Francisco Vilela v. General Motors, LLC

Defendant General Motors, LLC’s (“Defendant”) motion for judgment on the pleadings and motion to strike are DENIED.

Background

This is a lemon law action. Plaintiff Francisco Vilela (“Plaintiff”) alleges that in September 2022, he bought a 2022 Chevrolet Corvette manufactured or distributed by Defendant. (FAC, ¶ 6.) The car was allegedly covered by an express warranty. (Id. at ¶ 10.) Plaintiff alleges that during the warranty period, the vehicle presented certain defects, and Defendant was unable to cure them. (Id. at ¶¶ 12-16.) The FAC describes a transmission defect manifesting in abnormal shifting, jerking, loss of motive power, and/or engine shut-off. (Id. at ¶ 21.) Plaintiff asserts several claims under the Song-Beverly Consumer Warranty Act and a claim for fraud.

The Court now considers Defendant’s motion for judgment on the pleadings as to Plaintiff’s Sixth Cause of Action, the fraud claim, and Defendant’s motion to strike the FAC’s prayer for punitive damages.

MOTION FOR JUDGMENT ON THE PLEADINGS

Legal Standard

A defendant may bring a statutory motion for judgment on the pleadings as to the entire complaint or any cause of action stated therein. (Code Civ. Proc., § 438, subd. (c)(2)(A).) The motion may be brought only after the defendant has filed an answer to the complaint and the time to demur to the complaint has expired. (Code Civ. Proc., § 438, subd. (f)(2).) The grounds for the motion are that the court lacks jurisdiction or that the complaint does not state facts

sufficient to constitute a cause of action. (Code. Civ. Proc., § 438, subd. (c)(1)(B); see also Schabarum v. California Legislature (1998) 60 Cal.App.4th 1205, 1216 [“The standard for granting a motion for judgment on the pleadings is essentially the same as that applicable to a general demurrer, that is, under the state of the pleadings, together with matters that may be judicially noticed, it appears that a party is entitled to judgment as a matter of law.”].) Grounds for a motion for judgment on the pleadings must appear on the face of the challenged pleading or from matters properly subject to judicial notice. (See Code.

Civ. Proc., § 438, subd. (d).) As on a demurrer, the pleading includes matters shown in exhibits attached to it or incorporated by reference. (Frantz v. Blackwell (1987) 189 Cal.App.3d 91, 94; Alameda County Waste Management Authority v. Waste Connections US, Inc. (2021) 67 Cal.App.5th 1162, 1173- 74 (“ACWMA”) [rules governing demurrers apply to motions for judgment on the pleadings except to the extent provided by statute].) A motion for judgment on the pleadings may be granted with or without leave to amend. (Code Civ.

Proc., § 438, subd. (h).)

Discussion

“The required elements for fraudulent concealment are (1) concealment or suppression of a material fact; (2) by a defendant with a duty to disclose the fact; (3) the defendant intended to defraud the plaintiff by intentionally concealing or suppressing the fact; (4) the plaintiff was unaware of the fact and would have acted differently if the concealed or suppressed fact was known; and (5) plaintiff sustained damage as a result of the concealment or suppression of the material fact.” (Rattagan v.

Uber Technologies, Inc. (2024) 17 Cal.5th 1, 40; accord Bank of America Corp. v. Superior Court (2011) 198 Cal.App.4th 862, 870.) The duty to disclose can arise from various circumstances, including where “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)” or where the “defendant actively conceals discovery of material fact from [the] plaintiff (i.e., active concealment).” (Rattagan, supra, 17 Cal.5th 1, 40.)

If the duty to disclose arose by virtue of the defendant’s exclusive knowledge of the facts, “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, supra, 17 Cal.5th 1, 43-44.) Pleading these elements satisfies the requirement that, like all fraud claims, a claim for fraudulent concealment must be pleaded with specificity. (Id. at p. 43 [explaining that these requirements describe the specificity standard particular to fraudulent concealment].)

Defendant argues that Plaintiff has not pleaded his fraud claim with the specificity required by Rattagan. Plaintiff’s FAC alleges that Defendant concealed the fact that the car “was defective and susceptible to premature, sudden, and catastrophic failure.” (FAC, ¶ 83.) It describes the nature of the alleged defect with specificity. (Id. at ¶¶ 20-21, 40, 84, 85(d).) These allegations, coupled with allegations that Defendant was aware of the vehicle’s severe defect (¶¶ 84-85(a)), are sufficient to satisfy the requirements that Plaintiff plead both a material omission and Defendant’s knowledge of the fact that the omitted facts were material, although Plaintiff also expressly pleads those matters. (Id. at ¶¶ 86 [“Defendant has knowingly and intentionally concealed material facts”], 87.) The FAC alleges that Defendant had a duty to disclose this

information based on exclusive knowledge. (Id. at ¶ 85(a).) It pleads that Defendant’s concealment was intentional, that Plaintiff would either have paid substantially less for the vehicle or not bought it at all had he known of the true facts, and that Plaintiff was damaged as a result of Defendant’s conduct. (Id. at ¶¶ 86-89.) Plaintiff pleads the inaccessibility of the true facts to him (id. at ¶ 85(c)), the general point at which the true facts should have been disclosed (id. at ¶ 88 [at the time of sale, when Plaintiff was provided marketing materials about the car]), and justifiable reliance (ibid. [alleging that Plaintiff would not have bought the car had he known the true facts].) Plaintiff has made every allegation required of him by Rattagan.

Defendant argues that the FAC does not allege any omission by Defendant regarding “Plaintiff’s 2022 Chevrolet Corvette.” (Reply, p. 3 [emphasis in original].) Defendant is incorrect. The FAC plainly alleges that “Defendant . . . allow[ed] the Vehicle to be sold to Plaintiff without disclosing that the Vehicle was defective and susceptible to premature, sudden, and catastrophic failure.” (FAC, ¶ 83.) “Vehicle” refers to the 2022 Chevrolet Corvette Plaintiff purchased on September 25, 2022. (Id. at ¶ 6.)

The Court understands that Defendant plans to argue that it could not have had any knowledge specific to the performance of Plaintiff’s car, as opposed to cars of that make and model generally. However, at this stage, the Court is required to accept the FAC’s allegations as true, including the allegation that Defendant knew Plaintiff’s car was defective. (See Del E. Webb Corp. v. Structural Materials Co. (1981) 123 Cal.App.3d 593, 604 [as a general rule, in testing a pleading against a demurrer, the facts alleged in the pleading are deemed to be true, however improbable they may be]; see also ACWMA, supra, 67 Cal.App.5th 1162, 1173-74 [rules governing demurrers apply to motions for judgment on the pleadings].)

Defendant also argues that Plaintiff has inadequately pleaded that Defendant intended to defraud him. The FAC alleges that Defendant was aware of the defect with the car and intentionally withheld the facts surrounding the defect from Plaintiff as Plaintiff was considering purchasing the car. (FAC, ¶¶ 83, 88.) From these facts, one can draw a reasonable inference that Defendant’s purpose in intentionally concealing the facts was to induce Plaintiff to buy the car. (See Teva Pharmaceuticals USA, Inc. v.

Superior Court (2013) 217 Cal.App.4th 96, 102 [on a demurrer, the complaint must be liberally construed and all reasonable inferences must be drawn in favor of its allegations]; ACWMA, supra, 67 Cal.App.5th 1162, 1173-74.) Defendant relies on Tenzer v. Superscope, Inc. (1985) 39 Cal.3d 18, which stated that “ ‘something more than nonperformance is required to prove the defendant’s intent not to perform its promise.’ ” (39 Cal.3d 18, 30 [quoting People v. Ashley (1954) 42 Cal.2d 246, 263].) Tenzer was an appeal of a final judgment in favor of the defendant following a successful defense motion for summary judgment. (Id. at p. 21-22.)

It does not address pleading requirements. Even if it did, the statement Defendant relies on relates to promissory fraud and has no clear application to fraud by concealment or omission.

Finally, in its reply, Defendant argues for the first time that the FAC “does not establish agency between [Defendant] and the dealer that sold the Subject Vehicle or whichever of the dealer’s salespersons who allegedly assisted Plaintiff.” (Reply, p. 3.) The Court will not reach this argument as made for the first time in a reply brief. (Contractors’ State License Bd. v. Superior Court (2018) 23 Cal.App.5th 125, 130, fn. 3 [raising an argument for the first time in a reply brief creates a “potential [for] unfairness to the opposing party, who is deprived of the opportunity to respond to the new argument”]; see also Balboa Ins. Co. v. Aguirre (1983) 149 Cal.App.3d 1002, 1010 [“The salutory [sic] rule is that points raised in a reply brief for the first

time will not be considered unless good cause is shown for the failure to present them before.”) The Court notes that as pleaded, the fraud claim is not premised entirely, if at all, on statements made by car dealership employees. Plaintiff is accusing “Defendant” itself of not disclosing information, including in marketing materials “disseminated by Defendant[.]” (FAC, ¶ 88.) The motion for judgment on the pleadings is DENIED.

MOTION TO STRIKE

Legal Standard

The court may, upon a motion, or at any time in its discretion, and upon terms it deems proper, (1) strike out any irrelevant, false, or improper matter inserted in any pleading; or (2) strike out all or any part of any pleading not drawn or filed in conformity with the laws of California, a court rule, or an order of the court. (Code Civ. Proc., § 436, subds. (a)-(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.) “When the defect which justifies striking a complaint is capable of cure, the court should allow leave to amend.” (Vaccaro v. Kaiman (1998) 63 Cal.App.4th 761, 768.)

Discussion

To state a claim for punitive damages, a plaintiff must plead facts supporting the position that “defendant has been guilty of oppression, fraud, or malice.” (See Smith v. Superior Court (1992) 10 Cal.App.4th 1033, 1041; see also Civ. Code, § 3294, subd. (a).) “Malice” refers to “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).) “Oppression” refers to “despicable conduct that subjects a person to cruel and unjust hardship in conscious disregard of that person’s rights.” (Ibid.)

Here, Plaintiff pleads that Defendant sold him a car while concealing the fact that it had a serious defect of a sort that could potentially cause a major accident. (FAC, ¶¶ 39-41 [defect carried the potential for “loss of motive power” and “engine shut off”; Defendant allegedly knew of the car’s “safety risks”]; see also ¶¶ 21-22.) The Court cannot say that knowingly selling a person a product with a defect that can cause serious or fatal harm is so far removed from the definition of “despicable conduct” (Civ.

Code, § 3294, subd. (c)) that it does not qualify as a matter of law. (See Butte Fire Cases (2018) 24 Cal.App.5th 1150, 1159 [“ ‘Despicable conduct’ is conduct that is ‘ “so vile, base, contemptible, miserable, wretched or loathsome that it would be looked down upon and despised by most ordinary decent people.” ’ ”] [quoting Mock v. Michigan Millers Mutual Ins. Co. (1992) 4 Cal.App.4th 306, 330].) Plaintiff’s allegations are also consistent with Defendant consciously disregarding a significant risk to Plaintiff’s safety. (See Civ.

Code, § 3294, subd. (c) [definition of “malice”].) The FAC’s allegations are minimally sufficient to state a claim for punitive damages.

Defendant suggests that Civil Code, section 3294 does not apply to the complaint because it applies only “[i]n an action for the breach of an obligation not arising from contract[.]” (Civ. Code, § 3294, subd. (a).) Plaintiff’s fraud claim is a cause of action not arising from contract. The legal obligations on which that claim rests arise from principles of tort law, not from any contract.

Defendant argues that Plaintiff cannot request both a civil penalty under the Song-Beverly Act and punitive damages under Section 3294. A plaintiff may recover both a civil penalty under the Song-Beverly Act and punitive damages based on a separate cause of action for fraudulent concealment where the Song-Beverly Act claims and the fraud claim arise out of different conduct occurring at different times, as they do here. (Anderson v. Ford Motor Co. (2022) 74 Cal.App.5th 946, 966-967.)

The motion to strike is DENIED.

All parties must comply with Marin County Superior Court Local Rules, Rule 2.10(B) to contest the tentative decision. Parties who request oral argument are required to appear in person or remotely by ZOOM. Regardless of whether a party requests oral argument in accordance with Rule 2.10(B), the prevailing party shall prepare an order consistent with the announced ruling as required by Marin County Superior Court Local Rules, Rule 2.11.

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