Judge: Lee W. Tsao, Case: 23NWCV00752, Date: 2023-09-12 Tentative Ruling

Case Number: 23NWCV00752    Hearing Date: September 12, 2023    Dept: C

TABORA v. AMERICAN HONDA MOTOR CO., INC.

CASE NO.:  23NWCV00752

HEARING:  9/12/23

 

#8

TENTATIVE RULING

 

I.             Defendant American Honda Motor Co., Inc.’s demurrer to plaintiffs’ second cause of action for Fraudulent Inducement-Concealment is SUSTAINED with 10 days leave to amend.

 

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

 

Moving Party to give NOTICE.

 

 

Defendant American Honda Motor Co., Inc. (“Honda”) demurs to the 2nd cause of action for Fraudulent Inducement on the ground that it fails to state facts sufficient to constitute a cause of action.

 

Complaint

 

On August 17, 2021, Plaintiff(s) purchased a new 2021 Honda Accord, VIN 1HGCV1F48MA096461. (Complaint, ¶ 8.)  “The Subject Vehicle was equipped with a defective computerized driver-assistance safety system and a defective collision mitigation braking system.”  (Id., ¶ 85.)  Based thereon, the Complaint asserts causes of action for:

 

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

2.    Fraudulent Inducement-Concealment

 

2nd 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.)

 

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 Cerritos, an authorized American Honda dealership, and the “authorized agents” did not disclose to plaintiffs any information about the Honda Sensing Defect.  (Complaint, ¶¶ 84, 87).  The Dealership is not a party Defendant.  Instead, Plaintiffs assert warranty claims against the “manufacturer and/or distributor,” American Honda. (Complaint, ¶¶ 3, 11).  ¶¶ 110-116 allege that Defendant concealed and failed to disclose facts relating to the defects.  ¶¶ 117-119 allege scienter and intent to induce reliance based on concealment.  ¶¶ 123-125 allege Plaintiffs’ reliance and resulting damages.

 

The court finds that plaintiffs fail to allege a direct transaction between plaintiffs and American Honda, and the allegations that Norm Reeves Honda is an “authorized agent” is conclusory. 

 

In opposition, plaintiffs seek leave to allege more case-specific facts.  Leave to amend will be granted to allege facts supporting the allegation that Norm Reeves is an agent of American Honda.

 

Accordingly, the demurrer is SUSTAINED with 10 days leave to amend.

 

Defendant’s accompanying motion to strike punitive damages is MOOT in light of the court’s grant of leave to amend.