People v. James

“let-down fee” were paid, from making false representations concerning liens and other rights, and from forcing vehicle owners to waive claims for damages to their vehicles before releasing their vehicles.

All parties stipulated to a temporary restraining order and a show cause hearing was held on the People’s application for a preliminary injunction. At the hearing, the People introduced approximately 45 declarations of persons whose vehicles had been hoisted or towed from the El Don parking lot between December 22, 1979, and February 21, 1980. The declarations illustrated a pattern of business practices followed by James and Bagstad in authorizing and completing vehicle impounds. An Ace tow truck was stationed on the street near the El Don lot much of the time. As soon as a person who had parked a vehicle on the El Don lot left the premises, the tow truck would come onto the lot and immediately hoist the vehicle for towing. The tow truck driver would then wait for a short time (called a “courtesy” period) to see if the driver were coming right back. If the driver came back within a few minutes, he or she was charged a “let-down” fee (usually $40) before the car was lowered to the ground. The fee was demanded in cash, and a “standby” fee of $1 per minute was charged for any extra time it took for the driver to obtain the cash to pay the fee. If the driver failed to return within the “courtesy” period, or was unable to pay the “let-down fee,” the vehicle was towed to James’ impound garage. James’ tow truck operators often intimidated and threatened persons who were reluctant to pay the “let-down fee,” and asserted lien and other rights to justify their refusal to lower vehicles without payment.

The business practices challenged by the People were not confined to activities on the El Don premises. The declarations revealed that Ace employees also engaged in intimidation and misrepresentation when declarants went to the impound garage to retrieve their vehicles. One person was charged $10 to get his dog from his impounded van; another was forced to sign a statement that her car was in satisfactory condition when released, though Ace had damaged it during towing and storage; still another was told that Ace could charge anything it wanted to for the release of the car. Though the basic tow fee charged by Ace was $40, and the storage fee per day (or any part thereof) was $5, vehicle owners were customarily charged incidental fees for other services so that the average fee for impoundment for one day was approximately $67, and could be as high as $83. The other services included opening a locked car for towing purposes, straightening a locked steering wheel for towing purposes, use of a double hook in towing, dropping the vehi

On appeal, defendant Bagstad contends that his behavior did not constitute an unfair business practice within the meaning of section 17200. He further contends that the signs he posted fully complied with the requirements of Vehicle Code section 22658, subdivision (a), and that the trial court usurped the function of the Legislature by requiring that a time period be placed on the signs. Bagstad also maintains that the People are not entitled to equitable relief because persons who allegedly had their vehicles illegally towed from the El Don lot had an adequate remedy at law.

Defendant James contends that a vehicle has been “removed to a garage” within the meaning of Vehicle Code section 22851 at the moment the towing company takes possession of it and assumes responsibility for its safekeeping; consequently, he argues, the trial court erred in enjoining him from conditioning release of a seized vehicle on the payment of a fee unless the vehicle has been physically placed in his garage. He also contends that the portion of the preliminary injunction enjoining him from charging fees for services other than towing and storage is ambiguous, and that the terms “towing” and “towage” used in the injunction and in Vehicle Code section 22851, respectively, should be interpreted to include all activities which are reasonably necessary to transport an impounded vehicle. He further maintains that the persons whose vehicles are hoisted or towed from El Don’s lot have acted unlawfully in parking there, so that the doctrine of “unclean hands” precludes the People from seeking equitable relief. Finally, James contends that the trial court abused its discretion in granting a preliminary injunction since the People would have suffered little hardship from denial of the injunction, while defendants are “immensely” burdened by its issuance.

As we explain below, we have concluded that defendants’ contentions are meritless, and that the trial court did not abuse its discretion in granting the preliminary injunction.

Defendants’ Course of Conduct as “Unfair Business Practice”

Section 17200, enacted in 1977 as part of a new enforcement arm (§ 17200 et seq.) for the Unfair Practices Act (§ 17000 et seq.) states that “unfair competition shall mean and include unlawful, unfair or fraudulent business practice ....” Section 17200 replaces former Civil Code section 3369, subdivision 3, which provided the same broad definition for unfair competition which might, like nuisance, be enjoined in any court of competent jurisdiction. In Barquis v. Merchants Collection Assn. (1972) 7 Cal.3d 94 [ 101 Cal.Rptr. 745 , 496 P.2d 817 ], our Supreme Court examined the legislative and judicial history of former Civil Code section 3369 at length. (Id., at pp. 108-113.) It concluded that in enacting former Civil Code section 3369, the Legislature established a wide standard for the guidance of courts of equity in restraining all unfair business practices because it felt that “given the creative nature of the scheming mind, ... a less inclusive standard would not be adequate.” (Id., at p. 112.) Quoting an earlier Supreme Court decision, the Barquis court enlarged upon its view of former Civil Code section 3369: “‘When a scheme is evolved which on its face violates the fundamental rules of honesty and fair dealing, a court of equity is not impotent to frustrate its consummation because the scheme is an original one. There is a maxim as old as law that there can be no right without a remedy, and in searching for a precise precedent, an equity court must not lose sight, not only of its power, but of its duty to arrive at a just solution of the problem.’” (Id., quoting American Philatelic Soc. v. Claiborne (1935) 3 Cal.2d 689 , 698-699 [ 46 P.2d 135 ]; see People v. McKale (1979) 25 Cal.3d 626 , 631-632 [ 159 Cal. Rptr. 811 , 602 P.2d 731 ]; People v. E.W.A.P., Inc. (1980) 106 Cal. App.3d 315 , 318-319 [ 165 Cal.Rptr. 73 ]; Stoiber v. Honeychuck (1980) 101 Cal.App.3d 903 , 927 [ 162 Cal.Rptr. 194 ].)

In the case at bench, Bagstad contends that, since there are no cases in which section 17200 has been applied to business practices such as those in which he allegedly engaged he cannot be said to have engaged in unfair business practices. When we apply the principles enunciated in Barquis to the instant case, the business practices which defendants were shown to be engaged in were manifestly “unlawful, unfair, and

fraudulent.” Vehicles were hoisted or towed away without sufficient warning; drivers were subjected to payment of fees to have their cars “let-down” in the parking lot; they were coerced into paying either by physical intimidation or misrepresentation concerning the existence of liens or other rights of the tower; they were charged unconscionable fees to retrieve their vehicles from hoisting and impoundment; and they were forced to waive claims for damage to their property in order to get it back. There was also evidence that Bagstad participated in these practices by authorizing the impounds and taking kickbacks on fees. The fact that defendants’ scheme had never been dealt with by the appellate court does not render it any less fundamentally dishonest, unfair, or unlawful. (Barquis v. Merchants Collection Assn., supra, 7 Cal.3d 94 , 112.)

Vehicle Code Section 22658, Subdivision (a)

Vehicle Code section 22658, subdivision (a), states in pertinent part that “[t]he owner or person in lawful possession of any private property may, subsequent to notifying ... the city police ..., cause the removal of a vehicle parked on such property to the nearest public garage if there is displayed, in plain view on the property a sign prohibiting public parking and containing the telephone number of the local traffic law enforcement agency.” (Italics supplied.) Defendant Bagstad contends that in posting signs ón his property limiting parking to “customers” or to “El Don parking” he fully complied with the provisions of the statute, and that in enjoining him from authorizing impoundments unless he added a time limit to the sign the trial court usurped the Legislature’s role. We reject Bagstad’s contention.

The trial court determined that Bagstad’s sign did not comply with the statutory requirement that a person must clearly display “a sign prohibiting public parking” before authorizing an impoundment. (Veh. Code, § 22658, subd. (a).) We agree. Bagstad’s signs do not clearly and unambiguously prohibit public parking—rather they purport to limit parking to “El Don parking” or “customers.” From this language, those parking in the lot could reasonably conclude that so long as they patronized El Don Liquor they could utilize the lot as a public parking area while doing their errands. Bagstad’s intent, apparently, was to prohibit parking on the premises except for El Don customers only while they shopped in the El Don store. As we see it, this might have been

accomplished in two ways: by posting a sign allowing parking only “while shopping at El Don Liquor,” or by posting a sign allowing customer parking for a brief time limit. In enjoining Bagstad from authorizing impounds unless he posted time limit signs, the trial court was seeking to insure compliance with the Legislature’s mandate rather than adding to it. Bagstad’s contention is thus meritless.

Ill

Vehicle Code Section 22851

Vehicle Code section 22851 provides in pertinent part that “[w]henever a vehicle has been removed to a garage .. . and the keeper of the garage has received the notice or notices as provided herein, the keeper shall have a lien dependent upon possession for his compensation for towage and for caring for and keeping safe such vehicle .... ” Defendant James contends that the phrase “has been removed to a garage” should be construed to mean the time when the towing company takes possession of the vehicle and assumes responsibility for its safekeeping. Thus, he argues, the lien provision of the statute takes effect as soon as the vehicle has been hoisted, so that the tower has the right to charge a fee as a condition of letting the vehicle down, and the trial court erred in enjoining him from doing so. Alternatively, James contends that even if the lien does not become operative the moment the vehicle is hoisted, it takes effect as soon as the vehicle is moved off the lot and begins its journey to the impound garage. James argues that such an interpretation is necessary to prevent vehicle owners from following and flagging down the tow truck just before it enters the garage, retaking possession of the vehicle and depriving the towing company of the expenses incurred in towing the vehicle. For the reasons set out below, we conclude that the trial court’s interpretation of the statute is correct.

Vehicle Code section 22851 states succinctly that the keeper’s lien attaches when the vehicle “has been removed to a garage ....” It is a well-established tenet of our law that a court is required to give effect to statutes according to the usual, ordinary import of their language, and to refrain from “interpreting” where the language of the statute is clear and unambiguous. (E.g., Moyer v. Workmen’s Comp. Appeals Bd. (1973) 10 Cal.3d 222 ; [ 110 Cal.Rptr. 144 , 514 P.2d 1224 ]; Cline v. Yamaga (1979) 97 Cal.App.3d 239 , 245 [ 158 Cal.Rptr. 598 ]; People v. Clark (1977) 72 Cal.App.3d 80 , 82 [ 139 Cal.Rptr. 817 ].) In the instant case, “removed to a garage” clearly refers to placing a vehicle within a

storage facility; to construe it to mean “hoisted from the ground” or “removed from the private property where parked” would be to distort the plain meaning of the statute. Furthermore, if the trial court had construed the statute in issue to mean “removed from the private property where parked,” and had not enjoined James from charging a fee unless the vehicle were physically within his garage, James would have been free to tow a vehicle a few feet from the premises, park on the street nearby, and charge the returning owner a towage fee. The Legislature’s obvious intent in enacting Vehicle Code section 22851 was to grant a lien to one who has performed the labor of towing a vehicle to storage and borne the responsibility of keeping the vehicle safe until called for. To accept James’ interpretation of the statute would encourage the very abuses in which he engaged, a result hardly in keeping with the legislative intent in conferring lien rights on towers.

Defendant Janies also contends that the portion of the preliminary injunction enjoining him from charging fees for services other than “towing” and “storage” is ambiguous. The words “towing” and “tow-age,” as used in the injunction and the statute are not ambiguous; they refer to those activities reasonably necessary to transport and impound a vehicle. The injunction, however, prohibits charging of fees such as the “let-down” fee, the “standby” fee, fees for being allowed to get personal property from the impounded vehicle, or fees for the preparation of lien papers, since these activities are totally unrelated to towing and storage.

The Preliminary Injunction

Defendant James contends that the trial court incorrectly weighed the relative hardship which defendants would suffer if the injunction were granted compared to the hardship suffered by the People if the injunction were denied.

“The grant or refusal of a preliminary injunction is, generally speaking, within the discretion of the trial court and its order may be reversed on appeal only if abuse of discretion is shown.” (Gosney v. State of California (1970) 10 Cal.App.3d 921 , 924 [ 89 Cal.Rptr. 390 ]; Lagunitas Water co. v. Marin County Water Co. (1912) 163 Cal. 332 , 336-337 [ 125 P. 351 ]; U.S. Hertz, Inc. v. Niobrara Farms (1974) 41 Cal.App.3d 68 , 79 [ 116 Cal.Rptr. 44 ].) In exercising its discretion, the

trial court concerns itself with (1) whether defendant will suffer greater injury from granting of the preliminary relief than plaintiff from its denial and (2) whether there is reasonable probability that plaintiff will prevail on the merits. (People v. Pacific Land Research Co. (1977) 20 Cal.3d 10 , 21 [ 141 Cal.Rptr. 20 , 569 P.2d 125 ]; Continental Baking Co. v. Katz (1968) 68 Cal.2d 512 , 528 [ 67 Cal.Rptr. 761 , 439 P.2d 889 ]; U.S. Hertz, Inc. v. Niobrara Farms, supra, 41 Cal.App.3d 68 , 79.) In the case at bench there has been no abuse of discretion.

James argues that Bagstad will lose business because his parking lot is clogged and that he (James) will suffer tremendous business losses through not being able to charge fees except for vehicles which he physically places within his impound garage. Conversely, he argues, had the injunction been denied the public would be burdened only with the necessity to “pay more attention to signs,” or to park in a nearby municipal lot while going to the beach and shopping in the neighborhood of El Don Liquor.

We disagree with James’ characterization of the relative hardships involved. Bagstad is not required to stop removals from his lot, but only to make sure his warning signs give proper notice and are in plain view of all who park in the lot. James is indeed prohibited from charging fees unless he has actually towed a vehicle to his garage, but he is not prohibited from charging fees reasonably related to towing and storage for vehicles he has garaged. His plaint that vehicle operators will follow his tow trucks and stop them before they reach the garage seems rather empty, since in the large majority of cases the removal of an operator’s vehicle from a parking place deprives the operator of the means of giving immediate chase to the tow truck. Had the injunction been denied, however, many members of the public might be subjected to hoisting or towing without sufficient notice, to intimidation and physical threat, to misrepresentations concerning liens, and to various other indignities. The Huntington Beach Police’s PPI records reveal that approximately 150 people per month had their vehicles hoisted or towed from El Don Liquor by Ace. We conclude that the trial court accurately assessed the relative hardships involved in granting this preliminary injunction.

James next advances the equitable defense of “unclean hands.” (See 2 Witkin, Cal. Procedure (2d ed. 1970) § 69, p. 1509, and cases cited therein.) He argues that since those whose cars were hoisted or towed from the El Don lot were illegally parked, that they have unclean hands and are barred from equitable relief. The contention is without

merit. Most of those who were towed from El Don stated that they did not see the warning signs, or that they interpreted the signs to allow them to use the lot as public parking if they patronized El Don. More importantly, this is an action by the People to enjoin unlawful and fraudulent business practices; it is not an action by the individuals who were victimized by defendants. Defendant Bagstad’s contention that the persons who were hoisted or towed from El Don’s parking lot had an adequate remedy at law, so that the People, standing in those person’s shoes, have no right to injunctive relief is without merit for the same reason. The district attorney is acting pursuant to a legislative mandate to seek injunctive relief against unlawful, unfair or fraudulent business practices. (People v. McKale, supra, 25 Cal.3d 626 , 632-633; §§ 17203-17204; see fn. 1, ante.) The availability of remedies at law for those who have had dealings with James and Bagstad is irrelevant to the instant action.

The order granting preliminary injunction is affirmed.

Gardner, P. J., and Morris, J., concurred.