Judge Teresa A. Beaudet, Case 21STCV43793 2023-01-25 Tentative Ruling

DEONNA MILLER, Plaintiff, vs. KIA MOTORS AMERICA, INC., et al., Defendants.	Case No.:	21STCV43793
	Hearing Date:	January 25, 2023
	Hearing Time:	10:00 a.m.
	[TENTATIVE] ORDER RE: DEFENDANT KIA AMERICA, INC.’S DEMURRER TO PLAINTIFF’S FIRST AMENDED COMPLAINT; DEFENDANT KIA AMERICA, INC.’S MOTION TO STRIKE PORTIONS OF PLAINTIFF’S FIRST AMENDED COMPLAINT

Plaintiff Deonna Miller (“Plaintiff”) filed this lemon law action on December 1, 2021, against Defendant Kia Motors America, Inc. The original Complaint asserted causes of action for

Kia Motors America, Inc. demurred to each of the causes of action of the Complaint, and on June 20, 2022, the Court issued an order sustaining the demurrer in its entirety, with leave to amend.

Plaintiff filed the operative First Amended Complaint (“FAC”) on July 20, 2022 against Kia America, Inc. The FAC asserts causes of action for (1) violation of subdivision (d) of Civil Code section 1793.2, (2) violation of subdivision (b) of Civil Code section 1793.2, (3) violation of subdivision (a)(3) of Civil Code section 1793.2, (4) breach of the implied warranty of merchantability, and (5) fraudulent inducement-concealment.

Kia America, Inc. (“KA”), formerly Kia Motors America, Inc., now demurs to the second, third, fourth, and fifth causes of action of the FAC. KA also moves to strike portions of the FAC. Plaintiff opposes both.

Plaintiff alleges that on or about July 11, 2013 she entered into a “warranty contract” with KA regarding a 2013 Kia Optima vehicle (the “Subject Vehicle”), which was manufactured by KA. (FAC, ¶ 10.) Plaintiff alleges that 2011-2019 KIA Optima vehicles equipped with a 2.0 or 2.4L engine, including the 2013 Kia Optima, contained one or more design and/or manufacturing defects in their engines that results in the restriction of oil flow through the connecting rod bearings, as well as to other vital areas of the engine. (FAC, ¶ 25.) Plaintiff alleges that KA and its representatives have been unable to service or repair the Subject Vehicle to conform to the applicable warranties after a reasonable number of opportunities. (FAC, ¶ 94.)

KA first asserts that Plaintiff’s fourth cause of action for breach of the implied warranty of merchantability is barred by the statute of limitations.

KA notes that “[a]n action for breach of any contract for sale must be commenced within four years after the cause of action has accrued.” ((Cal. U. Com. Code, § 2725, subd. (1).) As set forth above, Plaintiff alleges that on or about July 11, 2013, she entered into a “warranty contract” with KA regarding the Subject Vehicle. (FAC, ¶ 10.) KA argues that the statute of limitations thus began to run at the purchase of the Subject Vehicle in July 2013, and expired four years later, in July 2017. The instant case was filed on December 1, 2021.

Plaintiff argues that the implied warranty cause of action is not time barred, citing to Mexia v. Rinker Boat Co., Inc. (2009) 174 Cal.App.4th 1297, 1304, where the Court of Appeal noted that “[t]he implied warranty of merchantability may be breached by a latent defect undiscoverable at the time of sale.” However, as KA notes, the Mexia Court also noted that “[i]n the case of a latent defect, a product is rendered unmerchantable, and the warranty of merchantability is breached, by the existence of the unseen defect, not by its subsequent discovery.” ((Id. at p. 1305.)

Pursuant to Cal. U. Com. Code section 2725, subd. (2), “[a] breach of warranty occurs when tender of delivery is made, except that where a warranty explicitly extends to future performance of the goods and discovery of the breach must await the time of such performance the cause of action accrues when the breach is or should have been discovered.” KA notes that “[b]ecause an implied warranty is one that arises by operation of law rather than by an express agreement of the parties, courts have consistently held it is not a warranty that explicitly extends to future performance of the goods…” (Cardinal Health 301, Inc. v. Tyco Electronics Corp. (2008) 169 Cal.App.4th 116, 134 [internal quotations omitted, citing Cal. U. Com. Code, § 2725, subd. (2).)

Based on the foregoing, the Court sustains KA’s demurrer to the fourth cause of action.

Next, KA asserts that Plaintiff’s fifth cause of action for fraudulent inducement – concealment is also barred by the statute of limitations. Pursuant to Code of Civil Procedure section 338, subdivision (d), there is a three-year statute of limitations for “[a]n action for relief on the ground of fraud or mistake.” “The 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.” (Ibid.)

In support of the fifth cause of action, Plaintiff alleges that “Defendant committed fraud by allowing the Vehicle to be sold to Plaintiff without disclosing that the Vehicle and its 2.4L Theta II engine was defective and susceptible to sudden and catastrophic failure.” (FAC, ¶ 113.) On or about July 11, 2013, Plaintiff entered into the warranty contract with Defendant regarding the Subject Vehicle. (FAC, ¶ 10.) Based on these allegations, KA asserts that the applicable statute of limitations began to run when Plaintiff purchased the Subject Vehicle on July 11, 2013, and expired three years later, on July 11, 2016.

Plaintiff notes that the FAC now alleges that “Plaintiff did not discover Defendant’s wrongful conduct alleged herein until February 2021, as the Subject Vehicle continued to exhibit symptoms of nonconformity, including the Engine Defect, following Defendant’s unsuccessful attempts to repair it (despite an engine replacement).” (FAC, ¶ 22.) Plaintiff also alleges in the FAC that on or about October 29, 2019, Plaintiff towed the Subject Vehicle to KA’s authorized repair facility with complaints that the engine turned off and would not turn on, and KA’s technicians verified engine failure. (FAC, ¶ 19.) Plaintiff further alleges that on or about February 26, 2021, the Subject Vehicle was towed to KA’s authorized repair facility with complaints that the Subject Vehicle would not engage into any gear, and that following this visit, Plaintiff continued to experience problems with the Subject Vehicle. (FAC, ¶¶ 20-21.)

KA argues that although Plaintiff alleges that she did not discover KA’s alleged fraud until around “February 2021” (FAC, ¶ 22), this allegation is contradicted by other allegations in the FAC that establish that a reasonable investigation by Plaintiff would have revealed the operative facts almost immediately upon purchase. KA notes that Plaintiff alleges that “[a]t the time of sale, the subject vehicle contained one or more latent defect(s) set forth above,” and that “[h]ad Plaintiff known that the Vehicle and its 2.4L Theta II engine were defective at the time of sale, Plaintiff would not have purchased the Vehicle.” (FAC, ¶¶ 110, 117, emphasis omitted.) KA asserts that these allegations are an admission that Plaintiff discovered or reasonably should have discovered the facts giving rise to the fifth cause of action years prior to the purported delayed discovery. But as discussed, Plaintiff alleges she did not discover KA’s wrongful conduct alleged herein until February 2021, as the Subject Vehicle continued to exhibit symptoms of nonconformity (including the engine defect), following KA’s unsuccessful attempts to repair it. (FAC, ¶ 22.) The Court finds that Plaintiff sufficiently pled facts demonstrating

Next, KA asserts that Plaintiff’s fifth cause of action for fraudulent inducement- concealment fails because there was no fiduciary or transactional relationship between Plaintiff and KA as necessary to give rise to a duty to disclose.

The elements of an 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.¿” (¿Marketing West, Inc. v. Sanyo Fisher Corp. (1992) 6 Cal.App.4th 603, 612-613¿.)

KA asserts that Plaintiff fails to plead a factual basis sufficient to trigger a duty disclose here. KA cites to Bigler-Engler v. Breg, Inc. (2017) 7 Cal.App.5th 276, 311-312, where the Court of Appeal noted that “[o]ur Supreme Court has described the necessary relationship giving rise to a duty to disclose as a transaction between the plaintiff and the 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…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.” ((Ibid. [internal quotations, citations, and emphasis omitted].)

KA asserts that here, Plaintiff does not allege a direct transaction with KA giving rise to a duty to disclose. Plaintiff does not respond to this point in the opposition or point to any allegations showing that KA and Plaintiff entered into some type of transaction that suggests direct dealings between them. Plaintiff also does not address the Bigler-Engler case in the opposition.

Based on the foregoing, the Court sustains KA’s demurrer to the fifth cause of action.

Lastly, KA asserts that the second cause of action for violation of subdivision (b) of Civil Code section 1793.2 and the third cause of action for violation of subdivision (a)(3) of Civil Code section 1793.2 fail to allege facts sufficient to state a cause of action.

KA asserts that the second cause of action is insufficient because Plaintiff does not allege the number of days the Subject Vehicle was out of service for repair. However, Plaintiff alleges that “[a]lthough Plaintiff presented the Vehicle to Defendant’s representative in this state, Defendant and its representative failed to commence the service or repairs within a

reasonable time and failed to service or repair the Vehicle so as to conform to the applicable warranties within 30 days, in violation of Civil Code section 1793.2, subdivision (b). Plaintiff

did not extend the time for completion of repairs beyond the 30-day requirement.” (FAC, ¶ 100.) The Court finds that these allegations are sufficient. Civil Code section 1793.2, subdivision (b) provides as follows:

“[w]here those service and repair facilities are maintained in this state and service or repair of the goods is necessary because they do not conform with the applicable express warranties, service and repair shall be commenced within a reasonable time by the manufacturer or its representative in this state. Unless the buyer agrees in writing to the contrary, the goods shall be serviced or repaired so as to conform to the applicable warranties within 30 days. Delay caused by conditions beyond the control of the manufacturer or its representatives shall serve to extend this 30-day requirement. Where delay arises, conforming goods shall be tendered as soon as possible following termination of the condition giving rise to the delay.”

KA also contends that the third cause of action is insufficient because “it fails to identify any facility relevant to Plaintiff’s claims or to allege in even cursory fashion what literature or

replacement parts supposedly were unavailable to any such repair facilities.” (Demurrer at p. 9:5-7.) Civil Code section 1793.2, subdivision (a)(3) provides that “[e]very manufacturer of consumer goods sold in this state and for which the manufacturer has made an express warranty shall…[m]ake available to authorized service and repair facilities sufficient service literature and replacement parts to effect repairs during the express warranty period.” In the FAC, Plaintiff alleges that “[i]n violation of Civil Code section 1793.2, subdivision (a)(3), Defendant failed to make available to its authorized service and repair facilities sufficient service literature and

replacement parts to effect repairs during the express warranty period.” (FAC, ¶ 105.)

The Court finds that the allegations of the second and third causes of action are sufficient, and thus overrules the demurrer to these causes of action.

A court may strike any “irrelevant, false, or improper matter inserted in any pleading” or all or any part of a 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.) “The grounds for a motion to strike shall appear on the face of the challenged pleading or from any matter of which the court is required to take judicial notice.” (Code Civ. Proc., § 437.)

KA moves to strike the prayer for punitive damages contained in the FAC. (FAC, p. 25:4.) Because the demurrer to the fraudulent inducement-concealment cause of action is sustained, and because no other cause of action in the FAC can support a claim for punitive damages, the Court grants KA’s motion to strike the request for punitive damages. The Court notes that Plaintiff does not cite to any binding legal authority in support of her assertion that punitive damages are available under the Song-Beverly Act.

Next, KA moves to strike Plaintiff’s requests for civil penalties. (FAC, ¶¶ 96, 103, 106, p. 25:5-6.) Civil Code section 1794, subdivision (c) provides that “[i]f the buyer establishes that the failure to comply was willful, the judgment may include, in addition to the amounts recovered under subdivision (a), a civil penalty which shall not exceed two times the amount of actual damages. This subdivision shall not apply in any class action under Section 382 of the Code of Civil Procedure or under Section 1781, or with respect to a claim based solely on a breach of an implied warranty.” KA asserts that the FAC offers no facts suggesting that KA’s conduct was willful.

Plaintiff counters that she alleges that KA willfully violated the Song-Beverly Act, citing to paragraphs 25, 48, 51, and 58 of the FAC. (Opp’n at p. 3:15.) In paragraph 25 of the FAC, Plaintiff alleges that “Defendant knew since 2009, if not earlier, that the 2011-2019 KIA Optima, 2011-2019 KIA Sportage, 2012-2019 KIA Sorento, 2011-2019 Hyundai Sonata, and 2013-2019 Hyundai Santa Fe vehicles equipped with a 2.0 or 2.4L engine, including the 2013 Kia Optima…contained one or more design and/or manufacturing defects in their engines…that results in the restriction of oil flow through the connecting rod bearings, as well as to other vital areas of the engine. This defect – which typically manifests itself during and shortly after the limited warranty period has expired – will cause the KIA Vehicle to experience catastrophic engine failure…” (FAC, ¶ 25.) Paragraph 48 of the FAC alleges that “while Defendant knew about the Engine Defect, and its safety risks since 2009…if not before, Defendant nevertheless concealed and failed to disclose the defective nature of the Vehicle and its 2.4L GDI engine to its sales representatives and Plaintiff at the time of sale and thereafter…” (FAC, ¶ 48.) Plaintiff alleges that “Defendant’s failure to comply with its obligations under Civil Code section 1793.2, subdivision (d) was willful, in that Defendant and its representative were aware that they were unable to service or repair the Vehicle to conform to the applicable express warranties after a reasonable number of repair attempts, yet Defendant failed and refused to promptly replace the Vehicle or make restitution.” (FAC, ¶ 86.) Plaintiff also alleges that “Defendant's failure to comply with its obligations under Civil Code section 1793.2(b) was willful, in that Defendant and its representative were aware that they were obligated to service or repair the Vehicle to conform to the applicable express warranties within 30 days, yet they failed to do so.” (FAC, ¶ 103.) The Court finds that the allegations are sufficient and thus denies KA’s motion to strike Plaintiff’s request for civil penalties.

Next, KA moves to strike Plaintiff’s request “[f]or prejudgment interest at the legal rate…” (FAC, p. 25:7.) KA notes that Civil Code section 3287, subdivision (a) provides that “[a] person who is entitled to recover damages certain, or capable of being made certain by calculation, and the right to recover which is vested in the person upon a particular day, is entitled also to recover interest thereon from that day, except when the debtor is prevented by law, or by the act of the creditor from paying the debt.”

KA asserts that here, “damages, if any, suffered by Plaintiff is not certain or capable of being made certain since, because, among other reasons, (1) Plaintiff’s ‘actual damages in an amount according to proof’ are per se uncertain (see FAC page 24, prayer (a)); (2) Plaintiff’s actual damages are neither fixed by the terms of a contract nor readily ascertainable by reference to well-established market values; (3) Plaintiff has not alleged the purchase price or market value of the Subject Vehicle; (4) Plaintiff has not alleged or attempted to quantify the diminution in value attributable to the alleged defects, nonconformities and impairments in the Subject Vehicle; and (4) even if Plaintiff had alleged the purchase price and monetary value of the alleged defects, any recoverable actual damages would be subject to several variables, such as mileage offset, recovery of negative equity, financing terms, payment history, and current status of payments.” (Mot. at p. 9:27-10:8.) Plaintiff fails to respond to this point in the opposition, which the Court construes as a concession of the merits of the argument. Thus, the Court grants KA’s motion to strike Plaintiff’s request for prejudgment interest.

Lastly, KA moves to strike paragraphs 5, 38, and 39 of the FAC, but the motion does not contain any argument as to why such paragraphs should be stricken. Thus, the Court denies KA’s motion to strike paragraphs 5, 38, and 39 of the FAC.

For the foregoing reasons, the Court sustains KA’s demurrer to the fourth and fifth causes of action, without leave to amend. The Court notes that in its June 20, 2022 Order, the Court sustained Kia Motors America, Inc.’s demurrer to the breach of the implied warranty of merchantability and fraudulent inducement-concealment causes of action in the original Complaint. Plaintiff has again failed to state facts sufficient to constitute a cause of action for breach of the implied warranty of merchantability or fraudulent inducement-concealment in the FAC, and Plaintiff has not demonstrated any way that she could amend these causes of action to alleviate the problems discussed above. Accordingly, the Court finds that it is appropriate to sustain the instant demurrer to the fourth and fifth causes of action without leave to amend.

KA’s motion to strike is granted in part and denied in part, as set forth above.

Superior Court of California

County of Los Angeles

Department 50