Superior Court of California 

County of Los Angeles – West District  

Beverly Hills Courthouse / Department 205 

 

 

MOVING PARTY: Defendant Airport Marina Ford 

 

RESPONDING PARTY: Plaintiff Michael L. Cohen 

 

BACKGROUND 

This action arises from a dispute over a defective Ford car.  Plaintiff Michael L. Cohen bought a Ford C-Max from Defendant Ford Motor Company (“Ford”), which was covered by an express warranty contract.  Within the applicable express warranty period, the car exhibited defects, including electrical, structural, hybrid battery and transmission problems.  Plaintiff brought the car for repairs to Defendant Fox Hills Auto Inc. dba Airport Marina Ford (“AMF”).  Plaintiff alleges AMF “fail[ed] to properly store, prepare and repair the Subject Vehicle in accordance with industry standards.”  (Compl. ¶57.)     

The operative complaint alleges claims for (1) violation of Song-Beverly Act – breach of express warranty, (2) violation of the Song Beverly Act Section 1793.2 and (3) negligent repair.  The first and second causes of action are alleged against Ford, while the third cause of action is alleged against AMF.      

This hearing is on AMF’s demurrer to the third cause of action for negligent repair.  AMF argues that the claim is barred by the economic loss doctrine, and Plaintiff has failed to plead any damages as a result of AMF’s alleged negligent repairs.   

LEGAL STANDARD 

“[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 Ins. 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 Hosp. Dist. (1992) 2 Cal.4th 962, 967.)  

Leave to amend must be allowed where there is a reasonable possibility of successful amendment. (See Goodman v. Kennedy (1976) 18 Cal.3d 335, 349 (court shall not “sustain a demurrer without leave to amend if there is any reasonable possibility that the defect can be cured by amendment”); Kong v. City of Hawaiian Gardens Redevelopment Agency (2002) 108 Cal.App.4th 1028, 1037 (“A demurrer should not be sustained without leave to amend if the complaint, liberally construed, can state a cause of action under any theory or if there is a reasonable possibility the defect can be cured by amendment.”).)  The burden is on the complainant to show the Court that a pleading can be amended successfully. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) 

 

DISCUSSION 

 

AMF argues that Plaintiff’s third cause of action for negligent repair is barred by the economic loss doctrine.  The Court disagrees. 

The economic loss rule provides that, “[i]n 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.)   

However, there is a “recognized exception to the economic loss rule for consumers who contract for certain kinds of professional services.”  (Id. at 933.)   

“In that context, … a cause of action for negligence ensures that the consumer receives the services the professional agreed to provide.  In such settings, professionals generally agree to provide ‘careful efforts’ in rendering contracted for services, but ‘most clients do not know enough to protect themselves by inspecting the professional’s work or by other independent means.’”  (Id. (citations omitted).)  “Given this disparity, a claim for professional negligence can serve the important purpose of ensuring that professionals render the ‘careful efforts’ they have contracted to provide.”  (Id. (citations omitted).) 

In a negligent performance case, a “plaintiff will be entitled to recover economic loss damages without the need to allege and prove personal injury or property damage” based on a consideration of the following factors: “(1) the extent to which the transaction was intended to affect the plaintiff, (2) the foreseeability of harm to the plaintiff, (3) the degree of certainty that the plaintiff suffered injury, (4) the closeness of the connection between the defendant’s conduct and the injury suffered, (5) the moral blame attached to the defendant’s conduct, and (6) the policy of preventing future harm.”  (North American Chemical Co. v. Superior Court (1997) 59 Cal.App.4th 764, 782, 786.)  “[T]he foreseeability of the economic harm to the plaintiff from the defendant’s negligent conduct [is] the critical factor.”  (Id. at 782.) 

Here, Plaintiff delivered his car for repair—a professional service—and reasonably expected that AMF would perform the repair with care and skill.  The transaction was clearly intended to affect the Plaintiff because the transaction was for repair of his car.  The harm to Plaintiff was foreseeable in the event AMF negligently repaired Plaintiff’s car.  Plaintiff alleges suffered injury due to the negligent repair, and public policy supports imposing liability for negligent repair where the car may result in injury to the owner or others on the road.  In sum, even if Plaintiff’s damages are solely economic, he may still seek recovery because the economic loss rule does not apply in cases involving the negligent performance of services that results in foreseeable injury. 

Citing federal court cases, AMF argues that North America Chemical Co. v. Superior Court is no longer good law.  But the holding in North American that the economic loss rule does not apply to contracts for services was recently reaffirmed by the Court of Appeal in Sheen v. Wells Fargo in 2022.  There, the Court of Appeal acknowledged there is a “recognized exception to the economic loss rule for consumers who contract for certain kinds of professional services.”  (Sheen, 12 Cal.5th at 933.)    

AMF further argues that North America predates two Supreme Court cases – Ehrlich v. Menezes (1999) 21 Cal.4th 543 and Robinson Helicopter Co., Inc. v. Dana Corp. (2004) 34 Cal.4th 949.  Neither case, however, addressed North American or its holding, and Sheen which post-dates both Ehrlich and Robinson Helicopter continues to recognize the services exception to the economic loss rule.   

As an additional ground for demurrer, AMF argues that Plaintiff fails to plead facts that defendant Airport Marina Ford’s conduct resulted in any damages.  The Court agrees.  The elements of a negligence cause of action are duty, breach, causation and damages.  (Cnty v. Santa Clara v. Atl. Ritchfield Co. (2006) 137 Cal.App.4th 292, 318.)  The Complaint expressly alleges that the “defects and nonconformities manifested themselves within the applicable express warranty period.”  (Compl. ¶16.)  It does not allege that Plaintiff paid out of pocket expenses for any repairs performed by AMF, or otherwise explain how Plaintiff was damaged by the negligent repair.  In the face of allegations that the defects were covered under warranty – and the absence of Plaintiff alleging that he actually paid out of pocket for any repairs – Plaintiff has not adequately alleged the essential element of damages to state his negligent repair claim.     

CONCLUSION 

Based on the foregoing, the Court SUSTAINS Defendant Airport Marina Ford’s demurrer on the third cause of action for negligent repair with 20 days’ leave to amend. 

     

IT IS SO ORDERED. 

 

DATED: May 9, 2023 ___________________________ 

Edward B. Moreton, Jr. 

Judge of the Superior Court