Judge: Lee W. Tsao, Case: 23NWCV00998, Date: 2024-03-06 Tentative Ruling
Case Number: 23NWCV00998 Hearing Date: March 6, 2024 Dept: C
GOMEZ v. FORD MOTOR COMPANY, ET AL.
CASE NO.: 23NWCV00998
HEARING: 3/6/24 @ 10:30 AM
#8
TENTATIVE RULING
Defendants Ford Motor Company and Norm Reeves
Ford Superstore’s demurrer to plaintiffs’ first amended complaint is OVERRULED
in part and SUSTAINED in part with 30 days leave to amend.
Moving Party to give NOTICE.
Defendants Ford Motor Company and Norm Reeves
Ford Superstore demurs to the First Amended Complaint’s (FAC) first through fourth
causes of action of breach of express warranty and breach of implied warranty because
they are time-barred. Defendants demur to the fifth cause of action of
fraudulent concealment on the grounds that it is time-barred and does not state
facts sufficient to constitute a cause of action.
Plaintiff
Carlos Gomez alleges that defendants Ford Motor Company and Norm Reeves Ford Superstore
violated the warranty provisions of the Song-Beverly Act and fraudulently
induced plaintiffs into purchasing a 2018 Ford F-150 manufactured by Ford Motor
Company.
Legal
Standard
The party against whom
a complaint has been filed may object to the pleading on several grounds,
including that the pleading does not state facts sufficient to constitute a
cause of action. (Code Civ. Proc., § 430.10, subd. (e).) A party may demur to
an entire complaint, or to any causes of action stated therein. (Code Civ. Proc.,
§ 430.50, subd. (a).)
First
through Third Cause of Action – Breach of Express Warranty
As a preliminary matter, the parties have
sufficiently met and conferred. (Decl. Liu, ¶ 3.) (Code Civ. Proc., § 430.41,
subd. (a) (3.)
Statute of Limitations
Defendants demur on the grounds that Plaintiff’s
claim is barred by the statute of limitations.
Plaintiff entered a warranty contract with Ford on February 25, 2018,
and filed suit on March 30, 2023. (FAC, ¶ 28.)
Under
Commercial Code section 2725,¿claims
for breach of express warranty are governed by a four-year statute of
limitations.¿Section¿2725
provides:¿¿¿
“(1)¿An action for
breach of any contract for sale must be commenced within four years after the
cause of action has accrued. By the original agreement the parties may reduce
the period of limitation to not less than one year but may not extend it.¿¿
(2) A cause of action
accrues when the breach occurs, regardless of the aggrieved party's lack of
knowledge of the breach. A breach of warranty occurs when tender of delivery is
made,¿except that where a warranty explicitly extends to future performance of
the goods and discovery of the breach must await the time of such performance
the cause of action accrues when the breach is or should have been
discovered.”¿(Com. Code, § 2725(1)-(2).)¿¿
Section
2725, including the “future
performance” exception in subdivision (2),¿applies to¿breach of warranty claims
under the Song-Beverly Act.¿¿(Krieger v. Nick Alexander Imports, Inc.¿(1991)
234 Cal.App.3d 205, 215.)¿¿“A promise to repair defects that occur during a
future period is the very definition of express warranty of future
performance.”¿(Id.,¿at 217.) The
running of the statute must appear clearly and affirmatively in the face of the
complaint. (Geneva Towers Ltd. Partnership v. City of San Francisco
(2003) 29 Cal.4th 769, 781.) It is not enough that the complaint might be
time-barred. (Ibid.)
Plaintiff argues that the cause of action did not
accrue on tender of delivery, but upon the failure to effect repairs within 30
days. A
cause of action under the SBA accrues when the plaintiff discovers or should
have discovered that the warrantor or its authorized repair facility was unable
to fix the warranty-covered defects after a reasonable number of repair
opportunities. (Krieger v. Nick Alexander Imports, Inc., supra, 234
Cal.App.3rd 205 at p. 218.) Plaintiff alleges that he presented the subject
vehicle on or about March 10, 2022, and again on January 23, 2023, to
defendant’s authorized repair facility. (FAC, ¶¶ 44-45.) Defendant’s technician
performed repairs, found erratic RPM fluctuations, found multiple diagnostic
trouble codes, replaced a battery, replaced the entire transmission, flushed
cooler lines, and ran adaptive learning strategy. (FAC, ¶ 45.) Plaintiff
alleges that the vehicle continues to exhibit signs of defects. (FAC, ¶ 46.) Thus,
the statute of limitations began to run on January 23, 2023 at the earliest.
Thus, the statute of
limitations does not bar Plaintiff’s claims for breach of express warranty.
The demurrer is overruled as to the first three
causes of action.
Fourth Cause of Action – Breach of
Implied Warranty
Claims for breach of implied warranty are similarly governed by the four-year
statute of limitations in Commercial Code section 2725.¿¿(Mexia¿v. Rinker
Boat Co., Inc.¿(2009) 174¿Cal.App.4th 1297, 1306.)¿¿However, in
contrast to express warranty, “[b]ecause¿an implied warranty is one that arises
by operation of law rather than by an express¿agreement of the parties, courts
have consistently held it is not a warranty that ‘explicitly extends to future
performance of the goods...’”¿¿(Cardinal Health 301, Inc. v. Tyco
Electronics Corp.¿(2008) 169 Cal.App.4th 116, 134.)¿¿Thus, breach of the
implied warranty¿occurs only¿at the time of delivery.¿¿(Mexia v. Rinker Boat
Co., Inc., supra, 174 Cal.App.4th at¿1304.)¿ “In the case of a
latent defect, a product is rendered unmerchantable, and the warranty of
merchantability is breached,¿by the existence of the unseen defect, not by its
subsequent discovery.” (Id.¿at 1305.)¿¿¿¿
“The duration of the implied warranty of merchantability and where
present the implied warranty of fitness shall be¿coextensive in duration with
an express warranty which accompanies the consumer goods, provided the duration
of the express warranty is reasonable; but¿in no¿event¿shall such implied
warranty have a duration of less than 60 days nor more than one year following
the sale of new consumer goods to a retail buyer. Where no duration for an
express warranty is stated with respect to consumer goods, or parts thereof,
the duration of the implied warranty shall be the maximum period prescribed
above.”¿(Civ. Code, § 1791.1, subd. (c).)¿
Defendants
contend that Plaintiff’s cause of action¿for breach of implied warranty fails
because the statute of limitations ran between February 25, 2018, and March 30,
2023. Plaintiff’s cause of action accrued on February 25, 2018, which was the
date of the purchase of the subject vehicle, and,¿from that time, Plaintiff had
four years to bring this¿cause of action.¿ Thus, Plaintiff was required to file
this cause of action no later than February 25, 2022, but Plaintiff did not
file this cause of action until March 30, 2023.¿ Plaintiff
contends that the statute of limitations was tolled when he discovered the
defects.
As
set forth above,¿the breach of the implied warranty¿occurs¿at the time of
delivery.¿¿(Mexia, supra, 174 Cal.App.4th at p. 1304.)¿¿As such,
Plaintiff was required to file this cause of action no later than February 25,
2022.¿ In addition, the implied warranty does not extend for¿more than one year
following the sale of the subject vehicle.¿¿Assuming that¿a defect did not
present itself until the last day that the implied warranty was in effect, on February
25, 2019, Plaintiff had¿until February 25, 2023¿to file this cause of action.¿
Plaintiff did not file this cause of action until March 30, 2023.
Thus,
the demurrer as to this cause of action is sustained.
¿
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.)
An essential element of
intentional concealment includes the duty to disclose, which must be based upon
a transaction, or a special relationship, between plaintiff and
defendant. (Bigler-Engler v.
Breg, Inc. (2017) 7 Cal.App.5th 276, 314.) “There are ‘four
circumstances in which nondisclosure or concealment may constitute actionable
fraud: (1) when the defendant is in a fiduciary relationship with the
plaintiff; (2) when the defendant had exclusive knowledge of material facts not
known to the plaintiff; (3) when the defendant actively conceals a material
fact from the plaintiff; and (4) when the defendant makes partial
representations but also suppresses some material facts.’” (Id. at
p. 311.) Less
specificity is required to plead fraud by concealment. (Ibid.)
“Even under the strict rules of common law pleading, one of the canons was that
less particularity is required when the facts lie more in the knowledge of the
opposite party.” (Alfaro v. Community Housing Improvement System &
Planning Assn., Inc. (2009) 171 Cal.App.4th 1256, 1384.)
The statute of limitations for bringing a fraud cause of action is three
years. (Civ. Code, § 338, subd. (d).)
Statute of Limitations
Defendants argue that the fraud cause of action
is barred by the statute of limitations because plaintiff cannot invoke tolling
for delayed discovery. Plaintiff alleges delayed discovery and equitable
tolling to its fraud causes of action. (FAC, ¶¶ 12-16, 20-24.) The
Court finds that the equitable tolling doctrine may apply to Plaintiff’s
allegations. Defendants do not dispute this. Thus, the running of the statute
of limitations does not appear “clearly and affirmatively” from the face of the
complaint. (Com. for Green Foothills v.
Santa Clara County Bd. of Supervisors (2010) 48 Cal. 4th 32, 42.)
Hence, Plaintiff’s fraud cause of action is not
barred by the statute of limitations.
Facts
Sufficient to State Cause of Action
Defendants also argue that the fraud cause of
action does not state sufficient facts to state a cause of action because it
was not pleaded with particularity.
Plaintiff alleges the defendants knew since at least 2018 the
transmission was defective and susceptible to sudden and premature
failure. (FAC, ¶¶ 47-56.) Plaintiff did not know about these
defects and problems, and the defendants did not disclose the defect when
Plaintiff purchased the vehicle. (FAC, ¶¶ 57, 79-86.) The
allegations are specific enough to allege the information that was concealed,
and the danger posed. (Jones v. ConocoPhillips Co. (2011) 198
Cal.App.4th 1187, 1199-1200.)
Economic Loss Rule
Defendants
also argue that this cause of action is barred by the economic loss
rule. Under the economic loss rule, “[w]here a purchaser’s expectations in
a sale are frustrated because the product he bought is not working properly,
his remedy is said to be in contract alone, for he has suffered only ‘economic’
losses.” (Robinson Helicopter Co., Inc. v. Dana Corp. (2004) 34
Cal.4th 979, 988.) However, tort damages may be permitted when the breach
of contract is accompanied by a tort such as fraud. (Id. at pp.
989-990.) To plead around the economic loss rule, a party must plead the
existence of a duty that arises independent of any contractual duty and
independent injury, other than economic loss, that arises from the breach of
that duty. (Id. at pp. 988-991.)
In
Robinson Helicopter, the defendant provided components to the plaintiff
for more than ten years under a contract requiring certain
specifications. Over the years, the defendant changed its manufacturing
process without telling the plaintiff and provided components that did not meet
the plaintiff’s specifications, but the defendant continued to certify that the
products in fact did comply with the specifications. These components
failed at a high rate, causing the plaintiff to have to recall and replace
parts, thereby incurring over $1.5 million in costs. (Robinson
Helicopter, supra, 34 Cal.4th at pp. 986-987.) The
Court held that the defendant had made false misrepresentations in the
certifications, which the plaintiff relied upon for years in accepting and
using the defective parts, causing the plaintiff to incur the over $1.5 million
in recalling and replacing parts. (Id. at pp. 990-991.)
Further, nothing in the case supports the conclusion that if the plaintiff had
incurred no costs, the unrealized risk of a potential accident would have been
sufficient alone to support a fraud cause of action.
Here,
Plaintiff did not allege with specificity any damages caused by the alleged
fraud that are distinct from the warranty damages. Unlike in Robinson
Helicopter, Plaintiff did not allege he incurred costs engaging in a recall
effort. Instead, he alleges he would not have purchased the vehicle if he
had known it was defective. (FAC ¶¶ 91, 92.) This is conclusory and
is no different than the economic damages covered by the warranty. This
allegation merely states that Plaintiff had disappointed expectations in the
car that did not work properly, which is exactly the type of damages that
“[t]he economic loss rule requires a purchaser to recover in contract.” (Robinson
Helicopter, supra, 34 Cal.4th at p. 988.) In sum, Plaintiff has not
alleged “harm above and beyond a broken contractual promise.” (Robinson
Helicopter, supra, 34 Cal.4th at p. 988.)
Thus, the demurrer is sustained with leave to
amend as to the fraud cause of action.
Defendants Ford Motor Company and Norm Reeves Ford Superstore’s demurrer
to plaintiffs’ first amended complaint is OVERRULED in part and SUSTAINED in
part with 30 days leave to amend.