Judge Lee W. Tsao, Case Number: 23NWCV02619, Date: 2024-01-24 Tentative Ruling

Judge: Lee W. Tsao, Case: 23NWCV02619, Date: 2024-01-24 Tentative Ruling

Case Number: 23NWCV02619 Hearing Date: January 24, 2024 Dept: C

delgado v. volkswagen, et al.

CASE NO.: 23NWCV02619

HEARING: 1/24/23 @ 9:30 AM

Defendant Audi’s Demurrer is SUSTAINED with 20 days leave to amend.

Defendant Audi to give NOTICE.

Defendant Audi Beverly Hills (Audi) demurs to Plaintiff Gisselle Delgado’s (Plaintiff) Complaint on the grounds that the Fifth Cause of Action for Negligent Repair fails to state a cause of action and is uncertain.

Background

Plaintiff filed a Complaint against Defendant Volkswagen Group of America (Volkswagen) for Violation of the Song-Beverly Act and the Magnuson-Moss Warranty Act and against Audi for Negligent Repair. Plaintiff purchased a 2021 Audi Q3 on November 25, 2020 and presented the vehicle to Audi for repairs.

Specifically, Plaintiff alleges that “Plaintiff delivered the Subject Vehicle to Defendant AUDI for substantial repair on at least one occasion.” (Compl. ¶ 56.) “Defendant AUDI breached its duty to Plaintiff to use ordinary care and skill by failing to properly store, prepare and repair the Subject Vehicle ….” (Compl. ¶ 58.)

Legal Standard

The standard for ruling on a motion for judgment on the pleadings is essentially the same as that applicable to a general demurrer, that is, under the state of the pleadings, together with matters that may be judicially noticed, it appears that a party is entitled to judgment as a matter of law. (Bezirdjian v. O'Reilly (2010) 183 Cal.App.4th 316, 321-322, citing Schabarum v. California Legislature (1998) 60 Cal.App.4th 1205, 1216.) “A demurrer tests the sufficiency of the complaint as a matter of law; as such, it raises only a question of law.” (Osornio v. Weingarten (2004) 124 Cal.App.4th 304, 316.) No matter how unlikely or improbable, the complainant’s allegations must be accepted as true for the purpose of ruling on the demurrer. (Del E. Webb Corp. v. Structural Materials Co. (1981) 123 Cal.App.3d 593, 604.) However, the Court does not need to assume the truth of “contentions, deductions or conclusions of law.” (Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 967.)

Discussion

Audi argues that Plaintiff’s Fifth Cause of Action for Negligent Repair is barred by the economic loss rule because Plaintiff claims solely economic damages. (Mot., p. 4) “Simply stated, the economic loss rule provides: ‘ “ ‘[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.)

Plaintiff argues there is an exception to the economic loss rule where the contract involves services rather than the sale of goods. (North American Chemical Co. v. Superior Court (1997) 59 Cal.App.4th 764.) North American Chemical recognized the “fundamental principle” that “accompanying every contract is a common-law duty to perform with care, skill, reasonable expedience, and faithfulness the thing agreed to be done, and a negligent failure to observe any of these conditions is a tort, as well as a breach of contract.” (Id. at p. 774.)

Since North American Chemical was decided, however, the California Supreme Court has narrowed the exceptions to the economic loss rule. In Erlich v. Menezes (1999) 21 Cal.4th 543, the court determined that homeowners could not recover tort damages for emotional distress caused by a contractor’s negligent construction of their home. A breach of contract is tortious “only when some independent duty arising from tort law is violated. [citation] If every negligent breach of a contract gives rise to tort damages, the limitation [upon tort damages] would be meaningless, as would the statutory distinction between tort and contract remedies.” (Id. at p. 554.) “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.’” (Ibid. (citing Freeman & Mills, Inc. v. Belcher Oil Co. (1995) 11 Cal.4th 85, 109).)

The Robinson court held “the economic loss rule does not bar [Plaintiff’s] fraud and intentional misrepresentation claims because they were independent of [Defendant’s] breach of contract.” (Robinson Helicoptor v. Dana Corp, supra, 34 Cal.4th 979, 991.) The court carved out a “narrow” and “limited” exception to the economic loss rule, holding that “a defendant's affirmative misrepresentations on which a plaintiff relies and which expose a plaintiff to liability for personal damages independent of the plaintiff's economic loss” is excluded from the economic loss rule. (Id. at 993.) Here, Plaintiff alleges a claim for negligent repair which does not fall within the narrow exceptions carved out by the California Supreme Court in Robinson. Plaintiff does not allege that Audi engaged in any intentional misconduct or made any affirmative misrepresentations. Nor does Plaintiff adequately allege an independent duty giving rise to tort liability. (Erlich v. Menezes, supra, 21 Cal.4th 543, 554.) As alleged, the Fifth Cause of Action for Negligent Repair is barred by the economic loss rule.

Plaintiff requests leave to amend. Leave to amend must be allowed where there is a reasonable possibility of successfully stating a cause of action. (Schulz v. Neovi Data Corp. (2007) 152 Cal. App. 4th 86, 92.) Thus, leave to amend is granted.

Accordingly, Defendant Audi’s Demurrer is SUSTAINED with 20 days leave to amend.