Judge: Michael E. Whitaker, Case: 19STCV44178, Date: 2023-05-09 Tentative Ruling

Case Number: 19STCV44178    Hearing Date: May 9, 2023    Dept: 32

PLEASE NOTE:   Parties are encouraged to meet and confer concerning this tentative ruling to determine if a resolution may be reached.  If the parties are unable to reach a resolution and a party intends to submit on this tentative ruling, the party must send an email to the Court at sscdept32@lacourt.org indicating that party’s intention to submit.  The email shall include the case number, date and time of the hearing, counsel’s contact information (if applicable), and the identity of the party submitting on this tentative ruling.  If the Court does not receive an email indicating the parties are submitting on this tentative ruling and there are no appearances at the hearing, the Court may place the motion off calendar or adopt the tentative ruling as the order of the Court.  If all parties do not submit on this tentative ruling, they should arrange to appear in-person or remotely (which is highly encouraged).  Further, after the Court has posted/issued a tentative ruling, the Court has the inherent authority to prohibit the withdrawal of the subject motion and adopt the tentative ruling as the order of the Court. 

TENTATIVE RULING

MOTION

Plaintiff Fabian Arroyo (Plaintiff) moves the Court for an order granting leave to file a first amended complaint (FAC).  Plaintiff asserts the FAC is necessary to allege an additional cause of action for Fraud/Fraudulent Misrepresentation, as well as to add a claim for punitive damages.  Defendant FCA US LCC (Defendant) opposes the motion.  Plaintiff replies.

ANALYSIS

Amendments to Pleadings:  General Provisions     

Under Code of Civil Procedure section 473, subdivision (a)(1), “The court may, in furtherance of justice, and on any terms as may be proper, allow a party to amend any pleading or proceeding by adding or striking out the name of any party, or by correcting a mistake in the name of a party, or a mistake in any other respect; and may, upon like terms, enlarge the time for answer or demurrer. The court may likewise, in its discretion, after notice to the adverse party, allow, upon any terms as may be just, an amendment to any pleading or proceeding in other particulars; and may upon like terms allow an answer to be made after the time limited by this code.”

            To wit, without notice to the other party the Court has wide discretion to allow either party (i) to add or strike the name of a party or (ii) to correct a mistake in the name of a party or a mistake in any other respect “in furtherance of justice” and “on any terms as may be proper.”  (See Code Civ. Proc., § 473, subd. (a)(1); see also Marriage of Liss (1992) 10 Cal.App.4th 1426, 1429.)  Alternatively, after notice to the other party, the Court has wide discretion to allow either party to amend pleadings “upon any terms as may be just.”  (See Code Civ. Proc., § 473, subd. (a)(1).)  Similarly, Code of Civil Procedure section 576 states “Any judge, at any time before or after commencement of trial, in the furtherance of justice, and upon such terms as may be proper, may allow the amendment of any pleading or pretrial conference order.” 

            Judicial policy favors resolution of all disputed matters between the parties and, therefore, leave to amend is liberally granted.  (Berman vs. Bromberg (1986) 56 Cal.App.4th 936, 945; Hirsa v. Superior Court (1981) 118 Cal.App.3d 486, 488-489 [this has been an established policy in California since 1901] (citing Frost v. Whitter (1901) 132 Cal. 421, 424; Thomas v. Bruza (1957) 151 Cal.App.2d 150, 155).)  The Court of Appeal in Morgan v. Superior Court held “If the motion to amend is timely made and the granting of the motion will not prejudice the opposing party, it is error to refuse permission to amend and where the refusal also results in a party being deprived of the right to assert a meritorious cause of action or a meritorious defense, it is not only error but an abuse of discretion.”  (Morgan v. Superior Court (1959) 172 Cal.App.2d 527, 530, citations omitted.)  Moreover, “it is an abuse of discretion for the court to deny leave to amend where the opposing party was not misled or prejudiced by the amendment.”  (Kittredge Sports Co. v. Superior Court (1989) 213 Cal.App.3d 1045, 1048 [opposing party did not establish harm by the delay in moving to amend the complaint].) 

            “The court may grant leave to amend the pleadings at any stage of the action.” (Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial (The Rutter Group 2022) ¶ 6:636 (hereafter Weil & Brown).)  Denial of a motion to amend is rarely justified if the motion is timely made and granting the motion will not prejudice the opposing party. (Id. at ¶ 6:639, citations omitted.)  However, if the party seeking the amendment has been dilatory, and the delay has prejudiced the opposing party, the judge has discretion to deny leave to amend. (Id. at ¶ 6:655, citations omitted.) Absent prejudice, any claimed delay alone is not grounds for denial. “If the delay in seeking the amendment has not misled or prejudiced the other side, the liberal policy of allowing amendments prevails. Indeed, it is an abuse of discretion to deny leave in such a case even if sought as late as the time of trial. (Id. at ¶ 6:653 (citing Higgins v. Del Faro (1981) 123 Cal.App.3d 558, 564-565).)  “Prejudice exists where the amendment would result in a delay of trial, along with loss of critical evidence, added costs of preparation, increased burden of discovery, etc.  . . .  But the fact that the amendment involves a change in legal theory which would make admissible evidence damaging to the opposing party is not the kind of prejudice the court will consider.”  (Weil & Brown, supra, at ¶ 6:656, citations omitted.)

            “Even if some prejudice is shown, the judge may still permit the amendment but impose conditions, as the Court is authorized to grant leave ‘on such terms as may be proper.’ ”  (Weil & Brown, supra, at ¶ 6:663, citation omitted.)  For example, the court may cause the party seeking the amendment to pay the costs and fees incurred in preparing for trial. (Id. at ¶ 6:664 (citing Fuller v. Vista Del Arroyo Hotel, 42 Cal.App.2d 400, 404).)

California Rules of Court, rule 3.1324:  Procedural Requirements

            Pursuant to California Rules of Court, rule 3.1324(a), a motion to amend a pleading before trial must:

“(1) Include a copy of the proposed amendment or amended pleadings, which must be serially numbered to differentiate it from previous pleadings or amendments;

(2) state what allegations in the previous pleading are proposed to be deleted, if any, and where, by page, paragraph, and line number, the deleted allegations are located; and

(3) State what allegations are proposed to be added to the previous pleading, if any, and where, by page, paragraph, and line number, the additional allegations are located.”

            In addition, under Rule 3.1324(b), a motion to amend a pleading before trial must be accompanied by a separate declaration that specifies the following:

“(1) the effect of the amendment;

(2) why the amendment is necessary and proper;

(3) when the facts giving rise to the amended allegations were discovered; and

(4) the reasons why the request for amendment was not made earlier.”

Here, as set forth in the declaration of counsel for Plaintiff, Trevor Weinberg (Counsel), Plaintiff first discovered facts giving rise to the proposed Fraud/Fraudulent Misrepresentation cause of action during the February 7, 2023 deposition of Defendant Dodge’s Studios Inc.’s Person Most Knowledgeable (Dodge PMK).  (Declaration of Trevor Weinberg, ¶ 5.)  Counsel summarizes Plaintiff’s findings during the deposition as follows: “. . . while Dodge represented to Plaintiff that the airbags ‘may’ not deploy, Dodge knew for a certainty that they would not deploy.”  (Declaration of Trevor Weinberg, ¶ 5.)   The following are relevant portions of the February 7, 2023 Dodge PMK deposition:

Q.  One of the things we talked about in your prior deposition was that the ORC algorithm being disabled was caused by a DTC B222A I believe; is that right?

            A.  Yes, the diagnostic trouble code.

Q.  I believe you testified that there were five elements that could cause that trouble code; is that right?

A.  I don't recall, but yes, there would be four or five different elements that could mature that DTC, diagnostic trouble code.

Q.  If that diagnostic trouble code, B222A, results from any of those four or five modifications, will they all disable the ORC?

            A.  Correct, yes.

            . . .

Q.  Okay. In this case, the airbag light was the only warning that the ORC had been disabled. fair?

A.  Yeah. We have one -- per FMVSS 208, we have one airbag warning like light that we will command on when there is a diagnostic trouble code detector.

(Declaration of Trevor Weinberg, ¶ 5, Exhibit 3, pp. 5:24-6:12, 69:7-12.)   

The following are the factual allegations Plaintiff requests to add to support the additional cause of action for Fraud/Fraudulent Misrepresentation in the proposed FAC:

• Defendants disabled Plaintiffs Vehicle's airbag, EDR, and post-crash safety systems, including internal lights turning off, the engine turning off, due to a B222A error code without telling Plaintiff.
• In June 6, 2018, at 2:30 p.m. Defendants Dodge emailed Plaintiff at his email address, fafalcon82@gmail.com, that Plaintiffs "airbag system may not be working properly,” and that "the air bags in your vehicle might not inflate in a collision."  This was a false and fraudulent misrepresentation because Defendant knew for a certainty that Plaintiffs airbag was totally disabled. Defendants also fraudulently concealed and omitted to disclose to Plaintiff that his safety systems, including his Vehicle's airbag, seatbelt pretensioner, electronic data recording ("EDR"), and post crash safety systems (including internal lights turning off, the engine turning off, and doors unlocking after a crash), were entirely disabled, and could not under any circumstances function until the B222A error code was fixed.
• Defendants knew that the representations to Plaintiff regarding his vehicle were false, and omitted material information, because Defendants Dodge intentionally designed the Vehicle to disable its safety systems, whenever the B222A code was triggered, and knew for a certainty the airbag would not deploy until the B222A error code was repaired. Nevertheless, Defendants misrepresented that it was only a risk that the airbag "may" or "might" not deploy, and failed to disclose the safety systems had been intentionally disabled and for a certainty would not work.
• In making this representation, Defendants intended to induce Plaintiffs reliance. Plaintiff did actually and justifiably rely on Defendants' misrepresentation by taking it in to be serviced, but continuing to drive and operate the Vehicle. Plaintiff was not aware that his safety systems, including his airbag, was entirely disabled.
• Because Defendants manufactured and designed Plaintiffs Vehicle, Plaintiff justifiably relied upon Defendant's representations.
• As a result of Defendant's fraud, Plaintiff has sustained permanent and catastrophic injuries.
• Defendants' conduct and actions were despicable, and were done maliciously, fraudulently and oppressively, with a willful and conscious disregard of Plaintiffs rights, entitling Plaintiff to punitive damages under California Civil Code Section 3294. Defendant's officers, directors, and managing agents were personally informed and involved in the decision-making process with respect to the misconduct alleged herein and to be proven at trial, and/or ratified such misconduct and decision-making.

(Proposed FAC, ¶¶ 41-47.) 

In opposition, Defendant argues Plaintiff’s claim that he only discovered the necessary facts for his proposed Fraud-Fraudulent Misrepresentation cause of action during the February 7, 2023 Dodge PMK’s deposition, is incorrect.  Defendant contends that Plaintiff would have discovered the facts at issue in the proposed Fraud-Fraudulent Misrepresentation cause of action during the September 27, 2022 Dodge PMK deposition, and further when Plaintiff’s expert downloaded the “Crash Data Report from the Challenger.”

            The following are relevant portions of the September 27, 2022 Dodge PMK deposition:

A.     So when I look at the configuration data for -- relative to the Diagnostic Trouble Code, the B222A, it will look at not only the vehicle line, the engine, but it looks at the trim of the vehicle. They have a specific flag in there if it's -- if it's in an SRT vehicle or not that -- that will dictate whether or not it's -- the ORC is in the correct vehicle or not.

So the DTC doesn't say specifically where the -- the discrepancy is at, but it's noting that there's something that's been reconfigured. Somebody has reconfigured this vehicle and it does not match the Occupant Restraint Control Module that's in it.

. . .

Again, the way – the way the Diagnostic Trouble Code is, it’s – it’s – it would prevent the ORC from – from detecting the events because it doesn’t know what type of vehicle in.  It might be – you – you know, it’s not calibrated for that type of vehicle, so it shuts down and – and yes, the – the algorithm is disabled to – to deploy bags at that point.

. . .

Q.  I understand that, but when the airbag light is on in that scenario where it has a chime and it remains on,    that doesn’t necessarily mean that the ORC system is shut down and the airbags will not   deploy in a frontal impact crash; correct?

                  . . .

A.     What the light indicates to the customer is that it needs to be serviced. There’s – there’s no guarantee at that point.  Once the light is on, it’s detected some failure mode in the system and needs to be serviced and – and repaired.

. . .

In certain Diagnostic Trouble Codes, yes, the – the system would still be function, but we still turn on the same light and give a chime and – and in the owner’s manual, it says to take your vehicle to the dealership immediately. 

Q.  I understand, but just try to follow my question. I'm asking when the light is on, the airbag light is on, for whatever reason, sometimes that light will be on and the ORC system will still be able to communicate and deploy the airbag in a frontal impact; correct?

A.  In certain Diagnostic Trouble Codes, yes, the -- the system would still be functioning, but we still turn on the same light and give a chime and – and in the owner's manual, it says to take your vehicle to the dealership immediately.

Q.   Is there any way for the customer to know,  based on the airbag light and the chime, when, like this case, the ORC system is just shut down and when the ORC  system will still communicate with the airbag?

. . .

A.  We provide plenty of  information in the owner's manual. It says as soon as that light comes on, it needs to be serviced. It's -- this is one where you shut down the vehicle and it's got to be taken to a dealership to be serviced. Whenever -- anytime the light comes on.

Q.   I understand that, but when the airbag light is on, is the customer able to determine this means that the ORC system is shut down and the airbag just will not  deploy or the ORC system is still working and the airbag may deploy? Is there a way for the customer, the driver, to know the difference when the airbag light is on?

A. When the light is on, it needs to be serviced. There are Diagnostic Trouble Codes that we have that do not turn on the light, but in this case, if the light is on, it needs to be serviced. There -- there shouldn't be a separation.

(Declaration of Dylan Goodwin, ¶ 6, Exhibit D, pp. 37:7-19, 38:9-16, 44: 4-8, 44:11-25-45:13; 4614-25, emphasis added.) 

            The Court agrees with Plaintiff’s position that circumstances concerning the proposed cause of action for Fraud/Fraudulent Misrepresentation did not arise at the September 27, 2022 Dodge PMK deposition.  A fair reading of the relevant portions of the Dodge PMK testimony from the September 27, 2022 is that airbags or ORC needed to be serviced to determine if they were inoperable.  The witness was not as definitive about the airbags or ORC being inoperable during the September 2022 deposition as he was during the February 2023 deposition. 

            Further, the Court finds that Plaintiff was not dilatory in seeking leave to amend the complaint.  Finally, the Court finds no prejudice to Defendant as the trial is currently set for October 18, 2023 with ample time to conduct any needed discovery regarding the new cause of action. 

CONCLUSION AND ORDER

Accordingly, the Court finds that Plaintiff has met his burden in establishing a factual and legal basis for leave to file a FAC and grants Plaintiff’s motion for leave.  Plaintiff shall file and serve the proposed amended complaint on or before May 19, 2023. 

Plaintiff shall provide notice of the Court’s orders and file a proof of service of such.