Judge Christopher K. Lui, Case 21STCV37308 2022-10-27 Tentative Ruling

Pursuant to California Rule of Court 3.1308(a)(1), the Court does not desire oral argument on the demurrer and motion addressed herein. As required by Rule 3.1308(a)(2), any party seeking oral argument must notify ALL OTHER PARTIES and the staff of Department 76 of their intent to appear and argue. Notice to Department 76 may be sent by email to smcdept76@lacourt.org or telephonically at 213-830-0776. If notice of intention to appear is not given and the parties do not appear, the Court will adopt the tentative ruling as the final ruling.

Plaintiffs allege that there was a Battery Defect in the 2019 Chevrolet Bolt Plaintiffs leased, and Defendant has failed to repair the vehicle to conform to warranties.

Defendant General Motors LLC demurs to the Second Amended Complaint and moves to strike portions thereof.

Defendant General Motors LLC’s demurrer to the Second Amended Complaint is SUSTAINED without leave to amend as to the fifth cause of action.

Defendant’s motion to strike the demand for punitive damages in the Prayer for Relief at 16:1 GRANTED without leave to amend.

Defendant is ordered to answer the remaining allegations of the Second Amended Complaint within 10 days.

The Declaration of Ryan Kay reflects that Defendant’s counsel satisfied the meet and confer requirement set forth in CCP § 430.41.

Fraud causes of action must be pled with specificity. (Hills Transportation Co. v. Southwest Forest Ind., Inc. (1968) 266 Cal.App.2d 702, 707.) The complaint must allege facts as to “‘how, when, where, to whom, and by what means the representations were tendered.’” (Stansfield v. Starkey (1990) 220 Cal.App.3d 59, 73.) “The requirement of specificity in a fraud action against a corporation requires the plaintiff to allege the names of the persons who made the allegedly fraudulent representations, their authority to speak, to whom they spoke, what they said or wrote, and when it was said or written. (Citations omitted.)” (Tarmann v. State Farm Mut. Auto. Ins. Co. (1991) 2 Cal.App.4^th 153, 157.)

Less specificity is required to plead fraud by concealment. (Jones v. ConocoPhillips Co. (2011) 198 Cal.App.4th 1187, 1199.) However, “[i]f a fraud claim is based upon failure to disclose, and ‘the duty to disclose arises from the making of representations that were misleading or false, then those allegations should be described.’ (Citation omitted.)” (Morgan v. AT&T Wireless Services, Inc. (2009) 177 Cal.App.4th 1235, 1262.)

11. Prior to leasing Subject Vehicle, Plaintiffs researched the features, components and driving range of the 2019 Chevy Bolt on GM’s website and compared it to other vehicles in its class. Towards the end of their Chevy Volt lease, they received GM’s ads encouraging them to switch over to the Bolt from the Volt. Plaintiffs reviewed the window-sticker affixed to Subject Vehicle before the lease. None of these GM marketing materials contained information about Subject Vehicle’s Battery Defect.

12. Also prior to Plaintiffs’ lease of Subject Vehicle, Plaintiffs interacted with Simi Valley Chevrolet dealership employees who discussed with them the Chevy Bolt features, range and reliability. At no point during those discussions did GM’s representatives mention to Plaintiffs that Subject Vehicle had a Battery Defect.

38. . . .. GM omitted mention of the Battery Defect in its sales materials, advertisements, publications, online marketing, television, radio, and other marketing campaigns for Chevy Vehicles. . . . .

40. Plaintiffs are reasonable consumers who interacted with sales representatives

considered GM’s advertisement, and/or other marketing materials concerning Chevy Vehicles prior to purchasing the Subject Vehicle. Had GM and its dealership(s) revealed the Battery Defect, Plaintiffs would have been aware of it and would not have purchased the Subject Vehicle.

However, Plaintiffs do not allege with sufficient specificity that themselves they actually saw and relied upon such statements in making the decision to lease their vehicle. Plaintiffs only make general allegations of being exposed to Defendants’ marketing, without the requisite specificity as to when, if at all, Plaintiffs were exposed to Defendant’s marketing materials and exactly what statements were made in the materials upon which Plaintiffs relied. Plaintiffs were warned by the Court that they must specifically allege statements which would constitute, at the very least, half-truths if not outright misrepresentations as to the subject vehicle, and actual reliance upon such statements.

Civil Code § 1710(3)(deceit is defined to include “[t]he suppression of a fact, by one who is bound to disclose it, or who gives information of other facts which are likely to mislead for want of communication of that fact. . . .”)(bold emphasis added). In a misleading half-truth situation, where the defendant undertakes to provide some information, the defendant is “obliged to disclose all other facts which ‘materially qualify’ the limited facts disclosed. (Citations omitted.)” (Randi W. v. Muroc Joint Unified School Dist. (1997) 14 Cal.4th 1066, 1082.)

[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. [Citation.]’ [Citation.]” (Citation omitted.)

(Kaldenbach v. Mutual of Omaha Life Ins. Co. (2009) 178 Cal.App.4th 830, 850.)

“There are ‘four circumstances in which nondisclosure or concealment may constitute actionable fraud: (1) when the defendant is in a fiduciary relationship with the plaintiff; (2) when the defendant had exclusive knowledge of material facts not known to the plaintiff; (3) when the defendant actively conceals a material fact from the plaintiff; and (4) when the defendant makes partial representations but also suppresses some material facts. [Citation.]’ ” (Citations omitted.) Where, as here, there is no fiduciary relationship, the duty to disclose generally presupposes a relationship grounded in “some sort of transaction between the parties. [Citations.] Thus, a duty to disclose may arise from the relationship between seller and buyer, employer and prospective employee, doctor and patient, or parties entering into any kind of contractual agreement. [Citation.]” (Citation omitted.)

(OCM Principal Opportunities Fund, L.P. v. CIBC World Markets Corp. (2007) 157 Cal.App.4th 835, 859 [bold emphasis added].)

As noted above, Plaintiffs do not sufficiently allege with specificity statements in marketing material upon which they relied in deciding to purchase the vehicle.

The demurrer to the fifth cause of action is SUSTAINED without leave to amend on this basis.

Defendant argues that this cause of action is barred by the economic loss rule. Given the foregoing, this ground for demurrer is MOOT. However, the Court previously found that the economic loss rule did not bar this cause of action.

The Declaration of Ryan Kay reflects that Defendant’s counsel satisfied the meet and confer requirement set forth in CCP § 435.5.

Defendant’s motion to strike the demand for punitive damages in the Prayer for Relief at 16:1 GRANTED without leave to amend.

For the reasons discussed above re: the demurer, Plaintiffs have not sufficiently pled fraud.

Moreover, although it appears that punitive damages are available as to the Song-Beverly Act claims (Johnson v. Ford Motor Co. (2005) 135 Cal.App.4th 137, 141, 143), so long as they are not awarded for the same acts for which a civil penalty is recovered (Troensegaard v. Silvercrest Indus. (1985) 175 Cal.App.3d 218, 228.), Plaintiffs have not pled malice, oppression or fraud[2] in connection with the Song-Beverly Act violations.

Defendant is ordered to answer the remaining allegations of the Second Amended Complaint within 10 days.

[1] Defendant did not argue the absence of a duty to disclose in the moving papers, and thus the Court will not address this argument raised for the first time on reply.

“Points raised in the reply brief for the first time will not be considered, unless good reason is shown for failure to present them before. To withhold a point until the closing brief deprives the respondent of the opportunity to answer it or requires the effort and delay of an additional brief by permission.” (Citations omitted.)

(People v. JTH Tax, Inc. (2013) 212 Cal.App.4th 1219, 1232.)

[2]

(1) “Malice” means conduct which is intended by the defendant to cause injury to the plaintiff or despicable conduct which is carried on by the defendant with a willful and conscious disregard of the rights or safety of others.

(2) “Oppression” means despicable conduct that subjects a person to cruel and unjust hardship in conscious disregard of that person’s rights.

(3) “Fraud” means an intentional misrepresentation, deceit, or concealment of a material fact known to the defendant with the intention on the part of the defendant of thereby depriving a person of property or legal rights or otherwise causing injury.

(Civ. Code, § 3294 (Deering).)