Judge Daniel M. Crowley, Case Number: 24STCV26206, Date: 2025-02-25 Tentative Ruling

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Defendant General Motors LLC’s unopposed demurrer to Plaintiff Eddie Cook’s complaint is sustained as to the 6th cause of action with 20 days leave to amend.

Defendant’s unopposed motion to strike is granted with 20 days leave to amend.

Defendant General Motors LLC (“GM”) (“Defendant”) demurs unopposed to Plaintiff Eddie Cook’s (“Cook”) (“Plaintiff”) complaint (“Complaint”) on the grounds that pursuant to C.C.P. §430.10(e), Plaintiff cannot state his sixth cause of action for fraudulent inducement – concealment against GM as a matter of law because the claim fails to plead essential elements to state the claim and is barred by the economic loss rule. (Notice of Demurrer, pg. 2; C.C.P. §430.10(e).)[1]

Defendant also moves unopposed to strike portions of Plaintiff’s Complaint pertaining to punitive damages. (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 December 6, 2024, the parties met and conferred telephonically, and the parties were unable to reach an agreement. (See Decl. of Quezada ¶3.) Defendant’s counsel’s declaration is sufficient under C.C.P. §430.41. Accordingly, the Court will consider Defendant’s demurrer.

Plaintiff filed his operative Complaint on October 9, 2024, against Defendant alleging six causes of action: (1) violation of the Song-Beverly Consumer Warranty Act (“Song-Beverly”) 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); (5) violation of the Magnuson-Moss Warranty Act; and (6) fraudulent inducement- concealment. Plaintiff’s causes of action arise from his entry into a warranty contract with GM on February 28, 2024, regarding the purchase of a 2024 Chevrolet Silverado 3500 (“Subject Vehicle”). (See Complaint.)

Defendant filed the instant demurrer and accompanying motion to strike on December 6, 2024. As of the date of this hearing no opposition has been filed.

Defendant demurs to the 6th cause of action for fraudulent inducement-concealment on the basis the claim fails to plead essential elements to state claims and is barred by the economic loss rule. (Demurrer, pg. 7; 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 GM allegedly concealed. The Complaint merely describes a list of ways in which Ford F-150 transmissions may be defective – e.g. “hesitation and/or delayed acceleration; harsh and/or hard shifting; jerking, shuddering, and/or juddering (“Transmission Defect”)” and hazardous driving conditions relating generally to the purported transmission defect, which, on information and belief, Defendant learned from pre-production and post-production testing data; early consumer complaints about the Transmission Defect made directly to Defendant GM and its network of dealers; aggregate warranty data compiled from Defendant GM’s network of dealers; testing conducted by Defendant GM in response to these complaints; as well as warranty repair and part replacements data received by Defendant GM from Defendant GM’s network of dealers. (Complaint ¶¶61-62.) 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 these Plaintiff relied on in purchasing the Subject Vehicle. Plaintiff does not plead that GM made any specific representations directly to Plaintiff. Plaintiffs do 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 aggregate warranty data 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 Ford 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, the economic loss rule bars Plaintiff’s fraud claim. The California Supreme Court in Robinson Helicopter Co., Inc. v. Dana Corp. limited its holding permitting fraud claims to proceed in contract actions to “a defendant’s affirmative misrepresentations on which Plaintiffs rely, and which expose Plaintiffs to liability for personal damages independent of the Plaintiffs’ economic loss.” (Robinson Helicopter Co., Inc. v. Dana Corp. (2004) 34 Cal.4th 979, 993.)

Here, Plaintiff’s fraud claim is based on an alleged fraudulent omission rather than affirmative misrepresentation, seeks purely economic losses, and derives from GM’s alleged breach of warranty. There are no allegations of physical damage to Plaintiff’s property beyond the defective vehicle itself, or that personal injury accompanied such losses. There are no allegations of intentional acts by GM to fit within Robinson’s narrow exception to the economic loss rule for intentional acts. (Robinson, 34 Cal.4th at pg. 993.)

Even if fraudulent inducement based on concealment claims are excepted from the economic loss rule, the Complaint fails to plead fraudulent inducement to fall within Robinson’s fraudulent inducement exception as there is no allegation that GM did not intend to honor its warranty obligations when Plaintiff purchased the vehicle. (See id. at pgs. 989-990 [limiting four exceptions to the traditional contract remedy restrictions including where the contract was fraudulently induced]; Food Safety Services v. Eco Safe Systems USA, Inc. (2012) 209 Cal.App.4th 1118, 1131 [stating to establish a claim of fraudulent inducement, one must show that the defendant did not intend to honor its contractual promises when they were made].)

Here, there is no allegation that GM “did not intend to honor its contractual promises” when Plaintiff entered into the warranty contract to state an inducement claim. The Complaint reflects that the gravamen of Plaintiff’s fraud claim is one and the same as his breach of warranty claim as it admits that Plaintiff’s fraud claim is based on GM’s alleged non-performance under the warranty contract as Plaintiff “discovered Defendant’s wrongful conduct . . . as the Vehicle continued to exhibit symptoms of defects following GM’s unsuccessful attempts to repair them.” (Complaint ¶24.) Therefore, Plaintiff’s fraud claim is barred by the economic loss rule.

Accordingly, Defendant’s demurrer to Plaintiff’s 6th cause of action is sustained with 20 days leave to amend.

Defendant’s unopposed demurrer to Plaintiff’s 6th cause of action is sustained with 20 days leave to amend.

Before filing a motion to strike, moving party’s counsel must meet and confer, in person or by telephone, with counsel for the party who filed the pleading in an attempt to reach an agreement that would resolve the objections to the pleading and obviate the need for filing a motion to strike. (C.C.P. §435.5.) A declaration must be filed with the motion to strike regarding the results of the meet and confer process. (C.C.P. §435.5(a)(3).)

Defendant’s counsel declares that on December 6, 2024, the parties met and conferred telephonically, and the parties were unable to reach an agreement. (See Decl. of Quezada ¶3.) Therefore, Defendant’s motion to strike is proper.

C.C.P. §436 provides that the Court may, upon a motion made pursuant to C.C.P. §435, or at any time within its discretion and upon terms it deems proper, “strike out any irrelevant, false, or improper matter inserted in any pleading.” (C.C.P. §436(a).)

Defendant moves to strike the following prayers for relief from the Complaint pertaining to punitive damages on the basis they are not permitted by law: Prayer ¶g at 12:15. (Notice of Motion, pg. 2.)

Punitive damages may be recovered upon a proper showing of malice, fraud, or oppression. (Civ. Code §3294(a).) “Malice” is defined as conduct intended to cause injury to a person or despicable conduct carried on with a willful and conscious disregard for the rights or safety of others. (Turman v. Turning Point of Central California, Inc. (2010) 191 Cal.App.4th 53, 63.) “Oppression” means despicable conduct subjecting a person to cruel and unjust hardship, in conscious disregard of the person’s rights. (Id.) “Fraud” is an intentional misrepresentation, deceit, or concealment of a material fact known by defendant, with intent to deprive a person of property, rights or otherwise cause injury. (Id.) Conclusory allegations, devoid of any factual assertions, are insufficient to support a conclusion that parties acted with oppression, fraud, or malice. (Smith v. Superior Court (1992) 10 Cal.App.4th 1033, 1042.)

“Conduct which warrants punitive damages must be of ‘such severity or shocking character [as] warrants the same treatment as accorded to willful misconduct – conduct in which defendant intends to cause harm.’” (Woolstrum v. Mailloux (1983) 141 Cal.App.3d Supp. 1, 10, quoting Nolin v. National Convenience Stores, Inc. (1979) 95 Cal.App.3d 279, 286.) “[C]onclusory characterization of defendant’s conduct as intentional, willful and fraudulent is a patently insufficient statement of ‘oppression, fraud, or malice, express or implied,’ within the meaning of section 3294.” (Brousseau v. Jarrett (1977) 73 Cal.App.3d 864, 872.)

Plaintiff’s first five causes of action in the Complaint are based upon GM’s alleged breaches of express and implied warranties under the Song-Beverly Consumer Warranty Act and Magnuson-Moss Warranty Act. (See generally Complaint.) Punitive damages are not available under the Song-Beverly Act or the Magnuson-Moss Warranty Act. Song-Beverly limits recovery to a refund of the purchase price paid and payable (or replacement of the subject vehicle), plus—under certain circumstances—a Civil Penalty not to exceed two times Plaintiff’s actual damages. (Civ. Code §1794; 15 U.S.C. §2301.)

As a matter of law, Plaintiff cannot demand both a civil penalty under Song-Beverly and punitive damages:

[H]ad the Legislature, by Civil Code sections 3294 (permitting punitive damages) and 1794 (permitting a civil penalty [under Song-Beverly]), 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.

(Troensegaard v. Silvercrest Industries, Inc. (1985) 175 Cal.App.3d 218, 228.) Here, like the plaintiff in Troensegaard, Plaintiff seeks both punitive damages and a “civil penalty” under Civil Code §1794, which he cannot do. (See Complaint Prayer ¶¶e, g.)

Further, the Complaint alleges that GM concealed transmission defects, but fails to allege well-pleaded facts to support that conclusory allegation. Plaintiff fails to allege what specific representation(s), if any, were made about the Subject Vehicle and its 6.6L Engine, and whether the person making those representation(s), if any, was an agent of GM. Plaintiff fails to assert the requisite facts to establish a cause of action for fraud.

Accordingly, Defendant’s motion to strike Plaintiff’s request for punitive damages from the Complaint is granted with 20 days leave to amend.

Defendant’s unopposed motion to strike is granted with 20 days leave to amend.

Hon. Daniel M. Crowley

Judge of the Superior Court

[1] The Court notes Defendant only demurs to the 6th cause of action. Defendant does not demur to the 1st, 2nd, 3rd, 4th, or 5th causes of action alleged in Plaintiff’s Complaint.