Judge: David B. Gelfound, Case: 22CHCV01394, Date: 2024-08-02 Tentative Ruling

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Case Number: 22CHCV01394    Hearing Date: August 2, 2024    Dept: F49

LOS ANGELES SUPERIOR COURT

NORTH VALLEY DISTRICT

DEPARTMENT F49

MOTION FOR SUMMARY JUDGMENT

Motion filed: 5/17/24

MOVING PARTY: Defendant Jones BH Acquisition, LLC d/b/a Audi Beverly Hills (the “Moving Defendant” or “Audi Beverely Hills”) 

RESPONDING PARTY: Plaintiffs Chance Tassone and Chance of a Lifetime, Inc. (“Plaintiffs”)

NOTICE: OK.¿¿¿ 

RELIEF REQUESTED: An order granting Audi Beverly Hills’ Motion for Summary Judgment on the Fourth Cause of Action in Plaintiffs’ Second Amended Complaint against it.

TENTATIVE RULING: The motion is GRANTED.

BACKGROUND

Plaintiffs filed this Song-Beverly Consumer Warranty Act lawsuit over alleged defects in their 2021 Audi E-tron (the “Subject Vehicle”), which was manufactured by Defendant Volkswagen Group of America, Inc. (“Volkswagen”). Plaintiffs allege that they entered into a warranty contract with Defendant Volkswagen on February 26, 2021. (Compl. ¶ 15.) Plaintiffs further allege that they delivered the Subject Vehicle to Defendant Audi Beverly Hills for repair on numerous occasions, however, Audi Beverly Hills failed to use ordinary care and skill in repairing the Subject Vehicle. (Id. ¶¶ 54-59.)

            On December 15, 2022, Plaintiffs initiated this action. Subsequently, Plaintiffs filed their First Amended Complaint (“FAC”) on January 17, 2023.

            On May 8, 2023, the Court sustained Defendants Volkswagen and Audi Beverly Hills’ demurrer to the FAC, granting Plaintiffs 30 days to amend. (5/8/23 Minute Order)

            On June 7, 2023, Plaintiffs filed their operative Second Amended Complaint (“SAC”) against Defendants Volkswagen and Audi Beverly Hills (collectively, “Defendants”), and Does 1 through 10, alleging the following causes of action: (1) Violation of Song-Beverly Act – Breach of Express Warranty (against Defendants Volkswagen and Does 1 through 10), (2) Violation of the Song-Beverly Act – Breach of Implied Warranty (against Defendants Volkswagen and Does 1 through 10), (3) Violation of the Song-Beverly Act Section 1793.2 (against Defendants Volkswagen and Does 1 through 10), and (4) Negligent Repair (against Defendants Audi Beverly Hills and Does 1 through 10). Subsequently, Audi Beverly Hills filed its Answer to the SAC on July 19, 2023.

            On May 17, 2024, Defendant Audi Beverly Hills filed the instant Motion for Summary Judgment (the “Motion”). Subsequently, Plaintiffs filed their Opposition on July 23, 2024, and Audi Beverly Hills replied on July 26, 2024.

ANALYSIS

“A party may move for summary judgment in an action or proceeding if it is contended that the action has no merit or that there is no defense to the action or proceeding.” (Code Civ. Proc., § 437c, subd. (a)(1).)

“The motion for summary judgment shall be granted if all the papers submitted show that there is no triable issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. In determining if the papers show that there is no triable issue as to any material fact, the court shall consider all of the evidence set forth in the papers, except the evidence to which objections have been made and sustained by the court, and all inferences reasonably deducible from the evidence, except summary judgment shall not be granted by the court based on inferences reasonably deducible from the evidence if contradicted by other inferences or evidence that raise a triable issue as to any material fact.” (Code Civ. Proc., § 437c, subd. (c).) 

“[I]f the moving papers establish prima facie showing that justifies a [ruling] in the [defendant’s] favor, the burden then shifts to the [plaintiff] to make prima facie showing of the existence of a triable material factual issue.”' (Citation.)" (See's Candy Shops, Inc. v. Superior Court (2012) 210 Cal.App.4th 889, 900, quoting Rehmani v. Superior Court (2012) 204 Cal.App.4th 945, 950.) “The defendant or cross-defendant shall not rely upon the allegations or denials of its pleadings to show that a triable issue of material fact exists but, instead, shall set forth the specific facts showing that a triable issue of material fact exists as to the cause of action or a defense thereto.” (Code Civ. Proc., § 437c, subd. (p)(1).) 

A.    Motion for Summary Judgment

1)      Fourth Cause of Action – Negligent Repair

The Fourth Cause of Action for Negligent Repair is based on a negligence theory, which requires the same elements of a negligence cause of action – the existence of a legal duty of care, a breach of that duty, and approximate causation resulting in injury. (McIntyre v. The Colonies-Pacific, LLC (2014) 228 Cal.App.4th 664, 671.)

            A negligence claim must be based on a duty owed by the defendant to the plaintiff. Absent such a duty, there is no liability, no matter how easily the injury might have been prevented. (J.L. v. Children’s Institute, Inc. (2009) 177 Cal.App.4th 388, 396; Bily v. Arthur Young & Co. (1992) 3 Cal.4th 370, 397 [threshold element is existence of duty to use due care toward another].)

            Here, Plaintiffs do not identify any statue or regulation that requires Audi Beverly Hills to repair the Subject Vehicle with due care. Without a statutory duty, Plaintiffs ground their negligence claim on a common law duty. However, this cause of action fails due to the economic loss rule, as the Court finds no such duty exists in this context.

a.      Economic Loss Rule

The Economic Loss Rule can be stated as follows - in general, there is no recovery in tort for negligently inflicted ‘purely economic losses,’ meaning financial harm unaccompanied by physical or property damage.” (Sheen v. Wells Fargo Bank, N.A. (2022) 12 Cal.5th 905, 922, citing Southern California Gas Leak Cases (2019) 7 Cal.5th 391.)

Courts have established that "conduct amounting to a breach of contract becomes tortious only when it also violates a duty independent of the contract arising from principles of tort law." (Erlich v. Menezes, (1999) 21 Cal.4th 543, 551; see also Freeman & Mills, Inc. v. Belcher Oil Co. (1995) 11 Cal.4th 85, 102). Tort damages have been allowed in contract cases where a breach of duty directly causes physical injury; for breaches of the covenant of good faith and fair dealing in insurance contracts; for wrongful discharge in violation of fundamental public policy; or where the contract was fraudulently induced. In these cases, the duty giving rise to tort liability is either completely independent of the contract or arises from conduct both intentional and intended to harm (Erlich v. Menezes, supra, at pp. 551–552; Butler-Rupp v. Lourdeaux (2005) 134 Cal.App.4th 1220, 1227).

Here, it is undisputed that Plaintiffs presented the Subject Vehicle to Audi Beverly Hills, which performed repairs from August 12 to 15, 2022 (Undisputed Material Fact (“UMF”) No. 3). Additionally, there are no allegations of fraud or other intentional tort claims independent of the breach of contract cause of action. Thus, this repair service, whether under warranty or not, establishes the parties in contractual privity, thereby implicating the Economic Loss Rule.

Moreover, it is undisputed that Plaintiffs did not incur any bodily injury or property damage due to the alleged negligence (UMF Nos. 4-6). Based on these facts, Audi Beverly Hills correctly asserts that the Negligent Repair claim is barred by the Economic Loss Rule, as Plaintiffs only claim economic loss damages and cannot prove that Audi Beverly Hills owed them an independent duty in tort.

Accordingly, the Court concludes that Audi Beverly Hills has demonstrated a prima facie case that there is no triable issue of material fact and that it is entitled to judgment as a matter of law. The burden now shifts to the Plaintiffs.

            Here, Plaintiffs first contend that a negligent breach of an agreement to perform a service, in itself, constitutes a tort, citing Eads v. Marks (1952) 39 Cal.2d 807, 810-811.

The Court distinguishes the Eads v. Marks case. In Eads, the court found that the defendants' breach of a promise for the benefit of the plaintiff's two-year-old minor child caused severe and permanent injuries, pain, and suffering to the child, thereby making the defendants liable in tort (Id. at p. 810). This ruling is consistent with the general principle of the Economic Loss Rule, which only bars recovery for purely economic loss but does not preclude recovery for personal injuries or property damages.

Here, it is undisputed that Plaintiffs did not suffer or claim recovery for any injuries or property damages as a result of the alleged negligence (UMF Nos. 4-6). Therefore, Plaintiffs’ contention does not meet their burden to show the existence of a triable issue regarding the applicability of the Economic Loss Rule.

            Additionally, Plaintiffs argue that although the damages they seek are in the form of monetary damages, they are not economic losses (Opp’n. at p. 5). The Court finds this argument unpersuasive.

The Sheen v. Wells Fargo Bank, N.A. court clarified that "'purely economic losses' mean[s] financial harm unaccompanied by physical or property damage" (Sheen v. Wells Fargo Bank, N.A., supra, 12 Cal.5th at p. 922). Thus, the crucial point is not the form of the recovery but the nature of the harm itself— specifically, whether the monetary damages are related to or intended to compensate physical or property damage.

As the undisputed evidence shows, Plaintiffs did not sustain any personal injuries or property damage. Consequently, their argument that their claimed damages—including those paid or payable under the lease agreement, incidental damages such as out-of-pocket expenses for tows or rentals, insurance premiums, registration fees, extended service contracts/warranties, repair deductibles, and repair and maintenance costs—are distinct from economic losses within the meaning of Economic Loss Rule is unsupported.

The Court, therefore, concludes that Plaintiffs have failed to meet their burden of demonstrating a prima facie case showing the existence of a triable issue of material fact, which leads to the granting of the Motion.

In conclusion, the Court GRANTS the Motion for Summary Judgment.

CONCLUSION

Defendant Audi Beverly Hills’ Motion for Summary Judgment is GRANTED.

Moving party to provide notice.