Judge: Jon R. Takasugi, Case: 24STCV12025, Date: 2024-10-01 Tentative Ruling

Case Number: 24STCV12025    Hearing Date: October 1, 2024    Dept: 17

Superior Court of California

County of Los Angeles

DEPARTMENT 17

TENTATIVE RULING

Defendant’s demurrer is SUSTAINED, WITHOUT LEAVE TO AMEND, as to the fifth cause of action, but OVERRULED as to the sixth cause of action.

            On 5/13/2024, Plaintiff Vanessa Tellez (Plaintiff) filed suit against Ford Motor Company and Norm Reeves Ford Superstore, alleging violations of the Song-Beverly Warranty Act. 

            Now, Defendant demurs to the fifth (negligent repair) and sixth causes of action (fraudulent inducement – concealment).

Discussion  

            Defendant argues that Plaintiff cannot state a claim for negligent repair and fraudulent concealment because both claims are barred by the economic loss rule.

            After review, the Court agrees only in part. 

            As for the concealment claim, Defendant argues that it is barred by the economic loss rule because Plaintiff’s damages are limited to economic loss. “As our Supreme Court has explained, although that fraudulent intent is often established by circumstantial evidence, “ ‘something more than nonperformance is required to prove the defendant’s intent not to perform his promise.’ [Citations.]”) (Robinson Helicopter Co., Inc. v. Dana Corp. (2004) 34 Cal.4th 979, 988, 993.)

            Here, Plaintiff’s claim is not based solely on a failure to perform. Rather, Plaintiff alleges that Defendant knew that the specific transmission installed in the vehicle was defective and did not disclose this fact. The California Supreme Court in Robinson expressly permitted fraud claims to proceed in contract actions to “a defendant’s affirmative misrepresentations on which a plaintiffs rely, and which expose a defendant to liability for personal damages independent of the Plaintiffs’ economic loss.” (Id. at p. 993.) While Plaintiff’s claim is here is based on concealment, rather than misrepresentation, there is no reason to believe that an individual can be held liable for fraud if they vocalize their deception, but not if they withhold material information as part of that deception.

            While Defendant may dispute whether or not Plaintiff can actually show that Defendant knowingly concealed a defective transmission, and while this may be Plaintiff transforming a run-of-the-mill Song Beverly claim into a fraud claim, this will require factual determinations not properly made at this stage.

            As for the negligent repair cause of action, Plaintiff does not allege that she paid out-of-pocket for any repairs performed by Norm Reeves because those repairs were covered under warranty. In the absence of Plaintiff alleging out of pocket expenses for any repairs, the Court agrees that Plaintiff has failed to allege the essential element of damages to state her negligent repair claim.

In opposition, Plaintiff did not indicate that she did, in fact, incur any costs related to the repair, nor did she allege any physical damage incurred separate and apart from the alleged defective vehicle. Accordingly, there is no reason to believe Plaintiff could cure this deficiency with leave to amend. Moreover, given this conclusion, the Court need not reach Plaintiff’s arguments regarding the special relationship or components exception.

            Based on the foregoing, Defendant’s demurrer is sustained, without leave to amend, as to the fifth cause of action, but overruled as to the sixth cause of action.

It is so ordered.

Dated:  October    , 2024

   Hon. Jon R. Takasugi
   Judge of the Superior Court

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