Garrard v. GATEWAY FINANCIAL SERVICES, INC.Garrard v. GATEWAY FINANCIAL SERVICES, INC.
INTRODUCTION
1 Thе Utah Legislature enacted the Unfair Practices Act, codified in Utah Code sections 18-5-1 to -18, to "safeguard the public against the creation or perpetuation of monopolies and to foster аnd encourage competition, by prohibiting unfair and discriminatory practices by which fair and honest competition is destroyed or prevented."
BACKGROUND
12 In reviewing the district court's grant of a directed verdict, we review the facts in the light most favorable to the losing party. Goebel v. Salt Lake City S. R.R. Co.,
13 In July 1999, Ray and Marva Garrard purchased a bedroom set for $2,419.95 from Granite Furniture Company. On the advicе of a sales associate, they agreed to a six-month financing agreement. The Garrards understood this financing agreement to waive any finance charges if the balance of the account was рaid within six months. However, the contract required monthly minimum payments, which the Garrards failed to make. Instead, the Garrards made two sporadic payments and then paid the remaining amount due on January 11, 2000, believing the six-mоnth financing period to expire on January 24.
T4 On March 5, 2004, the Garrards received a letter with an enclosed copy of a default judgment of $897.52 for unpaid interest and finance charges from Gateway Financial Services, Inc. (Gateway), a collection agency. Prior to this letter, the Garrards were unaware that any legal action had been taken against them. The Garrards immediately contacted legal counsel to resolve the matter. A few days later, the Garrards' legal counsel requested that Gateway provide proof of service for a small claims affidavit delivered to the Garrards. Gateway resрonded the same day by faxing a proof of service, which indicated that a service processor from Civil Process Services & Investi
15 Garrard sued Civil Process Services
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to recover treble damages under the Unfair Practices Act arguing that falsifying the civil process documents constituted unfair competition because it violated public policy, was unethical and immoral, and caused substantial injury to consumers. See
ANALYSIS
16 The Utah Unfair Practice Act makes unlawful "(unfair methоds of competition in commerce or trade."
17 Mr. Garrard urges us tо expand the reach of the Unfair Practice Act beyond anticompetitive methods to unfair and discriminatory practices as defined by the federal Cigarette Rule. The Federal Trade Commission uses thе Cigarette Rule, which was originally adopted to regulate unfair or deceptive advertising or labeling of cigarettes, to determine whether an act is unfair under the federal Act. FTC v. Sperry & Hutchinson Co.,
T8 Utah's Unfair Practices Act, Garrard argues, is so similar to the Federal Trade Commission Act that this court should interpret it in the same manner as the United States Supreme Court interpretеd the federal Act in Sperry. In Sperry, the Court found that the Federal Trade Commission Act was broad in scope and could allow the Federal Trade Commission to prohibit practices that are not per se antitrust law violations. See id. There is a critical difference, however, between the language in the Federal Trade Commission Act, as interpreted by Sperry, and Utah's Unfair Practices Act. The federal Act mаkes unlawful "[ulnfair methods of competition in or affecting commerce, and unfair or deceptive acts or practices in or affecting commerce."
9 In contrast to the Federal Trade Commission Act, Utah's Unfair Practices Act makes unlawful only "[ujnfair methods оf competition in commerce."
110 Garrard argues that the legislature did intend the Act to have a broader scope and points to the purpose stated in Utah Code
The Legislature declared that the purpose of this act is to safeguard the public against the creation or perpetuation of monopolies and to foster and encourage competition, by prohibiting unfair and discriminаtory practices by which fair and honest competition is destroyed or prevented. This act shall be liberally construed that its beneficial purposes may be subserved.
¶ 11 While this section does indicate the Division of Consumer Protection may prohibit unfair and discriminatory practices, the phrase is modified by a reference to preserving competition. Thus, we find it unambiguous that the legislature intended the Act to apply only to anticompetitive behavior. Gar-rard urges us to look to the authority of our sister states on this subject, some of whom have adopted the Cigarette Rule under their statutes, usually in reliance on expаnsive language similar to that contained in the Federal Trade Commission Act. Because the language of this statute is unambiguous, we will not do so. Brinkerhoff v. Forsyth,
112 Accordingly, we hold that the Unfair Practices Act makes unlawful only unfair methods of competition. The Act contains no language prohibiting unfair or deceptive practices in commerce, and therеfore we decline to adopt the reasoning of the Supreme Court in Sperry. Further, because the language of the Act unambiguously addresses unfair methods that impact fair competition, we do not look to the jurisprudence of our sister states to interpret the statute. The district court's decision is affirmed.
1118 We note that in interpreting the current statute, we make no judgment on the wisdom of a legislative expansion оf the Unfair Practices Act to protect consumers as well as commercial competitors. The legislature has already adopted an extensive framework of consumer protection laws in other areas, and there are numerous public policy reasons for extending the Unfair Practices Act to also protect consumers. We leave it to the legislature to consider those pоlicy concerns.