SUPERIOR COURT OF THE STATE OF CALIFORNIA CITY AND COUNTY OF SAN FRANCISCO

Transcription

1 0 HOJOON HWANG (SBN 0) MUNGER, TOLLES & OLSON LLP 0 Mission Street Twenty-Seventh Floor San, Francisco, CA 0-0 Telephone: () -000 HENRY WEISSMANN (SBN ) Henry.Weissmann@mto.com ZACHARY BRIERS (SBN ) Zachary.Briers@mto.com MUNGER, TOLLES & OLSON LLP South Grand Avenue Thirty-Fifth Floor Los Angeles, CA 00-0 Telephone: () -00 Attorneys for Defendant VERIZON CALIFORNIA, INC. SUPERIOR COURT OF THE STATE OF CALIFORNIA CITY AND COUNTY OF SAN FRANCISCO 0 DEANNA GASTELUM and HEATHER BRYDEN, individually and on behalf of all other persons similarly situated, vs. Plaintiff, VERIZON CALIFORNIA, INC. and DOES through 00, Defendants. VERIZON CALIFORNIA INC., vs. Cross-Complainant, DEANNA GASTELUM and HEATHER BRYDEN, individually and on behalf of all other persons similarly situated, Cross-Defendant. CASE NO. CGC-- CLASS ACTION SECOND AMENDED CROSS- COMPLAINT OF VERIZON CALIFORNIA INC. Third Complaint Filed: March, 0 Dept. 0 Judge: Hon. Curtis Karnow AMENDED CROSS-COMPLAINT OF VERIZON CALIFORNIA, INC.; CASE NO. CGC--

2 0 0 Cross-Complainant Verizon California, Inc. ( Verizon ), by and through its undersigned attorneys, hereby cross-complains against cross-defendant Deanna Gastelum and Heather Bryden ( Cross-Defendants ). This second amended cross-complaint is amended to conform to changes in Cross-Defendants Third Amended Complaint. Verizon makes the following allegations based upon information and belief. NATURE OF THE ACTION. Cross-Defendants allege that they entered into an agreement with Verizon for the provision of residential landline telephone service ( the Agreement ). To the extent this is true, Cross-Defendants agreed to pay Verizon for provision of such services on a monthly basis. Cross-Defendants further agreed that if they chose to not pay their bills according to the monthly schedule established by Verizon, they would pay an additional fee of $.0 or.% for outstanding balances of more than $0.00 ( the Late Payment Charge or the LPC ).. Cross-Defendants allege that they paid one or multiple LPCs. To the extent Cross- Defendants did pay an LPC, they did so as a result of the exercise of an option to make payment after the time for payment was due.. Cross-Defendants have filed suit against Verizon, on behalf of themselves and a putative class of California consumers, in the Superior Court for the State of California, County of San Francisco, alleging Verizon violated Cal. Civ. Code (d): Cal. Civ. Code 0, et seq.; Cal. Bus. and Prof. Code 00, et seq.; and Cal. Pub. Util. Code 0. They also assert claims for unjust enrichment/common law restitution and a common count for money had and received. Cross-Defendants claims are based on the LPCs they allege that they paid to Verizon.. According to Cross-Defendants, the Verizon LPC provision is unenforceable because it is a liquidated damages provision that violates California Law. Cross-Defendants seek, among other things, to have the Court declare that the Verizon LPC is void and to order Verizon to return any LPCs it collected from Cross-Defendants.. Contemporaneous with this cross-complaint, Verizon is filing an Answer in which Verizon denies that the LPC is an unlawful liquidated damages provision. Verizon thus contends that the LPC is valid and enforceable. -- AMENDED CROSS-COMPLAINT OF VERIZON CALIFORNIA, INC.; CASE NO. CGC--

3 0 0. In the event, and only in the event, that the Court disagrees with Verizon and determines that: (i) Cross-Defendants in fact breached the Agreement by making late payment; and (ii) that the LPC clause is a liquidated damages provision that violates California law, then Verizon brings this Cross-Complaint against Cross-Defendants to recover the actual damages sustained by Verizon as a result of Cross-Defendants breach of the Agreement.. Cross-Defendants seeks to certify their claims as a class action. At the present time, Cross-Defendants claims have not been certified for class resolution. However, in the event, and only in the event, that the Court certifies Cross-Defendants claims for class resolution, then Verizon brings this Cross-Complaint against the class to recover the actual damages sustained by Verizon as a result of the class s breach of the Agreement. PARTIES. Cross-Complainant Verizon California Inc., is a California corporation with its primary place of business in Newbury Park, CA. Verizon is in the business of providing residential and business landline telephone service to individuals, families and businesses in California.. On information and belief, Cross-Defendants Deanna Gastelum and J. Thomas Hannan are residents of the State of California. OPERATIVE FACTS 0. Verizon and Cross-Defendants entered in a Customer Agreement. Pursuant to the Customer Agreement, Verizon agreed to provide residential landline services to Cross- Defendants in exchange for monthly payments to be made by Cross-Defendants. Under the Customer Agreement, Cross-Defendants agreed to make monthly payments to Verizon in accordance with a monthly billing schedule set by Verizon.. On information and belief, on at least one occasion, Cross-Defendants did not submit timely payment in accordance with the Agreement.. To the extent Cross-Defendants paid an LPC to Verizon, they did so as a result of their submitting late payment in accordance with the Agreement. -- AMENDED CROSS-COMPLAINT OF VERIZON CALIFORNIA, INC.; CASE NO. CGC--

4 0 0. It is the position of Verizon that any LPC payment remitted by Cross-Defendants was collected in accordance with California law. However, in the event the Court determines that the LPC provision in the Agreement to which Cross-Defendants claim to be parties is void and unenforceable, and that Cross-Defendants breached the Agreement by submitting late payment, then Cross-Defendants owe Verizon compensation for the damages caused by their breach of the Agreement.. As of the date of the filing of this Cross-Complaint, Cross-Defendants claims have not been certified as a class action. In the event, and only in the event, the Court certifies Cross-Defendants claims for class resolution, Verizon asserts the claims set forth herein against the members of the plaintiff class on an individual and a class-wide basis. FIRST ALTERNATIVE CAUSE OF ACTION (Breach of Contract). Verizon realleges and incorporates by reference the allegations contained in Paragraphs through of this Cross-Complaint as if fully set forth herein.. The Customer Agreement Cross-Defendants executed with Verizon was binding and enforceable.. In the event the Court determines that the LPC provision set forth in the Cross- Defendants Customer Agreement is an invalid liquidated damages clause, and that the Customer Agreement did not allow Cross-Defendants to pay the LPC as an alternative means of performance, then Cross-Defendants damaged Verizon by not making timely payment. Damages incurred by Verizon include, but are not limited to, the carrying cost of Cross-Defendants outstanding balance; and all costs associated with collection efforts to obtain the agreed-upon payment from Cross-Defendants.. Verizon performed all of its duties and obligations under Cross-Defendants Customer Agreement.. Verizon seeks its damages, including prejudgment interest and consequential damages. -- AMENDED CROSS-COMPLAINT OF VERIZON CALIFORNIA, INC.; CASE NO. CGC--

5 0 0 SECOND ALTERNATIVE CAUSE OF ACTION (Breach of Contract Against the Putative Class) 0. Verizon realleges and incorporates by reference the allegations contained in Paragraphs through of this Cross-Complaint as if fully set forth herein.. As of the date of the filing of this Cross-Complaint, Cross-Defendants claims have not been certified as a class action. In the event, and only in the event, the Court certifies Cross-Defendants claims for class resolution, Verizon asserts this second alternative cause of action against the members of the plaintiff class on an individual and a class-wide basis.. The Customer Agreement the class members executed with Verizon was binding and enforceable.. In the event the Court determines that the LPC provision set forth in the Customer Agreement is an invalid liquidated damages clause, and that the Customer Agreement did not allow class members to pay the LPC as an alternative means of performance, then the class members damaged Verizon by not making timely payment. Damages incurred by Verizon include, but are not limited to, the carrying cost of the class members outstanding balances; and all costs associated with collection efforts to obtain the agreed-upon payment from the class members.. Verizon performed all of its duties and obligations to class members under the Customer Agreement.. Verizon seeks its damages, including prejudgment interest and consequential damages. THIRD ALTERNATIVE CAUSE OF ACTION (Unjust Enrichment). Verizon realleges and incorporates by reference the allegations contained in Paragraphs through of this Cross-Complaint as if fully set forth herein. -- AMENDED CROSS-COMPLAINT OF VERIZON CALIFORNIA, INC.; CASE NO. CGC--

6 0 0. It is the position of Verizon that the Customer Agreement to which Cross- Defendants assert they were parties is valid and enforceable. In the event the Court finds that any portion of Cross-Defendants Customer Agreement was void, then Cross-Defendants are liable to Verizon for the benefits they received under the contract.. Cross-Defendants received certain benefits as consideration for which Cross- Defendants agreed to remit timely payment in accordance with the schedule established by the Customer Agreement.. Cross-Defendants failed to remit timely payment in accordance with the schedule established by the Customer Agreement. 0. If Cross-Defendants are relieved of the obligation to pay the LPC, they should not in justice be permitted to retain the benefits they received from Verizon.. Accordingly, if Cross-Defendants are relieved of the obligation to pay the LPC, they will be unjustly enriched and the amount of the benefits they received should be restored to Verizon as restitution. FOURTH ALTERNATIVE CAUSE OF ACTION (Unjust Enrichment Against the Putative Class). Verizon realleges and incorporates by reference the allegations contained in Paragraphs through of this Cross-Complaint as if fully set forth herein.. As of the date of the filing of this Cross-Complaint, Cross-Defendants claims have not been certified as a class action. In the event, and only in the event, the Court certifies Cross-Defendants claims for class resolution, Verizon asserts this fourth alternative cause of action against the members of the plaintiff class on an individual and a class-wide basis.. It is the position of Verizon that the Customer Agreement to which the putative class asserts it was a party was valid and enforceable. In the event the Court finds that any portion of the Customer Agreement was void, then the putative class is liable to Verizon for the benefits it received under the contract. -- AMENDED CROSS-COMPLAINT OF VERIZON CALIFORNIA, INC.; CASE NO. CGC--

7 0 0. The putative class received certain benefits as consideration for which the class agreed to remit timely payment in accordance with the schedule established by the Customer Agreement.. The putative class failed to remit timely payment in accordance with the schedule established by the Customer Agreement.. If the putative class is relieved of the obligation to pay the LPC, it should not in justice be permitted to retain the benefits it received from Verizon.. Accordingly, if the putative class is relieved of the obligation to pay the LPC, it will be unjustly enriched and the amount of the benefits it received should be restored to Verizon as restitution. PRAYER WHEREFORE, Cross-Complainant prays for judgment as follows:. For an award of damages against Cross-Defendants, including incidental and consequential damages, in a specific amount to be proven at trial;. For an award of interest on the above;. If Cross-Defendants claims are certified for class resolution, for an award of damages against the class, including incidental and consequential damages, in a specific amount to be proven at trial;. For an award of interest on the above;. For an award of Cross-Complainant s attorneys fees and costs incurred herein;. If the Cross-Complainant s Customer Agreements are held void, for an award of restitution of benefits conferred by Verizon; and. For such other and further relief as the Court may deem proper. -- AMENDED CROSS-COMPLAINT OF VERIZON CALIFORNIA, INC.; CASE NO. CGC--

8 0 0 DATED: April, 0 Munger, Tolles & Olson LLP HOJOON HWANG By: /s/ Hojoon Hwang HOJOON HWANG Attorneys for Defendant VERIZON CALIFORNIA, INC. AND DOES THROUGH 00, -- AMENDED CROSS-COMPLAINT OF VERIZON CALIFORNIA, INC.; CASE NO. CGC--