Judge Upinder S. Kalra, Case Number: 24STCV28061, Date: 2025-02-20 Tentative Ruling

1. Demurrer to the Fifth Cause of Action for failure to state a claim (preemption by federal law);

On October 25, 2024, Plaintiff Christina Quezada (Plaintiff) filed a Song-Beverly Complaint against Defendant American Honda Motor Co., Inc. (Defendant or Honda) with causes of action for: (1) Violation of Civ. Code § 1793.2(D); (2) Violation of Civ. Code § 1793.2(B); (3) Violation of Civ. Code § 1793.2(A)(3); (4) Breach of the Implied Warranty of Merchantability; and (5) Fraudulent Inducement – Concealment.

According to the Complaint, Plaintiff entered a warranty contract with Honda concerning a 2021 Honda Accord VIN No. 1HGCV1F3XMA009134 (the Vehicle). Plaintiff alleges the Vehicle has a defective computerized driver-assisting safety system (the Honda Sensing) including: Adaptive cruise control, lane departure warnings and steering inputs, and autonomous braking. Plaintiff further alleges that Honda knew about the defects, failed to disclose them to Plaintiff, and was unable to repair the Vehicle.

On November 21, 2024, Honda filed the instant demurrer with motion to strike.[1] On February 5, 2025, Plaintiff filed oppositions. On February 7, 2025, Honda filed a reply in support of the motion to strike only.

A demurrer for sufficiency tests whether the complaint states a cause of action.¿(Hahn v. Mirda¿(2007) 147 Cal.App.4th 740, 747.) When considering demurrers, courts read the allegations liberally and in context.¿In a demurrer proceeding, the defects must be apparent on the face of the pleading or via proper judicial notice.¿(Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994.)¿“A demurrer tests the pleadings alone and not the evidence or other extrinsic matters. …. 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¿147 Cal.App.4th at 747.)¿¿

The court may, upon a motion, or at any time in its discretion, and upon terms it deems proper, strike any irrelevant, false, or improper matter inserted in any pleading. (CCP § 436(a).) The court may also strike all or any part of any pleading not drawn or filed in conformity with the laws of this state, a court rule, or an order of the court. (Id., § 436(b).) The grounds for moving to strike must appear on the face of the pleading or by way of judicial notice. (Id.¿§¿437.)¿“When the defect which justifies striking a complaint is capable of cure, the court should allow leave to amend.” (Vaccaro v. Kaiman¿(1998) 63 Cal.App.4th 761, 768.)¿¿¿

Prior to filing a demurrer, the demurring party is required to satisfy their meet and confer obligations pursuant to Code of Civ. Proc. (CCP) §430.41 and demonstrate that they so satisfied their meet and confer obligation by submitting a declaration pursuant to CCP §430.41(a)(2) & (3). The meet and confer requirement also applies to motions to strike. (CCP § 435.5.) Here, Honda indicates counsel sent one meet and confer letter to Plaintiff on November 12, 2024 without receiving a response from Plaintiff’s counsel. (Tsair Decl. ¶¶ 2,3.) The court is not convinced that one letter sent via email satisfies the meet and confer requirement. Still, failure to meet and confer is not a sufficient ground to overrule or sustain a demurrer. (CCP § 430.41(a)(4).)¿

Honda contends this claim fails because Plaintiff failed to sufficiently allege sufficient facts supporting this claim and it is barred by the economic loss rule.[2] Honda additionally contends that this claim is preempted by federal law (the NHTSA).[3] Plaintiff argues their common law fraud claim is not preempted, that Plaintiff sufficiently alleged a claim for fraudulent inducement – concealment, and that Plaintiff alleged a duty existed through a contractual relationship that does not require strict privity. Plaintiff additionally argues that the economic loss rule does not apply.

The elements of a claim for fraudulent inducement – concealment are: “(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.” (Dhital v. Nissan North America, Inc. (2022) 84 Cal.App.5th 828, 843-844 [review denied] (internal citations omitted).) “Suppression of a material fact is actionable when there is a duty of disclosure, which may arise from a relationship between the parties, such as a buyer-seller relationship.” (Ibid.) “Fraud, including concealment, must be pleaded with specificity.” (Ibid; Linear Technology Corp. v. Applied Materials, Inc. (2007) 152 Cal.App.4th 115, 132.)

Upon reviewing the Complaint, Plaintiff insufficiently alleged a claim for fraudulent inducement – concealment. Plaintiff did sufficiently allege the first, second, fourth, and fifth elements (concealed fact, knowledge of concealed fact, justifiable reliance, and damages). In Dhital, the Court found that the plaintiffs sufficiently alleged a claim against Nissan for fraudulent inducement – concealment. (Dhital, supra, 84 Cal.App.5th at p. 844.) There, the plaintiffs alleged:

“[T]he CVT transmissions installed in numerous Nissan vehicles (including the one plaintiffs purchased) were defective; Nissan knew of the defects and the hazards they posed; Nissan had exclusive knowledge of the defects but intentionally concealed and failed to disclose that information; Nissan intended to deceive plaintiffs by concealing known transmission problems; plaintiffs would not have purchased the car if they had known of the defects; and plaintiffs suffered damages in the form of money paid to purchase the car.”

The Court concluded these allegations sufficient at the pleading stage.[4] (Ibid.) The facts here are almost identical to Dhital. Plaintiffs allege serious defects with the braking system, that Honda knew about these defects from other customer complaints and warranty claims data, it knew they could not fix this defect and uses “software updates” as “a false attempt to repair the defect,” failed to disclose this defect to Plaintiff at the time of purchase or thereafter, Plaintiff did not have access to the same information as Honda concerning the defects, that Plaintiff relied on marketing materials that do not address the latent defect when deciding to purchase the Vehicle, that Plaintiff would not have purchased the Vehicle had she known about the defect, and that she incurred damages in the form of money paid for the Vehicle. (Complaint ¶¶ 47, 50, 51, 53, 56, 59, 58, 61, 62, 63, 64, 65, 66.) However, Plaintiff did not allege that Honda intended to defraud Plaintiff. There are allegations that Honda had a contractual duty to disclose the Sensing Defect and that Plaintiff “interacted” with Honda’s sales representatives and materials when deciding to purchase the Vehicle but this is not the same as alleging Honda intended to defraud Plaintiff.

In light of the above ruling, the court DENIES the motion to strike, without prejudice, as moot.[5]

[1] As an initial matter, Honda’s brief to the demurrer exceeds the page limit. (Cal. Rules of Court, rule 3.1113(d).)

[2] The economic loss rule does not apply to fraudulent inducement by concealment claims. (Dhital, supra, 84 Cal.App.5th at p. 841.) The court therefore declines to develop that argument.

[3] The court is not persuaded by this argument. While regulating disclosures by car manufacturers is governed by both federal and state regulations, there is no indication that the NHTSA regulates the disclosure of defects to consumers. As such, there is no preemption.

[4] This court notes that the Dhital court reached this conclusion in part because Nissan did not develop its argument on this point. With that in mind, this court first reviews Honda’s demurrer for a developed argument supporting further specificity.

[5] The court notes, however, that punitive damages would appear to be be warranted should Plaintiff sufficiently amend her claim for fraudulent inducement – concealment.