Judge: Nathan Vu, Case: 2021-01224730, Date: 2022-10-17 Tentative Ruling
Please Note: The hearing on this matter has been changed to 8:30 A.M.
Motion for Judgment on the Pleadings
Defendants Ford Motor Company’s and Villa Ford of Orange’s motion for judgment on the pleadings is GRANTED as to the 6th cause of action and DENIED as to the 7th cause of action.
Defendants Fort Motor Company and Village Ford of Orange move for judgment on the pleadings as to the 6th and 7th causes of action of the Complaint.
Standard for Motion for Judgment on the Pleadings
A motion for judgment on the pleadings has the same purpose and effect as a general demurrer: the trial court is asked to determine whether the complaint raises an issue that can be resolved as a matter of law. (Smiley v. Citibank (South Dakota) N.A. (1995) 11 Cal.4th 138, 146; Westly v. Board of Admin. (2003) 105 Cal.App.4th 1095, 1114.)
A defendant may make a motion for judgment on the pleadings on the ground that the complaint does not state facts sufficient to constitute a cause of action against that defendant. (Civil Proc. Code, § 438, subd. (c)(1)(B)(ii); Stevenson Real Estate Servs., Inc. v. CB Richard Ellis Real Estate Servs., Inc. (2006) 138 Cal.App.4th 1215, 1219.) Thus, a motion for judgment on the pleadings raises the legal issue of whether the complaint states a cause of action regardless of the existence of triable issues of fact. (Brownell v. Los Angeles Unified Sch. Dist. (1992) 4 Cal.App.4th 787, 793.)
Like a demurrer, a motion for judgment on the pleadings admits, for purposes of the motion, the truth of all material facts that have been pleaded in the complaint. (Consolidated Fire Protection Dist. v. Howard Jarvis Taxpayers’ Ass’n (1998) 63 Cal.App.4th 211, 219.) The grounds for a motion for judgment on the pleadings must appear on the face of the challenged pleading or from matters subject to judicial notice, including court records. (Civil Proc. Code, § 438, subd. (d); Stevenson Real Estate Servs., supra, 138 Cal.App.4th at p. 1219; Shea Homes L.P. v. County of Alameda (2003) 110 Cal.App.4th 1246, 1254.)
6th Cause of Action (Fraudulent Inducement – Concealment)
The sixth cause of action for fraudulent inducement – concealment is plead only against Defendant Ford Motor Company and alleges that Defendant Ford “committed fraud by allowing the Subject Vehicle to be sold to Plaintiff without disclosing that the Subject Vehicle and its transmission was defective and susceptible to sudden and premature failure.” (Compl., ¶ 39.)
Plaintiff Rafael C. Ramos also asserts that Defendant Ford knew that the transmission installed in the vehicle was defective. (Compl., ¶¶ 41-45.) Plaintiff alleges Defendant Ford was under a duty to disclose to Plaintiff the alleged defect because Defendant Ford knew of the defect prior to Plaintiff’s purchase of the vehicle. (Compl., ¶ 46.)
Defendant Ford contends that this claim is barred by the economic loss doctrine. Under this rule, “where a purchaser’s expectations in a sale are frustrated because the product he bought is not working properly, his remedy is said to be in contract alone, for he has suffered only economic losses.” (Robinson Helicopter, Co., Inc. v. Dana Corp. (2004) 34 Cal.4th 979, 988, internal quotations and citations omitted.)
Economic loss consists of “damages for inadequate value, costs of repair and replacement of the defective product or consequent loss of profits – without any claim of personal injury or damages to other property . . . .” (Id., internal quotations and citations omitted.) As the Supreme Court stated, “The economic loss rule requires a purchaser to recover in contract for purely economic loss due to disappointed expectations, unless he can demonstrate harm above and beyond a broken contractual promise.” (Id.)
Here, the alleged fraudulent concealment resulted only in purely economic loss. Plaintiff seeks damages for the purchase of an allegedly defective vehicle. (See Compl., ¶¶ 51-53.) While Plaintiff alleges that he has “exposed himself to the risk of liability, accident and injury” he does not assert that the vehicle’s alleged defects caused any personal injury or damage to property other than the vehicle. (Compl., ¶¶ 52-53; see Robinson Helicopter, Co., Inc. v. Dana Corp., supra, 34 Cal.4th at p. 988.)
While there is a “narrow” exception to the economic loss rule, it does not apply to every fraud claim between contracting parties. In Robinson Helicopter, Co., Inc. v. Dana Corp., the Supreme Court allowed a fraudulent inducement claim to proceed despite the economic loss rule but stated that “Our holding today is narrow in scope and limited to a defendant’s affirmative misrepresentations on which a plaintiff relies and which expose a plaintiff to liability for personal damages independent of the plaintiff’s economic loss.” (Robinson Helicopter, Co., Inc. v. Dana Corp., supra, 34 Cal. 4th at p. 993.)
Here the Complaint’s sixth cause of action does not allege an identifiable affirmative misrepresentation so that the “narrow” exception in Robinson Helicopter, Co., Inc. v. Dana Corp. does not apply here. Further, the Supreme Court specifically declined to consider whether the economic loss rule applied to fraudulent concealment. (Id. at p. 991.) Thus, the economic loss rule precludes Plaintiff’s sixth cause of action.
7th Cause of Action (Negligent Repair)
The seventh cause of action for negligent repair is asserted only against Defendant Villa Ford of Orange and alleges Defendant Villa breached its duty to use ordinary care and skill by failing to properly repair the vehicle in accordance with industry standards. Defendant Villa contends that this claim is also barred by the economic loss rule.
The elements of a cause of action for negligence are (1) the existence of a duty, (2) breach, (3) causation, and (4) damages. (Pellegrini v. Weiss (2008) 165 Cal.App.4th 515, 524.)
The Complaint states facts sufficient to make out each of these elements. Plaintiff claims that he delivered the subject vehicle, which was exhibiting engine and transmission defects, for “substantial” repair to Defendant Villa, an entity engaged in the business of servicing and repairing automobiles. (See Compl., ¶¶ 5 & 55.)
Plaintiff further alleges that Defendant Villa owed Plaintiff a duty to use ordinary care and skill in the storage, preparation and repair of the subject vehicle in accordance with industry standards. (Id., ¶ 56.) This is a correct statement of the law, as an agreement to perform services “gives rise to a duty of care which requires that such services be performed in a competent and reasonable manner.” (North American Chemical Co. v. Superior Court (1997) 59 Cal.App.4th 764, 774.)
Plaintiffs also asserts that Defendant Villa breached this duty by failing to properly store and repair the vehicle in accordance with industry standards, causing Plaintiff harm. (Compl., ¶¶ 57-58.)
This is sufficient to state a claim for negligent repair at this stage in the litigation. Except with respect to certain types of claims (such as fraud-based causes of action), a plaintiff need plead only ultimate facts, not evidentiary facts. (See Ludgate Ins. Co. v. Lockheed Martin Corp. (2000) 82 Cal.App.4th 592, 606 [“A cardinal rule of pleading is that only the ultimate facts need be alleged.”].) Defendants can obtain the additional details they seek through discovery. (See Lickiss v. Financial Industry Regulatory Authority (2012) 208 Cal.App.4th 1125, 1135.)
Finally, the economic loss rule does not apply to this cause of action. The seventh cause of action for negligent repair is based on Defendant Villa’s negligent failure to perform services, and not on the sale or furnishing of a defective product. The economic loss rule applies to claims involving the furnishing of goods, not the negligent performance of services as alleged here. (See North American Chemical Co. v. Superior Court, supra, 59 Cal.App.4th at pp. 780-781.) Accordingly, Plaintiff’s seventh cause of action withstands the motion for judgment on the pleadings.
Defendants shall give notice of this ruling.