Judge: Joseph Lipner, Case: 24STCV06177, Date: 2024-10-15 Tentative Ruling
Case Number: 24STCV06177 Hearing Date: October 15, 2024 Dept: 72
SUPERIOR COURT OF CALIFORNIA
COUNTY OF LOS ANGELES
DEPARTMENT 72
TENTATIVE
RULING
|
FRANCISCO MORALES, Plaintiff, v. GENERAL MOTORS LLC, Defendant. |
Case No:
24STCV06177 Hearing Date: October 15, 2024 Calendar Number: 7 |
Defendant General Motors LLC (“Defendant”) demurs to the third
and fourth claims in the First Amended Complaint (“FAC”) filed by Plaintiff
Francisco Morales (“Plaintiff”). Defendant additionally moves to strike the
FAC’s demand for punitive damages.
The Court OVERRULES the demurrer.
The Court DENIES the motion to strike.
This
is a Song-Beverly action. The following facts are taken from the allegations of
the FAC, which the Court accepts as true for the purposes of the demurrer.
On
September 18, 2021, Plaintiff purchased a 2021 Chevrolet Corvette (the “Vehicle”).
The Vehicle was sold with Defendant’s Limited Warranty.
Plaintiff
alleges that the Vehicle exhibited defects and nonconformities to warranty
involving a defective HVAC system, a defective transmission that caused the
“Service Transmission” light to illuminate, startup issues, the illumination of
the “Check Engine” warning light, and harsh, unpredictable gear shifting.
Plaintiff
presented the Vehicle to Defendant’s authorized dealership’s multiple times,
but Defendant could not fix the defects or nonconformities.
Defendant
refused to repurchase the Vehicle.
Plaintiff
alleges that Defendant had knowledge, since at least 2020, that 2021 Chevrolet
Corvette models had automatic transmissions that were predisposed to defects
that resulted in dangerous failures. Plaintiff alleges that Defendant concealed
this information from Plaintiff and the general public.
Plaintiff
filed this action on March 13, 2024. The operative complaint is now the FAC,
which raises claims for (1) breach of implied warranty of merchantability under
the Song-Beverly Act; (2) breach of express warranty under the Song-Beverly
Act; (3) fraudulent concealment; and (4) violation of the Consumer Legal
Remedies Act (“CLRA”), Civil Code, sections 1750, et seq.
On
June 4, 2024, Defendant filed the instant demurrer and motion to strike.
Plaintiff filed an opposition to each, and Defendant filed a reply in support
of each.
“The party against whom a complaint or cross-complaint has
been filed may object, by demurrer or answer as provided in Section 430.30, to
the pleading on any one or more of the following grounds:
(a) The court has
no jurisdiction of the subject of the cause of action alleged in the pleading.
(b) The person who filed the pleading does not have the
legal capacity to sue.
(c) There is
another action pending between the same parties on the same cause of action.
(d) There is a defect or misjoinder of parties.
(e) The pleading does not state facts sufficient to
constitute a cause of action.
(f) The pleading is
uncertain. As used in this subdivision, “uncertain” includes ambiguous and
unintelligible.
(g) In an action
founded upon a contract, it cannot be ascertained from the pleading whether the
contract is written, is oral, or is implied by conduct.
(h) No certificate was filed as required by Section 411.35.”
(Code Civ. Proc., § 430.10.)
As a general matter, in a demurrer proceeding, the defects
must be apparent on the face of the pleading or via proper judicial
notice. (Donabedian v. Mercury Ins.
Co. (2004) 116 Cal.App.4th 968, 994.) “A demurrer tests the pleading
alone, and not the evidence or facts alleged.” (E-Fab, Inc. v. Accountants,
Inc. Servs. (2007) 153 Cal.App.4th 1308, 1315.) The court assumes the truth
of the complaint’s properly pleaded or implied factual allegations. (Ibid.) The only issue a demurrer is
concerned with is whether the complaint, as it stands, states a cause of
action. (Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747.)
Where a demurrer is sustained, leave to amend must be
allowed where there is a reasonable possibility of successful amendment. (Goodman v. Kennedy (1976) 18 Cal.3d 335,
348.) The burden is on the plaintiff to show the court that a pleading can be
amended successfully. (Ibid.;
Lewis v. YouTube, LLC (2015) 244 Cal.App.4th 118, 226.) However, “[i]f
there is any reasonable possibility that the plaintiff can state a good cause
of action, it is error to sustain a demurrer without leave to amend.” (Youngman v. Nevada Irrigation Dist.
(1969) 70 Cal.2d 240, 245).
The court may, upon a motion, or at any time in its
discretion, and upon terms it deems proper, strike any irrelevant, false, or
improper matter inserted in any pleading. (Code Civ. Proc., § 436(a).) The
court may also strike all or any part of any pleading not drawn or filed in
conformity with the laws of this state, a court rule, or an order of the court.
(Code Civ. Proc., § 436(b).) The grounds for a motion to strike are that the
pleading has irrelevant, false or improper matter, or has not been drawn or
filed in conformity with laws. (Code Civ. Proc., § 436.) The grounds for moving
to strike must appear on the face of the pleading or by way of judicial notice.
(Code Civ. Proc., § 437.)
Plaintiff correctly states that Defendant has demurred to
the wrong complaint. The Court would
have appreciated Defendant addressing this argument in its reply brief. Nevertheless, Plaintiff was able to respond
to the substance of Defendant’s arguments with respect to Plaintiff’s First
Amended Complaint. Moreover, Defendant
would be entitled to file a motion for judgment on the pleadings even if the
Court overruled the demurrer on this technical ground. Accordingly, the Court exercises its
discretion
“[T]he elements of an action for fraud and deceit based on
concealment are: (1) the defendant must have concealed or suppressed a material
fact, (2) the defendant must have been under a duty to disclose the fact to the
plaintiff, (3) the defendant must have intentionally concealed or suppressed
the fact with the intent to defraud the plaintiff, (4) the plaintiff must have
been unaware of the fact and would not have acted as he did if he had known of
the concealed or suppressed fact, and (5) as a result of the concealment or
suppression of the fact, the plaintiff must have sustained damage.” (Lovejoy
v. AT&T Corp. (2004) 119 Cal.App.4th 151, 157–158.)
A duty to disclose arises when “[1] a defendant owes a
fiduciary duty to a plaintiff … [2] when the defendant has exclusive knowledge
of material facts not known to the plaintiff; [3] when the defendant actively
conceals a material fact from the plaintiff; or [4] when the defendant makes
partial representations but also suppresses some material facts.” (Jones v.
ConocoPhillips Co. (2011) 198 Cal.App.4th 1187, 1199 [internal citations
and quotation marks omitted; cleaned up].)
“Each of the [latter] three circumstances in which
nondisclosure may be actionable presupposes the existence of some other
relationship between the plaintiff and defendant in which a duty to disclose
can arise.” (LiMandri v. Judkins (1997) 52 Cal.App.4th 326, 336–337.)
“[S]uch a relationship can only come into being as a result of some sort of
transaction between the parties.” (Id. at p. 337.) “Thus, a duty to
disclose may arise from the relationship between seller and buyer, employer and
prospective employee, doctor and patient, or parties entering into any kind of
contractual agreement.” (Ibid.)
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.) 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.) “[Fraud’s] particularity requirement necessitates pleading
facts which ‘show how, when, where, to whom, and by what means the
representations were tendered.’ [Citation.]” (Stansfield v. Starkey
(1990) 220 Cal.App.3d 59, 73.)
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 that Plaintiff has not alleged a duty to
disclose because Plaintiff fails to plead a transactional relationship.
Defendant argues that Plaintiff did not buy the Vehicle directly from
Defendant, and therefore did not plead a transactional relationship.
A contractual relationship is not necessary to give rise to
a buyer-seller relationship for the purposes of establishing a duty to
disclose.
“Under California law, a vendor has a duty to disclose
material facts not only to immediate purchasers, but also to subsequent
purchasers when the vendor has reason to expect that the item will be resold.”
(OCM Principal Opportunities Fund, L.P. v. CIBC World Markets Corp.
(2007) 157 Cal.App.4th 835, 859 [emphasis in original]; see also Dhital,
supra, 84 Cal. App.5th at p. 884 [Plaintiffs’ allegations against Nissan
sufficient at pleading stage where plaintiffs alleged that they bought the car
from a Nissan dealership, that Nissan backed the car with an express warranty,
and that Nissan’s authorized dealerships are its agents for purposes of sale of
Nissan vehicles to consumers].)
“While an affirmative misrepresentation might not be
repeated … a nondisclosure must necessarily be passed on. Only Smith knew what
his soils engineers had found and it was unlikely that others would find out on
their own. …. Under these circumstances it would be anomalous if liability for
damages resulting from fraudulent concealment were to vanish simply because of
the fortuitous event of an intervening resale. Ultimately in such a case it is
the subsequent purchaser who is directly damaged by the initial nondisclosure.”
(Barnhouse v. City of Pinole (1982) 133 Cal.App.3d 171, 192.)
The Court therefore does not rule in Defendant’s favor on
this issue.
In Dhital v. Nissan North America, Inc. (2022) 84
Cal.App.5th 828 (review granted), the Court of Appeal found that the following
allegations of defect were adequate for a fraudulent inducement claim:
“The CVT is defective
in that it causes hesitation from a stop before acceleration; sudden, hard
shaking during deceleration; sudden, hard shaking and violent jerking (commonly
known as ‘juddering’ or ‘shuddering’) during acceleration; and complete failure
to function, each and all of which prevent a CVT-equipped vehicle from
operating as intended by the driver, especially during acceleration from a
complete stop.”
(Dhital v. Nissan North America,
Inc. (2022) 84 Cal.App.5th 828, 833–834, 844, review granted February
1, 2023.)
Here,
Plaintiff alleges that the Vehicle exhibited defects and nonconformities to
warranty involving a defective HVAC system, a defective transmission that
caused the “Service Transmission” light to illuminate, startup issues, the
illumination of the “Check Engine” warning light, and harsh, unpredictable gear
shifting.
Plaintiff’s
allegations in this case are similar in their level to specificity to those
permitted in Dhital. While the California Supreme Court has granted
review in Dhital, and it is therefore not binding on the Court, it may
be considered as persuasive authority.
(Cal. R. Ct. Rules 8.1105 and 8.1115.) The Court does find it
persuasive, barring any contrary ruling by the California Supreme Court. The
Court concludes that Plaintiff has specifically alleged defects and Ford’s
knowledge thereof.
Plaintiff has pled that Defendant acquired knowledge of the
transmission defects through internal repair data, including Technical Service
Bulletins, requests for assistance by authorized mechanics, and consumer
complaints. Plaintiff has pled that these sources are not available to
consumers. Plaintiff has pled Defendant’s exclusive knowledge with adequate
specificity.
Plaintiff has alleged that, despite having this knowledge,
Defendant concealed the information from Plaintiff and the public to attract
customers. (FAC ¶ 21.)
Plaintiff has pled that he was unaware of the transmission
defects and would not have purchased the Vehicle if he had been aware of them.
Plaintiff has pled damages as a result.
Plaintiff has therefore adequately pled this claim. The
Court overrules the demurrer to this claim.
“(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 or services
alleged to be in violation of Section 1770.”
(Civil Code, § 1782.)
Defendant argues that Plaintiff may not obtain damages under
his CLRA claim s because Plaintiff failed to provide notice under section 1782,
subd. (a) before filing its initial complaint.
In the context of this case, the Court agrees. However, for the reasons discussed at the end
of the section, this is not a sufficient reason to sustain the demurrer to this
claim.
Plaintiff argues that Defendant’s argument against damages is
“is contrary to the express language of the notice statute”, citing Morgan
v. AT&T Wireless Services, Inc. (2009) 177 Cal.App.4th 1235, 1260. However,
the Morgan court stated in the following sentence that “Plaintiffs (or
their predecessor) were not required to provide notice before filing the
original or first amended complaints because they did not seek damages under
the CLRA in those complaints.” (Morgan v. AT&T Wireless Services,
Inc., 177 Cal.App.4th at p. 1260 [emphasis added].)
It was important to the holding in Morgan that there
had been no pre-existing CLRA damages claim when the plaintiff served his
notice. Here, Plaintiff sought CLRA damages in the original Complaint and that
damages claim was pending at the very time that Plaintiff served its
notice. Plaintiff alleges that he
notified Defendant of his CLRA claim on March 13, 2024 by certified mail,
return receipt requested, demanding that Defendant repair, replace, or
otherwise rectify the Vehicle. (FAC ¶ 128.) This is the same date that
Plaintiff filed the Complaint. This notice therefore does not comply with the
statutory notice requirements for damages.
Morgan made clear that a CLRA damages claim “must
simply be dismissed until 30 days or more after the plaintiff complies with the
notice requirements.” (Id. at p.
1261.) Plaintiff never did so. The statute is designed to give Defendant a
time period without a claim pending “if the defendant corrects the alleged
wrongs within 30 days after notice, or indicates within that 30-day period that
it will correct those wrongs within a reasonable time.” (Ibid.) Plaintiff never afforded Defendant that
opportunity. Under these circumstances,
the claim for damages under the CLRA is legally barred for failure to give appropriate
notice.
The unavailability of damages under the CLRA does not,
however, entitle Defendant to an order sustaining the demurrer as to the entirety
of the fourth claim. The claim seeks injunctive relief as well as damages. (FAC ¶¶ 130-131.) “An action for injunctive relief brought
under the specific provisions of Section 1770 may be commenced without
compliance with [the notice requirement of] subdivision (a).” (Civil Code §
1782, subd. (d).) Defendant’s demurrer to the fourth claim fails because it
does not successfully attack the entirety of the claim.
The Court therefore overrules the demurrer to this claim.
Punitive damages are appropriate when a defendant acted with
malice, oppression, or fraud. (Civ. Code, § 3294, subd. (a).) “Malice” is
defined as conduct intended to cause injury to a person or despicable conduct
carried on with a willful and conscious disregard for the rights or safety of
others. (Turman v. Turning Point of Cent.
Cal., Inc. (2010) 191 Cal.App.4th 53, 63.) “Oppression” means despicable
conduct subjecting a person to cruel and unjust hardship, in conscious
disregard of the person’s rights. (Ibid.)
“Fraud” is an intentional misrepresentation, deceit, or concealment of a
material fact known by defendant, with intent to deprive a person of property,
rights or otherwise cause injury. (Ibid.)
“In order to survive a motion to strike an allegation of
punitive damages, the ultimate facts showing an entitlement to such relief must
be pled by a plaintiff.” (Clauson v. Superior Court (1998) 67
Cal.App.4th 1253, 1255.) “In passing on the correctness of a ruling on a motion
to strike, judges read allegations of a pleading subject to a motion to strike
as a whole, all parts in their context, and assume their truth.” (Ibid.)
“In ruling on a motion to strike, courts do not read allegations in isolation.”
(Ibid.) Conclusory allegations, devoid of any factual assertions, are
insufficient to support a conclusion that parties acted with oppression, fraud
or malice. (Smith v. Superior Court
(1992) 10 Cal.App.4th 1033, 1042.)
As discussed above, the Court finds that Plaintiff has
adequately alleged fraud. The Court therefore finds that Plaintiff has stated a
claim for punitive damages.
The Court therefore denies the motion to strike.