MICHAEL HIGH v. FORD MOTOR COMPANY

Case No.:  1-14-CV-259545

DATE:  September 11, 2014

TIME:  9:00 a.m.

DEPT.: 3

As an initial matter the Court in ruling on a demurrer or motion to strike considers only the pleading under attack, any attached exhibits (part of the “face of the pleading”) and any facts or documents for which judicial notice is properly requested and may be granted.  Any purported requests for judicial notice that do not comply with Rule of Court 3.1113(l) are denied.  The Court cannot consider extrinsic evidence in ruling on a demurrer or motion to strike.  “We treat the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law.”  Piccinini v. Cal. Emergency Management Agency (2014) 226 Cal App 4^th 685, 688, citing Blank v. Kirwan (1985) 39 Cal.3d 311, 318.

Defendant’s initial request for judicial notice of the fact that the original pleading in this matter was filed on January 24, 2014 is GRANTED pursuant to Evid. Code §452(d).  Defendant’s initial request for judicial notice of various legislative history materials (exhibits A-E) in support of its motion to strike is DENIED.  “Preliminarily, we note that resort to legislative history is appropriate only where statutory language is ambiguous.  . . .  If there is no ambiguity in the language, we presume the Legislature meant what it said, and the plain meaning of the statute governs.”  Kaufman & Broad Communities, Inc. v. Performance Plastering, Inc. (2005) 133 Cal App 4^th 26, 29, internal citations omitted.

Plaintiff’s request for judicial notice of several orders on demurrers from other superior courts in California (exhibits 1-19) is DENIED.  A precondition to judicial notice in either its permissive or mandatory form is that the matter to be noticed be relevant to the material issue before the Court.  Silverado Modjeska Recreation and Park Dist. v. County of Orange (2011) 197 Cal App 4^th 282, 307, citing People v. Shamrock Foods Co. (2000) 24 Cal 4^th 415, 422 fn. 2.  What other superior courts have ruled on demurrers to (unknown) pleadings is completely irrelevant to this Court’s analysis of the pleading before it.

Defendant’s further request for judicial notice, filed with its Reply, of a copy of the Second Amended Class Action Complaint in Custom Underground, Inc. v. Ford Motor Co. (N.D. Ill.) Case No. 1:10-CV-00127, is GRANTED pursuant to Evid. Code §452(d) only.  While the Complaint cannot be noticed as to the truth of its contents, the Court can and does take notice that the Custom Underground complaint alleges claims for breach of implied warranty and breach of express warranty.

Defendant’s demurrer to the 1^st, 2^nd, 3^rd, 4^th and 5^th causes of action in the FAC on grounds of uncertainty is OVERRULED.  Uncertainty is a disfavored ground for demurrer and is typically sustained only where the pleading is so bad the responding party cannot reasonably respond.  See Khoury v. Maly’s of Cal., Inc. (1993) 14 Cal App 4^th 612, 616 (“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.”)  Here it is apparent from Defendant’s other arguments that it understands perfectly well what each of these causes of action at least attempts to allege and there is no true uncertainty.

Defendant’s demurrer to the FAC’s 1^st cause of action (Fraud in the Inducement: Intentional Misrepresentation), 2^nd cause of action (Negligent Misrepresentation), 3^rd cause of action (Fraud in the Inducement: Concealment), 4^th cause of action (Fraud in the Performance of a Contract: Intentional Misrepresentation) and 5^th cause of action (Consumer Legal Remedies Act, “CLRA”) on the grounds that they are each time-barred by the three-year statutes of limitations set forth in CCP §338(d) (claims 1-4) and Civ. Code §1783 (claim 5) is SUSTAINED with 10 days’ leave to amend.

 

The FAC admits on its face that Plaintiff purchased his vehicle on July 30, 2005, that he did so in reliance on allegedly false statements by Defendant as to the quality and reliability of the vehicle made before this purchase, and that the vehicle was delivered to Plaintiff “with serious defects and nonconformities to warranty.”  See FAC at 6-7.  Plaintiff’s original complaint was not filed until Jan. 24, 2014.  Based on the face of the pleading the five targeted claims each became time-barred by no later than approximately July 30, 2008.  “When a plaintiff relies on a theory of fraudulent concealment, delayed accrual, equitable tolling, or estoppel to save a cause of action that otherwise appears on its face to be time-barred, he or she must specifically plead facts which, if proved, would support the theory.”  Mills v. Forestex Co. (2003) 108 Cal App 4^th 625, 641.  As presently pled the FAC does not satisfy this standard.

 

“Under the discovery rule, the statute of limitations begins to run when the plaintiff suspects or should suspect that her injury was caused by wrongdoing, that someone has done something wrong to her.  The limitations period begins once the plaintiff has notice or information of circumstances to put a reasonable person on inquiry.  A plaintiff need not be aware of the specific ‘facts’ necessary to establish the claim; that is a process contemplated by pretrial discovery.  Once the plaintiff has a suspicion of wrongdoing, and therefore an incentive to sue, she must decide whether to file suit or sit on her rights.  So long as a suspicion exists, it is clear that the plaintiff must go find the facts; she cannot wait for the facts to find her.”  Mills v. Forestex Co., supra, at 642-643.

 

“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.’ 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.’” Fox v. Ethicon Endo-Surgery, Inc. (2005) 35 Cal.4^th 797, 808, internal citations omitted, emphasis added.  To be entitled to the benefit of the delayed discovery rule a plaintiff must specifically plead the time and manner of discovery and show the following: 1) Plaintiff had an excuse for late discovery; 2) Plaintiff was not at fault in discovering facts late; 3) Plaintiff did not have actual or presumptive knowledge to be put on inquiry; 4) Plaintiff was unable to make earlier discovery despite reasonable diligence.  E-Fab, Inc. v. Accountants, Inc. Services (2007) 153 Cal App 4^th 1308, 1319, 1324-1325.

 

The FAC at 64 alleges that “[i]t was not until the engine in Plaintiff’s vehicle first required another repair for similar problems after the express warranty had expired on July 20, 2012, that Plaintiff first discovered, or reasonably could have discovered, that Ford’s previous repairs to the engine during the express warranty period had failed to conform Plaintiff’s vehicle to the express warranty.  On that date, Plaintiff first discovered that Ford misrepresented the engine quality and its ability to maintain the vehicle under warranty to intentionally prevent Plaintiff from discovering the irreparable non-conformities in the vehicle.   Plaintiff could not, thorough reasonable and diligent investigation, have discovered such on an earlier date because of Ford’s fraudulent misrepresentations and concealment of the defects . . .”  Court’s emphasis.  These allegations, by merely reciting the elements, do not satisfy the specific pleading standard for the delayed discovery rule and appear to contradict earlier allegations that Plaintiff was aware of problems with the vehicle from its delivery onward sufficient to put a reasonable person on inquiry as to claims for fraud in the inducement of the sale of the vehicle, fraud in the performance of the sales contract and for violation of the CLRA based on the sale of the vehicle.

 

Because Plaintiff has failed to adequately plead delayed discovery, Plaintiff’s allegations of tolling are equally ineffective.  Tolling can only pause and extend a limitations period that has not yet expired, it cannot resurrect claims that were already time-barred before the allegedly tolling event.  Furthermore, “[e]quitable tolling ‘halts the running of the limitations period so long as the plaintiff uses reasonable care and diligence in attempting to learn the facts that would disclose the defendant’s fraud or other misconduct.’  The doctrine ‘focuses primarily on the plaintiff’s excusable ignorance of the limitations period. [It] is not available to avoid the consequences of one’s own negligence.’” Sagehorn v. Engle (2006) 141 Cal.App.4^th 452, 460-461, internal citations omitted.  If Plaintiff cannot satisfy the specific pleading standards for delayed discovery, he cannot satisfy the specific pleading standards for equitable tolling.

 

Plaintiff alleges that under the “American Pipe rule,” his status as a putative class member in class actions filed on January 25, 2012 in San Diego County Superior Court (the Adams action), on November 5, 2010 in the federal district court for the Southern District of California (the Burns action) and on January 8 2010 in the federal district court for the Northern District of Illinois (the Custom Underground action), see FAC at 69-73, 87-92 and 109-114, all of which were consolidated into the federal multi-district litigation In re: Navistar 6.0 L Diesel Engine Products Liability Litigation; Custom Underground v. Ford Motor Company, United States District Court for the Northern District of Illinois, Eastern Division, Case No. 11 C 2496 (“In re Navistar”)  tolls the statute of limitations for all of his claims.  However the FAC admits that In re Navistar proceeded to a settlement which Plaintiff opted out of.

 

It is not clear that the American Pipe rule tolls any limitations period in such circumstances.  “In American Pipe, the United States Supreme Court held that, under limited circumstances, if class certification is denied, the statute of limitations is tolled from the time of commencement of the suit to the time of denial of certification for all purported members of the class who either make timely motions to intervene in the surviving individual action, or who timely file their individual actions.”  Jolly v. Eli Lilly & Co. (1988) 44 Cal 3d 1103, 1119, internal citations omitted, emphasis added.  See also Cal. Rest. Mgmt. Sys. v. City of San Diego (2011) 195 Cal App 4^th 1581, 1595, citing American Pipe (“[T]he filing of the class action can toll the statute of limitations with respect to individual members of the putative class until the class is denied certification.”)  Court’s emphasis.  The logic of tolling in such circumstances is that individuals with claims not already time-barred who opt to participate in the class-action procedure are not penalized if the class never achieves certification or if the class is later de-certified for reasons they could not have reasonably foreseen and are not related to the potential merits of their individual claims.  Plaintiff has not established that the targeted claims did not accrue and become time-barred before any of the cited class actions were filed and he has cited no authority for the proposition that a class action that proceeds to a settlement tolls the limitations period for the individual claims of those who voluntarily choose to opt out after a settlement is reached.

 

Further problems with this tolling argument include that American Pipe tolling in a California state court action cannot be based on a class action filed in another jurisdiction.  See Clemens v. DaimlerChrysler Corp. (9^th Cir. Cal. 2008) 534 F.3d 1017, 1025 (“The California Supreme Court has not adopted such cross-jurisdictional tolling, however, and few states do.  . . .  Accordingly, the weight of authority and California’s interest in managing its own judicial system counsel us not to import the doctrine of cross-jurisdictional tolling into California law. The rule of American Pipe–which allows tolling within the federal court system in federal question class actions–does not mandate cross-jurisdictional tolling as a matter of state procedure. We therefore conclude that the filing of the Illinois action did not toll the statute, and [Plaintiff’s] Civil Code fraud claim is barred by the three-year statute of limitations.”)  See also In re Ford Tailgate Litig. (N.D.Cal. 2014) 2014 U.S. Dist. LEXIS 32287 *1, *32 (“The equitable tolling doctrine articulated in American Pipe, however, applies only to federal question claims and not to plaintiffs’ state law claim under the CLRA.”)

 

The California Supreme Court in Jolly also “cautioned against a potential danger of abuse of the ‘generous’ rule of American Pipe: Class actions might be filed merely to evade limitations periods.  To avoid such abuse, tolling is to be allowed only where the class action and the later individual action or intervention are based on the same claims and subject matter and similar evidence.”  Perkin v. San Diego Gas & Elec. Company (2014) 225 Cal App 4^th 492, 504, internal citation omitted, Court’s emphasis.  As to at least one of the alleged class actions, the Custom Underground action, Defendant has established through its request for judicial notice that it alleged only breach of warranty claims, which are not the “same claims” as fraud claims.  The FAC itself also describes the Adams class action as primarily alleging breaches of warranty.

 

Because the Court has elected to sustain the demurrer with leave to amend based on the statute of limitations argument it is not necessary for the Court to consider Defendant’s other arguments such as that puffery cannot be a basis for the fraud claims as such statements are held to be statements of opinion.

 

Defendant’s Motion to Strike those portions of the FAC’s 6^th cause of action for Violation of the Song-Beverly Act that allege a breach of the implied warranty of merchantability (see Defendant’s Notice of Motion at 2:1-3) on the basis that such allegations are time-barred is GRANTED with 10 day’s leave to amend.  A motion to strike can be brought to attack purported defects in a portion of a claim that cannot be addressed by a demurrer (which does not apply to only a part of a cause of action).  PH II, Inc. v. Sup. Ct. (1995) 33 Cal App 4^th 1680, 1682-1683. Such motions are strictly limited.  “We have no intention of creating a procedural ‘line item veto’ for the civil defendant.”  Id. at 1683.  The implied warranty of merchantability arises by operation of law and is not a warranty of future performance.  The FAC alleges at 6-7 that the vehicle was delivered to Plaintiff on July 30, 2005 with “nonconformities” to warranty.  The breach of the implied warranty thus allegedly occurred at the time of delivery.  The duration of the implied warranty of merchantability under California law is limited to one year. Atkinson v. Elk Corporation of Texas (2006) 142 Cal App 4^th 212, 230-232 (holding that Civ. Code §1791.1(c) applies).  As Plaintiff’s original complaint was not filed until January 24, 2014 that portion of the 6^th cause of action alleging a breach of the implied warranty of merchantability is time-barred.