2013-00148920-CU-BC

Thomas F. Weimer vs. Ford Motor Company

Nature of Proceeding: Hearing on Demurrer

Filed By: Takahashi, Brian

Defendant Ford Motor Company’s (“Ford”) Demurrer to the 1st amended complaint is
overruled.

Ford’s Requests for Judicial Notice are granted.

Plaintiff’s Request for Judicial Notice is granted.

Plaintiffs purchased a new 2005 Ford F-350 Super Duty on March 25, 2005. The
Complaint was filed on July 29, 2013. Plaintiffs allege causes of action for fraud,
Breach of Express and Implied Warranty under the Song-Beverly Consumer Warranty
Act and the Consumer Legal Remedies Act. Plaintiffs allege that the vehicle was
delivered to them with serious defects and developed other serious defects and
nonconformities to warranty including engine defects. Ford allegedly made
representations that the 6.0 Diesel engine was the longest lasting diesel motor and
that the 6.0 Power Strike is the longest lasting diesel in its class, along with other
similar misrepresentations. (FAC ¶14-15) Plaintiffs allege they were told by the dealer
that the 2005 truck would out-perform plaintiff’s 2000 F-350. Plaintiffs allege that they
began experiencing problems after 19,000 miles. Plaintiffs thereafter took the truck in
for repairs at least 12 times with issues including sudden surging, loss of power, lack
of acceleration, failure to start, and smoke emitting from the exhaust. They allege that
each time they picked the truck up from the facility they were told that the problem was
solved. (FAC ¶ 20) On February 21, 2013 plaintiffs contacted the Better Business
Bureau pursuant to instructions in their Owners Manual and asked for a repurchase or
replacement of the vehicle under the Lemon Law. The request to the BBB, as well as
a subsequent request to Ford for replacement, was denied.

Plaintiffs allege that the statutes of limitation are tolled by the discovery rule and by the
doctrine of fraudulent concealment. Plaintiffs allege that Ford knew of the defects in
the engine years before the before the truck was sold and concealed the defects
thereafter. In 2007, Ford sued the engine supplier, Navistar. (FAC ¶ 32). Plaintiffs

were putative class members in another consolidated class actions against Ford that
was filed in 2010, but they timely requested to be excluded from the settlement in that
action and thereafter filed the instant action.

1st cause of action Fraud, 2nd cause of action Negligent Misrepresentation, 3rd
cause of action Fraud in the Inducement, 4th cause of action Fraud in the
Performance of a Contract:

Overruled. Ford contends that the first four causes of action (fraud claims) are barred
by their respective statutes of limitation (3 years) and the Economic Loss rule.
Pursuant to the Economic Loss rule, Ford contends that all four causes of action are
barred because plaintiff did not suffer personal injury.(“The economic loss rule requires
a purchaser to recover in contract for purely economic loss due to disappointed
expectations, unless he can demonstrate harm above and beyond a broken
contractual promise.” Robinson Helicopter Co. Inc. v. Dana Corp (2004) 34 Cal.4th
979, 988). The demurrer on the ground the action violates the Economic Loss rule is
overruled on the ground that a cause of action is stated for fraud even absent a
personal injury. The economic rule only bars a type of damages, not a cause of
action. Fraud is not limited to “tort damages.” The court is not ruling at this time
whether the economic loss rule ultimately applies in this case to exclude certain
claims.

Plaintiffs have adequately alleged, for pleading purposes, legal and equitable tolling
and late discovery of the alleged misrepresentations based on the allegations that
Ford knew of the inherent defects in the engines for many years before and after
plaintiffs bought the truck, yet chose to conceal the defects and inform plaintiffs that
the problems had been fixed. The discovery of the fraud is the subject of a factual
dispute that cannot be determined on a demurrer. Plaintiffs contend that the elements
of plaintiffs’ claim were present on the date of their last repair, but that the claim was
tolled by the discovery rule.

Plaintiffs were putative class members of the action Custom Underground v Ford
Motor Company, which they allege was filed within 4 years of accrual or discovery of
plaintiffs’ claim (on January 8, 2010.) Pursuant to the doctrine of equitable tolling and
the doctrine of legal tolling set forth in American Pipe and Const. Co. v Utah (1974)
414 U.S. 538, plaintiffs allege the filing of the Custom Underground case tolls the
statute of limitation. The class action sufficiently protects the efficiency and economy
of the litigation and the class action provides defendants with sufficient notice of the
individual claims which may be asserted against them in the future by class members.
(Jolly v Eli Lilly & Co. (1988) 44 Cal.3d 1103, 1118-1120. ) Thus, the for pleading
purposes the allegations that the statute was tolled from January 8, 2010 to July 29,
2013 are sufficient.

5th cause of action Consumer Legal Remedies Act Civil Code 1750 et seq.
Overruled.
Plaintiffs must allege the following in order to allege a violation of the CLRA (Civil Code
section 1760): (1) the employment of an unfair method of competition or deceptive acts
or practices (FAC, para. 276.); (2) Plaintiffs relied on the misrepresentation (para.
277.); (3) Defendant’s deception caused Plaintiffs’ harm (FAC, para.285,); (4)
Defendant intended the misrepresentation to result in the sale of goods to any
consumer (FAC, 276.); (5) Plaintiffs suffered damages ( paras. 286-293.)

Ford contends that this cause of action is barred by the three year statute of
limitations. Ford contends that the legislative history of this statute indicates that the
claim was intended to accrue on the date the vehicle was purchased and that the
statute expired three years thereafter. Ford also contends that the plaintiffs fail to
identify any representations other than puffery.

The Court finds that the alleged misrepresentations regarding the quality of the diesel
engine constitute more than puffery and is the type of statement that would be likely to
induce customer reliance. Moreover, for pleading purposes the claims are tolled as
set forth above.

Answer to be filed and served on or before May 2, 2014.

The minute order is effective immediately. No formal order pursuant to CRC Rule
3.1312 or further notice is required.

2013-00148920-CU-BC

Thomas F. Weimer vs. Ford Motor Company

Nature of Proceeding: Motion to Strike Implied Warranty Claims

Filed By: Takahashi, Brian

Defendant Ford Motor Company’s (“Ford”) Motion to Strike Implied Warranty Claims
language in the 6th cause of action for Violation of Song-Beverly Act in the 1st
Amended Complaint is denied.

The Requests for Judicial Notice are granted.

Plaintiffs purchased a new 2005 Ford F-350 Super Duty on March 25, 2005. The
Complaint was filed on July 29, 2013. Plaintiffs allege causes of action for Breach of
Express and Implied Warranty under the Song-Beverly Consumer Warranty Act and
the Consumer Legal Remedies Act (Civil Code section 1790 et seq. Plaintiffs allege
that the vehicle was delivered to them with serious latent defects and developed other
serious defects and nonconformities to warranty including engine defects.

Ford seeks to strike Paragraph 298, line 7, the words “and implied,” and paragraphs
303 and 304.

Ford contends that the implied warranty claim under the Song Beverly Act is untimely.
Ford seeks to strike those portions of the 6th cause of action that refer to the Implied
Warranty, contending any such claims expired on March 25, 2010.

Under the Song-Beverly Act, Civ. Code, § 1790 et seq., every retail sale of consumer
goods sold in California includes an implied warranty by the manufacturer and the
retail seller that the goods are merchantable unless the goods are expressly sold as is
or with all faults. Civ. Code, §§ 1791.3, 1792. Merchantability, for purposes of the Song
-Beverly Act, means that the consumer goods: (1) Pass without objection in the trade
under the contract description; (2) Are fit for the ordinary purposes for which such
goods are used; (3) Are adequately contained, packaged, and labeled; and (4)

Conform to the promises or affirmations of fact made on the container or label. Civ.
Code, § 1791.1. The core test of merchantability is fitness for the ordinary purpose for
which such goods are used. Such fitness is shown if the product is in safe condition
and substantially free of defects. When there has been a breach of the implied
warranty of merchantability, a buyer may bring an action for the recovery of damages
and other legal and equitable relief. Civ. Code, § 1794, subd. (a).

The duration of the implied warranty is at most one year following the sale of the new
consumer goods to the buyer. “[I]n no event shall such implied warranty have a
duration of less than 60 days nor more than one year following the sale of new
consumer goods to a retail buyer.” Civil Code section 1791.1(c).

Pursuant to Commercial Code section 2725(1), “a breach of warranty occurs when
tender of delivery is made, except that where a warranty explicitly extends to future
performance of the goods and discovery of the breach must await the time of such
performance that cause of action accrues when the breach is or should have been
discovered.” Com. Code section 2725(1). Ford contends that unlike a written
warranty, an implied warranty is not an agreement for future performance, therefore
the implied warranty expired after one year and the action must be filed within four
years. Ford relies on Atkinson v Elk Corp. of Texas (2006) 142 Cal.App.4th 212, in
which the court held that the roof shingles that were purchased had to have failed
within the first year and that the lawsuit had to be filed within four years in order to be
timely.

Plaintiffs rely on Mexia v. Rinker Boat Co. (2009) 174 Cal.App.4th 1297 wherein the
court held that latent defects that manifest outside the first year are covered by the
implied warranty. In Mexia, the plaintiff purchased a boat containing a latent defect
involving corrosion of the engine that did not surface until two years after the purchase.
The Mexia court, interpreting the legislative history of the statute, held that the claim
was not barred. The Court rejects Ford’s argument that its own interpretation of the
legislative history requires the Court to ignore the Mexia holding. Further, an absurd
and unjust result should not be ascribed to the legislature. As noted in Mexia, in order
to provide greater protections and remedies for consumers, the Legislature enacted
the Song-Beverly Act. (Robertson v. Fleetwood Travel Trailers of California, Inc.
(2006) 144 Cal.App.4th 785, 801 It “is strongly pro-consumer” and “makes clear its pro
-consumer remedies are in addition to those available to a consumer pursuant to the
[Uniform] Commercial Code … .” (Murillo v. Fleetwood Enterprises, Inc. (1998) 17
Cal.4th 985, 990 .) To “the extent that the [Song-Beverly] Act gives rights to the buyers
of consumer goods, it prevails over conflicting provisions of the Uniform Commercial
Code.” (4 Witkin, Summary of Cal. Law (10th ed. 2005) Sales, § 52, p. 63, citing Civ.
Code, § 1790.3.)

One innovation of the Song-Beverly Act is an express provision for a duration of the
implied warranty of merchantability. (Civ. Code, § 1791.1, subd. (c).) The Uniform
Commercial Code, by contrast, did not expressly set forth a duration of the warranty.
However, in order to prove a breach of the implied warranty, the purchaser was
required to show that the defect existed at the time the product was sold or delivered.
(1 White & Summers, Uniform Commercial Code (5th ed. 2006) § 9-12, pp. 657-658;
see, e.g., Makuc v. American Honda Motor Co. (1st Cir. 1987) 835 F.2d 389, 392-393;
Hargett v. Midas International Corp. (Miss. 1987) 508 So.2d 663, 665.) In effect,
therefore, there is no “duration” of the implied warranty under the Uniform Commercial
Code in any meaningful sense; the product is either merchantable or not (and a breach

of the implied warranty occurs or not) only at the time of delivery. (See Cal. U. Com.
Code, § 2725, subd. (2).) Indeed, as noted in the decision, the implied warranty of
merchantability may be breached by a latent defect undiscoverable at the time of sale.
(See Moore v. Hubbard & Johnson Lumber Co. (1957) 149 Cal.App.2d 236, 241;
Brittalia Ventures v. Stuke Nursery Co., Inc. (2007) 153 Cal.App.4th 17, 24; Garlock
Sealing Technologies, LLC v. NAK Sealing Technologies Corp. (2007) 148
Cal.App.4th 937, 950-952.) Indeed, “[u]ndisclosed latent defects … are the very evil
that the implied warranty of merchantability was designed to remedy.” ( Willis Mining,
Inc. v. Noggle (1998) 235 Ga.App. 747, 749. Mexia, supra, at pp. 1304-1305.

Answer to be filed on or before May 2, 2014.

The minute order is effective immediately. No formal order pursuant to CRC Rule
3.1312 or further notice is required.