Judge: Lee W. Tsao, Case: 23NWCV00969, Date: 2024-05-23 Tentative Ruling
Case Number: 23NWCV00969 Hearing Date: May 23, 2024 Dept: C
AVILA v. GENERAL
MOTORS, LLC
CASE NO.: 23NWCV00969
HEARING: 05/23/24
#4
I.
Defendant GENERAL MOTORS, LLC’s Demurrer to
Plaintiff’s First Amended Complaint is OVERRULED.
II.
Defendant GENERAL MOTORS, LLC’s Motion to Strike
Portions of Plaintiff’s First Amended Complaint is DENIED.
Opposing Party to give Notice.
This “lemon law” action was filed by Plaintiff ALONSO AVILA
(“Plaintiff”) on March 29, 2023.
On September 29, 2023, the operative First Amended Complaint
(“FAC”) was filed. Plaintiff alleges that “[o]n or about July 10, 2016,
Plaintiff entered into a warranty contract with Defendant GM regarding a 2014
Chevrolet Cruze vehicle… [¶] The warranty contract contained various
warranties, including but not limited to the bumper-to-bumper warranty,
powertrain warranty, emission warranty, etc.” (FAC ¶¶6-7.) “Defects and
nonconformities to warranty manifested themselves within the applicable express
warranty period, including, but not limited to, the cooling system; among other
defects and non-conformities.” (FAC ¶12.) “Defendant GM has failed to either
promptly replace the Subject Vehicle or to promptly make restitution in
accordance with Song-Beverly.” (FAC ¶15.)
The FAC asserts the following causes of action:
(1) Violation
of Cal. Civ. Code §1939.2(d);
(2) Violation
of Cal. Civ. Code §1793.2(b);
(3) Violation
of Cal. Civ. Code §1793.2(A)(3);
(4) Breach
of Implied Warranty of Merchantability
(5) Fraudulent
Inducement – Concealment;
(6) Violation
of the Magnuson-Moss Warranty Act
Defendant GENERAL MOTORS, LLC (“Defendant’ or “GM”)
generally demurs to each cause of action.
First Cause of Action – Violation of Song-Beverly Act-
Breach of Express Warranty
Relying on the Fourth District Court of Appeal’s holding in Rodriguez v. FCA
US, LLC (2022) 77 Cal.App.5th 209 (“Rodriguez”), Defendant argues
that Plaintiff does not allege facts demonstrating that they purchased a “new
motor vehicle” with a “new car warranty” within the meaning of Song-Beverly. Rodriguez holds that the
Song-Beverly Consumer Warranty Act does not apply to used vehicles sold with a
balance remaining on the manufacturer’s express warranty. (Id. at 225.)
In Opposition, Plaintiff argues that this Court should follow the Third
District Court of Appeal’s ruling in Jensen v. BMW of North America, Inc.
(1995) 35 Cal.App.4th 112 (“Jensen”), which holds that “cars sold with a
balance remaining on the manufacturer’s new motor vehicle warranty are included
within its definition of ‘new motor vehicle.”’ (Id. at 123.)
The Subject Demurrer was filed on October 30, 2023.
On May 2, 2024, the Second District Court of Appeal issued an opinion in
the case Stiles v. Kia Motors America, Inc. (Cal. Ct. App., May 2, 2024,
No. 2D.CIV.B325798) 2024 WL 1925430.) (“Stiles”).
Plaintiff cites to and addresses Stiles in the Opposition. Defendant’s
Reply does not expressly address the Stiles decision.
In Stiles, the Second District holds:
We cannot argue with the Rodriguez
court’s conclusion that the phrase ‘or other motor vehicle sold with a
manufacturer’s new car warranty’ appears under the definition of a new motor
vehicle. [Citation.] That is why we conclude Stiles’s car, in precisely meeting
the definition as a ‘motor vehicle sold with a manufacturer’s new car
warranty,’ is a new motor vehicle as defined by the statute. More importantly,
the Rodriguez court adds words to the statute. The statute contains no
such limitation as vehicles that have never been previously sold to a consumer
and come with full express warranties…. In the more than 30 years since then,
the Legislature has had ample opportunity to add such limiting language. It has
not done so…. The court’s assertion that section 1793.22, subdivision (e)(2)
has only two categories—dealer owned and demonstrator—defies the rules of
English grammar and logic….. [¶] [Jensen] was properly decided…. The
Court of Appeal held that the vehicle qualified as a new motor vehicle…. [¶]
We, like Jensen, but unlike Rodriguez, look to the plain words of
the statute. If any legislative history is required, its most salient feature
is that more than 30 years after section 1793.22 was enacted and almost 30
years after Jensen was decided, the Legislature has not amended the
definition of ‘new motor vehicle’ in section 1793.22. And neither will we. (Stiles
at 3-4.)
This Court finds that under Jensen and Stiles, used cars
purchased from a retail seller with a balance of the manufacturer’s warranty
are “new motor vehicles” within the meaning of Song-Beverly. Here, Plaintiff
alleges that they purchased a used 2014 vehicle in 2016, which included the
manufacturer’s new car warranty, and that defects occurred during the warranty
period. (FAC ¶¶6 and 12; see FAC Ex. A.) “[A] previously owned motor vehicle
purchased with the manufacturer’s new car warranty still in effect is a ’new
motor vehicle’ as defined by section 1793.22, subdivision (e)(2). Thus the
replace or refund remedy of section 1793.2 subdivision (d)(2) applies.” (Stiles
at 1.)
The demurrer to the first, second, third, and fourth causes of action is
OVERRULED.
Fifth Cause of Action – Fraudulent Inducement
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 ¶¶ 30-34
that Defendant concealed and failed to disclose facts relating to the Cooling
System Defect. ¶94 alleges scienter and
intent to induce reliance based on concealment.
¶98 alleges Plaintiff’s 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.)
Defendant also argues
that this claim is barred by the three year statute of limitations for fraud
claims, arguing that Plaintiff was aware of the purported fraud on July 10,
2016, but failed to file this action until March 29, 2023. Here, Plaintiff alleges
that Defendant actively concealed the purported defect thus tolling the statute
of limitations. (e.g. FAC ¶¶60-63.) These allegations are sufficient to
withstand demurrer. The running of the statute of limitations must appear
clearly and affirmatively from the dates alleged on the face of the complaint.
It is not enough that the complaint might be time-barred. It must necessarily
be time-barred on the facts alleged. (Marshall v. Gibson, Dunn &
Crutcher (1995) 37 Cal.App.4th 1397, 1403.)
The demurrer to the fifth cause of action is OVERRULED.
Sixth Causes of Action – Violation of the Magnuson -Moss Warranty Act
The Magnuson-Moss Act “authorizes a civil suit by a consumer to enforce
the terms of an implied or express warranty.” (Daugherty v. American Honda
Motor Co., Inc. (2006) 144 Cal.App.4th 824, 835.) It “calls for the
application of state written and implied warranty law, not the creation of
additional federal law, except in specific instances in which it expressly
prescribes a regulating rule.” (Id. at 833.)
Given the Court’s ruling with respect to the first through fourth causes
of action, the demurrer to the sixth cause of action is OVERRULED.
Motion to Strike
The Motion to Strike punitive damages
is DENIED based on the Court’s ruling with respect to the fifth cause of action
for Fraudulent Inducement, above.