Shoghibenam vs. Kia America, Inc.

“In its short argument on this point in its appellate brief, Nissan argues plaintiffs did not adequately plead the existence of a buyer-seller relationship between the parties, because plaintiffs bought the car from a Nissan dealership (not from Nissan itself). At the pleading stage (and in the absence of a more developed argument by Nissan on this point), we conclude plaintiffs’ allegations are sufficient. Plaintiffs alleged that they bought the car from a Nissan dealership, that Nissan backed the car with an express warranty, and that Nissan’s authorized dealerships are its agents for purposes of the sale of Nissan vehicles to consumers. In light of these allegations, we decline to hold plaintiffs’ claim is barred on the ground there was no relationship requiring Nissan to disclose known defects.

“Nissan also contends plaintiffs did not provide specifics about what Nissan should have disclosed. But plaintiffs alleged the CVT transmissions were defective in that they caused such problems as hesitation, shaking, jerking, and failure to function. The SAC also alleged Nissan was aware of the defects as a result of premarket testing and consumer complaints that were made both to the National Highway Traffic Safety Administration and to Nissan and its dealers. It is not clear what additional information Nissan believes should have been included.

We decline to hold (again in the absence of a more developed argument on this point) that plaintiffs were required to include in the SAC more detailed allegations about the alleged defects in the CVT transmissions. We conclude plaintiffs’ fraud claim was adequately pleaded.” (Dhital v. Nissan North America, Inc. (2022) 84 Cal.App.5th 828, 844.)

Importantly, the California Supreme Court’s three-step analysis from Rattagan controls fraudulent concealment within contractual relationships, whereas Dhital controls fraudulent concealment inducing the formation of a contractual relationship.

Fraud causes of action must be pled with specificity. “...This particularity requirement necessitates pleading facts which ‘show how, when, where, to whom and by what means the representations were tendered.”’ (Stansfield v. Starkey (1990) 220 Cal.App.3d 59, 73.)

With respect to fraudulent concealment claims, however, a plaintiff is not required to allege with the usual detail required in connection with fraud claims based on affirmative representations. In Vega v. Jones, Day, Reavis & Pogue (2004) 121 Cal.App.4th 282, the Court of Appeal found that the trial court had improperly sustained a demurrer to a concealment cause of action on the ground the cause of action on the ground plaintiff had failed to allege the cause of action “with the requisite degree of specificity.” (Id., 296.) The court held that “[t]he pertinent question in a concealment case is not who said what to whom.” (Ibid.) Rather the question is whether the defendant intentionally concealed something from plaintiff “so that they would proceed with the transaction.” (Ibid.)

Additionally, “[e]ven under the strict rules of common law pleading, one of the canons was that less particularity is required when the facts lie more in the knowledge of the opposite party.” (See Committee on Children’s Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 217, superseded by statute on other grounds in Branick v. Downey Savings & Loan Assn. (2006) 39 Cal.4th 235.) Less specificity is required for fraud claims when it appears from the nature of the allegations that the defendant must necessarily possess full information concerning the facts of the controversy. (Alfaro v. Community Housing Improvement System & Planning Assn., Inc. (2009) 171 Cal.App.4th 1356.)

Here, the Court finds that Plaintiffs have not alleged that Defendant had a duty to disclose the alleged concealed material facts. There are simply no allegations that state that Defendant had a duty to disclose to certain material facts to Plaintiffs that were concealed from Plaintiffs. In the Complaint, the word duty is only used to state that Defendant had a duty to repurchase the vehicle. (See Complaint, ¶ 14.) As discussed above, the duty to disclose is one of the five elements of a fraudulent concealment cause of action.

The Demurrer to the fifth cause of action is SUSTAINED WITH LEAVE TO AMEND. The Motion to Strike the fifth cause of action is GRANTED WITH LEAVE TO AMEND.

II. PUNITIVE DAMAGES

Next, Defendant moves to strike Plaintiffs’ claim for punitive damages on the grounds that “Plaintiffs’ Fraud allegations do not rise to the level of culpability required by Civil Code section 3294 and Plaintiffs have not pled facts showing that any officer, director, or managing agent of the corporation committed or authorized such acts.”

Plaintiffs oppose this argument.

Pursuant to the Song-Beverly Act, “[i]f the buyer establishes that the failure to comply was willful, the judgment may include, in addition to the amounts recovered under subdivision (a), a civil penalty which shall not exceed two times the amount of actual damages.” (Anderson v. Ford Motor Co. (2022) 74 Cal.App.5th 946, 963 [citing § 1794, subd. (c), italics added].)

Punitive damages are permitted when the “punitive damages and statutory penalties [a]re based on different conduct that took place at different times.” (Anderson v. Ford Motor Co. (2022) 74 Cal.App.5th 946, 966.) For example, punitive damages and statutory civil penalties are both permitted when (1) the “punitive damages were based on conduct underlying the fraud/CLRA causes of action and took place before the sale” and (2) the “civil penalty was based on defendant’s

postsale failure to comply with its Song- Beverly Act obligations to replace the vehicle or make restitution when reasonable attempts to repair had failed.” (Ibid.) Case law expressly allows a plaintiff to recover for both “presale fraudulent inducement and the postsale noncompliance with the Song- Beverly Act” when the conduct is distinguishable. (Id., at 69.)

Moreover, “plaintiffs are not prohibited from receiving both an award for punitive damages based on presale fraudulent inducement and a postsale Song-Beverly Act penalty based on willful noncompliance” when they argue “pattern and practice.” (Anderson v. Ford Motor Co. (2022) 74 Cal.App.5th 946, 971– 972.) A manufacturer “simply cannot escape liability for both awards by virtue of the fact that it engaged in a pattern or practice of deceitful misconduct throughout the course of the discrete events and conduct.” (Id., 972– 973.)

Here, Plaintiff’s claim for punitive damages is based solely on Plaintiff’s fifth cause of action for fraudulent inducement-concealment. Since the Demurrer to the fifth cause of action was sustained with leave to amend, Plaintiff’s claim for punitive damages necessarily fails as well.

While the Court tends to agree with Plaintiff that Defendant’s alleged “decision to continue to manufacture, advertise, and sell vehicles with known, widespread defects is one that necessarily implicates the exercise of corporate power,” the Complaint still lacks allegations with the requisite specificity expressly alleging “proof of malice among corporate leaders” and/or “employees who exercise substantial discretionary authority over decisions that ultimately determine corporate policy, such as those decisions that set these general principles and rules.” The Court, however, finds that Plaintiffs could easily cure such defects with an opportunity to amend their Complaint.

The Motion to Strike is GRANTED WITH LEAVE TO AMEND.

Plaintiff is granted 20 days leave to amend. The Case Management Conference is continued to August 27, 2026 at 1:30 p.m.

Defendant to give notice. 112 James vs. Subaru of America, Inc., 25-01465353 No tentative posted. 113 Gutierrez vs. Corral, 23-01328797 Plaintiff Mireya Gutierrez moves for an order appointing a referee to effectuate the partition by sale ordered in the Judgment entered on March 3, 2026 in favor of plaintiff.

Code of Civil Procedure section 873.010(a) provides: “The court shall appoint a referee to divide or sell the property as ordered by the court.” An appointed referee must be disinterested, impartial, and not a party to or a participant in the action. (Code Civ. Proc., § 874.315.)

On March 3, 2026, the Court entered Judgment in favor of plaintiff, ordering that the subject property shall be sold pursuant to Code of Civil Procedure section 872.820 and the net proceeds of the sale shall be divided equally between plaintiff and defendant. The Court finds that appointment of a referee to sell the property as ordered is warranted. Thus, the Motion for Appointment of Referee is GRANTED.

The parties are ordered to meet and confer on the selection of an impartial and disinterested referee. If the parties reach an agreement on a referee, they shall file a joint stipulation that the Court appoint that person as the referee within 15 days of the date of this order. If an agreement cannot be reached, each party shall submit up to three nominees for appointment as referee within 15 days of the date of this order. Upon receipt of the other party’s nominees for appointment, the other party may file any objections to the nominees within 10 days. The Court will then appoint a referee after consideration of the parties’ nominees and/or objections.

Moving party to give notice.