Judge Randolph M. Hammock, Case 21STCV15780 2023-02-03 Tentative Ruling

Plaintiffs Erika Sanchez and Sonia Palma bring this action against Defendants Peyton Cramer Ford and Ford Motor Company for violations of the Song-Beverly Act. Plaintiffs include related cause of action for negligent repair. Plaintiffs allege they purchased a 2015 Ford Edge that exhibits engine defects.

Generally speaking, leave to amend must be allowed where there is a reasonable possibility of successful amendment. (Goodman v. Kennedy (1976) 18 Cal.3d 335, 348.) Plaintiffs must demonstrate this possibility at the hearing. If they don’t, no leave to amend will be given.

The rules applicable to demurrers also apply to motions for judgment on the pleadings. (County of Orange v. Association of Orange County Deputy Sheriffs (2011) 192 Cal.App.4th 21, 32.) A motion for judgment on the pleadings is properly granted when the “complaint does not state facts sufficient to constitute a cause of action against that defendant.” (Code Civ. Proc., § 438, subd. (c)(1)(B)(ii).) The grounds for the motion must appear on the face of the challenged pleading or from matters that may be judicially noticed. (Code Civ. Proc., § 438, subd. (d).) The trial court must accept as true all material facts properly pleaded, but does not consider conclusions of law or fact, opinions, speculation, or allegations contrary to law or facts that are judicially noticed. (Stevenson Real Estate Services, Inc. v. CB Richard Ellis Real Estate Services, Inc. (2006) 138 Cal.App.4th 1215, 1219-20.) “A motion for judgment on the pleadings may be made at any time either prior to the trial or at the trial itself.” (Stoops v. Abbassi (2002) 100 Cal.App.4th 644, 650.)

Plaintiffs allege they presented their vehicle to Defendant Peyton Cramer Ford on “numerous occasions” and that Defendant “fail[ed] to properly store, prepare and repair” the vehicle. (Compl. ¶¶ 54, 55.) Defendant Peyton Cramer Ford moves for judgment on the pleadings as to the fourth cause of action for negligent repair. [FN 1] Defendant’s arguments are addressed in turn.

Defendant argues the fourth cause of action fails because the vehicle defects arose within the applicable express warranty period, and Plaintiffs have not alleged that they paid for any repairs out-of-pocket. Thus, Defendant argues, Plaintiffs cannot establish the essential element of damages to state their negligent repair claim. “The elements of a cause of action for negligence are: duty; breach of duty; legal cause; and damages.” (Friedman v. Merck & Co. (2003) 107 Cal. App. 4th 454, 463.)

Defendant next argues the cause of action is barred by the economic loss rule. “[B]ecause there are no allegations of physical damage to property - other than the defective product itself - or that personal injury accompanied such losses, the economic loss rule limits Plaintiffs’ claims to contract, not tort, such that Plaintiffs’ negligent repair claim is barred as a matter of law.” (Mtn. 5: 21-24.) On the other hand, Plaintiffs argue the rule does not apply here because “[n]o contract of any kind has been pled by either Plaintiffs or AutoNation Ford regarding this cause of action.” (Opp. 2: 9-10.)

“[T]he economic loss rule provides: 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.’ 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. Quite simply, the economic loss rule ‘prevents the law of contract and the law of tort from dissolving one into the other.” (Food Safety Net Services v. Eco Safe Systems USA, Inc. (2012) 209 Cal.App.4th 1118, 1130 [citing Robinson Helicopter Co., Inc. v. Dana Corp. (2004) 34 Cal.4th 979, 988].)

Here, Plaintiffs have alleged no physical damage to property (aside from the vehicle itself), and no personal injuries. Moreover, they have not alleged intentional acts on behalf of Defendant that would bring this case into the narrow exception to the economic loss rule for fraud recognized in Robinson Helicopter Co., Inc. v. Dana Corp. (2004) 34 Cal. 4th 979.) Rather, Plaintiffs have alleged purely economic losses as a result of Defendant’s failure to conform the vehicle to warranty. Thus, their “remedy is said to be in contract alone, for [they] ha[ve] suffered only ‘economic’ losses.” (Id. at 988.)

Plaintiffs’ reliance on North American Chemical to support the cause of action is misplaced. Later Supreme Court of California cases have addressed the economic loss rule in detail without invoking any distinction for negligent performance of services. (See Erlich v. Menezes (1999) 21 Cal.4th 543; Robinson Helicopter Co., supra, 34 Cal. 4th 979.) Indeed, more than one court has raised doubts as to North American Chemical’s continued vitality. (See Peregrine, supra, 2015 WL 13309286, *6 [finding that North American’s holding “has largely been ignored or contradicted in subsequent opinions by the California Supreme Court.”]; see also Vepo Design Corp. v. Am. Econ. Ins. Co. (C.D. Cal. Feb. 11, 2021) No. CV204950MWFJEMX, 2021 WL 968961, at *5 [stating North American Chemical “does not appear to be good law.”].) Thus, Plaintiffs’ fourth cause of action is barred by the economic loss rule.

Judge of the Superior Court

FN 1 - Of course, one is left to wonder what additional damages will the Plaintiff be able to obtain under this completely unnecessary cause of action, as compared to the other Song-Beverly causes of action? The answer is obvious: None. Although this Court recognizes that a Plaintiff may alleged alternative theories of recovery, it is submitted that the burden of proof required under Song-Beverly Act is much easier to meet than ordinary negligence. Perhaps Plaintiff’s specious opposition to this MJOP is merely another “billing event”? We shall see.

Any party may submit on the tentative ruling by contacting the courtroom via email at Smcdept49@lacourt.org by no later than 4:00 p.m. the day before the hearing. All interested parties must be copied on the email. It should be noted that if you submit on a tentative ruling the court will still conduct a hearing if any party appears. By submitting on the tentative you have, in essence, waived your right to be present at the hearing, and you should be aware that the court may not adopt the tentative, and may issue an order which modifies the tentative ruling in whole or in part.