Segerstrom v. Yergovich CA4/1 ( 2021 )

Filed 5/3/21 Segerstrom v. Yergovich CA4/1
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
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COURT OF APPEAL, FOURTH APPELLATE DISTRICT
DIVISION ONE
STATE OF CALIFORNIA
THEODORE SEGERSTROM et al., D076373
Plaintiffs and Appellants,
v. (Super. Ct. No. 37-2016-
00002434-CU-BT-CTL)
JEFFREY YERGOVICH et al.,
Defendants and Respondents.
APPEAL from a judgment of the Superior Court of San Diego County,
Richard S. Whitney, Judge. Affirmed.
Law Offices of Kevin M. Tripi, Kevin M. Tripi; The Ehrlich Law Firm
and Jeffrey I. Ehrlich for Plaintiffs and Appellants.
Pacific Employment Law and Joseph P. Mascovich; Diepenbrock &
Cotter, John P. Cotter and Brian J. O’Connor for Defendants and
Respondents.
INTRODUCTION
Dissatisfied with the restoration of seven Shelby Mustangs, Rae and
Theodore “Ted” Segerstrom (collectively, the Segerstroms) sued Jeffrey
Yergovich and R&A Motorsports, Inc. (R&A; collectively, Defendants) for
breach of contract, negligence, and violation of the Unfair Competition Law
(UCL; Bus. & Prof. Code, § 17200, et seq.), among other claims. Following
trial, the jury found for Defendants on all causes of action. The Segerstroms
challenge this outcome, contending (1) the trial court improperly denied their
motion for judgment notwithstanding the verdict (JNOV) because there was
substantial evidence to support their breach of contract claims; (2) the trial
court improperly granted a motion in limine excluding testimony by non-
party customers with allegedly similar experiences; and (3) the court
erroneously denied their motion for nonsuit regarding the UCL claim as a
result of the exclusion of evidence in connection with the motion in limine.
We conclude the trial court’s rulings on the motions challenged were
proper, and we will affirm.
BACKGROUND AND PROCEDURAL FACTS
The Segerstroms are Shelby Mustang car collectors. Shelby Mustangs
are high performance vehicles made by Ford between 1965 and 1970 in
limited numbers. Ted Segerstrom wanted to have a red convertible KR
Shelby Mustang, identified by the last four digits of its vehicle identification
number as 4266, restored in honor of his daughter, who had passed away in
1993. Based on a recommendation from someone from Shelby America, Ted’s
assistant Lawrence Williams reached out to Yergovich, who restores Shelbys.
In January 2005, Ted had Williams place car 4266, which was disassembled,
on a trailer and drive it to Scottsdale, Arizona so that he could show it to
Yergovich, the owner of R&A Motorsports, Inc. Yergovich was in Arizona
because a car he had restored was being sold at auction.
The Segerstroms had dinner with Yergovich, then they showed him car
4266 in the trailer in the parking lot. The parties discussed Yergovich
restoring the vehicle, and Williams drafted an agreement, under the terms of
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which Yergovich would take possession of the car, motor, and related parts
“for purpose of Concourse restoration of Shelby Mustang.” The agreement
did not define the term “concourse restoration.”
The restoration of vehicle 4266 took nearly two years and cost about
$240,000. It initially had 14 issues to correct, but after Yergovich addressed
the items, the car looked to Ted like it had been restored to a factory-
assembly-line condition; it looked brand new.
Between 2007 and 2013, the Segerstroms hired Defendants to restore
six additional Shelby Mustangs, orally extending the terms of the original
contract. The Segerstroms paid $1,230,000 for the restoration of the seven
vehicles.
Defendants finished the restoration of vehicle 1711 in 2015, and the
Segerstroms discovered a leak in the transmission shortly after it was
delivered. Yergovich traveled to California to repair the leak. About a month
later, car 1711 began leaking transmission fluid again. Yergovich offered to
repair the vehicle in Nevada and have a third party certify that the repair
was completed properly, but the Segerstroms refused his offer.
Instead, the Segerstroms brought the vehicle to Tim Lea, another
restorer, to fix the transmission problem. After Lea repaired the leak, he
gave the Segerstroms a list of additional problems with vehicle 1711. The
Segerstroms then hired Jeff Speegle, who had been a judge with the Shelby
America Automobile Club (SAAC) and the Mustang Club of America (MCA),
to examine the other six vehicles and to document any issues with them,
which Speegle did, looking at the vehicles as if they had rolled off the factory
line.
The Segerstroms hired Lea to re-restore the seven vehicles using a
standard of “concours trailered standards with upgrades.” To complete these
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restorations, Lea stripped away Defendants’ restoration work through media
blasting.
The Segerstroms filed a lawsuit against Defendants and filed an
amended complaint in October 2016. The first amended complaint alleged
eight causes of action: (1) breach of contract; (2) negligence regarding all
seven cars; (3) negligence regarding post-restoration repairs to car 1711 and
car 2506; (4) conversion; (5) promises made without intent to perform;
(6) intentional misrepresentation; (7) negligent misrepresentation; and
(8) unfair competition.
To support their unfair competition claim, the Segerstroms had
planned to introduce testimony from four former clients whose Shelby
restoration experiences with Defendants were unsatisfactory. Defendants
filed a motion in limine to exclude such testimony, and the court granted the
motion, excluding the evidence from the case-in-chief, but permitting it for
purposes of impeachment.
At trial, the Segerstroms testified regarding their understanding of the
quality of restoration Defendants had agreed to. They also called witnesses
to testify about the quality of the completed restorations, including the
engines in the seven vehicles.
At the close of the case-in-chief, Defendants moved for a nonsuit on the
unfair competition cause of action, and the trial court granted the motion.
The defense called witnesses to testify regarding the quality of
restoration, including the engine work completed as part of the restorations
and Defendants’ decisions not to rebuild or replace some original parts.
Robert Perkins, who had served as the national head judge for the
concours category for the SAAC since 2015, testified that restorers look to the
club rules and regulations as a guide during their restoration and that it was
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common in the industry to use the car club standards as the standards for
restoration.
The MCA and the SAAC hold competitions for Shelby Mustang
automobiles, including the Mid-America Ford Nationals, and the clubs certify
the judges who evaluate the restored cars. The MCA has three categories for
judging: thoroughbred, concours-trailered, and concours-driven.
The thoroughbred class is the highest class. It does not allow
reproduction of parts in the vehicles; they must be original, date-coded
correct parts, and finishes must be correct, natural finishes, not replicas. The
concours-trailered class allows for reproduction of parts and for finishes on
parts to replicate original surfaces. Although original finishes are not
required, often judges and restorers prefer the original parts if they are in
good condition. The standard of perfection in the MCA concours-trailered
class is 97 percent to earn a gold rating.
The concours-driven category applies to cars that are driven to events
rather than trailered there, and those cars do not require as much detail on
certain areas of the vehicles.
The SAAC is similar, though its classes are defined as divisions, with
Division 2 being comparable to the MCA concours-trailered division. To earn
the highest award in that category, a car must earn 95 percent of the points
available.
Following the nearly-two-month trial, the jury returned a special
verdict in favor of Defendants, concluding Defendants had not failed to do
anything required by the contract and had not engaged in negligence or
fraud.
The Segerstroms moved for JNOV and a new trial, claiming that
Yergovich admitted to completing substandard work and arguing the
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evidence of defective work on the cars entitled the Segerstroms to JNOV or
new trial on the contract and negligence claims. These motions claimed the
Segerstroms had proved that Yergovich promised “factory assembly line”
restorations. Defendants argued the jury had heard conflicting evidence
about the restoration standard and their compliance with it, so the jury’s
verdict was supported by substantial evidence. The court denied the motions.
The verdict was entered May 7, 2019, and judgment was entered
May 9, 2019. The Segerstroms timely appealed.
DISCUSSION
A. Judgment Notwithstanding the Verdict (JNOV)
On appeal from the denial of a JNOV motion, we review the record de
novo and make an independent determination as to whether there is
substantial evidence to support the jury’s findings. (Pacific Corporate Group
Holdings, LLC v. Keck (2014) 232 Cal.App.4th 294, 309; Trujillo v. North
County Transit Dist. (1998) 63 Cal.App.4th 280, 284.) Our review is limited
to determining whether there is substantial evidence that supports the jury’s
verdict. (Begnal v. Canfield & Associates, Inc. (2000) 78 Cal.App.4th 66, 72.)
We accept as true the evidence supporting the verdict; we disregard
conflicting evidence, and we indulge every legitimate inference that supports
the verdict. (Ibid.) If sufficient evidence supports the jury’s verdict, we must
uphold the denial of the JNOV motion. (Ibid.)
The issue presented here is whether the jury’s verdict finding that
Defendants did not breach an implied contractual duty of care is supported
by substantial evidence in the record. The Segerstroms contend the
undisputed evidence demonstrates a breach of the duty to perform the
automobile restorations “completely and with reasonable care” under the
concours-trailered standard and ask us to reverse the trial court’s denial of
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their partial JNOV on the issue of breach of contract. Defendants argue this
is a change in the theory of liability improperly raised on appeal, and they
also maintain that substantial evidence supports the jury’s verdict.
1. Theory of Trial Doctrine
Under the theory of trial doctrine, an appellant may not raise for the
first time on appeal issues that differ from the trial theory unless there has
been a post-judgment change in the law or the new theory involves only a
question of law that was not actually or potentially open to question at trial.
(Marsango v. Automobile Club of Southern California (1969) 1 Cal.App.3d
688, 694.) Defendants contend that because the Segerstroms argued at trial
that the contract called for restoration to a factory-line standard, not simply a
concours-trailered standard, they cannot now argue that the record
demonstrates a failure to restore the cars to the concours-trailered standard.
Defendants base their conclusion on the testimony elicited by the
Segerstroms’ attorney, which focused on whether Defendants restored the car
to factory-assembly-line condition.
Defendants argue that because the Segerstroms’ witnesses did not
explicitly address the concours-trailered standard in their testimony on direct
examination, that theory was not introduced. And further, had it been
introduced as a theory, Defendants could and would have introduced evidence
to rebut such a claim.
Whether the parties had agreed to restoration to the factory-line
standard or the concours-trailered standard was itself a dispute the jury had
to resolve; thus, there was reason for each party to introduce evidence
regarding both standards. Indeed, the defense repeatedly elicited testimony
regarding whether the work met concours-trailered requirements.
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Further, the special verdict forms were ambiguous regarding the
standard the parties agreed to, which allowed the jury to determine for itself
whether the factory-line standard or the concours-trailered standard
governed the relationship. Once the jury determined what standard the
agreement employed, it was able to evaluate if Defendants had failed to
restore the vehicles to that agreed-upon standard. Because the jury
considered the concours-trailered standard in reaching its verdict, it is not a
new theory on appeal.
Finally, the parties appear to agree the jury applied the concours-
trailered standard in reaching its conclusion that Defendants did not “fail to
do something that the contract required them to do.” Thus, it is not
inappropriate for the Segerstroms to now argue there was not substantial
evidence to support such a conclusion.
2. Substantial Evidence Supports the Verdict
We next consider whether substantial evidence supports the jury’s
verdict. Defendants argue the breach of contract claims use the same
standard of care as the negligence claim, and the Segerstroms’ failure to
challenge the negligence verdict prevents them from arguing there was any
breach of contract. The Segerstroms contend that Defendants were obligated
to perform the work “completely” and to do so with “reasonable care”; thus,
the breach of contract claim is not governed by the same standard of care as
the negligence claim.
The jury instruction for the implied contractual duty claim was a
modified version of CACI No. 328, which stated that the contracts implied
performance would “be done completely and with reasonable care.” The jury
instruction for the negligence claim used a modified version of CACI No. 401
and described negligence as the “fail[ure] to use the skill and care that a
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reasonably careful automobile restorer would have used in similar
circumstances.”
Although the standard of care provided under both the implied breach
of contract and the negligence causes of action require the services to be
performed in a competent and reasonable manner (North American Chemical
Co. v. Superior Court (1997) 59 Cal.App.4th 764, 774) and to use “the care,
skill and knowledge necessary to do the job in a good and workmanlike
manner” (Roscoe Moss Co. v. Jenkins (1942) 55 Cal.App.2d 369, 377), the
Segerstroms maintain that under the breach of contract claim, Defendants
were obligated to perform the work not only with “reasonable care,” but also
“completely.” In closing arguments, the Segerstroms’ attorney argued the
Defendants did not “do the work they said they were supposed to do” in
addition to arguing that Defendants owed a duty to do the work “the way that
the contract said they were supposed to do them.” Although we question
whether a reasonably careful automobile restorer in similar circumstances
would have incompletely restored the vehicles, even if we treat the standards
of care as distinct, the outcome is the same because there is substantial
evidence to support the jury’s verdict.
In their appeal, the Segerstroms detail problems and issues with each
of the seven vehicles to support their argument that Defendants failed to
perform the restoration of each of the cars “completely and with reasonable
care.” Among their complaints is the existence of perforations in the metal of
a vehicle, the use of filler and paint cover, nonfunctional or rotted window
tracks, pitting on various surfaces of the car, transmission leaks, holes in
some sheet metal, defective battery trays, rust damage, and dents in bottoms
of vehicles and on frame rails. The Segerstroms argue these issues provide
9
proof of materially deficient work in violation of their contract, even under
the concours-trailered standard of restoration.
Defendants provided testimony regarding some of these flaws, in some
cases arguing that they were not properly characterized as problems and in
other cases suggesting that the issues were the result of poor maintenance by
the Segerstroms over the intervening years rather than by incomplete or
substandard restoration by Defendants at the time of delivery. Defense
counsel elicited testimony that the standards for restoration had changed
over the intervening years; that restoration technology, methods, and parts
had changed and improved over time; that some of the decisions regarding
whether or not to replace or rebuild parts of the vehicles were judgment calls
based on the value of retaining the original parts; and that some of the
issues, like transmission leaks and rust, could be explained by the passage of
time coupled with improper or incomplete maintenance. Thus, Defendants
challenged whether the identified problems were issues at the time of
delivery and whether they rose to a level of material deficiency at all.
Further, Defendants countered the Segerstroms’ claims that these
issues meant they had “fail[ed] to do something that the contract required
them to do” because the contract required them to restore the vehicles to
concours-trailered standards, and Defendants had done so. In particular,
Defendants’ expert testified vehicles had met concours-trailered standards at
the gold or high silver level based on the standards at the time of restoration
completion,1 and one of the Segerstroms’ experts likewise acknowledged
1 None of the experts drew a conclusion regarding whether vehicle 0532
met the standards to earn a concours-trailered rating because the engine and
transmission were kept separate from the rest of the car at the request of the
Segerstroms. Perkins did not testify regarding the concours-trailered rating
he believed car 1044 would earn.
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vehicles met concours-trailered standards at the bronze, silver, or gold
levels.2
Thus, even taking into consideration all the evidence the Segerstroms
presented, listing the complaints and concerns with the work Defendants
completed, there was substantial evidence to support the jury’s conclusion
that Defendants met their contractual burden under the concours-trailered
standard, so the court appropriately denied the request for JNOV.
B. Motion in Limine
The Segerstroms first argue that the court improperly granted a
defense motion in limine, which resulted in the exclusion of testimony by four
of Defendants’ other customers regarding their vehicle restoration
experiences with R&A. They contend the exclusion of this evidence was
improper because it prevented them from presenting any evidence to support
their UCL cause of action.
We typically review a trial court’s evidentiary decisions for an abuse of
discretion. (Twenty-Nine Palms Enterprises Corp. v. Bardos (2012) 210
Cal.App.4th 1435, 1447.) There is no blanket prohibition on the use of the in
limine proceeding to decide a dispositive motion (K.C. Multimedia, Inc. v.
Bank of America Technology & Operations, Inc. (2009) 171 Cal.App.4th 939,
950-951), and courts have inherent power to use motions in limine to dispose
of a claim. (Amtower v. Photon Dynamics, Inc. (2008) 158 Cal.App.4th 1582,
1595.) However, when a motion in limine is used to dispose of an entire
cause of action, it triggers a more rigorous standard of review, with
inferences and conflicts of evidence resolved in favor of the nonmoving party.
(Kinda v. Carpenter (2016) 247 Cal.App.4th 1268, 1282, 1286-1287.)
2 Speegle did not testify regarding the concours-trailered rating he
believed car 0128 would earn.
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Here, however, the issue is not simply a conflict in the evidence or
inferences to draw. The motion in limine sought to exclude testimony under
Evidence Code3 section 1101, subdivision (a), which prohibits the
introduction of character evidence to prove a defendant’s propensity to act
badly. (Clark v. Optical Coating Laboratory, Inc. (2008) 165 Cal.App.4th 150,
174.) Evidence is properly excluded when bad conduct in one circumstance
suggests a propensity to act badly in another circumstance. (Ibid.)
In their opening brief, the Segerstroms do not argue that section 1101
was inapplicable to the evidence about the other customers they sought to
introduce. The Segerstroms maintain that this evidence was necessary and
relevant to the UCL claim because it would demonstrate a “practice of
‘knowingly performing grossly substandard restoration work.’ ” In other
words, the purpose identified by the Segerstroms for introducing this
evidence is precisely the type of evidence prohibited by section 1101,
subdivision (a).
In their reply brief, the Segerstroms argue explicitly for the first time
that an exception found in section 1101, subdivision (b) is applicable here,
contending that R&A’s conduct in advertising one type of restoration and
providing a lower quality restoration than promised violates the UCL
because it shows a pattern of an unfair business practice. However, the
Segerstroms forfeited this argument by failing to raise it in their opening
brief. (High Sierra Rural Alliance v. County of Plumas (2018) 29 Cal.App.5th
102, 111; see, e.g., Ewald v. Nationstar Mortgage, LLC (2017) 13 Cal.App.5th
947, 948 [“failure to provide legal authorities to support arguments forfeits
contentions of error”]; SCI California Funeral Services, Inc. v. Five Bridges
3 Further unspecified section references are to the Evidence Code.
12
Foundation (2012) 203 Cal.App.4th 549, 573, fn. 18 [cannot salvage forfeited
argument by addressing it in reply].)
Even were we to consider the Segerstroms’ arguments on their merits,
we would not conclude the court’s ruling was erroneous. Certainly, there are
occasions when a defendant’s pattern of conduct can be used appropriately to
demonstrate an unfair business practice, such as in cases where a plaintiff
brings a representative or class action. (See, e.g., Arce v. Kaiser Foundation
Health Plan, Inc. (2010) 181 Cal.App.4th 471, 478, 480 [pattern or practice of
denying coverage for behavior and speech therapy to members with autism
spectrum disorders brought as class action]; People v. Dollar Rent-A-Car
Systems, Inc. (1989) 211 Cal.App.3d 119, 122-123 [unfair competition action
brought by attorney general based on pattern of false or misleading
statements].) However, this is an individual action, not a representative one.
Thus, the experiences of other customers are not relevant to the Segerstroms’
experience and could improperly prejudice the jury. (See § 352.)
The Segerstroms rely on R & B Auto Center, Inc. v. Farmers Group, Inc.
(2006) 140 Cal.App.4th 327, 359 (R & B Auto) to support their claim that
testimony from other customers is relevant and appropriate to show unfair
competition in this case. In R & B Auto, the plaintiff argued a defendant’s
practice of selling new-car-only insurance coverage to dealerships that sold
only used cars violated the UCL. (R & B Auto, at pp. 357-358.) Defendants
sought to exclude testimony of witnesses from other dealerships that they
had received express representations that the policies would provide coverage
for their used vehicles. (Ibid.) Defendants argued the witnesses had not
been named in discovery and so should be excluded. (Ibid.) The trial court
agreed, and the result was the exclusion of nearly all the evidence that would
have shown this pattern and practice, which was underlying the unfair
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competition claim. (Ibid.) The court subsequently dismissed the UCL cause
of action. (Ibid.) The appellate court remanded the matter, reversing the
nonsuit decision and directing the trial court to revisit its evidentiary rulings.
(Id. at pp. 361-362.)
However, R & B Auto is distinguishable. There, the plaintiffs sued
before Proposition 64 amended the standing requirements of the UCL.4
Although the plaintiff had not initially made class or representative claims,
on appeal the plaintiff argued that it could meet class certification
requirements based in part on the testimony of the three witnesses that had
been excluded. (R & B Auto, supra, 140 Cal.App.4th at p. 361.) The
appellate court granted the plaintiff’s request so it could show compliance
with Code of Civil Procedure section 382 regarding class representation.
(R & B Auto, at p. 361.) In other words, the plaintiff acknowledged that in
order to introduce the testimony from the additional witnesses, it needed to
bring a class action.
The posture of the case before us is markedly different. The
Segerstroms did not plead the UCL cause of action as a representative one.
Instead, they argue that the unfair business practice here was based on false
promises to them and that a UCL claim can be based on a single instance of
4 Prior to the enactment of Proposition 64 in 2004, a plaintiff did not
have to show actual injury, and a representative action did not have to be
brought as a class action. (Amalgamated Transit Union, Local 1756, AFL-
CIO v. Superior Court (2009) 46 Cal.4th 993, 1000.) Proposition 64 amended
the UCL to allow private representative claims only by those who satisfied
new standing requirements and complied with Code of Civil Procedure
section 382 (Amalgamated Transit Union, at p. 1000), meaning the
requirements for a class action must be met (Arias v. Superior Court (2009)
46 Cal.4th 969, 980).
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an unfair business practice, even with only one victim.5 (See Blanks v.
Seyfarth Shaw LLP (2009) 171 Cal.App.4th 336, 364 (Blanks).) Section 1101,
subdivision (a) does not preclude evidence of Defendants’ conduct as it relates
to the Segerstroms; thus, the UCL claim is not foreclosed merely by the
application of this evidentiary rule.
Moreover, even were the evidence not prohibited by section 1101, the
court would be required to engage in a further inquiry under section 352.
(Brown v. Smith (1997) 55 Cal.App.4th 767, 791.) Section 352 gives the court
discretion to exclude evidence when “its probative value is substantially
outweighed by the probability that its admission will (a) necessitate undue
consumption of time or (b) create substantial danger of undue prejudice, of
confusing the issues, or of misleading the jury.”
Here, the introduction of the excluded evidence would have run afoul of
the concerns raised by section 352. Ensuring the evidence offered by other
customers demonstrated a true pattern or practice would necessitate time-
consuming testimony about the sophistication of the other customers, the
scope of their relationships with R&A, what specifically was agreed to in
their contracts, and the quality of the finished work. Not only would that
additional testimony have added to an already-lengthy trial, but the evidence
would have had limited relevance regarding what happened in the instant
5 In opposition to the motion in limine, the Segerstroms argued that
Defendants had a practice of stealing rare, valuable parts off the vintage
vehicles, of performing grossly substandard restoration services, and of
engaging in billing fraud. However, as we explain post, they do not repeat
these claims on appeal or explain whether evidence of these issues was
sufficient to warrant denial of the motion for nonsuit. (Okorie v. Los Angeles
Unified School Dist. (2017) 14 Cal.App.5th 574, 600 [matters lacking in legal
discussion is forfeited]; Lonely Maiden Productions, LLC v. GoldenTree Asset
Management, LP (2011) 201 Cal.App.4th 368, 384 [matters not adequately
supported with record citations deemed forfeited].)
15
case, potentially confusing issues and misdirecting the jury. We cannot say,
taking the limited probative value and the substantial potential for undue
prejudice in these circumstances, that excluding the evidence was a decision
made in error.
C. Nonsuit
The Segerstroms argue the court erred in granting Defendants’ nonsuit
for the UCL claim based on lack of evidence. They contend their cause of
action for unfair competition was hamstrung by the court’s decision to grant
the motion in limine, resulting in the exclusion of testimony by other
customers of R&A.
1. Standard of Review
A defendant is entitled to a nonsuit if the trial court determines that,
as a matter of law, the evidence the plaintiff has presented is not sufficient to
permit a jury to find in the plaintiff’s favor. (Nally v. Grace Community
Church (1988) 47 Cal.3d 278, 291.) We review a ruling on a motion for
nonsuit for substantial evidence (OCM Principal Opportunities Fund, L.P. v.
CIBC World Markets Corp. (2007) 157 Cal.App.4th 835, 845 (OCM
Principal)), accepting the evidence most favorable to plaintiff as true and
disregarding conflicting evidence (Carson v. Facilities Development Co. (1984)
36 Cal.3d 830, 838-839; Nally, at p. 291). However, “[a] mere ‘scintilla of
evidence’ does not create a conflict for the jury’s resolution; ‘there must be
substantial evidence to create the necessary conflict.’ ” (Nally, at p. 291.)
Substantive evidence is not synonymous with any evidence; it must be
reasonable, credible, and of solid value. (OCM Principal, at p. 845.)
2. The Unfair Competition Law
The UCL is an equitable means through which a private individual can
bring suit to prevent unfair business practices and restore money or property
16
to victims of such a practice. (Korea Supply Co. v. Lockheed Martin Corp.
(2003) 29 Cal.4th 1134, 1150 (Korea Supply).) To bring a UCL claim, a
plaintiff must demonstrate economic injury resulting from the unfair
competition. (Kwikset Corp. v. Superior Court (2011) 51 Cal.4th 310, 323,
326.) When a plaintiff alleges false advertising or misrepresentation, he or
she must show that the misrepresentation was the immediate cause of the
injury-producing conduct by showing reliance on the representation. (Id. at
p. 327.) Additionally, “a private plaintiff must file a class action in order to
represent the interest of others.” (Zhang v. Superior Court (2013) 57 Cal.4th
364, 372 (Zhang).) Thus, “[p]rivate plaintiffs must demonstrate economic
injury caused by the alleged unfair competition, and may not represent the
interest of others without meeting the requirements for class action.” (Id. at
p. 382.)
The UCL provides grounds for relief when a business practice is unfair
or fraudulent, even if that practice is not also unlawful. (Zhang, supra, 57
Cal.4th at p. 370.) To demonstrate a fraudulent practice, a plaintiff must
show he or she “was likely to be deceived and suffered economic injury as a
result of the deception.” (Id. at p. 380.) A business practice can be deemed
17
unfair even if it is not expressly prohibited by another law.6 (Korea Supply,
supra, 29 Cal.4th at p. 1143; Cel-Tech, at p. 180.)
As the Segerstroms note, “the UCL is not limited to cases involving
‘systematic misconduct’ by the defendant” because the definition of “unfair
competition” includes any unlawful, unfair, or fraudulent “business act or
practice.” (Bus. & Prof. Code, § 17200.) Thus, “a UCL claim may be based on
a single instance of unfair business practice” (Zhang, supra, 57 Cal.4th at
p. 383) “even if the unlawful practice affects only one victim” (Blanks, supra,
171 Cal.App.4th at p. 364).7
6 The Supreme Court has not defined “unfair” in the context of actions by
consumers alleging fraudulent or unlawful business practices or unfair,
deceptive, untrue, or misleading advertising. (Cel-Tech Communications,
Inc. v. Los Angeles Cellular Telephone Co. (1999) 20 Cal.4th 163, 187, fn. 12
(Cel-Tech).) Following Cel-Tech, this court explained that whether the Cel-
Tech definition of “unfair” should apply to consumer injuries has divided
courts. (Puentes v. Wells Fargo Home Mortgage, Inc. (2008) 160 Cal.App.4th
638, 646-647; see also Bardin v. DaimlerChrysler Corp. (2006) 136
Cal.App.4th 1255, 1274 [urging Legislature and Supreme Court to clarify
scope of definition of “unfair”].) Some courts continue to evaluate fairness by
considering the business practice’s impact on its victim, balancing that
against the justifications and motives of the wrongdoer. (See Smith v. State
Farm Mutual Automobile Ins. Co. (2001) 93 Cal.App.4th 700, 718-719.)
However, this definition presupposes a finding that a particular business
practice existed, and here Defendants challenge the very existence of the
alleged practice of “knowingly performing grossly substandard restoration
work.”
7 Zhang was decided on demurrer. The court noted that at that point, it
was not concerned with “how Zhang might go about proving her claim”
because “the possible difficulty of proving the plaintiff’s allegations is not a
relevant consideration on a review of a demurrer ruling.” (Zhang, supra, 57
Cal.4th at p. 383.) Although the case before us is at a procedurally different
point, the general rule that a UCL claim can be based on a single instance of
an unfair business practice is applicable.
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3. Additional Facts
At the close of the case-in-chief, Defendants moved for a nonsuit on the
UCL cause of action. Defendants argued that the language upon which the
Segerstroms based their fraud or deceptive advertising claim, that the
vehicles would be restored so they were “just like it left the factory,” did not
appear on R&A’s website until after 2013.8 They also argued any such
claims were simple puffery, and the standard the parties’ contract used for
the restoration was concours-trailered.
Before it granted the nonsuit, the trial court acknowledged that it was
obligated to take every inference concerning the evidence presented in a light
most favorable to the plaintiffs. Still, it explained there “was not sufficient
evidence, triable issues of fact presented in the form of evidence” to place the
matter before the jury. The court commented that the key issue appeared to
be the standard of restoration required by the parties’ agreement, that the
complaint did not present as one regarding unfair competition, and that the
evidence actually presented in the case-in-chief did not bear out a UCL cause
of action.
4. Analysis
The Segerstroms contend the trial court’s ruling on the motion in
limine precluded them from presenting testimony that would have supported
their UCL claim, and the nonsuit was the result of the exclusion of the
8 The Segerstroms also argued in their briefing that they had presented
evidence showing that Yergovich removed and kept valuable parts from their
cars. The Segerstroms do not raise similar arguments on appeal and we
therefore do not consider them in reaching our conclusion. We do note,
however, that Lea’s admission that he did not know what happened to the
parts and the Segerstrom’s failure to produce evidence that Defendants
received any of the allegedly stolen parts can hardly be described as
“ ‘ “reasonable . . . , credible, and of solid value.” ’ ” (OCM Principal, supra,
157 Cal.App.4th at p. 845.)
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testimony by former R&A customers. While the court’s ruling on that motion
explains the lack of evidence by other customers regarding R&A’s business
practices, it did not prevent the Segerstroms from introducing evidence
regarding their own experiences with R&A as a way to prove a UCL cause of
action.
The opening brief argues that they could have shown that R&A’s
business practices were fraudulent if they had been permitted to present
testimony from former customers who were misled about the restoration
standard promised by R&A and about the quality of work that occurred. And
they argue that the testimony of former costumers likewise would have
established an unfair business practice because it would have shown R&A
had a practice of using misrepresentation to obtain contracts, then
performing substandard work. Similarly, in their reply brief, the
Segerstroms argue that Defendants “used false or fraudulent promises to
induce Shelby owners to hire them to perform restorations” and then
“knowingly performed ‘improper, substandard, and unacceptable restoration
services.’ ” But these arguments focus on other parties, not the plaintiffs.
The Segerstroms fail to cite in their opening brief any evidence in the record
to support their UCL cause of action, instead maintaining that the relevant
evidence was excluded through the in limine process.
In their reply brief, the Segerstroms offer one argument for why the
court improperly granted the motion for nonsuit that was specific to their
experiences: “R&A’s advertising was likely to, and in fact did, mislead them
as well as other customers—and therefore R&A violated the UCL.” And they
argue that “R&A’s practice of promising a ‘factory new’ restoration while
delivering a restoration of decidedly lower quality would also qualify as an
‘unfair’ business practice.” They point to the R&A website as proof to support
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their theory that Defendants used false or fraudulent promises to induce
them to hire R&A.
However, the uncontroverted evidence demonstrates that the
Segerstroms hired Defendants in 2005, and the website was not built until
2013, toward the end of Defendants’ relationship with the Segerstroms. So,
even though Mr. Segerstrom testified that he believed they were getting what
was (eventually) advertised by the website, the website advertisement could
not have provided a basis for their beliefs because it did not exist at the time
the relationship was formed. Given the lack of substantial evidence to
support the UCL cause of action, the trial court properly granted the request
for nonsuit.9
9 The Segerstroms also address a number of other challenges to their
UCL cause of action raised by Defendants in their nonsuit motion, including
whether a UCL cause of action was appropriate given the existence of an
adequate remedy at law and whether there was standing because Defendants
had not retained any of the Segerstroms’ property, making restitution
impossible. Having already concluded that the nonsuit ruling was proper
based on its substantive merits, we decline to address these additional
arguments.
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DISPOSITION
The judgment is affirmed. Respondents are entitled to costs on appeal.
HUFFMAN, J.
WE CONCUR:
McCONNELL, P. J.
DO, J.
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