BARQUIS v. MERCHANTS COLLECTION ASSOCIATION OF OAKLAND INC

Reset A A Font size: Print

Court of Appeal, First District, Division 2, California.

Jessie BARQUIS, Pauline K. Barquis, individually, and for all others similarly situated, Plaintiffs and Appellants, v. MERCHANTS COLLECTION ASSOCIATION OF OAKLAND, INC., and Irwin Eskanos, Defendants and Respondents.

Civ. 26999.

Decided: April 20, 1971

Eugene M. Swann, Alan Verson, Contra Costa Legal Services Foundation, Richmond, for appellants. Crosby, Heafey, Roach & May, Professional Corp., Carlisle C. Crosby, Richard J. Heafey, P. Gerhardt Zacher, Oakland, for respondent Merchants Collection Assn. of Oakland, Inc. Gross, Gross, Rose & Schwartz, Barry R. Gross, Oakland, for respondent Irwin J. Eskanos.

The instant action was brought by six individual plaintiffs on behalf of themselves and others similarly situated against defendants Merchants Collection Association of Oakland, Inc. (hereafter ‘Merchants') and its attorney, Irwin Eskanos. Plaintiffs sought declaratory and injunctive relief, an accounting, an order vacating certain judgments obtained by defendants and compensatory and punitive damages. Defendants each demurred to plaintiffs' first amended complaint and said demurrers were sustained without leave to amend and a judgment of dismissal was thereafter entered as to each defendant, from which judgments plaintiffs appeal.

Plaintiffs base their right to injunctive and other relief solely upon the fact that defendants have allegedly been engaging in the practice of commencing municipal court actions for money due in the Oakland-Piedmont Judicial District although defendants were aware that the individuals sued were residents of another county and that the contracts sued upon were entered into and to be performed in that county. Plaintiffs incorporated into their first amended complaint copies of the verified municipal court complaints for money which defendant Merchants had filed in the Oakland-Piedmont Judicial District against certain of the plaintiffs. In each instance, the municipal court complaint alleged that the individual sued had become indebted to Merchants' assignor in a specified amount for goods, wares and merchandise sold on an open book account; and that Merchants was informed and believed that the account was payable in the City of Oakland, County of Alameda. The municipal court complaints failed to allege where the individuals sued resided and likewise failed to allege where the obligations sued upon were entered into.

Plaintiffs alleged that by filing such complaints, defendants were violating Code of Civil Procedure, section 395, by bringing suit in an improper court and were also violating Code of Civil Procedure, section 396a, in that the complaints filed by defendants failed to state facts from which it could be determined which court was the proper court for trial. Plaintiffs also alleged that defendants' conduct violated Civil Code, section 1812.10, in that they were suing to recover money due upon retail installment sales in an improper court. Finally, plaintiffs alleged that defendants were committing an unfair and fraudulent business practice in violation of Civil Code, section 3369, subdivision 3.

Turning first to the alleged violation of Civil Code, section 3369, that section provides in pertinent part that ‘2. Any person performing or proposing to perform an act of unfair competition within this State may be enjoined in any court of competent jurisdiction.

‘3. As used in this section, unfair competition shall mean and include unlawful, unfair or fraudulent business practice and unfair, untrue or misleading advertising and any act denounced by Business and Professions Code Sections 17500 to 17535, inclusive.’

The essence of the law of unfair competition is that one merchant shall not divert customers from another by representing what he sells as emanating from the second. (Don Alvarado Co. v. Porganan (1962) 203 Cal.App.2d 377, 381–382, 21 Cal.Rptr. 495.) The act of filing municipal court complaints in an improper court is in no sense ‘unfair competition’ and does not constitute conduct violative of Civil Code, section 3369, or of Business and Professions Code, sections 17500 through 17535.

Turning next to defendants' alleged violation of Civil Code, section 1812.10, plaintiffs' first amended complaint is devoid of and allegations which bring defendants within the purview of that statute.

Prior to a 1969 amendment to Civil Code, section 1812.10, the venue requirements of that section applied only to an action brought in a municipal or justice court upon a ‘contract under the provisions of upon a ‘contract under the provisions of this chapter’ (Stats.1969, ch. 186, § 1.) A ‘contract,’ as defined in Civil Code, section 1802.6, meant a contract for a retail installment sale which provided for repayment in installments and in which a time price differential is computed upon and added to the unpaid balance at the time of sale or where no time price differential is added but the goods or services are available at a lesser price if paid by cash or where the buyer, if he had paid cash, would have received any higher quality goods or services at no added cost over the total amount he pays in installments.

It was not until 1969 that Civil Code, section 1812.10, was amended to apply to an action on a contract ‘or installment account’ (Stats.1969, ch. 186, § 1).

Plaintiffs commenced the instant action in October 1968. Their first amended complaint contains no allegations to the effect that defendants had brought suit in the Oakland-Piedmont Judicial District upon a ‘contract,’ as defined in civil Code, section 1802.6. Plaintiffs alleged only that defendants had brought suit upon ‘retail installment sales.’ Plaintiffs incorporated into their complaint several of the municipal court complaints filed by defendants. All of them, as noted above, were for the balance due for goods sold upon an open book account. Under these facts, plaintiffs' complaint did not state a cause of action for a violation of Civil Code, section 1812.10, since that section was not applicable to the actions filed by defendants.

The remaining allegations of plaintiffs' first amended complaint merely charged defendants with failing to comply with the venue and procedural requirements contained in Code of Civil Procedure, sections 395 and 396a. By seeking to found a cause of action upon such failure, plaintiffs are, in effect, attempting to obtain in the superior court relief which plaintiffs should properly have sought in the various municipal court actions filed by defendants. Stated differently, plaintiffs are at tempting to collaterally attack municipal court proceedings which are not subject to any jurisdictional defect.

It is settled that venue is not jurisdictional and that the wrong venue may be waived by failure to move for a change. (2 Witkin, Cal.Procedure (2d ed. 1970), § 416, p. 1248; Brock v. Superior Court (1947) 29 Cal.2d 629, 632, 177 P.2d 273.) The plaintiff§ Choice of venue is presumptively proper. (Johnson v. Superior Court (1965) 232 Cal.App.2d 212, 217, 42 Cal.Rptr. 645.) A general allegation as to the place of performance is sufficient for venue purposes if defendant's answer failed to deny, and therefore admitted, the allegation. (Gilman v. Nordin (1952) 112 Cal.App.2d 788, 792, 247 P.2d 394.)

Code of Civil Procedure, section 395, is purely a venue provision, and if plaintiffs believed that defendants had violated that section by bringing suit in an improper court, plaintiffs' remedy was to appear in the municipal court action filed by defendants and move for a change of venue. Code of Civil Procedure, section 396a, does affirmatively require that the plaintiff in a justice or municipal court action must state facts state facts from which the proper court for trial may be determined, and the section further provides that the action shall be dismissed for the plaintiff's failure to do so. However section 396a specifically provides that the defendant may consent to trial in the court where the action is brought even though the plaintiff has failed to made the required factual statement or the action is actually in the wrong court. Under such circumstances, the provision cannot be said to be jurisdictional. (2 Witkin, Cal.Procedure (2d ed. 1970), § 517, pp. 1338–1339.)

The plaintiffs have failed to allege any jurisdictional defect in the municipal court actions filed by defendants and have therefore failed to establish their right to maintain the instant action, which is in essence a collateral attack upon the municipal court proceedings Plaintiffs and the other individuals who were allegedly sued in an improper court had two options: (1) they could appear in that court and take appropriate steps to obtain a change of venue if they in fact desired such change, or (2) they could do nothing, thereby waiving any defect in the venue. Certainly, plaintiffs did not have the additional option of waiving their venue objections and then attempting to base an independent action against defendants upon the alleged defects in the venue.

The judgments are affirmed.

I concur. No doubt, as contended by the plaintiffs, abuses and overreaching may arise in employment of accepted legal procedures by those suing to collect small amounts on assigned claims. One cannot infer, however, that the bulk of collection claims are not brought for creditors entitled to their money. This cause perhaps emphasizes that the remedy for abuses in the application of valid legal procedures is not an ineffectual ‘class action’ to exhume and rebury dead causes. Rather, the evidence of abuses, if any arise, should be displayed to the Legislature, for enactment of appropriate procedural safeguards. In the context of this case, these are at least partially provided by the 1969 amendment to Civil Code, section 1812.10.

SHOEMAKER, Presiding Justice.

TAYLOR, J., concurs.