Case Number: BC684045 Hearing Date: March 27, 2018 Dept: 53

endelia herrera vs. general motors, llc , et al.; BC684045, March 27, 2018

[Tentative] Order RE: DEFENDANT GENERAL MOTORS, LLC’S DEMURRER TO PLAINTIFF’S COMPLAINT

Defendant GENERAL MOTORS, LLC’s Demurrer to Plaintiff’s Complaint is SUSTAINED WITH LEAVE TO AMEND. Defendant’s Motion to Strike Punitive Damages from Plaintiff’s Complaint is DENIED AS MOOT.

BACKGROUND

Plaintiff Endelia Herrera (“Plaintiff”) filed this action on November 17, 2017 against Defendant General Motors, LLC (“Defendant”). This action concerns Plaintiff’s purchase of a 2010 Chevrolet Traverse (the “Subject Vehicle”). Plaintiff alleges that Defendant breached its warranty obligations and concealed a known defect from Plaintiff related to the steering system. The Complaint asserts causes of action for violations of statutory obligations, including violations of the Song-Beverly Act and Magnuson-Moss Act, as well as a cause of action for fraud by omission.

Defendant now demurs to the seventh cause of action (fraud by omission) on the grounds of failure to state facts sufficient to constitute a cause of action, uncertainty, and that the cause of action is barred by the statute of limitations.

DISCUSSION

A demurrer can be used only to challenge defects that appear on the face of the pleading under attack or from matters outside the pleading that are judicially noticeable. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) “To survive a demurrer, the complaint need only allege facts sufficient to state a cause of action; each evidentiary fact that might eventually form part of the plaintiff’s proof need not be alleged.” (C.A. v. William S. Hart Union High School Dist. (2012) 53 Cal.4th 861, 872.) For the purpose of testing the sufficiency of the cause of action, the demurrer admits the truth of all material facts properly pleaded. (Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 966-967.) A demurrer “does not admit contentions, deductions or conclusions of fact or law.” (Daar v. Yellow Cab Co. (1967) 67 Cal.2d 695, 713.) A demurrer for uncertainty may lie if the failure to label the parties and claims renders the complaint so confusing defendant cannot tell what he or she is supposed to respond to. (Williams v. Beechnut Nutrition Corp. (1986) 185 Cal.App.3d 135, 139, fn. 2.) A pleading is uncertain if it is ambiguous and unintelligible. (Code Civ. Proc., § 430.10(f).)

As an initial matter, the Court overrules the special demurrer on the basis of uncertainty. The Complaint is neither ambiguous nor unintelligible, and Defendant clearly is able to tell what claims are being alleged against it.

As to the statute of limitations argument, the Court overrules the general demurrer on those grounds. As noted by Plaintiff, the Complaint does not show on its face that it is time-barred, and therefore Plaintiff was not required to plead facts to benefit from the discovery rule. (See CAMSI IV v. Hunter Technology Corp. (1991) 230 Cal.App.3d 1525, 1536-1537.)

To plead a cause of action for fraud, Plaintiff must plead facts showing the following elements: (1) misrepresentation, (2) knowledge of falsity, (3) intent to defraud, (4) justifiable reliance, and (5) resulting damage. (Charnay v. Cobert (2006) 145 Cal.App.4th 170, 184.) Fraud must be pleaded specifically. To survive demurrer, plaintiff must plead facts that “show how, when, where, to whom, and by what means the representations were tendered.” (Hamilton v. Greenwich Investors XXVI, LLC (2011) 195 Cal.App.4th 1602, 1614.)

The elements of an action for fraud based on concealment are: “(1) the defendant must have concealed or suppressed a material fact, (2) the defendant must have been under a duty to disclose the fact to the plaintiff, (3) the defendant must have intentionally concealed or suppressed the fact with the intent to defraud the plaintiff, (4) the plaintiff must have been unaware of the fact and would not have acted as he did if he had known of the concealed or suppressed fact, and (5) as a result of the concealment or suppression of the fact, the plaintiff must have sustained damage.” (Marketing West, Inc. v. Sanyo Fisher Corp. (1992) 6 Cal.App.4th 603, 612-613.) Concealment may also constitute actionable fraud when “the defendant had exclusive knowledge of material facts not known to the plaintiff,” “when the defendant actively conceals a material fact from the plaintiff,” and “when the defendant makes partial representations but also suppresses some material facts.” (LiMandri v. Judkins (1997) 52 Cal.App.4th 326, 336.)

In support of the cause of action, Plaintiff alleges that Defendant concealed a material fact: the steering system on the subject vehicle was defective and susceptible to sudden and premature failure. (Compl., ¶ 66.) Plaintiff alleges that Defendant had exclusive knowledge of the material fact. (Compl., ¶¶ 69, 98.) Plaintiff alleges that had he known that the subject vehicle was defective at the time of sale, he would not have purchased the vehicle. (Compl., ¶ 100.) Plaintiff alleges that he has suffered and will continue to suffer actual damages. (Compl., ¶ 102.) What Plaintiff does not allege is that Defendant intentionally concealed the steering defect with the intent to defraud Plaintiff. Therefore, the Court sustains the demurrer on that basis.

Additionally, Defendant argues that Plaintiff’s claims are barred by the economic loss rule. Plaintiff alleges in general terms that he has suffered and will continue to suffer “actual damages” as a result of the purported fraudulent omissions by Defendant. (Compl., ¶ 102.) “Conduct amounting to a breach of contract becomes tortious … when it also violates a duty independent of the contract arising from principles of tort law.” (Erlich v. Menezes (1999) 21 Cal.4th 543, 551.) Tort damages are permitted in contract cases where the contract was fraudulently induced. (Las Palmas Associates v. Las Palmas Center Associates (1991) 235 Cal.App.3d 1220, 1238 [“We are aware of the danger of grafting tort liability on what ordinarily should be a breach of contract action. … However, no public policy is served by permitting a party who never intended to fulfill his obligations to fraudulently induce another to enter into an agreement.”] Therefore, Plaintiff’s reliance on Robinson Helicopter Co., Inc. v. Dana Corp. (2004) 34 Cal.4th 979 is inapposite. The holding in Robinson Helicopter was limited only to “affirmative intentional misrepresentations of fact.” (Id. at p. 991.) Here, Plaintiff’s fraud claims are premised on fraudulent concealment or omissions, rather than fraudulent inducement. In fact, Plaintiff has not pled any affirmative intentional misrepresentations of fact by Defendant. Furthermore, in order to avoid the economic loss rule, Plaintiff would need to have pled damages independent of his economic loss. (Id. at p. 993.) However, Plaintiff has failed to plead any damages separate from the damages arising from the breach of warranty claims. Therefore, the Court finds that the economic loss rule bars the fraudulent omission cause of action.

CONCLUSION

Based on the foregoing, Defendant’s Demurrer to Plaintiff’s Complaint is SUSTAINED WITH LEAVE TO AMEND. Defendant’s Motion to Strike Punitive Damages from Plaintiff’s Complaint is DENIED AS MOOT. Plaintiff is ordered to file an amended complaint, if any, within 10 days of this Order.

Defendant is ordered to provide notice of this ruling.

DATED: March 27, 2018

_____________________________

Howard L. Halm

Judge of the Superior Court