Judge: Michael E. Whitaker, Case: 23SMCV00780, Date: 2023-11-28 Tentative Ruling

Case Number: 23SMCV00780    Hearing Date: November 28, 2023    Dept: 207

TENTATIVE RULING

MOTIONS

Plaintiff Jack Richard Sacane (“Plaintiff”) brought the First Amended Complaint (“FAC”) against Defendant General Motors LLC (“Defendant”), alleging six causes of action: (1) Fraud Concealment and Misrepresentation; (2) Negligent Misrepresentation; (3) Business & Professions Code § 17200; (4) Song-Beverly Consumer Warranty Act – Breach of Express Warranty; (5) Song-Beverly Consumer Warranty Act – Breach of Implied Warranty; and (6) Song-Beverly Consumer Warranty Act – Civil Code § 1793.2(b). 

Defendant demurs to the first three causes of action for Fraud Concealment and Misrepresentation; Negligent Misrepresentation; and Commission of Unlawful, Unfair, or Fraudulent Business Acts and Practices, Business and Professions Code section 17200, et seq.    Defendant also moves to strike Plaintiff’s claim for punitive damages in the FAC.

Plaintiff opposes the demurrer and motion to strike.  Defendant replies.

ANALYSIS

1.      DEMURRER

Defendant demurs to the first three causes of action on the basis that they fail to state facts sufficient to constitute causes of action under Code of Civil Procedure section 430.10(e).

“It is black letter law that a demurrer tests the legal sufficiency of the allegations in a complaint.”  (Lewis v. Safeway, Inc. (2015) 235 Cal.App.4th 385, 388.)  In testing the sufficiency of a cause of action, a court accepts “[a]s true all material facts properly pled and matters which may be judicially noticed but disregard contentions, deductions or conclusions of fact or law.  [A court also gives] the complaint a reasonable interpretation, reading it as a whole and its parts in their context.”  (290 Division (EAT), LLC v. City & County of San Francisco (2022) 86 Cal.App.5th 439, 450 [cleaned up]; Hacker v. Homeward Residential, Inc. (2018) 26 Cal.App.5th 270, 280 [“in considering the merits of a demurrer, however, “the facts alleged in the pleading are deemed to be true, however improbable they may be”].)

Further, in ruling on a demurrer, a court must “liberally construe” the allegations of the complaint “with a view to substantial justice between the parties.”  (See Code Civ. Proc., § 452.)  “This rule of liberal construction means that the reviewing court draws inferences favorable to the plaintiff, not the defendant.”  (Perez v. Golden Empire Transit Dist. (2012) 209 Cal.App.4th 1228, 1238.)  

In summary, “[d]etermining whether the complaint is sufficient as against the demurrer on the ground that it does not state facts sufficient to constitute a cause of action, the rule is that if one consideration of all the facts stated it appears the plaintiff is entitled to any relief at the hands of the court against the defendants the complaint will be held good although the facts may not be clearly stated, or may be intermingled with a statement of other facts irrelevant to the cause of action shown, or although the plaintiff may demand relief to which he is not entitled under the facts alleged.”  (Gressley v. Williams (1961) 193 Cal.App.2d 636, 639.)

A.    First Cause of Action – Fraud Concealment and Misrepresentation

The required elements for fraudulent concealment are (1) concealment or suppression of a material fact; (2) by a defendant with a duty to disclose the fact to the plaintiff; (3) the defendant intended to defraud the plaintiff by intentionally concealing or suppressing the fact; (4) the plaintiff was unaware of the fact and would not have acted as he or she did if he or she had known of the concealed or suppressed fact; and (5) plaintiff sustained damage as a result of the concealment or suppression of the fact.”  (Hambrick v. Healthcare Partners Medical Group, Inc. (2015) 238 Cal.App.4th 124, 162.)  

The elements for fraudulent misrepresentation are “(1) the defendant represented to the plaintiff that an important fact was true; (2) that representation was false; (3) the defendant knew that the representation was false when the defendant made it, or the defendant made the representation recklessly and without regard for its truth; (4) the defendant intended that the plaintiff rely on the representation; (5) the plaintiff reasonably relied on the representation; (6) the plaintiff was harmed; and (7) the plaintiff's reliance on the defendant's representation was a substantial factor in causing that harm to the plaintiff.”  (Graham v. Bank of America, N.A. (2014) 226 Cal.App.4th 594, 605–606.) 

With regard to concealment, Plaintiff alleges:

30. GM intentionally and knowingly concealed, suppressed and/or omitted material facts including the presence of the defective high voltage battery pack in the Vehicle which was present at the time of Plaintiff’s lease of the Vehicle.

31. GM knew (at the time of lease and thereafter) that the Vehicle contained the battery defect, concealed the defect, and never intended to replace the battery defect during the relevant warranty periods. To date, GM has not provided Plaintiff with a repair or remedy that will eliminate the battery defect.

32. GM owed a duty to disclose the battery defect and its corresponding safety hazard to Plaintiff because GM possessed superior and exclusive knowledge regarding the defect. Rather than disclose the defect, GM intentionally and knowingly concealed, suppressed and/or omitted material facts including the standard, quality or grade of the Vehicles and the presence of the battery defect, to sell additional vehicles and avoid the cost of repair or replacement.

33. The fact that the battery defect causes the Vehicle to potentially pose a fire risk is material because Plaintiff had a reasonable expectation that the Vehicle would not expose him and other vehicle occupants to such a safety hazard. No reasonable consumer expects a vehicle to be designed, manufactured and assembled such that a defect will pose a significant fire risk.

34. Plaintiff would not have purchased the Vehicle but for GM’s omissions and concealment of material facts regarding the nature and quality of the Vehicle and existence of the battery defect.

35. GM knew its concealment and suppression of material facts were false and misleading and knew the effect of concealing those material facts. GM knew its concealment and suppression of the battery defect would sell more vehicles and would discourage Plaintiff from seeking replacement or repair of the Battery defect.

36. As a direct and proximate result of GM’s omissions and active concealment of material facts regarding the battery defect and associated safety hazard, Plaintiff has suffered actual damages in an amount to be determined at trial.

With regard to misrepresentation, Plaintiff alleges:

37. In addition, GM intentionally misrepresented material facts about the about the Vehicle through its advertisements, publications, and warranties, in addition to its authorized dealership’s salesperson who was authorized to speak on behalf of GM. Specifically, GM through its advertisements, publications, warranties and salesperson represented that the 2021 Chevrolet Bolt EV could travel 259 miles on a single charge, that it could be charged indoors at Plaintiff’s home, that the Vehicle was safe, and that it if it had a defect during the express warranty period, GM would repair it at no charge to Plaintiff.

38. At the time these representations were made, GM knew them to be false as the Vehicle’s battery was defective, it could not travel 259 miles on a single charge, could not be charged indoors at Plaintiff’s home, and it was not safe. Moreover GM knew that it could not replace the defective battery in Plaintiff’s Vehicle at no charge to Plaintiff pursuant to the terms of its express warranty.

39. GM made these misrepresentations regarding the distance the Vehicle could travel on a single battery charge, that the Vehicle could be charged indoors, that it was safe, and that repairs of any defects, including a battery defect, would be made pursuant to the terms of its express warranty to induce Plaintiff to purchase the Vehicle.

40. Plaintiff justifiably relied on the misrepresentations made by GM and executed a lease to acquire the Vehicle.

41. As a direct and proximate result of GM’s misrepresentations regarding the distance the Vehicle could travel on a single battery charge, that the Vehicle could be charged indoors, that it was safe, and that repairs of any defects, including a battery defect, would be made pursuant to the terms of its express warranty, Plaintiff has suffered actual damages in an amount to be determined at trial.

“In California, fraud must be pled specifically; general and conclusory allegations do not suffice.”  (Lazar v. Superior Court (1996) 12 Cal.4th 631, 645.)  “This particularity requirement necessitates pleading facts which show how, when, where, to whom, and by what means the representations were tendered.”  (Ibid.) 

“One of the purposes of the specificity requirement is notice to the defendant, to furnish the defendant with certain definite charges which can be intelligently met.”  (Alfaro v. Community Housing Improvement System & Planning Assn., Inc. (2009) 171 Cal.App.4th 1356, 1384, as modified on denial of reh'g (Mar. 18, 2009).)  As such, less specificity is required “when it appears from the nature of the allegations that the defendant must necessarily possess full information concerning the facts of the controversy[.]”  (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.”  (Ibid.)

With regard to misrepresentation, Plaintiff specifically alleges:

8. On or about June 3, 2021, Plaintiff travelled to Culver City Chevrolet in Culver City, California to acquire a safe and reliable electric vehicle that would be able to go at least 250 miles per charge. When Plaintiff arrived at the dealership, he met with the salesperson who was authorized to speak on behalf of Manufacturer with respect to the Chevrolet vehicles the dealership was selling. While at the dealership, Plaintiff asked the salesperson to show him a 2021 Chevrolet Bolt EV because he had researched the Vehicle and it seemed like a good fit for his specific needs. Specifically, Plaintiff had reviewed Manufacturer’s advertisements and publications which asserted that the 2021 Chevrolet Bolt EV could travel 259 miles on a single charge, that it could be charged indoors at his home, that the Vehicle was safe, and that it if it had a defect during the express warranty period, Manufacturer would repair it at no charge to Plaintiff. The salesperson spoke to Plaintiff about the Vehicle, how far it could drive on a single charge, and all of its features and warranties. The salesperson’s oral statements reiterated the written representations Manufacturer made in its advertisements and publications regarding the 2021 Chevrolet Bolt EV, i.e., that the 2021 Chevrolet Bolt EV could travel 259 miles on a single charge, that it could be charged indoors at his home, that the Vehicle was safe, and that it if it had a defect during the express warranty period, Manufacturer would repair it at no charge to Plaintiff. Due to the lack of extensive EV infrastructure and Plaintiff’s driving needs, it was vitally important to Plaintiff that the Vehicle could go at least 250 miles on a single charge. In reliance on the representations made by Defendant Manufacturer through its advertisements and publications and those of the salesperson who was authorized to speak on behalf of Manufacturer that the Vehicle’s range on a single charge was 259 miles, that it could be charged at home indoors, that it was safe, and that Manufacturer would repair any defects in the Vehicle during the express warranty period at no charge, Plaintiff decided to lease the Vehicle. Plaintiff executed the lease on June 3, 2021.

9. All owners and lessees of 2021 General Motors vehicles receive multiple express warranties directly from GENERAL MOTORS, LLC for periods of up to 8 years or 100,000 miles.  Owners and lessees receive these express warranties solely based on their status as owners and/or lessees and without regard to who they acquired the vehicle from or the terms of acquisition. By issuing the express warranties directly to Plaintiff, GENERAL MOTORS, LLC undertook to preserve or maintain the utility or performance of Plaintiff’s vehicle or provide compensation if there was a failure in such utility or performance.

10. The Vehicle was delivered to Plaintiff with serious defects and nonconformities to warranty and developed other serious defects and nonconformities to warranty including, but not limited to the EV battery module, potential high voltage battery fire, front seatbelt pretensioner, and other defects.

11. Unbeknownst to Plaintiff, the battery that Manufacturer installed in the Vehicle can start a fire and this resulted in Manufacturer issuing numerous recalls, reducing the charge capacity, reducing the distance the vehicle can be driven on a single charge, and Manufacturer advising owners of the Vehicle not to charge the Vehicle in their garages due to the risk of fire.

12. Plaintiff never would have purchased the Vehicle had he been advised that he could not drive 259 miles on a single charge, or had he been advised that the Vehicle could catch on fire and burn down his home.

With regard to concealment, Plaintiff alleges the following additional, specific allegations that pre-date Plaintiff’s June 3, 2021 lease:

13. Defendant Manufacturer was aware of the defective batteries plaguing Chevrolet Bolt vehicles as early as 2017. On April 2, 2018, GM issued a customer satisfaction notice for drivers of 2017 Bolts to get a software update to provide more warning about any potential “cell low-voltage condition” and loss of propulsion. This customer satisfaction notice was released by GM directly to its authorized dealerships and hidden from the public. Moreover, the customer satisfaction notice did not apply to 2021 Chevrolet Bolt vehicles.

14. On May 11, 2018, GM released a new software update for all Bolt owners to “provide additional warnings.” This software update was released by GM directly to its authorized dealerships and hidden from the public. Moreover, the software update did not apply to 2021 Chevrolet Bolt vehicles.

15. In August 2018, GM issued another Customer Satisfaction Program, stating: “Certain 2017-2018 model year Bolt EV vehicles may have a condition where the software will not detect the difference in the state of charge between the cell groups of the battery and over predict the indicated battery range. The current software may not provide sufficient warning prior to a battery cell low range condition, which may result in a loss of propulsion. Only certain vehicles will experience the battery low voltage cell condition.” This Customer Satisfaction Program was released by GM directly to its authorized dealerships and hidden from the public. Moreover, the Customer Satisfaction Program did not apply to 2021 Chevrolet Bolt vehicles.

16. From July 20, 2020 to August 26, 2020, GM received at least four claims alleging that the battery pack in Chevrolet Bolt vehicles had caused a fire. Indeed, GM has now identified at least a dozen battery-related allegations of fire involving 2017-2019 Bolt vehicles, and its internal investigations (spanning from August-November 2020, according to GM) have revealed that in at least five of those cases the fire was related to the battery. In four such cases, the fire occurred when the battery was highly charged just before the fire occurred.

17. Despite GM’s knowledge of the defective batteries in the 2017 to 2019 Chevrolet Bolt vehicles, it continued to manufacture, produce, and sell newer model Chevrolet Bolt vehicles using the same type of defective batteries and concealed the fact that it was doing so. GM included the same type of defective batteries in the 2020, 2021, 2022, and 2023 model year Chevrolet Bolt vehicles.

18. On November 13, 2020, GM announced to all of its authorized dealerships its intent to recall over 50,000 Chevrolet Bolt vehicles because the battery pack posed a risk of fire when charged to full, or very close to full, capacity. Although GM knew that the recall should cover all Chevrolet Bolt vehicles because they were all manufactured with the same type of defective batteries, the recall did not apply to 2020 and later model year Chevrolet Bolt vehicles.

19. Rather than issue a recall to replace the unreasonably dangerous batteries in the Chevrolet Bolt vehicles, GM informed the National Highway Traffic Safety Administration (NHTSA) that the purpose of the recall was to install an interim software fix that called for reprogramming the hybrid propulsion system control module to limit the battery’s range to approximately 214 miles on a single battery charge. At the very least, this programming change dropped the vehicle’s total range on a single charge approximately 10%. GM further instructed owners not to park their cars in their garages or carports until after they have visited their dealer. Although GM knew that the recall should cover all Chevrolet Bolt vehicles because they were all manufactured with the same type of defective batteries, the recall did not apply to 2020 and later model year Chevrolet Bolt vehicles.

20. Cell battery imbalances and/or defects in a battery management system can lead to thermal runaway in battery cells, thereby creating an increased risk of fire. GM has been aware of battery cell imbalances and/or problems with the battery management system of the Chevrolet Bolt vehicles since at least 2017. Indeed, customers have reported failed battery cells and problems indicating defects in the batteries of the Chevrolet Bolt vehicles for several years prior to GM’s recall.

21. On April 30, 2021, GM announced that it could improve upon the November 2020 recall. “That software will also be standard equipment on all new Bolts. Owner notifications of the final remedy are estimated to occur in two phases; the first on May 13, 2021, to address 2019 model year vehicles and the second on May 31, 2021, to address remaining vehicles,” GM told NHTSA. Although GM knew that it should cover all Chevrolet Bolt vehicles because they were all manufactured with the same type of defective batteries, the newly announced recall did not apply to the 2020 and later model year Chevrolet Bolts.

In addition, Plaintiff alleges the following specific allegations that occurred after Plaintiff leased the vehicle in question:

22. On July 23, 2021, GM issued another recall, recall N212343880. This recall stated, “General Motors has decided that a defect which relates to motor vehicle safety exists in certain 2017-2019 model year Chevrolet Bolt EV vehicles. A certain number of these vehicles were built with high voltage batteries produced at LG Chem’s Ochang, Korea facility that may pose a risk of fire when charged to full, or very close to full, capacity. GM previously recalled these vehicles for this condition. Through additional investigation, experts from GM and LG have now identified the root cause, and GM is commencing a new recall to replace defective battery modules in the recall population.” General Motors described the safety risk as, “If the batteries in certain vehicles within this population are charged to full capacity, or very close to full capacity, the batteries may pose a risk of fire.” And General Motors described the repair as follows, “The remedy will be the replacement of defective battery modules in the recall population. Until the updated recall remedy is performed, customers should take the following interim steps; (1) Customers should, whether or not they received the current software update, return their vehicle to the 90% state of charge limitation using Hilltop Reserve mode (for 2017-2018 model years) or Target Charge Level (for 2019 model year) mode. If customers are unable to successfully make these changes, or do not feel comfortable making these changes, we are asking them to visit their dealer to have these adjustments completed. (2) Additionally, we ask that customers charge their vehicle after each use and avoid depleting their battery below approximately 70 miles (113km) of remaining range, where possible. (3) Out of an abundance of caution, customers should continue to park their vehicles outside immediately after charging and not leave their vehicles charging overnight. Owners who have not visited their dealer to receive the original recall remedy should visit their nearest Chevrolet dealer to obtain this important software update, which includes a diagnostic check on the health of their vehicle’s battery system. After obtaining the software update, customers should still take the interim steps summarized above.” Although GM knew that the recall should cover all Chevrolet Bolt vehicles because they were all manufactured with the same type of defective batteries, the recall did not apply to 2020 and later model year Chevrolet Bolt vehicles.

23. On August 20, 2021, GM announced that it was adding all remaining 2019 model Bolt EV and all 2020–2022 Bolt EV and Bolt EUV models to its battery recall. Shortly after the recall was announced, Plaintiff presented the Vehicle to an authorized Chevrolet dealership to have the defective battery replaced pursuant to the terms of Defendant’s express warranty, but the dealership advised him that the parts were not available and it had no information as to when they would be.

24. On December 15, 2022, GM issued yet another recall – recall N222383791 – related to the seatbelt pretensioner. Specifically, the recall states that in “certain crashes that cause the front seatbelt pretensioners to deploy, the exhaust from the deployed pretensioner may ignite fibers in the floor carpet near the B-pillar.” “Following a crash that causes the seatbelt pretensioner to deploy, a fire may develop in the area near the B-pillar, which may increase the risk of injury.” Plaintiff also presented his Vehicle to an authorized Chevrolet dealership to have the seatbelt pretensioner recall performed, but again, the dealership advised that the parts were not available and it had no information as to when they would be.

25. To date, despite Plaintiff’s repeated presentations of the Vehicle to Manufacturer’s authorized repair facilities, Manufacturer has been unable to conform the Vehicle to its express warranties and it remains in a defective condition.

26. GM knew or should have known that the Vehicle was being advertised and sold with false and misleading representations regarding the range of the Vehicle and the risk of fire posed by the defective batteries.

27. As a result of GM’s unfair, deceptive and/or fraudulent business practices, Plaintiff has suffered an ascertainable loss of money and/or property and/or loss in value. The unfair and deceptive trade practices GM has committed were conducted in a manner giving rise to substantial aggravating circumstances. 28. Had Plaintiff known at the time of lease of the true range of the Vehicle and the propensity of the batteries installed in the vehicle to burst into flame, he would not have leased the Vehicle.

            Thus, Plaintiff has provided specific allegations concerning the who, what, where, when, and by what means of the alleged fraudulent concealment and misrepresentations.  Although Plaintiff has not included the specific name of the salesperson to whom Plaintiff spoke on June 3, 2021 when Plaintiff leased the vehicle in question, or the names of the specific individuals at GM who issued the recall announcements, such information is undoubtedly within Defendant’s knowledge.

            On Reply, Defendant argues that Plaintiff has not pleaded damages with sufficient particularity.  In support, Defendant cites two federal cases—one from the District of New Jersey, and one from the Central District of California—where the Plaintiffs happened to include more detailed damages calculations in the complaint.  (See Reply at p. 3.)  Defendant has cited no authority – much less binding authority – standing for the proposition that Plaintiff must plead specific damages calculations with specificity, and the Court declines to impose any such additional requirement.

            Therefore, Plaintiff has sufficiently pleaded a cause of action for fraudulent concealment and misrepresentation with requisite specificity to withstand demurrer.

B.     Second Cause of Action – Negligent Misrepresentation

“The essential elements of a count for negligent misrepresentation are the same [as intentional misrepresentation] except that it does not require knowledge of falsity but instead requires a misrepresentation of fact by a person who has no reasonable grounds for believing it to be true.”  (Chapman v. Skype Inc. (2013) 220 Cal.App.4th 217, 230-231 (hereafter Chapman).)  Like intentional misrepresentation, causes of action for negligent misrepresentation sound in fraud, and must also, therefore, be pleaded with particularity.  (Ibid.) 

Therefore, for the same reasons, Plaintiff has sufficiently pleaded a cause of action for negligent misrepresentation with requisite specificity to withstand a demurrer.

Defendant argues on reply that Plaintiff fails to plead facts demonstrating that Defendant is liable for the salesperson’s conduct or statements about the subject vehicle.  In this regard, Plaintiff alleges, “When Plaintiff arrived at the dealership, he met with the salesperson who was authorized to speak on behalf of Manufacturer with respect to the Chevrolet vehicles the dealership was selling.”  (FAC ¶ 8.)  Plaintiff also alleges:

5. All acts of corporate employees as alleged were authorized or ratified by an officer, director or managing agent of the corporate employer.

6. Each Defendant whether actually or fictitiously named herein, was the principal, agent (actual or ostensible), co-conspirator, or employee of each other Defendant and in acting as such principal or within the course and scope of such employment, agency, or conspiracy, took some part in the acts and omissions hereinafter set forth by reason of which each Defendant is liable to Plaintiff for the relief prayed for herein.  

            Defendant cites to several distinguishable cases in support of its argument that it is not liable for the conduct of the dealership’s employees.  At issue in Mel Clayton GM LLC v. GM LLC Motor Co. (2002) 104 Cal.App.4th 46, 49, was whether Defendant had a contractual duty to indemnify the dealer for damages dealer paid to consumer, stemming from dealer’s negligence.  The court analyzed the contract between dealer and manufacturer, and determined it did not.  It did not stand for the proposition, as Defendant contends, that “an automaker is not liable for the independent negligence of a dealership employee[…]” 

            And in Avalon Painting Co. v. Alert Lumber Co. (1965) 234 Cal.App.2d 178, 184, the appellate court noted that agency is typically a question of fact, before determining that the question could not be determined on demurrer at the pleadings stage.  It does not stand for the proposition that a dealer can never be an agent “in the legal sense of that relationship.”  Moreover, Vandermark v. Ford Motor Co. (1964) 61 Cal.2d 256, upon which Avalon purportedly relies, does not involve agency at all – that case analyzed strict liability as to manufacturer and dealer separately, and ultimately reversed the nonsuit held in manufacturer Ford’s favor.

            Thus, whether and to what extent the salesperson acted as an agent, actual or ostensible, for Defendant or Defendant ratified the salesperson’s statements or conduct are factual questions to be determined at later stages of the litigation.   

Moreover, Plaintiff alleges specific misrepresentations made by Defendant, in addition to those made by the salesperson:

GM intentionally misrepresented material facts about the about the Vehicle through its advertisements, publications, and warranties, in addition to its authorized dealership’s salesperson who was authorized to speak on behalf of GM. Specifically, GM through its advertisements, publications, warranties and salesperson represented that the 2021 Chevrolet Bolt EV could travel 259 miles on a single charge, that it could be charged indoors at Plaintiff’s home, that the Vehicle was safe, and that it if it had a defect during the express warranty period, GM would repair it at no charge to Plaintiff.

(FAC ¶ 37.)  Therefore, Plaintiff has sufficiently pleaded negligent misrepresentation as to Defendant.

C.    Third Cause of Action – Business & Professions Code section 17200

Business & Professions Code section 17200, known as the Unfair Competition Law, or “UCL,” bars unfair competition, defined as “any unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising and any act prohibited by Chapter 1 (commencing with Section 17500) of Part 3 of Division 7 of the Business and Professions Code.

“An ‘unlawful’ business practice or act within the meaning of the UCL is an act or practice, committed pursuant to business activity, that is at the same time forbidden by law.”  (Bernardo v. Planned Parenthood Federation of America (2004) 115 Cal.App.4th 322, 351.)  “By proscribing ‘any unlawful’ business practice, section 17200 borrows violations of other laws and treats them as unlawful practices that the unfair competition law makes independently actionable.”  (Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Co. (1999) 20 Cal.4th 163, 180.)  Moreover, “a practice may be deemed unfair even if not specifically proscribed by some other law.”  (Ibid.)

The FAC alleges Defendant violated all three prongs.  Specifically, it alleges, “GM’s conduct is unlawful because, as set forth herein, it violates the Song-Beverly Consumer Warranty Act and the Consumer Legal Remedies Act, among other laws.”  (FAC ¶ 51.)  Further, it alleges, “GM’s conduct is unfair because it violated California’s public policy, including that legislatively declared in the Song-Beverly Consumer Warranty Act, which requires a manufacturer to ensure that goods it places on the market are fit for their ordinary and intended purposes.  The defect impedes safe and reliable driving of the Vehicle.”  (FAC ¶ 52.)  Finally, the FAC alleges, “GM’s fraudulent acts include knowingly and intentionally concealing from Plaintiff the existence of the defect and falsely marketing and misrepresenting the Vehicle as being functional and not possessing a defect that impedes safe and reliable driving.”  (FAC ¶ 55.)

Defendant contends Plaintiff fails to state a UCL claim with sufficient particularity, and Plaintiff lacks standing because Plaintiff does not allege to have lost money or property as a result of the unfair competition, as required by Business and Professions Code section 17204.

As a threshold matter, the unlawful and unfair prongs do not require heightened particularity.  For this reason alone, Plaintiff’s UCL cause of action is sufficient to withstand demurrer.

With respect to a UCL claim premised on fraud against a corporation, Defendant argues that Plaintiff “must allege the names of the persons who made the misrepresentations, their authority to speak for the corporations, to whom they spoke, what they said or wrote, and when it was said or written.”  (Demurrer at p. 10.)  In support, Defendant cites Tarmann v. State Farm Mutual Automobile Insurance Co. (1991) 2 Cal.App.4th 153, 157.)  But Tarmann goes on to state that these requirements are relaxed when that information is within Defendant’s knowledge. 

Here, Plaintiff alleges that the official advertising for the 2021 Chevrolet Bold EV, upon which Plaintiff relied in doing his research prior to deciding to lease the subject vehicle, represented that the vehicle was capable of traveling 259 miles on a single charge, could be charged indoors at home, was safe, and if it had a defect during the express warranty period, Manufacture would repair it no charge.  (FAC ¶ 8.)  Plaintiff further alleges, that despite knowing since 2017 that the batteries had a tendency to catch fire while charging, resulting in a series of vehicle recalls whereby Defendant reprogrammed the vehicle software to reduce the total miles the vehicles could travel on a single charge, Defendant continued to make these representations in its official advertising for the 2021 Bolt EV, even though it contained the exact same battery as the recalled models of prior years.  (FAC ¶¶ 13-26.)

Therefore, while Plaintiff has not pleaded the specific name(s) of the individual(s) at GM responsible for the advertising, Plaintiff has pleaded with sufficient particularity that the official advertising by Defendant for the 2021 Chevrolet Bolt EV contained misrepresentations about the car’s mileage range and safety, despite knowing the representations were allegedly untrue.

As such, Plaintiff’s UCL cause of action withstands demurrer.

2.      MOTION TO STRIKE

Any party, within the time allowed to respond to a pleading, may serve and file a motion to strike the whole pleading or any part thereof.  (Code Civ. Proc., § 435, subd. (b)(1); Cal. Rules of Court, rule 3.1322, subd. (b).)  On a motion to strike, the court may: (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.  (Code Civ. Proc., § 436, subd. (a)-(b); Stafford v. Shultz (1954) 42 Cal.2d 767, 782.)  Here, Chan moves to strike from the complaint, references to and claims for punitive damages.    

In ruling on a motion to strike punitive damages, “judges read allegations of a pleading subject to a motion to strike as a whole, all parts in their context, and assume their truth.”  (Clauson v. Superior Court (1998) 67 Cal.App.4th 1253, 1255.)  To state a prima facie claim for punitive damages, a plaintiff must allege the elements set forth in the punitive damages statute, Civil Code section 3294.  (College Hosp., Inc. v. Superior Court (1994) 8 Cal.4th 704, 721.)  Per Civil Code section 3294, a plaintiff must allege that the defendant has been guilty of oppression, fraud, or malice.  (Civ. Code, § 3294, subd. (a).)   As set forth in the Civil Code,

(1) “Malice” means conduct which is intended by the defendant to cause injury to the plaintiff or despicable conduct which is carried on by the defendant with a willful and conscious disregard of the rights or safety of others.  (2) “Oppression” means despicable conduct that subjects a person to cruel and unjust hardship in conscious disregard of that person's rights.  (3) “Fraud” means an intentional misrepresentation, deceit, or concealment of a material fact known to the defendant with the intention on the part of the defendant of thereby depriving a person of property or legal rights or otherwise causing injury.

(Civ. Code, § 3294, subd. (c)(1)-(3), emphasis added.) 

Further, a plaintiff must assert facts with specificity to support a conclusion that a defendant acted with oppression, fraud or malice.  To wit, there is a heightened pleading requirement regarding a claim for punitive damages.  (See Smith v. Superior Court (1992) 10 Cal.App.4th 1033, 1041-1042.)  “When nondeliberate injury is charged, allegations that the defendant’s conduct was wrongful, willful, wanton, reckless or unlawful do not support a claim for exemplary damages; such allegations do not charge malice.  When a defendant must produce evidence in defense of an exemplary damage claim, fairness demands that he receive adequate notice of the kind of conduct charged against him.” (G. D. Searle & Co. v. Superior Court (1975) 49 Cal.App.3d 22, 29 [cleaned up].)  In Anschutz Entertainment Group, Inc. v. Snepp, the Court of Appeal noted that the plaintiffs’ assertions related to their claim for punitive damages were “insufficient to meet the specific pleading requirement.”  (Anschutz Entertainment Group, Inc. v. Snepp (2009) 171 Cal.App.4th 598, 643 [plaintiffs alleged “the conduct of Defendants was intentional, and done willfully, maliciously, with ill will towards Plaintiffs, and with conscious disregard for Plaintiff's rights. Plaintiff's injuries were exacerbated by the malicious conduct of Defendants. Defendants' conduct justifies an award of exemplary and punitive damages”]; see also Grieves v. Superior Court (1984) 157 Cal.App.3d 159, 166 [“The mere allegation an intentional tort was committed is not sufficient to warrant an award of punitive damages.  Not only must there be circumstances of oppression, fraud, or malice, but facts must be alleged in the pleading to support such a claim”].) 

Here, as discussed above, Plaintiff has alleged facts with requisite specificity to state  a cause of action for fraudulent concealment and misrepresentation against Defendant.  As such, the Court finds that the allegations adequately support a claim for punitive damages against Defendant.    

CONCLUSION AND ORDER

For the reasons stated, the Court overrules Defendant’s Demurrer to the First, Second, and Third Causes of Action, and denies Defendant’s Motion to Strike. 

Further, the Court orders Defendant to file and serve an Answer to the FAC on or before December 12, 2023.    

Defendant shall provide notice of the Court’s ruling and file a proof of service regarding the same. 

DATED:  November 28, 2023                                                ___________________________

                                                                                          Michael E. Whitaker

                                                                                          Judge of the Superior Court