Judge: H. Jay Ford, III, Case: 23SMCV00529, Date: 2023-05-18 Tentative Ruling

Case Number: 23SMCV00529    Hearing Date: May 18, 2023    Dept: O

Case Name:  Ryan v. General Motors, LLC

SUBJECT:                 (1) DEMURRER TO COMPLAINT

                                    (2) MOTION TO STRIKE

MOVING PARTY:   (1) and (2) Defendant General Motors LLC

RESP. PARTY:         (1) and (2) Plaintiff Brady Ryan

TENTATIVE RULING

            Defendant General Motors LLC’s Demurrer to the 1^st cause of action for fraudulent misrepresentation and concealment, 2^nd cause of action for negligent misrepresentation and 3^rd cause of action for violation of B&PC §17200 is OVERRULED.  Defendant GM’s Motion to Strike is DENIED.

I.  1^st cause of action for fraudulent misrepresentation and concealment and 2^nd cause of action for negligent misrepresentation—OVERRULE

            The elements of fraud are: (1) misrepresentation (false representation, concealment, or nondisclosure); (2) knowledge of falsity (scienter); (3) intent to defraud or induce reliance; (4) justifiable reliance; and (5) damages.  See Civil Code §1709.  Fraud actions are subject to strict requirements of particularity in pleading.  See Committee on Children’s Television, Inc. v. General Foods Corp. (1983) 35 Cal. 3d 197, 216.

            Consistent with the rule requiring specificity in pleading fraud, a complaint must state ultimate facts showing that the defendant intended or had reason to expect reliance by the plaintiff or the class of persons of which he is a member.”  See Geernaert v. Mitchell (1995) 31 Cal. App. 4th 601, 608. A plaintiff must allege what was said, by whom, in what manner (i.e. oral or in writing), when, and, in the case of a corporate defendant, under what authority to bind the corporation.  See Goldrich v. Natural Y Surgical Specialties, Inc. (1994) 25 Cal.App.4th 772, 782.

            Plaintiff alleges fraudulent misrepresentation and concealment and negligent misrepresentation with sufficient specificity.  Plaintiff alleges GM’s advertisements and publications misrepresented the range and safety of the subject vehicle’s battery, as did the sales person at the dealership.  See Complaint, ¶8.  Plaintiff alleges the relevant time frame of these misrepresentations was on or about June 17, 2021.  Id.  Plaintiff need not allege the misrepresentation or concealment with greater specificity, because Plaintiff is alleging concealment and Defendant is in a superior position to know the details of who specifically drafted and approved the alleged false advertisements within GM.  See Tenet Healthsystem Desert, Inc. v. Blue Cross of California (2016) 245 Cal.App.4th 821, 838 (less specificity required in connection with fraud claim where facts are more within the knowledge of the opposing party); Committee on Children's Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 216. 

II.  3rd cause of action for violation of B&PC 17200—OVERRULE

            “‘Unlawful business activity' proscribed under section 17200 includes anything that can properly be called a business practice and that at the same time is forbidden by law.” Farmers Ins. Exchange v. Supr. Ct. (1992) 2 Cal.4th 377, 383. An action under B&PC 17200 based on an unlawful business practice “borrows violations of other laws and treats these violations, when committed pursuant to business activity, as unlawful practices independently actionable under section 17200 et seq. and subject to the distinct remedies provided thereunder.” Id.

“In order to state a cause of action under the fraud prong of the UCL a plaintiff need not show that he or others were actually deceived or confused by the conduct or business practice in question. “The ‘fraud’ prong of [the UCL] is unlike common law fraud or deception. A violation can be shown even if no one was actually deceived, relied upon the fraudulent practice, or sustained any damage. Instead, it is only necessary to show that members of the public are likely to be deceived.”  Schnall v. Hertz Corp. (2000) 78 Cal.App.4th 1144, 1167.

Plaintiff alleges GM knew of the battery defect, concealed it and knowingly misrepresented the battery’s range and safety.  See Complaint, ¶¶8, 13, 19, 25, 46, 49.  Plaintiff alleges GM has also failed to repair it or replace it in violation of the Song Beverly Act.  Id. at ¶¶45-46.  Plaintiff’s allegations state a claim under B&PC 17200 based on Defendant’s unlawful and fraudulent business practices. 

III.  Motion to Strike Punitive Damages—DENY

            Plaintiff sufficiently states a claim for fraud based on knowing concealment and misrepresentation of the battery’s distance range and the battery’s safety.  Plaintiff alleges grounds for punitive damages under CC §3294 based on fraud.