Opinion
Hearing Ordered Aug. 14, 1967. Tremaine & Shenk, Jerrold A. Fadem, Los Angeles, for appellants.
Hastings & Lasker, Beverly Hills, for Great Western Financial Corporation, Great Western Savings and Loan Ass'n and Liberty.
McKenna & Fitting, Los Angeles, Milton Davis, Beverly Hills, Les J. Weinstein, Los Angeles, for Sherwood Escrow Co., and Summit Title Co. Jones & Maupin, Los Angeles, for American Title Co.
Milo V. Olson, Los Angeles, for Security Title Ins. Co. and Financial Corp. of America.
Adams, Duque & Hazeltine, Lawrence T.Lydick, Los Angeles, Richard W. Luesebrink, Santa Monica, for Lehman Brothers.
FOURT, Associate Justice.
Plaintiffs appeal from an order of dismissal entered after the court sustained the demurrers of respondents, variously, denied leave to amend and finally struck the fourth amended complaint in its entirety upon the representation by plaintiffs' counsel that no further facts could be alleged.
We confine our attention herein to the most recently filed fourth amended complaint since "The court on appeal will not consider the sufficiency of a superseded complaint where the plaintiff has amended it after demurrer sustained." (Rolley, Inc. v. Merle Norman Cosmetics, 129 Cal.App.2d 844, 852, 278 P.2d 63, 282 P.2d 991.) We are, moreover, not concerned with the grounds for special demurrer urged upon the trial court since the general demurrer was sustained without leave to amend and the complaint was stricken upon appellants' representation that no further facts could be alleged. We shall consider primarily the merits of that decision and, unless at least one cause of action is clearly stated, sustain the order of dismissal. (Southall v. Security Title Ins. Etc. Co., 112 Cal.App.2d 321, 323, 246 P.2d 74; Morris v. National Federation of the Blind, 192 Cal.App.2d 162, 164, 13 Cal.Rptr. 336.) We are constrained to determine only whether appellants state a cause of action, not whether they might have been able to do so. (Lemoge Electric v. County of San Mateo, 46 Cal.2d 659, 664 297 P.2d 638; Levinson v. Bank of America, 126 Cal.App.2d 122, 125, 271 P.2d 632.) The unverified fourth amended complaint, evolved over a period of more than two years of argument through law and motion, is presented to us without showing by brief that appellants could or would be willing to amend further. We conclude that the court did not, by the action taken, abuse it discretion since the pleadings are not susceptible of a construction that might entitle appellants either to injunctive relief or to damages.
Appellants attempt by their complaint to impose upon respondents treble damages for asserted violations of the antitrust, price discrimination and unfair trade practices sections of the Business and Professions Code, and also accuse respondents of the common law tort of interference with advantageous business or contractual relations. The issues as framed by appellants' brief are (1) whether parties allegedly damaged by the wrongdoing of competitors in violation of the subject statutes are entitled to the civil remedies of injunction and/or indemnity, and (2) whether the allegedly injured parties are entitled to damages from certain competitors, who, by a conspiracy to provide rebates, intentionally induce a prime customer to transfer its business to the wrongdoers. We must determine, more particularly, whether the superior court has jurisdiction to entertain an action based upon appellants' theories, or any of them, and, if so, whether appellants have stated a cause of action against any of the various named defendants. The latter finding, which is determinative, is in the negative.
The complaint alleges that Lehman Brothers, an investment firm and a partnership, owns a major or controlling interest in Great Western Financial Corporation (hereinafter sometimes referred to as Great Western) and in Financial Corporation of America (hereinafter sometimes referred to as Financial) both of which are financial holding companies. Great Western, in turn, owns Great Western Savings and Loan (hereinafter sometimes referred to as Great Western S & L) and a group of 25 individually named escrow companies hereinafter referred to collectively as Liberty. Financial owns title insurer Security Title Insurance Company (hereinafter sometimes referred to as Security); Financial and The complaint further alleges that appellants are corporations, each qualified to do business in California as an "underwritten title company." The "underwritten title company" (hereinafter sometimes called "title company") is described by code as a "person engaged in the business of preparing title searches, title examinations, certificates or abstracts of title upon the basis of which a title insurer regularly writes title policies * * *." (Ins.Code, § 12402.) Title insurance, which is a customary incident of practically every California real estate transaction, may be sold either by a title insurer or a title company, and both are regulated by the insurance commissioner, must be licensed, meet certain minimum capital requirements, submit to examination and audit, and may have licenses seized or revoked for financial instability or other regulatory infractions. (Ins.Code, §§ 12396 and 12411.) The title insurer is entitled to perform the search and abstract functions, as well as to issue the policy. The title company which performs only search and abstract work, may engage in the escrow business within statutory limitations. It is specifically contemplated that the title company shall contract to do the preliminary work for a title insurer and then distribute the policy of insurance, the risk of which is underwritten by the title insurer, in return for an appropriate division of fees. (Ins.Code, § 1242.)
Appellant title companies, therefore, compete directly with both Summit and American in Los Angeles County. All three either must do business with or compete with Security, and it is common knowledge that all compete with the long dominant Title Insurance and Trust Company and every other concern qualified to transact title business in this county.
It is appellants' theory that all respondents, including the powerful Lehman Brothers investment banking company, have conspired under the impetus of common interest to violate statutory prohibitions and intentionally interfere with appellants' business to their financial damage. Appellants contend that by virtue of this combination respondents, all and variously, have interfered with their business relationships, violated the California law of antitrust and unfair trade practices, and the Insurance Code. In appellants' words, they charge that defendants "conspired to pay an illegal rebate to lure away customers of the Plaintiffs, and to boycott the Plaintiffs, along with a battery of other acts forbidden by statute." It is the thrust of these allegations that the acts of the various respondents constitute a fraud on appellants which justifies and, indeed, compels the piercing of corporate veils to disclose an identity of interests between the Lehman-owned companies on the one hand the Sherwood and Summit shareholders on the other. The facts, however, are sparse and incomplete.
The California law of antitrust, commonly known as the Cartwright Act (Bus. & Prof.Code, §§ 16700-16800) is patterned upon the federal Sherman Act and both have their roots in the common law; hence federal cases interpreting the Sherman Act are applicable with respect to the Cartwright Act. (Milton v. Hudson Sales Corp., 152 Cal.App.2d 418, 313 P.2d 936; Rolley, Inc. v. Merle Norman Cosmetics, supra, 129 Cal.App.2d 844, 278 P.2d 63, 282 P.2d 991.) In 1961 California incorporated in essence also section 3 of that federal legislation known as the Clayton Act (Bus. & Prof.Code, § 16727) which goes beyond common law and the Sherman Act to inhibit trade restraints at their inception, and federal interpretations thereof are similarly persuasive. (Milton v. Hudson Sales Corp., supra.) We are persuaded by California Indeed, as to Lehman Brothers, the only ultimate facts alleged are that Lehman Brothers is a partnership, that it owns stock in Great Western and Financial and that at times it has had two or more directors concurrently on the boards of Great Western and Financial, respectively. Thus, Lehman Brothers stands at the investment apex of a pyramid of control which can be reached only by means of factual allegations of conduct on the part of related defendants from which a conspiracy or combination with the intent to jeopardize appellants' business may be inferred. The same analysis applies to Great Western and Financial in their passive administrative role as holding companies, Great Western S & L as a lender relatively remote from the scene, and even Security which, as title insurer, merely issues title policies which constitute the subject matter of appellants' claims.
The corporate interrelationship alleged is not a wrong per se. "Within the present Sherman Act there is no place for a doctrine of intra-enterprise conspiracy. No logical stopping point exists short of giving a prosecutor carte blanche to attack virtually all multicorporate enterprises." (McQuade, Conspiracy, Multicorporate Enterprises, and Section 1 of the Sherman Act, 1955, 41 Va.L.Rev. 183, 216.) There is substantial justification for intercorporate divisions and affiliated corporations to do business with one another so long as their very corporate existence and structure do not violate the antitrust laws per se (United States v. Yellow Cab Co., 338 U.S. 338, 70 S.Ct. 177, 94 L.Ed. 150; United States v. Columbia Steel Co., 334 U.S. 495, 523, 527, 68 S.Ct. 1107, 92 L.Ed. 1533.) Since the mere existence of the Lehman power complex is not the evil under attack, nor its proper subject, we must require that appellants allege with elaborate specificity conduct constituting unfair competition or a conspiracy to engage in such unfair practices and the precise nature of the damages inflicted.
"The gist of an action charging civil conspiracy is not the conspiracy but the damages suffered. [Citations.] It is the long established rule that a conspiracy, in and of itself, however atrocious, does not give rise to a cause of action unless a civil wrong has been committed resulting in damage. [Citations.] * * * The advantage to the pleader in charging a conspiracy is to implicate all participating in the common design and thus fasten liability on him who agreed to the plan to commit the wrong as well as on him who actually carried it out. [Citations.] The conspiracy 'may be inferred from the nature of the acts done, the relations of the parties, the interests of the alleged conspirators, and other circumstances.' [Citations.]
"To state a cause of action for conspiracy, the complaint must allege (1) the formation and operation of the conspiracy, (2) the wrongful act or acts done pursuant thereto; and (3) the damage resulting from such act or acts. [Citations.]" (Wise v. Southern Pacific Co., 223 Cal.App.2d 50, 64-65, 35 Cal.Rptr. 652, 660.) General allegations of agreement have been held sufficient (Farr v. Bramblett, 132 Cal.App.2d 36, 47, 281 P.2d 372), and the conspiracy averment has even been held unnecessary, providing the unlawful acts or civil wrongs are otherwise sufficiently alleged. (Hege v. Worthington, Park & Worthington, 209 Cal.App.2d 670, 678, 26 Cal.Rptr. 132.) Significantly, however "[t]he activities condemned by the anti-trust law are contracts, combinations, or conspiracies in restraint of * * * trade or commerce. Such contracts, combinations or conspiracies in restraint of * * * trade or commerce cannot be alleged generally in the words of the statute but the facts must be set forth which indicate the existence of such contracts, combinations or conspiracies." (Westor Theatres v. Warner Bros. Pictures, Inc., D.C., 41 F.SUpp. 757, 762.) Appellants themselves concede that they have not alleged facts but contend by reference to Business and Professions Code, section 16756, and a criminal decision (People v. Sacramento Butchers' Assn., 12 Cal.App. 471, 481, 107 P. 712), that general allegations of statutory violations are sufficient. The California and federal authorities, however, are contrary where plaintiffs base a civil action for damages upon anti-trust legislation. "While, in a criminal prosecution against persons for maintaining a trust or combination in restraint of commerce or trade, the gist of the offense is in the formation and maintenance of such trust or combination, and the fact of the existence of the combination for the purpose of doing some prohibited act is all that need be proved to support and sustain the charge, yet, in a civil action for damages based upon our anti-trust statute, it is incumbent upon the complaining party, not only to allege and prove the existence of an unlawful trust or combination, but also to allege and prove that his business or property has been injured by the very fact of the existence and prosecution of such unlawful trust or combination." (Munter v. Eastman Kodak Co., 28 Cal.App. 660, 664-665, 153 P. 737, 739.) General allegations of the existence and purpose of the conspiracy are insufficient and appellants must allege specific overt acts in furtherance thereof. "Conceding the formation of a conspiracy is charged, having for its object a common design and purpose, still we find no statement in the bill as to any specific overt acts done by defendants in pursuance of that design and purpose." (Davitt v. American Bakers' Union, 124 Cal. 99, 101, 56 P. 775.)
Section 16756 of the Business and Professions Code provides as follows:
Since the conspiracy allegations are insufficient in and of themselves, we turn to the purported averments of specific acts contained in the complaint and find them similarly lacking. The first count is directed primarily against Summit and Sherwood (hereinafter sometimes referred to as the Sherwood group), but the opening paragraphs allege appellants' corporate existence, Lehman Brothers' ownership of certain respondents and the conspiracy of those defendants to carry out the acts therein described for the purpose of unlawfully restraining trade and destroying competitors. There follow allegations that title insurance policies are customarily procured to insure buyer or lender upon the "transfer and encumbrancing" of real property; that title insurance business in Los Angeles County originates primarily with lenders or buyers of real property and those who perform escrow services; that Liberty is first and Sherwood second in volume of title activity generated by independent escrow companies; and that "[a]ll title companies and title insurance companies * * * compete for title insurance orders from lenders and escrow companies in Los Angeles County." Appellants then aver further that after American "approached" Sherwood, its stockholders incorporated Summit and competition has been lessened because all of Sherwood's title insurance business now goes to Summit; that Security furnishes Summit "all search data needed to insure title" and that Summit issues only Security title policies; that Summit pays one-half the posted rates for such policies to Security but charges Sherwood and its customers the full rates; that Summit performs no substantial function in the issuance of title policies and was created to "mask" the illegality of the acts herein described." Finally, it is alleged that all the above was accomplished "with the intent and with the result of interfering the [appellants'] business relationship with Each of these counts fails to state a cause of action for interference with contractual relationships because there is no allegation alleged that appellants had a contract with anyone which was breached as a result of the activities of defendants, or any of them. (Allen v. Powell, 248 Cal.App.2d 502, ---, 56 Cal.Rptr. 715.
Advance Report Citation: 248 A.C.A. 632, 636.
Appellants similarly fail in either count to state an action for interference with prospective business advantage which will lie on common law principles where the right to pursue a lawful business is intentionally interfered with either by unlawful means, or by means otherwise lawful when there is lack of sufficient justification (Willis v. Santa Ana etc. Hospital Assn., 58 Cal.2d 806, 26 Cal.Rptr. 640, 376 P.2d 568), but only if it appears that the business advantage would otherwise have been realized. (Perati v. Atkinson, 213 Cal.pp.2d 472, 28 Cal.Rptr. 898.) One with a financial interest in the business of another is privileged however, so long as he does not employ improper means but acts merely to protect his financial interest or promote the other's welfare, to induce the other not to enter a business relationship with a third party. (Rest., Torts, §§ 769, 770, 771.) The conduct of Sherwood and Summit is patently justified.
Appellants compete with Summit; Sherwood which owns Summit naturally sends its business there. Summit buys policies from Security and since appellants are not title insurers the business Security receives in this manner presumably does them no damage. We reiterate that the owners of a corporate escrow company, such as Sherwood, are authorized by statute to incorporate a separate title company which may then receive from the title insurer with which it does business a portion of the posted premium in exchange for its search and abstract services. (Ins.Code, § 12396 et seq.)
While it is difficult to isolate from the complaint the specific elements of any given legal action and virtually impossible to determine from each count the nature of the purported cause of action, a second category of circumstances is described in count eight. The gist of this count is that Great Western Financial has prevailed upon Great Western Savings & Loan and the Liberty escrow companies to send their title business to American, which buys policies from Security, and this has damaged appellants. This count realleges the Lehman ownership and control of various defendants, the existence of their conspiracy, and the nature of the title insurance business in Los Angeles County. Thereafter, the complaint alleges generally that savings and loan associations are substantial sources of title business resulting from purchase money loans, refinancing, and the financing of their direct sales of real estate; that buyers of real property frequently select the title company before they know who their lender will be; that when Great Western makes purchase money loans it refuses appellants' policies and favors Security or American; that for this reason escrow officers, when uncertain as to who the lender ultimately may be, are reluctant to deal with appellants; that escrow officers influence buyers who have no preferences; that the Liberty escrow companies, which formerly requested title policies from appellants, now conspire Insofar as appellants attempt to state an action against the Lehman-controlled defendants for interference with contract, they fail, by reference to authorities previously cited, because they allege no prior existing contract. The action for interference with prospective business advantage fails because they do not disclose wherein it is wrongful for Great Western, Great Western S & L, or Liberty to send business to American, any more than it is wrongful for Sherwood to purchase policies through Summit, since appellants had no reasonable assurance that their advantageous relations with Liberty would otherwise continue. They relate no facts from which we might find it improper for Summit or American to purchase title policies from Security. Since Great Western and Financial allegedly own various interests in Great Western S & L, Security, American and Liberty, it is merely prudent business practice for the other companies to request title policies from American and Security just as we heretofore established that the common ownership of Sherwood and Summit justifies a similar business practice. (Rest., Torts, §§ 769, 770, 771, and cases cited, supra.)
While Security, Summit and American all compete with appellants for title business, only Summit and American compete on precisely the same business plane and, by purchasing Security's title insurance, these companies do not inhibit appellants' access to the market. Appellants fail to join or allege the identity of the title insurer or insurers with whom they do business, and since they do not complain that they have been denied similar privileges or that Security refuses to sell them policies on terms equivalent to those tendered American and Summit, we must assume that appellants are not deprived of a competitive commodity. The only respondents, therefore, who might be accused of directly diverting business from appellants are Sherwood and Liberty, while the other defendants can be involved only by way of conspiracy. Appellants allude to no reasonable basis for assuming they enjoyed any prior right to do business with the customers of these escrow companies. Since the overt acts alleged are inadequate to establish an action for business interference against Sherwood and Liberty, respectively, the conspiracy allegations also fail.
The remaining counts incorporate successively the principal allegations of the first two counts, and final counts ten and eleven incorporate those of counts eight and nine as well. These miscellaneous counts charge defendants with various allegedly unfair competitive business practices. All except count seven, which deals with unlawful rebates (Ins.Code, § 12404), refer to the Cartwright Act (Bus. & Prof.Code, §§ 16700-16800). Count three charges that Security transmitted to Sherwood through Summit a secret rebate (Bus. & Prof.Code, § 17045). Count four suggests Security and Summit engaged in unreasonably low or discriminatory pricing (Bus. & Prof.Code, §§ 17043 and 17049). Counts five and ten charged defendants, acting through the Sherwood and Great Western groups, The Cartwright Act, as previously mentioned, is similar in spirit and substance to that federal legislation encompassed by the Sherman (15 U.S.C.A. §§ 1-7) and Clayton Acts (15 U.S.C.A. §§ 12-27). Private individuals, businesses or corporations have, in the absence of express statutory authority, no standing to enforce such regulatory statutes. (Cf. Show Management v. Hearst Pub. Co., 196 Cal.App.2d 606, 612-616, 16 Cal.Rptr. 731; West Coast Poultry Co. v. Glasner, 231 Cal.App.2d 747, 42 Cal.Rptr. 297; Hudson v. Craft, 33 Cal.2d 654, 204 P.2d 1, 7 A.L.R.2d 696.) The Cartwright Act however follows federal policy which expressly contemplates private civil litigation based upon statutes regulating antitrust and unfair trade practices, including illegitimate pricing practices. (Bus. & Prof.Code, §§ 17040-17051.)
These statutes and the common law which once constituted the "protection of the public against combinations in restraint of the insurance trade" (Speegle v. Board of Fire Underwriters, 29 Cal.2d 34, 45, 172 P.2d 867, 874) are now expressly superseded and contravened by the specific provisions of the Insurance Code. Counts three (secret rebate), four (discriminatory pricing) and seven (unlawful rebate) clearly concern the regulation of rates charged by title insurers and title companies, and rate regulation has traditionally commanded administrative expertise applied to controlled industries. (Ins.Code, §§ 12404-12412; County of Placer v. Aetna Cas. Etc. Co., 50 Cal.2d 182, 323 P.2d 753; Div. of Labor Law Enforcement v. Maroney, 28 Cal.2d 344, 170 P.2d 3.) Count three, for instance, is based upon a statute (Bus. & Prof.Code, § 17045) aimed at preventing a distributor from discriminating between customers, but fails to allege facts from which a court might properly infer that the prices charged by Security or Summit differ from customer to customer, and is thus defective. (Federal Automotive Services v. Lane Buick Co., 204 Cal.App.2d 689, 22 Cal.Rptr. 603.) Count four, presumably based on the same facts, charges that the discount constitutes a sale of title insurance below cost which is an infraction only if done "for the purpose of injuring competitors" (Bus. & Prof.Code, §§ 17043, 17049), but a court is not the appropriate initial arbiter of factors involved in insurance costs. Count seven implies that Sherwood (an escrow company) acts as "agent" for real property owners with whom title insurers and title companies are prohibited from splitting fees and that because Summit is controlled by identical interests, the receipt of a title policy from Security at a discount constitutes an illegal rebate (Ins.Code, § 12404) to Sherwood. The statutory framework, however, specifically contemplates a division of fees between title insurers and title companies which shall be proper unless the method used constitutes such fee divisions "illegal." (Ins.Code, §§ 12412, 12404.5, 12405.7) It is not clear from the facts alleged that the discount rendered would or should be considered illegal by the insurance commissioner, or that the practice of extending secret rebates, or engaging in unreasonably low or discriminatory pricing policy is followed by the defendants, or any of them.
The insurance commissioner, moreover, maintains exclusive jurisdiction in the initial determination of "all" practices in this state "which constitute unfair methods of competition or unfair or deceptive Rosenfield v. Malcolm,
Martino v. Concord Community Hosp. Dist.,Appellants fail to allege that they approached, much less exhausted, the administrative remedies prerequisite to judicial action of the nature herein requested. (Hesperia Land Development Co. v. Superior Court, 184 Cal.App.2d 865, 7 Cal.Rptr. 815; People v. Coit Ranch, Inc., 240 Cal.App.2d 52, 21 Cal.Rptr. 875; Anderson v. Dept. of Alcoholic Bev. Control, 159 Cal.App.2d 413, 324 P.2d 24; Abelleira v. District Court of appeal, 17 Cal.2d 280, 109 P.2d 942, 132 A.L.R. 715.) As to the title insurers, title companies, and independent escrow companies named herein, this defeats appellants' claims since their conclusion that their legal remedy is inadequate is unsupported by factual allegations.
We need not rest upon jurisdictional grounds alone, however, because the factual allegations, as illustrated, fail in each instance to support the charge. Just as the earlier counts state facts insufficient to establish proscribed conduct on the parts of the alleged actors and thus cannot reach their purported conspirators, so the final counts charging antitrust infringements fall for similar reasons.
"In Lawson v. Woodmere, Inc., 4 Cir., 217 F.2d 148, p. 151, it was said: 'In the classic cases * * * the Supreme Court established the celebrated "rule of reason" by holding that not all restraints of interstate commerce are within the ambit of the Sherman Anti-Trust Act, but only those restraints which are undue or unreasonable. The Act does not cover restraints that are merely incidental, casual and immaterial.'
"The California Supreme Court has written [citation]: '[I]t may be assumed that the broad prohibitions of the Cartwright Act are subject to an implied exception similar to the one that validates reasonable restraints of trade under the federal Sherman Antitrust Act.' " (Milton v. Hudson Sales Corp., supra, 152 Cal.App.2d 418, 442, 313 P.2d 936, 951.) We are thus admonished to view appellants' allegations in the perspective which condones reasonable competitive business practices but prohibits unreasonable restraints on trade. (Board of Trade of City of Chicago v. United States, 246 U.S. 231, 38 S.Ct. 242, 62 L.Ed. 63; People v. Building Maintenance, etc., Assn., 41 Cal.2d 719, 727, 264 P.2d 31.)
Appellants contend in counts six and eight that the conduct of the Sherwood and Great Western groups, respectively infringes Business and Professions Code, section 17046. The attempted application of this section to the facts evidences appellants' misinterpretation of the nature of a boycott. The allegation of boycott cannot be supported in this instance because everyone has the unrestricted right to select customers and sources of supply. (Bus. & Prof.Code, § 17042; A.B.C. Distrib. Co. v. Distillers Distr. Corp., 154 United States v. Columbia Steel,
Roley, Inc. v. Merle Norman Cosmetics, Klor's v. Broadway-Hale Stores, Eastern States R.L.D. Asso. v. United States, Webster Motor Car Co. v. Packard Motor Car Co., Dublin Distributors v. Edward & John Burke, Limited, D.C., Milton v. Hudson Sales Corp.,While the boycott statute (Bus. & Prof.Code, § 17046) referred to in count eight makes it unlawful to use threats, intimidation or boycott to effect a violation of the unfair trade practices laws, the complaint implies rather that respondents used the boycott to effect a restraint of trade (Bus. & Prof.Code, § 16727). Counts five and ten allege that the facts of count one as to the activities of Sherwood and Summit, and of count eight with respect to the Lehman enterprises, respectively, constitute exclusive sales agreements and "tying-in" contracts which "may * * * substantially lessen competition or tend to create a monopoly * * *." (Bus. & Prof.Code, § 16727.)
Again the allegations are inadequate. The term "tying-in" contracts has been applied judicially to those agreements whereby the seller or lessor of patented, or unpatented, equipment requires the purchaser or lessee to use only those unpatented accessory items manufactured or sold by the seller or lessor. (International Salt Co. v. United States, 332 U.S. 392, 68 S.Ct. 12, 92 L.Ed. 20; International B. Mach. Corp. v. United States, 298 U.S. 131, 56 S.Ct. 701, 80 L.Ed. 1085.)
"[A] tying arrangement may be defined as an agreement by a party to sell one product but only on the condition that the buyer also purchases a different (or tied) product, or at least agrees that he will not purchase that product from any other supplier." (Northern P.R. Co. v. United States, 356 U.S. 1, 5-6, 78 S.Ct. 514, 518, 2 L.Ed.2d 545.) A lending institution, however, has been traditionally entitled to require for its protection and as a condition of making the loan, a specific type of title policy from a particular source; the debtor-purchaser is free to obtain a policy to protect his equity from whatever source he chooses, though most frequently he relies upon the lender's policy.
Appellants fail to define the market by subject matter, total volume, proportion controlled by defendants, availability to appellants of the subject matter or a competing subject matter, and availability to the public of the subject matter or a competing subject matter. (Apex Hosiery Co. v. Leader,
Rolley, Inc. v. Merle Norman Cosmetics, A.B.C. Distrib. Co. v. Distillers Distr. Corp., Milton v. Hudson Sales Corp., Rolley, Inc. v. Merle Norman Cosmetics,Finally, count eleven in grand finale incorporates all prior counts and concludes that by reason of everything so stated respondents have formed a trust or combination in restraint of trade (Bus. & Prof.Code, § 16720), again a mere legal conclusion drawn from generalities. (Abouaf v. J.D. and A.B. Spreckles Co., D.C., 26 F.SUpp. 830, 834; Glenn Coal Co. v. Dickinson Fuel Co., 4 Cir., 72 F.2d 885, 887.) Where complainants are unsuccessful in establishing an action for conduct which "may * * * tend to create a monopoly" (Bus. & Prof.Code, § 16727), they are a fortiori doomed to failure with respect to the full blown conduct they must allege to come within acts proscribed by statutes patterned on the Sherman Act (Bus. & Prof.Code, § 16720); Tampa Electric co. v. Nashville Coal Co., 365 U.S. 320, 335, 81 S.Ct. 623, 5 L.Ed.2d 580; cf. Rolley, Inc. v. Merle Norman Cosmetics, supra, 129 Cal.App.2d 844, 278 P.2d 63.) There is a dangerous vice inherent in the complaint with which we are herein presented because it is ambiguous and investigatory in nature. Respondents are entitled to know precisely what acts constitute the alleged violations so that the time and expense involved in conducting an investigation and pursuing discovery may be reasonably limited, for the complaint might otherwise be construed as a blanket license to indulge in interrogatories, depositions, and motions to produce ad infinitum, ad nauseum. (Beegle v. Thomson, 7 Cir., 138 F.2d 875; Leonard v. Socony-Vacuum Oil Co., D.C., 42 F.Supp. 369; See: Yankwich, Leon R., "Short Cuts" in Long Cases, 13 F.R.D. 41 and Committee Report of the Judicial Conference of the United States, "Procedure in Antitrust and Other Protracted Cases" 13 F.R.D. 62.) This count which fails because of inadequate allegations of monopoly or monopoly power and lack of factual allegations of specific conduct in furtherance of a conspiracy or combination, is therefore insufficient as to each of the defendants charged with conspiracy.
Appellants, by their conduct, demonstrate that they are unable or unwilling to amend to cure the defects specified in various special demurrers to their complaint which were sustained on similar grounds designated by two different trial judges. These include the ground that certain counts unite and fail to separately state several causes of action, that certain counts improperly unite several causes of action, and that each count is ambiguous, unintelligible and uncertain. We find each of these grounds well taken. Leave to amend further is properly denied when a plaintiff fails to amend to correct defects on the basis of which special demurrers to a previous complaint were sustained, or Aitken v. Southwest Finance Corp.,
Spencer v. Crocker First Nat. Bank,By irresponsible pleading containing unrestrained and unverified allegations, appellants attempt to secure the right by discovery to explore at random and at enormous expense to respondents, several large and important businesses and their relationships with one another, namely, the savings and loan, escrow, title insurance and title businesses. The method used by appellants has been aptly characterized by Judge Kaus as a "shotgun" technique where plaintiffs deal solely in broad generalities and otherwise indulge in factual and legal conclusions, unsupported speculation and argumentative allegations. (Lesperance v. North American Aviation, Inc., 217 Cal.App.2d 336, 342-343, 31 Cal.Rptr. 873.) "A demurrer does not * * * admit contentions, deductions or conclusions of facts or law which may be alleged in a complaint [citation]." (Marin v. Jacuzzi, 224 Cal.App.2d 549, 552, 36 Cal.Rptr. 880, 882.) As earlier signified by Judge Kaus, where the complaint is thus devoid of facts to support its legal conclusions of conspiracy "it is just as possible that the difficulty of the pleader arises from the fact that the events and relationships which would give rise to a cause of action never took place, as it is that they did take place but that the defendants did not tell plaintiffs about them" and the conclusion is inescapable that "[t]he failure to make a good pleading probably arises in a lack of facts rather than in the fault of the pleader." (Dukes v. Kellogg, 127 Cal. 563, 565, 60 P. 44.)
"Abuse of discretion [by the trial court] is not shown where it is not indicated as to the manner in which it is proposed to amend nor the nature of the proposed amendment. [Citations.] Neither before the trial court nor before this court has plaintiff indicated the nature of a proposed amendment or the manner in which he would amend his complaint. Plaintiff has therefore failed to establish reversible error in the dismissal of the action. * * *" (Starbird v. Lane, 203 Cal.App.2d 247, 262, 21 Cal.Rptr. 280, 290.)
The order is affirmed.
WOOD,P.J., and McCOY, J. pro tem., concur.
Assigned by Chairman of Judicial Council.
"Indictment, information or complaint: Statements declared sufficient. In any indictment, information or complaint for any offense named in this chapter, it is sufficient to state the purpose or effects of the trust or combination, and that the accused is a member of, acted with, or in pursuant of it, or aided or assisted in carrying out its purposes, without giving its name or description, or how, when and where it was created."