Judge: Mark A. Young, Case: 23SMCV00991, Date: 2023-10-10 Tentative Ruling
Case Number: 23SMCV00991 Hearing Date: October 10, 2023 Dept: M
CASE NAME: Soler, v.
General Motors LLC et al.
CASE NO.: 23SMCV00991
MOTION: Demurrer
to the Complaint
HEARING DATE: 10/10/2023
Legal
Standard
A
demurrer for sufficiency tests whether the complaint states a cause of action.
(Hahn v. Mirda (2007)
147 Cal.App.4th 740, 747.) When considering demurrers, courts read the
allegations liberally and in context. In a demurrer proceeding, the defects
must be apparent on the face of the pleading or via proper judicial notice. (Donabedian v. Mercury Ins. Co.
(2004) 116 Cal.App.4th 968, 994.) A demurrer tests the pleadings alone and not
the evidence or other extrinsic matters. Therefore, it lies only where the
defects appear on the face of the pleading or are judicially noticed. (CCP §§
430.30, 430.70.) At the pleading stage, a plaintiff need only allege ultimate
facts sufficient to apprise the defendant of the factual basis for the claim
against him. (Semole v. Sansoucie
(1972) 28 Cal. App. 3d 714, 721.) A “demurrer does not, however, admit
contentions, deductions or conclusions of fact or law alleged in the pleading,
or the construction of instruments pleaded, or facts impossible in law.” (S. Shore Land Co. v. Petersen
(1964) 226 Cal.App.2d 725, 732, internal citations omitted.)
A
special demurrer for uncertainty is disfavored and will only be sustained where
the pleading is so bad that defendant cannot reasonably respond—i.e., cannot
reasonably determine what issues must be admitted or denied, or what counts or
claims are directed against him/her. (CCP § 430.10(f); Khoury v. Maly’s
of Calif., Inc. (1993) 14 Cal.App.4th 612, 616.) Moreover, even if
the pleading is somewhat vague, “ambiguities can be clarified under modern
discovery procedures.” (Ibid.)
Any party, within the time allowed
to respond to a pleading may serve and file a notice of motion to strike the
whole or any part thereof. (CCP § 435(b)(1); Cal. Rules of Court, Rule
3.1322(b).) The court may, upon a motion or at any time in its discretion and
upon terms it deems proper: (1) strike out any irrelevant, false, or improper
matter inserted in any pleading; or (2) strike out all or any part of any
pleading not drawn or filed in conformity with the laws of California, a court
rule, or an order of the court. (CCP §§ 436(a)-(b); Stafford v. Shultz (1954) 42 Cal.2d 767, 782 [“Matter in a
pleading which is not essential to the claim is surplusage; probative facts are
surplusage and may be stricken out or disregarded”].)
“Liberality in permitting amendment
is the rule, if a fair opportunity to correct any defect has not been given.” (Angie
M. v. Superior Court (1995) 37 Cal.App.4th 1217, 1227.) It is an abuse of
discretion for the court to deny leave to amend where there is any reasonable
possibility that plaintiff can state a good cause of action. (Goodman v.
Kennedy (1976) 18 Cal.3d 335, 349.) The burden is on plaintiff to
show in what manner plaintiff can amend the complaint,
and how that amendment will change the legal effect of the
pleading. (Id.)
Analysis
Defendant General Motors (GM) demurs to the first three causes of action.
GM also moves to strike punitive damages.
Fraud and
Negligent Misrepresentation
GM argues that Plaintiff failed to
plead the alleged “fraud” with particularity. Plaintiff did not identify a
single representation by or from GM, nor did he allege facts showing when,
where, or how GM made any representation, much less a misrepresentation, about the
Bolt.
“‘[T]he elements of an action for fraud
and deceit based on concealment are: (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.’ [Citations.]” (Blickman Turkus, LP v. MF Downtown Sunnyvale, LLC (2008) 162 Cal.App.4th 858, 868.)
In California, fraud, including negligent
misrepresentation, must be pled with specificity. (Small v. Fritz Companies,
Inc. (2003) 30 Cal.4th 167, 184.) “Fraud must be pleaded with specificity
rather than with “ ‘general and conclusory allegations.’ The specificity
requirement means a plaintiff must allege facts showing how, when, where, to
whom, and by what means the representations were made, and, in the case of a
corporate defendant, the plaintiff must allege the names of the persons who
made the representations, their authority to speak on behalf of the
corporation, to whom they spoke, what they said or wrote, and when the
representation was made.” (West v. JPMorgan Chase Bank, N.A. (2013) 214
Cal.App.4th 780, 793, internal citations omitted.)
Less specificity is required if it appears
from the nature of allegations that defendant must necessarily possess full
information, or if the facts lie more in the knowledge of opposing parties. (Alfaro
v. Community Housing Improvement System & Planning Assn., Inc. (2009)
171 Cal.App.4th 1356, 1384-1385 [“it does not appear necessary to require each
of the 38 plaintiffs to allege each occasion on which an agent of either
defendant could have disclosed …. Surely defendants have records of their
dealings with the plaintiffs”] accord Bushell v. JPMorgan Chase Bank, N.A. (2013)
220 Cal.App.4th 915, 931 [“plaintiffs did not have to specify the … personnel
who prepared these documents because that information is uniquely within …
[defendant’s] knowledge”].) “‘[T]he courts should not ... seek to absolve the
defendant from liability on highly technical requirements of form in pleading.
Pleading facts in ordinary and concise language is as permissible in fraud
cases as in any others, and liberal construction of the pleading is as much a
duty of the court in these as in other cases.’” (Appollo Capital Fund, LLC
v. Roth Capital Partners, LLC (2007) 158 Cal.App.4th 226, 242.) Logically, the rule of
specificity of pleading is intended to apply only to affirmative
representations and not to fraud by concealment. (See Alfaro, supra, 171
Cal.App.4th at 1384.) “[I]t is harder to apply [the requirement of specificity]
to a case of simple nondisclosure. ‘How does one show “how” and “by what means”
something didn't happen, or “when” it never happened, or “where” it never
happened?’ ” (Ibid.; see Jones v. ConocoPhillips
(2011) 198 Cal.App.4th 1187, 1200 [concealment is sufficiently pled when the
complaint as a whole provides sufficient
notice of the claims against defendants].)
A failure to disclose a material fact to a
transaction can constitute actionable fraud. (Collins v. eMachines, Inc. (2011) 202 Cal.App.4th 249, 255, 259
[finding plaintiffs sufficiently pled common law fraud in connection with
defendant’s failure to disclose a material fact].) A duty to disclose material
facts arises in four discrete circumstances: (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. (LiMandri v. Judikins (1997) 52 Cal.
App. 4th 326, 336.) For instance, a manufacturer’s omission from its customers
posing a safety concern may breach this duty. (Jones, supra, 198
Cal.App.4th 1187, 1198-99 [stating that the general rule that “ ‘manufacturers have a duty to warn consumers about the hazards
inherent in their products’ ” is “equally pertinent to the scope of the defendants’ duty
to disclose”]; see Daugherty v. American Honda Motor Co., Inc.¿(2006)
144 Cal.App.4th 824, 835-838.)
According to the Complaint, Plaintiff
leased a new 2020 Chevrolet Bolt on February 19, 2021. (Compl., ¶ 8.) The
Vehicle was delivered with substantial defects and non-conformities to
warranty, including but not limited to serious battery defects, reduced range
the potential for fire leading to serious bodily injury or death. (¶¶ 10-11.) There
is no current fix available for the defective battery. (¶ 24.)
Plaintiff advances the fraud causes
on two theories regarding the battery on the Subject Vehiclet. First, an
express misrepresentation as to the battery’s effective range. Second, an
omission as to the battery defect. Plaintiff alleges that he had conversations
with the sales representatives at Culver City Chevrolet and reviewed
manufacturer publications and advertisements about the quality of the Chevrolet
Bolt. (Compl., ¶ 8.) At no time did GM or its authorized agents publicly or
privately disclose to Plaintiff any information about the battery defect. (¶¶
8, 11.) Plaintiff was misled by GM and its authorized dealership about the
problems with the battery prior to and at the time of Plaintiff’s leasing the
Subject Vehicle. (¶¶ 25-27.) Plaintiff relied on the statements from the sales
representatives and marketing materials about the qualities of the Chevrolet
Bolt. (¶¶ 25- 27.) Plaintiff is now stuck with a vehicle with limited range,
can catch fire, and by GM’s own admission, cannot be fixed. (¶ 26.) Had
Plaintiff known about the battery defects, he would never have leased the
defective vehicle. (¶ 27.)
As to the battery defect, Plaintiff
arguably pleads fraud by omission with sufficient particularity. GM exclusively
knew of battery defects since at least 2017 from its issuance of customer
satisfaction notices, software updates, internal investigations, recalls, and
other sources not available to consumers. (Compl., ¶¶ 13-23.) The existence of
the battery defect is a material fact, pertaining to safety, that a reasonable
consumer would consider in determining whether to purchase or lease a vehicle. Therefore,
GM had a duty to disclose the nature of the defect to Plaintiff prior to the lease.
If not for this omission, Plaintiff would not have leased the Bolt. (¶ 27.)
However, the Complaint alleges that
Plaintiff relied on express representations, including marketing brochures,
television and radio commercials, and statements made during the sales process
by GM’s authorized agents regarding the Subject Vehicle, in order to conclude
that the Subject Vehicle would not be plagued with battery defects. (Compl., ¶
27.) Thus, the Complaint does not rely on a theory of pure omission, but of
partial representations. The Complaint fails to allege the express representations
that were made regarding the Bolt, including the effective battery range and
other defects. The Complaint fails to allege who specifically made any
representations, how and by what means the representations were made. Additionally,
negligent misrepresentation cause does not lie against omissions. (See Kaldenbach
v. Mutual of Omaha Life Ins. Co. (2009) 178 Cal.App.4th 830, 850.) The
fraud causes of action therefore fail to meet the heightened pleading standards
of fraud.
Accordingly, the demurrer is
SUSTAINED with leave to amend as to the first and second causes of action.
UCL Fraud
To bring a claim under the fraud
prong, a plaintiff must allege an affirmative misrepresentation, conduct, or
business practice on the part of a defendant; or an omission in violation of a
defendant’s duty to disclose; and that is likely to deceive members of the
public. (Buller v. Sutter Health (2008) 160 Cal.App.4th 981, 986; Hypertouch,
Inc. v. ValueClick, Inc. (2011) 192 Cal.App.4th 805, 839-840 [whether
statements or advertisements are likely to deceive a reasonable consumer, is a
fact question].) The fraud prong of the UCL is less rigorous than common law
fraud, as common law fraud requires allegations of actual falsity and
reasonable reliance while fraud under UCL does not. (Morgan v. AT&T
Wireless Services, Inc. (2009) 177 Cal.App.4th 1235, 1256.)
The Complaint alleges that despite
GM’s knowledge of the battery defect, it leased the Vehicle to Plaintiff. (Compl.,
¶¶ 46-50.) As discussed above, this amounts to an omission in violation of GM’s
duty to disclose. (¶¶ 8, 11, 24-27.) The battery defect was a latent defect,
and not reasonably discoverable by consumers. (¶ 48.) Therefore, consumers are
likely to be deceived. As such, the UCL claim is well-pled.
Accordingly, the demurrer is
OVERRULED as to this cause of action.
Motion to Strike
The motion to strike is MOOT given leave to amend the fraud-based causes
of action.
Plaintiff has 10 days to file an amended complaint.