Judge Christopher K. Lui, Case Number: 22STCV41010, Date: 2023-09-28 Tentative Ruling

Pursuant to California Rule of Court 3.1308(a)(1), the Court does not desire oral argument on the motion addressed herein. Counsel must contact the staff in Department 76 to inform the Court whether they wish to submit on the tentative, or to argue the matter. As required by Rule 3.1308(a), 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.

Per Rule of Court 3.1308, if notice of intention to appear is not given, the Court may adopt the tentative ruling as the final ruling.

Defendant American Honda Motor Co., Inc. demurs to the First Amended Complaint and moves to strike portions thereof.

Defendant American Honda Motor Co., Inc.’s demurrer to the First Amended Complaint is SUSTAINED with leave to amend as to the second, third and fifth causes of action, and without leave to amend as to the fourth cause of action.

The motion to strike is MOOT as Paragraphs 53 and 54, in their entirety, and as to ¶ 57 in its entirety, given the ruling on the demurrer.

The motion to strike is DENIED as to ¶¶ 26 – 37; MOOT as to ¶¶ 63 -76; and GRANTED with leave to amend as to ¶ 8, page 14, Prayer for Relief (punitive damages).

Defendant requests that the Court take judicial notice of the following: (1) October 26, 2022, ruling in Sobita Dhital v. Nissan North America, Inc. No. A162817, 2022 WL 14772909 (Cal. Ct. App. Oct. 26, 2022); (2) he court’s order Denying Defendant’s Motion for Judgment on the Pleadings in Scherer v. FCA US, LLC, _ F.

Supp._ No. 320CV02009AJBBLM, 2021 WL 4621692 (S.D. Cal. Oct. 5, 2021); (3)court’s order in also Tanner v. Ford Motor Co. (N.D. Cal. Nov. 25, 2019) No. 5:19-CV-02495-EJD, 2019 WL 6269307; (4) Anderson v. Ford Motor Co., 74 Cal. App. 5th 946, 963 (2022), reh'g denied (Mar. 8, 2022), review filed (Mar. 21, 2022).

The Declaration of Kevin D. Zipser reflects that Defendant’s counsel satisfied the meet and confer requirement set forth in Civ. Proc. Code, § 430.41.

Defendant American Honda Motor Co., Inc. demurs to the First Amended Complaint as follows:

Defendant argues that this is not pled with the requisite particularity required for statutory claims.

The second cause of action is for violation of Civil Code, § 1793.2(b), which reads as follows:

(b) Where those service and repair facilities are maintained in this state and service or repair of the goods is necessary because they do not conform with the applicable express warranties, service and repair shall be commenced within a reasonable time by the manufacturer or its representative in this state. Unless the buyer agrees in writing to the contrary, the goods shall be serviced or repaired so as to conform to the applicable warranties within 30 days. Delay caused by conditions beyond the control of the manufacturer or its representatives shall serve to extend this 30-day requirement. Where delay arises, conforming goods shall be tendered as soon as possible following termination of the condition giving rise to the delay.

“[S]tatutory causes of action must be pleaded with particularity.” (Covenant Care, Inc. v. Superior Court (2004) 32 Cal.4th 771, 790.)

this state, Defendant and its representative failed to commence the service or repairs within a reasonable time and failed to service or repair the Vehicle to conform to the applicable warranties within 30 days, in violation of Civil Code section 1793.2, subdivision (b). Plaintiffs did not extend the time for completion of repairs beyond the 30-day requirement.

Here, Plaintiffs only allege “some portions of the Subject Vehicles” repair history, alleging June 13, 2019 and November 21, 2020 visits. (1AC, ¶¶ 23, 24.) Plaintiffs do not allege when the repairs commenced, nor how long those repairs took. Plaintiffs must allege the date which was beyond 30 days.

Defendant argues that this is not pled with the requisite particularity required for statutory claims.

The third cause of action is for violation of Civil Code § 1793.2(a)(3). Subdivision(a) requires that a manufacturer that sells consumer goods in California, for which it has made an express warranty, shall “[m]ake available to authorized service and repair facilities sufficient service literature and replacement parts to effect repairs during the express warranty period.” (Civ. Code. § 1793.2(a)(3).)

Here, Plaintiffs do not identify the repair facility, and which repair could not be effected during the express warranty period due to unavailable service literature and replacement parts.

3. Fourth Cause of Action (Breach of Implied Warranty of Merchantability—Civ. Code, §§ 1791.1, 1794, 1795.5.)

Defendant argues that this cause of action is barred by the applicable statute of limitations.

Defendant argues that this cause of action is time-barred under the 4-year statute of limitations set forth in UCC § 2725.

Plaintiffs allege that they purchased their 2018 Honda Odyssey (“entered a warranty contract with Defendant”) on January 28, 2018. (1AC, ¶ 6.) The Complaint in this action was filed on December 30, 2022.

Here, Plaintiffs allege that their vehicle is equipped with a defective transmission (1AC, ¶¶ 26, 27.) As such, the transmission defect existed during the implied warranty period from the moment of sale.

(c) The duration of the implied warranty of merchantability and where present the implied warranty of fitness shall be coextensive in duration with an express warranty which accompanies the consumer goods, provided the duration of the express warranty is reasonable; but in no event shall such implied warranty have a duration of less than 60 days nor more than one year following the sale of new consumer goods to a retail buyer. Where no duration for an express warranty is stated with respect to consumer goods, or parts thereof, the duration of the implied warranty shall be the maximum period prescribed above.

Because the transmission defect existed as of the date of the sale, per the discussion below, the maximum time an implied warranty under the Song-Beverly implied warranty of merchantability claim could be brought would be four years from the date of sale, The four-year statute of limitations set forth in UCC § 2725 began to accrue on the day of the sale. (Mexia v. Rinker Boat Co., Inc. (2009) 174 Cal.App.4th 1297, 1301, 1304-06, 1309-10; Donlen v. Ford Motor Co. (2013) 217 Cal.App.4th 138, 149, superseded by statute on other grounds as stated in Velasco v. Mercedes-Benz USA, LLC (C.D.Cal. June 13, 2019, No. 2:18-cv-07880-MWF (SKx)) 2019 U.S.Dist.LEXIS 222387, at *3.) As such, Plaintiffs’ claim, to the extent it is based upon a viable breach of implied warranty, must have been brought no later than January 28, 2022. Having been filed on December 30, 2022, this cause of action is time-barred..

In Mexia v. Rinker Boat Co., Inc. (2009) 174 Cal.App.4th 1297, as to implied warranties under the Song-Beverly Act, the Court held that the duration provision did not limit when the defect must be discovered, but instead, limited the period during which the implied warranty existed:

[T]he plain language of the statute, particularly in light of the consumer protection policies supporting the Song-Beverly Act, make clear that the statute merely creates a limited, prospective duration for the implied warranty of merchantability; it does not create a deadline for discovering latent defects or for giving notice to the seller.

The duration provision provides, in essence, that the duration of the implied warranty of merchantability shall be the same as the duration of any reasonable express warranty that accompanies the product, but in no event shorter than 60 days or longer than one year. (Civ. Code, § 1791.1, subd. (c).) There is nothing that suggests a requirement that the purchaser discover and report to the seller a latent defect within that time period.

The implied warranty of merchantability may be breached by a latent defect undiscoverable at the time of sale. (See Moore v. Hubbard & Johnson [*1305] Lumber Co. (1957) 149 Cal.App.2d 236, 241 [308 P.2d 794]; Brittalia Ventures v. Stuke Nursery Co., Inc. (2007) 153 Cal.App.4th 17, 24 [62 Cal. Rptr. 3d 467]; Garlock Sealing Technologies, LLC v. NAK Sealing Technologies Corp. (2007) 148 Cal.App.4th 937, 950–952 [56 Cal. Rptr. 3d 177].) Indeed, “[u]ndisclosed latent defects … are the very evil that the implied warranty of merchantability was designed to remedy.” (Willis Mining, Inc. v. Noggle (1998) 235 Ga.App. 747, 749 [509 S.E.2d 731].) In the case of a latent defect, a product is rendered unmerchantable, and the warranty of merchantability is breached, by the existence of the unseen defect, not by its subsequent discovery.

(Mexia, supra, 174 Cal.App.4th at 1304-05 [bold emphasis and underlining added].)

“Thus, although a defect may not be discovered for months or years after a sale, merchantability is evaluated as if the defect were known.” (Mexia, supra, 174 Cal.App.4th at 1305 [bold emphasis added].)

The Song-Beverly Act does not include its own statute of limitations. (Krieger, supra, 234 Cal.App.3d at p. 213.) California courts have held that the statute of limitations for an action for breach of warranty under the Song-Beverly Act is governed by the same statute that governs the statute of limitations for warranties arising under the California Uniform Commercial Code: section 2725 of the California Uniform Commercial Code. (Krieger, supra, at p. 215; Jensen v. BMW of North America, Inc. (1995) 35 Cal.App.4th 112, 132 [41 Cal. Rptr. 2d 295]; Carrau v. Marvin Lumber & Cedar Co. (2001) 93 Cal.App.4th 281, 297 [112 Cal. Rptr. 2d 869].) Under this statute, “(1) An [*1306] action for breach of any contract for sale must be commenced within four years after the cause of action has accrued. … [¶] (2) A cause of action accrues when the breach occurs, regardless of the aggrieved party's lack of knowledge of the breach. A breach of warranty occurs when tender of delivery is made, except that where a warranty explicitly extends to future performance (not applicable here[1]) of the goods and discovery of the breach must await the time of such performance the cause of action accrues when the breach is or should have been discovered.” (Cal. U. Com. Code, § 2725, subds. (1), (2).)

(Mexia, supra, 174 Cal.App.4th at 1305-1306 [bold emphasis and parentheticals added].)

The foregoing principles expressed in Mexia lead to the conclusion that the effect of the Song-Beverly implied warranty duration for a minimum of 60 days to a maximum of one year is that if a latent defect exists at any point during that 60-day to one-year period, as long as a lawsuit is filed within the 4-year statute of limitations period which accrues when the defect comes into existence—then the action for breach of implied warranty is timely, regardless of whether the latent defect was discovered after the 60-day to one-year implied warranty period. In this regard, a discovery after the expiration of the 4-year statute of limitations of a latent defect which breached the implied warranties would be time-barred.

This conclusion is consistent with Mexia because the defect was deemed to have existed at the time of sale, i.e, within the 60-day to one-year period, and the plaintiff filed within the four-year statute of limitation. (Mexia, supra, 174 Cal.App.4th at 1300-01.) Mexia did not articulate nor purport to apply a delayed discovery rule, because resort to such a rule was unnecessary—the action was filed within four years of the date of purchase.

[T]he statute of limitations for an action for breach of warranty under the Song-Beverly Act is four years pursuant to section 2725 of the California Uniform Commercial Code. (See Krieger, supra, 234 Cal.App.3d at p. 215; Jensen v. BMW of North America, Inc., supra, 35 Cal.App.4th at p. 132.) Under that statute, a cause of action for breach of warranty accrues, at the earliest, upon tender of delivery. (Cal. U. Com. Code, § 2725, subd. (2).) Thus, the earliest date the implied warranty of merchantability regarding Mexia's boat could have accrued was the date Mexia purchased it—April 12, 2003. n7 Because he filed this action three years seven months after that date, he did so within the four-year limitations period. Therefore, Mexia's action is not barred by a statute of limitations.

On the other hand, if the defect does not come into existence until after the 60-day to one-year period expires, a cause of action does not accrue because the implied warranty has not been breached after it ceases to exist. The date of discovery of the defect would be irrelevant in this instance.

The word “duration” has a clear and readily understood meaning, viz., the period of time during which something exists or lasts. (Webster's 3d New Internat. Dict. (1993) p. 703; Black's Law Dict. (7th ed. 1999) p. 520, col. 1.) In the duration provision, the “something” that has a period of existence is the implied warranty of merchantability. (Civ. Code, § 1791.1, subd. (c).) According to its plain language, the implied warranty exists for at least 60 days and at most for one year after delivery of the product; after that time, the warranty ceases to exist.

To say that a warranty exists is to say that a cause of action can arise for its breach. Defining the time period during which the implied warranty exists, therefore, also defines the time period during which the warranty can be breached. Thus, by giving the implied warranty a limited prospective existence beyond the time of delivery, the Legislature created the possibility that the implied warranty could be breached after delivery.

(Mexia, supra, 174 Cal.App.4th at 1309 [bold emphasis and underlining added].)

Thus, there is no risk of an open-ended period whereby a defendant is exposed to liability for breach of an implied warranty under Song-Beverly. A cause of action for breach of implied warranty can only accrue within the 60-day to one-year period, discovery of the defect can occur at any time from the date of sale until the expiration of the four-year statute of limitations, and a lawsuit must be filed within the four-year statute of limitations which can accrue at any time within the 60-day to one-year period. Thus, the maximum time an implied warranty under the Song-Beverly implied warranty of merchantability claim could be brought would be five years from the date of sale, utilizing the maximum one-year period which begins to run at the time of sale (Civil Code § 1791.1(c)), assuming the defect came into existence on the last day of the one-year period, and the four-year statute of limitations began to accrue on the last day of the one-year period.

Ford argues allowing evidence of postwarranty repairs extends the term of its warranty to whatever limit an expert is willing to testify. We disagree. Evidence that a problem was fixed for a period of time but reappears at a later date is relevant to determining whether a fundamental problem in the vehicle was ever resolved. (Jensen v. BMW of North America, Inc. (1995) 35 Cal.App.4th 112, 134–135 [41 Cal. Rptr. 2d 295].) Indeed, that a defect first appears after a warranty has expired does not necessarily mean the defect did not exist when the product was purchased. (Mexia v. Rinker Boat Co., Inc. (2009) 174 Cal.App.4th 1297, 1308 [95 Cal. Rptr. 3d 285].) Postwarranty repair evidence may be admitted on a case-by-case basis where it is relevant to showing the vehicle was not repaired to conform to the warranty during the warranty's existence.

(Donlen v. Ford Motor Co. (2013) 217 Cal.App.4th 138, 149 [bold emphasis added], superseded by statute on other grounds as stated in Velasco v. Mercedes-Benz USA, LLC (C.D.Cal. June 13, 2019, No. 2:18-cv-07880-MWF (SKx)) 2019 U.S.Dist.LEXIS 222387, at *3.)

Although Plaintiffs allege that they did not discover facts regarding the wrongful conduct shortly before filing this Complaint (1AC, ¶ 42), based upon the analysis above, the cause of action accrues upon delivery, not upon the date of discovery. Because the cause of action accrues regardless of the plaintiff’s lack of knowledge of the breach, issues of delayed discovery/concealment or tolling are inapplicable. Based upon the January 28, 2018 sale date, Plaintiffs’ claim for breach of implied warranty, must have been brought no later than January 28, 2022. Having been filed on December 30, 2022, this cause of action is time-barred.

Defendant argues that this is not pled with the requisite particularity required for statutory claims, and it is barred by the economic loss rule.

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.)

32. Plaintiffs are a reasonable consumer who interacted with sales representatives, considered Defendant’s advertisement, and/or other marketing materials concerning the Defendant’s Vehicles prior to purchasing the Subject Vehicle. Had Defendant revealed the Transmission Defect, Plaintiffs would have been aware of it and would not have purchased the Subject Vehicle.

More specificity is required 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 must allege statements which would constitute, at the very least, half-truths if not outright misrepresentations as to the transmission of 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].)

The Complaint alleges that the transmission defect may cause the transmission to hesitate on acceleration, lose power, engage in hard and/or hard shifts and/or jerking, and is a safety concern because it severely affects the driver’s ability to control the car’s speed, acceleration and deceleration, and could cause the vehicle to fail without warning at highway speeds. (1AC, ¶¶ 27, 28.)

This exposes Plaintiffs to the risk of injuring other persons, and exposing Plaintiffs to liability to third parties.

These facts would bring Plaintiffs’ claims outside the economic loss rule for fraud which exposes the plaintiff to liability to third parties, as recognized in Robinson Helicopter and its progeny. The alleged fraud exposes Plaintiffs to causing harm to third persons as a result of driving a vehicle with an undisclosed defect. (County of Santa Clara v. Atlantic Richfield Co. (2006) 137 Cal.App.4th 292, 326-29.

Because the application of the economic loss doctrine to plaintiffs' fraud cause of action depends on our interpretation of the California Supreme Court's recent decision in Robinson Helicopter Co. v. Dana Corp. (2004) 34 Cal.4th 979 [22 Cal. Rptr. 3d 352, 102 P.3d 268] (Robinson), we turn to this question first.

Robinson was a breach of contract and fraud action. Dana and Robinson had contracted for Dana to supply a part for Robinson's helicopters. Their contract required the part to be manufactured to certain specifications and prohibited changes to the manufacturing process without approval. When it delivered the parts, Dana provided Robinson with certificates required by the Federal Aviation Administration (FAA). These certificates asserted that the parts had been manufactured to the requisite specifications. (Robinson Helicopter Co. v. Dana Corp., supra, 34 Cal.4th at pp. 985–986.) After a couple of years, Dana changed its manufacturing process so that the parts did not meet Robinson's specifications and did not comport with the required certificates. However, Dana continued to supply the required certificates and did not tell Robinson about the change. (Id. at p. 986.) After more than a year [*327] of supplying the nonconforming parts, Dana switched back to the original manufacturing process that met the required specifications. It did not notify Robinson of this change either. (Ibid.)

Eventually, Robinson's helicopters began to experience a high failure rate for this part. (Robinson Helicopter Co. v. Dana Corp., supra, 34 Cal.4th at p. 986.) It was only after Robinson complained to Dana about the high failure rate that Dana disclosed that the parts were nonconforming. (Id. at pp. 986–987.) The defective parts did not cause any physical injury to person, property or other components of the helicopters. However, Robinson was required to recall and replace the nonconforming parts. And Dana was not very cooperative in providing the information necessary to identify the nonconforming parts so that they could be rapidly replaced. (Ibid.) Robinson incurred more than $ 1.5 million in expenses for replacement parts and employee time spent investigating the matter, identifying the nonconforming parts and replacing them. (Id. at p. 987.)

The jury found that Dana had breached its contract with Robinson, breached the warranties, and committed fraud. (Robinson Helicopter Co. v. Dana Corp., supra, 34 Cal.4th at pp. 987–988.) It awarded Robinson nearly all of its claimed expenses as compensatory damages and also awarded Robinson $ 6 million in punitive damages. (Id. at p. 987.) The Court of Appeal held that Robinson had no tort action (and therefore could not recover punitive damages) because it had suffered only economic loss. (Id. at p. 988.) The California Supreme Court granted review to decide that issue. (Ibid.)

The court held that Dana's provision of false certificates of conformance supported a cause of action for fraud even absent physical injury. (Robinson Helicopter Co. v. Dana Corp., supra, 34 Cal.4th at p. 988.) Initially, the court noted that the economic loss rule was intended to separate contract from tort. (Ibid.) “ ‘[T]he economic loss rule allows a plaintiff to recover in strict products liability in tort when a product defect causes damage to “other property”, that is, property other than the product itself. The law of contractual warranty governs damage to the product itself.’ ” (Id. at p. 989.)

Robinson claimed that its fraud cause of action was permitted because it arose independently from the contract breach: the contract was breached by the supply of nonconforming parts; the fraud was providing false certificates claiming that the parts conformed. (Robinson Helicopter Co. v. Dana Corp., supra, 34 Cal.4th at p. 989.) Dana argued that its fraud was not independent of the breach of contract. (Id. at p. 992.) The court concluded that, because Robinson had relied on the certificates and its lack of knowledge of the nonconformity had led to economic loss and exposed Robinson to liability if [*328] any of the affected helicopters failed and caused physical injury, the fraud was “independent” of the breach. (Id. at pp. 990–991.)

The court then reasoned that the economic loss rule did not bar Robinson's fraud cause of action “because [the fraud cause of action was] independent of Dana's breach of contract.” (Robinson Helicopter Co. v. Dana Corp., supra, 34 Cal.4th at p. 991, italics added.) “ ‘Because of the extra measure of blameworthiness inhering in fraud, and because in fraud cases we are not concerned about the need for “predictability about the cost of contractual relationships,” … fraud plaintiffs may recover “out-of-pocket” damages in addition to benefit-of-the bargain damages.’ ” (Id. at p. 992, citation omitted.)

“ ‘… [a] party to a contract cannot rationally calculate the possibility that the other party will deliberately misrepresent terms critical to that contract.’ … No rational party would enter into a contract anticipating that they are or will be lied to. ‘While parties, perhaps because of their technical expertise and sophistication, can be presumed to understand and allocate the risks relating to negligent product design or manufacture, those same parties cannot, and should not, be expected to anticipate fraud and dishonesty in every transaction.’ … Dana's argument therefore proposes to increase the certainty in contractual relationships by encouraging fraudulent conduct at the expense of an innocent party. No public policy supports such an outcome. [¶] Nor do we believe that our decision will open the floodgates to future litigation. Our holding today is narrow in scope and limited to a defendant's affirmative misrepresentations on which a plaintiff relies and which expose a plaintiff to liability for personal damages independent of the plaintiff's economic loss.” (Robinson Helicopter Co. v. Dana Corp., supra, 34 Cal.4th at p. 993, citations and fn. omitted.)

The determination of whether the economic loss rule applies to plaintiffs' fraud cause of action depends on whether the California Supreme Court intended in Robinson to obviate the application of the economic loss rule to all intentional affirmative fraud causes of action where the fraud exposes the plaintiff to liability or the court intended to provide a narrow exception to the economic loss rule that applies only where that fraud cause of action also accompanies, but is independent of, a breach of contract cause of action. We believe that the California Supreme Court's decision in Robinson precludes the application of the economic loss rule to any intentional affirmative fraud action where the plaintiff can establish that the fraud exposed the plaintiff to liability.

The structure of the Robinson opinion supports this conclusion. The first part of the Robinson opinion was concerned with whether Dana's wrongful conduct constituted tortious conduct, not whether the economic loss rule [*329] applied to it. It was only after the court held that Dana's conduct was a tort independent of Dana's breach of contract that the court addressed the application of the economic loss rule. (Robinson Helicopter Co. v. Dana Corp., supra, 34 Cal.4th at p. 991.) The analysis that followed suggested that fraud itself is immune from application of the economic loss rule because fraud is particularly blameworthy and therefore unlike both contract causes of action and products liability causes of action. Although the court suggested that its decision was a narrow one, its explicit limits did not exclude a fraud cause of action such as the one pleaded by plaintiffs.

Here, plaintiffs alleged that defendants' affirmative misrepresentations about the dangers of low-level lead exposure, upon which they justifiably relied, had caused plaintiffs to fail to make timely efforts to prevent and treat low-level lead exposure. The delay in instituting prevention and treatment caused more people to be exposed and increased the cost of treatment for those who had been exposed or continued to be exposed. In addition, plaintiffs, as the owners of numerous buildings containing unremediated lead, continued to expose people to low levels of lead that plaintiffs believed were not harmful due to defendants' misrepresentations. These people who were exposed to low levels of lead in plaintiffs' buildings may hold plaintiffs liable for the permanent damage to their bodies that no amount of prevention or treatment can now completely remediate. Thus, plaintiffs' potential liability to these people is independent of the economic harm to plaintiffs from the additional costs of prevention and treatment. Accordingly, we conclude that the economic loss doctrine does not apply to plaintiffs' fraud cause of action, and we proceed to address whether defendants established that plaintiffs' fraud cause of action had accrued more than three years prior to the March 2000 filing of the original complaint. (Code Civ. Proc., § 338, subd. (d) [three-year limitations period for fraud].)

(County of Santa Clara v. Atlantic Richfield Co. (2006) 137 Cal.App.4th 292, 326-29 [bold emphasis and underlining added].)

The Declaration of Kevin D. Zipser reflects that Defendant’s counsel satisfied the meet and confer requirement set forth in Civ. Proc. Code, § 435.5.

Defendant American Honda Motor Co., Inc. moves to strike the following portions of the First Amended Complaint:

¿ Paragraphs 53 and 54, in their entirety, on the basis that the applicable law does not allow for recovery of replacement or restitution and related damages, including civil penalties, for violations of Civil Code Section 1793.2(b). (Code Civ. Proc., § 436 (a) and (b).)

¿ Paragraph 57, in its entirety, on the grounds that Plaintiffs’ claim for civil penalties pursuant to an alleged violation of Civil Code section 1793.2(a)(3) is not supported by applicable law and therefore not drawn in conformity with the laws of this state. (Code Civ. Proc., § 436 (a) and (b).)

¿ Paragraphs 26-37, and 63-76, in their entirety, and Paragraph e on page 14 in the

“Prayer for Relief” in their entirety, on the basis that Plaintiffs have failed to properly allege allegations that would support punitive damages and therefore the allegations are not drawn in conformity with the laws of this state. (Code Civ. Proc., § 436 (a) and (b).)

DENIED as to ¶¶ 26 – 37; MOOT as to ¶¶ 63 -76; GRANTED with leave to amend as to ¶ 8, page 14, Prayer for Relief (punitive damages)

The motion to strike ¶ 8, page 14, Prayer for Relief (punitive damages) is GRANTED with 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.

“The Johnsons sued Ford and Decker for intentional and negligent misrepresentation and concealment, violations of the Song-Beverly Consumer Warranty Act (Civ. Code, §§ 1790–1795.7) (Lemon Law), the Consumer Legal Remedies Act (Civ. Code, §§ 1750–1784), the unfair competition law (Bus. & Prof. Code, §§ 17200–17210), and the prohibition on false or misleading advertising (Bus. & Prof. Code, § 17500). Plaintiffs settled with Decker prior to trial and, after the jury verdict, voluntarily dismissed their unfair competition and false advertising causes of action against Ford.” (Johnson, supra, 35 Cal.4th at pp. 1197–1198, fn. omitted.)

The jury awarded plaintiffs $ 17,811.60 in compensatory damages and punitive damages of $ 10 million. The Supreme Court summarized our disposition of defendant's appeal: “The Court of Appeal found substantial evidence not only that Ford had fraudulently concealed material facts from the Johnsons by failing to provide them the warranty buyback notice required under section 1793.24, but also that punitive damages against the corporation were justified because ‘defendant's entire customer response program was structured precisely to short-circuit lemon law claims whenever defendant plausibly could,’ by restrictively interpreting state lemon laws and ignoring the possibility of nonpresumptive lemons.” (Johnson, supra, 35 Cal.4th at p. 1200.) In conducting our de novo review of the punitive damages for constitutional excessiveness, however, we modified the $ 10 million judgment, concluding that punitive damages of $ 53,435 (three times the compensatory damages) was the maximum award permitted under the due process clause of the federal Constitution.

(Johnson v. Ford Motor Co. (2005) 135 Cal.App.4th 137, 141, 143 [bold emphasis added].)

As we stated in our earlier opinion in this case, the Song-Beverly Consumer Warranty Act is the most comparable statutory regulation of the kind of conduct involved in this case. Song-Beverly provides for a civil penalty equal to twice the compensatory damages award when the defendant has committed a “willful” violation of the act. Here, however, the jury found, in essence, that defendant intentionally concealed information with the intent to defraud plaintiffs. Thus, on the one hand, the statutory scheme does not (with its double damages penalty) “tend to support the present award of [$ 10 million] in punitive damages, a sum [560] times the financial harm defendant's fraud caused plaintiff.” (Simon, supra, 35 Cal.4th at p. 1184 [in Simon the bracketed amounts were $ 1.7 million and 340 times the compensatory damages, respectively].) On the other hand, the present intentional conduct (based, as it was, on formal company-wide practices and policies) was [*149] significantly more egregious than the minimum “willful” conduct sufficient to support a Song-Beverly civil penalty. Accordingly, in our view, the comparison with Song-Beverly does not begin to justify the $ 10 million punitive damages award, but neither does Song-Beverly represent a legislative determination that punitive damages for the intentional conduct before us must be limited to the lower end of the ordinary range of such damages.

We conclude that punitive damages of $ 175,000, or just less than 10 times the compensatory award, will sufficiently vindicate California's “legitimate interests in punishing unlawful conduct and deterring its repetition.” (BMW, supra, 517 U.S. at p. 568.)

(Johnson, supra, 135 Cal.App.4th at 148-149, 150 [bold emphasis and underlining added].)

It also appears that punitive damages and a civil penalty cannot be recovered for the same acts, i.e., double recovery is not permitted, and Plaintiffs may eventually be found to have waived punitive damages:

We are of the opinion that had the Legislature, by Civil Code sections 3294 (permitting punitive damages) and 1794 (permitting a civil penalty), intended a double recovery of punitive and penal damages for the same willful, oppressive, malicious, and oppressive acts, it would in some appropriate manner have said so. And we believe that by seeking a "civil penalty" and also attorney's fees and all reasonable expenses as allowed by Civil Code section 1794, plaintiff had in effect elected to waive punitive damages under section 3294.

[1] This would appear to apply in the case of an express warranty.

[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).)