Opinion ID: 2585147
Heading Depth: 1
Heading Rank: 1

Heading: Kansas Comment, 1973

Text: 1. Section 50-627 forbids unconscionable advertising techniques, unconscionable contract terms, and unconscionable debt collection practices. As under the UCC (K.S.A. 84-2-302), unconscionability typically involves conduct by which a supplier seeks to induce or to require a consumer to assume risks which materially exceed the benefits to him of a related consumer transaction. It involves overreaching, not necessarily deception. The Old Buyer Protection Act had no such provision. `Knowledge or reason to know' often will be established by a supplier's course of conduct. 2. Subsection (b)(1) includes such conduct as selling an English-language encyclopedia set for personal use to a Spanish-American bachelor laborer who does not read English, or using legal verbiage in a manner which cannot be readily comprehended by a low-income consumer who both reads and speaks English. Subsection (b)(2) includes such conduct as a home solicitation sale of a set of cookware to a housewife for $375 in an area where a set of comparable quality is readily available to such a housewife for $125 or less. Subsection (b)(3) includes such conduct as the sale of two expensive vacuum cleaners to two poor families whom the salesman knows, or has reason to know, share the same apartment and the same rug. Subsection (b)(4) includes such conduct as the sale of goods, services, or intangibles to a low-income consumer whom the salesman knows, or has reason to know, does not have sufficient income to make the stipulated payments. Subsection (b)(5) includes such conduct as requiring a consumer to sign a onesided adhesion contract which is loaded too heavily in favor of the supplier, even though some or all of the contract terms are lawful in and of themselves. Subsection (b)(6) applies to misleading subjective expressions of opinion on which a supplier should reasonably expect a consumer to rely to his detriment. For example, a violation of this subsection would occur if a prospective purchaser asked a supplier what the useful life of a paint job was and the supplier, with reason to know that repainting would be necessary within two years, responded, `in my opinion the paint will wear like iron.' Overt factual misstatements expressed in form of opinion are dealt with by 50-626's proscription of deceptive consumer sales practices. For example, a violation of 50-626 would occur if a prospective purchaser asked a supplier what the useful life of a two-year paint job was and the supplier responded, `in my opinion repainting will not be necessary for five years.' The State's first argument is premised on the direction of K.S.A. 50-623 of the KCPA which requires its provisions to be construed liberally to . .. protect consumers from suppliers who commit deceptive and unconscionable practices. The State contends that the trial court's ruling involved a strict construction of the KCPA, which was improper, as was the trial court's analysis that centered on the examples the legislature provided in the Kansas Comment to K.S.A. 2000 Supp. 50-627(b). Dr. Levine more convincingly argues that the trial court's ruling, while stating that it could find no logical connection between the examples established by the legislature and the actions in issue, also looked to other hallmarks of unconscionable conduct such as whether there was harm to a consumer, whether any misrepresentation occurred, or whether there was a failure to provide authentic goods. The State is mistaken that the trial court's ruling was limited to the statutory examples. Although the court wrote: First, the conduct bears no resemblance to the statutory examples of such behavior, it went on to note: [T]here was no actual harm done to anyone. In viewing the transaction, the trial court held that [n]othing was misrepresented and 101 drugs furnished were authentic. The trial court specifically noted that if the waivers signed were true, more information would have been known and understood by the purchasers than is typically provided to Kansas patients. The court did not limit its construction to the statutory examples. The wording of K.S.A. 2000 Supp. 50-627(b) sets the tone for consideration of whether an action is unconscionable when it states: [T]he court shall consider circumstances of which the supplier knew or had reason to know, such as, but not limited to the following. It is clear the legislature intended the original subsections of (b)(1) through (b)(6) to be a guide in determining what kind of conduct should be found unconscionable without expressly limiting the court to the statutory examples. See L. 1973, ch. 217, § 5; see also Willman v. Ewen, 6 Kan. App.2d 321, 324, 627 P.2d 1190, 1192 (1981), affd 230 Kan. 262, 634 P.2d 1061 (1981) ([The KCPA] sets forth certain things for a court to consider, but states they are not the exclusive tests by which a court should determine unconscionability.). It should be noted that certain other statutes such as K.S.A. 50-644 (flammable thermal insulation), K.S.A. 2000 Supp. 50-670 (unsolicited telemarketing calls), K.S.A. 50-669 (check identification), K.S.A. 50-669a (credit card sales), K.S.A. 50-692 (prize notification), and K.S.A. 17-1769 (charitable solicitations) specifically make certain conduct unconscionable. The State points to these provisions as showing unconscionability is a broad, sweeping concept that cannot be limited to contract formation issues. Dr. Levine counters that by making specific conduct unconscionable, the legislature implicitly did not intend K.S.A. 2000 Supp. 50-627 to have a broad scope. We do not adopt either argument as being definitive. The legislature has obviously desired for certain conduct to be considered unconscionable per se, but this should in no way contract or expand the right of courts to find (or fail to find) other conduct unconscionable. In State ex rel. Miller v. Midwest Serv. Bur. of Topeka, Inc., 229 Kan. 322, 324, 623 P.2d 1343 (1981), this court cited the comment to K.S.A. 50-627 (Weeks) in noting the three general categories of conduct proscribed: [Mat section forbids `unconscionable advertising techniques, unconscionable contract terms, and unconscionable debt collection practices.' Limitation of implied warranties, added as an example to the statute after the Midwest decision, would be a fourth category. See L. 1983, ch. 180, § 1. Although unconscionable contract terms were somewhat expanded by the decision of Willman v. Ewen, 230 Kan. 262, 266, 634 P.2d 1061 (1981), in which the contract itself was found to be valid but the subsequent deceptive conduct tainted the transaction as unconscionable, this court has held to general guidelines in determining unconscionability. After reviewing several cases, we concluded: The cases seem to support the view that there must be some element of deceptive bargaining conduct present as well as unequal bargaining power to render the contract between the parties unconscionable. Willman, 230 Kan. at 266. Further support is the comment to K.S.A. 50-627 which references unconscionability in the context of the UCC, clearly a contractual-based form of the doctrine: As under the UCC (K.S.A. 84-2-302), unconscionability typically involves conduct by which a supplier seeks to induce or to require a consumer to assume risks which materially exceed the benefits to him of a related consumer transaction. See also Wille v. Southwestern Bell Tel. Co., 219 Kan. 755, 758-59, 549 P.2d 903 (1976) (lists 10 factors that aid in applying the doctrine of unconscionability but in situations involving the Uniform Commercial Code). We hold that the trial court did consider potential unconscionable acts outside of the enumerated examples of K.S.A. 2000 Supp. 50-627(b), and the State's argument to the contrary must fail. Before considering the State's final arguments that three different specific acts of Dr. Levine must be considered to be unconscionable, we briefly mention that there remains unanswered a question of whether the agents were consumers as defined under the KCPA. K.S.A. 50-624(b) states: `Consumer' means an individual or sole proprietor who seeks or acquires property or services for personal, family, household, business or agricultural purposes. This is not a question we reach, as the trial court centered its decision on the question of whether unconscionable conduct existed. The State contends that charging $75 for an online consultation service, prescribing medication without a physical examination or advisement of the dangers of the medicine, and prescribing Viagra to a minor without consulting the parents or guardian constitute individually or collectively unconscionable practices under K.S.A. 2000 Supp. 50-627. While we do not retreat from what we have previously said concerning our standard of review as being unlimited, we also note that in Remco Enterprises, Inc. v. Houston, 9 Kan. App.2d 296, Syl. ¶ 3, 677 P.2d 567, rev. denied 235 Kan. 1042 (1984), the court said: Generally speaking, the unconscionability of acts under the Kansas Consumer Protection Act, K.S.A. 50-623 et seq., and amendments thereto is left to the sound discretion of the trial court to be determined under the peculiar circumstances of each case. The Remco opinion also quoted from Meyer v. Diesel Equipment Co., Inc., 1 Kan. App.2d 574, 570 P.2d 1374 (1977), where the trial court's finding that the KCPA was inapplicable was reversed but the appellate court upheld the trial court's determination that unconscionability did not exist with the following statement:  The trial court concluded that defendant's conduct was not unconscionable. We are not of a mind to now hold that defendant's complained-of conduct was unconscionable as a matter of law. With a concept so nebulous as unconscionability involved, it is necessary that a certain amount of leeway be granted trial courts when deciding the unconscionability of acts. Our legislature recognized this and, accordingly, left the unconscionability question to be decided by the court under the peculiar circumstances of each case.' Remco, 9 Kan. App.2d at 303. In addition, a review of 50-627 shows that the determination of unconscionability involves not only a review of the written documents but also consideration of the witness testimony as to actions surrounding the transaction. We have long held that the credibility of witnesses will not be reweighed on appeal. State v. Chaney, 269 Kan. 10, 20, 5 P.3d 492 (2000). The State's contention that the agreed-upon $75 for an online consultation is unconscionable because the applicants did not receive a material benefit (See K.S.A. 2000 Supp. 50-627[b][3]) lacks merit. The record reflects the applicants failed to give substantive information in blank areas and provided false answers to others. The declaration of Dr. Levine stated the applications were reviewed for any contradictions and, if noted, the prospective purchaser would be rejected. In fact, Agent Crawford's application truthfully stating that she was a female was rejected. Nelson and Crawford at best made a bad bargain, but, lacking any indication of deceptive bargaining conduct or unequal bargaining power, the $75 charge for the consultation was not unconscionable. See Willman, 230 Kan. at 266; see also Gonzales v. Associates Financial Ser v. Co. of Kansas, 266 Kan. 141, 166, 967 P.2d 312 (1998)(Transactions that merely appear unfair, or in retrospect are bad bargains, do not state a claim under the KCPA.)(citing Remco Enterprises, Inc. v. Houston, 9 Kan. App. 2d 296, 300-03, 677 P.2d 567, rev. denied 235 Kan. 1042 [1984]). The State next argues that prescribing Viagra without a physical examination and the actual physical supervision of the patient is unconscionable. The State relies on 21 U.S.C. 353(b)(1) (1994) and the testimony of its pharmaceutical expert to conclude that Dr. Levine's actions do not comply with established standards of conduct. The State makes no effort to analogize these facts with any of the examples of unconscionable conduct in 50-627(b). This conduct falls short of this court's pronouncement in Willman that there must be some element of deceptive bargaining conduct present as well as unequal bargaining power to render the contract between the parties unconscionable. 230 Kan. at 266. Also, [w]here a record is `devoid of any evidence of any deceptive or oppressive practices, overreaching, intentional misstatements, or concealment of facts,' there is no claim under the KCPA. [Remco Enterprises, Inc.] 9 Kan. App.2d at 303. Gonzalez, 266 Kan. at 166-67. As the trial court pointed out, Nelson and Crawford paid for Viagra. and received Viagra. Further, they falsified their applications by affirmatively stating that they had read the information available about Viagra from the manufacturer and that they understood the potential side effects. At best, the State argues that the conduct is hazardous to consumers. However, in this case, both purchasers did not intend to use the drugs nor did they use the drugs. The lack of a physical examination posed no threat to either of them. They falsified information in order to procure the pharmaceutical. Finally, the State's pharmacist testified that had the purchasers in fact read the manufacturer information about Viagra, they would know more information than he provides his own customers. He also admitted that the questions asked on the computerized consultation form were more in depth than those he poses to individuals who have been prescribed Viagra. When considering the entire transaction, the facts are insufficient to fall within the purview of K.S.A. 2000 Supp. 50-627. Finally, the State argues that Nelson's minority makes this transaction unconscionable. Although Dr. Levine did admit that the prescription should not have been allowed to be dispensed to a minor and this clearly violates a medical standard of conduct, this does not make it unconscionable under K.S.A. 2000 Supp. 50-627. It must be noted that the evidence presented to the trial court showed that the minor's parent was present and involved in every step of the transaction. The State failed to present any evidence that Dr. Levine deceived, oppressed, or misused superior bargaining power in supplying or prescribing Viagra to Nelson. Nelson was not overcharged, and the testimony clearly showed that he would never have been allowed to use the medication because of the supervision of his mother. The doctor was enjoined from further practice in Kansas. The trial court said, I don't have any trouble with saying ... these people ought to be de-frocked as medical practitioners, as pharmaceutical practitioners.... But, I'm trying to figure out how this is a consumer fraud case. Ultimately, after examining all of the documents and hearing all of the witnesses, the trial court properly held Dr. Levine's actions did not involve advertising techniques, contract terms, debt obligation, limitation of warranties, or the type of conduct intended to be considered unconscionable under K.S.A. 2000 Supp. 50-627 of the KCPA. The public is adequately protected by the injunction that was issued, and the trial court's refusal to expand the scope of the KCPA under the facts of this case is affirmed. DAVIS, J., not participating. BRAZIL, Chief Judge Retired, assigned. [1]