Judge: Shirley K. Watkins, Case: 22VECV01056, Date: 2023-03-24 Tentative Ruling

Case Number: 22VECV01056    Hearing Date: March 24, 2023    Dept: T

            [TENTATIVE] ORDER:  Defendant General Motors LLC’s Demurrer to the First Amended Complaint is SUSTAINED WITHOUT LEAVE TO AMEND as to the fourth cause of action.  No opposition nor request to amend was filed.  Answer due in 20 days.

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

Introduction

            Defendant General Motors LLC (Defendant) demurrer to Plaintiff Hector Sanchez’s (Plaintiff) First Amended Complaint (FAC.)  Defendant placed into issue the fourth cause of action (COA) for fraudulent inducement - concealment.  Defendant moved to strike the request for punitive damages in the FAC’s Prayer paragraph 6. 

            Plaintiff did not file an opposition.  In response to a previous demurrer, plaintiff filed a 1st Amended Complaint.  The demurrer was then taken off-calendar.

            Discussion 

            Defendant 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 March 31, 2020, three years after Plaintiff’s purchase of the vehicle on March 31, 2017.  (FAC par. 4.)  Defendant asserted that delayed discovery cannot be alleged because Plaintiff admitted that the vehicle was delivered with serious defects.  (FAC par. 11.)  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.  Further, Plaintiff alleged facts to support the delaying/tolling of the SOL.  (FAC pars. 60-77.)  Defendant’s demurrer failed to address these additional facts as to delayed discovery/tolling.  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 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.)  “[A] fraud action against a corporation requires the plaintiff to allege the names of the persons who made the allegedly fraudulent representations, their authority to speak, to whom they spoke, what they said or wrote, and when it was said or written.”  (Tarmann v. State Farm Mut. Auto Ins. Co. (1991) 2 Cal.App.4th 153, 157.)  “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.

As to Defendant’s argument that Plaintiff failed to allege specific facts to support 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, 125.)  However, these allegations as to knowledge and intent only provide facts as to Defendant’s knowledge and intent regarding defective transmissions in 2015 “GM-brand vehicles”, in general.  (FAC par. 29.)  Plaintiff does not allege specific facts regarding Defendant’s knowledge and intent to deceive, specific to Plaintiff’s 2017 GMC Sierra.  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 on this pleading defect is SUSTAINED.

            Defendant 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 showing a fiduciary relationship or direct dealings, the fraud COA would not have alleged specific facts to allege a duty to disclose.  There is no dispute that a fiduciary relationship and direct dealing are 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.  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. 

As plaintiff has not opposed the demurrer in order to request leave to amend or to assert what can be done to amend, the demurrer to the fourth COA for fraud is SUSTAINED WITHOUT 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.

            IT IS SO ORDERED, CLERK TO GIVE NOTICE.