Judge: John J. Kralik, Case: 22BBCV01204, Date: 2023-03-24 Tentative Ruling

Case Number: 22BBCV01204    Hearing Date: March 24, 2023    Dept: NCB

Superior Court of California

County of Los Angeles

North Central District

Department B

BACKGROUND

A.    Allegations

Plaintiffs Jose C. Espino and Paola Espino (“Plaintiffs”) bring this Song-Beverly Act complaint against Defendants Ford Motor Company (“Ford”) and Vista Ford Inc. dba Vista Ford Lincoln (“Vista”). The complaint, filed December 14, 2022, alleges causes of action for: (1) violation of the Song-Beverly Act – breach of express warranty against Ford; and (2) negligent repair against Vista.

In the 1^st cause of action, Plaintiffs allege that on October 15, 2020, they entered into a warranty contract with Defendant Ford Motor Company (“Ford”) regarding a 2022 Ford Escape.  Plaintiffs allege that defects and nonconformities to the warranty manifested during the express warranty period, including but not limited to brakes and transmission.  (Compl., ¶¶15-16.)  Plaintiffs allege they delivered the subject vehicle to an authorized Ford repair facility for repair of nonconformities, but Ford was unable to conform the vehicle to the applicable express warranty after a reasonable number of repairs.  (Id., ¶¶18-19.)

In the 2^nd cause of action, Plaintiffs allege that they delivered the subject vehicle to Vista for repair on numerous occasions and that Vista owed Plaintiffs a duty to use ordinary care and skill in storage, preparation, and repair of the vehicle in accordance with industry standards.  (Id., ¶¶28-29.)  Plaintiffs allege that Vista breached its duty by failing to properly store, prepare, and repair the subject vehicle.  (Id., ¶30.) 

B.     Demurrer on Calendar

On January 23, 2023, Defendant Vista Ford Lincoln (“Vista”) filed a demurrer to the 2^nd cause of action in the complaint.

On March 13, 2023, Plaintiff filed an opposition brief.

On March 17,. 2023, Vista filed a reply brief.

DISCUSSION

The elements of a negligence cause of action are “duty, breach of duty, proximate cause, and damages.”  (Carlsen v. Koivumaki (2014) 227 Cal.App.4th 879, 892.) 

Vista demurs to the sole cause of action alleged against it in the complaint for negligent repair on the grounds that it is barred by the economic loss rule and fails to plead damages. 

First, Vista argues that Plaintiffs have not alleged a duty that is independent from a contract (warranty) or that Vista acted intentionally. 

The economic loss rule prevents the law of contract and law of tort from dissolving into one another.  (Robinson Helicopter Co., Inc. v. Dana Corp. (2004) 34 Cal.4th 979, 988.)  Economic losses consist of damages for inadequate value, cost of repair, replacement of defective products or consequent loss of profits—without any claim of personal injury or damages to other property.  (Id.)  The rule requires a purchaser to recover in contract for purely economic loss due to disappointed expectations, unless he can demonstrate harm above and beyond a broken contractual promise.  (Id.)  “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.] In each of these cases, the duty that gives rise to tort liability is either completely independent of the contract or arises from conduct which is both intentional and intended to harm. [Citation.]”  (Erlich v. Menezes (1999) 21 Cal.4th 543, 551–552.)

As currently alleged, the 2^nd cause of action does not allege a duty above and beyond that of bringing the vehicle into conformity with the warranty.  In order to overcome the economic loss rule, Plaintiffs are required to allege fact showing intentionality of the conduct and of the harm.  The allegations as currently alleged are general and cursory. Further allegations should be alleged to state sufficient facts for this cause of action.

In opposition, Plaintiffs argue that their allegations are adequate based on North America Chemical Co. v. Superior Court (1997) 59 Cal.App.4th 764.  They argue that under the North American Chemical Co. case, a claim for negligent performance can be alleged in spite of the economic loss rule where the six Biakanja factors are established—"(1) the extent to which the transaction was intended to affect the plaintiff, (2) the foreseeability of harm to the plaintiff, (3) the degree of certainty that the plaintiff suffered injury, (4) the closeness of the connection between the defendant's conduct and the injury suffered, (5) the moral blame attached to the defendant's conduct, and (6) the policy of preventing future harm.”  (North American Chemical Co., supra, 59 Cal.App.4th at 782 and 785.)  However, as summarized above, the allegations of the complaint are cursory and do not address these six factors. 

Second, Vista argues that Plaintiffs fail to plead damages or that they paid any out-of-pocket expenses for repairs performed by Vista—and any such payments would have been covered under warranty.  The complaint alleges that Vista’s negligence was the proximate cause of Plaintiffs’ damages, but the damages are not specified.  (Compl., ¶31.)  It is unclear what the nature of Plaintiffs’ damages are—i.e., out of pocket costs to repair the vehicle, damage to the vehicle while stored at Vista’s facilities, etc.

For these reasons, the demurrer to the 2^nd cause of action is sustained with leave to amend.

CONCLUSION AND ORDER

            Defendant Vista Ford Lincoln’s demurrer to the 2^nd cause of action in the complaint is sustained with 20 days leave to amend.

Defendant shall provide notice of this order.