Judge William A. Crowfoot, Case Number: 23AHCV02709, Date: 2024-12-05 Tentative Ruling

Judge: William A. Crowfoot, Case: 23AHCV02709, Date: 2024-12-05 Tentative Ruling

On November 17, 2023, plaintiff Gabriel Santiago, Jr. (“Plaintiff”) filed this action against defendant General Motors, LLC (“Defendant”). Plaintiff asserts five causes of action arising from his acquisition of a 2019 Chevrolet Volt (“Subject Vehicle”) on May 6, 2019, from Sierra Chevrolet in Monrovia, California. (Compl., ¶ 6.) Plaintiff alleges that on

On January 23, 2024, Defendant filed a demurrer to Plaintiff’s Fifth Cause of Action for fraudulent concealment on the grounds that it: (1) was barred by the applicable statute of limitations, (2) failed to state facts relevant to the elements of the claim, and (3) failed to allege a transactional relationship giving rise to a duty to disclose. (Demurrer, p. 2.) Defendant also filed, on January 23, 2024, a motion to strike Plaintiff’s prayer for punitive damages.

On May 13, 2024, Plaintiff filed a First Amended Complaint with additional allegations addressing the statute of limitations. (FAC, ¶¶ 29-45.) Plaintiff also added allegations addressing the Subject Vehicle’s problems and its repair history. (FAC, ¶¶ 24-25.) Plaintiff alleges that he presented the Subject Vehicle for repair on December 29, 2020, with “various concerns, including infotainment concerns.” On January 5, 2022, he presented the Subject Vehicle for repair with “various concerns, including transmission and brake system concerns.” (FAC, ¶¶ 24-25.) Thereafter, Plaintiff allegedly continued to experience symptoms including: (1) a rattling sound coming from underneath the Vehicle driving 30-70 mph, (2) the Vehicle not always responding when trying to accelerate using the pedal, having to press multiple times to accelerate property, (3) an electrical current sound heard from under the Vehicle when applying the brakes. (FAC, ¶ 26.)

On July 1, 2024, Defendant filed a demurrer to Plaintiff’s Fifth Cause of Action and a motion to strike on the same grounds. Plaintiff filed opposition briefs on November 20, 2024. Defendant filed reply briefs on November 21, 2024.

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 demurs to Plaintiff’s Fifth Cause of Action for “Fraudulent Inducement - Concealment.” Plaintiff alleges that he purchased the Subject Vehicle as manufactured with Defendant’s battery system and that Defendant did not disclose that the Vehicle and its lithium-ion battery was defective and susceptible to sudden and premature failure. (FAC, ¶¶ 66-67.) The specific defects with the battery system of which Defendant was allegedly aware include: overheating when charged to full or near full capacity, loss of propulsion power while driving, catastrophic fire, no crank, reduced range, thermal runaway, and/or spontaneous combustion (collectively, “Battery Defect”). (FAC, ¶ 69.) These alleged conditions present a safety hazard and are unreasonably dangerous to consumers. (Ibid.) Plaintiff alleges that Defendant was under a duty to disclose the Battery Defect because it was in a superior position to know of the Battery Defect and acquired its knowledge of the Battery Defect through pre-production testing data, early consumer complaints, aggregate warranty data, testing performed in response to those complaints, and warranty and part replacements data. (FAC, ¶ 73.)

The required elements for fraudulent concealment are (1) concealment or suppression of a material fact; (2) by a defendant with a duty to disclose the fact; (3) the defendant intended to defraud the plaintiff by intentionally concealing or suppressing the fact; (4) the plaintiff was unaware of the fact and would have acted differently if the concealed or suppressed fact was known; and (5) plaintiff sustained damage as a result of the concealment or suppression of the material fact. (Graham v. Bank of America, N.A. (2014) 226 Cal.App.4th 594, 606; see also CACI No. 1901.)

Defendant argues that as a threshold issue, Plaintiff’s fraud claim is barred by the 3-year statute of limitations applicable to fraud claims. The Court agrees that a statute of limitations defense is apparent on the face of the FAC because this action was filed on November 17, 2023, and Plaintiff alleges he purchased the vehicle on May 6, 2019. (Code Civ. Proc., § 338(d).) Plaintiff alleges that Defendant intentionally failed to disclose facts about the Battery Defect, causing Plaintiff to purchase the Subject Vehicle, and that Plaintiff would not have purchased the Vehicle had he known the actual facts. (FAC, ¶ 71; Norgart v. Upjohn Co. (1999) 21 Cal.4th 383, 397 [cause of action accrues when the wrongful act is done or the wrongful result occurs and the consequent liability arises].) In opposition, Plaintiff argues that the statute of limitations is tolled by the discovery rule, the repair doctrine, and Defendant’s fraudulent concealment. (Opp., pp. 4-6.)

In order to rely on the discovery rule for delayed accrual of a cause of action, “[a] plaintiff whose complaint shows on its face that his claim would be barred without the benefit of the discovery rule must specifically plead facts to show (1) the time and manner of discovery and (2) the inability to have made earlier discovery despite reasonable diligence.” (Fox v. Ethicon Endo-Surgery, Inc. (2005) 35 Cal.4th 797, 808 [citing McKelvey v. Boeing North American, Inc. (1999) 74 Cal.App.4th 151, 160].) In assessing the sufficiency of the allegations of delayed discovery, the court places the burden on the plaintiff to
“show diligence”; “conclusory allegations will not withstand demurrer.” (Ibid.) A plaintiff must plead that, “despite diligent investigation of the circumstances of the injury, he or she could not have reasonably discovered facts supporting the cause of action within the applicable statute of limitations period.” (Id. at p. 809.)

Here, Plaintiff merely alleges that he discovered Defendant’s wrongful conduct alleged herein “shortly before filing this Complaint.” (FAC, ¶ 36.) Plaintiff provides no other detail regarding the circumstances of his discovery or his diligence in conducting an investigation. Therefore, Plaintiff fails to plead facts showing “the time and manner of discovery” as required to allege the delayed accrual of a cause of action. (See Fox, supra, 35 Cal.4th at p. 808.) Simply put, Plaintiff must describe how Plaintiff discovered Defendant’s concealment of the battery defect to demonstrate why that discovery could not have occurred earlier with reasonable diligence.

As for Plaintiff’s reliance on the repair doctrine and equitable tolling, Defendant argues, and the Court agrees, that they are also unavailing. The repair doctrine applies to toll the statute of limitations for Plaintiff’s claims which are based on warranty, not fraud. (Civ. Code, § 1793.1(a)(2).) Also, Plaintiff generally refers to inadequate Technical Service Bulletins and/or recalls but does not identify any specific representations by Defendant demonstrating an ongoing intent to conceal. For purposes of equitable tolling, absent a fiduciary relationship, nondisclosure of essential facts is not fraudulent concealment of those facts and affirmative deceptive conduct is required. (Long v. Walt Disney Co. (2004) 116 Cal.App.4th 868, 874.)

Insofar as Plaintiff’s fraud claim is predicated on Defendant’s continued intentional concealment of facts after he purchased the Subject Vehicle, Plaintiff fails to allege fraud with specificity. In Rattagan v. Uber Technologies, Inc. (2024) 17 Cal.5th 1, 43–44, the California Supreme Court stated:

California courts apply the same specificity standard to evaluate the factual underpinnings of a fraudulent concealment claim at the pleading stage . . . If the duty allegedly arose by virtue of the parties' relationship and defendant's exclusive knowledge or access to certain facts . . . the complaint must also include specific allegations establishing all the required elements, 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.

In the instant action, Plaintiff does not allege, with specificity, when Defendant knew or should have known of the Battery Defect, and the “general point” at which the omitted facts could have been revealed.

Last, the Court briefly addresses Defendant’s argument that Plaintiff fails to allege a transactional relationship exists between them in order to impose a duty to disclose. (See, e.g., LiMandri v. Judkins (1997) 52 Cal.App.4th 326, 336; Heliotis v. Schuman (1986) 181 Cal.App.3d 646, 651.) Plaintiff alleges, however, that he “entered into a warranty contract” with Defendant when he purchased the Subject Vehicle on May 6, 2019, and Plaintiff refers to this allegation in his opposition brief, to which Defendant failed to respond. (FAC, ¶ 6; Opp., 10.) Plaintiff also identifies the material facts which were concealed by listing the safety hazards posed by the Battery Defect, as well as Defendant’s exclusive knowledge of the Battery Defect and its attendant risks. (FAC, ¶ 69; see also Rattagan, supra, 17 Cal.5th at pp. 42-43, n. 13 [seller manufacturer of defective item under warranty liable for fraudulent concealment if seller fails to disclose the defect and the defect poses a risk of serious harm beyond the parties’ reasonable contemplation under the warranty contract].) Additionally, a vendor has a duty to disclose material facts “not only to immediate purchasers, but also to subsequent purchasers when the vendor has reason to expect that the item will be resold.” (OCM Principle Opportunities Fund v. CIBC World Markets Corp. (2007) 157 Cal.App.4th 835, 859-60.) Therefore, Plaintiff has adequately pleaded a duty to disclose and Defendant’s demurrer on this ground is overruled. (LiMandri, supra, 52 Cal.App.4th at p. 3346.)

Nevertheless, because Plaintiff’s fraud claim is time-barred and insufficiently pled, the demurrer to the Fifth Cause of Action is SUSTAINED with leave to amend.

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 [punitive damages not recoverable under the Song–Beverly Consumer Warranty Act].) Therefore, the motion to strike is GRANTED.

Defendant’s demurrer to the Fifth 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.