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Petrovich v. Raley's

California Court of Appeals, Third District, Sacramento
Jul 25, 2008
No. C056090 (Cal. Ct. App. Jul. 25, 2008)

Opinion


PAUL S. PETROVICH et al., Plaintiffs and Appellants, v. RALEY'S, Defendant and Respondent. C056090 California Court of Appeal, Third District, Sacramento July 25, 2008

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

Super. Ct. No. C06AS01059

BLEASE, Acting P. J.

Plaintiffs Paul and Cheryl Petrovich, real estate developers, appeal from the judgment entered against them in their suit for unfair competition against defendant Raley’s, a corporation that owns a chain of grocery stores and supermarkets. The superior court sustained Raley’s demurrer to the third amended complaint without leave to amend.

In their appeal, plaintiffs contend they alleged sufficient facts to support their claim that Raley’s business practices constitute illegal tying, which is a per se violation of the Cartwright Act (Bus. & Prof. Code, § 16720) and an unfair business practice under the Unfair Competition Law. (§ 17200.)

All further section references are to the Business and Professions Code unless otherwise specified.

We find no error and shall affirm the judgment.

We deny defendant’s request for judicial notice of facts relating to the presence and nature of certain businesses at the intersection of Hazel and Madison Avenues in Sacramento County. Such facts are not of such common knowledge within the territorial jurisdiction of the court that they cannot reasonably be the subject of dispute. (Evid. Code, § 452, subds. (g), (h).) Although defendant proffered two photographs and a MapQuest printout, the photographs fail to identify the location of the images and the MapQuest printout fails to reflect the presence and/or location of any buildings. Thus, these materials do not provide this court with sufficient information to accurately determine the truth of the requested facts. (Evid. Code, § 452, subd. (h); see Sierra Club v. California Coastal Zone Conservation Com. (1976) 58 Cal.App.3d 149, 158.)

FACTUAL AND PROCEDURAL BACKGROUND

When reviewing a judgment based on an order sustaining a demurrer without leave to amend, we treat all properly pled facts as true. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.)

The assertions of fact are taken from the third amended complaint. Paul and Cheryl Petrovich own Petrovich Development Company (PDC), a limited liability company that specializes in real estate development projects. Its primary focus is developing shopping centers with large retail anchor tenants and mixed-use projects, which combine retail and residential establishments. PDC owns 8.5 acres of property in the City of Fair Oaks and desired to purchase an adjoining one-acre parcel located on the corner of Hazel and Madison Avenues (the Hazel Property).

Raley’s, a California corporation with its principal place of business in West Sacramento, owns and operates grocery stores and supermarkets under various names. It also operates gas stations under the name Aisle 1 Fuel Stations. One of Raley’s supermarkets is located in a shopping center (Raley’s Center) across the street from the Hazel Property and Raley’s is developing an Aisle 1 Fuel Station at that center. To date, Raley’s has had no significant competition from a similar sized supermarket in the area surrounding Raley’s Center.

Desiring to create a contiguous 9.5 acre property for the purpose of developing a shopping center on the combined property (the Proposed Center), in 1996 plaintiffs began negotiating with the owner to purchase the Hazel Property. They also negotiated a lease with Safeway, Inc. (Safeway) as the anchor tenant. Initially, Safeway planned to open and operate a 65,000 square foot supermarket and an adjacent gasoline station and mini-part at the Proposed Center.

In April 1998, while plaintiffs were finalizing the terms of the purchase and unbeknownst to them, defendant, through a third party, interfered with their negotiations and caused Raley’s to take title to the Hazel Property for the purpose of hindering development of the Proposed Center with a competing supermarket and gasoline station.

Raley’s subsequently agreed to sell the Hazel Property to Panattoni Development Company, Inc. (Panattoni), a California corporation that develops, leases, owns, and manages industrial, office, and retail projects throughout the United States. Plaintiffs contacted Panattoni and entered into an agreement to purchase the Hazel Property after he acquired it from Raley’s. Plaintiffs also began discussions with several potential tenants for the Proposed Center, including Safeway. As a result of these discussions, Safeway’s real estate committee approved a plan to develop a supermarket and nearby gas station and mini-mart at the Proposed Center. The commitment of other potential tenants to sign leases with plaintiff was dependent on the operation of a Safeway store at the Proposed Center.

Meanwhile, defendant learned that Panattoni intended to sell the Hazel Property to plaintiffs and that plaintiffs had been negotiating with Safeway to develop a combined supermarket and gas station at the Proposed Center. As a prerequisite to purchasing the Hazel Property, Raley’s forced Panattoni to purchase the property subject to a restrictive covenant that prohibits the use of the property as a gasoline station. The covenant was recorded on February 24, 2006.

During the same period of time, plaintiffs were also negotiating with Panattoni to purchase a vacant building and land at the corner of 48th and J Streets in Sacramento (the J Street Property). They secured Rite-Aid Corporation as the anchor tenant and Rite-Aid’s national board of directors approved a 20-year lease to commence upon completion of the sale of the property to plaintiffs. Defendant was aware of these negotiations and of plaintiffs’ plan to develop the J Street Property with Rite-Aid as its anchor tenant.

Defendant had substantial economic leverage over Panattoni due to their ongoing business relationship and applied this leverage to induce Panattoni to condition the sale of the J Street Property to plaintiffs on their purchase of the Hazel Property as well. As a result, Panattoni informed plaintiffs in February 2006 of the condition. Plaintiffs agreed to purchase the Hazel Property in order to complete the sale of the J Street Property and avoid breaching their obligations to Rite-Aid. The sale was completed and plaintiffs obtained title to the Hazel Property on February 24, 2006.

Plaintiffs filed a complaint for declaratory relief and quiet title in March 2006, seeking to remove the restrictive covenant on the Hazel Property. After defendant filed a demurrer, plaintiffs filed a first amended complaint and a second amended complaint. The later pleading alleged a third cause of action for unfair business practices. (§ 17200 et seq.) The trial court sustained demurrers with leave to amend as to both of the amended complaints. However, leave to amend the second amended complaint was limited to facts encompassed by the test set forth in Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Co. (1999) 20 Cal.4th 163 (Cel-Tech) relating to the new cause of action for unfair business practices.

Plaintiffs filed their third amended complaint (hereafter complaint) alleging two causes of action, one for unfair business practices and a second one for intentional interference with prospective economic relations. Defendant again demurred and the trial court sustained it without leave to amend. In its ruling the superior court found there is nothing wrongful in selling property with a restrictive covenant and the tying agreement was not unlawful. Judgment of dismissal with prejudice was entered and plaintiffs appeal from the judgment.

DISCUSSION

I.

Standard of Review

The function of a demurrer is to test the sufficiency of the complaint as a matter of law and we review its sufficiency de novo. (Code Civ. Proc., § 589; Holiday Matinee, Inc. v. Rambus, Inc. (2004) 118 Cal.App.4th 1413, 1421.) When the trial court sustains a general demurrer because the complaint fails to “state facts sufficient to constitute a cause of action” (Code Civ. Proc., § 430.10, subd. (e)), we may reverse if the plaintiffs alleged facts showing they are entitled to relief under any permissible legal theory that is supported by the facts alleged. (Platt v. Coldwell Banker Residential Real Estate Servs., Inc. (1990) 217 Cal.App.3d 1439, 1444.)

II.

Unfair Competition

Plaintiffs contend their complaint alleged four bases for unfair competition and the lower court erred by sustaining the demurrer as to all four bases. Defendant counters that the complaint alleges only two business acts, a tying arrangement and a restrictive covenant and neither of these is unlawful.

In plaintiffs’ view, these four grounds are that (1) defendant and Panattoni conspired to tie the sale of the J Street Property to the purchase of the Hazel Property, which was subject to the restrictive covenant in violation of the Cartwright Act (§ 16720) and, (2) that same conspiracy was a combination in restraint of trade (§ 16720), (3) defendant’s actions were injurious to competition, and (4) defendant’s tortious interference with plaintiffs’ economic relationship with Panattoni and defendant’s pattern and practice of tortiously interfering with the economic and contractual relationships of third parties constituted unfair competition.

We agree with defendant. Plaintiffs’ complaint boils down to two business acts or practices, an agreement to tie the purchase of the J Street Property to the purchase of the Hazel Property and the recordation of a restrictive covenant on the Hazel Property prohibiting the building or operation of a gasoline station on the property. As we shall show, the agreement to sell the two properties as a package does not constitute an illegal tying agreement because it does not restrain competition in the real estate market for the Hazel Property and the restrictive covenant is not unlawful because it is neither fraudulent nor monopolistic in effect.

A. Unfair Competition Law

The Unfair Competition Law (UCL or act) allows for injunctive and restitutionary relief (§ 17203) and civil penalties (§ 17206) in cases involving “unfair competition.” (§ 17200.) The act “governs ‘anti-competitive business practices’ as well as injuries to consumers, and has as a major purpose the preservation of fair business competition.’ [Citations.]” (Cel-Tech, supra, 20 Cal.4th at p. 180.)

Unfair competition is defined as including “any unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising . . . .” (§ 17200.) Written in the disjunctive, the UCL proscribes three varieties of unfair competition, those that are “unlawful,” those that are “unfair,” and those that are “fraudulent.” (Cel-Tech, supra, 20 Cal.4th at p. 180.) The term “unlawful” within the meaning of the UCL includes violations of other laws, which the UCL makes independently actionable. (Ibid.) The meaning of the term “unfair” has been “tethered to some legislatively declared policy or proof of some actual or threatened impact on competition. . . . When a plaintiff who claims to have suffered injury from a direct competitor’s ‘unfair’ act or practice invokes section 17200, the word ‘unfair’ . . . means conduct that threatens an incipient violation of an antitrust law, or violates the policy or spirit of one of those laws because its effects are comparable to or the same as a violation of the law, or otherwise significantly threatens or harms competition.” (Cel-Tech, supra, 20 Cal.4th at pp. 186-187, fn. omitted.)

By contrast, the Unfair Practices Act (UFA) (§ 17000) “prohibits specific ‘practices which the legislature has determined constitute unfair trade practices,’” (Cel-Tech, supra, 20 Cal.4th at p. 179, quoting Wholesale T. Dealers v. National etc. Co. (1938) 11 Cal.2d 634, 643), including such practices as locality discrimination, below-cost sales, loss leaders, and boycotts. (§§ 17040, 17043, 17044, 17046.)

Plaintiffs contend defendant entered into an illegal tying arrangement with Panattoni by conditioning the purchase of the J Street Property to the purchase of the Hazel Property. They argue that this arrangement is “unlawful” under the UCL because it violates the Cartwright Act (§ 16720) and also is an “unfair” business practice. We disagree.

The Cartwright Act prohibits combinations that unreasonably restrain trade. (§ 16720, subds. (a), (c); Morrison v. Viacom, Inc. (1998) 66 Cal.App.4th 534, 540 (Morrison).) Combinations may be adjudged violations of the Cartwright Act under the “rule of reason” formulated in Standard Oil Co. v. United States (1911) 221 U.S. 1, 58-62 [55 L.Ed. 619, 644-646], or may be adjudged per se violations because “‘their pernicious effect on competition and lack of any redeeming virtue are conclusively presumed to be unreasonable . . . without elaborate inquiry as to the precise harm they have caused or the business excuse for their use.’" (Marin County Bd. of Realtors, Inc. v. Palsson, supra, 16 Cal.3d at pp. 930-931, quoting Northern Pac. R. Co. v. United States (1958) 356 U.S. 1, 5 [2 L.Ed.2d 545, 549] (Northern Pac. R.).) Certain tying arrangements are considered illegal per se. (Ibid; Corwin v. Los Angeles Newspaper Service Bureau, Inc. (1971) 4 Cal.3d 842, 853.)

Section 16720 provides in pertinent part that “[a] trust is a combination of capital, skill or acts by two or more persons for any of the following purposes: [¶] (a) To create or carry out restrictions in trade or commerce. . . . [¶] (c) To prevent competition in manufacturing, making, transportation, sale or purchase of merchandise, produce or any commodity.” Any such trust is “unlawful, against public policy and void” (§ 16726) and any person injured in his or her business or property by reason of anything declared unlawful under the act may bring a civil action to recover treble damages and for injunctive relief. (§ 16750, subd. (a).)

Section 16727 prohibits certain types of tying arrangements. It provides: “It shall be unlawful for any person to lease or make a sale or contract for the sale of goods, merchandise, machinery, supplies, commodities for use within the State, or to fix a price charged therefore, or discount from, or rebate upon, such price, on the condition, agreement or understanding that the lessee or purchaser thereof shall not use or deal in the goods, merchandise, machinery, supplies, commodities, or services of a competitor or competitors of the lessor or seller, where the effect of such lease, sale, or contract for sale or such condition, agreement or understanding may be to substantially lessen competition or tend to create a monopoly in any line of trade or commerce in any section of the State.”

“A tying arrangement is ‘a requirement that a buyer purchase one product or service as a condition of the purchase of another. [Citation.] Traditionally the product which is the inducement for the arrangement is called the “tying product” and the product or service that the buyer is required to purchase is the “tied product.”’” (Morrison, supra, 66 Cal.App.4th at pp. 540-541.)

Tying agreements are condemned because they “serve hardly any purpose beyond the suppression of competition.” (Standard Oil Co. v. United States (1949) 337 U.S. 293, 305-306 [93 L.Ed. 1371, 1382].) Competitors are denied free access to the market for the tied product, not because they are selling a product that is inferior in quality or higher in price, but because the party imposing the tying condition has economic power or leverage in another market. Buyers are compelled to forego their free choice between competing products. (Northern Pac. R., supra, 356 U.S. at p. 6 [2 L.Ed.2d at p. 550]; Suburban, supra, 101 Cal.App.3d at p. 542.)

A plaintiff claiming injury from an unlawful tying arrangement under section 16720 must plead the following elements: “(1) a tying agreement, arrangement or condition existed whereby the sale of the tying product was linked to the sale of the tied product; (2) the [offending] party had sufficient economic power in the tying market to coerce the purchase of the tied product; and (3) a substantial amount of sale was effected in the tied product." (Suburban, supra, 101 Cal.App.3d at p. 542.) The seller has “sufficient economic power” under section 16727 if “the seller has a dominant monopolistic position in the tying product” or “the tie-in restrains a substantial volume of commerce in the tied product.” (People v. National Association of Realtors (1984) 155 Cal.App.3d 578, 583.)

However, the mere sale of products that are packaged together, or the refusal to sell such products separately, does not constitute unlawful tying if no portion of the tied market has been foreclosed to other sellers. (Morrison, supra, 66 Cal.App.4th at pp. 545, 548.)

Morrison, supra, 66 Cal.App.4th 534 is dispositive. There cable television customers brought an antitrust class action against Viacom, a cable television supplier, for restraining trade in the local broadcast television market through an illegal tying arrangement. The plaintiffs challenged Viacom’s practice of requiring its customers to purchase broadcast channels (the tied service) as a prerequisite to purchasing satellite cable channels (the tying service) and to purchase both broadcast and satellite cable channels (the tied services) as a prerequisite to purchasing premium cable channels (the tying service). (Id. at p. 539.)

Affirming the order sustaining the demurrer, the court in Morrison stated that “[a]ppellants have failed to plead the requisite tied product market foreclosure because they do not allege that plaintiffs would have purchased the broadcast channels from someone else if not forced to buy them from Viacom.” (Morrison, supra, 66 Cal.App.4th at p. 543.) The court concluded that the consumer suffered no antitrust injury because the “‘tie simply increases the effective price of the tying product. If that effective price exceeds the market price, no one would patronize the tying seller; if it does not, the effective price paid the defendant is the market price for his product.’” (Id. at pp. 548-549.)

In the present case, plaintiffs challenge the provision in their agreement with Panattoni that required them to purchase the Hazel Property (the tied item) as a prerequisite to the purchase of the J Street Property (the tying item). This condition operates in much the same way as the pricing practice in Morrison because it merely bundled the two parcels of property into one package deal. While this condition may have affected the total price plaintiffs paid by causing them to purchase the Hazel Property, it had no adverse effect on competition in the tied market because the Hazel Property could only be purchased from a single source. Since there were no competitors who could have sold plaintiffs that property, the tying arrangement did not restrain competition in the real estate market for that property, nor did it restrict competition for other properties in the area. (Morrison, supra, 66 Cal.App.4th at p. 543 [“A transaction cannot restrain trade when no competitor exists from whom to purchase the tied product”].)

Plaintiffs attempt to distinguish Morrison on the grounds that in Morrison there was no market in the tied product (broadcast channels) because those channels were freely available while here the tied product was not free. Plaintiffs miss the point. The evil accompanying tying arrangements is the foreclosure of competition in the market for the tied product. (Suburban, supra, 101 Cal.App.3d at p. 542.) The fact competition is not injured because the tied product is free rather than because it was only available from one source is immaterial. Since there were no other competitors selling the Hazel Property and the tying arrangement had no restrictive effect on plaintiffs’ ability to buy other property, it had no injurious antitrust effect.

Relying on People v. National Association of Realtors, supra, 155 Cal.App.3d at page 583, plaintiffs mistakenly argue that they do not have to allege actual restraint of trade in the tied market. To the contrary, as stated ante, the court in National Association of Realtors explained that to prove an unlawful tie-in arrangement under section 16727, the plaintiff must show inter alia that “the seller has sufficient economic power over the tying product to restrain free competition in the tied product, ” which requires proof “the tie-in restrains a substantial volume of commerce in the tied product.” (Ibid.)

Next plaintiffs contend that even if the tying arrangement is not “unlawful” under the Cartwright Act (§ 16720), it still constitutes an “unfair” business practice. (§ 17200.) They argue that the tie-in agreement violated the policy or spirit of the antitrust law by depriving them of the chance to negotiate directly and freely over the sale of the Hazel Property because it was subject to the restrictive covenant. Plaintiffs are wrong.

As stated, the tie-in agreement did not compel plaintiffs to forego their free choice between competing properties or competing sellers. (Northern Pac. R., supra, 356 U.S. at p. 6 [2 L.Ed.2d at p. 550].) However, that is not their real grievance. Although they strongly disavow that they are claiming the restrictive covenant is unlawful, the crux of plaintiffs’ argument is that by virtue of the tie-in arrangement, they were forced to accept the Hazel Property subject to the restrictive covenant and the covenant restrains trade among sellers of gasoline and groceries in the trade area of the Hazel Property. This argument is therefore based upon the implied but erroneous claim that the covenant operates as an unlawful restraint of trade.

Covenants restricting the use of property for business purposes are lawful when reasonable, not contrary to public policy or law, and not made for the purpose of securing a monopoly for the grantor. (Doo v. Packwood (1968) 265 Cal.App.2d 752, 755 (Doo).) In Doo, a family partnership owned three major grocery stores in Turlock and was building a larger market on the same street as one of the three family stores. When the family sold the property and the building in which they had been operating the smaller store, they inserted a covenant on the deed to protect themselves from neighborhood competition by restricting the use of the building as a retail grocery store. The court upheld the covenant finding the Doo’s purpose was legitimate, the restriction did not constitute an attempt to set up a monopoly by restraining the buyer from pursuing an entire business, trade or profession, and the buyer had full knowledge of the restriction. (Id. at p. 756; see also Boughton v. Socony Mobil Oil Co. (1965) 231 Cal.App.2d 188, 190-191 (upholding a restriction on property imposed by oil company to prevent the use of the property to operate a gas station).)

Likewise, plaintiffs purchased the Hazel Property with full knowledge of the recorded covenant (Doo, supra, 265 Cal.App.2d at pp. 758-759) and they were free to negotiate the price of the property as restricted. Nor did the covenant threaten to create a monopoly. Covenants that merely limit the buyer’s right to pursue a small or limited part of its business are lawful. (Boughton v. Socony Mobil Oil Co., supra, 231 Cal.App.2d at p. 192.) Here the restrictive covenant only restricted plaintiffs’ use of the property to sell gasoline and other related petroleum products. They are free to use the property to sell groceries and any other product or service unrelated to the sale of petroleum products. That this restriction may result in smaller profits for plaintiffs’ tenants does not constitute a monopoly or an unreasonable or unfair restraint of trade.

Monopolies “unduly diminish competition and . . . enhance prices” (Standard Oil Co. v. United States, supra, 221 U.S. at p. 57 [55 L.Ed. at p. 644]) and are therefore defined as the “‘power to control prices or exclude competition.’" (Fisher v. City of Berkeley (1984) 37 Cal.3d 644, 678, quoting United States v. Du Pont Co. (1956) 351 U.S. 377, 391 & fn. 18 [100 L.Ed. 1264, 1278-1279].)

In sum, a covenant, which merely restricts the sale of gasoline on one corner of an intersection in a county the size of Sacramento, does not threaten to give defendant a monopoly in the combined grocery and gasoline business where as here the covenant does not restrict plaintiffs from building and operating a gas station on the other 8.5 acres of their property at that same intersection.

Nevertheless, relying on Quelimane Co., Inc. v. Stewart Title Guar. Co. (1998) 19 Cal.4th 26, plaintiffs assert that allegations of a conspiracy, a wrongful act, and resulting damages is sufficient because they may generally plead the elements of a Cartwright Act violation. While the court in Quelimane stated that specific fact pleading is not required to state an antitrust claim, it cautioned that “a plaintiff cannot merely restate the elements of a Cartwright Act violation.” To state such a claim, the plaintiff must allege “certain facts in addition to the elements of the alleged unlawful act so that the defendant can understand the nature of the alleged wrong . . . .” (Id. at pp. 47-48.) Plaintiffs have pled such acts and as we have found, those acts are not unlawful. They cannot escape this conclusion by arguing less is more.

For these reasons, we conclude plaintiffs have failed to allege facts sufficient to state a cause of action for unlawful or unfair competition.

III.

Interference With Prospective Economic Relations

Plaintiffs contend the trial court erred by sustaining the demurrer to its tort action for intentional interference with prospective economic relations. They argue that defendant’s violations under the UCL in the form of an illegal tying arrangement and conspiracy to restrain competition in the combined marketplace for groceries and gasoline constitute independently wrongful acts supportive of this tort.

Plaintiffs properly concede however, that if this court holds as we have, that none of defendant’s conduct constituted unfair competition under section 17200, the trial court’s ruling was proper.

“[A] plaintiff seeking to recover for alleged interference with prospective economic relations has the burden of pleading and proving that the defendant's interference was wrongful ‘by some measure beyond the fact of the interference itself.’" (Della Penna v. Toyota Motor Sales U.S.A., Inc. (1995) 11 Cal.4th 376, 392-393, fn. omitted.) Although intentionally interfering with an existing contract is an independent wrong, intentionally interfering with a plaintiff’s prospective economic advantage is not, despite the defendant’s motive. (Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1159.) An act is independently wrongful only if it is unlawful because “it is proscribed by some constitutional, statutory, regulatory, common law, or other determinable legal standard.” (Ibid., fn. omitted.)

Plaintiffs do not allege that defendant interfered with their contractual relations and as we have found in Part II, they have failed to allege acts of independent wrongdoing. We therefore find the trial court properly sustained the demurrer as to this cause of action.

IV.

Leave To Amend

Last, plaintiffs contend the lower court abused its discretion by denying them leave to amend their complaint. On appeal, they baldly assert that they can allege additional facts relating to defendant’s economic power in compelling the tying arrangement. Defendant claims there was no abuse of discretion because no valid claims exist. We agree with defendant.

When a demurrer “is sustained without leave to amend, we decide whether there is a reasonable possibility that the defect can be cured by amendment: if it can be, the trial court has abused its discretion and we reverse; if not, there has been no abuse of discretion and we affirm. [Citations.] The burden of proving such reasonable possibility is squarely on the plaintiff.” (Blank v. Kirwan, supra, 39 Cal.3d at p. 318.)

As our discussion in Part II illustrates, plaintiffs have failed to establish a reasonable possibility that the defect in their third amended complaint can be cured by amendment because the factual gap in their pleading is not a lack of defendant’s economic power. The problem lies in their failure to identify any facts to show there were any competitors in the market for the Hazel property. Accordingly, the superior court did not abuse its discretion in denying plaintiffs leave to amend their complaint for a fourth time.

DISPOSITION

The judgment is affirmed. Defendant is awarded its costs on appeal. (Cal. Rules of Court, rule 8.276(a)(1).)

We concur: MORRISON, J., HULL, J.

We also deny defendant’s request for sanctions against plaintiffs for having filed a frivolous appeal. An appeal is frivolous if “‘any reasonable attorney would agree that the appeal is totally and completely without merit.’ [Citations].” (Johnson v. Lewis (2004) 120 Cal.App.4th 443, 457.) If the appellant presents issues that are arguably correct even if extremely unlikely to win, sanctions will not result. (In re Marriage of Flaherty (1982) 31 Cal.3d 637, 650.) Defendant’s claim that the appeal is completely without merit is based in large part on facts outside the pleadings and we have denied their request for judicial notice of those facts. Given the complexity of the issues raised by the operative complaint, we cannot say the appeal is “totally and completely without merit.”

Because the Cartwright Act is patterned after the Sherman Antitrust Act (15 U.S.C. § 1 et seq.) and the two acts share common roots, federal cases interpreting the Sherman Act are applicable when construing the Cartwright Act. (Marin County Bd. of Realtors, Inc. v. Palsson (1976) 16 Cal.3d 920, 925.)

Because section 16727 is inapplicable to agreements for the sale of land (Suburban Motor Homes, Inc. v. AMFAC Communities, Inc. (1980) 101 Cal.App.3d 532, 549 (Suburban)), it does not apply to the tying arrangement alleged in this case.


Summaries of

Petrovich v. Raley's

California Court of Appeals, Third District, Sacramento
Jul 25, 2008
No. C056090 (Cal. Ct. App. Jul. 25, 2008)
Case details for

Petrovich v. Raley's

Case Details

Full title:PAUL S. PETROVICH et al., Plaintiffs and Appellants, v. RALEY'S, Defendant…

Court:California Court of Appeals, Third District, Sacramento

Date published: Jul 25, 2008

Citations

No. C056090 (Cal. Ct. App. Jul. 25, 2008)