Entire Contract Reinstated
Justice Bigelow Says Lawyer, Handed Only First Page of Two-Page Contract Which Alluded to Existence of Additional Terms, Not Obliged to Inquire as to Those Terms
By a MetNews Staff Writer
The Court of Appeal for this district has reversed the dismissal of an action by an attorney who paid liquidated damages under a contract, based on early termination of it, then wanted the money back, complaining that he didn’t know the contract contained such a provision.
The complaint adequately alleged fraud and deceit, Presiding Justice Trish Bigelow said in her opinion for Div. Eight. The opinion, filed Thursday and not certified for publication, reverses, in part, the decision of Los Angeles Superior Court Judge William F. Highberger.
Plaintiff Sean Jaquez, an attorney for Sony Pictures, had entered into a contract with Protection One Alarm Monitoring, Inc. for activation of an existing home alarm system and for monitoring of it. Only the first page of the contract was initially provided to him.
Warning in Contract
It said, directly above the signature line:
“THIS CONTRACT AUTOMATICALLY RENEWS AT THE END OF THE TERM. IF I CANCEL EARLIER THAN PROVIDED, I MAY BE CHARGED A CANCELLATION FEE. I UNDERSTAND THAT I MAY CANCEL THIS CONTRACT WITHIN THREE (3) BUSINESS DAYS BY GIVING NOTICE TO PROTECTION ONE AS INDICATED ON THE ATTACHED NOTICE OF CANCELLATION. I HAVE READ AND UNDERSTAND THIS CONTRACT.”
He signed the contract, before receiving the second page which spelled out what the term was and what the cancellation fee would be.
When the system was activated, Jaquez signed a copy of the contract which did contain the second page. However, he alleged that he thought the document was merely a copy of what he had already signed and therefore did not read the second page.
Jaquez cancelled the alarm service prior to the end of the three-year term and was assessed a fee of $449.35, pursuant to the liquidated-damage clause on the second page. He paid under protest, then sued Protection One.
Highberger granted the defendant judgment on the pleadings, with leave to amend; Jaquez amended; the judge then sustained a demurrer without leave to amend, and a judgment of dismissal was entered.
Bigelow Explains Reversal
In explaining the reinstatement of the action, Bigelow said:
“Based on the record before us, Jaquez…had no reasonable opportunity to learn the essential terms of the document he signed as a result of Protection One’s purported failure to provide him with the second page of the agreement. Although the agreement warns a potential customer that he may be charged a cancellation fee, that statement alone would not have informed a reasonable person that he would be charged an early termination fee, much less one for $750 or the remaining amount due under the agreement. Jaquez was not negligent in failing to take additional steps to ascertain what may be charged as an early termination fee. While the law is clear that a consumer is generally not excused from reading a contract, Protection One has provided no legal authority for the proposition that a consumer is obligated to question and investigate any provisions which merely allude to a potential fee.”
Jaquez presented broad-ranging contentions under the Unfair Competition Law, as well as the Consumers Legal Remedies Act. Bigelow said they were ill-founded, except to the extent that the cause of action under the UCL was predicated on fraud and deceit.
The case is Jaquez v. Protection One Alarm Monitoring, B245829.
Minh T. Nguyen represented Jaquez. C. Robert Boldt, Alexander M. Bastian of Kirkland & Ellis and Mark T. Cramer of Buchalter Nemer acted for the alarm company.
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