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General Principles

General Principles

General Principles-Wholly derivative action subject to demurrer sam as primary action-Ball v. Fleetboston
 

“36.  A controversy has arisen and now exists between Plaintiff and Plaintiff class members on the one hand, and Defendant Bank of America Corporation on the other hand, concerning their respective rights and duties in that Plaintiff and Plaintiff class members contend that the Defendant’s standard form pre‑printed credit card agreement contains provisions which are illegal, unconscionable and/or violate strong California public policy, whereas Defendant disputes these contentions and contends that none of the provisions of its standard form pre‑printed credit card agreement are illegal, unconscionable and/or violate strong California public policy.

“37.  Plaintiff desires a judicial determination of her rights and duties, and the rights and duties of the absent class members, and a declaration as to whether or not the arbitration provisions of the Defendant’s standard form pre‑printed credit card agreement are invalid because of illegality, unconscionability, and/or violation of strong California public policy.”

Thus, paragraph 36 of the proposed second amended complaint alleges that the contract provision for arbitration was illegal, unconscionable, and violated public policy, based on the allegations set forth in paragraphs 1 through 34 – all of which relate to the alleged violation of the CLRA.

The statute permitting independent claims for declaratory relief provides, in relevant part:  “Any person interested under a written instrument . . . or under a contract, or who desires a declaration of his or her rights or duties with respect to another . . . may, in cases of actual controversy relating to the legal rights and duties of the respective parties, bring an original action or cross-complaint in the superior court for a declaration of his or her rights and duties in the premises, including a determination of any question of construction or validity arising under the instrument or contract.  He or she may ask for a declaration of rights or duties, either alone or with other relief; and the court may make a binding declaration of these rights or duties, whether or not further relief is or could be claimed at the time. . . . The declaration may be had before there has been any breach of the obligation in respect to which said declaration is sought.”  (Code Civ. Proc., § 1060, italics added.)

Because Code of Civil Procedure section 1060 permits an original action, and authorizes a claim for declaratory relief to be filed “alone,” Ball is correct in arguing she could pursue a claim for declaratory relief in the absence of another cause of action or other requested relief.  Ball is also correct in noting that the language of her proposed cause of action for declaratory relief establishes she is an interested person under a contract and seeks a declaration of her rights and duties under that contract. 

Fatal to Ball’s claim for declaratory relief is our conclusion, ante, regarding Ball’s CLRA claim.  Where a trial court has concluded the plaintiff did not state sufficient facts to support a statutory claim and therefore sustained a demurrer as to that claim, a demurrer is also properly sustained as to a claim for declaratory relief which is “wholly derivative” of the statutory claim.  (Ochs v. PacifiCare of California (2004) 115 Cal.App.4th 782, 794.)  As can be seen from the language of the proposed declaratory relief cause of action, quoted ante, it is wholly derivative of the proposed cause of action for violation of the CLRA.  The only declaration sought by the cause of action is a judicial declaration that the arbitration provisions of the credit card agreement are illegal and unconscionable, and violate public policy.  The CLRA cause of action requests that the enforcement of the arbitration provisions of the credit card agreement be enjoined, because they are unlawful and/or unconscionable. 

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