Wilson v. Brawn of California, Inc.
California Court of Appeal
33 Cal. Rptr. 3d 769 (2005)
- Written by Mike Begovic, JD
Facts
Brawn of California Inc. (Brawn) (defendant), a mail-order company operating outside of California, sold clothing through catalogs and via the internet. Brawn would send orders from its warehouses to customers using a common carrier. Brawn would provide customers’ addresses to the common carrier. Brawn charged customers a fee of $1.48 for insurance on items lost or damaged in transit. Brawn used this fee to offset the cost that it bore for replacing such items. Brawn also had its own, separate insurance policy, which covered its goods until they were picked up by a common carrier. This policy did not cover goods damaged in transit. Jacq Wilson (plaintiff) purchased items from Brawn and paid the insurance fee. Wilson then filed an action against Brawn on behalf of all similarly situated customers, alleging that Brawn violated several laws, including: (1) the Unfair Competition Law; (2) Business and Professions Code (BPC) § 17200, prohibiting unfair competition; and (3) BPC § 17500, prohibiting false advertising. Wilson’s claims rested on the premise that Brawn was legally required to cover the cost of goods lost or damaged in transit, and so the insurance fee was superfluous, or an illusory benefit. A trial court ruled against Brawn, finding that Brawn had engaged in a deceptive business practice. Brawn appealed.
Rule of Law
Issue
Holding and Reasoning (Stein, J.)
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