Judge: Blaine K. Bowman, Case: 37-2023-00017840-CU-BC-NC, Date: 2023-12-15 Tentative Ruling

SUPERIOR COURT OF CALIFORNIA,

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SOUTH BUILDING TENTATIVE RULINGS - December 14, 2023

12/15/2023  10:00:00 AM  N-31 COUNTY OF SAN DIEGO

JUDICIAL OFFICER:Blaine K. Bowman

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Civil - Unlimited  Breach of Contract/Warranty Demurrer / Motion to Strike 37-2023-00017840-CU-BC-NC ELDER VS. GENERAL MOTORS, LLC [IMAGED] CAUSAL DOCUMENT/DATE FILED: Demurrer, 09/29/2023

The Demurrer to First Amended Complaint brought by defendant General Motors LLC (the Manufacturer) is OVERRULED.

The Motion to Strike Punitive Damages from Plaintiff's First Amended Complaint brought by the Manufacturer is GRANTED without leave to amend, but without prejudices to the bringing of a formal noticed motion for leave to amend if facts are uncovered in discovery that would support a claim for punitive damages.

The Manufacturer's time to answer or otherwise plead shall be as set forth in California Rules of Court, rule 3.1320.

This is a lemon law case. This Court previously ruled on a Demurrer to Complaint on the same issue as is raised in the present motion, but provided plaintiff Joseph Elder (Plaintiff) an opportunity to amend.

Having previously analyzed the law on those issues, the Court refers the parties to its original ruling (see ROA 23) with regard to the applicable legal standards (i.e. the pleading standard applicable to a claim for concealment under the Consumer Legal Remedies Act (CLRA)).

As previously noted, Plaintiff is suing only the manufacturer of the vehicle in question, which is a 2020 Chevrolet Silverado truck – not the dealership that sold the vehicle to him. Among other lemon law warranty claims, Plaintiff is also alleging claims for: fraudulent concealment and violation of the CLRA based upon a theory of concealment.

When this Court previously addressed the matter, Plaintiff had not complied with the 30-day notice requirement to bring a CLRA claim, but that deficiency has since been remedied – at least allegedly, which is all that matters for purposes of demurrer. (ROA 23.) This Court also noted that under Gutierrez v. Carmax Auto Superstores California (2018) 19 Cal.App.5th 1234, 1261 'causes of action under the CLRA... must be stated with reasonable particularity, which is a more lenient pleading standard than is applied to common law fraud claims.' (ROA 23, p. 3, quoting Gutierrez, supra, 19 Cal.App.5th at 1261.) With that, this Court concluded that the allegations that were previously made were still insufficient. However, Plaintiff has now added substantial additional pleadings concerning transmissions that the Manufacturer knew were defective since 2008, numerous technical service bulletins that were issued regarding said transmissions, numerous safety complaints that were made to the National Highway Traffic Safety Administration, the Manufacturer's unique ability to have greater or exclusive knowledge of these issues, and a marketing strategy of concealing these defective Calendar No.: Event ID:  TENTATIVE RULINGS

3030815 CASE NUMBER: CASE TITLE:  ELDER VS. GENERAL MOTORS, LLC [IMAGED]  37-2023-00017840-CU-BC-NC transmission issues. These allegations are sufficient to state claims for concealment and for violation of the CLRA. As such, the demurrer to these causes of action is overruled.

However, one of the challenges of the instant series of motions is that the term 'fraud' is a legal term of art that appears in a variety of different context and that does not necessarily have the same meaning across those various contexts. There is 'common law' fraud, which is a bit of an umbrella term for a number of causes of action that have now been parsed-out by jury instructions on things like intentional misrepresentation, negligent misrepresentation, deceit, and concealment. There is 'fraud' as one of the bases upon which unfair business practices can be established (the others being 'unfairness' and 'unlawful' activity). There is 'fraud' as one type of action that can warrant punitive damages under the definition provided in Civil Code § 3294(c)(3) (with the other actions being 'malice' and 'oppression').

There is even criminal 'fraud.' In the briefing on this issue, both parties seem to be eager to use the phrase 'fraud' but to pull from various contexts in which that word is used to grab standards that suit their needs. For the Manufacturer, this means drawing upon the heightened pleading standard that applies when alleging common law fraud – in spite of the differences established when alleging concealment (wherein the alleging party is not always able to be specific because the specifics are, by definition, being concealed). For Plaintiff, this means jumping to the conclusion that a mere allegation of fraud always warrants punitive damages.

The allegations as they appear in this case presently fall in between the cracks of these two concepts.

The heightened particularly is not quite so high when alleging concealment, such that Plaintiff's claims survive demurrer. On the other hand, the facts alleged do not rise to the level of supporting punitive damages.

Additionally, a motion to strike may lie where the facts alleged do not rise to the level of 'malice, fraud or oppression' required to support a punitive damages award. (Weil and Brown, California Practice Guide: Civil Procedure Before Trial (The Rutter Group, 2023) ¶ 7:186, citing Turman v. Turning Point of Central Calif., Inc. (2010) 191 Cal.App.4th 53, 63.) The facts alleged here do not rise to the level of the kind of conduct that fits the definition of 'fraud' as provided in the punitive damages statute. (See Civil Code § 3294(c)(3).) However, as discovery is ongoing, today's ruling striking punitive damages from the First Amended Complaint is without prejudice to Plaintiff bringing a formal noticed motion seeking leave to amend to add punitive damages back into the operative complaint if facts are uncovered that would meet that statutory definition.

Unless the ruling(s) above indicate that an appearance is necessary, parties who wish to submit, who are satisfied with the above tentative ruling(s), and/or who do not otherwise wish to argue the motion(s) are encouraged to give notice to the Court and each other of their intention not to appear.

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