Judge: Gary I. Micon, Case: 23CHCV02627, Date: 2024-11-07 Tentative Ruling
Case Number: 23CHCV02627 Hearing Date: November 7, 2024 Dept: F43
Dept. F43
Date: 11-7-24
Case #23CHCV02627, Antonio Villanueva, et al. vs.
General Motors, LLC
Trial Date: N/A
DEMURRER TO FIRST AMENDED COMPLAINT WITH
MOTION TO STRIKE
MOVING PARTY: Defendant General Motors, LLC
RESPONDING PARTY: Plaintiffs Ada Villanueva and Antonio
Villanueva
RELIEF REQUESTED
Demurrer to the First Amended Complaint
·
5th Cause of Action: Fraudulent
Inducement – Concealment
Motion to Strike
·
Punitive damages demand in the Prayer for Relief
(Page 15, line 14, ¶
h)
RULING: Demurred is overruled; motion to strike is
denied.
SUMMARY OF ACTION
On February 5, 2022, Plaintiffs Ada Villanueva and
Antonio Villanueva (Plaintiffs) purchased a 2022 Chevrolet Colorado. Plaintiffs
received various warranties in connection with the purchase of the vehicle from
Defendant General Motors, LLC (Defendant). Plaintiffs allege that there were
transmission defects with the vehicle.
Plaintiffs allege that Defendant knew of the vehicle’s
transmission defects prior to Plaintiffs purchasing the vehicle. Plaintiffs allege that the Transmission
Defect presents a safety hazard. Plaintiffs also allege that Defendant issued
several service bulletins related to the Transmission Defect.
On August 30, 2023, Plaintiffs filed their initial
complaint, alleging causes of action related to the Song-Beverly Act and a
cause of action for fraudulent inducement – concealment. After Defendant
demurred to the original version of Plaintiffs’ complaint, they filed the
current First Amended Complaint (FAC) on May 28, 2024, prior to the hearing on
the original demurrer. The FAC is the version of the complaint to which
Defendant has now demurred.
Defendant filed a demurrer to the Fifth Cause of Action
of the FAC with a Motion to Strike on July 26, 2024. Plaintiffs oppose
Defendant’s demurrer with motion to strike.
ANALYSIS
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.)
Fifth Cause of Action for Fraudulent Inducement - Concealment
Defendant brings a demurrer for the Fifth Cause of Action
for Fraudulent Inducement – Concealment. Defendant contends the challenged
cause of action fails to state sufficient facts alleging fraud.
A fraud cause of action requires a Plaintiff to plead and
prove: “(a) [a] misrepresentation (false representation, concealment, or
nondisclosure); (b) knowledge of falsity (or “scienter”); (c) intent to
defraud, i.e., to induce reliance; (d) justifiable reliance; and (e) resulting
damage.” (Lazar v. Superior Court (1996) 12 Cal 4th 631, 638.) Fraud
causes of action must be pled with specificity. “…This particularity
requirement necessitates pleading facts which ‘show how, when, where, to whom
and by what means the representations were tendered.’” (Stansfield v.
Starkey (1990) 220 Cal.App.3d 59, 73, quoting Hills Trans. Co. v.
Southwest (1968) 266 Cal.App.2d 702, 707.)
Fraud claims against a corporation must “allege the names of
the persons who made the allegedly fraudulent representations, their authority
to speak, to whom they spoke, what they said or wrote, and when it was said or
written.” (Tarmann v. State Farm Mut. Auto. Ins. Co. (1991) 2
Cal.App.4th 153, 157.)
In this case, Plaintiffs have alleged that there was a
defect with the transmission; that Defendant knew of the defect and its
hazards; that Defendant has exclusive knowledge of the transmission defect and
intentionally concealed and failed to disclose that information; that Defendant
intended to deceive Plaintiffs by concealing the known defect; that Plaintiffs
would not have purchased the car if they had known of the defects; and that
Plaintiffs suffered damages. (FAC, ¶¶ 62-78.) Plaintiffs state that they “considered
Defendant GM’s advertisement, and/or other marketing materials concerning GM
Vehicles prior to purchasing/leasing Subject Vehicle,” and they give examples
of marketing materials: Defendant marketed its transmission as having
“world-class performance” rivaling top performance vehicles and marketed the
transmission as being “tuned for world-class shift-response times” and
deliver[ing] shift performance that rivals the dual-clutch/semi-automatic
transmissions found in many supercars – but with the smoothness and refinement
that comes with a conventional automatic fitted with a torque converter.” (FAC,
¶ 66.)
Defendant argues in its demurrer that Plaintiffs’ cause of
action for fraudulent inducement – concealment fails because Plaintiffs do not
allege a transactional relationship between Plaintiffs and Defendant. However,
when pleading a cause of action for fraudulent concealment, it is sufficient
for a plaintiff to allege that there was a defect; that the car manufacturer
knew of the defect and its hazards; that the car manufacturer had exclusive
knowledge of the defect and intentionally concealed and failed to disclose that
information; that the car manufacturer intended to deceive the plaintiff by
concealing the known defect; that plaintiffs would not have purchased the car
if they had known of the defects; and that plaintiff suffered damages in the
form of money paid to purchase the car. (See Dhital v. Nissan North America,
Inc. (2022) 84 Cal.App.5th 828, 844 [certified to the California Supreme
Court on a separate issue concerning the economic loss rule; review granted
February 1, 2023; citable for persuasive value pursuant to Cal. Rules of Court
Rule 8.1115].) The Dhital Court also addressed the issue of whether a
transactional relationship was required. The Court declined to hold that the
plaintiffs’ claim was barred on the ground that there was no relationship
requiring Nissan, as the manufacturer, to disclose known defects. (Id.
at 844.) Defendant does not address Dhital in its reply.
Plaintiffs’ FAC contains the needed allegations to
constitute a cause of action for fraudulent concealment under the reasoning of Dhital,
and their FAC states what representations were made about the transmission in
Defendant’s marketing materials. (See FAC, ¶ 66.) Therefore, Plaintiffs’
allegations for fraudulent concealment are sufficient in this regard to
maintain a cause of action for fraudulent inducement – concealment. (Morgan
v. AT&T Wireless Services, Inc. (2009) 177 Cal.App.4th 1235, 1262 [it
is sufficient for a plaintiff to provide a representative selection of the
advertisements or other statements upon which they relied and which indicate
the language upon which the implied misrepresentations are based].)
Accordingly, Plaintiffs have pled facts sufficient to
maintain a cause of action for fraudulent inducement – concealment. Defendant’s
demurrer to Plaintiff’s Fifth Cause of Action is overruled.
Motion to
Strike
Defendant has
moved to strike Plaintiffs’ request for punitive damages and related
allegations.
A 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.” Under CCP
§ 436(b), the court may “[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.”
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).)
To state a prima
facie claim for punitive damages, a complaint must set forth the elements as
stated in Civ. Code § 3294. (Coll. Hosp., Inc. v. Superior Court (1994)
8 Cal.4th 704, 721.) “Malice is defined in the statute as conduct intended by
the defendant to cause injury to the plaintiff or despicable conduct which is
carried on by the defendant with a willful and conscious disregard of the
rights or safety of others.” (Id. at 725.) Oppression is “despicable
conduct that subjects a person to cruel and unjust hardship in conscious
disregard of that person’s rights.” (Civ. Code § 3294(c)(2).) Fraud is defined
as “an intentional misrepresentation, deceit, or concealment of a material fact
known to the defendant with the intention on the part of the defendant of
thereby depriving a person of property or legal rights or otherwise causing
injury.” (Civ. Code § 3294(c)(3).)
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 Plaintiff’s actual damages (Civ. Code § 1794.)
The Court has overruled
Defendant’s demurrer to Plaintiffs’ fraud cause of action. Therefore,
Plaintiffs have stated a sufficient basis for punitive damages through their
fraud cause of action. Accordingly, Defendant’s motion to strike is denied.
Conclusion
Defendant’s
demurrer to Plaintiffs’ Fifth Causes of Action is overruled.
Defendant’s
motion to strike is denied.
Defendant is
ordered to file an answer to Plaintiffs’ FAC within 30 days.
Moving party to give notice.