Judge: Frank M. Tavelman, Case: 22BBCV00912, Date: 2023-12-22 Tentative Ruling

Case Number: 22BBCV00912    Hearing Date: December 22, 2023    Dept: A

LOS ANGELES SUPERIOR COURT

NORTH CENTRAL DISTRICT - BURBANK

DEPARTMENT A

DEMURRER & MOTION TO STRIKE

MP:     General Motors, LLC (Defendant)

RP:     Kevin W. Arnold (Plaintiff)

NOTICE:

The Court is not requesting oral argument on this matter.  Pursuant to California Rules of Court, Rule 3.1308(a)(1) notice of intent to appear is required.  Unless the Court directs argument in the Tentative Ruling, no argument will be permitted unless a “party notifies all other parties and the court by 4:00 p.m. on the court day before the hearing of the party’s intention to appear and argue.  The tentative ruling will become the ruling of the court if no notice of intent to appear is received.”  

Notice may be given either by email at BurDeptA@LACourt.org or by telephone at (818) 260-8412.

ALLEGATIONS:

Kevin W. Arnold (“Plaintiff”) brings this action against General Motors, LLC (“GM”) in connection with alleged defects in Plaintiff’s vehicle. Specifically, Plaintiff claims GM sold him a certified pre-owned 2017 Cadillac Escalade (“Subject Vehicle”) on February 25, 2021, which contained a defective transmission (“Transmission Defect”). Plaintiff’s Second Amended Complaint (“SAC”) contains four causes of action for (1) Violation of Song-Beverly Act- Breach of Express Warranty, (2) Violation of Song-Beverly Act - Breach of Implied Warranty, (3) Violation of Song- Beverly Act Section 1793.2, and (4) Fraudulent Inducement- Concealment.

On July 30, 2023, the Court sustained GM’s demurrer to Plaintiff’s First Amended Complaint (“FAC”). GM had demurred to the FAC’s fourth cause of action for fraudulent concealment, arguing that Plaintiff did not sufficiently plead his claim with particularity, and failed to appropriately allege a transactional relationship resulting in a duty to disclose. The Court found Plaintiff had pled his cause of action with sufficient particularity but that there were no allegations of agency between GM and the Dealership which sold Plaintiff the Subject Vehicle. The Court sustained the demurrer with 20 days’ leave to amend.

GM now demurs to the fourth cause of action for Fraudulent Inducement-Concealment on the grounds that Plaintiff has not pled sufficient facts to establish the elements of his claim and has failed to allege a transactional relationship to establish a duty to disclose. GM also seeks to strike the SAC’s request for punitive damages; however, but no such motion to strike was noticed for this hearing and GM submits no memorandum of points and authorities.

ANALYSIS:

I.                    LEGAL STANDARDS

The grounds for a demurrer must appear on the face of the pleading or from judicially noticeable matters. (C.C.P. § 430.30(a); Blank v. Kirwan (1985) 39 Cal. 3d 311, 318.) A demurrer for sufficiency tests whether the complaint states a cause of action. (Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747.) The only issue involved in a demurrer hearing is whether the complaint states a cause of action. (Id.)

A demurrer assumes the truth of all factual, material allegations properly pled in the challenged pleading. (Blank v. Kirwan, supra, 39 Cal. 3d at p. 318.) No matter how unlikely or improbable, the plaintiff’s allegations must be accepted as true for the purpose of ruling on the demurrer. (Del E. Webb Corp. v. Structural Materials Co. (1981) 123 Cal.  App. 3d 593, 604.) But this does not include contentions; deductions; conclusions of fact or law alleged in the complaint; facts impossible in law; or allegations contrary to facts of which a court may take judicial notice.  (Blank, supra, 39 Cal. 3d at 318.)

Pursuant to Code of Civil Procedure (“C.C.P.”) §§ 430.10(e) and (f), the party against whom a complaint has been filed may demur to the pleading on the grounds that the pleading does not state facts sufficient to constitute a cause of action, or that the pleading is uncertain, ambiguous and/or unintelligible. It is an abuse of discretion to sustain a demurrer without leave to amend if there is a reasonable probability that the defect can be cured by amendment. (Schifando v. City of Los Angeles (2003) 31 Cal. 4th 1074, 1082.)

Motions to strike are used to reach defects or objections to pleadings that are not challengeable by demurrer, such as words, phrases, and prayers for damages. (See C.C.P. §§ 435, 436, and 437.) The proper procedure to attack false allegations in a pleading is a motion to strike. (C.C.P. § 436(a).) In granting a motion to strike made under C.C.P. § 435, “[t]he court may, upon a motion made pursuant to Section 435 [notice of motion to strike whole or part of complaint], or at any time in its discretion, and upon terms it deems proper: (a) Strike out any irrelevant, false, or improper matter inserted in any pleading.” (C.C.P. § 436(a).) Irrelevant matters include immaterial allegations that are not essential to the claim or those not pertinent to or supported by an otherwise sufficient claim. (C.C.P. § 431.10.)

The court may also “[s]trike out all or any part of any pleading not drawn or filed in conformity with the laws of this state, a court rule, or an order of the court.” (C.C.P. § 436 (b).)

To succeed on a motion to strike punitive damages allegations, it must be said as a matter of law that the alleged behavior was not so vile, base, or contemptible that it would not be looked down upon and despised by ordinary decent people. (Angie M. v. Superior Court (1995) 37 Cal. App. 4th 1217, 1228-1229.)

II.                 MEET & CONFER

C.C.P. §§ 430.41(a) and 435.5(a) requires that the moving party meet and confer with the party who filed the pleading that is subject to the demurrer and/or motion to strike. Upon review the Court finds the meet and confer requirements were met. (Valencia Decl. ¶¶ 2-4.)

III.              MERITS

Demurrer

The elements of a fraud claim based on concealment are: “(1) the defendant must have concealed or suppressed a material fact, (2) the defendant must have been under a duty to disclose the fact to the plaintiff, (3) the defendant must have intentionally concealed or suppressed the fact with the intent to defraud the plaintiff, (4) the plaintiff must have been unaware of the fact and would not have acted as he did if he had known of the concealed or suppressed fact, and (5) as a result of the concealment or suppression of the fact, the plaintiff must have sustained damage.” (Bigler-Engler v. Breg, Inc. (2017) 7 Cal.App.5th 276, 310-311 [“Bigler-Engler”].)

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.” (Id. at 311.) If a fiduciary relationship does not exist, but the latter three circumstances are present, Plaintiff must still show “the existence of some other relationship between the plaintiff and defendant from which a duty to disclose can arise.” (Id.)

Specificity of Pleading

The Court previously outlined that Plaintiff had pled this cause of action with the appropriate specificity. Rules of specifically pleading how, when, where, to whom, and by what means, misrepresentations were communicated, are intended to apply to affirmative misrepresentations, and not to concealment. (See Alfaro v. Community Housing Improvement System & Planning Assn., Inc. (2009) 171 Cal. App. 4th 1356, 1384.)

Plaintiff’s SAC has not departed from the FAC in this regard. Plaintiff still alleges sales representatives made several representations about the Subject Vehicle but did not disclose to Plaintiff any information about the Transmission Defect. (SAC ¶ 20.) Plaintiff alleges GM intended to deceive him by concealing the known issues with the Transmission Defect, in an effort to sell the Vehicle at maximum price. (SAC. ¶ 139.)

GM’s demurrer makes no departure from its arguments against the FAC with regard to specificity of the pleadings. GM’s citation to authority and substantive argument in this regard are verbatim of those in their first demurrer which the Court rejected. It appears the only change made for this demurrer was the replacement of “FAC” with “SAC.” GM has presented no new authority and no new argument with respect to specificity of pleadings. As such, the Court sees no cause to deviate in its finding that Plaintiff pled his cause of action with requisite specificity.

Transactional Relationship & Duty to Disclose

GM again argues Plaintiff has not alleged a relationship between himself and GM sufficient to establish GM’s duty to disclose. Once again GM relies primarily on the decision in Bigler-Engler which held the following:

“In transactions which do not involve fiduciary or confidential relations, a cause of action for non-disclosure of material facts may arise in at least three instances: (1) the defendant makes representations but does not disclose facts which materially qualify the facts disclosed, or which render his disclosure likely to mislead; (2) the facts are known or accessible only to defendant, and defendant knows they are not known to or reasonably discoverable by the plaintiff; (3) the defendant actively conceals discovery from the plaintiff.”[Citation].

A duty to disclose may arise as a result of a transaction between the parties. However, the transaction “…must necessarily arise from direct dealings between the plaintiff and the defendant; it cannot arise between the defendant and the public at large.”

(Bigler-Engler supra, 7 Cal.App.5th 276 at 311-312.)

The Court previously noted this issue was addressed by the recent decision in Dhital v. Nissan North America, Inc. (2022) 84 Cal.App.5th 828, wherein the plaintiffs sued Nissan North America, Inc. alleging a transmission defect. The plaintiffs alleged claims under the Song-Beverly Consumer Warranty Act and a common law fraud claim alleging that Nissan fraudulently concealed the defects and induced them to purchase a car. (Dhital supra, 84 Cal.App.5th 828 at 838).

The California Supreme Court granted review of Dhital on February 1, 2023, however, the request for republication was denied. Since review is pending and the Supreme Court did not otherwise order, Dhital depublished, and as a result “it may be cited for potentially persuasive value only.” (CRC, Rule 8.1115 (e)(1).)

Dhital remains on review and has no precedential value, but the Court finds its analysis persuasive. The Dhital court held plaintiffs sufficiently alleged a transactional relationship because they alleged that they bought the car from a Nissan dealership, that the car was backed by Nissan warranty, and that Nissan dealerships are authorized agents. (Dhital supra, 84 Cal.App.5th at 844.)

Plaintiff is not required to allege evidentiary facts supporting the existence of an agency relationship, only allegations of ultimate fact. (Quelimane Co. v. Stewart Title Guaranty Co. (1998) 19 Cal. 4th 26, 47). An allegation of agency is an allegation of ultimate fact that must be accepted as true for purposes of ruling on a demurrer. (Dones v. Life Ins. Co. of North America (2020) 55 Cal.App.5th 665, 685.)

The Court previously found Plaintiff had not alleged any agency relationship between the dealership where he purchased the Subject Vehicle and GM. It appears from the Court’s review that the SAC has rectified this issue. Plaintiff alleges the dealership, Cadillac of Beverly Hills (“BH”), is “an authorized retail dealership, repair facility, agent, and representative of” GM. (SAC ¶ 4.) Plaintiff alleges that BH’s personnel were authorized agents/representatives of GM and represented to Plaintiff that no defects were present in the Subject Vehicle. (SAC ¶ 5.) Plaintiff alleges that GM, through its authorized agents at BH, knowingly and intentionally assured Plaintiff’s no defects existed in the Subject Vehicle. (SAC ¶ 8.)

Plaintiff’s SAC appears to have cured the defects raised by the previous demurrer. GM’s demurrer again adds no authority or substantive argument on this point, instead repeating verbatim the authorities and arguments raised in the prior demurrer.

Accordingly, the demurrer to fourth cause of action is OVERRULED.

Motion to Strike

GM has submitted a proposed order on a motion to strike and Plaintiff has opposed such a motion. However, GM has not actually noticed a motion to strike any portion of the SAC, nor has GM submitted a memorandum of points and authorities for the motion to strike pursuant to California Rules of Court, Rule 3.1113(a).

As no motion to strike has been properly noticed for this hearing and GM has not briefed the basis for such a motion, the motion to strike punitive damages is DENIED. 

RULING:

In the event the parties submit on this tentative ruling, or a party requests a signed order or the court in its discretion elects to sign a formal order, the following form will be either electronically signed or signed in hard copy and entered into the court’s records.

ORDER

General Motors, LLC’s Demurrer and Motion to Strike came on regularly for hearing on December 22, 2023, with appearances/submissions as noted in the minute order for said hearing, and the court, being fully advised in the premises, did then and there rule as follows:

THE DEMURRER TO THE FOURTH CAUSE OF ACTION FOR FRAUDULENT INDUCEMENT-CONCEALMENT IS OVERRULED.  

THE MOTION TO STRIKE PLAINTIFF’S REQUEST FOR PUNITIVE DAMAGES IS DENIED.

RESPONSIVE PLEADINGS ARE DUE WITHIN 20 DAYS.

CASE MANAGEMENT CONFERENCE IS CONTINUED TO MARCH 19, 2024 AT 9:00 A.M.

UNLESS ALL PARTIES WAIVE NOTICE, PLAINTIFF TO GIVE NOTICE.

IT IS SO ORDERED.

DATE:  December 22, 2023                              

_______________________________

                                                                        F.M. TAVELMAN, Judge

                                                                        Superior Court of California

County of Los Angeles