Judge: Christian R. Gullon, Case: 23PSCV02726, Date: 2024-01-11 Tentative Ruling

Case Number: 23PSCV02726    Hearing Date: January 11, 2024    Dept: O

Tentative Ruling

(1)   GENERAL MOTORS LLC’S DEMURRER TO PLAINTIFF’S FIRST AMENDED COMPLAINT is SUSTAINED with leave to amend.

(2)   GENERAL MOTORS LLC’S MOTION TO STRIKE PUNITIVE DAMAGES FROM PLAINTIFF’S FIRST AMENDED COMPLAINT is MOOT.

Background

This is a lemon law case.

On September 6, 2023, Plaintiff FLAVIO GONZALEZ APOLINAR filed suit against Defendant GM.

On October 23, 2023, Defendant filed a demurrer with a motion to strike.

On November 14, 2023, Plaintiff filed its first amended complaint asserting the following COAs:

On December 14, 2023, Defendant filed the instant demurrer x MTS.

On December 21, 2023, Plaintiff filed an opposition.

On January 4, 2023, Defendant filed its Reply.

Legal Standard

As relevant here, a demurrer may be asserted when the pleading does not state facts sufficient to constitute a cause of action. A demurrer tests the sufficiency of a pleading, and the grounds for a demurrer must appear on the face of the pleading or from judicially noticeable matters.  CCP §430.30(a); Blank v. Kirwan, (1985) 39 Cal.3d 311, 318. 

The face of the pleading includes attachments and incorporations by reference (Frantz v. Blackwell, (1987) 189 Cal.App.3d 91, 94); it does not include inadmissible hearsay.  Day v. Sharp, (1975) 50 Cal.App.3d 904, 914.   

Discussion

As this is a fraud cause of action which requires a heightened pleading standard,[1] the court’s tentative will focus on the issue of whether the FAC alleges specific facts of fraud.

The CLRA protects individuals engaging in consumer transactions.  The CLRA prohibits “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 to any consumer.”  (Civ. Code, § 1770, subd. (a).)  The CLRA sets forth twenty-seven (27) different “unfair or deceptive acts or practices” that may constitute a violation of the statute.  (Ibid.)  In assessing whether the representations made in the course of the consumer transaction violate the CLRA, courts use the reasonable consumer standard—i.e., whether a reasonable consumer would be misled by the representation.  (Consumer Advocates v. Echostar Satellite Corp. (2003) 113 Cal.App.4th 1351, 1360.)  To the extent an alleged violation is based on the defendant’s omission of a material fact, “to be actionable the omission must be contrary to a representation actually made by the defendant, or an omission of a fact the defendant was obliged to disclose.”  (Daugherty v. American Honda Motor Co., Inc. (2006) 144 Cal.App.4th 824, 835.)  A cause 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.”  (Gutierrez v. Carmax Auto Superstore California (2018) 19 Cal.App.5th 1234, 1261.) 

“[T]he elements of a cause of action for fraud based on concealment are: ‘“(1) the defendant must have concealed or suppressed a material fact, (2) the defendant must have been under a duty to disclose the fact to the plaintiff, (3) the defendant must have intentionally concealed or suppressed the fact with the intent to defraud the plaintiff, (4) the plaintiff must have been 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.”’” (Jones v. ConocoPhillips Co. (2011) 198 Cal. App. 4th 1187, 1198, quoting Kaldenbach v. Mutual of Omaha Life Ins. Co. (2009) 178 Cal.App.4th 830, 850.)

The 4^th COA alleges as follows:

GENERAL MOTORS LLC intentionally concealed the design defect found in the 8L90 and 8L45 transmissions because the of the common architecture of the transmission that causes “harsh shifts” in lower gears, which can feel like jerking, lurching, and/or hesitations . . . As a result of GM’s failure to disclose to Plaintiff the material fact that the 8L90 and 8L45 transmissions are defective, Plaintiff is required to spend thousands of dollars to repair or replace the defective transmission or sell their vehicles at a substantial loss . . . GENERAL MOTORS LLC intended to deceive Plaintiff by concealing the known issues with the Transmission Defect in an effort to sell the Subject Vehicle at a maximum price.

(Complaint pp. 25-26.)

Here, as noted by Defendant in its demurrer, the allegations are conclusory at best. Plaintiff fails to allege (i) the identity of the individuals at GM who purportedly concealed material facts or made untrue representations about his Silverado (ii) his authority to speak and act on behalf of GM, (iii) GM’s knowledge about alleged defects in Plaintiff’s Silverado at the time of purchase, (iv) any interactions with GM before or during the purchase of his Silverado, or (v) GM’s intent to induce reliance by Plaintiff to purchase the specific Silverado at issue.

In opposition, Plaintiff cites to Dhital v. Nissan North America, Inc. (2022) 84 Cal.App.5th 828 to support its proposition that it has pled enough as the “current case presents almost exactly the same fact pattern as the one in Dhital.” (Opp. p. 13) However, the cases are distinguishable. In Dhital, the plaintiffs alleged that the vehicle had transmission problems “including stalling, jerking, and lack of power” such that the “[u]ncertain and unpredictable performance of a vehicle's engine” caused serious safety concerns. (Id. at p. 833.) Of import, the plaintiffs alleged Nissan manufactured or distributed more than 500,000 vehicles that were equipped with defective continuously variable transmissions (CVT's), including plaintiffs’ model years 2013 through 2017.

Here, however, Plaintiff does not predicate Defendant’s knowledge of a supposed defect based upon the same engine. Rather, Plaintiff alleges that GM knew, or should have known, about the Transmission Defect because the 6L transmission on which the 8L transmission is based suffered from similar defect. (FAC ¶44-47.) Simply put, Plaintiff is imputing knowledge based upon a defect in a different engine. The mere fact that the 8L transmissions succeeded the 6L transmission does not bear significance for a fraud cause of action wherein a plaintiff is to plead that a defendant made a specific misrepresentation as to a specific material fact (i.e., specific misrepresentation as to 8L engine).

Therefore, as Plaintiff has failed to plead sufficient facts that GM concealed material information regarding the 8L transmission, the court SUSTAINS the demurrer with leave to amend. The court need not address the other two arguments nor the motion to strike as it is moot.

Conclusion

Based on the foregoing, the demurrer is sustained with leave to amend, and the motion to strike is moot.