Demeter v. Taxi Computer Servs., Inc.

230 Cal. Rptr. 3d 817, 21 Cal. App. 5th 903
CourtCalifornia Court of Appeal, 5th District
DecidedMarch 27, 2018
DocketB276192
StatusPublished
Cited by6 cases

This text of 230 Cal. Rptr. 3d 817 (Demeter v. Taxi Computer Servs., Inc.) is published on Counsel Stack Legal Research, covering California Court of Appeal, 5th District primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Demeter v. Taxi Computer Servs., Inc., 230 Cal. Rptr. 3d 817, 21 Cal. App. 5th 903 (Cal. Ct. App. 2018).

Opinion

BAKER, J.

*906Plaintiff and appellant Michael Demeter (Demeter) filed a putative class action complaint against defendants and respondents Taxi Computer Services, Inc. (TAXI) and its CEO Michael Laskow (Laskow). The complaint alleged TAXI operated a talent listing service without procuring the bond California's Fee-Related Talent Services Law (FTSL) requires "for the benefit of any person injured by any unlawful act, omission, or failure to provide the services of the talent service." ( Lab. Code, § 1703.3, subd. (b).) Demeter alleged causes of action under the FTSL itself and under California's Unfair Competition Law (UCL) ( Bus. & Prof. Code, § 17200 et seq. ). TAXI and Laskow moved for summary judgment, arguing Demeter was not *907aware of the bond requirement when he *819signed up with TAXI and suffered no injury because he had no complaints about the service TAXI offered. The trial court agreed with TAXI and Laskow, and we consider whether the trial court properly granted summary judgment in their favor.

I. BACKGROUND

A. TAXI and Demeter

TAXI is an "Artist & Repertoire" corporation that works with companies, publishers, and supervisors in the music industry who are looking for composers and songs for their artists, or for TV and film placements. Based on information provided by industry professionals, TAXI creates and posts listings on its website describing the type of music sought and the submission deadline. TAXI members pay an annual flat fee for access to TAXI's listings and other services, plus an additional $5.00 fee to submit music in response to a listing on the TAXI website.

Demeter is a musician and DJ who has worked in the music industry for thirty years. In early December 2012, Demeter purchased a one-year TAXI membership via TAXI's website for $299.95.

When Demeter purchased his TAXI membership, he was directed to a webpage that required him to provide his name, email address, and other information. As part of the purchase process, Demeter was required to agree to TAXI's Terms and Conditions. The webpage included the following text: "Please read these Terms and Conditions before pressing the button below. By pressing the 'Join TAXI Now!' button below, you agree to pay the amount shown above and abide by our terms." The words "Terms and Conditions" in the above text were in blue, and were hyperlinked to another webpage that set forth the terms and conditions. In order to join TAXI, a prospective member was required to click the "Join TAXI Now!" button. TAXI's user agreement provided TAXI members could request a full refund (if they were dissatisfied with TAXI's listings, feedback, or customer service) for up to 365 days after purchasing a TAXI membership.

Demeter did not do "too much" research before joining TAXI, though he had heard about the company and read parts of TAXI's website before signing up. Demeter did not know about the FTSL prior to joining TAXI, nor did he know of the law's bond requirement. The day Demeter paid for his membership, the TAXI website represented TAXI had either an "A+" or "A-" rating with the Better Business Bureau.

*908B. Demeter's Complaint

Roughly six weeks after he purchased his membership, Demeter filed a putative class action complaint alleging (1) TAXI had not procured the $50,000 bond required by the FTSL at the time Demeter paid for his membership, (2) TAXI failed to provide Demeter with a written contract that satisfied the requirements of the FTSL, including an advisement that TAXI had complied with the bonding requirement, and (3) the TAXI website represented the company had an A+ or A- rating with the Better Business Bureau (BBB) when, in truth, TAXI had no rating when his complaint was filed because "the BBB does not rate talent services that are not in compliance with California law." The operative complaint further alleged a violation of the UCL because TAXI and Laskow "violated the FTSL ... and therefore engaged in unfair competition." The operative complaint's prayer for relief sought, among other things, payment of Demeter's attorney fees, treble compensatory damages under the FTSL, and restitution and injunctive relief under the UCL.

*820C. TAXI and Laskow's Motion for Summary Judgment

TAXI and Laskow's motion for summary judgment (for simplicity's sake, we will refer to it as TAXI's motion) argued Demeter could not prevail at a trial on his cause of action alleging a violation of the FTSL because he could not establish he had been injured by TAXI's failure to obtain the requisite bond or by the absence of any reference to the bonding requirement (and other statutorily required terms) in the terms and conditions to which Demeter agreed when purchasing his membership online.

As to the failure to obtain the bond itself, TAXI argued Demeter could not demonstrate he had suffered an injury entitling him to sue because he had not relied on the bond requirement when purchasing his membership (indeed, he was unaware of the obligation imposed by law) and he had received the services he was promised. As to the absence of a reference to the statutorily-required bond and other alleged deficiencies in TAXI's online terms and conditions, TAXI argued the alleged violation of the FTSL's provision governing the form of talent services contracts merely rendered TAXI's contract with Demeter voidable, not void, which meant the contract was not illegal and could not have been injurious. TAXI further argued, as to Demeter's UCL claim, that he could not establish standing or causation because he could not establish he had suffered an "injury in fact" caused by the asserted violation of the FTSL.

TAXI's summary judgment motion also maintained Demeter could not prove his suit was necessary to redress an injury because he had not availed *909himself of the contract provision that would permit him to obtain a full refund of the membership fee he paid. The motion cited evidence suggesting Demeter instead was a "stalking horse" for a competing company and had purchased a TAXI membership simply for the purpose of attempting to establish a predicate for bringing suit. In TAXI's view, this meant that insofar as Demeter had suffered any injury, the injury was "self-inflicted" and therefore insufficient to support a lawsuit.

In opposition, Demeter argued he had been injured by TAXI's alleged violations of the FTSL (and, correspondingly, the UCL) because he would not have paid TAXI's membership fee if he had known TAXI was violating legal requirements and thus was "an illegal company." He acknowledged he had not attempted to cancel his contract with TAXI (i.e., invoked his contractual right to a refund) prior to filing suit, but claimed a full-blown lawsuit was nevertheless a proper means for seeking to void the contract. Demeter further asserted TAXI's "stalking horse" argument was meritless because TAXI had not presented evidence demonstrating Demeter had knowledge of TAXI's violation before purchasing a membership.

The trial court granted TAXI's motion for summary judgment.

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Cite This Page — Counsel Stack

Bluebook (online)
230 Cal. Rptr. 3d 817, 21 Cal. App. 5th 903, Counsel Stack Legal Research, https://law.counselstack.com/opinion/demeter-v-taxi-computer-servs-inc-calctapp5d-2018.