Case Name: Alan Travasso v. Bolea Motors, Inc., et al.

Case No.: 17CV315118

(1) Defendant Bolea Motors, Inc. dba Gilroy Toyota’s Demurrer to Plaintiff’s Unverified First Amended Complaint
(2) Defendant Bolea Motors, Inc. dba Gilroy Toyota’s Motion to Strike Portions of Plaintiff’s First Amended Complaint

Factual and Procedural Background

On or about November 5, 2015, plaintiff Alan Travasso (“Travasso”) went to defendant Bolea Motors, Inc. dba Gilroy Toyota (erroneously sued as Bolea Motors Inc, a limited liability company, Independent Dealer, dba Gilroy Toyota; hereafter, “Bolea”) to purchase a 2015 Toyota Sienna. (First Amended Complaint (“FAC”), ¶5.)

While at defendant Bolea, plaintiff Travasso discovered and disputed issues regarding obligations stated within an August 25, 2012 purchase contract administered by Bolea. (FAC, ¶6.) Defendant Bolea orally represented a purchase contract would be administered but instead sold plaintiff Travasso a vehicle lease. (FAC, ¶¶7 – 8.)

After taking possession of the vehicle, plaintiff Travasso discovered numerous problems with the contract administered by defendant Bolea including a misrepresentation of a lease instead of a purchase; misrepresentation of down payment figures; undisclosed prior debt balances, and rental charges applied. (FAC, ¶9.)

After attempting to remedy the issues by telephone to no avail, plaintiff Travasso took the vehicle back to the dealer on or about February 11, 2016 and requested amendments be made to the written contract pursuant to the verbally agreed upon purchase aspects. (FAC, ¶10.) Bolea agreed to amend the contract and represented to plaintiff Travasso that he would receive rebates and discounts on the Sienna purchase price after consummation of a sales transaction for Scion IA, if full payment for both vehicles ($40,492) was received. (FAC, ¶11.)

Bolea misrepresented the terms of the November 2015 sales contract stating that there was to be a purchase agreement when, in fact, there was not. (FAC, ¶12.)

Bolea misrepresented the terms of the February 2016 sales contract, stating there was to be a purchase contract for the delivery of a 2016 Scion IA and discounts applied to the sale of the 2015 Sienna after fully payment was received when, in fact, there was not. (FAC, ¶13.) Bolea’s reasons for denying claims for the 2016 Scion IA was because a contract had previously been signed and the sales agent did not have authorization to conduct the sale of the Scion IA on behalf of Bolea. (Id.)

Bolea misrepresented the terms of the August 2012 sales contract by stating conflicting information including obligations in the sale purchase agreement when, in fact, there was not. (FAC, ¶14.)

On August 28, 2017, plaintiff Travasso filed a Judicial Council form complaint against Bolea. Paragraph 8 of the form complaint states, “The following causes of action are attached … breach of contract – verbal; other: #37, other contractual dispute/ contractual fraud.” Paragraph 9 of the form complaint states, “Other allegations: – general negligence.” Bolea thereafter attached a one page, typewritten single-spaced “Statement of Claim to the Court” along with various exhibits.

On October 16, 2017, defendant Bolea filed a demurrer and motion to strike plaintiff Travasso’s complaint.

Plaintiff filed no opposition to Bolea’s demurrer and motion to strike. On January 23, 2019, the court sustained Bolea’s demurrer and granted Bolea’s motion to strike. The order after hearing, filed January 24, 2018, granted plaintiff Travasso 10 days leave to amend.

On February 2, 2018, plaintiff Travasso filed the operative FAC which asserts a single cause of action entitled, “Violation of the Consumers Legal Remedies Act.”

On March 23, 2018, defendant Bolea filed the two motions now before the court, a demurrer and motion to strike portions of plaintiff Travasso’s FAC.

I. Defendant Bolea’s demurrer to plaintiff Travasso’s FAC is OVERRULED.

A. Plaintiff’s requests in opposition.

As a preliminary matter, plaintiff Travasso makes certain requests in his opposition to the demurrer. For instance, plaintiff Travasso asks this court to enter default judgment against defendant Bolea and for leave to amend. Plaintiff Travasso’s requests are not properly before the court. Consequently, the court declines to rule on any of the requests for affirmative relief sought by plaintiff Travasso in opposition.

B. CLRA prefiling notice.

Plaintiff Travasso’s FAC asserts a single cause of action for violation of the Consumer Legal Remedies Act, Civil Code sections 1750, et seq. (“CLRA”). “The CLRA has a unique prefiling notice requirement, set forth in CC § 1782, designed to promote early settlement of consumer suits.” (Stern, BUS. & PROF. C. §17200 PRACTICE (The Rutter Group 2018) ¶10:55.) “CC § 1782 provides that “thirty days or more” prior to filing a CLRA action “for damages” the consumer “shall” notify the potential defendant “of the particular alleged violations of Section 1770” and demand that he or she “correct, repair, replace or otherwise rectify the goods or services alleged to be in violation of Section 1770.” (Id. at ¶10:56.)

The purpose of the notice requirement of section 1782 is to give the manufacturer or vendor sufficient notice of alleged defects to permit appropriate corrections or replacements. [Footnote.] The notice requirement commences the running of certain time constraints upon the manufacturer or vendor within which to comply with the corrective provisions. The clear intent of the act is to provide and facilitate pre-complaint settlements of consumer actions wherever possible and to establish a limited period during which such settlement may be accomplished. This clear purpose may only be accomplished by a literal application of the notice provisions.

(Outboard Marine Corp. v. Superior Court (1975) 52 Cal.App.3d 30, 40–41 (Outboard).)

“The 30-day letter is required as a condition precedent to maintaining an action for ‘damages’ under the CLRA. However, it may be waived by the defendant.” (Stern, BUS. & PROF. C. §17200 PRACTICE (The Rutter Group 2018) ¶10:59 citing Outboard, supra, 52 Cal.App.3d at p. 41.)

Defendant Bolea demurs to plaintiff Travasso’s FAC by arguing that plaintiff has not alleged any facts demonstrating compliance with the prefiling notice requirement except to make a “self-serving boilerplate allegation.” This allegation is found at paragraph 22 of the FAC wherein plaintiff Travasso alleges, “Defendants were properly notified of their violations pursuant to California Civil Code § 1782(a)(1) and (2), given more than 30 days to remedy the complaints, and refused to take any remedial action.” Plaintiff has adequately alleged compliance with the prefiling notice. “A demurrer tests only the legal sufficiency of the pleading. It admits the truth of all material factual allegations in the complaint; the question of plaintiff’s ability to prove these allegations, or the possible difficulty in making such proof does not concern the reviewing court.” (Committee on Children’s Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 213 – 214.)

C. Beyond the scope of permissible amendment.

Defendant Bolea argues next that plaintiff Travasso’s CLRA claim goes beyond the scope of permissible amendment. However, this is not a grounds for demurrer. (See Code Civ. Proc., §430.10.)

D. Statute of limitations.

Defendant Bolea demurs further on the basis that plaintiff Travasso’s CLRA claim, to the extent it is based upon an August 25, 2012 contract, is barred by the statute of limitations. A claim under the CLRA is subject to a three year statute of limitations which runs from the commission of the unfair commercial practice at issue. (Civ. Code, §1783; Purdum v. Holmes (2010) 187 Cal.App.4th 916, 924.)

Regardless of the merits of this argument, a defendant cannot demur to a portion of a cause of action. (See Financial Corp. of America v. Wilburn (1987) 189 Cal.App.3d 764, 778—“[A] defendant cannot demur generally to part of a cause of action;” see also PH II, Inc. v. Superior Court (1995) 33 Cal.App.4th 1680, 1682—“A demurrer does not lie to a portion of a cause of action;” Pointe San Diego Residential Community, L.P. v. Procopio, Cory, Hargreaves & Savitch, LLP (2011) 195 Cal.App.4th 265, 274—“ A demurrer challenges a cause of action and cannot be used to attack a portion of a cause of action.”)

E. Failure to plead justifiable reliance.

The CLRA declares unlawful a variety of “unfair methods of competition and unfair or deceptive acts or practices” used in the sale or lease of goods or services to a consumer. (Civ. Code, §1770, subd. (a).) “The standards for determining whether a representation is misleading under the False Advertising Law apply equally to claims under the CLRA. [Citation.] Conduct that is ‘likely to mislead a reasonable consumer’ thus violates the CLRA. [Citation.]” (Colgan v. Leatherman Tool Group, Inc. (2006) 135 Cal.App.4th 663, 680.)

Defendant Bolea argues the CLRA claim fails because plaintiff cannot plead justifiable reliance. “[R]eliance is required for CLRA actions.” (Princess Cruise Lines, Ltd. v. Superior Court (2009) 179 Cal.App.4th 36, 46.) Defendant Bolea focuses on plaintiff Travasso’s allegation that Bolea misrepresented the November 2015 contract was for a purchase rather than a lease of the Sienna vehicle. Defendant Bolea also focuses on the allegation that it allegedly misrepresented the February 2016 contract included the purchase of a Scion vehicle. Defendant Bolea contends plaintiff Travasso cannot justifiably rely on these misrepresentations because plaintiff Travasso attached copies of these two contracts to his original complaint and the contracts, on their face, disclose, respectively, that they were for a lease of the Sienna, not a purchase, and that the purchase was for a single vehicle (Sienna), not the purchase of two vehicles (Sienna and Scion).

Again, regardless of the merits, defendant Bolea’s demurrer cannot be sustained because it attacks only a portion of the cause of action. Plaintiff Travasso’s cause of action alleges multiple misrepresentations and are not limited to the two that defendant Bolea focuses on in demurring.

F. Uncertainty.

As a final basis for demurrer, defendant Bolea contends the FAC is uncertain. For instance, paragraph 21 refers to a “service contract” when there is no mention of a service contract anywhere else in the pleading. Defendant Bolea also contends the FAC is uncertain because it alleges seven different acts which are prohibited by the CLRA but some or all of them are not supported by the factual allegations. For instance, plaintiff Travasso alleges defendant Bolea violated Civil Code section 1770, subdivision (a)(2) by “Misrepresenting the source, sponsorship, approval, or certification of goods or services,” but there are no allegations regarding any such misrepresentations. Instead, the misrepresentations are with regard to “contract types being administered as a lease vs purchase, misrepresented down payment figures, discrepant/undisclosed obligated prior debt balances, and rental charges applied.” (FAC, ¶9.) Bolea is also alleged to have “misrepresented the terms of the November 2015 sales contract, stating that there was to be a purchase agreement administered when in fact there was not.” (FAC, ¶12.) Bolea allegedly “misrepresented the terms of the February 2016 sales contract, stating that there was to be a purchase agreement administered for the delivery of a 2016 Scion IA, and discounts applied to the sale of the 2015 Sienna after full payment was received, when in fact there was not.” (FAC, ¶13.) Bolea allegedly “misrepresented the terms of the August 2012 sales contract, by stating conflicting information both verbally and on the face of the contract by including obligations in the sale purchase agreement administered when in fact there was not.” (FAC, ¶14.) The court agrees with Bolea that the alleged misrepresentations do not concern “the source, sponsorship, approval, or certification of goods or services.”

While the facts do not appear to support a violation of Civil Code section 1770, subdivision (a)(2), plaintiff Travasso alleges several other violations including a violation of Civil Code section 1770, subdivision (a)(17), “Representing that a consumer will receive a rebate, discount, or other economic benefit if the earning of the benefit is contingent on an event to occur subsequent to the consummation of the transaction.” With this particular subdivision,

the Legislature intended to prohibit merchants from advertising a rebate or discount when they conceal from consumers the conditions to be satisfied to receive the rebate or discount. Specifically, the relevant Assembly Committee Report explains by way of example that this subdivision would prevent a situation where the consumer would “be required to buy an additional product before he could receive the advertised discount, or that he buy a more expensive and high quality product than the one advertised.” (Assem. Com. on Judiciary, Rep. on Assem. Bill No. 292 (Sept. 30, 1970) 4 Assem. J. (1970 Reg. Sess.) p. 8466.)

(Kramer v. Intuit Inc. (2004) 121 Cal.App.4th 574, 580.)

Defendant Bolea argues certain alleged violations of the CLRA are uncertain, but does not claim uncertainty with regard to plaintiff Travasso’s alleged violation of Civil Code section 1770, subdivision (a)(17). “A demurrer for uncertainty is strictly construed, even where a complaint is in some respects uncertain, because ambiguities can be clarified under modern discovery procedures.” (Khoury v. Maly’s of California, Inc. (1993) 14 Cal.App.4th 612, 616.) Although plaintiff Travasso’s CLRA claim is in some respects uncertain, “the allegations are sufficiently clear to apprise the defendant of the issues that must be met.” (Gonzales v. State of California (1977) 68 Cal.App.3d 621, 631.)

Accordingly, defendant Bolea’s demurrer to plaintiff Travasso’s FAC on the ground that the pleading does not state facts sufficient to constitute a cause of action [Code Civ. Proc., §430.10, subd. (e)] and on the ground that the pleading is uncertain [Code Civ. Proc., §430.10, subd. (f)] is OVERRULED.

II. Defendant Bolea’s motion to strike portions of plaintiff Travasso’s FAC is GRANTED, in part.

A. Code of Civil Procedure, section 435.5.

Defendant Bolea moves to strike either the entirety or portions of plaintiff Travasso’s FAC. Defendant Bolea’s motion to strike is made pursuant to Code of Civil Procedure sections 435 and 436. However, “[b]efore filing a motion to strike pursuant to this chapter, the moving party shall meet and confer in person or by telephone with the party who filed the pleading that is subject to the motion to strike for the purpose of determining if an agreement can be reached that resolves the objections to be raised in the motion to strike. … As part of the meet and confer process, the moving party shall identify all of the specific allegations that it believes are subject to being stricken and identify with legal support the basis of the deficiencies. The party who filed the pleading shall provide legal support for its position that the pleading is legally sufficient, or, in the alternative, how the pleading could be amended to cure any legal insufficiency.” (Code Civ. Proc., §435.5, subd. (a)(1).)

“The moving party shall file and serve with the motion to strike a declaration stating either of the following: (A) The means by which the moving party met and conferred with the party who filed the pleading subject to the motion to strike, and that the parties did not reach an agreement resolving the objections raised by the motion to strike. (B) That the party who filed the pleading subject to the motion to strike failed to respond to the meet and confer request of the moving party or otherwise failed to meet and confer in good faith.” (Code Civ. Proc., §435.5, subd. (a)(3).)

In furtherance of judicial economy, the court will overlook defendant Bolea’s failure to comply with Code of Civil Procedure section 430.41 in this instance but hereby places defendant Bolea and its counsel on notice that they are required to comply with the Code of Civil Procedure in the future.

B. Plaintiff’s requests in opposition.

Just as he did in opposition to the demurrer, plaintiff Travasso makes certain requests in his opposition to the motion to strike. As previously indicated, plaintiff Travasso’s requests are not properly before the court. Consequently, the court declines to rule on any of the requests for affirmative relief sought by plaintiff Travasso in opposition.

C. Scope of permissible amendment.

Under general rules of civil procedure, a motion to strike may be brought on the following two grounds: (a) Strike out any irrelevant, false, or improper matter inserted in any pleading. (b) Strike out all or any part of any pleading not drawn or filed in conformity with the laws of this state, a court rule, or an order of the court. (Code Civ. Proc., §436.) Irrelevant matter includes “immaterial allegations.” (Code Civ. Proc., §431.10, subd. (c).) “An immaterial allegation in a pleading is any of the following: (1) An allegation that is not essential to the statement of a claim or defense; (2) An allegation that is neither pertinent to nor supported by an otherwise sufficient claim or defense; (3) A demand for judgment requesting relief not supported by the allegations of the complaint or cross-complaint.” (Code Civ. Proc., §431.10, subd. (b).)

Defendant Bolea moves to strike the entirety of plaintiff Travasso’s FAC on the ground that it exceeds the scope of permissible amendment following Bolea’s demurrer to plaintiff Travasso’s original complaint. “Generally, where a court grants leave to amend after sustaining a demurrer, the scope of permissible amendment is limited to the cause(s) of action to which the demurrer has been sustained: ‘Such granting of leave to amend must be construed as permission to the pleader to amend the cause of action which he pleaded in the pleading to which the demurrer has been sustained.’” (Weil & Brown, CIV. PRO. BEFORE TRIAL (The Rutter Group 2017) ¶6:635.5, p. 6-181 citing People v. Clausen (1967) 248 Cal.App.2d 770, 785 – 786; Harris v. Wachovia Mortg., FSB (2010) 185 Cal.App.4th 1018, 1023.) “When a demurrer is sustained with leave to amend, the leave must be construed as permission to the pleader to amend the causes of action to which the demurrer has been sustained, not add entirely new causes of action. [¶] Addition of a new cause of action may be proper, however, when it ‘directly responds to the court’s reason for sustaining the earlier demurrer.’ ” (Id. at ¶7:148.1a, p. 7(I)-67 citing Patrick v. Alacer Corp. (2008) 167 Cal.App.4th 995, 1015.)

Here, the court previously sustained Bolea’s demurrer to plaintiff Travasso’s original Judicial Council form complaint which purportedly asserted causes of action for breach of contract, fraud, and negligence. However, the court sustained the demurrer largely due to the fact that plaintiff failed to file any opposition. The court’s ruling simply granted plaintiff leave to amend. While it would have been preferable for plaintiff Travasso to request leave to add a new cause of action, the court finds no prejudice here. In light of the liberality with which amendments are allowed, such a request by plaintiff would likely have been granted. Consequently, the court declines to strike the entire FAC merely because plaintiff Travasso is now asserting a different legal theory.

D. Punitive damages.

At paragraph 23 of the FAC, plaintiff Travasso alleges, “Defendants have violated California Civil Code § 1750 et seq. by failing to replace or repurchase the Vehicle and, therefore, are subject to punitive damages pursuant to California Civil Code § 1780(a)(4).”

Among other grounds, defendant Bolea moves to strike this allegation by arguing that plaintiff has not alleged a factual basis for seeking punitive damages against Bolea, a corporate entity.

“In 1980, the Legislature added subdivision (b) to section 3294, to add a special qualification for employer liability for those damages. Subdivision (b) states, in relevant part, that an employer shall not be liable for punitive damages based on an employee’s acts unless ‘the employer had advance knowledge of the unfitness of the employee and employed him or her with a conscious disregard of the rights or safety of others or authorized or ratified the wrongful conduct for which the damages are awarded or was personally guilty of oppression, fraud, or malice.’ The statute includes an additional qualification for corporate employers, who may not be liable for punitive damages unless ‘the advance knowledge and conscious disregard, authorization, ratification or act of oppression, fraud, or malice [is] on the part of an officer, director, or managing agent of the corporation.’

(White v. Ultramar, Inc. (1999) 21 Cal.4th 563, 566 (White).)

Plaintiff Travasso offers no argument or legal authority in opposition to defendant Bolea’s point with regard to punitive damages.

Accordingly, defendant Bolea’s motion to strike paragraph 23 of the FAC is GRANTED with 10 days’ leave to amend.

E. CLRA prefiling notice.

Defendant Bolea moves to strike plaintiff Travasso’s claim for monetary damages on the basis that plaintiff has not filed the requisite CLRA prefiling notice. As discussed above, plaintiff Travasso has adequately alleged compliance with the prefiling notice at paragraph 22 of the FAC. Accordingly, defendant Bolea’s motion to strike plaintiff Travasso’s claims for monetary damages is DENIED.

F. Civil penalties.

Defendant Bolea moves to strike plaintiff Travasso’s prayer for a civil penalty at paragraph 3 of his prayer for relief on the basis that civil penalties are not authorized by the CLRA. While the CLRA does allow for civil penalties in certain circumstances (see Civ. Code, §1780, subd. (b)), plaintiff has not pleaded any facts which would support a claim for a civil penalty.

Accordingly, defendant Bolea’s motion to strike paragraph 3 of the prayer for relief in plaintiff Travasso’s FAC is GRANTED with 10 days’ leave to amend.

G. Injunctive relief.

At paragraph 4 of his prayer for relief, plaintiff Travasso asks “[f]or an injunction ordering Defendant to desist from selling service contracts without disclosing the actual terms.” Defendant Bolea moves to strike this allegation on the basis that the underlying facts, except at paragraph 24, do not make any reference to a “service contract” and instead refer to either purchase contracts or lease contracts.

In opposition, plaintiff concedes the reference to a service contract is a typographical error and asks for leave to correct this mistake.

Accordingly, defendant Bolea’s motion to strike paragraph 4 of the prayer for relief in plaintiff Travasso’s FAC is GRANTED with 10 days’ leave to amend.