Judge: Bruce G. Iwasaki, Case: 23STCV23991, Date: 2024-02-08 Tentative Ruling
Case Number: 23STCV23991 Hearing Date: February 8, 2024 Dept: 58
Hearing
Date: February 8, 2024
Case
Name: Davis v. General
Motors, LLC
Case
No.: 23STCV23991
Matter: Demurrer with Motion to
Strike
Moving
Party: Defendant
General Motors, LLC
Responding
Party: Plaintiff Gavin R. Davis
This is a
Song-Beverly action. On November 28, 2019, Plaintiff
Gavin Davis (Plaintiff) purchased a 2019 Chevrolet Bolt EV (Vehicle). On
October 2, 2023, Plaintiff sued Defendant General Motors, LLC (GM) alleging three
breach of warranty claims under Song-Beverly, and causes of action for
fraudulent concealment/misrepresentation, negligent misrepresentation and
violation of Business and Professions Code section 17200. The Complaint alleges
that GM was aware of and concealed a known defect with the Vehicle’s battery (Defective
Battery).
Defendant General Motors, LLC (GM) demurs
to the first through third causes of action, which allege fraudulent
concealment and misrepresentation, negligent misrepresentation, and violation
of Business and Professions Code section 17200. Defendant also moves to strike
the request for punitive damages in the Complaint. Plaintiff Davis filed an
opposition to both the demurrer and the motion to strike.
The
demurrer is sustained in part and overruled in part. The motion to strike is granted.
Legal Standard for
Demurrers
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.)
Statute of Limitations
Defendant
GM demurs to the first through third cause of action on the grounds that they
are barred by the applicable statute of limitations, Code of Civil Procedure
section 338, subdivision (d).
The Complaint
alleges the “Vehicle was delivered to Plaintiff with serious defects and
nonconformities to warranty and developed other serious defects and
nonconformities to warranty including, but not limited to the EV battery
module, potential high voltage battery fire, front seatbelt pretensioner, and
other defects.” (Compl., ¶ 10.)
“[S]tatutes
of limitation do not begin to run until a cause of action accrues. [¶]
Generally speaking, a cause of action accrues at ‘the time when the cause of
action is complete with all of its elements.” (Fox v. Ethicon Endo–Surgery,
Inc. (2005) 35 Cal.4th 797, 806–807.)
Thus, on
the face of the Complaint, the fraud cause of action was complete as of the
date of delivery – November 28, 2019. Plaintiff did not file his Complaint
until October 2, 2023.
Further, while the opposition argues
that “Plaintiff had no way of discovering [the defects] at the time of lease” (Opp.,
2:24-25), the Complaint does not allege grounds for the doctrine of delayed
discovery. Where a Complaint is barred on its face, the burden is on the plaintiff
to allege facts demonstrating delayed discovery. (Czajkowski
v. Haskell & White, LLP (2012) 208 Cal.App.4th 166, 174 [“[W]hen a plaintiff
relies on the discovery rule or allegations of fraudulent concealment, as
excuses for an apparently belated filing of a complaint, “ ‘the burden of
pleading and proving belated discovery of a cause of action falls on the
plaintiff.’ ”].)
The demurrer
to the first cause of action for fraud is sustained based on the statute of limitations.
The second and third causes of
action, for negligent misrepresentation and Business and Professions Code 17200,
are based on these same allegations of misconduct such that the claims all
share the same accrual start date. (Compl., ¶¶ 44, 55-56.)
The
applicable statute of limitations for the negligent misrepresentation cause of
action is section 339, subdivision (1), the general two-year statute for
liability not founded upon an instrument of writing. (Ventura County Nat.
Bank v. Macker (1996) 49 Cal.App.4th 1528, 57 Cal.Rptr.2d 418.) Thus, the demurrer to the second
cause of action for negligent misrepresentation is sustained on this
ground, as well.
However, while the statute of limitations for
a claim of fraud is three years, the statute for unfair competition under
Business and Professions Code section 17200 is four years. (Code Civ. Proc., §
338, subd. (d); Bus. & Prof. Code, § 17208.)
Thus, the demurrer to the third
cause of action for unfair competition is overruled to the extent it
relies on the limitations period.
First
Cause of Action for Fraud
Defendant
GM also argues that the fraudulent misrepresentation and fraudulent concealment
claims contained within the first cause of action fail to state a claim.
The
Complaint fails to allege an affirmative representation.
Specifically,
with respect to the intentional misrepresentation claim, Defendant contends
that the Complaint does not identify any affirmative representation made by GM
that GM knew to be false when it was made. (Dem., 9:7-10:11.)
The elements
of intentional misrepresentation “are (1) a misrepresentation, (2) knowledge of
falsity, (3) intent to induce reliance, (4) actual and justifiable reliance,
and (5) resulting damage.” (Chapman v. Skype Inc. (2013) 220 Cal.App.4th
217, 230–231.)
In
opposition, Plaintiff argues only that a claim for concealment has been
alleged—seemingly conceding that no claim for an affirmative misrepresentation can
be maintained. (Opp. 3:6-6:10.)
The
Complaint fails to allege facts sufficient to support fraudulent concealment.
Defendant
also argues that the Complaint does not state a claim because Plaintiff has not
alleged fraud with the requisite specificity and the allegations are insufficient
to demonstrate a duty to disclose.
Defendant avers
that the Complaint fails to allege (i)
the identity of the individuals at GM who purportedly concealed material facts
or made untrue representations about his Vehicle, (ii) their authority to speak
and act on behalf of GM, (iii) GM’s knowledge about alleged defects in
Plaintiff’s Vehicle at the time of sale, (iv) any interactions with GM before
or during the lease of his Vehicle, or (v) GM’s intent to induce reliance by
Plaintiff to lease the specific Vehicle at issue. (Dem., 11:1-6.)
To state a
claim for fraudulent inducement-concealment, Plaintiffs must allege: (1) the
defendant “concealed or suppressed a material fact,” (2) the defendant was
“under a duty to disclose the fact to the plaintiff,” (3) the defendant
“intentionally concealed or suppressed the fact with the intent to defraud the
plaintiff,” (4) the plaintiff was “unaware of the fact and would not have acted
as he did if he had known of the concealed or suppressed fact,” and (5) “as a
result of the concealment or suppression of the fact, the plaintiff must have
sustained damage.” (BiglerEngler v. Breg, Inc. (2017) 7 Cal.App.5th 276,
310-311.)
As a preliminary
matter, Plaintiff adequately alleges the concealment of material fact: the
defective battery. (Compl., ¶¶ 28 [“Had Plaintiff known at
the time of lease of the true range of the Vehicle and the propensity of the
batteries installed in the vehicle to burst into flame, she [sic] would
not have leased the Vehicle.”], 34) Based on this material fact, the allegation
claiming Defendant intended to induce reliance and to defraud are adequate. (Compl.,
¶¶ 32-34, 39.)
Defendant GM’s argument that the concealment
is not alleged with adequate specificity is also not well-taken.
The ordinary rule about pleading
fraud with specificity is less demanding when the alleged fraud is concealing
the truth. Ordinarily, “fraud must be pleaded specifically; general and
conclusory allegations do not suffice.” (Lazar v. Superior Court (1996)
12 Cal.4th 631, 645.). “This particularity requirement necessitates pleading
facts which show how, where, to whom, and by what means” the alleged fraud
occurred. (Id.) The purpose of the particularity requirement is to
“separate meritorious and nonmeritorious cases, if possible in advance of
trial.” (Small v. Fritz Companies, Inc. (2003) 30 Cal.4th 167,
184.)
Some cases,
however, conclude that this standard is less stringent when the defendant
already has “ ‘full information concerning the facts of the controversy.’ ” (Committee
on Children’s Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197,
217, superseded by statute on other grounds as stated in Californians for
Disability Rights v. Mervyn's, LLC (2006) 39 Cal.4th 223, 227.) Relaxation
of the specificity requirement is particularly appropriate in
a concealment case. Unlike
intentional misrepresentation, which requires some affirmative representation
or promise, a fraudulent concealment is the absence of something, the
suppression of a fact. (Civ. Code § 1710.)
This
distinction was recognized in Turner v. Milstein (1951) 103
Cal.App.2d 651. In rejecting a demurrer based on uncertainty,
the Turner court pointed out:
“The only
specification of uncertainty was that it could not be determined how, or in
what manner, Milstein concealed from plaintiff the time and place of
the sale of the real property. The ultimate fact is pleaded. It is an old and
elemental rule of pleading that a demurrer for uncertainty does not lie if what
is sought is a statement of matter already within the knowledge of the
demurring party.... If, in truth, Milstein concealed from plaintiff
the fact that the property was to be sold, he knows it and he knows the time
and place of concealment, if there was a time and place. It would seem
that concealment is negative and that it would occur without any time
or place. Milstein knows the facts. (103 Cal.App.2d at p. 658.)
Thus, based
on the nature of this type of claim, a plaintiff in a fraud by omission suit
will not be able to specify the time, place, and specific content of an
omission as precisely as would a plaintiff in a false representation claim. Here,
the Court cannot conclude that the contents of the alleged concealment was not
plead with the adequate level of specificity.
In reply, Defendant
also argues that the Complaint does not adequately allege exclusive knowledge
of the material facts such that there was no duty to disclose.
Absent a fiduciary relationship
between the parties (which Plaintiff does not allege here), a duty to disclose
can arise in only three circumstances: (1) the defendant had exclusive
knowledge of the material fact; (2) the defendant actively concealed the
material fact; or (3) the defendant made partial representations while also suppressing
the material fact. (BiglerEngler, supra, 7 Cal.App.5th at p. 311; LiMandri
v. Judkins (1997) 52 Cal.App.4th 326, 336.) The California Supreme Court
“has described the necessary relationship giving rise to a duty to disclose as
a ‘transaction’ between the plaintiff and defendant ….” (Bigler-Engler,
supra, 7 Cal.App.5th at p. 311; Warner Construction Corp. v. City of Los
Angeles (1970) 2 Cal.3d 285, 294 [“In transactions which do not involve
fiduciary or confidential relations”]; Hoffman v. 162 North Wolfe LLC
(2014) 228 Cal.App.4th 1178, 1187–89 [rejecting concealment claim where
plaintiffs “were not involved in a transaction with the parties they claim
defrauded them”]; LiMandri, supra, 52 Cal.App.4th at p. 337 [“such a
relationship can only come into being as a result of some sort of transaction
between the parties”].)
Defendant GM argues there are no facts
alleged that would support a duty to disclose. The Complaint contains no
allegations of any direct dealing with GM. Instead, the Complaint alleges
Plaintiff visited and purchased the Vehicle from Martin Chevrolet in Torrance.
(Compl., ¶ 8.)
In opposition, Plaintiff argues that GM had
exclusive knowledge of the Defective Battery, citing Falk v.
General Motors Corp. (N.D. Cal. 2007) 496 F.Supp.2d 1088.
In Falk, the
plaintiffs alleged that General Motors had exclusive knowledge of
the defect because “only GM had access to the aggregate data from its dealers,
only GM had access to prerelease testing data, and only GM had access to the
numerous complaints from its customers.” (Id. at 1096.)
Plaintiffs also cite Daniel v.
Ford Motor Co. (E.D. Cal. May 18, 2016) 2016 WL 2899026 which discussed
the duty to disclose in the context of the Consumers Legal Remedies
Act claim and Unfair Competition Claim. In Daniel v. Ford Motor Co., the court explained:
“Generally, courts have not defined ‘exclusive’ literally, but have found such
claims cognizable if the defendant had ‘superior’ knowledge of a defect that
was not readily apparent and there is no or only ... limited publicly available
information about the defect.” (Daniel v. Ford Motor Co., supra, 2016 WL
2899026, *4.)
Here, the Complaint does not adequately
allege GM’s exclusive knowledge of the Battery Defect. Although Plaintiff cites
Paragraphs 13 to 23, these citations do not contain allegations to support the exclusive
knowledge over a Battery Defect in Plaintiff’s 2019 Bolt EV. (Compl., ¶¶
13-23.) This
is a ground for sustaining the demurrer.
This case turns on whether facts
were alleged that gave rise to a duty to disclose, not on the specificity of
what, assertedly, was unexpressed; on this basis, the Court will sustain the
demurrer to the first cause of action.
Second Cause of Action for Negligent
Misrepresentation
As with the
intentional misrepresentation claim, Defendant argues Plaintiff has failed to
allege any misrepresentation to support this cause of action.
The elements
of negligent misrepresentation are: “(1) the misrepresentation of a past or
existing material fact, (2) without reasonable ground for believing it to be
true, (3) with intent to induce another's reliance on the fact misrepresented,
(4) justifiable reliance on the misrepresentation, and (5) resulting damage.” (Apollo
Capital Fund LLC v. Roth Capital Partners, LLC (2007) 158 Cal.App.4th 226,
243.)
“California
courts have recognized a cause of action for negligent misrepresentation, i.e.,
a duty to communicate accurate information, in two circumstances. The first
situation arises where providing false information poses a risk of and results
in physical harm to person or property. The second situation arises where
information is conveyed in a commercial setting for a business purpose.” (Friedman
v. Merck Co. (2003) 107 Cal.App.4th 454, 477, 131 Cal.Rptr.2d 885.)
Here, the Opposition
fails to identify any specific representation made by Defendant to Plaintiff. In
fact, the opposition does not address the negligent misrepresentation claim at
all. The Court concludes that Plaintiff has abandoned this claim.
The demurrer
to the second cause of action is sustained without leave to amend.
Third Cause of Action for Violation
of Business and Profession Code section 17200
The UCL proscribes “unlawful, unfair
or fraudulent business act[s] or practice [s].” (Bus. & Prof. Code §
17200.)
In demurring
to this claim, Defendant argues that the UCL claim is derivative of the fraud
claims and, thus, the UCL claim fails for the same reasons as the fraud claims.
Moreover, Plaintiff
also fails to establish the requisite standing to recover under the UCL as the
Complaint as a whole fails to allege any facts in support of the contention
that Plaintiff has suffered an injury in fact and has lost money or property as
a result of unfair competition as required pursuant to Section 17204.
In
opposition, Plaintiff first contends that a UCL violation claim has been
sufficiently alleged under the UCL's “unlawful” prong. Here, by
prohibiting any unlawful business practice, section 17200 necessarily “borrows”
violations of other laws, in this case, the Song-Beverly Act. “Virtually any statute or regulation (federal or state)
can serve as a predicate for a UCL unlawful practice cause of action.” (See
Gutierrez v. Carmax Auto Superstores California (2018) 19 Cal.App.5th 1234, 1265.) Therefore, this
claim sufficiently alleges an “unlawful” business practice based on the Song-Beverly
Act. (Compl., ¶ 52.)
Moreover,
Plaintiff alleges that he expended money on an
automobile with a defective battery. (Compl., ¶ 34.) Plaintiff has pled sufficient
injury to support his UCL cause of action. (Quelimane Co. v. Stewart Title
Guaranty Co. (1998) 19 Cal.4th 26, 46-47; Schnall v. Hertz Corp.
(2000) 78 Cal.App.4th 1144, 1167.)
The demurrer
to the third cause of action is overruled.
Legal Standard for
Motions to Strike
“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).)
Punitive Damages Allegations
Defendant
GM moves to strike the request for punitive damages in the Complaint. Defendant
argues, based on its demurrer arguments, Plaintiffs lack a
viable fraud claim to support the punitive damage request. Further, even with
the fraud claim, GM argues the allegations in the Complaint 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.)
Based on the Court’s ruling on the demurrer
to the fraud-based causes of action, the motion to strike is granted; the
Complaint is devoid of adequate allegations of fraud to support a request for
punitive damages.
Further, punitive
damages are not available under the remaining claims for violations under the
Song-Beverly Consumer Warranty Act. (See Civ. Code, § 1794.)
Conclusion
The demurrer to the first cause of
action is sustained with leave to amend, sustained without leave to amend as to
the second cause of action, and overruled as to third cause of action. The
motion to strike is granted. The amended complaint shall be served and filed on
or before March 6, 2024.