Barquis v. Merchants Collection Assn

In Barquis v. Merchants Collection Assn. (1972) 7 Cal.3d 94, 101 Cal. Rptr. 745, 496, the plaintiffs alleged that a collection agency had "wilfully commenced actions in improper counties, with knowledge that such counties are improper, and for the improper ulterior purpose of impairing its adversaries' ability to defend such suits . . . ." ( Barquis, supra, 7 Cal.3d at p. 98.) The court concluded that the allegations sufficiently demonstrated that the defendant "has in the past been continually committing a gross 'abuse of process' and that the agency threatens to continue this unlawful, tortious conduct in the future." (Ibid.) The California Supreme Court held that a plaintiff stated a cause of action for abuse of process by alleging that a collection agency "wilfully and knowingly filed actions in an improper county pursuant to statutorily inadequate pleadings . . . for the ulterior purpose and with the intent to impair individuals' rights to defend suits and, in effect, to coerce inequitable settlements and default judgments by making it inconvenient for defendants to defend suits on their merits." Specifically, the Barquis court noted that the "widespread occurrence of the alleged misfiling abuse" "stated a cause of action for injunctive relief from an abuse of process." (Barquis, supra, 7 Cal. 3d at page 108). The California Supreme Court examined the legislative and judicial history of former Civil Code section 3369 at length. ( Id., at pp. 108-113.) It concluded that in enacting former Civil Code section 3369, the Legislature established a wide standard for the guidance of courts of equity in restraining all unfair business practices because it felt that "given the creative nature of the scheming mind, . . . a less inclusive standard would not be adequate." ( Id., at p. 112.) Quoting an earlier Supreme Court decision, the Barquis court enlarged upon its view of former Civil Code section 3369: "'When a scheme is evolved which on its face violates the fundamental rules of honesty and fair dealing, a court of equity is not impotent to frustrate its consummation because the scheme is an original one. There is a maxim as old as law that there can be no right without a remedy, and in searching for a precise precedent, an equity court must not lose sight, not only of its power, but of its duty to arrive at a just solution of the problem.'" (Id., quoting American Philatelic Soc. v. Claiborne (1935) 3 Cal.2d 689, 698-699.) The California Supreme Court said of Civil Code section 3369 (a predecessor section to Bus. & Prof. Code, 17204, containing identical language): "'The section demonstrates a clear design to protect consumers as well as competitors by its final clause, permitting inter alia, any member of the public to sue on his own behalf or on behalf of the public generally. If the Legislature had been solely concerned with protection against the evil of unfair competitive advantage, it would certainly have more narrowly circumscribed the class of persons permitted to institute such actions.'"