Judge: Lee W. Tsao, Case: 23NWCV01493, Date: 2024-05-16 Tentative Ruling

Case Number: 23NWCV01493    Hearing Date: May 16, 2024    Dept: C

TORRES v. MERCEDES-BENZ USA, LLC

CASE NO.:  23NWCV01493

HEARING:  05/16/24

#10

Defendant FLETCHER JONES MOTOR CARS, INC.’s Motion for Summary Judgment is GRANTED.

Moving Party to give notice.

This “lemon law” action was filed by Plaintiffs ARMANDO TORRES and MA XOCHITL TORRES (collectively “Plaintiffs”) on May 15, 2023.  Plaintiffs allege that Defendant FLETCHER JONES MOTOR CARS, INC. (“Fletcher Jones”)  negligently repaired Plaintiffs’ 2019 Mercedes Benz E-Class Vehicle. (See Complaint §§14 and 26-29.)

Plaintiffs’ Complaint asserts the following causes of action:

(1) Violation of Song-Beverly Act – Breach of Express Warranty (against Defendant Mercedes-Benz USA, LLC only); and

(2) Negligent Repair (against Fletcher Jones only)

Fletcher Jones moves for summary judgment, arguing that “FJMC cannot be held liable for negligence as it did not owe any tort duty to plaintiffs, nor did plaintiffs suffer any tort damages as a result of FJMC’s conduct.” (Motion 3:15-17.)  

In Opposition, Plaintiff argues: (1) Defendant failed to meet its initial burden; (2) Defendant’s Motion is premised on a misunderstanding of the law; and (3) The economic loss rule is inapplicable.

This cause of action is barred by the economic loss rule. Consequently, Fletcher Jones’ arguments based on other grounds for granting the Motion will not be addressed.

Plaintiffs rely  on the case North American Chemical Co. v. Sup. Ct. (1997) 59 Cal.App.4th 764 to argue that the economic loss rule is inapplicable. In that case, the defendant packed and shipped various chemicals on behalf of the plaintiff. (Id. at 769.) The chemicals became contaminated while in defendant’s possession, rendering them unusable by the customer, who then sued plaintiff. (Id. at 770-771.) The plaintiff then settled with the customer and in turn sued the defendant for breach of contract and negligence. (Id. at 771-772.) The Court of Appeal concluded that the defendant had a duty of reasonable care in performing on a contract which authorized a tort claim for negligent performance of contract. (Id. 773-788.) However, since North American Chemical was decided, the California Supreme Court has narrowed the exceptions to the economic loss rule. (See Erlich v. Menezes (1999) 21 Cal.4th 543, 551-552.) “The benefits of broad compensation must be balanced against the burdens on commercial stability. Courts should be careful to apply tort remedies only when the conduct in question is so clear in its deviation from socially useful business practices that the effect of enforcing such tort duties will be… to aid rather than discourage commerce. [Citation Omitted.]” (Id. at 554.)

“The [economic loss] rule itself is deceptively easy to state: In general, there is no recovery in tort for negligently inflicted ‘purely economic losses,’ meaning financial harm unaccompanied by physical or property damage… In [a] recurring set of circumstances, the rule functions to bar claims in negligence for pure economic losses in deference to a contract between litigating parties.” (Sheen v. Wells Fargo Bank, N.A. (2022) 15 Cal.5th 905, 922.) The economic loss rule provides that “where a purchaser’s expectations in a sale are frustrated because the product he bought is not working properly, his [or her] remedy is said to be in contract alone, for he [or she] has suffered only economic losses.”  (Robinson Helicopter Company v. Dana Corporation (2004) 34 Cal.4th 979, 988.)  “Tort damages have been permitted in contract cases where a breach of duty directly causes physical injury; for breach of the covenant of good faith and fair dealing in insurance contracts; for wrongful discharge in violation of fundamental public policy; or where the contract was fraudulently induced…. in each of these cases, the duty that gives rise to tort liability is either completely independent of the contract or arises from conduct which is both intentional and intended to harm.”  (Robinson, supra, 34 Cal.4th at 989–990.)

Here, Plaintiffs allegations and discovery responses establish that they have not suffered any tort damages. (See MP Evidence Exs. B and C, Interrogatory 14.)  “[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.’ [Citation.]” (Robinson Helicopter Co., Inc. v. Dana Corp. (2004) 34 Cal.4th 979m 988.)  

Negligent performance of a contract does not create a tort claim. The repair work done by the dealer here was done in accordance with Plaintiffs’ warranty contract. Plaintiffs’ remedy for work done poorly (and in the absence of some physical injury) is a claim for breach of the contract—not the tort claim of negligent performance.

Summary judgment in favor of Defendant Fletcher Jones is GRANTED.

Plaintiffs’ Evidentiary Objections

Plaintiffs’ Objections to the Declaration of Warren S. Fujimoto, Ex. A—Plaintiffs’ own Complaint. Nos. 1-6 are OVERRULED.

Defendant’s Evidentiary Objections

Nos. 1-5. OVERRULED.