Judge Salvatore Sirna, Case Number: 23PSCV03217, Date: 2024-05-23 Tentative Ruling

Judge: Salvatore Sirna, Case: 23PSCV03217, Date: 2024-05-23 Tentative Ruling

Case Number: 23PSCV03217 Hearing Date: May 23, 2024 Dept: G

Defendant General Motors LLC’s Demurrer to Plaintiff’s First Amended Complaint

Respondent: Plaintiff Jaime Cervantes

Defendant General Motors LLC’s Motion to Strike Punitive Damages from Plaintiff’s First Amended Complaint

Respondent: Plaintiff Jaime Cervantes

TENTATIVE RULING

Defendant General Motors LLC’s Demurrer to Plaintiff’s First Amended Complaint is OVERRULED.

Defendant General Motors LLC’s Motion to Strike Punitive Damages from Plaintiff’s First Amended Complaint is DENIED.

General Motors is ordered to answer the FAC in ten (10) days.

BACKGROUND

This is a lemon law action. In July 2021, Plaintiff Jaime Cervantes entered into a warranty contract with Defendant General Motors LLC (General Motors) by purchasing a 2021 Chevrolet Silverado. Subsequently, Cervantes alleges the vehicle began to manifest serious defects with the transmission, electrical, and suspension system.

On October 17, 2023, Cervantes filed a complaint against General Motors and Does 1-10, alleging (1) breach of express warranty in violation of the Song-Beverly Act, (2) breach of implied warranty in violation of the Song-Beverly Act, (3) violation of Section 1793.2, subdivision (b) of the Song-Beverly Act, and (4) fraudulent concealment.

On November 30, 2023, Cervantes filed a First Amended Complaint (FAC) against same Defendants alleging the same causes of action.

On December 27, 2023, General Motors filed the present demurrer and motion to strike. Prior to filing on December 18, 2023, General Motors’s counsel met and conferred telephonically with Cervantes’s counsel. (Valencia Decl., ¶ 2.)

A hearing on the demurrer and motion to strike is set for May 23, 2024, along with a case management conference.

ANALYSIS

General Motors demurs to Cervantes’ fourth cause of action (concealment). For the following reasons, the Court OVERRULES General Motors’s demurrer.

Legal Standard

A party may demur to a complaint on the grounds that it “does not state facts sufficient to constitute a cause of action.” (Code Civ. Proc., § 430.10, subd. (e).) A demurrer tests whether the complaint states a cause of action. (Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747 (Hahn).) When considering demurrers, courts accept all well pleaded facts as true. (Fox v. JAMDAT Mobile, Inc. (2010) 185 Cal.App.4th 1068, 1078.) In a demurrer proceeding, the defects must be apparent on the face of the pleading or via proper judicial notice. (Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994.) “A demurrer tests the pleadings alone and not the evidence or other extrinsic matters. Therefore, it lies only where the defects appear on the face of the pleading or are judicially noticed.” (SKF Farms v. Superior Court (1984) 153 Cal.App.3d 902, 905.) “The only issue involved in a demurrer hearing is whether the complaint, as it stands, unconnected with extraneous matters, states a cause of action.” (Hahn, supra, at p. 747.)

Discussion

General Motors argues Cervantes’ fourth cause of action for fraudulent concealment fails because it is not pled with specificity and does not establish General Motors had a duty to disclose. The court disagrees.

“[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, quoting Roddenberry v. Roddenberry (1996) 44 Cal.App.4th 634, 665-666.)¿ 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.)

“A duty to disclose facts arises only when the parties are in a relationship that gives rise to the duty, such as ‘seller and buyer, employer and prospective employee, doctor and patient, or parties entering into any kind of contractual agreement.’” (Shin v. Kong (2000) 80 Cal.App.4th 498, 509, quoting Wilkins v. National Broadcasting Co. (1999) 71 Cal.App.4th 1066, 1082.) In this case, the FAC alleges Cervantes purchased the vehicle from Chevrolet of Glendora, a retail dealership authorized by General Motors (FAC, ¶ 4.) General Motors argues the FAC fails to allege Cervantes purchased the subject vehicle directly from General Motors. (Demurrer, p. 10:27-11:4.)

As an initial matter, the court notes the FAC alleges Chevrolet of Glendora was General Motors’ agent. (FAC, ¶ 4.) But even if this is insufficient to establish a direct sales transaction between General Motors and Cervantes, the FAC also alleges General Motors made express written warranties. (FAC, ¶ 9.) Express warranties are contractual in nature. (See Hauter v. Zogarts (1975) 14 Cal.3d 104, 117.) Because General Motors does not address this issue or point to any authority holding express warranties are insufficient to create a relationship between the parties, the court finds General Motors’ argument fails.

General Motors next contends the FAC failed to plead fraud with specificity because it (1) did not identify which individual concealed material facts, (2) establish that General Motors knew of the defects at time of Cervantes’ purchase, (3) point to any interactions with General Motors before or during the purchase of Cervantes’ vehicle, and (4) allege General Motors intended to induce reliance with respect to Cervantes’ specific vehicle. (Demurrer, p. 9:7-16.) But the specificity requirement is relaxed “when the allegations indicate that ‘the defendant must necessarily possess full information concerning the facts of the controversy’” (Tarmann v. State Farm Mut. Auto. Ins. Co. (1991) 2 Cal.App.4th 153, 158, quoting Bradley v. Hartford Acc. & Indem. Co. (1973) 30 Cal.App.3d 818, 825) or if “the facts lie more in the knowledge of the opposite party.” (Ibid, quoting Turner v. Milstein (1951) 103 Cal.App.2d 651, 658.)

In this case, the FAC alleges that General Motors knew of the defects at issue before Cervantes purchased the subject vehicle. (FAC, ¶ 140.) The FAC alleges General Motors had exclusive knowledge of these defects and intentionally concealed them. (FAC, ¶ 130-131, 135.) Last, the FAC alleges Defendant intentionally concealed the transmission defects in vehicles like Cervantes’ so they could be sold for the maximum price. (FAC, ¶ 139.) Thus, the FAC has alleged sufficient facts to establish fraudulent concealment.

Accordingly, General Motors’s demurrer to Cervantes’ fourth cause of action is OVERRULED. Furthermore, because General Motors’s motion to strike the FAC’s prayer for punitive damages is based on the grounds that the FAC has not adequately alleged fraud, it is DENIED for the same reasons described above.

CONCLUSION

Based on the foregoing, General Motors’ demurrer to Cervantes’ FAC is OVERRULED. Furthermore, General Motors’ motion to strike Cervantes’s prayer for punitive damages is DENIED.

General Motors is ordered to answer the FAC in ten (10) days.