Coleman v. Mercedes-Benz USA, LLC.

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Defendant Mercedes-Benz of Santa Rosa (“Defendant”) moves for judgment on the pleadings on Plaintiff Dominic Monte Coleman’s (“Plaintiff’s”) third cause of action for negligent repair on the grounds that it fails to allege facts sufficient to constitute a cause of action. I. Complaint On August 27, 2025, Plaintiff filed his complaint against Defendant and others based upon his purchase of a 2025 Mercedes-Benz E-Class (“Subject Vehicle”). The causes of action arise out of the alleged warranty and repair obligations of the Subject Vehicle. Only one cause of action is alleged against Defendant: the third cause of action for Negligent Repair. That cause of action 5

alleges Plaintiff delivered the Subject Vehicle to Defendant for repairs on numerous occasions. Plaintiff alleges Defendant breached its duty to Plaintiff to use ordinary care and skill in storage, preparation, and repair of the Subject Vehicle in accordance with industry standards. II. Injury and Economic Loss Rule Defendant first argues that Plaintiff’s claim fails because Plaintiff must assert damage to a person or property other than the product itself. Defendant cites the portion of federal cases that discuss the economic loss rule.

In Sabicer v. Ford Motor Company (C.D. Cal. 2019) 362 F.Supp.3d 837, the defendants failed to meet their burden to establish that the plaintiffs failed to state a cause of action against Santa Margarita Ford for negligent repair. (Id., at p. 840.) The court stated: “One who undertakes repairs has a duty arising in tort to do them without negligence.” (Id., at p. 840-841.) “In support of their negligent repair claim, Plaintiffs allege that they took their Vehicle to Santa Margarita Ford on at least one occasion. [Citation.]

They further allege that Santa Margarita Ford owed them a duty to use ordinary care and skill in the storage, preparation, and repair of their Vehicle and that Santa Margarita Ford breached this duty by failing to properly store, prepare, and repair the Vehicle. [Citation.] They allege this breach was a proximate cause of their damages. [Citation.]” (Id., at p. 841.) These are essentially the same allegations as in the instant complaint. The Sabicer defendants also failed to show that the economic loss rule barred that plaintiff’s negligent repair claim. (Id., at p. 841.)

The Sabicer plaintiffs alleged problems with various subcomponents of the engine, including the rear driveshaft, engine compartment, and turbocharger. (Ibid.) “The economic loss rule would not bar recovery in tort for damage that these subcomponents cause to the engine as a whole or for damage that the engine caused to the Vehicle in which it has been incorporated.” As stated in Jimenez v. Superior Court (2002) 29 Cal.4th 473, “the economic loss rule allows a plaintiff to recover in strict products liability in tort when a product defect causes damage to ‘other property,’ that is, property other than the product itself.

The law of contractual warranty governs damage to the product itself.” (Id., at p. 483.) However, California law is not so settled that a plaintiff could not possibly recover against a dealership for negligent repair of a vehicle. (Sabicer, supra, at p. 841 [citing case.]) Here, Plaintiff alleges negligence, not strict products liability. Contract and tort are different branches of the law. Contract law exists to enforce the intentions of the parties to an agreement while tort law is designed to vindicate social policy. (North American Chemical Co. v.

Superior Court (1997) 59 Cal.App.4th 764, 774.) However, the same wrongful act may constitute both a breach of contract and an invasion of an interest protected by the law of torts. (Ibid.) The general rule is that where the “negligent” performance of a contract amounts to nothing more than a failure to perform the express terms of the contract, the claim is one for contract breach, not negligence. (Id. at p. 774.) “[A]ccompanying every contract is a common-law duty to perform with care, skill, reasonable expedience, and faithfulness the thing agreed to be done, and a negligent failure to observe any of these conditions is a tort, as well as a breach of the contract.'

The rule which imposes this duty is of universal application as to all persons who by contract undertake professional or other business engagements requiring the exercise of care, skill and knowledge; the obligation is implied by law and need not be stated in the agreement.” (Ibid. [citing case].) This is precisely the allegation here—that Defendant failed to use the degree of care and skill required. In addition, a general demurrer, here the equivalent motion for judgment on the pleadings, must be overruled/denied if the complaint alleges any cause of action.

Therefore, even if negligence were inapplicable to the facts, the complaint would still allege a cause of action for breach of contract for failure to repair the Subject Vehicle as warranted. III. Damage 6

Defendant argues Plaintiff’s complaint fails to allege personal injury or damage to property. Plaintiff is not alleging a personal injury cause of action. He alleges negligent repair; i.e., that Defendant owed Plaintiff a duty to repair the Subject Vehicle, which was covered by an express warranty from Mercedes-Benz USA, LLC. (Complaint, ¶10.) Plaintiff alleges the Subject Vehicle was brought to Defendant for repair of defects and nonconformities to warranty, including engine, transmission, suspension, structural, and electrical system defects. (Id., ¶11.)

Plaintiff first presented the Subject Vehicle for repairs in May 2025, with approximately 3,023 miles on the odometer and reported the Auto Stop/Start feature malfunctioning, harsh gear shifts, and structural nonconformities with the cup holder. (Id.,¶12.) In June 2025, with approximately 3,844 miles on the odometer, Plaintiff presented the Subject Vehicle again and reported cosmetic abnormalities with the window trims, continuous harsh gear shifts, an abnormal noise while driving, and the malfunction of exterior door handles. (Id., ¶13.)

Plaintiff presented the Subject Vehicle again on or around, July 10, 2025, with approximately 4,820 miles on the odometer and reported the transmission jolting upon completing a stop, the “blue P light” illuminated, and cosmetic abnormalities on the window trims. (Id. ¶14.) On or around, July 22, 2025, with approximately 4,656 miles on the odometer Plaintiff presented the Subject Vehicle for repair of harsh gear shifts. (Id., ¶15.) Plaintiff alleges that Defendant breached its duty to use ordinary care and skill by failing to properly store, prepare, and repair the Subject Vehicle in accordance with industry standards. (Id., ¶52.)

The damages alleged are Defendant’s failure to repair the Subject Vehicle. IV.

Conclusion

Defendant has failed to establish that Plaintiff’s cause of action fails to state facts sufficient to constitute a cause of action against it. The motion is DENIED. Plaintiff’s counsel is directed to submit a written order to the court consistent with this ruling and in compliance with Cal. Rules of Court, Rule 3.1312.

5. 25CV08705, Morales v. Hansel Dealerships, Inc.

(TENTATIVE ISSUED BY HON. JANE GASKELL)

IF ORAL ARGUMENT IS REQUESTED, MATTER WILL BE HEARD IN DEPT.

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Defendants Hansel Dealerships Inc. (“Dealer”) and Redwood Credit Union (“RCU”)(together “Defendants”) move to compel Plaintiff Laura Morales (“Plaintiff”) to arbitration and to stay this action pending resolution of arbitration. The motion is made on the grounds that the Retail Installment Sale Contract entered into between Defendants and Plaintiff on or about October 6, 2025, requires that the parties arbitrate their dispute. I. First Amended Complaint Plaintiff brought this action based upon her purchase of a 2024 Kia Forte (“the Kia”) which she purchased from Dealer.

Plaintiff states that she went to Dealer to find a reliable used vehicle. Dealer showed Plaintiff the Kia. Dealer bought the Kia at an auction, but informed Plaintiff the Kia had been traded in. The Dealer represented it had not been involved in any accidents, had not been previously damaged, and did not have any mechanical issues. Plaintiff purchased the Kia for: $17,888.00 cash price; $3,000.00 down payment; $22,727.54 financed; 6.74% annual percentage rate; $5,924.02 finance charge; 84 monthly payments of $341.09 starting on November 20, 2025; and a total sale price of $31,661.56.

Plaintiff alleges the day after she purchased the Kia, she noticed damage to its left side. She contacted Dealer who indicated it could repair the Kia for $600 to $800, 7

of which it would contribute $400. Plaintiff did not accept this repair offer. She alleges she would not have purchased the Kia if she knew it had damage to its left side rocker panel, which is a structural component of the Kia. In addition, she states she obtained two different repair estimates that indicate it will actually cost over $5,000 to repair. The complaint alleges causes of action for Violations of the Consumer Legal Remedies Act, Intentional Misrepresentation, Concealment, Negligent Misrepresentation, Violations of the Unfair Competition Law, and a Cause of Action under Vehicle Code section 11711.

II. Arbitration Clause The Retail Installment Sales Contract (“the Contract”) is attached to the complaint as Exhibit 1. Page 5 contains an Arbitration Provision. That provision states that either party to the Contract may choose to have any dispute decided by arbitration. (FAC, Exhibit 1, p. 5.) Plaintiff does not oppose arbitration. She states that when Dealer’s counsel asked Plaintiff’s counsel if she would stipulate to arbitration with AAA or NAMADR, Plaintiff’s counsel responded she would agree if Dealer stipulated to certain discovery requests.

Specifically, Plaintiff sought to have Dealer agree to the following: Three-hour depositions of Liam Asadi (sales representative), Louis Passot (sales manager), the person who inspected the Kia before it was sold to Plaintiff, and the Dealer’s PMQ; 10 Request for Admissions; 10 Requests for Production; 10 Special Interrogatories; Form Interrogatories 15.1 and 17.1; and a Subpoena for appearance to PV Holding Corporation (prior owner of Vehicle). Dealer refused this request stating it would only agree to one PMQ deposition and 10 requests for production.

Plaintiff states she did not agree to this proposal because its scope was too limited and it would not ensure that the PMQ was someone involved in the sale or the inspection of the Kia. Plaintiff argues forcing her to arbitrate her claims against Defendant is unconscionable because arbitration does not guarantee Plaintiff sufficient discovery to vindicate her rights. III. Unconscionability Unconscionability has both procedural and substantive elements. (Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 114.)

Procedural unconscionability focuses on “oppression” or “surprise” due to unequal bargaining power and substantive unconscionability focuses on “overly-harsh” or “one-sided” results. (Ibid.) The unconscionability analysis begins with an inquiry into whether the contract is one of adhesion. (Id. at p. 113.) “ ‘The term [contract of adhesion] signifies a standardized contract, which, imposed and drafted by the party of superior bargaining strength, relegates to the subscribing party only the opportunity to adhere to the contract or reject it.’ [Citation.]

If the contract is adhesive, the court must then determine whether ‘other factors are present which, under established legal rules— legislative or judicial—operate to render it [unenforceable].’ [Citation.] ‘Generally speaking, there are two judicially imposed limitations on the enforcement of adhesion contracts or provisions thereof. The first is that such a contract or provision which does not fall within the reasonable expectations of the weaker or 'adhering' party will not be enforced against him. [Citations.]

The second—a principle of equity applicable to all contracts generally—is that a contract or provision, even if consistent with the reasonable expectations of the parties, will be denied enforcement if, considered in its context, it is unduly oppressive or ' “unconscionable.”’ (Ibid.) Subsequent cases have referred to both the ‘reasonable expectations’ and the ‘oppressive’ limitations as being aspects of unconscionability.” (Ibid.) The subject Contract is adhesive as it was imposed upon Plaintiff in a pre-printed form and there was no opportunity for her to negotiate its terms.

Whether the arbitration provision is enforceable depends upon whether it is also substantively unconscionable. Plaintiff argues the AAA rules are insufficient to allow Plaintiff to obtain the discovery needed to fairly prosecute her case. She points to Rule 20(a), which she states appears to provide the 8