Judge Teresa A. Beaudet, Case 21STCV46680 2022-08-01 Tentative Ruling

YOLANDA CURIEL, et al.

Plaintiffs,

vs.

kia motors america, inc., et al.

Defendants.

Case No.:

21STCV46680

Hearing Date:

August 1, 2022

Hearing Time: 2:00 p.m.

[TENTATIVE] ORDER RE:

DEFENDANTS KIA AMERICA, INC. AND KIA DOWNTOWN LOS ANGELES’ NOTICE OF DEMURRER AND DEMURRER TO PLAINTIFFS’

COMPLAINT;

DEFENDANT KIA AMERICA, INC.’S MOTION TO STRIKE PORTIONS OF PLAINTIFFS’ COMPLAINT

Plaintiffs Yolanda Curiel (“Curiel”) and Natan Davoodi (jointly, “Plaintiffs”) filed this action on December 22, 2021 against Defendants Kia Motors America, Inc, Kia Downtown Los Angeles, and Kia of Carson. The Complaint alleges causes of action for: (1) violation of the Consumer Legal Remedies Act, (2) violation of the Unfair Competition Law, (3) violation of the False Advertising Act, (4) negligent repair, and (5) misrepresentation.

Defendants Kia America, Inc. (erroneously sued as Kia Motors America, Inc.) (“KA”) and Kia Downtown Los Angeles (“KDTLA”) (jointly, Defendants) now demurrer to each of the causes of action of the Complaint. Defendants also move to strike the Complaint in its entirety. Plaintiffs oppose.

Curiel alleges that she purchased a 2017 Kia Sportage, (the “Subject Vehicle”) on or about February 11, 2017. (Compl., ¶ 22, Ex. A.) Defendant appended to the Subject Vehicle an express written warranty undertaking to preserve and maintain the utility and performance of the automobile and/or provide compensation in the event of a failure in utility or performance. (Compl., ¶ 26.)

On or about September 2018, Plaintiff was involved in a bumper-to-bumper incident. (Compl., ¶ 27.) On or about April 4, 2019, May 21, 2019, May 11, 2020, June 11, 2020, July 3, 2020, and July 14, 2020, the Subject Vehicle’s HVAC, electrical and other systems sustained internal failures. (Compl., ¶¶ 29, 31, 33, 36, 38, 39.) The Subject Vehicle was serviced for warranty repairs. (Ibid.) On multiple occasions, Defendants indicated to plaintiff that the bumper-to-bumper incident was not the cause of the AC issues. (Compl., ¶ 30, 34, 35.) However, on or about July 3, 2020, Defendants indicated that the bumper-to-bumper incident caused the defect in the Subject Vehicle. (Compl., ¶ 38.) On or about December 2, 2021, KA claimed that the vehicle was never subject to a warranty repair. (Compl., ¶ 41.)

First, Defendants argue that the allegations set forth in Plaintiffs’ Complaint are vague, ambiguous, and uncertain with respect to which allegations are against which Defendants. However, in the Complaint, Plaintiffs define Kia Motors America, Inc. as “KIA” or “Defendant”, Kia of Downtown Los Angeles as “KDTLA” or “Defendant”, and Kia of Carson as “KCARSON” or “Defendant.” (Compl., ¶ 1.) KIA, KDTLA and KCARSON are collectively referred to in the Complaint as “Defendants.” (Compl., ¶ 1.) The Court overrules the demurrer on the basis of uncertainty because it finds that the allegations of the Complaint are sufficiently clear to apprise Defendants of the issues of which they are to meet. (See People v. Lim (1941) 18 Cal.2d 872, 882 [holding that demurrer for uncertainty should “not be sustained where the allegations of the complaint are sufficiently clear to apprise the defendant of the issues which he is to meet”].)

Defendants contend that Plaintiffs’ causes of action for negligent repair and misrepresentation are barred by the economic loss rule. “[C]onduct amounting to a breach of contract becomes tortious only when it also violates a duty independent of the contract arising from principles of tort law.” (Erlich v. Menezes (1999) 21 Cal.4th 543, 551.) In other words, “[e]conomic loss consists of damages for inadequate value, costs of repair and replacement of the defective product or consequent loss of profits—without any claim of personal injury or damages to other property… Simply stated, the economic loss rule provides: [W]here a purchaser’s expectations in a sale are frustrated because the product he bought is not working properly, his remedy is said to be in contract alone, for he has suffered only economic losses….The economic loss rule requires a purchaser to recover in contract for purely economic loss due to disappointed expectations, unless he can demonstrate harm above and beyond a broken contractual promise.” (Robinson Helicopter Co., Inc. v. Dana Corp. (2004) 34 Cal.4th 979, 988 [internal quotations and citations omitted].) Thus, “[t]ort damages have been permitted in contract cases where a breach of duty directly causes physical injury; for breach of the covenant of good faith and fair dealing in insurance contracts; for wrongful discharge in violation of fundamental public policy; or where the contract was fraudulently induced.” (Id. at pp. 989-990 [references to “citation” omitted].) In Robinson Helicopter, the tort claim at issue was a fraud and misrepresentation claim. (Id. at p. 990.) The California Supreme Court held that “the economic loss rule does not bar [plaintiff’s] fraud and intentional misrepresentation claims because they were independent of [defendant’s] breach of contract.” (Id. at p. 991.) This holding was “narrow in scope and limited to a defendant’s affirmative misrepresentations on which a plaintiff relies and which expose a plaintiff to liability for personal damages independent of the plaintiff’s economic loss.” (Id. at p. 993.)

In support of the fourth cause of action for negligent repair, Plaintiffs allege that Defendants misrepresented what repairs needed to be done and purposely misdiagnosed the Subject Vehicle. (Compl., ¶ 97.) Plaintiffs also allege that although Defendants knew the vehicle was repaired under warranty, Defendants misrepresented that the vehicle was not repaired under warranty. (Compl., ¶ 98.) In support of the fifth cause of action for misrepresentation, Plaintiffs allege that “[o]n or about December 2, 2021, Defendants misrepresented the status of the warranty file to Plaintiff stating that Defendants had never approved any warranty repairs when

they had repaired the vehicle under warranty no less than four times.” (Compl., ¶ 109.)

As to the negligent repair cause of action, Defendants assert that Plaintiffs have only provided a conclusory allegation that they are “entitled to general damages…for her/his injuries, pain and suffering, mental suffering, medical expenses, property damage, lost earnings, and lost earning capacity,” (Compl., ¶ 104) without asserting factual allegations of the personal injuries. As to the misrepresentation cause of action, Defendants similarly assert that Plaintiffs fail to allege that they have suffered personal injury or property damage independent of the economic loss, except for the conclusory allegations contained in the fourth cause of action. (Compl., ¶ 104.) In addition, Plaintiffs primarily allege economic loss in connection with the misrepresentation cause of action. (See Compl., ¶¶ 111, 113, 115.)

In the opposition, Plaintiffs indicate that they are “amenable to dismissal of the Negligent Cause of Action against KIA MOTORS OF AMERICA, INC. only.” (Opp’n at p. 14:15-16.) Plaintiffs also assert that they have adequately alleged personal injury in paragraphs 55 and 64 of the Complaint. But paragraphs 55 and 64 of the Complaint solely contain conclusory allegations regarding injury.[1]

Based on the foregoing, the Court sustains Defendants’ demurrer to the fourth and fifth causes of action on the grounds that they are barred by the economic loss rule.

Defendants argue that Plaintiffs’ second cause of action for violation of the Unfair Competition Law (Business and Professions Code section 17200, et seq.) must fail because Plaintiff cannot cite to any specific violation of law by either defendant. “By proscribing any unlawful business practice, section 17200 borrows violations of other laws and treats them as unlawful practices that the unfair competition law makes independently actionable.” (Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Co. (1999) 20 Cal.4th 163, 180 [internal quotations omitted].) However, Plaintiffs do allege that Defendants engaged in unlawful business practices by, among other things, engaging in conduct that violates the Consumer Legal Remedies Act (“CLRA”) and Business and Professions Code section 17500 et seq. (Compl., ¶¶ 69, 72.) In any event, “[t]he statutory language referring to ‘any unlawful, unfair or fraudulent’ practice (italics added) makes clear that a practice may be deemed unfair even if not specifically proscribed by some other law…[b]ecause Business and Professions Code section 17200 is written in the disjunctive, it establishes three varieties of unfair competition—acts or practices which are unlawful, or unfair, or fraudulent.” (Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Co., supra, 20 Cal.4th at p. 180.)

Defendants also argue that Plaintiffs do not allege facts showing that Defendants’ conduct fails the “balancing test” for unfair conduct. Defendants cite to Bardin v. DaimlerChrysler Corp. (2006) 136 Cal.App.4th 1255, 1262–1263, where the Court of Appeal noted that “[t]he test of whether a business practice is unfair involves an examination of [that practice’s] impact on its alleged victim, balanced against the reasons, justifications and motives of the alleged wrongdoer. In brief, the Court must weigh the utility of the Defendant’s conduct against the gravity of the harm to the alleged victim…An unfair business practice occurs when the practice offends an established public policy or when the practice is immoral, unethical, oppressive, unscrupulous or substantially injurious to consumers.” (Internal quotations omitted, superseded by statute on other grounds as stated in Safaie v. Jacuzzi Whirlpool Bath, Inc. (2008) No. D051511, 2008 WL 4868653.) Plaintiffs allege that Defendants committed unfair practices by affirmatively misrepresenting to Plaintiffs the true condition, quality and benefits of the Subject Vehicle and their repair estimates by willfully concealing the true extent of the damage to the vehicle, and by willfully undervaluing the costs of repair and damage. (Compl., ¶ 61.) The Court finds that Plaintiffs have adequately alleged a cause of action for violation of Business and Professions Code section 17200, and thus overrules the demurrer to this cause of action.

Defendants argue that the third cause of action must fail because the conduct alleged by Plaintiffs does not constitute fraud, and because there are no factual allegations as to what

specific advertisements are subject to the claim. The Court notes that Defendants do not state what the elements of a false advertising cause of action are. Nevertheless, as noted by Plaintiffs, Business and Professions Code section 17500 provides in pertinent part that:

“[i]t is unlawful for any…corporation…or any employee thereof with intent directly or indirectly to dispose of real or personal property or to perform services, professional or otherwise, or anything of any nature whatsoever or to induce the public to enter into any obligation relating thereto, to make or disseminate…before the public in this state, or to make or disseminate…from this state before the public in any state, in any newspaper or other publication, or any advertising device, or by public outcry or proclamation, or in any other manner or means whatever, including over the Internet, any statement, concerning that real or personal property or those services, professional or otherwise, or concerning any circumstance or matter of fact connected with the proposed performance or disposition thereof, which is untrue or misleading, and which is known, or which by the exercise of reasonable care should be known, to be untrue or misleading…”

Plaintiffs allege that Defendants’ advertisements and representations about their automotive goods and services were untrue and misleading because it led Plaintiffs to believe that the warranty would cover the cost of repairs and rental automobiles, that the automobile would be repaired properly and timely, and that there would be transparent communications about what was being done to the automobile during claims and repairs. (Compl., ¶ 80.) Therefore, the Court finds that a cause of action has been sufficiently stated.

The CLRA (Civil Code section 1750 et seq.) “proscribes specified unfair methods of competition and unfair or deceptive acts or practices in transactions for the sale or lease of goods to consumers.” (Daugherty v. American Honda Motor Co., Inc. (2006) 144 Cal.App.4th 824, 833 [internal quotations omitted].) Defendants note that pursuant to Civil Code section 1782, subdivision (a), “[t]hirty days or more prior to the commencement of an action for damages pursuant to this title, the consumer shall do the following: (1) Notify the person alleged to have employed or committed methods, acts, or practices declared unlawful by Section 1770 of the particular alleged violations of Section 1770. (2) Demand that the person correct, repair, replace, or otherwise rectify the goods or services alleged to be in violation of Section 1770.”

Defendants contend that Curiel has failed to provide and allege that a notice as required under Civil Code section 1782 was given to Defendants. However, Plaintiffs allege that “[p]ursuant to California Civil Code section 1782, in conjunction with the filing of this action, Plaintiffs have notified Defendants in writing of the particular alleged violations of California Civil Code section 1770 and demanded that Defendants rectify the consequences of their conduct detailed above, which acts and practices are in violation of Civil Code section 1770.” (Compl., ¶ 66.)

Next, Defendants argue that “[i]n order to bring a CLRA claim against Defendants, Plaintiff Curiel must plead the following: (1) she is a consumer; (2) she entered into a transaction with Defendants that resulted or intended to result in the sale of the subject vehicle to Plaintiff; (3) Defendants made a representation to Plaintiff in connection with the sale; (4) the representation was false; (5) she relied on Defendants’ representations; (6) she was damaged; and (7) Defendants’ alleged wrongful conduct caused Plaintiff Curiel’s damages.” (Demurrer at p. 12:4-9.) Defendants appear to argue that Plaintiffs have not satisfied certain of these elements. However, Defendants fail to cite to any legal authority in support of the assertion that Plaintiffs must plead in the foregoing elements in order to state a claim for violation of the CLRA.

In support of the first cause of action for violation of the CLRA, Plaintiffs allege that Defendants affirmatively misrepresented to Plaintiffs the true condition, quality and benefits of the Subject Vehicle and their repair estimates by willfully concealing the true extent of the damage to the vehicle and willfully undervaluing the costs of repair and damage. (Compl., ¶ 61.) Plaintiffs further allege that Defendants’ actions violated the CLRA by representing that the goods or services have characteristics, uses or benefits which they do not have. (Compl., ¶ 62.) Under Civil Code section 1770, subdivision (a), “[t]he unfair methods of competition and unfair or deceptive acts or practices listed in this subdivision undertaken by any person in a transaction intended to result or that results in the sale or lease of goods or services to any consumer are unlawful.” One of such specified acts or practices is “[r]epresenting that goods or services have sponsorship, approval, characteristics, ingredients, uses, benefits, or quantities that they do not have or that a person has a sponsorship, approval, status, affiliation, or connection that the person does not have.” (Civ. Code, § 1770, subd. (a)(5).)

The Court finds that Plaintiffs have sufficiently alleged a cause of action for violation of the CLRA and overrules Defendants’ demurrer to the first cause 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.)

First, Defendants move to strike each of the causes of action of the Complaint in their entirety. Because the Court sustains the demurrer as to the fourth and fifth causes of action, the motion to strike these causes of action is moot. As to the remaining causes of action, Defendants repeat the arguments set forth in their demurrer in the motion to strike. Thus, the Court denies Defendants’ motion to strike the first, second, and third causes of action.

Defendants also move to strike Plaintiffs’ requests in the Prayer for Relief for general damages, punitive damages, injunctive relief, and a civil penalty. (Compl., Prayer for Relief, p. 23.) A motion to strike may lie where the facts alleged do not rise to the level of “malice, oppression or fraud” required to support a punitive damages award. (Turman v. Turning Point of Central California, Inc. (2010) 191 Cal.App.4th 53, 63-64.) Defendants argue that the allegations of the Complaint do not support an award of punitive damages. In the opposition, Plaintiffs note that under the CLRA, “[a]ny consumer who suffers any damage as a result of the use or employment by any person of a method, act, or practice declared to be unlawful by Section 1770 may bring an action against that person to recover or obtain,” among other relief, “[p]unitive damages.” (Civ. Code, § 1780, subd. (a)(4).) As set forth above, the Court finds that Plaintiffs have sufficiently alleged a cause of action for violation of the CLRA. Thus, the Court denies the motion to strike Plaintiffs’ punitive damages allegations.

Defendants also argue that Plaintiffs’ negligent repair and misrepresentation causes of action are not pled with particularity, and that any damages based on those claims, including general damages, must fail. But the Court overrules Defendants’ demurrer to the first through third causes of action. Thus, the Court denies Defendants’ motion to strike the request for general damages.

Defendants assert that Plaintiffs are not entitled to injunctive relief against Defendants. Plaintiffs seek to “[p]ermanently enjoin Defendant from engaging in the unlawful practices alleged herein.” (Compl., Prayer for Relief, ¶ 6.) Defendants assert that Plaintiffs have not alleged any likelihood of suffering future harm from Defendants that would be remedied by injunctive relief, but fail to cite to any binding legal authority demonstrating that this is required. Plaintiffs also note that under Civil Code section 1780, subdivision (a)(2), “[a]ny consumer who suffers any damage as a result of the use or employment by any person of a method, act, or practice declared to be unlawful by Section 1770 may bring an action against that person to recover or obtain…[a]n order enjoining the methods, acts, or practices.” Thus, the Court denies Defendants’ motion to strike the request for injunctive relief.

Lastly, Defendants move to strike Plaintiff’s request for “a civil penalty of nine times the amount of actual damages.” (Compl., Prayer for Relief, ¶ 5.) Defendants assert that Plaintiffs fail to cite to any authority authorizing such an award of damages. Plaintiffs do not offer any response to this argument their opposition. Thus, the Court grants Defendants’ motion to strike the request for a civil penalty.

For the foregoing reasons, the Court sustains Defendants’ demurrer in part and overrules the demurrer in part. The demurrer to the fourth cause of action is sustained with leave to amend as to KDTLA, and sustained without leave to amend as to KA.[2] The demurrer to the fifth cause of action is sustained with leave to amend. The demurrer to the first, second, and third causes of action is overruled.

Defendants’ motion to strike is granted as to the request for a civil penalty, with leave to amend. (Compl., Prayer for Relief, ¶ 5.) Defendants’ motion to strike is otherwise denied.

The Court orders Plaintiffs to file and serve an amended complaint, if any, within 20 days of the date of this order. If no amended complaint is filed within 20 days, the Court orders Defendants to file and serve their answer to the operative complaint within 30 days of this order.

[1]Plaintiffs also argue that “Defendants do not acknowledge the health issues caused by the leaking refrigerant inside the cabin.” (Opp’n at p. 14:17-18). However, the Complaint contains no allegations concerning such alleged health issues.

[2]As set forth above, Plaintiffs indicate that they are amenable to dismissal of the negligent repair cause of action as to KA only. (Opp’n at p. 14:15-16.)

Superior Court of California

County of Los Angeles

Department 50