Demurrer

Cal. Super. - 6th Dist.May 19, 2021

LWN KOOOQONUI 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 21 CV382585 Santa Clara - Civil Mary Arens McBride, Esq. (SBN 282459) Cameron Major, Esq. (SBN: 325986) ERSKINE LAW GROUP, APC 1576 N. Batavia Street, Suite A Orange, California 92867 Phone: (949) 777-6032 Fax: (714) 844-9035 Y. Che Electronically Filed by Superior Court of CA, County of Santa Clara, on 8/11/2021 2:44 PM Reviewed By: Y. Chavez Case #21 CV382585 Envelope: 7042674 Email: marensmcbride@erskinelaw.com Email: cmajor@erskinelaw.com Attorneys for Defendant GENERAL MOTORS LLC SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF SANTA CLARA MARIA BRAMBILA, Case N0.: 2 1 CV382585 Plaintiff, GENERAL MOTORS LLC’S NOTICE VS_ OF DEMURRER AND DEMURRER TO PLAINTIFF’S COMPLAINT; AND A GENERAL MOTORS, LLC, and DOES 1 MEMORANDUM 0F POINTS 0F through 10, inclusive, AUTHORITIES Defendants. [Filed concurrently With Declaration 0f Cameron Major; [Proposed] Orders; and Motion t0 Strike Punitive Damages] DATE: TIME: DEPT: TO THE HONORABLE COURT, ALL PARTIES AND THEIR ATTORNEYS OF RECORD: PLEASE TAKE NOTICE that 0n , 202_ at AM/PM, 0r as soon thereafter as the matter may be heard in Department of the above Court located at DEMURRER TO PLAINTIFF’S COMPLAINT 1 VGZ Dept.20 9:00am 11-9-21 11-9-21 9:00am 20 LWN KOOOQONUI 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 191 North First Street, San Jose, CA 95 1 13, GENERAL MOTORS LLC (“GM”) will and hereby does move this Court for an order sustaining GM’s Demurrer to Plaintiff Maria Brambila’s (“Plaintiff”) Complaint. DEMURRER TO PLAINTIFF’S COMPLAINT GM hereby demurs t0 Plaintiffs Causes of Action within Plaintiff’s Complaint as filed herein, on the following grounds: 1. The sixth cause 0f 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)) 2. The sixth cause 0f action for Fraud by Omission fails t0 state facts relevant to the elements 0f the claim, and therefore does not constitute a cause 0f action. (Code of CiV. Proc., §430.10, subd. (6.)) 3. The sixth cause 0f action for Fraud by Omission is uncertain, ambiguous, and/or unintelligible. (Code ofCiv. Proa, § 430.10, subd. (6)) This Demurrer is brought pursuant t0 California Code 0f Civil Procedure Section 430.10 and is based 0n this Notice 0f Demurrer and the attached Demurrer, Memorandum 0f Points and Authorities, the Declaration 0f Cameron Major, the papers and pleadings and records 0n file in this action and such other papers, pleadings, and arguments as this Court shall admit at the time 0f the hearing. DATED: August 11, 2021 ERSKINE LAW GROUP, APC QM~ Cameron Major, ESQ. COUNSEL FOR GENERAL MOTORS LLC By: 2 DEMURRER TO PLAINTIFF’S COMPLAINT LWN KOOOQONUI 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 TABLE OF CONTENTS I. INTRODUCTION ................................................................................................................... 7 II. SUMMARY OF ALLEGATIONS AND PROCEDURAL HISTORY .................................. 7 III. MEET AND CONFER PER CODE OF CIVIL PROCEDURE SECTION 430.41 ............... 8 IV. LEGAL STANDARD ............................................................................................................. 8 V. ARGUMENT ........................................................................................................................... 8 A. The Economic Loss Rule Bars the Fraud Cause of Action. ............................................. 8 B. Plaintiff” s Allegations Fail t0 State a Viable Claim for Fraud by Omission. ................. 13 C. Plaintiff’ s Concealment Allegations Are Insufficient as a Matter 0f Law. .................... 14 D. Plaintiff Fails to Allege Fraud With the Requisite Specificity. ....................................... 16 E. Concealment Cannot Be Based upon Non-actionable Puffery. ...................................... 17 VI. CONCLUSION ..................................................................................................................... 18 g DEMURRER TO PLAINTIFF’S COMPLAINT LWN KOOOQONUI 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 Anunziato v. eMachines, Inc. (C.D. Cal. 2005) 402 F.Supp.2d 1133 ............................................ 17 Avalon Painting C0. v. Alert Lumber C0. (1965) 234 Cal.App.2d 178 ........................................ 15 Bardin v. DaimlerChrj/sler Corp. (2006) 136 Ca1.App.4th 1255 .................................................. 15 Blank v. Kirwan (1985) 39 Cal.3d 311 ............................................................................................ 8 Blickman Turkus, LP v. MF Downtown Sunnyvale, LLC (2008) 162 Ca1.App.4th 858 ................. 16 Cardinal Health 301, Inc. v. Tyco Electronics Corp. (2008) 169 Cal.App.4th 116 ...................... 16 Consumer Advocates v. EchoStar Satellite Corp. (2003) 113 Cal.App.4th 1351 ......................... 17 D ’Acquisto v. Evola (1949) 90 Cal.App.2d 210 ............................................................................ 16 Daugherty v. Am. Honda. C0., 144 Cal.App.4th 824 ..................................................................... 14 De Spirito v. Andrews (1957) 151 Cal.App.2d I26 ....................................................................... 15 Donabedian v. Mercury Ins. C0. (2004) 116 Ca1.App.4th 968 ....................................................... 8 Engalla v. Permanente Medical Group, Inc. (1997) 15 Cal.4th 951 ............................................ 13 Finney v. Ford Motor C0., 2019 WL 79033 (ND. Cal. 2019) ..................................................... 11 Hammond v. BMW ofNorth America, N0. CV 18-226 DSF (MRWX), 2019 WL 2912232... 10, 11 Heliotis v. Schuman (1986) 181 Cal.App.3d 646 .......................................................................... 15 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 ........................................................... 16 Hsieh v. FCA US LLC, 440 F. Supp. 3d 1157 (S.D. Cal. 2020) .................................................... 12 In re FordMotor C0. DPS6 Powershift Transmission Prod. Liab. Lit., N0. CV1706656ABFFMX, 2019 WL 3000646 (CD. Cal. May 22, 2019) ........................................................................... 11 Kamen v. Lindley (2001) 94 Cal.App.4th 197 ................................................................................. 8 Kelsey v. Nissan N. Am., N0. CV 20-4835 MRW, 2020 WL 4592744 (C.D. Cal. July 15, 2020)10 La Vista Cemetery Assoc. v. American Savings & Loan Association (1970) 12 Cal.App.3d 365 ..8 Lazar v. Superior Court (1996) 12 Cal 4th 631 ............................................................................ 13 4 DEMURRER TO PLAINTIFF’S COMPLAINT LWN KOOOQONUI 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 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 ............................................................ 11 Mason v. Drug Inc. (1939) 31 Cal.App.2d 697 ............................................................................. 16 Mel Clayton GMLLC v. GMLLC Motor C0. (2002) 104 Cal.App.4th 46 ............................. 15, 17 Moore v. Regents 0f University ofCalifomia (1990) 51 Cal.3d 120 .............................................. 8 Mosqueda v. American Honda Motor C0., -F. Supp. 3d -, N0. 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 (N.D. Cal. 2014) .............. 9 Osborne v. Subaru ofAmerica, Inc. (1988) 198 Cal. App. 3d 646 ............................................... 17 Penrose v. Winter (1901) 135 Cal. 289 ........................................................................................... 8 Robinson Helicopter C0,, Inc. v. Dana Corp. (2004) 34 Cal. 4th 979 ............................................ 9 Sloan v. Gen. Motors LLC, N0. 16-CV-07244-EMC, 2020 WL 1955643 (ND. Cal. Apr. 23, 2020) ..................................................................................................................................................... 9 Sloan v. General Motors, 2020 WL 1955643 (N.D. Cal. 2020) ................................................... 11 Stansfield v. Starkey (1990) 220 Cal.App.3d 59 ............................................................................ 16 Stewart v. Electrolux Home Prod, Ina, 304 F. Supp. 3d 894 (E.D. Cal. 2018) ........................... 11 Tarmann v. State Farm Mut. Auto Ins. C0. (1991) 2 Ca1.App.4th 153 ......................................... 16 Tenzer v. Superscope, Inc. (1985) 39 Cal.3d 18 ............................................................................ 17 Thompson v. BMW ofNorth America, N0. SA CV 17-1912 CJC (KSX), 2019 WL 988694.. 10. 11 Traba v. Ford Motor C0., N0. CV 18-808 SVW (GJSX), 2018 WL 6038302 (C.D. Cal. 2018) .. 11 Vandermark v. Ford Motor C0. (1964) 61 Cal.2d 256 .................................................................. 16 Wilson v. Hewlett-Packard, 668 F.3d 1136 (9th Cir. 2012) ........................................................... 14 Yi v. BMW ofNorth America LLC, No. 2: 17-CV-06467-SVW-SK (C.D. Cal. Mar. 5, 2018) ....... 10 Zagarian v. BMW 0fN.Am., N0. CV 18-4857 RSWL (PLAX), 2019 WL 61 1 1731 ............... 10, 11 Statutes Code 0f CiV. Proc., § 430.10 (t) ...................................................................................................... 8 Code of CiV. Proc., § 430.10(e) ....................................................................................................... 8 S DEMURRER TO PLAINTIFF’S COMPLAINT LWN KOOOQONUI 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Treatises 4 Witkin, Summary of Cal. Law (8th ed. 1974) Torts, §§ 459-464, pp. 2724-2728 ..................... 15 6 DEMURRER TO PLAINTIFF’S COMPLAINT LWN KOOOQONUI 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 Maria Brambila (“‘Plaintiff’) is attempting to turn this simple lemon law action into a fraud case against GM. But that effort fails, for multiple reasons, and GM’s Demurrer 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, t0 Whom, and by What means the fraud occurred. Rather than providing these details (which, of course do not exist), Plaintiffparrots allegations from a different case. Those unproven allegations are not “facts,” and assuredly are not facts relevant to Plaintiffs vehicle 0r the repairs to 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 to amend. II. SUMMARY OF ALLEGATIONS AND PROCEDURAL HISTORY On or about January 18, 2019, Plaintiff purchased a 2018 Chevrolet Silverado 1500, VIN 3GCPCPECXJG642 1 91 (“Subj ect Vehicle”). (Complaint at 1] 8.) On May 19, 202 1 , Plaintiff filed “breach 0f warranty” claims under Song-Beverly, as well as a common law “Fraud by Omission” claim. GM now timely files this demurrer. Plaintiff’s Complaint fails to provide critical facts necessary t0 state a claim, such as (1) Whether Plaintiffhad any interaction With GM before 01‘ after the sale, (2) GM’s knowledge 0f the alleged “defects,” (3) how GM intended t0 “defraud” Plaintiff, (4) the lack of privity with GM, and/or (5) specifics regarding the warranties that covered the Subj ect Vehicle. Instead ofproviding these basic details, the Complaint alleges in conclusory fashion that GM “committed fraud by allowing t0 be sold to Plaintiff the Vehicle Without disclosing that the Subject Vehicle and its transmission was [sic] defective and susceptible t0 sudden and premature failure.” (Complaint 1] 36.) The claim is based almost entirely 0n the allegation that GM did not disclose t0 Plaintiff prior to the sale of the vehicle that it had “defects” based upon unspecified facts GM “knew.” (Id. 1N 7 DEMURRER TO PLAINTIFF’S COMPLAINT LWN KOOOQONUI 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 37-41 .) That is not enough. III. MEET AND CONFER PER CODE OF CIVIL PROCEDURE SECTION 430.41 On July 27, 2021, the parties telephonically met and conferred to discuss GM’s Demurrer and Motion to Strike t0 Plaintiff s Complaint. After discussing the points raised herein, the parties remained at an impasse. (Declaration 0f Cameron Major (“Major Decl.”), at 1] 2.) IV. LEGAL STANDARD A demurrer challenges defects that appear 0n the face of the complaint 0r matters outside the pleadings that are judicially noticeable. (Blank v. Kirwan (1985) 39 Cal.3d 31 1, 318; Donabedian v. Mercury Ins. C0. (2004) 116 Ca1.App.4th 968, 994.) In ruling on 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 to constitute a cause 0f action” is subj ect to demurrer.” (Code 0f CiV. Proc., § 430.10(e).) A pleading fails to state a cause of 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 t0 demurrer. (Code 0f CiV. Proc., § 430.10 (f).) The Court must determine if the flaws inherent in the pleading can be remedied by the amendment; if the plaintiff cannot correct the deficiencies, leave t0 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 of legal doctrines such that this Court should sustain GM’s demurrer without leave to amend. V. ARGUMENT A. The Economic Loss Rule Bars the Fraud Cause 0f Action. A person “may not ordinarily recover in tort for the breach of duties that merely restate contractual obligations.” (Aas v. Superior Court (2000) 24 Cal 4th 627, 643, superseded by statute R DEMURRER TO PLAINTIFF’S COMPLAINT LWN KOOOQONUI 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 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 0f contract and the law of tort from dissolving one into the other”) (internal citation and quotation marks 0mitted).) California courts have consistently held that the economic loss doctrine bars fraudulent omissions claims based 0n 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 her Complaint 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 of 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 on Which it relied, nor does it allege that it was exposed to liability for personal damages independent 0f its economic loss. Without having done s0, [Plaintiff] cannot fit Within Robinson’s narrow and limited holding.”).) The affirmative misrepresentation that exposed the Robinson plaintiff t0 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 all concluded that the Robinson exception does not extend to fraud claims based upon alleged concealment, omissions, 0r non-disclosures: o In Zagarian, the plaintiff asserted fraud based upon allegations that BMW omitted information about an “oil consumption” defect in the subject vehicle. (Zagarian v. BMW 0fN.Am., No. CV 18-4857 RSWL (PLAX), 2019 WL 6111731 at *2 (CD. Cal. 2019)). The court there recognized that “some courts have applied the economic loss rule to claims 9 DEMURRER TO PLAINTIFF’S COMPLAINT LWN KOOOQONUI 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 of 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 to “personal damages independent 0f his economic loss,” the court dismissed the plaintiff’s fraud claim as barred by the economic loss rule. (Id.) o In Hammond, the plaintiff only sought damages associated With defects in the subject vehicle, yet still asserted fraud claims (i) Without alleging thatBMW 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 on “omissions” and “concealment” was barred by the economic loss rule. (Id. at *3.) o In Thompson, the plaintiff asserted a fraud claim based upon an allegation that BMW omitted information about an “abnormally high consumption 0f oil” defect. (Thompson v. BMW ofNorth America, No. SA CV 17-1912 CJC (KSX), 2019 WL 988694 at *1 (CD. Cal. 2019)). The court there held that, because plaintiff (i) had alleged fraud due to 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.) o 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, No. 2: 17-cv-06467-SVW-SK at *1 (CD. Cal. Mar. 5, 20 1 8)). The Yi court ruled that, to avoid preclusion 0f a fraud claim under the economic loss rule, a plaintiffmust show exposure t0 personal damages independent of the economic loss. (Id. at *2 (citing R0bins0n)). A plaintiff cannot satisfy this condition (i.e., personal damages independent 0f the economic loss) merely by arguing that the alleged “fraud” would open the door t0 greater damages for the plaintiff. (Id.) The Yi 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 (i.e. , 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., N0. CV 20- 4835 MRW, 2020 WL 4592744, at *1-2 (CD. 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 to alleged vehicle defects. The court 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 10 DEMURRER TO PLAINTIFF’S COMPLAINT LWN KOOOQONUI 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 warranty breach actions.” (Id. at *2.) The court then provided a “monstrously-long” string cite to support its conclusion: (Id. at *2.) In addition to 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 t0 preclude fraudulent omission claim); Leon v. Kia Motors America, Inc. (Orange Cnty Cal. Super. 30-2019-01093543-CU-BC-CJC) (Order 12/13/2019), RJN EX. G Mosqueda v. American Honda Motor C0., -F. Supp. 3d-, N0. SA CV 19-839 MWF (MAAX), 2020 WL 1698710 at *13 (CD. 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, N0. CV 18-226 DSF (MRWX), 2019 WL 2912232 at *2 (C.D. Cal. 2019); Traba v. Ford Motor C0,, No. CV 18-808 SVW (GJSX), 2018 WL 6038302 at *4 (CD. Cal. 2018) (fraudulent concealment “resulted only in Plaintiffs’ disappointed expectations”; plaintiffs “do not claim that the vehicle's alleged defects caused any personal injury or damage to property other than the vehicle”); Thompson v. BMW 0f North America, No. SA CV 17-1912 CJC (KSX), 2019 WL 988694 at *5 (CD. Cal. 2019); Zagarian v. BMW ofNorth America, N0. CV 18- 4857 RSWL (PLAX), 2019 WL 6111731 at *3 (C.D. Cal. 2019); Sloan v. GeneralMotors, 2020 WL 1955643 at *24 (ND. Cal. 2020) (“Robinson and the weight of authority Within the Ninth Circuit suggest that the economic loss rule applies to fraudulent omission claims under California law”; “many courts Within the Ninth Circuit have relied on Robinson in holding that affirmative representations are required for exceptions to the rule to apply”); Finney v. Ford Motor C0., 2019 WL 79033 at *5 (N.D. 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 to economic loss, precluding their strict liability and fraudulent concealment claims”); see also, In 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 to dismiss] stage”). (applying economic loss rule t0 preclude fraudulent concealment/omission claim).) 1 1 DEMURRER TO PLAINTIFF’S COMPLAINT LWN KOOOQONUI 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Most notably, in a decision issued earlier this year - in a case that mirrors this case - plaintiff filed a complaint against Mercedes-Benz USA alleging a fraud claim based upon an alleged omission. (Hien Buz‘ v. Mercedes-Benz USA, LLC, N0. 20-CV-1530-CAB-WVG, 2021 WL 242936, at *4 (SD. Cal. Jan. 25, 2021)). The court there barred plaintiff” s claim for fraudulent concealment because the complaint did not allege any personal injury to the plaintiff or any damage to physical property independent of the subject vehicle. (Id.) In fact, the only allegation of harm caused by the alleged omission was that “plaintiff purchased the vehicle at issue that he would not have otherwise purchased.” (Id. See also Complaint at 1] 44.) The complaint there did not allege any facts that supported a “plausible inference” that Mercedes had any “general duty to disclose the alleged defect regardless ofWhether plaintiffpurchased 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. (Id.) But the court did not stop there. It went 0n to say that, because plaintiffs alleged “damages were strictly economic” and arose out 0f the “same conduct as the breach 0f warranty claims, n0 amendment to the complaint would be able to avoid this outcome.” (Id. (citing Hsieh v. FCA US LLC, 440 F. Supp. 3d 1157, 1162 (S.D. Cal. 2020) (dismissing fraud claim without leave t0 amend because the fact that the lawsuit involved “alleged omissions, not affirmative misrepresentations [precluded] Plaintiff’s ability to avoid the economic loss rule.”).) The Bui court also dismissed plaintiff’ s prayer for punitive damages predicated on the alleged concealment, because there was n0 argument t0 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 t0 the facts presented in Bui. Here, Plaintiff alleges that GM “committed fraud by allowing t0 be sold to Plaintiff the Vehicle without disclosing that the Subject Vehicle and its transmission was [sic] defective and susceptible t0 sudden and premature failure.” (Complaint 1] 36.) Plaintiff has not alleged personal injuries or damages t0 property other than economic loss for the vehicle itself. (Id.) In fact, the only allegation of harm that Plaintiff alleged in the 12 DEMURRER TO PLAINTIFF’S COMPLAINT LWN KOOOQONUI 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Complaint is that, “Had Plaintiff know that the Vehicle and its transmission were defective at the time 0f sale, she would not have purchased/leased the Vehicle.” (Id. at fl 44.) 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 to her 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 0f deceit 0r fraud. The torts 0f deceit 0r fraud require a plaintiff t0 plead and prove: “(21) [a] misrepresentation (false representation, concealment, or nondisclosure); (b) knowledge of falsity (or “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 Complaint does not allege a single, specific, concrete omission by GM. Plaintiff does not allege facts stating the terms of the warranty or warranties at issue 0r allege that GM misrepresented anything about the Subject Vehicle. Nor does the Complaint allege facts about (1) whether Plaintiff communicated with GM before she 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 to its intended use, (5) how GM allegedly failed t0 repurchase or 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 to 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 Complaint alleges the following, and nothing more: GM did not disclose to Plaintiff prior t0 the sale 0f the vehicle that it had “defects” based upon unspecified facts GM “knew.” (Id. 1W 37-41 .) To establish GM’S knowledge and intent at the time of sale, Plaintiff alleges that GM “knew” about 1 3 DEMURRER TO PLAINTIFF’S COMPLAINT LWN KOOOQONUI 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 the Vehicle’s “Transmission Defect,” failed t0 disclose the defective nature “of the Vehicle and its transmission,” and “intentionally concealed material facts” from Plaintiff, yet she does not offer any information or source for her claim. (Id. 1W 40-43.) This does not establish GM’s intent to defraud Plaintiff or demonstrate that the transmission was defective at the time 0f sale. (Id.) Plaintiff has failed t0 provide any factual support for these statements and allegations and has merely provided convenient conclusions that lack any the foundation and specificity required to plead fraud. C. Plaintiff’s Concealment Allegations Are Insufficient as a Matter 0f Law. To establish the tort of concealment (Fraud by Omission), Plaintiff must prove: (1) GM concealed or suppressed a material fact; (2) GM was under a duty t0 disclose the fact t0 Plaintiff; (3) GM intentionally concealed 0r suppressed the fact With intent t0 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. C0,, 144 Cal.App.4th 824, 836; Wilson v. Hewlett-Packard, 668 F.3d 1136, 1141-42 (9th Cir. 2012).) Plaintiff pled n0 such facts; instead, she 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, 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 to amend as to the CLRA and UCL claims because the plaintiff failed t0 identify any representation made by Honda that its automobiles had any characteristics they did not have 0r were of a standard 0r quality they were not. The Daugherty court held: “T0 be actionable, the [fraudulent] omission must be contrary to a representation actually made by the defendant, or an omission of a fact that defendant was 14 DEMURRER TO PLAINTIFF’S COMPLAINT LWN KOOOQONUI 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 obliged to disclose.” (Daugherty, 144 Ca1.App.4th at 835; see also Bardz'n v. DaimlerChrj/sler Corp. (2006) 136 Cal.App.4th 1255, 1276 (no fraud can be alleged if there is n0 showing that the defendant was “bound to disclose” the fact at issue)) Here, there is no allegation that GM was aware 0fany material fact that allegedly impacted the Subject Vehicle’s safety at the time 0f the sale, 0r that Plaintiffhad any direct contact With GM at the time of sale. Therefore, there could not be an omission 0f any material fact at the time of the sale by GM 0r a failure t0 disclose any material fact at the time of the sale as it relates to Plaintiff’ s Subj ect Vehicle having characteristics and benefits that it did not have, 0r that it was of 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 t0 disclose arises in four circumstances: when the defendant: (1) is in a fiduciary relationship with the plaintiff, (2) had exclusive knowledge of 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 of Cal. Law (8th ed. 1974) Torts, §§ 459-464, pp. 2724-2728.) As a matter of law, there is no 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 Cal.App.2d 126, 130.) Nor does Plaintiff allege any 0f the other three circumstances which would create a duty t0 disclose. In California, an automaker is not liable for the independent conduct of a dealership employee 0r another third-party entity with n0 relationship t0 GM. (Mel Clayton GMLLC v. GM LLC Motor C0. (2002) 104 Cal.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 of employees at a dealership are not representations of an agent 0f Defendant itself. (Avalon Painting C0. v. Alert Lumber C0. (1965) 234 Ca1.App.2d 178, 184 [citing Vandermark v. Ford Motor C0. (1964) 61 Cal.2d 256; Cardinal Health 301, Inc. v. Tyco 1 5 DEMURRER TO PLAINTIFF’S COMPLAINT LWN KOOOQONUI 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 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 on defendant)] .) Further, Plaintiffbears the burden to prove agency, which must rest upon an agreement. (D’Acquisto v. Evola (1949) 9O Cal.App.2d 210, 213.) The Complaint 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 Cal.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.” (Tarmarm v. State Farm Mut. Auto Ins. C0. (1991) 2 Cal.App.4th 153, 157.) “[T]he policy 0f liberal construction 0f the pleadings . . . will not ordinarily be invoked t0 sustain a pleading defective in any material respect. [citations] This particularity requirement necessitates pleading facts which ‘show how, when, Where, to Whom and by What means the representations were tendered.’” (Stansfield v. Starkey (1990) 220 Cal.App.3d 59, 73, quoting Hills Trans. C0. v. Southwest (1968) 266 Cal.App.2d 702, 707.) Pleading fraud with specificity is particularly important. (Tarmann v. State Farm, supra, at 157 [“The requirement 0fspecificity in a fraud action against a corporation requires the Plaintiffs to allege the names of the persons who made the allegedly fraudulent representations, their authority t0 speak, t0 whom they spoke, What they said 0r wrote, and When it was said 0r written.”]; Mason v. Drug Ina, supra, at 703 [“if the Plaintiffs would charge the defendant corporation With making fraudulent misrepresentations it was necessary for him t0 allege the name of the person Who spoke, his authority to speak, to whom he spoke, what he said 0r wrote, and When it was said or written.”]; Blickman Turkus, LP v. MFDowntown Sunnyvale, LLC (2008) 162 Ca1.App.4th 858, 878 [“Concealment is a species of fraud, and fraud must be pleaded with specificity.”].) Here, Plaintiff fails to identify the salesperson Plaintiff spoke to When buying the vehicle, 16 DEMURRER TO PLAINTIFF’S COMPLAINT LWN KOOOQONUI 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 when Plaintiff had any conversations with salespeople regarding the vehicle} or what advertisements and/or marketing brochures Plaintiff reviewed 0r relied upon in purchasing the vehicle and Whether they were prepared by GM 0r someone else. The vast maj ority of Plaintiff” s Complaint consists 0f non-case specific, conclusory statements. Plaintiff fails t0 plead with specificity, as is required, the facts supporting any allegation that GM intended t0 defraud Plaintiff by either making any affirmative statements or failing to disclose any alleged facts. (Tenzer v. Superscope, Inc. (1985) 39 Cal.3d 18, 30 [“something more than non-performance is required to prove the defendant’s intent not to 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. 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 t0 support a cause 0f 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 to ‘puff’ their products by stating opinions about the quality of the goods so long as they d0 not cross the line and make factual representations about important characteristics like a product's safety”]; Ammziato v. eMachines, Inc. (CD. Cal. 2005) 402 F.Supp.2d 1133, 1140 [holding that phrases 9, ‘6 9 like “quality, reliability,” “high performance criteria,’ and “latest technology” are all non- actionable puffery].) Plaintiff s Complaint does not allege What statements she might have relied on from GM. However, to the extent she may have relied on some unspecified statement, GM asserts that such representation will likely be nothing more than standard sales talk, forward- looking statements, and statements 0f opinion - all 0f Which are puffery and none 0f which are actionable. 1 In California, an automaker is not liable for the independent conduct of a dealership employee or another third-party entity With n0 relationship t0 GM. (Mel Clayton GMLLC v. GMLLC Motor C0. (2002) 104 Ca1.App.4th 46, 49.) 17 DEMURRER TO PLAINTIFF’S COMPLAINT LWN KOOOQONUI 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 VI. CONCLUSION The sixth cause 0f action for Fraud by Omissiona is precluded by the economic loss rule. Additionally, Plaintiff has failed t0 state a Viable claim for fraud. For these reasons, GM’S Demurrer t0 the sixth cause 0f action for fraud by omission should be sustained without leave to amend. Dated: August 11, 2021 THE ERSKINE LAW GROUP, APC QM~ Cameron Major, Esq. Attorneys for GENERAL MOTORS LLC 1 R DEMURRER TO PLAINTIFF’S COMPLAINT lO ll 12 13 l4 15 l6 l7 l8 19 20 21 22 23 24 25 26 27 28 PROOF OF SERVICE I am employed in the County 0f Orange and my business address is 1576 N. BataVia St, Suite A, Orange, CA 92867. I am over the age 0f 18 years and I am not a party t0 this action. I am readily familiar with the practices of THE ERSKINE LAW GROUP, PC for the collection and processing 0f correspondence for mailing With the United States Postal Service. Such correspondence is deposited With the United States Postal Service the same day in the ordinary course 0f business. On August 11, 2021, I served the foregoing document(s), bearing the title(s): GENERAL MOTORS LLC’S NOTICE OF DEMURRER AND DEMURRER TO PLAINTIFF’S COMPLAINT; AND A MEMORANDUM OF POINTS OF AUTHORITIES 0n the interested parties in the action as follows: [X] by placing [] the original [X] a true copy thereof enclosed in a sealed envelope addressed as follows: Counsel for Plaintiff(s), STRATEGIC LEGAL PRACTICES, APC 1840 Century Park East, Suite 430 Los Angeles, CA 90067 emailservicesdbslpattornev.c0m [] (BY MAIL SERVICE) I placed such envelopes for collection and t0 be mailed 0n this date following ordinary business practices. [] (BY NEXT DAY DELIVERY) I caused to be delivered such envelope by hand t0 the office 0f the addressee. [X] (BY E-MAIL) I caused said document t0 be transmitted t0 the email address(s) 0f the addresses(s) designated above. [X] (STATE) I declare under penalty 0f perjury under the laws of the State 0f California that the foregoing is true and correct. [] (FEDERAL) I declare under penalty of perjury that I am employed by a member 0f the Bar 0f this Court, at Whose direction this service is made. Executed 0n August 11, 2021, at Orange, California. Signed: Anisa Sasso -1- PROOF OF SERVICE