Judge William A. Crowfoot, Case Number: 23AHCV02704, Date: 2024-11-14 Tentative Ruling

Judge: William A. Crowfoot, Case: 23AHCV02704, Date: 2024-11-14 Tentative Ruling

Plaintiff Efrain de la Fuente (“Plaintiff”) filed this action against defendant General Motors, LLC (“Defendant”) on November 17, 2023. On May 24, 2024, Plaintiff filed the operative First Amended Complaint (“FAC”). Plaintiff asserts causes of action for fraud, violations of the Song-Beverly Consumer Warranty Act (“SBA”), and violation of Business & Professions Code section 17200 et seq. (“UCL”) arising from his acquisition of a 2021 Chevrolet Bolt on March 15, 2021. (FAC, ¶ 6.)

On June 24, 2024, Defendant filed a demurrer and motion to strike. Defendant demurs to Plaintiff’s fraud and UCL claims on the grounds that they fail to state sufficient facts. Defendant moves to strike Plaintiffs request for exemplary or punitive damages.

A demurrer may be brought if insufficient facts are stated to support the cause of action asserted. (Code Civ. Proc., § 430.10, subd. (e).) A demurrer tests the legal sufficiency of the pleadings and will be sustained only where the pleading is defective on its face. (City of Atascadero v. Merrill Lynch, Pierce, Fenner & Smith, Inc. (1998) 68 Cal.App.4th 445, 459.) “We treat the demurrer as admitting all material facts properly pleaded but not contentions, deductions or conclusions of fact or law. We accept the factual allegations of the complaint as true and also consider matters which may be judicially noticed. [Citation.]” (Mitchell v. California Department of Public Health (2016) 1 Cal.App.5th 1000, 1007; Del E. Webb Corp. v. Structural Materials Co. (1981) 123 Cal.App.3d 593, 604 [“the facts alleged in the pleading are deemed to be true, however improbable they may be”].) Allegations are to be liberally construed. (Code Civ. Proc., § 452.) In construing the allegations, the court is to give effect to specific factual allegations that may modify or limit inconsistent general or conclusory allegations. (Financial Corporation of America v. Wilburn (1987) 189 Cal.App.3rd 764, 769.)

Any party, within the time allowed to respond to a pleading may serve and file a notice of motion to strike the whole or any part thereof. (Code Civ. Proc., § 435, subd. (b)(1).) 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. (Code Civ. Proc., § 436, subd. (a); Stafford v. Shultz (1954) 42 Cal.2d 767, 782 [“Matter in a pleading which is not essential to the claim is surplusage; probative facts are surplusage and may be stricken out or disregarded”].) The court may also strike all or any part of any pleading not drawn or filed in conformity with California law, a court rule, or an order of the court. (Code Civ. Proc., § 436, subd. (b).) An immaterial or irrelevant allegation is one that is not essential to the statement of a claim or defense; is neither pertinent to nor supported by an otherwise sufficient claim or defense; or a demand for judgment requesting relief not supported by the allegations of the complaint. (Code Civ. Proc., § 431.10, subd. (b).) The grounds for moving to strike must appear on the face of the pleading or by way of judicial notice. (Code Civ. Proc., § 437.)

Defendant first demurs to Plaintiff’s Fourth Cause of Action for fraud on the grounds that Plaintiff fails to plead a claim for affirmative fraudulent misrepresentations with specificity. California law requires that every element of a fraud cause of action “must be alleged in the proper manner[,] and the facts constituting the fraud must be alleged with sufficient specificity to allow defendant to understand fully the nature of the charge made.” (Tarmann v. State Farm Mut. Auto Ins. Co. (1991) 2 Cal.App.4th 153, 157.)

Here, the Complaint alleges a litany of misrepresentations allegedly made in marketing materials for the Chevrolet Bolt’s battery range and charging capabilities from 2015 to 2020. However, the only actionable misrepresentation appears to be limited to a marketing brochure for the 2020 Chevrolet Bolt (which is a different model year than the vehicle at issue in this litigation). (FAC, ¶ 30-32.) In this brochure, Defendant allegedly represented that the Chevrolet Bolt could be charged safely at home in the garage to full capacity. Plaintiff alleged he reviewed this brochure and relied upon it prior to purchasing his vehicle, but Plaintiff does not specifically identify when the marketing brochure was reviewed. (See Cansino v. Bank of America (2014) 224 Cal.App.4th 1462, 1469.) Plaintiff also does not allege specific facts demonstrating Defendant's knowledge of the purported battery defect and risk of fire at the time Plaintiff purchased his vehicle. Plaintiff only alleges that in March 2019 Defendant “became aware of the first battery fire involving the Chevrolet Bolt,” but does not allege that it was aware of the reasons for the fire or that charging the batteries to 100 percent would be unsafe. Plaintiff refers to a warning issued in 2017 by the National Highway Traffic Safety Administration advising that “overcharging lithium ion batteries, such as the battery in the Bolt, can result in spontaneous ignition.” (FAC ,¶ 23.) However, “overcharging” a battery is different from charging batteries to full capacity. Accordingly, Plaintiff fails to plead affirmative misrepresentations with the requisite specificity.

Next, Defendant demurs to Plaintiff’s theory of fraudulent concealment. In Rattagan v. Uber Technologies, Inc. (2024) 17 Cal.5th 1, 43, the California Supreme Court stated that a plaintiff must allege a sufficient factual basis for establishing a duty of disclosure independent of the parties contract. “A duty to disclose a material fact can arise if (1) it is imposed by statute; (2) the defendant is acting as plaintiff's fiduciary or is in some other confidential relationship with plaintiff that imposes a disclosure duty under the circumstances; (3) the material facts are known or accessible only to defendant, and defendant knows those facts are not known or reasonably discoverable by plaintiff (i.e., exclusive knowledge); (4) the defendant makes representations but fails to disclose other facts that materially qualify the facts disclosed or render the disclosure misleading (i.e., partial concealment); or (5) defendant actively conceals discovery of material fact from plaintiff (i.e., active concealment).” (Id., p. 40.) The Rattagan court continued, “Circumstances (3), (4), and (5) presuppose a preexisting relationship between the parties, such as ‘between seller and buyer, employer and prospective employee, doctor and patient, or parties entering into any kind of contractual agreement. [Citation.] All of these relationships are created by transactions between parties from which a duty to disclose facts material to the transaction arises under certain circumstances.’ (Id., pp. 40-41 [citing LiMandri v. Judkins 52 Cal.App.4th 326, 337].) 60 Cal.Rptr.2d 539.) “Such a transaction must necessarily arise from direct dealings between the plaintiff and the defendant; it cannot arise between the defendant and the public at large.” (Id., p. 41[citing Bigler-Engler v. Breg, Inc. (2017) 7 Cal.App.5th 276, 312].)

Here, Defendant argues, and the Court agrees, that Plaintiff fails to allege a duty of disclosure. Plaintiff admittedly did not purchase his vehicle directly from Defendant, but from a third-party dealership which acted as Defendant’s agent for sales purposes. Plaintiff relies on Dhital v. Nissan North America, Inc. (2022) 84 Cal.App.5th 828, 844, in which the Court of Appeal held that identical agency allegations regarding a dealership and manufacturer were sufficient to state a relationship giving rise to a duty to disclose. However, district courts have cast doubt on the analysis in Dhital, especially in light of the Dhital court’s acknowledgment that the issue of a transactional relationship was not fully briefed. (See e.g., Antonov v. General Motors LLC (C.D. Cal. 2024) 2024 WL 217825, at *11.) Therefore, in order to successfully state a duty to disclose, Plaintiff must include specific allegations regarding the existence and nature of the transactional relationship between Plaintiff and Defendant. (See Bigler-Engler, supra, 7 Cal.App.5th at p. 312.)

Additionally, as stated above, Plaintiff fails to allege with specificity the facts demonstrating Defendant's knowledge of the purported battery defect and risk of fire at the time Plaintiff purchased his vehicle. In Rattagan, the California Supreme Court emphasized that “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 the inquiry shifts to the unique elements of the claim.” (Rattagan, supra, 17 Cal.5th at p. 43.) The Rattagan court stated that a fraudulent concealment claim must include “specific allegations”, including “(1) the content of the omitted facts, (2) defendant's awareness of the materiality of those facts, (3) the inaccessibility of the facts to plaintiff, (4) the general point at which the omitted facts should or could have been revealed, and (5) justifiable and actual reliance, either through action or forbearance, based on the defendant's omission.” (Id., pp. 43-44.) “[M]ere conclusionary allegations that the omissions were intentional and for the purpose of defrauding and deceiving plaintiff[ ] ... are insufficient for the foregoing purposes.” (Ibid. [citing Goodman v. Kennedy (1976) 18 Cal.3d 335, 347].)

Based on the foregoing, the demurrer to the Fourth Cause of Action is SUSTAINED with leave to amend.

The UCL prohibits unfair competition, including the use of unlawful, unfair or fraudulent business practices. (BPC § 17200 et seq.) Since the Court sustains Defendant’s demurrer to Plaintiff’s fraud claim, the Court only addresses Defendant’s argument that Plaintiff does not allege any unfair or unlawful activity.

First, unlawful business practices under BPC section 17200 are "violations of other laws…and makes those unlawful practices actionable under the UCL." (Lazar v. Hertz Corp. (1999) 69 Cal.App.4th 1494, 1505). To allege a violation of section 17200 under the “unlawful” prong of the UCL, a violation of another law must be alleged. (Berryman v. Merit Property Management, Inc. (2007) 152 Cal.App.4th 1544, 1554.) Here, in addition to alleging violations of the SBA, Plaintiff has adequately stated a claim for unfair competition by alleging violations of Business and Professions Code section 17500 et seq.

Second, a business practice is “unfair” when “any injury it causes outweighs any benefits provided to consumers and the injury is one that the consumers themselves could not reasonably avoid.” (Camacho v. Auto Club of Southern California (2006) 142 Cal.App.4th 1394, 1403.) Here, Plaintiff sufficiently alleges that Defendant’s use of the allegedly defective battery did not benefit Plaintiff (FAC, ¶ 111) and caused injuries to consumers and Plaintiff (¶¶ 112-114), thus creating risks which outweighed the benefits. (See McKell v. Wash. Mut., Inc. (2006) 142 Cal.App.4th 1457, 1473.)

Last, Defendant argues that Plaintiff has not established equitable jurisdiction for his UCL claim. (Demurrer, p. 21.) Defendant contends that Plaintiff must allege that “there is no adequate remedy at law available” because the UCL only provides equitable remedies. Defendant claims that because Plaintiff has adequate remedies at law under the SBA, Plaintiff’s UCL claim should be dismissed. This argument is unpersuasive because it is contrary to the language provided in Business and Professions Code section 17205, which states: “Unless otherwise expressly provided, the remedies or penalties are cumulative to each other and to the remedies or penalties available under all other laws of this state.” Defendant also claims that Plaintiff is required to plead an actual or imminent threat of future injury to obtain injunctive relief, but Defendant ignores Plaintiff’s allegation that the use of a defective battery “causes injuries to consumers, like Plaintiff, who cannot use their vehicle commensurate with their reasonable expectations.” (FAC, ¶¶ 112-114.)

Defendant moves to strike Plaintiff’s prayer for exemplary and punitive damages. Since the Court sustains Defendant’s demurrer to Plaintiff’s fraud claim, Plaintiff’s FAC fails to include any basis for punitive damages. (See Troensegaard v. Silvercrest Industries, Inc. (1985) 175 Cal.App.3d 218, 227–228 [determining that punitive damages are not recoverable under the Song–Beverly Consumer Warranty Act]; Bank of the West v. Superior Court (1992) 2 Cal.4^th 125, 1266 [no damages for UCL action].) Therefore, the motion to strike is GRANTED.

Defendant’s demurrer to the Fourth Cause of Action is SUSTAINED with 20 day’s leave to amend.

William A. Crowfoot

Judge of the Superior Court

Parties who intend to submit on this tentative must send an email to the Court at ALHDEPT3@lacourt.org indicating intention to submit on the tentative as directed by the instructions provided on the court website at www.lacourt.org. Please be advised that if you submit on the tentative and elect not to appear at the hearing, the opposing party may nevertheless appear at the hearing and argue the matter. Unless you receive a submission from all other parties in the matter, you should assume that others might appear at the hearing to argue. If the Court does not receive emails from the parties indicating submission on this tentative ruling and there are no appearances at the hearing, the Court may, at its discretion, adopt the tentative as the final order or place the motion off calendar.