Judge: Peter A. Hernandez, Case: 23PSCV01703, Date: 2023-11-16 Tentative Ruling

Case Number: 23PSCV01703    Hearing Date: November 16, 2023    Dept: K

1.         Defendant Martin Automotive, Inc. dba Glendora Chevrolet’s Demurrer to First Amended Complaint is SUSTAINED without leave as to the second cause of action and SUSTAINED as to the first cause of action. The court will hear from counsel for Plaintiff as to whether leave to amend is requested and will require an offer of proof if so.

2.         Defendant Martin Automotive, Inc. dba Glendora Chevrolet’s Motion to Strike First Amended Complaint is DENIED as MOOT in part (i.e., as to Page 9, ¶ 51, Page 18, ¶ 68, Page 13, ¶ 61, Page 16, ¶ 63(2) and Page 34, ¶ 146(d)) and is otherwise GRANTED (i.e., as to Pages 8-9, ¶44).

Background[1]  

Plaintiff Andrew Paul Dancyger (“Plaintiff”) alleges as follows:

Martin Automotive, Inc. dba Glendora Chevrolet (“Defendant”) sold Plaintiff a new 2020 Chevrolet Corvette, VIN # 1G1Y63D41L5114749 (“subject vehicle”). Defendant sold the subject vehicle to Plaintiff above the advertised price without proper disclosures to Plaintiff and Plaintiff’s consent.

On June 15, 2023, Plaintiff filed a First Amended Complaint (“FAC”), asserting causes of action against Defendant and Does 1-30 for:

1.                  Fraud and Deceit

2.                  Breach of Implied Covenant of Good Faith and Fair Dealing

3.                  Selling Automobile Above Advertised Price

4.                  Violation of Business & Professions Code § 17200, et seq.

5.                  Violation of Business & Professions Code § 17500, et seq.

6.                  Violation of California Consumer Legal Remedies Act

A Case Management Conference is set for November 16, 2023.

1.         Demurrer to FAC

Legal Standard

A demurrer may be made on the grounds that the pleading, inter alia, does not state facts sufficient to constitute a cause of action. (Code Civ. Proc., § 430.10, subd. (e).)

When considering demurrers, courts read the allegations liberally and in context. In a demurrer proceeding, the defects must be apparent on the face of the pleading or via proper judicial notice. (Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994.) “A demurrer tests the pleadings alone and not the evidence or other extrinsic matters. Therefore, it lies only where the defects appear on the face of the pleading or are judicially noticed.” (SKF Farms v. Superior Court (1984) 153 Cal.App.3d 902, 905 [citations omitted].) At the pleading stage, a plaintiff need only allege ultimate facts sufficient to apprise the defendant of the factual basis for the claim against him. (Semole v. Sansoucie (1972) 28 Cal. App. 3d 714, 721.) “[A] demurrer does not, however, admit contentions, deductions or conclusions of fact or law alleged in the pleading, or the construction placed on an instrument pleaded therein, or facts impossible in law, or allegations contrary to facts of which a court may take judicial knowledge.” (S. Shore Land Co. v. Petersen (1964) 226 Cal.App.2d 725, 732 [citations omitted].)

Discussion

Defendant demurs to the first and second causes of action in Plaintiff’s FAC, on the basis that they both fail to state facts sufficient to constitute a cause of action.

At the outset, the court notes that Plaintiff represents in opposition that he “is agreeable to withdraw his second cause of action from the FAC.” (Opp., 9:17-18). The court will summarily sustain Defendant’s demurrer to the second cause of action, without leave, based on the foregoing statement.

The sole remaining cause of action that is the subject of the instant demurrer, then, is the first cause of action for Fraud and Deceit. “The elements of fraud, which give rise to the tort action for deceit, are (a) misrepresentation (false representation, concealment, or nondisclosure); (b) knowledge of falsity (or 'scienter'); (c) intent to defraud, i.e., to induce reliance; (d) justifiable reliance; and (e) resulting damage.” (Lazar v. Superior Court (1996) 12 Cal.4^th 631, 638 [quotations and citation omitted].)

“[F]raud must be pled specifically; general and conclusory allegations do not suffice.” (Id. at 645). The “particularity requirement necessitates pleading facts which show how, when, where, to whom, and by what means the representations were tendered.” (Id. [internal quotations and citation omitted].) Additionally, “[t]he requirement of specificity in a fraud action against a corporation requires the plaintiff to allege the names of the persons who made the allegedly fraudulent 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.4^th 153, 157.)

Further, “[a]fter establishing actual reliance, the plaintiff must show that the reliance was reasonable by showing that (1) the matter was material in the sense that a reasonable person would find it important in determining how he or she would act; and (2) it was reasonable for the plaintiff to have relied on the misrepresentation.” (Hoffman v. 162 North Wolfe LLC (2014) 228 Cal.App.4^th 1178, 1194.)

Plaintiff alleges that sometime prior to November 2020, Plaintiff saw the subject vehicle advertised on Defendant’s official webpage at the price of $72,860.00 and wanted to purchase it at that price (FAC, ¶¶ 13-15); that on or about November 21, 2020, he went to Defendant dealership (Id., ¶ 16); that Defendant’s representatives verbally represented to Plaintiff that the subject vehicle had a $25,000.00 markup and that it was mandatory for Plaintiff to additionally acquire optional products and/or service contracts totaling $7,897.00 (Id., ¶ 57(a)); and that he signed a written Retail Installment Sales Contract (“RISC”) for the purchase of the subject vehicle that same day (Id., ¶ 22.)

Plaintiff alleges that Defendant had a “scheme” which was “designed to induce consumers to purchase and/or lease vehicles, silently await in hopes that the consumer does not notice the fact that the vehicle is sold and/or leased above the advertised price and with optional products and/or services and lie to consumers about the vehicles’ price and optional products and/or services” (Id., ¶ 45). Plaintiff alleges that he would have never agreed to purchase the subject vehicle had he known about this scheme, the subject vehicle’s grossly inflated price and his right to refuse to pay for the optional products and/or services. (Id., ¶¶ 38 and 46; see also, ¶ 61(4) [“Plaintiff reasonably relief on Defendant’s assurances that he would purchase the Subject Vehicle for the advertised price. Subsequently, he relied on Defendant’s assurances that the optional products/services were mandatory”].).

The RISC attached as Exhibit A to the FAC, however, states that the subject vehicle has a cash price of $97,860.00 and that there is an optional service contract for $6,998.00 and an optional debt cancellation agreement for $899.00. The RISC also contains a clause reading, “YOU AGREE TO THE TERMS OF THIS CONTRACT. YOU CONFIRM THAT BEFORE YOU SIGNED THIS CONTRACT, WE GAVE IT TO YOU, AND YOU WERE GREE TO TAKE IT AND REVIEW IT. YOU ACKNOWLEDGE THAT YOU HAVE READ BOTH SIDES OF THIS CONTRACT. . . BEFORE SIGNING BELOW. YOU CONFIRM THAT YOU RECEIVED A COMPLETELY FILLED-IN COPY WHEN YOU SIGNED IT.” The RISC is signed by Plaintiff and Defendant and is dated November 21, 2020.

“Where facts appearing in attached exhibits or judicially noticed documents contradict, or are inconsistent with, the complaint's allegations, we must rely on the facts in the exhibits and judicially noticed documents.” (Genis v. Schainbaum (2021) 66 Cal.App.5th 1007, 1015.) The RISC reflects that the $97,860.00 cash price and the optional nature of the optional add-on products/services were, in fact, disclosed in writing to Plaintiff prior to his purchase of the subject vehicle. Further, Plaintiff could not have reasonably relied on any alleged oral misrepresentations at the time of the sale because he was provided the terms of the contract in writing prior to signing and proceeded to sign the written contract. “[W]hen a plaintiff asserts that the defendant misrepresented the nature of the contract, the contract is not considered void due to the fraud if the plaintiff had a reasonable opportunity to discover the true terms of the contract. The contract is only considered void when the plaintiff's failure to discover the true nature of the document executed was without negligence on the plaintiff's part.” (Brown v. Wells Fargo Bank, N.A. (2008) 168 Cal.App.4th 938, 958-959.)

Defendant’s demurrer to the first cause of action is sustained.

2.         Motion to Strike Portions of FAC

Legal Standard

Pursuant to Code of Civil Procedure section 436, “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.”

The grounds for a motion to strike must “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.)

Discussion

Defendant moves the court for an order striking out the following portions of Plaintiff’s FAC:

1.                  All references to punitive damages, including Page 9, ¶ 51; Page 18, ¶ 68 and Page 34, ¶ 146(d); and

2.                  All references to alleged complaints by unknown persons who are not parties to this action, including Pages 8-9, ¶44; Page 13, ¶ 61 and Page 16, ¶ 63(2).

At the outset, the instant motion is denied as moot with respect to Page 18, ¶ 68, Page 13, ¶ 61 and Page 16, ¶ 63(2), based on the ruling made on the demurrer. The court will deny as moot the references to punitive damages contained in Page 9, ¶ 51 and Page 34, ¶ 146(d) as well, inasmuch as it appears Plaintiff seeks punitive damages solely in connection with his Fraud and Deceit cause of action. (See Opp., 6:10-12).

The motion is otherwise granted (i.e., as to Pages 8-9, ¶44). Plaintiff does not purport to have personally experienced any of the alleged events described in the three online complaints, which were made by unknown persons. The language is stricken as irrelevant.