Martinez v. Best Buy Co.

IN THE UTAH COURT OF APPEALS
‐‐‐‐ooOoo‐‐‐‐
Hugo Martinez and Claudia Martinez, ) MEMORANDUM DECISION
)
Plaintiffs and Appellants, ) Case No. 20110182‐CA
)
v. ) FILED
) (July 12, 2012)
Best Buy Co., Inc., )
) 2012 UT App 186Defendant and Appellee. )
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Third District, Salt Lake Department, 090905510
The Honorable Sandra N. Peuler
Attorneys: Brian W. Steffensen, Salt Lake City, for Appellants
Gregory J. Sanders and Patrick C. Burt, Salt Lake City, for Appellee
‐‐‐‐‐
Before Judges McHugh, Davis, and Thorne.
DAVIS, Judge:
¶1 Hugo and Claudia Martinez appeal the trial court’s ruling in favor of Best Buy
Co. on claims the Martinezes brought under section 13‐11‐4 of the Utah Consumer Sales
Practices Act (the UCSPA), which proscribes “deceptive act[s] or practice[s] by a
supplier in connection with a consumer transaction,” see Utah Code Ann. § 13‐11‐4(1)
(Supp. 2011). We affirm.
¶2 On March 6, 2008, the Martinezes applied for a Best Buy credit card, which was
issued by a credit card company called HSBC.1 In filling out the application, Claudia
Martinez signed up for an “account shield” credit protection service (the account shield
1. The Martinezes are apparently engaged in separate litigation with HSBC.
service) associated with the card. The Martinezes were charged for the account shield
service based on the amount of the balance they carried on the card. When the
Martinezes realized that they were being charged, they called HSBC to cancel the
service, but not before they were assessed a late fee for failing to pay the charge.
Ultimately, the Martinezes’ failure to pay for the account shield service negatively
impacted their credit. They sued Best Buy, alleging that they unintentionally signed up
for the account shield service as a result of Best Buy engaging in a number of deceptive
business practices in violation of the UCSPA.
I. Intent Under the UCSPA
¶3 Before addressing the substance of the Martinezes’ arguments, we must first
consider the standard for determining whether a supplier has violated the UCSPA by
engaging in deceptive acts or practices. The Martinezes point us to the language of
Utah Code section 13‐11‐2, which provides that the UCSPA “shall be construed liberally
to promote,” among other things, the policy of making “state regulation of consumer
sales practices not inconsistent with the policies of the Federal Trade Commission Act
[FTCA] relating to consumer protection.” Id. § 13‐11‐2(4) (2009). In light of this
provision, they urge us to interpret “deceptive” the same way the federal courts do
under the FTCA, that is, by eliminating intent as an element of a deceptive act or
practice and focusing instead on whether “the business entity made material
representations likely to mislead ordinary consumers to their detriment.” Federal Trade
Comm’n v. Freecom Commc’ns, Inc., 401 F.3d 1192, 1202‐03 (10th Cir. 2005) (emphasis
omitted); see also ASRC Energy Servs. Power & Commc’ns, LLC v. Golden Valley Elec. Ass’n,
267 P.3d 1151, 1163 (Alaska 2011) (per curiam) (“‘To show deception under the [FTCA],
intent, scienter, actual reliance or damage, and even actual deception are unnecessary.
All that is required is proof that a practice has a tendency or capacity (or, under the
FTC’s latest formulation, is likely) to deceive even a significant minority of consumers.’”
(quoting National Consumer Law Center, Unfair and Deceptive Acts and Practices
§ 4.2.3.1, at 190 (7th ed. 2008))).
¶4 However, the plain language of the UCSPA specifically identifies intentional or
knowing behavior as an element of a deceptive act or practice, see Utah Code Ann. § 13‐
11‐4(2), making it inappropriate to construe the UCSPA as the Martinezes urge.2
2. This appears to be a conscious effort on the part of the legislature, as evidenced by its
refining of the intent provision over the years. See Act of Feb. 27, 1985, ch. 250, § 1, 1985
(continued...)
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Furthermore, Utah courts and courts employing Utah law have consistently recognized
intent as an element of a UCSPA claim. See Reed v. AFNI, Inc., No. 2:09‐CV‐459 TS, 2011
WL 112430, at *3 (D. Utah Jan. 13, 2011) (mem.) (rejecting a UCSPA claim in part due to
the plaintiff’s failure to present evidence of intent); Kee v. R‐G Crown Bank, 656 F. Supp.
2d 1348, 1356 (D. Utah 2009) (dismissing a UCSPA claim for failure to state a claim
because the court determined that the plaintiff had failed to sufficiently plead “a
required element of the statute,” i.e., that the defendants “committed a deceptive act or
practice ‘knowingly or intentionally’” (quoting Utah Code Ann. § 13‐11‐4(2) (2009)
(current version at id. (Supp. 2011)))); Rawson v. Conover, 2001 UT 24, ¶ 36, 20 P.3d 876(quoting the language of the UCSPA and observing that it “requires that the supplier
knowingly or intentionally deceive the consumer”); State ex rel. Div. of Consumer Prot. v.
GAF Corp., 760 P.2d 310, 313 (Utah 1988) (observing that the original version of the
UCSPA, which “contained no intent requirement,” was amended in 1985 “to require
‘intent to deceive’ on the part of a supplier before a deceptive trade practice can be
found” (quoting Utah Code Ann. § 13‐11‐4(2) (Supp. 1988) (current version at id. (Supp.
2011)))). Thus, in order to establish a violation of the UCSPA, the Martinezes were
required to establish that Best Buy knowingly or intentionally engaged in deceptive acts
or practices. With this standard in mind, we now examine the trial court’s ruling that
the Martinezes failed to establish that Best Buy violated the UCSPA, reviewing its legal
determinations for correctness and its factual determinations for clear error, see MacKay
v. Hardy, 973 P.2d 941, 944 (Utah 1998).
II. Alleged Violations of the UCSPA
¶5 The Martinezes allege that the following actions by Best Buy were deceptive in
violation of the UCSPA: (1) the employee assisting the Martinezes with their credit card
application instructed them to sign in two places in order to get the credit card even
though the second place they were told to sign referred to the account shield service
rather than the credit card; (2) the employee failed to explain the account shield service,
to inform the Martinezes that it was a separate product from the credit card, or to
inform them that by signing the second line they were agreeing to enrollment in the
account shield service; (3) the Martinezes were neither offered nor provided a Spanish
translation of the credit card application, despite the fact that the application required
2. (...continued)
Utah Laws 926 (adding “with intent to deceive” to the deceptive acts and practices
provision); Act of Feb. 27, 1995, ch. 237, § 1, 1995 Utah Laws 799 (substituting
“knowingly or intentionally” for “with intent to deceive”).
20110182‐CA 3
them to attest that they had been; (4) the application did not disclose the cost of the
account shield service; and (5) Best Buy informed HSBC that both of the Martinezes had
agreed to purchase the account shield service despite the fact that only Claudia
Martinez signed that portion of the application. We address each of these allegations in
turn.
A. Employee’s Misrepresentation Regarding the Signature Lines
¶6 The Martinezes first argue that the employee’s representation that they were
required to sign in both places was deceptive in violation of the UCSPA. The trial court
found that the employee did falsely represent to the Martinezes that they were required
to sign in both places in order to get the credit card when, in fact, they needed only to
sign the first portion of the application.3 The trial court made no finding as to whether
this was a knowing or intentional misrepresentation. Nevertheless, the trial court
determined that the Martinezes could not rely on the statement to allege a deceptive act
because it was clearly contradicted by the language of the application.
¶7 The Martinezes challenge the trial court’s use of contract principles in its
analysis, arguing that it was improper for the trial court to determine that this allegedly
deceptive act did not violate the UCSPA based solely on its determination that the
correct information was provided in the application. As the Martinezes point out, one
of the purposes of the UCSPA is “to protect consumers from suppliers who commit
deceptive and unconscionable sales practices,” Utah Code Ann. § 13‐11‐2(2). Thus, the
fact that the Martinezes could have better protected themselves by reading the terms of
the application would not necessarily bar them from recovering under the UCSPA if
Best Buy had knowingly or intentionally deceived them as to the contents of the
application. Cf. Semenov v. Hill, 1999 UT 58, ¶ 12, 982 P.2d 578 (emphasizing that a
party will be bound by the provisions of a contract he signed, despite failing to read it,
“‘in the absence of fraud or mistake’” (quoting 17 C.J.S. Contracts § 41(f) (1963) (current
3. We question whether this was actually a false representation in light of the fact that
the second place the Martinezes were told to sign, which dealt with the account shield
service, contained two separate signature lines—one for accepting the service and one
for declining the service. It may well be that a signature was in fact needed in the
second area as the employee represented, but that the Martinezes could have elected to
sign the line rejecting the service rather than the line accepting the service.
Nevertheless, we defer to the trial court’s finding on this factual issue, given that no
party has challenged it on appeal.
20110182‐CA 4
version at 17 C.J.S. Contracts § 50 (2011)))); Sosa v. Paulos, 924 P.2d 357, 363 (Utah 1996)
(holding that a party’s “duty to read and understand the terms of a contract before
signing it . . . is obviated when the party’s failure to read the agreement results from the
procedurally unconscionable behavior of the party in the stronger bargaining position”
(citation omitted)).
¶8 Nevertheless, even accepting the Martinezes’ argument that the employee’s
misrepresentation was sufficiently deceptive to violate the UCSPA, the Martinezes
presented no argument to the trial court and no argument on appeal alleging that the
misrepresentation was either knowing or intentional. In fact, they attempt to avoid this
question by asserting that intent is not an element of unlawful deception under the
UCSPA, an argument that we have rejected. Thus, in the absence of any evidence of
intent, the employee’s misrepresentation cannot be determined to have violated the
UCSPA.4
B. Explanation of the Account Shield Service
¶9 The Martinezes also contend that Best Buy was deceptive because it failed to
notify them that the second signature line related to the account shield service and that
acceptance of that product would result in additional fees. The UCSPA is intended not
only to protect consumers but also to “protect suppliers who in good faith comply with
[its] provisions.” Utah Code Ann. § 13‐11‐2(6) (2009). Best Buy’s failure to orally
explain the account shield service is not comparable to the specific categories of
deceptive acts and practices listed in the UCSPA. See id. § 13‐11‐4(2) (Supp. 2011)
(listing a variety of affirmative misrepresentations as violations of the UCSPA). See
generally Whitney v. Division of Juvenile Justice Servs., 2012 UT 12, ¶ 14, 274 P.3d 906(“Under the doctrine of ejusdum generis, we read a statute’s use of a term or phrase as
restricted to include things of the same kind, class, character, or nature as those
specifically enumerated.” (internal quotation marks omitted)). Moreover, the
Martinezes point us to no evidence that could support a finding that the absence of an
explanation separate from that in the application was intended to deceive them. Thus,
4. [I]t is well settled that an appellate court may affirm the
judgment appealed from if it is sustainable on any legal
ground or theory apparent on the record, even though such
ground or theory differs from that stated by the trial court to
be the basis of its ruling or action . . . .
Dipoma v. McPhie, 2001 UT 61, ¶ 18, 29 P.3d 1225 (internal quotation marks omitted).
20110182‐CA 5
we agree with the trial court that the Martinezes failed to demonstrate that these actions
violated the UCSPA.
C. Spanish Translation
¶10 For the same reasons, we are not convinced that the employee’s failure to
provide the Martinezes with a Spanish translation of the application was deceptive.
Furthermore, the trial court specifically determined that there was no evidence to
support a finding that Best Buy knowingly or intentionally deprived them of the
translation. “The determination of whether a person had the [requisite] intent is one of
fact for the [trial] court.” Wade v. Jobe, 818 P.2d 1006, 1016 (Utah 1991), superseded by
statute on other grounds as stated in Carlie v. Morgan, 922 P.2d 1, 6 (Utah 1996). The
Martinezes have neither marshaled the evidence in support of this finding nor made
any argument regarding Best Buy’s intent apart from their argument that they did not
need to show intent, which was made without even a passing reference to binding Utah
authority to the contrary. Therefore, we uphold the trial court’s determination that the
employee’s failure to provide the Martinezes with a Spanish translation of the
application did not violate the UCSPA.
D. Charge for the Account Shield Service
¶11 Next, the Martinezes contest the trial court’s finding that the application
adequately informed the Martinezes that there would be a charge associated with the
account shield service and that the application was therefore not deceptive. The
language in the application addressing the account shield service did not specifically
identify any cost associated with the service. However, it did require the applicant to
attest, “I authorize the monthly charge on my account when I have a balance.” A Best
Buy representative testified at trial that the application indicated that the cost of the
account shield service was “based on the balance of the account.” The trial court
determined that it was incapable of reading the blurry copy of the application provided
to it and therefore relied on the representative’s testimony in finding that there was “an
indication and language in th[e account shield] provision that would reflect a charge”
for the service and, specifically, that the application disclosed that the cost would be “‘a
portion of the balance based upon the balance of the account.’”
¶12 Although we agree that the copy of the application provided to the trial court
was extremely difficult to read, it was not completely indecipherable and ought to have
been considered by the trial court. Thus, it was error for the trial court to find that the
application identified the cost as “‘a portion of the balance based upon the balance of
20110182‐CA 6
the account,’” since no such language is actually contained in the application.
However, the trial court did not clearly err in finding that the language of the account
shield provision indicated that there was a charge associated with the service, given that
the application clearly refers to such a charge. In any event, the Martinezes do not claim
that they were induced to sign up for the account service because they thought there
was no cost or that the cost was lower than it was; rather, they maintain that they were
completely unaware they were signing up for the service. Given that they did not read
the application and did not actually intend to sign up for the account shield service,
regardless of the cost, we cannot see how a clearer statement of the cost of the service in
the application would have prevented them from inadvertently signing up for it.5
E. Communication with HSBC
¶13 Finally, the Martinezes allege that Best Buy acted deceptively by informing
HSBC that both of the Martinezes had signed up for the account shield service when
only Claudia Martinez had signed that portion of the application. However, this
allegation is not supported by the evidence. At trial, the only evidence relating to this
issue was the testimony of the Best Buy representative. The representative testified that
when a customer fills out an application for a Best Buy credit card, an employee
generally enters the information from the application into Best Buy’s computer, from
which it is transmitted to HSBC, and that the employee then mails the original
application to HSBC. The representative testified that the information entered into the
computer includes whether the account shield service was requested. However, this
general testimony provides no evidence of what precise information was entered into
the computer with respect to the Martinezes’ application, and there is nothing to
indicate that the employee entering the information affirmatively represented that
Hugo Martinez had individually signed up for the account shield service. Furthermore,
the evidence suggests that HSBC received a copy of the actual application, which clearly
contains only Claudia Martinez’s signature on the account shield portion. And, as with
the Martinezes’ other allegations, they have presented no evidence that any
misrepresentation that may have been made in entering the information into the
computer was either knowing or intentional. Thus, we agree with the trial court that
5. Though an explanation of the service and its cost by the employee might have
prevented the Martinezes from accidentally signing up for it, we have already
established that the lack of explanation does not rise to the level of a UCSPA violation.
See supra ¶ 9.
20110182‐CA 7
the Martinezes failed to demonstrate that Best Buy’s communication with HSBC
regarding the Martinezes’ application was deceptive under the UCSPA.6
¶14 In sum, we reject the Martinezes’ assertion that intent is not an element of a
deceptive act or practice under the UCSPA. Furthermore, we reject the Martinezes’
arguments that Best Buy violated the UCSPA by engaging in the various acts discussed
above. Thus, we affirm the trial court’s ruling in favor of Best Buy.
____________________________________
James Z. Davis, Judge
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¶15 WE CONCUR:
____________________________________
Carolyn B. McHugh,
Presiding Judge
____________________________________
William A. Thorne Jr., Judge
6. As the trial court observed, the question of whether Hugo Martinez could be held
responsible for the charge, despite the fact that only Claudia Martinez signed up for the
account shield service, more properly relates to the Martinezes’ litigation with HSBC,
and is not before us in this case.
20110182‐CA 8