Judge Cherol J. Nellon, Case Number: 23STCV20155, Date: 2024-11-16 Tentative Ruling

Judge: Cherol J. Nellon, Case: 23STCV20155, Date: 2024-11-16 Tentative Ruling

Case Number: 23STCV20155 Hearing Date: November 16, 2024 Dept: 14

Case Background

This is an action for violations of the Song-Beverly Act and the Consumer Legal Remedies Act (CLRA).

On August 22, 2023, Plaintiff Nancy Beltran filed her Complaint against Defendant General Motors, LLC.

On March 27, 2024, the Court sustained Defendant’s demurrer with leave to amend.

On May 13, 2024, Plaintiff filed a First Amended Complaint (FAC).

On June 12, 2024, Defendant filed a demurrer and motion to strike.

On October 3, 2024, Plaintiff filed oppositions.

On October 8, 2024, Defendant filed replies.

Instant Pleading

Defendant demurs to the FAC and moves to strike Plaintiff’s demand for punitive damages.

Decision

Defendant’s demurrer is OVERRULED.

Defendant’s motion to strike is DENIED.

Discussion

Demurrer

Defendant demurs to the FAC on the grounds that the FAC fails to set forth facts sufficient to constitute a cause of action against Defendant.

1. First and Second Causes of Action – Breach of Implied and Express Warranties

Defendant first demurs to the first and second causes of action for breach of the implied warranty of merchantability and breach of express warranties on the grounds that the subject vehicle was purchased used.

As Plaintiff points out in the opposition, the FAC does not state that the vehicle was used. Rather, the FAC alleges the vehicle was a new motor vehicle under the Song-Beverly Act. (FAC ¶6.) Thus, Defendant’s assertion that the vehicle was purchased used is an extrinsic fact to the FAC which cannot be considered on demurrer.

Even if the FAC stated the vehicle was used, Defendant’s argument that a purchaser of a used vehicle may not pursue claims under the Song-Beverly Act is the subject of a split in authority.

Defendant relies on Rodriguez v. FCA US, LLC (2022) 77 Cal.App.5th 209, 221 (Rodriguez) to support its argument that a used vehicle cannot qualify as a new motor vehicle within the meaning of the Song-Beverly Act. The Supreme Court of California granted review of Rodriguez on July 13, 2022. The Second Appellate District, which encompasses this Court, reached a conclusion contrary to the Rodriguez holding in Stiles v. Kia Motors America, Inc. (2024) 101 Cal.App.5th 913 (Stiles). In Stiles, the Second District Court of Appeal held “that a previously owned motor vehicle purchased with the manufacturer's new car warranty still in effect is a ‘new motor vehicle’ as defined under the Act.” Stiles, supra, 101 Cal.App.5th at p. 915. On July 24, 2024, the Supreme Court granted review in Stiles. (See Stiles v. Kia Motors America, Inc. (2024) 551 P.3d 1123.) Rodriguez and Stiles may only be cited for persuasive value under Cal. Rules of Court, Rules 8.1105 and 8.1115 because the California Supreme Court granted review.

Here, Rodriguez and Stiles are in direct conflict and represent a split in circuit authority. However, the Court need not choose between the two cases at this time because the FAC does not state Plaintiff purchased the subject vehicle used. The demurrer is OVERRULED as to the first and second causes of action for breach of implied and express warranties.

2. Fifth Cause of Action – Violation of the CLRA

Defendant next argues that the fifth cause of action for violation of the CLRA fails because Plaintiff failed to plead fraud with the required specificity. Defendant argues that the FAC does not state what misrepresentations Defendant made, identify where Defendant made the misrepresentations, or identify how Defendant made the misrepresentations.

Fraud causes of actions must be pled with specificity in order to give notice to the defendant and to furnish him or her with definite charges. (Committee on Children's Television, Inc. v. General Foods Corp. (1983) 35 Cal. 3d 197, 216, superseded by amendments to the Unfair Competition Law contained in Proposition 64 on unrelated grounds.) “(a) General pleading of the legal conclusion of ‘fraud’ is insufficient; the facts constituting the fraud must be alleged. (b) Every element of the cause of action for fraud must be alleged in the proper manner (i.e., factually and specifically), and the policy of liberal construction of the pleadings … will not ordinarily be invoked to sustain a pleading defective in any material respect.” (Ibid.)

The specificity standard is less stringent “when ‘it appears from the nature of the allegations that the defendant must necessarily possess 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, quoting Bradley v. Hartford Acc. & Indem. Co. (1973) 30 Cal.App.3d 818, 825.)

Here, the FAC states that when Plaintiff presented the subject vehicle for repair, “Defendants falsely represented that the Vehicle was of a particular standard, quality, or grade that could not conform to the quality of the vehicles it was advertising which is in direct violation of the CLRA.” (FAC ¶62.) Defendants also represented that the vehicle would operate and perform properly after the repairs. (Id., ¶63.) However, Defendants knew that the vehicle could not be repaired to conform to the specifications outlined in the warranties. (Id.)

The specificity standard is relaxed here because the alleged misrepresentations were made by Defendants when Plaintiff brought the vehicle to Defendants for repair. Defendants would necessarily have full information about the misrepresentations because Defendants would have access to records of the repair. Contrary to Defendants’ assertions, the FAC does state what misrepresentations were made. Therefore, the FAC adequately pleads a cause of action for violation of the CLRA based on fraud. The demurrer is OVERRULED as to the second cause of action for violation of the CLRA.

Motion to Strike

Defendant moves to strike punitive damages on the grounds that the FAC fails to state facts sufficient to support a demand for punitive damages.

Civil Code section 1780(a) provides for an award for punitive damages for CLRA claims. (See Civ. Code, section 1780(a)(4).) For the plaintiff to obtain punitive damages under the CLRA, there must be a finding that the defendant acted with malice, oppression, or fraud. (See Graciano v. Robinson Ford Sales, Inc. (2006) 144 Cal.App.4th 140, 147; Civil Code, section 1780(a)(4).)

Here, the Court overruled the demurrer as to the cause of action for violation of the CLRA based on fraud. Therefore, the FAC sufficiently supports a demand for punitive damages based on fraud.

Conclusion

Defendant’s demurrer is OVERRULED.

Defendant’s motion to strike is DENIED.