Judge: Gary I. Micon, Case: 23CHCV00101, Date: 2024-01-24 Tentative Ruling

Case Number: 23CHCV00101    Hearing Date: January 24, 2024    Dept: F49

Dept. F49

Date: 1-24-24

Case # 23CHCV00101

Trial Date: N/A

DEMURRER TO FIRST AMENDED COMPLAINT WITH MOTION TO STRIKE

MOVING PARTY: Defendant American Honda Motor Co., Inc.

RESPONDING PARTIES: Plaintiffs Manuel Rangel Quintero and Miriam Mayoral Hernandez

RELIEF REQUESTED

Demurrer to the First Amended Complaint (FAC)

·         2^nd Cause of Action: Fraudulent Inducement – Concealment

Motion to Strike

·         Entire 2^nd Cause of Action for Fraudulent Inducement-Concealment [FAC ¶¶ 83-101]

·         Prayer for Punitive Damages [FAC, p. 21, line 9, subpart 6]

SUMMARY OF ACTION

On August 30, 2021, Plaintiffs Manuel Rangel Quintero and Miriam Mayoral Hernandez (Plaintiffs) purchased a 2018 Honda Odyssey. (FAC, ¶ 8.) Plaintiffs received a New Vehicle Limited Warranty in connection with the purchase of the vehicle manufactured by Defendant American Honda Motor Co., Inc. (Defendant). (FAC, ¶ 9.) Plaintiffs allege that Defendant was deceptive in its marketing of the vehicle because Defendant and its representatives did not inform Plaintiffs that the vehicle suffered from the Transmission Defect. (FAC, ¶ 60.) Plaintiffs claim that they would not have purchased the subject vehicle had they known about the Transmission Defect. (FAC, ¶¶ 93, 99.)

Plaintiffs allege that Defendant knew of the Transmission Defect since at least 2014. (FAC, ¶ 21.) Plaintiffs allege that the Transmission Defect makes the vehicle dangerous (FAC, ¶ 13.) Further, Plaintiffs allege that Defendants knew about the Transmission Defect because of pre-market testing; consumer complaint; testing conducted in response to the complaints; high failure rates and replacement part sales date; and other sources. (FAC, ¶ 15.) From September 2014 to at least February 2019, Defendant issued service bulletins acknowledging the Transmission Defect. (FAC, ¶ 15.)

On January 13, 2023, Plaintiffs filed their original complaint with two causes of action for (1) Violation of Song-Beverly Act – Breach of Express Warranty; and (2) Fraudulent Inducement – Concealment.

On June 29, 2023, this Court sustained Defendant’s demurrer with leave to amend to Plaintiffs’ original complaint. Defendant demurred to Plaintiffs’ Second Cause of Action for Fraudulent Inducement – Concealment. The Court sustained the demurrer on the basis that Plaintiff has not articulated any damages for the concealment that are separate and independent from the warranty claim. Plaintiffs were given 30 days leave to amend their complaint.

Plaintiffs filed their untimely FAC on August 10, 2023. In their FAC, Plaintiffs added the following to their Second Cause of Action:

“Plaintiffs purchase of the Subject Vehicle was induced by Defendant’s concealment of the 9-Speed Transmission Defect. The purchase price Plaintiffs paid for the Subject Vehicle --which Plaintiffs would not have purchased but-for Defendant’s concealment – represents separate and distinct damages from Defendant’s liability for its violation of the Song-Beverly Act.” (FAC, ¶¶ 98-99)

Defendant filed its demurer with motion to strike on September 14, 2023. Plaintiffs oppose Defendant’s demurer and motion to strike

RULING

Demurrer: Sustained without leave to amend

Defendant brings a demurrer to the Second Cause of Action for Fraudulent Inducement – Concealment. Defendant contends the challenged cause of action fails to state facts sufficient to constitute a fraud cause of action against Defendant. Pursuant to CCP § 581(f)(2), Defendant also argues that the Court should dismiss Plaintiffs’ Second Cause of Action due to Plaintiffs’ failure to amend their complaint within the time allowed by the Court.

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.) “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.) 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 applying these standards, the court liberally construes the complaint to determine whether a cause of action has been stated. (Picton v. Anderson Union High School Dist. (1996) 50 Cal.App.4th 726, 733.)

On the issue of separate and distinct damages, Civ. Code § 1794 of the Song-Beverly Act states in part:

(a) Any buyer of consumer goods who is damaged by a failure to comply with any obligation under this chapter or under an implied or express warranty or service contract may bring an action for the recovery of damages and other legal and equitable relief. (b) The measure of the buyer's damages in an action under this section shall include the rights of replacement or reimbursement as set forth in subdivision (d) of Section 1793.2, and the following…

Civil Code §1793.2 states in pertinent part:

(d) (1) Except as provided in paragraph (2), if the manufacturer or its representative in this state does not service or repair the goods to conform to the applicable express warranties after a reasonable number of attempts, the manufacturer shall either replace the goods or reimburse the buyer in an amount equal to the purchase price paid by the buyer, less that amount directly attributable to use by the buyer prior to the discovery of the nonconformity.

Reimbursement of the purchase price of the vehicle, less the amount directly attributable to use by the buyer prior to the discovery of the nonconformity, is already included as a remedy under the Song-Beverly Act. Plaintiffs argue in their opposition that Bowser v. Ford Motor Co. (2022) 78 Cal.App.5th 587 stands for the proposition that they could obtain separate and distinct damages because they could recover the entire purchase price under their cause of action for fraud, while they could only recover the purchase price less the amount directly attributable to Plaintiffs’ use of the vehicle prior to discovery of the nonconformity under the Song-Beverly Act. Defendant argues in its reply that Bowser dealt with election of remedies and the rule against a double recovery rather than the sufficiency of the pleadings. (Id. at 623.)

While Plaintiffs’ FAC has pled that the purchase price is separate and distinct from the Song-Beverly Act damages, Plaintiffs’ FAC has not pled how they are distinct. (FAC, ¶ 99.) The Court sustains Defendant’s demurrer to Plaintiffs’ Second Cause of Action.

As for the untimely filing of Plaintiffs’ FAC, CCP § 581(f)(2) states that “The court may dismiss the complaint as to that defendant when: … (2) Except where Section 597 applies, after a demurrer to the complaint is sustained with leave to amend, the plaintiff fails to amend it within the time allowed by the court and either party moves for dismissal.”

The Court gave Plaintiffs 30 days from June 29, 2023, to file their amended complaint. Plaintiffs did not file their amended complaint until August 10, 2023. Defendant has moved for the dismissal of Plaintiffs’ Second Cause of Action as part of its demurrer, due to Plaintiffs’ late filing. The only argument against this that Plaintiffs have offered is that their counsel had a scheduling failure. Plaintiffs have not offered any authority that would support an attorney’s mistake being an exception to CCP § 581(f)(2).

Due to Plaintiffs’ late filing of their FAC, the Court sustains Defendant’s demurrer to Plaintiff’s Second Amended Complaint without leave to amend.

Motion to Strike: Granted

Defendant has moved to strike Plaintiffs’ request for punitive damages on the basis that Plaintiffs have not sufficiently pled that Defendant acted with oppression, fraud, or malice.

This Court may strike from the complaint any irrelevant, false, or improper matter. Under CCP § 435, “[a]ny party, within the time allowed to respond to a pleading may serve and file a notice of motion to strike the whole or any part thereof.” Under CCP § 436(a), “[t]he court may, upon a motion made pursuant to Section 435, or at any time in its discretion, and upon terms it deems proper . . . [s]trike out any irrelevant, false, or improper matter inserted in any pleading.”

Punitive damages are governed by Civ. Code § 3294: “In an action for the breach of an obligation not arising from contract, where it is proven by clear and convincing evidence that the defendant has been guilty of oppression, fraud, or malice, the plaintiff, in addition to the actual damages, may recover damages for the sake of example and by way of punishing the defendant.” (Civ. Code § 3294(a).)

No punitive damages are available under the Song-Beverly Act. Recovery under that statute is limited to a refund of the purchase price paid and payable (or replacement of the subject vehicle), plus a civil penalty, where applicable, not to exceed two times a plaintiff’s actual damages (Civ. Code § 1794.)

The Court has sustained Defendant’s demurrer to Plaintiffs’ fraud cause of action. Because punitive damages are not allowable under the Song-Beverly Act, punitive damages are not available for Plaintiffs’ other cause of action. Defendant’s motion to strike Plaintiff’s request for punitive damages is granted.

Defendant has also requested that the Court strike Plaintiffs’ entire Second Cause of Action due to Plaintiffs’ late filing of their FAC. Defendant’s motion to strike Plaintiff’s Second Cause of Action is granted.

Defendant is given 30 days to file its answer to Plaintiff’s Complaint.

Moving party to give notice.