Judge: Salvatore Sirna, Case: 24PSCV00893, Date: 2025-03-04 Tentative Ruling

Case Number: 24PSCV00893    Hearing Date: March 4, 2025    Dept: G

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

Respondent: Plaintiff Michael Rojano

Defendant General Motors, LLC’s Motion to Strike Portions of Plaintiff’s First Amended Complaint

Respondent: Plaintiff Michael Rojano

TENTATIVE RULING

Defendant General Motors, LLC’s Demurrer to Plaintiff’s First Amended Complaint is SUSTAINED with twenty (20) days leave to amend as to the fourth cause of action and without leave to amend as to the fifth cause of action.

Defendant General Motors, LLC’s Motion to Strike Portions of Plaintiff’s First Amended Complaint is DEEMED MOOT.

BACKGROUND

This is a Song Beverly action. In January 2020, Plaintiff Michael Rojano entered into a warranty contract with Defendant General Motors, LLC (General Motors) by acquiring a 2020 Chevrolet Bolt. Subsequently, Rojano allegedly became aware of defects with the vehicle’s batteries which created an ignition risk.

On March 21, 2024, Rojano filed a complaint against Defendants General Motors, Paradise Chevrolet Cadillac, 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 of the Song-Beverly Act, (4) fraud, (5) violation of Business and Professions Code section 17200, and (6) negligent repair.

On May 17, 2024, Rojano filed a First Amended Complaint (FAC) against the same defendants alleging the same causes of action.

On June 17, 2024, General Motors filed the present demurrer and motion to strike. Prior to filing on May 17, 2024, General Motors’ counsel met and conferred over videoconference with Rojano’s counsel. (Park Decl., ¶ 1.) On July 25, 2024, the court stayed the hearing on the demurrer and motion to strike pending proceedings before the California Supreme Court on similar legal issues.

A hearing on the present demurrer and motion to strike is set for March 4, 2025, along with a CMC.

REQUEST FOR JUDICIAL NOTICE

General Motors’ request for the court to take judicial notice of a report by the Environmental Protection Agency (EPA) is GRANTED pursuant to Evidence Code section 452, subdivision (c).

ANALYSIS

General Motors demurs to Rojano’s fourth cause of action (fraud) and fifth cause of action (violation of Business and Professions Code section 17200).

For the following reasons, the court SUSTAINS General Motors’ demurrer with leave to amend as to the fourth cause of action and without leave to amend as to the fifth cause of action.

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.)

Fraud (Fourth Cause of Action)

General Motors argues Rojano’s fourth cause of action for fraud based on affirmative misrepresentations and concealment are insufficiently pled. The court agrees.

Affirmative Misrepresentations

Legal Standard

“To establish a claim for deceit based on intentional misrepresentation, the plaintiff must prove seven essential elements: (1) the defendant represented to the plaintiff that an important fact was true; (2) that representation was false; (3) the defendant knew that the representation was false when the defendant made it, or the defendant made the representation recklessly and without regard for its truth; (4) the defendant intended that the plaintiff rely on the representation; (5) the plaintiff reasonably relied on the representation; (6) the plaintiff was harmed; and (7) the plaintiff's reliance on the defendant's representation was a substantial factor in causing that harm to the plaintiff.” (Manderville v. PCG&S Group, Inc. (2007) 146 Cal.App.4th 1486, 1498.)

Furthermore, 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.) In alleging a cause of action for fraud, “[t]he specificity requirement means a plaintiff must allege facts showing how, when, where, to whom, and by what means the representations were made, and, in the case of a corporate defendant, the plaintiff must allege the names of the persons who made the representations, their authority to speak on behalf of the corporation, to whom they spoke, what they said or wrote, and when the representation was made.” (West v. JPMorgan Chase Bank, N.A. (2013) 214 Cal.App.4th 780, 793.)

Discussion

In this case, General Motors first argues the FAC fails to allege fraud with specificity because it does not allege (1) who made the representations and the identity of the General Motors employee who made representations on General Motors’ behalf, (2) that employee’s authority to speak and act on behalf of General Motors, (3) General Motors’ knowledge of the alleged defects at the time of Rojano’s purchase, (4) what specific representations were made by General Motors and relied upon Rojano, (5) when the representations were made to Rojano, (6) General Motors’ intent to defraud Rojano, and (7) Rojano’s justifiable reliance. (Demurrer, p. 12:8-24.)

Rojano’s cause of action for affirmative misrepresentations is based on alleged misrepresentations made in General Motors’ marketing materials and by General Motors’ dealership personnel. (FAC, ¶ 92.) The FAC alleges General Motors marketed the subject vehicle as safe and long-range despite defects that allegedly created a risk of fire when the subject vehicle’s battery was charged to one hundred percent. (FAC, ¶ 92-93.) The FAC alleges General Motors’ “marketing was made on GM’s website, among other places.” (FAC, ¶ 92.) This allegation is wholly insufficient and impermissibly vague as it does not describe what the marketing materials were in detail along with what statements were made, who made the statements on behalf of General Motors, when the statements were made, and how the statements were made.

Although the FAC references other alleged misrepresentations, the facts surrounding them are equally vague. The FAC suggests General Motors had knowledge of the defect between October 2017 when NHTSA issued a warning about overcharging lithium ion batteries and March 2019 when General Motors became aware of a battery fire involving the Chevrolet Bolt. (FAC, ¶ 23, 28.) The FAC then alleges General Motors failed to “alter its marketing campaign with respect to the subject vehicle.” (FAC, ¶ 28.) The FAC fails to allege what representations were made in this marketing campaign with specificity. The FAC also alleges General Motors created a marketing brochure for the 2020 Chevrolet Bolt that Rojano relied on prior to the purchase of the subject vehicle. (FAC, ¶ 30.) But the FAC fails to allege when General Motors issued the brochure and when Rojano reviewed the brochure beyond the vague claim that it was before Rojano’s purchase.

The FAC also alleges a General Motors employee named Adam Piper made comments on General Motors’ behalf in October 2019 where Piper claimed the battery system could be charged to the maximum range. (FAC, ¶ 29.) Although this allegation does contain more specificity, the FAC fails to allege Rojano read these comments and relied on them. To the extent the FAC also alleges General Motors’ dealership personnel echoed the vaguely alleged marketing and “assured [Rojano] that the vehicle had a long-range and was safe,” the FAC again fails to allege the names of the dealership personnel who made these statements to Rojano, how they made these statements, what they specifically said, when they made these statements, and their authority to make these statements on General Motors’ behalf. (FAC, ¶ 92.) Rojano’s opposition also fails to address these deficiencies. Thus, the FAC fails to allege this cause of action with the required specificity

Accordingly, the court SUSTAINS General Motors’ demurrer to the cause of action for fraudulent misrepresentation with leave to amend.

Concealment

Legal Standard

[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.)

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.) “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 (Shin), quoting Wilkins v. National Broadcasting Co. (1999) 71 Cal.App.4th 1066, 1082 (Wilkins).) “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 (Warner).)

Discussion

In this case, General Motors first argues Rojano’s claim of fraudulent concealment is barred by the economic loss rule. (Demurrer, p. 17:5-25.) 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.)¿ If fraud occurs independent of a breach of contract, the economic loss rule does not apply. (See Robinson v. Helicopter Co., Inc. v. Dana Corp. (2004) 34 Cal.4th 979, 991.) For example, fraudulent misrepresentations made to induce a party to enter into an agreement are not barred because they are independent of that breach of contract. (Id., at p. 991.) And no distinction is made with regards to whether the act of fraud was an affirmative representation or concealment of material facts. (See Rattagan v. Uber Technologies, Inc. (2024) 17 Cal.5th 1, 39 (Rattagan).)

While General Motors’ demurrer was filed before the California Supreme Court’s decision in Rattagan, General Motors argues in supplemental briefing that the economic loss rule still applies. First, General Motors argues that no independent statutory or common law duty applies to Rojano’s claims and instead suggests this is a standard consumer transaction involving the sale of goods. (Suppl. Brief, p. 3:11-21.) But while General Motors focuses on the lack of a fiduciary relationship between General Motors and Rojano, a fiduciary relationship is not the only relationship giving rise to a duty to disclose. Such a duty may also arise between “parties entering into any kind of contractual agreement.” (Shin, supra, 80 Cal.App.4th at p. 509, quoting Wilkins, supra, 71 Cal.App.4th at p. 1082.) Thus, a standard consumer transaction involving the sale of goods may still give rise to the independent duty to disclose material facts provided General Motors made partial representations, had exclusive knowledge, or actively concealed facts from Rojano. (See Warner, supra, 2 Cal.2d at p. 294.)

General Motors next argues Rojano failed to allege facts to establish partial representations, exclusive knowledge, or active concealment. (Suppl. Brief, p. 4:23-5:7.) Although the FAC alleges all three of these grounds, it does so in a conclusory manner without sufficient supporting facts. (FAC, ¶ 101.) While Rojano alleges General Motors made partial representations in advertisements, Rojano failed to allege these representations with specificity as noted above in the section discussing Rojano’s cause of action for affirmative misrepresentations. And while Rojano also alleges General Motors had exclusive knowledge and concealed facts from Rojano, Rojano fails to allege specific facts that establish how General Motors’ knowledge was exclusive and how it actively concealed the facts from Rojano. Thus, Rojano’s cause of action for concealment also remains inadequately pled.

Accordingly, the court SUSTAINS General Motors’ demurrer to the cause of action for concealment with leave to amend.

Violation of Business and Professions Code § 17200 (Fifth Cause of Action)

General Motors contends Rojano’s fifth cause of action for violation of Business and Professions Code section 17200 fails because it is inadequately pled. The court agrees.

Legal Standard

To state a cause of action for unfair business practices, a plaintiff must establish defendant engaged in “unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising.” (Bus. & Prof. Code, § 17200.) This section establishes three types of unfair competition, prohibiting “practices that are either ‘unfair,’ or ‘unlawful,’ or ‘fraudulent.’” (Pastoria v. Nationwide Ins. (2003) 112 Cal.App.4th 1490, 1496.) Thus, “An act or practice may be actionable as “unfair” under the unfair competition law even if it is not ‘unlawful.’” (Chavez v. Whirlpool Corp. (2001) 93 Cal.App.4th 363, 374.) However, despite the broad scope of Business and Professions Code section 17200, its remedies are limited to equitable relief and damages are not recoverable. (Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1144.) A plaintiff has standing to bring an action for unfair business practices if they “(1) establish a loss or deprivation of money or property sufficient to qualify as injury in fact, i.e., economic injury, and (2) show that that economic injury was the result of, i.e., caused by, the unfair business practice or false advertising that is the gravamen of the claim.” (Kwikset Corp. v. Superior Court (2011) 51 Cal.4th 310, 322.)

Discussion

In this case, General Motors contends Rojano failed to establish equitable jurisdiction for Rojano’s unfair business practices claim. (Demurrer, p. 20:10-21:3.) It is well established “that an adequate legal remedy precludes equitable relief.” (Wilkison v. Wiederkehr (2002) 101 Cal.App.4th 822, 835.) In Prudential Home Mortgage Co. v. Superior Court (1998) 66 Cal.App.4th 1236, the Fourth District Court of Appeal applied this rule to strike unfair business practices claims on the grounds that adequate statutory remedies existed. (Id., at p. 1249-1250.) While the plaintiffs in that action attempted to allege unfair business practices for real estate lenders’ failure to reconvey title after loan payoff, the court held Civil Code section 2941 provided adequate statutory remedies and precluded the availability of equitable relief. (Id., at p. 1240, 1250.)

Here, Rojano’s unfair business practices claims are based on the allegations that the subject vehicle did not perform as promised. (FAC, ¶ 107-108.) But Rojano’s claims already have a remedy at law in the form of the Song-Beverly Act and Rojano has specifically requested relief pursuant to that act. Additionally, Rojano failed to provide any argument to address why such relief under the Song-Beverly Act is inadequate. Thus, Rojano is not entitled to equitable relief and this cause of action fails as a matter of law.

Accordingly, the court SUSTAINS General Motors’ demurrer to this cause of action without leave to amend.

CONCLUSION

Based on the foregoing, General Motors’ demurrer to Rojano’s FAC is SUSTAINED with twenty (20) days leave to amend as to the fourth cause of action and without leave to amend as to the fifth cause of action.

Furthermore, based on the foregoing, General Motors’ motion to strike portions of Rojano’s FAC is DEEMED MOOT.