Demurrer

Cal. Super. - 6th Dist.February 16, 2021

ERSKINE LAW GROUP, PC 1576 N. BATAVIA STREET, SUITE A, ORANGE, CA 92867 (949) 777-6032 (OFFICE) | (714) 844-9035 (FAx) \DOONO‘xUl-bUJN 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 21 CV377708 Santa Clara - Civil Mary Lynn Arens McBride, Esq. (SBN 282459) Jed VonDielingen, Esq. (SBN PL-446866) ERSKINE LAW GROUP, PC 1576 N. Batavia Street, Suite A Orange, California 92867 Phone: (949) 777-6032 Fax: (714) 844-9035 Email: marensmcbride@erskinelaw.com Email: ivondielingen(a3erskinelaw.com A. VillanL Electronically Filed by Superior Court of CA, County of Santa Clara, on 11/2/2021 1:03 PM Reviewed By: A. Villanueva Case #21 CV377708 Envelope: 7585692 Attorneys for Defendant, GENERAL MOTORS LLC SUPERIOR COURT OF THE STATE OF CALIFORNIA FOR THE COUNTY OF SANTA CLARA GERARDO VASQUEZ, Plaintiff, VS. GENERAL MOTORS, LLC, and DOES 1 through 10, inclusive, Defendants. CASE NO. 21CV377708 ASSIGNED FOR ALL PURPOSES T0: Hon. Christopher G. Rudy in Dept. 7 GENERAL MOTORS LLC’S NOTICE OF DEMURRER AND DEMURRER TO PLAINTIFF’S FIRST AMENDED COMPLAINT; AND A MEMORANDUM OF POINTS OF AUTHORITIES [Filed concurrently With Declaration 0f Mary Arens McBride; [Proposed] Order 0n Demurrer; [Proposed] Order 0n Motion t0 Strike; and, Motion t0 Strike Punitive Damages] RESERVATION ID: DATE: TIME: T DEPT: 7 3-10-2022 9:00am TO THE HONORABLE COURT, ALL PARTIES AND HIS ATTORNEYS OF RECORD: PLEASE TAKE NOTICE that 0n A DATE AND TIME T0 BE DETERMINED, 0r as soon thereafter as the matter may be heard in Department 7 0f the above Court located at 191 North DEMURRER TO PLAINTIFF’S FIRST AMENDED COMPLAINT 8V3 ERSKINE LAW GROUP, PC 1576 N. BATAVIA STREET, SUITE A, ORANGE, CA 92867 (949) 777-6032 (OFFICE) | (714) 844-9035 (FAx) J; QOONQUI 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 First Street, San Jose, CA 951 13, GENERAL MOTORS LLC (“GM”) will and hereby does move this Court for an order sustaining Defendant’s Demurrer t0 Plaintiff Gerardo Vasquez’s First Amended Complaint. DEMURRER TO PLAINTIFF’S FIRST AMENDED COMPLAINT GM hereby demurs to PlaintiffHenry Dominguez’s (“Plaintiff”) Fraud Cause 0fAction within his First Amended Complaint (“FAC”) as filed herein, 0n the following grounds: 1. The sixth cause of action, for Fraud by Omission, fails t0 state facts relevant t0 the elements 0f the claim, and therefore, does not constitute a cause 0f action. (Code 0f CiV. Proc., §430.10, subd. (6.); 2. The sixth cause 0f action for Fraud by Omission, is uncertain, ambiguous, and/or unintelligible. (Code ofCiv. Proa, § 430.10, subd. (6)) 3. The sixth cause of action, for Fraud by Omission, is barred by the Economic Loss Rule and thus fails to state facts sufficient t0 constitute a cause 0f action. (Code 0f Civ. Proc., § 430.10, subd. (6)) This Demurrer is brought pursuant t0 California Code ofCivil Procedure section 430.10 and is based 0n this Notice of Demurrer and the attached Demurrer, Memorandum of Points and Authorities, the Declaration ofMary Arens McBride, and the papers and pleadings and records on file in this action and such other papers, pleadings, and arguments as this Court shall admit at the time 0f the hearing. DATED: November 2, 2021 ERSKINE LAW GROUP, PC By: MARY LYNN ARENS MCBRIDE, ESQ. Attorney for Defendant GENERAL MOTORS LLC 2 DEMURRER TO PLAINTIFF’S FIRST AMENDED COMPLAINT ERSKINE LAW GROUP, PC 1576 N. BATAVIA STREET, SUITE A, ORANGE, CA 92867 (949) 777-6032 (OFFICE) | (714) 844-9035 (FAx) J; QOONQUI 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 I. II. TABLE OF CONTENTS INTRODUCTION .................................................................Error! Bookmark not defined. SUMMARY OF ALLEGATIONS AND PROCEDURAL HISTORY ................................. 8 III. MEET AND CONFER PER CODE OF CIVIL PROCEDURE SECTION 430.41 ..... Error! Bookmark not defined. IV. LEGAL STANDARD ............................................................Error! Bookmark not defined. V. ARGUMENT .......................................................................................................................... 8 A. The Economic Loss Rule Bars the Fraud Cause 0f Action. ............................................. 8 B. Plaintiff s Allegations Fail t0 State a Viable Claim for Fraud by Omission................ 133 C. Plaintiff s Omission Allegations Are Insufficient as a Matter 0f Law. ....................... 144 D. Plaintiff Fails to Allege Fraud With the Requisite Specificity. .................................... 166 E. Concealment/Omission Cannot Be Based upon Non-actionable Puffery. ................... 177 VI. CONCLUSION .......................................................................................... Error! Bookmark not defined.7 3 DEMURRER TO PLAINTIFF’S FIRST AMENDED COMPLAINT ERSKINE LAW GROUP, PC 1576 N. BATAVIA STREET, SUITE A, ORANGE, CA 92867 (949) 777-6032 (OFFICE) | (714) 844-9035 (FAx) L QOONQUI 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 TABLE OF AUTHORITIES Cases Aas v. Superior Court (2000) 24 Cal 4th 627 ................................................................................. 9 Ammziato v. eMachines, Inc. (C.D. Cal. 2005) 402 F.Supp.2d 1133 ........................................... 18 Avalon Painting C0. v. Alert Lumber C0. (1965) 234 Cal.App.2d 178 ........................................ 17 Bardin v. DaimlerChrj/sler Corp. (2006) 136 Ca1.App.4th 1255 ................................................. 16 Blank v. Kirwan (1985) 39 Cal.3d 311 ........................................................................................... 8 Blickman Turkus, LP v. MF Downtown Sunnyvale, LLC (2008) 162 Cal.App.4th 858 ................ 18 Cardinal Health 301, Inc. v. Tyco Electronics Corp. (2008) 169 Ca1.App.4th 116 ..................... 17 Consumer Advocates v. EchoStar Satellite Corp. (2003) 113 Ca1.App.4th 1351 ........................ 18 D ’Acquisto v. Evola (1949) 90 Ca1.App.2d 210 ........................................................................... 17 Daugherty v. Am. Honda. C0., 144 Cal.App.4th 824 .................................................................... 15 De Spirito v. Andrews (1957) 151 Ca1.App.2d 126 ...................................................................... 16 Donabedian v. Mercury Ins. C0. (2004) 116 Ca1.App.4th 968 ...................................................... 8 Engalla v. Permanente Medical Group, Inc. (1997) 15 Cal.4th 951 ............................................ 14 Finney v. Ford Motor C0., 2019 WL 79033 (N.D. Cal. 2019) ..................................................... 11 Hammond v. BMW ofNorth America, N0. CV 18-226 DSF (MRWX), 2019 WL 2912232 .. 10, 11 Heliotis v. Schuman (1986) 181 Ca1.App.3d 646 ......................................................................... 16 Hien Bui v. Mercedes-Benz USA, LLC, N0. 20-CV-1530-CAB-WVG, 2021 WL 242936 (S.D. Cal. Jan. 25, 2021) ............................................................................................................................ 12 Hills Trans. C0. v. Southwest (1968) 266 Cal.App.2d 702 ........................................................... 17 Hobart v. Hobart Estate C0. (1945) 26 Cal.2d 412 ...................................................................... 14 Hsieh v. FCA USLLC, 440 F. Supp. 3d 1157 (S.D. Cal. 2020) ................................................... 13 In re FordMotor C0. DPS6 Powershift Transmission Prod. Liab. Lit., N0. CV1706656ABFFMX, 2019 WL 3000646 (C.D. Cal. May 22, 2019) .......................................................................... 12 Johnson v. Ehrgott (1934) 1 Cal.2d 136 ....................................................................................... 14 Kamen v. Lindley (2001) 94 Ca1.App.4th 197 ................................................................................ 8 4 DEMURRER TO PLAINTIFF’S FIRST AMENDED COMPLAINT ERSKINE LAW GROUP, PC 1576 N. BATAVIA STREET, SUITE A, ORANGE, CA 92867 (949) 777-6032 (OFFICE) | (714) 844-9035 (FAx) L QOONQUI 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Kelsey v. Nissan N. Am., N0. CV 20-4835 MRW, 2020 WL 4592744 (C.D. Cal. July 15, 2020)11 La Vista Cemetery Assoc. v. American Savings & Loan Association (1970) 12 Cal.App.3d 365.. 9 Lazar v. Superior Court (1996) 12 Cal 4th 631 ............................................................................ 14 Leon v. Kia Motors America, Inc. (Orange Cnty Cal. Super. 30-2019-01093543-CU-BC-CJC) (Order 12/13/2019) ................................................................................................................... 12 Macias v. Chrysler, N0. CV 17-1823, 2020 WL 4723976 ........................................................... 12 Mason v. Drug Inc. (1939) 31 Cal.App.2d 697 ............................................................................ 17 Mel Clayton GMLLC v. GMLLC Motor C0. (2002) 104 Ca1.App.4th 46 ............................ 16, 18 Moore v. Regents 0f University ofCalifornia (1990) 51 Cal.3d 120 .............................................. 8 Mosqueda v. American Honda Motor C0., -F. Supp. 3d -, No. SA CV 19-839 MWF (MAAX), 2020 WL 1698710 (C.D. Cal. 2020) ......................................................................... 11 Nada Pac. Corp. v. Power Eng'g and Mfg, Ltd, 73 F. Supp. 3d 1206 (ND. Cal. 2014) .............. 9 Osborne v. Subaru ofAmerica, Inc. (1988) 198 Cal. App. 3d 646 ............................................... 18 Penrose v. Winter (1901) 135 Cal. 289 ........................................................................................... 9 Robinson Helicopter C0., Inc. v. Dana Corp. (2004) 34 Cal. 4th 979 ........................................... 9 Sloan v. General Motors, 2020 WL 1955643 (ND. Cal. 2020) ............................................... 9, 11 Stansfield v. Starkey (1990) 220 Cal.App.3d 59 ........................................................................... 17 Stewart v. Electrolux Home Prod, Ina, 304 F. Supp. 3d 894 (ED. Cal. 2018) .......................... 11 Tarmann v. State Farm Mut. Auto Ins. C0. (1991) 2 Ca1.App.4th 153 ........................................ 17 Tenzer v. Superscope, Inc. (1985) 39 Cal.3d 18 ........................................................................... 18 Thompson v. BMWofNorth America, No. SA CV 17-1912 CJC (KSX), 2019 WL 988694. 10, 11 Traba v. Ford Motor C0., No. CV 18-808 SVW (GJSX), 2018 WL 6038302 (C.D. Cal. 2018). 11 Vandermark v. Ford Motor C0. (1964) 61 Ca1.2d 256 ................................................................. 17 Wilson v. Hewlett-Packard, 668 F.3d 1136 (9th Cir. 2012) .......................................................... 15 Yi v. BMW ofNorth America LLC, N0. 2: 17-CV-06467-SVW-SK (C.D. Cal. Mar. 5, 2018) ....... 11 Zagarian v. BMW 0fN.Am., N0. CV 18-4857 RSWL (PLAX), 2019 WL 61 1 1731 .............. 10, 11 5 DEMURRER TO PLAINTIFF’S FIRST AMENDED COMPLAINT L Statutes ERSKINE LAW GROUP, PC 1576 N. BATAVIA STREET, SUITE A, ORANGE, CA 92867 (949) 777-6032 (OFFICE) | (714) 844-9035 (FAx) QOONQUI 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Code of CiV. Proc., § 338(d) ......................................................................................................... 13 Code of CiV. Proc., § 430.10 (f) ...................................................................................................... 9 Code 0f CiV. Proc., § 430.10(e) ...................................................................................................... 8 Treatises 4 Witkin, Summary 0f Cal. Law (8th ed. 1974) Torts, §§ 459-464, pp. 2724-2728 .................... 16 6 DEMURRER TO PLAINTIFF’S FIRST AMENDED COMPLAINT ERSKINE LAW GROUP, PC 1576 N. BATAVIA STREET, SUITE A, ORANGE, CA 92867 (949) 777-6032 (OFFICE) | (714) 844-9035 (FAx) L QOONQUI 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 MEMORANDUM OF POINTS AND AUTHORITIES I. INTRODUCTION Plaintiff Gerardo Vasquez (“Plaintiff”) is attempting t0 turn this simple lemon law action into a fraud case against GM. But that effort fails and GM’S Demurrer t0 Plaintiff” s First Amended Complaint (“FAC”) should be sustained without leave t0 amend. First, the fraud claim fails under the Economic Loss Rule. Second, the claim does not provide the requisite specificity; it has no well-pleaded facts about the how, when, where, to whom, and by What means the fraud occurred. Rather than providing these details (Which, 0f course do not exist), Plaintiffparrots allegations from a different case. Those unproven allegations are not “facts,” and assuredly are not facts relevant t0 Plaintiff’s vehicle or the repairs t0 that vehicle under warranty. In short, there is zero factual 0r legal basis for Plaintiff’s fraud claim. GM’s demurrer should be sustained Without leave t0 amend. II. SUMMARY OF ALLEGATIONS AND PROCEDURAL HISTORY On or about April 29, 2018, Plaintiff purchased a 2018 Chevrolet Silverado, VIN 1GC1KWEY6JF198047 (“Subject Vehicle”). (First Amended Complaint (“FAC”), 1] 6.) Almost three years later, 0n February 16, 2021, Plaintiff filed “breach 0f warranty” claims under Song- Beverly, as well as a common law “Fraud by Omission” claim. On September 28, 2021, Plaintiff filed a First Amended Complaint (“FAC”) asserting additional allegations that the Subj ect Vehicle developed various alleged “defects” during the warranty period. (See FAC generally.) GM now timely files this demurrer. Plaintiff” s FAC fails to provide critical facts necessary to state a claim, such as (1) Whether Plaintiff had any interaction with GM before 0r after the sale, (2) GM’S knowledge 0f the alleged “defects,” (3) how GM intended t0 “defraud” Plaintiff, (4) the lack 0f priVity with GM, and/or (5) specifics regarding the warranties that covered the Subject Vehicle. Instead 0f providing these basic details, the FAC alleges in conclusory fashion that GM committed fraud by allowing the Subject Vehicle t0 be sold t0 Plaintiff Without disclosing that the Subject Vehicle was defective 7 DEMURRER TO PLAINTIFF’S FIRST AMENDED COMPLAINT ERSKINE LAW GROUP, PC 1576 N. BATAVIA STREET, SUITE A, ORANGE, CA 92867 (949) 777-6032 (OFFICE) | (714) 844-9035 (FAx) L QOONQUI 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 related t0 the Engine Fuel System. (Id. 1] 96). The claim is based almost entirely 0n the allegation that GM did not disclose t0 Plaintiff prior t0 the sale 0f the vehicle that it had “defects” based upon unspecified facts GM “knew.” (Id. W 98-99.) That is not enough. III. MEET AND CONFER PER CODE OF CIVIL PROCEDURE SECTION 430.41 GM made a good-faith effort to meet and confer with Plaintiff to avoid this demurrer but was unsuccessful despite its best efforts. (Declaration 0f Mary Lynn Arens McBride (“McBride Decl.”), atW 2-5.) IV. LEGAL STANDARD A demurrer challenges defects that appear 0n the face 0f the FAC 0r matters outside the pleadings that are judicially noticeable. (Blank v. Kirwan (1985) 39 Cal.3d 31 1, 3 1 8; Donabedian v. Mercury Ins. C0. (2004) 116 Cal.App.4th 968, 994.) In ruling 0n a demurrer, “the trial court . . . treats the demurrer as admitting all material facts properly pleaded, but not contentions, deductions 0r conclusions 0f fact 0r law.” (Kamen v. Lindley (2001) 94 Cal.App.4th 197, 201; see also Moore v. Regents 0f University ofCalifornia (1990) 51 Cal.3d 120, 125.) A pleading that “does not state facts sufficient t0 constitute a cause 0f action” is subject t0 demurrer.” (Code 0f CiV. Proc., § 430.10(e).) A Complaint fails to state a cause 0f action if it pleads essential allegations as legal conclusions rather than as ultimate facts. (Penrose v. Winter (1901) 135 Cal. 289, 290-291.) Furthermore, a pleading that is uncertain, ambiguous and/or unintelligible is subject to demurrer. (Code of CiV. Proc., § 430.10 (f).) In ruling on a demurrer, the Court must also determine if the flaws inherent in the Complaint can be remedied by the amendment; if the Plaintiff will be unable to correct its deficiencies of pleading, leave to amend should be denied. (La Vista Cemetery Assoc. v. American Savings & Loan Association (1970) 12 Cal.App.3d 365, 369.) Against this standard, Plaintiff” s fraud claim is barred by significant factual deficiencies and a number 0f legal doctrines such that this Court should sustain GM’S demurrer without leave t0 amend. 8 DEMURRER TO PLAINTIFF’S FIRST AMENDED COMPLAINT ERSKINE LAW GROUP, PC 1576 N. BATAVIA STREET, SUITE A, ORANGE, CA 92867 (949) 777-6032 (OFFICE) | (714) 844-9035 (FAx) J; QOONQUI 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 V. ARGUMENT A. The Economic Loss Rule Bars the Fraud Cause 0f Action. A person “may not ordinarily recover in tort for the breach 0f duties that merely restate contractual obligations.” (Aas v. Superior Court (2000) 24 Cal 4th 627, 643, superseded by statute 0n other grounds.) The purchaser must “demonstrate harm above and beyond a broken contractual promise.” (Robinson Helicopter C0,, Inc. v. Dana Corp. (2004) 34 Cal. 4th 979, 988 (noting “the economic loss rule prevents the law of contract and the law of tort from dissolving one into the other”) (internal citation and quotation marks omitted).) California courts have consistently held that the economic loss doctrine bars fraudulent omissions claims based on purely economic loss. (See Sloan v. Gen. Motors LLC, N0. 16-CV-07244-EMC, 2020 WL 1955643, at *23-*24 (N.D. Cal. Apr. 23, 2020) (surveying decisions).) Plaintiff did not allege in his FAC that GM is liable for anything other than economic loss. Despite Robinson’s holding that “the economic loss rule does not bar [a plaintiff” s] fraud and intentional misrepresentation claims [where they are] independent 0f breach 0f contract,” it expressly stated that its holding was “narrow in scope and limited t0 a defendant’s affirmative misrepresentations on Which a plaintiff relies and which expose a plaintiff to liability for personal damages independent 0f the plaintiff‘s economic loss.” (22 Cal.Rptr.3d 352 at 991, 993. See also Nada Pac. Corp. v. Power Eng'g and Mfg, Ltd, 73 F. Supp. 3d 1206, 1225 (N.D. Cal. 2014) (“[Plaintiff] does not allege that [the defendant] made any affirmative misrepresentations 0n which it relied, nor does it allege that it was exposed to liability for personal damages independent of its economic loss. Without having done so, [Plaintiff] cannot fit Within Robinson’s narrow and limited holding.”).) The affirmative misrepresentation that exposed the Robinson plaintiff to liability for personal damages, independent 0f that plaintiffs economic loss, is regularly referred t0 as the “Robinson exception.” Multiple courts, in opinions that post-date Robinson, have confirmed that the Robinson exception only applies When the defendant has made an affirmative misrepresentation and the plaintiff has sustained damages independent 0f the alleged economic loss. The following courts 9 DEMURRER TO PLAINTIFF’S FIRST AMENDED COMPLAINT ERSKINE LAW GROUP, PC 1576 N. BATAVIA STREET, SUITE A, ORANGE, CA 92867 (949) 777-6032 (OFFICE) | (714) 844-9035 (FAx) J; QOONQUI 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 all concluded that the Robinson exception does not extend t0 fraud claims based upon alleged concealment, omissions, or non-disclosures: In Zagarian, the plaintiff asserted fraud based upon allegations thatBMW omitted information about an “oil consumption” defect in the subject vehicle. (Zagarian v. BMWofNAm. , No. CV 18-4857 RSWL (PLAX), 2019 WL 61 1 1731 at *2 (CD. Cal. 2019)). The court there recognized that “some courts have applied the economic loss rule t0 claims 0f fraudulent concealment, finding that its application is only barred where a party has made affirmative representations that are fraudulent.” (Id. at *3) Because the Zagarian plaintiff (i) had not alleged “a single affirmative misrepresentation 0n the part 0fBMW” and (ii) had not shown any exposure t0 “personal damages independent 0f his economic loss,” the court dismissed the plaintiff’s fraud claim as barred by the economic loss rule. (Id.) In Hammond, the plaintiff only sought damages associated with defects in the subject vehicle, yet still asserted fraud claims (i) without alleging that BMW made any affirmative misrepresentations and (ii) without claiming damages beyond his economic loss associated with the vehicle itself. (Hammond v. BMW 0f North America, No. CV 18-226 DSF (MRWX), 2019 WL 2912232 at *2 (C.D. Cal. 2019)). When the plaintiff argued that his fraud claim fell under the Robinson exception, the court rejected that argument, opining that the Robinson exception applied only t0 affirmative misrepresentations. (Id) Because the plaintiff had not alleged any affirmative misrepresentations by BMW and did not seek damages other than his economic loss, the Hammond court ruled that the fraud claim based 0n “omissions” and “concealment” was barred by the economic loss rule. (Id. at *3.) In Thompson, the plaintiff asserted a fraud claim based upon an allegation that BMW omitted information about an “abnormally high consumption of oil” defect. (Thompson v. BMW0f North America, No. SA CV 17-1912 CJC (KSX), 2019 WL 988694 at *1 (C.D. Cal. 2019)). The court there held that, because plaintiff (i) had alleged fraud due t0 an alleged omission, (ii) had not alleged any personal injury or damages other than economic loss, and (iii) had not alleged a “single affirmative misrepresentation” by BMW, the fraud claim was barred by the economic loss rule. (Id. at *5.) In Yi, the plaintiff asserted a fraud claim based upon allegations that BMW had omitted information about the subject vehicle “burning through oil at an excessive rate.” (Yi v. BMWofNorth America LLC, N0. 2: 17-CV-O6467-SVW-SK at *1 (C.D. Cal. Mar. 5, 20 1 8)). The Yi court ruled that, to avoid preclusion of a fraud claim under the economic loss rule, a plaintiffmust show exposure to personal damages independent of the economic loss. (Id. at *2 (citing Robinson». A plaintiff cannot satisfy this condition (i.e., personal damages independent of the economic loss) merely by arguing that the alleged “fraud” would open the door to greater damages for the plaintiff. (1d.) The Yz' court noted that, if a court were to interpret the Robinson exception that broadly, it would “eviscerate the guidelines set out by the Robinson court.” (Id) Because the Yi plaintiff” s complaint did not claim additional, non-economic damages other than the alleged damages arising from the alleged defect (zle. , damages “above and beyond a broken contractual promise”), the “fraud” claim failed as a matter 0f law. (Id) These four cases are not outliers. Last summer, in Kelsey v. Nissan N. Am., No. CV 20- 4835 MRW, 2020 WL 4592744, at *1-2 (C.D. Cal. July 15, 2020), the court dismissed the plaintiff’s fraud claim because the plaintiff did not claim any affirmative misrepresentations by Nissan 0r economic damages other than economic loss due t0 alleged vehicle defects. The court 10 DEMURRER TO PLAINTIFF’S FIRST AMENDED COMPLAINT L there noted that “numerous California federal courts sitting in diversity have applied the economic loss rule to prohibit a follow-on fraudulent inducement claim in run-of-the-mill Song-Beverly Act warranty breach actions.” (Id. at *2.) The court then provided a “monstrously-long” string cite t0 support its conclusion: ERSKINE LAW GROUP, PC 1576 N. BATAVIA STREET, SUITE A, ORANGE, CA 92867 (949) 777-6032 (OFFICE) | (714) 844-9035 (FAx) QOONQUI 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 (1d. at *2.) In addition t0 Kelsey’s “monstrously-long” list 0f authority, courts have routinely barred omission- and concealment-based fraud claims under the economic loss rule. (See Macias v. Chrysler, N0. CV 17-1823, 2020 WL 4723976, at *2 (C.D. Cal. Aug. 13, 2020) (applying economic loss rule to preclude fraudulent omission claim); Leon v. Kia Motors America, Inc. Mosqueda v. American Honda Motor C0., -F. Supp. 3d-, N0. SA CV 19-839 MWF (MAAX), 2020 WL 1698710 at *13 (C.D. Cal. 2020) (“Because Plaintiffs concede that they seek only economic damages and premise their fraud claim 0n alleged omissions [,] Plaintiffs’ fraudulent omission claim is barred by the economic loss rule.”); Hammond v. BMW ofNorth America, No. CV 18-226 DSF (MRWX), 2019 WL 2912232 at *2 (C.D. Cal. 2019); Traba v. Ford Motor C0., N0. CV 18-808 SVW (GJSX), 2018 WL 6038302 at *4 (C.D. Cal. 2018) (fraudulent concealment “resulted only in Plaintiffs’ disappointed expectations”; plaintiffs “d0 not claim that the vehicle's alleged defects caused any personal injury 0r damage t0 property other than the vehicle”); Thompson v. BMW ofNorth America, No. SA CV 17-1912 CJC (KSX), 2019 WL 988694 at *5 (C.D. Cal. 2019); Zagarian v. BMW 0fN0rth America, N0. CV 18- 4857 RSWL (PLAX), 2019 WL 6111731 at *3 (C.D. Cal. 2019); Sloan v. General Motors, 2020 WL 1955643 at *24 (N.D. Cal. 2020) (“Robinson and the weight 0f authority within the Ninth Circuit suggest that the economic loss rule applies t0 fraudulent omission claims under California law”; “many courts within the Ninth Circuit have relied 0n Robinson in holding that affirmative representations are required for exceptions t0 the rule t0 apply”); Finney v. Ford Motor C0,, 2019 WL 79033 at *5 (ND. Cal. 2019) (under economic loss rule, car purchaser's “remedies are in contract and not in fraud”); Stewart v. Electrolux Home Prod, Ina, 304 F. Supp. 3d 894, 902 (E.D. Cal. 2018) (“Plaintiffs’ damages are limited t0 economic loss, precluding their strict liability and fraudulent concealment claims.”); see also, 1n re Ford Motor C0. DPS6 Powershift Transmission Prod. Liab. Lit, N0. CV1706656ABFFMX, 2019 WL 3000646, at *6 (C.D. Cal. May 22, 2019) (finding “insufficient support in the California cases [defendant] cites for its distinction between fraudulent inducement by misrepresentation and fraudulent inducement by omission, and therefore declin[ing] to apply the economic loss rule to the omission claims at [the motion t0 dismiss] stage”). 1 1 DEMURRER TO PLAINTIFF’S FIRST AMENDED COMPLAINT ERSKINE LAW GROUP, PC 1576 N. BATAVIA STREET, SUITE A, ORANGE, CA 92867 (949) 777-6032 (OFFICE) | (714) 844-9035 (FAx) L QOONQUI 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 (Orange Cnty Cal. Super. 30-2019-01093543-CU-BC-CJC) (Order 12/13/2019), RJN EX. G (applying economic loss rule t0 preclude fraudulent concealment/omission claim).) Most notably, in a decision issued earlier this year - in a strikingly similar case - plaintiff filed a complaint against Mercedes-Benz USA alleging a fraud claim based upon an alleged omission. (Hien Bui v. Mercedes-Benz USA, LLC, No. 20-CV-1530-CAB-WVG, 2021 WL 242936, at *4 (S.D. Cal. Jan. 25, 2021)). The court there barred plaintiff’s claim for fraudulent concealment because the complaint did not allege any personal injury t0 the plaintiff or any damage to physical property independent of the subject vehicle. (Id) In fact, the only allegation 0f harm caused by the alleged omission was that “[b]ut for GM’S failure t0 disclose the Engine Fuel System Defect, Plaintiffwould not have purchased the Subj ect Vehicle.” (Id. See also FAC atW 103, 1 1 1.) The complaint there did not allege any facts that supported a “plausible inference” that Mercedes had any “general duty t0 disclose the alleged defect regardless 0f whether plaintiff purchased a vehicle,” so “any omissions were not independent 0f any warranties related t0 the actual purchase.” (Id) Naturally, the court there held that the economic loss rule barred plaintiff‘s fraudulent concealment claim. (1d,) But the court did not stop there. It went 0n to say that, because plaintiff’s alleged “damages were strictly economic” and arose out 0f the “same conduct as the breach of warranty claims, n0 amendment t0 the complaint would be able t0 avoid this outcome.” (Id. (citing Hsieh v. FCA US LLC, 440 F. Supp. 3d 1157, 1162 (SD. Cal. 2020) (dismissing fraud claim without leave t0 amend because the fact that the lawsuit involved “alleged omissions, not affirmative misrepresentations [precluded] Plaintiffs ability t0 avoid the economic loss rule.”).) The Bui court also dismissed plaintiff’s prayer for punitive damages predicated 0n the alleged concealment, because there was no argument to suggest that his punitive damages claim could survive Without his fraudulent concealment claim. (Id) This case is indistinguishable from all the cases in Kelsey’s “monstrously-long” list and nearly identical to the facts presented in Bui. Here, Plaintiff alleges that GM committed fraud by allowing the Subj ect Vehicle t0 be sold t0 PlaintiffWithout disclosing that the Subj ect Vehicle and its engine and/or engine fuel system was defective. (FAC, fl 96.) Plaintiff alleges that GM 12 DEMURRER TO PLAINTIFF’S FIRST AMENDED COMPLAINT ERSKINE LAW GROUP, PC 1576 N. BATAVIA STREET, SUITE A, ORANGE, CA 92867 (949) 777-6032 (OFFICE) | (714) 844-9035 (FAx) J; QOONQUI 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 “committed fraud by (1) allowing the Subject Vehicle t0 be sold t0 Plaintiff at Gilroy Chevrolet Cadillac, its authorized dealership, Without disclosing that the Subject Vehicle, its engine, and/or the engine’s fuel system was defective and susceptible t0 sudden and premature failure and/or (2) failing t0 disclose the existence, nature, 0r extent 0f the Engine Fuel System Defect in the Subject Vehicle When Plaintiff presented the Vehicle t0 GM’S authorized dealership, Premier Chevrolet, 0n numerous occasions With concerns related t0 the Engine Fuel System Defect.” (FAC, 1] 93.) Plaintiff has not alleged personal injuries 0r damages t0 property other than economic loss for the vehicle itself. (Id) In fact, the only allegation ofharm that Plaintiff alleged in the FAC is that, if GM had disclosed the “Engine Fuel System Defect,” then Plaintiff would not have bought the subject vehicle. (Id. at 1N 103, 111). This allegation is exactly what the Bui court rejected. (2021 WL 242936, at *4.) Without an affirmative misrepresentation by GM, and without damages independent of the alleged economic loss related t0 his vehicle, Plaintiff’s fraud claim is barred and should be dismissed without leave t0 amend. B. Plaintiff’s Allegations Fail t0 State a Viable Claim for Fraud by Omission. Plaintiff’s fraud by omission claim attempts, but fails, t0 allege the tort of deceit or fraud. The torts 0f deceit 0r fraud require a plaintiff t0 plead and prove: “(a) [a] misrepresentation (false representation, concealment, 0r nondisclosure); (b) knowledge 0f falsity (0r “scienter”); (c) intent to defraud, i.e., to induce reliance; (d) justifiable reliance; and (e) resulting damage.” (Lazar v. Superior Court (1996) 12 Cal 4th 631, 638; see also Engalla v. Permanente Medical Group, Inc. (1997) 15 Ca1.4th 951, 974.) Plaintiff” s FAC does not allege a single, specific, concrete omission by GM. Plaintiffdoes not allege facts stating the terms 0f the warranty 0r warranties at issue 0r allege that GM misrepresented anything about the Subj ect Vehicle. Nor does the FAC allege facts about (1) whether Plaintiff communicated with GM before he bought the Subject Vehicle, (2) whether the purported “defect” was covered under the warranty, (3) which alleged representations were made to Plaintiff, (4) how the Subject Vehicle does not allegedly conform t0 its intended use, (5) how 13 DEMURRER TO PLAINTIFF’S FIRST AMENDED COMPLAINT ERSKINE LAW GROUP, PC 1576 N. BATAVIA STREET, SUITE A, ORANGE, CA 92867 (949) 777-6032 (OFFICE) | (714) 844-9035 (FAx) L QOONQUI 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 GM allegedly failed t0 repurchase 0r replace the vehicle, (6) how GM owed a duty t0 Plaintiff, and (7) what facts support Plaintiff” s allegation that the Subj ect Vehicle is unsafe 0r ever exhibited a safety concern. Plaintiff merely alleges in conclusory fashion that GM failed t0 disclose safety risks associated With the Subject Vehicle. Plaintiff has provided nothing other than speculative and conclusory statements cloaked in broad and sweeping allegations. Specifically, Plaintiff’s FAC alleges the following, and nothing more: GM did not disclose t0 Plaintiff prior t0 the sale 0f the subj ect vehicle that it had a “defect” based upon unspecified facts GM “knew.” (Id. W 98-99.) To establish GM’S knowledge and intent at the time 0f sale, Plaintiff alleges that GM “knew” that the fuel system 0n the Subiect Vehicle was defective, failed t0 disclose the defects and “intentionally concealed material facts” yet he does not offer any information 0r source for his claim. (Id. 1W 102- 103.) This does not establish GM’S intent t0 defraud Plaintiff 0r demonstrate that the fuel system is 0r was defective at the time 0f sale. (161.) Plaintiff has failed to provide any factual support for these statements and allegations and has merely provided convenient conclusions that lack any the foundation and specificity required t0 plead fraud. C. Plaintiff’s Omission Allegations Are Insufficient as a Matter 0f Law. To establish the tort 0f concealment (Fraud by Omission), Plaintiff must prove: (1) GM concealed or suppressed a material fact; (2) GM was under a duty to disclose the fact to Plaintiff; (3) GM intentionally concealed or suppressed the fact with intent to defraud Plaintiff; (4) Plaintiff was unaware of the fact and would not have acted as Plaintiff did if Plaintiff had known of the concealed or suppressed fact; and (5) Plaintiff was damaged by the concealment. (Jones v. ConocoPhillips C0. (201 1) 198 Cal.App.4th 1187, 1198.) When dealing with a product, omitted facts are material only if they implicate a safety concern. (Daugherty v. Am. Honda. Ca, 144 Ca1.App.4th 824, 836; Wilson v. Hewlett-Packard, 668 F.3d 1136, 1141-42 (9th Cir. 2012).) Plaintiffpled no such facts; instead, he pled nothing other than speculative and conclusory statements. This issue was addressed in Daugherty, an action brought under the CLRA and Business and Professions Code section 17200 (“UCL”). (Daugherty, 14 DEMURRER TO PLAINTIFF’S FIRST AMENDED COMPLAINT ERSKINE LAW GROUP, PC 1576 N. BATAVIA STREET, SUITE A, ORANGE, CA 92867 (949) 777-6032 (OFFICE) | (714) 844-9035 (FAx) L QOONQUI 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 144 Ca1.App.4th at 824). In that case, several car buyers filed a class action against Honda alleging that it had failed to disclose that its F22 engine had persistent problems with respect to oil leakage. The trial court sustained Honda’s demurrer without leave t0 amend as t0 the CLRA and UCL claims because the Plaintiffs failed t0 identify any representation made by Honda that its automobiles had any characteristics they did not have or were of a standard or quality they were not. The Daugherty court held: “T0 be actionable, the [fraudulent] omission must be contrary t0 a representation actually made by the defendant, or an omission of a fact that defendant was obliged t0 disclose.” (Daugherty, 144 Ca1.App.4th at 835; see also Bardin v. DaimlerChrj/Sler Corp. (2006) 136 Ca1.App.4th 1255, 1276 (n0 fraud can be alleged if there is n0 showing that the defendant was “bound t0 disclose” the fact at issue)) Here, there is no allegation that GM was aware of any material fact that allegedly impacted the Subj ect Vehicle’s safety at the time 0f the sale, or that Plaintiffhad any direct contact with GM at the time 0f sale. Therefore, there could not be an omission 0f any material fact at the time 0f the sale by GM 0r a failure t0 disclose any material fact at the time 0f the sale as it relates t0 Plaintiff” s Subject Vehicle having characteristics and benefits that it did not have, 0r that it was 0f a particular standard, quality, or grade when it was of another. Further, GM did not have any duty t0 disclose, and is not liable for concealment. The duty to disclose arises in four circumstances: When the defendant: (1) is in a fiduciary relationship with the plaintiff, (2) had exclusive knowledge 0f material facts not known to the plaintiff, (3) actively conceals a material fact from the plaintiff; and/or (4) makes partial representations but also suppresses some material facts. (Heliotis v. Schuman (1986) 181 Ca1.App.3d 646, 651, quoting 4 Witkin, Summary 0f Cal. Law (8th ed. 1974) Torts, §§ 459-464, pp. 2724-2728.) As a matter 0f law, there is n0 fiduciary relationship between GM and Plaintiff. “It is a general rule that a vendor not in a confidential relation t0 the buyer is not under a duty t0 make full disclosure concerning the object Which he would sell.” (De Spirito v. Andrews (1957) 151 Ca1.App.2d 126, 130.) Nor does Plaintiff allege any 0f the other three circumstances Which would 15 DEMURRER TO PLAINTIFF’S FIRST AMENDED COMPLAINT ERSKINE LAW GROUP, PC 1576 N. BATAVIA STREET, SUITE A, ORANGE, CA 92867 (949) 777-6032 (OFFICE) | (714) 844-9035 (FAx) J; QOONQUI 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 create a duty to disclose. In California, an automaker is not liable for the independent conduct of a dealership employee 0r another third-party entity with no relationship t0 GM. (Mel Clayton GMLLC v. GM LLC Motor C0. (2002) 104 Ca1.App.4th 46, 49.) “A [manufacturer’s] dealer 0r retailer may in a layman’s View be an agent 0f the [manufacturer], but he is not an agent in the legal sense of that relationship.” Representations 0f employees at a dealership are not representations 0f an agent 0f Defendant itself. (Avalon Painting C0. v. Alert Lumber C0. (1965) 234 Cal.App.2d 178, 184 [citing Vandermark v. Ford Motor C0. (1964) 61 Cal.2d 256; Cardinal Health 301, Inc. v. Tyco Electronics Corp. (2008) 169 Ca1.App.4th 116, 134 (tolling and estoppel both rely 0n representations by defendant that repairs Will be made; third party representations d0 not involve reliance 0n defendant)] .) Further, Plaintiffbears the burden to prove agency, Which must rest upon an agreement. (D ’Acquisto v. Evola (1949) 90 Ca1.App.2d 210, 213.) The FAC fails to demonstrate any direct representations by GM t0 Plaintiff. D. Plaintiff Fails t0 Allege Fraud With the Requisite Specificity. “Fraud is never presumed.” (Mason v. Drug Inc. (1939) 31 Ca1.App.2d 697, 703.) Rather, California law requires that every element 0f a fraud cause 0f action “must be alleged in the proper manner and the facts constituting the fraud must be alleged With sufficient specificity t0 allow defendant t0 understand fully the nature 0f the charge made.” (Tarmann v. State Farm Mut. Auto Ins. C0. (1991) 2 Ca1.App.4th 153, 157.) “[T]he policy 0f liberal construction 0f the pleadings . . . Will not ordinarily be invoked to sustain a pleading defective in any material respect. [citations] This particularity requirement necessitates pleading facts which ‘show how, when, where, t0 whom and by what means the representations were tendered.” (Stansfield v. Starkey (1990) 220 Ca1.App.3d 59, 73, quoting Hills Trans. C0. v. Southwest (1968) 266 Ca1.App.2d 702, 707.) Pleading fraud With specificity is particularly important. (Tarmann v. State Farm, supra, at 157 [“The requirement 0f specificity in a fraud action against a corporation requires the Plaintiffs to allege the names 0f the persons who made the allegedly fraudulent representations, their authority to speak, t0 whom they spoke, What they said 0r wrote, and when it was said 0r written.”] ; 16 DEMURRER TO PLAINTIFF’S FIRST AMENDED COMPLAINT ERSKINE LAW GROUP, PC 1576 N. BATAVIA STREET, SUITE A, ORANGE, CA 92867 (949) 777-6032 (OFFICE) | (714) 844-9035 (FAx) L QOONQUI 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Mason v. Drug Ina, supra, at 703 [“if the Plaintiffs would charge the defendant corporation with making fraudulent misrepresentations it was necessary for him to allege the name of the person who spoke, his authority to speak, t0 Whom he spoke, what he said 0r wrote, and when it was said 0r written.”]; Blickman Turkus, LP v. MFDowntown Sunnyvale, LLC (2008) 162 Cal.App.4th 858, 878 [“Concealment is a species 0f fraud, and fraud must be pleaded with specificity.”].) Here, Plaintiff fails to identify the salesperson Plaintiff spoke t0 when buying the vehicle, When Plaintiff had any conversations With salespeople regarding the vehicle,1 0r What advertisements and/or marketing brochures Plaintiff reviewed or relied upon in purchasing the vehicle and whether they were prepared by GM 0r someone else. The vast maj ority 0f Plaintiff s FAC consists 0f non-case specific, conclusory statements. Plaintiff fails to plead with specificity, as is required, the facts supporting any allegation that GM intended t0 defraud Plaintiff by either making any affirmative statements 0r failing to disclose any alleged facts. (Tenzer v. Superscope, Inc. (1985) 39 Ca1.3d 18, 30 [“something more than non-performance is required to prove the defendant’s intent not t0 perform his promise”].) Based 0n the foregoing, Plaintiff’s Fraud by Omission cause of action fails to meet the applicable pleading standard and should be dismissed. E. Omission/Concealment Cannot Be Based upon Non-actionable Puffery. Even where pled specifically, forward-looking statements, sales talk, puffery, and other generalized statements, cannot constitute facts to support a cause of action for fraud. (Consumer Advocates v. EchoStar Satellite Corp. (2003) 113 Cal.App.4th 1351, 1361; Osborne v. Subaru 0f America, Inc. (1988) 198 Cal. App. 3d 646, 660, n.8 [manufacturers “are permitted t0 ‘puff their products by stating opinions about the quality of the goods so long as they do not cross the line and make factual representations about important characteristics like a product's safety”]; Ammziato v. eMachines, Inc. (C.D. Cal. 2005) 402 F.Supp.2d 1133, 1140 [holding that phrases 9 like “quality,” “reliability,” “high performance criteria,’ and “latest technology” are all non- actionable puffery] .) Plaintiff” s FAC does not allege what statements he might have relied on from 1 In California, an automaker is not liable for the independent conduct 0f a dealership employee 0r another third-party entity With n0 relationship t0 GM. (Mel Clayton GMLLC v. GM LLC Motor C0. (2002) 104 Ca1.App.4th 46, 49.) 17 DEMURRER TO PLAINTIFF’S FIRST AMENDED COMPLAINT ERSKINE LAW GROUP, PC 1576 N. BATAVIA STREET, SUITE A, ORANGE, CA 92867 (949) 777-6032 (OFFICE) | (714) 844-9035 (FAx) L QOONQUI 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 GM. However, t0 the extent he may have relied 0n some unspecified statement, GM asserts that such representation will likely be nothing more than standard sales talk, forward-looking statements, and statements of opinion - all 0fWhich are puffery and none 0fwhich are actionable. VI. CONCLUSION The sixth cause 0f action for Fraud by Omission was filed nearly three years too late; it is time-barred. Further, Plaintiff has failed to state a Viable claim for fraud. Putting aside these two fatal flaws, the fraud claim is precluded by the economic loss rule. For all these reasons, GM’S Demurrer to the sixth cause 0f action for fraud by omission should be sustained Without leave t0 amend. Dated: November 2, 2021 ERSKINE LAW GROUP, PC MARY LYNN ARENS MCBRIDE, Esq. Attorney for Defendant GENERAL MOTORS LLC 1 8 DEMURRER TO PLAINTIFF’S FIRST AMENDED COMPLAINT ERSKINE LAW GROUP, PC 1576 N. BATAVIA STREET, SUITE A, ORANGE, CA 92867 (949) 777-6032 (OFFICE) | (714) 844-9035 (FAx) J; QOONQUI 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PROOF OF SERVICE I declare that I am employed at the law firm ERSKINE LAW GROUP, PC in the County 0f Orange, State 0f California. I further declare that I am over the age 0f 18 and am not a party to the within action, and my law firm’s business address is: ERSKINE LAW GROUP, PC 1576 N. Batavia Street, Suite A Orange, California 92867 I further declare that 0n 0r about, November 2, 2021, I served 0n the parties, t0 whom are addressed below, the foregoing document(s) described as: Notice 0f Demurrer and Demurrer t0 Plaintiff’s First Amended Complaint By placing the [_] 0riginal(s), or the [=1 true copies, thereof enclosed in sealed envelopes, attached t0 electronic mail, and addressed t0 the following: COUNSEL FOR PLAINTIFF STRATEGIC LEGAL PRACTICES 1840 CENTURY PARK EAST STE 430 Los ANGELES, CA 90067 EMAILSERVICES@SLPATTORNEY.COM [_] BY MAIL: as follows, I am "readily familiar" with the firm's practice 0f collection and processing of correspondence for mailing. Under that practice it would be deposited with the U.S. Postal Service 0n that same day With postage thereon fully prepaid at Encino, California, in the ordinary course 0f business. I am aware that 0n motion 0f the party served, service is presumed invalid if postal cancellation date or postage meter date is more than one day after date 0f deposit for mailing in affidavit. [fl] BY ELECTRONIC SERVICE [Code Civ. Proc. § 1010.6; CRC 2.251]: by electronically mailing a true and correct copy through NETZAH & SHEM-TOV INC.’S electronic mail system to the email address(es) set forth above, 0r as stated 0n the attached service list per agreement in accordance with CA’S CCP § 1010.6 and CRC Rule 2.25 1. [_] BY PERSONAL SERVICE: t0 the addressee(s) above. [fl] (State): I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct. [_] (Federal): I declare that I am employed in the office 0f a member of the bar of this court at Whose direction the service was made. Executed, November 2, 2021, in Orange, California. By: James Gimeno 19 DEMURRER TO PLAINTIFF’S FIRST AMENDED COMPLAINT