Judge: Stephen P. Pfahler, Case: 23CHCV00081, Date: 2023-05-02 Tentative Ruling

Case Number: 23CHCV00081    Hearing Date: May 2, 2023    Dept: F49

Dept. F-49

Date: 5-2-23

Case #: 23CHCV00081

Trial Date: Not Set

 

DEMURRER TO THE COMPLAINT

 

MOVING PARTY: Defendant, Ford Motor Company

RESPONDING PARTY: Plaintiff, Rolando Urquidiez

 

RELIEF REQUESTED

Demurrer to the Complaint

·         3rd Cause of Action: Violation of Civil Code section 1793.2(a)(3)

·         5th Cause of Action: Fraudulent Inducement - Concealment

 

SUMMARY OF ACTION

Plaintiff Rolando Urquidieza alleges a 2019 certified pre-owned Ford F-150 vehicle suffers from a defective transmission. On January 11, 2023, Plaintiff filed a complaint for Violations of Civil Code section 1793.2, Breach of Implied Warranty of Merchantability, Fraudulent Inducement – Concealment, Negligent Repair, Violation of Consumer Legal Remedies Act, and Violation of Magnuson-Moss Warranty Act. On March 3, 2023, Galpin Motors, Inc. answered the complaint.

 

RULING: Sustained with Leave in Part/Overruled in Part

Defendant Ford Motor Company (Ford) bring the subject demurer to the third and fifth causes of action in the complaint for Violation of Civil Code section 1793.2(a)(3) and Fraudulent Inducement - Concealment on grounds the claims lack facts in support of the claims. Plaintiff counters that the complaint sufficiently articulates the two challenged claims. Ford in reply reiterates the insufficient facts and economic loss rule arguments.

 

A demurrer is an objection to a pleading, the grounds for which are apparent from either the face of the complaint or a matter of which the court may take judicial notice. (Code Civ. Proc., § 430.30, subd. (a); see also Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) The purpose of a demurrer is to challenge the sufficiency of a pleading “by raising questions of law.” (Postley v. Harvey (1984) 153 Cal.App.3d 280, 286.) “In the construction of a pleading, for the purpose of determining its effect, its allegations must be liberally construed, with a view to substantial justice between the parties.” (Code Civ. Proc., § 452.) The court “ ‘ “treat[s] the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law . . . .” ’ ” (Berkley v. Dowds (2007) 152 Cal.App.4th 518, 525.) In applying these standards, the court liberally construes the complaint to determine whether a cause of action has been stated.  (Picton v. Anderson Union High School Dist. (1996) 50 Cal.App.4th 726, 733.)

 

“A demurrer for uncertainty is strictly construed, even where a complaint is in some respects uncertain, because ambiguities can be clarified under modern discovery procedures.” (Khoury v. Maly's of California, Inc. (1993) 14 Cal.App.4th 612, 616; Williams v. Beechnut Nutrition Corp. (1986) 185 Cal.App.3d 135, 139 [“[U]nder our liberal pleading rules, where the complaint contains substantive factual allegations sufficiently apprising defendant of the issues it is being asked to meet, a demurrer for uncertainty should be overruled or plaintiff given leave to amend.]

 

3rd Cause of Action, Violation of Civil Code section 1793.2(a)(3): Overruled.

For challenges the lack of even a “cursory” reference to the missing literature regarding transmission repairs. Plaintiff in opposition challenges the demurrer on grounds that the complaint clearly alleges transmission repair issues, and any missing information is within the possession of Ford.

 

“(a) Every manufacturer of consumer goods sold in this state and for which the manufacturer has made an express warranty shall: … (3) Make available to authorized service and repair facilities sufficient service literature and replacement parts to effect repairs during the express warranty period.” (Civ. Code, § 1793.2, subd. (a)(3).) The complaint arises from the alleged defective transmission and inability to repair the defects at the participating repair center, caused at least in part due to the lack of literature and replacement parts necessary to complete repairs addressed in the technical service bulletin. [Comp., ¶¶ 8, 18, 26-32, 36, 42, 46-48.] The court finds the allegations sufficient for purposes of the subject demurrer. Any further refinement and gradation disputes can be addressed in discovery. The demurrer is overruled as to this cause of action.

 

5th Cause of Action, Fraudulent Inducement - Concealment: Sustained with Leave to Amend.

Ford challenges the claim on grounds of a lack of sufficient factual particularity against the corporate entity, including the denial of any transactional relationship between the parties. Since Plaintiff purchased the vehicle from a dealership, rather than Ford, no basis for a claim of direct concealment or omission(s) exists in the subject context. Ford also denies the existence of a fiduciary relationship between the parties. Ford finally cites to the economic loss rule as a bar to the claim.

 

The operative complaint relies on allegations that Ford (as the only named party in the subject cause of action) failed to disclose the defective transmission within the vehicle at the time of purchase. Plaintiff contends Ford was under a duty to disclose said known defect, which was identified by Ford prior to the time of the sales transaction.

 

“[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.” (Bank of America Corp. v. Superior Court (2011) 198 Cal.App.4th 862, 870 [internal quotations omitted]; Marketing West, Inc. v. Sanyo Fisher (USA) Corp. (1992) 6 Cal.App.4th 603, 612–613.)

 

“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. [Citation.]’” (LiMandri v. Judkins (1997) 52 Cal.App.4th 326, 336.) “Each of the other three circumstances in which nondisclosure may be actionable presupposes the existence of some other relationship between the plaintiff and defendant in which a duty to disclose can arise. … 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.” (Id. at pp. 336–337.)

 

“‘Active concealment or suppression of facts by a nonfiduciary “is the equivalent of a false representation, i.e., actual fraud.” [Citation.] (Citation).)’ A fraud claim based upon the suppression or concealment of a material fact must involve a defendant who had a legal duty to disclose the fact. (Civ.Code, § 1710, subd. (3) [a deceit includes “[t]he suppression of a fact, by one who is bound to disclose it, or who gives information of other facts which are likely to mislead for want of communication of that fact”]; Citation.)” (Hoffman v. 162 North Wolfe LLC (2014) 228 Cal.App.4th 1178, 1186.) “A plaintiff's burden in asserting a fraud claim against a corporate employer is even greater. In such a case, 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 v. Superior Court, (1996) 12 Cal.4th 631, 645.)

 

“Under California law, a vendor has a duty to disclose material facts not only to immediate purchasers, but also to subsequent purchasers when the vendor has reason to expect that the item will be resold.” (OCM Principal Opportunities Fund, L.P. v. CIBC World Markets Corp. (2007) 157 Cal.App.4th 835, 859.) The court finds the complaint properly alleges the purchase of the Ford vehicle with the represented warranty and required merchantability requirements incorporates the imposed a duty to disclose known material defects at the time of the transaction. [Comp., ¶¶ 55-65.] The withheld information constituted a material fact that impacts a purchase decision. Given the allegations of a failure to disclose, the court declines to further consider Ford’s argument regarding insufficient facts at the corporate level in that Plaintiff is not relying on a claim for misrepresentation. Regardless, any variation on the wording of the basis of the claim offered by Ford can be addressed in discovery.

 

“Plaintiffs alleged that they bought the car from a Nissan dealership, that Nissan backed the car with an express warranty, and that Nissan's authorized dealerships are its agents for purposes of the sale of Nissan vehicles to consumers. In light of these allegations, we decline to hold plaintiffs’ claim is barred on the ground there was no relationship requiring Nissan to disclose known defects.” (Dhital v. Nissan North America, Inc. (2022) 84 Cal.App.5th 828, 844.) “Grant of review by the Supreme Court of a decision by the Court of Appeal does not affect the appellate court's certification of the opinion for full or partial publication under rule 8.1105(b) or rule 8.1110, but any such Court of Appeal opinion, whether officially published in hard copy or electronically, must be accompanied by a prominent notation advising that review by the Supreme Court has been granted. [¶] (2) The Supreme Court may order that an opinion certified for publication is not to be published or that an opinion not certified is to be published. The Supreme Court may also order depublication of part of an opinion at any time after granting review.” (Cal. Rules of Court, rule 8.1105(e)(1)(B), (e)(2).)

 

The agency relationship distinction lacks support in that the subject cause of action is only against Ford and Plaintiff makes no claims of tortious conduct against the dealership. (Mel Clayton Ford v. Ford Motor Co. (2002) 104 Cal.App.4th 46, 56.)

 

As for the economic loss rule, Plaintiff correctly represents the current state of the economic loss rule allowing for a claim for concealment upon a pleading articulating separate and independent from the warranty claim. Warranty claims arise in contract. (Robinson Helicopter Co., Inc. v. Dana Corp. (2004) 34 Cal.4th 979, 993; Dhital v. Nissan North America, Inc., supra, 84 Cal.App.5th 843; see Anderson v. Ford Motor Co. (2022) 74 Cal.App.5th 946, 963.) Again, the complaint arises in concealment not misrepresentation. (In re Ford Motor Co. DPS6 Powershift Transmission Products Liability Litigation (C.D. Cal. 2020) 483 F.Supp.3d 838, 848.) (The court requests Ford update its case citation “Altamirano-Torres v. Ford Motor Co., et al. (C.D. Cal. 2020) 2020 WL 5267567.” “A case citation must include the official report volume and page number and year of decision. The court must not require any other form of citation.” (Cal. Rules of Court, rule 3.1113(c).)

 

The court also declines to consider the conclusive argument in reply regarding the findings of the Second Appellate District questioning the contractual relationship of parties between a manufacturer and consumer for purposes of enforcing an arbitration agreement. (Ford Motor Warranty Cases (Cal. Ct. App., Apr. 4, 2023, No. B312261) 2023 WL 2768484.) Ford is again reminded to update its citations. (Cal. Rules of Court, rule 3.1113(c).)

 

As for the non-economic loss portion of the claim itself, Plaintiff represents the allegations regarding the threat to personal safety from the non-disclosure constitutes a separate and independent basis of damages. [Comp., ¶¶ 33, 58-60.] The allegations while perhaps establishing a foundation for evading the economic loss rule bar, still insufficiently articulate actual personal injury damages required for the claim. The demurrer is sustained with leave to amend as to this cause of action.

 

The demurrer is therefore overruled on the third cause of action and sustained with 30 days leave to amend as to the fifth cause of action. Plaintiff is only granted leave to amend the facts within the fifth cause of action in order to allege a separate and distinct claim for damages, and may not otherwise add any new causes of action.

 

Defendant to give notice.