Judge: Michael P. Linfield, Case: 23STCV20938, Date: 2024-01-12 Tentative Ruling

Case Number: 23STCV20938    Hearing Date: January 12, 2024    Dept: 34

SUBJECT:        Demurrer to Complaint

Moving Party: Defendant General Motors LLC

Resp. Party:    Plaintiff Juana Silva

SUBJECT:        Motion to Strike Punitive Damages from Complaint

Moving Party: Defendant General Motors LLC

Resp. Party:    Plaintiff Juana Silva

The Demurrer is OVERRULED.

The Motion to Strike is DENIED.

BACKGROUND:

On August 30, 2023, Plaintiff Juana Silva filed her Complaint against Defendant General Motors LLC on causes of action arising from issues Plaintiff had with her vehicle.

On November 9, 2023, Defendant filed its Demurrer to Complaint and Motion to Strike Punitive Damages from Complaint. In support of these filings, Defendant concurrently filed: (1) Declaration of Ryan Kay; and (2) Proposed Order (one for the Demurrer and one for the Motion to Strike).

On December 4, 2023, Plaintiff filed her Oppositions to the Demurrer and the Motion to Strike.

On December 8, 2023, Defendant filed its Replies regarding the Demurrer and the Motion to Strike.

ANALYSIS:

I.          Demurrer

A.      Legal Standard

“The party against whom a complaint or cross-complaint has been filed may object, by demurrer or answer as provided in Section 430.30, to the pleading on any one or more of” various grounds listed in statute. (Code Civ. Proc., § 430.10.)

“When any ground for objection to a complaint, cross-complaint, or answer appears on the face thereof, or from any matter of which the court is required to or may take judicial notice, the objection on that ground may be taken by a demurrer to the pleading.” (Code Civ. Proc., § 430.30, subd. (a).)

“A demurrer to a complaint or cross-complaint may be taken to the whole complaint or cross-complaint or to any of the causes of action stated therein.” (Code Civ. Proc., § 430.50, subd. (a).)

“In reviewing the sufficiency of a complaint against a general demurrer, we are guided by long-settled rules. We treat the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law. We also consider matters which may be judicially noticed. Further, we 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, citations and internal quotation marks omitted.)

B.      Discussion

Defendant demurs to the third and fourth causes of action in the Complaint.

1.      Third Cause of Action — Fraudulent Concealment

a.     Legal Standard

“The elements of fraud are (a) a misrepresentation (false representation, concealment, or nondisclosure); (b) scienter or knowledge of its falsity; (c) intent to induce reliance; (d) justifiable reliance; and (e) resulting damage.” (Hinesley v. Oakshade Town Ctr. (2005) 135 Cal.App.4th 289, 294.)

The elements of a cause of action for negligent misrepresentation include “[m]isrepresentation of a past or existing material fact, without reasonable ground for believing it to be true, and with intent to induce another’s reliance on the fact misrepresented; ignorance of the truth and justifiable reliance on the misrepresentation by the party to whom it was directed; and resulting damage.” (Hydro-Mill Co., Inc. v. Hayward, Tilton & Rolapp Ins. Associates, Inc. (2004) 115 Cal.App.4th 1145, 1154, quotation marks omitted.)

The facts constituting the alleged fraud must be alleged factually and specifically as to every element of fraud, as the policy of “liberal construction” of the pleadings will not ordinarily be invoked. (Lazar v. Super. Ct. (1996) 12 Cal.4th 631, 645.)

To properly allege fraud against a corporation, the plaintiff must plead the names of the persons allegedly making the false representations, their authority to speak, to whom they spoke, what they said or wrote, and when it was said or written. (Tarmann v. State Farm Mut. Auto. Ins. Co. (1991) 2 Cal.App.4th 153, 157.)

b.     Discussion

        Defendant demurs to the third cause of action for fraudulent concealment, arguing: (1) that the three-year statute of limitations bars Plaintiff’s fraud claims; (2) that the third cause of action fails because Plaintiff does not plead fraud with required specificity; (3) that the third cause of action fails because Plaintiff does not allege a transactional relationship between Plaintiff and Defendant giving rise to a duty to disclose; and (4) that omissions and concealment causes of action cannot be based upon non-actionable puffery. (Demurrer, pp. 9:11–12, 10:7–8, 11:1–3, 20:10–11.)

        The Court disagrees with Defendant’s arguments.

“The limitations period for fraud is three years. (Code Civ. Proc., § 338, subd. (c).) The limitations period for breach of fiduciary duty is at most four years. (Code Civ. Proc., § 343.) The limitations period for unfair and unlawful business practices is four years. (Bus. & Prof. Code, § 17208.)” (Vaca v. Wachovia Mortgage Corp. (2011) 198 Cal.App.4th 737, 744, fn. 4.)

“The statute of limitations usually commences when a cause of action accrues, and it is generally said that an action accrues on the date of injury. Alternatively, it is often stated that the statute commences upon the occurrence of the last element essential to the cause of action. These general principles have been significantly modified by the common law ‘discovery rule,’ which provides that the accrual date may be delayed until the plaintiff is aware of her injury and its negligent cause.” (Bernson v. Browning-Ferris Indus. (1994) 7 Cal.4th 926, 931 [cleaned up].)

“A close cousin of the discovery rule is the well accepted principle of fraudulent concealment. It has long been established that the defendant's fraud in concealing a cause of action against him tolls the applicable statute of limitations, but only for that period during which the claim is undiscovered by plaintiff or until such time as plaintiff, by the exercise of reasonable diligence, should have discovered it. Like the discovery rule, the rule of fraudulent concealment is an equitable principle designed to effect substantial justice between the parties; its rationale is that the culpable defendant should be estopped from profiting by his own wrong to the extent that it hindered an otherwise diligent plaintiff in discovering his cause of action.” (Bernson, supra, at p. 931 [cleaned up].)

“While ignorance of the existence of an injury or cause of action may delay the running of the statute of limitations until the date of discovery, the general rule in California has been that ignorance of the identity of the defendant is not essential to a claim and therefore will not toll the statute. As we have observed, the statute of limitations begins to run when the plaintiff suspects or should suspect that her injury was caused by wrongdoing, that someone has done something wrong to her. Aggrieved parties generally need not know the exact manner in which their injuries were effected, nor the identities of all parties who may have played a role therein.” (Bernson, supra, at p. 932 [cleaned up].)

        Among other things, Plaintiff alleges: (1) that Plaintiff purchased a 2018 Chevrolet Silverado on March 5, 2018; (2) that Defendant knew about the problems with the vehicle; (3) that Defendant concealed the problems and refused to resolve them; (4) that Defendant knowingly concealed this information from Plaintiff at the time of purchase and throughout the repair efforts; (5) that Defendant promised Plaintiff that the vehicle would conform to the applicable warranties when Defendants knew the vehicle’s defect could not be repaired; (6) that Plaintiff’s relied on Defendant and thought Defendant was being fully transparent; (7) that Plaintiff has only recently learned of the intentional concealment of the information; and (6) that Plaintiff has suffered damages as a direct and proximate result of Defendants’ misrepresentations and concealment of material facts. (Complaint, ¶¶ 5, 133–137.)

        These allegations are sufficient to allege each of the elements of a cause of action for fraudulent concealment. They do not constitute non-actionable puffery, and they do meet the heightened pleading requirements for a cause of action of fraud. Further, given that the Court must assume the truth of all allegations in a complaint when considering a demurrer, Plaintiff’s allegations in her Complaint sufficiently withstand demur on ground of statute of limitations due to tolling from the discovery rule and the principle of fraudulent concealment.

        The Court OVERRULES the Demurrer to the third cause of action for fraudulent concealment.

2.          Fourth Cause of Action — Consumer Legal Remedies Act

a.     Legal Standard

The Consumer Legal Remedies Act (CLRA) prohibits certain unfair methods of competition and unfair or deceptive acts or practices undertaken by any person in a transaction intended to result or that results in the sale or lease of goods or services to any consumer. (Civ. Code, § 1770.)

Among these prohibited acts are:

(1)       Representing that goods or services are of a particular standard, quality, or grade, or that goods are of a particular style or model, if they are of another.

(2)             Representing that the subject of a transaction has been supplied in accordance with a previous representation when it has not.

(3)             Inserting an unconscionable provision in the contract.

(Civ. Code, § 1770, subds. (a)(7), (a)(16), (a)(19).)

“Any consumer who suffers any damage as a result of the use or employment by any person of a method, act, or practice declared to be unlawful by Section 1770 may bring an action against that person . . . .” (Civ. Code, § 1780, subd. (a).)

b.     Discussion

        Defendant demurs to the fourth cause of action for violations of the CLRA, arguing: (1) that Plaintiff did not provide adequate notice to properly plead a CLRA violation; (2) that Plaintiff’s allegations do not state a viable claim for violation of the CLRA; (3) that Plaintiff’s concealment allegations are insufficient as a matter of law; (4) that Plaintiff’s CLRA claim fails because Plaintiff did not plead fraud with the required specificity; and (5) that omissions and concealment causes of action cannot be based upon non-actionable puffery. (Demurrer, pp. 12:23–24, 13:25–26, 15:1–2, 17:1–2, 20:10–11.)

        The Court disagrees with Defendant’s arguments.

        The same allegations discussed above regarding the third cause of action are sufficient for the fourth cause of action to withstand demur. That is because those allegations sufficiently plead the elements of a cause of action for violation of the CLRA, the allegations do not constitute non-actionable puffery, and, to the extent necessary, they meet the heightened pleading standard for fraud.

        The “notice” requirement requires additional consideration. 

“Thirty days or more prior to the commencement of an action for damages pursuant to this title, the consumer shall do the following:

“(1) Notify the person alleged to have employed or committed methods, acts, or practices declared unlawful by Section 1770 of the particular alleged violations of Section 1770.

“(2) Demand that the person correct, repair, replace, or otherwise rectify the goods or services alleged to be in violation of Section 1770.

“The notice shall be in writing and shall be sent by certified or registered mail, return receipt requested, to the place where the transaction occurred or to the person’s principal place of business within California.” (Civ. Code, § 1782, subd. (a).)

“Except as provided in subdivision (c), no action for damages may be maintained under Section 1780 if an appropriate correction, repair, replacement, or other remedy is given, or agreed to be given within a reasonable time, to the consumer within 30 days after receipt of the notice.” (Civ. Code, § 1782, subd. (b).)

“An action for injunctive relief brought under the specific provisions of Section 1770 may be commenced without compliance with subdivision (a). Not less than 30 days after the commencement of an action for injunctive relief, and after compliance with subdivision (a), the consumer may amend his or her complaint without leave of court to include a request for damages. The appropriate provisions of subdivision (b) or (c) shall be applicable if the complaint for injunctive relief is amended to request damages.” (Civ. Code, § 1782, subd. (d).)

        Plaintiff argues that the notice requirement does not apply because Plaintiff only requested injunctive relief, citing Civil Code section 1782, subdivision (d). (Opposition to Demurrer, p. 15:8.)

        This is accurate. The Complaint explicitly states:

“Simultaneously with the filing of this Complaint, Plaintiff notified Defendants of the particular alleged violations of § 1770 and demanded that it correct, repair, replace, or otherwise rectify the goods or services alleged to be in violation of § 1770. . . . Although Plaintiff has suffered damages in the amount of at least $70,909.25, no damages are sought on Plaintiff’s claim pursuant to the CLRA at the time of the filing of this Complaint. By operation of law, and without leave of Court, this Complaint will be amended to state a claim for damages pursuant to Civ. Code, § 1782(d) upon the expiration of thirty days after the notice is given.”

(Complaint, ¶¶ 152–153.)

        The Complaint was filed on August 30, 2023, and the applicable notice was sent by Plaintiff to Defendant that same day. More than thirty days have passed since the notice was provided. The Court does not see any issues with the formatting of the notice or how it was provided. Thus, Plaintiff may amend the Complaint to request damages in accordance with the provisions of Civil Code section 1782. In any case, with the notice requirement met, the fourth cause of action for violation of CLRA withstands demur.

        The Court OVERRULES the Demurrer to the fourth cause of action for violation of CLRA.

C.      Conclusion

The Demurrer is OVERRULED.

II.       Motion to Strike

A.      Legal Standard

“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, but this time limitation shall not apply to motions specified in subdivision (e).” (Code Civ. Proc., § 435, subd. (b)(1).)

“The court may, upon a motion made pursuant to Section 435, or at any time in its discretion, and upon terms it deems proper:

“(a) Strike out any irrelevant, false, or improper matter inserted in any pleading.

“(b) Strike out all or any part of any pleading not drawn or filed in conformity with the laws of this state, a court rule, or an order of the court.”

(Code Civ. Proc., § 436.)

“The grounds for a motion to strike shall appear on the face of the challenged pleading or from any matter of which the court is required to take judicial notice.” (Code Civ. Proc., § 437, subd. (a).)

“A notice of motion to strike a portion of a pleading must quote in full the portions sought to be stricken except where the motion is to strike an entire paragraph, cause of action, count, or defense. Specifications in a notice must be numbered consecutively.” (Cal. Rules of Court, rule 3.1322(a).)

B.      Discussion

Defendant moves the Court to strike punitive damages from the Complaint, arguing: (1) that the Court may strike from a pleading any irrelevant, false, or improper matter; (2) that claims for damages which may not be imposed may properly be stricken from a pleading; (3) that as a matter of law Plaintiff may not recover punitive damages based upon the Song-Beverly Consumer Warranty Act; (4) that the Complaint does not state facts sufficient to support the recovery of punitive damages; and (5) that Plaintiff’s cause of action for violation of the CLRA does not state facts sufficient to state a cause of action and therefore cannot support punitive damages. (Motion to Strike, pp. 3:23–24, 4:3–4, 4:13–14, 4:20–21, 6:4–5.)

In its Reply, Defendant reiterates these arguments and broadens them.

The Court disagrees with Defendant’s arguments.

Case law has directly held contrary to Defendant’s arguments in a situation that appears to be exactly on point. (See Anderson v. Ford Motor Co. (2022) 74 Cal.App.5th 946.) As neither Plaintiff’s Counsel nor Defense Counsel cited Anderson in their filings, the Court encourages the Counsel for both Parties to read the case.

Here, Plaintiff has alleged different conduct that would lead to violations of fraud and the CLRA than the conduct that would lead to violations of the Song-Beverly Consumer Warranty Act. (Complaint, ¶¶ 123–131, 133–140, 146–154.) It is possible for Plaintiff to obtain both punitive damages for the former and civil penalties for the latter so long as the conduct that leads to the various causes of action are indeed different. (Anderson, supra, 74 Cal.App.5th at p. 973.)

At the demurrer stage, Plaintiff is entitled to allege that Defendant acted in manners that make both civil penalties and punitive damages available. It will ultimately be Plaintiff’s burden to prove that she is entitled to the relief she seeks.

C.      Conclusion

The Motion to Strike is DENIED.