NELSON v. PEARSON FORD CO.,



























Filed 7/15/10















CERTIFIED FOR PUBLICATION



COURT OF APPEAL, FOURTH
APPELLATE DISTRICT



DIVISION ONE



STATE OF CALIFORNIA






>

REGINALD NELSON, Plaintiff and Appellant v. PEARSON FORD CO., Defendant and Appellant.

D054369 (Super. Ct. No. GIC881178)

Story continued from part I…..









In summary,
based on Pearson Ford's violation of section 2981.9, and subdivision (a) of
section 2982, we reverse the trial court's conclusion that Pearson Ford is not
liable to the backdating class under the ASFA, and remand the matter to the
trial court to determine an appropriate statutory remedy under the ASFA. The parties have not briefed the allowable
remedies for the backdating class under the ASFA; however, our discussion of
the appropriate ASFA remedy for the insurance class provides the trial court
and the parties with some guidance on this issue. (Post,
part II.B.)

b. The Insurance Class

Subdivision
(a)(3) of section 2982 requires sellers to disclose
the cost of insurance on a separate line in the contract. Although Nelson purchased insurance from
Pearson Ford, this cost is not listed anywhere in the second contract. Rather, the parties executed a separate
document, the Due Bill, acknowledging the insurance purchase and lumping the insurance premium into the cash price of the
car. The trial court determined that
Pearson Ford's failure to disclose the cost of insurance violated subdivision
(a)(3) of section 2982 and the single document rule
(§ 2981.9), and that Pearson Ford had not substantially complied with the
ASFA by adding the cost of insurance to the cash price of the car.

Pearson Ford admits that it added
the cost of insurance to the price of the car, that the insurance premium should have been separately
listed in the second contract, and that Nelson erroneously paid $30 in
additional sales tax and financing charges on the insurance premium. Nonetheless, Pearson Ford asserts it
"substantially complied" with the informational purpose of the ASFA as
matter of law because: (1) not
separately itemizing the insurance premium in the second contract was a
technical violation and (2) the Due Bill provided Nelson with all the
information he needed to be fully aware that he had purchased insurance for a
$250 premium.

Again, assuming without deciding
that the concept of substantial compliance continues to apply to violations of
the ASFA, we conclude the trial court correctly determined there was no
substantial compliance. The failure to
separately itemize the cost of insurance in the second contract is not a mere
technical imperfection because this error caused Nelson to pay additional sales
tax and financing charges. This is not a
situation where the dealer simply placed the cost item on an improper line in
the contract. We reject Pearson Ford's
argument that it substantially complied with subdivision (a)(3)
of section 2982 because Nelson had access to the additional document which
contained the information he needed to evaluate the purchase. This argument subverts the informational
purpose of the ASFA, and the purpose behind the single document rule. Moreover, review of the Due Bill and second
contract did not inform Nelson that he would be paying sales tax and financing
charges on the insurance. While it could
be argued that some consumers would realize the implications of adding the
insurance premium to the cash price of the car, the ASFA was designed to
protect less sophisticated consumers.

Pearson Ford argues that the single
document rule does not preclude using multiple documents for matters relating
to insurance because insurance is not part of the "total cost and the
terms of payment for the motor vehicle . . . ." (§ 2981.9.) While it may be true that the price of
insurance generally does not impact the total cost of a vehicle, Pearson Ford's
act of adding the insurance premium to the cash price of the car unquestionably
impacted the total cost of the car because it increased the sales tax and
financing charges. Accordingly, as the
trial court correctly found, Pearson Ford violated section 2981.9 by placing
the parties' agreements regarding insurance in a separate document.

Finally,
to avoid liability to the insurance class under the ASFA, Pearson Ford argues
that if the monetary award to the insurance
class under the ASFA is correct, then, as a matter of law, the one-year statute
of limitations for actions on a statute imposing a forfeiture barred Nelson's
ASFA claims. (Code Civ.
Proc., § 340, subd. (a).) This contingent argument is moot based on our
conclusion that the trial court imposed an improper remedy for Pearson Ford's
violations of the ASFA as to the insurance class. (Post,
part II.B.)

B. ASFA Remedies

The trial court concluded that
Pearson Ford's practices toward the insurance class violated the ASFA and the
UCL. Citing both statutory schemes, the
trial court allowed all members of the insurance class to recover from Pearson
Ford "the total
amount paid by them, pursuant to their [contracts], to Defendant Pearson Ford
and/or its assignees as of the date of this Judgment [October
24, 2008],
in an aggregate amount not to exceed $145,535.91." (Pearson Ford represents that this figure was
not directly related to insurance premiums or sales tax on the premiums. It was the aggregate of the entire amount
that the nine members of the insurance class should have paid under the terms
of their contracts from the date they bought their cars to the judgment date of
October 24, 2008.)
The trial court also gave all members of the insurance class "the
option, upon submission of a claim and according to proof, and subject to
application of the equitable powers and considerations of the Court, to elect
to retain their vehicle and continue with their [contract] in force or to
rescind the contract and cancel all further obligations under the [contract]
and return the vehicle to Defendant Pearson Ford. Defendant Pearson Ford's additional liability
for rescission to the members of [the insurance class] shall not exceed an
aggregate amount of $101,578.29."
(Pearson Ford represents that this was the aggregate of the monthly
payments that the nine members of the insurance class still owed under their
contracts from October 24, 2008, until their final payments were
due.)

Pearson
Ford asserts on appeal that the trial court erred in the remedy awarded to the
insurance class because the ASFA does not allow the insurance class members to
obtain return of all money paid if they elect to continue their contracts. Pearson Ford also contends the trial court
erred by not providing it with an appropriate offset for use of the vehicles by
those insurance class members that elected to rescind their contracts and
return their vehicles. Nelson responds
the trial court did not err because where contracts are found to be unenforceable,
buyers are allowed to recover from sellers everything they paid under
their contracts (§ 2983), and keep their vehicles (§ 2983.1).

Our
analysis begins with an overview of the case law interpreting the former
version of section 2982 in force before the Legislature enacted the ASFA in
1961. Because the Legislature is
presumed to be aware of existing laws and judicial decisions and to have
enacted or amended statutes in light of this knowledge (People v. Overstreet (1986) 42 Cal.3d 891, 897), this case law
explains the changes made by the Legislature in 1961. We then turn to the statutes themselves. Where the language of a statute is
susceptible to more than one reasonable construction, we review the legislative
history of the measure to ascertain its meaning. (Diamond Multimedia Systems, Inc. v. Superior Court (1999) 19
Cal.4th 1036, 1055.) Statutory interpretation presents a
question of law subject to de novo review on appeal. (Bialo v. Western Mutual Ins. Co. (2002)
95 Cal.App.4th 68, 76-77.)

In
General Motors Acceptance Corp. v.
Kyle (1960) 54 Cal.2d 101 (General
Motors), the California Supreme Court determined the rights of the parties
to a conditional sale contract that violated former section 2982, subdivision
(a) because it failed to itemize and describe the fees paid by the dealer to
public officials, and was not signed by an authorized representative of the
dealer. ( >General Motors, supra, at p. 106.) The Supreme Court remarked that subdivisions
(a) and (b) of former section 2982, which were "designed to enable the
buyer to know just what his contract is," had been termed
"formal" requirements. (Id. at pp. 108-109.) It observed that subdivisions (c) and (d) of
former section 2982, which were "directly aimed at excessive charges which
are akin to usury," had been termed as "substantive"
requirements. ( >General Motors, supra, at pp. 108-109.)

The
General Motors court noted that
former section 2982 did not specify the effect of violation of the formal
requirements. ( >General Motors, supra, 54 Cal.2d at p. 109.) In contrast, both the 1945 and 1949 versions
of section 2982 provided sanctions for substantive violations, at subdivisions
(c) and (e), respectively. (General Motors, >supra, 54 Cal.2d at p. 109 & fn. 3.) Namely, such contracts shall be unenforceable
"except by a purchaser for value, and the buyer may recover from the seller in a civil action" ‑
"three times the total amount paid on the contract balance" (the 1945
version) or "the total amount paid on the contract balance by the buyer to
the seller" (the 1949 version). (Ibid.) The court observed that despite the lack of
specified sanctions for formal violations and the express sanctions for
substantive violations, that for either violation the buyer could "invoke
the restitutive measure of recovery and obtain the
total amount or value of that with which he parted, including down payments, >less offsets hereinafter
described." ( >Id. at p. 111, italics added.)

The General Motors court then explained that a seller guilty of substantive
violations was not entitled to an offset, but that a seller guilty of formal
violations could obtain "an offset 'in an amount representing the
depreciation in value of the car occasioned by the use made of it by the buyer
while in his possession, which necessarily excludes any allowance for
depreciation resulting from a general decline in the market value of such
automobile during the period in question[.]'" (General Motors, supra, 54
Cal.2d at p. 111, citing Williams v.
Caruso Enterprises (1956) 140 Cal.App.2d Supp. 973, 980 ( >Williams).) In adopting the measure of offset enunciated
in Williams, the General Motors court stated that "the seller can in no event
recover on the theory of offset more than an amount equal to that which the
buyer is entitled to recover . . . ." (General Motors, supra, at p. 111.) It also rejected several other measures of
offset suggested by the lower courts, such as (1) the rental value of the car;
(2) the reasonable value of use of a conditionally sold car; and (3) where a
trade-in is part of the purchase, the "difference between rental value of
the conditionally sold vehicle and the automobile traded in." (Id. at p. 111 & fn. 8.)

After the Supreme Court decided >General Motors, the Interim Committee on
Finance and Insurance published its report on former section 2982 in 1961. (Assem.
Interim Com. on Finance and Insurance, Final Rep., 15 Assem. Interim Com. Reps. (1961)
No. 24, 1 Appen. to Assem. J. (1961 Reg. Sess.)
(the Report).)
The Report reiterated many of the observations made by the >General Motors court, namely: (1) even though former section 2982,
subdivision (e) pertained only to substantive violations, courts have applied
the subdivision to formal violations; and (2) sellers guilty of formal violations were allowed the
offset described in Williams, but
sellers guilty of substantive violations could not obtain an offset. (The Report, >supra, at pp. 31-32.)

The
Report noted that "[d]espite this judicial
surgery" the law remained inadequate and ambiguous. (The Report, >supra, at p. 32.) The Report observed that dealers infrequently
committed substantive violations where an offset was not allowed; however,
dealers continued to commit formal violations where they could obtain an
offset. ( >Ibid.) The drafters of the Report speculated that
dealers continued to commit formal violations knowing: (1) they could obtain an offset; (2) trial
courts would need to interpret the offset described in Williams; and (3) "the mere existence of the case law granting
the offset will lead many lawyers to advise their clients in the first place
that to file suit will be a risky and uncertain venture at best." (The Report, >supra, at p. 33.) The drafters of the Report heard testimony
from an attorney that dealers have ready access to experts willing to testify
that a vehicle loses value the minute it is driven off a dealer's lot. (Id. at pp. 32-33.)
The attorney opined that if an offset is allowed, "it should not
include the drop in value caused by that car leaving the sales floor and
becoming a used car." (Id. at p. 34.)

The Legislature subsequently enacted
the ASFA, which added sections 2983 and 2983.1.
(Stats. 1961, ch. 1626, pp.
3537-3538, § 4, eff. Jan. 1, 1962.) Section 2983 is similar to former section
2982, subdivision (e). (General Motors, >supra, 54 Cal.2d at p. 109, fn. 3.) It provides that when a seller
violates subdivision (a) of section 2982 and there is no showing of an
accidental or bona fide error in computation, "the conditional sale
contract shall not be enforceable,
except by a bona fide purchaser, assignee or pledgee
for value or until after the violation is corrected as provided in Section
2984, and if the violation is not corrected the buyer may recover from the seller the total amount paid, pursuant to the
terms of the contract, by the buyer to the seller or his assignee." (Stats. 1961, ch. 1626, p.
3537, § 4, eff. Jan. 1, 1962, italics added.)

In turn, paragraph 4 of section
2983.1 sets forth the buyer's choice of remedies if a contract is unenforceable
under section 2983: "When a
conditional sale contract is not enforceable under Sections 2983 or 2983.1, the
buyer may elect to retain the motor vehicle and continue the contract in force
or may, with reasonable diligence, elect to rescind the contract and return the
motor vehicle. The value of the motor
vehicle so returned shall be credited as restitution by the buyer >without any decrease which results from the
passage of time in the cash price of the motor vehicle as such price
appears on the conditional sale contract."
(Stats. 1961, ch. 1626, p.
3538, § 4, eff. Jan. 1, 1962, italics added.) The first paragraph of section 2983.1 is
similar to former section 2982, subdivision (f), but the option to retain the
vehicle and continue the contract in force, or rescind the contract and return
the vehicle appears for the first time in the ASFA. (Compare, Stats. 1949, ch. 1594, pp. 2843-2844, with Stats. 1961, ch. 1626, p. 3538, § 4, eff.
Jan. 1, 1962.) Although the
Legislature subsequently amended sections 2983 and 2983.1, the above cited
language did not change. (Stats. 1967, ch. 815, p. 2239, § 1;
Stats. 1979, ch. 805, p. 2794, §§ 23 & 24; Stats.
1981, ch. 1075, pp. 4132-4133, §§ 18 & 19,
operative Oct. 1, 1982.)

With
this background, we address Pearson Ford's contentions. First, Pearson Ford asserts the ASFA does not
allow the insurance class members to obtain return of all money paid, even if
they elect to continue their contracts, essentially giving the insurance class
members a free vehicle. Pearson Ford
contends that section 2983 must be read along with section 2983.1. Thus, when the Legislature stated "the
buyer may recover from the seller the
total amount paid, pursuant to the terms of the contract," the buyer can
recover its payments only if he or she elects to rescind the contract. (§ 2983, italics added.) Nelson disputes this interpretation, claiming
it renders section 2983 meaningless. We
conclude that Pearson Ford has the better argument.

First,
the General Motors court disapproved
that portion of Williams suggesting
that buyers could retain their vehicles and also recover the sums paid for
purchase of the vehicle. ( >General Motors, supra, 54 Cal.2d at p. 112-113, citing Williams, supra, 140
Cal.App.2d Supp. at p. 979.) The >General Motors court stated that
"buyer[s] cannot both recover the consideration with which [they] parted
and keep the vehicle; [they] cannot simultaneously avoid the conditional sale
contract and assert rights in the conditionally sold car." (General Motors, supra, at p.
112.)

Second, as we already noted, section
2983 is similar to former section 2982, subdivision (e), both stating that
where a violation renders a contract unenforceable "the buyer may recover
from the seller" the total amount paid on the contract. (§ 2983; >General Motors, supra, 54 Cal.2d at p. 109, fn. 3.) The Court of Appeal in Katsaros > v. O.E. Saugstad Co. (1961) 197
Cal.App.2d 745 (Katsaros)
interpreted former section 2982, subdivision (e), concluding that the vehicle
must be returned as a condition of recovery of all payments made, noting that
the "object of the statute is to protect the buyer, not to provide him
with a windfall." (Id. at p. 749.) The Katsaros court cited the Report as support for its
conclusion. ( >Ibid.)

Thus, it appears the Legislature
created the rescission option in section 2983.1 to codify the legal principles
discussed by the General Motors and Katsaros
courts. Notably, these legal principles
track the Civil Code, which requires a party seeking rescission to "[r]estore to the other party everything of value which he has
received from him under the contract or offer to restore the same upon
condition that the other party do likewise, unless the latter is unable or
positively refuses to do so." (§ 1691, subd. (b).)

It also appears the Legislature
intended sections 2983 and 2983.1 be read together. Section 2983 states that "the
buyer may recover from the seller the
total amount paid, pursuant to the terms of the contract" (§ 2983,
italics added), not that the buyer "shall" recover. Section 2983.1 then describes the
circumstances under which buyers "may" recover what they paid, i.e.,
when they elect to rescind their contracts and return their vehicles. The last sentence of section 2983.1 allows
buyers to obtain restitution for their returned vehicles. The restitution award could allow buyers to recover from
sellers the total amount they paid under their contracts, or a lesser amount.

Nelson's interpretation of sections
2983 and 2983.1 ignores the restitution provision in section 2983.1. Nelson appears to advocate that buyers
electing to rescind their contracts could recover from sellers
everything they paid under their contracts, return their vehicles, >and obtain restitution from the sellers
for the value of the returned vehicles.
This surely results in a windfall to buyers. Nothing in the legislative history of the
ASFA or the prior case law supports this interpretation.

In summary, we conclude the trial
court erred to the extent it found that the ASFA allowed the insurance class
members to recover from Pearson Ford what they paid under their contracts, and
keep their vehicles.

We next turn to the portion of
section 2983.1 that allows buyers rescinding their contracts and returning
their vehicles to obtain restitution for the value of the returned vehicles
"without any decrease which results from the passage of time
in the cash price of the motor vehicle as such price appears on the conditional
sale contract." (§ 2983.1,
4th par.) Pearson Ford asserts
the trial court erred by not providing an offset for the buyer's use of any
returned vehicles. Nelson does not
address the offset issue. We discuss
Pearson Ford's contention to provide guidance to the trial court on remand.

As a threshold matter, the clear
language of section 2983.1 allows consumers to obtain restitution when they
rescind their contracts and return their vehicles, but disallows an offset
resulting from the passage of time.
Accordingly, section 2983.1 begs the question whether the Legislature
intended to disallow any offset for
the buyer's use of the vehicle. Had the
Legislature intended to disallow any offset, it could have eliminated the
passage of time language and simply stated:
"The value of the motor vehicle so returned shall be credited as
restitution in full by the buyer."
The Legislature did not do so; rather, it carefully proscribed an offset
resulting from the passage of time.

This harks back to the variety of
offsets discussed in General Motors. Namely, the Supreme Court in >General Motors allowed a seller's offset
"'in an amount representing the depreciation in value of the car
occasioned by the use made of it by the
buyer while in his possession, which necessarily excludes any allowance for depreciation resulting from a general
decline in the market value of such automobile during the period in question,'
[citation]." (General Motors, supra, 54
Cal.2d at p. 111, quoting Williams, >supra, 140 Cal.App.2d Supp. at p. 980,
italics added.) Thus, it appears the
Legislature adopted the offset approved by our high court in >General Motors. By not allowing an offset for the passage of
time the Legislature was trying to avoid situations where a new vehicle loses
value when it is driven off the dealer's lot and immediately becomes a used
vehicle. (The Report, >supra, at p. 34.) In the
almost 50 years that section 2983.1 has been in existence, there are no
published cases addressing the offset.

We also adopt the offset for the
buyer's use of the vehicle. Accordingly,
on remand those class members electing to rescind their contracts and return
their vehicles are entitled to restitution.
The restitution amount must not be decreased for depreciation resulting
from a general decline in the market value of their vehicles resulting from the
passage of time. The restitution amount,
however, may be decreased for depreciation in the value of the vehicles
occasioned by the buyers' use of the vehicles.
Any seller's offset of this nature may not exceed the amount which the
buyers are entitled to recover under their contracts.

We believe the court has broad
discretion to consider the equities when setting the offset amount, if
any. For example, a buyer might return
to a dealer a few days after purchasing a car based on a violation of the ASFA,
but the dealer refuses to remedy the situation forcing the buyer to sue. While the action is pending, the buyer has no
choice but to use the car. If the buyer
prevails and opts to return the vehicle, the dealer's unwillingness to address
the violation should be considered in setting any offset for the buyer's use of
the vehicle. Discretion in setting the
offset amount encourages buyers to immediately return to the dealer when a
violation of the ASFA is suspected, and encourages dealers to quickly remedy
any ASFA violations.

III. The UCL

Pearson
Ford argues that Nelson lacked standing to sue under the UCL, but assuming he
had standing the trial court erred in the remedies it awarded. Nelson also contends the trial court erred in
the remedies it awarded. We reject Pearson
Ford's argument that Nelson lacked standing, and separately address the
parties' respective appeals regarding the remedies awarded by the trial court
under the UCL.

A. Liability

The
UCL defines "unlawful competition" to include an "unlawful,
unfair or fraudulent business act or practice and unfair, deceptive, untrue or
misleading advertising . . . ." (Bus. & Prof. Code,
§ 17200.) "By
proscribing 'any unlawful' business practice, '[Business & Professions
Code,] section 17200 "borrows" violations of other laws and treats
them as unlawful practices' that the unfair competition law makes independently
actionable." (Cel >-Tech Communications, Inc. v. Los Angeles
Cellular Telephone Co. (1999) 20 Cal.4th 163, 180 ( >Cel-Tech).) After the
2004 amendment of the UCL by Proposition 64, 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.'" ( >In re Tobacco II Cases (2009) 46 Cal.4th
298, 305 (Tobacco II), citing Bus.
& Prof. Code, § 17204, italics added.)
In the context of a class action, only the class representatives must
meet Proposition 64's standing requirements of actual injury and causation. (Tobacco II, supra, at pp.
315-316.)

The
actual payment of money by a plaintiff, as wrongfully
required by a defendant, "constitute[s] an 'injury in fact' for
purposes of Business and Professions Code section 17204. [Citations.]" ( >Troyk v. Farmers Group, Inc. (2009) 171 Cal.App.4th 1305, 1347 (Troyk).) Causation for UCL standing purposes
is satisfied if "a causal connection [exists] between the harm
suffered and the unlawful business activity." ( >Daro v. Superior Court (2007) 151 Cal.App.4th 1079, 1099 (Daro); accord, Troyk, >supra, at p. 1349.) However, "[t]hat causal connection is
broken when a complaining party would suffer the same harm whether or not a
defendant complied with the law." (Daro,
supra, at p. 1099.)

For
example, in Troyk,
an insured filed a class action against his automobile insurer alleging the
insurer violated the UCL by requiring him to pay a service charge for payment
of his automobile insurance policy premium and, because the service charge was
not stated in his policy, the insurer violated Insurance Code section 381,
subdivision (f), requiring that this be done.
(Troyk, supra, 171
Cal.App.4th at p. 1314.) Although
the Troyk
court found that the insurer had violated the Insurance Code as alleged ( >id., at p. 1334), it concluded that
causation under the UCL did not exist because plaintiff did not show that had
the insurer disclosed the monthly service charges in the policy documents as
required by the Insurance Code, he would not have paid them. (Id. at p. 1350.)
Significantly, the lack of disclosure of proper charges, not illegal charges, violated the UCL in Troyk.

Here,
the trial court impliedly found that Pearson Ford had violated the UCL as to
both classes through its violations of the ASFA, and we have affirmed that
Pearson Ford is liable for its violations of the ASFA. (Ante,
part II.A.2.) Pearson Ford does not
challenge the conclusion that its violations of the ASFA support Nelson's UCL
claims; rather its appeal is limited to the trial court's finding that Nelson
had standing to pursue claims under the UCL.
Pearson Ford focuses its argument on whether Nelson suffered injury
"as a result of" its unfair competition under the UCL. (Bus. & Prof. Code,
§ 17204.) Relying on Troyk, Pearson
Ford contends that Nelson needed to prove he would not have bought the car if
he had known that the second contract:
(1) charged him pre-consummation interest; (2) misstated the APR; and
(3) failed to separately itemize the $250 insurance premium. We disagree.

The
failure of Pearson Ford to comply with the ASFA caused Nelson to suffer an
injury and lose money as to both classes because he paid pre-consummation
interest (the backdating class), and paid sales tax and financing charges on
the insurance premium (the insurance class).
Unlike Troyk,
these illegal charges violated the UCL and Pearson Ford improperly collected
additional funds from Nelson. UCL
causation exists because Nelson would not
have paid pre-consummation interest, or sales tax and financing charges on the
insurance premium had Pearson Ford complied with the ASFA. Because Nelson had standing to pursue claims
under the UCL, we reject Pearson Ford's argument that the judgment in favor of
both classes should be vacated to the extent it grants relief under the UCL.

B. UCL Remedies

1. General Legal Principles

The
focus of the UCL is "on the defendant's conduct, rather than the
plaintiff's damages, in service of the statute's larger purpose of protecting
the general public against unscrupulous business practices." (Tobacco II, supra, 46
Cal.4th at p. 312.) The remedies
available under the UCL are limited to injunctive, restitutionary
and related relief (Bus. & Prof. Code, § 17203; State v. Altus Finance, S.A. (2005) 36 Cal.4th 1284, 1303), and are
"cumulative . . . to the
remedies or penalties available under all other laws of this state" (Bus.
& Prof. Code, § 17205).
However, restitutionary or injunctive relief
is not mandatory; rather, equitable considerations may guide the court's
discretion in fashioning a remedy for a UCL violation. (Cortez v. Purolator Air Filtration Products
Co. (2000) 23 Cal.4th 163, 180 (Cortez).)

Under
the UCL, a trial court has broad equitable power to award restitution after
considering "the equities on both sides of a dispute." (Cortez, supra, 23 Cal.4th
at p. 180.) However, "[a]
court cannot, under the equitable powers of [Business and Professions Code]
section 17203, award whatever form of monetary relief it believes might deter
unfair practices." (Korea Supply Co. v. Lockheed
Martin Corp. (2003) 29 Cal.4th 1134, 1148 (Korea Supply).) The "object of restitution is to restore
the status quo by returning to the plaintiff funds in which he or she has an
ownership interest." (Id. at p. 1149.) Additionally, "disgorgement of money
obtained through an unfair business practice is an available remedy in a
representative action only to the extent that it constitutes
restitution." ( >Id. at p. 1145.) "While it may be that an order of
restitution will also serve to deter future improper conduct, in the absence of
a measurable loss [Business
and Professions Code section 17203] does not allow the imposition of a
monetary sanction merely to achieve this deterrent effect." (Day v. AT&T Corp. (1998) 63 Cal.App.4th 325, 339.)

The
trial court also has broad power under the UCL to "enjoin on-going
wrongful business conduct in whatever context such activity might
occur." (Barquis > v. Merchants Collection Assn. (1972) 7
Cal.3d 94, 111, fn. omitted; Bus. & Prof. Code, § 17203.) To obtain injunctive relief, the plaintiff
must show that the wrongful conduct alleged in the complaint is ongoing or
likely to recur. ( >Madrid v.
Perot Systems Corp. (2005) 130 Cal.App.4th 440,
464-466.) The trial court's decision on the propriety
of granting injunctive relief is reviewed for abuse of discretion. (Salazar v. Eastin (1995) 9 Cal.4th 836,
850.)

2. Nelson's Appeal Regarding Restitutionary Remedies to the Backdating Class

Based
on its conclusion that Pearson Ford is liable under the UCL for engaging in an
unlawful business practice the trial court awarded each member of the
backdating class restitution in the amount of $50. Nelson appeals, arguing the trial court
erroneously ignored or arbitrarily threw out the parties' stipulation to use
statistical sampling to calculate restitution under the UCL, and awarded an
approximate mid-point between the stipulated amount ($63.14) and what Pearson
Ford argued for ($43.40). Pearson Ford
asserts that it agreed to the sampling methodology, but did not agree to be
bound by the resulting number. We agree
with Pearson Ford.

The
parties initially agree in principle that the amount of restitution paid to
each class member would be determined through statistical sampling. The court took a recess to allow the parties
to consult with an expert regarding the appropriate sample size. The parties agreed that Nelson's expert would
review a randomly selected sample of 176 contracts, and that defense counsel
would review the resulting spreadsheet.
Before the hearing adjourned, Nelson's counsel expressed his hope that
defense counsel would stipulate to the number calculated by his expert. The trial court agreed that a stipulation
would be preferable.

At
the next hearing, Nelson's counsel represented that his expert calculated the
pre-consummation interest and the finance charge for the pre-consummation
interest (interest on interest) charged for the sampled contracts, and
calculated an average of $43.40 for pre-consummation interest, and an average
finance charge incurred on that amount of $19.75, resulting in total
restitution of about $63.14 for each class member. Defense counsel informed the court that the
parties disputed whether a finance charge over the life of the loan should be
allowed in the recovery because it was unknown whether every class member paid
off his or her loan over the life of the loan.
After hearing argument on this issue, the court stated:

"Would it be beyond the realm of possibility to end
this by stipulating or agreeing to $50â€