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

Although courts should take a liberal view of inartfully drawn complaints (see Code Civ. Proc., § 452), it remains essential that a complaint set forth the actionable facts relied upon with sufficient precision to inform the defendant of what plaintiff is complaining, and what remedies are being sought. (Leek v. Cooper (2011) 194 Cal.App.4th 399, 413.) Bare conclusions of law devoid of any facts are insufficient to withstand demurrer. (Schmid v. City and County of San Francisco (2021) 60 Cal.App.5th 470, 481; see Code Civ. Proc., § 425.10(a).)

Sixth Cause of Action (Fraudulent Concealment)

The Complaint alleges Defendant TMS failed to disclose the subject vehicle and its lithium-ion battery were defective and susceptible to sudden and premature failure (Compl. ¶¶ 63, 65), which TMS learned of through sources not available to consumers, including but not limited to pre-production and post-production testing data, early consumer complaints about the battery defect made directly to TMS and its network of dealers, aggregate warranty data compiled from TMS’s network of dealers, testing conducted by TMS in response to these complaints, and warranty repair and part replacement data. (FAC ¶ 66.)

The elements of a cause of action for fraudulent concealment are: (i) concealment or suppression of a material fact; (ii) by a defendant with a duty to disclose the fact to the plaintiff; (iii) defendant’s intent to defraud plaintiff by intentionally concealing or suppressing the fact; (iv) plaintiff was unaware of the fact and would not have acted as he did if he had known of the concealed or suppressed fact; and (v) as a result, the plaintiff sustained damage. (Hambrick v. Healthcare Partners Medical Group, Inc. (2015) 238 Cal.App.4th 124, 162; see also Civ. Code, § 1573.)

Requisite Specificity

Defendant TMS contends the Complaint relies on only boilerplate conclusions rather than specific facts.

For pleading purposes, the facts that constitute the fraud must be alleged fully, factually, and specifically. (Wilhelm v. Pray, Price, Williams & Russell (1986)186 Cal.App.3d 1324, 1331; see also, Dhital, 84 Cal.App.5th at 843-844 [“Fraud, including concealment, must be pleaded with specificity”].) This particularity requirement generally necessitates the pleading of facts that show how, when, where, to whom and by what means the representation was tendered; and pleading specifically the detriment proximately caused by the

defendant’s conduct. (Service of Medallion, Inc. v. Clorox Co. (1996) 44 Cal.App.4th 1807, 1818; Stansfield v. Starkey (1990) 220 Cal.App.3d 59, 73.)

Notably, an exception to the general rule exists when it appears the facts lie more within the defendant’s knowledge than the plaintiff’s, i.e., less specificity is required where “defendant must necessarily possess full information concerning the facts of the controversy.” (Committee on Children’s Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 216, superseded by statute, on other grounds; see also Miles v. Deutsche Bank Nat'l Trust Co. (2015) 236 Cal.App.4th 394, 403-404 [finding omission of names of mortgage servicer employees and their authority to speak not fatal to fraud claim where defendants had more knowledge of the facts than did plaintiffs]; Tenet Healthsystem Desert, Inc. v. Blue Cross of Calif. (2016) 245 Cal.App.4th 821, 840 [holding complaint need not specify information uniquely within defendants’ knowledge, such as who prepared documents in question].)

Here, the Complaint alleges Defendant TMS concealed specific material facts, including that the battery system had one or more defects and that as a result of the defective battery, vehicles experienced overheating, loss of propulsion power while driving, sudden and premature battery failure, failure to start, reduced range, thermal runaway, and/or spontaneous combustion and/or fire. (FAC ¶ 65.) The Complaint need not allege the identity of the specific facts establishing pre-sale knowledge or concealment conduct, as Defendant TMS is in a better position to know that information.

Duty to Disclose

Defendant TMS contends the Complaint does not allege facts supporting a duty by TMS to disclose because the Complaint does not allege sufficiently specific facts plausibly establishing that TMS had pre-sale knowledge of the alleged battery defect.

“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.” (SCC Acquisitions, Inc. v. Central Pac. Bank (2012) 207 Cal.App.4th 859, 860.) Under California law, “[t]here 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.)

The court in Dhital v. Nissan North America considered this principle in the context of consumers purchasing a manufacturer’s vehicle and held the plaintiff consumer need not allege a transaction with the manufacturer to allege a duty to disclose. Specifically, the Dhital court concluded allegations that the plaintiffs bought a vehicle from a Nissan dealership that was backed by an express warranty from Nissan, and that Nissan’s authorized dealerships are its agents for purposes of the sale of Nissan vehicles to consumers, was sufficient at the demurrer stage to support a duty to disclose. (Dhital v.

Nissan North America, Inc. (2022) 84 Cal.App.5th 828, 844, petition for review granted (2023) 523 P.3d 392 and dismissed and remanded, 559 P.3d 1083, 2024 WL5162583 (Dec. 18, 2024).) 1 Moreover, where a manufacturer partners with the seller by offering an express warranty as part of the sales package, that manufacturer steps into the role of a retailer. (See e.g., Kiluk v. Mercedes-Benz USA, LLC (2019) 43 Cal.App.5th 334, 337, 343 [manufacturer stepped into the role of the distributor and retail seller by issuing an express warranty in sale of used vehicle].)

The Complaint here alleges sufficient facts from which the court may reasonably construe the warranty contract was executed as part of the sales package for the purchase of a new vehicle manufactured by Defendant TMS. (See Compl. ¶ 7, Ex. A.)

The Complaint alleges facts supporting Defendant TMS’s exclusive knowledge of the alleged Battery Defect, including that Defendant TMS was aware that the vehicle was equipped with a defective battery and actively concealed these material defects from the public. (Compl. ¶¶ 63-72.) Defendant was in a superior position from various internal sources to know of the facts surrounding the material defects. (Compl. ¶ 69(b).) These allegations are sufficient to establish a duty to disclose.

1 Neither the order granting review nor dismissing the review affects the publication status of the Dhital opinion.

(See Cal. Rules Ct., Rule 8.1115(e)(2) [providing that unless otherwise ordered by the Supreme Court, a published opinion by the appellate court on review by the Supreme Court remains citable and has binding or precedential effect, except to the extent it is inconsistent with the decision of the Supreme Court or disapproved by that court], Rule 8.528(b)(3) [providing a Cal. Supreme Court order “dismissing review does not affect the publication status of the Court of Appeal opinion unless the Supreme Court orders otherwise”].)

Reliance and Damages

Defendant TMS does not challenge the sufficiency of pleading the reliance and damages, and the court finds the Complaint alleges sufficient facts to support these elements. (See, e.g., Compl. ¶¶ 72, 74.)

In sum, the court finds the allegations sufficient to support each element of the fraudulent concealment claim.

No later than 10 days after service of the notice of ruling, Defendant TMS shall file and serve an answer or other response to the Complaint. (Cal. Rules Ct., Rule 3.1320(g).)

Motion 2. Motion to Strike Portions of Complaint

Defendant Toyota Motor Sales, U.S.A., Inc., (“TMS”) moves to strike the prayer for punitive damages in the Complaint of Plaintiff Thach D. Hoang. For the following reasons, the motion is DENIED.

Request for Judicial Notice

The court DENIES as unnecessary Defendant TMS’s request for judicial notice. (See Zucchet v. Galardi (2014) 229 Cal.App.4th 1466, 1474, fn. 5 [citing Jordache Enterprises, Inc. v. Brobeck, Phleger & Harrison (1998) 18 Cal.4th 739, 748, fn. 6].)

Timeliness

The court exercises its discretion to consider the late-filed motion to strike, given the unique procedural history in this action.

Standard on Motion to Strike

The grounds for a motion to strike must appear on the face of the pleading or matters from which the court may judicially notice. (Code Civ. Proc., § 437.) Pursuant to Code of Civil Procedure Section 436 the court may, upon a motion made or at any time in its discretion, strike out “any irrelevant, false, or improper matter inserted in any pleading.” A motion to strike, however, is not “a procedural ‘line item veto’ for the civil defendant.” (PH II, Inc. v. Superior Ct. (1995) 33 Cal.App.4th 1680, 1683.) In a motion to strike, the court reads the complaint as a whole, considering all parts in their context, and must assume the truth of all well-pleaded allegations. (Courtesy Ambulance Serv. v. Superior Court (1992) 8 Cal.App.4th 1504, 1519.)

Punitive Damages

Defendant TMS contends that the Complaint fails to allege facts supporting a claim of oppression, fraud, or malice, and Plaintiff does not allege that any officer, director, or managing agent of TMS committed, authorized, or ratified any such conduct.

To plead a claim to recover punitive damages, a plaintiff must plead and show one of the following bases for imposition of exemplary damages, i.e. malice, oppression, or fraud. (Civ. Code, § 3294(a), (c).) To plead a claim to recover punitive damages against an employer based on the acts of an employee, a plaintiff must plead facts showing the employer “had advance knowledge of the unfitness of the employee and employed him or her with a conscious disregard of the rights or safety of others or authorized or ratified the wrongful conduct for which the damages are awarded or was personally guilty of oppression, fraud or malice. With respect to a corporate employer, the advance knowledge and conscious disregard, authorization, ratification or [wrongful] act must be on the part of an officer, director, or managing agent of the corporation.” (Civ. Code, § 3294(b).)

At the pleading stage, the complaint may rely on ultimate facts of fraud, oppression or malice. (Spinks v. Equity Residential Briarwood Apartments (2009) 171 Cal.App.4th 1004, 1055.)

Here, the Complaint alleges sufficient facts to support the punitive damages claim, including fraudulent concealment and actions on the part of an officer, director, or managing agent of Defendant TMS. (See FAC ¶¶ 61-73.)

No later than 10 days after service of the notice of ruling, Defendant TMS shall file and serve an answer or other response to the Complaint.

Plaintiff to give notice.

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