Judge: Lee W. Tsao, Case: 22NWCV01086, Date: 2023-04-27 Tentative Ruling

Case Number: 22NWCV01086    Hearing Date: April 27, 2023    Dept: C

Salvador Rincon and Florencia Salazar Matlala. vs. American Honda Motor Co., Inc., and Does 1 through 10

CASE NO.:  22NWCV01086

HEARING:  04/27/23

#6

TENTATIVE ORDER

Defendant American Honda Motor Co., Inc.’s Demurrer is OVERRULED.

Opposing party(s) to give notice.

This suit arises out of the purchase of a 2019 Honda CR-V automobile by Salvador Rincon and Florencia Salazar Matlala (collectively “Plaintiffs”) from a dealership on October 27, 2019 (Complaint, ¶ 27). Shortly after purchase, Plaintiffs allege that they began to experience issues with the Vehicle, specifically with what Plaintiffs’ call the “Sensing Defect” (Complaint, 2:19.) The Complaint describes the Sensing Defect as part of the autonomous braking system within the Vehicle, referred to as the Collision Mitigating Braking System (“CMBS”). The Complaint states that CMBS is dependent on computerized sensors that can detect vehicle speed and the speed of other vehicles and objects on the road and can automatically deploy the brakes to avoid a collision. (Complaint, ¶ 11.) However, because of the Sensing Defect within Plaintiffs’ Vehicle, Plaintiffs experienced issues with the warning light for the brake. (Complaint, ¶ 83.) After multiple repair attempts, (Complaint, ¶¶ 83-85) Plaintiffs filed this suit against the manufacturer for the Vehicle, American Honda Motor Co., Inc. (“Defendant”). The suit was filed on October 24, 2022 and brought two causes of action: (1) Violation of the Song-Beverly Act – Breach of Express Warranty and (2) Fraudulent Inducement - Concealment. The instant Demurrer was filed by Defendant on December 27, 2022, demurring only to the second cause of action. Opposition papers were filed by Plaintiff on April 14, 2023. Reply papers were filed by Defendant on April 20, 2023.       

A.   Judicial Notice

Both parties request that this Court take judicial notice of their respective items.

Defendant asks that this Court take judicial notice of the following:

(1)      Manufacturer Communications, including recalls and technical service bulletins issued by manufacturers, publicly available via NHTSA’s website per 49 Code of Federal Regulations section 573.15 and 49 United States Code section 30166(f).

(2)      The Tech-Line Summary Article 170102 with NHTSA Manufacturer Communication ID Number 10098927, publicly available through the NHTSA website beginning on January 28, 2017.

(3)      The Tech-Line Summary Article 170204 with NHTSA Manufacturer Communication ID Number 10108698, publicly available through the NHTSA website beginning on February 15, 2017.

(4)      The Tech-Line Summary Article 170902 with NHTSA Manufacturer Communication ID Number 10118213, publicly available through the NHTSA website beginning on September 22, 2017.

(5)      The Tech-Line Summary Article 171104 with NHTSA Manufacturer Communication ID Number 10125000, publicly available through the NHTSA website beginning on November 2017.

(6)      The Technical Service Bulletin 17-064 with NHTSA Manufacturer Communication ID Number 10136438, publicly available through the NHTSA website beginning on September 23, 2017.

(7)      The message to dealerships with NHTSA Manufacturer Communication ID Number 10124995, publicly available through the NHTSA website beginning on November 27, 2017.

(8)       The Engineering Request AER170308 with NHTSA Manufacturer Communication ID Number 10108326, publicly available through the NHTSA website beginning on March 29, 2017.

(9)      The Engineering Request AER170308 with NHTSA Manufacturer Communication ID Number 10108326, publicly available through the NHTSA website beginning on March 29, 2017.

(10)   Recall 20VV1000 with NHTSA Manufacturer Communication ID Number 20V771, publicly available through the NHTSA website beginning on December 15, 2020.

(11)   Petition for review filed in the Superior Court of California in the matter of Dhital v. Nissan North America, Inc.

Pursuant to CEC 452(c), this Court will grant Defendant’s request for judicial notice of items (1) – (10). Pursuant to CEC 452(d)(1), this Court will grant Defendant’s request for judicial notice of item (11). 

Plaintiff asks this Court to take judicial notice of the following:

(1)  A conformed copy of the second amended complaint filed in Dhital v Nissan North America, Inc., No. RG19009260 in Alameda County

Pursuant to CEC 452(d)(1), this Court will grant Plaintiff’s request for judicial notice of item (1). 

B. Meet and Confer

1)    Legal Standard for Meet and Confer

“Before filing a demurrer…the demurring party shall meet and confer in person or by telephone with the party who filed the pleading that is subject to demurrer for the purpose of determining whether an agreement can be reached that would resolve the objections to be raised in the demurrer.” (CCP § 430.41(a); see also CCP § 435.5 (imposing similar requirements for a motion to strike).) However, per CCP § 430.41(a)(4), “A determination by the court that the meet and confer process was insufficient shall not be grounds to overrule or sustain a demurrer.”  

2)    Analysis for Meet and Confer

Per the Declaration of Alexandra Lototsky (“Lototsky Dec.”) the parties were able to meet and confer telephonically on December 1, 2002, but were unable to reach an agreement. (Lototsky Dec, ¶ 4).

3)    Conclusion on Meet and Confer

Accordingly, although no agreement was reached, the requirements for CCP § 430.41(a) have been satisfied.

C. Demurrer

1)    Legal Standard for Demurrer

“[A] demurrer tests the legal sufficiency of the allegations in a complaint.” (Lewis v. Safeway, Inc. (2015) 235 Cal.App.4th 385, 388.) A demurrer can be used only to challenge defects that appear on the face of the pleading under attack or from matters outside the pleading that are judicially noticeable. (See Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994 [in ruling on a demurrer, a court may not consider declarations, matters not subject to judicial notice, or documents not accepted for the truth of their contents].) For purposes of ruling on a demurrer, all facts pleaded in a complaint are assumed to be true, but the reviewing court does not assume the truth of conclusions of law. (Aubry v. Tri-City Hosp. Dist. (1992) 2 Cal.4th 962, 967.)

2)    Analysis for Demurrer

                      i.        Fraudulent Inducement - Concealment

“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.” (Hambrick v. Healthcare Partners Medical Group, Inc. (2015) 189 Cal.Rptr.3d 31, at 36, citing Graham v. Bank of America, N.A., supra, 226 Cal.App.4th at p. 606, 172 Cal.Rptr.3d 218.)

Here, Plaintiff alleges at ¶¶ 8-9 that Plaintiff purchased a vehicle that contained a New Vehicle Limited Warranty with Honda, and attaches the warranty contract as Exhibit 1.  ¶ 25 alleges Defendant “knew about the Honda Sensing Defects contained in 2017-2020 Honda CR-V Vehicles and 2016-2020 Honda Accord vehicles equipped with Honda Sensing, along with the attendant safety problems and associated costs, and concealed the existence of those defects from Plaintiff(s) and other consumers prior to the time they purchased or leased their respective Accord/CR-V vehicles.”  ¶ 74 alleges “Plaintiff(s) would not have purchased the Subject Vehicle, had they known, prior to their respective time of purchase or lease, of the Honda Sensing Defect in the Subject Vehicle.”  ¶ 77 alleges Plaintiff’s resulting damages. 

                    ii.        Economic Loss Rule

Defendant argues that Plaintiff’s second cause of action is barred by the economic loss rule.  Plaintiff relies on Dhital v. Nissan North America, Inc., wherein the Court of Appeal held that the plaintiff’s claim for fraudulent inducement (concealment) was not barred by the economic loss rule (Id. (2022) 84 Cal.App.5th 828, 837.) Similar to the instant case, the Dhital plaintiffs alleged that “Nissan, by intentionally concealing facts about the defective transmission, fraudulently induced them to purchase a car.” (Id. at 838.). The Court of Appeal ruled that “Robinson did not hold that any claims for fraudulent inducement are barred by the economic loss rule. Quite the contrary, the Robinson court affirmed that tort damages are available in contract cases where the contract was fraudulently induced.” (Id. at 839.) “[A] defendant’s conduct in fraudulently inducing someone to enter a contract is separate from the defendant’s later breach of the contract or warranty provisions that were agreed to.” (Id.)

Here, Plaintiff alleges Defendant’s presale concealment, which is distinct from Defendant’s alleged subsequent breach of its warranty obligations. Accordingly, based on the existing persuasive authority— Dhital, the Court finds that the economic loss rule does not bar Plaintiff’s claim. 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 will follow Dhital for its “potentially persuasive value” (CRC Rule 8.1115(e)(1)), and finds that Plaintiff’s claim is not barred by the Economic Loss Rule.

The Demurrer to the second cause of action is OVERRULED.