Judge: Shirley K. Watkins, Case: 22VECV01026, Date: 2023-03-15 Tentative Ruling

Case Number: 22VECV01026    Hearing Date: March 15, 2023    Dept: T

THIS TENTATIVE RULING APPLIES ONLY IF THERE WAS A MEET AND CONFER AFTER THE FILING OF THE DEMURRER AS ORDERED BY THE COURT.

         [TENTATIVE]
ORDER:  Defendant General Motors LLC’s Demurrer
to the First Amended Complaint is OVERRULED as to the first, second and third
causes of action; and SUSTAINED WITH 20 DAYS LEAVE TO AMEND as to the fourth
cause of action.  The leave to amend is
limited to curing the pleading defects in the fourth cause of action and not to
add new causes of action.

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

Introduction

            Defendant General
Motors LLC (Defendant) demurred to Plaintiff Douglas Rosen’s (Plaintiff) First
Amended Complaint (FAC.)  Defendant
placed into issue all four causes of action (COA) alleged in the FAC: (1)
breach of express warranty; (2) breach of implied warranty; (3) violation of
Civil Code sec. 1793.2; and (4) fraudulent inducement - concealment.  Defendant moved to strike the request for
punitive damages. 

Plaintiff’s oppositions were untimely filed on March 1, 2023, for the
original March 8, 2023.  Despite the
untimely oppositions, Defendant filed their replies on March 3, 2023.  At the March 8, 2023, the Court continued the
matter to the current hearing date, in part to have the parties meet and confer
and to allow for consideration of the March 1, 2023, filed oppositions and in
part to have a thorough meet and confer. 
The Court allowed the untimely oppositions. The Court further permitted
Defendant to file a new replies by March 10, 2023.  Defendant did not file a new replies on March
10, 2023.  The Court considered the March
3, 2023, filed replies. 

            Discussion 

            Defendant’s
demurrer argued that the breach of express warranty COA is not pled with
sufficient facts because Plaintiff alleged the purchase of a used vehicle with
only a balance remaining on the manufacturer’s express warranty.  (Rodriguez v. FCA US LLC (2022) 77 Cal.App.5th 209, review granted July 13, 2022.)  Defendant failed
to apply the legal authority to the allegations in the FAC.  However, Defendant’s argument appears to be
simply grounded on the allegation that a 2015 model Escalade was purchased in
October 2016.  (FAC par. 4.)  As for the express warranty, Plaintiff
alleged receipt of an express written warranty without any allegation as to how
much of the warranty was still in effect. 
(Id.)  These factual allegations
are the only allegations related to the status of the vehicle and the
warranty.  It is unclear how Defendant
gleaned from these allegations that the vehicle was “used” and the warranty was
only a portion of the manufacturer’s express warranty (i.e., not a full
warranty.)  An alleged delay in the sale
of a vehicle does not necessarily make the vehicle a “used” vehicle.  Without more facts, the fact that the
vehicle’s sale was delayed does not necessarily mean that the vehicle was
“used.”   Defendant’s argument is not
supported by the facts alleged in the four corners of the FAC.  Defendant may have some knowledge of facts
outside the four corners of the pleading but using such facts on a demurrer is
improper.

            The
Demurrer to the first COA is OVERRULED.

            Defendant
asserted that the second COA for breach of implied warranty is insufficiently
supported by factual allegations because the vehicle purchased by Plaintiff was
used.  (Nunez v. FCA US LLC (2021) 61Cal.App.5th 385, 399.)  As reviewed above, the facts alleged in the
FAC do not show that the vehicle purchased by Plaintiff was used. 

            The Demurrer to the second COA is
OVERRULED.

            Although the Notice to the Demurrer
identified the third COA to be at issue, Defendant’s Points and Authorities did
not assert arguments expressly against the third COA.  To the extent that Defendant sought to apply
the arguments above against the third COA, the argument is unpersuasive as
reviewed above.

            The Demurrer to the third COA, if
any, is OVERRULED.

            Defendant then provided that the fourth
COA for fraud is time-barred under the three-year statute of limitations (SOL)
and there are insufficient facts to allege delayed discovery.  Defendant asserted that the SOL expired on
October 6, 2019, three years after Plaintiff’s purchase of the vehicle on
October 6, 2016.  (FAC par. 4.)  Defendant asserted that delayed discovery
cannot be alleged because Plaintiff admitted that the vehicle was delivered
with serious defects.  (FAC pars. 11 and
13.)  The delayed discovery rule “postpones
accrual of a cause of action until the plaintiff discovers, or has reason to discover,
the cause of action.  [Citation
omitted.]  A plaintiff has reason to
discover a cause of action when he or she “has reason at least to suspect a
factual basis for its elements.” 
[Citation omitted.]”  (Fox v.
Ethicon Endo-Surgery, Inc.  (2005) 35
Cal.4th 797, 807.)  Defendant’s argument is
only a part of the delayed discovery rule. 
Plaintiff’s allegation only shows discovery of the harm or damages
(i.e., defects in the vehicle.)  To show
that the delayed discovery rule accrued on the purchase date, Defendant needed to
cite to facts in the FAC and argue that Plaintiff also had knowledge or should
have known at the time of delivery that Defendant was the cause of the defects
in the vehicle.  Defendant failed to
argue this element of delayed discovery. 
On a demurrer, Defendant must show “clearly and affirmatively that, upon
the face of the complaint, the right of action is necessarily barred.”  (Lee v. Henley (2015) 61 Cal.4th 1225,
1232.)  Without addressing when Plaintiff
knew of should have known that Defendant was the cause of the harm, there is
insufficient showing that the action is “necessarily barred.”  Defendant’s SOL argument is not
persuasive.  The parties’ arguments as to
equitable tolling and equitable estoppel are not considered as they are
moot.  The SOL argument is overruled.

             Defendant argued that the fraud COA failed to
allege specific facts showing the identity of the individuals that concealed
the material facts or made false representations and their authority to speak
for Defendant.  The rule of specifically
pleading how, when, where, to whom, and by what means, misrepresentations were
communicated, is intended to apply to affirmative misrepresentations, and not
to concealment.  (Alfaro v. Community
Housing Improvement System & Planning Assn., Inc. (2009) 171 Cal. App.
4th 1356, 1384.)  “Less specificity
should be required of fraud claims “when ‘it appears from the nature of the
allegations that the defendant must necessarily possess full information
concerning the facts of the controversy,’ [citation]; ‘[e]ven under the strict
rules of common law pleading, one of the canons was that less particularity is
required when the facts lie more in the knowledge of the opposite party....’ ”  (Id.) 
Defendant will necessarily have records of their dealings/interactions
with Plaintiff.  The details of the
identity of the representative Plaintiff dealt with and their authority to
speak (or not speak in this claim) would be within Defendant’s possession and
is better resolved during discovery.  The
demurrer on this ground is overruled.

            Defendant
also argued that the fraud COA failed to allege specific facts to show a
fiduciary relationship or a transaction involving “direct dealings” between the
parties.  Without facts show a fiduciary
relationship or direct dealings, the fraud COA failed to allege specific facts
to allege a duty to disclose.  There is
no dispute that a fiduciary relationship or a direct dealing is not
alleged.  At issue is Defendant’s, as a
manufacturer, duty to disclose if there is (1) an affirmative
misrepresentation, or, (2) if plaintiff alleges “physical injury or . . .
safety concerns posed by the defect” at issue. 
(Daugherty v. Am. Honda Motor Co. (2006) 144 Cal.App.4th 824, 836
(Daugherty.))  Plaintiff alleged
that the vehicle: “hesitates when attempting to pick up speed after slowing
down, and when taking off from a stop. This hesitation is sometimes accompanied
by excessive revving in which the rpm meter moves, but the vehicle does not
accelerate commensurately, followed by a jerk or judder when the vehicle does
engage. In addition, Plaintiff transmission slips when driven at highway speeds”
and “suddenly lurching forward, sudden acceleration, delayed acceleration, and
sudden loss of forward propulsion.”  (FAC
pars. 13 and 32.)  Because these defects
involve the reliability of the vehicle propulsion and loss of engagement of the
transmission at highway speeds, Plaintiff sufficiently alleged facts to show a
safety concern posed by the defect. 
Defendant’s Reply did not address the Daugherty case and a
manufacturer’s duty to disclose when safety concerns are alleged.  The Court does not find persuasive
Defendant’s argument as to the element of fiduciary relationship or direct
transaction.  The demurrer is overruled
as to this argument.

            Defendant
argued that Plaintiff failed to allege specific facts to allege Defendant’s
knowledge of the defects in Plaintiff’s vehicle at the time of purchase and
Defendant’s intent to defraud.  Plaintiff
specifically pleads facts to show Defendant’s knowledge of defects in
transmissions through years of consumer complaints, internal documents, service
bulletins, attempts to repair the transmission, and testing and an intent to
deceive.  (FAC pars. 23-59, 126.)  However, these allegations as to knowledge
and intent only provide facts as to Defendant’s knowledge and intent regarding
defective transmissions in 2015 Cadillac Escalades, in general.  Plaintiff does not allege specific facts
regarding Defendant’s knowledge and intent to deceive specific to Plaintiff’s
2015 Cadillac Escalade.  The totality of
the allegations make an inference that Defendant had knowledge as to
Plaintiff’s vehicle and an intent to deceive, however, fraud pleading requires
specificity.  On this pleading defect,
the fraud-concealment is insufficient pled and the demurrer is persuasive. 

            The
demurrer to the fourth COA for fraud is SUSTAINED WITH LEAVE TO AMEND.

Defendant’s motion to strike punitive
damages is MOOT due to the sustaining of the demurrer as to the fourth COA for
fraud.