Filed 7/17/17 Burger v. Mr. Heater, Inc. CA4/3






NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FOURTH APPELLATE DISTRICT

DIVISION THREE


MATTHEW BURGER,

Plaintiff and Appellant,

v.

MR. HEATER, INC., et al.,

Defendants and Respondents.


G049505

(Super. Ct. No. 30-2010-00386025)

O P I N I O N

Appeal from a judgment of the Superior Court of Orange County, Nancy Wieben Stock, Judge. Affirmed.
The Arkin Law Firm, Sharon J. Arkin; Hodes Milman Liebeck Mosier, Jason M. Caruso for Plaintiff and Appellant.
Greenberg Gross, Wayne R. Gross, Evan C. Borges, and Michael E. Lopez for Defendants and Respondents.


In 2016, this court affirmed (in a related appeal) the trial court’s ruling granting summary judgment on an unfair competition law (UCL) (Bus. & Prof. Code, § 17200 et seq.) claim in favor of the alleged principal tortfeasor. (Matthew Burger v. Lowe’s Home Centers, LLC (March 28, 2016, G049771) [nonpub. opn.] (Burger I).) What was not before us then, and what we must decide in the appeal before us now, is whether plaintiff’s derivative UCL claims based on aiding and abetting theories—against other parties who did not move for summary judgment—are viable after elimination of the UCL cause of action against the primary tortfeasor.
This appeal, like the prior one, concerns Matthew Burger’s efforts to obtain an injunction, a refund, and the recovery of attorney fees and costs for prosecuting a class action to enforce a 1970’s statutory prohibition against the sale of unvented home heaters. It is a misdemeanor to sell any “unvented [non-electric] heater that is designed to be used inside any dwelling house or unit, with the exception of . . . decorative gas logs for use in a vented fireplace.” (Health & Saf. Code, §§ 19881, 19882.) This legislation was passed to address public safety concerns after many people died from asphyxiation or gas poisoning after installing unvented heaters in their homes.
In 2010, Burger purchased a portable “Tough Buddy” propane gas powered heater (heater) from Lowe’s Home Centers, LLC (LHC) located in Tustin, California. Neither he nor anyone else was injured in any way by the portable heater. Six months later, Burger filed a class action complaint against LHC and the heater’s manufacturers, Mr. Heater and Enerco Group (collectively referred to as the manufacturers unless the context requires otherwise). This appeal challenges the trial court’s decision to sustain, without leave to amend, the manufacturers’ demurrer to the second amended complaint’s UCL cause of action. Burger’s UCL claim against the manufacturers was based on a theory they aided and abetted LHC’s criminal conduct in selling the heater. Burger asserted the trial court incorrectly ruled the manufacturers could not be liable for aiding and abetting because it was not alleged they were a retail merchant or that they could have prevented LHC’s purported crime. After Burger filed his opening brief, this court issued our opinion in Burger I, affirming the summary judgment ruling on the UCL claim in favor of the primary tortfeasor (LHC). The manufacturers argue in their respondent’s brief that this decision is an additional reason to affirm the trial court’s demurrer ruling. We agree and affirm the judgment.
FACTS
In June 2010, Burger filed his class action against LHC and the manufacturers. He did not allege any personal injury or harm resulted from using the heater. The gravamen of the complaint is LHC and the manufacturers were liable for violating section 19881. He amended the complaint in August 2010 and May 2012. The second amended complaint (SAC) alleged three causes of action against the manufacturers and LHC as follows: (1) violation of the UCL; (2) false advertising; and (3) violation of the CLRA. With respect to the UCL claim, Burger split the cause of action into two counts. First, there was the “Principal UCL” claim against LHC for violating section 19881 by selling the heater. Second was the “Derivative UCL” claim against the manufacturers for aiding and abetting LHC’s illegal sale of the heater.
In the SAC, Burger explained the relationship between the two manufacturers (Mr. Heater was a wholly owned subsidiary of Enerco Group). Burger stated he represented a class of plaintiffs who, since January 30, 2006, purchased a new “Buddy Model MH9BX or MH9B, ‘Big Buddy’ Model MX18B, and/or ‘Little Buddy’ or ‘Basecamp’ Model MH4B portable, propane-fueled heater” (hereinafter [collectively referred to in the singular as ‘heater’]), designed and manufactured by . . . [the manufacturer]” from any LHC store in California or online and shipped to any LHC location in California.
In January 2010, Burger purchased a heater for approximately $40 from LHC in Tustin, California. Burger claimed that when he made the purchase he was unaware of section 19881’s prohibition against selling unvented heaters designed for indoor use. Pursuant to Business and Professions Code section 17203, Burger sought equitable relief against the manufacturers and LHC, seeking permanent injunctive relief enjoining them from continuing to sell the heaters, removing the heaters from the store shelves, issuing a recall of unsold heaters, and offering a refund for heaters already purchased. Burger sought an order requiring the manufacturers to place permanent labels on any unsold heaters stating it was unlawful to sell the product in California. Burger sought the recovery of attorney fees and costs incurred for prosecuting the class action pursuant to Code of Civil Procedure section 1021.5.
LHC and the manufacturers jointly filed a demurrer to the SAC. Relevant to this appeal, the trial court sustained without leave to amend the manufacturers’ demurrer to the Derivative UCL claim. However, it overruled the manufacturers’ demurrer to the false advertising and CLRA causes of action. With respect to LHC, the court sustained without leave to amend the demurrer to the false advertising and CLRA claims but allowed Burger to proceed on the UCL claim against LHC.
The following year, Burger filed a motion for summary judgment or summary adjudication against LHC and the manufacturers on the remaining causes of action. He argued there was no defense to the causes of action and the undisputed evidence supported liability. At the same time, LHC filed a summary judgment motion, arguing the sole remaining claim against it (the UCL cause of action) failed as a matter of law because the portable heater was not covered by section 19881, subdivision (a). To support their respective motions, the parties submitted declarations and copies of section 19881’s legislative history. The court took judicial notice of the legislative history documents.
The trial court denied Burger’s motion and granted LHC’s motion for summary judgment. It entered judgment in LHC’s favor after determining the portable heater did not fall within the scope of section 19881 because it was not designed to be permanently installed in an unvented area or designed for use in a dwelling house. As mentioned, we considered Burger’s appeal challenging the trial court’s demurrer and summary judgment rulings. (Burger I, supra, G049771) At oral argument, Burger’s counsel made an offer of proof she could allege facts and amend the complaint to adequately plead causes of action for false advertising and CLRA. We remanded the matter to permit Burger to amend his complaint on those two causes of action. (Ibid.) However, we affirmed the summary judgment ruling on the UCL claim. Burger filed a petition for rehearing, which this court denied. He did not file a petition for review in our Supreme Court, and the Burger I decision is final.
While the appeal was pending, the court denied Burger’s motions for class certification on the two remaining causes of action (false advertising and CLRA) against the manufacturers. This decision eliminated those claims under the “death knell” doctrine. Burger then appealed the court’s demurrer and class certification rulings. In his opening brief, Burger states he is abandoning his appeal of the order denying class certification. The only issue to be decided in this appeal is the viability of the Derivative UCL claim.

I. The Burger I Opinion
In his reply brief, Burger argues our decision affirming the trial court’s summary judgment ruling on LHC’s UCL claim was “based purely on procedural grounds” and was not a final ruling “on the merits.” He concludes the ruling did not decide the legality of the heater’s sale and he could therefore pursue the Derivative UCL claims against the parties who did not join in the summary judgment motion. Before addressing his legal argument, we will briefly summarize the scope and holding of our prior opinion regarding the Principal UCL claim.
After setting forth a legal summary of the general nature of UCL claims, we discussed the focus of Burger’s challenge on appeal. (Burger I, supra, G049771.) He argued the non-electric heater purchased from LHC was unvented and designed to be used inside, violating the express terms of section 19881. The trial court disagreed, concluding the portable heater did not fit the definition of section 19881. It agreed with LHC’s argument that resolution of the summary judgment motion depended on its statutory interpretation of the term “unvented” and the phrase “designed to be used.” We noted the trial court correctly applied the basic rules of statutory interpretation after it determined section 19881 did not define any of its operative terms and there was no legal authority on this issue. We stated the following: “Reviewing the matter de novo, and applying the same legal principles, we reach the same conclusion as the trial court. As will be explained below, section 19881 does not apply to the type of portable heater at issue in this case.” (Ibid.)
In our opinion, we recited and applied the basic rules of statutory interpretation. (Burger I, supra, G049771.) The first step was to determine the plain meaning of the statutory language. (Mt. Hawley Ins. Co. v. Lopez (2013) 215 Cal.App.4th 1385, 1396-1397.) We stated the following: “The statute does not prohibit the sale of all gas heaters, only ‘unvented [non-electric] heater[s] . . . designed to be used inside any dwelling house or unit . . . .’ (§ 19881, subd. (a).) The parties heartily disagree whether the portable propane heater at issue in this case is ‘unvented’ as described in the statute. However, we need not decide the legislative intent regarding this term standing alone because it is modified and further defined by the phrase ‘designed to be used inside any dwelling house or unit.’ (§ 19881, subd. (a).) ‘Fundamental rules of statutory interpretation require that a statute be read as a whole, and that the parts of a statute be read together and harmonized, when possible, in order to give effect to the intent of the Legislature.’ [Citation.] When the statute is read together the limited scope of the statutory ban becomes clear.” (Burger I, supra, G049771.)
We determined the phrase “‘designed to be used inside any dwelling house or unit’” (§ 19881, subd. (a)), contained two distinct conditions. (Burger I, supra, G049771.) First, the common meaning of the word “designed” referred to the intent of the designer, creator, or manufacturer of the heater. In the case before us, all three functions were performed by the same entity. Thus, the phrase “designed to be used” was referring to the manufacturer’s state of mind. (Ibid.) The second limiting condition of the statutory ban was contained in the phrase “inside a dwelling house or unit.” The parties and trial court agreed this phrase referred to what is commonly understood to be residences. We determined this interpretation was supported by the legislative history. We concluded, “[T]he plain meaning of the statutory language when read together is unambiguous. The statute was not intended to ban all unvented heaters. The Legislature included two plainly worded conditions limiting the scope of the ban to only those heaters (1) designed by the manufacturer for (2) indoor residential use.” (Ibid.)
We next considered the second step in statutory analysis, the legislative history. (Burger I, supra, G049771.) In the opinion, we reviewed aspects of the legislative history that shed light on the purpose and limited scope of section 19881. We concluded the legislative documents relating to the original legislation clarify two key points. First, the catalyst for enacting the legislation was to protect citizens from being asphyxiated from toxic fumes as they slept in their homes near gas-fueled heaters. (Ibid.) Second, the bill’s proponents and the Legislators recognized some unvented heaters should remain legal and had justifiable uses, and therefore, the scope of the statute was limited to cover only certain kinds of unvented room heaters. (Ibid.) We also reviewed the legislative documents relating to several failed attempts to amend section 19881. Eventually the statute was amended in 1996 to permit the sale of unvented decorative logs and fireplaces, fueled by natural gas, if their use was approved by several different state agencies and they were installed in accordance with the California Building Standards Code. (§ 19881, subds. (b)-(c).) We disagreed with both parties’ arguments that this history was particularly relevant to the issue raised in this case. “The numerous legislative committee reports and analysis, letters, and counsel reports all concerned a specific kind of heating appliance that is not at all comparable to the portable propane heater at issue in this case. Decorative fireplaces and logs are typically installed inside a residence. There was no debate in the legislative history over whether an unvented fireplace designed to be installed inside a residence would be banned by the statute. This is because section 19881 specifically and unequivocally prohibited the sale of decorative fireplaces/gas logs unless they were installed in a residence’s vented fireplace. (§ 19881, subd. (a).) The amendment carved out a limited and highly regulated exception for installed decorative fireplaces/logs containing ODS safety devices. The only relevance of these legislative history documents to the case at hand is that they further highlight the primary purpose of the statutory ban was to protect people from dying from asphyxiation as they slept in their homes. We found nothing in the legislative history suggesting this goal changed or was expanded to require a statutory ban of all unvented heaters.” (Ibid.)
We then turned our analysis to applying the facts to our statutory interpretation on the statute. (Burger I, supra, G049771.) We stated, “LHC presented ample evidence the inventor/manufacturer designed the heater to solve the problems created by heating devices being used in recreational and commercial activities, such as people in camping enclosures, recreational vehicles, and commercial buildings. There was absolutely no evidence presented to support Burger’s allegation the heater was originally designed to be used inside a residence.” (Ibid.) The primary source of LHC’s evidence was testimony from the manufacturer’s vice president of engineering, Brian Vandrak, responsible for all engineering management functions and the person designated most knowledgeable in technical areas. We provided a detailed discussion of Vandrak’s testimony in the prior opinion, and explained Burger’s challenges to this evidence regarding the manufacturer’s intent were meritless. (Ibid.)
We held the plain language and legislative history of section 19881 establish “that in 1970 the Legislature did not intend to ban the sale of heaters designed to be used for recreational activities. Our analysis of the relevant documents confirms the Legislature’s goal was to protect the public from the deadly danger of installing unvented gas-fueled heating appliances in rooms where people sleep and reside. LHC presented ample evidence the heater was designed for a different purpose, i.e., keeping recreational users and campers safe and warm. The burden shifted to Burger, who was unable to show the existence of a triable issue of act. We conclude the trial court properly granted LHC’s summary judgment motion.” (Burger I, supra, G049771.)
Burger asserts our holding of Burger I should be limited to an evidentiary ruling, i.e., “whether [Burger] had produced sufficient evidence to carry its shifted burden of production to show triable factual issues required to defeat the motion.” Burger maintains our opinion “did not decide that no sufficient evidence existed.” He asserts that if the manufacturers brought a motion for summary judgment, he would obtain “new and additional evidence from the manufacturers in addition [to] future discovery which would carry [his] procedural burden of production, and thereby raise triable factual issues precluding summary judgment on the design intent element of [his] UCL claim[.]” He misunderstands the effect of the summary judgment/summary adjudication ruling. We resolved more than a procedural question. We affirmed the trial court’s decision to entirely eliminate the Principal UCL liability claim from the lawsuit.
“The purpose of federal summary judgment law, which is identical to the purpose of ours, is to provide courts with a mechanism to cut through the parties’ pleadings in order to determine whether, despite their allegations, trial is in fact necessary to resolve their dispute. [Citations.]” (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 844.) Our prior opinion affirming the summary judgment ruling established “there is no issue requiring a trial as to any fact that is necessary under the pleadings and, ultimately, the law . . . and that the ‘moving party is entitled to a judgment as a matter of law’ [on the UCL claim].” (Id. at p. 843.)
II. The Derivative UCL Claim—Aiding and Abetting
It is well settled that in criminal law, “A person may be convicted as an aider and abettor even though the actual perpetrator is convicted of a greater or lesser crime or is acquitted. (See People v. Wilkins (1994) 26 Cal.App.4th 1089, 1090 [acquittal of principal does not require acquittal of aider and abettor].)” (1 Witkin & Epstein, Cal. Crim. Law (4th ed. 2017) Introduction to Crimes § 96.) The same is not true for those alleged to have secondary civil liability for violations of section 17200 and 17500.
“There is no vicarious liability, as such, under [section] 17200 or 17500. Rather, the liability of each individual defendant ‘must be predicated on his personal participation in the unlawful practices.’ [Citations.] [¶] Liability can be secondary, however. The California courts have recognized six forms of secondary liability: aiding and abetting, agency, conspiracy, “furnishing the means” for another’s violations, respondeat superior, and alter ego.” (Stern, Cal. Practice Guide: Bus. & Prof. Code Section 17200 Practice (The Rutter Group 2017) Who May Be Liable?, ¶ 6:6, p. 6-2.) Burger maintains the SAC adequately pled the elements of two forms of secondary liability, (1) aiding and abetting, and (2) conspiracy. We conclude neither claim is cognizable following Burger I.
The manufacturers’ liability is “derivative” under either of Burger’s theories. Under either legal avenue, the demurrer was properly sustained without leave to amend because the manufacturers’ liability is dependent upon the commission of an underlying tort by LHC, a claim found to lack merit in our Burger I opinion. Simply stated, there is no separate tort of civil conspiracy or for only aiding and abetting. (See Richard B. LeVine, Inc. v. Higashi (2005) 131 Cal.App.4th 566, 574 (Higashi) [“‘[t]here is no separate tort of civil conspiracy, and there is no civil action for conspiracy to commit a recognized tort unless the wrongful act itself is committed and damage results therefrom’”]; Wynn v. National Broadcasting Co., Inc. (C.D.Cal. 2002) 234 F.Supp.2d 1067, 1114 [“Plaintiffs cannot proceed with this claim of aiding and abetting, until such time as they have properly alleged discrimination by a particular employer or group of employers”].) Since we decided in Burger I that Burger cannot state the Principal UCL claim against LHC as a matter of law, his causes of action based on secondary liability must fail.
A similar situation occurred in the Higashi case. In that case, one of the members of a medical partnership died and his wife (Plaintiff) became the sole shareholder and president. (Higashi, supra, 131 Cal.App.4th at p. 571.) Thereafter, the partnership, Orange County Heart Institute and Research Center (OCHI) informed its accountant that it had changed its method of allocating the partners’ income. Plaintiff objected and arbitrated her claims against OCHI. After the arbitrator ruled in OCHI’s favor, Plaintiff sued the accountant for fraud, negligence, and conspiracy in the superior court. (Id. at p. 571.) The trial court granted the accountant’s motion for summary judgment on the conspiracy claim, concluding “res judicata . . . conclusively established [the accountant’s] complete defense to the claim for civil conspiracy.” (Id. at p. 573, fn. omitted.) The appellate court affirmed, holding, “The unifying principle under either theory of recovery, civil conspiracy or aiding and abetting, is that [the accountant’s] liability [was dependent] upon the actual commission of a tort [by OCHI and its partners].” (Id. at p. 574.)
The Higashi court determined, “the arbitrator’s award in favor of the OCHI partners on plaintiff’s claims of breach of fiduciary duty and conversion precludes the claims of civil conspiracy and aiding and abetting made against [the accountant] in this action.” (Higashi, supra, 131 Cal.App.4th at p. 575.) It ruled as follows: “The instant conspiracy and aiding and abetting claim against defendants asserts the identical primary right. Thus plaintiff’s claim against the OCHI partners is identical to its claim against defendants. Of course, liability for invasion of that primary right must be established against each party charged with the invasion. But if plaintiff’s primary right is not violated at all, no defendant is liable.” (Id. at pp. 575-576.)
As applied to the case before us, unless LCH committed the underlying tort alleged here (the UCL claim), the manufacturers cannot be held liable under either a conspiracy or aider and abettor theory. This court affirmed the trial court’s determination LCH is not liable for violating the UCL. (Burger I, supra, G049771.) This ruling is now the law of the case. Accordingly, we must conclude the demurrer relating to the manufacturers’ secondary liability was properly sustained without leave to amend.
III. Law of the Case
“An unpublished opinion may be cited or relied on . . . [w]hen the opinion is relevant under the doctrines of law of the case, res judicata, or collateral estoppel.” (California Rules of Court, rule 8.1115(b).) We reject Burger’s argument the decision in Burger I is irrelevant to our review of the demurrer ruling. He asserts law of the case, res judicata, and collateral estoppel are inapplicable. Not so.
We recognize the doctrines of res judicata and collateral estoppel both typically arise after entry of final judgment in one lawsuit and commencement of another. Here, the matter was remanded for further proceedings and Burger has not started a new lawsuit. However, under the doctrine of law of the case, our ruling in Burger I “must be followed in all subsequent proceedings in the action.” (Eisenberg et al., Cal. Practice Guide: Civil Appeals and Writs (The Rutter Group 2016) ¶ 14:172, p. 14-67.)
The doctrine of law of the case operates primarily within the proceedings in a single lawsuit and deals with the effect of the first appellate decision on a subsequent retrial or appeal. “Under that doctrine, ‘“the decision of an appellate court, stating a rule of law necessary to the decision of the case, conclusively establishes that rule and makes it determinative of the rights of the same parties in any subsequent retrial or appeal in the same case.”’ [Citation.] . . . The doctrine promotes finality by preventing relitigation of issues previously decided. [Citation.]” (Sargon Enterprises, Inc. v. University of Southern California (2013) 215 Cal.App.4th 1495, 1505.)
Burger correctly points out the manufacturers were not parties to the summary judgment motion or the appeal. This does not matter. The holding is nevertheless relevant to his case against the manufacturers because in Burger I we affirmed the trial court’s ruling the Principal UCL claim against LHC was not viable. Under the law of the case doctrine, Burger is prohibited from reviving this cause of action against LHC on remand. The determination LHC cannot be held directly liable for UCL violations precludes Burger from pursing secondary theories of liability against other defendants. As discussed in detail above, the manufacturers’ derivative liability is dependent upon the commission of an underlying tort by LHC. Contrary to Burger’s contention, the Burger I decision precludes him from re-litigating the claim against the primary tortfeasor. And without proof of the underlying tort, there can be no secondary liability.
Burger characterizes our opinion affirming the summary judgment as “purely a procedural and fact-based one” and asserts he should be permitted to “introduce new and different evidence” on this issue. This theory is not only at odds with the law of the case doctrine but also the clear statutory language regarding summary judgment and summary adjudication.
Because of the unique procedural status of this case, we treat the trial court’s summary judgment ruling as summary adjudication of the UCL claim in LHC’s favor. Code of Civil Procedure section 437c, subdivision (f)(1), expressly provides: “A party may move for summary adjudication as to one or more causes of action within an action . . . if that party contends that the cause of action has no merit . . . . A motion for summary adjudication shall be granted only if it completely disposes of a cause of action, an affirmative defense, a claim for damages, or an issue of duty.” (Italics added.) The clear Legislative intent in adding subdivision (f) to Code of Civil Procedure section 437c, was “‘to stop the practice of adjudication of facts or adjudication of issues that do not completely dispose of a cause of action or a defense.’” (Lilienthal & Fowler v. Superior Court (1993) 12 Cal.App.4th 1848, 1853.) Accordingly, we conclude the trial court’s ruling completely disposed of the Principal UCL claim against the primary tortfeasor (LHC).
In addition, Code of Civil Procedure section 437c, subdivision (n), provides, “(1) If a motion for summary adjudication is granted, at the trial of the action, the cause or causes of action within the action, affirmative defense or defenses, claim for damages, or issue or issues of duty as to the motion that has been granted shall be deemed to be established and the action shall proceed as to the cause or causes of action, affirmative defense or defenses, claim for damages, or issue or issues of duty remaining. [¶] (2) . . . [¶] (3) In the trial of an action, neither a party, a witness, nor the court shall comment to a jury upon the grant or denial of a motion for summary adjudication.” (Italics added.) Applying this provision to this case, we conclude Burger cannot litigate the Principal UCL claim or “comment to a jury” that the court granted summary adjudication (Code Civ. Proc., § 437c, subd. (n)(3)). The court’s ruling conclusively established that the alleged principal tortfeasor was not liable for this tort. (Catalano v. Superior Court (2000) 82 Cal.App.4th 91, 97 [“summary adjudication is meant to dispose of an entire substantive area”].)
DISPOSITION
The judgment is affirmed. Respondents shall recover their costs on appeal.




O’LEARY, P. J.

WE CONCUR:



FYBEL, J.



IKOLA, J.