Judge Daniel M. Crowley, Case Number: 2224STCV03729, Date: 2024-09-18 Tentative Ruling

Judge: Daniel M. Crowley, Case: 2224STCV03729, Date: 2024-09-18 Tentative Ruling

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Case Number: 2224STCV03729 Hearing Date: September 18, 2024 Dept: 71

Defendant General Motors, LLC’s demurrer to Plaintiff Matthew Vaughn’s first amended complaint is sustained as to the 5th cause of action with 20 days leave to amend.

Defendant General Motors, LLC (“GM”) (“Defendant”) demurs to Plaintiff Matthew Vaughn’s (“Vaughn”) (“Plaintiff”) first amended complaint (“FAC”) on the grounds Plaintiff cannot state his 5th cause of action[1] for fraudulent inducement – concealment against it because the cause of action is barred by the applicable statute of limitations; the claim fails to plead essential elements to state a cause of action; and fails to allege a transactional relationship giving rise to a duty to disclose. (Notice of Demurrer, pg. 2; C.C.P. §430.10(e).)

Defendant also moves to strike portions of Plaintiff’s FAC. (Notice of MTS, pg. 2.)

Before filing a demurrer, the moving party must meet and confer in person, by telephone, or by video conference with the party who filed the pleading to attempt to reach an agreement that would resolve the objections to the pleading and obviate the need for filing the demurrer. (C.C.P. §430.41, emphasis added.)

Defendant’s counsel declares that on June 27, 2024, counsel for Defendant met and conferred telephonically with Plaintiff’s counsel, and the parties were unable to reach an agreement. (See Decl. of Quezada ¶2.) Defendant’s counsel’s declaration is sufficient under C.C.P. §430.41. Accordingly, the Court will consider Defendant’s demurrer.

Plaintiff filed his initial Complaint on February 14, 2024, against Defendant. Plaintiff filed the operative FAC against Defendant on May 9, 2024, alleging five causes of action: (1) violation of Civil Code §1793.2(D); (2) violation of Civil Code §1793.2(B); (3) violation of Civil Code §1793.2(A)(3); (4) breach of implied warranty of merchantability (Civ. Code §§1791.1, 1794, 1795.5); and (5) fraudulent inducement- concealment. Plaintiff’s causes of action arise from his entry into a warranty contract with Defendant on January 3, 2021, regarding the purchase of a 2021 Chevrolet Silverado 1500 at AutoNation Chevrolet Valencia (“Subject Vehicle”). (See FAC.)

Defendant filed the instant demurrer and accompanying motion to strike on June 28, 2024. Plaintiff filed his opposition on September 5, 2024. Defendant filed its reply on September 6, 2024.

Defendant demurs to the 5th cause of action for fraudulent inducement-concealment on the basis the claims is barred by the applicable statute of limitations, fails to plead essential elements to state claims, and fails to allege a transactional relationship giving rise to a duty to disclose. (Demurrer, pg. 2; C.C.P. §430.10(e).)

“[A] demurrer tests the legal sufficiency of the allegations in a complaint.” (Lewis v. Safeway, Inc. (2015) 235 Cal.App.4th 385, 388.) A demurrer can be used only to challenge defects that appear on the face of the pleading under attack or from matters outside the pleading that are judicially noticeable. (See Donabedian v. Mercury Insurance Co. (2004) 116 Cal.App.4th 968, 994 [in ruling on a demurrer, a court may not consider declarations, matters not subject to judicial notice, or documents not accepted for the truth of their contents].) For purposes of ruling on a demurrer, all facts pleaded in a complaint are assumed to be true, but the reviewing court does not assume the truth of conclusions of law. (Aubry v. Tri-City Hospital District (1992) 2 Cal.4th 962, 967.)

The required elements for fraudulent concealment are: “(1) concealment or suppression of a material fact; (2) by a defendant with a duty to disclose the fact to the plaintiff; (3) the defendant intended to defraud the plaintiff by intentionally concealing or suppressing the fact; (4) the plaintiff was unaware of the fact and would not have acted as he or she did if he or she had known of the concealed or suppressed fact; and (5) plaintiff sustained damage as a result of the concealment or suppression of the fact.” (See Bank of America Corp. v. Superior Court (2011) 198 Cal.App.4th 862, 870; Civ. Code §1710(3); CACI 1901.) The rule of specificity of pleading is only intended for affirmative fraud cases not fraud by concealment. (See Alfaro v. Community Housing Improvement Systems & Planning Association, Inc. (2009) 171 Cal.App.4th 1356, 1384.)

Plaintiff failed to plead with sufficient particularity the defect Defendant allegedly concealed. The FAC merely describes a list of ways in which Chevrolet Silverado 1500 transmissions may be defective – e.g. “hard or harsh shifts, jerking, lurching, hesitation on acceleration, surging and/or inability to control the vehicle’s speed, acceleration, or deceleration (“Transmission Defect”)” and hazardous driving conditions relating generally to the purported transmission defect in technical service bulletins (“TSBs”). (FAC ¶¶63-72). Plaintiff does not allege what the defect is, let alone the defect in the Subject Vehicle, which is insufficient to establish Plaintiff’s fraud claim. (See Santana v. FCA US LLC (2020) 56 Cal.App.5th 334, 345 [“The very existence of a warranty presupposes that some defects may occur. Thus, the occurrence of a few defects that . . . mostly involved vehicles Santana did not own, is not enough to demonstrate an intent to conceal a defect.”].)

Further, Plaintiff fails to allege what representations GM made to this particular Plaintiff regarding the Transmission Defect that this Plaintiff relied on in purchasing the Subject Vehicle. Plaintiff does not plead that GM made any specific representations directly to Plaintiff. Plaintiff does not allege any direct contact with GM before purchasing the Subject Vehicle where representations regarding the Transmission Defect at issue should or could have been revealed. Merely alleging that GM omitted facts about an alleged Transmission Defect in TSBs is not sufficient to establish: (1) knowledge of a particular defect in a particular vehicle, or (2) intent to conceal this particular knowledge from this particular Plaintiff. (See Tenzer v. Superscope, Inc. (1985) 39 Cal. 3d 18, 30 [“something more than nonperformance is required to prove the defendant’s intent not to perform his promise”]; American Honda Motor Co., Inc. v. Superior Court (2011) 199 Cal.App.4th 1367, 1378 [“A TSB is not and cannot fairly be construed by a trial court as an admission of a design or other defect, because TSBs are routinely issued to dealers to help diagnose and repair typical complaints.”].)

Plaintiff has also failed to show GM had a duty to disclose to Plaintiff. (LiMandri v. Judkins (1997) 52 Cal.App.4th 326, 336 [“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.’”].) Plaintiff fails to allege a transactional relationship with GM that would invoke a duty on the part of GM to disclose to Plaintiff. (Id. at pgs. 336-337.)

Further, Plaintiff fails to allege that GM had exclusive knowledge of the purported transmission defect at the time of sale to trigger a duty to disclose. (Id. at pg. 337 [stating duty to disclose may exist “when the defendant had exclusive knowledge of material facts not known to the Plaintiff”]; see FAC ¶73.) First, Plaintiff’s allegation regarding “pre-production testing data” is insufficient to allege what the testing revealed or tie it to the alleged defects at issue here. Second, Plaintiff’s conclusory allegations regarding consumer complaints fail to allege any connection between the issues raised in those unspecified consumer complaints and Plaintiff’s experiences with the Subject Vehicle. Finally, assuming GM’s knowledge of each consumer complaint relating to the Chevrolet Silverado 1500 transmission, it does not follow that GM knew the Subject Vehicle’s transmission was defective, much less that there was any supposed common defect.

Accordingly, Defendant’s demurrer to Plaintiff’s 5th cause of action is sustained with 20 days leave to amend.

A demurrer lies only where the dates in question are shown on the face of the complaint. If they are not, there is no ground for general or special demurrer. (Union Carbide Corp. v. Superior Court (1984) 36 Cal.3d 15, 25.) A court may sustain a demurrer on the ground of failure to state sufficient facts if “the complaint shows on its face the statute [of limitations] bars the action.” (E-Fab, Inc. v. Accountants, Inc. Services (2007) 153 Cal.App.4th 1308, 1315.) A demurrer is not sustainable if there is only a possibility that the cause of action is time-barred; the statute of limitations defense must be clearly and affirmatively apparent from the allegations in the pleading. (Id. at pgs. 1315-1316.)

When evaluating whether a claim is time-barred, a court must determine (1) which statute of limitations applies and (2) when the claim accrued. (Id. at pg. 1316.) The statute of limitations under C.C.P §338(d) states: “An action for relief on the ground of fraud or mistake. The cause of action in that case is not deemed to have accrued until the discovery, by the aggrieved party, of the facts constituting the fraud or mistake.” (C.C.P §338(d).)

Here, the operative portion of the statute is “until the discovery, by the aggrieved party, of the facts constituting the fraud.” (C.C.P. §338(d); see also Britton v. Girardi (2015) 235 Cal.App.4th 721, 734 [stating cause of action is not deemed to have accrued until the discovery, by the aggrieved party, of the facts constituting the fraud].)

Defendant’s argument that the Fraudulent Inducement-Concealment occurred at the time of the sale of the Subject Vehicle in or around January 3, 2021, and Plaintiff filed this action on February 14, 2024, is misplaced. Under C.C.P. §338(d), the cause of action accrues once the plaintiff discovers the facts constituting the fraud. (C.C.P. §338(d).)

That the alleged fraudulent inducement-concealment occurred on the date of sale does not establish that Plaintiff discovered the facts constituting fraud on that date. (See Broberg v. Guardian Life Insurance Co. of America (2009) 171 Cal.App.4th 912, 921 [“When a plaintiff reasonably should have discovered facts for purposes of the accrual of a cause of action . . . is generally a question of fact, properly decided as a matter of law only if the evidence (or, in this case, the allegations in the complaint and facts properly subject to judicial notice) can support only one reasonable conclusion.”].)

Here, Plaintiff allege that GM’s fraudulent inducement-concealment occurred, not only at the time of sale, but every time that Plaintiff presented Subject Vehicle to Defendant’s dealership(s) with concerns related to the Transmission Defect and up through the time that Plaintiff filed his Complaint. (FAC ¶¶23-24.) Consequently, the statute of limitations defense is not clearly and affirmatively apparent from the allegations in the FAC and cannot be asserted on demurrer.

Defendant’s demurrer to Plaintiff’s 5th cause of action is sustained with 20 days leave to amend.

In light of this Court’s ruling on the demurrer, Defendant’s motion to strike is denied as moot.

Hon. Daniel M. Crowley

Judge of the Superior Court

[1] The Court notes Defendant only demurs to the 5th cause of action, and therefore does not demur to the 1st, 2nd, 3rd, or 4th causes of action asserted in the FAC.