Judge: Kevin C. Brazile, Case: 22STCV17467, Date: 2022-10-05 Tentative Ruling

Hearing Date: October 5, 2022

Case Name: Collier v. General Motors, LLC, et al.

Case No.: 22STCV11626 

Matter: Demurrer; Motion to Strike

Moving Party: Defendant General Motors, LLC

Responding Party: Plaintiff Steve Collier

Notice: OK

Ruling: The Demurrer is sustained, with twenty days leave to amend.

The Motion to Strike is granted, with twenty days leave to amend.

Moving party to give notice.

If counsel do not submit on the tentative, they are strongly 

encouraged to appear by LACourtConnect rather than in person due to the COVID-19 pandemic. 

This is a lemon law action.  On June 22, 2022, Plaintiff Steve Collier filed the operative First Amended Complaint (“FAC”) for (1)-(4) violations of the Song-Beverly Consumer Warranty Act §§ 1793.2(d), 1793.2(b), 1793.2(a)(3), 1791.1 and 1794, and (5) fraud by omission.

1. Demurrer

Defendant General Motors, LLC demurs to the fifth cause of action for failure to state sufficient facts.  Specifically, Defendant argues Plaintiff’s fraud claim is barred by both the economic loss rule and the statute of limitations and is otherwise insufficiently pled.  

When considering demurrers, courts read the allegations liberally and in context, and “treat the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law.” (Serrano v. Priest (1971) 5 Cal.3d 584, 591.)  “A demurrer tests the pleadings alone and not the evidence or other extrinsic matters. Therefore, it lies only where the defects appear on the face of the pleading or are judicially noticed. The only issue involved in a demurrer hearing is whether the complaint, as it stands, unconnected with extraneous matters, states a cause of action.”  (Hahn v. Mirda¿(2007) 147 Cal.App.4th 740, 747.)  It is error “to sustain a demurrer without leave to amend if the plaintiff shows there is a reasonable possibility any defect identified by the defendant can be cured by amendment.”  (Aubry v. Tri-City Hospital Dist.¿(1992) 2 Cal.4th 962, 967.)

1. Economic Loss Rules

The Court believes that the economic loss rule does not apply where, as here, there is a pleading of fraudulent inducement coupled with exposure to the risk of personal injury due to defects in the subject vehicle.  (Robinson Helicopter Co., Inc. v. Dana Corp. (2004) 34 Cal.4th 979, 989-90; see also NuCal Foods, Inc. v. Quality Egg LLC (E.D. Cal. 2013) 918 F.Supp.2d 1023, 1031 [“[N]o meaningful distinction exists between intentional concealment and intentional misrepresentation; rather, the material distinction is whether the tortious conduct was intentional or negligent.”].)

2. Statute of Limitations

The statute of limitations for fraud-based claims is three years.  (Code Civ. Proc. § 338(d).)  Moreover, “a cause of action accrues at the time when the cause of action is complete with all of its elements.”  (Fox v. Ethicon Endo-Surgery, Inc. (2005) 35 Cal.4th 797, 806 (“Fox”), internal quotation marks omitted.)   Here, Plaintiff’s fraud claim—without benefit of the delayed discovery rule as built into Code Civ. Proc. § 338(d)—accrued at the time of his purchase of the subject vehicle on March 22, 2018.  (See, e.g., FAC ¶ 74 [“Had Plaintiff known that the Vehicle suffered from the Battery Defect, he would not have purchased the Vehicle.”].)  Thus, his fraud claim would be time-barred on Mach 22, 2021; however, the Complaint was filed much later on April 6, 2022. 

Code Civ. Proc. § 338(d) states that a claim for fraud “is not deemed to have accrued until the discovery, by the aggrieved party, of the facts constituting the fraud or mistake.”  “This discovery element has been interpreted to mean the discovery by the aggrieved party of the fraud or facts that would lead a reasonably prudent person to suspect fraud.”  (Doe v. Roman Catholic Bishop of Sacramento (2010) 189 Cal.App.4th 1423, 1430 (internal quotation marks omitted).)  “The discovery rule only delays accrual until the plaintiff has, or should have, inquiry notice of the cause of action. . . . In other words, plaintiffs are required to conduct a reasonable investigation after becoming aware of an injury, and are charged with knowledge of the information that would have been revealed by such an investigation.”  (Fox, supra, 35 Cal.4th at pp. 807–08.)  A “plaintiff whose complaint shows on its face that his claim would be barred without the benefit of the discovery rule must specifically plead facts to show (1) the time and manner of discovery and (2) the inability to have made earlier discovery despite reasonable diligence.”  (Fox, supra, 35 Cal.4th at p. 808, internal quotation marks omitted.)  

Similarly, fraudulent concealment tolls the statute of limitations “only for that period during which the claim is undiscovered by plaintiff or until such time as plaintiff, by the exercise of reasonable diligence, should have discovered it.”  (Sanchez v. S. Hoover Hosp. (1976) 18 Cal.3d 93, 99.). 

There is tolling on the basis of the repair doctrine “where one who has breached a warranty claims that the defect can be repaired and attempts to make repairs.”  (Aced v. Hobbs-Sesack Plumbing Co. (1961) 55 Cal.2d 573, 585.)   The statute of limitations is tolled “during the time ‘the seller [defendant] honestly endeavors to make repairs to enable the product to fit the warranty or at least until such time as it becomes reasonably apparent to the owner that the warranty cannot be met ....’ ”  (A & B Painting & Drywall, Inc. v. Superior Court (1994) 25 Cal.App.4th 349, 354.)  

Here, Plaintiff seems to allege that fraud was discovered in May 2021 when Plaintiff’s car was returned to an authorized retailer, but Defendant refused to provide restitution or do repairs.  Plaintiff also pleads that Defendant blamed Plaintiff’s vehicle problems on issues that could be repaired when the vehicle was suffering from a battery defect.  Liberally construing the FAC, this is sufficient to invoke the delayed discovery rule, which is a factual issue.  

3. Sufficient Facts 

“The required elements for fraudulent concealment are (1) concealment or suppression of a material fact; (2) by a defendant with a duty to disclose the fact to the plaintiff; (3) the defendant intended to defraud the plaintiff by intentionally concealing or suppressing the fact; (4) the plaintiff was unaware of the fact and would not have acted as he or she did if he or she had known of the concealed or suppressed fact; and (5) plaintiff sustained damage as a result of the concealment or suppression of the fact. [Citation.]”  (Graham v. Bank of America, N.A. (2014) 226 Cal.App.4th 594, 606.)

“[F]raud must be pled specifically; general and conclusory allegations do not suffice. [Citations] Thus the policy of liberal construction of the pleadings . . . will not ordinarily be invoked to sustain a pleading defective in any material respect.  This particularity requirement necessitates pleading facts which show how, when, where, to whom, and by what means the representations were tendered.”  (Lazar v. Superior Court (1996) 12 Cal. 4th 631, 645, internal quotation marks omitted.)  

Where fraud is pled against a corporation, Plaintiff must “allege the names of the persons making the allegedly fraudulent 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 Mutual Auto. Ins. Co. (1991) 2 Cal.App.4th 153, 157.)

In order to establish a non-fiduciary duty to disclose for the purposes of a concealment claim, there must be a transactional relationship.  (Bigler-Engler v. Breg, Inc. (2017) 7 Cal.App.5th 276, 312.)  The FAC fails to plead specific facts supporting any such relationship.  

The FAC makes reference to concealment at a dealership, but it is not apparent why Defendant would be liable for some dealership’s omissions.  (See Avalon Painting Co. v. Alert Lumber Co. (1965) 234 Cal.App.2d 178, 184 [“A Ford dealer or retailer may in a layman's view be an agent of the Ford Motor Co., but he is not an agent in the legal sense of that relationship.”]; Steven Brand v. Nissan N. Am., Inc. (C.D. Cal. Feb. 24, 2017) 2017 WL 11610901, at *9 [“Courts have consistently held that authorized dealers are not inherently agents of a vehicle manufacturer.”].)  The FAC fails to plead facts supporting an agency theory, whether actual or ostensible.  

The FAC also indicates that Plaintiff reviewed Defendant’s marketing materials (FAC ¶ 35), but no specificity is provided on this point.  Because a transactional relationship is not pled, the Demurrer is sustained as to the fifth cause of action, with twenty days leave to amend.

2. Motion to Strike

Given the ruling on the Demurrer, the Motion to Strike punitive damages is granted, with twenty days leave to amend.

Moving party to give notice.

If counsel do not submit on the tentative, they are strongly encouraged to appear by LACourtConnect rather than in person due to the COVID-19 pandemic.