Judge Richard S. Whitney, Case 37-2023-00033823-CU-BC-CTL 2024-03-22 Tentative Ruling

Judge: Richard S. Whitney, Case: 37-2023-00033823-CU-BC-CTL, Date: 2024-03-22 Tentative Ruling

SUPERIOR COURT OF CALIFORNIA,

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HALL OF JUSTICE

TENTATIVE RULINGS - March 20, 2024

03/22/2024 10:30:00 AM C-68 COUNTY OF SAN DIEGO

JUDICIAL OFFICER:Richard S. Whitney

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Civil - Unlimited Breach of Contract/Warranty Demurrer / Motion to Strike 37-2023-00033823-CU-BC-CTL GONZALEZ VS FORD MOTOR COMPANY [IMAGED] CAUSAL DOCUMENT/DATE FILED:

TENTATIVE RULING: DEFENDANT FORD MOTOR COMPANY'S DEMURRER TO PLAINTIFF'S COMPLAINT is OVERRULED.

Defendants FORD MOTOR COMPANY ('Defendant' or 'FORD') challenges Plaintiff MARTIN GONZALEZ's ('Plaintiff') third cause of action for 'Fraudulent Inducement – Concealment.' Defendant argues Plaintiffs have not alleged sufficient facts to support fraud. '[T]he elements of an action for fraud and deceit 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 the plaintiff, (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, and (5) as a result of the concealment or suppression of the fact, the plaintiff must have sustained damage.' (Lovejoy v. AT&T Corp. (2001) 92 Cal.App.4th 85, 96 [Citation omitted].) Fraud must be pled with particularity; however, such rule of particularity is harder to apply to a case of simple nondisclosure. 'How does one show 'how' and 'by what means' something didn't happen, or 'when' it never happened, or 'where' it never happened?' ... One of the purposes of the specificity requirement is 'notice to the defendant, to 'furnish the defendant with certain definite charges which can be intelligently met.' ' (Committee on Children's Television, Inc. v. General Foods Corp., supra, 35 Cal.3d 197, 216, 197 Cal.Rptr. 783, 673 P.2d 660.) Less specificity should be required of fraud claims 'when 'it appears from the nature of the allegations that the defendant must necessarily possess full information concerning the facts of the controversy,' ...

(Alfaro v. Community Housing Improvement System & Planning Assn., Inc. (2009) 171 Cal.App.4th 1356, 1384–1385.) Plaintiff has alleged that Defendant failed to disclose the '10R80 Transmissions Defect,' which Plaintiffs allege was in Plaintiff's vehicle, that Defendant had a duty to disclose the defect, that Defendant and its agents 'intentionally concealed and failed to disclose material facts relating to the defective 10R80 transmission,' that Defendant intended to deceive Plaintiff in an effort to sell or lease the subject vehicle, that Plaintiff was unaware of the '10R80 Transmissions Defect,' that Plaintiff would not have purchased or leased the vehicle had the known of the defect, and that he was damaged. (Complaint, ¶¶ 126-145.) Plaintiff describes the '10R80 Transmissions Defect' in detail and that '[d]uring the powertrain warranty Calendar No.: Event ID: TENTATIVE RULINGS

3045605 67 CASE NUMBER: CASE TITLE: GONZALEZ VS FORD MOTOR COMPANY [IMAGED] 37-2023-00033823-CU-BC-CTL period, Plaintiff presented the Subject Vehicle to a FORD authorized dealership for repair after experiencing drivability concerns stemming from the 10R80 Transmission Defect on at least one occasion.' (Complaint, ¶¶ 12-15, 58.) Whether any of Plaintiff's repair visits fit the description of the '10R80 Transmissions Defect' is a factual dispute that need not be addressed at this stage. The Court finds these allegations are sufficient.

Defendant has a duty to disclose if it 'has exclusive knowledge of material facts not known or reasonably accessible to the plaintiff.' (Collins v. eMachines, Inc. (2011) 202 Cal.App.4th 249, 255.) '[M]ateriality is generally a question of fact unless the fact misrepresented is so obviously unimportant that the jury could not reasonably find that a reasonable man would have been influenced by it.' (Stearns v. Ticketmaster Corp. (9th Cir. 2011) 655 F.3d 1013, 1022.) A safety concern is a material fact that a manufacturer has a duty to disclose. (See Jones v. ConocoPhillips (2011) 198 Cal.App.4th 1187, 1198.) Plaintiff alleges Defendant's knowledge of safety concerns with '10R80 equipped FORD vehicles' and supporting facts as to how Defendant had such knowledge and why such information was not reasonably accessible to Plaintiff. (Complaint, ¶¶ 14-45.) Specifically, as to it being a safety concern, Plaintiff alleges '[t]his Transmission Defect creates unreasonably dangerous situations while driving and increases the risk of a crash when trying to accelerate from a stop; when slowing down to a stop, at low speeds when drivers intend to accelerate to merge with highway traffic; and when attempting to drive uphill.' (Complaint, ¶ 15.) The allegations are enough to support a duty to disclose.

Defendant also asserts the lack of a direct transaction relationship.

There are four circumstances in which nondisclosure or concealment may constitute actionable fraud: (1) when the defendant is in a fiduciary relationship with the plaintiff; (2) when the defendant had exclusive knowledge of material facts not known to the plaintiff; (3) when the defendant actively conceals a material fact from the plaintiff; and (4) when the defendant makes partial representations but also suppresses some material facts.

(Bigler-Engler v. Breg, Inc. (2017) 7 Cal.App.5th 276, 311 [Citation and quotes omitted].) Aside from a fiduciary relationship, the three other circumstances 'presuppose[ ] the existence of some other relationship between the plaintiff and defendant in which a duty to disclose can arise.' (Id. [Citation and quotes omitted].) Our Supreme Court has described the necessary relationship giving rise to a duty to disclose as a 'transaction' between the plaintiff and defendant: 'In transactions which do not involve fiduciary or confidential relations, a cause of action for non-disclosure of material facts may arise in at least three instances: (1) the defendant makes representations but does not disclose facts which materially qualify the facts disclosed, or which render his disclosure likely to mislead; (2) the facts are known or accessible only to defendant, and defendant knows they are not known to or reasonably discoverable by the plaintiff; (3) the defendant actively conceals discovery from the plaintiff.' (Warner Construction Corp. v. City of Los Angeles (1970) 2 Cal.3d 285, 294, 85 Cal.Rptr. 444, 466 P.2d 996, italics added, fns.

omitted.) (Id.) 'Such a transaction must necessarily arise from direct dealings between the plaintiff and the defendant; it cannot arise between the defendant and the public at large.' (Id. at 312.) 'Where...a sufficient relationship or transaction does not exist, no duty to disclose arises even when the defendant speaks.' (Id.) 'Plaintiffs must show a transaction before a duty to disclose may arise....' (Scherer v. FCA US, LLC (S.D. Cal. 2021) 565 F.Supp.3d 1184, 1194.) The Court agrees with the court in Scherer that the contractual warranty relationship is sufficient to establish a relationship that creates a duty to disclose. (See Scherer, supra, 565 F.Supp.3d at 1194 wherein the court distinguishes Bigler-Engler based on the existence of a contractual relationship with the defendant based on a warranty.) Further, in an analogous case the court found a similar argument unpersuasive. (Dhital v. Nissan North America, Inc. (2022) 84 Cal.App.5th 828, 844.) The Court finds Calendar No.: Event ID: TENTATIVE RULINGS

3045605 67 CASE NUMBER: CASE TITLE: GONZALEZ VS FORD MOTOR COMPANY [IMAGED] 37-2023-00033823-CU-BC-CTL Dhital persuasive. The Court is aware Dhital is not binding as review has been granted, but it may still be considered persuasive under California Rules of Court, Rule 8.1115(e). Defendant's argument in this regard fails.

'[T]he only intent by a defendant necessary to prove a case of fraud is the intent to induce reliance.

Moreover, liability is affixed not only where the plaintiff's reliance is intended by the defendant but also where it is reasonably expected to occur.' (Lovejoy, supra, 92 Cal.App.4th at 93.) The Court finds Plaintiff has alleged sufficient facts to support that Defendant could reasonably expect that Plaintiff would rely upon the intentional nondisclosures in making Plaintiff's decision to purchase or lease the vehicle.

Finally, Defendant asserts the economic loss rule bars Plaintiff's fraud claim. 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.' (Robinson Helicopter Co., Inc. v. Dana Corp. (2004) 34 Cal.4th 979, 988.) Robinson's holding was '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.' (Robinson, supra, 34 Cal.4th at 993.) Robinson did not decide whether fraudulent concealment would be barred by the economic loss rule. However, in Nu Cal Foods, Inc. v. Quality Egg LLC (E.D. Cal. 2013) 918F.Supp.2d 1023, the court found Robinson 'strongly suggests no meaningful distinction exists between intentional concealment and intentional misrepresentation' and found the economic loss rule did not bar a claim for intentional omissions. (Id. at 1031-1033.) Where a duty separate from the contract is breached, the economic loss rule does not apply, such as 'where the contract was fraudulently induced.' (Erlich v. Menezes (1999) 21 Cal.4th 543, 552.) '[U]nder California law, the economic loss rule does not bar plaintiffs' claim here for fraudulent inducement by concealment. Fraudulent inducement claims fall within an exception to the economic loss rule recognized by our Supreme Court (Robinson, supra, 34 Cal.4th at pp. 989–990, 22 Cal.Rptr.3d 352, 102 P.3d 268), and plaintiffs allege fraudulent conduct that is independent of Nissan's alleged warranty breaches.' (Dhital, supra, 84 Cal.App.5th at 843.) While Dhital is not binding on this Court, the Court agrees with the reasoning in Dhital. Defendant's argument fails. The demurrer is overruled.

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