Judge William A. Crowfoot, Case Number: 23AHCV01932, Date: 2024-04-29 Tentative Ruling

Judge: William A. Crowfoot, Case: 23AHCV01932, Date: 2024-04-29 Tentative Ruling

On August 23, 2023, plaintiff Gary Smith (“Plaintiff”) filed this action against defendant General Motors LLC (“Defendant”) arising from his purchase of a 2020 Chevrolet Bolt EV (“Vehicle”).

On November 20, 2023, Defendant filed this demurrer and motion to strike. Defendant demurs to Plaintiff’s first cause of action for fraud and misrepresentation, second cause of action for negligent misrepresentation, and third cause of action for violation of Business and Professions Code section 17200 et seq. (the “UCL”). Defendant moves to strike Plaintiff’s demands for punitive damages in the Complaint’s prayer for relief.

A demurrer tests the legal sufficiency of the pleadings and will be sustained only where the pleading is defective on its face. (City of Atascadero v. Merrill Lynch, Pierce, Fenner & Smith, Inc. (1998) 68 Cal.App.4th 445, 459.) “We treat the demurrer as admitting all material facts properly pleaded but not contentions, deductions or conclusions of fact or law. We accept the factual allegations of the complaint as true and also consider matters which may be judicially noticed. [Citation.]” (Mitchell v. California Department of Public Health (2016) 1 Cal.App.5th 1000, 1007; Del E. Webb Corp. v. Structural Materials Co. (1981) 123 Cal.App.3d 593, 604 [“the facts alleged in the pleading are deemed to be true, however improbable they may be”].) Allegations are to be liberally construed. (Code Civ. Proc., § 452.) In construing the allegations, the court is to give effect to specific factual allegations that may modify or limit inconsistent general or conclusory allegations. (Financial Corporation of America v. Wilburn (1987) 189 Cal.App.3rd 764, 769.) A demurrer may be brought if insufficient facts are stated to support the cause of action asserted. (Code Civ. Proc., § 430.10, subd. (e).)

Any party, within the time allowed to respond to a pleading may serve and file a notice of motion to strike the whole or any part thereof. (Code Civ. Proc., § 435, subd. (b)(1).) The court may, upon a motion, or at any time in its discretion, and upon terms it deems proper, strike any irrelevant, false, or improper matter inserted in any pleading. (Code Civ. Proc., § 436, subd. (a); Stafford v. Shultz (1954) 42 Cal.2d 767, 782 [“Matter in a pleading which is not essential to the claim is surplusage; probative facts are surplusage and may be stricken out or disregarded”].) The court may also strike all or any part of any pleading not drawn or filed in conformity with California law, a court rule, or an order of the court. (Code Civ. Proc., § 436, subd. (b).) An immaterial or irrelevant allegation is one that is not essential to the statement of a claim or defense; is neither pertinent to nor supported by an otherwise sufficient claim or defense; or a demand for judgment requesting relief not supported by the allegations of the complaint. (Code Civ. Proc., § 431.10, subd. (b).) The grounds for moving to strike must appear on the face of the pleading or by way of judicial notice. (Code Civ. Proc., § 437.)

First, Defendant argues that Plaintiff’s cause of action for fraudulent concealment and misrepresentation fails because Plaintiff did not identify the alleged misrepresentations, the individual who made those alleged misrepresentations and their authority to do so on Defendant’s behalf, and when, where, and how those alleged misrepresentations were made.

In opposition, Plaintiff argues that the rule of specificity does not apply to claims for fraudulent concealment. “The requirement of specificity is relaxed when the allegations indicate that ‘the defendant must necessarily possess full information concerning the facts of the controversy.” (Tarmann v. State Farm (1991) 2 Cal.App.4th 153, 58.) Here, Plaintiff’s fraud claim is partly based on concealment because Plaintiff alleges that “[Defendant] concealed, suppressed and/or omitted material facts” about the Vehicle’s defective high voltage battery pack and inability to travel 259 miles on a single charge. (Compl.¶¶ 8, 30.) It is true that Plaintiff alleges that Defendant made affirmative misrepresentations regarding the Vehicle’s battery and mileage range, but Plaintiff sufficiently pleads a theory of liability for fraudulent concealment and a demurrer does not lie as to only a portion of a cause of action.

The Court additionally notes that Defendant raises more than four new arguments in its reply brief regarding the duty to disclose, whether Defendant possessed exclusive knowledge of any material fact, Defendant’s intent to defraud, and Plaintiff’s damages. Because these arguments were raised for the first time on reply, the Court disregards these arguments.

Next, Defendant argues that Plaintiff’s second cause of action for negligent misrepresentation fails because Plaintiff did not allege that Defendant made any representations about the Vehicle. The second cause of action does not appear to be based on concealment. (Compl., ¶ 44.) Instead, Plaintiff alleges that he “met with the salesperson who was authorized to speak on behalf of [Defendant] with respect to the Chevrolet vehicles the dealership was selling” and that the salesperson made oral statements which “reiterated the written representations [Defendant] made in its advertisements and publications” regarding the 2020 Chevrolet Bolt EV, including its ability to travel 259 on a single charge and be charged indoors at Plaintiff’s home. (Compl., ¶ 8.) Plaintiff refers to affirmative misrepresentations in the form of oral statements from Defendant’s “authorized salesperson” and marketing material, but fails to identify the particular salesperson he spoke with, any specific marketing materials he saw and relied on, or when he saw those materials.

Accordingly, the demurrer to the Second Cause of Action is SUSTAINED with leave to amend.

Last, the Court addresses Defendant’s demurrer to Plaintiff’s claim for violation of the UCL. By prohibiting any unlawful business practice, the UCL “borrows” violations of other laws (such as the Song-Beverly Consumer Warranty Act (“SBA”), which Defendant does not demur to) and treats such violations as independently actionable. (Collins v. EMachines, Inc. (2011) 202 Cal.App.4th 249, 258) [“Our conclusion that the complaint states a CLRA violation means the complaint states a UCL violation as well, under the UCL’s “unlawful” prong.”]) “There are innumerable ways in which economic injury from unfair competition may be shown. A plaintiff may (1) surrender in a transaction more, or acquire in a transaction less, than he or she otherwise would have; (2) have a present or future property interest diminished; (3) be deprived of money or property to which he or she has a cognizable claim; or (4) be required to enter into a transaction, costing money or property, that would otherwise have been unnecessary.” (Kwikset Corp. v. Superior Ct. (2011) 51 Cal. 4th 310, 323.)

Defendant argues that Plaintiff did not allege any “unlawful” conduct because Plaintiff fails to state a claim for fraud. As discussed above, Plaintiff sufficiently pleads a claim for fraudulent concealment; also, Defendant did not challenge Plaintiff’s claim based on the SBA. Furthermore, Plaintiff sufficiently alleges standing and a basis for equitable relief (i.e., restitution) because Plaintiff alleges that Defendant’s unfair business practices caused Plaintiff to purchase the Vehicle, which did not have the attributes that Plaintiff believed it had. Therefore, Plaintiff allegedly acquired less than what he otherwise would have, such as a car with a battery that could be driven at least 250 miles on a single charge. The demurrer to the Third Cause of Action is OVERRULED.

Because the Court finds that Plaintiff sufficiently pleads a claim for fraudulent concealment, the motion to strike Plaintiff’s prayer for punitive damages is DENIED.

Defendant’s demurrer to the Second Cause of Action is SUSTAINED with 20 days’ leave to amend.

William A. Crowfoot

Judge of the Superior Court

Parties who intend to submit on this tentative must send an email to the Court at ALHDEPT3@lacourt.org indicating intention to submit on the tentative as directed by the instructions provided on the court website at www.lacourt.org. Please be advised that if you submit on the tentative and elect not to appear at the hearing, the opposing party may nevertheless appear at the hearing and argue the matter. Unless you receive a submission from all other parties in the matter, you should assume that others might appear at the hearing to argue. If the Court does not receive emails from the parties indicating submission on this tentative ruling and there are no appearances at the hearing, the Court may, at its discretion, adopt the tentative as the final order or place the motion off calendar.