Judge: Nathan Vu, Case: 2022-01243193, Date: 2022-09-26 Tentative Ruling
Motions to Compel
Pursuant to the Stipulation and Order entered 09/20/2022, Defendant Kia America, Inc.’s (1) motion to compel further responses to form interrogatories (set one), (2) motion to compel further responses to special interrogatories (set one), (3) motion to compel further responses to requests for production of documents (set one), and (4) motion to compel further responses to requests for admission (set one), have been CONTINUED to 11/28/2022 at 8:30 am in Department N15.
Demurrer
Defendant Kia America, Inc.’s demurrer to Plaintiff Matthew Parrish’s First Amended Complaint is SUSTAINED as to the third and fifth causes of action, with 15 days leave to amend.
Defendant Kia America, Inc.’s motion to strike may be mooted by any amended complaint filed by Plaintiff Matthew Parrish. Therefore, the hearing on the motion to strike shall be CONTINUED from 10/24/2022 to 11/07/2022 at 8:30 am in Department N15.
Defendants Kia America, Inc. demurs to the third and fifth causes of action of the First Amended Complaint (FAC) filed by Plaintiff Matthew Parrish.
In ruling on a demurrer, a court must accept as true all allegations of fact contained in the complaint. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) A demurrer challenges only the legal sufficiency of the affected pleading, not the truth of the factual allegations in the pleading or the pleader’s ability to prove those allegations. (Cundiff v. GTE Cal., Inc. (2002) 101 Cal.App.4th 1395, 1404-05.)
Questions of fact cannot be decided on demurrer. (Berryman v. Merit Prop. Mgmt., Inc. (2007) 152 Cal.App.4th 1544, 1556.) Because a demurrer tests only the sufficiency of the complaint, a court will not consider facts that have not been alleged in the complaint unless they may be reasonably inferred from the matters alleged or are proper subjects of judicial notice. (Hall v. Great W. Bank (1991) 231 Cal.App.3d 713, 718 fn.7.)
Although courts should take a liberal view of inartfully drawn complaints, (see Civil Proc. Code, § 452), it remains essential that a complaint set forth the actionable facts relied upon with sufficient precision to inform the defendant of what plaintiff is complaining, and what remedies are being sought, (Leek v. Cooper (2011) 194 Cal.App.4th 399, 413). Bare conclusions of law devoid of any facts are insufficient to withstand demurrer. (Schmid v. City and County of San Francisco (2021) 60 Cal.App.5th 470, 481; see Civil Proc. Code, § 425.10, subd. (a).)
Third Cause of Action (Violation of Civil Code Section 1793.2(a)(3))
The third cause of action of the FAC alleges a violation of Civil Code section 1793.2(a)(3), which 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.” (Civil Code, § 1793.2, subd. (a)(3).)
In general, statutory causes of action must be pled with particularity. (Covenant Care, Inc. v. Superior Court (2004) 32 Cal.4th 771, 790.)
Defendant contends that the FAC fails to
meet this requirement as to the third cause of action because it fails to
identify any facility relevant to Plaintiff’s claims or to allege what
service literature or replacement parts were unavailable to any such repair
facilities.
Defendant is incorrect as to its first argument. The FAC alleges that the vehicle in question was taken to “Defendant’s authorized repair facility” in Irvine, California; Garden Grove, California; and Downtown Los Angeles, California. (See FAC, ¶¶ 19-28.)
However, Defendant is correct that the FAC fails to specify, even in general terms, what service literature or replacement parts were unavailable to any of the above repair facilities. The FAC merely states in conclusory terms 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.” (FAC, ¶ 110.)
Thus, the FAC fails to allege whether the third cause of action is based upon the unavailability of service literature or the unavailability of replacement parts or both. The FAC also fails to allege in general terms what service literature was not available or what replacement parts were not available. The court must sustain the demurrer as to the third cause of action.
Fifth Cause of Action (Fraudulent Inducement – Concealment)
The elements of a cause of action for fraudulent inducement 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 or to induce the plaintiff to enter into a contract, (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 (justifiable reliance), and (5) as a result of the concealment or suppression of the fact, the plaintiff must have sustained damage. (See Lazar v. Superior Court (1996) 12 Cal.4th 631, 638; Boschma v. Home Loan Center, Inc. (2011) 198 Cal.App.4th 230, 248.)
Fraud must be plead with particularity rather than with “general and conclusory” allegations. (Small v. Fritz Companies, Inc. (2003) 30 Cal.4th 167, 184.) This heightened pleading requirement also applies to fraudulent concealment claims. (Boschma v. Home Loan Center, Inc., supra, 198 Cal.App.4th at p. 248.)
Here, the FAC alleges that Defendant concealed the fact that the vehicle in question and its 2.4L Theta II engine were defective and that the Defendant had a duty to disclose the defect to Plaintiff. However, FAC fails to allege that Defendant intentionally concealed the defect with the intent to induce Plaintiff to enter into a contract. The fifth cause of action fails for that reason.
Defendant also contends that the fifth cause of action 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.) “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.)
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.)
Here, the alleged fraudulent inducement based on concealment resulted only in purely economic loss. Plaintiff seeks damages for the alleged defective vehicle. Plaintiff does not claim that the vehicle’s alleged defects caused any personal injury or damage to property other than the vehicle. (Robinson Helicopter, Co., Inc. v. Dana Corp., supra, 34 Cal. 4th 979 at p. 988.) Therefore, the economic loss rule precludes Plaintiff’s fraudulent concealment claim.
Plaintiff cannot avail himself of the “narrow” exception to the economic loss rule articulated in Robinson Helicopter, Co. Although that case allowed a fraudulent inducement claim to proceed despite the economic loss rule, the Supreme Court there 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.” (Id. at p. 99.)
The FAC does not allege that Defendant made any affirmative misrepresentations nor does it allege any personal damages independent of Plaintiff’s economic loss. Thus, the exception in Robinson Helicopter Co. does not apply here. Robinson Helicopter Co. itself declined to consider whether the economic loss rule applied in a case of fraudulent concealment.
Plaintiff argues that Anderson v. Ford Motor Co. (2022) 74 Cal.App.5th 946 recently “confirmed, contrary to [Defendant’s] assertion, that fraudulent omissions arise from conduct wholly distinct from SBA violations, and that fraud damages and SBA remedies may—because they arise from different conduct—both be recovered in a single action.” (Opposition to Def.’s Dem. at p. 1:11-14.)
Anderson v. Ford Motor Co. was a case against Ford arising out of alleged defects in the 6.0L engine. (Id. at pp. 950-959.) Ford argued that the plaintiffs could not recover both a statutory penalty under the Song-Beverly Act and punitive damages. (Id. at pp. 962-963.) The appellate court disagreed because “the punitive damages and statutory penalties were based on different conduct that took place at different times. The punitive damages were based on conduct underlying the fraud . . . cause[ ] of action and took place before the sale. The civil penalty was based on defendant’s post-sale failure to comply with its Song-Beverly Act obligations to replace the vehicle or make restitution when reasonable attempts to repair had failed.” (Id. at p. 966; see also id. at p. 971.)
Although Anderson v. Ford Motor Co. concluded that Song-Beverly breach of warranty claims differ from fraud claims, it did not discuss the economic loss rule or rule that the exception in Robinson Helicopter, Co., Inc. applied to fraudulent concealment claims.
Defendant shall give notice of this ruling.