Judge: Malcolm Mackey, Case: 21STCV34200, Date: 2023-05-03 Tentative Ruling
Case Number: 21STCV34200 Hearing Date: May 3, 2023 Dept: 55
BAGUMYAN
v. ROLLS-ROYCE MOTOR CARS NA, LLC 21STCV34200
Hearing Date: 5/3/23,
Dept. 55
#9: MOTION
FOR SUMMARY ADJUDICATION.
Notice: Okay
Opposition
MP:
Defendant OF DEFENDANTS ROLLS-ROYCE
MOTOR CARS NORTH AMERICA, LLC and O’GARA COACH COMPANY, LLC.
RP:
Plaintiff
Summary
On 9/16/21, Plaintiff RAZMIK BAGUMYAN filed a Lemon
Law Complaint, based in part on allegedly deceptive repairs, against defendants
ROLLS-ROYCE MOTOR CARS NA, LLC, et al., alleging that, on or about
November 17, 2016, Plaintiff purchased a used 2015 Rolls Royce Ghost, under
express written warranty, but the vehicle kept experiencing unrepaired defects,
and/or nonconformities, and defendants
conspired to secretly place tamper seal material on the vehicle, without
Plaintiff's knowledge or consent, to try to catch Plaintiff tampering with the
vehicle, which never happened, and which reduced the vehicle’s value. Further, defendants allegedly concealed some
defects, including by making unauthorized and undocumented repairs, and
providing misleading invoices and other information, concerning the work
performed.
The causes of action are:
MP
Positions
Moving parties request an order granting the motion for
summary adjudication, on grounds including the following:
1. Plaintiff’s first cause of action
for civil conspiracy is without merit because
Plaintiff admitted at his deposition
that he had no information that there was any agreement between two or more
parties in connection with the placing of tamper seals in Plaintiff’s vehicle.
2. Plaintiff’s second cause of action
for conversion is without merit because:
(a)
Plaintiff admitted at his deposition that Defendants have never taken
control
over the Vehicle, and that Plaintiff retains sole possession and
control
over the Vehicle; and
(b)
At his deposition, Plaintiff also admitted that he has never had the Vehicle
appraised
or valued, and that he did not know the value of the car on the
one
occasion when he claimed he attempted to sell it. He further testified
that
he did an electronic search for the value of the Vehicle, but did not
remember
what information he found regarding the car’s value, or save the
value
search results. Because he has no evidence to support an alleged loss of value
claim, he cannot establish damage.
3. Plaintiff’s third cause of action
for intentional misrepresentation is without merit
because:
(a)
At his deposition, Plaintiff admitted that he had no information that
anyone
from Rolls-Royce has ever knowingly made a false statement to
him
about the Vehicle; and
(b)
The cause of action is barred by the economic loss doctrine, which
precludes
recovery in tort where, as here, the Plaintiff’s damages consist solely of
alleged economic losses (see Seely v. White Motor Co. (1965) 63 Cal.2d 9,
17-18; see also Sacramento Regional Transit Dist. v. Grumman Flexible (1984)
158 Cal.App.3d 289, 295 ["a plaintiff may only recover in tort when there
is damage to "other property," that is, property other than the
product itself."].)
4. Plaintiff’s fourth cause of action
for fraud by omission is without merit because:
(a)
Plaintiff admitted at his deposition that he bought the Vehicle from an
independent
third-party reseller and, as a matter of law, a duty to disclose
only
arises from direct dealings between the plaintiff and the defendant
(see
Bigler-Engler v. Breg, Inc., (2017) 7 Cal.App.5th 276, 311-12); and
(b)
At his deposition, Plaintiff could not establish any harm done to him
because
he has never had the Vehicle appraised or valued, and that he did
not
know the value of the car on the one occasion when he claimed he
attempted
to sell it. He further testified that he did an electronic search for
the
value of the Vehicle, but did not remember what information he found
regarding
the car’s value, or save the value search results. Because he has
no
evidence to support an alleged loss of value claim, he cannot establish
any
loss of value; and
(c)
The cause of action is barred by the economic loss doctrine.
5. Plaintiff’s sixth cause of action
for trespass to chattels is without merit because at
his deposition, Plaintiff admitted
that no one from Rolls Royce of North America has ever interfered with his
possession of the car or damaged the car.
6. Plaintiff’s eight cause of action
for breach of implied warranty is without merit
because Plaintiff admitted at his
deposition that he bought the subject used vehicle from a thirdparty seller,
which is not an authorized Rolls-Royce dealership. This third-party seller
could not and did not issue any Rolls-Royce warranties to Plaintiff regarding
its sale of the used car to Plaintiff. Any breach of implied warranty liability
regarding the sale of the Vehicle to Plaintiff rests with the third-party
vehicle seller;
7. Plaintiff’s ninth cause of action
for breach of express warranty is without merit
because Plaintiff admitted at his
deposition that he bought the subject used vehicle from a third-party seller,
which is not an authorized Rolls-Royce dealership. The third-party seller could
not and did not issue any Rolls-Royce warranties to Plaintiff regarding its
sale of the used car to Plaintiff;
8. Plaintiff’s tenth cause of action
for violation of the Song-Beverly Act is without
merit because Plaintiff bought a used
vehicle, Rolls-Royce did not sell the Vehicle, and Rolls-Royce did not issue
any express warranties at the time of sale.
(Motion, pp. 2 – 4.).
RP
Positions
Opposing party advocates denying, for reasons
including the following:
·
Conspiracy and Agency: Deponent Brown admitted that once
Rolls-Royce advises a dealership to apply tamper proof paste, the
"technicians will generally go along with what is recommended,…” In applying the tamper proof paste without
Plaintiffs knowledge or permission, Defendant engaged in fraudulent conduct and
breached its warranty. O'Gara breached
its statutory duties under Bus. & Prof. Code §§ 9884.8, which requires all
auto work to be recorded on an invoice describing all service work done and
parts supplied, as well as its duties under Bus. & Prof. Code § 9884.9,
which requires authorization from the customer before any repair work is
performed. Regarding damages, the
Declaration of Michael Koudsi opined that after "[h]aving appraised
vehicles for the past thirty-six (36) years, it is my professional opinion that
the application of tamper proof paste to the Subject Vehicle reduced the value
of the vehicle by between 20-25%.
·
Conversion: Any unlawful interference with property which
causes damage is conversion. [Plummer v. 21 Day/Eisenberg, LLP (2010) 184
Cal.App.4th 38, 50.]
·
Economic Loss Rule: The economic loss rule does not apply if the
Plaintiff can demonstrate harm above and beyond a broken contractual promise,
such as personal injury or damage to property, concealment, or . [See, e.g.,
Khan v. Shiley Inc. (1990) 217 Cal.App.3d 848, 857.]
·
Trespass to Chattel: Plaintiff submitted evidence of the reduction
in value caused by Defendants'
unauthorized application of tamper proof paste to the Subject Vehicle.
·
Implied Warranty: Because Plaintiff’s purchase of the Subject
Vehicle was accompanied by the remainder of the express new vehicle warranty,
RRMC is statutorily prohibited from disclaiming the existence of an implied warranty.
[See, Civ. Code § 1793].
·
Punitive Damages: Plaintiff is not evidencing fraud in relation
to his purchase of the Subject Vehicle, but in relation to the repairs
performed on the Subject Vehicle.
Tentative
Ruling
The motion is denied entirely.
The Court determines that there are triable issues of
material fact, as to each issue raised, including whether defendants committed
fraud and trespass to chattels, in connection with concealed tampering, and
misrepresented repairs, with the dealer acting as agent or coconspirator in
monitoring suspected customer tampering in deciding warranty coverage, and were
taking more repair time due to the addition of baseless placements of
tamper-indicator paste, thereby causing a reduced value of Plaintiff’s
vehicle (e.g., opposing counsel’s decl., exh. 5 (Travis
Brown, PMK depo., pp. 12 - 82), exh. 7
(expert Michael Kudsi decl., ¶¶ 11 - 14)).
Conspiracy and Agency
The opposing evidence and reasonable inferences about
the manufacturer suggesting to the dealer to place tamper-monitoring paste on
vehicle parts in addition to doing customer-requested repairs, support
material, triable issues of fact regarding conspiracy between independent
businesses or an agency relationship. See
generally Klistoff v. Sup. Ct.
(2007) 157 Cal.App.4th 469, 479 (“The existence of a civil
conspiracy makes each participant in the wrongful act responsible as a joint
tortfeasor for all damages resulting from the wrong,….”)).
Dealers may be vehicle manufacturers’ agents or
representatives for purposes of making warranty repairs, including based on the
warranty provisions. See Ibrahim v. Ford Motor Co. (1989) 214
Cal.App.3d 878, 888; Lundy v. Ford
Motor Co. (2001) 87 Cal.App.4th 472, 477 n. 3. An authorized dealer acts as the
manufacturer's agent when the dealer make final inspections, corrections, and
adjustments to make vehicles ready to be used.
Defries v. Yamaha Motor Corp. (2022) 84 Cal.App.5th 846, 860.
Economic
Loss Rule
Evidence inferring fraudulent concealment of add-ons
to repairs, including via misinformation in invoices, supports damages without
application of the economic loss rule. See
generally County of Santa Clara
v. Atlantic Richfield Co. (2006) 137 Cal. App. 4th 292, 328 (economic loss rule is inapplicable to
fraud actions); Dhital v. Nissan
North America, Inc. (2022) 84 Cal.App.5th 828, 840 (“concealment-based claims for fraudulent
inducement are not barred by the economic loss rule.”); Sheen v. Wells Fargo Bank, N.A. (2022)
12 Cal.5th 905, 929 (in some contexts,
tort actions are authorized, even though they arise from contracts, despite the
economic loss rule.); McClung v. Watt(1922)
190 Cal. 155, 161 (“one who accepts the fruits of a fraud, with knowledge of
the misrepresentations or concealments by which the fraud was perpetrated,
thereby inferentially ratifies
the fraud complained of and will be liable therefor even though he did not
personally participate in the fraud….”).
Conversion
and Trespass to Chattel
The evidence of defendants’ substantially prolonged
deprivation of possession of the vehicle, while placing unauthorized paste,
instead of just doing customer-requested repairs, supports the claim of
conversion See, e.g., Collin v. Am. Empire Ins. Co. (1994)
21 Cal. App. 4th 787, 815 (conversion
can be temporary deprivation of possession).
The elements of a claim for trespass to chattel are:
Jamgotchian v. Slender
(2009) 170 Cal. App. 4th 1384, 1400-01; Intel
Corp. v. Hamidi (2003) 30 Cal. 4th 1342, 1350-51.
Express
and Implied Warranty and Violation of Song-Beverly Act
The
law is somewhat unsettled about whether used vehicles, purchased from retail
sellers unaffiliated with manufacturers, statutorily qualify as new motor
vehicles, when there is a balance remaining on manufacturers’ warranties. See, e.g., Rodriguez v. FCA
US, LLC (4th Dist. 2022) 77 Cal. App. 5th 209, 223, 224 (“Dagher is not the only opinion to
question Jensen's statement about express warranties. In Kiluk, the court
expressed ‘reservations’ ….”); Kiluk
v. Mercedes-Benz USA, LLC (2019) 43 Cal. App. 5th 334, 340 (under Song-Beverly Act, used vehicles sold
within the time of a new vehicle warranty, are new motor vehicles, but a
manufacturer that stepped partly into the role of a retailer of used vehicles
sold with express warranties, can be obligated).
Where there is a split of authority, trial courts have
discretion to choose between the decisions.
Auto Equity Sales, Inc.
v. Sup. Ct. (1962) 57 Cal.2d 450, 456. Where there is a split of authority, “[a]s a
practical matter, a superior court ordinarily will follow an appellate opinion
emanating from its own district even though it is not bound to do so.” McCallum v. McCallum (1987) 190 Cal.App.3d 308, 316 n.4.