Judge: Matthew C. Braner, Case: 37-2023-00016282-CU-BC-CTL, Date: 2024-02-23 Tentative Ruling

SUPERIOR COURT OF CALIFORNIA,

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HALL OF JUSTICE

TENTATIVE RULINGS - February 22, 2024

02/23/2024  09:00:00 AM  C-60 COUNTY OF SAN DIEGO

JUDICIAL OFFICER:Matthew C. Braner

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Civil - Unlimited  Breach of Contract/Warranty Demurrer / Motion to Strike 37-2023-00016282-CU-BC-CTL SCHIPPER VS GENERAL MOTORS LLC [IMAGED] CAUSAL DOCUMENT/DATE FILED:

Defendant General Motors LLC's demurrer to the first amended complaint is SUSTAINED with leave to amend.

Defendant's motion to strike is GRANTED.

A demurrer shall be sustained if the complaint 'does not state facts sufficient to constitute a cause of action.' (Code Civ. Proc., § 430.10(e).) To test the sufficiency of a cause of action, the court treats as true 'all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law.' (Centinela Freeman Emergency Medical Associates v. Health Net of California, Inc. (2016) 1 Cal.5th 994, 1010.) The court may also consider matters that have been judicially noticed. (Id.) The court shall give the complaint a 'reasonable interpretation, reading it as a whole and its parts in their context.' (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) Defendant demurs to the fifth cause of action for fraudulent inducement–concealment on several grounds. In particular, Defendant argues the claim is barred by the statute of limitations, and it fails to state facts sufficient to constitute a cause of action because Defendant did not owe Plaintiffs a duty of disclosure, as Plaintiff has not adequately alleged a direct transaction between Defendant and Plaintiff.

Although the court disagrees regarding the statute of limitations, the court agrees the complaint lacks facts sufficient to establish a duty of disclosure.

First, as to the statute of limitations argument, the court is not persuaded that the date of accrual is the date of purchase; for fraud claims, accrual is not until 'the discovery, by the aggrieved party or the aggrieved party's agent, of the facts constituting the fraud or mistake.' (Code Civ. Proc., § 338, subd.

(d).) At a minimum, the type of fraud alleged by Plaintiff (concealment) could not have been discovered until sometime after the purported defect(s) manifested, requiring repairs. For whatever reason (given the long history of repair attempts alleged in the complaint from February 2019 to October 2022), Plaintiff alleges that February 15, 2019, is effectively the date of accrual. (FAC, ¶ 29 ['Plaintiff could not have discovered Defendant's wrongful conduct alleged regarding the Transmission Defect until February 15, 2019, as the Subject Vehicle continued to exhibit symptoms of defects following Defendant's unsuccessful attempts to repair them.'].) Even with tolling under Emergency Rule 9, Plaintiff's April 19, 2023 filing would still be untimely based on a February 19, 2019 accrual date. However, Plaintiff also alleges that each time he took the vehicle in for repairs, Defendant (via its agent for repairs) continued to conceal the alleged Transmission Defect, rendering the concealment ongoing through October 2022.

Based on the alleged facts, tolling should apply; whether Plaintiff could or should have discovered the wrongful conduct earlier is a factual issue not suitable for resolution at the pleading stage.

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3046960  15 CASE NUMBER: CASE TITLE:  SCHIPPER VS GENERAL MOTORS LLC [IMAGED]  37-2023-00016282-CU-BC-CTL Second, to succeed on a fraudulent concealment claim, Plaintiffs must prove: (1) Defendant concealed or suppressed a material fact; (2) Defendant was under a duty to disclose the fact to Plaintiffs; (3) Defendant intentionally concealed or suppressed the fact with the intent to defraud Plaintiffs; (4) Plaintiffs were unaware of the fact and would not have acted purchased the subject vehicle of they had known of the concealed or suppressed fact; and (5) as a result of the concealment or suppression of the fact, Plaintiffs sustained damage. (Boschma v. Home Loan Center, Inc. (2011) 198 Cal.App.4th 230, 248 [quoting Hahn v. Mirda (2007) 147 Cal.App.4th 740, 748].) A duty to disclose arises only when some kind of preexisting relationship exists between the plaintiff and the defendant, and as 'a matter of common sense, such a relationship can only come into being as a result of some sort of transaction between the parties.' (LiMandri v. Judkins (1997) 52 Cal.App.4th 326, 337.) 'Thus, a duty to disclose may arise from the relationship between seller and buyer, employer and prospective employee, doctor and patient, or parties entering into any kind of contractual agreement.' (Id.) 'Such a transaction must necessarily arise from direct dealings between the plaintiff and the defendant; it cannot arise between the defendant and the public at large.' (Bigler-Engler v. Breg, Inc.

(2017) 7 Cal.App.5th 276, 312.) Here, Plaintiffs have not adequately alleged a transaction between themselves and Defendant that is sufficient to trigger a duty of disclosure. Plaintiff alleges he 'interacted with sales representatives, considered Defendant GM's advertisement, and/or other marketing materials concerning GM Vehicles prior to purchasing Subject Vehicle.' (FAC, ¶ 71.) However, a transaction sufficient to trigger a duty to disclose must arise from direct dealings between the plaintiff and defendant and 'cannot arise between the defendant and the public at large.' Plaintiff's allegations regarding advertising at best describe a 'relationship' between Defendant and the public at large, and not directly between Plaintiff and Defendant. As such, Plaintiff has failed to allege Defendant had a duty to disclose the alleged defect, and therefore has not adequately stated a claim for fraudulent concealment.

Plaintiff contends a transactional relationship is not required, because 'a vendor has a duty to disclose material acts not only to immediate purchasers, but also to subsequent purchasers when the vendor has reason to expect that the item will be resold.' (OCM Principal Opportunities Fund, L.P. v. CIBC World Markets Corp. (2007) 157 Cal.App.4th 835, 851.) However, the cases on which Plaintiff relies for this proposition are distinguishable, given the facts as alleged in the FAC. In particular, this theory requires that the vendor (i.e., Defendant) mislead both purchasers. In other words, if Plaintiff's claim was that Defendant misrepresented to the dealership the condition of the vehicle and the dealership then (unknowingly) passed that misrepresentation to Plaintiff, then a duty of disclosure on the part of Defendant might trigger. But that is not Plaintiff's claim.

Plaintiff's reliance on Dhital v. Nissan N. Am., Inc. (2022) 84 Cal.App.5th 828 (review granted), is misplaced. Not only is that case nonbinding authority because review was granted by the California Supreme Court, but the Dhital court also provided no analysis on the issue of the buyer-seller relationship between the parties because there was an 'absence of a more developed argument by Nissan on this point.' (Id. at p. 844.) Accordingly, Defendant's demurrer to the fifth cause of action is sustained with leave to amend.

As to Defendant's motion to strike, Plaintiffs' prayer for punitive damages relies exclusively on their fraud claim. Consequently, the prayer for punitive damages is stricken. Plaintiffs have leave to amend.

Plaintiffs have 30 days from entry of this order to file and serve an amended complaint.

The minute order is the order of the court.

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