Judge: Richard Y. Lee, Case: 30-2022-01239973, Date: 2023-05-18 Tentative Ruling
Defendant General Motors LLC (“Defendant”) filed a Motion for Judgment on the Pleadings as to Plaintiff’s ninth cause of action for advertising defective merchandise without disclosing defects pursuant to Business and Professions Code sections 17531 and 17535 and tenth cause of action for conversion.
As required, Defendant sufficiently met and conferred prior to bringing this Motion. (Code Civ. Proc., § 439, subd. (a).)
I. Ninth Cause of Action for Violation of California’s Unfair Competition Law
Defendant seeks judgment on the pleadings as to Plaintiff’s ninth cause of action for violation of California’s Unfair Competition Law. In his ninth cause of action, Plaintiff alleges that Defendant violated Business and Professions Code sections 17531 and 17535.
Business and Professions Code section 17531 states:
“It is unlawful for any person, firm, or corporation, in any newspaper, magazine, circular, form letter or any open publication, published, distributed, or circulated in this state, including over the Internet, or on any billboard, card, label, or other advertising medium, or by means of any other advertising device, to advertise, call attention to or give publicity to the sale of any merchandise, which merchandise is secondhand or used merchandise, or which merchandise is defective in any manner, or which merchandise consists of articles or units or parts known as “seconds,” or blemished merchandise, or which merchandise has been rejected by the manufacturer thereof as not first class, unless there is conspicuously displayed directly in connection with the name and description of that merchandise and each specified article, unit, or part thereof, a direct and unequivocal statement, phrase, or word which will clearly indicate that the merchandise or each article, unit, or part thereof so advertised is secondhand, used, defective, or consists of “seconds” or is blemished merchandise, or has been rejected by the manufacturer thereof, as the case may be. Any violation of this section is a misdemeanor punishable by imprisonment in the county jail not exceeding six months, or by a fine not exceeding two thousand five hundred dollars ($2,500), or by both that imprisonment and fine.” (Bus. & Prof. Code, § 17531.)
Business and Professions Code section 17535 states:
“Any person, corporation, firm, partnership, joint stock company, or any other association or organization which violates or proposes to violate this chapter may be enjoined by any court of competent jurisdiction. The court may make such orders or judgments, including the appointment of a receiver, as may be necessary to prevent the use or employment by any person, corporation, firm, partnership, joint stock company, or any other association or organization of any practices which violate this chapter, or which may be necessary to restore to any person in interest any money or property, real or personal, which may have been acquired by means of any practice in this chapter declared to be unlawful.
“Actions for injunction under this section may be prosecuted by the Attorney General or any district attorney, county counsel, city attorney, or city prosecutor in this state in the name of the people of the State of California upon their own complaint or upon the complaint of any board, officer, person, corporation or association or by any person who has suffered injury in fact and has lost money or property as a result of a violation of this chapter. Any person may pursue representative claims or relief on behalf of others only if the claimant meets the standing requirements of this section and complies with Section 382 of the Code of Civil Procedure, but these limitations do not apply to claims brought under this chapter by the Attorney General, or any district attorney, county counsel, city attorney, or city prosecutor in this state.” (Bus. & Prof. Code, § 17535.)
Importantly, the “phrase ‘as a result of’ in its plain and ordinary sense means ‘caused by’ and requires a showing of a causal connection or reliance on the alleged misrepresentation.” (Kwikset Corp. v. Superior Court (2011) 51 Cal.4th 310, 326.)
Here, Plaintiff alleges that the vehicle at issue contained defects related to the “electrical system, problems with the door locks, and failure of the key fob, among other defects and nonconformities.” (ROA 2, Compliant, ¶ 7.)
Plaintiff also alleges that Defendant advertised the defective vehicle “without conspicuously displaying directly in connection with the name and description of that merchandise and each article, unit, or part thereof, a direct and unequivocal statement, phrase, or word which clearly indicated that the merchandise or each article, unit, or part thereof so advertised was defective.” (ROA, Complaint, ¶ 53.)
Plaintiff further alleges that such advertisements were made in “a newspaper, magazine, circular, form letter or in an open publication, published, distributed, or circulated in this state, including over the Internet, or on any billboard, card, label, or other advertising medium, or by means of another advertising device.” (ROA, Complaint, ¶ 54.) This is a legal conclusion and recitation of the Business and Professions Code section 17531. The Complaint lacks information regarding the advertisement that Plaintiff relied on in making his purchase of the allegedly defective vehicle.
Moreover, Plaintiff does not sufficiently plead the requisite causal connection or reliance on the alleged advertisements with regarding his purchase of the vehicle. Rather, Plaintiff simply concludes that “Plaintiff has suffered injury in fact and has lost money or property as a result of Defendant Warrantor’s violation of Business & Professions Code section 17531.” (Complaint, ¶ 55.) This too is a legal conclusion.
Once Plaintiff adequately alleges a violation of Business and Professions Code section 17531, Plaintiff necessarily establishes a claim for injunctive relief pursuant to Business and Professions Code section 17535. Business and Professions Code section 17535 permits “any person who has suffered injury in fact and has lost money or property as a result of a violation of this chapter” to bring a claim for injunctive relief.
As such, the Motion for Judgment on the Pleadings is GRANTED WITH 20 DAYS LEAVE TO AMEND as to Plaintiff’s ninth cause of action for advertising defective merchandise without disclosing defects pursuant to Business and Professions Code sections 17531 and 17535.
II. Conversion
Defendant seeks judgment on the pleadings as to Plaintiff’s tenth cause of action for conversion.
“Conversion is the wrongful exercise of dominion over the property of another.” (Los Angeles Federal Credit Union v. Madatyan (2012) 209 Cal.App.4th 1383, 1387.) “The elements of a conversion claim are: (1) the plaintiff’s ownership or right to possession of the property; (2) the defendant’s conversion by a wrongful act or disposition of property rights; and (3) damages. Conversion is a strict liability tort.” (Ibid.)
Importantly, “the foundation of the action rests neither in the knowledge nor the intent of the defendant” and “[t]herefore, questions of the defendant’s good faith, lack of knowledge, and motive are ordinarily immaterial.” (Los Angeles Federal Credit Union v. Madatyan (2012) 209 Cal.App.4th 1383, 1387.)
“Money can be the subject of a conversion action if a specific, identifiable sum is involved.” (Ortega v. Toyota Motor Sales, USA, Inc. (S.D. Cal. 2008) 572 F.Supp.2d 1218, 1220.) However, “the simple failure to pay money owed does not constitute conversion.” (Kim v. Westmoore Partners, Inc. (2011) 201 Cal.App.4th 267, 284.)
Rather, “[a] cause of action for conversion of money can be stated only where a defendant interferes with the plaintiff’s possessory interest in a specific, identifiable sum, such as when a trustee or agent misappropriates the money entrusted to him.” (Kim v. Westmoore Partners, Inc. (2011) 201 Cal.App.4th 267, 284.)
Here, Plaintiff alleges that “Plaintiff is the owner of and has an immediate right to possession of a specific sum of money which is capable of identification.” (Complaint, ¶ 57.) Plaintiff does not identify the “specific sum of money” to which he has an immediate right to possession.
Even so, a clear, fixed identifiable sum of damages does not appear to exist, to reasonably consider this as a “converted” sum of money. The measure of damages under the Song-Beverly Act includes reimbursement of the buyer’s purchase price paid to the seller. (CACI No. 3241; Civ. Code, §§ 1794(b) and 1793.2(d).) If a claim of unpaid “damages” under the Act, underlies the conversion theory, then the statute also provides that reimbursement will be apparently reduced for the plaintiff’s use of the vehicle and this will be measured under a fairly complicated formula for determining this usage. (Civil Code, § 1793.2(d)(1) and (d)(2)(C); CACI No. 3241.).
Moreover, Plaintiff’s allegations that Defendant has failed to make a restitution to Plaintiff also does not appear to be a claim for conversion. Instead, this appears to be an allegation regarding a failure to pay money allegedly owed under the Song-Beverly Act. As expressly stated in Kim v. Westmoore Partners, Inc. (2011) 201 Cal.App.4th 267, such a circumstance does not constitute conversion.
As such, Motion for Judgment on the Pleadings is GRANTED WITHOUT LEAVE TO AMEND as to Plaintiff’s tenth cause of action for conversion.
Defendant to give notice.