Before: Betty B. Fletcher, Dorothy W. Nelson, and Barry G. Silverman, Circuit Judges.
The opinion of the court was delivered by: Opinion by Judge D.w. Nelson
Appeal from the United States District Court for the Central District of California Linda H. McLaughlin, District Judge, Presiding
Argued and Submitted June 5, 1998 Pasadena, California
D.W. NELSON, Circuit Judge:
To resolve the instant appeal, we must determine whether the Federal Trade Commission ("FTC") is a "person" entitled to enforce liability on a surety bond. We conclude that it is.
FACTUAL AND PROCEDURAL BACKGROUND
This case calls upon us to interpret Article 1.4 of California's Telephone Sellers Act ("Act"), which regulates the practices of telephone solicitors. Cal. Bus. & Prof. Code SS 17511-17511.12. The Act provides:
It is the intent of the Legislature in enacting this article to (1) provide each prospective telephonic sales purchaser with information necessary to make an intelligent decision regarding the offer made, (2) safeguard the public against deceit and financial hardship, (3) insure, foster, and encourage competition and fair dealings among telephonic sellers by requiring adequate disclosure, and (4) prohibit representations that tend to mislead. This article shall be construed liberally in order to achieve these purposes.
The Act requires all telephonic sellers to maintain a surety bond in the amount of $100,000 "for the benefit of any person suffering pecuniary loss in a transaction commenced during the period of bond coverage with a telephonic seller who violated" the Act. S 17511.12(a). The bond is to "include coverage for the payment of the portion of any judgment, including a judgment entered pursuant to Section 17203 or 17535, that provides for restitution to any person suffering pecuniary loss, notwithstanding whether the surety is joined or served in the action or proceeding." Id.
As telephonic sellers engaged in telemarketing in California MTK Marketing, Inc. ("MTK") and Copy Resource Center, Inc. ("CRC") were required to post a bond pursuant to section 17511.12. On November 13, 1992, Defendant Erick Graziano purchased from the Ranger Insurance Company a $50,000 bond, which was later increased to $100,000. Frontier substituted as surety on November 14, 1994, and ...