Opinion ID: 2612723
Heading Depth: 1
Heading Rank: 4

Heading: Equitable Power to Impose Monetary Sanction

Text: The Legislature has exercised its police power through enactment of the act which is equitable in nature. ( People ex rel. Sorenson v. Randolph, supra, 99 Cal. App.3d 183, 188; People v. Barbiere, supra, 33 Cal. App. 770, 776.) Equitable power is generally flexible and expansive; thus equity courts will `mold and adjust their decrees as to award substantial justice according to the requirements of the varying complications that may be presented to them for adjudication.' ( Times-Mirror Co. v. Superior Court (1935) 3 Cal.2d 309, 331 [44 P. 547], quoting Humboldt Sav. Bank v. McCleverty (1911) 161 Cal. 285 [119 P. 82]; cf. Crain v. Electronic Memories & Magnetics Corp. (1975) 50 Cal. App.3d 509, 524 [123 Cal. Rptr. 419].) Thus, the act has been interpreted as vesting the equity side of our courts with a broad discretion to fashion appropriate remedies to abate nuisances and afford the relief to which the public are entitled under the act. ( Barbiere, supra, 33 Cal. App. at p. 776; see also Selowsky v. Superior Court (1919) 180 Cal. 404 [181 P. 652].) The court below sought to fashion a just remedy which would afford the People the relief to which they are entitled and would not permit a conceded violation of the act to go unsanctioned. The act, as earlier noted, gives the trial court a panoply of equitable remedies, many of which are punitive. That the court chose to describe the monetary sanction as damages is not determinative. A court of equity may award damages as an incident of its relief (see generally 30 C.J.S., Equity, §§ 71, 72, p. 935 et seq.), or as an alternative to injunction or other equitable remedies (see and cf. Kornoff v. Kingsburg Cotton Oil Co. (1955) 45 Cal.2d 265, 270 [288 P.2d 507] [damages awarded when injunctive relief inadequate to abate nuisance]; Alderson v. Cutting (1912) 163 Cal. 503, 506 [126 P. 157] [damages in lieu of injunction]; Alexandrou v. Alexander (1974) 37 Cal. App.3d 306, 320 [112 Cal. Rptr. 307] [damages awarded when complaint sought equitable relief]; Potrero Homes v. Western Orbis Co. (1972) 28 Cal. App.3d 450, 456 [104 Cal. Rptr. 633] [same]; Morgan v. Veach (1943) 59 Cal. App.2d 682, 693-694 [139 P.2d 976] [same]; see also Code Civ. Proc., § 580). As earlier noted, however, damages are inappropriate in a public nuisance action brought by a public attorney. Nevertheless, I think the monetary sanction imposed here may be viewed as an equitable penalty which, as I have explained, bore a reasonable relationship to the preventative and penal objectives of the act. It is important to observe that the monetary sanction in this case was, as one court put it, an act of grace toward the defendants, ... ( Morgan v. Veach, supra, 59 Cal. App.2d at p. 694), as it cannot be disputed that defendants would have been more severely penalized had the court closed the premises and ordered their personal property sold. [6] A court acting in equity may impose sanctions less drastic than those permitted by statute. Indeed, the majority agrees that the closure language in the statute appears mandatory but has long been interpreted to be discretionary. ( Selowsky v. Superior Court, supra, 180 Cal. 404, 412-413.) The lower court acted in an eminently equitable fashion by affording relief to the People while at the same time protecting the innocent tenant. It is true that the act does not expressly authorize the imposition of monetary sanctions. As the majority notes, the statute permits the recovery of costs only from the sale of property. Nevertheless, the statute should not be read, as the majority has done, so that its purpose is frustrated. In the absence of any express legislative restriction, I would find such a monetary sanction proper as applied to the facts of this case. The majority's contrary holding permits defendants to escape all liability, thus seriously impairing the People's interest in regulating public nuisances like prostitution. (Cf. Pen. Code, § 4.) The majority reasons that the Legislature, by specifically empowering the People to seek injunction and/or closure and declining to expressly provide for monetary sanctions, intended that the latter, less harsh remedy not be available to the People. This literal construction in effect operates contrary to legislative intent and exempts from the act defendants, like the ones in the present case, who are able to change, with chameleon-like ease, their corporate identity and move the headquarters of their empire elsewhere. (See American Art I, supra, 75 Cal. App.3d 523, 534-539; conc. opn. of Hanson, J.) The majority's invitation to the People to file a new action if defendants continue their prostitution business elsewhere rings hollow; the lesson to be learned by defendants from today's decision is that to obtain immunity, they should litigate the matter until an adverse judgment is entered against them, at which time they can change locations while an appeal is pending. Yet, remedies may be appropriate even if not specifically authorized by statute. ( People v. Superior Court ( Jayhill ) (1973) 9 Cal.3d 283 [107 Cal. Rptr. 192, 507 P.2d 1400, 55 A.L.R.3d 191].) Jayhill involved an action by the Attorney General for unfair competition (Civ. Code, § 3369) and false and misleading advertising (Bus. & Prof. Code, § 17500). With respect to the latter, the Attorney General sought injunctive relief and, in the same action, restitution for nonparty victims of the fraudulent advertising. Business and Professions Code section 17535 provided for injunctive relief but, as we observed, was silent as to the power of the trial court to order restitution.... ( Id., at p. 286.) Nonetheless, this court declared that [o]n the other hand the statute did not restrict the court's general equity jurisdiction `in so many words, or by a necessary and inescapable inference' ...[,] and that [i]n the absence of such a restriction a court of equity may exercise the full range of its inherent powers in order to accomplish complete justice between the parties, ... ( Ibid., citations omitted.) Accordingly, this court held that the trial court had inherent power to order defendants to make restitution to nonparty victims. Because there is no express restriction on the court's equity power in this case, I would hold, like the court in Jayhill, that the trial court had the inherent power to impose the monetary sanction on defendants. As in Jayhill, this result promotes the legislative intent which, it has been held, should be given effect, even though it may not be consistent with the strict letter of the statute. ( People v. Black (1941) 45 Cal. App.2d 87, 94 [113 P.2d 746].) I recognize though that Jayhill also held that damages were unavailable under Civil Code section 3369. With respect to this latter action for unfair competition, the Attorney General sought exemplary damages on behalf of the people of the state, not on behalf of the victims. We did not permit these nonstatutory exemplary damages. (But see United Farmworkers of America v. Superior Court (1975) 47 Cal. App.3d 334, 344-345 [120 Cal. Rptr. 904] [equity court has inherent power to award compensatory and punitive damages for unfair competition].) [7] To hold otherwise would have subjected the Jayhill defendants to multiple liability because, as the opinion later observes, the Attorney General was already seeking a civil penalty of $2,500 for each violation under Business and Professions Code section 17536. (9 Cal.3d at p. 288.) Here, the trial court imposed the only possible remedy available against defendants. Moreover, as I have indicated, I view the monetary sanction as a type of penalty, not damages. In Jayhill, the Attorney General sought exemplary damages to punish those who engage in unfair competition. ( Id., at p. 287.) However, Civil Code section 3369 provided only for injunctive relief and not for the equivalent of a civil penalty ( ibid. ), though, as the Jayhill court noted, the Legislature subsequently enacted an amendment providing for a civil penalty not to exceed $2,500. ( Id., at p. 287, fn. 2; see Bus. & Prof. Code, § 17536.) By contrast, the Red Light Abatement Law has allowed from its enactment various punitive sanctions. Thus, because the act is both penal and equitable in nature, an equitable penalty is especially appropriate here. Jayhill or any other case disallowing damages in the context of a civil statute which does not provide for penalties or forfeitures would not control this case. [8] In my judgment, the majority has circumscribed the power of an equity court to render justice in novel situations. Today's decision violates the maxim that a court of equity has discretion to determine the nature and scope of allowable relief and may avail itself of powers broad, flexible and capable of being expanded to deal with novel cases and conditions. ( MacFarlane v. Peters (1980) 103 Cal. App.3d 627, 631 [163 Cal. Rptr. 655].) Although I would not allow monetary sanctions as a general rule, I think the trial court acted within its equitable power under the factual circumstances of this case. The court understandably felt compelled to afford relief when, as a matter of law, defendants were in violation of the act. As the dissenting justice in the Court of Appeal opinion below observed: The `hit and run' tactics frequently employed by similar defendants in abatement proceedings are deplorable and demand a response. Now that the majority holds that monetary sanctions are not available to the court, the fashioning of a remedy by which to thwart such tactics is a task ... left to the Legislature. My review of the applicable case law and the available indicia of legislative intent  combined with the analogous nature of the monetary sanction and the closure-sale remedy  leads me to the conclusion that the trial court acted properly. I would affirm. Respondent's petition for a rehearing was denied March 2, 1983.