Judge: Virginia Keeny, Case: 22VECV00949, Date: 2023-03-21 Tentative Ruling

Case Number: 22VECV00949    Hearing Date: March 21, 2023    Dept: W

ASHLEY COLLINS, et al. vs GENERAL MOTORS, LLC.

defendant GENERAL MOTORS LLC’s demurrer to the first amended complaint

Date of Hearing:        March 21, 2023                                 Trial Date:       None set.

Department:              W                                                        Case No.:        22VECV00949

Moving Party:            Defendant General Motors LLC

Responding Party:     Plaintiffs Ashley Collins and Kevin McMahon

Meet and Confer:      Yes. (Yaraghchian Decl. ¶¶2-3.)

BACKGROUND

This lemon law action, filed on July 8, 2022, arises from Plaintiffs Ashley Collins and Kevin McMahon’s purchase of a Certified Pre-Owned 2017 Cadillac Escalade vehicle. On November 2, 2022, Plaintiffs filed a first amended complaint asserting claims for (1) Violation of Civil Code section 1793.2(d); (2) Violation of Civil Code section 1793.2(b); (3) Violation of Civil Code section 1793(a)(3); (4) Breach of the Implied Warranty of Merchantability (Civ. Code §§ 1791.1; 1794; 1795.5); (5) Violation of Consumers Legal Remedies Act; and (6) Violation of the Magnuson-Moss Warranty Act.

Plaintiffs allege the vehicle had several defects including electrical, brake, engine, and transmissions issues. However, when Plaintiffs presented the vehicle for repair, none of the repair attempts resolved the transmissions defect.

[Tentative] Ruling

Defendant General Motors LLC’s Demurrer is OVERRULED.

DISCUSSION

Defendant demurs to the fifth cause of action for violation of the CLRA on the grounds Plaintiffs fail to state facts sufficient to constitute a cause of action against GM and the cause of action is barred because Plaintiffs failed to provide the requisite written notice.

Defendant GM first argues the CLRA claim fails as a matter of law because Plaintiffs did not plead statutory fraud with the requisite specificity. Defendant GM contends Plaintiffs had to plead facts specifically demonstrating how statements by GM were false or objectively misleading at the time they were made and Plaintiffs’ failure to satisfy these requirements has been fatal to claims for fraudulent misrepresentation or omission under the CLRA.

The CLRA bars engaging in deceptive acts or practices in the sale of consumer goods. (Civ. Code, § 1770.) In the CLRA context, “[f]raud or deceit may consist of the suppression of a fact by one who is bound to disclose it or who gives information of other facts which are likely to mislead for want of communication of that fact.” (McAdams v. Monier, Inc. (2010) 182 Cal.App.4th 174, 185 (italics omitted).) “Thus, a CLRA claim may be predicated on ‘an alleged failure to disclose a material fact that is misleading in light of other facts … that [the defendant] did disclose.”’ (Klein v. Chevron U.S.A., Inc. (2012) 202 Cal.App.4th 1342, 1382.)

To allege sufficiently a failure to disclose, a plaintiff must allege one of the four circumstances: "(1) when the defendant is the plaintiff's fiduciary; (2) when the defendant has exclusive knowledge of material facts not known or reasonably accessible to the plaintiff; (3) when the defendant actively conceals a material fact from the plaintiff; and (4) when the defendant makes partial representations that are misleading because some other material fact has not been disclosed.” (Collins v. eMachines, Inc. (2011) 202 Cal.App.4th 249, 255.)

In the instant matter, Plaintiffs allege prior to Plaintiffs purchasing the Subject Vehicle, Defendant GM knew that the Subject Vehicle was defective and specifically, that the transmission caused hesitation on acceleration, loss of power, hard and/or harsh shifts, and/or jerking. (FAC ¶64.) However, Defendant GM nevertheless concealed and failed to disclose the defective nature of the Vehicle and its transmission to Plaintiffs at the time of sale and thereafter. (FAC ¶66.) These allegations are sufficient to support a CLRA claim against Defendant GM for the purposes of a demurrer.

Defendant GM attempts to argue that the heightened pleading standard that applies to causes of action for fraud should apply to a CLRA claim. However, GM cites to no authority that supports this argument. The complaint as alleged is alleged with reasonable particularity as required by the CLRA. (See Gutierrez v. Carmax Auto Superstores California (2018) 19 Cal.App.5th 1234, 1261 holding “[c]auses of action under the CLRA and UCL must be stated with reasonable particularity, which is a more lenient pleading standard than is applied to common law fraud claims.”)

The court also notes Defendant GM’s contention that Plaintiffs cannot reasonably cite to publicly available information as evidence that GM knew of the alleged defect, while in the same breath arguing that GM intentionally suppressed and concealed the very same information. (See FAC ¶32.) However, the court finds these allegations do not support Defendant GM’s claim that they were not in exclusive knowledge of material facts. Plaintiffs allege these various TSBs and Recalls made it difficult to discover the defect because they purported to fix various symptoms of the defects. That does not negate Plaintiffs’ allegations that Defendant GM had exclusive knowledge of the transmission defect or that Defendant GM actively concealed this defect from Plaintiffs.

Next, Defendant GM argues the CLRA claim fails because plaintiffs did not provide the requisite pre-suit notice. The CLRA provides that “thirty days or more” prior to filing a CLRA action “for damages” the consumer shall notify the potential defendant “of the particular alleged violations of Section 1770” and demand that he or she “correct, repair, replace or otherwise rectify the goods or services alleged to be in violation of Section 1770.” (Civ. Code §1782.) This requirement does not apply to injunctive relief. (Civ. Code § 1782(d).) Further, “[n]ot less than 30 days after the commencement of an action for injunctive relief, and after compliance with subdivision (a), the consumer may amend his or her complaint without leave of court to include a request for damages.” (Id.; see also Morgan v. AT & T Wireless Servs., Inc. (2009) 177 Cal.App.4th 1235, 1261 (holding that failure to comply with the 30-day rule requirement should not result in forfeiture of the CLRA damage remedy altogether; rather, plaintiff should be entitled to re-send the letter after the complaint is filed).)

In opposition, Plaintiffs argue this argument is inappropriate for demurrer, as it asks the court to consider facts of the case outside of the pleadings. Further, with respect to the CLRA claim, Plaintiffs have only asked for equitable and injunctive relief at this time. (FAC ¶76). Therefore, Plaintiff’s 30-day notice requirements have not been triggered. (Civ. Code § 1782(a-b)).

Such an argument is not outside the scope of a demurrer. Rather, the 30-day notice requirement is necessary to sufficiently state facts for a CLRA claim when seeking damages. However, the court agrees that because the cause of action only seeks injunctive and equitable relief, Plaintiffs did not need to give 30-day notice.

Accordingly, Defendants’ Demurrer is OVERRULED.