Judge: Lee W. Tsao, Case: 23NWCV00871, Date: 2023-12-19 Tentative Ruling
Case Number: 23NWCV00871 Hearing Date: December 19, 2023 Dept: C
ROXANNA LEE RAMIREZ vs GENERAL MOTORS LLC.
Case No.: 23NWCV00871
Hearing Date: 12/19/23 at 9:30 a.m.
#5
Tentative Ruling
Defendant General Motors LLC’s Demurrer to the
fourth cause of action for Fraud -Fraudulent Inducement-Concealment is OVERRULED.
Defendant’s Motion to Strike Punitive Damages is
DENIED.
Moving party to give notice.
Background
This is a lemon law case.
On February 9, 2019, Plaintiff purchased a 2018 Chevrolet
Silverado from Penske Chevrolet of Cerritos. (FAC, ¶ 4.) On May 30, 2023,
Plaintiff sued Defendant General Motors LLC (Defendant) alleging “breach of
warranty” claims under the Song-Beverly Consumer Warranty Act as well as a
common law “Fraud-Fraudulent Inducement-Concealment” claim (Count IV). Defendant
timely filed a demurrer to the Fraud-Fraudulent Inducement-Concealment claim,
and Plaintiff refiled the same claims in her First Amended Complaint.
Defendant again demurrers to the fourth cause of action and
moves to strike punitive damages.
Meet and Confer
A
party filing a demurrer “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.” (Code Civ. Proc., section 430.41(a).)
“The parties shall meet and confer at least five days before the date the
responsive pleading is due. If the parties are not able to meet and confer at
least five days prior to the date the responsive pleading is due, the demurring
party shall be granted an automatic 30-day extension of time within which to
file a responsive pleading, by filing and serving, on or before the date on
which a demurrer would be due, a declaration stating under penalty of perjury
that a good faith attempt to meet and confer was made and explaining the
reasons why the parties could not meet and confer.” (Code Civ. Proc., section
430.41(a)(2).) A failure to meet and confer does not constitute grounds to
sustain or overrule a demurrer. (See Code Civ. Proc., sections 430.41 (a)(4).)
Counsel attest they met and conferred telephonically on
September 26, 2023. (Declaration of Siyun Yang, ¶ 4.) Therefore, the meet and
confer requirement has been met.
I.
Demurrer
Legal
Standard
A demurrer for sufficiency
tests whether the complaint states a cause of action. (Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747.) When considering
demurrers, courts read the allegations liberally and in context. In a
demurrer proceeding, the defects must be apparent on the face of the pleading
or via proper judicial notice. (Donabedian v. Mercury Ins. Co.
(2004) 116 Cal.App.4th 968, 994.) “A demurrer tests the pleadings alone
and not the evidence or other extrinsic matters. Therefore, it lies only
where the defects appear on the face of the pleading or are judicially
noticed. (Code Civ. Proc., §§ 430.30, 430.70.) At the pleading
stage, a plaintiff need only allege ultimate facts sufficient to apprise the
defendant of the factual basis for the claim against him. (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).)
Discussion
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 First Amended Compliant (“FAC”) alleges that Plaintiff purchased
her vehicle in 2019 from Penske Chevrolet of Cerritos, an authorized retail
dealership of GM. (FAC, ¶ 4). The FAC alleges
the “authorized agents” did not disclose to Plaintiff any information about the
defect found in 8L90 and 8L45 transmissions. (Complaint, ¶ 129). The Dealership is not a party Defendant. Instead, Plaintiff assert warranty claims
against the manufacturer and/or distributor, General Motor’s LLC. (Complaint, ¶¶
3, 11). ¶¶ 128-136 allege that Defendant concealed and failed to
disclose facts relating to the defects.
¶¶ 137-145 allege scienter and intent to induce reliance based on
concealment. ¶¶ 146-148 allege Plaintiff’s
reliance and resulting damages.
The
court finds that the FAC 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.)
Direct
Transaction
“Each of the
three circumstances in which nondisclosure may be actionable presupposes the
existence of some other relationship between the plaintiff and defendant in
which a duty to disclose can arise.” (LiMandri, supra, 52 Cal.App.4th at
336-337; Wilkins v. Nat'l Broad. Co. (1999) 71 Cal.App.4th 1066, 1082-83
- affirming summary judgment on alleged omissions because plaintiffs “presented
no evidence that they and [defendants] shared the requisite relationship which
would impose ... a duty to disclose”]. “[S]uch 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 337; 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.)
“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
v. Breg, Inc. (2017) 7 Cal.App.5th 276, 311, emphasis added.) “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.)
In Dhital, “plaintiffs alleged that they bought the car from a Nissan
dealership, that Nissan backed the car with an express warranty, and that
Nissan's authorized dealerships are its agents for purposes of the sale of
Nissan vehicles to consumers. In light of these allegations, we decline to hold
plaintiffs’ claim is barred on the ground there was no relationship requiring
Nissan to disclose known defects.” (Dhital v. Nissan North America, Inc.
(2022) 84 Cal.App.5th 828, 843.) The
court concluded that at the pleading stage, these allegations sufficiently
allege a relationship.
Here, ¶¶ 8
and 89 allege that Plaintiff relied on statements made by GM agents, and backed
by GM’s express written warranty, which is attached as Exhibit 1, but GM and
its agents “concealed from and failed to disclose to Plaintiff, any of the known
irreparable issues with the subject vehicle.” (FAC, ¶ 137.) The court finds the allegations
sufficiently allege fraud in inducement.
Accordingly, Defendant’s
demurrer to the fourth cause of action is OVERRULED.
II.
Motion to Strike
Legal Standard
Upon motion, or at any time in its own discretion, a court
may grant a motion to strike any of the following material: (1) irrelevant,
false, or improper matter inserted in any pleading; or (2) all or any part of
any pleading not drawn in conformity with the laws of this state, a court rule,
or an order of the court. (Code Civ. Proc. §436.) These provisions also
authorize “the striking of a pleading due to improprieties in its form or in
the procedures pursuant to which it was filed.” (Ferraro v. Camarlinghi,
(2008) 161 Cal.App.4th 509, 528, emphasis in original.)
“In order to survive a
motion to strike an allegation of punitive damages, the ultimate facts showing
an entitlement to such relief must be pled by a plaintiff.” (Clauson v.
Superior Court (1998) 67 Cal.App.4th 1253, 1255.) A request for punitive
damages may be made pursuant to Civil Code § 3294(a) which provides that “[i]n
an action for the breach of an obligation not arising from contract, where it
is proven by clear and convincing evidence that the defendant has been guilty
of oppression, fraud, or malice, the plaintiff, in addition to the actual
damages, may recover damages for the sake of example and by way of punishing
the defendant.”
Under the statute,
malice is defined as “conduct which is intended by the defendant to cause
injury to the plaintiff or despicable conduct which is carried on by the
defendant with a willful and conscious disregard of the rights or safety of
others” and oppression is defined as “despicable conduct that subjects a person
to cruel and unjust hardship in conscious disregard of that person’s rights.”
(Code Civ. Proc. § 3294(c)(1), (c)(2).) Although not defined by the statute,
despicable conduct refers to circumstances that are base, vile, or
contemptible. (College Hospital, Inc. v. Superior Court (1994) 8 Cal.4th
704, 725.) Also, “[u]nder the statute, malice does not require actual intent to
harm…Conscious disregard for the safety of another may be sufficient where the
defendant is aware of the probable dangerous consequences of his or her conduct
and he or she willfully fails to avoid such consequences…. [Citation.]” (Pfeifer
v. John Crane, Inc. (2013) 220 Cal.App.4th 1270, 1299.)
Defendant’s accompanying
motion to strike the fourth 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 ¶
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”.)
Accordingly, the Court finds that the FAC supports the
request for punitive damages.