18-CIV-04342 DANIEL S. JANUSZ VS. VOLKSWAGEN GROUP OF AMERICA, INC., ET AL.

DANIEL S JANUSZ VOLKSWAGEN GROUP OF AMERICA, INC.
EDWARD O. LEAR ANDREW T. FIELDS

VOLKSWAGEN GROUP 0F AMERICA, INC.’S MOTION FOR JUDGMENT ON THE PLEADINGS TENTATIVE RULING:

Defendant Volkswagen’s motion for judgment on the pleadings is GRANTED, in part, and DENIED, in part. Plaintiff shall file any amended complaint within 30 days of this order pursuant to Cal. Civ. Proc. Code § 438(h).

First Cause of Action – Breach of Express Warranty

Defendant contends Plaintiff has failed to assert a cause of action for breach of express warranty because Plaintiff has not alleged that the “latent defect” in the timing chain system manifested itself during the five-year warranty period. According to Defendant, Plaintiff has alleged “no manifestation of the purported defect in the timing chain.” [MPA, p.4] Construing the complaint liberally, however, Plaintiff’s allegations are sufficient to indicate that the “latent” defect manifested itself during the express warranty period. Plaintiff alleges numerous repairs to the subject vehicle, from July 2013 to October 2017. [Complaint, ¶¶ 76-81] Plaintiff alleges that the repairs were necessitated by the defective timing chain system. [Complaint, ¶ 95] Accordingly, the court concludes Plaintiff has sufficiently alleged that the defect manifested itself within the warranty period.

As a result, Defendant’s motion is DENIED with respect to this cause of action.

Second Cause of Action – Breach of Implied Warranty

Defendant contends Plaintiff’s claim for breach of the implied warranty of merchantability is barred by the four-year statute of limitations set forth at Cal. Com. Code § 2725. Plaintiff asserts that the limitations period was tolled by the delayed discovery rule. Plaintiff relies on Jones v. Credit Auto Ctr., Inc., 237 Cal. App. 4th Supp. 1, 9 (Cal. App. Dep’t Super. Ct. 2015), a decision by the Appellate Division of the Los Angeles Superior Court, for the proposition that “By providing a duration period for the implied warranty of merchantability, Civil Code section 1795.5, subdivision (c), contemplates that a breach may occur either when the goods are first purchased, or afterwards, when a latent defect is discovered by the buyer.” Pursuant to Civ. Code § 1795.5, the duration period for an implied warranty of merchantability is not “less than 30 days nor more than three months following the sale of used consumer goods to a retail buyer.” In Jones, the plaintiff discovered a defect within a month after purchasing a used vehicle. The court concluded that “The trial court thus erred in determining the Song– Beverly Act was not violated because there was no breach of the implied warranty at the time the vehicle was sold. The breach occurred when the latent defect came to light, which was within the time period set forth in Civil Code section 1795.5, subdivision (c), i.e., within three months of the time of sale.” Id., at 10. Accordingly, even if the delayed discovery rule applies to breach of implied warranty claims, Plaintiff has provided no authority indicating that discovery may be delayed, and the applicable statute of limitations tolled, beyond the three months set forth in Civil Code § 1795.5.

The facts as alleged in Plaintiff’s first amended complaint contain no indication that she discovered the alleged defect within three months of purchasing the subject vehicle. Consequently, Defendant’s motion is GRANTED without leave to amend with respect to this cause of action.

Fifth & Sixth Causes of Action – Intentional & Negligent Misrepresentation

Plaintiff has alleged that Defendant represented the timing chain in the subject vehicle would not need maintenance for at least 120,000 miles. (FAC, ¶¶ 25, 41) This allegation, however, appears to be based on the alleged fact that the warranty and maintenance schedules for the subject vehicle do not identify any maintenance requirements with respect to the timing chain system. Indeed, Plaintiff alleges “the Timing Chain System is omitted from the maintenance schedules” and that “Volkswagen’s maintenance schedules require replacement of timing belts after a certain number of miles but do not require maintenance or replacement of the chain-driven Timing Chain System.” (FAC, ¶¶ 23, 32) This fact, however, does not constitute an affirmative representation that the Timing Chain System would be maintenance free for 120,000 miles.

Further, claims of intentional and negligent misrepresentation require the assertion of a past or present fact. Statements about the future are considered to be opinions or predictions, not statements of fact, and are not actionable. Cohen v. S & S Const. Co. (1983) 151 Cal.App.3d 941, 946. Any suggestion in the maintenance schedules that the timing chain would “last for the useful life of the engine and at least 120,000 miles without the need for repair or replacement” is, at best, a prediction and, therefore, not a statement of fact. (FAC ¶ 41)

Because Plaintiff has not alleged any positive assertion, and because any representation that the timing chain system would last for 120,000 miles is necessarily a prediction, Plaintiff’s claims for intentional and negligent misrepresentation are insufficiently pled. The complaint, however, does not show on its face that these claims are incapable of amendment. Accordingly, Defendant’s motion is GRANTED with leave to amend the causes of action for intentional and negligent misrepresentation.

Fraudulent Concealment

A claim for fraudulent concealment, in contrast to intentional or negligent misrepresentation, does not require an affirmative representation. Defendant contends, however, that Plaintiff’s concealment claim has not been pled with the required specificity. Notably, Defendant has provided no authority indicating that a claim of fraudulent concealment must be pled with the same specificity as a claim for intentional misrepresentation. In any case, however, as set forth below, the court finds Plaintiff has sufficiently pled a claim for fraudulent concealment.

Defendant notes that, when alleging a fraud claim against a corporate defendant, a plaintiff must “allege the names of the persons who made the allegedly fraudulent representations, their authority to speak, to whom they spoke, what they said or wrote, and when it was said or written.” Lazar v. Sup.Ct. (Rykoff-Sexton, Inc.) (1996) 12 C4th 631, 645. However, “the requirement of specificity is relaxed when the allegations indicate that ‘the defendant must necessarily possess full information concerning the facts of the controversy’ or ‘when the facts lie more in the knowledge of the opposite party.’” Tarmann v. State Farm Mutual Auto-Mobile Ins. Co. (1992) 2 Cal.App.4th 153, 158 (internal citations omitted).

In this case, Plaintiff alleges that Volkswagen knew about the timing chain defect as indicated by a number of internal Technical Service Bulletins, as well as pre-production testing and other consumer complaints. (FAC ¶¶ 25, 52-57) Plaintiff has alleged that, notwithstanding Volkswagen’s knowledge of the timing chain defect, Volkswagen did not disclose this fact to her or other similarly situated consumers. (FAC ¶ 58) Plaintiff has not alleged the identities of persons suppressing information relating to the timing chain system or their authority for doing so. Based on the allegations in the complaint, however, this is precisely the kind of case in which the defendant possesses far superior information regarding the facts in controversy. Unlike the defendant in Tarmann, Volkswagen has more reason to know who was responsible for the alleged concealment, and their authority for doing so, than Plaintiff.

Defendant’s remaining arguments are unpersuasive. Defendant claims that Plaintiff cannot demonstrate justifiable reliance with respect to the concealment claim because “no consumer can justifiably expect a manufacturer to disclose that a vehicle component may fail after warranty because a manufacturer does not have a duty to ensure that a product will last as long as a consumer desires after the warranty ends.” However, justifiable reliance is generally a question for the trier of fact and, accordingly, the issue is not appropriately decided in a motion for judgment on the pleadings. Blankenheim v. E.F. Hutton & Co., Inc. (1990) 217 Cal.App.3d 1463, 1474, 266 CR 593, 600; Alliance Mortg. Co. v. Rothwell (1995) 10 Cal.4th 1226, 1246, 44 CR3d 352, 364.

Defendant further contends that Plaintiff failed to plead damages because she did not allege failure of the timing system in the subject vehicle. As noted above, however, Plaintiff alleged that she repaired the vehicle on numerous occasions and that the repairs were necessitated by the allegedly defective timing system. These allegations are sufficient to meet the damages requirement.

Finally, Defendant contends that “Plaintiff’s alleged misrepresentation are inactionable” because Plaintiff did not allege failure of the timing chain system. Defendant relies on Daugherty v. Am. Honda Motor Co., 144 Cal. App. 4th 824, 834 (2006). In that case, the court affirmed a judgment of dismissal after concluding that the plaintiff failed to state a cause of action for violation of the Consumer Legal Remedies Act (CLRA). As noted in that decision, however, the plaintiff alleged no malfunction within the warranty period:

The complaint fails to identify any representation by Honda that its automobiles had any characteristic they do not have, or are of a standard or quality they are not. All of plaintiffs’ automobiles functioned as represented throughout their warranty periods, and indeed many still have experienced no malfunction. Daugherty insists, however, that the CLRA should be broadly interpreted to include claims based exclusively on fraudulent omissions, and for this proposition cites Outboard Marine Corp. v. Superior Court (1975) 52 Cal.App.3d 30, 124 Cal.Rptr. 852 (Outboard Marine ). In Outboard Marine, the court held that the practices proscribed by the CLRA—specifically, “[r]epresenting that goods … are of a particular standard, quality, or grade, … if they are of another” (Civ.Code, § 1770, subd. (a)(7))—included “a proscription against a concealment of the characteristics, use, benefit, or quality of the goods contrary to that represented.” (Outboard Marine, supra, 52 Cal.App.3d at p. 37, 124 Cal.Rptr. 852.) As the court observed, it is “fundamental that every affirmative misrepresentation of fact works a concealment of the true fact.” (Id. at p. 36, 124 Cal.Rptr. 852.) While we do not disagree with Outboard Marine, it does not assist Daugherty, because the complaint does not allege any representation of fact that “works a concealment of the true fact.” (Ibid.) In other words, and as Outboard Marine also opined, the CLRA proscribes a concealment of characteristics or quality “contrary to that represented,” but in Daugherty’s case, no representation was made to which the alleged concealment was contrary. (Id. at p. 37, 124 Cal.Rptr. 852.)

In this case, unlike the plaintiff in Daughtery, Plaintiff has alleged numerous malfunctions during the warranty period which she asserts resulted from the defective timing chain system. As a result, Defendant’s reliance on Daugherty is misplaced.

For the foregoing reasons, Defendant’s motion is DENIED with respect to Plaintiff’s cause of action for fraudulent concealment.

If the tentative ruling is uncontested, it shall become the order of the Court. Thereafter, counsel for Defendant shall prepare a written order consistent with the Court’s ruling for the Court’s signature, pursuant to California Rules of Court, Rule 3.1312, and provide written notice of the ruling to all parties who have appeared in the action, as required by law and the California Rules of Court.