Judge Bruce G. Iwasaki, Case Number: 22STCV19051, Date: 2023-10-30 Tentative Ruling

Tentative Ruling: The Demurrer to fifth cause of action in the Third Amended Complaint is sustained without leave to amend. The Motion to Strike is moot.

On September 12, 2014, Plaintiff Marlene Soria (Plaintiff) purchased a 2014 Chevrolet Cruze (Vehicle). Plaintiff alleges that, at the time of the purchase, her Vehicle contained defects covered under the express warranty and that Defendant General Motors LLC (GM) failed to repair the Vehicle in compliance with the warranty. Plaintiff also claims that Defendant GM’s fraudulent conduct contributed to her decision to purchase the Vehicle.

On June 10, 2022, Plaintiff sued Defendant GM; the original Complaint alleged breach of warranty claims under the Song-Beverly Act.

On September 29, 2022, Plaintiff amended the Complaint, adding a violation of the Consumer Legal Remedies Act (CLRA) and Magnuson-Moss Warranty claims in addition to the claims alleged in her initial Complaint. Defendant GM filed a demurrer and motion to strike the FAC, challenging the fraud and CLRA claims. The Court sustained the demurrer with leave to amend.

On February 1, 2023, Plaintiff filed a Second Amended Complaint (SAC), again alleging breach of warranty claims under Song-Beverly, a common law fraudulent concealment claim, a claim under the CLRA, and a Magnuson Moss Warranty Act claim. On April 26, 2023, Defendant GM filed a motion for judgment on the pleadings and motion to strike. The Court granted the motion for judgment on the pleadings without leave to amend as to the fraud claim and with leave to amend as to the CLRA claim; the motion to strike was rendered moot.

On July 24, 2023, Plaintiff filed a Third Amended Complaint (TAC), alleging causes of action for (1.) Violation of Subdivision (d) of Civil Code Section 1793.2, (2.) Violation of Subdivision (b) of Civil Code Section 1793.2, (3.) Violation of Subdivision (a)(3) of Civil Code Section 1793.2, (4.) Breach of the Implied Warranty of Merchantability, (5.) Violation of Consumer Legal Remedies Act, and (6.) Violation of Magnuson-Moss Warranty Act.

Defendant GM demurs to the fifth cause of action in the Third Amended Complaint, which alleges violation of the Consumer Legal Remedies Act. Defendant GM also moves to strike the request for punitive damages. Plaintiff opposes the demurrer and the motion to strike.

The Court sustains the demurrer without leave to amend. The motion to strike is moot.

A demurrer is an objection to a pleading, the grounds for which are apparent from either the face of the complaint or a matter of which the court may take judicial notice. (Code Civ. Proc., § 430.30, subd. (a); see also Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) The purpose of a demurrer is to challenge the sufficiency of a pleading “by raising questions of law.” (Postley v. Harvey (1984) 153 Cal.App.3d 280, 286.) “In the construction of a pleading, for the purpose of determining its effect, its allegations must be liberally construed, with a view to substantial justice between the parties.” (Code Civ. Proc., § 452.) The court “ ‘ “treat[s] the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law . . . .” ’ ” (Berkley v. Dowds (2007) 152 Cal.App.4th 518, 525.) In applying these standards, the court liberally construes the complaint to determine whether a cause of action has been stated. (Picton v. Anderson Union High School Dist. (1996) 50 Cal.App.4th 726, 733.)

Fifth Cause of Action for Violation of California's Consumer Legal Remedies Act (CLRA):

Defendant GM demurs to the fifth cause of action for violation of CLRA on the grounds the claim is barred by the statute of limitations and the allegations are insufficient to state a claim.

The statute of limitations period for a CLRA claim is three years. (Civ. Code, § 1783.)

Here, in the TAC, Plaintiff alleges that GM violated the CLRA at the time of the sale of the Vehicle. (TAC ¶ 78.) Specifically, the TAC alleges “Defendant violated the California Consumer Legal Remedies Act (CLRA) when, inter alia, it engaged in unfair and deceptive acts, and by knowingly warranting and allowing to be sold to Plaintiff the Vehicle without disclosing that the Subject Vehicle was defective and susceptible to sudden and premature failure.” (TAC ¶ 78 [italics added].)

The Complaint alleges that Plaintiff purchased her Vehicle on September 12, 2014. (TAC ¶ 7.) Accordingly, the statute of limitations began to accrue on this CLRA claim on September 12, 2014 and expired on September 12, 2017. Plaintiff did not file her Complaint until June 12, 2022 – more than four and a half years after expiration of the limitations period.

Thus, contrary to Plaintiff’s opposition, elements of the claim were complete as of September 12, 2014, when Plaintiff purchased the allegedly defective Vehicle. (Fox v. Ethicon Endo-Surgery, Inc. (2005) 35 Cal.4th 797, 806 [“Generally speaking, a cause of action accrues at ‘the time when the cause of action is complete with all of its elements.’ ”].) As result, the Complaint raises statute of limitations issues “clearly and affirmatively” from the face of the pleadings.

In opposition, Plaintiff posits the theory that there were multiple violations of the CLRA: “Plaintiff alleges that GM’s CLRA violations occurred not only at the time of sale, but every time that Plaintiff presented the Subject Vehicle to GM’s dealership(s) with concerns related to the Cooling System Defect and up through the time that Plaintiff filed her Complaint. (TAC ¶¶ 41-44.)” (Opp. 4:11-14.) Plaintiff fails to demonstrate that these are separate injuries arising from GM’s conduct or, otherwise, subject to a continuing accrual theory. No legal authority is cited to support this argument. (Opp. 4:2-5:3.)

Plaintiff’s opposition further argues that “Plaintiff’s CLRA claim is nonetheless timely because of the discovery rule, equitable estoppel doctrine, repair rule, and/or class action tolling (i.e., the American Pipe rule).” (Opp. 3:1-2.) In making this argument, Plaintiff relies on Code of Civil Procedures section 338, subdivision (d), and makes no mention of the applicable statute, Civil Code section 1783.[1]

“An important exception to the general rule of accrual is the ‘discovery rule,’ which postpones accrual of a cause of action until the plaintiff discovers, or has reason to discover, the cause of action. [¶] A plaintiff has reason to discover a cause of action when he or she ‘has reason at least to suspect a factual basis for its elements.’ Under the discovery rule, suspicion of one or more of the elements of a cause of action, coupled with knowledge of any remaining elements, will generally trigger the statute of limitations period.” (Fox v. Ethicon Endo–Surgery, Inc. (2005) 35 Cal.4th 797, 806–807.)

Plaintiff argues that she did not discover the Vehicle defects until “shortly before Plaintiff filed her Complaint.” (Opp. 6:8.) Specifically, she states that she only became aware of GM’s fraud underlying the CLRA after GM’s repeated failure to repair the Vehicle. (FAC ¶ 46.) The TAC concedes that Plaintiff presented the Vehicle on multiple occasions to GM’s authorized repair facilities with complaints relating to the Vehicle’s engine and/or the engine’s cooling system, but claims she only discovered the defect “following Defendant’s unsuccessful attempts to repair them.” (TAC ¶¶ 41-44, 46.)

“A plaintiff need not be aware of the specific ‘facts’ necessary to establish the claim; that is a process contemplated by pretrial discovery. Once the plaintiff has a suspicion of wrongdoing, and therefore an incentive to sue, [he or] she must decide whether to file suit or sit on [his or] her rights. So long as a suspicion exists, it is clear that the plaintiff must go find the facts; [the plaintiff] cannot wait for the facts to find [him or] her.” (Jolly v. Eli Lilly & Co. (1988) 44 Cal.3d 1103, 1111 [italics added].) Thus, “[t]he discovery rule only delays accrual until the plaintiff has, or should have, inquiry notice of the cause of action.” (Fox, supra, 35 Cal.4th at p. 807 [italics added].)

“[I]n order to employ the discovery rule to delay accrual of a cause of action, a potential plaintiff who suspects that an injury has been wrongfully caused must conduct a reasonable investigation of all potential causes of that injury. If such an investigation would have disclosed a factual basis for a cause of action, the statute of limitations begins to run on that cause of action when the investigation would have brought such information to light. In order to adequately allege facts supporting a theory of delayed discovery, the plaintiff must plead that, despite diligent investigation of the circumstances of the injury, he or she could not have reasonably discovered facts supporting the cause of action within the applicable statute of limitations period.” (Fox, supra, 35 Cal.4th at pp. 808–809.)

Plaintiff’s allegations establish facts demonstrating delayed discovery. In particular, the TAC alleges ongoing and continuous problems with the Vehicle. (TAC ¶¶ 41-44, 46.) However, Plaintiff’s first alleged repair attempt – at least, according to the TAC – did not occur until January 9, 2020. (TAC ¶ 41.) There are no alleged repair attempts between 2014 and 2020 or any other facts that would indicate Plaintiff knew or should have known of GM’s wrongful conduct earlier. Thus, TAC supports finding delayed discovery under the circumstances.

Defendant GM argues this cause of action fails because Plaintiff has failed to allege sufficient facts to state a claim.

The CLRA prohibits certain “unfair methods of competition and unfair or deceptive acts or practices undertaken by any person in a transaction intended to result or which results in the sale or lease of goods or services.” (Civ. Code, § 1770.) The elements of a CLRA claim are: (i) a consumer; (ii) who suffers any damage; (iii) because of the use or employment by any person of a method, act, or practice declared to be unlawful by Civil Code section 1770. (Civ. Code, § 1780(a).)

Here, Plaintiff’s CLRA claim is based on GM’s allegedly fraudulent conduct pertaining to the Vehicle’s cooling defect. (FAC ¶ 79.) The TAC alleges that Civil Code sections 1770, subdivisions (a)(5) and (a)(7) were violated. (TAC ¶ 81.)

“(5) Representing that goods or services have sponsorship, approval, characteristics, ingredients, uses, benefits, or quantities that they do not have or that a person has a sponsorship, approval, status, affiliation, or connection that the person does not have.

(7) Representing that goods or services are of a particular standard, quality, or grade, or that goods are of a particular style or model, if they are of another.” (Civ. Code, § 1770, subd. (a).)

Plaintiff fails to allege facts regarding GM’s alleged representations under those two subdivisions. (TAC ¶ 81 [“ . . . Defendant violated California Civil Code § 1770(a), as it represented that the Vehicle and its Cooling System had characteristics and benefits that they do not have, and ii) represented that the Vehicle and its Cooling System were of a particular standard, quality, or grade when they were of another.”].) The demurrer states: “Plaintiff did not identify the characteristics and benefits that GM represented the Cruze as having, nor did Plaintiff allege facts showing that GM misrepresented anything about the characteristics and benefits of Plaintiff’s Cruze. Plaintiff also did not identify the particular standard, quality or grade that GM represented the Cruze as having, nor did Plaintiff allege facts showing when, where, or how GM misrepresented a particular standard for, quality of, or grade in the Cruze.” (Dem. 5:2-7.) The TAC does not plead Defendant made affirmative misrepresentations to support the violation of CLRA.

Instead, Plaintiff relies on a fraudulent omission theory. That is, Defendant GM had a duty to disclose the defective cooling system in the Vehicle but failed to do so.

A CLRA claim may arise from fraudulent concealment or omission, but to be actionable, “the omission must be contrary to a representation actually made by the defendant, or an omission of fact the defendant was obliged to disclose.” (Daughtery v. American Honda Motor Co., Inc. (2006) 144 Cal.App.4th 824, 835; Gutierrez v. Carmax Auto Superstores Cal. (2018) 19 Cal.App.5th 1234, 1258.)

When claims under CLRA are based on allegations of fraudulent concealment or omissions, they “must be stated with reasonable particularity, which is a more lenient pleading standard than is applied to common law fraud claims.” (Gutierrez, supra, 19 Cal.App.5th at p. 1261.) Specifically, a plaintiff must plead with reasonable particularity the facts supporting the elements of the violation. (See Khoury v. Maly's of Cal., Inc. (1993) 14 Cal.App.4th 612, 619.)

Plaintiff concedes that she cannot allege a direct relationship between GM and herself because she did not purchase the Vehicle from GM but argues GM “may” still have a duty to disclose. Plaintiff suggests that the warranty agreement with GM creates a sufficient transactional relationship and goes on to cite Dhital v. Nissan North America, Inc. (2022) 84 Cal.App.5th 828, 844. (Opp. 11:24-12:13.)

However, the Dhital court found that the plaintiffs’ statutory warranty claims under the Song-Beverly Act was the equivalent of contract claims for the purposes of determining whether the economic loss rule applies. This finding, however, was not used to support finding a duty to disclose. (Dhital, 84 Cal. App. 5th at 838, fn. 3.) Only later in its decision did the Dhital court state that the plaintiffs’ allegations were sufficient to overcome the defendant's argument that there was no buyer-seller relationship giving rise to a duty to disclose. (Id. at 844.) The Dhital court explained that the plaintiffs sufficiently alleged that the requisite buyer-seller relationship existed because the plaintiffs had alleged that they bought the car from a Nissan dealership, Nissan backed the purchase with an express warranty, and Nissan's authorized dealerships are its agents for purposes of the sale of Nissan vehicles to customers. (Id.)

In this case, Plaintiff does not allege where she bought the Vehicle. Thus, Plaintiff has not pleaded a transactional relationship giving rise to a duty to disclose.

Nonetheless, a failure to disclose a fact constitutes a deceptive practice actionable under the CLRA “when the defendant is the plaintiff's fiduciary, when the defendant has exclusive knowledge of material facts not known or reasonably accessible to the plaintiff, and when the defendant actively conceals a material fact.” (Gutierrez v. Carmax Auto Superstores California (2018) 19 Cal.App.5th 1234, 1258.)

Here, Plaintiff contends she adequately alleged facts establishing that GM had exclusive/superior knowledge of material facts not known to Plaintiff (TAC ¶¶ 28, 80, 85-86) and actively concealed material facts from Plaintiff (TAC ¶¶ 29-32, 37-38, 52-53, 81, 90-91).

Despite repeated opportunities to allege sufficient facts with respect to the CLRA claim, these allegations are conclusory and lacking in ultimate facts. Thus, these allegations are insufficient to demonstrate either superior knowledge or active concealment by GM. Plaintiff has failed to alleged facts giving rise to duty to disclose. The Court sustains the demurrer to Plaintiff’s fifth cause of action.[2]

Based on the insufficiency of the allegations to state a CLRA claim, the demurrer is sustained without leave to amend.

“The court may, upon a motion made pursuant to Section 435, or at any time in its discretion, and upon terms it deems proper: (a) Strike out any irrelevant, false, or improper matter inserted in any pleading. (b) Strike out all or any part of any pleading not drawn or filed in conformity with the laws of this state, a court rule, or an order of the court.”¿(Code Civ. Proc., § 436.) “Immaterial” or “irrelevant” matters include allegations not essential to the claim, allegations neither pertinent to nor supported by an otherwise sufficient claim or a demand for judgment requesting relief not supported by the allegations of the complaint. (Code Civ. Proc., § 431.10, subds. (b)(1)-(3).)

Defendant GM moves to strike the request for punitive damages in the TAC. Defendant argues, based on its demurrer arguments, Plaintiff lacks a viable fraud-based claim to support the punitive damage request. Further, even with the CLRA claim, GM argues the allegations in the TAC do not satisfy the statutory standards required to seek punitive damages.

Punitive damages are recoverable where the defendant has been guilty of oppression, fraud, or malice, express or implied. (Civ. Code § 3294.) “Something more than the mere commission of a tort is always required for punitive damages. There must be circumstances of aggravation our outrage, such as spite or malice, or a fraudulent or evil motive on the part of the defendant, or such a conscious and deliberate disregard of the interests of others that his conduct may be called willful or wanton.” (Taylor v. Superior Court (1979) 24 Cal.3d 890, 894.) Specific intent to injure is not necessary for a showing of malice—it is sufficient that the defendant’s conduct was so “wanton or so reckless as to evince malice or conscious disregard of others’ rights.” (McConnell v. Quinn (1925) 71 Cal. App. 671, 682.)

A request for punitive damages that is not supported with specific allegations of oppression, fraud, or malice is subject to a motion to strike. Conclusory allegations that defendants acted “willfully,” “maliciously,” or with “oppression, fraud, or malice” are not, without more, sufficient to give rise to a claim for punitive damages, but such language is permissible where the complaint contains sufficient factual support for the conclusions. (Perkins v. Superior Court (1981) 117 Cal.App.3d 1, 6-7.)

Here, Plaintiff seeks punitive damages only in its fifth cause of action for the violation of the CLRA.. (TAC ¶ 96.) Given the Court’s ruling sustaining the demurrer to this causes of action, there is no underlying claim to support a request for punitive damages. The motion to strike is moot.

The demurrer to the fifth cause of action is sustained without leave to amend. The motion to strike is moot.

[1] Because the delayed discovery doctrine effectively applies to either statute of limitation, the reliance on either three-year statute has the same result.

[2] Only in its Reply, Defendant GM argues the TAC fails to allege compliance with the notice requirements of Civil Code section 1782.

If a plaintiff sues for damages under the CLRA, she must send a written notice of the claim to the defendant thirty days before filing suit “by certified or registered mail, return receipt requested, to the place where the transaction occurred or to the person's principal place of business within California.” (Civ. Code, § 1782, subd. (a).) However, a claim for injunctive relief brought under Section 1770 “may be commenced without compliance with subdivision (a).” (Civ. Code, § 1782, subd. (d).) That is, the notice requirement applies only to claims for damages. (Civ. Code, § 1782, subd. (d), [“An action for injunctive relief brough under the specific provisions of Section 1770 may be commenced without compliance with subdivision (a).”].) Furthermore, “[n]ot less than 30 days after the commencement of an action for injunctive relief,” a plaintiff may amend their complaint to include a request for damages “after compliance with subdivision (a).” (Id.)

Here, Plaintiff’s CLRA claim does not seek damages. (TAC ¶ 95 [“Plaintiff is entitled to equitable and injunctive relief under the CLRA.”].) As the CLRA claim does not seek relief besides equitable and injunctive relief, Plaintiff is not required to allege compliance with Section 1782, subdivision (a).

Judge Bruce G. Iwasaki

Department 58