FRANCISCO - (Mealey's) The statute providing for treble damages in cases
brought by senior citizens alleging unfair competition provides for such a remedy
only as a penalty, making recovery under the unfair competition law, Business
and Professions Code Section 17200, et.
seq., impossible, the California Supreme Court held Aug. 9 (James A.
Clark v. Superior Court of Los Angeles County, National Western Life Insurance
Co., No. S174229, Calif. Sup.).
statutory construction of California Civil Code Section 3345 indicates that the
additional remedy it provides was intended as a penalty and clearly requires
such an outcome, the court said.
3345 provides for treble damages "or any other remedy the purpose or effect of
which is to punish or deter." To read that as anything but a penalty
"would turn into meaningless surplusage the phrase immediately preceding the
statute's 'deter' language, which expressly refers to a 'fine, or a civil
penalty or other penalty,'" the court concluded.
remedies have some incidental deterrent effect.
Here, the trebled recovery provision comes into play when the governing
statutory remedy has 'the purpose or
effect' of punishing or deterring," the court held.
trebled damages under Section 3345 are permissible only if the statute under
which recovery of those damages is sought allows for recovery of a penalty, the
court said. Because the unfair
competition law limits recovery to injunctions and restitution, it cannot be
used to recover Section 3345 damages, the court held.
James Clark sued National
Western Life Insurance Co. in September 2004 in the Los Angeles County Superior
Court, alleging that the insurer deceived senior citizens into purchasing
high-commission annuity contracts. Clark alleged that the conduct
violated the UCL, and he sought treble damages under Section 3345.
court also held that Section 3345 is not limited to actions brought under the
Consumer Legal Remedies Act, as defendant National Western Life Insurance Co.
Note: Full coverage will be in the
August issue of Mealey's California Section 17200 Report. In the meantime, the opinion is available at www.mealeysonline.com or by calling
the Customer Support Department at 1-800-833-9844. Document #58-100831-005Z. For all of
your legal news needs, please visit www.lexisnexis.com/mealeys.]
For more information, call
editor Bryan Redding at 610-205-1124, or e-mail him at firstname.lastname@example.org.