Judge Upinder S. Kalra, Case Number: 21STCV28907, Date: 2023-10-20 Tentative Ruling

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MOVING PARTY: Defendant Kia America, Inc. (formerly known as Kia Motors America, Inc.)

1. Summary Adjudication of Plaintiffs’ Fourth Cause of Action for Fraudulent Inducement – Intentional Misrepresentation.

1. Defendant’s motion for summary adjudication as to Plaintiffs’ Fourth Cause of Action for Fraudulent Inducement – Intentional Misrepresentation is GRANTED.

2. Defendant’s motion for summary adjudication as to Plaintiffs’ Prayer for Punitive Damages is GRANTED.

On August 5, 2021, Plaintiffs Cree Powell and Tamara Lanett Johnson (“Plaintiffs”) filed a complaint against Defendant Kia Motor America, Inc. (“Defendant”). Plaintiffs filed a First Amended Complaint on August 19, 2022. Plaintiffs filed a Second Amended Complaint on January 25, 2023. The court SUSTAINED Defendant’s Demurrer and Motion to Strike portions of the SAC on May 15, 2023 as to the third cause of action only without leave to amend. The remaining causes of action are: (1) Violation of Song-Beverly Act – Breach of Express Warranty; (2) Violation of Song-Beverly Act – Breach of Implied Warranty; and (4) Fraudulent Inducement – Intentional Misrepresentation.

The SAC alleges that Plaintiffs purchased the Subject Vehicle, which contained warranties. Defendant manufactured the Subject Vehicle; however, the Subject Vehicle contained defects that were unable to be repaired properly. Plaintiffs also allege that the engine defect was known to Defendant and Defendant actively concealed this defect.

Defendant timely filed the instant motion on August 1, 2023. Plaintiffs timely filed an opposition on October 6, 2023. Defendant timely filed a reply on October 13, 2023.

The purpose of a motion for summary judgment or summary adjudication “is to provide courts with a mechanism to cut through the parties’ pleadings in order to determine whether, despite their allegations, trial is in fact necessary to resolve their dispute.” (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 843.) “Code of Civil Procedure section 437c, subdivision (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.)

“On a motion for summary judgment, the initial burden is always on the moving party to make a prima facie showing that there are no triable issues of material fact.” (Scalf v. D.B. Log Homes, Inc. (2005) 128 Cal.App.4th 1510, 1519.) A defendant or cross-defendant moving for summary judgment or summary adjudication “has met his or her burden of showing that a cause of action has no merit if the party has shown that one or more elements of the cause of action . . . cannot be established, or that there is a complete defense to the cause of action.” (Code Civ. Proc. (CCP) § 437c, subd. (p)(2).) “Once the defendant or cross-defendant has met that burden, the burden shifts to the plaintiff or cross-complainant to show that a triable issue of one or more material facts exists as to the cause of action or a defense thereto.” (CCP § 437c, subd. (p)(2).) “If the plaintiff cannot do so, summary judgment should be granted.” (Avivi v. Centro Medico Urgente Medical Center (2008) 159 Cal.App.4th 463, 467.) “When deciding whether to grant summary judgment, the court must consider all of the evidence set forth in the papers (except evidence to which the court has sustained an objection), as well as all reasonable inferences that may be drawn from that evidence, in the light most favorable to the party opposing summary judgment.” (Id. at p. 467; CCP, § 437c, subd. (c).)

Defendant contends that Plaintiffs’ cause of action for Fraudulent Inducement - Intentional Misrepresentation fails because Defendant did not make any misrepresentations regarding the GDI engine to Plaintiffs to induce them to lease the vehicle and Plaintiffs did not rely on any alleged misrepresentations regarding the GDI engine by Defendant when they leased the vehicle. Plaintiffs argue that authorized dealership personnel misrepresented facts regarding the subject vehicle’s and that Defendant’s online advertising material were false.

To establish a claim for deceit based on intentional misrepresentation, the plaintiff must prove seven¿essential elements: (1) the defendant represented to the plaintiff that an important fact was true; (2) that representation was false; (3) the defendant knew that the representation was false when the defendant made it, or the defendant made the representation recklessly and without regard for its truth; (4) the defendant intended that the plaintiff rely on the representation; (5) the plaintiff¿reasonably relied on the¿representation;¿(6) the plaintiff was harmed; and (7) the plaintiff's reliance on the defendant's representation was a substantial factor in causing that harm to the plaintiff.¿ (Manderville¿v. PCG & S Group, Inc.¿(2007) 146 Cal.App.4th 1486, 1498.)¿

Here, Defendant provided sufficient evidence that it did not make an intentional misrepresentation regarding the GDI engine. First, it is undisputed that Car Pros Kia is not named as a defendant in this case and it leased the vehicle to Plaintiffs. (Separate Statement of Undisputed Material Facts (UF) No. 6.) Defendant’s alleged misrepresentation is contained in an unidentified marketing brochure. (UF No. 4.) Defendant provided evidence that Plaintiffs did not see or rely on this supposed marketing brochure in connection with their lease of the subject vehicle. (UF No. 5.) Additionally, Defendant provided evidence that Plaintiffs did not research the 2016 Kia Optima before leasing it and did not recall seeing or hearing any advertisements or brochures about the GDI engine before leasing the vehicle. (UF Nos. 6 & 7.) Finally, Defendant highlights that Plaintiffs did not produce any brochures or marketing materials they allegedly relied on during discovery. (UF No. 9.)

Accordingly,¿Defendant¿has presented sufficient evidence that¿it did not make an intentional misrepresentation regarding the Vehicle.¿¿This shifts the burden to Plaintiff to offer evidence that Defendant made intentional misrepresentations regarding the vehicle.

Plaintiffs are unable to rebut this shifted burden. Plaintiffs’ contention that they did research regarding the GDI engine is unsupported by the evidence. First, it is undisputed that Plaintiffs did not research the 2016 Kia Optima before leasing it.[1] (UF No. 7.) Second, while Plaintiffs contend that they relied on Defendant’s online marketing materials on the date they entered the lease, their deposition testimony indicates otherwise. Plaintiff Cree Powell testified that this was for purposes of selecting interior add-ons recommended by the salesperson and not the GDI engine. Plaintiff Tamara Lanett Johnson added that she only recalls verbal claims by Car Pros Kia’s salespersons, not Defendant, regarding gas mileage.[2] (UF Nos. 4, 7, and 8; Plaintiffs’ Additional Statement of Material Facts (AMF) AMF No. 11.) Third, Plaintiffs proffer¿no¿evidence demonstrating that there is a principal-agent relationship¿between Defendant and Car Pros Kia.¿An authorized dealer is not automatically an agent for the purpose of selling vehicles.[3] (See, e.g.,¿Avalon Painting Co. v. Alert Lumber Co.¿(1965) 234 Cal.App.2d 178, 184 [noting that whether an agency relationship exists depends on the facts of each case and holding the facts pled in the instant amended complaint and prior complaints established a probability that the relationship between paint manufacturer and dealer was one of buyer and seller as opposed to principal and agent, and whether an agency relationship actually existed can only be determined after taking evidence, not on demurrer].) Stated otherwise, Plaintiff has failed to demonstrate the existence of a triable issue of one or more material facts as to this cause of action.

Thus, Defendant’s Motion for Summary Adjudication as to the fourth cause of action is GRANTED.

Punitive damages may be imposed where it is proven by clear and convincing evidence that the defendant has been guilty of oppression, fraud, or malice. (Civ. Code, § 3294, subd. (a).) "Malice" is conduct intended by the defendant to cause injury to the plaintiff or despicable conduct, which is carried on with a willful and conscious disregard of the rights or safety of others. (Civ. Code, § 3294(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. Such conduct has been described as 'having the character of outrage frequently associated with crime.'" (Tomaselli v. Transamerica Ins. Co. (1994) 25 Cal.App.4th 1269, 1287.) “Fraud” 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. (Civ. Code, § 3294, subd. (c).) “‘Punitive damages are proper only when the tortious conduct rises to levels of extreme indifference to the plaintiff’s rights, a level which decent citizens should not have to tolerate.’ [Citation.]” (Lackner v. North (2006) 135 Cal.App.4th 1188, 1210.)

Plaintiffs’ prayer for punitive damages is premised solely on their fourth cause of action for Fraudulent Inducement – Intentional Misrepresentation.

Defendant moves for summary adjudication of the claim for punitive damages, arguing that because Plaintiffs’ fourth cause of action fails, so must their claim for punitive damages.

Given the court’s ruling finding that Plaintiffs have failed to create a triable issue of material fact as to their fourth cause of action, Plaintiffs have likewise failed to create a triable issue of material fact as to their claim for punitive damages, which relies on their fourth cause of action.

Based on the foregoing, Defendant’s motion for summary adjudication of the claim for punitive damages is GRANTED.

1. Defendant’s motion for summary adjudication as to Plaintiffs’ Fourth Cause of Action for Fraudulent Inducement – Intentional Misrepresentation is GRANTED.

2. Defendant’s motion for summary adjudication as to Plaintiffs’ Prayer for Punitive Damages is GRANTED.

[1] Plaintiffs’ citation to Cree Powells deposition testimony claiming otherwise is belied by this Court’s review of the transcript where Powell admitted not doing any research prior to September 4, 2016—the date she entered into the lease on lease. (Manning Decl., Exhibit 1 at 44:1-20.)

[2]Manning Decl., Exhibit 1 at 47:21-48:20 & Exhibit 2 at 20:9-21:1.

[3] The court is not persuaded by Plaintiffs’ citation to Daniel v. Ford Motor Co. (2015) 806 F.3d 1217 because the complaint there did not have a cause of action for Fraudulent Inducement – Intentional Misrepresentation. Also, the purpose for which Plaintiffs cite to this case is misplaced because the question here is not whether they relied on misrepresentations but that there ever was a misrepresentation by Defendant. Similarly, Plaintiffs’ reliance on Ibrahim v. Ford Motor Co. (1989) 214 Cal.App.3d 878 is also misplaced because that case focused on cumulative repair efforts between the manufacturer and the dealer – not statements the dealer made allegedly on behalf of the manufacturer.