2013-00147081-CU-CO

Patricia Van Dyke vs. Suburban Motors, Inc.

Nature of Proceeding:    Motion to Strike

Filed By:   Hill, Andre R.

Defendant Ford Motor Company’s Motion to Strike the Fraud cause of action and the
claim for punitive damages is denied.

The motion to strike the Fraud cause of action is denied on the ground that the motion
contained no discussion of this cause of action.  The appropriate means to challenge a
cause of action is a demurrer, not a motion to strike.

The motion to strike punitive damages language is denied on the ground plaintiffs have
alleged sufficient facts to support a claim for punitive damages against Ford Motor
Company.

Plaintiffs allege that they purchased a 2007 Ford F150 truck that was a certified pre-
owned vehicle.  Plaintiffs allege Defendant Ford Motor Company failed to inspect,
repair, and recondition vehicles pursuant to its certification program before
representing them as Certified Pre-Owned vehicles.  Plaintiffs allege that Defendant
Ford Motor Company is the principal of Defendant Suburban Motors, Inc. dba Future
Ford of Sacramento. Future Ford represented to plaintiffs that the vehicle was a
certified pre-owned vehicle, when it had not been properly certified.  Plaintiffs allege
that the acts of Future Ford’s employees were authorized or ratified by Future Ford, an
alleged managing agent of Ford Motor Company. (Complaint paragraph 9-11)

Plaintiffs allege that they were induced to purchase a bumper to bumper warranty for
the certified vehicle.  Thereafter,  the truck malfunctioned but another Future Ford
employee told plaintiffs that the warranty should never have been sold for this vehicle.

Plaintiff alleges that on January 16, 2013, Plaintiff’s boyfriend was driving the vehicle in
the fast lane, with his three year-old son and his friend, at a speed of 70 miles per
hour, when the truck’s steering wheel made a 180 degree turn as the truck continued
to drive straight. Suddenly, the truck’s driver’s side tire flew off and the front bumper
began to scrape the ground, igniting sparks.  Plaintiff’s boyfriend began to pull the
steering wheel toward the right to avoid colliding with the center divider, and he
discovered that the brakes were not operating and he began to apply pressure to the
brake pedal until it reached the floor. When the truck was towed to Future Ford,
employee Nunes stated, “You must have hit something.” Plaintiff stated, ” I know I
didn’t, actually,” and Nunes stated, “At least you’re still alive.” Nunes refused to repair
the Vehicle. (Complaint, paragraph 25)

The facts are sufficient to support a fraud and punitive damage claim against Future
Ford who is alleged, with supporting facts, to be a managing agent of Ford Motor
Company with regard to the certification and warranty programs. The factual
allegations must be assumed to be true for purposes of the motion to strike , as the
court does not go beyond the scope of the pleadings. Kaiser foundation Health Plan,
Inc. v. Superior Court (2012) 203 Cal. App. 4th 696, 704.   There is a dispute as to
whether Ford Motor Company is liable for the acts of Future Ford, however the
allegations of ratification and authorization by the managing agent are sufficient for
pleading purposes to state a claim for punitive damages.

In the case of a corporation acting through its employees or agents, punitive damages
will not lie unless (1) an officer, director, or managing agent of the corporate employer
is guilty of malice, oppression, or fraud; (2) an officer, director, or managing agent of
the corporate employer authorized or ratified the wrongful conduct for which punitive
damages are awarded, or (3) an officer, director, or managing agent of the corporate
employer had advance knowledge of the unfitness of an employee but nevertheless               chose to hire him or her. Civil Code § 3294(b). “Managing agent” under Civil Code §
3294(b) means “only those corporate employees who exercise substantial
independent authority and judgment in their corporate decision making so that their
decisions ultimately determine corporate policy.”  White v. Ultramar. Inc. (1999) 21
th
Cal.4   563, 566-67. The scope of a corporate employee’s discretion and authority
under this test is a question of fact for decision on a case-by-case basis.  Id.

Answer to be filed and served on or before December 27, 2013.

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