Judge: Kristin S. Escalante , Case: 22STCV17142, Date: 2023-03-29 Tentative Ruling
Case Number: 22STCV17142 Hearing Date: March 29, 2023 Dept: 24
MOVING PARTY: Defendants For Motor Company and
Advantage Ford Lincoln
RESP. PARTY:
The
above-captioned matters are called for hearing.
The Court has
read the moving papers in the above-captioned motions and announces its
tentative rulings in open Court.
The Demurrer to Plaintiff's First Amended Complaint;
reservation no.: 910492490322 filed by Defendants Ford Motor Company and
Advantage Ford Lincoln on 12/06/2022 is OVERRULED.
Defendants For Motor Company (“Ford”) and Advantage Ford
Lincoln (“AFL”) (collectively “Defendants”) demurrer to the first (violation of
Magnuson-Moss Warranty Act), second (breach of implied warranty), and third
(negligent repair) causes of action in the first amended complaint (“FAC”)
filed by Plaintiff Gino Mortillaro (“Plaintiff”). Defendant argue Plaintiff
failed to allege sufficient facts to constitute the causes of action. (Notice
of Mtn., at p. 1; see also Code Civ. Proc., § 430.10 subd., (e).)
On May 24, 2022, Plaintiff filed suit against Defendants. On
November 4, 2022, the parties filed a joint stipulation for Plaintiff to file a
first amended complaint (“FAC”), which the parties attached to the joint
stipulation. (Order,
Nov. 4, 2022.) The court granted the stipulation. Defendants then brought a
demur on the attached FAC, but Plaintiff had not filed the FAC. As a result the
demur was continued and Plaintiff was ordered to file the FAC. Plaintiff has
done so.
In the FAC, Plaintiff alleged three causes of action for (1)
violation of the Magnuson-Moss Warranty Act, (2) breach of the implied warranty
of merchantability, and (3) negligent repair. Plaintiff alleged causes of
action one and two against Ford and cause of action three against AFL.
Plaintiff’s suit arises from his purchase of a 2017 Ford
Explorer (“subject vehicle”). When Plaintiff obtained the subject vehicle, it
demonstrated defects and nonconformities to the warranty, including but not
limited to defects to the engine, the electrical system, and the transmission.
The nonconformities impaired the use, value, and safety of the subject vehicle.
Ford failed to either promptly replace or repair the subject vehicle in
conformance Ford’s statutory obligations. Plaintiff brought the subject vehicle
to AFL and AFL failed to bring the vehicle into conformity with the warranties
after multiple opportunities.
A demurrer for sufficiency tests whether the complaint
states a cause of action. (Hahn
v. Mirda (2007) 147 Cal.App.4th 740, 747 (Hahn).) When considering
demurrers, courts read the allegations liberally and in context. (Schultz v. Harney (1994) 27 Cal.App.4th 1611,
1622
(Schultz), as modified on denial of reh’g (Sept. 29, 1994).) At
the pleading stage, a plaintiff need only allege ultimate facts sufficient to
apprise the defendant of the factual basis for the claim against them. (Semole
v. Sansoucie (1972) 28 Cal.App.3d 714, 721.) A “demurrer does not, however,
admit contentions, deductions or conclusions of fact or law alleged in the
pleading, or the construction of instruments pleaded, or facts impossible in
law.” (S.
Shore Land Co. v. Petersen (1964) 226 Cal.App.2d 725, 732 [internal
citations omitted].)
The court addresses the causes of action out of order as
they affect one another.
1. Cause of Action
Two - Breach of the implied warranty of merchantability
Defendants first argue Plaintiff purchased the subject
Vehicle in another state and, thus, cannot make a claim under the Song Beverly
Act (“Song Beverly”).
The FAC does not allege where Plaintiff purchased the
subject vehicle. Accordingly, Defendants have not raised a valid ground for
demurrer based on the face of the pleading. (See Bezirdjian v. O’Reilly (2010)
183 Cal.App.4th 316, 321-22.) Defendants attempt to establish where Plaintiff
purchased the subject vehicle through a request for judicial notice of the
retail installment sales contract between Plaintiff and D.J. Quick Ford Inc,
but they failed to file any request for judicial notice concurrently with the
motion. Regardless, the sales contract is not a proper item for judicial notice.
(See Evid. Code, § 452.) Defendants’ argument that courts routinely take
judicial notice of contracts based on two unpublished federal district court
cases is unpersuasive. Defendants also attach the sales contract to the
declaration of Hannah Miller. The court declines to consider it because it is
improper extrinsic evidence.
Additionally, even if Plaintiff paid for the vehicle out of
California, that does not mean the it was “sold” out of the state because,
“[u]nder California law, title to the [vehicle] passed upon delivery. . .”
(Davis v. Newmar Corp (2006) 136 Cal.App.4th 275, 278.) There are no
allegations in the FAC regarding where delivery of the subject vehicle was had.
Thus, it is not clear on the face of the FAC that Plaintiff has no claim under
Song Beverly.
Next, Defendants argue Plaintiff’s claim under Song Beverly
is barred by the statute of limitations. “The Song–Beverly Act does not include
its own statute of limitations. [citation] California courts have held that the
statute of limitations for an action for breach of warranty under the
Song–Beverly Act is governed by. . . section 2725 of the Uniform Commercial
Code. (Mexia v. Rinker Boat Co. (2009) 174 Cal. App. 4th 1297, 1305–06.) The
same limitations period applies for breach of contract and breach of warranty
claims because the factual basis for the two claims is the same. (Cardinal
Health 301, Inc. v. Tyco Electronics Corp. (2008) 169 Cal.App.4th 116, 135
review denied [applying reasoning to claim for breach of warranty against
seller of electrical connectors].) The parties do not dispute that the statute
of limitations is four years but do dispute when the statute of limitations
period expired. Defendants argue the statute of limitations began running at
the time of purchase and expired four years later in 2021. Plaintiff argues the
statute of limitations was tolled until at least 2019 based on the delayed
discovery rule.
“A breach of warranty occurs when tender of delivery is
made, except that where a warranty explicitly extends to future performance of
the goods and discovery of the breach must await the time of such performance
the cause of action accrues when the breach is or should have been discovered.”
(Com. Code, §2725, subd. (2).) This exception is narrow and “does not occur in
the usual case.” (Cardinal Health, supra, 169 Cal.App.4th at p. 130.) Instead
it applies “only when the seller has expressly agreed to warrant its produce
for a specific and defined period of time.” (Ibid.) “Because an implied
warranty is one that arises by operation of law rather than by an express
agreement of the parties, courts have consistently held [that an implied
warranty] is not a warranty that ‘explicitly extends to future performance of
the goods.’ ” (Id. at p. 134.)
Thus, under the Uniform Commercial Code accrual happened at
the time of purchase absent an express warranty extending the time to future
performance. (See Cardinal Health, supra, 169 Cal.App.4th at p. 132’ see also
Mexia, supra, 174 Cal.App.4th at p. 1307 [where plaintiff was suing for a
breach of the implied warranty of merchantability, the court reasoned the claim
“arises by operation of law and has a four-year statute of limitations”].) As,
Plaintiff purchased the vehicle in 2017, the statute of limitations would bar
the claim unless tolled on some other basis.
Plaintiff argues the implied warranty claim is tolled based
on delayed discovery of the underlying defect. The FAC alleges the claims are
tolled based on “equitable tolling, the discovery rule, the fraudulent
concealment rules, equitable estoppel, the repair rule, and/or class action
tolling (e.g., the American Pipe rule).” (FAC, ¶ 7.) At this early stage it is
unclear if the subject vehicle had an undiscoverable latent defect or if the
defect was caused by something such as improper maintenance. Plaintiff has
sufficiently alleged his claim for the implied warranty of merchantability is
tolled based on delayed discovery. Plaintiff alleged he discovered the defect
in June 2019 when he brought the subject vehicle for repairs, and there was
delayed discovery. Per the—albeit cursory—allegations, the statute was tolled
until June 2019 and Plaintiff was within the statute of limitations by filing the
lawsuit in May 2022. (See Mexia, supra, 174 Cal.App.4th at p. 1306-09.)
Plaintiff also appears to argue that the claim may have accrued later but does
not explain the argument. Defendants cite federal case law that delayed
discovery rule does not apply to implied warranty claims, but Defendants have
not cited any California case law. The court is not inclined to follows these
cases at this preliminary stage given the lack of guidance under California
law.
Finally, Defendants argue the implied warranty claim fails
because Song Beverly does not extend warranties for used vehicles to original
manufacturers. There are no allegations in the FAC that Plaintiff purchased a
used vehicle. To the extent Defendants are relying on the request for judicial
notice or the Miller declaration to establish the subject vehicle is used,
Defendants are again relying on improper extrinsic evidence.
Accordingly, the court overrules the demurrer as to cause of
action two.
Defendants argue that the Magnuson-Moss claim fails because
Plaintiff cannot state a claim for breach of implied warranty. However,
Plaintiff has stated a claim for breach of implied warranty. (See Daugherty v
Am. Honda Motor Co., Inc., 144 Cal.App.4th 824, 833 [“the trial court correctly
concluded that failure to state a warranty claim under state law necessarily
constituted a failure to state a claim under Magnuson–Moss”].) Accordingly, the
Magnuson-Moss claim is proper.
Defendants argue the negligent repair claim fails because
the economic loss rule bars it and because Plaintiff has not plead damages.
Generally, a plaintiff may recover
for all harm proximately cause by a defendant’s wrongful acts. (Civ. Code, §
3333; see also 6
Witkin, Summary of California Law, Torts §§ 1715-1719]
.); However, under the economic loss rule, a plaintiff cannot recover for
purely economic losses—e.g. “damages for inadequate value, costs of repair and
replacement of the defect product or consequent loss of profits.” (Jimenez
v. Sup. Ct (T.M. Cobb.) (2002) 29 Cal.4th 473, 481-84 (Jimenez).)
Under the rule, a purchaser may only recover in contract for
purely economic loss due to disappointed expectations unless the purchaser can
demonstrate harm above and beyond the broken contractual promise. (Robinson
Helicopter Co., Inc. v. Dana Corp. (2004) 34 Cal.4th 979, 988) Tort damages
are permitted in certain contract cases. (Id.
at pp. 989-990 [stating tort damages available for breach of the covenant
of good faith and fair dealing, wrongful discharge, or where the contract was
fraudulently induced.].)
In the case of a contract for the
performance of services “[t]he question of whether a plaintiff may recover
damages for economic loss, absent physical injury to person or property, has
been answered differently in cases involving the quality and condition of goods
from when plaintiff’s loss arises from a negligent performance of services.”
(N. Am. Chem. Co. v. Superior Ct. (1997) 59 Cal.App.4th 764, 777 (North
America).) “Entities generally have no duty to prevent purely economic
loss to a potential plaintiff. Under the common law, it is only where a special
relationship exists, giving rise to such a duty, that a plaintiff may recover
purely economic loss.” (Mega RV Corp. v. HWH Corp. (2014) 225 Cal. App. 4th
1318, 1339 [internal brackets and quotations omitted].)
“[I]n negligent performance cases,
. . . the six criteria [mentioned]. . .will determine the existence of the
necessary special relationship . . . In addition, if those six criteria are
satisfied the plaintiff will be entitled to recover economic loss damages
without the need to allege and prove personal injury or property damage.”
(North America, surpa, 59 Cal.App.4th at p. 785.) The necessary “special
relationship” is established by the following criteria: “(1) the extent to
which the transaction was intended to affect the plaintiff, (2) the
foreseeability of harm to the plaintiff, (3) the degree of certainty that the
plaintiff suffered injury, (4) the closeness of the connection between the
defendant’s conduct and the injury suffered, (5) the moral blame attached to
the defendant’s conduct, and (6) the policy of preventing future harm.” (Id. at
p. 782.) “[I]n cases where economic loss has resulted from the negligent
performance of services, . . . absence of a contract remedy is not a
requisite.” (Ibid. [internal quotations and brackets omitted].)
On the face of the complaint, the
court cannot determine whether the economic loss rule bars the cause of action.
Pleading a special relationship is not required for a negligent repair claim
(See CACI No. 1200.) Therefore, the omission of details establishing a special
relationship does not require a dismissal of the claim. Defendants’ reliance on
unpublished, nonbinding, district court cases from the ninth circuit to support
their argument that the economic loss rule bars Plaintiff’s claim for negligent
repair is not conclusive. The court disagrees with Defendants’ argument that
Plaintiff alleged no damages. (See FAC, ¶ 59.)
Accordingly, the court overrules
the demurrer to the third cause of action.