Judge: Margaret L. Oldendorf, Case: 23AHCV00698, Date: 2024-02-21 Tentative Ruling
Case Number: 23AHCV00698 Hearing Date: February 21, 2024 Dept: P
SUPERIOR COURT OF THE STATE OF CALIFORNIA
FOR THE COUNTY OF LOS ANGELES
NORTHEAST DISTRICT
I. INTRODUCTION
Plaintiff Pedro Hernandez Garcia sues General Motors LLC
under the Song-Beverly Act. The allegations concern Garcia’s purchase of a 2019
Chevrolet Silverado. Garcia alleges that the vehicle is equipped with a
transmission (GM Hydra-Matic 8L90) that is defective. It is alleged that GM marketed
and sold these 8-cylinder transmissions as having “world-class performance”
when in fact the transmission provided harsh shifts in low gears, which feel
like jerking, lurching, and hesitations.
In addition to the Song-Beverly causes of action, Garcia
alleges a cause of action for fraudulent concealment. GM demurs to the
fraudulent concealment cause of action on three grounds: (1) it is time-barred;
(2) it is not plead with sufficient particularity; (3) the facts do not
demonstrate a duty to disclose.
Pursuant
to the reasoning below, the demurrer is overruled. GM’s concurrent motion to
strike punitive damages is also denied, because the fraudulent concealment
cause of action provides a basis for such damages.
This is the second demurrer to the fourth cause of action
for fraudulent concealment. Garcia filed a first amended complaint (FAC) on
July 10, 2023. This demurrer was filed August 9, 2023. Garcia filed an
opposition on February 5, 2024. GM filed a reply on February 13, 2024.
II. DEMURRER
A. Legal Standard
Code
Civ. Proc. §430.10(e) provides for a demurrer on the basis that a complaint
fails to state a cause of action. A demurrer admits, provisionally for purposes
of testing the pleading, all material facts properly pleaded. (Tindell v. Murphy (2018) 22 Cal.App.5th
1239, 1247.) A demurrer tests the legal sufficiency of a complaint. ((Donabedian v. Mercury Ins. Co. (2004)
116 Cal.App.4th 968, 994.)
B. The Meet And Confer Requirement Was Met
Code Civ. Proc. § 430.41(a) mandates that prior to filing a
demurrer, the demurring party is to meet and confer in person or by telephone
with the party who filed the pleading. This meeting is required to take place
at least five days before the responsive pleading is due. Section 430.41(a)(3)
requires that a declaration must accompany the demurrer, and that it must state
either the means by which the parties met and conferred, and that no agreement
was reached, or that the party who filed the pleading subject to demurrer,
“failed to respond to the meet and confer request of the demurring party or
otherwise failed to meet and confer in good faith.”
The Declaration of Jesse Valencia was filed in connection
with GM’s demurrer. Valencia states, “Prior to filing GM’s Demurrer and Motion
to Strike, this office met and conferred telephonically with Plaintiff’s
counsel to discuss the issues we had with Plaintiff’s First Amended Complaint.
Counsel met and conferred telephonically on July 31, 2023. Counsel discussed
the pleadings, specifically Plaintiff’s inclusion of a fraud cause of action
and punitive damages. After discussion, the parties remained at an impasse.”
Plaintiff does not debate the sufficiency of meet and
confer efforts; and in fact, affirms
that the parties met and conferred. (Yang Decl. ¶ 4.)
Therefore, the meet and confer requirement was met.
C. The Fraudulent Concealment Cause of Action Is Not Time-Barred
When grounds for objecting to a complaint, such as the
statute of limitations, appear on the face of the pleading, a demurrer on that
ground is permissible. (Vaca v. Wachovia Mortgage Corp. (2011) 198
Cal.App.4th 737, 746.)
Fraud is subject to a three-year statute of limitations. (Code
Civ. Proc. §338(d).) A fraud claim
begins to accrue when the aggrieved party discovers the facts constituting the
fraud or could have discovered the fraud through the exercise of reasonable
diligence. (San Francisco Unified School Dist. v. W.R. Grace & Co.
(1995) 37 Cal.App.4th 1318, 1327.)
Garcia alleges he purchased the vehicle at issue in
September 2019. (FAC ¶ 4.)
This action was not filed
until March 30, 2023, more than three years later. Thus, on its face, the
fraudulent concealment cause of action may be time-barred.
Plaintiff Garcia urges that the statute of limitations is
tolled by the delayed discovery rule. “In order to rely on the discovery rule
for delayed accrual of a cause of action, ‘[a] plaintiff whose complaint shows
on its face that his claim would be barred without the benefit of the discovery
rule must specifically plead facts to show (1) the time and manner of discovery
and (2) the inability to have made earlier discovery despite reasonable
diligence.’ (McKelvey v. Boeing North American, Inc. (1999) 74
Cal.App.4th 151, 160.) In assessing the sufficiency of the allegations of
delayed discovery, the court places the burden on the plaintiff to ‘show
diligence’; ‘conclusory allegations will not withstand demurrer.’ ((Ibid.)”
Fox v. Ethicon Endo-Surgery, Inc. (2005) 35 Cal.4th 797, 808. See also NBC
Universal Media, LLC v. Superior Court (2014) 225 Cal.App.4th 1222, 1232.)
The
FAC alleges Plaintiff discovered the facts constituting the cause of action for
fraudulent concealment sometime after the third repair attempt in September
2022. (FAC ¶ 70.) Specifically, the first amended complaint alleges that:
“After the third visit to the dealership for repair, Plaintiff, through their
own investigation, discovered Global Safety Field Safety Investigation
correspondence, #DCS5461, which was issued by GENERAL MOTORS LLC in August
2020, for Hydra-Matric transmissions found in 2016 Chevrolet Silverado.” It was this correspondence that allegedly made
Plaintiff aware that there may be defects. (FAC ¶ 70.) Plaintiff alleges he did
not have the ability to make an earlier discovery because Defendant was
concealing the defects and at every repair attempt, stated that “that the
Subject Vehicle was operating as designed, and only required a software update
to allow the transmission’s adaptive feature to develop.” (FAC ¶¶ 70, 142.)
Plaintiff alleges GM concealed the alleged defect, and he did not discover GM’s
concealment until shortly before this action was filed. (See, e.g., FAC
¶¶¿79, 81-83.) This is sufficient to plead delayed
discovery. Whether Plaintiff knew or should have known of the Global
Safety Field Safety Investigation correspondence #DCS5461 earlier is a factual
inquiry that cannot be resolved on a demurrer.
D. Fraudulent Concealment is Pled with Sufficient
Particularity
Fraud
based on concealment requires that “(1) the defendant must have concealed or
suppressed a material fact, (2) the defendant must have been under a duty to
disclose the fact to the plaintiff, (3) the defendant must have intentionally
concealed or suppressed the fact with the intent to defraud the plaintiff, (4)
the plaintiff must have been unaware of the fact and would not have acted as he
did if he had known of the concealed or suppressed fact, and (5) as a result of
the concealment or suppression of the fact, the plaintiff must have sustained
damage.” (Bigler-Engler v. Breg, Inc. (2017) 7 Cal.App.5th 276,
310-311.) 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.)
Plaintiff
alleges Defendant knew since at least 2014 that the Hydra-Matic 8L90
transmission had defects that could result in various problems, including harsh
shifts, jerking, and lurching when driving. (FAC ¶¶ 19-20, 22.)
These defects allegedly expose Plaintiff, his passengers, and others on the
road to a serious risk of accident and injury. (Id. at ¶ 135.)
Plaintiff did not know about these defects and problems, and Defendant did not
disclose the defects when Plaintiff purchased the vehicle. (Id. at
¶ 136.) Further, Plaintiff alleges that every time he presented the
vehicle for repairs, it was represented that the issues were fixable. (FAC ¶
142.)
These
allegations are specific enough to allege the information that was concealed,
and the danger the defect posed. (See Jones v. ConocoPhillips Co.
(2011) 198 Cal.App.4th 1187, 1199-1200.)
E. Transactional Relationship is Sufficiently Alleged
A
duty to disclose does not exist in all circumstances. The tort of fraudulent
concealment is only viable where it does. “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. [Citation.]”’ (LiMandri v. Judkins (1997) 52
Cal.App.4th 326, 336.)
Where
there is no fiduciary relationship, a duty to disclose exists only where the parties
are in a direct transactional relationship. (CACI 1901; Hoffman v. 162 North
Wolfe, LLC (2014) 228 Cal.App.4th 1178, 1187.)
Garcia urges that he has adequately alleged a transactional
relationship. He cites Ibrahim v.
Ford Motor Co. (1989) 214 Cal.App.3d
878, 889 and Dhital v. Nissan North America, Inc. (2022) 84
Cal.App.5th 828, 844, for the proposition that allegations that a plaintiff was
sold the vehicle by defendant’s authorized dealership is sufficient to prove the
existence of a transactional relationship. Specifically, the Court in Dhital
held that the fraudulent concealment cause of action was not barred by
failure to plead a buyer-seller relationship, as the plaintiffs alleged in that
case that they bought the car from an authorized dealership; an express
warranty accompanied the vehicle; and that the dealerships were the authorized
agents of the manufacturer. (Id.)
Here,
the First Amended Complaint contains identical allegations to the plaintiffs in
Dhital, namely, that the car was bought from an authorized dealership,
that the dealership and its salesman were agents of GM, and that there was an
express warranty in place. (FAC ¶¶ 4,5,8.)
GM does not address this argument in its reply.
Because the First Amended
Complaint alleges the existence of a transactional relationship between the
parties that supports the existence of a duty to disclose, fraudulent concealment
is adequately alleged.
III. MOTION
TO STRIKE
A. Legal Standard
Code Civ. Proc. §436 provides: “The court may, upon a
motion made pursuant to Section 435, or at any time in its discretion, and upon
terms it deems proper:
(a) Strike out any
irrelevant, false, or improper matter inserted in any pleading.
(b) Strike out all or any
part of any pleading not drawn or filed in conformity with the laws of this
state, a court rule, or an order of the court.”
Civ.
Code § 3294(a) provides that where it is proven by clear and convincing
evidence that a defendant has been guilty of oppression, fraud, or malice, the
plaintiff may recover punitive damages.
B.
Motion to Strike is Denied
A
request for punitive damages must be supported by allegations of oppression, fraud,
or malice. As discussed above, sufficient allegations exist concerning fraudulent
concealment. The motion to strike is
therefore denied.
IV. CONCLUSION
AND ORDER
GM’s demurrer to the
fourth cause of action for fraudulent concealment is overruled. GM’s motion to strike punitive damages is also
denied.
GM is ordered to file its answer to the First Amended Complaint
within ten days.
Plaintiff is ordered to give notice of ruling.
Dated: _______________________________
MARGARET L. OLDENDORF
JUDGE
OF THE SUPERIOR COURT