Judge Teresa A. Beaudet, Case Number: 24STCV19893, Date: 2025-03-26 Tentative Ruling

BRIAN ALEXANDER, et al.

Plaintiffs,

vs.

AMERICAN HONDA MOTOR CO, inc., et al.

Defendants.

Case No.:

24STCV19893

Hearing Date:

March 26, 2025

Hearing Time: 10:00 a.m.

[TENTATIVE] ORDER RE:

DEFENDANT AMERICAN HONDA MOTOR CO., INC.’S NOTICE OF DEMURRER AND DEMURRER TO PLAINTIFFS’

FIRST AMENDED COMPLAINT;

DEFENDANT AMERICAN HONDA MOTOR CO., INC.’S MOTION TO STRIKE PLAINTIFFS’ CLAIM FOR PUNITIVE DAMAGES

Plaintiffs Brian Alexander and Kimberly I. Alexander (jointly, “Plaintiffs”) filed this action on August 7, 2024, against Defendant American Honda Motor Co., Inc. (“Defendant”) and DOES 1 through 10, inclusive.

On November 1, 2024, Plaintiffs filed the operative First Amended Complaint (“FAC”) against Defendant alleging causes of action for: (1) violation of subdivision (D) of Civ. Code § 1793.2, (2) violation of subdivision (B) of Civ. Code § 1793.2, (3) violation of subdivision (A)(3) of Civ. Code § 1793.2, (4) breach of the implied warranty of merchantability, and (5) fraudulent inducement—concealment.

Defendant now demurs to each of the causes of action of the FAC. Defendant also moves to strike Plaintiffs’ punitive damages claim from the FAC. Plaintiffs oppose.

Defendant contends that each cause of action in the FAC is time-barred by the applicable statute of limitations. As to the fifth cause of action for fraudulent concealment, Defendant argues that such cause of action fails. Plaintiff opposes. [1]

A party may demur to a complaint on the grounds that it “does not state facts sufficient to constitute a cause of action.” ((Code Civ. Proc., § 430.10, subd. (e).) A demurrer tests whether the complaint states a cause of action. ((Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747.)

When considering demurrers, courts accept all well pleaded facts as true. ((Fox v. JAMDAT Mobile, Inc. (2010) 185 Cal.App.4th 1068, 1078.) “A demurrer tests the pleadings alone and not the evidence or other extrinsic matters. Therefore, it lies only where the defects appear on the face of the pleading or are judicially noticed.” ((SKF Farms v. Superior Court (1984) 153 Cal.App.3d 902, 905.) “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 p. 747.)¿On demurrer, a court does “not accept contentions, deductions or conclusions of fact or law.” (Simonyan v. Nationwide Insurance Company of America (2022) 78 Cal.App.5th 889, 895.)

Although courts construe pleadings liberally, sufficient facts must be alleged to support the allegations pled to survive a demurrer. (Rakestraw v. California Physicians' Serv. (2000) 81 Cal.App.4th 39, 43.) Where a demurrer is sustained, leave to amend must be allowed where there is a reasonable possibility of successful amendment. ((Goodman v. Kennedy (1976) 18 Cal.3d 335, 349.) The burden is on the party who filed the pleading subject to demurrer to show the court that a pleading can be amended successfully. (Ibid.)

Plaintiffs allege that on or about November 18, 2017, Plaintiffs purchased a 2017 Honda Pilot (the “Subject Vehicle”). (Compl., ¶ 6.) Plaintiffs entered into a warranty contract with Defendant for the Subject Vehicle and the Subject Vehicle. (FAC, ¶ 6.) The warranty contract contained various warranties including, but not limited to, the bumper-to-bumper warranty, powertrain warranty, and emissions warranty. (FAC, ¶ 7; Exh. A.)

The New Vehicle Limited Warranty indicated that it was to begin on the date of delivery of the Subject Vehicle to a purchaser. (FAC, Exh. A at p. 9.) The New Vehicle Limited Warranty provides that the Subject Vehicle is subject to a 3 year or 36,000-mile warranty, whichever comes first, and that Defendant would “repair or replace any part that is defective in material or workmanship under normal use.” (FAC ¶ 7; Exh. A at p. 9.) The Powertrain Warranty indicated that the warranty began on the same date as the New Vehicle Limited Warranty, and that the Powertrain Warranty covered the powertrain of the Subject Vehicle “for 5 years or 60,000 miles, whichever comes first.” (FAC, Exh. A at p. 10.) Pursuant to the Powertrain Warranty, Defendant would “repair or replace any part that is defective in material or workmanship under normal use.” (FAC, Exh. A at p. 10.) Defendant warranted the future performance of the Subject Vehicle. (FAC, ¶ 7; Exh. A.)

Plaintiffs allege that this action arises out of the warranty obligations of Defendant in connection with a motor vehicle for which Defendant issued a written warranty. (FAC, ¶10.) Defects and/or nonconformities to warranty manifested themselves within the applicable express warranty period including, but not limited to, transmission defects, engine defects, electrical defects, suspension defects, body defects and other defects and/or non-conformities. (FAC, ¶ 11.) Plaintiffs allege that the defects/nonconformities substantially impair the use, value, or safety of the Subject Vehicle. (FAC, ¶ 12.) Defendant had an affirmative duty to promptly offer to repurchase or replace the Subject Vehicle at the time if it failed to conform the Subject Vehicle to the terms of the express warranty after a reasonable number of repair attempts. (FAC, ¶ 14.) Defendant has failed to either promptly repair or replace the Subject Vehicle or to promptly make restitution in accordance with the Song-Beverly Act. (FAC, ¶ 15.)

Plaintiffs presented the Subject Vehicle to Defendant’s authorized repair facility on 11 separate occasions, for concerns including, but not limited to, transmission concerns, engine concerns, and electrical concerns. (FAC, ¶¶ 22-32.) On each occasion, the authorized repair facility performed warranty repairs and represented to Plaintiffs that the Subject Vehicle had been repaired. (FAC, ¶¶ 22-32.) The first presentation to the authorized repair facility occurred on May 22, 2018, and the last presentation to the authorized repair facility occurred on February 17, 2024. (FAC, ¶¶ 22-32.)

Plaintiffs allege that they continued to experience symptoms of the defects despite Defendant’s representation that the various defects were repaired. (FAC, ¶ 33.) Plaintiffs had no way of uncovering Defendant’s deception with respect to the defects given that Defendant performed various diagnostics and/or undertook repairs and claimed that nothing was wrong with the Subject Vehicle or that the Subject Vehicle had been repaired. (FAC, ¶ 34.) Plaintiffs discovered Defendant’s wrongful conduct shortly before filing this action as the Subject Vehicle continued to exhibit symptoms of the defects following Defendant’s unsuccessful attempts to repair them. (FAC, ¶ 35.)

Defendant contends that Plaintiffs’ first, second, and third causes of action arising under the Song-Beverly Act are untimely under Comm. Code § 2725. Defendant contends that “Plaintiffs purchased the vehicle on November 18, 2017; thus their warranty-based claims expired November 18, 2021.” (Dem. at p. 12:23-24.) Plaintiffs assert that the Song-Beverly Claims are not untimely and the FAC does not affirmatively show a statute of limitations defense.

“The Song-Beverly Act does not include its own statute of limitations.” ((Mexia v. Rinker Boat Co., Inc. (2009) 174 Cal.App.4th 1297, 1305 (Mexia).) “California courts have held that the statute of limitations for an action for breach of warranty under the Song-Beverly Act is governed by the same statute that governs the statute of limitations for warranties arising under the Uniform Commercial Code: section 2725 of the Uniform Commercial Code.” (Ibid.) “An action for breach of any contract for sale must be commenced within four years after the cause of action accrued. By the original agreement the parties may reduce the period of limitation to not less than one year but may not extend it.” (Com. Code, § 2725, subd. (1).) “Section 2725 of the California Uniform Commercial Code provides that an action for breach of warranty accrues on tender of delivery. An exception is made where a warranty explicitly extends to future performance of the goods and discovery of the breach must wait the time of such performance.” ((Krieger v. Nick Alexander Imports, Inc. (1991) 234 Cal.App.3d 205, 215 (Krieger).) “A promise to repair defects that occur during a future period is the very definition of . . . [the warranting] of future performance.” ((Id. at p. 217.)

As noted above, Defendant issued the New Vehicle Limited Warranty and the Powertrain Limited Warranty, both of which extended to the future performance of the Subject Vehicle. (FAC, Exh. A at p. 9.) Given that Defendant promised to repair or replace parts that were defective in material or workmanship, such promise to repair extends to the future performance of the subject vehicle. (Krieger, supra, 234 Cal.App.3d 205, 217.) Plaintiffs presented the Subject Vehicle for repairs on numerous occasions, the last of which occurred on February 17, 2024. (FAC, ¶ 32.) The authorized repair facility, however, did not repair the Subject Vehicle despite a representation that the repairs were completed. (FAC, ¶ 32.) Whether a number of repair attempts is reasonable is a question for the trier of fact. ((Silvio v. Ford Motor Co. (2003) 109 Cal.App.4th 1205, 1209.) Thus, the statute of limitations as to the first, second, and third causes of action did not begin on the date of purchase of the Subject Vehicle. “Where a latent defect exists, the statute of limitations is tolled until the plaintiff discovers, or has reason to discover, the cause of action.” (Yeager v. Ford Motor Company (N.D. Cal. 2020) 2020 WL 95645 at *3 (Yeager). [internal quotations omitted])

Given that Plaintiffs have set forth efforts to repair the Subject Vehicle—and that each time Defendant’s authorized dealer falsely represented that the issues were repaired—the first, second, and third causes of action did not accrue until Plaintiffs discovered or should have discovered the breach. Using the date of February 17, 2024, which is the last date on which Plaintiffs took the Subject Vehicle for repairs to Defendant’s authorized repair facility, This action was filed on August 7, 2024. Plaintiffs did not discover Defendant’s conduct until shortly before filing the complaint in this action. (FAC, ¶ 35.) Plaintiffs have alleged that they had no way of uncovering Defendant’s deception with respect to the defects. (FAC, ¶ 34.) Thus, the Court finds that Plaintiffs did not have reason to discover the breach until shortly after February 17, 2024 and the action was timely filed on August 7, 2024.. (FAC, ¶ 32.)

Therefore, the Court finds that the first, second, and third causes of action are not barred by the statute of limitations. Defendant’s demurrer to those causes of action is OVERRULED.

Defendant contends that the fourth cause for breach of implied warranty is time-barred as it was not filed within one-year from the purchase of the Subject Vehicle. Plaintiffs assert that the fourth cause of action is not barred by the statute of limitations as the statute of limitations on that claim did not run until discovery of the defect.

“When there has been a breach of the implied warranty of merchantability, a buyer may bring an action for the recovery of damages and other legal and equitable relief.” (Mexia, supra, 174 Cal.App.4th 1297, 1303 [internal quotations omitted].) “The implied warranty of merchantability may be breached by a latent defect undiscoverable at the time of sale.” (Id. at p. 1304.) “In 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.) “The statute of limitations for breaches of the implied warranty of merchantability is four years.” (Montoya v. Ford Motor Company (2020) 46 Cal.App.5th 493, 495.) Under the Song-Beverly Act, the implied warranty of merchantability extends for a period of one year after delivery, and the time for bringing an action is four years from the breach.” (Deutsch v. Ford Motor Company (N.D. Cal. 2019) 2019 WL 2076713 at *3.) “[T]here is nothing [in the Song-Beverly Act] that suggests a requirement that the purchaser discover and report to the seller a latent defect within that time period.” (Ibid., internal quotations omitted.) Under “binding California precedent . . . [a] [p]laintiff can sue more than five years after the purchase on the theory that a latent defect lurked within the vehicle not reasonably discoverable until after the year ran such that the four-year limitations period began only upon discovery.” (Yeager, supra, 2020 WL 95645 at *4.)

Here, pursuant to the fourth cause of action, Plaintiffs have alleged that the defects present in the Subject Vehicle were latent defects. (FAC, ¶ 65.) Given that Plaintiffs presented the Subject Vehicle to Defendant’s authorized repair facility—and each time Defendant’s authorized dealer falsely represented that the issues were repaired—the fourth cause of action did not accrue until Plaintiff discovered or should have discovered the breach. (FAC, ¶¶ 32-36.) Plaintiffs did not discover Defendant’s conduct until shortly before filing the complaint in this action. (FAC, ¶ 35.) Plaintiffs have alleged that they had no way of uncovering Defendant’s deception with respect to the defects. (FAC, ¶ 34.) Thus, the Court finds that Plaintiffs did not have reason to discover (and did not discover) the breach until shortly after February 17, 2024. (FAC, ¶ 32.)

Therefore, the Court finds that the fourth cause of action is not barred by the statute of limitations.

Therefore, the demurrer to the fourth cause of action in the FAC for breach of the implied warranty of merchantability is OVERRULED.

Defendant argues that the fifth cause of action for fraudulent inducement—concealment is: (1) time-barred; (2) barred by the economic loss rule; (3) insufficient because Defendant owed no duty of disclosure to Plaintiffs; (4) insufficient because it is made on information and belief; and (5) not alleged with the required specificity.

“As with all fraud claims, the necessary elements of a concealment/suppression claim consist of (1) misrepresentation (false representation, concealment, or nondisclosure); (2) knowledge of falsity (scienter); (3) intent to defraud (i.e., to induce reliance); (4) justifiable reliance; and (5) resulting damage.” (Hoffman v. 162 North Wolfe LLC (2014) 228 Cal.App.4th 1178, 1185-86 [internal quotations omitted].) “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.]’ [Citation.]” (Ibid.) A fraud cause of action must be alleged with specificity. ((Rattagan v. Uber Technologies, Inc. (2024) 17 Cal.5th 1, 43 (Rattagan).) “California courts apply the same specificity standard to evaluate the factual underpinnings of a fraudulent concealment claim at the pleading stage, even though the focus of inquiry shifts to the unique elements of the claim.” ((Ibid.) A fraud cause of action is subject to a three-year statute of limitations. ((Code Civ. Proc., § 338, subd. (d).)

On reply, Defendant correctly notes that “Plaintiffs did not address [Defendant’s] arguments that their fraud claim is barred by the statute of limitations under Cal. Code Civ. Proc. § 338(d).” (Reply at p. 4:15-16.) Defendant argues that, due to the lack of opposition on such point, Plaintiffs have conceded that their fraud claim is untimely and cannot proceed. (Reply at p. 4:16-17.) “When [a party] fails to raise or point, or asserts it but fails to support it with reasoned argument and citations to authority, we treat the point as waived.” (Badie v. Bank of America (1998) 67 Cal.App.4th 779, 784-85.) The Court finds that, by failing to rebut the argument as to the expiration of the statute of limitations as to the fifth cause of action, Plaintiffs have conceded that the fifth cause of action is time-barred.

The Court rejects Defendant’s argument that the fifth cause of action is barred by the economic loss rule. Rattagan¸ supra, 17 Cal.5th 1, to which Defendant cites held to the contrary. The economic loss rule “does not apply to limit recovery for intentional tort claims like fraud.” (Rattagan, supra, 17 Cal.5th 1, 38.)

Defendant contends that the fifth cause of action fails because it did not have a duty to disclose. “’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 [italics added, fns. omitted].) A relationship between the parties is present if there is some sort of transaction between the parties” and thus a duty to disclose will be found. (Hoffman, supra, 228 Cal.App.4th 1178, 1187 [emphasis in original].)

Here, Plaintiffs allege that they entered into a warranty contract with Defendant and that Defendant manufactures, constructs, markets, distributes, and assembles automobiles. (FAC, ¶¶ 4, 6.) As such, the Court finds that Defendant had a duty to disclose the purported Transmission Defect that gives rise to the fifth cause of action. (FAC, ¶¶ 69-71.) Plaintiffs has also alleged Defendant’s exclusive knowledge of the Transmission Defect and the active concealment of such facts (FAC, ¶¶ 74-77), which both give rise to the duty to disclose. ((See LiMandri v. Judkins (1997) 52 Cal.App.4th 326, 336.)

“[I]t is not sufficient to allege fraud or its elements upon information and belief, unless the facts upon which the belief is founded are stated in the pleading.” ((Findley v. Garrett (1952) 109 Cal.App.2d 166, 177.)

The Court acknowledges that the fifth cause of action is based on information and belief concerning how Defendant acquired knowledge of the Transmission Defect. (FAC, ¶¶ 70, 72, 73.) Plaintiffs, however, have set forth the basis for the facts upon which the belief is founded as Plaintiffs allege that Defendant “was in a superior position from various internal sources to know . . . the true state of facts about the material defects contained in vehicles equipped with the transmission . . . .” (FAC, ¶ 75(b).) Thus, the Court rejects Defendant’s argument as to the fifth cause of action being insufficient because it is based on information and belief.

Plaintiffs Have Failed to Specifically Plead the Required Elements to State a Fraud Cause of Action

The Court, however, does credit the argument of Defendant that the fifth cause of action lacks the required specificity. (Dem. at pp. 20-21.) The Court has reviewed the allegations of the fifth cause of action. (FAC, ¶¶ 67-80.) Plaintiffs have failed to plead the element of an intent to defraud and the element of reliance. (FAC, ¶¶ 67-80.)

The Court therefore SUSTAINS the demurrer to the fifth cause of action with leave to amend. The Court does not find that there is no reasonable possibility of successful amendment. Plaintiffs may allege facts, if proven, that would state a cause of action for fraudulent inducement—concealment. Thus, leave to amend will be allowed.

Defendant moves to strike the prayer for punitive damages from the FAC. Defendant contends that the Court should strike Plaintiffs’ claim for punitive damages because the fifth cause of action for fraudulent inducement—concealment fails as a matter of law. Plaintiffs argue that they have sufficiently alleged facts to support punitive damages.

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.)

“In order to survive a motion to strike an allegation of punitive damages, the ultimate facts showing an entitlement to such relief must be pled by a plaintiff.” (Clauson v. Superior Court (1998) 67 Cal.App.4th 1253, 1255.) California Civil Code, Section 3294 authorizes punitive damages upon a showing of malice, fraud, or oppression. Malice is defined as either “conduct which is intended by the defendant to cause injury to the plaintiff,” or “despicable conduct which is carried on by the defendant with a willful and conscious disregard of the rights or safety of others.” (Civ. Code, § 3294, subd. (c)(1).) “Despicable conduct is conduct which is so vile, base, contemptible, miserable, wretched or loathsome that it would be looked down upon and despised by ordinary decent people.” (Mock v. Michigan Millers Mutual Ins. Co. (1992) 4 Cal. App. 4th 306, 331.) California Civil Code, Section 3294(c)(2) defines oppression as “despicable conduct that subjects a person to cruel and unjust hardship in conscious disregard of that person’s rights.” Fraud under California Civil Code, Section 3294(c)(3) “means an intentional misrepresentation, deceit, or concealment of a material fact known to the defendant with the intention on the part of the defendant of thereby depriving a person of property or legal rights or otherwise causing injury.” Specific facts must be pled in support of punitive damages. (Hillard v. A.H. Robins Co. (1983) 148 Cal.App.3d 374, 391-392.)

“An employer shall not be liable for [punitive] damages ..., based upon acts of an employee of the employer, unless the employer had advance knowledge of the unfitness of the employee and employed him or her with a conscious disregard of the rights or safety of others or authorized or ratified the wrongful conduct.... With respect to a corporate employer, the advance knowledge and conscious disregard, authorization, [or] ratification ... must be on the part of an officer, director, or managing agent of the corporation.” (Civ. Code, § 3294, subd. (b).) An officer, director, or managing agent is “someone who exercises substantial discretionary authority over decisions that ultimately determine corporate policy.” (White v. Ultramar, Inc. (1999) 21 Cal.4th 563, 573.)¿

Plaintiffs have failed to allege sufficient facts to show malice, fraud, or oppression by Defendant. Defendant is a corporation as acknowledged by Plaintiffs. (FAC, ¶ 4.) Plaintiffs, however, have failed to allege specific facts that an officer, managing agent, or director authorized or ratified the acts complained of in the FAC.

For the foregoing reasons, the Court sustains Defendant’s demurrer in part and overrules the demurrer in part. The demurrer to the first, second, third, and fourth causes of action is overruled. The demurrer to the fifth cause of action is sustained with leave to amend.

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

[1] Defendant notes that the opposition was not timely filed. The Court exercises its discretion to consider the opposition, particularly since Defendant was able to submit a reply thereto.

Superior Court of California

County of Los Angeles

Department 50