Judge Ronald F. Frank, Case Number: 24TRCV01386, Date: 2025-01-09 Tentative Ruling

Judge: Ronald F. Frank, Case: 24TRCV01386, Date: 2025-01-09 Tentative Ruling

Case Number: 24TRCV01386 Hearing Date: January 9, 2025 Dept: 8

Tentative Ruling

HEARING DATE: January 9, 2025

CASE NUMBER: 24TRCV01386

CASE NAME: Perla Alamillo v. General Motors, LLC, et al.

MOVING PARTY: Defendant, General Motors, LLC

RESPONDING PARTY: Plaintiff, Perla Alamillo

TRIAL DATE: Not Set

MOTION: (1) Demurrer to fraudulent concealment cause of action

(2) Motion to Strike

Tentative Rulings: (1) SUSTAINED

(2) MOOTED

I. BACKGROUND

A. Factual

On April 24, 2024, Plaintiff, Pamela Alamillo (“Plaintiff”) filed a complaint against Defendant General Motors (“GM”) and DOES 1 through 10. On July 25, 2024, Plaintiff filed a First Amended Complaint (“FAC”) alleging causes of action for: (1) Violation of Civil Code § 1793.2(d); (2) Violation of Civil Code § 1793.2(b); (3) Violation of Civil Code §1793.2(a)(3); (4) Breach of the Implied Warranty of Merchantability – Civil Code §§ 1791.1, 1794, 1795; and (5) Fraudulent Inducement – Concealment.

Defendant GM has now filed a Demurrer and Motion to Strike portions of the FAC.

B. Procedural

On September 23, 2024, Defendant, GM filed a Demurrer and Motion to Strike. On December 26, 2024, Plaintiff filed opposition papers. On January 2, 2025, GM filed a reply brief.

II. ANALYSIS

A. Demurrer

i. 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.)¿¿¿

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.)

ii. Meet and Confer Efforts

The declaration of Cameron Major, Esq. (“Major Decl.”), is offered in support of counsel’s compliance with Code of Civil Procedure section 430.41. Major declares that on July 31, 2024, prior to filing the Demurrer and Motion to Strike, counsel met and conferred telephonically with Plaintiff’s counsel regarding the pleadings. (Major Decl., ¶ 2.) However, Major contends that after the discussions, the parties remained at an impasse. (Major Decl., ¶ 2.) Thus, this Court finds that the meet and confer requirements have been met.

iii. Fraudulent Inducement

GM demurs to the FAC on the grounds that it argues Plaintiff’s fifth cause of action for fraudulent inducement fails on the grounds that: (1) it is barred by the applicable statute of limitations; (2) fails to state relevant facts as to the elements of the claim; and (3) fails to allege a transactional relationship giving rise to a duty to disclose.

1. Statute of Limitations

The statute of limitations for fraud generally is three years. (See Code Civ. Proc., § 338(d).) The cause of action begins to accrue when the aggrieved party discovers the facts constituting the fraud. (San Francisco Unified School Dist. v. W.R. Grace & Co. (1995) 37 Cal.App.4th 1318, 1327 (“A cause of action does not accrue until the plaintiff either discovers the injury and its negligent cause or could have discovered the injury and cause through the exercise of reasonable diligence.”).) Further, the statute of limitations for the fraud causes of action is highly related to the delayed discovery rule.

California’s discovery rule delays the start of the statute of limitations until the plaintiff discovers, or is on inquiry notice (i.e., has reason to discover) facts supporting a cause of action. (Fox v. Ethicon Endo-Surgery, Inc. (2005) 35 Cal.4th 797, 807.) “The discovery rule only delays accrual until the plaintiff has, or should have, inquiry notice of the cause of action. The discovery rule does not encourage dilatory tactics because plaintiffs are charged with presumptive knowledge of an injury if they have “ ‘ “information of circumstances to put [them] on inquiry ” ’ ” or if they have “ ‘ “the opportunity to obtain knowledge from sources open to [their] investigation.” (Id. at 808; fn. 2 provides: “At common law, the term “injury,” as used in

determining the date of accrual of a cause of action, “means both ‘a person's physical condition and its “negligent cause.” ’ ” ”(emphasis in original).)

Here, Defendant asserts that the Fraudulent Inducement – Concealment occurred at the time of the sale of the Subject Vehicle, on or about October 14, 2018, and that Plaintiff did not file this action until April 24, 2024. Plaintiff included in her FAC that class action tolling, discovery rule rolling, the repair doctrine, and fraudulent concealment tolling (Estoppel) delayed expiration of her fraudulent inducement – concealment claim. The FAC alleges GM’s fraudulent inducement – concealment occurred, not only at the time of the sale, but also concealed the defects, minimized the scope, cause, and dangers of the defects with inadequate TSBs and/or recalls, and refused to investigate, address, and remedy the defects as it pertains to all affected vehicles. (FAC, ¶ 40.) Plaintiff also alleges that Defendant’s fraudulent concealment was ongoing as Defendant blamed the symptoms of the defects on other issues and not the actual defect itself and purported to be able to repair Plaintiff’s issues. (FAC, ¶ 41.) Plaintiff also includes allegations that from around January 16, 2023 through March 28, 2024 and between 27,349 miles and 36,069 miles, Plaintiff presented the Vehicle to Defendant’s authorized repair facility with various concerns. (FAC, ¶¶ 21-25.) Based on the details in these allegations, the Court finds that it is not “clearly and affirmatively” apparent from the FAC that the fraudulent inducement – concealment claim is barred by the statute of limitations. As such, the Court finds that based on Plaintiff’s allegations, tolling is sufficiently alleged.

The "class action tolling" allegations are insufficient to enable Plaintiff to claim when the claimed tolling period may have ended. Despite this, Plaintiff has provided at least some factual allegations as to the discovery rule and repair doctrine, as discussed above.

2. Specificity Requirement

As recently reaffirmed in the California Supreme Court case of Rattagan v. Uber Technologies, Inc., 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. (Rattagan v. Uber Technologies, Inc. (2024) 17 Cal.5th 1, 40 citing Civ. Code, § 1710; Warner Constr. Corp. v. City of Los Angeles (1970) 2 Cal.3d 285, 294; LiMandri v. Judkins (1997) 52 Cal.App.4th 326.) Our Supreme Court in Rattagan answered “Yes” to the question of whether “a plaintiff [can] assert an independent claim of fraudulent concealment in the performance of a contract?” (Rattagan, supra, 17 Cal.5th at 38.) “A plaintiff may assert a tort claim for fraudulent concealment based on conduct occurring in the course of a contractual relationship, if the elements of the cause of action can be established independently of the parties’ contractual rights and obligations and the tortious conduct exposes the plaintiff to a risk of harm beyond the reasonable contemplation of the parties when they entered into the agreement.” (Ibid.) The current complaint does not satisfy these pleading requirements.

The Rattagan Court explained the economic loss rule as applied to fraudulent concealment: “the economic loss doctrine applies wen the parties have entered into a contract; the plaintiff sues for tort damages, alleging defendant failed to perform as the contract requires;

and negligently caused economic losses flowing from the breach.” (Id. at 44.) The Court continued, that “[i]n such a case, plaintiffs are generally limited to recovery of those economic damages and cannot seek to expand their remedies beyond those available in contract.” (Ibid.) Further, the Rattagan Court explained that “[t]he doctrine does not apply if defendant’s breach caused physical damage or personal injury beyond that economic loss caused by the contractual breach and defendant violated a duty flowing, not from the contract, but from a separate, legally recognized tort obligation.” (Ibid.) The Court stated that “[a] case in which the plaintiff sues a contractual party for fraud based on conduct committed during the course of a contractual relationship falls outside the economic loss doctrine,” citing to their reasoning in Robinson which reads, “[d]ealing with affirmative acts of fraud and misrepresentation raises different policy concerns than those raised by negligence or strict liability claims.” (Ibid citing Robinson, supra, 34 Cal.4th at 991.) There is no allegation in the Plaintiff’s Complaint here of physical injury or property damage. The reaffirmed economic loss doctrine thus appears to bar the fraudulent concealment claim in a garden-variety Lemon Law claim. Perhaps that explains why the Supreme Court remanded Dhital for consideration of Rattagan’s impact on claims in the Song-Beverly arena.

The Rattagan Court explained that the analysis “focuses on whether the plaintiff can establish the elements of the cause of action independently of the parties’ contractual rights and obligations.” (Rattagan, supra, 17 Cal.5th at 44.) In other words, “the question will turn on the nature of the alleged conduct, the provisions of the contract itself, and whether the conduct exposed a party to a risk of harm neither reasonably contemplated nor allocated by the parties before entering their agreement.” (Ibid.) The Court clarified in Rattagan, that “[p]arties generally do not enter a contract expecting that its terms will be intentional ignored…[h]owever, to assure greater certainty between themselves, they may choose at the outset to contractually guard against certain risks by imposing specific obligations on the other party and allocate their agreed-upon remedies should a breach occur.” (Ibid.) The Rattagan Court continued that “[a]mong other reasons, they may choose to provide for how violations will be treated, to provide greater deterrence for some kinds of violations, or to eliminate the need to litigate regardless of whether the breach was intentional or negligent. The freedom to do so, however, is limited to agreements that do not violate public policy.” (Ibid.) Rattagan stated that “California public policy strongly supports imposing a tort duty on contractual parties to refrain from fraudulent deceit and favors enforcement of valid fraud actions, which the Legislature has facilitated through the enactment of the general fraud statute.” (Ibid.)

Arguably, where the duty to disclose is tied to contractual performance, fraudulent concealment cannot survive the economic loss rule. Plaintiff’s alleged injury – impaired value, use, or safety of the vehicle due to an allegedly unrepaired defect – was within the contemplation of the parties at the time they entered into the sales contract, as evidenced by the warranty itself. The fact that the warranty expressly contemplates that the vehicle might have a defect or nonconformity and allocates the risk of the cost of repairing such issue to GM or to plaintiffs depending on, among other things, when the issue occurs. GM argues that Plaintiff’s allegations are confined to purely economic loss tied to the vehicle’s quality and performance, which are foreseeable risks when a vehicle is purchased. The California Supreme Court in Rattagan noted that “the question will turn on the nature of the alleged conduct, the provisions of the contract itself, and whether the conduct exposed a party to a risk of harm neither reasonably contemplated nor allocated by the parties before entering their agreement.” (Rattagan, supra, 17 Cal.5th at

44.). Plaintiff’s allegations do not satisfy these parameters as currently pleaded. Plaintiff does not even mention Rattagan in its opposition papers.

On the record before the Court, the GM warranty accounts for repair issues and contemplates a remedy allocated by the parties if and when that issue might arise during Plaintiff’s use of the subject product. The Song-Beverly Act’s use, value, and safety parameters for measuring substantiality and the cause of action for failure to recall a motor vehicle adequately account for the claim of a potential, possible, future physical harm or property damage that might occur because of a malfunction or failure of a component or system covered byte GM warranty. Thus, the Court seeks oral argument on how Plaintiff can allege that GM’s conduct exposed him to a risk of harm neither reasonably contemplated nor allocated by the parties before entering their agreement. The court’s tentative ruling is to SUSTAIN the demurrer.

Thus, the Court’s tentative ruling is to SUSTAIN the demurrer with leave to amend.

A. Motion to Strike

The court may, upon a motion, or at any time in its discretion, and upon terms it deems proper, strike any irrelevant, false, or improper matter inserted in any pleading. (Code Civ. Proc., § 436(a).) The court may also strike all or any part of any pleading not drawn or filed in conformity with the laws of this state, a court rule, or an order of the court. (Id., § 436(b).) The grounds for a motion to strike are that the pleading has irrelevant, false improper matter, or has not been drawn or filed in conformity with laws. (Id., § 436.)The grounds for moving to strike must appear on the face of the pleading or by way of judicial notice. (Id., § 437.) “When the defect which justifies striking a complaint is capable of cure, the court should allow leave to amend.” (Vaccaro v. Kaiman (1998) 63 Cal.App.4th 761, 768.)

Civil Code section 3294, subdivision (a) authorizes punitive damages in non-contract cases “where the defendant has been guilty of oppression, fraud, or malice.”

“Malice [is defined as] conduct which is intended by the defendant to cause injury to the plaintiff or despicable conduct which is carried on by the defendant with a willful and conscious disregard for the rights and safety of others.” (Civ. Code, § 3294, subd. (c)(1).) “Oppression” means “despicable conduct that subjects a person to cruel and unjust hardship in conscious disregard of that person's rights.” (Civ. Code, § 3294, subd. (c)(2).) “Fraud” is “an intentional misrepresentation, deceit, or concealment of a material fact known to the defendant with the intention on the part of the defendant of thereby depriving a person of property or legal rights or otherwise causing injury.” (Civ. Code, § 3294, subd. (c)(3).)

Here, GM bases its Motion to Strike Plaintiff’s prayer for Punitive Damages on the argument that Plaintiff has not plead the fraud cause of action with the specificity required. As for the fraud claim, the Court emphasizes that the argument for punitive damages as to fraud are predicated on the same arguments made in the demurrer. Because the Court’s tentative ruling is to SUSTAIN the demurrer as to the fraud cause of action. As such the Motion to Strike is MOOTED.

IV. CONCLUSION

For the foregoing reasons, Defendant’s Demurrer is SUSTAINED. Additionally, Defendant’s Motion to Strike is MOOTED.

GM is ordered to give notice.