Judge Kerry Bensinger, Case Number: 24STCV22929, Date: 2025-02-05 Tentative Ruling

This is a lemon law case. On September 6, 2024, Plaintiff, Latasha Woods, filed a Complaint, against Defendant, General Motors, LLC, alleging that she purchased a defective 2023 Chevrolet Trailbrazer (the “Vehicle”) which Defendant’s failed to conform to the Vehicle’s express warranties. On October 9, 2024, Plaintiff filed the operative First Amended Complaint (“FAC”) asserting causes of action for:

On November 13, 2024, Defendant filed this Demurrer to the Fifth Cause of Action and concurrently filed a Motion to Strike the punitive damages request from the Fifth Cause of Action.

A demurrer for sufficiency tests whether the complaint states a cause of action.¿ (Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747.)¿ When considering demurrers, courts read the allegations liberally and in context, accepting the alleged facts as true.¿ (Nolte v. Cedars-Sinai Medical Center (2015) 236 Cal.App.4th 1401, 1406.)¿ “Because a demurrer challenges defects on the face of the complaint, it can only refer to matters outside the pleading that are subject to judicial notice.”¿ (Arce ex rel. Arce v. Kaiser Found. Health Plan, Inc. (2010) 181 Cal.App.4th 471, 556.)¿¿¿

The Consumers Legal Remedies Act (the “CRLA”) “declares unlawful a variety of ‘unfair methods of competition and unfair or deceptive acts or practices’ used in the sale or lease of goods to a consumer.” (Bower v. AT&T Mobility, LLC (2011) 196 Cal.App.4th 1545, 1556.) Civil Code section 1770, subdivision (a)(1)-(27), provides a list of methods, acts, or practices that are unlawful under the CLRA. “An individual seeking to recover damages under the CLRA based on a misrepresentation must prove, among other things, actual injury. ‘Relief under the CLRA is specifically limited to those who suffer damage, making causation a necessary element of proof.’ [Citation.] Accordingly, ‘plaintiffs in a CLRA action [must] show not only that a defendant’s conduct was deceptive, but that the deception caused them harm...’ [Citations.] [Citations.]” (Bower, supra, 196 Cal.App.4th at p. 1556.)

Defendant demurs to the Fifth Cause of Action for Violation of the CLRA for three reasons: (1) Plaintiff failed to provide adequate notice pursuant to the CLRA, and (2) the CLRA claim fails to plead fraud with the required specificity.[1] The court addresses each in turn.

Defendant argues that Plaintiff failed to provide the adequate notice required to properly plead a CLRA claim for damages. The Court disagrees. Civil Code section 1782 provides, in relevant part, that:

(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.

(d) An action for injunctive relief brought under the specific provisions of Section 1770 may be commenced without compliance with subdivision (a). Not less than 30 days after the commencement of an action for injunctive relief, and after compliance with subdivision (a), the consumer may amend his or her complaint without leave of court to include a request for damages. The appropriate provisions of subdivision (b) or (c) shall be applicable if the complaint for injunctive relief is amended to request damages.

Here, the original Complaint alleges that “Plaintiff sent to Defendants via US Certified Mail return receipt requested a notice of violation of the CLRA and demanded that Defendants make an appropriate correction of the CLRA violations described herein. Should Defendants fail to make an appropriate correction after the expiration of thirty (30) days from said notice, by operation of law and without leave of Court this Complaint will be amended to state a claim for damages pursuant to Civ. Code § 1782(d) upon the expiration of thirty (30) days after the notice is given.” (Complaint, ¶ 63.) The original Complaint sought injunctive relief, not punitive damages. (See Prayer for Relief, Complaint.)

Then, in the FAC, Plaintiff alleges that, on September 6, 2024, the “notice was given in writing and was sent by certified mail, return receipt requested, to Defendants. Defendants have failed, within thirty (30) days of receipt, to respond to Plaintiffs demand and/or provide Plaintiff with an appropriate correction, repair, replacement, relief, cure or any other remedy.” (FAC, ¶ 63.) Plaintiff seeks punitive damages for the first time in the FAC. As such, pursuant to Civil Code section 1782, subdivision (d), Plaintiff was not required to provide notice. “An action for injunctive relief brought under the specific provisions of Section 1770 may be commenced without compliance with [the 30-day requirement under] subdivision (a).” (Civ. Code, § 1782, subd. (d); Morgan v. AT&T Wireless Services, Inc. (2009) 177 Cal.App.4th 1235, 1259-60.) Plaintiff complied with the notice requirements.

The essential factual elements of a CLRA violation are: (1) that plaintiff purchased the produce for personal purposes, (2) the defendant violated one of the prohibited practices, (3) plaintiff was harmed, and (4) that harm resulted from defendant’s conduct. (CACI No. 4700.) Plaintiff’s harm resulted from defendant’s conduct if plaintiff relied on defendant’s representation. To prove reliance, plaintiff need only prove that the representation was a substantial factor in his decision, not the primary or only factor. (Id.)

The parties disagree over the applicable standard to state a CLRA claim. Defendant argues that a CLRA must be plead with specificity because it sounds in fraud. Plaintiff argues the pleading standard is reasonable particularity. Plaintiff wins this argument. “[C]auses of action under the CLRA and UCL must be stated with reasonable particularity, which is a more lenient pleading standard than is applied to common law fraud claims. (Gutierrez v. Carmax Auto Superstores California (2018) 19 Cal.App.5th 1234, 1261.)

Applying the reasonable particularity standard, the court finds each element is pleaded. The FAC alleges that Plaintiff purchased a 2023 Chevrolet Trailbrazer for personal purposes (FAC, ¶ 5), that Defendant misrepresented the Vehicle as being safe to drive (FAC, ¶¶ 61, 62), that Plaintiff was harmed as a result of Defendant’s failure to repair the Vehicle, (FAC, ¶¶ 13, 14), and that Plaintiff relied on Defendant’s representation (FAC, ¶ 62). The CLRA claim is sufficiently pled. Accordingly, the demurrer is OVERRULED.

Defendant seeks an order to strike punitive damages allegations from the Fifth Cause of Action based on two grounds: (1) Plaintiff does not state a CLRA claim, and (2) Plaintiff did not sufficiently plead malice, oppression, or fraud to support a punitive damages award.[2] The court agrees punitive damages should be stricken, but on different grounds.

“In an action for the breach of an obligation not arising from contract, where it is proven by clear and convincing evidence that the defendant has been guilty of oppression, fraud, or malice, the plaintiff, in addition to the actual damages, may recover damages for the sake of example and by way of punishing the defendant.”¿ (Civ. Code, § 3294, subd. (a).)¿ When the defendant is a corporation, an award of punitive damages against it must be based on the malice of its employees; however, the law does not impute every employee’s malice to the corporation. Instead the oppression or malice must be perpetrated, authorized, or knowingly ratified by an officer, director, or managing agent of the corporation.”¿ (Civ. Code, § 3294, subd. (b); Tilkey v. Allstate Ins. Co. (2020) 56 Cal.App.5th 521, 554 (corporation ratifies managing agent’s decision when it knows about and accepts that decision); see also Wilson v. Southern California Edison Co. (2015) 234 Cal.App.4th 123, 164-165 (assuming employees were managing agents, conduct they ratified “was far from despicable”).)

Here, Defendant is a corporation. However, the FAC does not allege that the oppression, fraud, or malice was “perpetrated, authorized, or knowingly ratified by an officer, director, or managing agent of the corporation.”¿ (Wilson, supra, 234 Cal.App.4th at p. 164, citing Civ. Code, § 3294, subd. (b).)¿¿¿

Accordingly, the motion to strike punitive damages is GRANTED. Leave to amend is DENIED without prejudice.

The Motion to Strike is Granted. Leave to amend is Denied without prejudice. Plaintiff may seek leave to amend if she uncovers additional facts during discovery which support a claim for punitive damages.

Defendant is ordered to file and serve its Answer to the FAC within 10 days of this order.

Kerry Bensinger

Judge of the Superior Court

[1] Defendant also argues that the CLRA claim is barred by the economic loss rule. However, Defendant did not identify the economic loss rule as a basis for demurrer in its notice of demurrer. “A demurrer shall distinctly specify the grounds upon which any of the objections to the complaint, cross-complaint, or answer are taken. Unless it does so, it may be disregarded.” (Code Civ. Proc., § 430.60.) The court exercises its discretion to disregard this argument.

[2] Defendant also argues that punitive damages are not available because Plaintiff’s CLRA claim arises from a contract. Not so. The CLRA statute expressly authorizes recovery of punitive damages. (See Civ. Code, § 1780, subd. (a).)