Judge Theresa M. Traber, Case 21STCV24406 2023-05-16 Tentative Ruling

Judge: Theresa M. Traber, Case: 21STCV24406, Date: 2023-05-16 Tentative Ruling

Case Number: 21STCV24406 Hearing Date: May 16, 2023 Dept: 47

Tentative Ruling

Judge Theresa M. Traber, Department 47

HEARING DATE: May 16, 2023 TRIAL DATE: July 5, 2023

CASE: Oscar Garcia Lopez v. FCA US, LLC

CASE NO.: 21STCV24406

MOTION FOR SUMMARY ADJUDICATION

MOVING PARTY: Defendant FCA US, LLC

RESPONDING PARTY(S): Plaintiff Oscar Garcia Lopez

STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS:

This is a lemon law action filed on July 1, 2021. According to the complaint, Plaintiff leased a 2018 Jeep Grand Cherokee that subsequently manifested brake, engine, and electrical defects.

Defendant moves for summary adjudication on Plaintiff’s third cause of action for fraudulent concealment and accompanying claim for punitive damages.

TENTATIVE RULING:

Defendant’s Motion for Summary Adjudication is DENIED.

DISCUSSION:

Defendant moves for summary adjudication on Plaintiff’s third cause of action for fraudulent concealment and accompanying claim for punitive damages.

Legal Standard

The function of a motion for summary judgment or adjudication is to allow a determination as to whether an opposing party can show evidentiary support for a pleading or claim and, if not, to enable an order of summary dismissal without the need for trial. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 843.) Code of Civil Procedure Section 437c(c) “requires the trial judge to grant summary judgment if all the evidence submitted, and ‘all inferences reasonably deducible from the evidence’ and uncontradicted by other inferences or evidence, show that there is no triable issue as to any material fact and that the moving party is entitled to judgment as a matter of law.” (Adler v. Manor Healthcare Corp. (1992) 7 Cal.App.4th 1110, 1119.) “The function of the pleadings in a motion for summary judgment is to delimit the scope of the issues; the function of the affidavits or declarations is to disclose whether there is any triable issue of fact within the issues delimited by the pleadings.” (Juge v. County of Sacramento (1993) 12 Cal.App.4th 59, 67, citing FPI Development, Inc. v. Nakashima (1991) 231 Cal. App. 3d 367, 381-82.)

As to each claim as framed by the complaint, the defendant moving for summary judgment must satisfy the initial burden of proof by presenting facts to negate an essential element, or to establish a defense. (Code Civ Proc. § 437c(p)(2); Scalf v. D. B. Log Homes, Inc. (2005) 128 Cal.App.4th 1510, 1520.) Courts “liberally construe the evidence in support of the party opposing summary judgment and resolve doubts concerning the evidence in favor of that party.” (Dore v. Arnold Worldwide, Inc. (2006) 39 Cal.4th 384, 389.) The lack of opposition by a plaintiff is not grounds to grant a motion for summary judgment if a defendant cannot meet their initial burden of proof. (See Thatcher v. Lucy Stores, Inc. (2000) 79 Cal.App.4th 1081, 1087.)

Once the defendant has met that burden, the burden shifts to the plaintiff to show that a triable issue of one or more material facts exists as to that cause of action or a defense thereto. To establish a triable issue of material fact, the party opposing the motion must produce substantial responsive evidence. (Sangster v. Paetkau (1998) 68 Cal.App.4th 151, 166.)

Issue No. 1: Inability to Prove Claims

Defendant first moves for summary adjudication on the third cause of action on the basis that Plaintiff cannot prove intentional concealment of a defect in the vehicle’s PowerNet electrical architecture with the requisite intent to deceive Plaintiff.

To succeed on a claim for fraudulent concealment, a plaintiff must establish (1) concealment or failure by the defendant to disclose a material fact; (2) that the defendant had a duty to disclose that fact to the plaintiff; (3) that the defendant intentionally concealed, omitted, or suppressed that fact with the intent to defraud the plaintiff; (4) that the plaintiff was unaware of the fact and would not have acted as they did had they known of the concealed fact; and (5) as a result of the concealment or suppression of the fact, the plaintiff sustained damage. (Boschma v. Home Loan Center, Inc. (2011) 198 Cal.App.4th 230, 248.)

Defendant bases its contention principally on Plaintiff’s responses to Defendant’s interrogatories and requests for production, which Defendant argues are factually devoid. Factually devoid discovery responses can be an evidentiary basis in support of a motion for summary judgment or adjudication, (Union Bank v. Superior Court (1995) 31 Cal.App.4th 573, 590; see also Andrews v. Foster Wheeler LLC, (2006) 138 Cal.App.4th 96, 101.) Although Defendant concedes that Plaintiff provided substantive responses and responsive documents, Defendant contends that these responses are nonetheless factually devoid with respect to this action because the responses only concern vehicles utilizing the Totally Integrated Power Module (TIPM) electrical architecture, not the PowerNet architecture used in the subject vehicle. (SSUMF Nos. 39-53.) Since the Complaint alleges that the defects in the PowerNet architecture are inherited from the TIPM architecture (see, e.g., Complaint ¶ 16), however, the evidence referred to in Plaintiff’s discovery responses is probative of the existence of defects in the TIPM architecture and, thus, not sufficient to demonstrate Plaintiff’s inability to produce supportive evidence.

Defendant further argues that evidence concerning the TIPM architecture is not relevant because, according to the declaration of Defendant’s expert, James Bielenda, the PowerNet architecture is not actually based on the TIPM architecture because it was not designed by the same engineers nor even the same companies which designed the most recent iteration of the TIMP architecture. (SSUMF No. 43.) Upon review of Mr. Bielenda’s declaration, however, the Court finds that his conclusions that TIPM and PowerNet are not related, and that there are no defects common to all electrical architectures and all FCA vehicles, are not supported by the facts to which he attests. For example, Mr. Bielenda states that PowerNet was not designed by the same engineers or companies as TIPM. (Bielenda Decl. ¶ 42.) However, this statement is not probative of whether the PowerNet and TIPM systems share hardware or software. Mr. Bielenda also states that PowerNet uses several modules which collectively perform the functions of the single TIPM unit, but does not state whether these modules share any internal components. (See, e.g., Bielenda Decl. ¶ 28.) Further still, Defendant’s expert opines that electrical architectures and software are unique to each vehicle model, but, again, does not opine on any similarities of the architectures at issue. (Id. ¶¶ 11, 23.) The Court does not find this evidence sufficient to carry Defendant’s burden to show that there was no defect in the PowerNet architecture because that system is not related to the TIPM architecture. Thus, the burden of proof does not shift to Plaintiff to demonstrate a triable issue of fact regarding the existence of a defect on this basis.

In addition to this argument, Defendant contends that Plaintiff can produce no evidence that Defendant concealed any known facts concerning the PowerNet architecture. Defendant argues that the three recalls involving TIPM-equipped vehicles were publicly disclosed to NHTSA and “all owners of potentially affected vehicles.” (SSUMF No. 27-33.) Further, Defendant contends that none of the defects in these recall notices pertained to systems or components present in the subject vehicle. (Id.) Defendant contends that, when asked to produce evidence of concealment, Plaintiff again produced factually devoid responses and documents concerning only the TIPM, not the PowerNet architecture. (SSUMF Nos. 39-53.) As Defendant has not demonstrated that the TIPM is not related to PowerNet, however, the Court cannot conclude that this evidence is factually devoid in a way that supports Defendant’s burden on summary adjudication to negate Plaintiff’s ability to prove his case. The burden of proof therefore does not shift to Plaintiff to demonstrate a triable issue of fact in this respect.

Defendant also contends that Plaintiff cannot show that the vehicle had any defect relating to the electrical system because all the problems that prompted Plaintiff to present the vehicle for repairs were unrelated to the electrical system. According to Defendant, the issues for which the vehicle was brought in consisted entirely of problems with mechanical components or sensor solenoids, not the electrical system itself. (SSUMF Nos. 55-57.) The Court is not persuaded by this contention. As Plaintiff argues in opposition, the relevant question for an intentional concealment claims is not whether the vehicle’s electrical system has malfunctioned, but rather whether Defendant was aware of a flaw in the design of the system but failed to disclose it. (See Khan v. Shiley Inc. (1990) 217 Cal.App.3d 848, 858.) Defendant has failed to carry its burden to show that the third cause of action is without merit in this respect. Thus, the burden of proof does not shift to Plaintiff to demonstrate a triable issue of fact regarding the existence of a defect on this basis.

As Defendant has not carried its burden with respect to any of the arguments advanced above, Defendant is not entitled to summary adjudication on this issue.

Issue No. 2: Economic Loss

Defendant also moves for summary adjudication of the third cause of action on the basis that it is barred by the economic loss rule.

Under the economic loss rule, “[w]here a purchaser’s expectations in a sale are frustrated because the product he bought is not working properly, his remedy is in contract alone, for he has suffered only ‘economic losses.’” (Robinson Helicopter Co., Inc. v. Dana Corp. (2004) 34 Cal.4th 979, 988.) The economic loss rule “hinges on a distinction drawn between transactions involving the sale of goods for commercial purposes where economic expectations are protected by commercial and contract law, and those involving the sale of defective products to individual consumers who are injured in a manner which has traditionally been remedied by resort to the law of torts.” (Id.) Simply stated, the economic loss rule “prevents the law of contract and the law of tort from dissolving one into the other.” (Id.)

The restrictions on contract remedies serve purposes not found in tort law—they protect the parties’ freedom to bargain over special risks, and they promote contract formation by limiting liability to the value of the promise. (Harris v. Atlantic Richfield (1993) 14 Cal.App.4th 70, 77.) This encourages efficient breaches, resulting in increased production of goods and services at a lower cost to society. (Id.) Because of these overriding policy considerations, the California Supreme Court has proceeded with caution in carving out exceptions to the traditional contract remedy restrictions. (Id.)

Nevertheless, the most widely recognized exception to the economic loss rule is when a defendant’s conduct constitutes a tort as well as a breach of contract. (Id. at 78.) When one party commits fraud during the contract formation or performance, the injured party may recover in both contract and tort. (Id.)

In fact, the Court of Appeal expressly ruled late last year that the economic loss rule does not apply to fraudulent concealment claims in Song-Beverly actions. (Dihital v. Nissan North America, Inc. (2022) 84 Cal.App.5th 828, 843 [review granted February 1, 2023].) Although our Supreme Court has granted review of this opinion and deferred pending consideration and disposition of a related issue in Rattagan v. Uber Technologies, Inc. (S272113) (see Dhital v. Nissan North America (2023) 304 Cal.Rptr.3d 82 (Mem)), the appellate opinion remains published and therefore controlling authority. Defendant’s citations to federal authority on this issue are irrelevant in the face of binding California precedent on this issue. Further, Defendant’s attempt to narrow the reach of Dhital by claiming that this case stands only for the proposition that the economic loss rule does not bar a fraudulent concealment claim at the pleadings stage is not supported by the opinion. The opinion states “[f]raudulent inducement claims fall within an exception to the economic loss rule recognized by our Supreme Court.” (Dhital, supra, 84 Cal.App.5th at 843.) Thus, as Defendant has not demonstrated that Plaintiff cannot establish the elements of a cause of action for fraudulent inducement by concealment, the third cause of action is not barred by the economic loss rule as a matter of law.

Accordingly, Defendant is not entitled to summary adjudication of the third cause of action on the basis of the economic loss rule.

Issue No. 3: Punitive Damages

Defendant moves for summary adjudication of Plaintiff’s claim for punitive damages on the basis that this claim fails because the third cause of action for fraudulent inducement by concealment fails. As the Court has rejected Defendant’s contentions concerning the third cause of action, Defendant likewise is not entitled to summary adjudication of Plaintiff’s punitive damages claim on this basis.

CONCLUSION:

Accordingly, Defendant’s Motion for Summary Adjudication is DENIED.

Moving Party to give notice.

IT IS SO ORDERED.

Dated: May 16, 2023 ___________________________________

Theresa M. Traber

Judge of the Superior Court

Any party may submit on the tentative ruling by contacting the courtroom via email at Smcdept47@lacourt.org by no later than 4:00 p.m. the day before the hearing. All interested parties must be copied on the email. It should be noted that if you submit on a tentative ruling the court will still conduct a hearing if any party appears. By submitting on the tentative you have, in essence, waived your right to be present at the hearing, and you should be aware that the court may not adopt the tentative, and may issue an order which modifies the tentative ruling in whole or in part.