Judge: Joseph Lipner, Case: 21STCV32268, Date: 2024-02-20 Tentative Ruling

Case Number: 21STCV32268    Hearing Date: February 20, 2024    Dept: 72

SUPERIOR COURT OF CALIFORNIA

COUNTY OF LOS ANGELES

DEPARTMENT 72

TENTATIVE RULING

Defendant Kia Motors America, Inc. (“Defendant”) moves for judgment on the pleadings on the fourth cause of action in the First Amended Complaint (“FAC”) filed by Plaintiffs Jorga Pina Alonso and Ivonne Maltos (collectively, “Plaintiffs”).

The Court DENIES Defendant’s motion.

Background

This is a Lemon Law case. The following facts are taken from the allegations in the FAC.

Plaintiffs purchased a vehicle (the “Subject Vehicle”) with a defective engine from Defendant. Plaintiffs allege that the type of engine installed in the Subject Vehicle had a propensity to suffer from a blockage of oil flow to the engine’s moving parts, causing unreliable and potentially dangerous performance. Plaintiffs allege that Defendants were aware of this defect due to internal reports such as pre-release testing data, consumer complaints, replacement part sale data, and other sources of aggregate information. This information was not available to the public. Defendants did not disclose any information about the engine’s defect to Plaintiffs before Plaintiff’s purchased the vehicle.

Plaintiffs filed this action on August 31, 2021. The operative complaint is now the FAC, which raises claims for (1) breach of express warranty under the Song-Beverly Act; (2) breach of implied warranty under the Song-Beverly Act; (3) violation of the Song-Beverly Act, section 1793.2; (4) fraudulent inducement by concealment; and (5) fraudulent inducement by intentional misrepresentation.

Defendant filed this motion on January 18, 2024, seeking judgment on the pleadings as to the fourth cause of action. Plaintiff filed an opposition and Defendant filed a reply.

Legal Standard

Either prior to trial, but after the time to answer or demur has passed, or at the trial, the plaintiff or the defendant may move for judgment on the pleadings and that the appropriate ground for such a motion is the same as that arguable by general demurrer, namely, the failure to state a cause of action or defense. (Dobbins v. Hardister (1966) 242 Cal.App.2d 787, 791; See also Sofias v. Bank of America (1985) 172 Cal.App.3d 583, 586 [The non-statutory motion for judgment on the pleadings can be made at any time, even during trial, since the grounds for a general demurrer are never waived.], see also Code Civ. Proc., §438(f).)  

A motion for judgment on the pleadings performs the same function as a general demurrer, and hence attacks only defects disclosed on the face of the pleadings or by matters that can be judicially noticed. (See, e.g., Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial (TRG 1998) §§ 7:275, 7:322; Lance Camper Manufacturing Corp. v. Republic Indemnity Co. (1996) 44 Cal.App.4th 194, 198.) Presentation of extrinsic evidence is therefore not proper on a motion for judgment on the pleadings. (Id.; Cloud v. Northrop Grumman Corp. (1998) 67 Cal.App.4th 995, 999.) Both a demurrer and a motion for judgment on the pleadings accept as true all material factual allegations of the challenged pleading, unless contrary to law or to facts of which a court may take judicial notice. (Mechanical Contractors Assn. v. Greater Bay Area Assn. (1998) 66 Cal.App.4th 672, 677; Edwards v. Centex Real Estate Corp, (1997) 53 Cal.App.4th 15, 27.) 

The motion may be made only after one of the following conditions has occurred: (1) If the moving party is a plaintiff, and the defendant has already filed his or her answer to the complaint and the time for the plaintiff to demur to the answer has expired; (2) If the moving party is a defendant, and the defendant has already filed his or her answer to the complaint and the time for the defendant to demur to the complaint has expired. (Code Civ. Proc., § 438(f).) The motion provided for in Code of Civil Procedure section 438 may be made even though either of the following conditions exist:  (1) The moving party has already demurred to the complaint or answer, as the case may be, on the same grounds as is the basis for the motion provided for in this section and the demurrer has been overruled, provided that there has been a material change in applicable case law or statute since the ruling on the demurrer; (2) The moving party did not demur to the complaint or answer, as the case may be, on the same grounds as is the basis for the motion provided for in this section. (Code Civ. Proc., § 438(g).) No motion may be made pursuant to Code of Civil Procedure section 438 if a pretrial conference order has been entered pursuant to Code of Civil Procedure section 575, or within 30 days of the date the action is initially set for trial, whichever is later, unless the court otherwise permits. (Code Civ. Proc., § 438(e).)   

Discussion

Timeliness

The Court exercises its discretion under Code of Civil Procedure, section 438, subd. (e) to hear the motion.

Preemption

Defendant argues that Plaintiffs’ fraudulent concealment claim is preempted by federal disclosure requirements.

78 Fed. Reg. 161, 51382 establishes Early Warning Reporting, which lays out a regulatory scheme under which manufacturers of vehicles must report certain vehicle data to the NHTSA.

5 U.S.C. § 552 provides that covered agencies shall make certain information available to the public. 5 U.S.C. § 552(b)(4) provides that “[t]his section does not apply to matters that are … trade secrets and commercial or financial information obtained from a person and privileged or confidential[.]” (Ibid.)

49 CFR Part 512 governs how the NHTSA handles confidential information that is submitted to the agency. In relevant part, the regulation provides that that NHTSA will not publicly disclose confidential information. (49 CFR § 512.20.)

“If Congress has not entirely displaced state regulation over the matter in question, state law is still preempted to the extent it actually conflicts with federal law, that is, when it is impossible to comply with both state and federal law, or where the state law stands as an obstacle to the accomplishment of the full purposes and objectives of Congress[.]” (Silkwood v. Kerr-McGee Corporation (1984) 464 U.S. 238, 248.)

Defendant argues that permitting state law causes of action regarding the disclosure of vehicle data to consumers would impair the NHTSA’s ability to obtain necessary information in the future.

These federal statutes and regulations handle what information must be reported to federal agencies and how the agency handles information that is reported to it. The forgoing law serves to ensure that agencies protect confidential information which is disclosed to them. Nothing in their language suggests that they are intended to control what information manufacturers do or do not disclose to buyers of their vehicles. Although Defendant argues that the regulations also cover how agencies handle Freedom of Information Act (“FOIA”) requests, that is, again, a rule controlling what information agencies may give to the public when the public requests it from the agency. It is not a regulation protecting manufacturers from ever having to disclose confidential information to members of the public.

Defendant cites to Lloyd v. Ford Motor Co. (In re Ford Motor Co. F-150) (6th Cir. 2023) 65 F.4th 851, where the Sixth Circuit found that the plaintiff’s fraud-on-the-agency argument was preempted by federal law which established requirements for disclosure to the EPA. In re Ford Motor Co. F-150 is inapposite. Plaintiffs do not allege that Defendant committed fraud on a federal agency. Plaintiffs allege that Defendants committed fraud on Plaintiffs. Thus, Plaintiff’s claim does not require an analysis of whether Defendants correctly reported information to the federal government – it requires an analysis of whether Defendants fraudulently failed to disclose information to Plaintiffs.

Defendant attempts to represent Plaintiffs’ claim as an assertion that Plaintiffs are entitled to the same aggregate data that Defendant provides to the NHTSA. This is not the case, as Defendant would not have had to disclose its aggregate data to Plaintiffs to avoid liability – it would only have had to disclose the engine’s propensity for defects.

Thus, the Court finds that permitting Plaintiff to pursue a cause of action for fraudulent concealment of the engine’s defects does not conflict with the NHTSA’s regulatory scheme for its own information acquisition and protection procedures. The Court therefore finds that Plaintiff’s claim is not preempted.

Failure to State a Claim

“The elements of fraud,” including a cause of action for fraudulent inducement, “are (a) a misrepresentation (false representation, concealment, or nondisclosure); (b) scienter or knowledge of its falsity; (c) intent to induce reliance; (d) justifiable reliance; and (e) resulting damage.” (Hinesley v. Oakshade Town Ctr. (2005) 135 Cal.App.4th 289, 294.) The facts constituting the alleged fraud must be alleged factually and specifically as to every element of fraud, as the policy of “liberal construction” of the pleadings will not ordinarily be invoked. (Lazar v. Superior Court (1996) 12 Cal.4th 631, 645.) To properly allege fraud against a corporation, the plaintiffs must plead the names of the persons allegedly making the false representations, their authority to speak, to whom they spoke, what they said or wrote, and when it was said or written. (Tarmann v. State Farm Mut. Auto. Ins. Co. (1991) 2 Cal.App.4th 153, 157.)

Defendant argues in its reply that Plaintiffs fail to carry their burden to establish that Defendant had a duty to disclose. This argument was not raised in the moving papers and is therefore waived.

The Court therefore denies Defendant’s motion.