Opinion
NOT TO BE PUBLISHED
APPEAL from a judgment of the Superior Court of Los Angeles County No. BC373763, Ann I. Jones, Judge.
Shulman Hodges & Bastian, Ronald S. Hodges and J. Ronald Ignatuk for Plaintiff and Appellant.
Foley & Lardner, Michael E. Delehunt and Page R. Barnes for Defendants and Respondents.
BIGELOW, P. J.
Tammie D. Turner sought to bring a class action against 24 Hour Fitness and its related entities (24 Hour Fitness) for unlawful and unfair conduct in selling personal training sessions. The trial court sustained a demurrer to Turner’s fifth amended complaint without leave to amend. We affirm.
FACTS
Evan W. Granowitz initially brought this action on July 3, 2007, on behalf of a similarly situated class of individuals who entered into a Fitness Service Agreement (FSA) to buy personal training sessions from 24 Hour Fitness. In his third amended complaint, Granowitz alleged that he purchased five one-hour training sessions but was unable to schedule his sessions outside of work hours due to an insufficient number of personal trainers. He also alleged he was not allowed to view the FSA until after he made the purchase so was unaware of the six-month expiration. Instead, Granowitz had previously purchased training sessions from personal trainers who paid 24 Hour Fitness a monthly fee to sell their services to its members. These prepaid training sessions did not expire. 24 Hour Fitness’s demurrer to the third amended complaint was sustained with leave to amend.
In the fourth amended complaint, Granowitz alleged causes of action for violation of the Unfair Competition Law under Business & Professions Code section 17200 (UCL), breach of the implied covenant of good faith and fair dealing, declaratory relief and money had and received. The trial court sustained in part and overruled in part 24 Hour Fitness’s demurrer. It overruled the demurrer as to the allegations that 24 Hour Fitness breached the implied covenant of good faith by failing to provide enough personal trainers to accommodate the number of training sessions sold, but sustained the demurrer as to the allegations that the covenant was breached because 24 Hour Fitness forced him to purchase training sessions before he saw the FSA and declared the unused training session forfeited and refused to provide him a refund. The trial court further overruled the demurrer as to the claim for money had and received. It also “granted without leave to amend as to any allegations that the FSA’s expiration provision itself provides a basis for liability or that liability can be predicated on conversion or violation of the [Consumer Legal Remedies Act].” We summarily denied Granowitz’s petition for writ of mandate seeking review on this issue.
At the hearing on the second amended complaint, Granowitz revealed that he worked for the law firm representing him in this matter. He was granted leave to locate an alternate class representative as he could not both serve as class representative and class counsel. Turner was substituted in as class representative in the fifth amended complaint, which alleged causes of action for violation of the UCL, money had and received, forfeiture and unlawful penalty. Turner alleged that she purchased 20 half training sessions from a sales associate at 24 Hour Fitness but that she was not made aware that unused training sessions would expire if not used within six months of purchase. Turner did not use all of her 20 training sessions before the six month expiration.
Turner sought to maintain a class composed of U.S. residents who entered into an FSA for personal training sessions with 24 Hour Fitness in California and did not receive a refund when their unused training sessions expired. 24 Hour Fitness demurred to the fifth amended complaint. The trial court sustained the demurrer without leave to amend on July 7, 2010, almost three years from the day the complaint was initially filed. This appeal followed.
DISCUSSION
Turner attempts to revive her complaint by this appeal, particularly the UCL and the forfeiture causes of action. “In reviewing the sufficiency of a complaint against a general demurrer, we are guided by long-settled rules. ‘We treat the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law. [Citation.] We also consider matters which may be judicially noticed.’ [Citation.] Further, we give the complaint a reasonable interpretation, reading it as a whole and its parts in their context. [Citation.] When a demurrer is sustained, we determine whether the complaint states facts sufficient to constitute a cause of action. [Citation.] And when it is sustained without leave to amend, we decide whether there is a reasonable possibility that the defect can be cured by amendment: if it can be, the trial court has abused its discretion and we reverse; if not, there has been no abuse of discretion and we affirm. [Citations.] The burden of proving such reasonable possibility is squarely on the plaintiff. [Citation.]” (Blank v. Kirwan (1985) 39 Cal.3d 311, 318 (Blank).) We review the trial court’s decision de novo. (McCall v. PacifiCare of Cal., Inc. (2001) 25 Cal.4th 412, 415.)
I. Turner Failed to State a Claim for Forfeiture
We first consider whether Turner has stated a cause of action for forfeiture under section 3275 of the Civil Code. Section 3275, unchanged since 1872, provides: “Whenever, by the terms of an obligation, a party thereto incurs a forfeiture, or a loss in the nature of a forfeiture, by reason of his failure to comply with its provisions, he may be relieved therefrom, upon making full compensation to the other party, except in case of a grossly negligent, willful, or fraudulent breach of duty.” Turner takes issue with the trial court’s ruling that she failed to state a cause of action for forfeiture under section 3275 because she could not allege she was seeking relief from default. According to Turner, the phrase “failure to comply with the [obligation’s] provisions” is not limited to defaults but means the failure to exercise a right resulting in forfeiture.
All further section references will be to the Civil Code unless otherwise specified.
Turner contends that the trial court improperly relied upon dicta in Barkis v. Scott (1949) 34 Cal.2d 116, 120 (Barkis), which states, “Section 3275 presupposes that the party seeking relief is in default, and in order to secure relief under its terms it is necessary for him to plead and prove facts that will justify its application.” Turner distinguishes Barkis on the grounds that it did not address the specific issue of whether a party must be in default of a contract provision to obtain relief under section 3275.
Fortunately, we need not rely on Barkis alone for our analysis. The courts of appeal in this state have followed Barkis in holding that section 3275 presupposes a defaulting plaintiff. (Hendren v. Yonash (1966) 243 Cal.App.2d 672, 676-678 [no forfeiture where plaintiffs failed to timely exercise option to extend contract and contract clearly provided that title to lumber not removed from property would revert back to owners after 10 years]; see also Lazzareschi Inv. Co. v. San Francisco Fed. Sav. & Loan Assn. (1971) 22 Cal.App.3d 303, 307; Hayward Lbr. & Inv. Co. v. Const. Prod. Corp. (1953) 117 Cal.App.2d 221, 228-229; Kelley v. Olympic Pharmacy (1956) 144 Cal.App.2d 43; McNulty v. Lloyd (1957) 149 Cal.App.2d 7; Lines v. Marin Mun. Water Dist. (1964) 228 Cal.App.2d 155.) Indeed, we have found no cases in which a non-defaulting party obtained relief from forfeiture under section 3275 and Turner fails to direct us to any such case.
Further, the Supreme Court in Holiday Inns of America v. Knight (1969) 70 Cal.2d 327, 330 (Holiday Inns) bolstered Barkis’ purported dicta when it explained, “Although most of the cases considering section 3275 have involved land sale contracts, its proscriptions against forfeiture apply in any case in which the party seeking relief from default has brought himself within the terms of the section by pleading and proving facts that justify its application. (Barkis, supra, at pp. 118, 120.) In determining whether a given case falls within section 3275, however, it is necessary to consider the nature of the contract and the specific clause in question.” (Holiday Inns, supra, at p. 330.)
With these instructions in mind, we review the cases which discuss section 3275 and find that the expiration provision in the FSA does not constitute a forfeiture under section 3275. In Holiday Inns, the Supreme Court indicated that there would be no forfeiture in a case where a buyer paid for the exclusive right to purchase a property during a one year period. When the one year term expired and the buyer failed to timely extend the contract, the buyer received what he bargained for, regardless of whether he exercised his option to purchase the property or not. (Holiday Inns, supra, at p. 331.)
Similarly, in Hendren v. Yonash, supra, 243 Cal.App.2d at pages 676-678, the court held there was no forfeiture where the plaintiffs failed to timely exercise an option to extend a contract which allowed them to cut and remove trees from the defendant’s land within a certain time period. The contract clearly provided that title to any lumber not removed from the property would revert back to the owners after 10 years and the right of entry on to the land would terminate. (Id. at p. 677.)
Like the plaintiffs in Holiday Inns and Hendren v. Yonash, Turner had a specified period of time in which to receive the benefit of her bargain with 24 Hour Fitness and she failed to do so. Turner alleges she entered into a contract to receive 20 training sessions from 24 Hour Fitness. The FSA specified that the term of her FSA was for six months, to begin January 31, 2007, and to end July 31, 2007. This information was located right above Turner’s signature, in bold, capital letters and the expiration date was repeated below her signature. Turner, however, was under no obligation to use any of her training sessions. Neither does Turner allege that 24 Hour Fitness somehow prevented her from using her training sessions. She merely alleges that “[a]t no time has Turner received all of the purchased training sessions or a refund of the purchase price for the training sessions that were not provided to her by 24 Hour.” By failing to use her training sessions during that six month period, through no fault of 24 Hour Fitness, Turner lost the benefit of her bargain. We do not find that this constitutes a forfeiture for which section 3275 provides relief. (Holiday Inns, supra, 70 Cal.2d at p. 331.)
Judicial notice of the FSAs signed by Granowitz and Turner was taken by the trial court at the request of 24 Hour Fitness.
We are not persuaded by Turner’s argument that applying section 3275 to defaulting plaintiffs but not plaintiffs who fulfill their contractual obligations creates an anomalous result. As noted by 24 Hour Fitness, those non-defaulting plaintiffs have other avenues for recovery such as claims for breach of contract, unconscionability, and fraud.
II. Turner Failed to State a Claim for Violation of the UCL
Turner also challenges the trial court’s conclusion that she failed to state a cause of action for violation of the UCL. The UCL prohibits any “unlawful, unfair or fraudulent business act or practice.” (Bus. & Prof. Code, § 17200.) “Because Business and Professions Code section 17200 is written in the disjunctive, it establishes three varieties of unfair competition—acts or practices which are unlawful, or unfair, or fraudulent.” (Podolsky v. First Healthcare Corp. (1996) 50 Cal.App.4th 632, 647.) Turner attacks the FSA on the grounds that it is unlawful or unfair. Turner contends the FSA is unlawful because it violates the prohibition against forfeiture under section 3275. Because we conclude that Turner’s claim does not fall within the ambit of section 3275, we need only address whether Turner has stated a cause of action under the UCL that the FSA is unfair.
With respect to the unfairness prong of the UCL, Turner alleges as follows:
“23. In connection with Defendants’ sale of personal training sessions to Turner and the other class members, Defendants committed acts and engaged in practices of unfair competition by inserting provisions into the agreements memorializing Turner’s and class members’ purchase of training sessions that the services purchased by Turner and class members expired after 6 months from the date of purchase and that all monies paid for these services not used by Turner and class members before six months from the date of purchase are forfeited to Defendants. Defendants further committed acts and engaged in practices of unfair competition by retaining all monies paid by Turner and the class members for training sessions that were not used within 6 months of purchase.
“24. Defendants’ aforementioned conduct is unfair within the meaning of California Business and Professions Code § 17200 et seq. because the utility of these business practices, if any, is outweighed by the harm that these business practices have caused to Turner and to the other class members. In that regard, Turner is informed and believes that 24 Hour only pays the personal trainers for sessions actually used and that 24 Hour keeps all of the money when training sessions purportedly expire.”
In this court, the test for determining whether a practice is unfair in consumer cases under the UCL is the same as that used under section 5 of the Federal Trade Commission Act (15 U.S.C. § 45, subd. (n).). (Camacho v. Automobile Club of Southern California (2006) 142 Cal.App.4th 1394, 1403 (Camacho).) An act or practice is unfair if: (1) the consumer injury is substantial; (2) it is not outweighed by any countervailing benefits to consumers or to competition and; (3) is not an injury the consumers themselves could reasonably have avoided. (Ibid.)
In this case, we need not analyze all three factors in the Camacho test, because the conduct alleged fails to meet the third factor. Under the Camacho test, “consumers cannot have reasonably avoided the injury if they could not have reasonably anticipated the injury, if they did not have the means to avoid the injury, or if their free market decisions were unjustifiably hampered by the conduct of the seller.” (Camacho, supra, at p. 1405.) Here, Turner has not pled facts to show she could not have reasonably avoided her injury. As noted by the trial court, Turner could easily have avoided her injury by using her training sessions during the six month period. Because they were half sessions, Turner would have used all of her time in eight hours and fifteen minutes (or one hour and fifteen minutes each month). Unlike Granowitz, Turner does not allege that 24 Hour Fitness prevented her from using her training sessions during the six month period. Further, the FSA which Turner signed expressly states the expiration date of the training sessions both before and after her signature. Accordingly, Turner has failed to sufficiently allege that 24 Hour Fitness’s business practices were unfair under the UCL.
While we acknowledge it may often be difficult to determine the issue of unfairness as a matter of law, that is not the case here. Here, the allegations, even if true, fail to state a claim. (Berryman v. Merit Property Management, Inc. (2007) 152 Cal.App.4th 1544, 1556.)
III. Leave to Amend Was Properly Denied
We now consider whether Turner can cure the defects contained in the fifth amended complaint. (Blank, supra, 39 Cal.3d at p. 318.) We find she cannot. As discussed above, a key component of the claim for violation of the UCL is an allegation showing the injury could not have been avoided. The trial court, in its ruling on the demurrer to the third amended complaint, found that Granowitz had stated a cause of action for violation of the UCL because, among other things, he had alleged “defendants’ practice of providing insufficient personal trainers” and “consumers could not reasonably avoid injury because the availability of trainers is not under their control.” In its ruling on the demurrer to the fourth amended complaint, the trial court reminded the parties that “[t]he court did not find the expiration provision’s unfairness to be irresolvable on demurrer. It found only that the cause of action survived because plaintiff alleged other unfair conduct[, ]” later identifying 24 Hour Fitness’s practice of overbooking trainers.
Finally, the trial court confirmed its two prior rulings that the expiration provision in the FSA alone was insufficient to establish unfairness under the UCL without further allegations of insufficient trainers or other unfair practices. Despite all of this, Turner’s only proposed amendment to her complaint is an additional allegation that “Turner attempted to use her fitness training sessions after the six month expiration period and was not permitted to do so.” Accordingly, Turner has failed to meet her burden to show a reasonable possibility that a sixth amended complaint would state a valid cause of action. (Blank, supra, 39 Cal.3d at p. 318.)
We do not intend to suggest that Turner can cure all the defects in the fifth amended complaint simply by alleging she was unable to avoid her injury. This is merely an example to show that Turner has failed to meet her burden to show she can amend the complaint to state a cause of action.
DISPOSITION
The judgment is affirmed. Respondents are to recover costs on appeal.
We concur: FLIER, J., GRIMES, J.