O'LEARY, P.J.
Since 1970 it has been a misdemeanor to sell any "unvented [non-electric] heater that is designed to be used inside any dwelling house or unit, with the exception of . . . decorative gas logs for use in a vented fireplace." (Health & Saf. Code, §§ 19881, 19882.)
In 2010, Matthew Burger purchased a portable "Tough Buddy" propane gas powered heater (hereafter heater) from Lowe's Home Centers, LLC (LHC) located in Tustin, California. Neither he nor anyone else was injured in any way by the portable heater. Six months later, Burger filed a class action complaint alleging LHC and the heater's manufactures were liable for violating California's unfair competition law (UCL) (Bus. & Prof. Code, § 17200 et seq.), because it was illegal to sell the unvented heater. Burger also alleged LHC was liable for statutory false advertising (Bus. & Prof. Code, § 17500), and for violating the Consumer Legal Remedies Act (CLRA) (Civ. Code, § 1750 et seq.), based on LHC's false representation the heater was approved for indoor dwelling use in California.
The trial court sustained without leave to amend LHC's demurrer to the false advertising and CLRA claims based on its conclusion LHC did not participate in making the allegedly false representations printed on the heater's packaging. With respect to the remaining UCL cause of action, the trial court denied Burger's motion for summary adjudication and granted LHC's summary judgment motion. The trial court determined the portable heater did not fall within the scope of section 19881 because it was not designed to be permanently installed in an unvented area or designed for use in a dwelling house. The trial court entered judgment in LHC's favor. On appeal, Burger maintains these ruling were erroneous, and based on his counsel's offer of proof at oral argument, we reverse the trial court's ruling on the demurrer to give Burger leave to amend his complaint. However, we conclude the trial court was right with respect to summary adjudication of the UCL cause of action, and we affirm that order.
In June 2010, Burger filed his class action against LHC and the heater's manufacturers, Mr. Heater and Enerco Group (hereafter collectively referred to as the manufacturers unless the context requires otherwise). He filed a first amended complaint in August 2010, and a second amended complaint (SAC), which is the operative complaint, in May 2012.
The SAC alleged three causes of action against LHC as follows: (1) violation of the UCL; (2) false advertising; and (3) violation of the CLRA. In the SAC, Burger explained Mr. Heater was a wholly owned subsidiary of Enerco Group. Berger stated he represents a class of plaintiffs who, since January 30, 2006, purchased a new "Buddy Model MH9BX or MH9B, `Big Buddy' Model MX18B, and/or `Little Buddy' or `Basecamp' Model MH4B portable, propane-fueled heater" (hereinafter [collectively referred to in the singular as `heater']), designed and manufactured by . . . [the manufacturer]" from any LHC store in California or online and shipped to any LHC location in California.
In January 2010, Burger purchased a heater for approximately $40 from LHC in Tustin, California. Burger claimed that when he made the purchase he was unaware of section 19881's prohibition against selling unvented heaters designed for indoor use. Pursuant to Business and Professions Code section 17203, Burger sought equitable relief against the manufacturers and LHC, seeking permanent injunctive relief enjoining them from continuing to sell the heaters, removing the heaters from the store shelves, issuing a recall of unsold heaters, and offering a refund for heaters already purchased. Burger sought an order requiring the manufacturers to place permanent labels on any unsold heaters stating it was unlawful to sell the product in California. Burger sought the recovery of attorney fees and costs incurred for prosecuting the class action pursuant to Code of Civil Procedure section 1021.5.
In the SAC, Burger described the heater's packaging. Before purchasing the heater, Burger saw it was "expressly represented and warranted that the [heater] . . . was `designed and approved for indoor use.'" Prominently displayed on three sides of the box, in large fluorescent yellow text against a red background, were the words "Indoor Safe Propane Heater." On the front panel of the heater's box, statements indicated the product provided the following: "`Temporary Heat For: . . . Workshops . . . Cabins . . . Garages . . . [and] . . . Emergency heat.'"
Several photographs were displayed on the packaging to demonstrate various uses for the heater. One photograph showed the heater being used on a table in a house during an emergency power outage while its occupants played cards at a dining room table lit by candles and a flashlight. Another photograph depicted the heater operating on top of a workshop bench in a room looking like a basement or a garage. The room contained a hobbyist painting a duck hunting decoy.
LHC and the manufacturer jointly filed a demurrer to the SAC. Relevant to this appeal, the trial court sustained without leave to amend LHC's demurrer to Burger's false advertising and CLRA claims.
The following year, Burger filed a motion for summary judgment or summary adjudication against LHC and the manufacturers on the remaining causes of action. He argued there was no defense to the causes of action and the undisputed evidence supported liability. At the same time, LHC filed a summary judgment motion, arguing the remaining UCL cause of action failed as a matter of law because the portable heater was not covered by section 19881, subdivision (a). To support their motions, both parties submitted declarations and copies of section 19881's legislative history. The court took judicial notice of the legislative history documents.
The court denied Burger's motion and granted LHC's motion for summary judgment. The order stated, "[T]he [c]ourt finds that there is no triable issue of material fact, and that [LHC's] subject [heater] does not fall within the purview of . . . section 19881[, subdivision] (a). Specifically, the [heater] is not an `unvented' heater within the meaning of section 19881[, subdivision] (a). Nor was the [heater] `designed to be used inside any dwelling house or unit.' Accordingly, [Burger's] UCL claim fails as a matter of law."
The trial court included the following lengthy legal analysis in its order, "[Burger's] [f]irst [c]ause of [a]ction . . . is entirely founded upon the `unlawful' prong of the [UCL] based upon the allegation that the California sale of the [heater] violates . . . section 19881[, subdivision] (a). (See, [SAC]; [o]pposition, [s]ection III). Section 19881[, subdivision] (a), makes it a criminal offense to sell an unvented heater which is designed for use in dwelling houses or units. It states, "No person shall sell, or offer for sale, any new or used unvented heater that is designed to be used inside any dwelling house or unit. . . .' LHC's motion is based on their evidence and legal arguments that it did not commit the criminal act described above and so the UCL claims fails for lack of an unlawful act. [¶] Both sides concur that in applying [s]ection 19881[, subdivision] (a), to the . . . portable heater, two elements are critical. The first is whether uncontroverted evidence shows that the [heater] is not unvented, within the meaning of this statutory scheme."
The court stated its determination the heater was not unvented within the meaning of the statute was based on the following evidence: "The [heater] has an outlet in the upper portion of the heater's housing to allow gases resulting from combustion to exit the heater in the surrounding atmosphere. ([Citation to Brian Vandrak's Declaration].) The [heater] was not designed to be installed in a building or used in residences, but instead designed for use in recreational[,] and commercial enclosures. ([Citation to Vandrak's declaration].) Because [s]ection 19881 is part of the same statutory framework as the California Mechanical Code, the Mechanical Code's definitions are relevant to interpreting the term `unvented' as used in [s]ection 19881[, subdivision] (a). The Mechanical Code defines `unvented room heaters' as those installed in a room or building. Furthermore, the Mechanical Code distinguishes between `unvented' heaters and `portable' heaters, providing a separate definition for `Portable Heating Appliance.' [¶] Similarly, the relevant heating industry standards applicable at the time of [s]ection 19881's enactment make clear that an unvented room heater is one that is `installed' and attached to a permanent gas supply. The American National Standards Institute sets safety standards for `unvented room heaters' and defines them as those that are `installed' in a room and attached to a permanent gas supply. ([Citation to Nicholas V. Marchica's declaration].) It also specifically distinguishes between `unvented' heaters and `portable' heaters such as camping heaters. ([Citation to Marchica's Declaration].)"
The trial court also addressed Burger's oral argument "that the manufacturer must have thought it was an unvented device because the manufacturer product insert uses the phrase `unvented gas-fired portable heater.'" The court reasoned, "Other than pointing out from a safety standpoint that the portable heater does not come with its own duct system, there appears to be no utility to the use of the description when applied to a portable device. Acknowledging that such a device is unvented does not convert it into a residential heater. For further discussion see, the `Rule of Lenity,' infra."
The court then turned its attention to the second critical element, holding, "Even if the [the heater was] shown [by] the evidence to be an unvented heater within the meaning of this statute, summary judgment would still be granted on the basis that the [heater] was not designed to be used `inside any dwelling house or unit.' In this area, the only intent that is relevant to this statute is the intent of the designer/creator/manufacturer of this device. In this case, all three functions were performed by the same co-defendant entit(ies). [T]here is ample evidence that the inventor designed the [heater] to solve the problem created by oxygen depleting non-electrical heating devices that were being used by people in camping enclosures, recreational vehicles and commercial buildings, to the effect that, in these indoor settings carbon monoxide levels could exceed safe levels. The extant condition sought to be fixed was the indoor environment associated with recreational or commercial activities. There has never been any doubt that the [heater] was designed for indoor use. That was the whole purpose of the ODS feature. Because the primary purpose of the patented design was to provide safe non-electrical heating . . . these co-defendant manufacturers have not denied this obvious fact.
"Where [Burger's] interpretation of the statute differs from the [c]ourt's is in the confusing the term `indoor' with the phrase `inside [a] dwelling house.' This interpretation ignores the many lawful indoor uses that do not involve a residence. Indeed. [Burger's] interpretation would render illegal the use of this heater in any number of California settings such as mountain cabins or remote desert shacks, where the lack of electricity renders indoor heating impossible, without a vented fireplace in every room, or the availability of a portable, free-standing heating device like the [heater]. There is simply no indication in the legislative history or in the surrounding parts of the Health and Safety Code that the Legislature intended to deny access to such devices to recreational users of these types of facilities.
"Another area of confusion is [Burger's] focus on the marketing of the [heater] as safe for temporary emergency use in a dwelling, in the event of an electrical service interruption. While the [c]ourt concurs that such marketing skirts the boundaries of good sense, given the California ban on use in dwellings, this marketing emphasis does not change the original intent of the design. This interpretation is consistent with the Legislature's obvious intent not to reach indoor camping and recreational use where the same families who usually inhabit permanent dwellings are sleeping in an enclosed area with a portable gas-fired heater."
The trial court concluded its written ruling with a discussion of the rule of lenity. "The above discussions make it all too obvious that, at a minimum, there is ambiguity in the reach of section 19881[, subdivision] (a), to portable recreational or commercial heaters. In this situation, [Burger] carries a heavier burden in convincing the [c]ourt of its interpretation. This is because of the public policy indicated by the rule of lenity.
"The rule of lenity applies even though this is not a criminal prosecution because the statute the [c]ourt is construing imposes criminal penalties. [Citations.] The rule is explained as follows[:] `[When] the governing standard is set forth in a criminal statute, it is appropriate to apply the rule of lenity in resolving any ambiguity in the ambit of the statute's coverage. To the extent that the language or history of [a statute] is uncertain, this "time-honored interpretive guideline" serves to ensure both that there is fair warning of the boundaries of criminal conduct and that legislature, not courts, define criminal liability [citations].' [Citation.] [¶] There is a reasonable argument that a portable heater cannot be vented when placed inside a building. Alternatively, given the definition of `unvented room heaters' found in the Mechanical Code ([Cal. Code Regs., tit. 24,] part 4, § 2.03), such heaters are unvented because they are installed for use without a duct connection. A duct connection by definition is a fixed stationary contrivance that does not up and move around the building. Since there is a reasonable argument to be made that a portable heater is not a device capable of being vented within a building, a person charged with the criminal offense of selling one, is not on notice as to the illegality of its conduct.
"This is the very harm sought to be avoided by the application of the rule of lenity. Quite simply, it is a denial of due process for a person to be exposed to jail or fines because of a law that is not clear in its scope. The government has no reasonable interest in prosecuting people who have accidentally committed a technical crime, solely because of a poorly drafted statute."
A trial court properly grants summary judgment where no triable issue of material fact exists and the moving party is entitled to judgment as a matter of law. (Code Civ. Proc., § 437c, subd. (c).) "We review the trial court's decision de novo, considering all of the evidence the parties offered in connection with the motion (except that which the court properly excluded) and the uncontradicted inferences the evidence reasonably supports. [Citation.] In the trial court, once a moving defendant has `shown that one or more elements of the cause of action, even if not separately pleaded, cannot be established,' the burden shifts to the plaintiff to show the existence of a triable issue; to meet that burden, the plaintiff `may not rely upon the mere allegations or denials of its pleadings . . . but, instead, shall set forth the specific facts showing that a triable issue of material fact exists as to that cause of action. . . .' [Citations.]" (Merrill v. Navegar, Inc. (2011) 26 Cal.4th 465, 476-477.) "The purpose of the law of summary judgment is to provide courts with a mechanism to cut through the parties' pleadings in order to determine whether, despite their allegations, trial is in fact necessary to resolve their dispute. [Citation.]" (Aguilar v. Atlantic Richfield Co. (2011) 25 Cal.4th 826, 843.)
Burger contends the trial court erred by concluding LHC met its burden in moving for summary judgment by showing there were no triable issues of material fact and that he and his class members were entitled to judgment as a matter of law on the UCL cause of action.
"The UCL does not proscribe specific activities, but in relevant part broadly prohibits `any unlawful, unfair or fraudulent business act or practice.' (§ 17200.) `"`Because . . . section 17200 is written in the disjunctive, it establishes three varieties of unfair competition—acts or practices which are unlawful, or unfair, or fraudulent. "In other words, a practice is prohibited as `unfair' or `deceptive' even if not `unlawful' and vice versa."'" [Citations.] [¶] A private party has standing to bring a UCL action only if he or she `has suffered injury in fact and has lost money or property as a result of the unfair competition.' (§ 17204.) `While the scope of conduct covered by the UCL is broad, its remedies are limited.' [Citation.] `Suits asserting statutory UCL claims are equitable actions. [Citation.] For that reason, "compensatory damages are not available" in such suits.' [Citation.] `Prevailing plaintiffs are generally limited to injunctive relief and restitution.' [Citation.] `The object of restitution is to restore the status quo by returning to the plaintiff funds in which he or she has an ownership interest.' [Citation.]" (Aleksick v. 7-Eleven, Inc. (2012) 205 Cal.App.4th 1176, 1184 (Aleksick).)
"`"By proscribing `any unlawful' business practice, `section 17200 "borrows" violations of other laws and treats them as unlawful practices' that the unfair competition law makes independently actionable."' [Citation.] `Virtually any law—federal, state or local—can serve as a predicate for a [UCL] action.' [Citation.] When a statutory claim fails, a derivative UCL claim also fails. [Citation.]" (Aleksick, supra, 205 Cal.App.4th at p. 1185.)
As the predicate for his claim of unlawfulness under the UCL, Burger cites section 19881, subdivision (a), which prohibits the sale of an "unvented [non-electric] heater that is designed to be used inside any dwelling house or unit, with the exception of . . . decorative gas logs for use in a vented fireplace." Burger argues the non-electric heater he purchased from LHC was unvented and designed to be used inside, violating the express terms of section 19881.
The trial court determined Burger did not state a claim for UCL because the portable heater did not fit the definition of section 19881. It agreed with LHC's argument resolution of the summary judgment motion depended on its statutory interpretation of the term "unvented" and the phrase "designed to be used." Because section 19881 does not define any of its operative terms and there is currently no legal authority on this issue, the trial court correctly applied the basic rules of statutory interpretation. Reviewing the matter de novo, and applying the same legal principles, we reach the same conclusion as the trial court. As will be explained below, section 19881 does not apply to the type of portable heater at issue in this case.
"Since we are called upon to interpret section [19881], as a threshold matter we set out the basic rules relating to interpretation of statutes. As emphasized time and again, the fundamental principle of statutory interpretation is to ascertain the intent of the Legislature so as to effectuate the purpose of the law [citations]. In determining the legislative intent, the court turns first to the words used in the statute [citation]. The words, however, must be read in context, keeping in mind the nature and obvious purpose of the statute where they appear [citations], and the statutory language applied must be given such interpretation as will promote rather than defeat the objective of the law [citations]. Finally, in ascertaining the legislative intent, the courts should consider not only the words used, but should also take into account other matters as well, such as the object in view, the evils to be remedied, the legislative history, public policy, and contemporaneous administrative construction [citations]." (Pennisi v. Department of Fish & Game (1979) 97 Cal.App.3d 268, 272-273.)
"California courts `have established a process of statutory interpretation to determine legislative intent that may involve up to three steps.' [Citation.] The `key to statutory interpretation is applying the rules of statutory construction in their proper sequence . . . as follows: "we first look to the plain meaning of the statutory language, then to its legislative history and finally to the reasonableness of a proposed construction."' [Citations.] [¶] `The first step in the interpretive process looks to the words of the statute themselves.' ([Citations] [`[w]e look first to the words of the statute, "because the statutory language is generally the most reliable indicator of legislative intent"'].) `If the interpretive question is not resolved in the first step, we proceed to the second step of the inquiry. [Citation.] In this step, courts may "turn to secondary rules of interpretation, such as maxims of construction, `which serve as aids in the sense that they express familiar insights about conventional language usage.'" [Citation.] We may also look to the legislative history. [Citation.] "Both the legislative history of the statute and the wider historical circumstances of its enactment may be considered in ascertaining the legislative intent." [Citation.] [¶] "If ambiguity remains after resort to secondary rules of construction and to the statute's legislative history, then we must cautiously take the third and final step in the interpretive process. [Citation.] In this phase of the process, we apply `reason, practicality, and common sense to the language at hand.' [Citation.] Where an uncertainty exists, we must consider the consequences that will flow from a particular interpretation. [Citation.] Thus, `[i]n determining what the Legislature intended we are bound to consider not only the words used, but also other matters, "such as context, the object in view, the evils to be remedied, the history of the times and of legislation upon the same subject, public policy and contemporaneous construction." [Citation.]' [Citation.] These `other matters' can serve as important guides, because our search for the statute's meaning is not merely an abstract exercise in semantics. To the contrary, courts seek to ascertain the intent of the Legislature for a reason—`to effectuate the purpose of the law.'"' [Citations.] [¶] We do not necessarily engage in all three steps of the analysis. `It is only when the meaning of the words is not clear that courts are required to take a second step and refer to the legislative history.' [Citations.]" (Mt. Hawley Ins. Co. v. Lopez (2013) 215 Cal.App.4th 1385, 1396-1397.)
We recognize the parties discuss one other statutory interpretation concept. They dispute whether the court should have utilized the "rule of lenity" when interpreting section 19881. This rule is necessarily one of last resort that comes into play only if we cannot ascertain a legislative intent. (Cf. People v. DeGuzman (2003) 113 Cal.App.4th 538, 546 [rule of lenity applies only where there is egregious ambiguity and uncertainty such that the court can do no more than guess what the Legislature intended].) As we will now explain, we do not find the statute so grievously ambiguous or uncertain as to require application of the rule of lenity, which simply requires that statutes give "fair warning" in understandable language. We need not guess as to what the Legislature intended when it enacted section 19881, 46 years ago. As we will explain below, the statute was plainly written to selectively ban only non-electric unvented heaters designed for indoor residential use. The Legislature did not intend to ban the sale of all non-electric heaters, and certainly not those designed for outdoor/indoor non-residential uses, i.e., in commercial or recreational settings. And as aptly described by the trial court, application of the rule of lenity does not compel a different result in this case.
The statute does not prohibit the sale of all gas heaters, only "unvented [non-electric] heater[s] . . . designed to be used inside any dwelling house or unit. . . ." (§ 19881, subd. (a).) The parties heartily disagree whether the portable propane heater at issue in this case is "unvented" as described in the statute. However, we need not decide the legislative intent regarding this term standing alone because it is modified and further defined by the phrase "designed to be used inside any dwelling house or unit." (§ 19881, subd. (a).) "Fundamental rules of statutory interpretation require that a statute be read as a whole, and that the parts of a statute be read together and harmonized, when possible, in order to give effect to the intent of the Legislature." (County of Orange v. Flournoy (1974) 42 Cal.App.3d 908, 914.) When the statute is read together the limited scope of the statutory ban becomes clear.
The phrase "designed to be used inside any dwelling house or unit" (§ 19881, subd. (a)), can be interpreted as having two distinct conditions. The trial court concluded the common meaning of the word "designed" was clear, stating, "The only intent that is relevant to this statute is the intent of the designer/creator/manufacturer of this device. In this case, all three functions were performed by the same [entities]." We agree. Courts have construed the phrase "designed to be used" as referring to the manufacturer's state of mind. (Village of Hoffman Estates v. Flipside, Hoffman Estates, Inc. (1982) 455 U.S. 489, 501 ["A principal meaning of `design' is `[t]o fashion according to a plan.' Webster's New International Dictionary of the English Language 707 (2d ed. 1957)"].) "The phrase `designed for' is commonly employed to designate the purpose for which an item of personal property is constructed." (Farmers Ins. Exchange v. Schepler (1981) 115 Cal.App.3d 200, 206.)
The second limiting condition of the statutory ban was created by including the phrase "inside a dwelling house or unit." The parties and trial court agreed this phrase referred to what is commonly understood to be residences. This interpretation is supported by the legislative history, discussed in more detail anon, that distinguished between heaters being used in places where people slept from heaters used in commercial and recreational settings. The local government agency that originally recommended enacting a statutory ban in 1970, noted that while there was evidence people were killed by unvented heaters in their homes, unvented heaters "have a justifiable use in commercial buildings where people don't reside." (County of Kings Department of Public Health, Director of Environmental Sanitation, A.R. Maniscalco, letter to Assemblyman Gordon Duffy, Mar. 11, 1970.)
In summary, the plain meaning of the statutory language when read together is unambiguous. The statute was not intended to ban all unvented heaters. The Legislature included two plainly worded conditions limiting the scope of the ban to only those heaters (1) designed by the manufacturer for (2) indoor residential use.
The legislative history sheds additional light on the purpose and scope of section 19881. The original draft of the legislation phased out the sale of unvented heaters "designed to be used in a dwelling house" by January 1972. (Gordon Duffy, Chairman Committee on Health and Welfare, letter to Governor Ronald Reagan, Sept. 15, 1970.) Gordon Duffy, who drafted the bill, reported Assembly Bill No. 2394 was unanimously passed by both houses and required specified warning labels placed "on the outside visible surface" of those existing heaters sold before January 1, 1972, after which the sale of these heaters would be completely banned. The warning "caution[ed] users that the heater is not vented and must not be used where people sleep or reside because of the deadly carbon monoxide which is produced. Exceptions are made for electric heaters or decorative gas logs in a vented fireplace and the bill does not affect heaters used in commercial buildings." (Ibid; see also Enrolled Bill Report by Professional and Vocational Standards Memorandum Services, Analysis of Assembly Bill No. 2394, September 15, 1970.)
After carefully reviewing the legislative documents relating to the original legislation, we conclude they make clear two key points. First, they reveal the catalyst for enacting the legislation and the statute's overall public safety goal. Specifically, section 19881 was enacted to protect citizens from being asphyxiated from toxic fumes as they slept in their homes near gas-fueled heaters. Second, the bill's proponents and the Legislators recognized some unvented heaters should remain legal and had justifiable uses, and therefore, the scope of the statute was limited to cover only certain kinds of unvented room heaters. For example, there was no need to ban the sale of gas heaters used inside commercial buildings or installed in places where people do not sleep or reside. In addition, the Legislature determined there was no need to ban the sale of electric heaters or "decorative gas logs in a vented fireplace" because of course those devices do not expel deadly fumes into a person's room.
The parties devote a great deal of their briefing on appeal to a lengthy discussion of the legislative history relating to several attempts to amend section 19881 to permit installation of decorative gas logs and fireplaces equipped with oxygen depletion sensors (ODS).
Eventually the Legislature amended section 19881 with the passage of Senate Bill No. 798 in 1996 and added one specific exception to the 20-year ban on unvented room heaters. The amendment permitted the sale of unvented decorative logs and fireplaces, fueled by natural gas, under the following limited circumstances: (1) Their use is approved by the California Department of Housing and Community Development (HCD) and the California State Department of Health Services (DHS); (2) they meet the standards considered and developed by HCD and DHS for their use; (3) the California Building Standards Commission adopted the standards developed in accordance with the HCD and DHS and pursuant to section 18930; (4) "Natural-gas-fueled unvented decorative gas logs and fireplaces are listed by an agency approved by the [HCD]"; and (5) they are installed in accordance with the California Building Standards Code. (§ 19881, subds. (b)-(c).)
We conclude the legislative history surrounding the efforts to carve out this new exception to section 19881 has limited relevance. The numerous legislative committee reports and analysis, letters, and counsel reports all concerned a specific kind of heating appliance that is not at all comparable to the portable propane heater at issue in this case. Decorative fireplaces and logs are typically installed inside a residence. There was no debate in the legislative history over whether an unvented fireplace designed to be installed inside a residence would be banned by the statute. This is because section 19881 specifically and unequivocally prohibited the sale of decorative fireplaces/gas logs unless they were installed in a residence's vented fireplace. (§ 19881, subd. (a).) The amendment carved out a limited and highly regulated exception for installed decorative fireplaces/logs containing ODS safety devices. The only relevance of these legislative history documents to the case at hand is that they further highlight the primary purpose of the statutory ban was to protect people from dying from asphyxiation as they slept in their homes. We found nothing in the legislative history suggesting this goal changed or was expanded to require a statutory ban of all unvented heaters.
LHC presented ample evidence the inventor/manufacturer designed the heater to solve the problems created by heating devices being used in recreational and commercial activities, such as people in camping enclosures, recreational vehicles, and commercial buildings. There was absolutely no evidence presented to support Burger's allegation the heater was originally designed to be used inside a residence.
In its summary judgment motion, LHC discussed the manufacturer's intent in designing the heater, asserting it was invented "to prevent carbon monoxide (CO) poisoning resulting from the use of portable propane-fueled heaters in enclosed recreational and commercial spaces." This assertion is supported by the declaration of Vandrak, who worked for the manufacturer. Vandrak was initially hired to be the manufacturer's director of engineering, and he was promoted to vice president of engineering. Vandrak stated he was "responsible for all engineering management functions at a senior level, which include[d] responsibility for safety and compliance for all of our products. . . . [He] also assist[ed] both [the] corporate and legal departments as the person most knowledgeable in many technical areas."
Vandrak stated that since 1999 he had also served on the Camping Heater Subcommittee of the ANSI (a nonprofit organization designed to oversee the development of standards for products). He explained these standards "help ensure that the characteristics and performance of heating products are consistent, that people use the same definitions and terms, and that products are tested the same way." In this capacity, Vandrak had worked with representatives of the United States Consumer Product Safety Commission (CPSC), created by congress to protect the public against unreasonable risks of injuries caused by consumer products.
In his declaration, Vandrak explained the manufacturer, based in Ohio, had produced gas-fired heating products since 1984. The company also manufactured a "vent-free" heater designed for permanent installation in a residence. That device would be permanently connected to a home gas line and did not pose any safety concerns because it used an oxygen depletion sensor (ODS). The ODS technology measured the level of available oxygen in the atmosphere surrounding the heater and would shut the heater off before the oxygen fell to a level that would correspond to an unsafe level of carbon monoxide. Vandrak stated that although the vent-free heater was safe, the manufacturer did not sell it in California due to section 19881. The heater was being sold in other states.
Vandrak stated that due to his work on the ANSI subcommittee, he was aware there had been a growing concern about carbon monoxide death caused by portable camping heaters. He explained that although camping heaters are designed for outdoor use in open areas, consumers were using the heaters in small enclosed areas such as tents or trailers. Because these spaces are often poorly ventilated, the camping heaters posed a carbon monoxide poisoning hazard. Vandrak attended a meeting of CPSC representatives and the ANSI Camping Heater Subcommittee to discuss the creation of appropriate emission performance levels for camping heaters in an attempt to mitigate the problem. ANSI created a voluntary standard for portable gas camp heaters (referred to as ANSI Z21.63) that limited the carbon monoxide concentration in a 100 cubic foot room to not exceed 100 parts per million (ppm). The standard specified oxygen concentration could not drop below 16 percent.
Vandrak stated that to address this specific problem, he supervised a team of "Mr. Heater" employees "who invented the first portable propane-fueled heater incorporating the same ODS technology used in unvented stationary heaters." He explained that because the technology shuts the heater off before the oxygen levels in the surrounding area drops to dangerous levels, the team invented "an indoor-safe product for use in recreational and commercial enclosures."
Vandrak added, "Although our primary intent in designing the heater was to provide a safe heater for use in those enclosed spaces where the use of camping heaters had concerned the CPSC, we recognized that the heater would also be valuable to consumers for emergency use in home during power failures and other emergencies. Mr. Heater holds patents for portable propane-powered heaters incorporating ODS technology." Vandrak stated the initial patent for the "ODS-equipped portable heater" reflected the company's intent to invent a heater that addressed "the dangers posed by the use of camping heaters in enclosed recreational areas that the CPSC had worked with the ANSI Camping Heater Subcommittee to mitigate." The patent application mentioned several different potential uses for the heater. Vandrak stated, "There is no mention in the patent application of any potential use of the invention inside of a home or residence." The manufacturer began marketing the heaters in 2000, and all models were designed to be portable, "and not designed or intended for installation in a building."
Vandrak stated several models of the heater were specifically packaged for LHC's stores. He stated the model Burger purchased "has an outlet in the upper portion of the heater's housing to allow gases resulting from combustion to exit the heater into the surrounding atmosphere." Vandrak explained that on the back of this heater, written in bold type face is the following warning, "`
In addition to this declaration regarding the intended design of the heater, LHC included evidence showing that in June 2002 the CPSC advised consumers who were "[o]utdoor [e]nthusiasts" to choose portable propane-fueled heaters equipped with ODS technology. The CPSC stated the heater's safety device can prevent CO poisoning deaths and "`are safer to use when camping.'"
In his appeal, Burger asserts Vandrak's declaration was insufficient to carry LHC's burden of negating the manufacturer's design intent as including homes. Burger points out that nowhere in the declaration does Vandrak state the heater was not designed for homes. Burger notes Vandrak stated the "primary intent" was to make a safer camping heater, but also the manufacturer recognized the heater would be valuable for emergency use in homes. Burger argues section 19881 does not limit the application to heaters "primarily" designed for dwelling houses. Burger adds that he produced substantial evidence the heater was designed for use in homes. First, the product's packaging stated the heater could be used for "emergency home heating use." Second, the package contained a photograph of a couple sitting indoors during an apparent power outage. And third, the rear panel of the product enclosure stated "this heater provides safe, reliable, heat anytime, anywhere."
We agree with the trial court's assessment that the product's packaging simply reflects the company's marketing and sale efforts. Marketing the heater as safe for temporary emergency use does not change the original intent of the designer to make a safe camping heater. Many products are designed for one purpose and are used (and misused) by consumers for other purposes. The ever-changing marketing ploys do not define the original design intent of the inventor/manufacturer.
As for Burger's contention Vandrak's declaration was insufficient, we conclude the assertion is based on a misrepresentation of the record. Burger asserts, "the manufacturer's person most qualified corporate designee testified that `one of the uses of the [heater] was for use during a power outage at a home.'" The record reference supplied to support this "fact" shows the quote has been taken out of context. Our record reference relates to Dennis O'Toole's deposition. The record does not contain the page containing the question being asked O'Toole. His response was as follows: "I don't believe that we ever used the words `in residences,' but it was for emergency heat situations in power outages generally. I don't believe we ever said `in residences,' but as I said, we did promote it as being suitable for use in power outages." O'Toole next agreed with counsel that a power outage can take place in a home. When asked if the picture on the box showed the heater being used in a home, O'Toole replied he did not know where the photograph was taken but it simply represented "an indoor situation."
Read in it its entirety, and without the benefit of knowing the original question, it appears O'Toole was discussing the marketing and promotion of the heater. We make this inference because he describes words used to "promote" the heater, not words used by original creators and inventors in designing the heater. Moreover, the question and answer concerning where power outages can take place were likely in reference to the heater's packaging, which shows a photograph of the heater being used in a room during an apparent power outage. Indeed, O'Toole noted he did not know where the marketing photograph was taken. He was not discussing the manufacturer's intent when originally designing the heater.
We disagree with Burger's contention this evidence somehow diminishes or refutes Vandrak's declaration that he and his team designed a heater to solve a specific safety problem for recreational consumers. O'Toole's statements do not contradict Vandrak's declaration he helped design a heater to be used in enclosed recreational areas, such as tents, duck blinds, and workshops. As discussed above, it is legal to sell a portable heater for recreational indoor and outdoor use.
Berger also asserts that "LHC's defense counsel" made statements and "admitted in the proceedings below that the heater was sold in 48 states for use in homes." (Capitalization omitted.) Defense counsel's statements are not evidence. Moreover, California is one of the few states with legislation banning the sale of unvented room heaters. The manufacturer can legally sell unvented heaters in other states. As stated earlier, post-production sales, like marketing decisions, have no bearing on the original intent of the inventor/manufacturer. We conclude this evidence does not serve to refute the declaration of one of the inventors, who unequivocally stated the specific reasons why the heater was invented, designed, and manufactured.
In summary, when section 19881 is analyzed to determine legislative intent, the plain language and legislative history convince us that in 1970 the Legislature did not intend to ban the sale of heaters designed to be used for recreational activities. Our analysis of the relevant documents confirms the Legislature's goal was to protect the public from the deadly danger of installing unvented gas-fueled heating appliances in rooms where people sleep and reside. LHC presented ample evidence the heater was designed for a different purpose, i.e., keeping recreational users and campers safe and warm. The burden shifted to Burger, who was unable to show the existence of a triable issue of act. We conclude the trial court properly granted LHC's summary judgment motion.
"On review of an order sustaining a demurrer without leave to amend, our standard of review is de novo, `i.e., we exercise our independent judgment about whether the complaint states a cause of action as a matter of law.' [Citation.]" (Santa Teresa Citizen Action Group v. State Energy Resources Conservation & Development Com. (2003) 105 Cal.App.4th 1441, 1445.)
The causes of action for false advertising and CLRA seek to hold LHC liable for misstatements contained on the heater's packaging. On appeal, Burger focuses on the legal principle that it is an abuse of discretion to sustain a demurrer without leave to amend if plaintiff shows there is a reasonable probability the identified defect can be cured by amendment. (Citing Aubry v. Tri-City Hosp. Dist. (1992) 2 Cal.4th 962, 967.) Burger notes the court sustained the "very first demurrer" brought by LHC to attack these causes of action, suggesting the defect could have been cured by amendment.
We recognize, "It is an abuse of discretion to sustain demurrers without leave to amend if there is a reasonable possibility that the plaintiff can amend the complaint to cure its defects. [Citations.] To meet the plaintiff's burden of showing abuse of discretion, the plaintiff must show how the complaint can be amended to state a cause of action. [Citation.] However, such a showing need not be made in the trial court so long as it is made to the reviewing court. [Citations.]" (Careau & Co. v. Security Pacific Business Credit, Inc. (1990) 222 Cal.App.3d 1371, 1386.)
In this case, Burger initially made the same showing on appeal as he made below. However, at oral argument, Burger's counsel made an offer of proof that she could allege facts establishing LHC had control over the misrepresentations made on the heater's packaging beyond the color scheme and name of the heater. She indicated Burger could allege new facts establishing LHC's authority to control the packaging's marketing statements regarding the heater's uses inside a residence.
Based on counsel's statements at oral argument that new facts could be alleged, we reverse the trial court's order sustaining the demurrer without leave to amend. In doing so, we remind Burger that conclusory allegations will not withstand demurrer. Burger must support legal allegations with facts. (See e.g., Freeman v. San Diego Association of Realtors (1999) 77 Cal.App.4th 171, 184 [plaintiffs "complaint, read in the context of the facts of which we may take judicial notice, and shorn of its conclusory allegations, did not adequately allege" a viable claim].)
The judgment is reversed in apart and affirmed in part. Specifically, the summary judgment ruling on the UCL claim is affirmed, but the ruling sustaining the demurrer without leave to amend is reversed. On remand, the trial court is directed to enter an order sustaining the demurrer with leave to amend. Burger will have the opportunity to amend his complaint regarding only the false advertising and CLRA causes of action. Respondent's request for judicial notice of the Uniform and California Mechanical Code and the dictionary (exhibits A-D) is granted, but we deny the request to take judicial notice of two unpublished federal cases (exhibits E and F). (Evid. Code, §§ 452 & 459.) In the interests of justice, neither party shall recover costs on appeal.
IKOLA, J., Concur.
RYLAARSDAM, J., Concurring.
I concur in the opinion's analysis and the result and reached on the UCL claim and with the result on the false, concurs. advertising and CLRA claim.
We are dealing with a fairly simple and straightforward statute and, using the plain meaning rule of statutory interpretation, plaintiff's complaint adequately alleges defendant's violation of the statute by falsely advertising a prohibited use of the device. Thus, I conclude plaintiff adequately alleged facts supporting its causes of action based on false advertising.
Health and Safety Code section 19881 provides (with two non-applicable exceptions) "[n]o person shall sell, or offer for sale, any . . . unvented heater that is designed to be used inside any dwelling house or unit." This provision would not make sense unless we interpret "unvented" as referring to a failure to provide that gasses produced by the devices are allowed to escape to the outside of the "dwelling house or unit." The parties acknowledged this fact during oral argument.
The issue much debated is whether the heaters sold by defendant were "designed" for use in a dwelling. This strikes me as a red herring. Let us concede they may not have been designed for this purpose. But defendant sold the heaters in boxes carrying a picture of the heaters being used inside a house in the presence of people. Such a use is prohibited by section 19881. These pictures are a form of advertising. And, if defendant placed the boxes with the misleading pictures on its shelf, it engaged in advertising. If plaintiff's allegations are proven, this would be false advertising under Business and Professions Code section 17500 and the CRLA.
I agree the judgment should be reversed as the allegations pertaining to false advertising and remand the case to permit the trial court to conduct a trial on this issue.
