Wei vs. Toyota Motor Sales, U.S.A., Inc.

“A duty to disclose a material fact can arise if (1) it is imposed by statute; (2) the defendant is acting as plaintiff’s fiduciary or is in some other confidential relationship with plaintiff that imposes a disclosure duty under the circumstances; (3) the material facts are known or accessible only to defendant, and defendant knows those facts are not known or reasonably discoverable by plaintiff (i.e., exclusive knowledge); (4) the defendant makes representations but fails to disclose other facts that materially qualify the facts disclosed or render the disclosure misleading (i.e., partial concealment); or (5) defendant actively conceals discovery of material fact from plaintiff (i.e., active concealment)...Circumstances (3), (4), and (5) presuppose a preexisting relationship between the parties, such as ‘between seller and buyer, employer and prospective employee, doctor and patient, or parties entering into any kind of contractual agreement. [Citation.]

All of these relationships are created by transactions between parties from which a duty to disclose facts material to the transaction arises under certain circumstances.’...’Such a transaction must necessarily arise from direct dealings between the plaintiff and the defendant; it cannot arise between the defendant and the public at large.’” (Rattagan v. Uber Technologies, Inc., 17 Cal.5th at 40-41; see, Blickman Turkus, LP v. MF Downtown Sunnyvale, LLC (2008) 162 Cal.App.4th 858, 867 [“A duty to speak may arise in four ways: it may be directly imposed by statute or other prescriptive law; it may be voluntarily assumed by contractual undertaking; it may arise as an incident of a relationship between the defendant and the plaintiff; and it may arise as a result of other conduct by the defendant that makes it wrongful for him to remain silent.”].)

“There are ‘four circumstances in which nondisclosure or concealment may constitute actionable fraud: (1) when the defendant is in a fiduciary relationship with the plaintiff; (2) when the defendant had exclusive knowledge of material facts not known to the plaintiff; (3) when the defendant actively conceals a material fact from the plaintiff; and (4) when the defendant makes partial representations but also suppresses some material facts. [Citation.]’” (LiMandri v. Judkins (1997) 52 Cal.App.4th 326, 336, citing Heliotis v. Schuman (1986) 181 Cal.App.3d 646, 651.)

“Suppression of a material fact is actionable when there is a duty of disclosure, which may arise from a relationship between the parties, such as a buyer-seller relationship.” (Dhital v. Nissan North America, Inc. (2022) 84 Cal.App.5th 828, 843.)

Every element of fraud must be pleaded with specificity. The particularity requirement for fraud requires the pleading of facts showing how, when, where, to whom, and by what means the representations were made. (Stansfield v. Starkey (1990) 220 Cal. App. 3d 59, 73.) This is to provide the defendant with notice and to give the court enough information to assess whether there is a foundation for the charge of fraud. (Committee on Children’s Television, Inc. v. General Foods Corp. (1983) 35 Cal. 3d 197, 216.)

The requirement of specificity in a fraud action against a corporation requires the plaintiff to allege the names of the persons who made the allegedly fraudulent representations, their authority to speak, to whom they spoke, what they said or wrote, and when it was said or written. (Tarmann v. State Farm Mut. Auto. Ins. Co. (1991) 2 Cal.App.4th 153, 157.) Nonetheless, “[l]ess specificity is required when it appears from the nature of the allegations that the defendant must necessarily possess full information concerning the facts of the controversy.” (Committee on Children’s Television, 35 Cal. 3d at 216 [citation and internal quote marks omitted].)

“California courts apply the same specificity standard to evaluate the factual underpinnings of a fraudulent concealment claim at the pleading stage, even though the focus of inquiry shifts to the unique elements of the claim...For instance, in a case such as this, the court must determine whether the plaintiff has alleged a sufficient factual basis for establishing a duty of disclosure on the part of the defendant independent of the parties’ contract. If the duty allegedly arose by virtue of the parties’ relationship and defendant’s exclusive knowledge or access to certain facts, as Rattagan has alleged here, the complaint must also include specific allegations establishing all the required elements, including (1) the content of the omitted facts, (2) defendant’s awareness of the materiality of those facts, (3) the inaccessibility of the facts to plaintiff, (4) the general point at which the omitted facts should or could have been revealed, and (5) justifiable and actual reliance, either through action or forbearance, based on the defendant’s omission.” (Rattagan v.

Uber Technologies, Inc., 17 Cal.5th at 43-44.)

Plaintiff did not allege sufficient facts with the necessary specificity to state this cause of action. (See, Dhital v. Nissan North America, Inc. (2022) 84 Cal.App.5th 828, 844.) Accordingly, the demurrer is sustained with 15 days leave to amend.

In light of the ruling above, the Court declines to reach the merits of whether the sixth cause of action is barred by the economic loss rule.

MOTION TO STRIKE

Pursuant to Code of Civil Procedure section 436, the Court may: (a) Strike out any irrelevant, false, or improper matter inserted in any pleading. (b) Strike out all or any part of any pleading not drawn or filed in conformity with the laws of this state, a court rule, or an order of the court.

“The grounds for a motion to strike shall appear on the face of the challenged pleading or from any matter of which the court is required to take judicial notice.” (Code Civ. Proc., § 437, subd. (a).)

“[J]udges read allegations of a pleading subject to a motion to strike as a whole, all parts in their context, and assume their truth.” (Clauson v. Superior Court (1998) 67 Cal.App.4th 1253, 1255.)

Plaintiff may recover exemplary damages in an action for the breach of an obligation not arising from contract if Plaintiff proves by clear and convincing evidence that Defendants are “guilty of oppression, fraud, or malice.” (Civ. Code § 3294, subd. (a).) Malice is defined as “conduct which is intended by the defendant to cause injury to the plaintiff or despicable conduct which is carried on by the defendant with a willful and conscious disregard of the rights or safety of others.” (Civ. Code § 3294, subd. (c)(1).)

Oppression is defined as “despicable conduct that subjects a person to cruel and unjust hardship in conscious disregard of that person’s rights.” (Civ. Code § 3294, subd. (c)(2).) Fraud is defined as “an intentional misrepresentation, deceit, or concealment of a material fact known to the defendant with the intention on the part of the defendant of thereby depriving a person of property or legal rights or otherwise causing injury.” (Civ. Code § 3294, subd. (c)(3).)

Punitive damages cannot be pled in conclusory terms, instead the facts supporting a claim for punitive damages must be set out clearly, concisely, and with particularity. (Smith v. Superior Court (1992) 10 Cal.App.4th 1033, 1041-1042.) However, “it has long been recognized that ‘(t)he distinction between conclusions of law and ultimate facts is not at all clear and involves at most a matter of degree.’” (Perkins v. Superior Court (1981) 117 Cal.App.3d 1, 6.) “What is important is that the complaint as a whole contain sufficient facts to apprise the defendant of the basis upon which the plaintiff is seeking relief.” (Id.)

In ruling on a motion to strike, the Court should “read allegations of a pleading subject to a motion to strike as a whole, all parts in their context, and assume their truth.” (Clauson v. Superior Court (1998) 67 Cal.App.4th 1253, 1255; See Perkins, 117 Cal.App.3d at 6 [“stricken language must be read not in isolation, but in the context of the facts alleged in the rest of petitioner’s complaint.”].)

“When the defendant is a corporation, ‘[a]n award of punitive damages against a corporation...must rest on the malice of the corporation’s employees.’” (Wilson v. Southern California Edison Co. (2015) 234 Cal.App.4th 123, 164 [citing Cruz v. HomeBase (2000) 83 Cal.App.4th 160, 167].)

Plaintiff did not allege sufficient facts to support Plaintiff’s request for punitive damages. Plaintiff did not allege sufficient facts to state Plaintiff’s sixth cause of action for fraudulent inducement concealment. Plaintiff did not allege sufficient facts to seek punitive damages against a corporation. Plaintiff may not seek punitive damages for a Song Beverly Act violation. The Song-Beverly Act provides for civil remedies and does not provide for punitive damages. (Civ. Code, § 1794.) California courts have explained that civil penalties “have been likened, by courts, to punitive damages.” (Suman v.

Superior Court (1995) 39 Cal.App.4th 1309, 1317, citing Kwan v. Mercedes-Benz of North America, Inc. (1994) 23 Cal.App.4th 174, 184.) A plaintiff may not recover both civil penalties and punitive damages “based upon substantially the same conduct.” (Troensegaard v. Silvercrest Industries, Inc. (1985) 175 Cal.App.3d 218, 226.)

Accordingly, Manufacturer’s motion to strike is granted with 15 days leave to amend.

15. 2025-1517586 The motion by Michael Israel of Adamantium Legal APC, to be Je Beaute, Inc. relieved as counsel of record for Jingyi Guo, is granted. vs. Guo Upon the signing of the order, counsel shall serve the signed order on the client and all parties that have appeared. Michael Israel of Adamantium Legal APC will be relieved as counsel of record for Jingyi Guo, effective upon the filing of the proof of service of the signed order upon the client and all parties.

The Court declines Guo’s request for the Court to issue an order directing counsel to turn over her client file, because such an order is not necessary. An attorney has a duty to promptly release a client’s file upon termination of employment, at the client’s request. (Cal. R. Prof. Conduct Rule 1.16.) Failure to do so may be cause for discipline from the State Bar. (Cal. Prac. Guide Prof. Resp. & Liability at ¶ 10:333.)

Adamantium Legal APC is ordered to give notice of the ruling.