Tentative Rulings

Case Number: BC680074    Hearing Date: February 10, 2020    Dept: 37

HEARING DATE: February 10, 2020

CASE NUMBER: BC680074

CASE NAME: Eddie Urquiza v. BMW of North America, LLC

MOVING PARTIES: Defendant BMW of North America, LLC

OPPOSING PARTY: Plaintiff, Eddie Urquiza

TRIAL DATE: None

PROOF OF SERVICE: OK

PROCEEDING: Defendant’s Motion for Judgment on the Pleadings

OPPOSITION: January 28, 2020

REPLY: January 31, 2020

TENTATIVE: BMW’s motion for judgment on the pleadings is GRANTED. Plaintiff is given leave to amend within 30 days of this date. Moving party’s counsel to give notice.

Background

This is a lemon law action arising out of Plaintiff, Eddie Urquiza (“Plaintiff”)’s purchase of a BMW 550i vehicle (“Subject Vehicle”) on April 1, 2014. Plaintiff contends he received an express written warranty in connection with the purchase and that during the warranty period, the Subject Vehicle developed defects including excessive oil consumption, a burnt oil smell, erroneous “low oil” light, coolant leaks, spark plus defects, and other defects. Plaintiff further alleges that Defendant, BMW North America, LLC (“BMW”) knew or should have known that the Subject Vehicle’s “twin-turbo charged engine” was defective as early as mid-2008 and that the oil defects, specifically, are safety concerns because they can cause engine failure while the Subject Vehicle is in operation.

Plaintiff’s Complaint alleges the following causes of action against BMW: (1) Violation of Civil Code § 1793.2(d), (2) Violation of Civil Code § 1793.2(b), (3) Violation of Civil Code § 1793.2(a)(3), (4) Breach of Express Written Warranty, (5) Breach of Implied Warranty of Merchantability, and (6) Fraud.

BMW now moves for judgment on the pleadings as to Plaintiff’s sixth cause of action for fraud. Plaintiff opposes the motion.

Discussion

1. Legal Authority

A defendant may move for judgment on the pleadings if the complaint does not state facts sufficient to constitute a cause of action against the defendant. (Code Civ. Proc., § 438, subds. (b)(1) & (c)(1)(B)(ii).) Except as provided by statute, the rules governing demurrers govern motions for judgment on the pleadings. (Cloud v. Northrup Grumman Corp. (1998) 67 Cal.App.4th 995, 999.) Therefore, the grounds for a motion for judgment on the pleadings must be apparent from either the face of the complaint or a matter of which the court may take judicial notice. (Ibid.) The court accepts the truth of all material facts properly pleaded, but not the truth of “contentions, deductions or conclusions of law.” (Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 967.)

As with demurrers, “[d]enial of leave to amend after granting a motion for judgment on the pleadings is reviewed for abuse of discretion.” (Ott v. Alfa-Laval Agri, Inc. (1995) 31 Cal.App.4th 1439, 1448.) “It is an abuse of discretion to deny a party leave to amend a complaint if there is a reasonable possibility the pleading can be cured by amendment.” (Brenner v. City of El Cajon (2003) 113 Cal.App.4th 434, 444.)

1. Analysis

The elements of a fraud cause of action are: (1) misrepresentation (false representation, concealment, or omission); (2) knowledge of falsity; (3) intent to induce reliance; (4) justifiable reliance; and (5) resulting damage. (Davis v. Southern California Edison Co. (2015) 236 Cal.App.4th 619.) Fraud must be pled in the complaint specifically. General and conclusory allegations are not sufficient. (Stansfield v. Starkey (1990) 220 Cal.App.3d 59, 74; Nagy v. Nagy (1989) 210 Cal.App.3d 1262, 1268.) Unlike most causes of action where the “the policy of liberal construction of the pleadings,” fraud requires particularity, that is, “pleading facts which show how, when, where, to whom, and by what means the representations were tendered.” (Stansfield, supra, 220 Cal.App.3d at 73; Lazar v. Superior Court (1996) 12 Cal.4th 631, 645.) Every element of a fraud cause of action must be alleged both factually and specifically. (Hall v. Department of Adoptions (1975) 47 Cal.App.3d 898, 904; Cooper v. Equity General Insurance (1990) 219 Cal.App.3d 1252, 1262.)

The economic loss rule requires plaintiff to recover in contract for purely economic loss due to disappointed contractual expectations, unless he can demonstrate harm above and beyond a broken contractual promise. (Robinson Helicopter Co. v. Dana Corp. (2004) 34 Cal.4th 979, 988.) An “economic loss” consists of damages for inadequate value, costs of repair, and replacement, or consequent loss of profits, without any claim of personal injury or damages to other property. (Robinson, supra, 34 Cal.4th at 988; see also Jimenez v. Superior Court (2002) 29 Cal.4th 473.) “A person may not ordinarily recover in tort for the breach of duties that merely restate contractual obligations. Instead, ‘[c]ourts will generally enforce the breach of a contractual promise through contract law, except when the actions that constitute the breach violate a social policy that merits the imposition of tort remedies.’ [Citations.]” (Stop Loss Ins. Brokers, Inc. v. Brown & Toland Medical Group (2006) 143 Cal.App.4th 1036, 1041.)

BMW moves for judgment on the pleadings as to Plaintiff’s cause of action for fraud on the grounds that it is barred by the economic loss rule. (Motion, 1-4). Further, BMW contends that the Complaint fails to allege any affirmative misrepresentations by BMW. (Id.)

Plaintiff’s opposition does not argue against application of the economic loss rule or articulate how the complaint pleads the elements of fraud with particularity.

Here, the Complaint alleges that BMW committed fraud by allowing the Subject Vehicle to be sold without disclosing that the Subject Vehicle “was defective and susceptible to sudden and premature failure.” (Complaint, ¶ 35.) Plaintiff specifically contends that BMW was “well aware and knew” that the Subject Vehicle’s engine “was defective” such that the Subject Vehicle was “unable to properly utilize the engine oil.” (Complaint ¶¶ 36-37.) The Complaint also alleges that BMW acquired its knowledge about the defective nature of the Subject Vehicle’s engine well prior to Plaintiff’s purchase of the Subject Vehicle, was in a superior position to know of the true facts of the defect, and, as such, had a duty to disclose this information to Plaintiff. (Complaint ¶¶39-40, 42.) Plaintiff alleges that he “has suffered and will continue to suffer actual damages” as a result of BMW’s alleged fraud. (Complaint ¶ 46.) Plaintiff prays for actual damages, restitution, civil penalties pursuant to Civil Code section 1794, costs of suit, punitive damages and prejudgment interest in connection with all causes of action in the Complaint. (see Complaint, Prayer for Damages.)

Given the lack of a coherent opposition to the motion, the court grants BMW’s motion for judgment on the pleadings. The Complaint does not allege that Plaintiff suffered any tort damages beyond economic damages to the Subject Vehicle due to its alleged defects. Further, as BMW asserts, the Complaint fails to allege that BMW made any affirmative misrepresentations. Instead, the Complaint appears to only allege that BMW learned of alleged defects to the Subject Vehicle but failed to disclose them. As such, Plaintiff’s cause of action for fraud is insufficiently pled.

Conclusion

BMW’s motion for judgment on the pleadings is granted. Plaintiff is given leave to amend within 30 days of this date.