Judge Lee W. Tsao, Case 22NWCV1685 2023-03-21 Tentative Ruling

Judge: Lee W. Tsao, Case: 22NWCV1685, Date: 2023-03-21 Tentative Ruling

Case Number: 22NWCV1685 Hearing Date: March 21, 2023 Dept: SEC

TENTATIVE RULING

I. Defendant American Honda Motor Co., Inc.’s demurrer to the second 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 American Honda Motor Co., Inc. (“Honda”) demurs to the 2^nd cause of action on the ground that it fails to state facts sufficient to constitute a cause of action and is uncertain.

Defendant’s RJN is granted.

Plaintiffs Angie Antunez and Darwin Zabrano allege that on August 18, 2019, Plaintiffs purchased a 2017 Honda Pilot that contained a transmission defect. (Complaint, ¶ 50.) Plaintiff’s claims arise from warranty obligations of America Honda. (Complaint, ¶ 5.) Based thereon, the Complaint asserts causes of action for:

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

2. Fraudulent Inducement – Concealment

2^nd 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.5^th 828, 838-839.)

In transactions which do not involve fiduciary or confidential relations, a cause of action for non-disclosure of material facts may arise in at least three instances: (1) “the defendant had exclusive knowledge of material facts not known to the plaintiff,” (2) “the defendant actively conceals a material fact from the plaintiff,” and (3) “the defendant makes partial representations but also suppresses some material facts.” (Bigler-Engler v. Breg, Inc. (2017) 7 Cal.App.5th 276, 311; see also LiMandri v. Judkins (1997) 52 Cal.App.4th 326, 336.) “These three circumstances, however, ‘presuppose[] the existence of some other relationship between the plaintiff and defendant in which a duty to disclose can arise.’ ” (Id. quoting LiMandri, supra, 52 Cal.App.4th at 336-337, emphasis added; see also Shin v. Kong (2000) 80 Cal.App.4th 498, 509; Wilkins v. Nat'l Broad. Co. (1999) 71 Cal.App.4th 1066, 1082-83 - affirming dismissal of alleged omissions because plaintiffs “presented no evidence that they and [defendants] shared the requisite relationship which would impose... a duty to disclose”].)

“Our Supreme Court has described the necessary relationship giving rise to a duty to disclose as a ‘transaction’ between the plaintiff and defendant ... .” (Bigler-Engler, supra, Cal.App.5th at p. 311, emphasis added.) Indeed, “[a]s a matter of common sense, such a relationship can only come into being as a result of some sort of transaction between the parties.” (LiMandri, supra, 52 Cal.App.4th at p. 337, emphasis added; see also Kovich v. Paseo Del Mar Homeowners Ass'n (1996) 41 Cal.App.4th 863, 866-867 - no duty to disclose where complaint alleged no facts that defendant “acted as a seller, was a party to [a] contract, or assumed a special relationship” with plaintiff; Platt Elec. Supply, Inc. v. EOFF Elec., Inc. (9th Cir. 2008) 522 F.3d 1049, 1059, fn. 3 - “because [plaintiff] failed to allege that there was a transactional relationship between [plaintiff] and [defendant], the district court properly observed that, pursuant to California law, [plaintiff's] fraudulent concealment claim could not be premised on a duty to disclose”.)

Such a transaction must necessarily arise from direct dealings between the plaintiff and the defendant; it cannot arise between the defendant and the public at large.” (Bigler-Engler, supra, 7 Cal.App.5th 276, 312, emphasis added.)

The Complaint alleges that Plaintiffs purchased their vehicle from Norm Reeves Honda Superstore, an authorized American Honda dealership. (Complaint, ¶ 49.) Norm Reeves is not a party Defendant. Instead, Plaintiffs assert warranty claims against the manufacturer, American Honda. (Complaint, ¶ 5.) Plaintiffs allege that the vehicle contained a New Vehicle Limited Warranty with Honda, and attaches the warranty contract as Exhibit 1. (Id., ¶¶ 8-9.) ¶ 108 alleges that Defendant concealed and failed to disclose facts relating to the defects. ¶¶ 116-117 allege scienter and intent to induce reliance based on concealment. ¶ 120 alleges Plaintiff’s resulting damages.

¶ 52 alleges that Plaintiffs reviewed marketing brochures, viewed television commercials and/or heard radio commercials about a Honda Pilot. These facts do not give rise to a direct confidential fiduciary relationship because these marketing materials were distributed to the public. “[A] transaction must necessarily arise from direct dealings between the plaintiff and the defendant; it cannot arise between the defendant and the public at large.” (Bigler-Engler, supra, 7 Cal.App.5th 276, 312, emphasis added.)

Plaintiffs then allege that Norm Reeves Honda is an authorized agent who omitted to tell Plaintiffs about the Transmission Defect. (Complaint, ¶ 52.) While Plaintiffs bear the burden of proving agency (D'Acquisto v. Evola (1949) 90 Cal.App.2d 210, 213), at this pleading stage, Plaintiffs need not prove agency. It is sufficient that Plaintiffs have alleged direct dealings through an agent of American Honda.

Statute of Limitations

“[W]here class action status has been denied solely because of failure to demonstrate that the class is so numerous that joinder of all members is impracticable, the commencement of the original class suit tolls the running of the statute for all purported members of the class who make timely motions to intervene after the court has found the suit inappropriate for class action status.” (American Pipe and Const. Co. v. Utah (1974) 414 U.S. 538, 553.) Under limited circumstances, if class certification is denied, the statute of limitations is tolled from the time of commencement of the suit to the time of denial of certification for all purported members of the class who either make timely motions to intervene in the surviving individual action or who timely file their individual actions. (Falk v. Children’s Hospital of Los Angeles (2015) 237 Cal.App.4th 1454, 1463 - “Tolling lasts from the day a class claim is asserted until the day the suit is conclusively not a class action—which may be because the judge rules adversely to the plaintiff.”)

Plaintiffs’ Fraud Cause of Action is governed by the three-year statute of limitations under CC § 338(d).

Plaintiffs purchased the Subject Vehicle on “August 18, 2019” but did not file suit until December 21, 2022. (Complaint, ¶ 8.)

¶ 71 alleges that the Mobayen class action is still ongoing. However, Plaintiffs fail to allege that class certification was denied. (See American Pipe & Construction Co. v. Utah (1974) 414 U.S. 538, 552–53; Chardon v. Fumero Soto (1983) 462 U.S. 650, 654; see also Crown, Cork & Seal Co., Inc. v. Parker (1983) 462 U.S. 345, 354; China Agritech v. Resh (2018) 138 S.Ct. 1800, 1804.) Indeed, the “watchwords of American Pipe are efficiency and economy of litigation,” and extending American Pipe tolling where class certification has not been denied does not serve that purpose. (China Agritech v. Resh (2018) 138 S.Ct. 1800, 1804.)

The court does find, however, that the delayed discovery rule may be applied to these facts. ¶ 57 alleges that on September 6, 2022, Plaintiffs delivered the vehicle to Norm Reeves Honda Superstore with the same vehicle complaints that Plaintiffs made previously. Therefore, running of the statute of limitations does not appear “clearly and affirmatively” from the face of the complaint. (Committee for Green Foothills v. Santa Clara County Bd. of Supervisors (2010) 48 Cal.4th 32, 42.)

Accordingly, the demurrer is OVERRULED.

Defendant’s accompanying motion to strike punitive damages is DENIED. The court finds that the Complaint sufficiently pleads malicious conduct by concealment. Corporate ratification is alleged at ¶ 7. 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”.)