Judge: Michelle Williams Court, Case: 20STCV05524, Date: 2022-09-13 Tentative Ruling
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Case Number: 20STCV05524 Hearing Date: September 13, 2022 Dept: 74
20STCV05524 CHARLES
MENDOZA vs FCA US, LLC
Motion for Summary Judgment
TENTATIVE RULING: Defendants’ Motion for Summary
Judgment is GRANTED as to Defendant FCA US, LLC and DENIED as to and Redlands
Automotive Sales, Inc. dba Tom Bell's Redlands Chrysler Dodge Jeep Ram.
Background
On February 11, 2020, Plaintiffs Charles Mendoza and Julie Mendoza filed
this lemon law action against Defendants FCA US, LLC (“FCA”) and Redlands
Automotive Sales, Inc. dba Tom Bell's Redlands Chrysler Dodge Jeep Ram
(erroneously sued as Tom Bell’s Redlands Chrysler Dodge Jeep Ram) (“Tom
Bells”). The complaint alleged Plaintiffs purchased a 2010 Chrysler Town and
Country from Tom Bells on April 28, 2010. The complaint alleges the vehicle
suffered dozens of defects, including with the Totally Integrated Power Module
(“TIPM”).
The
complaint asserts causes of action for: (1) violation of subdivision (d) of Civil Code Section 1793.2, (2)
violation of subdivision (b) of Civil Code Section 1793.2, (3) violation of
subdivision (A)(3) of Civil Code Section 1793.2, (4) breach of express written
warranty (Civ. Code, § 1791.2, Subd. (a); § 1794), (5) breach of implied warranty of
merchantability (Civ. Code, § 1791.1; § 1794; § 1795.5) (6) fraudulent inducement—concealment and
(7) negligent repair.
Motion
On November 19, 2021, Defendants
FCA US, LLC and Redlands Automotive Sales, Inc. dba Tom Bell's Redlands
Chrysler Dodge Jeep Ram (erroneously sued as Tom Bell’s Redlands Chrysler Dodge
Jeep Ram) filed their motion for summary judgment and adjudication arguing all
of Plaintiffs’ claims are barred by the statute of limitations and the sixth
cause of action for fraudulent inducement is barred by the economic loss rule, and
Plaintiffs cannot prove the elements of the fraud claim.
Opposition
In opposition, Plaintiffs contend they have provided
sufficient evidence to state a claim for fraud, Defendants defenses are
inapplicable, and the statute of limitations was tolled by delayed discovery.
The Court notes Plaintiffs’ use of extensive
argument in footnotes, using a type far smaller than permitted by California
Rules of Court, rule 2.104, is a transparent attempt to exceed the page
limitations imposed by Rule 3.1113(d).
Reply
The Court did not receive a timely reply. (Code Civ.
Proc. § 437c(b)(4) (“A reply to the opposition shall be served and filed by the
moving party not less than five days preceding the noticed or continued date of
hearing.”).)
Plaintiffs’ Evidentiary Objections in
Opposition
Each of Plaintiffs’ evidentiary objections are
OVERRULED.
Request for Judicial Notice
In support of their motion, Defendants request the
Court take judicial notice of the Second Amended Complaint and the Order and
Judgment approving settlement in federal district court case Velasco et al. v. Chrysler Group
LLC, United States District Court, Central District of California No.
2:13-cv-08080-DDP-VBK. The request is GRANTED as to the existence of these
documents, but not the hearsay facts stated therein. (Evid. Code § 452(d).)
In
opposition, Plaintiffs request the Court take judicial notice of the Court of
Appeal’s opinion in Santana v. FCA US, LLC (2020) 56 Cal.App.5th 334.
This request is unnecessary. (Quelimane Co. v. Stewart Title Guaranty Co.
(1998) 19 Cal.4th 26, 46 n.9 (“A request for judicial notice of published
material is unnecessary. Citation to the material is sufficient.”).)
Plaintiff
also requests the Court take judicial notice of “the exhibits filed in
connection with Cieslikowski v. FCA US LLC, United States Court of
Appeal for the Ninth Circuit, Case No. 19-55679.” The Court shall take judicial
notice of the existence of these documents as court records, but not the truth
of the matters asserted therein. (Steed v. Department of Consumer Affairs
(2012) 204 Cal.App.4th 112, 121 (“while the existence of any document in a
court file may be judicially noticed, the truth of the matters asserted in
those documents, . . . is not entitled to notice.”); Sosinsky v. Grant (1992)
6 Cal.App.4th 1548, 1569 (“the superior court properly refused to take judicial
notice of the truth of any of the factual assertions appearing in the court
documents from action No. 204488 which appellants presented to the court.”).)
Motion for Summary Judgment and Adjudication
Standard
The function of a motion for summary
judgment or adjudication is to allow a determination as to whether an opposing
party cannot show evidentiary support for a pleading or claim and to enable an
order of summary dismissal without the need for trial.¿(Aguilar v. Atlantic
Richfield Co. (2001) 25 Cal.4th 826, 843.) In analyzing such motions,
courts must apply a three-step analysis: “(1) identify the issues framed by the
pleadings; (2) determine whether the moving party has negated the opponent's
claims; and (3) determine whether the opposition has demonstrated the existence
of a triable, material factual issue.”¿(Hinesley¿v.¿Oakshade¿Town Center¿(2005)
135 Cal.App.4th 289, 294.)¿Thus, summary judgment or summary adjudication is
granted when, after the Court’s consideration of the evidence set forth in the
papers and all reasonable inferences accordingly, no triable issues of fact exist
and the moving party is entitled to judgment as a matter of law.¿(Code Civ.
Proc. § 437c(c);¿Villa v.¿McFarren¿(1995) 35 Cal.App.4th 733, 741.) ¿
¿
Courts “liberally construe the evidence
in support of the party opposing summary judgment and resolve doubts concerning
the evidence in favor of that party.”¿(Dore v. Arnold Worldwide, Inc.¿(2006)
39 Cal.4th 384, 389.) A motion for summary adjudication shall be granted only
if it completely disposes of a cause of action, an affirmative defense, a claim
for damages, or an issue of duty. (Code Civ. Proc. § 437c(f)(1).)
Statute of Limitations
Defendants argue all Plaintiffs’ claims are
untimely. “Generally, statute of limitations issues raise questions of fact
that must be tried, however, when the uncontradicted facts are susceptible of
only one legitimate inference, summary judgment is proper.” (Kline
v. Turner (2001)
87 Cal.App.4th 1369, 1374.)
Defendants did not properly seek summary
adjudication of each cause of action based upon the statute of limitations.
Defendants’ Noticed Issue No. 1 refers to every cause of action and Defendants’
separate statement does not seek summary adjudication of each cause of action
on statute of limitations grounds. (Cal. R. Ct., rule 3.1350; Gonzales
v. Superior Court (1987)
189 Cal.App.3d 1542, 1545 (“It is elemental that a notice of motion must state
in writing the grounds upon which it will be made. [Citation]. Only the grounds
specified in the notice of motion may be considered by the trial court.”).)
Both Defendants’ notice of motion and separate statement seek “summary
judgment,” not summary adjudication, on statute of limitations grounds. (Not.
at 2:3-14; Sep. Stmt. at 2:6-7 (“DEFENDANTS
ARE ENTITLED TO SUMMARY JUDGMENT BECAUSE PLAINTIFFS’ CAUSES OF ACTION ARE
BARRED BY THE APPLICABLE STATUTES OF LIMITATION.”).) Accordingly, to prevail on the statute of limitations defense on this
motion, there must be an absence of triable issues of fact as to whether every
cause of action against either Defendant is time barred. (Hawkins v. Wilton (2006) 144 Cal.App.4th 936, 949 (“because Wilton did not move in the
alternative for summary adjudication of specified issues, we will not address
whether Wilton may have prevailed on some issues in this case.”).)
Plaintiffs’ Song-Beverly causes of action, the
first through fifth causes of action in the complaint, are subject to a
four-year statute of limitations. (Krieger v. Nick Alexander Imports, Inc. (1991) 234
Cal.App.3d 205, 213-14; Jensen v. BMW of North America, Inc. (1995) 35
Cal.App.4th 112, 133.) Plaintiffs’ sixth cause of action for fraud and seventh
cause of action for negligent repair are subject to a three-year statute of
limitations. (Code Civ. Proc. § 338.) Defendants cite the two-year statute of
limitations contained in Code of Civil Procedure section 335.1 to argue the
negligent repair claim has a two-year statute of limitations. (Mot. at
6:14-16.) However, Section 335.1 is inapplicable here as it applies to “[a]n
action for assault, battery, or injury to, or for the death of, an individual.”
(Code Civ. Proc. § 335.1.)
Plaintiffs assert the first through sixth causes of
action against Defendant FCA and only the seventh cause of action is asserted
against Defendant Tom Bell’s.
It is undisputed Plaintiffs purchased the subject
vehicle on April 28, 2010, (Opp. Sep. Stmt. Fact 1), and the vehicle was sold with
a three year/36,000-mile basic express
warranty and five-year/100,000-mile powertrain warranty. (Opp. Sep. Stmt. Fact 2.) Plaintiffs do not
provide responsive evidence to dispute that the vehicle reached 36,000 miles between
July 10, 2012 and November 12, 2012, (Cronin Decl. ¶ 18), and the five-year
warranty expired on April 28, 2015. (Cronin Decl. ¶ 28.) Plaintiffs filed this
action on February 11, 2020, more than 4 years after the expiration of all
applicable warranties.
Plaintiffs brought the vehicle in for service for
the following complaints and repairs:
-
November 15, 2010: “Engine stalls while driving.
Just like someone turns key off. Radio & A/C go off at same time. . . .
Vehicle shutters going back in reverse sometimes.” (Cronin Decl. Ex. J.)
-
December 28, 2010: “Wireless ignition module was
replaced and required new updated fobs.” (Cronin Decl. Ex. L.)
-
August 4, 2011:
“Vehicle has vibration on brake application from higher speeds. . . .
Customer states engine has a ticking noise at all speeds.” (Cronin Decl. Ex.
M.)
-
November 25, 2011: “wireless ignition node module
detents.” (Cronin Decl. Ex. N.)
-
July 3, 2012: “Oil leaks . . . transmission shifts
hard out park and into gear. Happens most of time. . . . radio sound stops at
times . . . brake pulsation when braking going down a steep hill . . . engine
temperature seems hotter.” (Cronin Decl. Ex. O.)
-
July 10, 2012: “Brakes have vibration when braking
going down steep grades. . . . radio sound stops . . . transmission does not
shift down manually. (Cronin Decl. Ex. P.)
-
November 12, 2012: “Buzz noise A/C vent . . .
replace battery.” (Cronin Decl. Ex. Q.)
-
February 18, 2013: “Transmission shifts harsh . . .
Roasd test after TIPM was flashed – unable to duplicate customers concerns at
this time. . . . back 2 power outlets are inop . . . vehicle won’t start up on
the 1st try – cranks but wont’s start.” (Cronin Decl. Ex. R.)
-
July 10, 2013: “sometimes when starting only
clicks.” (Cronin Decl. Ex. S.)
-
December 23, 2013: “Car was shifting roughly
again.” (Cronin Decl. Ex. B, Mendoza Depo at 79:14-80:13; Cronin Decl. Ex. T.)
-
June 12, 2014: Unidentified electrical issue. (Cronin
Decl. Ex. B, Mendoza Depo at 82:6-19; Cronin Decl. Ex. U.)
-
August 28, 2014: “Automatic door wasn’t opening.” (Cronin
Decl. Ex. B, Mendoza Depo at 84:2-25; Cronin Decl. Ex. V.)
-
January 30, 2015: “same ticking sound that
[Plaintiff] would hear coming from the engine.” “Ticking from rocker arms.” (Cronin
Decl. Ex. B, Mendoza Depo at 86:1-18; Cronin Decl. Ex. W.)
-
February 4, 2015: “Same ticking sound that kept coming from the engine.” “Verified ticking noise. Using stethascope
isolated ticking noise to front valve cover area. Removed upper intake plenum
and left valve cover. Inspected rocker shafts and found wear on shaft. Replaced
rocker shaft assembly. After
line a repair. Heard another clicking noise. Using stethascope isolated noise
to intake manifold runner. Removed and replaced upper intake manifold.” (Cronin
Decl. Ex. B, Mendoza Depo at 87:5-88:1; Cronin Decl. Ex. X.)
-
March 12, 2015: “Intermittent starting problem
where [Plaintiffs’] car wouldn’t start.” (Cronin Decl. Ex. B, Mendoza Depo at
88:11-89:4; Cronin Decl. Ex. Y)
During her April 1, 2020 deposition, Plaintiff Julie Mendoza admitted the vehicle suffers
from “continued dashboard issues, the air conditioning on and off, the radio on
and off, the speedometer dipping,” which were “[a]ll of those problems [Plaintiffs]
had before” as well as the car not starting. (Cronin Decl. Ex. B, Mendoza Depo.
at 167:13-168:2.)
Accordingly, Defendants provided evidence that Plaintiffs
brought the vehicle in for a reasonable number of repair attempts during the
warranty period and the defects were known but not repaired well outside the
statute of limitations period for all Plaintiffs’ claims.
“Where as here a defendant moving for summary
judgment shows, as an affirmative defense, the applicable limitations period
ran out before the complaint was filed and the plaintiff relies on the delayed
discovery rule the plaintiff has the burden “to show that a triable issue of
one of more material facts exists as to that ... defense....” (Gryczman v. 4550 Pico Partners, Ltd. (2003) 107 Cal.App.4th 1, 6–7.)
In opposition, Plaintiffs rely solely upon delayed
discovery to toll the statute of limitations. (Opp. at 16:12-20:9.) “Under the discovery rule, suspicion of one or more of the elements of a
cause of action, coupled with knowledge of any remaining elements, will
generally trigger the statute of limitations period.” (Fox v. Ethicon Endo-Surgery, Inc. (2005) 35 Cal.4th 797, 807.)
Plaintiffs provide the joint declaration of both
Plaintiffs, who note they brought the vehicle in for service after the warranties
expired for the following issues:
-
November 10, 2015: “sliding door lock actuator.”
(Mendoza Decl. ¶ 20.)
-
February 2, 2016: “Recall 2181 and a water pump
leak.” (Id. ¶ 21.)
-
July
1, 2016: “illumination of the check engine light and electrical issues. . . .
The torque converter, valve body, and transmission range sensor were replaced,
among other repairs.” (Id. ¶ 22.)
-
April
4, 2017: “vehicle overheating.” (Id. ¶ 23.)
-
July
24, 2017: “idle engine temperature went to red.” (Id. ¶ 24.)
-
December
6, 2017: “various concerns related to the transmission, engine and electrical
system.” (Id. ¶ 25.)
-
February
26, 2018: “ongoing concerns including rattling noises when accelerating.” (Id.
¶ 26.)
-
August
23, 2019: “various concerns including the dash panel powering off, radio sound
going out, and the A/C going in and out.” (Id. ¶ 27.)
-
October
10, 2019: “ongoing concerns including drivability issues and the transmission
not shifting correctly.” (Id. ¶ 28.)
After all the above repairs, Plaintiffs contend
they “continued to experience ongoing problems with the Subject Vehicle
including issues related to the TIPM defects, among others.” (Id. ¶ 29.) Plaintiffs
state “[a]s a result of these ongoing
problems, we realized and discovered that Defendant and its authorized repair
facilities never permanently repaired/successfully fixed the Subject Vehicle
during the warranty, despite having given them a reasonable number of
opportunities to do so. We are not automotive experts and so we relied on the
expertise of Defendant’s certified technicians who informed me on each visit
that the Subject Vehicle was repaired. However, in or around October 2019,
realizing that Defendant and its authorized repair facilities concealed their
inability to fix the Subject Vehicle, and having lost confidence and trust in
the Subject Vehicle, we called Defendant to request a lemon law buyback of the
Subject Vehicle.” (Id. ¶ 30.) Plaintiffs’
expert indicates the issues with the vehicle were related to the TIPM. (Bounds
Decl. ¶ 27.)
Repairs Within the Statutory Period
Preclude Summary Judgment in Favor of Defendant Tom Bell’s
To
obtain summary judgment, Defendant Tom Bell’s was required to demonstrate an
absence of a triable issue of fact regarding the seventh cause of action for
negligent repair, the only cause of action asserted against Defendant Tom
Bell’s. As noted above, Defendants solely moved for summary judgment based upon
statute of limitations. While Defendants and Plaintiffs focus upon the delayed
discovery rule and repairs outside the limitation period, the Complaint alleges
several repairs by Defendant within the three-year limitation period prior to
Plaintiffs’ filing this action. (Compl. ¶¶ 113-115.) In opposition, Plaintiff
provides evidence of repairs by Tom Bell’s between April 7, 2017 and October
10, 2019. (Mendoza Decl. ¶¶ 23-28, Ex. 1.) The complaint alleges Tom Bell’s “breached
its duty to Plaintiffs to use ordinary care and skill by failing to properly
store, prepare and repair the Subject Vehicle in accordance with industry
standards.” (Compl. ¶ 168.) By failing to address the repairs made within the limitations
period, Defendants failed to meet their burden that the seventh cause of action
for negligent repair is barred by the statute of limitations. Accordingly, the
motion is DENIED as to Defendant Tom Bell’s.
Plaintiffs’ Claims Against FCA are
Time-Barred
As
to Plaintiffs’ Song Beverly and fraud claims against Defendant FCA, the Court
finds all of Plaintiffs’ claims are untimely under the applicable statute of
limitations. As evidenced above,
Plaintiffs brought the vehicle in for repairs fifteen times during the warranty
period, including for TIPM related issues. (Cronin Decl. Ex. J, L-Y; Mendoza
Decl. ¶¶ 5, 8-19, Ex. 1.) In opposition, Plaintiff contends “a buyer
cannot know of the breach until after (1) the buyer provides the defendant with
a reasonable number of repair attempts and (2) the defect manifests again
outside of the warranty period, thereby establishing that the defendant's
repairs did not conform the vehicle to warranty.” (Opp. at 17:15-18.) The
second portion of Plaintiffs’ statement is not a correct statement of California
law.
“A plaintiff pursuing an action under the Act has
the burden to prove that (1) the vehicle had a nonconformity covered by the
express warranty that substantially impaired the use, value or safety of the
vehicle (the nonconformity element); (2) the vehicle was presented to an
authorized representative of the manufacturer of the vehicle for repair (the
presentation element); and (3) the manufacturer or his representative did not
repair the nonconformity after a reasonable number of repair attempts (the
failure to repair element).” (Donlen v. Ford Motor Co. (2013) 217
Cal.App.4th 138, 152.) Accordingly, once Plaintiffs were aware of facts
demonstrating the defects were not repaired after a reasonable number of
attempts, the claim accrued and the statute of limitations began, even if
within the warranty period. (See e.g. Krieger v. Nick Alexander Imports,
Inc. (1991) 234 Cal.App.3d 205, 218 (finding cause of action accrued within
sixth months after purchase and within warranty period).) Similarly, the fraud
cause of action is based upon the alleged concealment of the defective TIPM.
(Compl. ¶ 147.)
In addition to the extensive repair history,
Plaintiffs admit to ongoing issues with the vehicle and Plaintiffs’ expert
states the symptoms experienced by Plaintiffs’ vehicles were caused by the TIPM.
(Mendoza Decl. ¶¶ 10, 13-15, 17-18, 26, 28, 29; Bounds Decl. ¶ 27. See Schick
v. BMW of North America, LLC (9th
Cir. 2020) 801 Fed.Appx. 519, 520 (“Furthermore, in a declaration submitted to
the district court, Schick admitted that he ‘experienced ongoing issues’ with the
car’s windows.”); Smothers v. BMW of North America, LLC (9th Cir. 2020)
813 Fed.Appx. 291, 293 (“Smothers’ claims accrued no later than December
2013—the point at which he was aware of the oil consumption issue, and, despite
presenting the vehicle to BMW technicians for repair on multiple occasions, the
issue remained.”).)
Based upon the evidence before the Court, a
reasonable jury could only reach one conclusion as to delayed discovery:
Plaintiffs had sufficient facts to pursue their claims, but failed to file this
action within the applicable statutes of limitation. Plaintiffs’ subjective conclusion that
the defects could not be repaired, (Mendoza Decl. ¶ 30), is immaterial. (Mills
v. Forestex Co. (2003) 108 Cal.App.4th 625, 648 (“the discovery rule uses
an objective test that looks not to what the particular plaintiff actually knew
but to what a reasonable inquiry would have revealed.”); Vera v. REL-BC, LLC (2021)
66 Cal.App.5th 57, 69 (“A fraud
claim will accrue even without actual knowledge if a plaintiff knows facts that
should raise suspicion and trigger a further investigation.”).)
Summary
judgment is GRANTED in favor of Defendant FCA.
Fraud – Sixth Cause of Action
The Court briefly addresses Defendants’ specific
arguments as to the fraud cause of action.
Defendants contend “Plaintiffs’ allegations for
fraudulent inducement – concealment rest entirely on the faulty premise that
there is a defect in all TIPMs and FCA US concealed and failed to disclose the
known electrical architecture defect to Plaintiffs prior to their purchase of
the 2010 Chrysler Town and Country. Plaintiffs’ claim fails outright because the
2010 Chrysler Town and Country, does not utilize TIPM 7C electrical
architecture.” (Mot. at 12:11-16.) Plaintiffs allege Defendant FCA concealed
the defective TIPM and was aware of the TIPM defect as early as 2007 and failed
to disclose the defect. (Compl. ¶¶ 147; 151.) Defendant provides evidence
indicating the first TIPM 7 was designed in 2007, but it is not identical
throughout models and years, (Bielenda Decl. ¶¶ 11-19), and there was never a
recall related to the TIPM in the 2010 Chrysler
Town and Country. (Id. ¶ 21.) Defendants’ evidence does not establish either
that Plaintiffs’ vehicle was not defective or that Defendants were unaware of
the defect and accordingly does not provide a basis for summary adjudication. Just
as Defendants contend “Plaintiffs cannot support a fraud claim based on
defects found in other vehicles, but not their own,” (Mot. 12:18-20),
Defendants cannot refute Plaintiffs’ fraud claim solely by pointing to other
vehicles.
Defendants argue Plaintiffs’ fraud claim is barred
by the economic loss rule. (Mot. at 13:7-15:8.) However, the Court finds the
economic loss rule does not apply to Plaintiffs’ fraudulent inducement claim. “The
most widely recognized exception is when the defendant's conduct constitutes a
tort as well as a breach of the contract. For example, when one party commits a
fraud during the contract formation or performance, the injured party may
recover in contract and tort.” (Harris v. Atlantic Richfield Co. (1993) 14
Cal.App.4th 70, 78.) “Tort damages have been permitted in contract cases where
. . . where the contract was fraudulently induced. . . . the duty that gives
rise to tort liability is either completely independent of the contract or
arises from conduct which is both intentional and intended to harm.” (Erlich
v. Menezes (1999) 21 Cal.4th 543, 552.) Moreover, Defendants note
Plaintiffs assert actual reliance is sufficient to avoid application of the
economic loss rule. (Gawara v. U.S. Brass Corp. (1998) 63
Cal.App.4th 1341, 1354 (“plaintiffs who suffer only economic losses, i.e.,
Coles and those homeowners who suffered no property damage, are required to
show actual reliance.”); Fassberg Construction Co. v. Housing
Authority of City of Los Angeles (2007) 152 Cal.App.4th 720, 757 (“A plaintiff
seeking to recover damages for economic loss caused by fraud must show that the
plaintiff actually relied on the defendant's misrepresentation or
nondisclosure, that the reliance was reasonable, and that the plaintiff
suffered damages as a result.”).)
Defendants argue Defendant FCA did not owe a duty
to Plaintiffs because there were no direct dealings between FCA and Plaintiff. (Mot.
at 15:9-17:12.) Defendants rely upon Bigler-Engler v. Breg, Inc. (2017)
7 Cal.App.5th 276, which involved an intentional concealment claim against a
manufacturer based upon plaintiffs’ use of a product rented from their doctor. The
court found a duty to disclose must arise from a transaction between the
parties and therefore the “transaction must necessarily arise from direct dealings
between the plaintiff and the defendant.” (Id. at 312.) First, Defendants admit it had a
contractual relationship with Plaintiffs via its warranty. (Sep. Stmt.
Fact 2, Cronin Decl. ¶ 18. See Bigler-Engler,
supra, 7
Cal.App.5th at 311 (“A duty to disclose facts arises only when the parties are
in a relationship that gives rise to the duty, such as . . . parties entering
into any kind of contractual arrangement.”).) Moreover, courts have held that
manufacturers, such as Defendant FCA, owe a duty of disclosure. (See e.g. Khan v. Shiley Inc. (1990) 217 Cal.App.3d 848, 858 (“[A]
manufacturer of a product may be liable for fraud when it conceals material
product information from potential users. This is true whether the product is a
mechanical heart valve or frozen yogurt.”); OCM Principal Opportunities Fund, L.P. v. CIBC World Markets Corp. (2007) 157 Cal.App.4th 835, 859 (“Under
California law, a vendor has a duty to disclose material facts not only to
immediate purchasers, but also to subsequent purchasers when the vendor has
reason to expect that the item will be resold.”).) Summary adjudication cannot
be granted based upon the absence of a duty to disclose.
Defendants contend “Plaintiffs’ fraudulent
concealment claim fails for lack of evidence of a specific failure potential
about which FCA US had exclusive knowledge,” but fails to cite any evidence in
support of this argument. (Mot. at 17:12-18:24.) Defendants’ citation to a
federal district court case regarding the federal pleading standard is not
sufficient to meet their burden on summary judgment.
Finally, Defendants contend Plaintiffs have not
demonstrated evidence that could support the calculation of fraud damages.
(Mot. at 18:25-20:11.) Defendants cite Plaintiffs interrogatory responses
indicating they did not have knowledge of the market value of the vehicle at
the time of sale. (Cronin Decl. Ex. F, G.) “In fraud cases involving the
purchase, sale, or exchange of property, as here, the out-of-pocket measure of
damages applies.” (Hensley v. McSweeney (2001) 90 Cal.App.4th 1081, 1085.)
“The ‘out-of-pocket’ measure of damages is directed to restoring the plaintiff
to the financial position enjoyed by him prior to the fraudulent transaction,
and thus awards the difference in actual value at the time of the transaction
between what the plaintiff gave and what he received.” (Alliance
Mortgage Co. v. Rothwell (1995) 10 Cal.4th 1226, 1240.)
In opposition, Plaintiffs failed to provide any
evidence of the value of the vehicle at the time of sale and therefore failed
to raise a triable issue of fact as to fraud damages. Plaintiffs contend,
without evidence or authority, that “[t]he market value of a Lemon vehicle—like
Plaintiffs' Vehicle—at the time of sale is zero.” (Opp. at 11:1.) Plaintiffs
cite OCM
Principal Opportunities Fund, L.P. v. CIBC World Markets Corp. (2007) 157
Cal.App.4th 835, which involved substantial evidence that the market value of a
company’s registered notes was zero because the company was “dying or dead.” No
such evidence is presented here. Plaintiffs only state they would not have
purchased the vehicle, which does not establish a market value. (Mendoza Decl.
¶ 3.) Plaintiffs cite Schroeder v. Auto Driveaway Co. (1974) 11
Cal.3d 908, 921, which stated “[t]he opinion of an owner of personal property
is in itself competent evidence of the value of that property, and sufficient
to support a judgment based on that value.” However, the cited declaration does
not make any reference to the value of the property at the time of sale.
(Mendoza Decl. ¶¶ 29-31.) Plaintiffs’ merely state their belief that the
vehicle is presently worthless, more than 12 years after purchase. (Ibid.) Plaintiffs’
citation to F.T.C. v. Figgie Intern., Inc. (9th Cir.
1993) 994 F.2d 595, (Opp. at 12:4-23), is inapposite as it is a federal case
involving a federal agency enforcing a federal statute. Accordingly, summary
adjudication of the sixth cause of action is properly GRANTED on this
alternative basis as well. (Nece v. Bennett (1963) 212
Cal.App.2d 494, 498 (“By reason of the fact that there was no substantial
evidence to prove the market value of the property at the time of the purchase,
the plaintiffs failed to meet the burden of establishing the cause of action.”).)