Judge: Gail Killefer, Case: 21STCV35425, Date: 2022-10-31 Tentative Ruling
Case Number: 21STCV35425 Hearing Date: October 31, 2022 Dept: 37
HEARING DATE: October 31, 2022
CASE NUMBER: 21STCV35425
CASE NAME: Robert James Brenneman v. General Motors, LLC
MOVING PARTY: Defendant General Motors, LLC
OPPOSING PARTY: Plaintiff Robert James Brenneman
TRIAL DATE: Not Set
PROOF OF SERVICE: OK
PROCEEDING: Defendant’s Demurrer to
Complaint and Motion to Strike
OPPOSITION: October 18, 2022
REPLY: October
24, 2022
Tentative: Defendant’s demurrer is sustained, without leave to amend. Having
sustained Defendant’s demurrer, Defendant’s motion to strike is moot. Defendant
is to give notice.
This action arises out of Robert James Brenneman’s
(“Plaintiff”) lease of a 2019 Chevrolet Bolt EV (“Subject Vehicle” or “Vehicle”)
which was manufactured and or distributed by Defendant General Motors, LLC
(“Defendant”). Plaintiff alleges that in connection with the lease, Plaintiff
received warranties which provided that in the event a defect developed in the
Vehicle, Plaintiff could deliver the Vehicle for repair services to Defendant’s
representatives and the Vehicle would be repaired. Plaintiff also alleges that
the Vehicle was delivered with and developed various defects and that Defendant
failed to repair the Vehicle. Plaintiff further alleges that Defendant
committed fraud by allowing the Vehicle to be sold to Plaintiff without
disclosing certain defects.
Plaintiff’s initial Complaint alleged the following causes
of action: (1) violation of 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 express written warranty (Civil Code §
1791.2(a), § 1794), (5) breach of the implied warranty of merchantability
(Civil Code §§ 1791.1, 1794), and (6) fraud by omission.
Plaintiff’s First Amended Complaint (“FAC”) alleged
identical causes of action.
On June 30, 2022, the court sustained Defendant’s demurrer
to the sixth cause of action, and granted Plaintiff leave to amend.
On September 7, 2022, Plaintiff filed the operative Second
Amended Complaint (“SAC”) alleging five causes of action: (1) violation of
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 express written
warranty (Civil Code §§ 1791.2(a), § 1794); and (5) fraudulent
inducement-concealment.
Defendant now demurs to the fifth cause of action of the SAC
for fraudulent inducement and moves to strike Plaintiff’s request for punitive
damages. Plaintiff opposes the motions.
A
demurrer is an objection to a pleading, the grounds for which are apparent from
either the face of the complaint or a matter of which the court may take
judicial notice. (CCP § 430.30(a); see also Blank v. Kirwan (1985)
39 Cal.3d 311, 318.) The purpose of a demurrer is to challenge the
sufficiency of a pleading “by raising questions of law.” (Postley v.
Harvey (1984) 153 Cal.App.3d 280, 286.) The court “treat[s] the
demurrer as admitting all material facts properly pleaded, but not contentions,
deductions or conclusions of fact or law. . . .” (Berkley v. Dowds
(2007) 152 Cal.App.4th 518, 525.) “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.” (CCP §
452; see also Stevens v. Sup. Ct. (1999) 75 Cal.App.4th 594, 601.)
“When a court evaluates a complaint, the plaintiff is entitled to reasonable
inferences from the facts pled.” (Duval v. Board of Trustees
(2001) 93 Cal.App.4th 902, 906.)
The
general rule is that the plaintiff need only allege ultimate facts, not
evidentiary facts. (Doe v. City of Los Angeles (2007) 42 Cal.4th
531, 550.) “All that is required of a plaintiff, as a matter of pleading,
even as against a special demurrer, is that his complaint set forth the
essential facts of the case with reasonable precision and with sufficient
particularity to acquaint the defendant with the nature, source and extent of
his cause of action.” (Rannard v. Lockheed Aircraft Corp. (1945)
26 Cal.2d 149, 156-157.) “[D]emurrers for uncertainty are disfavored and
are granted only if the pleading is so incomprehensible that a defendant cannot
reasonably respond.” (Mahan v. Charles W. Chan Ins. Agency, Inc. (2017)
14 Cal.App.5th 841, 848, fn. 3, citing Lickiss v. Fin. Indus. Regulatory
Auth. (2012) 208 Cal.App.4th 1125, 1135.) In addition, even where a
complaint is in some respects uncertain, courts strictly construe a demurrer
for uncertainty “because ambiguities can be clarified under modern discovery
procedures.” (Khoury v. Maly’s of California, Inc. (1993) 14
Cal.App.4th 612, 616.)
Demurrers
do not lie as to only parts of causes of action where some valid claim is
alleged but “must dispose of an entire cause of action to be sustained.”
(Poizner v. Fremont General Corp. (2007) 148 Cal.App.4th 97, 119.)
“Generally it is an abuse of discretion to sustain a demurrer without leave to
amend if there is any reasonable possibility that the defect can be cured by
amendment.” (Goodman v. Kennedy (1976) 18 Cal.3d 335,
349.)
III. Analysis
The
elements of an action for fraud based on an omission 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.’” (Boschma v. Home Loan Center, Inc.
(2011) 198 Cal.App.4th 230, 248 [quoting Han v. Mirda (2007) 147
Cal.App.4th 740, 748.].)
Fraud
must be pled in the complaint specifically. General and conclusory allegations
are not sufficient. (Nagy v. Nagy (1989) 210 Cal.App.3d 1262, 1268.)
Unlike most causes of action where the “the policy of liberal construction of
the pleadings,” fraud requires particularity, that is, “pleading facts which
show how, when, where, to whom, and by what means the representations were
tendered.” (Lazar v. Superior Court (1996) 12 Cal.4th 631, 645.) Every
element of a fraud cause of action must be alleged both factually and
specifically. (Hall v. Department of Adoptions (1975) 47 Cal.App.3d 898,
904; Cooper v. Equity General Insurance (1990) 219 Cal.App.3d 1252,
1262.)
The economic loss rule requires plaintiff to recover in
contract for purely economic loss due to disappointed contractual expectations
unless he can demonstrate harm above and beyond a broken contractual promise.¿
(Robinson Helicopter Co. v. Dana Corp. (2004) 34 Cal.4th 979, 988.) An “economic loss” consists of damages for
inadequate value, costs of repair, and replacement, or consequent loss of
profits, without any claim of personal injury or damages to other property. (Robinson,
supra, 34 Cal.4th at 988; see also Jimenez v. Superior Court (2002)
29 Cal.4th 473.)¿ “A
person may not ordinarily recover in tort for the breach of duties that merely
restate contractual obligations. Instead, ‘[c]ourts will generally enforce the
breach of a contractual promise through contract law, except when the actions
that constitute the breach violate a social policy that merits the imposition
of tort remedies.’ [Citations.]” (Stop Loss Ins. Brokers, Inc. v. Brown
& Toland Medical Group (2006) 143 Cal.App.4th 1036, 1041.)¿“ “Tort
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.]” (Robinson, supra, 34 Cal.4th at
989-990, [quoting Erlich v. Menezes (1999) 21 Cal.4th 543, 551.)
Defendant again contends that Plaintiff’s fifth cause of
action of the SAC fails because it is not pled with the required specificity
(Demurrer, 8-9), and that it is barred by the economic loss rule (Demurrer, 10-15).
Specifically, Defendant again contends the fifth cause of action fails “because
Plaintiff failed to allege (i) the identity of the individuals at GM who
purportedly concealed material facts or made untrue representations about his
Bolt, (ii) their authority to speak and act on behalf of GM, (iii) GM’s
knowledge about alleged defects in Plaintiff’s Bolt at the time of purchase,
(iv) any interactions with GM before or during the lease of his Bolt, or (v)
GM’s intent to induce reliance by Plaintiff to lease the specific Bolt at
issue.” (Demurrer, 9-10.) Defendant asserts the SAC again fails to provide
factual support for his claims, and “merely provided conclusions that lack the
foundation and specificity required to pursue a viable fraud claim.” (Demurrer,
10.)
Further, Defendant contends the fifth cause of action merely
restates contractual obligations and “Plaintiff did not plead any facts
alleging damages or harm for anything other than economic loss (i.e., his
decision to lease the Bolt); therefore, GM cannot be held liable for fraud
under the Economic Loss Rule.” (Demurrer, 10.) Defendant further asserts that
Plaintiff cannot point to any affirmative misrepresentations made by GM, and
only relies on the breach of the contractual promise between the parties for
the claim. (Demurrer, 11-14; citing Robinson Helicopter Co., Inc. v.
Dana Corp. (2004) 34 Cal. 4th 979, 988.)
In opposition, Plaintiff claims
the economic loss rule does not apply to its fraudulent inducement claim, as it
is not based in contract. (Opposition, 1-2.) Plaintiff further contends that
fraudulent inducement has regularly been found to not be exempted by the
economic loss rule in California case law. (Opp., 3-4.) Plaintiff then points
to a case certified by the Ninth Circuit to the California Supreme Court, Rattagan
v. Uber Technologies, Inc., 19 F.4th 1188, 1193 (9th Cir. 2021), and
contends the “California Supreme Court’s most recent decision on the economic
loss rule offers more evidence that what matters is the commission of an
independent tort, and not the specific type of fraud.” (Opp., 4-5.) However,
the court here notes that the parties acknowledge the same inquiry for this
cause of action—the alleging of a separate, extracontractual and independent
conduct is necessary to sufficiently plead a claim for fraudulent inducement
which is not exempted by the economic loss rule. Plaintiff then points to
several cases to suggest its contention that GM had a duty to disclose the
alleged “Battery Defect, and its failure to do so” is sufficient to plead a
fraudulent inducement claim. (Opp., 6, n.1) Plaintiff contends the SAC alleges
GM intended to induce reliance from Plaintiff, and Plaintiff reasonably relied
on the representations. (Opp., 8-9.)
As such, Plaintiff points to SAC
¶¶ 32, 89, and 90 to assert sufficient pleading. (Opp., 7.) Here, the SAC alleges as follows: Plaintiff purchased the
Vehicle on February 6, 2019. (SAC ¶ 6.) During the
warranty period, the Vehicle contained or developed defects, including a
defective lithium-ion battery, electrical system, and radio screen and
software. (SAC ¶¶ 9, 14, 26.) Defendant knew “since 2016” that its lithium-ion
battery, which the Vehicle has, contained one or more manufacturing defects. (SAC
¶¶ 23-33.) Defendant further “had superior and exclusive knowledge of the
Battery Defect, “through sources not available to consumers such as Plaintiff”
and “knew or should have known that the defect was not known to or reasonably discoverable”
to consumers. (SAC 30-32.) Further, Defendant’s “superior position” meant it
had a duty to disclose “the defective nature of the Vehicle” to Plaintiff, and
it failed to do so. (SAC ¶¶ 89-90.)
Plaintiff
alleges that since 2016, “GM has made several communications to the National
Highway Traffic Safety Administration (“NHTSA”) relating to the “battery”
components in Chevrolet Bolt EV vehicles.” (SAC ¶ 31.) “GM was inundated with
complaints regarding the Battery Defect but rather than repair the problem
under warranty, GM dealers either inform consumers that their vehicles are
functioning properly or conduct repairs that merely mask the defect.” (SAC ¶34.)
Lastly, the SAC alleges “[i]n failing to disclose the defects in the Vehicle’s
lithium-ion battery, Defendant has knowingly and intentionally concealed
material facts and breached its duty not to do so.” (SAC ¶90.)
In
reply, Defendant reiterates it had no duty to disclose to Plaintiff, as no
fiduciary relationship existed, and Defendant made no affirmative
misrepresentations such that an exception to finding duty for GM would apply.
(Reply, 1.) Defendant again contends Plaintiff’s SAC fails to meet the heightened
pleading standard by not alleging the how, when, what means, and other
“essential elements” here. (Reply, 2-3; Lazar, supra, 12 Cal.4th at 645.)
Defendant lastly repeats its earlier contentions that Plaintiff has failed to
plead affirmative misrepresentations to show the commis-sion of an independent
tort, such that the economic loss rule would be exempted. (Reply, 3-7.)
The court agrees with Defendant again that
the fifth cause of action fails to plead fraud with the required specificity.
Specifically, it is again still unclear from the SAC that Defendant knew or
actively concealed that the Vehicle had defects prior to Plaintiffs’ purchase
of the Vehicle, which individuals authorized to speak on behalf of GM made the
omissions and/or misrepresentations, and lastly fails to specify how the
damages claimed are not merely a restatement of contractual obligations, or
point to the commission of an independent tort by GM otherwise, per the lease
agreement for the Subject Vehicle. Instead, the SAC again alleges generally
that Defendant knew of defects in GM vehicles generally. “The very existence of
a warranty presupposes that some defects may occur.” (Santana v. FCA US, LLC
(2020) 56 Cal.App.5th 334, 344.) Thus, the existence of defects which involved
vehicles Plaintiff did not own are not, by themselves, enough to demonstrate
that a defendant vehicle manufacturer fraudulently concealed a defect from
Plaintiffs. (Id.)
For
these reasons, Defendant’s demurrer is again sustained.
Conclusion
Defendant’s demurrer is sustained, without leave to amend.
Defendant is to give notice.
MOTION TO STRIKE
Having
sustained Defendant’s demurrer as to the fraud cause of action, Defendant’s
motion to strike is moot.