Judge: Kenneth J. Medel, Case: 37-2023-00006044-CU-BC-CTL, Date: 2023-08-25 Tentative Ruling

SUPERIOR COURT OF CALIFORNIA,

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HALL OF JUSTICE

TENTATIVE RULINGS - August 24, 2023

08/25/2023  09:30:00 AM  C-66 COUNTY OF SAN DIEGO

JUDICIAL OFFICER:Kenneth J Medel

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Civil - Unlimited  Breach of Contract/Warranty Demurrer / Motion to Strike 37-2023-00006044-CU-BC-CTL DEL CARMEN BECERRA GARCIA VS DESERT AUTO GROUP V LLC [IMAGED] CAUSAL DOCUMENT/DATE FILED: Demurrer, 03/20/2023

Desert Auto Group V, LLC dba Chula Vista Ford's Demurrer is SUSTAINED with 10 days leave to amend.

The Complaint filed in February, 2023 alleges four causes of action. Three causes of action are alleged only against Ford Motor Company related to the Warranty: 1. VIOLATION OF SONG-BEVERLY ACT - BREACH OF EXPRESS WARRANTY 2. VIOLATION OF SONG-BEVERLY ACT - BREACH OF IMPLIED WARRANTY 3. VIOLATION OF THE SONG-BEVERLY ACT SECTION 1793.2.

The Complaint pleads at paragraph 16: 'Defects and nonconformities to warranty manifested themselves within the applicable express warranty period, including but not limited to brakes.' The Fourth Cause of Action is for NEGLIGENT REPAIR against named defendant Chula Vista Ford (Desert Auto Group V, LLC).

Chula Vista Ford demurs to the Fourth Cause of Action arguing that the economic loss rule bars Plaintiffs' claim and that Plaintiffs have not pled damages (independent of damages from breach of warranty claims).

Plaintiff relies on the California Jury Instructions to the elements to the claim: - Defendant repaired - Defendant was negligent in repairing - Plaintiff was harmed - Defendant's negligence was a substantial factor in causing harm. (CACI No. 1220.) The Complaint is bare bones: Plaintiffs alleged that they delivered the vehicle to Defendant for repair.

(Complaint ¶ 53.) As Plaintiffs alleged, Defendant owed a duty to Plaintiffs to use ordinary care and skill in storage, preparation, and repair of the Subject Vehicle in accordance with industry standards.

(Complaint ¶ 54.) The Subject Vehicle was not properly repaired, and Defendant's negligent breach of the duties it owed to Plaintiffs was a proximate cause of Plaintiffs' damages. (Complaint ¶ 55-56.) No specifics are alleged.

Defendant argues that the economic loss doctrine should bar the cause of action at demurrer. Under the economic loss rule, a plaintiff may not recover purely economic damages for tort claims. Jimenez v. Superior Court, 29 Cal.4th 473 (Cal. 2002). 'In general, there is no recovery in tort for negligently inflicted 'purely economic losses,' meaning financial harm unaccompanied by physical or property damage.' Sheen v. Wells Fargo Bank, N.A. (2022) 12 Cal.5th 905, 922. The so-called economic loss rule 'functions to bar claims in negligence for pure economic losses in deference to a contract between litigating parties.' (Ibid., citing Robinson Helicopter Co., Inc. v. Dana Corp. (2004) 34 Cal.4th 979, 988 ['Quite simply, the economic loss rule 'prevent[s] the law of contract and the law of tort from dissolving one into the other.''].) Chula Vista Ford argues that 'the crux of Plaintiffs' claim is that Chula Vista Ford failed to repair Plaintiffs' vehicle to conform to warranty. The claim arises from, and is not independent of, the warranty Calendar No.: Event ID:  TENTATIVE RULINGS

2952599  47 CASE NUMBER: CASE TITLE:  DEL CARMEN BECERRA GARCIA VS DESERT AUTO GROUP V LLC  37-2023-00006044-CU-BC-CTL contract. Accordingly, there is no duty 'completely independent of the contract' alleged, nor allegations of intentional conduct by Chula Vista Ford.' The Complaint alleges: '16. Defects and nonconformities to warranty manifested themselves within the applicable express warranty period, including but not limited to brakes. 17. The nonconformities substantially impair the use, value and/or safety of the Subject Vehicle. 18. Plaintiffs delivered the Subject Vehicle to an authorized FORD repair facility for repair of the nonconformities. 19. Defendant was unable to conform the Subject Vehicle to the applicable express warranty after a reasonable number of repair attempts.' The Fourth Cause of Action incorporates as these paragraphs as 'fully restated and re-alleged.' (Paragraph 52) These paragraphs indicate that the claim is based on failure to conform the vehicle to warranty. The first three causes of action allege a failure on the part of Ford Motor to conform to warranty. The Fourth Cause of Action pleads simply: '53. Plaintiffs delivered the Subject Vehicle to Defendant CHULA VISTA FORD for repair of on numerous occasions. 54. Defendant CHULA VISTA FORD owed a duty to Plaintiffs to use ordinary care and skill in storage, preparation and repair of the Subject Vehicle in accordance with industry standards.' However, read with paragraphs 16-19, the Complaint is based upon failure to comply with warranty. There are no allegations that Chula Vista Ford contributed to damages 'independent of the contract.' In opposition, plaintiffs attempt to argue around the economic loss argument by arguing that this is a service contract. First, there is no contract for repair services alleged separate and apart from the warranty. But even so, the courts have not made a clear distinction between contracts for goods and contracts for services. Cases have applied the economic loss rule to service contracts. For example, the Supreme Court declined to allow tort recovery in the loan modification context and held the economic loss rule applied because 'Plaintiff's claim here arises from, and is not independent of, the mortgage contract.' Sheen v. Wells Fargo Bank, N.A., 12 Cal.5th 905, 942 (2022)12 Cal.5th at 924. Because Plaintiffs' negligent repair cause of action is based on the alleged defective vehicle and there are no allegations or proof of physical damage to property or personal injury, the economic loss rule applies.

Plaintiffs also rely on the so-called 'the component exception': 'the economic loss rule does not necessarily bar recovery in tort for damage that a defective product (e.g., a window) causes to other portions of a larger product (e.g., a house) into which the former has been incorporated.' Jimenez v. Superior Court, 29 Cal.4th 473. Multiple district courts have recognized the potential applicability of the component exception in cases involving negligent repair claims against parties sought to be joined in breach of warranty cases against manufacturers. See Diiullo v. FCA US LLC, No. 20-CV-382-MMA (BLM), 2020 WL 1921927, at *3 (S.D. Cal. Apr. 21, 2020) (collecting cases); Viveros, 2021 WL 5989365, at *8. Plaintiff cites a host of federal district cases.

While the District Court opinions could generally be persuasive on an interpretation of California law, the Court notes the limitations of the District Court analysis. The cases cited by plaintiffs involved determining whether there was sufficient basis for the federal court to retain jurisdiction. In so ruling, the District Court's standard of review was limited to whether plaintiff's claim is 'facially viable' under California law. 'For the purposes of joinder under § 1447(e), a plaintiff's claim need only be facially viable-the claim need not be plausible nor stated with particularly. Dordoni, 2020 WL 6082132, at *5. 'In considering the validity of plaintiff's claims, 'the [c]ourt need only determine whether the claim seems valid' which is not the same as the standard in either a motion to dismiss or a motion for summary judgment.' Sabag, 2016 WL 6581154, at *6 (quoting Freeman v. Cardinal Health Pharm.

Servs., LLC, No. 14-cv-01994-JAM-KJN, 2015 WL 2006183, at *3 (E.D. Cal. May 1, 2015)). '[I]f there is a possibility that a state court would find that the complaint states a cause of action against any of the resident defendants, the federal court must find that the joinder was proper and remand the case to the state court.' Ram v. FCA US LLC, No. 220CV00319WBCCKD, 2020 WL 3178388, at *1 (E.D. Cal. June 15, 2020) Thus, this Court can determine that the claim is not viable even if the federal court determined for their jurisdiction purposes that the claim was viable. The case of Jimenez v. Superior Court (2002) 29 Cal. 4th 473 that articulates the 'component part exception' is distinguishable. The Jimenez Court specifically limited its holding only to a homeowner's recovery in tort for damage that a defective window causes to other parts of the home in which it has been installed. (Id. at 484.) Jimenez also held that the product at issue was the window, the window was the product governed by a warranty and as such the economic loss rule did not bar recovery in tort for damages to other portions of the houses such windows were Calendar No.: Event ID:  TENTATIVE RULINGS

2952599  47 CASE NUMBER: CASE TITLE:  DEL CARMEN BECERRA GARCIA VS DESERT AUTO GROUP V LLC  37-2023-00006044-CU-BC-CTL installed in. (Id.) As the attached warranty indicates, as in the typical SBA case, the product governed by the warranty is the motor vehicle as a whole, not the individual component part in which the defect is alleged to have manifested itself. Thus, because the entire vehicle is under warranty, any damage within the vehicle would seemingly be economic loss.

Federal courts have recognized the potential applicability of the component exception to negligent repair claims involving vehicles and do not seem to make the above distinction. See Valenciano v. FCA US LLC, No. CV 20-3197-CJC (ASx), 2020 WL 1699552, at *3 (C.D. Cal. Apr. 8, 2020); Diiullo v. FCA US LLC, No. 20-CV-382-MMA (BLM), 2020 WL 1921927, at *3 (S.D. Cal. Apr. 21, 2020). However, even these cases all indicate that the pleading specifically alleged defects with various components of the subject vehicle and subcomponents of the engine. For example, in Reyes, the Court noted: 'plaintiff does allege that he brought his vehicle to Lampe for repairs on subcomponent parts. (Doc. Nos. 1-2 at 6; 7-5 at 5.) 'Negligent repair of those subcomponents could cause damage to other parts of the vehicle.' Ruiz, 2019 WL 4137613, at *2. Reyes v. FCA US LLC, No. 120CV00833DADSKO, 2020 WL 7224286, at *9 (E.D. Cal. Dec. 8, 2020) As stated above, this pleading is short on specifics as to what component parts were negligently repaired and what damages occurred as a result.

Another basis for the demurrer is the lack of damages. While the Complaint alleges general damages, plaintiffs' negligent repair cause of action lacks any allegations regarding damages, i.e., damages resulting from repairs performed by Chula Vista Ford, such as out-of-pocket expenses, or any other monetary losses or property damage he may have sustained. There is no allegation that Plaintiffs paid for any repairs. Rather, the Complaint plainly alleges that the defects manifested during the warranty period. See Complaint, ¶ 16 ('Defects and nonconformities to warranty manifested themselves within the applicable express warranty period[.]') The face of the Complaint shows that Plaintiffs only seek damages for the alleged defective vehicle itself, which forms the basis of their breach of warranty causes of action against Ford, not Chula Vista Ford.

The Court will hear as to whether leave to amend should be granted.

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