Opinion
NOT TO BE PUBLISHED
Sonoma County Super. Ct. No. SCV225677
GEMELLO, J.
Baywood Service Center and American Tow Service are competing towing companies in the City of Petaluma. Baywood brought suit against American under the unfair competition law (Business and Professions Code, section 17200 et seq.) after American entered into a towing agreement with the City which Baywood believed violated state law regulating police department vehicle tows. After a bench trial, Baywood obtained declaratory and injunctive relief, as well as attorney fees. American contends that Baywood lacks standing, that the action is moot, that the City’s towing agreement provides a “safe harbor” from liability under the unfair competition law, and that the trial court erred in awarding attorney fees. We affirm.
On January 30, 2007, we consolidated appeal numbers A114373, relating to the merits, and A116154, relating to the attorney fees award, for purposes of argument and decision.
Factual and Procedural Background
Our summary of the background to this case is constrained by the parties’ failure to cite evidence in the record for all the factual assertions in their briefs. Under rule 8.204(a)(1)(C) of the California Rules of Court, both parties were obligated in their briefs to “[s]upport any reference to a matter in the record by a citation to the volume and page number of the record where the matter appears.” Both parties have violated this rule by submitting briefs with numerous missing citations. Because we “must presume that the record contains evidence to support every trial court finding of fact” (Trailer Train Co. v. State Bd. Of Equalization (1986) 180 Cal.App.3d 565, 587), we rely on the trial court’s detailed and well-reasoned statement of decision in summarizing the background.
American did not object to the trial court factual findings in its opening brief, and it failed to file a reply brief challenging any of the findings specifically relied upon by Baywood. The absence of a reply brief also means that many of Baywood’s legal arguments are unanswered by American.
Plaintiff and respondent Bobby Thompson is the owner of Baywood Service Center (Baywood), a company that offers towing services in the City of Petaluma (City). Defendant and appellant American Tow Service (American) is a competitor of Baywood in the provision of towing services to the City.
We use the name Baywood to refer to plaintiff Thompson, who brought suit individually and dba Baywood.
In August 2000, the Petaluma City Council adopted City Resolution 00-150, which revised the Tow Service Agreement (TSA) governing the 1,200 cars the Petaluma Police Department (Department) anticipated towing each year. The resolution increased the fee imposed by the City on towed vehicles and imposed the fee on all towed vehicles. The resolution also added two addenda to the standard TSA developed by the California Highway Patrol.
According to the Department’s Agenda Report, the goal of Resolution 00-150 and the revised TSA was to generate sufficient revenue to enable the Department’s traffic safety program to “become self-funding and cost-effective” and thereby “further ensure that [the program] will always be in place, even during difficult fiscal times.”
Before and after approval of Resolution 00-150, Baywood informed the City and American that it believed various terms of the TSA were in conflict with portions of the Vehicle Code and the Civil Code and against public policy. The City implemented the new TSA in November 2000.
As explained by the trial court, American towed under the TSA for two and one-half years, from November 2000 until the resolution was repealed and replaced by another resolution and revised TSA. That resolution and TSA are not part of the record. At the time of trial, American continued to tow for the City.
Baywood towed under the TSA from November 2000 until approximately March 2001, when it was removed from the City’s tow list. Baywood was advised by the City that it would not be permitted to apply for reinstatement to the tow list unless it agreed to abide by all the terms of the TSA. Baywood has not towed for the City since it was removed from the tow list. Before that time, City tows accounted for 95 percent of Baywood’s towing business. Towing jobs that would have gone to Baywood were allocated to American and another competitor, Dion’s Downtown Towing.
Baywood filed the present action in December 2000, seeking declaratory relief, injunctive relief, and restitution on the grounds that various provisions of the resolution and TSA violate Vehicle Code sections 12110 and 22850-22856 and Civil Code sections 3067-3073. Baywood alleged that American was engaging in an unlawful business practice within the meaning of the unfair competition law (Business and Professions Code section 17200 et seq.) by towing for the City under the TSA.
According to the trial court’s decision, the City and the Department were dismissed as defendants before trial pursuant to a settlement agreement.
An additional plaintiff, David Clark (individually and dba Dave’s Auto Body & Painting), was dismissed as a party at his request. An additional defendant, Dion’s Downtown Towing, was severed from the case following its filing for bankruptcy.
Following a bench trial, the trial court held that portions of the TSA are preempted because they conflict with Vehicle Code sections 22850-22856 and Civil Code sections 3067-3073. In particular, the court found that portions of the TSA regarding the distribution of lien sale proceeds violate state law “by requiring lien sale proceeds to be distributed in an entirely different manner than called for [by] statute.” The TSA requires tow companies to pay an assessment fee to the City, in violation of statutory provisions barring assignment of the lien. The trial court declared that provisions of the TSA requiring tow companies to waive their statutory rights are preempted and unenforceable. Further, the trial court concluded that the TSA conflicts with a statutory provision prohibiting the City from imposing an administrative tow fee where the selling price of a vehicle is less than the tow company’s statutory lien. On appeal, American does not challenge the trial court’s conclusion that the TSA violates state law.
The trial court entered judgment in favor of Baywood and against American. The court granted Baywood’s request for declaratory relief and declared that portions of the TSA conflict with state law and are “invalid and unenforceable as preempted and against public policy.” The trial court issued an injunction directing American to comply with Vehicle Code sections 22850-22856 and Civil Code sections 3067-3073 and enjoining American from entering into contracts which violate or conflict with those statutory provisions. The court granted Baywood’s motion for attorney fees and costs in the amount of $60,942.00, pursuant to Code of Civil Procedure sections 1021.5 and 1033.5.
Discussion
I. Standing
American contends that Baywood lacks standing to bring suit under Business and Professions Code section 17200 et seq. because it did not suffer an injury in fact as a result of American’s actions.
At the November 2, 2004, General Election, the voters approved Proposition 64, which amended Business and Professions Code section 17204 to provide that a private person has standing to sue only if he or she “has suffered injury in fact and has lost money or property as a result of such unfair competition.” (Bus. and Prof. Code, § 17204, as amended by Prop. 64, § 3; see also Californians For Disability Rights v. Mervyn’s LLC (2006) 39 Cal.4th 223, 227-228.) American argues, without citation to authority, that Baywood has not suffered injury in fact due to American’s conduct because it was the City that imposed the illegal contract.
In fact, Baywood was injured by American’s conduct. American gained a competitive advantage because it was willing to violate state law and thereby secure a place for itself on the City’s tow list. It is noteworthy that American does not challenge the trial court finding that this conduct constituted unfair competition. The City was another actor, but the harm suffered by Baywood “fairly can be traced” to American’s willingness to compete by violating the law. (Northeastern Fla. Chapter, Associated Gen. Contractors of America v. Jacksonville (1993) 508 U.S. 656, 663.) The result was that American continued to tow for the City, while Baywood was removed from the City’s tow list and lost 95 percent of its towing business. The tows that would have gone to Baywood were allocated to American and another competitor, Dion’s Downtown Towing.
American’s suggestion that Baywood failed to show “reliance” is not persuasive. The cited case discusses the reliance concept in relation to a claim based on false or misleading advertising (Laster v. T-Mobile USA, Inc. (S.D. Cal. 2005) 407 F.Supp.2d 1181, 1194), whereas this case is based on American’s unfair competition in contracting to violate the law. We need not determine whether plaintiffs asserting claims based on false or misleading advertising must show reliance.
Baywood has standing under Business and Professions Code section 17204.
We need not consider Baywood’s arguments that it also has taxpayer and citizen standing.
II. Mootness
American contends that the trial court erred in granting injunctive and declaratory relief because the action was moot at the time the judgment was issued. It separately recasts the argument in contending that the trial court erred in granting declaratory relief because only “past wrongs” were at issue. American argues the action became moot when Baywood entered a settlement agreement with the City and the Department in November 2004. According to Baywood’s trial brief, in June 2003 the City repealed Resolution 00-150 and the TSA and enacted a new ordinance and a revised contract.
The burden of demonstrating error rests on the appellant American. (Winograd v. American Broadcasting Co. (1998) 68 Cal.App.4th 624, 632.) We review the trial court’s decision to grant injunctive and declaratory relief for an abuse of discretion. (Haley v. Casa Del Rey Homeowners Ass’n (2007) 153 Cal.App.4th 863, 872.) “[A] court’s power to grant injunctive relief to prevent future unfair business practices is ‘ “extraordinarily broad.” ’ ” (People v. First Federal Credit Corp. (2002) 104 Cal.App.4th 721, 735-736.) American has not demonstrated error.
In Marin County Bd. of Realtors, Inc. v. Palsson (1976) 16 Cal.3d 920, 929, the court held that “ ‘[i]t is settled that the voluntary discontinuance of alleged illegal practices does not remove the pending charges of illegality from the sphere of judicial power or relieve the court of the duty of determining the validity of such charges where by the mere volition of a party the challenged practices may be resumed.’ ” (See also Aguilar v. Avis Rent A Car System, Inc. (1999) 21 Cal.4th 121, 133; Friends of Earth, Inc. v. Laidlaw Environmental Services (TOC), Inc. (2000) 528 U.S. 167, 189.) That is the situation here. American did not acknowledge during the five years of litigation that its conduct was illegal, and it has not provided assurances that it will not execute similarly illegal contracts in the future, either with the City or a different municipality. Neither are there any assurances on the record from the City. The City’s new tow agreement is not part of the record, and neither is the settlement agreement with the City. We cannot speculate as to the contents of those documents.
American’s claim fails for a second reason. Even if factual developments rendered the action moot, the trial court had discretion to resolve “issues of broad public interest that are likely to recur.” (Coachella Valley Mosquito & Vector Control Dist. v. California Public Employment Relations Bd. (2005) 35 Cal.4th 1072, 1079, fn. 3.) The laws at issue are broadly applicable provisions that advance public policies relating to the orderly removal, and subsequent recovery or sale, of vehicles subject to tow from public roadways in California. The trial court was entitled to rely on the evidence that the City “based [the TSA] on similar successful Traffic Safety Programs” in more than 14 other cities. There was demonstrable support for the conclusion that the issue had broad public interest and was likely to recur. The trial court did not abuse its discretion in rejecting American’s claim of mootness.
American also contends that the trial court erred in granting declaratory relief because only the City could correct the harm suffered by Baywood. But Baywood’s harm is fairly traceable to American’s unfair competition, and it was reasonable for the trial court to conclude that the injury to Baywood will be relieved if American, the only company currently towing for the City disclosed in the record, refuses to sign contracts with the City that violate the law. American also contends that the trial court erred in granting declaratory relief because Baywood has “unclean hands” due to the fact that it towed under the challenged contract for several months. The evidence is undisputed that Baywood told the City that it believed the contract was illegal and signed only under protest. The trial court did not abuse its discretion.
III. Safe Harbor
American contends that the Petaluma City Council’s adoption of the tow agreement provided a “safe harbor” from liability under the unfair competition law. American’s argument is without merit.
First, American presents no authority supporting its argument that a municipal enactment can establish a safe harbor under the unfair competition law. The cases it cites involve safe harbors arising from state laws authorizing specific business practices. (Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Co. (1999) 20 Cal.4th 163, 182, 187-188; Olszewski v. Scripps Health (2003) 30 Cal.4th 798, 827-829.) As the California Supreme Court explained, “If the Legislature has permitted certain conduct or considered a situation and concluded no action should lie, courts may not override that determination. When specific legislation provides a ‘safe harbor,’ plaintiffs may not use the general unfair competition law to assault that harbor.” (Cel-Tech, at p. 182; see also Olszewski, at p. 829 [“Californians should be able to presume that statutes enacted by the Legislature are constitutional. Otherwise, we place our citizens in the untenable position of guessing whether their conduct may subject them to penalty even when the Legislature has expressly condoned it”].) In short, “[t]he power to create and define an exception to the UCL is committed to the Legislature.” (Aron v. U-Haul Co. of California (2006) 143 Cal.App.4th 796, 804; see also Krumme v. Mercury Ins. Co. (2004) 123 Cal.App.4th 924, 940, fn. 5.) Here, the tow contract adopted by the City directly conflicted with state law. American has presented no basis to conclude that the enactment of a city, a subordinate political body, may create a safe harbor from liability under the state unfair competition law.
Second, American presents no authority supporting its argument that a safe harbor prevents a court from awarding declaratory and injunctive relief. In the cases it cites the plaintiffs sought restitution and/or damages. (Cel-Tech Communications v. Los Angeles Cellular Telephone Company, supra, 20 Cal.4th at p. 179 & fn. 7; Olszewski v. Scripps Health, supra, 30 Cal.4th at p. 806.) Olszewski affirmed declaratory relief regarding the validity of the liens challenged in the suit, even though damages were precluded by the safe harbor. (Olszewski, at pp. 805-806, 808.) In a concurrence, Chief Justice George emphasized that “a business whose ongoing practices are found unlawful or unfair could not complain, on fairness grounds, ‘of being enjoined from further such violations’ in the future, even if the business’s past conduct was based on what seemed to be an enforceable state law.” (Id. at p. 832 (conc. opn. of George, C.J.).)
American has failed to show that a safe harbor precluded the trial court’s judgment.
IV. The Attorney Fees Award
American contends that the trial court erred in awarding attorney fees to Baywood because the litigation did not confer a significant benefit on the general public or a significant class of persons, as required under Code of Civil Procedure section 1021.5.
Code of Civil Procedure section 1021.5 provides in relevant part, “Upon motion, a court may award attorneys’ fees to a successful party against one or more opposing parties in any action which has resulted in the enforcement of an important right affecting the public interest if: (a) a significant benefit, whether pecuniary or nonpecuniary, has been conferred on the general public or a large class of persons, (b) the necessity and financial burden of private enforcement, or of enforcement by one public entity against another public entity, are such as to make the award appropriate, and (c) such fees should not in the interest of justice be paid out of the recovery, if any.”
American argues that Baywood’s lawsuit did not confer a significant benefit because the judgment only enjoins American from violating the Vehicle Code and Civil Code; it does not enjoin the City or other tow companies from entering into contracts that violate the applicable state laws. American cites no authority supporting its argument that to confer a significant benefit a plaintiff must obtain an injunction prohibiting all similarly situated companies from engaging in the illegal conduct at issue. Other cases have not required such broad-reaching injunctions to justify an award of fees under Code of Civil Procedure section 1021.5. For example, in Rich v. City of Benicia (1979) 98 Cal.App.3d 428, 436, the court affirmed a fee award because the lawsuit effectuated state environmental law, even though the court acknowledged that the underlying litigation was settled in terms relating to a single house and to the plaintiff’s participation in further planning activities. (See also County of San Luis Obispo v. Abalone Alliance (1986) 178 Cal.App.3d 848, 867.) American’s argument disregards the reality that the judgment obtained by Baywood is likely to deter cities and other tow companies from entering into contracts violating the relevant provisions of the Vehicle Code and Civil Code. (See Graham v. DaimlerChrysler Corp. (2004) 34 Cal.4th 553, 578; Beach Colony II v. California Coastal Com. (1985) 166 Cal.App.3d 106, 112; Rich, at p. 436.)
The trial court did not abuse its discretion in awarding attorney fees under Code of Civil Procedure section 1021.5. (Graham v. DaimlerChrysler Corp., supra, 34 Cal.4th at p. 578.)
V. Attorney Fees on Appeal
On January 30, 2007, we deferred ruling on Baywood’s January 4 motion for attorney fees on appeal until our decision on the merits. “ ‘[I]t is established that fees, if recoverable at all—pursuant either to statute or parties’ agreement—are available for services at trial and on appeal.’ ” (Morcos v. Board of Retirement (1990) 51 Cal.3d 924, 927.) Baywood is thus entitled to attorney fees under Code of Civil Procedure section 1021.5 as the successful party on appeal. (Lyons v. Chinese Hosp. Assn. (2006) 136 Cal.App.4th 1331, 1356.) “Although this court has the power to fix attorney fees on appeal, the better practice is to have the trial court determine such fees.” (Security Pacific National Bank v. Adamo (1983) 142 Cal.App.3d 492, 498; see also Lyons, at pp. 1356-1357.)
DISPOSITION
The judgment is affirmed. Plaintiff is awarded its attorney fees and costs on appeal. The matter is remanded to the trial court with directions to determine a reasonable award for attorney fees on appeal.
We concur. JONES, P.J., SIMONS, J.