JULIAN HAMMOND (SBN 268489) jhammond@hammondlawpc.com POLINA PECHERSKAYA (SBN 269086) ppecherskaya@hammondlawpc.com ARI CHERNIAK (SBN 290071) acherniak@hammondlaw.com HAMMONDLAW, RC. 1829 Reisterstown Rd., Suite 410 Baltimore, MD 21208 (310) 601?6766 (310) 295-2385 (Fax) Attorneys for Plaintz?and the Putative Class UQNPUHMEU GOPY omemae imam .. . {superior Court. of California of for: JUL 1.2 201? 353%? CWBL unmet/mart- ?e?e?e Heatwave, Bevan: SUPERIOR COURT FOR THE STATE OF CALIFORNIA COUNTY OF LOS ANGELES MARCEL GOLDMAN, individually and on behalf of all others similarly situated, Plaintiff, vs. THE CHEESECAKE FACTORY INCORPORATED, a Delaware Corporation, Defendant. CASE NO. COMPLAINT FOR: (1) (2) (3) (4) (5) (6) (7) Breach of the Covenant of Good Faith and Fair Dealing; a Reformation Based on Unilateral Mistake (Cal. Civ. Code 3399); Willful Failure to Correct Billing Error (Cal. Civ. Code 1747.60); Negligent Misrepresentation (in the alternative); Mistaken Receipt; Money Had and Received; and Unfair, Unlawful, 0r Fraudulent Business Practices (Cal. Bus. Prof. Code 17200 et seq) DEMAND FOR JURY TRIAL By Fax CLASS ACTION COMPLAINT 1 2 Plaintiff Marcel Goldman (“Plaintiff”), on behalf of herself and all others similarly situated, complains and alleges the following: INTRODUCTION 3 4 5 6 1. This is a class action against The Cheesecake Factory Incorporated (“Defendant” or “The Cheesecake Factory”), brought on behalf of Plaintiff and its other customers who were essentially duped by Defendant into paying double gratuity, and sometimes even more than double. 2. Upon information and belief, beginning at least four years prior to the filing of this 7 Complaint, when a party of two or more purchases food and/or drink at The Cheesecake Factory or 8 other restaurants owned by Defendant and uses two or more credit or debit cards to pay for the charges, 9 the combined bill is divided between the credit/debit cards and Defendant presents each diner/consumer 10 11 12 with a separate sales draft for a portion of the bill (a “split bill”). On each of the sales drafts, Defendant includes suggested gratuity amounts to facilitate customers in calculating and leaving a gratuity for service. Defendant represents the suggested gratuity to be 15%, 18%, 20% or 22% of the check amount reflected on the sales draft, but, in reality, it calculates the suggested gratuity on the combined bill and 13 the suggested gratuity amounts are actually 30%, 36%, 40%, or 44% of the amounts shown on the 14 separate sales drafts. 15 16 17 18 3. Fully expecting Defendant to deal fairly and honestly with its customers and/or to perform accurate mathematical calculations, Plaintiff and Class Members relied on the accuracy of the preprinted suggested gratuity amounts on their sales drafts and paid one of those suggested amounts, while intending only to pay half (or less than half) of those amounts. 4. Whether or not The Cheesecake Factory or its agents or employees who carried it out at 19 restaurant locations were aware of this unscrupulous practice at the time they presented separate sales 20 drafts to diners/customers including Class Members, Plaintiff alleges on information and belief that such 21 awareness is attributable to The Cheesecake Factory and its managers and agents because the practice 22 has been going on for at least the last four years and at over 200 restaurant locations operated under The 23 24 Cheesecake Factory mark and at 13 locations operated under the Grand Lux Café mark, and customers have complained of the practice on the internet. That is, even if the Defendant cannot be shown to have actually intended to perpetrate fraud on its customers in this manner during the entire Class Period, and 25 even in the unlikely event that Defendant did not receive complaints from some or numerous customers 26 about its deceptive practice, Defendant should be held accountable to have known about the practices 27 which resulted in the misrepresentations to and fraud against its customers. 28 29 30 CLASS ACTION COMPLAINT -1- 1 5. As a result of those practices, which are described in more detail below, Plaintiff brings 2 this class action, pursuant to California Code of Civil Procedure § 382, for damages, restitution, 3 reformation, reasonable attorneys’ fees and costs, and injunctive and/or other equitable relief pursuant to 4 5 California Civil Code § 1021.5, common counts, California Business & Professions Code §§ 17200 et seq., and California Civil Code § 3399, on behalf of herself and all other individuals whose combined bill at one of Defendant’s restaurants was divided by Defendant between two or more credit or debit 6 cards, who were presented by Defendant with a split bill and who paid a suggested gratuity amount by 7 credit or debit card, on which they accepted suggested amounts printed on the sales draft, during the last 8 four years prior to the filing of this Action (“Class Period”). Those persons are the “Class Members” 9 Plaintiff seeks to represent in this action. 10 11 12 6. Plaintiff also brings this class action for damages, treble damages, attorneys’ fees and costs, pursuant to California Civil Code § 1747.60, on behalf of herself and all members of the Class who paid one of the gratuity amounts suggested by Defendant on their split bills sales drafts by credit card (“Billing Error Subclass”). 13 PARTIES 14 15 16 17 18 7. Plaintiff Marcel Goldman is an individual residing in Los Angeles, California. During the Class Period, Plaintiff was subject to Defendant’s unfair, deceptive, and unlawful conduct described herein. 8. Defendant The Cheesecake Factory, Incorporated is a corporation organized and existing under the laws of the State of Delaware, with its headquarters located at 26901 Malibu Road, Calabasas Hills, California. Defendant owns and operates a restaurant chain of almost 200 locations throughout 19 the United States under The Cheesecake Factory mark, a restaurant chain of 13 locations throughout the 20 United States under Grand Lux Café mark, and one restaurant under Rock Sugar Pan Asian Kitchen 21 mark in California. JURISDICTION 22 23 24 25 26 27 9. This Court has jurisdiction over Plaintiff and Class Members’ claims for breach of the covenant of good faith and fair dealing, reformation based on unilateral mistake, alternative claim for negligent misrepresentation, mistaken receipt, and money had and received under Code of Civil Procedure § 410.10. 10. This Court has jurisdiction over Plaintiff and Subclass Members’ claims for damages, treble damages, and reasonable attorneys’ fees and costs pursuant to Civil Code § 1747.60. 28 29 30 CLASS ACTION COMPLAINT -2- 1 11. This Court has jurisdiction over the Plaintiff and Class Members’ claims for restitution 2 and injunctive relief arising from Defendant’s unfair, unlawful, and/or fraudulent business practices, 3 under Business & Professions Code §§ 17203 and 17204. 4 5 VENUE 12. Venue is proper in the County of Los Angeles pursuant to California Code of Civil Procedure §§ 395(a) and 395.5. The Cheesecake Factory, Incorporated is a Delaware corporation, 6 headquartered in Calabasas Hills, California, which is located in the Los Angeles County. Substantial 7 portions of the acts and transactions that constitute violations of law complained of herein occurred in 8 Los Angeles and Defendant conducts substantial business throughout Los Angeles County. The 9 particular billing practices that form the factual basis for Plaintiff’s claims were conceived, designed, 10 11 12 implemented and/or perpetuated throughout the United States at Defendant’s headquarters in Los Angeles County. FACTUAL BACKGROUND 13. Defendant offers onsite dining with waiter service, as well as take out. As of June 2017, 13 Defendant owned and operated 208 restaurants throughout the United States and Puerto Rico including 14 numerous locations in California operating, including 193 restaurants under The Cheesecake Factory 15 mark, 20 of which are located in California, 13 restaurants under the Grand Lux Café mark, which are 16 17 18 19 located outside California, and one restaurant under Rock Sugar Pan Asian Kitchen mark located in California. Those restaurants are located in approximately 41 states. 14. Defendant reported revenues of over $2.27 billion for fiscal year 2016. On information and belief, a vast majority of this revenue was charged to debit and credit cards. 15. As mentioned above, and as discussed in detail below, when customers use credit or 20 debit cards to settled their dining bill, Defendant provides them with sales drafts that contain suggested 21 gratuity amounts, and when Defendant divides the total bill between two or more credit/debit cards, the 22 sales drafts contain suggested gratuity amounts which do not accurately represent the total of each sales 23 24 25 26 draft. Plaintiff estimates that over 80% of restaurant charges are paid by credit or debit cards and that approximately 10% or more of those charges (which represents many thousands of consumers) are divided between two or more credit/debit cards and are affected by The Cheesecake Factory’s wrongful suggested gratuity practices. 16. During the Class Period, Defendant utilized, and, upon information and belief, continues 27 to utilize, a customizable point of sale software system called POSitouch to manage customer orders, 28 print dining bills, including split bills sales drafts, and to process credit card/debit cards. Through its use 29 30 CLASS ACTION COMPLAINT -3- 1 of POSitouch, Defendant has control over what information to provide customers on the bills and sales 2 drafts including, but not limited to, suggested gratuity percentages and amounts. 3 4 5 6 17. On information and belief, during the Class Period, Defendant has maintained a policy and/or practice to include on all its bills and credit/debit card sales drafts a line item referred to as “Suggested Gratuity” and/or “Suggested Gratuity Percentages” of “15%”, “18%”, “20%”, and “22%” (hereinafter “Suggested Gratuity Policy”). 18. The Suggested Gratuity Policy was adopted and implemented at Defendant’s 7 headquarters in Calabasas Hills. Defendant directed its IT department, also located at Defendant’s 8 headquarters in Calabasas Hills, to configure the form and content of the bills and sales drafts, including 9 suggested gratuity information, via the POSitouch system. 10 11 12 19. During the Class Period, Plaintiff and Class Members ordered food and/or drinks from one or more of Defendant’s restaurants. As part of the transactions between Defendant and its customers, Plaintiff and each Class Member entered into a contract with Defendant, whereby Plaintiff and each Class Member made offers to Defendant to purchase food, drink, and/or services by ordering 13 items at prices specified on menus and/or price lists and Defendant accepted their offers by having its 14 employees take the orders, prepare the food or drink items ordered, and serve them to Plaintiff and Class 15 Members. In consideration of Defendant providing Plaintiff and Class Members with food/drink items 16 17 18 19 and related service, Plaintiff and Class Members promised to pay Defendant for their orders at the prices listed on the menu or price list (hereinafter “first contract”). 20. At the end of each meal, Defendant provided Plaintiff and Class Members with a written statement and/or bill containing the TOTAL amount owed under the first contract (hereinafter “debt”). 21. During the Class Period, instead of performing the first contract, and paying off the debt 20 directly, Plaintiff and Class Members entered into a second contract with Defendant, whereby 21 Defendant, in order to attract more business, agreed to allow Plaintiff and Class Members to enjoy the 22 convenience of using their credit/debit cards in exchange for their promising to pay the credit card issuer 23 24 the TOTAL amount listed on the sales draft. In exchange for Plaintiff and Class Members making the promise to pay the TOTAL amount to the credit card issuers and allowing the credit card issuer to post a charge on their accounts, Defendant agreed to release Plaintiff and each Class Members from their 25 debt(s). By allowing the use of credit/debit cards, Defendant guaranteed that it would receive the 26 TOTAL amount, less service fees, from the credit/debit card issuers, who, for the service fees, took on 27 the risk of nonpayment by Plaintiff and Class Members and devoted resources to processing the 28 transaction. 29 30 CLASS ACTION COMPLAINT -4- 1 22. Plaintiff and Class Members then provided Defendant with their credit and/or debit 2 cards, authorizing charges against them, and Defendant processed the credit/debit cards through its point 3 of sale system, and generated a written statement containing the terms of the second contract 4 5 (hereinafter “sales draft”). 23. Defendant then presented Plaintiff and Class Members with the sales draft. The sales drafts provided to Plaintiff and Class Members contained the following information: 6 (i) “CHECK:” and the amount representing a portion of the combined bill; 7 (ii) Suggest Gratuity percentages of 15%, 18%, 20%, and 22%, and corresponding dollar amounts; 8 9 10 11 (iii) “TIP:” followed by a blank; (iv) “TOTAL:” followed by a blank line; (v) A signature line; and (vi) The following statement in all caps “Cardholder will pay card issuer above amount 12 pursuant to cardholder agreement . . .” 13 24. Defendant, in order to facilitate Plaintiff’s and Class Members’ decisions and actions in 14 determining and paying the TIP, caused the sales draft, through its point of sale system, to contain line 15 items with different suggested gratuity percentages (i.e., 15%, 18%, 20%, 22%) of the total CHECK 16 17 18 amount and dollar amounts purportedly corresponding to the suggested gratuity’s percentage of the CHECK amount (hereinafter “suggested gratuity representation”). 25. However, the suggested gratuity amounts did not accurately reflect the corresponding suggested gratuity percentages of the CHECK amounts. Instead, they were a greater percentage of the 19 CHECK amount than the listed percentage amount on the sales draft (hereinafter “mathematical error”). 20 The presentation of the CHECK including the mathematical error is shown by the following true and 21 correct (redacted) copy of Plaintiff’s sales draft for her split bill charge at one of The Cheesecake 22 Factory restaurants: 23 24 /// /// /// 25 26 27 28 29 30 CLASS ACTION COMPLAINT -5- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 26. Defendant expected and intended Plaintiff and Class Members to rely on the Suggested Gratuity percentages and dollar amounts in calculating the TIP and TOTAL. 27. Plaintiff and Class Members did reasonably rely on the Suggested Gratuity percentage 20 and dollar amounts, and were induced to enter into, and did enter into, one of the suggested gratuity 21 amounts in the TIP line, and used it to calculate the TOTAL. 22 23 24 25 28. As a result, the TOTAL was based on the mathematical error perpetrated by Defendant. 29. Unaware of the mathematical error in the suggested gratuity amount, Plaintiff and Class Members signed their sales drafts, thus accepting the terms presented by Defendant and creating an enforceable contract. 30. As a result of the suggested gratuity representation, which contained the mathematical 26 error, the sales drafts did not reflect the true intent of at least one the parties to the second contract. 27 Plaintiff and Class Members entered into the second contract based on a unilateral mistake on their part 28 consisting of their belief, based on Defendant’s representation, that the suggested gratuity amounts in 29 30 CLASS ACTION COMPLAINT -6- 1 dollars were 15%, 18%, 20%, or 22% of the CHECK amount, i.e. only of their individual split bill 2 portions of the combined bill. Defendant knew or should have known that the suggested gratuity 3 amounts incorporated the mathematical error on sales drafts that it presented to Plaintiff and Class 4 5 Members when it split their bill between two or more credit/debit cards. 31. Defendant subsequently presented the sales draft for payments, and Plaintiff’s and Class Members’ credit card accounts were charged for the TOTAL, including a suggested gratuity amount to 6 be paid by them as a result of a mistake on their part. Defendant caused them to make that mistake by 7 the practices alleged herein. 8 9 10 11 12 32. Plaintiff and Class Members have fully performed their respective obligations under the second contract. Defendant, however, has failed to uphold its end of the bargain entered into and instead acted in a manner that can be reasonably described as unfair and in bad faith. Defendant maintained a system of tracking gratuities paid to each server, including the order number, time of transaction, payment method used, amount of combined bill on which the gratuity was paid, total sales, and total suggested gratuity. From the information contained in this system, Defendant knew or should 13 have known that its suggested gratuity representations caused its customers to leave higher than typical 14 expected gratuity amounts. Despite having access to and, on information and belief, continuously and 15 carefully having reviewed information available on the system, Defendant continued to deal unfairly 16 17 18 and in bad faith with its split bill-paying customers by continuing to include incorrect suggested gratuity and continuing to induce those customers to pay more money in gratuities than they would have paid otherwise. 33. After the transactions alleged above, Plaintiff and Class Members received credit card 19 statements from their credit card issuers, which contained charges for the TOTAL they agreed to pay, 20 which also included a mathematical error as a result of the mathematically erroneous suggested gratuity 21 amounts being included in the TOTALs specified by Defendant in their sales drafts. 22 23 24 25 26 27 34. Upon discovering the error made in her sales draft, after having paid the TOTAL amount to her credit card issuer, Plaintiff sent Defendant a letter on or about April 6, 2017 by certified mail to its corporate office and headquarters at 26901 Malibu Hills Rd. Calabasas Hills, CA 91301. In the letter, Plaintiff explained and put Defendant on notice concerning the billing errors. That letter constituted an inquiry for purposes of Civil Code § 1747.60 (hereinafter “billing error inquiry”). 35. Despite receipt of Plaintiff’s billing error inquiry, Defendant has not corrected the billing error within 60 days of the date on which Plaintiff’s inquiry was mailed. 28 29 30 CLASS ACTION COMPLAINT -7- 1 36. Defendant’s failure to correct the billing error was willful. Defendant received Plaintiff’s 2 billing error inquiry which plainly explained the billing error that was committed by Defendant in 3 Plaintiff’s case and in the cases of other Class Members throughout the approximately four years 4 5 6 preceding the date of Plaintiff’s dining experience. Upon information and belief, Defendant also knew, suspected, or should have known previously of the billing errors caused by its credit card processing system based on its system described above that tracked gratuities paid by customers. 37. As a result of the foregoing, Defendant is indebted to Plaintiff and Class Members who 7 paid money to Defendant as a result of a mistake of fact, specifically their mistaken belief based on 8 Defendant’s representations that the suggested gratuity percentage listed on the sales draft accurately 9 represented a percentage of the CHECK amount of the sales draft. Defendant did not have the right to 10 11 12 13 the money paid to it by Plaintiff and Class Members. 38. Even though Plaintiff requested in her billing inquiry that Defendant return the money paid by mistake, Defendant has not returned to Plaintiff and/or Class Members any of the money paid, which are now due and owing. 39. Defendant has no right to the money paid to it by Plaintiff and Class Members in form of 14 higher suggested gratuity amounts and the money thereby paid rightfully belongs to Plaintiff and Class 15 Members. 16 17 18 40. As a result of ignoring Plaintiff’s billing error inquiry and the request contained therein to return the money, Defendant now wrongfully holds and has failed to return any of it to Plaintiff and Class Members. 41. Defendant’s actions in including suggested gratuity representations which were not true 19 and its inaction in failing to remove or correct the suggested gratuity representations, were willful, or at 20 the very least grossly negligent. 21 22 23 24 42. Defendant had no reasonable grounds for believing that its suggested gratuity representations were accurate when it included them on Plaintiff’s and Class Members’ sales drafts. 43. The purpose of printing suggested gratuity amounts on sales drafts was to facilitate Plaintiff and Class Members in calculating and paying gratuities and Defendant thus intended for Plaintiff and Class Members to rely on its suggested gratuity amounts. As Defendant intended, Plaintiff 25 and Class Members did rely on the suggested gratuity amounts presented by Defendant because they 26 used those amounts in calculating the TOTAL of the sales draft and their reliance on the suggested 27 gratuity representation was a substantial factor in causing them harm. 28 29 30 CLASS ACTION COMPLAINT -8- 1 44. Defendant’s representations as to the suggested gratuity amounts (“representation”) was 2 a substantial factor in causing Plaintiff and Class Members harm consisting of paying higher gratuity 3 amounts than they would otherwise have paid. 4 5 45. error and failure to deal fairly and in good faith with Plaintiff and Class Members, also constitutes a violation of the UCL. 6 7 Defendant’s actions and failures to act, including the willful failure to correct the billing CLASS ACTION ALLEGATIONS 46. Plaintiff brings this class action pursuant to California Civil Procedure Code § 382. 8 Upon information and belief, there are at least 1,000 Class Members. Given Defendant’s systematic 9 misrepresentations of the suggested gratuity amount on written agreements with its customers, the 10 11 12 13 14 15 16 17 18 members of the Class seeking relief for those violations are so numerous that joinder of all members is impractical. 47. The identity of the members of the Class is ascertainable using the Defendant’s credit card charge and other billing records, and by other feasible and efficient means based on electronic records. 48. Plaintiff’s claims are typical of the claims of the members of the Class and the Subclass. She dined at one of Defendant’s locations in Los Angeles County with another customer. She and the person she dined with used two credit/debit cards to settle their debt. Plaintiff used a credit card and the other individual also used a credit or debit card. Defendant divided their combined bill between the cards, processed the cards, and presented Plaintiff and the other customer each with a sales draft, each for a CHECK amount that was only a portion of the combined bill. Plaintiff’s sales draft contained 19 suggested gratuity amounts that were untrue and mathematically erroneous. Relying on the accuracy of 20 Defendant’s suggested gratuity representation, Plaintiff by mistake used one of the printed suggested 21 gratuity amounts in calculating the TOTAL, while intending to only tip the suggested gratuity 22 percentage on the CHECK amount. Plaintiff then signed the sales draft and later received a credit card 23 24 bill containing a charge for the TOTAL, and paid that bill including the TOTAL. 49. Plaintiff will fairly and adequately represent the interests of the Class. Plaintiff has no conflict of interest with any member of the Class. Plaintiff has retained competent and experienced 25 counsel in complex class action litigation. Plaintiff’s counsel has the expertise and financial resources to 26 adequately represent the interests of the Class. 27 28 29 30 CLASS ACTION COMPLAINT -9- 1 50. Common questions of law and fact exist as to all members of the Class and predominate 2 over any questions solely affecting individual members of the Class. Among the questions of law and 3 fact common to Plaintiff and the Class are the following: 4 5 6 7 a. Whether Plaintiff and Class Members and Defendant entered into a valid and binding second contract. b. Whether suggested gratuity amounts contained in the sales drafts were not true. c. Whether Defendant dealt unfairly and acted in bad faith in including in the second contract a representation that was untrue. 8 d. Whether Plaintiff and Class Members are entitled to reformation. 9 e. Whether Defendant represented to Plaintiff and Class Members on sales drafts that the 10 11 12 suggested gratuity amounts corresponding to 15%, 18%, 20%, and 22% were actually 15%, 18%, 20%, and 22% of the CHECK amount, not of the combined bill amount. f. Whether Defendant’s representation was untrue. g. Whether Defendant knew or should have known that its representation was untrue or 13 inaccurate, or had no reasonable ground for believing that the representation was true. 14 h. Whether Defendant intended for Plaintiff and Class Members to rely on the suggested 15 16 17 18 19 20 gratuity representation. i. Whether the Class Members reasonably relied on the suggested gratuity representation. j. Whether reliance of Plaintiff and Class Members on Defendant’s representation can be proved by circumstantial evidence. k. Whether Defendant made a billing error for purpose of Civil Code § 1747.60. l. Whether the billing error inquiry letter Plaintiff sent to Defendant constitutes inquiry for purpose of Civil Code § 1747.60. 21 m. Whether Defendant’s failure to correct the billing error was willful. 22 n. Whether the second contract failed to reflect the true intent of the parties. 23 24 25 26 27 o. Whether such failure was due to a mistake of fact on the part of Plaintiff and Class Members. p. Whether part of the money paid by Plaintiff and Class Members to Defendant belongs to Plaintiff and Class Members. q. Whether Defendant’s actions or inactions constituted unlawful, unfair, or fraudulent business practices in violation of Bus. & Prof. Code §§ 17200 et seq. 28 29 30 CLASS ACTION COMPLAINT - 10 - 1 r. Whether Plaintiff and Class Members are entitled to restitution under Bus. & Prof. Code 2 §§ 17200 et seq. and/or under the common cause(s) of action pled in this matter for the 3 portion of suggested gratuity erroneously paid. s. The proper formula(s) for calculating damages, treble damages, interest, and restitution 4 owed to Plaintiff and Class Members for the violations alleged in this Complaint. 5 6 t. Whether Plaintiff and Class Members are entitled to injunctive relief. 51. Class action treatment is superior to any alternative to ensure the fair and efficient 7 adjudication of the controversy alleged herein. Such treatment will permit a large number of similarly 8 situated persons to prosecute their common and small claims in a single forum simultaneously, 9 efficiently, and without duplication of effort and expense that numerous individuals would entail. If this 10 11 12 action is not certified as a Class Action, it will be impossible as a practical matter for many or most members of the Class to bring individual actions to recover monies due from Defendant, due to the relatively small amounts of such individual recoveries relative to the costs and burdens of litigation. 52. Defendant’s actions are generally applicable to the entire Class. Prosecution of separate 13 actions by individual members of the Class creates the risk of inconsistent or varying adjudications of 14 the issues presented herein, which, in turn, would establish incompatible standards of conduct for 15 Defendant. 16 17 18 53. other available methods for the fair and efficient adjudication of this controversy. Furthermore, the amounts at stake for many members of the Class, while substantial, may not be sufficient to enable them to maintain separate suits against Defendant. 19 20 21 22 23 24 25 26 Because joinder of all members of the Class is impractical, a class action is superior to 54. FIRST CAUSE OF ACTION Breach of the Covenant of Good Faith and Fair Dealing [Common Count] Plaintiff re-alleges and incorporates by reference each and every allegation set forth in the preceding paragraphs. 55. A covenant of good faith and fair dealing is implied in all contracts, including those contracts entered into by Plaintiff and Class Members with the Defendant, as alleged above. 56. Defendant offered to enter into valid and binding contracts with the Plaintiff and Class Members by generating sales drafts and presenting them to Plaintiff and Class Members. 57. Plaintiff and Class Members entered into the contracts presented by Defendant in 27 designating specified gratuity amounts and agreeing to pay the TOTAL including those amounts. 28 Plaintiff and Class Members have performed all of the conditions, covenants, and promises required to 29 30 CLASS ACTION COMPLAINT - 11 - 1 be performed by them in accordance with the terms and conditions of these contracts by authorizing and 2 directing their credit card issuers to settle the debts on their accounts with Defendant. 3 4 5 6 7 58. Defendant has failed to uphold its end of the bargains entered into and has breached its implied duty of good faith and fair dealing owed to Plaintiff and Class Members by including in the contracts suggested gratuity amounts and corresponding percentages, which it represented accurately reflected corresponding percentages of each Class Members’ CHECK amount, which it knew or should have known were not true and accurate. 59. Relying on Defendant’s representation that the listed gratuity amounts accurately 8 reflected the listed corresponding percentages of their portion of the combined bill, Plaintiff and Class 9 Members agreed to pay the total amounts reflected on the sales drafts, which included the incorrectly 10 11 12 13 calculated gratuity amounts. 60. As a result of Defendant’s actions, as set forth above, Defendant has unfairly breached its obligation pursuant to the covenant of good faith and fair dealing and interfered with Plaintiff’s and Class Members’ right to receive the benefit of the contracts they had entered into in good faith. 61. As a result of Defendant’s breach of the covenant of fair dealing, Plaintiff and Class 14 Members lost the benefit of their bargain by being induced to agree to pay an amount that was higher 15 than they would have agreed to pay had Defendant not acted unreasonably in making the suggested 16 17 18 gratuity misrepresentations. 62. according to proof. 19 20 21 22 23 24 25 26 As a result, Plaintiff and Class Members are entitled to damages to be determined 63. SECOND CAUSE OF ACTION Reformation Based on Unilateral Mistake [Civil Code § 3399] Plaintiff re-alleges and incorporates by reference each and every allegation set forth in the preceding paragraphs. 64. As alleged above, Defendant entered into valid and enforceable contracts with the Plaintiff and Class Members. 65. The parties’ contracts fail to reflect the true intent of the parties in that Plaintiff and Class Members intended to pay 15%, 18%, 20%, or 22% of their respective CHECK amounts and not of the combined bills whereas the contracts show an agreement to pay a percentage of the combined bills. 66. The above-described failure of the agreements to reflect the true intent of the parties 27 resulted from the unilateral mistake on the part of Plaintiff and Class Members in that in executing the 28 sales draft, Plaintiff and Class Members were not aware of the mathematical error made by Defendant 29 30 CLASS ACTION COMPLAINT - 12 - 1 and did not intend to pay gratuity amounts that represented 15%, 18%, 20% or 22% of the combined 2 bill, but only those percentages of their split bill portion of the combined bill. 67. 3 4 5 6 at the time of the execution of each agreement. 68. listed in the agreements. 69. 10 11 70. 15 16 THIRD CAUSE OF ACTION Willful Failure to Correct Billing Error (On behalf of Billing Error Subclass) [Civil Code § 1747.60] Plaintiff re-alleges and incorporates by reference each and every allegation set forth in the preceding paragraphs. 71. 13 14 The Court should award Plaintiff and Class Members relief on this Claim as specified in the Prayer for Relief below. 9 12 Plaintiff and Class Members will suffer pecuniary loss unless the agreements are reformed to correctly state the gratuity amounts that accurately represent the corresponding percentages 7 8 Upon information and belief, Defendant knew or suspected the above-described mistake Defendant is, and at all times herein mentioned was, a retailer for purposes of Civil Code § 1747.60. 72. As alleged above, to the extent the suggested gratuity misrepresentation was a result of a mathematical or similar error, Defendant committed a billing error by making a suggested gratuity misrepresentation on sales drafts that, after it was accepted by Plaintiff and members of the Subclass 17 and included in the TOTAL on the sales draft, appeared on Plaintiff’s and Subclass Members’ credit 18 card statements. 19 20 21 22 23 24 25 26 27 73. Pursuant to Civil Code § 1747.60, Plaintiff mailed an inquiry to Defendant on April 6, 74. Defendant received Plaintiff’s inquiry and more than 60 days have passed since the 2017. mailing of the inquiry, but Defendant has not responded to the inquiry and did not correct the billing error. 75. Plaintiff is informed and believes and thereon alleges that Defendant’s failure to correct the billing error was willful. 76. Defendant’s failure to correct the billing error within 60 days of the mailing of the inquiry also entitles Plaintiff and members of the Subclass to any interest, finance charges, service charges, or other charges on the obligation giving rise to the billing error. 28 29 30 CLASS ACTION COMPLAINT - 13 - 1 77. Defendant’s willful failure to correct the billing error within 60 days of the mailing of the 2 inquiry additionally entitles Plaintiff and the members of the Subclass to treble damages, three times the 3 amount of actual damages assessed, and reasonable attorneys’ fees and costs incurred in prosecuting this 4 5 action. 78. according to proof, and attorneys’ fees and costs. 6 7 8 9 10 Therefore, Plaintiff and Subclass Members are entitled to damages and treble damages 79. FOURTH CAUSE OF ACTION Negligent Misrepresentation (In the Alternative) [Common Count] Plaintiff re-alleges and incorporates by reference each and every allegation set forth in the preceding paragraphs. 80. Defendant made the suggested gratuity representation to Plaintiff and Class Members. 11 81. Defendant’s suggested gratuity representation was not true. 12 82. Defendant had no reasonable grounds for believing its suggested gratuity representation 13 14 15 16 17 18 19 20 was true when it made it. 83. representation. 84. 23 24 Plaintiff and Class Members reasonably relied on Defendant’s suggested gratuity representation in copying down on their receipts the suggested amounts and in paying those amounts. 85. Plaintiff’s and Class Members’ reliance on Defendant’s representation was a substantial factor in causing them harm. 86. Plaintiff and the Class Members are entitled to damages in the amount proved at trial and prejudgment interest. 21 22 Defendant intended that Plaintiff and Class Members rely on its suggested gratuity 87. FIFTH CAUSE OF ACTION Mistaken Receipt [Common Count] Plaintiff re-alleges and incorporates by reference each and every allegation set forth in the preceding paragraphs. 88. Defendant has become indebted to Plaintiff and Class Members in that Plaintiff and 25 Class Members paid Defendant amounts by a mistake of fact, as alleged above, and Defendant did not 26 have the right to that money. 27 28 29 30 89. As alleged above, Plaintiff requested that Defendant return the money paid by mistake. But, neither the whole nor any part of the mistakenly paid amounts has been returned to Plaintiff and CLASS ACTION COMPLAINT - 14 - 1 Class Members, and here is now due, owning and unpaid the amounts paid by mistake, to be determined 2 based on Defendants records, with interest at the legal rate through to the present. 3 4 90. the Prayer for Relief below. 5 6 7 Plaintiff, on behalf of herself and all other Class Members, request relief as specified in 91. SIXTH CAUSE OF ACTION Money Had and Received [Common Count] Plaintiff re-alleges and incorporates by reference each and every allegation set forth in the preceding paragraphs. 8 92. Defendant received money from Plaintiff and Class Members. 9 93. The monies belong to the Plaintiff and Class Members. 94. Defendant has not returned the money. 95. Plaintiff, on behalf of herself and all other Class Members, requests relief as specified in 10 11 the Prayer for Relief below. 12 SEVENTH CAUSE OF ACTION Violation of Unfair Competition Laws [Bus. & Prof. Code §§ 17200 et seq.] 13 14 15 16 17 18 19 20 96. Plaintiff re-alleges and incorporates by reference each and every allegation set forth in the preceding paragraphs. 97. The UCL prohibits any unlawful, unfair, and/or fraudulent business practices. Bus. Prof. Code § 17204 allows “any person who has suffered injury in fact and has lost money or properly” to prosecute a civil action for violation of the UCL. Such a person may bring such an action on behalf of themselves and other similarly situated who are affected by the unlawful, unfair, or fraudulent business practice. 98. During the Class Period, Defendant has committed, and continues to commit, acts of 21 unfair, unlawful and/or fraudulent competition as defined by the UCL by engaging in the acts and 22 practices described above. 23 24 25 26 99. As a direct result of Defendant’s unlawful, unfair and/or fraudulent acts and practices described herein, Plaintiff and Class Members have suffered significant injury in fact and have lost money or property by paying higher gratuity amounts than they would have paid had Defendant not made the billing error and failed to correct it in violation of Civil Code § 1747.60 and/or had Defendant not induced Plaintiff and Class Members to include an erroneous and higher amount into their 27 agreement with Defendant and/or had Defendant not misrepresented the accuracy of the suggested 28 gratuity amounts in the parties’ agreement and refused to return the money Plaintiff and Class Members 29 30 CLASS ACTION COMPLAINT - 15 - 1 overpaid as a result of its misrepresentation. Therefore, Defendant’s actions described herein constitute 2 unfair, unlawful and/or fraudulent business practice or acts within the meaning of the UCL. 3 4 5 100. Plaintiff, and similarly situated Class Members, are entitled to restitution pursuant to Bus. & Prof. Code §§ 17203 and 17208 for all monies paid by them as a result of Defendant’s billing error and/or negligent representation as to suggested gratuity amounts, together with interest at rates specified by law. 6 PRAYER FOR RELIEF 7 8 9 10 11 12 13 14 15 16 17 18 19 WHEREFORE, Plaintiff, on behalf of herself and the members of the Class and the members of the Subclass, prays for judgment against Defendant and requests the following relief: A. That the Court order than this action may proceed and be maintained as a class action under § 382 of the Code of Civil Procedure; and that the Court define the Class and the Subclass as specified above and appoint Plaintiff as the Representative of the Class and of the Subclass and her attorneys as Counsel for the Class and for the Subclass. B. That the Court find and declare that Defendant has breached the covenant of good faith and fair dealing, and order Defendant to pay Plaintiff and Class Members damages for that breach. C. That the Court find that the parties’ agreements do not reflect the parties’ true intent and reform the agreements to reflect parties’ true intent, creating an enforceable obligation for Defendant to pay Plaintiff and Class Members damages and/or restitution in the amount of the gratuities that they unwittingly or mistakenly paid based on Defendant’s representations. D. That the Court find and declare pursuant to Civil Code § 1747.60 Defendant has made a billing error and has failed to correct it within 60 days after inquiry was made. E. That the Court find that (1) Plaintiff and Class Members paid money to Defendant by 20 mistake, Plaintiff requested that the money be returned, but Defendant has not returned the money; (2) 21 Defendant is in possession of money that belongs to Plaintiff and Class Members and Defendant has not 22 returned the money; (3) Defendant holds money wrongfully withheld from Plaintiff and Class Members 23 24 25 26 as a constructive trustee for the benefit of Plaintiff and Class Member; and that based on those findings the Court order that Defendant return to Plaintiff and Class Members the money it wrongfully holds and has not returned. F. That the Court award to Plaintiff and the Class Members damages on the foregoing causes of action in the amount of their actual losses together with pre-judgment interest. 27 G. 28 Code § 1747.60. 29 30 That the Court award to Plaintiff and Subclass Members treble damages pursuant to Civil CLASS ACTION COMPLAINT - 16 - 1 H. That the Court find and declare that (1) Defendant has violated the UCL and committed 2 an unlawful business practice by making a billing error and failing to correct it; (2) Defendant has 3 violated the UCL and committed an unlawful business practice by making the suggested gratuity 4 5 6 7 8 misrepresentation; and that the based on those findings the Court order disgorgement and/or restitution by Defendant to Plaintiff and Class Members of the amounts paid by them due to Defendant’s practices as alleged herein pursuant to Bus. & Prof. Code § 17603, in an amount to be proved at trial. I. That Plaintiff and the Class Members be awarded attorneys’ fees and costs pursuant to Code of Civil Procedure § 1021.5 and/or other applicable law. J. That the Court award such other and further relief as this Court may deem appropriate. JURY DEMAND 9 10 11 12 13 Plaintiff, on behalf of herself and the Class and Subclass Members, hereby demands trial by jury of all claims against Defendant alleged herein. Dated: July 12, 2017 Respectfully submitted, HAMMONDLAW, P.C. 14 15 16 Julian Hammond 17 Attorneys for Plaintiff and Putative Class 18 19 20 21 22 23 24 25 26 27 28 29 30 CLASS ACTION COMPLAINT - 17 -