Judge: Christopher K. Lui, Case: 24STCV09996, Date: 2024-12-10 Tentative Ruling
Case Number: 24STCV09996 Hearing Date: December 10, 2024 Dept: 76
The following
tentative ruling is issued pursuant to Rule of Court 3.1308 at 12:04 PM on December 9,
2024.
Notice of intent
to appear is REQUIRED pursuant to California Rule of Court 3.1308(a)(1). The Court does not desire oral argument on
the motion addressed herein.
As required by
Rule 3.1308(a)(1), any party seeking oral argument must notify ALL OTHER
PARTIES and the staff of Department 76 by 4:00 p.m. on December 9,
2024.
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, oral argument will not
be permitted.
Plaintiff
alleges that Defendant has failed to repair the subject vehicle to conform to
applicable warranties and concealed the existence of a Defective Transmission..
Defendant
General Motors LLC. demurs to the Second Amended Complaint and moves to strike
portions thereof.
TENTATIVE RULING
Defendant General Motors LLC’s demurrer to
the Second Amended Complaint is OVERRULED as to the third and fourth causes of
action.
The motion to strike is DENIED as to Second Amended Complaint Prayer for
Relief E at 36:10 (punitive damages).
Defendant is ordered to answer the Second
Amended Complaint within 10 days.
ANALYSIS
Demurrer
Meet and Confer
The
Declaration of Sandra Habib reflects that Defendant’s counsel satisfied the
meet and confer requirement set forth in Civ. Proc. Code, § 430.41.
Discussion
Defendant
General Motors LLC. demurs to the First Amended Complaint as follows:
1. Third
Cause of Action (Fraudulent Inducement – Concealment).
Defendant
withdraws its demurrer to this cause of action because the Court previously
overruled the demurrer to this cause of action asserted in the 1AC. (See
Declaration of Sandra Habi filed on October 14, 2024.)
2. Fourth
Cause of Action (Violation of the CLRA).
A. Re: Failure To Provide Adequate Notice.
Defendant
argues that Plaintiff did not provide the 30-day notice required by Civil Code,
§ 1782 prior to filing this action.
However,
the § 1782 notice must be sent at least 30 days before the filing of the
operative complaint seeking damages, which may be an amended complaint. (Morgan v. AT&T Wireless Services, Inc. (2009)177 Cal.App.4th 1235, 1259-61.) Here, the
original Complaint was filed on April 19, 2024, and the 1AC—filed on May 20,
2024—parroted in the 2AC, alleges at ¶ 123 as follows:
123. Plaintiff complied with the notice
provisions of Civ. Code § 1782 by notifying Defendants on April 19, 2024, of
the particular alleged violations of Civ. Code § 1770 and demanding that it
correct, repair, replace, or otherwise rectify the goods or services alleged to
be in
violation of Civ. Code§ 1770. The
notice was given in writing and was sent by certified mail, return receipt
requested, to Defendants. Defendants have failed, within thirty (30) days of
receipt, to respond to Plaintiffs demand and/or provide Plaintiff with an
appropriate correction, repair,
replacement, relief, cure or any other
remedy.
(1AC and 2AC, ¶ 123.)
The
foregoing allegations are sufficient to plead compliance with Civil Code §
1782, given the timeline of the complaints filed.
This
ground for demurrer is not persuasive.
B. Re: Failure to State Viable Claim and
Failure to Plead Fraud With The Required Specificity.
“Under the CLRA,
plaintiffs must show actual reliance on the misrepresentation and harm. (§
1780, subd. (a); Buckland v. Threshold Enterprises, Ltd. (2007) 155 Cal.App.4th
798, 809–810 [66 Cal.Rptr.3d 543].)” (Nelson v. Pearson Ford Co. (2010) 186 Cal.App.4th 983, 1022, overruled on other grounds in Raceway Ford Cases (2016) 2 Cal.5th 161, 180.]
The 2AC alleges as follows:
61. As early as 2017,
Defendants marketed and sold the then new Defective Transmission 2 as having
"advanced design, GM control system support capability, enhanced
efficiency" rivaling top performance vehicles, lightning-fast and smooth
shifting, along with improved fuel efficiency, among other representations.
According to Defendants 2016 press release, "[t]he 10-speed is an
all-new design - and the first-ever application in a car- with a wider, 7.39
overall gear ratio spread, that enables [vehicles equipped with the Defective
Transmission] to remain at optimal engine speeds during upshifts."5 Dan
Nicholson, vice-president of GM Global Propulsion Systems, said "[w]ith
world-class shift times on par with the world's best dual-clutch transmissions
and the refinement that comes only from a true automatic, the 10-speed delivers
incomparable performance on and off the track. It also leverages the experience
of our other multispeed transmissions to deliver that performance with greater
efficiency as its use expands into other vehicles. " Defendants went on to
tell
consumers that the Defective Transmission's "wider overall ratio enables a
lower numerical top gear ratio - an attribute that reduces engine speed on the
highway, which contributes to greater fuel efficiency than a comparable
eight-speed transmission. Improvements in spin loss complement the optimized
gearing, further enhancing efficiency. "
62. In its marketing brochures for the 2023 Yukon,
Defendants informed consumers, including Plaintiff, that, "[t]he 2023
Yukon delivers premium accommodations, our latest available technologies and
robust capability." In addition, the marketing brochures promote the
Defective Transmission as follows: "10-speed automatic transmission, it
gives you 460 lb-ft of torque so going big is always on the table."
Notwithstanding Defendants knowledge of the dangers caused by the Defective
Transmission, Defendants' website continues to tout the Silverado's superiority
among its competitors and tells consumers that, "[t]his powerful full-size
SUV is the epitome of GMC performance, advanced technology and first-class
design, [including a] Key Feature [of] the 10- Speed Automatic
Transmission."
63. Based upon the national, multimedia marketing campaign
positioning Defendants as a premier American automobile company, other
representations in Defendants' marketing materials as well as the
recommendations of the dealer salesperson assisting the Plaintiff, the Vehicle
was purchased by Plaintiff. More important than what Defendants told consumers
(including Plaintiff) about the Vehicle, however, is what Defendants
intentionally and knowingly concealed about the Vehicle. Defendants and their
authorized dealer sales staff and other personnel never publicly or privately
disclosed to Plaintiff any information about the persistent and dangerous
concerns that plagued the Defective Transmission, including the Vehicle. Not
prior to Plaintiff's purchase of the Vehicle. Not during the Plaintiff's
research, test drive or sales process of the Vehicle. Not at any point during
the numerous times the Vehicle was presented to Defendants for repair for the
very known defects that plague the Defective Transmission.
(2AC, ¶¶ 61 – 63 [bold emphasis added].)
The
CLRA cause of action is specifically based upon the following representations:
118.
Defendants have been aware of the incessant and irremediable problems caused by
the Defective Transmission since at least 2018 and, nevertheless, continue
to deceive consumers like Plaintiff by intentionally concealing the truth.
Defendants go further by continually promising consumers that vehicles
equipped with the Defective Transmission as having a "IO-speed automatic 2
transmission, it gives you 460 lb-ft of torque so going big is always on the
table" and that the "powerful full-size SUV is the epitome of GMC
performance, advanced technology and first-class design, [including a] Key
Feature [of] the IO-Speed Automatic Transmission." Plaintiffs reliance
on Defendants' representations and intentional concealment with regard to the
Vehicle was a substantial factor in causing Plaintiffs harm. Defendants
sold Plaintiff the Vehicle knowing full well that the Defective Transmission
did not and could not conform to the quality of the vehicles it was advertising
which is in direct violation of Civil Code § 1770(a)(5).
(2AC, ¶ 118 [bold emphasis added].)
Plaintiffs' claims under the UCL and the
CLRA are subject to a more lenient standard for pleading than their fraud
claims. (Gutierrez v. Carmax Auto Superstores California (2018) 19
Cal.App.5th 1234, 1261 [248 Cal. Rptr. 3d 61] [statutory claims “must be stated
with reasonable particularity,” rather than the specificity required for claims
of fraud].)
(Amiodarone
Cases (2022) 84 Cal.App.5th 1091, 1115.)
Here,
Plaintiff has sufficiently pled with reasonable particularity at ¶ 118 that she
relied as a consumer upon Defendants’ representation regarding vehicles
equipped with the Defective Transmission. Plaintiff also alleges at ¶ 32:
32. Prior to purchasing the Vehicle,
Plaintiff reviewed marketing materials and viewed television commercials
touting the quality, durability and performance of GMC vehicles and in particular, the Yukon. As described in
greater detail below, the marketing materials for the Vehicle stated in great detail the vehicle's numerous
styling attributes, durability, fuel efficiency and impressive performance. The
salesperson also reiterated many of the same attributes and benefits of the
Vehicle.
The specific advertisement upon
which Plaintiff relief may be ascertained through discovery.
Regarding the Defective
Transmission as to Plaintiff’s vehicle, the 2AC alleges as follows:
35. Specifically with
respect to the Defective Transmission, on November 6, 2023, Plaintiff delivered
the Vehicle to a repair facility authorized by Defendants notifying Defendants
that the Defective Transmission was slipping when shifting gears, and lacking
acceleration. After being in Defendants' custody for nine (9) days the Vehicle
was returned to Plaintiff. Defendants' authorized service technician
represented to Plaintiff that the Vehicle was then operating as intended and
was safe to drive. Plaintiff reasonably relied on this representation by the
service technician at the Defendants' authorized repair facility. All
diagnostics/repairs were covered under Defendants' written warranty.
36. On January 24,
2024, Plaintiff delivered the Vehicle to a repair facility authorized by
Defendants informing Defendants that the Defective Transmission was delaying
and jamming when shifting gears. After being in Defendants' custody for three
(3) days the Vehicle was returned to Plaintiff. Defendants' authorized service
technician represented to Plaintiff that the Vehicle was then operating as
intended and was safe to drive. Plaintiff reasonably relied on this
representation by the service technician at the Defendants' authorized repair
facility. All diagnostics/repairs were covered under Defendants' written
warranty.
37. Notwithstanding
Defendants' numerous attempts to repair the Vehicle, Plaintiff unsurprisingly
continues to experience the same dangerous and persistent issues caused by the
Defective Transmission.
38. At the time of
Plaintiffs purchase, and during each presentation of the Vehicle for repair,
Defendants knew that that the Vehicle was equipped with the Defective
Transmission. Neither Defendants nor any of its agents, dealers, or
representatives informed Plaintiff of the Defective Transmission prior to the
purchase of the Vehicle. Further, Defendants nor any of its agents, dealers, or
representatives informed Plaintiff of the Defective Transmission during any of
the multiple presentations of the Vehicle for repair. Plaintiff purchased -
then continued to operate the Vehicle on the reasonable but incorrect belief
that the Vehicle would perform properly as warranted.
39. Had Plaintiff been
advised of the Defective Transmission at or before the point of purchase,
Plaintiff would not have purchased the Vehicle or would have paid significantly
less for the Vehicle. Plaintiff did not receive the benefit of Plaintiffs
bargain. As a result, Plaintiff has paid and continues to pay a premium for the
Vehicle equipped with a known Defective Transmission which poses a safety
hazard to Plaintiff, Plaintiffs family, and others.
(2AC, ¶¶ 36 – 39.)
The
foregoing allegations taken together are sufficient to plead with reasonable
particularity that Defendant violated the various provisions of CLRA, Civil Code
§ 1770(a)(5) & (7) as alleged in ¶ 117:
(5)
Represented the goods or services have sponsorship, approval,
characteristics,
ingredients, uses, benefits, or quantities that they do not have, or that a
person has a sponsorship, approval, status, affiliation, or connection that the
person does not have.
(7)
Represented that goods or services are of a particular standard, quality, or
grade, or that goods are of a particular style or model, if they are another.
The
CLRA cause of action is sufficiently pled. Defendant’s argument that the
statements were non-actionable puffery presents a question of fact for the jury
to determine.
The
demurrer to the fourth cause of action is OVERRULED.
Motion To Strike
Meet and Confer
The
Declaration of Sandra Habib reflects that Defendant’s counsel satisfied the
meet and confer requirement set forth in Civ. Proc. Code, § 435.5.
Discussion
Defendant moves to strike the following
portions of Plaintiff’s 1AC.
u [Second Amended Complaint], Prayer for
Relief E at 36:10 (punitive damages): DENIED.
The Court
previously determined that Plaintiff has sufficiently pled fraud by
concealment, sufficient to constitute fraud for purposes of punitive damages as
that term is defined in Civil Code, § 3294(c)(3) as follows:
(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(c)(3).)
That cause
of action is sufficient to support the general claim for punitive damages that
is not tied to any specific cause of action.
Defendant is ordered to answer the Second Amended
Complaint within 10 days.