Judge: Matthew C. Braner, Case: 37-2023-00043276-CU-BC-CTL, Date: 2024-06-28 Tentative Ruling

SUPERIOR COURT OF CALIFORNIA,

DEPT.:

EVENT DATE:

EVENT TIME:

HALL OF JUSTICE

TENTATIVE RULINGS - June 27, 2024

06/28/2024  09:00:00 AM  C-60 COUNTY OF SAN DIEGO

JUDICIAL OFFICER:Matthew C. Braner

CASE NO.:

CASE CATEGORY:

EVENT TYPE:

CASE TITLE: CASE TYPE:

Civil - Unlimited  Breach of Contract/Warranty Demurrer / Motion to Strike 37-2023-00043276-CU-BC-CTL SOTO VS FORD MOTOR COMPANY [IMAGED] CAUSAL DOCUMENT/DATE FILED:

Defendant Ford Motor Company's demurrer to the first amended complaint is SUSTAINED with leave to amend.

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. To succeed on a fraudulent concealment claim, Plaintiffs Samuel Soto and Grecia Soto 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].) Here, Defendant contends Plaintiffs have failed to plead the specific defect that was concealed, its active concealment, and Defendant's exclusive knowledge of such defect, have failed to allege the requisite direct transactional relationship that may trigger a duty of disclosure, and have failed to plead Defendant made partial representations while suppressing material facts. Because Plaintiffs have failed to plead a duty to disclose by alleging sufficient direct transactional relationship, Defendant's demurrer is sustained.

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 them and Defendant sufficient to Calendar No.: Event ID:  TENTATIVE RULINGS

3101804  34 CASE NUMBER: CASE TITLE:  SOTO VS FORD MOTOR COMPANY [IMAGED]  37-2023-00043276-CU-BC-CTL trigger a duty of disclosure for purposes of a fraudulent concealment claim. Plaintiffs allege they 'reviewed Defendant's marketing and advertising materials, conferred with Defendant's sales representatives, and took the Vehicle for a test drive.' (FAC, ¶ 81.) 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 marketing and advertising at best describe a 'relationship' between Defendant and the public at large, and not directly between Plaintiff and Defendant. Moreover, Plaintiffs do not allege facts establishing the kind of agency relationship between Defendant and the dealership's salesmen that might create a direct transaction. As such, Plaintiff has failed to allege Defendant had a duty to disclose the alleged defect or defects, and therefore has not adequately stated a claim for fraudulent concealment.

As they do in all their cases involving fraud claims, Plaintiffs' counsel relies on Dhital v. Nissan North America, Inc. (2022) 84 Cal.App.5th 828 (review granted) and contends the allegations in this complaint mirror the ones in that case. But as Plaintiffs' counsel well knows by now, this court does not find the Dhital case to be persuasive. Not only is the case nonbinding authority, 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.) Plaintiffs' counsel also argues, as they have in their other cases, that 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 Plaintiffs' counsel rely for this proposition are distinguishable, as the theory requires that the vendor (i.e., Defendant) mislead both purchasers. In other words, if Plaintiffs' claim was founded on a set of facts whereby Defendant misrepresented to the dealership the condition of the specific vehicle Plaintiffs purchased and the dealership then (unknowingly) passed that misrepresentation to Plaintiffs, then a duty of disclosure on the part of Defendant might trigger. But that is not Plaintiffs' claim.

Accordingly, Defendant's demurrer to the fifth cause of action is sustained.

The court will grant leave to amend. However, the court emphasizes it will not be pleased if the second amended complaint does not address the issues described above with new facts that support the kind of direct transactional relationship the court believes is necessary to ground a claim for fraudulent concealment. If Plaintiffs' counsel uses leave to amend as an opportunity to repeat the same arguments without alleging relevant new facts, as they have done before, not only will the court sustain the inevitable demurrer without leave to amend, it will also view and record the conduct as an effort to unreasonably inflate incurred attorneys' fees and costs.

Plaintiff has 30 days from entry of this order to file and serve a second amended complaint.

If the tentative is confirmed, the minute order is the order of the court.

Calendar No.: Event ID:  TENTATIVE RULINGS

3101804  34