Demurrer_to_complaintDemurrerCal. Super. - 4th Dist.July 23, 2018T H E E R S K I N E L A W G R O U P A T T O R N E Y S A T L A W C O L U M B U S 10 11 12 13 14 L5 16 17 18 19 20 21 22 23 24 25 26 27 28 ELECTROMICALLY FILED Superior Court of California, County of Orange Mary Lynn Arens, Bar No. 282459 11/30/2018 at 02:37:00 PM Sean Morrissey, Bar No. 297371 THE ERSKINE LAW GROUP, PC 3995 E. La Palma Ave Anaheim, CA 92807 Telephone: 949.777.6367 Facsimile: 714-844-9035 Email: marens@erskinelaw.com Email: smorrissey@erskinelaw.com Clerk of the Superior Court By Jeannette Dowling. Deputy Clerk Attorneys for Defendant GENERAL MOTORS LLC SUPERIOR COURT OF CALIFORNIA COUNTY OF ORANGE ERICA GARCIA, an individual, CASE NO. 30-2018-01007424-CU-BC-CIJC Plaintiff, [ASSIGNED FOR ALL PURPOSES TO: Honorable David R. Chaffee v. Department C-20] DEFENDANT GENERAL MOTORS LLC NOTICE OF DEMURRER AND GENERAL MOTORS LLC, a Delaware DEMURRER TO PLAINTIFF’S Limited Liability Company, and DOES 1 COMPLAINT AND MEMORANDUM OF through 50, inclusive, POINTS OF AUTHORITIES Defendants. Reservation ID: 72938934 DATE: February 1, 2019 TIME: 9:30 am. DEPT: C-20 Date Filed: July 23, 2018 Trial Date: N/A [Filed concurrently with Declaration of Sean Morrissey, and [Proposed] Order] TO THE PARTIES AND TO THEIR ATTORNEYS OF RECORD: PLEASE TAKE NOTICE that on February 1, 2019, at 9:30 a.m., or as soon thereafter as the matter may be heard, in Department C-20 of the above-entitled court located at 700 West Civic Center Drive, Santa Ana, CA 92701, Defendant General Motors LLC (“GM LLC”) will demur to Plaintiff’s (“Complaint”) herein. DEFENDANT GENERAL MOTORS LLC’S NOTICE OF DEMURRER TO PLAINTIFF COMPLAINT T H E E R S K I N E L A W G R O U P A T T O R N E Y S A T L A W 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 x7 28 The Demurrer will be made pursuant to Code of Civil Procedure section 430.30. The Demurrer will be made on the following grounds: I. The third cause of action for violation of California Business and Professions Code section 17200 et seq. fails to state facts sufficient to constitute a cause of action. (Code Civ. Proc., § 430.10(e)). The seventh cause of action for conversion fails to state facts sufficient to constitute a cause of action. (Code Civ. Proc., § 430.10(¢)). The Demurrer will be based upon this Notice, the attached Memorandum of Points and Authorities, The Declaration of Sean Morrissey, and the pleadings and records on file herein. Dated: November 30, 2018 THE ERSKINE LAW Hou, PC -0. DEFENDANT GENERAL MOTORS LLC’S NOTICE OF DEMURRER TO PLAINTIFF'S COMPLAINT T H E E R S K I N E L A W G R O U P A T T O R N E Y S A T L A W 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 L IL. III. IV. TABLE OF CONTENTS INTRODUCTION AND STATEMENT OF RELEVANT FACTS...oooviiiiiiiaae. 1 EFFORTS TO MEET AND CONFER. ....ottiiii eee eee eee 1 ARGUMENT oe 1 A. Demurrer Standard. ..........ooeeueee rn 1 B. Plaintiff’s Third Cause of Action Does Not State a Claim for Violation of the C. Plaintiff’s Seventh Cause of Action Fails to State a Cause of Action for COMVETSION t reee eee eee eee ee eees 3 D. The Economic Loss Rule Bars the Fraud Cause of Action ........................ 7 E. GM LLC’s Demurrer Should be Granted Without Leave to Amend............ 10 CONCLUSION. «cette ee eee eet eee 11 i DEFENDANT GENERAL MOTORS LLC’S DEMURRER TO PLAINTIFF'S COMPLAINT T H E E R S K I N E L A W G R O U P A T T O R N E Y S A T L A W 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 TABLE OF AUTHORITIES Cases Kamen v. Lindley (2001) 94 Cal. APPA™ 197... ieee 1 Moore v. Regents of University of California (1990) 51 Cal3d 120...........ccoiiiiiiiiiiininninnn. 1 Penrose v. Winter (1901) 135 Cal. 289, 290-291... coir eee eas 2 Khoury v. Maly’s of Calif, Inc. (1994) 14 Cal. App.A™ 612... ..ueeeeeeiiiiieee eee, 2 Makreas v. First National Bank of N. Cal., 856 F. Supp. 2d 1097, 1101 (N.D. Cal. 2012).......... 3 Korea Supply Co. v. Lockheed Martin Corp., (2003) 29 Cal. 4th 1134..........cooiiiiiiiiiiii 3 Penrose v. Winter (1901) 135 Cal. 289... oii eee eee eee, 3 Khoury v. Maly’s of Calif, Inc. (1994) 14 Cal. App.A™ 612... ...oeeeeeiiieee eee, 3 McKinniss v. General Mills Inc. (C.D. Cal. Sept. 18,2007) 2007 LEXIS 96107, *10............... 4 Daugherty v. American Honda Motor Co., Inc. (2006) 144 Cal. App.4th 824................cooent. 4 Bardin v. DaimlerChrysler Corp. (2006) 136 Cal. App.4th 1255.....cciiiiiiiiiiiiie 4 Welco Electronics, Inc. v. Mora (2014) 223 Cal.App.4th 202.......ccovviiiiiiiiiiiiiiiiiiiiieeaen, 5 Lge v, Hagley (2018) G1, Cal Ath [225mm 1 5 ssumumnso 1s s sommes e «5s poommmsonns s §3 558000080 1 3 § § OGRE § 18 5 Fischer v. Machado (1996) 50 Cal. APpAth 1069. cceecs «sss snsswais sss sanmoness i 5 sanmmassss s 5 samsns 5,6 Software Design & Application, Ltd. v. Hoefer & Arnett, Inc. (1996) 49 Cal. App.4th 472...... 5,6 Vu v. California Commerce Club, Inc. (1997) 58 Cal. App.4th229.........coiiiiiiiiiiiiiiiin... 5,6 PCO, Inc. v. Christensen, Miller, Fink, Jacobs, Glaser, Weil & Shapiro, LLP (2007) 150 Cal APD. At 38a. ea 5,6 Haigler v. Donnelly (1941) 18 Cal.2d 674, 681......oiiiiiiii ieee 6 Weiss v. Marcus (1975) 51 Cal.App.3d 590, 599... ceria 6 Watson v. Stockton Morris Plan Co. (1939) 34 Cal. App.2d 393... cirri, 6 Kim v. Westmoore Partners, Inc. (2011) 201 Cal. App.4th 267........cooiiiiiiiiiiiiiiiaae, 7 Food Safety Net Services v. Eco Safe Systems USA, Inc. (2012) 209 Cal. App.4th 1118, 1130.....7 Robinson Helicopter Co., Inc. v. Dana Corp. (2004) 34 Cal.4th 979... 7,8,9 Jiminez v. Superior Court (2002) 29 Cal. 4th 473,482... oii eee 8 ii DEFENDANT GENERAL MOTORS LLC’S DEMURRER TO PLAINTIFF’S COMPLAINT T H E E R S K I N E L A W G R O U P A T T O R N E Y S A T L A W 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Seely v White Motor Co. (1965) 63 Cal.2d 9, 18-19... coir, 8,9 Applied Equipment Corp. v. Litton Saudi Arabia Ltd. (1994) 7 Cal.4th 503, 514................... 8 Erlich v. Menezes (1999) 21 Cal.dth 543, 551... 8 La Vista Cemetery Association v. American Savings & Loan Association (1970) 12 Cal. App3d 30S 10 Chapman v. Skype Inc (2013) 220 Cal. APPA" 217. .oooiiiie eee 10 Statutes Civil Code § 1790, © SEQ.uvu tment atte eee eee eee eee eerie enreeaeeas 1,2,3,5,7,10 Business and Professions Code § 17200 et S€q........ovvveriieeniieniannannnns yeseeene 1,3,4,7,8,9, 10 Code of Civil Procedure § 430.100€)....cuuuiinriiieit ieee eee eee eee eee eee eee aaes 3 Code of Civil Procedure § 425.100) (1). ...uieniiniiiiiii ieee eee eee eee eee 3 Code of Civil Procedure § 430.100) ....oviiniiiiii eee eee eee 3 Business and Professions Code § 17500 © SEQ... ..uuuirteniintiiiateieet eee eee e e eae 3 Business and Professions Code § 17204... o.oo eee eee eas 3,4 Business and Professions Code § 17203... iii ieee eee eee 4 1 DEFENDANT GENERAL MOTORS LLC’S DEMURRER TO PLAINTIFF’S COMPLAINT T H E E R S K I N E L A W G R O U P A T T O R N E Y S A T L A W 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 AND STATEMENT OF RELEVANT FACTS This action arises from Plaintiff Erica Garcia’s (“Plaintiff”) purchase of a 2017 Chevrolet Silverado on, or about, September 7, 2017. (See Complaint at 4 4). This action was filed on July 23, 2018, but GM was not properly served with Plaintiff’s Complaint until October 31, 2018. (Declaration of Sean Morrissey (“Morrissey Dec.”), at § 4, Ex. C) Plaintiff alleges that the subject vehicle contained or developed defects and/or nonconformities during the warranty period. (See Complaint 9 6). Plaintiff alleges a violation of the Song-Beverly Consumer Warranty Act and Civil Code sections 1790 et seq. (“Song-Beverly”), a violation of Unfair Competition Laws (“UCL”) encoded in Business and Professions Code section 17200 ef seq., and Conversion. The UCL allegation contained in the Third Cause of Action and the Conversion allegation contained in the Seventh Cause of Action of Plaintiff's Complaint are the subject of this demurrer. Plaintiff’s failure to provide any specific and coherent factual basis is telling and undermines Plaintiff’s Third and Seventh Causes of Action. II. EFFORTS TO MEET AND CONFER GM LLC’s counsel made a good-faith effort to meet and confer on the issues raised in this demurrer, but was unsuccessful despite his best efforts. (Morrissey Dec. at q 2-3, Ex. A). On September 6, 2018, counsel for GM LLC and counsel for Plaintiff met and conferred telephonically. (Morrissey Dec. at {9 2 & 3). Both parties made a good-faith effort to resolve the issues raised in this demurrer but were unsuccessful despite their best efforts. (Morrissey Dec. at 2). III. ARGUMENT A. Demurrer Standard In ruling on a demurrer, “the trial court . . . treats the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law.” (Kamen v. Lindley (2001) 94 Cal.App.4th 197, 201; see also Moore v. Regents of University of California (1990) 51 Cal.3d 120, 125.) A complaint that “does not state facts sufficient to constitute a cause of action” is subject 1 DEFENDANT GENERAL MOTORS LLC’S DEMURRER TO PLAINTIFF’S COMPLAINT T H E E R S K I N E L A W G R O U P A T T O R N E Y S A T L A W 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 to demurrer.” (Code of Civ. Proc., § 430.10(e).) A complaint 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.) Complaints must contain statements of fact in ordinary and concise language. (Code Civ. Proc., § 425.10(a)(1)). Furthermore, a pleading that is uncertain, ambiguous and/or unintelligible is subject to demurrer. (Code of Civ. Proc., § 430.10 (f).) Here, third cause of action fails to allege sufficient facts and is uncertain, ambiguous, and unintelligible. B. Plaintiff’s Third Cause of Action Does Not State a Claim for Violation of the UCL Plaintiff fails to plead with requisite specificity the conduct she believes constitutes Defendant’s unlawful, unfair and/or fraudulent business practices. Plaintiff’s UCL cause of action is nothing more than a breach of warranty claim cloaked as a UCL claim. A plaintiff alleging unfair business practices under the UCL “must state with reasonable particularity the facts supporting the statutory elements of the violation.” (Khoury v. Maly’s of Calif., Inc (1994) 14 Cal. App.4th 612, 619). A demurrer is properly sustained under the “unlawful” prong if a complaint “identifies no particular section of the statutory scheme which was violated.” (1d.). Moreover, Plaintiffs alleging a UCL claim must have "suffered injury in fact and lost money or property as a result of the unfair competition." (Bus. & Prof. Code §17204). Plaintiff’s third cause of action, or UCL claim, is premised entirely on the following conclusory allegations: 19. On or about September 7, 2017, Defendant advertised, called attention to, or gave publicity to the sale of merchandise, which merchandise was defective in any manner, without conspicuously displaying directly in connection with the name and description of that merchandise and each article, unit, or part thereof, a direct and unequivocal statement, phrase, or word which clearly indicated that the merchandise or each article, unit, or part thereof so advertised was defective, in violation of Business & Professions Code section 17531. 20. The representations were made in a newspaper, magazine, circular, form letter or in an open publication, published, distributed, or circulated in this state, including over the Internet, or on any billboard, card, label, or other advertising medium, or by means of another advertising device. 22. Plaintiff’s agreement to lease the vehicle is subject to the provisions of Civil Code section 2986.10, which provides that ANY HOLDERS OF THIS CONSUMER CREDIT CONTRACT IS SUBJECT TO ALL CLAIMS AND DEFENSES WHICH THE DEBTOR COULD ASSERT AGAINST THE SELLER OF GOODS OR SERVICES OBTAINED PURSUANT HERETO OR WITH THE PROCEEDS HEREOF” 2 DEFENDANT GENERAL MOTORS LLC’S DEMURRER TO PLAINTIFF’S COMPLAINT T H E E R S K I N E L A W G R O U P A T T O R N E Y S A T L A W 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Defendant DOES 10 through 19 are or, at one time, were assignees of the lease ad are thus subject to all equities and defenses wich Plaintiff could assert against the lessor. (Complaint 4 19, 20, & 21) The Third Cause of Action merely incorporates and regurgitates the code section that Plaintiff is relying on and has not alleged any facts, whatsoever, other than mere legal conclusions. Plaintiff has not alleged what, if any, of the above mediums Plaintiff actually relied upon. As such, Plaintiff’s Third Cause of Action fails to state with reasonable particularity the specific facts that would support violation of the UCL. Moreover, the Third Cause of Action also fails to identify any particular and specific conduct that has allegedly violated the UCL. “In order to bring a claim for violation of Section 17200, a plaintiff must show either an (1) ‘unlawful, unfair, or fraudulent business act or practice,” or (2) ‘unfair, deceptive, untrue or misleading advertising.” Makreas v. First National Bank of N. Cal., 856 F. Supp. 2d 1097, 1101 (N.D. Cal. 2012). Plaintiff refers to a violation of §§17531 and 17535, but does not identify any particular act or practice of GM under which a violation occurred. Moreover, Plaintiff has not pled sufficient facts to state a claim under either of the two prongs. The UCL provides two remedies to redress its violations: (1) injunctive relief “to ‘prevent’ practices of unfair competition” and (2) restitution “to ‘restore to any person in interest’ any money or property acquired through unfair practices.” (Korea Supply Co. v. Lockheed Martin Corp., (2003) 29 Cal. 4th 1134, 1147 (quoting Bus.& Prof. Code §17203)). In addition, Plaintiff must demonstrate that she has "suffered injury in fact and lost money or property as a result of the unfair competition." (Bus. & Prof. Code §17204). Plaintiff’s Third Cause of Action contends that Defendant allegedly violated Business and Professions Code, sections 17531 and 17535, which resulted in harm to Plaintiff, and therefore the harm somehow gives rise to injunctive relief. Plaintiff’s assertion that she is entitled to injunctive relief is without merit. Nowhere in the complaint has Plaintiff identified any particular activity against which an injunction could be enforced as a preventative measure or which specific advertisement allegedly violated Business and Professions Code, sections 17531 and 17535. Merely alleging that Plaintiff was harmed by Defendant’s conduct does not by itself give rise to 3 DEFENDANT GENERAL MOTORS LLC’S DEMURRER TO PLAINTIFF’S COMPLAINT T H E E R S K I N E L A W G R O U P A T T O R N E Y S A T L A W 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 injunctive relief. Moreover, Plaintiff fails to state any facts of future practices of unfair competition that could be prevented by injunctive relief. Further, Plaintiff has also failed to establish the requisite standing to recover under the UCL because the Complaint as a whole fails to allege any facts that Plaintiff has lost money or property as a result of unfair competition. In short, the conclusory allegation parroted from the code section and legal conclusions contained in Plaintiff’s Third Cause of Action fail to state sufficient facts to support a violation of the Business and Professions Code and cannot not withstand the instant demurrer. It is Defendant’s position that Plaintiff’s complaint fails to plead facts sufficient to constitute a cause of action for any relief under the UCL. McKinniss v. General Mills Inc. (C.D. Cal. Sept. 18, 2007) 2007 LEXIS 96107, *10 (applying California law) (“As a threshold matter, to state a claim under the UCL or CLRA, a plaintiff must allege that the alleged false and misleading statements were likely to deceive a reasonable consumer.”)). (emphasis in original) (citations omitted.) Instead, the Third Cause of Action improperly pleads essential allegations as legal conclusions. Plaintiff’s UCL allegations are boilerplate and devoid of any supporting facts allegedly in violation of the UCL. Plaintiffs have also failed to establish the requisite standing to recover under the UCL as the Complaint as a whole fails to allege any facts that Plaintiffs have suffered an injury in fact and have lost money or property as a result of unfair competition as required pursuant to Section 17204. This issue was squarely addressed in Daugherty v. American Honda Motor Co., Inc. (2006) 144 Cal.App.4th 824, an action brought under the CLRA and Business and Professions Code section 17200 (“UCL”). 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 cause of action and the cause of action under the UCL. The court noted the complaint failed to 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 court held: To be actionable, the [fraudulent] omission must be contrary to a representation actually made by the defendant, or an omission of a fact that 4 DEFENDANT GENERAL MOTORS LLC’S DEMURRER TO PLAINTIFF’S COMPLAINT T H E E R S K I N E L A W G R O U P A T T O R N E Y S A T L A W 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 defendant was obliged to disclose.... (Daugherty, 144 Cal. App.4th at 835; see also Bardin v. DaimlerChrysler Corp. (2006) 136 Cal.App.4th 1255, 1276 (no fraud can be alleged if there is no showing that the defendant was “bound to disclose” a tubular steel exhaust manifold rather than the conventional cast iron)). Additionally, Plaintiff has failed to plead any specific facts that go beyond an alleged breach of warranty cause of action. Merely alleging that Plaintiffs have suffered harm under Song-Beverly does not by itself establish standing to recover under the UCL. For these reasons, Plaintiffs have failed to sufficiently plead a cause of action to withstand a demurrer. C. Plaintiff’s Seventh Cause of Action Fails to State a Cause of Action for Conversion The Seventh Cause of Action merely incorporates the allegations made in the Complaints Fifth Cause of action and improperly concludes that because Defendant is allegedly in violation of Song-Beverly, it has per se converted some unidentifiable and unascertainable sum of monies from Plaintiff for its own use. This is not a legally sustainable cause of action. It has not been adjudicated, determined, ordered, decreed, or conceded that GM has been found to be in violation of Civil Code, section 1793.2(d). “© “ “Conversion is the wrongful exercise of dominion over the property of another. The elements of a conversion claim are: (1) the plaintiff’s ownership or right to possession of the property; (2) the defendant’s conversion by a wrongful act or disposition of property rights; and (3) damages . . ..” ”’ (Welco Electronics, Inc. v. Mora (2014) 223 Cal.App.4th 202, 208.)” (Lee v. Hanley (2015) 61 Cal.4th 1225, 1240.) 6 ¢ Under California law, ©“ ‘[m]oney cannot be the subject of a cause of action for conversion unless there is a specific, identifiable sum involved, such as where an agent accepts a sum of money to be paid to another and fails to make the payment. [Citation.]’ . . . Fischer v. Machado (1996) 50 Cal. App.4th 1069, 1072-1074 [sales agent liable for conversion of proceeds from consignment sale of farm products]; Software Design & Application, Ltd. v. Hoefer & Arnett, Inc. (1996) 49 Cal.App.4th 472, 485 [‘money cannot be the subject of a conversion action unless a specific sum capable of identification is involved.’].) A ‘generalized claim for money [is] not 5 DEFENDANT GENERAL MOTORS LLC’S DEMURRER TO PLAINTIFF’S COMPLAINT T H E E R S K I N E L A W G R O U P A T T O R N E Y S A T L A W 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 actionable as conversion.” (Vu v. California Commerce Club, Inc. (1997) 58 Cal.App.4th 229, 235; 5 Witkin, Summary of Cal. Law (10th ed. 2005), Torts, § 703, pp. 1026-1027.)” (PCO, Inc. v. Christensen, Miller, Fink, Jacobs, Glaser, Weil & Shapiro, LLP (2007) 150 Cal.App.4th 384, 395 (PCO).) The tort of conversion “is derived from the common law action of trover. The gravamen of the tort is the defendant’s hostile act of dominion or control over a specific chattel to which the plaintiff has the right of immediate possession. (See generally, Rest.2d Torts, § 222A, com. a, p. 431; 1 Dobbs, The Law of Torts (2001), § 59, pp. 121-122.) That is why money can only be treated as specific property subject to being converted when it is ‘identified as a specific thing.” (PCO, supra, 150 Cal.App.4th at p. 395.) California cases “permitting an action for conversion of money typically involve those who have misappropriated, commingled, or misapplied specific funds held for the benefit of others. (See, e.g., Haigler v. Donnelly (1941) 18 Cal.2d 674, 681 [real estate broker[, while acting as agent for lessors, retained funds received from lessee]]; Fischer v. Machado, supra, 50 Cal.App.4th at pp. 1072-1074 [sales agent for consigned farm products]; Weiss v. Marcus (1975) 51 Cal. App.3d 590, 599 [attorney’s claim for $6,750 fee from proceeds of settlement subject to lien]; Watson V. Stockton Morris Plan Co. (1939) 34 Cal.App.2d 393, 403 [savings and loan issued duplicate passbook and delivered funds to third party].) In each of these cases, the amount of money converted was readily ascertainable.” (PCO, supra, 150 Cal. App.4th at p. 396, italics added.) In contrast, “actions for the conversion of money have not been permitted when the amount of money involved is not a definite sum. (Vu v. California Commerce Club, Inc., supra, 58 Cal.App.4th at p. 235; Software Design & Application, Ltd. v. Hoefer & Arnett, Inc., supra, 49 Cal.App.4th at p. 485 [no conversion where money was allegedly misappropriated ‘over time, in various sums, without any indication that it was held in trust for’ plaintiff]; . . . . For example, in Vu v. California Commerce Club, Inc., supra, 58 Cal.App.4th 229, the court affirmed a [defense] summary judgment on a conversion claim [brought by] two gamblers who lost ‘approximately $1.4 million” and ‘approximately $120,000,” respectively, at a specific card club during specified 6 DEFENDANT GENERAL MOTORS LLC’S DEMURRER TO PLAINTIFF’S COMPLAINT T H E E R S K I N E L A W G R O U P A T T O R N E Y S A T L A W 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 periods of time, due to alleged cheating. (Id. at pp. 231-232.) The [Vu ] court held, ‘neither by pleading nor responsive proof did plaintiffs identify any specific, identifiable sums that the club took from them. That rendered the generalized claim for money not actionable as conversion.’ (Id. at p. 235.) (PCO, supra, 150 Cal.App.4th at pp. 396-397.) A cause of action for conversion of money can be stated only where a defendant interferes with the plaintiff’s possessory interest in a specific, identifiable sum, such as when a trustee or agent misappropriates the money entrusted to him.” (Kim v. Westmoore Partners, Inc. (2011) 201 Cal.App.4th 267, 284.) Plaintiff has failed to allege any of the above. In essence, Plaintiff is attempting to deprive GM of its due process and assert that by alleging that GM has violated Civil Code, section 1793.2(d), Plaintiff is somehow entitled to a predetermination that GM has converted an unidentifiable and hypothetical sum of money from Plaintiff. Plaintiff has failed to establish, or allege, how she has any ownership of, possession of, or right to possess any such unidentified and hypothetical sum of monies that GM has allegedly wrongfully converted for its own use. Plaintiff must establish that Plaintiff has actual ownership, possession, or right to possess the unidentifiable and hypothetical sum of money for such a cause of action to be viable. As such, Plaintiff’s Seventh Cause of Action fails to state facts sufficient to constitute a cause of action that would support a conversion cause of action. (Code Civ. Proc., § 430.10(e)). D. The Economic Loss Rule Bars the Fraud Cause of Action The economic loss rule provides that where a purchaser’s expectations in a sale are frustrated because the product he bought is not working properly, his remedy is said to be in contract alone, for he has suffered only economic losses. (Food Safety Net Services v. Eco Safe Systems USA, Inc. (2012) 209 Cal. App.4th 1118, 1130 [citing Robinson Helicopter Co., Inc. v. Dana Corp. (2004) 34 Cal.4th 979, 988].) The economic loss rule requires a purchaser to recover in contract for purely economic loss due to disappointed expectations, unless he can demonstrate harm above and beyond a broken contractual promise. Quite simply, the economic loss rule prevents the law of contract and the law of tort from dissolving one into the other. (/d. at 988 [citing Redarowicz v. Ohlendorf (Ill. 1982) 92 Ill. 2d 171]). The rationale for the economic loss 7 DEFENDANT GENERAL MOTORS LLC’S DEMURRER TO PLAINTIFF’S COMPLAINT T H E E R S K I N E L A W G R O U P A T T O R N E Y S A T L A W 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 rule was set forth in Jiminez v. Superior Court, where the court provided: The distinction that the law has drawn between tort recovery for physical injuries and warranty recovery for economic loss is not arbitrary and does not rest on the “luck” of one plaintiff in having an accident causing physical injury. The distinction rests, rather, on an understanding of the nature of the responsibility a manufacturer must undertake in distributing his products. We concluded that the nature of this responsibility meant that a manufacturer could appropriately be held liable for physical injuries (including both personal injury and damage to property other than the product itself), regardless of the terms of any warranty. But the manufacturer could not be held liable for ‘the level of performance of his products in the consumer's business unless he agrees that the product was designed to meet the consumer's demands. (Jiminez v. Superior Court (2002) 29 Cal. 4th 473, 482 [citing Seely v White Motor Co. (1965) 63 Cal.2d 9,18-19]) The economic loss rule precludes Plaintiff from recovering anything beyond the alleged economic loss, i.e. tort/punitive damages, for her UCL and Conversion Causes of Action, which is premised upon GM LLC’s alleged pre-purchase misrepresentations and/or concealments about the soundness of the vehicle. As explained by the California Supreme Court in Applied Equipment Corp. v. Litton Saudi Arabia Ltd. (1994) 7 Cal.4th 503, 514, “Contract and tort are different branches of law. Contract law exists to enforce legally binding agreements between parties; tort law is designed to vindicate social policy.” The California Supreme Court also discussed the reasoning and importance of the Economic Loss rule in Erlich v. Menezes (1999) 21 Cal.4th 543, 55, clarifying “Conduct amounting to a breach of contract becomes tortious only when it also involves a duty independent of the contract arising from principles of tort law . . . An omission to perform a contract obligation is never a tort unless that omission is also an omission of a legal duty.” Importantly, the Erlich Court emphasized: “the importance of predictability in assuring commercial stability in the contractual dealing ...and the potential for converting every contract breach into a tort with accompanying punitive damage recovery” that risked rendering the demarcation between tort and contract remedies meaningless. (See Id. at 554.) Further, in Robinson Helicopter, the California Supreme Court specifically held that a extra-contractual causes of action may only be brought where alleged representations were made as to matters which were independent from those contained in the contract which exposed the 8 DEFENDANT GENERAL MOTORS LLC’S DEMURRER TO PLAINTIFF’S COMPLAINT T H E E R S K I N E L A W G R O U P A T T O R N E Y S A T L A W 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 plaintiff to personal injury damages independent of the Plaintiff’s economic loss. (Robinson Helicopter Co., supra, 34 Cal.4th at 979) (emphasis added). The California Supreme Court carved out this narrow and limited circumstance where “a party alleging fraud or deceit in connection with a contract” can recover in tort if he can “establish tortious conduct independent of a breach of the contract itself, that is, violation of ‘some independent duty arising from tort 355 law.”” (Id. at 1130.) This exception is extremely “narrow in scope and limited to a defendant’s affirmative misrepresentations on which a plaintiff relies and which expose a plaintiff to liability for personal damages independent of the Plaintiff’s economic loss.” (Robinson Helicopter, supra, at 993.) That is, where there is a tort allegation that a contract was fraudulently induced, the fraud is only actionable when (1) the fraudulent conduct breached an independent tort duty and, (2) the fraudulent misrepresentation exposes a plaintiff to liability for personal damages independent of the Plaintiffs’ economic loss. (/d. at 991 and 993.) Applying the economic loss rule to the allegations in Plaintiff’s Complaint warrants sustaining this demurrer because Plaintiff’s allegations concern the merchantable quality of the subject vehicle and GM LLC’s alleged inability to repair the vehicle pursuant to GM LLC’s warranty and Plaintiff has not alleged personal injury or secondary property damage. (See Seely v White Motor Co., supra, 63 Cal.2d 9). Even if Plaintiff was to allege some kind of potential personal damages, such an allegation would not amount to anything but mere speculation. (Robinson, supra, at 991 [where a Plaintiff’s independent tort damages was beyond mere speculation because the safety components of the helicopters had a measurably higher failure rate and the plaintiff suffered a helicopter crash and was subject to disciplinary action by the FAA].) The Song-Beverly, UCL, and Conversion Causes of Action are contractual in nature since the allegations relate to the sales contract and the warranty contract themselves. Thus, Plaintiff’s UCL and Conversion Causes of Action do not qualify for the exception to the economic loss rule. Additionally, Plaintiff’s Complaint does not identify any alleged independent duty of GM 9 DEFENDANT GENERAL MOTORS LLC’S DEMURRER TO PLAINTIFF’S COMPLAINT T H E E R S K I N E L A W G R O U P A T T O R N E Y S A T L A W 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 LLC or allege that Plaintiff suffered any damage other than economic loss of the vehicle itself.’ Further, Plaintiff has not and cannot point to any similar damage that she has actually incurred beyond damage to the product itself (i.e., her disappointed expectations regarding vehicle performance). The most Plaintiff's Complaint specifically states with respect to Plaintiff’s experience and problems is that “[dJuring the warranty period, the Vehicle contained or developed various defects, including but not limited to defects which cause the engine to leak oil, defects which cause the dashboard lights and instruments to fail to operate, defects which cause the vehicle to make an unusual buzzing noise, and defects which cause the vehicle to jerk when being driven”. (See Complaint 9 6). Plaintiff does not state in her Complaint whether: 1) she has suffered personal injury or property damage independent of her economic loss (e.g. her contractual damages); or 2) still owns and drives the vehicle such that she might be exposed to such speculative damages. Thus, application of the economic loss rule to the Complaint’s UCL and Conversion allegations warrants that the demurrer be sustained because the allegations concern the merchantable quality of the vehicle and GM LLC’s ability to repair the vehicle pursuant to its warranty (i.e. Contract). Plaintiff has only claimed economic loss. The claims filed pursuant to the Song-Beverly Warranty Act, and the allegations contained in the Complaint, are contractual in nature and provide Plaintiff with full and appropriate remedies at law. As such, the allegations relate to the sales contract or the warranty contract themselves and do not qualify for the exception to the economic loss rule. E. GM LLC’s Demurrer Should be Granted Without Leave to Amend. 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 ' Robinson, illustrates the kind of damage that goes beyond mere economic loss from the breach of contract. In Robinson, as the plaintiff had sold helicopters with defective parts which defendant had fraudulently represented as being FAA compliant, and the helicopters were no longer under Plaintiff’s control, plaintiff suffered extra damages in the form of (1) a helicopter crash which subjected plaintiff to disciplinary action by the FAA; and (2) likely claims against plaintiff by its customers given the defective safety components’ measurably higher failure rate. 10 DEFENDANT GENERAL MOTORS LLC’S DEMURRER TO PLAINTIFF’S COMPLAINT T H E E R S K I N E L A W G R O U P A T T O R N E Y S A T L A W 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 deficiencies of pleading, leave to amend should be denied. (La Vista Cemetery Association v. American Savings & Loan Association (1970) 12 Cal. App.3d 365, 369.) “The burden is on the plaintiff to demonstrate how the complaint can be amended to state a valid cause of action.” (Chapman v. Skype Inc. (2013) 220 Cal. App.4™ 217, 226). Plaintiff has made no showing that she can plead facts sufficient to constitute a cause of action under the UCL for injunctive relief or support punitive damages under a Conversion Cause of Action. Plaintiff’s complaint makes no factual allegation to the ongoing threat of Defendant’s conduct, nor does it allege any facts to establish standing in order to recover injunctive relief. Plaintiff has not plead facts from which it can reasonably be inferred that the defendant acted with malice, oppression, or fraud within the meaning of Civil Code section 3294, as in necessary to support a punitive damages award. With nothing pled aside from the statutory language it is apparent that Plaintiff cannot amend her complaint to properly state a cause of action under the UCL or to support a Conversion claim. Accordingly, GM LLC’s demurrer to Plaintiff’s Third and Seventh Causes of Action should be sustained without leave to amend. III. CONCLUSION In short, Plaintiff’s complaint fails to plead facts sufficient to constitute a cause of action for injunctive relief under Business and Professions Code Section 17200 or punitive damages under a Conversion Cause of Action. For the foregoing reasons, GM LLC respectfully requests that this Court sustain GM LLC’s Demurrer without leave to amend. Dated: November 30, 2018 ERSKINE LAW GROf PC 11 DEFENDANT GENERAL MOTORS LLC’S DEMURRER TO PLAINTIFF’S COMPLAINT T H E E R S K I N E L A W G R O U P A T T O R N E Y S A T L A W 10 11 12 13 14 L5 16 17 18 19 20 21 22 23 24 25 26 27 28 PROOF OF SERVICE I am employed in the County of Orange and my business address is 3995 E. La Palma Ave, Anaheim, CA 91042. I am over the age of 18 years and I am not a party to this action. I am readily familiar with the practices of THE ERSKINE LAW GROUP for the collection and processing of 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 of business. On November 30, 2018, I served the foregoing document(s), bearing the title(s) DEFENDANT GENERAL MOTORS LLC NOTICE OF DEMURRER AND DEMURRER TO PLAINTIFF’S COMPLAINT AND MEMORANDUM OF POINTS OF AUTHORITIES on 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: ANDERSON LAW FIRM LAW OFFICES OF JEFFREY KANE Martin W. Anderson Jeffrey Kane 2070 North Tustin Ave. 20902 Brookhurst Street, Suite 210 Santa Ana, CA 92707 Huntington Beach, CA 92646 Tel: (714) 516-2700 Tel: (714) 964-6900 Fax: (714) 532-4700 Fax: (714) 964-6944 [X] (BY MAIL SERVICE) I placed such envelopes for collection and to be mailed on this date following ordinary business practices. [1 (BY PERSONAL SERVICE) I caused to be delivered such envelope by hand to the office of the addressee. [] (BY FACSIMILE) The document stated herein was transmitted by facsimile transmission and the transmission was reported as complete and without error. A transmission report was properly issued by the transmitting facsimile machine and a copy of said transmission report is attached to the original proof of service indicating the time of transmission. [] (BY NEXT DAY DELIVERY) I caused to be delivered such envelope by hand to the office of the addressee. [] (BY E-MAIL) I served the above mentioned document via electronic transmission per agreement of the parties. [X] (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 under penalty of perjury that I am employed by a member of the Bar of this Court, at whose direction this service is made. Executed on November 30, 2018, at Anaheim, CA. { oprizy 74 Signed: Js Jerry Gonzalez 1 PROOF OF SERVICE - DEMURRER TO PLAINTIFF'S COMPLAINT
