Fourth District, Division Two Construes the Scope of the California Independent Wholesale Sales Representative Contractual Relations Act.
The California Independent Wholesale Sales Representative Contractual Relations Act (Civ. Code sections 1738.10-1738.16) was enacted to protect wholesale sales representatives—“any person who contracts with a manufacturer, jobber, or distributor for the purpose of soliciting wholesale orders, is compensated, in whole or part, by commission.” (Civ. Code sec. 1738.12(e).) In fact, section 1738.15 provides the wholesale sales representative can recover treble damages against a defendant willfully failing to pay commissions pursuant to a written contract. Section 1738.16 provides for recovery of attorney’s fees to the prevailing wholesale sales representative. A recent unpublished case discussed these statutory sections, reversing a denial of treble damages and fees to a plaintiff and directing that plaintiff is entitled to such recovery.
In Prestidge v. Oscar Home Care, Inc., Case No. E043006 (4th Dist., Div. 2 Dec. 31,
2008) (unpublished), plaintiff claimed to be acting as a wholesale sales representative and sued for recovery of unpaid commissions. He was awarded unpaid commissions for 2001-2005 in a default prove-up proceeding, but the trial court denied awarding treble damages or attorney’s fees on the basis plaintiff did not establish he was a wholesale sales representative.
The Fourth District, Division 2—in a 3-0 opinion authored by Justice Gaut—reversed.
Plaintiff was a master wholesale broker, who set up a network of sales representatives soliciting orders of defendant’s air freshener products in California. Although section 1738.12(e) did not mention that it encompassed master wholesale brokers (and no case law addressed the subject), Justice Gaut found no basis to find the statutory scheme should not apply to a master broker who retained sub-brokers to place orders for defendant. “The fact that plaintiff used sub-brokers in furtherance of marketing defendant’s products should not preclude plaintiff from the protections provided under the Act. Depriving plaintiff of protection under the Act is contrary to the intent of the Act since master brokers, such as plaintiff, are an integral part of the development of a sales territory used to market products. As a master broker, plaintiff facilitated the sale of defendant’s products through sub-brokers who contacted the retailers and thus was instrumental in developing the sale territories for marketing defendant’s products to retailers.” (Slip Opn., at p. 13.)
Plaintiff was thus allowed an opportunity to seek recovery of treble damages and reasonable attorney’s fees on remand.