Demurrer

Cal. Super. - 6th Dist.August 3, 2021

.b KOOONQUI 10 11 12 13 l4 15 16 17 18 19 20 21 22 23 24‘ 25 26 27 28 Mary Lynn Arens McBride, Esq. (SBN 282459) Tavian King, Esq. (SBN 334649) 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: tking@erskinelaw.com Attorneys for Defendant GENERAL MOTORS LLC TERRA L. LUGO and ANTHONY URBAN Plaintiffs, VS. GENERAL MOTORS, LLC, and DOES 1 through 10, inclusive, Defendants. Electronically Filed by Superior Court of CA, County of Santa Clara, on 11/10/2021 4:18 PM Reviewed By: R. Tien Case #21CV386542 Envelope: 7645879 SUPERIOR COURT OF THE STATE OF CALIFORNIA FOR THE COUNTY OF SANTA CLARA Case No.: 21CV386542 GENERAL MOTORS LLC’S NOTICE OF DEMURRER AND DEMURRER TO PLAINTIFFS’ COMPLAINT; AND A MEMORANDUM OF POINTS OF AUTHORITIES DATE: 3'1 '22 ' TIME; 9:00am " DEPT: 20 Assignedfor all purposes t0 the Hon. Socrates P. Manoukian TO THE HONORABLE COURT, ALL PARTIES AND THEIR ATTORNEYS OF RECORD: PLEASE TAKE NOTICE that on afl or as soon thereafter as the matter may be heard in Department 20 of the above Court located at 191 North First Street, San Jose, CA 95113, GENERAL MOTORS LLC (“GM”) will and hereby does move this Court for an order sustaining GM’s Demurrer to Plaintiffs Terra L. Lugo’s and Anthony Urban’s (“Plaintiffs”) Complaint. 1 DEMURRER TO PLAINTIFFS’ COMPLAINT J; QOONQUI 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DEMURRER TO PLAINTIFFS’ COMPLAINT GM hereby demurs t0 Plaintiffs’ Causes 0f Action within Plaintiffs’ 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 t0 state facts sufficient t0 constitute a cause 0f action. (Code 0f Civ. Proa, § 430.10, subd. (6)) 2. The sixth cause 0f action for Fraud by Omission is barred by the applicable Statute 0f Limitations. (Code of Civ. Proc. § 338, subd. (d)) Therefore, the sixth cause of action fails t0 state a cause of action. (Code of Civ. Proc., § 430.10, subd. (6)) 3. The sixth cause 0f action for Fraud by Omission fails to 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.)) 4. 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 of Demurrer and the attached Demurrer, Memorandum 0f Points and Authorities, the Declaration of Cameron Major, 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 of the hearing. DATED: November 10, 2021 ERSKINE LAW GROUP, PC TAVIAN KING, ESQ. Attorney for Defendant GENERAL MOTORS LLC By: 2 DEMURRER TO PLAINTIFFS’ COMPLAINT L QOONQUI 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 .......................................................................................................................... 9 A. The Economic Loss Rule Bars the Fraud Cause 0f Action. ............................................. 9 B. The Three-Year Statute 0f Limitations Bars Plaintiffs’ Sixth Cause 0f Action for Fraud by Omission. .................................................................................................................. 13 C. Plaintiffs’ Allegations Fail t0 State a Viable Claim for Fraud by Omission .................. 14 D. Plaintiffs’ Concealment Allegations Are Insufficient as a Matter 0f Law. .................... 15 E. Plaintiffs Fail to Allege Fraud with the Requisite Specificity. ...................................... 17 F. Concealment Cannot Be Based upon Non-actionable Puffery. ..................................... 18 VI. CONCLUSION ..................................................................................................................... 19 3 DEMURRER TO PLAINTIFFS’ COMPLAINT 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. MFDowntown 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 Fox v. Ethicon Endo-Surgerjy, Inc. (2005) 35 Ca1.4th 797 ........................................................... 14 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 Ca1.App.2d 702 ........................................................... 17 Hobart v. Hobart Estate C0. (1945) 26 Cal.2d 412 ...................................................................... 14 Hsieh v. FCA USLLC, 440 F. Supp. 3d 1157 (SD. 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. Ehrgoz‘t (1934) 1 Cal.2d 136 ....................................................................................... 14 4 DEMURRER TO PLAINTIFFS’ COMPLAINT L QOONQUI 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 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)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 Cal.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 -, 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 (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 (N.D. 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 Cal.App.4th 153 ........................................ 17 Tenzer v. Superscope, Inc. (1985) 39 Cal.3d 18 ........................................................................... 18 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 ................................................................. 17 Wilson v. Hewlett-Packard, 668 F.3d 1136 (9th Cir. 2012) .......................................................... 15 Yi v. BMW ofNorth America LLC, No. 2: 17-CV-06467-SVW-SK (CD. 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 PLAINTIFFS’ COMPLAINT L Statutes 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 PLAINTIFFS’ COMPLAINT 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 Plaintiffs Terra L. Lugo and Anthony Urban (“Plaintiffs”) are attempting t0 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 is time-barred. Third, 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, 0f course d0 not exist), Plaintiffs parrot allegations from a different case. Those unproven allegations are not “facts,” and assuredly are not facts relevant t0 Plaintiffs’ vehicle or the repairs to that vehicle under warranty. In short, there is zero factual 0r legal basis for Plaintiffs’ fraud claim. GM’S demurrer should be sustained Without leave to amend. II. SUMMARY OF ALLEGATIONS AND PROCEDURAL HISTORY On or about June 21, 2018, Plaintiffs purchased a 2018 Chevrolet Silverado 1500 vehicle identification number 3GCUCRER1JG365403 (“Subject Vehicle”). (Complaint at 1] 8.) Over three years later, 0n August 3, 2021, Plaintiffs filed “breach 0f warranty” claims under Song- Beverly, as well as a common law “Fraud by Omission” claim. GM now timely files this demurrer. Plaintiffs’ Complaint fails t0 provide critical facts necessary t0 state a claim, such as (1) whether Plaintiffs had any interaction with GM before 0r after the sale, (2) GM’S knowledge 0f the alleged “defects,” (3) how GM intended t0 “defraud” Plaintiffs, (4) the lack of priVity with GM, and/or (5) specifics regarding the warranties that covered the Subject Vehicle. Instead 0f providing these basic details, the Complaint alleges in conclusory fashion that GM “committed fraud by allowing t0 be sold t0 Plaintiffs the Vehicle without disclosing that the Subject Vehicle and its transmission was defective and susceptible t0 sudden and premature failure.” (Complaint 11 7 DEMURRER TO PLAINTIFFS’ COMPLAINT L QOONQUI 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 36.) The claim is based almost entirely 0n the allegation that GM did not disclose t0 Plaintiffs prior t0 the sale 0f the vehicle that it had “defects” based upon unspecified facts GM “knew.” (Id. W 35-47.) That is not enough. III. MEET AND CONFER PER CODE OF CIVIL PROCEDURE SECTION 430.41 GM made a good-faith effort t0 meet and confer with Plaintiffs t0 avoid this demurrer but was unsuccessful despite its best efforts. (Declaration of Tavian King (“King Decl.”), atW 2-5.) IV. LEGAL STANDARD A demurrer challenges defects that appear 0n the face 0f the complaint or matters outside the pleadings that are judicially noticeable. (Blank v. Kirwan (1985) 39 Ca1.3d 3 1 1, 318; 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 Ca1.App.4th 197, 201; see also Moore v. Regents 0f University ofCalz'fornia (1990) 51 Ca1.3d 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(6).) A pleading fails to state a cause 0f action ifit pleads essential allegations as legal conclusions rather than as ultimate facts. (Penrose v. Winter (1901) 135 Cal. 289, 290-29 1 .) Furthermore, a pleading that is uncertain, ambiguous and/or unintelligible is subject to demurrer. (Code of 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 to amend should be denied. (La Vista Cemetery Assoc. v. American Savings & Loan Association (1970) 12 Cal.App.3d 365, 369.) Against this standard, Plaintiffs’ 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 to amend. 8 DEMURRER TO PLAINTIFFS’ COMPLAINT 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 0f 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 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).) Plaintiffs did not allege in their 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 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 t0 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 0f 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 plaintiff’s 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 PLAINTIFFS’ COMPLAINT 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 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 (C.D. 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 subj ect 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 to 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 0f oil” defect. (Thompson v. BMW ofNorth 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 0r 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-06467-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 R0binson)). 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 to greater damages for the plaintiff. (Id.) 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 (Le. , damages “above and beyond a broken contractual promise”), the “fraud” claim failed as a matter of 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 10 DEMURRER TO PLAINTIFFS’ COMPLAINT L QOONQUI 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Nissan 0r economic damages other than economic loss due t0 alleged vehicle defects. The court there noted that “numerous California federal courts sitting in diversity have applied the economic loss rule t0 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: 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 [,] Plaintiff’s 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 Plaintiff’s 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, N0. SA CV 17-1912 CJC (KSX), 2019 WL 988694 at *5 (C.D. 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 (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 on 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 (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) (“Plaintiff’s damages are limited t0 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 t0 the omission claims at [the motion t0 dismiss] stage”). (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, No. CV 17-1823, 2020 WL 4723976, at *2 (CD. Cal. Aug. 13, 2020) (applying 1 1 DEMURRER TO PLAINTIFFS’ COMPLAINT L QOONQUI 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 economic loss rule to 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 (applying economic loss rule t0 preclude fraudulent concealment/omission claim).) 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 Bui v. Mercedes-Benz USA, LLC, N0. 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 to the plaintiff or any damage t0 physical property independent 0f the subject vehicle. (Id.) In fact, the only allegation 0fharm caused by the alleged omission was that “plaintiff purchased the vehicle at issue that she [sic] 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 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. (Id.) But the court did not stop there. It went 0n t0 say that, because plaintiff’s alleged “damages were strictly economic” and arose out 0f the “same conduct as the breach 0f 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 to amend because the fact that the lawsuit involved “alleged omissions, not affirmative misrepresentations [precluded] Plaintiff’s ability t0 avoid the economic loss rule.”).) The Buz’ court also dismissed plaintiff’s prayer for punitive damages predicated 0n 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 to the facts presented in Bui. Here, Plaintiffs allege that GM “committed fraud by allowing t0 be sold t0 Plaintiff [sic] the Vehicle Without disclosing that the Subj ect Vehicle and 12 DEMURRER TO PLAINTIFFS’ COMPLAINT J; QOONQUI 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 its transmission was defective and susceptible t0 sudden and premature failure.” (Complaint 11 36.) Plaintiffs have not alleged personal injuries or damages to property other than economic loss for the vehicle itself. (1d,) In fact, the only allegation ofharm that Plaintiffs alleged in the Complaint is that, if GM had disclosed the “defective transmission,” then Plaintiffs would not have bought the subject vehicle. (Id. at 11 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 0f the alleged economic loss related t0 their vehicle, Plaintiffs’ fraud claim is barred and should be dismissed without leave to amend. B. The Three-Year Statute 0f Limitations Bars Plaintiffs’ Sixth Cause 0f Action for Fraud by Omission. The three-year statute 0f limitations for fraud bars Plaintiffs’ claim (Code of CiV. Proc., § 338(d)), and the Complaint fails t0 allege facts justifying its late filing. Plaintiff purchased the Subject Vehicle 0n or about June 21, 2018. (Complaint, 1] 8.) To assert a fraud claim based upon an alleged omission at the time of sale, Plaintiffs had t0 file their claim n0 later than June 2021. They did not. Plaintiffs did not file their complaint until August 3, 2021- almost two months too late. Plaintiffs cannot invoke the delayed discovery rule because they affirmatively state that the Subj ect Vehicle contained 0r developed the alleged “defects” “during the warranty period” (Id. 11 10) and plead no other facts as t0 when the alleged defect was discovered. The delayed discovery rule tolls the applicable statute 0f limitations only if a plaintiff is unable t0 discover their cause of action with reasonable diligence, and t0 rely upon it, the plaintiff must plead “facts showing that [they] were not negligent in failing t0 make the discovery sooner and that [they] had no actual 0r presumptive knowledge 0f facts sufficient t0 put [them] 0n inquiry.” (Hobart v. Hobart Estate C0. (1945) 26 Cal.2d 412, 437; Johnson v. Ehrgott (1934) 1 Cal.2d 136, 137.) Conclusory allegations will not withstand a demurrer. (Fox v. Ethicon Endo-Surgery, Inc. (2005) 35 Cal.4th 797, 808.) By their own allegations in Paragraph 10 0f the Complaint, Plaintiffs cannot come close t0 carrying this burden. They concede that they discovered the alleged “defects” “during the warranty 13 DEMURRER TO PLAINTIFFS’ COMPLAINT J; QOONQUI 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 period” (id). Moreover, Plaintiffs d0 not providefactual support for the argument that they could not, With reasonable diligence, discover the alleged defect. Instead, the Complaint states this legal conclusions as fact. (See Complaint 11 42) Therefore, they cannot sustain their burden of demonstrating that they did not discover the actions giving rise t0 their claim Within the applicable limitations period. Plaintiffs did not timely assert a Fraud Cause 0f Action. Therefore, GM’S demurrer should be sustained. C. Plaintiffs’ Allegations Fail t0 State a Viable Claim for Fraud by Omission. Plaintiffs’ 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: “(a) [a] misrepresentation (false representation, concealment, 0r nondisclosure); (b) knowledge 0f falsity (0r “scienter”); (c) intent t0 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.) Plaintiffs’ Complaint does not allege a single, specific, concrete omission by GM. Plaintiffs do not allege facts stating that GM misrepresented anything about the Subject Vehicle or the warranty. Nor does the Complaint allege facts about (1) whether Plaintiffs communicated With GM before they bought the Subject Vehicle, (2) whether the purported “defect” was covered under the warranty, (3) Which alleged representations were made to Plaintiffs, (4) how the Subject Vehicle does not allegedly conform t0 its intended use, (5) how GM allegedly failed to repurchase 0r replace the vehicle, (6) how GM owed a duty t0 Plaintiffs, and (7) what facts support Plaintiffs’ allegation that the Subj ect Vehicle is unsafe or ever exhibited a safety concern. Plaintiffs merely allege in conclusory fashion that GM failed t0 disclose safety risks associated With the Subj ect Vehicle. Plaintiffs have provided nothing other than speculative and conclusory statements cloaked in broad and sweeping allegations. Specifically, Plaintiffs’ Complaint alleges the following, and nothing more: GM did not disclose t0 Plaintiffs prior to the sale 0f the subject vehicle that it had a “defect” based upon unspecified facts GM “knew.” (Id. fl 14 DEMURRER TO PLAINTIFFS’ COMPLAINT J; QOONQUI 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 36-47.) T0 establish GM’S knowledge and intent at the time 0f sale, Plaintiffs alleges that GM “knew” that the engine in the Subject Vehicle was defective, failed t0 disclose the defects and “intentionally concealed material facts” yet they d0 not offer any information 0r source for their claim. (Id. 1] 42.) This does not establish GM’s intent t0 defraud Plaintiffs 0r demonstrate that the transmission is or was defective at the time of sale. (Id.) Plaintiffs have failed to provide any factual support for these statements and allegations and have merely provided convenient conclusions that lack any the foundation and specificity required t0 plead fraud. D. Plaintiffs’ Concealment Allegations Are Insufficient as a Matter 0f Law. T0 establish the tort of concealment (Fraud by Omission), Plaintiffs must prove: (1) GM concealed 0r suppressed a material fact; (2) GM was under a duty to disclose the fact t0 Plaintiffs; (3) GM intentionally concealed 0r suppressed the fact with intent t0 defraud Plaintiffs; (4) Plaintiffs were unaware 0f the fact and would not have acted as Plaintiffs did if Plaintiffs had known 0f the concealed 0r suppressed fact; and (5) Plaintiffs were 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).) Plaintiffs pled n0 such facts; instead, they 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 t0 oil leakage. The trial court sustained Honda’s demurrer without leave t0 amend as t0 the CLRA and UCL claims because the plaintiff failed to identify any representation made by Honda that its automobiles had any characteristics they did not have 0r were 0f a standard 0r 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, 0r an omission 0f a fact that defendant was 15 DEMURRER TO PLAINTIFFS’ COMPLAINT J; QOONQUI 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 obliged t0 disclose.” (Daugherty, 144 Cal.App.4th at 835; see also Bardz'n v. DaimlerChrj/Sler Corp. (2006) 136 Cal.App.4th 1255, 1276 (n0 fraud can be alleged if there is no showing that the defendant was “bound t0 disclose” the fact at issue)) Here, there is n0 allegation that GM was aware 0f any material fact that allegedly impacted the Subject Vehicle’s safety at the time 0f the sale, 0r that Plaintiffs had any direct contact with GM at the time of sale. Therefore, there could not be an omission of any material fact at the time 0f the sale by GM 0r a failure t0 disclose any material fact at the time of the sale as it relates t0 Plaintiffs’ 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 0f 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 0f material facts not known t0 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 Cal.App.3d 646, 651, quoting 4 Witkin, Summary of Cal. Law (8th ed. 1974) Torts, §§ 459-464, pp. 2724-2728.) As a matter 0f law, there is n0 fiduciary relationship between GM and Plaintiffs. “It is a general rule that a vendor not in a confidential relation to the buyer is not under a duty to make full disclosure concerning the object which he would sell.” (De Spirito v. Andrews (1957) 151 Cal.App.2d 126, 130.) Nor do Plaintiffs allege any of the other three circumstances Which would create a duty to disclose. In California, an automaker is not liable for the independent conduct 0f a dealership employee 0r another third-party entity with no relationship to 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 0f 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 16 DEMURRER TO PLAINTIFFS’ COMPLAINT J; QOONQUI 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 do not involve reliance 0n defendant)] .) Further, Plaintiffs bear the burden t0 prove agency, which must rest upon an agreement. (D’Acquisto v. Evola (1949) 90 Cal.App.2d 210, 213.) The Complaint fails t0 demonstrate any direct representations by GM to Plaintiffs. E. Plaintiffs Fail 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 of 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 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 or wrote, and when it was said 0r written.”]; Blickman Turkus, LP v. MFDowntown Sunnyvale, LLC (2008) 162 Ca1.App.4th 858, 878 [“Concealment is a species 0f fraud, and fraud must be pleaded with specificity.”].) Here, Plaintiffs fail to identify the salesperson Plaintiffs spoke t0 when buying the vehicle, 17 DEMURRER TO PLAINTIFFS’ COMPLAINT L QOONQUI 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 When Plaintiffs had any conversations With salespeople regarding the vehicle} or What advertisements and/or marketing brochures Plaintiffs reviewed or relied upon in purchasing the vehicle and whether they were prepared by GM 0r someone else. The vast maj ority 0f Plaintiffs’ Complaint consists 0f non-case specific, conclusory statements. Plaintiffs fail t0 plead With specificity, as is required, the facts supporting any allegation that GM intended t0 defraud Plaintiffs by either making any affirmative statements or failing t0 disclose any alleged facts. (Tenzer v. Superscope, Inc. (1985) 39 Cal.3d 18, 30 [“something more than non-performance is required t0 prove the defendant’s intent not t0 perform his promise”].) Based 0n the foregoing, Plaintiffs’ Fraud by Omission cause 0f action fails t0 meet the applicable pleading standard and should be dismissed. F. 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 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”]; Anunziato 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].) Plaintiffs’ Complaint does not allege what statements they might have relied on from GM. However, t0 the extent they 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 of which are actionable. 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.) 18 DEMURRER TO PLAINTIFFS’ COMPLAINT J; QOONQUI 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 VI. CONCLUSION The sixth cause of action for Fraud by Omission is precluded by the economic loss rule. Additionally, the fraud claim was filed too late; it is time-barred. Further, Plaintiffs have failed t0 state a Viable claim for fraud. For all these reasons, GM’S Demurrer t0 the sixth cause 0f action for fraud by omission should be sustained without leave to amend. Dated: November 10, 2021 ERSKINE LAW GROUP, PC TAVIAN KING, ESQ. Attorney for Defendant GENERAL MOTORS LLC 19 DEMURRER TO PLAINTIFFS’ COMPLAINT 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 of Orange, State of California. I further declare that I am over the age of 18 and am not a party t0 the within action, and my law firm’s business address is: ERSKINE LAW GROUP, PC 1576 N. Batavia Street, Suite A Orange, CA 92867 I further declare that on or about, November 10, 2021, I served 0n the parties, t0 whom are addressed below, the foregoing document(s) described as: NOTICE OF DEMURRER AND DEMURRER TO PLAINTIFFS’ COMPLAINT By placing the [_] original(s), or the [XX] true copies, thereof enclosed in sealed envelopes, attached t0 electronic mail, and addressed t0 the following: COUNSEL FOR PLAINTIFFs STRATEGIC LEGAL PRACTICES 1840 CENTURY PARK EAST STE 430 Los ANGELES, CA 90067 EMAILSERVICES@SLPATTORNEY.COM [=1 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 of deposit for mailing in affidavit. [XX] BY ELECTRONIC SERVICE [Code Civ. Proc. § 1010.6; CRC 2.251]: by electronically mailing a true and correct copy through STRATEGIC LEGAL PRACTICE’S electronic mail system t0 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 2.251. [_] BY PERSONAL SERVICE: t0 the addressee(s) above. [fl] (State): I declare under penalty 0f 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 of a member of the bar 0f this court at Whose direction the service was made. Executed, November 10, 2021, in Orange, California. By: James Gimeno 20 DEMURRER TO PLAINTIFFS’ COMPLAINT