Filed 2/16/21 Grundman v. Tranik Enterprises CA2/6

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.111.5.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION SIX

This appeal concerns the sale of four luxury watches and a buyer who suffered no cognizable injury. The watches work and there was nothing wrong with the internet sales of these watches. The buyer, Channah Grundman, appeals from the order granting seller/defendants, Tranik Enterprises, Berj Kacherian, and Shant Kacherian (Tranik) summary adjudication on the first cause of action (Consumer Legal Remedies Act; Civ. Code, § 1750 et seq.), the second cause of action (Magnusson-Moss Consumer Warranty Act; 15 U.S.C. § 2301 et seq.), and the fourth cause of action (Song-Beverly Consumer Warranty Act; Civ. Code, § 1790 et seq.) in appellant’s first amended complaint. The trial court granted judgment on the pleadings on the third cause of action for violation of the Grey Market Goods Act (Civ. Code, § 1797.8 et seq.). We affirm.

Facts and Procedural History

In 2016, appellant purchased four luxury watches from Tranik on its website, AuthenticWatches.com. The watches were sold without the manufacturer’s express warranty but AuthenticWatches.com provided its own warranty. Appellant sued for violation of the Consumer Legal Remedies Act (Civ. Code, § 1770 et seq.), the Magnuson-Moss Consumer Warranty Act (15 U.S.C., § 2301 et seq.), the Grey Market Goods Act (Civ. Code, § 1797.8, et seq.)^[1], and the Song-Beverly Consumer Warranty Act (Civ. Code, § 1792.3, et seq.). The first amended complaint alleges that Tranik posted watch manufacturer trademarks and logos on AuthenticWatches.com but did not disclose the watches were not eligible for authorized service from the manufacturer.

After Tranik answered the first amended complaint, appellant filed a motion for summary adjudication. Tranik filed a cross-motion for summary adjudication (SAI) and judgment on the pleadings. The trial court denied appellant’s SAI motion and granted Tranik’s motion for SAI on the first, second, and fourth causes of action for violation of the Consumer Legal Remedies Act (CLRA), the Magnuson-Moss Warranty Act (Magnuson-Moss Act), and the Song-Beverly Consumer Warranty Act (Song Beverly Act). The court granted a judgment on the pleadings (JOP) on the Grey Market Goods count (third cause of action) because Civil Code section 1797.8 does not authorize a private right of action. Appellant dismissed the remaining causes of action and appealed.

In a postjudgment hearing, the trial court awarded Tranik $177,196.80 attorney’s fees, finding that appellant brought the action in bad faith on behalf of her husband, Yehuda Fulda, who had a “blood feud” with Tranik. (Civ. Code, § 1780, subd. (e).) She appealed the attorney’s fee award but the appeal was dismissed for failure to file an opening brief. (Grundman v. Tranik Enterprises (B299883).)

The Watch Feud

Fulda’s feud with Tranik dates back to 2013. Fulda bought an Oris watch from AuthenticWatches.com in 2013, and thereafter demanded a refund because AuthenticWatches.com was not an authorized dealer. Fulda broke the wrist band and cracked the watch crystal before returning the watch. He was angry that he had to pay a $150 shipping fee. It became a vendetta. In 2015, Fulda bought a Tag watch from AuthenticWatches.com for $945 and paid through PayPal. Fulda disputed the purchase with PayPal and lost. Fulda then had his cousin, Jason Klor, purchase an Oris watch for $2,225, disputed the AuthenticWatches.com purchase with PayPal, and lost.

Then, Fulda registered the name AuthenticWatches.online as an internet domain, filed a trademark application for AuthenticWatches.com and opened a storefront on Amazon.com using the name “AuthenticWatches. com,” advertising watches for sale with a link to Fulda’s domain - AuthenticWatches.online. That was the subject of a federal action (Tranik Enterprises, Inc. v. AuthenticWatches.com., Inc. et al, U.S. Dist. Ct., Case No. 2:16-cv-02931-SVW-JC).

In January 2016, Fulda tried to purchase two watches from AuthenticWatches.com, but Tranik cancelled the orders because the orders were a “setup” and part of Fulda’s vendetta. Fulda testified “that’s exactly what it is.”

Fulda had a family friend (Shmuel Herman) and Klor purchase two watches from AuthenticWatches.com, pay with PayPal, then dispute the purchases with PayPal. The plan was to get PayPal and Amazon Payments to cancel Tranik’s internet payment services. Herman and Klor lost the PayPal dispute and had to pay for the watches. Fulda also used the alias Joseph Fahys to purchase an Oris watch through Amazon Payments, and disputed the purchase. Fulda lost the dispute and had to pay for the watch.

Fulda then suggested that appellant buy four watches from AuthenticWatches.com and selected the watches. Appellant made the online purchases on January 11, 13, 14, and 18, 2016, using her Amazon Payments and PayPal accounts. As soon as the watches were delivered, appellant demanded a refund because the watches did not come with a manufacturer’s warranty even though AuthenticWatches.com provided its own warranty. Appellant did not return the watches after AuthenticWatches.com issued appellant Return Management Authorizations (RMAs).

After appellant sued for damages, Fulda was deposed and stated that he spent “close to a million dollars on legal fees” in his vendetta against Tranik, all because he had to pay the $150 shipping fee on the first watch dispute in 2013.

Judgment on the Pleadings

Tranik was granted a JOP on the third cause of action for violation of the Grey Market Goods Act. We review the order de novo to determine whether a cause of action has been stated, treating as true all properly pleaded material facts. (Soco West, Inc. v. California Environmental Protection Agency (2013) 213 Cal.App.4th 1511, 1514.) A motion for judgment on the pleadings is analogous to a general demurrer (Ludgate Ins. Co. v. Lockheed Martin Corp. (2000) 82 Cal.App.4th 592, 602), which may be sustained without leave to amend if the cause of action is duplicative of another cause of action and adds nothing to the complaint. (See Award Metals, Inc. v. Superior Court (1991) 228 Cal.App.3d 1128, 1135.)

The Grey Market Goods Act requires that trademarked goods imported by someone other than the manufacturer’s authorized United States distributor without a warranty valid in the United States, be sold with a conspicuous disclosure. (See Civ. Code, §§ 1770, subd. (a)(21), 1797.81.) A seller who fails to comply with the disclosure requirement is liable for damages providing the buyer “returns the product for a refund” and the product has not been used in a manner inconsistent with the printed instructions provided by the seller. (Civ. Code, § 1797.85, italics added.) There is no authority which permits a buyer to bring a stand alone cause of action violation of the Grey Market Goods Act. Civil Code section 1789.86 states the remedy is to sue for unfair competition under Bus. & Prof. Code § 17200, rescission (Civ, Code, § 1689), or unfair competition or deceptive practices under the CLRA (Civ. Code, § 1770 et seq.; see Stern, Bus. & Prof. C. § 17200 Practice (The Rutter Group 2020) [¶] 4:99, pp. 4-39 to 4-40).

Here the alleged Grey Market Goods Act violation is the legal basis for CLRA cause of action (see Civ. Code, § 1770, subd. (a)(21) [prohibiting [s]elling or leasing goods in violation of Chapter 4 (commencing with Section 1797.8) of Title 1.7”]), and is restated in the second and fourth causes of action for violation of the Magnuson-Moss and Song-Beverly Acts. The trial court did not err in granting a JOP on the third cause for violation of the Grey Market Goods Act which is duplicative of the CLRA cause of action.

Summary Adjudication

Tranik was granted summary adjudication on the CLRA (first cause of action), the Magnuson-Moss Act (second cause of action) and the Song-Beverly Act (fourth cause of action) claims because there are no material triable facts of reliance or economic damage. “‘“Regardless of how the trial court reached its decision, it falls to us to examine the record de novo and independently determine whether the decision is correct.” [Citation.]’” (California Bank & Trust v. Lawlor (2013) 222 Cal.App.4th 625, 630-631.)

Reliance and Cognizable Injury

Appellant’s CLRA cause of action is premised upon the allegation that the AuthenticWatches.com web site did not comply with the disclosure requirements of the Grey Market Goods Act and was fraud by concealment. The first amended complaint states that Tranik sold the watches as authentic watches and misrepresented the “quality, condition, authenticity and pedigree of each watch, and the customer’s warranty rights.” Standing alone, that is not reliance. Appellant testified that she did not read or recall reading the AuthenticWatches.com disclosures. Appellant purchased the watches based on her husband’s (Fulda) recommendation and selection. It was all part of Fulda’s vendetta which appellant characterized as a “blood feud” with Tranik. Whatever Fulda’s motives, it was appellant’s lawsuit and she is bound by her discovery admissions.

Appellant admitted that she did not rely on the AuthenticWatches.com disclosures, that Fulda selected the watches to purchase, that the watches were in good working order, and that appellant did not return the watches. Based on these admissions, the trial court made the commonsense inference that there was no reliance or cognizable injury. (See, e.g., Visueta v. General Motors Corp. (1991) 234 Cal.App.3d 1609, 1615.) Appellant’s declaration, filed in opposition to the SAI motion, is conclusionary and argumentative, and does not supersede her discovery admissions or create a material triable issue of fact. (Shin v. Ahn (2007) 42 Cal.4th 482, 500 fn. 12; Alvis v. County of Ventura (2009) 178 Cal.App.4th 536, 549.)

To bring a claim under the CLRA or the Unfair Competition Law (Bus. & Prof. Code, § 17200), appellant must show: (1) she suffered “‘economic injury’” or “‘damage,’” and (2) “[the] injury or damage ‘was the result of, i.e., caused by,’ the unfair business practice, false advertising, or the CLRA violation . . . . [Citations.]” (Shaeffer v. Califia Farms, LLC (2020) 44 Cal.App.5th 1125, 1137.) The first amended complaint alleges that fraudulent and deceptive representations were made on AuthenticWatches.com. But, there is no evidence of buyer reliance. That is required to “‘establish a complete causal relationship’ between the alleged misrepresentations and the harm claimed to have resulted therefrom.” (Mirkin v. Wasserman (1993) 5 Cal.4th 1082, 1092.) “[A]ctual reliance occurs only when the plaintiff reposes confidence in the truth of the relevant representation, and acts upon this confidence.” (Buckland v. Threshold Enterprises, Ltd. (2007) 155 Cal.App.4th 798, 808 (Buckland), disapproved on other grounds in Kwikset Corp. v. Superior Court (2011) 51 Cal.4th 310, 337.)

Appellant admitted that she did not read or rely on the AuthenticWatches.com disclosures, did not read the “About Us” company information, or read the AuthenticWatches.com “Authenticity and Service Guarantee” disclosure that: “‘We are not, nor are we affiliated with authorized dealers of any of the timepiece manufacturers advertised.’” Nor did appellant read the disclosure that “‘AuthenticWatches.com does not sell products in accordance to manufacturer suggested retail pricing, therefore, the warranty of merchantability provided is directly through AuthenticWatches.com.’” In order to make a watch purchase, appellant had to click the “Buyer Agreement” on the shipping/billing page, acknowledging that she read, agreed to, and understood the “Store Policies” link which stated that AuthenticWatches.com was not an authorized dealer and the warranty on each watch was by AuthenticWatches.com. Appellant claims that Tranik sold counterfeit watches. But she testified that she did not know whether the watches purchased were counterfeits.

Missing here is the deceptive sales representation, reliance on that representation, and economic damage. Appellant argues the watches are worth less without a manufacturer’s warranty, but there is no evidence of that, not even an appraisal. The CRLA “‘does not create an automatic award of statutory damages upon proof of an unlawful act. Relief under the CLRA is specifically limited to those who suffer damage, making causation a necessary element of proof.’ Citation.] Accordingly, ‘plaintiffs in a CLRA action [must] show not only that a defendant’s conduct was deceptive but that the deception caused them harm.’ [Citations.]” (Buckland, supra, 155 Cal.App.4th at p. 809; see also Meyer v. Sprint Spectrum L.P. (2009) 45 Cal.4th 634, 641; Bower v. AT&T Mobility, LLC (2011) 196 Cal.App.4th 1545, 1556 [CLRA relief is limited to those who suffer damage, making causation a necessary element of proof].)

Appellant argues that if she returned the watches, Tranik would charge a restocking fee. But there is no evidence that appellant returned or presented the watches for repair or refund. Appellant also argues that a grey market watch has a reduced value. There is no evidence that the watches were appraised, were sold for more than what they were worth, or that appellant tried to resell the watches. Appellant also argues there will be “transactional costs” if she asks AuthenticWatches.com for a refund. That is speculation. Appellant did not present the watches for repair or refund, and for good reason. Fulda had the watches tested, found no timekeeping defects, and wore one of the watches to his deposition. Fulda said the watch keeps good time and that he wears it regularly because it is one of his favorite watches. Appellant has failed to show that the trial court erred in granting the SAI motion on the CLRA cause of action.

Breach of Warranty Claims under the MBA and SBA

To sue for a Song Beverly Warranty Act violation, appellant must present the watch for repair. (Robertson v. Fleetwood Travel Trailers of California, Inc. (2006) 144 Cal.App.4th 785, 805.) There are no triable facts that appellant did that, that the watches needed repair, that the watches were presented to AuthenticWatches.com for repair, or that it failed to repair the watches after a reasonable opportunity to do so. Unless the watches were not “presented” for repair, there can be no claim for breach of warranty under the Song-Beverly Act. (Ibid.) Because there are no triable facts of presentation or breach of warranty under state law (i.e., the Song Beverly Act), the federal Magnuson-Moss Act cause of action also fails. (Daugherty v. American Honda Motor Co., Inc. (2006) 144 Cal.App.4th 824, 833.)

In order to state a violation of Grey Goods Market Act, which is the predicate for the CLRA, Magnuson-Moss Act, and Song-Beverly Act causes of action, appellant had to attempt a return (the “presentation”). Appellant claims she will suffer “transactional costs” (i.e., shipping fees) if the watches are returned, but that is red herring. Appellant never followed through with the refund or try to return the watches.

Business & Professions Code section 17200

Appellant unsuccessfully argues that the watch sales violate Business & Professions Code section 17200 (the Unfair Completion Law, UCL), and because a deceptive sales practices is alleged, it ipso facto establishes damages under CLRA. Not so. Under the UCL, private plaintiffs may seek injunctive relief and restitution (Bus. & Prof. Code, § 17203) but “not receive damages, much less treble damages, or attorney fees.” (Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Co. (1999) 20 Cal.4th 163, 179.)

The purpose of the summary judgment procedure, is to weed out cases where there is no factual issue warranting the time and cost of a trial. (Martin v. Lockheed Missiles & Space Co. (1994) 29 Cal.App.4th 1718, 1735.) Appellant makes no showing there are material triable facts of reliance, presentation, causation, economic harm or damages. The first amended complaint is a recitation of spurious allegations, which appellant admitted was part of her husband’s vendetta. As Fulda put it, “[m]oney is no object. I want to make as big a mess of this as possible.” The trial court correctly determined that the “watch wars” should be terminated.

Disposition

The judgment (orders granting judgment on the pleadings on the third cause of action (Grey Market Goods Act claim) and summary adjudication on the first, second, and fourth causes of action of the first amended complaint) is affirmed. Tranik is awarded costs on appeal.

NOT TO BE PUBLISHED.

YEGAN, Acting P. J.

We concur:

PERREN, J.

TANGEMAN, J.

Henry J. Walsh, Judge

Superior Court County of Ventura

______________________________

Boris & Associates and Donna M. Boris, for Plaintiff and Appellant.

Carlsen Law Corporation and Miles Carlsen, for Defendants and Respondents.

[1]Civil Code section 1797.8, subdivision (a) provides: “[T]he term ‘grey market goods’ means consumer goods bearing a trademark and normally accompanied by an express written warranty valid in the United States of America which are imported into the United States through channels other than the manufacturer’s authorized United States distributor and which are not accompanied by the manufacturer’s express written warranty valid in the United States.”