Judge: Robert B. Broadbelt, Case: 19STCV29421, Date: 2022-12-06 Tentative Ruling

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Case Number: 19STCV29421    Hearing Date: December 6, 2022    Dept: 53

Superior Court of California

County of Los Angeles – Central District

Department 53

MOVING PARTY:                 Defendant Ford Motor Company      

RESPONDING PARTY:       Plaintiff Arin Yaghoubi

Motion for Judgment on the Pleadings

The court considered the moving, opposition, and reply papers filed in connection with this motion.

BACKGROUND

Plaintiff Arin Yaghoubi (“Plaintiff”) filed this lemon law action against defendant Ford Motor Company on August 19, 2019.

Plaintiff filed the operative Second Amended Complaint against defendants Ford Motor Company and Star Ford Lincoln on March 21, 2022, alleging 10 causes of action for (1) breach of the implied warranty of merchantability; (2) breach of the implied warranty of fitness; (3) sale of defective merchandise without disclosing defects; (4) breach of express warranty; (5) failure to promptly repurchase product; (6) failure to commence repairs within a reasonable time and to complete them within 30 days; (7) fraud; (8) negligence; (9) breach of contract; and (10) violation of the Consumer Legal Remedies Act.

Defendant Ford Motor Company (“Defendant”) moves the court for an order granting its motion for judgment on the pleadings, without leave to amend, as to Plaintiff’s third, seventh, and tenth causes of action.

REQUEST FOR JUDICIAL NOTICE

Defendant requests that the court take judicial notice of the following facts: (1) manufacturer communications are publicly available on the website maintained by the National Highway Transportation and Safety Administration (“NHSTA”) under 49 Code of Federal Regulations section 573.15, and 49 United States Code section 30166, subdivision (f); (2) Bulletin 17-0044 was publicly available on NHTSA’s website in May of 2018; (3) Bulletin 14-0130 was publicly available on NHTSA’s website in July of 2014; and (4) consumer complaints are publicly available on NHTSA’s website pursuant to 49 United States Code section 30166, subdivision (f), and NHTSA makes its complaints searchable by keyword on its recall page. 

To the extent Defendant requests the court take judicial notice of the public statutory law or regulations, the court grants Defendant’s request for judicial notice.  (Evid. Code, § 451, subd. (a).)  The court denies Defendant’s remaining requests for judicial notice. 

DISCUSSION

The court notes that, as a threshold matter, Plaintiff contends that Defendant’s motion should be denied on procedural grounds, arguing that Defendant presents grounds only permitted by a special demurrer.  The court disagrees.  Defendant has filed its motion for judgment on the pleadings as to Plaintiff’s Second Amended Complaint on the ground that the challenged causes of action fail to state facts sufficient to constitute a cause of action, which is a proper ground to assert on a motion for judgment on the pleadings.  (Code Civ. Proc., § 438, subd. (c)(1)(B)(ii).)  

The court denies Defendant’s motion for judgment on the pleadings as to Plaintiff’s third cause of action for sale of defective merchandise without disclosing defects because it states facts sufficient to constitute a cause of action since (1) Plaintiff sufficiently alleges that Defendant did not disclose the known safety problems with the known defect in the prior model years (SAC ¶ 22) and thus alleges that Defendant advertised merchandise that was defective without placing a conspicuously displayed statement indicating that the vehicles were defective; (2) Plaintiff alleges that he was injured because he has lost money or property as a result of Defendant’s conduct, since Plaintiff would not have leased the subject vehicle had he known of the safety defects (SAC ¶¶ 27, 29); and (3) the Second Amended Complaint does not show, on its face, that Plaintiff has other adequate remedies under the Song-Beverly Act.  (Code Civ. Proc., § 438, subd. (c)(1)(B)(ii); Bus. & Prof. Code, § 17531.)

The court denies Defendant’s motion for judgment on the pleadings as to Plaintiff’s seventh cause of action for fraud because it states facts sufficient to constitute a cause of action since Plaintiff alleges, with sufficient particularity, that (1) Defendant concealed material facts relating to the defects of the vehicle, including the propensity for vehicles of its type to have a dangerous condition whereby carbon monoxide is able to leak, which Defendant was under a duty to disclosure since it knew of the facts and Plaintiff had no means to discover the facts (SAC ¶¶ 53-54); (2) Defendant knew of these facts and concealed them with the intent to defraud Plaintiff and induce him to lease the vehicle (SAC ¶ 74); (3) had Plaintiff known of the facts, he would not have leased the vehicle (SAC ¶¶ 74, 81); and (4) Plaintiff was harmed and suffered actual damages, including because the vehicle was and is unsafe to drive.  (Code Civ. Proc., § 438, subd. (c)(1)(B)(ii); Jones v. ConocoPhillips Co. (2011) 198 Cal.App.4th 1187, 1198 [setting forth elements for fraud based on concealment]; Apollo Capital Fun LLC v. Roth Capital Partners, LLC (2007) 158 Cal.App.4th 226, 242 [“Pleading facts in ordinary and concise language is as permissible in fraud cases as in any others”].)

The court denies Defendant’s motion for judgment on the pleadings as to Plaintiff’s seventh cause of action for fraud because it states facts sufficient to constitute a cause of action since it is not barred by the economic loss rule.  (Code Civ. Proc., § 438, subd. (c)(1)(B)(ii); Dhital v. Nissan North America (2022) 84 Cal.App.5th 828.)   

“[T]he economic loss rule provides:¿ ‘ “ ‘[W]here 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.’ ”¿ (Robinson Helicopter Co., Inc. v. Dana Corp. (2004) 34 Cal.4th 979, 988 [citation omitted].)¿ Therefore, “[t]he 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.”¿ (Ibid.)¿ There are exceptions to this rule.  “[U]nder California law, the economic loss rule does not bar [a plaintiff’s] claim . . . for fraudulent inducement by concealment.”  (Dhital, supra, 84 Cal.App.5th at p. 843.)  “[I]n the case of fraudulent inducement (whether it is achieved by intentional concealment or by intentional affirmative misrepresentations), because a defendant’s conduct in fraudulently inducing someone to enter a contract is separate from the defendant’s later breach of the contract or warranty provisions that were agreed to[,]” it is an exception to the economic loss rule.  (Id. at p. 841.)  Therefore, the court finds that Plaintiff’s claim for fraud is not barred by the economic loss rule, since Plaintiff has sufficiently alleged that Defendant concealed material facts relating to the vehicle with the intent to defraud him and to induce him to lease the vehicle (SAC ¶ 74), which constitutes “fraudulent conduct that is independent of [Defendant’s] alleged warranty breaches.”  (Code Civ. Proc., §¿430.10, subd. (e); Dhital, supra, 84 Cal.App.5th at p. 843.) 

The court denies Defendant’s motion for judgment on the pleadings as to Plaintiff’s tenth cause of action for violation of the Consumer Legal Remedies Act because it states facts sufficient to constitute a cause of action since Plaintiff alleges that Defendant sold the subject vehicle “despite knowing that the vehicle did not meet the reliability and safety qualities advertised” (SAC ¶ 111 [emphasis added]), and therefore alleges that Defendant represented that the subject vehicle (1) had characteristics that it did not have (i.e., the safety qualities advertised), and (2) the goods were “of a particular standard, quality, or grade, or that goods are of a particular style  or model, if they are of another.”  (Code Civ. Proc., § 438, subd. (c)(1)(B)(ii); Civ. Code, § 1770, subds. (a)(5), (a)(7).)

The court notes that Defendant also moves for judgment on the pleadings as to the tenth cause of action on the ground that Plaintiff is not entitled to damages under the statute until notice is provided.  However, Plaintiff also requests other remedies (i.e., punitive damages and injunctive relief) in connection with this cause of action.  To the extent that Defendant believes that Plaintiff is requesting an improper remedy in connection with this cause of action, the appropriate procedure would be to file a motion to strike. 

ORDER

            The court denies defendant Ford Motor Company’s motion for judgment on the pleadings.

The court orders plaintiff Arin Yaghoubi to give notice of this ruling.

IT IS SO ORDERED.

DATED:  December 6, 2022

_____________________________

Robert B. Broadbelt III

Judge of the Superior Court