Judge Jill Feeney, Case Number: 23STCV08306, Date: 2023-10-19 Tentative Ruling

This is an action for fraud and breach of contract arising from Plaintiff’s purchase of a vehicle from Defendant. Plaintiff alleges that on October 31, 2022, she purchased a vehicle from Defendant and immediately noticed flaws with the vehicle, including issues with the vehicle’s exterior. (Compl., p.3.) Defendant promised to repair the vehicle but failed to properly perform the work each time it attempted the repairs and further damaged the vehicle. (Id.) Plaintiff also alleges that Defendant billed for items and repairs that were never performed, failed to use the parts and perform the work specified in estimates provided to Plaintiff, and failed to properly repair the vehicle as promised. (Compl., p.4.)

A demurrer for sufficiency tests whether the complaint states a cause of action. (Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747.) When considering demurrers, courts read the allegations liberally and in context. In a demurrer proceeding, the defects must be apparent on the face of the pleading or via proper judicial notice. (Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994.) “A demurrer tests the pleadings alone and not the evidence or other extrinsic matters. Therefore, it lies only where the defects appear on the face of the pleading or are judicially noticed. (Code Civ. Proc., §§ 430.30, 430.70.) At the pleading stage, a plaintiff need only allege ultimate facts sufficient to apprise the defendant of the factual basis for the claim against him. (Semole v. Sansoucie (1972) 28 Cal. App. 3d 714, 721.) A “demurrer does not, however, admit contentions, deductions or conclusions of fact or law alleged in the pleading, or the construction of instruments pleaded, or facts impossible in law.” (S. Shore Land Co. v. Petersen (1964) 226 Cal.App.2d 725, 732 (internal citations omitted).)

A party filing a demurrer “shall meet and confer in person or by telephone with the party who filed the pleading that is subject to demurrer for the purpose of determining whether an agreement can be reached that would resolve the objections to be raised in the demurrer.” (Code Civ. Proc., section 430.41(a).) “The parties shall meet and confer at least five days before the date the responsive pleading is due. If the parties are not able to meet and confer at least five days prior to the date the responsive pleading is due, the demurring party shall be granted an automatic 30-day extension of time within which to file a responsive pleading, by filing and serving, on or before the date on which a demurrer would be due, a declaration stating under penalty of perjury that a good faith attempt to meet and confer was made and explaining the reasons why the parties could not meet and confer.” (Code Civ. Proc., section 430.41(a)(2).) A failure to meet and confer does not constitute grounds to sustain or overrule a demurrer. (See Code Civ. Proc., sections 430.41 (a)(4).)

Here, Defendant’s counsel testifies that he attempted to meet and confer telephonically with Plaintiff. (Shugart Decl., ¶2.) Counsel called the number listed on the Complaint three times and was unsuccessful reaching her telephonically. (Id.) Plaintiff responded to email communications, but the parties were unable to meet telephonically. (Id.) Because Defendant attempted to meet and confer with Plaintiff, Defendant satisfies meet and confer requirements.

The elements of a claim for breach of contract are: “(1) the existence of the contract, (2) plaintiff’s performance or excuse for nonperformance, (3) defendant's breach, and (4) the resulting damages to the plaintiff.” (Oasis West Realty, LLC v. Goldman (2011) 51 Cal. 4th 811, 821.) In addition, the complaint must demonstrate damages proximately caused by the breach. (St. Paul Ins. v. American Dynasty (2002) 101 Cal.App.4th 1038, 1060.)

For a written contract, the plaintiff may plead it “by its terms – set out verbatim in the complaint or a copy of the contract attached to the complaint and incorporated therein by reference – or by its legal effect.” (McKell v. Washington Mutual, Inc. (2006) 142 Cal.App.4th 1457, 1489 abrogated on other grounds in Freeman v. Quicken Loans Inc. (2012) 566 U.S. 624.) To plead a contract’s legal effect the plaintiff’s pleading must include “the substance of its relevant terms. This is more difficult, for it requires a careful analysis of the instrument, comprehensiveness in statement, and avoidance of legal conclusions.” (Id.)¿

“Plaintiff purchased the vehicle at issue from Defendants on or about 10/31/2022 and Plaintiff subsequently noticed multiple flaws with the vehicle, including but not limited to issues with the vehicle's exterior and paint job. Defendants promised to repair Plaintiff's vehicle, and Plaintiff brought the vehicle in multiple times for those repairs. Each time, Defendants failed to properly perform the promised work and further damaged the vehicle in multiple respects.

Defendants failed to use the necessary skill, care, and expertise expected of those in the field of auto maintenance and repair, failed to use the parts and perform the work specified in the estimates provided to Plaintiff and failed to properly repair the vehicle in multiple aspects. Defendants fraudulently promised to repair the vehicle at issue in multiple aspects but continually, intentionally failed to do so.”

The Complaint merely states that Defendant promised to repair her vehicle and that Defendant failed to repair the vehicle according to Defendant’s estimates. The Complaint does not set forth the substance of the contract’s relevant terms. Although the Complaint states Defendant promised to repair the vehicle, there are no facts describing what repairs were to be made. There are also no facts describing Plaintiff’s performance under the alleged contract. There are also no facts showing that Defendant was required to repair the vehicle according to its estimates under the alleged contract. Thus, the Complaint fails to state facts sufficient to support a cause of action for breach of contract. The demurrer is sustained on this ground.

The elements of fraud are: “(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.” (Charnay v. Cobert (2006) 145 Cal.App.4th 170, 184.) In California, fraud, including negligent misrepresentation, must be pled with specificity. (Small v. Fritz Companies, Inc. (2003) 30 Cal.4th 167, 184.) “The particularity demands that a plaintiff plead facts which show how, when, where, to whom, and by what means the representations were tendered.” (Cansino v. Bank of America (2014) 224 Cal.App.4th 1462, 1469.)

“Defendants were to repair Plaintiff's car as per agreement with Plaintiff. Defendants failed to use the necessary skill, care, and expertise expected of those in the field of auto repair, failed to use the parts and perform the work specified in the estimates provided to Plaintiff , and failed to properly repair the vehicle in multiple aspects.

Defendants billed for items/repairs that were never performed, failed to use the parts and perform the work specified in the estimates provided to Plaintiff, and failed to properly repair the vehicle in multiple aspects despite promising to do so.”

The Complaint alleges that Defendant failed the make repairs and use parts according to estimates it provided to Plaintiff and billed her for the work that was never performed. However, the allegations fail to state what misrepresentations Defendant made to Plaintiff. The allegations fail to describe the contents of the estimates and how Defendant failed to comply with those estimates. Additionally, there are no facts showing that Plaintiff justifiably relied on Defendant’s estimates when she allowed Defendant to attempt the repairs on her vehicle. Thus, the Complaint fails to plead facts sufficient to support a cause of action for fraud. The demurrer is sustained on this ground.

Any 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. (Code Civ. Proc., section 435, subd. (b)(1); Cal. Rules of Court, rule 3.1322, subd. (b).) The court may, upon a motion or at any time in its discretion and upon terms it deems proper: (1) strike out any irrelevant, false, or improper matter inserted in any pleading; or (2) strike out all or any part of any pleading not drawn or filed in conformity with the laws of California, a court rule, or an order of the court. (Code Civ. Proc. section 436, subd. (a)-(b); Stafford v. Shultz (1954) 42 Cal.2d 767, 782.)

In order to state a prima facie claim for punitive damages, a complaint must set forth the elements as stated in the general punitive damage statute, Civil Code section 3294. (College Hospital, Inc. v. Superior Court (1994) 8 Cal.4th 704, 721.) These statutory elements include allegations that the defendant has been guilty of oppression, fraud or malice. (Civ. Code, section 3294, subd. (a).)

“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.” (College Hospital, Inc., supra, 8 Cal.4th at p. 725 [examining Civ. Code, section 3294, subd. (c)(1)].) “A conscious disregard of the safety of others may constitute malice within the meaning of section 3294 of the Civil Code. In order to justify an award of punitive damages on this basis, the plaintiff must establish that the defendant was aware of the probable dangerous consequences of his conduct, and that he willfully and deliberately failed to avoid those consequences.” (Taylor v. Superior Court (1979) 24 Cal.3d 890, 895-896.)

“As amended to include [despicable], the statute plainly indicates that absent an intent to injure the plaintiff, ‘malice’ requires more than a ‘willful and conscious’ disregard of the plaintiffs’ interests. The additional component of ‘despicable conduct’ must be found.” (College Hospital, Inc., supra, 8 Cal.4th at p. 725.) The statute’s reference to despicable conduct represents a “new substantive limitation on punitive damage awards.” (Ibid.) Despicable conduct is “conduct which is so vile, base, contemptible, miserable, wretched or loathsome that it would be looked down upon and despised by ordinary decent people. Such conduct has been described as ‘having the character of outrage frequently associated with crime.’” (Tomaselli v. Transamerica Ins. Co. (1994) 25 Cal.App.4th 1269, 1287.)

“[T]he imposition of punitive damages upon a corporation is based upon its own fault. It is not imposed vicariously by virtue of the fault of others.” (City Products Corp. v. Globe Indemnity Co. (1979) 88 Cal.App.3d 31, 36.) “Corporations are legal entities which do not have minds capable of recklessness, wickedness, or intent to injure or deceive. An award of punitive damages against a corporation therefore must rest on the malice of the corporation’s employees. But the law does not impute every employee’s malice to the corporation. Instead, the punitive damages statute requires proof of malice among corporate leaders: the ‘officer[s], director[s], or managing agent[s].’” (Cruz v. Home Base (2000) 83 Cal.App.4th 160, 167 [citation omitted].) As to ratification, “[a] corporation cannot confirm and accept that which it does not actually know about.’” (Ibid. [citing College Hospital, Inc., supra, 8 Cal.4th at p. 726 [for ratification sufficient to justify punitive damages against corporation, there must be proof that officers, directors, or managing agents had actual knowledge of the malicious conduct and its outrageous character]].)

Here, the Complaint alleges that Defendant promised to repair Plaintiff’s vehicle, failed to make the repairs according to Defendant’s estimate, and billed Plaintiff for the repairs that were never performed. Defendant is a corporation. (Compl., p.1.) The Complaint fails to describe the conduct of Defendant’s employees and fails to name any officer, director, or managing agent. Moreover, the allegations in the Complaint are insufficient to show that any employee acted with an intent to harm Plaintiff or a reckless disregard for Plaintiff’s rights. Additionally, failing to repair a vehicle does not constitute conduct that rises to the level of despicable conduct sufficient to support a demand for punitive damages.