Judge Ronald F. Frank, Case Number: 23TRCV02570, Date: 2023-10-31 Tentative Ruling

Judge: Ronald F. Frank, Case: 23TRCV02570, Date: 2023-10-31 Tentative Ruling

Case Number: 23TRCV02570 Hearing Date: March 6, 2024 Dept: 8

Tentative Ruling¿

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HEARING DATE: March 6, 2024¿

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CASE NUMBER: 23TRCV02570

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CASE NAME: Kevin Symons v. General Motors, LLC, et al.

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MOVING PARTY: Defendant, General Motors, LLC

RESPONDING PARTY: Plaintiff, Kevin Symons

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TRIAL DATE: Not Set

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MOTION:¿ (1) Demurrer¿

(2) Motion to Strike

Tentative Rulings: (1) SUSTAINED

(2) Defendant’s Motion to Strike is MOOTED

I. BACKGROUND¿¿

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A. Factual¿¿

On August 9, 2023, Plaintiff, Kevin Symons (“Plaintiff”) filed a Complaint against Defendant General Motors (“GM”) and DOES 1 through 20. On November 20, 2023, Plaintiff filed a First Amended Complaint (“FAC”) alleging causes of action for: (1) Fraud – Concealment; (2) Business and Professions Code § 17200; (3) Song-Beverly Consumer Warranty Act – Breach of Express Warranty; (4) Song-Beverly Consumer Warranty Act – Breach of Implied Warranty; (5) Song-Beverly Consumer Warranty Act – Civil Code § 1793.2(b).

On October 31, 2023, this Court SUSTAINED GM’s demurrer as to the original complaint and ruled that the Motion to Strike was mooted. Plaintiff amended the allegations and served a FAC, to which Defendant GM has now filed another Demurrer and Motion to Strike.

B. Procedural¿¿

On December 20, 2023, Defendant, GM filed a Demurrer and Motion to Strike. On February 22, 2024, Plaintiff filed opposition papers. On February 28, 2024, Defendant, GM filed a reply briefs.

¿II. MOVING PARTY’S GROUNDS

GM demurs to Plaintiff’s complaint on the grounds that it argues the First Cause of Action for Fraudulent Concealment and Second Cause of Action for Violation of Business and Professions Code § 17200 fail to state sufficient facts to state a cause of action against Defendant, GM.

III. ANALYSIS¿

A. Demurrer

Legal Standard

A demurrer can be used only to challenge defects that appear on the face of the pleading under attack or from matters outside the pleading that are judicially noticeable. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) “To survive a demurrer, the complaint need only allege facts sufficient to state a cause of action; each evidentiary fact that might eventually form part of the plaintiff’s proof need not be alleged.” (C.A. v. William S. Hart Union High School Dist. (2012) 53 Cal.4th 861, 872.) For the purpose of testing the sufficiency of the cause of action, the demurrer admits the truth of all material facts properly pleaded. (Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 966-967.) A demurrer “does not admit contentions, deductions or conclusions of fact or law.” (Daar v. Yellow Cab Co. (1967) 67 Cal.2d 695, 713.)¿¿¿

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A pleading is uncertain if it is ambiguous or unintelligible. (Code Civ. Proc., § 430.10, subd. (f).) A demurrer for uncertainty may lie if the failure to label the parties and claims renders the complaint so confusing defendant cannot tell what he or she is supposed to respond to.¿ (Williams v. Beechnut Nutrition Corp. (1986) 185 Cal.App.3d 135, 139, fn. 2.) However, “[a] demurrer for uncertainty is strictly construed, even where a complaint is in some respects uncertain, because ambiguities can be clarified under modern discovery procedures.” (Khoury v. Maly's of California, Inc. (1993) 14 Cal.App.4th 612, 616.)¿¿

Fraudulent Concealment

Specificity Requirement

Defendant GM argues that Plaintiff’s fraud claim fails as a matter of law because it is not pleaded with the requisite specificity. The elements of a cause of action for fraudulent concealment are: (1) concealment of a material fact; (2) by a defendant with a duty to disclose; (3) the defendant intended to defraud by failing to disclose; (4) plaintiff was unaware of the fact and would not have acted as it did had it known the fact; and (5) damages.” (Butler America, LLC v. Aviation Assurance Company, LLC (2020) 55 Cal.App.5th 136, 144.) The facts constituting the alleged fraud must be alleged factually and specifically as to every element of fraud, as the policy of “liberal construction” of the pleadings will not ordinarily be invoked. (Lazar v. Superior Court (1996) 12 Cal.4th 631, 645.) To properly allege fraud against a corporation, the plaintiffs must plead the names of the persons allegedly making the false representations, their authority to speak, to whom they spoke, what they said or wrote, and when it was said or written. (Tarmann v. State Farm Mut. Auto. Ins. Co. (1991) 2 Cal.App.4th 153, 157.)

. GM asserts that Plaintiff’s fraud claim fails because Plaintiff did not: (1) the identity of the individuals at GM who purportedly concealed material facts or made untrue representations about his Bolt; (2) their authority to speak and act on behalf of GM; (3) GM’s knowledge about alleged defects in Plaintiff’s Bolt at the time of sale; (4) any interactions with GM before or during the purchase of his Bolt; or (5) GM’s intent to induce reliance by Plaintiff to purchase the specific Bolt at issue. The Court disagrees. In fact, the allegations in Plaintiff’s FAC are exceptionally detailed. Although it is true that the FAC fails to allege the names of the persons who concealed facts or who knew of a battery defect in the subject vehicle, details of that nature are required in AFFIRMATIVE misrepresentation cases, not concealment cases.

This Court finds that the FAC meets the pleading standard for fraudulent concealment. However, with fraudulent concealment, California law, a duty to disclose material facts may arise (1) when the defendant is in a fiduciary relationship with the plaintiff; (2) when the defendant has exclusive knowledge of material facts not known to the plaintiff; (3) when the defendant actively conceals a material fact from the plaintiff; or (4) when the defendant makes partial representations but also suppresses some material facts. (Falk v. General Motors Corp. (N.D. Cal. 2007) 496 F.Supp.2d 1088, 1098-1099 citing LiMandri v. Judkins (1997) 52 Cal.App.4th 326.) The Opposition alleges that the FAC contains allegations supporting that the defective battery was a material fact, and that GM had exclusive knowledge of non-public information.

Transactional Relationship

Here, GM does not argue that Plaintiff has failed to allege a transactional relationship between itself and Plaintiff, nor does it argue that Plaintiff has failed to allege other circumstances giving rise to a duty to disclose. Nonetheless, this Court notes that absent a fiduciary relationship between the parties, a duty to disclose can arise in only three circumstances: (1) the defendant had exclusive knowledge of the material fact; (2) the defendant actively concealed the material fact; or (3) the defendant made partial representations while also suppressing the material fact. (BiglerEngler v. Breg, Inc. (2017) 7 Cal.App.5th 276, 311; LiMandri v. Judkins (1997) 52 Cal.App.4th 326, 336.) In Bigler-Engler, the Court of Appeals reversed a verdict for fraudulent concealment against the manufacturer of a medical device because the manufacturer and the plaintiff (who was injured by using the device) did not have the required direct transactional relationship. (Bigler-Engler, supra, 7 Cal.App.5th at 314-15.) There, the plaintiff did not obtain the device directly from the manufacturer but from a medical group that sold and leased such devices. (Id. at 287, 314.) The Court of Appeals went on to explain, the lack of direct dealings between the plaintiff and the manufacturer was fatal to the plaintiff’s argument that the manufacturer had a duty to disclose. (Id. at 312 [“Where, as here, a sufficient relationship or transaction does not exist, no duty to disclose arises even when the defendant speaks.”].)

In a fraud action based on nondisclosure, if the duty to disclose arises from the making of representations that were misleading or false, then those allegations should be described. (Alfaro, supra, 171 Cal.App.4th at p. 1384.) Further, “mere conclusionary allegation that the omissions were intentional and for the purpose of defrauding and deceiving plaintiffs and bringing about the purchase…and that plaintiffs relied on the omissions in making such purchase are insufficient to show fraud by concealment.” (Goodman v. Kennedy (1976) 18 Cal.3d 335, 347.) Here, Plaintiff does not seem to allege a direct transactional relationship between himself and GM. Instead, Plaintiff contends that a transactional relationship is not required for GM to have a duty to disclose and relies on the material fact being concealed by GM – who allegedly had exclusive knowledge. The Court notes that the FAC does allege that from September 2014 to at least February 2019, Defendant issued many “Costumer Satisfaction Program to its dealers in the United States, but not to its customers, warning about the battery defects in the Bolt EV vehicles.

Although a transactional relationship has not been alleged or argued, Plaintiff does argue that the battery defect is a material fact. As to the second potentila ground for a duty to disclose, Plaintiff argues that the FAC sufficiently alleges exclusive knowledge of the claimed material fact. The FAC alleges that GM possessed superior and exclusive knowledge regarding the defect through various means, including, but not limited to, customer complaints and internal testing. (FAC, ¶ 33.) The FAC also alleges that GM’s concealment of this battery defect was material and Plaintiff relied on Defendant GM’s omissions and concealment of material facts regarding the nature and quality of the vehicle and existence of the battery defect. (FAC, ¶¶ 30, 35.) The FAC also contends that GM knowingly and intentionally concealed material facts and breached its duty not to do so. (FAC, ¶ 30.) Plaintiff also alleges that he had a reasonable expectation that the Vehicle would not expose him and other vehicle occupants to such a safety hazard, and that no reasonable consumer expects a vehicle to be designed, manufactured and assembled such that a defect will pose a significant fire risk. (FAC, ¶ 31.) But the Complaint does not allege that plaintiff actually encountered a safety hazard or experienced what the FAC vaguely alleges to be facts revealed by customer complaints and internal testing.

Here, the Court finds that Plaintiff has not alleged that had he received information about the consumer complaints, or other non-public material allegedly issued by GM, that he would not have bought the vehicle. The Court will invite oral argument as to whether there exists any general duty by a motor vehicle manufacturer to disclose to a consumer that it has had warranty complaints or reports of malfunctions or that a component or system in a prior version of a battery has been the subject of repair recommendations or procedures. The creation of such a duty seems better left to the policy-making branches of government rather than the judiciary. Such a duty seems to implicate balancing the burden that would be placed on manufacturers of such a broad duty against the perceived value that disclosures of such a wide array of information might yield for consumers. The law already recognizes a duty to recall or retrofit (see, e.g., Hernandez v. Badger Construction Equipment Co. (1994) 28 Cal.App.4th 1791, 1827; Lunghi v. Clark Equipment Co. (1984) 153 Cal.App.3d 485, 494), but such a cause of action requires harm in the form of personal injury rather than the economic losses alleged in the FAC here. (The Court is mindful that a claim for fraudulent inducement by concealment is not subject to demurrer on the ground it is barred by the economic loss rule, pending a decision by the California Supreme Court on certified question from the Ninth Circuit and on petition for review of Dhital v. Nissan North America, Inc. (2022) 84 Cal.App.5th 828.)

Business and Professions Code § 17200

Lastly, GM argues that Plaintiff has failed to allege specific facts sufficient to establish the cause of action for Business and Professions Code § 17200. To set forth a claim for a violation of Business and Professions Code section 17200 (“UCL”), Plaintiff must establish Defendant was engaged in an “unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising” and certain specific acts. (Bus. & Prof. Code, § 17200.) A cause of action for unfair competition “is not an all-purpose substitute for a tort or contract action.” (Cortez v. Purolator Air Filtration Products Co. (2000) 23 Cal.4th 163, 173.) Here, the Court contends that Plaintiff has not sufficiently alleged the unlawful behavior for which it bases its action, besides noting that GM’s behavior violates the Song Beverly Consumer Warranty Act; does not contend how GM’s actions were unfair besides alleging conclusory allegations that it violated public policy; and as noted above, Plaintiff’s FAC is devoid of the specificity required to plead fraud since the FAC does not make this clear. As such, the cause of action is SUSTAINED. Because this is the second time Plaintiff has been unable to successfully plead facts to sufficiently support this cause of action, this Court will require oral argument on whether Plaintiff truly believes he can sufficiently amend another pleading.