Judge Randolph M. Hammock, Case Number: 22STCV11762, Date: 2023-12-20 Tentative Ruling

Plaintiff Gail Chelebian alleges she purchased a 2017 Chevrolet Bolt EV with battery defects from Defendant General Motors, LLC (“GM”). Plaintiff further alleges that Defendant was aware since 2016 that the Bolt contained battery defects. Plaintiff brings causes of action for (1) violation of Civil Code section 1793.2(d), (2) violation of section 1793.2(b), (3) violation of section 1793.2(a)(3), (4) breach of implied warranty, and (5) fraudulent concealment.

A demurrer for sufficiency tests whether the complaint states a cause of action. (Hahn v. Mirda (2007) 147 Cal. App. 4th 740, 747.) When considering demurrers, courts read the allegations liberally and in context. (Taylor v. City of Los Angeles Dept. of Water and Power (2006) 144 Cal. App. 4th 1216, 1228.) In a demurrer proceeding, the defects must be apparent on the face of the pleading or by proper judicial notice. (CCP § 430.30(a).) A demurrer tests the pleadings alone and not the evidence or other extrinsic matters. (SKF Farms v. Superior Court (1984) 153 Cal. App. 3d 902, 905.) Therefore, it lies only where the defects appear on the face of the pleading or are judicially noticed. (Id.) The only issue involved in a demurrer hearing is whether the complaint, as it stands, unconnected with extraneous matters, states a cause of action. (Hahn, 147 Cal.App.4th at 747.)

First, Defendant argues Plaintiff has not alleged the cause of action with the requisite specificity required for fraud-based claims. “Count V fails as a matter of law,” Defendant argues, “because Plaintiff failed to allege (i) the identity of the individuals at GM who purportedly concealed material facts or made untrue representations about her Bolt (ii) their authority to speak and act on behalf of GM, (iii) GM’s knowledge about alleged defects in Plaintiff’s Bolt at the time of purchase, (iv) any interactions with GM before or during the purchase of the Bolt, or (v) GM’s intent to induce reliance by Plaintiff to purchase or lease the specific Bolt at issue.” (Dem. 8: 7-12.)

Plaintiff alleges “[o]n or about December 20, 2020, Plaintiff entered into a warranty contract with Defendant GM regarding a 2020 Chevrolet Bolt EV vehicle.” (FAC ¶ 6.) The vehicle exhibited battery defects, and Defendant has failed to repair the vehicle. (Id. ¶ 64.)

Prior to purchasing the vehicle, Plaintiff reviewed GM’s marketing materials, none of which “contained information about the Battery Defect.” (Id. ¶ 8.) GM’s authorized sales representatives “assured Plaintiff that the 2020 Chevrolet Bolt battery was not plagued by the same Battery Defect that Plaintiff’s 2017 Chevrolet Bolt had.” (Id. ¶ 9.)

Plaintiff alleges that “GM knew since 2016 that the model year 2017 or newer Chevrolet Bolt EV vehicles, including 2020 Chevrolet Bolt vehicles…contained one or more design and/or manufacturing defects in the battery (i.e., the “Battery Defect”) that causes the high voltage battery to overheat when charged to full capacity and results in overheating when charged to full capacity or near full capacity, losses of propulsion power while driving, catastrophic fire, no crank, reduced range, thermal runaway, and/or spontaneous combustion.” (Id. ¶ 4.) “While it had been fully aware of the Battery Defect, GM actively concealed the existence and nature of the alleged defect from Plaintiff prior to, and at the time of entering the lease. Defendant persisted in concealing the defect and its inability to fix it during repair, and thereafter. (Id. ¶ 33.)

Specific to the Fifth Cause of Action for fraudulent inducement-concealment, Plaintiff alleges “Defendant General Motors, LLC committed fraud by allowing the Vehicle to be sold to Plaintiff without disclosing that the Vehicle and its lithium-ion battery were defective and susceptible to sudden and premature failure.” (Id. ¶ 84.)

“As with all fraud claims, the necessary elements of a concealment/suppression claim consist of ‘ “(1) misrepresentation (false representation, concealment, or nondisclosure); (2) knowledge of falsity (scienter); (3) intent to defraud (i.e., to induce reliance); (4) justifiable reliance; and (5) resulting damage.” ’ ” (Hoffman v. 162 North Wolfe LLC (2014) 228 Cal.App.4th 1178, 1185–1186.) Suppression of a material fact is actionable when there is a duty of disclosure, which may arise from a relationship between the parties, such as a buyer-seller relationship. (Id. at pp. 1186–1187.) Fraud, including concealment, must be pleaded with specificity. (Linear Technology Corp. v. Applied Materials, Inc. (2007) 152 Cal.App.4th 115, 132.)

Here, Plaintiff alleges the vehicle’s battery was defective; GM knew of the defects and the hazards they posed; GM had exclusive knowledge of the defects but intentionally failed to disclose that information; GM intended to deceive Plaintiff by concealing known battery problems; Plaintiff would not have purchased the car if she had known of the defects; and Plaintiff suffered damages in the form of money paid to purchase the car. (See Dhital v. Nissan N. Am., Inc. (2022) 84 Cal. App. 5th 828, 844 [currently under review].) Therefore, Plaintiff has adequately stated her claim.

Second, Defendant argues Plaintiff has failed to allege a “transactional relationship” giving rise to a duty to disclose. Under the LiMandri factors, a duty to disclose arises when a Defendant “actively conceals a material fact” or “makes partial representations that are misleading because some other material fact has not been disclosed.” (Collins v. eMachines, Inc. (2011) 202 Cal.App.4th 249, 255.)

Here, Plaintiff has adequately alleged the active concealment by Defendant. Plaintiff also alleges she bought the car from a GM dealership, that GM backed the car with an express warranty, and that GM’s authorized dealerships are its agents for purposes of the sale of GM vehicles to consumers. (See Dhital, supra, 84 Cal. App. 5th at 844 [finding allegations of a sale of vehicle to plaintiff from third-party dealer sufficient to allege “buyer-seller relationship” between consumer and manufacturer].)

A motion to strike lies either (1) to strike any irrelevant, false or improper matter inserted in any pleading; or (2) to strike any pleading or part thereof not drawn or filed in conformity with the laws of this state, a court rule or order of court. (CCP § 436.)

Civil Code § 3294 provides that “[i]n an action for the breach of an obligation not arising from contract where it is proven by clear and convincing evidence that the defendant has been guilty of oppression, fraud, or malice, the plaintiff, in addition to the actual damages, may recover damages for the sake of example and by way of punishing the defendant.”

First, Plaintiff is not entitled to punitive damages under the causes of action brought under the Song-Beverly Act. (See Troensegaard v. Silvercrest Industries, Inc. (1985) 175 Cal.App.3d 218 [holding punitive damages award was improper where the judgment also included a § 1794 civil penalty]; see also Gomez v. Volkswagen of America, Inc. (1985) 169 Cal. App.3d 921, 928 [“There is nothing before the court to indicate that the remedy afforded by Civil Code section 1794 is inadequate either in the amount of damages that a meritorious plaintiff may recover or as a deterrent to the proscribed conduct.”]). Plaintiff’s assertions to the contrary are incorrect. The cases cited by Plaintiff purportedly allowing “punitive damages” under Song-Beverly were in reality referring to the § 1794 “civil penalty.” (Brilliant v. Tiffin Motor Homes, Inc., 2010 WL 2721531, at *3 (N.D. Cal. July 7, 2010); Clark v. LG Elecs. U.S.A., Inc., 2013 WL 5816410, at *14 (S.D. Cal. Oct. 29, 2013)).

However, the Fifth Cause of Action for Fraudulent Inducement could permit an award of punitive damages. As discussed in the corresponding demurrer, Plaintiff has alleged facts, that if true and proven at trial, could support an award of punitive damages. (See Camenisch v. Superior Court (1996) 44 Cal.App.4th 1689, 1699 [courts are given “broad discretion” when ruling on a motion to strike].)