Judge: Jon R. Takasugi, Case: 24STCV17400, Date: 2025-01-08 Tentative Ruling

Case Number: 24STCV17400    Hearing Date: January 8, 2025    Dept: 17

Superior Court of California

County of Los Angeles

DEPARTMENT 17

TENTATIVE RULING

Defendant’s demurrer to the fifth cause of action is OVERRULED.

Defendant’s motion to strike is DENIED.

            On 7/12/2024, Plaintiff James Michael Gubbins Jr. (Plaintiff) filed suit against General Motors, LLC (Defendant), alleging violation of the Song-Beverly Act.

             Now, Defendant demurs to the fifth cause of action for fraudulent concealment. Defendant also moves to strike portions of Plaintiff’s Complaint.

Discussion

            Defendant argues that Plaintiff has not pled fraudulent concealment with the requisite specificity.

            After review, the Court disagrees.

            Here, Plaintiff alleges that Defendant knew about defects with the 8-speed transmission in the Chevrolet Colorado. More specifically, Plaintiff alleges that:

Defendant GM knew that the 8-speed transmission had one or more defects that can result in various problems, including, but not limited to hard or harsh shifts, jerking, lurching, hesitation on acceleration, surging and/or inability to control the vehicle's speed, acceleration, or deceleration ("Transmission Defect"). These conditions present a safety hazard and are unreasonably dangerous to consumers because they can suddenly and unexpectedly cause the driver to be unable to control the speed and acceleration/deceleration of the vehicle. Such unexpected inability to control the vehicle's speed and acceleration/deceleration thereby, exposes Plaintiff and passengers (along with other drivers who share the road or garage with Plaintiff) to a serious risk of accident and injury

Plaintiff is informed, believes and thereon alleges that Defendant GM acquired its knowledge of the Transmission Defect prior to Plaintiff acquiring the Vehicle, through sources not available to consumers such as Plaintiff, including but not limited to pre-production and post-production testing data; early consumer complaints about the Transmission Defect made directly to Defendant GM and its network of dealers; aggregate warranty data compiled from Defendant GM's network of dealers; testing conducted by Defendant GM in response to these complaints; as well as warranty repair and part replacements data received by Defendant GM from Defendant GM's network of dealers, amongst other sources of internal information.

                        ..

However, prior to Plaintiff's purchase of the Subject Vehicle, Defendant GM was internally referring the 8-speed transmission as a "neck snapper." Defendant GM engineers even considered stopping production in 2015 (but did not) and in 2016, president Johan de Nysschen acknowledged customer frustration surrounding the Transmission Defect internally and meeting with its authorized repair facility. Nonetheless, Defendant GM continued to conceal the Transmission Defect from consumers, including in its marketing materials, and advised any complaining customers that poor shifts were "normal."

In fact, Defendant GM's Mark Gordon lamented in February 2019 that "shift quality issues are an ongoing concern with the 8-Speed transmission. Unfortunately, these issues have been through an Op-ex and a service solution is not going to be developed due to cost.

            (Complaint ¶¶ 61-66.)

            As such, Plaintiff alleges specific facts which could show Defendant knew about the 8-speed transmission defects, including that it was referred to internally as the “neck snapper” while publicly advertising the transmissions as having “world-class performance.” Moreover, Plaintiff alleges that he “interacted with sales representatives, considered Defendant GM's advertisement, and/or other marketing materials concerning GM Vehicles prior to purchasing Subject Vehicle” and thus has alleged facts which could show interactions before or during his purchase of the Vehicle. (Complaint ¶ 62.)

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.

            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. (BiglerEngler 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.

Based on the foregoing, Defendant’s demurrer to the fifth cause of action is overruled.

Motion to Strike

            Defendant moves to strike Plaintiff’s prayer for punitive damages. As set forth above, the Court overruled Defendant’s demurer to the Plaintiff’s fraudulent concealment cause of action. As such, Plaintiff has necessarily alleged facts which could show malice, oppression, or fraud.

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

It is so ordered.

Dated:  January    , 2025

   Hon. Jon R. Takasugi
   Judge of the Superior Court

Parties who intend to submit on this tentative must send an email to the court at smcdept17@lacourt.org by 4 p.m. the day prior as directed by the instructions provided on the court website at www.lacourt.org.  If a party submits on the tentative, the party’s email must include the case number and must identify the party submitting on the tentative.  If all parties to a motion submit, the court will adopt this tentative as the final order.  If the department does not receive an email indicating the parties are submitting on the tentative and there are no appearances at the hearing, the motion may be placed off calendar.  For more information, please contact the court clerk at (213) 633-0517.