The Motion to Strike Punitive Damages is DENIED. 

Counsel for Defendant General Motors LLC to give notice.  

STATEMENT OF THE CASE 

This is a lemon law action. Plaintiffs Lisa S Castillo and Clemente Arrizon (collectively, “Plaintiffs”) bring suit against Defendant General Motors, LLC (“Defendant”) alleging the following causes of action: 

Defendant filed the instant Demurrer to Plaintiff’s Complaint (the “Demurrer”) with Motion to Strike Punitive Damages (the “Motion”). 

GROUNDS FOR DEMURRER 

(1) Demurrer 

Pursuant to Code of Civil Procedure section 430.10, subdivision (e), Defendant demur to the Fifth Cause of Action on the ground it fails to allege facts sufficient to constitute a cause of action. 

(2) Motion to Strike 

Pursuant to Code of Civil Procedure sections 435 and 436, Defendant moves to strike the punitive damages allegations.  

MEET/CONFER 

The Court finds that Defendant satisfied the meet and confer requirements. (See Xylon Quezada Decl., ¶ 2.) 

DISCUSSION 

As an initial matter, Plaintiffs failed to file an opposition, effectively consenting to the Court sustaining the Demurrer and granting the Motion, without leave to amend. (See Cal. R. Ct., 8.54(c) [“A failure to oppose a motion may be deemed a consent to the granting of the motion.”]; Sexton v. Superior Court (1997) 58 Cal.App.4th 1403, 1410.) 

A demurrer for sufficiency tests whether the complaint states a cause of action. (Hahn v. Mirda (2007) 147 Cal. App. 4th 740, 747.) When considering demurrers, courts read the allegations liberally, with a view to substantial justice between the parties. (Code Civ. Proc. § 452; Stevens v. Superior Court (1999) 75 Cal.App.4th 594, 601.) 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.) “We treat the demurrer as admitting all material facts properly pleaded but not contentions, deductions or conclusions of fact or law. We accept the factual allegations of the complaint as true and also consider matters which may be judicially noticed.” (Mitchell v. California Department of Public Health (2016) 1 Cal.App.5th 1000, 1007.) “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, 147 Cal.App.4th at 747.) “To survive a demurrer, the complaint need only allege facts sufficient to state a cause of action; each evidentiary fact that might eventually form part of the plaintiff's proof need not be alleged.” (C.A. v. William S. Hart Union High School District (2012) 53 Cal.4th 861, 872.) 

Defendant demurs to the Fifth Cause of Action on the grounds that (1) it is barred by the statute of limitations; (2) it fails to state facts relevant to the elements of the claim; and (3) it fails to allege a transactional relationship giving rise to a duty to disclose. (Demurrer, pp. 7-12.) 

The Fifth Cause of Action alleges that Defendant fraudulently concealed facts from Plaintiffs, namely, facts concerning transmission defects applicable to the vehicle at issue (the “Subject Vehicle”). (Compl., ¶¶ 56-72.) Thus, the Court finds that the Fifth Cause of Action is a fraudulent concealment claim. 

The Court rejects Defendant’s argument that the Fifth Cause of Action is subject to demurrer on the ground that it is barred by the statute of limitations. (See Demurrer at pp. 7-8.) 

“‘[A] demurrer on the ground of the bar of the statute of limitations does not lie where the complaint merely shows that the action may have been barred. It must appear affirmatively that, upon the facts stated, the right of action is necessarily barred.’” (Stueve Bros. Farms, LLC v. Berger Kahn (2013) 222 Cal.App.4th 303, 313 (quoting Baright v. Willis (1984) 151 Cal.App.3d 303, 311 (other internal citations and quotations omitted); see Choi v. Sagemark Consulting (2017) 18 Cal.App.5th 308, 323 (quoting San Francisco Unified School Dist. v. W.R. Grace & Co. (1995) 37 Cal.App.4th 1318, 1325) [“‘The resolution of a statute of limitations defense is typically a factual question for the trier of fact.’”] 

The Court agrees with Defendant that the Fifth Cause of Action is subject to the limitations period in Code of Civil Procedure section 338, subdivision (d) which provides that “[a] action for relief on the ground of fraud or mistake” must be brought within three years. (Code Civ. Proc., § 338(d).) Code of Civil Procedure section 338, subdivision (d) further provides that “[t]he cause of action in that case is not deemed to have accrued until the discovery, by the aggrieved party, of the facts constituting the fraud or mistake.” (Id.) 

Yet, the Court does not find that it affirmatively appears from the facts alleged in the Complaint that the Fifth Cause of Action is necessarily time barred.  

Defendant contends that the Fifth Cause of Action is time barred because Plaintiffs had to bring the claim within three years of the date that they purchased or leased the Subject Vehicle, which the Complaint alleges occurred on May 22, 2018. (Demurrer at p. 7 (citing Compl. at ¶ 6).  

However, as stated above, Code of Civil Procedure section 338, subdivision (d) provides that “[t]he cause of action in that case is not deemed to have accrued until the discovery, by the aggrieved party, of the facts constituting the fraud or mistake.” (Code Civ. Proc., § 338(d).) It does not affirmatively appear from the facts alleged in the Complaint that Plaintiffs necessarily discovered the alleged concealment the same day they purchased or leased the Subject Vehicle on May 22, 2018. 

As Defendant concedes, (see Demurrer at pp. 7-8), the Complaint does not allege the specific date that Plaintiffs discovered the alleged concealment, but rather alleges that the “[d]efects and nonconformities to warranty manifested themselves within the applicable express warranty period,” (Compl. at ¶ 11), and that “Plaintiffs discovered Defendant's wrongful conduct alleged herein shortly before the filing of the complaint, as the Vehicle continued to exhibit symptoms of defects following Defendant’s unsuccessful attempts to repair them.” (Id. at ¶ 24.) 

Yet, “[w]here a complaint does not reveal on its face that it is barred by the statute of limitations, a plaintiff has no obligation to plead around the defense.” (JPMorgan Chase Bank, N.A. v. Ward (2019) 33 Cal.App.5th 678, 688 (citing Union Carbide Corp. v. Superior Court (1984) 36 Cal.3d 15, 25; Spray, Gould & Bowers v. Associated Internat. Ins. Co. (1999) 71 Cal.App.4th 1260, 1266, fn. 4); see Norgart v. Upjohn Co. (1999) 21 Cal.4th 383, 396 [statute of limitations is an affirmative defense].) 

It does not affirmatively appear on the fact stated in the Complaint that Plaintiffs necessarily discovered the alleged concealment more than three (3) years prior to the filing of the Complaint, and therefore the Fifth Cause of Action is not subject to demurrer on statute of limitations grounds.  

“The elements for a fraudulent concealment claim 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.’” (Nissan Motor Acceptance Cases (2021) 63 Cal.App.5th 793, 826 (quoting Boschma v. Home Loan Center, Inc. (2011) 198 Cal.App.4th 230, 248).) 

Claims for fraud must be plead with specificity. (Charnay v. Cobert¿(2006) 145 Cal.App.4th 170, 185, fn. 14.) “[T]hat is, a plaintiff must plead facts that show with particularity the elements of the cause of action.” (Glaski v. Bank of Am., Nat'l Ass’n (2013) 218 Cal. App. 4th 1079, 1090.) A plaintiff must plead “facts which show how, when, where, to whom, and by what means the representations were tendered.” (Lazar v. Sup. Ct. (1996) 12 Cal.4th 631, 645 [emphasis in original omitted].) When the fraud claim is based on false or incomplete statements, the plaintiff “must set forth at least the substance of those statements.” (Blickman Turkus, LP v. MF Downtown Sunnyvale, LLC (2008) 162 Cal.App.4th 858, 878 (emphasis in original omitted).) In the case of a corporate defendant, “the plaintiff must ‘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.’” (Lazar, supra, 12 Cal.4th at 645 (quoting Tarmann v. State Farm Mut. Auto. Ins. Co. (1991) 2 Cal.App.4th 153, 157).) In addition, damages must be alleged distinctly and their “causal connection with the reliance on the representations must be shown.” (Service by Medallion v. Clorox Co. (1996) 44 Cal.App.4th 1807, 1818.) 

The specificity requirement “serves two purposes. First, it gives the defendant notice of the definite charges to be met. Second, the allegations should be sufficiently specific that the court can weed out nonmeritorious actions on the basis of the pleadings.” (Heritage Pacific Financial, LLC v. Monroy (2013) 215 Cal.App.4th 972, 989.) “Thus the pleading should be sufficient ‘to enable the court to determine whether, on the facts pleaded, there is any foundation, prima facie at least, for the charge of fraud.’” (Id. (quoting Committee on Children's Television, Inc. v. General Goods Corp. (1983) 35 Cal.3d 197, 216–217, superseded by statute on another issue).) 

However, the particularity requirement in pleading a fraud cause of action “is relaxed when it is apparent from the allegations that the defendant necessarily possesses knowledge of the facts.” (Quelimane Co. v. Stewart Title Guaranty Co. (1998) 19 Cal.4th 26, 47; see Committee on Children's Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 216 [“[l]ess specificity is required when ‘it appears from the nature of the allegations that the defendant must necessarily possess full information concerning the facts of the controversy....”].) Similarly, less specificity is required for fraud claims based on omission or concealment. (Alfaro v. Community Housing Imp. System & Planning Ass’n, Inc.¿(2009) 171 Cal.App.4th 1356, 1384 [specify rule requiring the pleading of facts which show how, when, where, to whom, and by what means the representations were tendered “is intended to apply to affirmative misrepresentations. If the duty to disclose arises from the making of representations that were misleading or false, then those allegations should be described…” because “it is harder to apply this rule to a case of simple nondisclosure. How does one show ‘how’ and ‘by what means' something didn't happen, or ‘when’ it never happened, or ‘where’ it never happened?”].) 

Here, Defendant contends that the Fifth Cause of Action “¿fails as a matter of law because Plaintiffs failed to allege (i) the identity of the individuals at GM who purportedly concealed material facts or made untrue representations about their Escalade (ii) their authority to speak and act on behalf of GM, (iii) GM’s knowledge about alleged defects in Plaintiffs’ Escalade at the time of purchase, (iv) any interactions with GM before or during the purchase of their Escalade, or (v) GM’s intent to induce reliance by Plaintiffs to purchase the specific Escalade at issue.” (Demurrer at p. 9.) Defendant also contends that the Complaint fails to sufficiently allege intent to defraud. (Id.) 

The Court rejects Defendants’ arguments. As stated above, less specificity is required for fraud claims based on omission or concealment and when it appears that the defendant necessarily possess full information concerning the facts of the controversy. 

The Court finds the Complaint sufficiently alleges what was concealed or suppressed with respect to the Subject Vehicle, namely, defects with the transmission. (See, e.g., Compl. at ¶¶ 57-64.)  

Given that the Fifth Cause of Action is subject to less specificity, the Court does not find that Plaintiffs were required to allege the identity of the individuals at “GM” who purportedly concealed material facts or made untrue representations about the Subject Vehicle, their authority to speak and act on behalf of “GM,” or “GM’s” knowledge about alleged defects in Plaintiffs’ Subject Vehicle at the time of purchase. The Court finds that Defendant necessarily possess full information concerning these facts. Moreover, the Complaint alleges that “Defendant GM acquired its knowledge of the Transmission Defect prior to Plaintiffs acquiring the Vehicle, through sources not available to consumers such as Plaintiffs, including but not limited to pre-production and post-production testing data; early consumer complaints about the Transmission Defect made directly to Defendant GM and its network of dealers; aggregate warranty data compiled from Defendant GM's network of dealers; testing conducted by Defendant GM in response to these complaints; as well as warranty repair and part replacements data received by Defendant GM from Defendant GM's network of dealers, amongst other sources of internal information.” (Compl. at ¶ 60.) 

Defendant does not provide any legal or factual basis to conclude that the Fifth Cause of Action fails because it fails to sufficiently allege “any interactions” with “GM” “before or during the purchase” of the Subject Vehicle. The Complaint alleges that “Plaintiffs are reasonable consumers who interacted with sales representatives, considered Defendant GM's advertisement, and/or other marketing materials concerning GM Vehicles prior to purchasing Subject Vehicle.” (Compl. at ¶ 61.) 

The Court also finds that the Complaint sufficiently alleges intent to induce reliance/intent to defraud. (Compl. at ¶¶ 65-72.) 

Finally, Defendant argues that the Fifth Cause of Action fails because it fails to allege a transactional relationship between Defendant and Plaintiffs that gives rise to a duty to disclose, reasoning that “[t]he  Complaint does not allege that Plaintiffs purchased their Escalade directly from GM” and therefore “any alleged concealment by GM did not arise in a direct transaction between Plaintiffs and GM.” (Demurrer at pp. 10-11.) 

For the reasons discussed below, the Court rejects Defendant’s arguments.  

As explained by the Court of Appeal in Bigler-Engler v. Breg, Inc. (2017) 7 Cal.App.5th 276, relied on by Defendant: 

“There are ‘four circumstances in which nondisclosure or concealment may constitute actionable fraud: (1) when the defendant is in a fiduciary relationship with the plaintiff; (2) when the defendant had exclusive knowledge of material facts not known to the plaintiff; (3) when the defendant actively conceals a material fact from the plaintiff; and (4) when the defendant makes partial representations but also suppresses some material facts.’” 

(Id. at 311 (quoting LiMandri v. Judikins (1997) 52 Cal.App.4th 326, 336).)  

The Court agrees with Defendant that the Complaint does not allege a fiduciary relationship between Defendant and Plaintiffs. 

Yet, as explained by the Court of Appeal in Bigler-Engler: 

Where… a fiduciary relationship does not exist between the parties, only the latter three circumstances may apply. These three circumstances, however, “presuppose[ ] the existence of some other relationship between the plaintiff and defendant in which a duty to disclose can arise.” ([LiMandri, supra, 52 Cal.App.4th at 336-337].) “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 arrangement.” ’ ” (Shin v. Kong (2000) 80 Cal.App.4th 498, 509, 95 Cal.Rptr.2d 304.) 

Our Supreme Court has described the necessary relationship giving rise to a duty to disclose as a “transaction” between the plaintiff and defendant: “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 Construction Corp. v. City of Los Angeles (1970) 2 Cal.3d 285, 294….) Other cases have described the requisite relationship with the same term. (See, e.g., Hoffman v. 162 North Wolfe LLC (2014) 228 Cal.App.4th 1178, 1187, 175 Cal.Rptr.3d 820 (Hoffman); LiMandri, supra, 52 Cal.App.4th at p. 337, 60 Cal.Rptr.2d 539 [“As a matter of common sense, such a relationship can only come into being as a result of some sort of transaction between the parties.”].) Such a transaction must necessarily arise from direct dealings between the plaintiff and the defendant; it cannot arise between the defendant and the public at large. 

(Id. at 311-312.) 

In Jones v. ConocoPhillips Co. (2011) 198 Cal.App.4th 1187, the plaintiff brought suit against manufacturers of chemicals for injuries sustained while the plaintiff was exposed to those chemicals while working for his employer. (Id. at 1191.) The Court of Appeal held that the plaintiff sufficiently alleged a duty to disclose for purposes of a fraudulent concealment cause of action because the complaint alleged that the manufacturers were aware of the toxic nature of their products, owed a duty to disclose to the plaintiff because they had knowledge of the material facts concerning the toxic nature of their products which were not available to the plaintiff, and that they made misleading representations regarding their products. (Id. at pp. 1199-1200.)   

Here, like the complaint at issue in Jones, the Complaint alleges that Defendant was aware of the defects with the transmission and “¿was under a duty to Plaintiffs to disclose the defective nature of the Vehicle, its transmission, its safety consequences and/or the associated repair costs” because Defendant alone had knowledge of the material facts and made representations that the Subject Vehicle had “‘world-class performance’ rivaling top performance vehicles, lightning-fast and smooth shifting, along with improved fuel efficiency, among other representations.” (Compl. at ¶¶ 61-68.) 

Thus, the Court finds that the Complaint sufficiently alleges a duty to disclose. (See, e.g., Jones, supra, 198 Cal.App.4th at 1199 (internal citations omitted) [“Although, typically, a duty to disclose arises when a defendant owes a fiduciary duty to a plaintiff, a duty to disclose may also arise when a defendant possesses or exerts control over material facts not readily available to the plaintiff.”]; Bigler-Engler, supra, 7 Cal.App.5th at 311 [holding duty to disclose may arise where “the defendant makes representations but does not disclose facts which materially qualify the facts disclosed, or which render his disclosure likely to mislead” or “the facts are known or accessible only to defendant, and defendant knows they are not known to or reasonably discoverable by the plaintiff”].)  

Accordingly, for all the foregoing reasons, the Court OVERRULES the Demurrer in its entirety. 

For all 

The court may, upon a motion, or at any time in its discretion, and upon terms it deems proper, “[s]trike out any irrelevant, false, or improper matter inserted in any pleading.” (Code Civ. Proc., § 436(a).) The court may also “[s]trike out all or any part of any pleading not drawn or filed in conformity with the laws of this state, a court rule, or an order of the court.” (Code Civ. Proc., § 436(b).) A motion to strike cannot be based upon the grounds that a complaint fails to state facts sufficient to constitute a cause of action, but instead is properly based on grounds of superfluous or abusive allegations, or improprieties in form or procedure. (Ferraro v. Camarlinghi (2008) 161 Cal.App.4th 509, 528-29.) The grounds for moving to strike must appear on the face of the pleading or by way of judicial notice. (Code. Civ. Proc., § 437; Turman v. Turning Point of Central California, Inc. (2010) 191 Cal.App.4th 53, 63 [“judges read allegations of a pleading subject to a motion to strike as a whole, all parts in their context, and assume their truth”].)