Judge: Lee W. Tsao, Case: 22NWCV00740, Date: 2023-02-14 Tentative Ruling

Case Number: 22NWCV00740    Hearing Date: February 14, 2023    Dept: C

PEREZ-MORALES v. AMERICAN HONDA MOTOR CO., INC.

CASE NO.:  22NWCV00740

HEARING: 2/14/23 @ 1:30 PM

 

#3

TENTATIVE RULING

 

I.             Defendant American Honda Motor Co., Inc.’s demurrer to the third cause of action for fraudulent inducement-concealment is OVERRULED. 

 

II.            Defendant American Honda Motor Co., Inc.’s motion to strike is DENIED.

 

Defendant is ORDERED to file and serve its Answer within 10 days.

 

Opposing Party to give NOTICE.

 

 

Defendant Honda Motor Co., Inc. (“Honda”) demurs to the 3rd cause of action on the ground that it fails to state facts sufficient to constitute a cause of action, and is barred by the Economic Loss Rule.

 

Plaintiff Jose Perez-Morales alleges that on September 8, 2019, Plaintiff purchased a 2019 Honda Odyseey, which contained express and implied warranties made by Defendant.  (Complaint, ¶ 8.)  The vehicle contained transmission defects.  (Id., ¶ 49.)  Based thereon, the Complaint asserts causes of action for:

 

1.    Violation of Song-Beverly – Breach of Express Warranty

2.    Violation of Song-Beverly – Breach of Implied Warranty

3.    Fraudulent Inducement – Concealment

 

3rd CAUSE OF ACTION

 

FRAUDULENT INDUCEMENT - CONCEALMENT:

 

“Fraudulent inducement is a viable tort claim under California law. ‘The elements of fraud are (a) a misrepresentation (false representation, concealment, or nondisclosure); (b) scienter or knowledge of its falsity; (c) intent to induce reliance; (d) justifiable reliance; and (e) resulting damage.  Fraud in the inducement is a subset of the tort of fraud. It ‘occurs when ‘the promisor knows what he is signing but his consent is induced by fraud, mutual assent is present and a contract is formed, which, by reason of the fraud, is voidable.’”  (Dhital v. Nissan North America, Inc. (2022) 84 Cal.App.5th 828, 838-839.)

 

Here, Plaintiff alleges at ¶¶ 8-9 that he purchased a vehicle that contained a Vehicle Limited Warranty with Honda, and attaches the warranty contract as Exhibit 1.  ¶¶ 90-95 allege that Defendant concealed and failed to disclose facts relating to the Transmission Defect.  ¶¶ 94-95 allege scienter and intent to induce reliance based on concealment.  ¶¶ 96-98 allege Plaintiff’s resulting damages.

 

The court finds that the Complaint alleges sufficient prior knowledge at this pleading stage.  Less specificity is required if it appears from the nature of allegations that defendant must necessarily possess full information, or if the facts lie more in the knowledge of opposing parties.  (Alfaro v. Community Housing Improvement System & Planning Assn., Inc. (2009) 171 Cal.App.4th 1356, 1384-1385.)

 

Economic Loss Rule

 

“Applying Robinson here (and cognizant that our Supreme Court may soon provide additional guidance), we conclude plaintiffs' claim for fraudulent inducement by concealment is not subject to demurrer on the ground it is barred by the economic loss rule… We acknowledge the differing views taken by courts that have considered this issue.”  (Dhital v. Nissan North America, Inc. (2022) 84 Cal.App.5th 828, 840-843; Robinson, supra, 34 Cal.4th at 989–990 – alleging punitive damages).

 

Here, Plaintiff alleges he was induced to purchase the vehicle by American Honda’s agents, but Defendant did not disclose the transmission defects (Complaint, ¶¶ 51-53), and Item 7 of the prayer requests punitive damages, which was considered sufficient non-economic damages in Robinson.  This court is aware that this very issue is pending before the Supreme Court in Rattagan v. Uber Tech., Inc. (Case No. S272113) and in Kia v. Superior Court (Case No. S273170).  Until the Supreme Court states otherwise, this court is bound by the holding in Dhital, and finds that Plaintiffs’ claim is not barred by the Economic Loss Rule.

 

Accordingly, the demurrer is OVERRULED.  Defendant is ORDERED to file and serve its Answer within 10 days. 

 

Defendant’s accompanying motion to strike the 3rd cause of action and punitive damages is DENIED.  The court finds that the Complaint sufficiently pleads malicious conduct by concealment.  Corporate ratification is alleged at ¶ 6.  Less specificity is required if it appears from the nature of allegations that defendant must necessarily possess full information, or if the facts lie more in the knowledge of opposing parties.  (Alfaro v. Community Housing Improvement System & Planning Assn., Inc. (2009) 171 Cal.App.4th 1356, 1384-1385; Bushell v. JPMorgan Chase Bank, N.A. (2013) 220 Cal.App.4th 915, 931 - “plaintiffs did not have to specify the … personnel who prepared these documents because that information is uniquely within … [defendant’s] knowledge”.)