Judge: Elaine Lu, Case: 23STCV04944, Date: 2023-10-04 Tentative Ruling

Case Number: 23STCV04944    Hearing Date: October 4, 2023    Dept: 26

Superior Court of California

County of Los Angeles

Department 26

Procedural Background

On March 6, 2023, Plaintiff Art G. Garcia (“Plaintiff”) filed the instant action against Defendants DWWVF, Inc. dba David Wilsons Villa Ford (“DWWVF”), and Ford Motor Company (“Ford”) (jointly “Defendants”).  The complaint asserts two causes of action for (1) Violation of the Song-Beverly Act – Breach of Express Warranty against Defendant Ford, and (2) Negligent Repair against Defendant DWWVF.

            On April 13, 2023, Defendant DWWVF filed the instant demurrer to the complaint.  On September 18, 2023, Plaintiff filed an opposition.  On September 25, 2023, Defendant DWWVF filed a reply.

Allegations of the Operative Complaint

            The complaint alleges that:

            “On January 1, 2019, Plaintiff entered into a warranty contract with FORD regarding a 2019 Ford Mustang [‘Subject Vehicle’][.]”  (Complaint ¶ 15.) 

            “Defects and nonconformities to warranty manifested themselves within the applicable express warranty period, including but not limited to engine and transmission problems.”  (Id. ¶ 16.)  Beginning October 9, 2021, Plaintiff brought in the Subject Vehicle to repair the nonconformities, but Ford was unable to conform the Subject Vehicle to the applicable express warranty after a reasonable number of repair attempts.  (Id. ¶¶ 18-19.)

            After these failed repair attempts, “Defendant FORD [] failed to either promptly replace the Subject Vehicle or to promptly make restitution in accordance with the Song-Beverly Act.”  (Id. ¶ 21.)

            “Plaintiff delivered the Subject Vehicle to Defendant DWWVF, INC. for repair of on numerous occasions.”  (Id. ¶ 28.)  “Defendant DWWVF, INC. owed a duty to Plaintiff to use ordinary care and skill in storage, preparation and repair of the Subject Vehicle in accordance with industry standards.”  (Id. ¶ 29.)  “Defendant DWWVF, INC. breached its duty to Plaintiff to use ordinary care and skill by failing to properly store, prepare and repair of the Subject Vehicle in accordance with industry standards.”  (Id. ¶ 30.)  “Defendant DWWVF, INC.’s negligent breach of its duties owed to Plaintiff was a proximate cause of Plaintiff’s damages.”  (Id. ¶ 31.) 

Legal Standard

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. (Blank v. Kirwan (1985) 39 Cal 3d 311, 318.) No other extrinsic evidence can be considered (i.e., no “speaking demurrers”). (Ion Equipment Corp. v. Nelson (1980) 110 Cal.App.3d 868, 881.)

A demurrer for sufficiency tests whether the complaint states a cause of action. (Hahn v. Mirda (2007) 147 Cal. App. 4th 740, 747.)  When considering demurrers, courts “give the complaint a reasonable interpretation, and read it in context.”  (Schifando v. City of Los Angeles (2003) 31 Cal.4th 1074, 1081.)  In a demurrer proceeding, the defects must be apparent on the face of the pleading or via proper judicial notice.  (Donabedian v. Mercury Ins. Co. (2004) 116 Cal. App. 4th 968, 994.)  “A demurrer tests the pleadings alone and not the evidence or other extrinsic matters.  Therefore, it lies only where the defects appear on the face of the pleading or are judicially noticed.”  (SKF Farms v. Superior Ct. (1984) 153 Cal. App. 3d 902, 905.)  “The only issue involved in a demurrer hearing is whether the complaint, as it stands, unconnected with extraneous matters, states a cause of action.”  (Hahn, supra, 147 Cal.App.4th at 747.) 

Meet and Confer Requirement

Code of Civil Procedure § 430.41, subdivision (a) requires that “[b]efore filing a demurrer pursuant to this chapter, the demurring party shall meet and confer¿in person or by telephone¿with the party who filed the pleading that is subject to demurrer for the purpose of determining whether an agreement can be reached that would resolve the objections to be raised in the demurrer.” The parties are to meet and confer at least five days before the date the responsive pleading is due and if they are unable to meet the demurring party shall be granted an automatic 30-day extension.  (CCP § 430.41(a)(2).)  The demurring party must also file and serve a declaration detailing the meet and confer efforts.  (Id.¿at (a)(3).)¿ If an amended pleading is filed, the parties must meet and confer again before a demurrer may be filed to the amended pleading.  (Id.¿at (a).) 

Here, Defendant DWWVF has fulfilled the meet and confer requirements.  (Ross Decl. ¶ 3.)

Discussion

Second Cause of Action: Negligent Repair

            Defendant DWWVF contends that the second cause of action for Negligent Repair is (1) barred by the Economic Loss Rule, and (2) fails because Plaintiff fails to allege damages.

            The Economic Loss Rule is Inapplicable

            The Economic Loss Rule “is deceptively easy to state: 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.)  “The economic loss rule has been applied in various contexts. First, it carries force when courts are concerned about imposing ‘ “liability in an indeterminate amount for an indeterminate time to an indeterminate class.” ’ [Citation.]”  (Ibid.)  “In another recurring set of circumstances, the rule functions to bar claims in negligence for pure economic losses in deference to a contract between litigating parties.”  (Ibid.)  “Because it involves parties who are in contractual privity, this strand of the economic loss rule is sometimes referred to as the ‘contractual economic loss rule,’ ‘contractual rule,’ or ‘consensual paradigm.’”  (Id. at p.923.)

            However, “[n]ot all tort claims for monetary losses between contractual parties are barred by the economic loss rule. But such claims are barred when they arise from — or are not independent of — the parties’ underlying contracts.”  (Ibid.)  For example, “‘outside the insurance context, “a tortious breach of contract . . . may be found when (1) the breach is accompanied by a traditional common law tort, such as fraud or conversion; (2) the means used to breach the contract are tortious, involving deceit or undue coercion; or (3) one party intentionally breaches the contract intending or knowing that such a breach will cause severe, unmitigable harm in the form of mental anguish, personal hardship, or substantial consequential damages.” ’[Citations.]”  (Robinson Helicopter Co., Inc. v. Dana Corp. (2004) 34 Cal.4th 979, 990.)  Similarly, “[t]ort damages have been permitted in contract cases where a breach of duty directly causes physical injury [Citation]; for breach of the covenant of good faith and fair dealing in insurance contracts [Citation}; for wrongful discharge in violation of fundamental public policy [Citation]; or where the contract was fraudulently induced. [Citation.] In each of these cases, the duty that gives rise to tort liability is either completely independent of the contract or arises from conduct which is both intentional and intended to harm.” (Erlich v. Menezes (1999) 21 Cal.4th 543, 551–552.)

            Here, the Economic Loss Rule is plainly inapplicable to Plaintiff’s claims against Defendant DWWVF.  As to Defendant DWWVF, the complaint alleges that “Plaintiff delivered the Subject Vehicle to Defendant DWWVF, INC. for repair of on numerous occasions.”  (Complaint ¶ 28.)  “Defendant DWWVF, INC. owed a duty to Plaintiff to use ordinary care and skill in storage, preparation and repair of the Subject Vehicle in accordance with industry standards.”  (Id. ¶ 29.)  “Defendant DWWVF, INC. breached its duty to Plaintiff to use ordinary care and skill by failing to properly store, prepare and repair of the Subject Vehicle in accordance with industry standards.”  (Id. ¶ 30.)  “Defendant DWWVF, INC.’s negligent breach of its duties owed to Plaintiff was a proximate cause of Plaintiff’s damages.”  (Id. ¶ 31.)  Even presuming that the alleged damages are only economic – which notably the complaint does not allege – the economic loss rule is not applicable under these circumstances.

            First, in the instant action there is no concern about imposing “ ‘ “liability in an indeterminate amount for an indeterminate time to an indeterminate class.” ’ [Citation.]”  (Sheen, supra, 12 Cal.5th at p.922.)  Plaintiff directly brought the Subject Vehicle to Defendant DWWVF to repair.  This is not a scenario where Defendant DWWVF’s negligent repair of the Subject Vehicle caused a breakdown on a freeway for which Plaintiff is suing Defendant DWWVF for the economic damages caused by a subsequent traffic delay.  (See e.g., Southern California Gas Leak Cases (2019) 7 Cal.5th 391, 402–403 [discussing a hypothetical scenario where the economic loss rule would apply absent contractual privity, “where ‘a defendant negligently causes an automobile accident that blocks a major traffic artery such as a bridge or tunnel.’ [Citations.] That defendant would of course be liable for ‘personal injuries and property damage suffered in such an accident.’ [Citation.] But would ‘any court,’ we continued, ‘allow recovery by the myriad [other] third parties who might claim [purely] economic losses because the bridge or tunnel’ was blocked? [Citation.] Based on concerns about limitless liability and unending litigation, as well as on long-standing legal consensus, we considered that prospect ‘doubtful.’ [Citation.]”].) 

            Nor does Defendant DWWVF contend that this type of economic loss rule is applicable.  Rather, Defendant DWWVF contends that – as coined by the Supreme Court in Sheen – the contractual economic loss rule applies.  Specifically, Defendant DWWVF claims that “Plaintiff’s negligent repair claim squarely falls within the purview of the economic loss rule. The crux of Plaintiff’s claim is that [DWWVF] failed to repair Plaintiff’s vehicle to conform to warranty. The claim arises from, and is not independent of, the warranty contract.”  (Demurrer at p.3:24-27.)  However, DWWVF is not a party to the warranty contract.  As alleged in the complaint, only Plaintiff and Defendant Ford are parties to the warranty contract.  (Complaint ¶ 15, Exh. 1.)  Thus, the claim against DWWVF cannot arise from the warranty contract. 

            Rather, the claim against DWWVF arises from Plaintiff bringing the Subject Vehicle to DWWVF and DWWVF failing below the industry standard in storing, preparing, and repairing the Subject Vehicle.  (Complaint ¶¶ 28-30.)  Thus, the claim against DWWVF is independent of any contract.

            Accordingly, Defendant DWWVF’s demurrer based on the economic loss rule is OVERRULED.

            Plaintiff Sufficiently Alleges Damages

            “‘The elements of a negligence cause of action are the existence of a legal duty of care, breach of that duty, and proximate cause resulting in injury.’ [Citations.]”  (McIntyre v. The Colonies-Pacific, LLC (2014) 228 Cal.App.4th 664, 671.)

            As noted above, Plaintiff brought the Subject Vehicle to DWWVF and DWWVF failed to comply with the industry standard in storing, preparing, and repairing the Subject Vehicle.  (Complaint ¶¶ 28-30.)  “Defendant DWWVF, INC.’s negligent breach of its duties owed to Plaintiff was a proximate cause of Plaintiff’s damages.”  (Id. ¶ 31.)  Though Plaintiff does not specify the damages, the complaint clearly specifies that Plaintiff did suffer damages as a result of DWWVF’s claims.  California follows a notice pleading standard, (See e.g., Morris v. JPMorgan Chase Bank, N.A. (2022) 78 Cal.App.5th 279, 305, Fn. 14), and the pleadings are generally liberally construed.  (CCP § 452, [“In the construction of a pleading, for the purpose of determining its effect, its allegations must be liberally construed, with a view to substantial justice between the parties.”].)  Defendant DWWVF does not cite any authority indicating that conclusory allegations of damages are insufficient as a matter of law.

            Accordingly, Defendant DWWVF’s demurrer to the second cause of action for failure to allege damages is OVERRULED.

CONCLUSION AND ORDER

Based on the foregoing, Defendant DWWVF, Inc. dba David Wilsons Villa Ford’s  demurrer to the complaint is OVERRULED.

Defendant DWWVF, Inc. dba David Wilsons Villa Ford is to file an answer on or before November 6, 2023.

The case management conference is continued to November 8, 2023 at 8:30 am.

Moving Party is ordered to give notice and file proof of service of such.

DATED:  October ___, 2023                                                 ___________________________

                                                                                          Elaine Lu

                                                                                          Judge of the Superior Court