Judge Salvatore Sirna, Case Number: 23PSCV00710, Date: 2024-10-25 Tentative Ruling

Judge: Salvatore Sirna, Case: 23PSCV00710, Date: 2024-10-25 Tentative Ruling

The Court may change tentative rulings at any time. Therefore, counsel are advised to check this website periodically to determine whether any changes or updates have been made to the tentative ruling. Counsel may submit on a tentative ruling by calling the clerk in Department G at (909) 802-1104 prior to 8:30 a.m. the morning of the hearing.

Case Number: 23PSCV00710 Hearing Date: October 28, 2024 Dept: G

Defendant Ford Motor Company’s Motion for Summary Adjudication

Respondent: Plaintiff Ventura Rios

TENTATIVE RULING

Defendant Ford Motor Company’s Motion for Summary Adjudication is determined by the court to be a motion for judgment on the pleadings and GRANTED with twenty (20) days leave to amend.

BACKGROUND

This is a Song-Beverly action. In October 2019, Plaintiff Ventura Rios allegedly entered into a warranty contract with Defendant Ford Motor Company (Ford) by purchasing a 2019 Ford F150. Subsequently, Rios alleges the vehicle presented with transmission defects, infotainment system defects, and electrical system defects.

On March 10, 2023, Rios filed a complaint against Ford, Puente Hills Ford, and Does 1-10, alleging the following causes of action: (1) violation of Civil Code section 1793.2, subdivision (d); (2) violation of Civil Code section 1793.2, subdivision (b); (3) violation of Civil Code section 1793.2, subdivision (a)(3); (4) breach of the implied warranty of merchantability; (5) concealment; and (6) negligent repair.

On August 13, 2024, Ford filed the present motion for summary adjudication. A hearing on the motion is set for October 28, 2024, along with a trial setting conference.

ANALYSIS

Ford moves for summary adjudication of Rios’s fifth cause of action for concealment on the grounds that (1) Rios cannot establish Ford had knowledge of the alleged defects, (2) Rios cannot establish Ford had a duty to disclose to Rios, and (3) it is barred by the economic loss rule. Because the court finds this cause of action to be insufficiently pled, the court does not address the first two issues and GRANTS Ford’s motion as a motion for judgment on the pleadings with leave to amend.

Legal Standard

Summary Adjudication

A motion for summary judgment or adjudication provides “courts with a mechanism to cut through the parties’ pleadings in order to determine whether, despite their allegations, trial is in fact necessary to resolve their dispute.” (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 843 (Aguilar).) It must be granted “if all the evidence submitted, and ‘all inferences reasonably deducible from the evidence’ and uncontradicted by other inferences or evidence, show that there is no triable issue as to any material fact and that the moving party is entitled to judgment as a matter of law.” (Adler v. Manor Healthcare Corp. (1992) 7 Cal.App.4th 1110, 1119, quoting Code Civ. Proc., § 437c, subd. (c).) To establish a triable issue of material fact, the opposing party must produce substantial responsive evidence. (Sangster v. Paetkau (1998) 68 Cal.App.4th 151, 166.) Courts “liberally construe the evidence in support of the party opposing summary judgment and resolve doubts concerning the evidence in favor of that party.” (Dore v. Arnold Worldwide, Inc. (2006) 39 Cal.4th 384, 389.) “A motion for summary adjudication shall be granted only if it completely disposes of a cause of action, an affirmative defense, a claim for damages, or an issue of duty.” (Code Civ. Proc., § 437c, subd. (f)(1).)

Concealment

“[T]he elements of a cause of action for fraud 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.’” (Kaldenbach v. Mutual of Omaha Life Ins. Co. (2009) 178 Cal.App.4th 830, 850 (Kaldenbach), quoting Roddenberry v. Roddenberry (1996) 44 Cal.App.4th 634, 665-666 (Roddenberry).)

One party’s failure to disclose material facts unknown to another party is not fraud unless “unless there is some relationship between the parties which gives rise to a duty to disclose such known facts.” (LiMandri v. Judkins (1997) 52 Cal.App.4th 326, 337, quoting BAJI No. 12.36 (8th ed. 1994.) “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 Constr. Corp. v. City of Los Angeles (1970) 2 Cal.3d 285, 294.)

Economic Loss Rule

Pursuant to the economic loss rule, “there is no recovery in tort for negligently inflicted ‘purely economic losses,’ meaning financial harm unaccompanied by physical or property damage.” (Sheen v. Wells Fargo Bank. N.A. (2022) 12 Cal.5th 905, 922.) It “functions to bar claims in negligence for pure economic losses in deference to a contract between litigating parties.” (Id., at p. 922.) “Tort damages have been permitted in contract cases where a breach of duty directly causes physical injury [Citation]; for breach of the covenant of good faith and fair dealing in insurance contracts [Citation]; for wrongful discharge in violation of fundamental public policy [Citation]; or where the contract was fraudulently induced. [Citation.] In each of these cases, the duty that gives rise to tort liability is either completely independent of the contract or arises from conduct which is both intentional and intended to harm.” (Erlich v. Menezes (1999) 21 Cal.4th 543, 551-552.)

Discussion

In this case, Ford argues the California Supreme Court in Robinson Helicopter Co., Inc. v. Dana Corp. (2004) 34 Cal.4th 979, has applied the economic loss rule to limit fraud claims in breach of contract actions to cases where affirmative misrepresentations were made as opposed to omissions. (MSA, p. 13:25-15:11.) But in a recent decision, the California Supreme Court explicitly rejected this approach in Rattagan v. Uber Technologies, Inc. (2024) 17 Cal.5th 1 (Rattagan). Instead, the court held that “[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.” (Id., at p. 38.)

Ford also argues that Rios failed to adequately plead the fraudulent inducement exception to the economic loss rule. (MSA, p. 15:12-16:14.) Specifically, Ford argues Rios failed to allege that Ford did not intend to honor its warranty obligations as required by Food Safety Net Services v. Eco Safe Systems USA, Inc. (2012) 209 Cal.App.4th 1118, 1131. There, the court noted “[t]o establish a claim of fraudulent inducement, one must show that the defendant did not intend to honor its contractual promises when they were made.” (Id., at p. 1131.) But this is not the correct standard here as Rios did not allege Ford made a false promise or false representation. Rather, Rios has alleged Ford concealed material facts—transmission defects—from Rios. (Complaint, ¶ 59, 62.) Concealment requires that “defendant must have intentionally concealed or suppressed the fact with the intent to defraud the plaintiff.” (Kaldenbach, supra, 178 Cal.App.4th at p. 850, quoting Roddenberry, supra, 44 Cal.App.4th at p. 665-666.) Because intent is not always established by direct evidence, it may be inferred from the circumstances surrounding an act. (People v. Petsas (1989) 214 Cal.App.3d 70, 78.)

Here, the Complaint fails to allege Ford concealed the transmission defect with the intent to defraud Rios. Instead, it makes the conclusory allegation that Ford “committed fraud by allowing the Subject Vehicle to be sold to Plaintiff without disclosing that the Subject Vehicle and its transmission was defective and susceptible to sudden and premature failure.” (Complaint, ¶ 55.) Because this cause of action fails to allege the essential element of fraudulent intent, it is insufficiently pled.

If a court finds the pleadings insufficiently pled while entertaining a motion for summary adjudication, the court may treat the motion as a motion for judgment on the pleadings and grant it with leave to amend. (Hejmadi v. Amfac, Inc. (1988) 202 Cal.App.3d 525, 536; see Wood v. Riverside General Hospital (1994) 25 Cal.App.4th 1113, 1119.) The court takes that approach here and GRANTS Ford’s motion with leave to amend.

CONCLUSION

Based on the foregoing, Ford’s motion for summary adjudication is determined to be a motion for judgment on the pleadings and GRANTED with twenty (20) days leave to amend.