Judge Ralph C. Hofer, Case Number: 23GDCV00569, Date: 2023-09-01 Tentative Ruling

Judge: Ralph C. Hofer, Case: 23GDCV00569, Date: 2023-09-01 Tentative Ruling

Case Number: 23GDCV00569 Hearing Date: September 1, 2023 Dept: D

TENTATIVE RULING

Calendar: 6

Date: 9/1/2023

Case No: 23 GDCV00569 Trial Date: None Set

Case Name: Aguilar, et al. v. Subaru of America, Inc., et al.

DEMURRER

MOTION TO STRIKE

Moving Party: Defendant Subaru of America, Inc.

Responding Party: Plaintiffs Lourdes Isabel Aguilar and Jose R. Aguilar

RELIEF REQUESTED:

Sustain demurrer to third cause of action of First Amended Complaint

Strike prayer for injunctive relief and restitution

CAUSES OF ACTION: from First Amended Complaint

1) Violation of Song Beverly Act—Breach of Express Warranty

2) Violation of Song Beverly Act—Breach of Implied Warranty

3) Violation of Business & Professions Code section 17200

4) Negligent Repair

SUMMARY OF FACTS:

Plaintiffs Lourdes Isabel Aguilar and Jose R. Aguilar allege that in January of 2020, they purchased a 2017 Subaru Impreza pursuant to which defendant Subaru of America, Inc. (Subaru) was a warrantor of the vehicle, and defendant Universal Auto Group dba Subaru of Glendale (Subaru of Glendale) was a manufacturer and/or distributor of the vehicle.

Plaintiffs allege that defendants violated the Song-Beverly Consumer Warranty Act by failing to conform the vehicle to the express written warranties within a reasonable number of repair attempts or within the warranty periods, and by failing to promptly replace the vehicle or make restitution to plaintiffs. Plaintiffs allege that the defects, malfunctions, and nonconformities that were presented to defendants’ authorized repair facilities multiple times substantially impair the use, value and safety of the vehicle.

It is also alleged that plaintiffs delivered the vehicle to defendant Subaru of Glendale for repair on numerous occasions, and that Subaru of Glendale failed to properly store, prepare, and repair the vehicle in accordance with industry standards, causing plaintiffs damages.

Moving defendant Subaru filed a demurrer to the third cause of action and a motion to strike in response to the initial complaint. The demurrer was heard on June 16, 2023, and the demurrer to the third cause of action for violation of Business & Professions Code section 17200 was sustained with leave to amend. The motion to strike was deemed moot in light of the sustaining of the demurrer with leave to amend.

Defendant Subaru now challenges the sufficiency of the First Amended Complaint.

ANALYSIS:

Procedural

Untimely

The demurrer and motion to strike are not timely.

Under CCP §436, the court may “upon motion made pursuant to Section 435, or at any time in its discretion” 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.”

Under CCP §435, a party may serve and file a notice of motion to strike “within the time allowed to respond to a pleading…”

Under CCP §430.40, the time permitted to demur to a complaint is “within 30 days after service of the complaint…”

CRC Rule 3.110(d) provides:

“The parties may stipulate without leave of court to one 15-day extension beyond the 30-day time period prescribed for the response after service of the initial complaint.”

Here, the First Amended Complaint was served by email on June 27, 2023. Thirty days from this date, plus an additional two court days for service of the pleading by electronic transmission, fell on July 31, 2023. The demurrer and motion to strike were filed and served on August 2, 2023. This filing was two days late. The FAC is not the initial complaint, so the parties were not permitted to stipulate to an extension without leave of court. The demurrer could be overruled and the motion to strike denied on this ground alone, but the court elects not to do so.

Substantive

Demurrer

Third Cause of Action —Violation of Business & Professions Code section 17200

The demurrer to this cause of action was previously sustained as follows:

“Defendant Subaru of America, Inc.’s Demurrer to Plaintiffs’ Complaint is SUSTAINED WITH LEAVE TO AMEND on the ground the cause of action fails to state with reasonable particularity the actual alleged unlawful, unfair, or fraudulent practice or transaction and the facts supporting any alleged violation, including identification of the statutory provisions relied upon in the opposition. Khoury v. Maly’s of California, Inc. (1993) 14 Cal.App.4th 612, 619. In addition, there is authority under which such claims cannot be based on vicarious liability, making it particularly inappropriate to refer to the conduct of more than one defendant jointly as is done here. See Emery v. Visa International Service Association (2002) 95 Cal.App.4th 952, 960.”

Defendant Subaru argues that the First Amended Complaint again fails to allege with reasonable particularity the facts supporting the statutory elements of a violation subject to the unfair business practices act.

A cause of action for Violation of Business & Professions Code § 17200 et seq. requires the pleading of the following elements:

1) Defendant has engaged in any unlawful, unfair, or fraudulent business act or practice, including unfair, deceptive, untrue or misleading advertising.

2) Plaintiff’s right to restitution, if any.

3) Plaintiff’s right to injunctive relief, if any.

Bus. & Prof. Code § 17200 et seq. Damages are not recoverable. Dean Witter Reynolds, Inc. v. Superior Court (1989) 211 Cal.App.3d 758, 773-774.

To state a claim, there must be allegations showing unlawful, unfair, or fraudulent business acts or practices. Paulus v. Bob Lynch Ford, Inc. (2006) 139 Cal.App.4th 659, 676-677. Since the cause of action is based on statute, pleadings must state with reasonable particularity the facts supporting the statutory elements of the violation, including the particular section of the statute violated and the particular facts showing that the statute was violated. Khoury v. Maly’s of California, Inc. (1993, 2nd Dist.) 14 Cal.App.4th 612, 619.

Here, the cause of action has been amended to now allege that the conduct of defendant Subaru under the “Unlawful” prong, intentionally placing the vehicle with defective components into the stream of commerce, “violated the Song-Beverly Act.” [FAC, para. 39]. This approach is not ideal, as the FAC does not allege in the cause of action itself the specific statutory provisions of the Song-Beverly Act which were allegedly violated by the alleged unlawful conduct, when plaintiff’s previous opposition had included reference to the various sections, quoting them, and the court’s previous minute order suggested that these statutes be identified in that manner in the cause of action in an amended complaint.

However, the FAC does now in the cause of action itself identify a statute violated specifically by defendant Subaru, as opposed to the other defendants, and the identification of this statute, its alleged violation expressly by this defendant, combined with the facts concerning the conduct allegedly engaged in by this defendant, and the previous references to specific statutory violations, is now sufficient to withstand demurrer. [FAC, para. 39]. Specifically, the conduct alleged to have been engaged in by this defendant which is now alleged to have violated the Song-Beverly Act is, in effect, intentionally selling defective vehicles to the general public, specifically, with defects causing multiple fluid and oil leaks, requiring the replacement of a new head gasket, and causing a clogged and contaminated radiator. [FAC, para. 39]. While the allegations concerning the conduct have not changed, their combination with the allegation of Song-Beverly Act violation by this specific defendant, is sufficient to support a claim on the “Unlawful” prong of Business & Professions Code section 17200.

This result seems to be appropriate, as the Song-Beverly Act expressly states that its remedies, “are cumulative and shall not be construed as restricting any remedy that is otherwise available, and, in particular, shall not be construed to supplant the provisions of the Unfair Practices Act.” Civil Code section 1790.4.

While the demurrer argues that the unintentional distribution of a defective product is beyond the scope of the “unlawful” prong of Section 17200, the FAC here alleges defendant “intentionally” placed a defective product into the stream of commerce, and “knew that defects existed and intentionally sold defective vehicles…” [FAC, para. 39]. These allegations must be accepted as true for purposes of demurrer. See Serrano v. Priest (1971) 5 Cal.3d 584, 591; Del E. Webb Corp. v. Structural Materials Co. (1981, 2nd Dist.) 123 Cal.App.3d 593, 604 (“As a general rule in testing a pleading against a demurrer the facts alleged in the pleading are deemed to be true, however improbable they may be.”)

Defendant again argues that the “Fraudulent” prong allegations are not sufficiently specific to support a fraud claim, and that the FAC fails to sufficiently specifically allege actual reliance by plaintiff. The FAC continues to allege this prong against defendant or defendants, without differentiating between the differently positioned defendants here, the manufacturer/warrantor and the repair facility. The FAC newly alleges that defendants represented the subject vehicle would be repaired under warranty in a reasonable manner, which allegation appears directed at moving defendant, but it remains unclear.

However, Business and Professions Code section 17200 defines prohibited unfair competition to include, “any unlawful, unfair or fraudulent business act or practice…” This requirement is stated by the statute in the disjunctive, so that the proper pleading of conduct under any of the prongs would be sufficient to state a cause of action, regardless of any insufficiency of the pleading as to the other prongs. As discussed above, a claim has sufficiently been stated under the “Unlawful” prong.

The demurrer accordingly now is overruled.

Motion to Strike

Defendant Subaru seeks to strike the prayer for injunctive relief and for restitution under Business & Professions Code section 17200 et seq. on the ground that plaintiffs have failed to properly allege the third cause of action.

As noted above, under Business & Professions Code section 17200 et seq., if a proper claim is stated, the recognized remedies are injunctive relief and restitution. See Business & Professions Code section 17203 (“Any person who engages, has engaged, or proposes to engage in unfair competition may be enjoined in any court of competent jurisdiction”); Dean Witter Reynolds, Inc. v. Superior Court (1989) 211 Cal.App.3d 758, 774 (legislative history “sources indicate that the Legislature was concerned to affirm the ‘general equity power’ of the courts, particularly the power to order restitution”).

Since the demurrer to the third cause of action is overruled, the remedies provided under Business & Professions Code section 17200 et seq. are properly sought in the prayer, and the motion to strike will be denied.

RULING:

Amended Defendant Subaru of America, Inc.’s Demurrer to Plaintiffs’ First Amended Complaint is OVERRULED as untimely and on its merits.

Amended Defendant Subaru of America, Inc.’s Motion to Strike Portions of Plaintiffs’ First Amended Complaint is DENIED as untimely and on its merits.

Ten days to answer.

DEPARTMENT D IS CONTINUING TO CONDUCT AND ENCOURAGE AUDIO OR VIDEO APPEARANCES

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