Judge: Jon R. Takasugi, Case: 24STCV14837, Date: 2025-02-03 Tentative Ruling

Case Number: 24STCV14837    Hearing Date: February 3, 2025    Dept: 17

Superior Court of California

County of Los Angeles

DEPARTMENT 17

TENTATIVE RULING

Defendant’s motion for judgment on the pleadings is DENIED.

Defendant’s motion to strike is DENIED.

On 5/13/2024, Plaintiff Victor Garcia (Plaintiff) initiated this action against Defendant General Motors, LLC (Defendant). On 7/15/2024, Plaintiff filed a first amended complaint (FAC) alleging: (1) breach of implied warranty; (2) breach of express warranty; (3) fraudulent concealment; and (4) violation of the Consumers Legal Remedies Act (CLRA).

On 12/3/2024, Defendant moved for a judgment on the pleadings. Defendant also moves to strike portions of the FAC.

Discussion

            Defendant argues that Plaintiff’s third cause of action for fraudulent concealment is time-barred and barred by the Economic Loss Rule, and that the fourth cause of action for violation of the Consumers Legal Remedies Act (CLRA) is barred by Plaintiff’s failure to provide proper notice. Defendant also argues that the claims are insufficiently pled.

            As for the statute of limitations argument, California Civil Code section 1783 provides that the any cause of action brought under the specific provisions of the CLRA (California Civil Code §1770) “shall be commenced not more than three years from the date of the commission of such method, act, or practice.

            While Defendant argues that Plaintiff cannot invoke the delayed discovery rule, this requires factual determinations not properly made at this stage. As Defendant notes, the delayed discovery rule tolls the applicable statute of limitations if a plaintiff is unable to discover their cause of action with reasonable diligence. To rely on it, the plaintiff must plead “facts showing that [he] was not negligent in failing to make the discovery sooner and that [she] had no actual or presumptive knowledge of facts sufficient to put [him] on inquiry.” (Hobart v. Hobart Estate Co. (1945) 26 Cal.2d 412, 437; Johnson v. Ehrgott (1934) 1 Cal.2d 136, 137.)  Here, Plaintiff alleges that Defendant had exclusive knowledge of the persistent issues, and are not reasonably discoverable by consumers. As such, whether or not Plaintiff did, or should, have discovered the defect within the three-years statute of limitations is a factual determination not properly made at this time. The same goes for the alleged violation of the CLRA.

            As for the Economic Loss Rule argument, the Economic Loss Rule provides that “[w]here a purchaser’s expectations in a sale are frustrated because the product he bought is not working properly, his remedy is in contract alone, for he has suffered only ‘economic’ losses.” (Food Safety Net Services v. Eco Safe Systems USA, Inc. (2012) 209 Cal.App.4th 1118, 1130 [quoting Robinson Helicopter Co., Inc. v. Dana Corp. (2004) 34 Cal.4th 979, 988].) In other words, the Economic Loss Rule applies in a retail vehicle sale unless a consumer can prove harm above and beyond a broken contractual promise.

In Rattagan v. Uber Technologies, Inc., the Supreme Court found that fraudulent concealment can form the basis of a tort action only if the information allegedly concealed was outside the contemplation of the parties at the time they entered into the contractual relationship. (Rattagan v. Uber Technologies, Inc. (Cal. 2024) 553 P.3d 1213, 1240.)

Here, Plaintiff alleges that Defendants “actively concealed information about the Defective Transmission from its authorized dealerships and from potential purchasers by omitting information about the Defective Transmission from marketing materials and training programs offered to the sales personnel at Defendants' authorized dealerships, instead opting to further conceal the truth by only issuing TSBs that merely provided band-aid repairs to mask the Defective Transmission.” (Complaint ¶ 18.) As such, Plaintiff alleges fact which could show that the information allegedly concealed was outside the contemplation of the parties at the time they entered into the contractual duty. 

            Defendant further argues that Plaintiff has not sufficiently alleged concealment, and has not alleged a transactional duty to disclose.

The Court disagrees. While Defendant contends that Plaintiff has not sufficiently alleged facts of the identities of the individuals who allegedly concealed this information, or which could establish Defendant’s knowledge of defects at the time of purchase, access to this specific information is clearly contemplated by the discovery process. Indeed, it is nearly impossible to imagine how Plaintiff could have access to those facts without the benefit of discovery. Rather, it is sufficient that Plaintiff has alleged facts which, accepted as true, could state a claim for concealment. As part of this finding, the Court disagrees with Defendant that Plaintiff’s allegations of concealment amount only to “unactionable puffery”.

            Moreover, the Court finds sufficient facts have been alleged to show a duty to disclose. A duty to disclose can arise from three circumstances: (1) the defendant had exclusive knowledge of the material fact; (2) the defendant actively concealed the material fact; or (3) the defendant made partial representations while also suppressing the material fact. (Bigler-Engler v. Breg, Inc. (2017) 7 Cal.App.5th 276, 311; LiMandri v. Judkins (1997) 52 Cal.App.4th 326, 336.) However, “[t]hese three circumstances, however, ‘presuppose[ ] the existence of [a] relationship between the plaintiff and defendant in which a duty to disclose can arise.’” (Bigler-Engler, supra, 7 Cal. App.5th at 311.0

“Such a transaction must necessarily arise from direct dealings between the plaintiff and defendant; it cannot arise between the defendant and the public at large.” (Bigler-Engler, supra, 7 Cal.App.5th at 311, emphases added.)

Here, Defendant manufactured the Vehicle purchased by Plaintiff, provided warranties to Plaintiff on behalf of that Vehicle, and attempted repair on Plaintiff’s vehicle pursuant those warranties. As such, the Court finds direct dealings between Plaintiff and Defendant sufficient to give rise to a duty to disclose.

This leaves Defendant’s argument that Plaintiff failed to provide adequate notice under the CLRA claim. 

California Civil Code § 1782 provides in pertinent part:

 (a) Thirty days or more prior to the commencement of an action for damages pursuant to this title, the consumer shall do the following:

(1)  Notify the person alleged to have employed or committed methods, acts, or practices declared unlawful by Section 1770 of the particular alleged violations of Section 1770.

(2)  Demand that the person correct, repair, replace, or otherwise rectify the goods of services alleged to be in violation of Section 1770.

The notice shall be in writing and shall be sent by certified or registered mail, return receipt requested, to the place where the transaction occurred or to the person’s principal place of business within California.

(d) An action for injunctive relief brought under the specific provisions of Section 1770 may be commenced without compliance with subdivision (a).

(California Civil Code § 1782).

Here, Plaintiff alleges that Plaintiff “notified Defendants of the particular alleged violations of [the CLRA]” . . . “[s]imulataneously with the filing of this Complaint”; FAC, ¶ 127.) In opposition, Plaintiff cited Morgan v. AT & T Wireless Services, Inc. (2009) 177 Cal.App.4th 1235. The Court of Appeal in Morgan specifically rejected any argument that the CLRA notice must be sent before commencement of a lawsuit, explaining such an argument "is contrary to the express language of the notice statute." (Morgan, supra, 177 Cal.App.4th at 1260.)

The court affirmed that notice is not required if a plaintiff is not seeking damages under the CLRA and the "statute contemplates" that a consumer may amend a complaint to add a request for damages, which is expressly allowed. (Id.) This is what occurred here. Plaintiffs’ first 6/13/2024 Complaint alleged that, "[u]pon the expiration of 30 days after the notice required by Civil Code § 1782(a) is given, Plaintiff seeks all available remedies pursuant to Civil Code section 1780, including restitution, actual damages, punitive damages, attorney's fees, costs, and expenses, according to proof." (Complaint, ¶ 129.) The Court's docket reflects that Plaintiffs FAC was filed on 7/15/2024, over a month after Plaintiff alleges the CLRA notice was sent to GM on 6/13/2024.

This is sufficient at the pleadings stage to show compliance with notice requirement.

Based on the foregoing, Defendant’s motion for judgment on the pleadings is denied. 

Motion to Strike

Defendant moves to strike Plaintiff’s prayer for punitive damages. Given the Court’s ruling above, Plaintiff has an operative cause of action for fraudulent concealment. As such, Plaintiff has necessarily alleged sufficient facts which could show malice, oppression, or fraud. (Civ. Code §3294.)

Based on the foregoing, Defendant’s motion to strike is denied.

It is so ordered.

Dated:  February    , 2025

   Hon. Jon R. Takasugi
   Judge of the Superior Court

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