2017-00217746-CU-PL

Angela Osborn vs. Hyundai Motor Company

Nature of Proceeding: Hearing on Demurrer to Plaintiffs’ First Amended Complaint

Filed By: Schlichter, Kurt A.

*** If oral argument is requested, the parties must at the time oral argument is requested notify the clerk and opposing counsel of the causes of action that will be addressed at the hearing. Counsel are also reminded that pursuant to local rules, only limited oral argument is permitted on law and motion matters. ***

Defendant CarMax Auto Superstores West Coast, Inc.’s (“CarMax”) demurrer to the First Amended Complaint (“1AC”) in this action is SUSTAINED with leave to amend.

Plaintiffs’ 1AC fails to comply with CRC Rule 2.112(3) and (4).

Factual Background

This action arises from a motor vehicle accident involving a 2007 Hyundai which was purchased from CarMax in 2009 by Regina Wander. According to the 1AC, Ms. Wander was driving her Hyundai in August 2015 when it “suddenly and without warning accelerated out of control and at a high rate of speed,” colliding with a Chrysler and causing the death of two occupants of the Chrysler and injuries to five other passengers.

Plaintiffs in this action have sued CarMax and others including Hyundai and the dealership which allegedly inspected and serviced Ms. Wander’s vehicle after being purchased from CarMax. The 1AC purports to assert the following causes of action:

(1) Wrongful Death – Strict Liability, (2) Personal Injury – Strict Liability, (3) Wrongful Death – Negligence, (4) Personal Injury – Negligence and (5) Contemporaneous Observation – Dillon v. Legg.

The court notes that Ms. Wander has filed her own action against the same defendants for personal injuries based on strict liability, violation of the Consumer Legal Remedies Act and breach of warranty. Ms. Wander’s action was recently consolidated with the present action.

Moving Papers. CarMax now demurs to all causes of action in the 1AC on the grounds that each fails to state facts sufficient constitute a valid claim against CarMax and each is fatally uncertain and unintelligible with respect to the basis of CarMax’s alleged liability and the causation of legally cognizable damages. According to the moving papers, the 1AC “makes clear that CarMax is a used vehicle reseller that merely sold the used 2007 Hyundai to [Ms.] Wander in 2009” and thus, under California Supreme Court precedent, a reseller of used vehicles cannot be liable for any design or manufacturing defects in the used vehicles it sells. CarMax adds that the 1AC allegations about CarMax inspecting, servicing and certifying the 2007 Hyundai before re-selling it to Ms. Wander do not alter the application of this well-established decisional law and are otherwise insufficient to transform CarMax into an entity which can be strictly liable for the defect alleged in this case.

As to the causes of action based on negligence, CarMax contends these too fail for essentially the same reasons especially in light of the allegations that “Defendants, and each of them, negligently and carelessly designed, manufactured, fabricated, assembled, engineered, tested, distributed, serviced, installed and/or sold the subject vehicle in such a fashion as to make it likely to experience the aforementioned sudden unexpected acceleration” and that it is clear from the 1AC CarMax was neither designer or manufacturer of the 2007 Hyundai purchased by Ms. Wander. Moreover, even if CarMax owed a duty of reasonable care with respect to its inspection, service and sale of this 2007 Hyundai, such duty would not extend beyond Ms. Wander as the purchaser so as to include those who were injured in 2015 by the allegedly defective 2007 Hyundai. Finally, CarMax maintains that the 1AC does not actually plead any claim based on a failure to warn of defects in the 2007 Hyundai but regardless, such theory would fail against CarMax for several distinct reasons including but not limited to plaintiffs’ failure to identify the alleged defect to be warned of and CarMax’s actual or constructive knowledge of a defect which “suddenly and without warning” manifested itself six years after Ms. Wander’s acquisition of the used 2007 Hyundai from CarMax in 2009.

Opposition. Plaintiffs oppose, arguing first that a reseller of used products may be strictly liable where it is shown to be in some manner responsible for creating the defect causing the injury, such as when the reseller modifies or reconditions the product manufactured by another and that this is what is alleged in Paragraph 5 of the 1AC:

“[CarMax] advertised and performed a ‘Certified Quality Inspection’ (which included checking more than 125 points on the vehicle) and thoroughly ‘inspected and reconditioned’ the subject [2007 Hyundai] prior to its sale to Ms. Wander in or around November, 2009.”

Coupled with the allegation that CarMax “knew…the vehicle was defective and unsafe

in that it was designed, manufactured,…and/or sold in such a fashion as to allow it to experience sudden unexpected and unintended acceleration” which ultimately injured plaintiffs, the opposition insists the 1AC is sufficient to render CarMax strictly liable particularly since the extent of CarMax’s reconditioning remains a factual question which cannot be resolved on demurrer.

Plaintiff further assert the 1AC adequately pleads facts sufficient to establish a negligence claim against CarMax as it sets forth the essential facts of this case and notifies CarMax of the nature of the claim. The opposition clarifies that CarMax is alleged to have been negligent in numerous respects including negligently testing, servicing and selling the 2007 Hyundai as well as negligently failing to give adequate warning of the risk the 2007 Hyundai could suddenly and unexpectedly accelerate.

Analysis

Strict Liability. The demurrer to the causes of action based on strict liability will be sustained because the facts pled in the 1AC demonstrate that CarMax was in no way involved in the original design, manufacture or distribution of the 2007 Hyundai which Ms. Wander subsequently acquired from CarMax in 2009 and fall far short of coming within an apparent exception to the well-establish rule barring for various policy reasons a secondhand seller of used goods from being strictly liable for injuries caused by defects in another’s design or manufacturing.

In particular, the Green v. City of Los Angeles decision cited in the opposition resulted in the liability of the secondhand seller of a crane because it was determined that the reseller had made “extensive modifications” to the crane prior to its re-sale such that the Court of Appeal characterized the reseller as “tantamount to a manufacturer insofar as liability here is concerned.” (Green, at 838.) In contrast, the 1AC in the present case merely asserts that CarMax performed a thorough inspection of the vehicle, reconditioned it and then advertised it for sale without any suggestion, even in conclusory terms, that CarMax altered the vehicle in such a manner as to justify characterizing CarMax as a designer or manufacturer traditionally subject to the imposition of strict liability.

Moreover, plaintiffs have not alleged any facts sufficient to show that CarMax’s ‘thorough inspection and reconditioning’ in some fashion created the defect which allegedly caused plaintiffs’ injuries, as suggested at Page 4, Lines 7-9 of the opposition. The court also notes that the single authority cited for this proposition, Brejcha v. Wilson Machinery, Inc., does not seem to support plaintiffs’ theory of strict liability against a seller of used goods but instead seems to affirm the principle that an auctioneer who merely re-sold a used machine and had no role to the machine’s design or manufacture was not liable on either a strict liability or negligence theory.

Negligence. The court sustains CarMax’s demurrer to the negligence-based causes of action as well. While the opposition contends these negligence claims are based in part on CarMax’s own failure to properly test, service and sell the 2007 Hyundai “so as to make it likely to experience the aforementioned sudden unexpected acceleration,” the 1AC fails to plead facts which tend to show not only how or why CarMax’s alleged testing, servicing and selling of the 2007 Hyundai was either improper or inappropriate under the circumstances but also how or why CarMax’s alleged testing, servicing and selling of the 2007 Hyundai “make it likely to experience…sudden unexpected acceleration.” Regardless, the 1AC does not contain any facts which establish that

any duty of care CarMax may have had with respect to the testing, servicing and selling of the 2007 Hyundai was owed to anyone beyond Ms. Wander. In the absence of a factual basis for this court to conclude CarMax owed to plaintiffs any duty relative to the testing, servicing and selling of the 2007 Hyundai prior to its sale to Ms. Wander in 2009, plaintiffs have failed to establish any viable basis on which to hold CarMax liable for negligently failing to properly test, service and sell the 2007 Hyundai “so as to make it likely to experience the aforementioned sudden unexpected acceleration.”

For essentially the same reasons, the court holds that plaintiffs have not adequately pled facts to support a claim that CarMax negligent in failing to warn of the risk the 2007 Hyundai was “likely to experience…sudden unexpected acceleration” and even if may have been such a duty, it would have been owed only to Ms. Wander as the purchaser of the vehicle. Moreover, assuming a duty to warn was owed to Ms. Wander and CarMax did not provide an appropriate warning, the 1AC fails to state facts which establish a causal connection between the lack of warning at the time of Ms. Wander’s purchase in 2009 and the unfortunate accident occurring six years later in 2015.

Conclusion

For the reasons explained above, CarMax’s demurrer to the 1AC is sustained.

As this is the first challenge to the complaint on which the court has had an opportunity to rule, leave to amend is granted. Plaintiffs may file and serve a second amended complaint no later than 4/9/2018. Although not required by court rule or statute, plaintiffs are directed to present a copy of this order when the second amended complaint is presented for filing.

Defendant CarMax to respond within 30 days if the second amended complaint is personally served, 35 days if served by mail.

If defendant CarMax intends to demur to the second amended complaint or move to strike, it shall determine if any other defendant who has appeared in this action also intends to demur or move to strike. If so, all such defendants shall coordinate a single hearing date for the demurrers and motions to strike.