Judge Michael T. Smyth, Case 37-2023-00037870-CU-BC-CTL 2024-03-01 Tentative Ruling

Judge: Michael T. Smyth, Case: 37-2023-00037870-CU-BC-CTL, Date: 2024-03-01 Tentative Ruling

SUPERIOR COURT OF CALIFORNIA,

DEPT.:

EVENT DATE:

EVENT TIME:

HALL OF JUSTICE

TENTATIVE RULINGS - February 29, 2024

03/01/2024 09:00:00 AM C-67 COUNTY OF SAN DIEGO

JUDICIAL OFFICER:Michael T. Smyth

CASE NO.:

CASE CATEGORY:

EVENT TYPE:

CASE TITLE: CASE TYPE:

Civil - Unlimited Breach of Contract/Warranty Demurrer / Motion to Strike 37-2023-00037870-CU-BC-CTL FORTENBERRY VS FORD MOTOR COMPANY [IMAGED] CAUSAL DOCUMENT/DATE FILED: Demurrer, 10/05/2023

Defendant Ford Motor Company's Demurrer is OVERRULED.

A demurrer may be sustained upon defects that appear on the face of the pleading or any matter of which the court takes judicial notice. (Code Civ. Proc., § 430.30.) Courts 'treat the demurrer as admitting all material facts properly pleaded, but not contentions, deductions, or conclusions of fact or law.' (Sarale v. Pacific Gas & Electric Co. (2010) 189 Cal.App.4th 225, 245.) A demurrer may be sustained where the pleading 'does not state facts sufficient to constitute a cause of action. (Code Civ.

Proc., § 430.10(e).) A demurrer is also proper where it discloses a complete defense that would bar the plaintiff's recovery. (Guardian North Bay, Inc. v. Superior Court (2001) 94 Cal.App.4th 963, 971-972.) 1. Third Cause of Action for Violation of Civil Code section 1793(a)(3) Civil Code section 1793.2(a)(3) requires a manufacturer to '[m]ake available to authorized service and repair facilities sufficient service literature and replacement parts to effect repairs during the express warranty period.' Plaintiff alleges that Defendant 'failed to make available to its authorized service and repair facilities sufficient service literature and replacement parts to effect repairs during the express warranty period' and that such failure was willful. (ROA 1, Compl., ¶¶ 49-50.) Defendant argues that Plaintiff has not plead this cause of action with sufficient particularity and only repeated the statutory language. (E.g., Carter v. Prime Healthcare Paradise Valley LLC (2011) 198 Cal.App.4th 396, 410 [requiring causes of action seeking statutory remedies to be pleaded with particularity].) Defendant contends that Plaintiff is required to allege what literature or replacement parts were not made available to the authorized service and repair facilities and how that failure injured Plaintiff. Plaintiff has provided examples of literature that Defendant did provide that arguably failed to correct the alleged defects.

Additional facts related to this cause of action are within the knowledge of the Defendant. The pleadings are sufficient at this stage.

2. Fifth Cause of Action for Fraudulent Inducement - Concealment '[T]he elements of a cause of action for fraud based on concealment are: (1) the defendant must have concealed or suppressed a material fact, (2) the defendant must have been under a duty to disclose the fact to the plaintiff, (3) the defendant must have intentionally concealed or suppressed the fact with the intent to defraud the plaintiff, (4) the plaintiff must have been unaware of the fact and would not have acted as he did if he had known of the concealed or suppressed fact, and (5) as a result of the concealment or suppression of the fact, the plaintiff must have sustained damage.' (Jones v. ConocoPhillips Co. (2011) 198 Cal. App. 4th 1187, 1198 [cleaned up].) Calendar No.: Event ID: TENTATIVE RULINGS

3092481 10 CASE NUMBER: CASE TITLE: FORTENBERRY VS FORD MOTOR COMPANY [IMAGED] 37-2023-00037870-CU-BC-CTL Defendant makes three arguments against Plaintiffs' concealment claim. The court rejects each of these arguments.

First, Defendant argues that it had no duty to disclose any information to Plaintiff because there was no contractual or transactional relationship between Plaintiff and Ford. A duty to disclose arises where the defendant is either: (1) 'in a fiduciary relationship with the plaintiff'; (2) 'had exclusive knowledge of material facts not known to plaintiff'; (3) 'actively conceals a material fact from the plaintiff'; or (4) 'makes partial representations but also suppresses some material fact.' (LiMandri v. Judkins (1997) 52 Cal.App.4th 326, 337.) Generally, there must be some transactional relationship, as a duty of disclosure may only 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, 311-312 [in the context of proceedings that went to trial].) However, in cases involving a failure to disclose material information, a direct relationship may not be required. (E.g., OCM Principal Opportunities Fund, L.P. v. CIB World Markets Corp. (2007) 157 Cal.App.4th 835, 859 [holding a vendor 'has a duty to disclose material facts not only to the immediate purchasers, but also to subsequent purchaser when the vendor has reason to expect that the item will be resold.'].) Here, Plaintiffs have alleged Defendant had exclusive knowledge of the true extent of the defect (regardless of whether TSBs were public) and actively concealed information regarding that defect.

Additionally, the relationship between Defendant and Plaintiffs is more particular than one between Defendant and the public at large due to the warranty agreement between the parties. (Compl., ¶¶ 9-10.) This is sufficient for the pleading stage. (See, e.g., Scherer v. FCA US, LLC (S.D. Cal. 2021) 565 F.Supp.3d 1184, 1194 [discussion of Bigler-Engler case and holding that a failure to disclose claim is properly grounded on contractual relationship reflected in the warranty agreement].) Second, Defendant argues that Plaintiff's allegations are insufficiently specific. But as the court found in Dhital v. Nissan North America, Inc. (2022) 84 Cal.App.5th 828,[1] Plaintiff's allegations are sufficient. In that case, the First District Court of Appeal found it sufficient where a plaintiff had alleged '[systems] installed in numerous Nissan vehicles (including the one plaintiffs purchased) were defective; Nissan knew of the defects and the hazards they posed; Nissan had exclusive knowledge of the defects but intentionally concealed and failed to disclose that information; Nissan intended to deceive plaintiffs by concealing known transmission problems; plaintiffs would not have purchased the car if they had known of the defects; and plaintiffs suffered damages in the form of money paid to purchase the car.' (Id. at 844.) Plaintiffs were specifically not 'required to include in the SAC more detailed allegations about the alleged defects' or the manufacturer's knowledge where it had superior information. (Ibid.) Here, Plaintiff has sufficiently alleged that she entered a warranty contract with Ford on March 29, 2019 (Compl. ¶¶ 9-10); that Ford knew of those defects and withheld from Plaintiff (id. ¶ 25); that Defendant had superior knowledge of the facts (id. ¶¶ 26, 61, 64a-c); the safety risks posed by the Transmission Defect (id. ¶¶ 25, 60); the materiality of that information (id. ¶¶ 66-67); Plaintiff's reliance on the nondisclosure (ibid.); and damages (id. ¶¶ 16, 23, 69-70.) This is sufficient, particularly given that the specificity requirement is greatly relaxed or eliminated under circumstances where the defendant must necessarily possess superior information of the fraud. (See, e.g., Committee on Children's Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 216-217.) Third, Defendant argues that Plaintiff's fifth cause of action is barred by the economic loss rule. The reasoning in Dhital also forecloses this argument. In Dhital, the Court of Appeal analyzed Robinson Helicopter Co., Inc. v. Dana Corp (2004) 34 Ca.4th 979 and determined that fraudulent concealment was exempt from the economic loss rule because it involved a tort 'either completely independent of the contract or aris[ing] from conduct which is both intentional and intended to harm.' (Dhital, supra, 84 Cal.App.5th at 838 [quoting Robinson, supra, 34 Cal.4th at 989-990].) While Defendant cites to Ochoa v. Ford Motor Company (2023) 89 Cal.App.5th 1324 ('Ford Motor Warranty Cases')[2] to suggest that the economic loss rule would apply, that case is inapposite. Ford Motor Warranty Cases involved the question of whether Ford was entitled to enforce an arbitration agreement between the plaintiff and the Calendar No.: Event ID: TENTATIVE RULINGS

3092481 10 CASE NUMBER: CASE TITLE: FORTENBERRY VS FORD MOTOR COMPANY [IMAGED] 37-2023-00037870-CU-BC-CTL dealer, where Ford was not a party to the agreement. Ford Motor Warranty Cases expresses no view on the requirements for bringing fraudulent concealment claims against a manufacturer or whether the economic loss rule would bar such claims. Moreover, the quoted passage on Reply (see Reply at pp.

9:15-10:4) does not appear in Ford Motor Warranty Cases and instead appears in Lorenzo Altamirano-Torres v. Ford Motor Co. (C.D. Cal. 2020) 483 F. Supp. 3d 838, 848-849 ('In re Ford Motor Co. DPS6 Powershift Transmission Products Liability Litigation'). The analysis from a federal court opinion pre-dating Dhital has little if any persuasive value. Until such a time that the California Supreme Court decides otherwise, the court will follow the reasoning in Dhital to 'conclude that, under California law, the economic loss rule does not bar plaintiffs' fraudulent inducement claim.' (Dhital, supra, 84 Cal.App.5th at 833.) The demurrer is overruled./n [1] The court understands that Dhital is on hold by the California Supreme Court pending its decision in Rattagan v. Uber Technologies, Inc. (2022) S272113 wherein the Court will answer the Ninth Circuit's question: 'Under California law, are claims for fraudulent concealment exempted from the economic loss rule?' Until the Court issues its opinion, Dhital 'may be cited for potentially persuasive value only.' (Cal.

Rules of Court, rule 8.1115(e)(1).) However, the court finds much of Dhital's reasoning persuasive.

[2] The court notes that this case is also on review to the California Supreme Court and may only be cited for persuasive value on the issues raised here, to the degree it is relevant at all.

Calendar No.: Event ID: TENTATIVE RULINGS

3092481 10