Preview
KNIGHT LAW GROUP LLP
1 07/13/2020
Steve Mikhov (SBN 224676)
2 stevem@knightlaw.com
Amy Morse (SBN 323668)
3 armandol@knightlaw.com
10250 Constellation Blvd., Ste. 2500
4
Los Angeles, CA 90067
5 Telephone: (310) 552-2250
Fax: (310) 552-7973
6
7 Attorneys for Plaintiffs,
DAVID F. TIBBET and
8 DEANNA TIBBETT
9
SUPERIOR COURT OF CALIFORNIA
10
COUNTY OF PLACER
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12 DAVID F. TIBBETT and DEANNA Case No.: SCV0042147
13 TIBBETT, Unlimited Jurisdiction
14 Plaintiff, PLAINTIFFS’ MEMORANDUM OF
POINTS AND AUTHORITIES IN
15 vs. OPPOSITION TO FORD MOTOR
16 COMPANY AND WARREN-
FORD MOTOR COMPANY, a Delaware ANDERSON FORD’S DEMURRER TO
17 Corporation; WARREN-ANDERSON SECOND AMENDED COMPLAINT
18 FORD, a California Corporation dba
FUTURE FORD, and DOES 1 through 10, Hearing Date: July 24, 2020
19 inclusive, Hearing Time: 8:30 a.m.
Department: 31
20 Defendants.
Complaint Filed: November 19, 2018
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Trial Date: Not Set
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PLAINTIFFS’ MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEMURRER
1 TABLE OF CONTENTS
2
TABLE OF CONTENTS................................................................................................................. i
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I. INTRODUCTION .......................................................................................................... - 1 -
4
5 II. ARGUMENT .................................................................................................................. - 1 -
6 A. Legal Standard ................................................................................................................ - 1 -
7
B. Plaintiffs Have Sufficiently Pled all of Their Fraud Claims with the Requisite
8
Factual Specificity .......................................................................................................... - 1 -
9
1. Plaintiffs Pled Sufficient Facts to Maintain Their Misrepresentation Claim ........... - 1 -
10
2. Plaintiffs Pled Sufficient Facts to Maintain the Concealment Claim ....................... - 3 -
11
12 3. Plaintiffs’ Claims Are Based on More Than Mere Non-Actionable Puffery ........... - 4 -
13 4. Plaintiffs’ CLRA Claim is Actionable ..................................................................... - 4 -
14
C. Ford’s Statute of Limitations Arguments Must be Rejected .......................................... - 5 -
15
1. The Statutes of Limitations Were Tolled by the Delayed Discovery Rule .............. - 5 -
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2. The Statutes of Limitations Were Tolled by the Doctrine of Fraudulent
17
Concealment and Equitable Estoppel ........................................................................... - 8 -
18
19 D. The Economic Loss Rule Does Not Bar Plaintiffs’ Claims............................................ - 9 -
20 E. Alternatively, Plaintiffs Seek Leave to Amend ............................................................ - 14 -
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III. CONCLUSION ............................................................................................................. - 15 -
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PLAINTIFF’S MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEMURRER
TABLE OF AUTHORITIES
1
2 Cases
3 Abbott Laboratories v. Owens (Del. Super. Ct., Sept. 15, 2014, No. CV13C09186JRJCCLD)
4 2014 WL 8407613, at *8 ....................................................................................................... - 10 -
5 Abi-Najm v. Concord Condominium, LLC (2010) 280 Va. 350 ............................................... - 10 -
6 Applied Equipment Corp. v. Litton Saudi Arabia (1994) 7 Cal.4th 503................................... - 10 -
7 April Enterprises, Inc. v. KTTV (1983) 147 Cal.App.3d 805 ..................................................... - 5 -
8 Bankers Trust Co. v. Pacific Employers Insurance Co. (9th Cir. 1960) 282 F.2d 106 ............ - 11 -
9 Blank v. Kirwan (1985) 39 Cal.3d 311 ............................................................................ - 1 -, - 14 -
10 Boschma v. Home Loan Center, Inc. (2011) 198 Cal.App.4th 230, 248 .................................... - 3 -
11 Broberg v. Guardian Life Ins. Co. of America (2009) 171 Cal.App.4th 912 ............................. - 6 -
12 Buxbom v. Smith (1944) 23 Cal.2d 535 ...................................................................................... - 1 -
13 Carruth v. Fritch (1950) 36 Cal.2d 426...................................................................................... - 9 -
14 Committee on Children’s Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197 ........ - 1 -
15 Consumer Advocates v. Echostar Satellite Corp. (2003) 113 Cal.App.4th 1351 ....................... - 5 -
16 Davis v. Monte (1927) 81 Cal.App. 164, 170 ............................................................................. - 4 -
17 Del. E. Webb Corp. v. Structural Materials Co. (1981) 123 Cal.App.3d 593............................ - 1 -
18 Diamond Multimedia Systems, Inc. v. Superior Court (1999) 19 Cal.4th 1036 ....................... - 11 -
19 EED Holdings v. Palmer Johnson Acquisition Corp. (S.D.N.Y. 2004) 387 F.Supp.2d 265 .... - 10 -
20 E-Fab Inc. v. Accountants, Inc. Services (2007) 153 Cal.App.4th 1308 .................................... - 6 -
21 Ehrlich v. BMW of N. Am., LLC, (2010) 801 F.Supp. 2d 908 .................................................... - 7 -
22 Elliot v. City of Pacific Grove, 54 Cal.App.3d 53 ...................................................................... - 1 -
23 Engalla v. Permanente Medical Group, Inc. (1997) 15 Cal. 4th 951 .......................................... - 2 -
24 Erlich v. Menezes (1999) 21 Cal.4th 543............................................................ - 11 -, - 12 -, - 13 -
25 Falco v. Nissan North America, 2013 WL 5575065, at 10 (C.D. Cal. Oct. 10, 2013) ............... - 7 -
26 Ford Motor Co. v. Rice, 726 So. 2d 626, 631 (Ala. 1998) ....................................................... - 10 -
27 Formosa Plastics Corp. USA V. Presido Engineers and Contractors, Inc. (Tex. 1998) 960 S.W.
28 2d 41....................................................................................................................................... - 10 -
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PLAINTIFF’S MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEMURRER
1 Fox v. Ethicon-Endo Surgery, Inc. (2005) 35 Cal.4th 797 ......................................................... - 5 -
2 Freeman & Mills, Inc. v. Belcher Oil Co. (1995) 11 Cal.4th 85 .............................................. - 12 -
3 Furla v. Jon Douglas Co. (1998) 65 Cal.App.4th 1069 ............................................................. - 4 -
4 Giles v. General Motors Acceptance Corp. (9th Cir. 2007) 494 F.3d 865 ............................... - 12 -
5 Glendale Fed. Sav. & Loan Assn. v. Marina View Heights Dev. Co. (1977) 66 Cal.App.3d 101... -
6 11 -
7 Harris v. Atlantic Richfield Co. (1993) 14 Cal.App.4th 70 ...................................................... - 10 -
8 Hebrew Academy of San Francisco v. Goldman (2007) 42 Cal. 4th 883 ................................... - 5 -
9 Herzog v. Capital Company (1945) 27 Cal. 2d 349 ................................................................... - 4 -
10 Hospital Council of Northern Cal v. Superior Court, 30 Cal.App. 3d 331 ................................ - 1 -
11 Huron Tool and Engineering Co. v. Precision Consulting Services, Inc. (Mich. Ct. App. 1995)
12 209 Mich.App. 365 ................................................................................................................ - 10 -
13 Jiminez v. Superior Court (2002) 29 Cal.4th 473 ....................................................................... - 9 -
14 Johnson v. Ford Motor Co. (2005) 35 Cal.4th 1191 ................................................................ - 11 -
15 Jolly v. Eli Lilly & Co. (1988) 44 Cal.3d 1103 .................................................................. - 5 -, - 6 -
16 Klein v. Chevron U.S.A., Inc. (2012) 202 Cal.App.4th 1342 ...................................................... - 5 -
17 Lantzy v. Centex Homes (2003) 31 Cal.4th 363.......................................................................... - 9 -
18 Las Palmas Associates v. Las Palmas Center Associates (1991) 235 Cal.App.3d 1220 - 10 -, - 11
19 -
20 Lazar v. Superior Court (1996) 12 Cal.4th 631 ........................................................................ - 12 -
21 LiMandri v. Judkins (1997) 52 Cal.App.4th 326 ........................................................................ - 5 -
22 Marketing West, Inc. v. Sanyo Fisher (USA) Corp. (1992) 6 Cal.App.4th 603.......................... - 8 -
23 McAdams v. Monier (2010) 182 Cal.App.4th 175 ...................................................................... - 2 -
24 Mexia v. Rinker Boat Co. (2009) 174 Cal.App.4th 1297 ............................................................ - 7 -
25 Mirkin v. Wasserman (1993) 5 Cal.4th 1082 ..................................................................... - 5 -, - 8 -
26 Moorman Mfg. Co. v. National Tank Co. (1982) 91 Ill.2d 69 .................................................. - 10 -
27 Murillo v. Fleetwood Enterprises, Inc. (1998) 17 Cal. 4th 985 .................................................. - 7 -
28 Paduano v. American Honda Motor Co. (2009) 169 Cal.App.4th 1453 .................................... - 4 -
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PLAINTIFF’S MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEMURRER
1 Pat Rose Associates v. Coombe (1990) 225 Cal.App.3d 9 ....................................................... - 11 -
2 Robinson Helicopter Co., Inc. v. Dana Corp. (2004) 34 Cal.4th 979 ................ - 11 -, - 12 -, - 14 -
3 Rutledge v. Hewlett-Packard Company (2015) 238 Cal.App.4th 1164 ...................................... - 4 -
4 Sime v. Malouf (1949) 95 Cal.App.2d 82 .......................................................................... - 6 -, - 7 -
5 Stickrath v. Globalstar, Inc. (N.D. Cal. 2007) 527 F.Supp.2d 992 ............................................ - 3 -
6 Thrifty-Tel, Inc. v. Bezenek, (1996) 46 Cal.App.4th 1559 .......................................................... - 2 -
7 Tommy L. Griffin Plumbing & Heating Co. v. Jordan, Jones & Goulding, Inc. (1995) 320 S.C.
8 49............................................................................................................................................ - 10 -
9 Town of Alma v. AZCO Const., Inc. (Colo. 2000) 10 P.3d 1256 .............................................. - 10 -
10 Vu v. Prudential Property & Casualty Ins. Co., (2001) 26 Cal.4th 1142 ................................... - 9 -
11
Statutes
12
Civ. Code § 1791.1, subd. (c) ..................................................................................................... - 7 -
13 Code Civ. Proc., § 589 ................................................................................................................ - 6 -
14
Other Authorities
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CACI 1900 .................................................................................................................................. - 2 -
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CACI 1901 ......................................................................................................................... - 3 -, - 8 -
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PLAINTIFF’S MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEMURRER
MEMORANDUM OF POINTS AND AUTHORITIES
1
I. INTRODUCTION
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The underlying action is a civil matter brought by Plaintiffs David F. Tibbett and Deanna
3
Tibbett against Defendants Ford Motor Company’s (“Ford”) and Defendant Future Ford Inc.
4
(“Future Ford;” collectively, “Defendants”) regarding a defective 2006 Ford F-250 sold by
5 Defendants, and equipped with a defective 6.0-liter diesel engine (“6.0L”) (SAC ¶¶ 2, 9, 25.) What
6 Plaintiffs did not know was that the 6.0L diesel engine had irreparable problems that Ford concealed
7 from Plaintiffs, and other consumers, at the time of sale, and that Ford had been aware of those
8 problems for years. (SAC ¶¶ 16-32, 35-47.) During the five-year engine warranty, Plaintiffs brought
9 their vehicle in for repairs to the 6.0L engine. (SAC ¶¶ 83-87.) During this time, Ford was aware
10 that the vehicle had irreparable problems and continued to conceal this information from Plaintiffs
by misrepresenting that it was able to fix the Subject Vehicle. (SAC ¶¶ 16-32, 35-47, 48-62, 63-81,
11
113.)
12
Ford demurrers to all causes of action contained in Plaintiffs’ Second Amended Complaint
13
by arguing that Plaintiffs failed to plead facts with the requisite specificity, and on various other
14
arguments including that tolling does not apply. For the reasons below, the Court should overrule
15 Defendants; demurrer.
16 II. ARGUMENT
17 A. Legal Standard
18 A demurrer tests the sufficiency of the pleading. (Elliot v. City of Pacific Grove, 54
19 Cal.App.3d 53, 56; Hospital Council of Northern Cal v. Superior Court, 30 Cal.App. 3d 331, 337-
20 338.) Allegations must be liberally construed in a manner directed toward achieving substantial
justice between the parties. (Buxbom v. Smith (1944) 23 Cal.2d 535, 545.) A demurrer admits “all
21
material facts properly pleaded.” (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) This is true no matter
22
how improbable the facts may be. (Del. E. Webb Corp. v. Structural Materials Co. (1981) 123
23
Cal.App.3d 593, 604.) For this reason, potential problems with proof are irrelevant. (Committee on
24
Children’s Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 213-4.)
25 B. Plaintiffs Have Sufficiently Pled all of Their Fraud Claims with the Requisite
26 Factual Specificity
27 1. Plaintiffs Pled Sufficient Facts to Maintain Their Misrepresentation Claim
28 The elements of intentional misrepresentation are: “(a) misrepresentation, (SAC, ¶¶ 33, 95-
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PLAINTIFFS’ MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEMURRER
104); (b) knowledge of falsity (SAC ¶¶ 16-32, 100-101); (c) intent to defraud, i.e. to induce reliance
1
(SAC ¶¶ 34, 48-56, 105-108); (d) justifiable reliance (SAC ¶¶ 34, 48-56, 105-108); and (e) resulting
2
damage” (SAC ¶¶ 109-115) (CACI 1900; Engalla v. Permanente Medical Group, Inc. (1997) 15
3
Cal. 4th 951, 974.) “[F]alse representations made recklessly and without regard for their truth in
4
order to induce action by another are the equivalent of misrepresentations knowingly and
5 intentionally uttered”. (Id.) One “who gives information of other facts which are likely to mislead
6 for want of communication of that fact” may be liable for misrepresentation. (McAdams v. Monier,
7 (2010) 182 Cal.App.4th 175, 185.) A “misrepresentation need not be oral; it may be implied by
8 conduct.” (Thrifty-Tel, Inc. v. Bezenek, (1996) 46 Cal.App.4th 1559, 1567.)
9 Despite Defendant’s assertions otherwise, Plaintiffs in fact sufficiently alleged the elements
10 of intentional misrepresentation. Plaintiffs alleged that Defendants made representations to them
through their marketing materials and their authorized agents. (SAC ¶¶ 33-34, 48-49, 52, 95-104.)
11
Plaintiffs went to Ford’s authorized dealership seeking a long-lasting vehicle that could offer
12
superior horsepower and torque. (SAC ¶ 51.) Plaintiffs were told by the sales personnel that the Ford
13
F-250 vehicles with a 6.0L engine would offer superior power and tow capacity. (SAC ¶ 52.)
14
Plaintiffs believed and reasonably relied on the representations made by the marketing materials and
15 sales personnel. (SAC ¶¶ 50, 53-54, 105-109.)
16 Defendants did not make any disclosures to Plaintiffs to qualify the representations.
17 Problems with the 6.0L engine were known by Ford prior to the purchase of the Subject Vehicle.
18 (SAC ¶¶ 16-32, 99-101.) Ford had exclusive knowledge of material facts that it failed to disclose
19 prior to purchase. (SAC ¶¶ 16-32, 72, 100-101.) Plaintiffs would not have purchased the Subject
20 Vehicle had they known of the problems with the 6.0L engine. (SAC ¶ 109, 132, 140, 157.)
Defendants’ failure to disclose the problems rendered its representations misleading and fraudulent.
21
(SAC ¶¶ 35-47, 55, 72, 78, 89, 116-119.) Defendants duped Plaintiffs into buying a vehicle that had
22
defects in its engine that led to incessant problems. (SAC ¶¶ 48-62, 78, 83-87, 95-102, 106-108.)
23
The claims made by Defendants were false, and known to be false, at the time they were made,
24
especially given Ford’s knowledge of such defects and their failed attempts to implement measures
25 to address symptoms. (SAC ¶¶ 16-32, 35-47, 116-121.)
26 These factual representations concerning the characteristics of the F-250 and its 6.0L engine
27 that are capable of being proved false because objectively the vehicle either does or does not possess
28 the attributes claimed. Lastly, Plaintiffs’ cause of action for negligent misrepresentation is equally
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PLAINTIFFS’ MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEMURRER
supported with all the facts detailed above. It is much the same as the intentional misrepresentation
1
except there is no element of scienter. Thus, Plaintiffs have pled sufficient facts to maintain their
2
claims of intentional and negligent misrepresentation, and the Court is warranted in denying Ford’s
3
Motion.
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2. Plaintiffs Pled Sufficient Facts to Maintain the Concealment Claim
5 A claim for fraudulent concealment requires that: (1) the defendant concealed or suppressed
6 a material fact; (2) the defendant was under a duty to disclose the fact to the plaintiff; (3) the
7 defendant intentionally concealed or suppressed the fact with intent to defraud the plaintiff; (4) the
8 plaintiff was unaware of the fact and would have acted otherwise if he had known of the concealed
9 or suppressed fact; and (5) as a result of the concealment or suppression of the fact, the plaintiff
10 sustained damage. (Boschma v. Home Loan Center, Inc., (2011) 198 Cal.App.4th 230, 248.) A duty
to disclose occurs: (1) when the defendant is in a fiduciary relationship with the plaintiff; (2) when
11
the defendant had exclusive knowledge of material facts not known to the plaintiff; (3) when the
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defendant actively conceals a material fact from the plaintiff; or (4) when the defendant makes partial
13
representations but also suppresses some material fact. (Stickrath v. Globalstar, Inc., (N.D. Cal.
14
2007) 527 F.Supp.2d 992, 1000-01; see also CACI 1901.)
15 The crux of Plaintiffs’ fraudulent concealment claim is that Ford identified a defect relating
16 to motor vehicle safety, prior to sale of the vehicle, and did not disclose it to consumers such as
17 Plaintiffs. (See generally, SAC.) Plaintiffs’ SAC alleges that Ford concealed or suppressed a material
18 fact: that their Ford F-250 was equipped with a defective 6.0L engine that would exhibit ongoing
19 problems. (SAC ¶¶ 16-47, 144-154.) Despite Ford’s access to years of analysis concerning the
20 problematic 6.0L engine, Ford continued to conceal the information regarding the defect. (Id.) The
existence of the engine defect is a material fact that a reasonable consumer would consider in
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determining whether to purchase a vehicle. (SAC ¶155-156.) Ford had a duty to disclose the
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concealed facts alleged in Plaintiffs’ SAC because Ford knew that the internal testing, previous
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consumer complaints, and other internal information were not readily accessible to Plaintiffs. (SAC
24
¶ 68.) Further, Defendant had a duty to disclose the concealed facts about the 6.0L engine because
25 Defendant actively concealed material facts in order to induce Plaintiffs’ false belief in the quality,
26 characteristics, and safety of the 6.0L engine. (SAC ¶ 70.) Finally, Plaintiffs were damaged by
27 Ford’s concealment of the 6.0L engine defect because Plaintiffs purchased a vehicle they would not
28 have otherwise purchased. (SAC ¶¶ 154-165.) Thus, Plaintiffs’ concealment claim is sufficiently
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PLAINTIFFS’ MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEMURRER
pled, and the Court should overrule Defendant’s demurrer.
1
3. Plaintiffs’ Claims Are Based on More Than Mere Non-Actionable Puffery
2
“Whether a statement is nonactionable opinion or actionable misrepresentation of fact is a
3
question of fact for the jury.” (Furla v. Jon Douglas Co., (1998) 65 Cal.App.4th 1069, 1081; see
4
also Davis v. Monte, (1927) 81 Cal.App. 164, 170.) Representations such as “most stringent quality
5 control tests,” “carefully checked by our quality control department,” in “sound condition” and
6 “perfectly intact” are actionable. (Id.; Herzog v. Capital Company (1945) 27 Cal. 2d 349.) The
7 “question of whether a manufacturer’s representation about a product is specific, and was relied
8 upon by a consumer should be decided by a trier of fact.” (Rutledge v. Hewlett-Packard Company
9 (2015) 238 Cal.App.4th 1164, 1176.)
10 Paduano v. American Honda Motor Co. (2009) 169 Cal.App.4th 1453, demonstrates the
fallacy of Ford’s contention that its statements are “nonactionable puffery.” In that case, Honda
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advertised its Civic Hybrid as having “terrific gas mileage,” stating a rating of 48 m.p.g. Honda’s
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brochure boasted, “IS THERE ANYTHING SPECIAL I HAVE TO DO? You just have to love
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saving money and getting terrific gas mileage” and “Just drive the Hybrid like you would a
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conventional car and save on fuel bills.” (Id. at 1472.) In reality, the fuel economy was 23-30 m.p.g.
15 (Id. at 1461.) In order to achieve higher mileage, the Hybrid had to be driven in specialized manner
16 that was for all intents and purposes impossible given modern driving conditions. (Id. at 1460.) The
17 court found the representation that the Hybrid had “terrific gas mileage” was actionable. (Id. at 1471–
18 72.) A reasonable juror could find that the plaintiff had been misled because he drove the vehicle as
19 a conventional car and did not receive “terrific gas mileage.” (Id.)
20 Similarly to Paduano, Ford’s statements about the 6.0L engine are more than nonactionable
“puffery”: they are provably false, and were shown to be false as a result of defects in the engine.
21
(SAC ¶¶ 16-32, 33, 35-47.) As with the gas mileage claim in Paduano, a reasonable juror could find
22
that Ford’s claims that its representations that the F-250 has superior towing capacity and that it has
23
“best-in-class: horsepower, gas torque, unsurpassed diesel horsepower” are actionable
24
representations. (SAC ¶ 33.) Thus, Plaintiffs’ fraud claims alleging Ford’s misrepresentations are
25 more than mere puffery, and the Court is warranted in overruling Defendant’s demurrer.
26 4. Plaintiffs’ CLRA Claim is Actionable
27 A CLRA claim is allowed when an “omission [is] contrary to a representation actually made
28 by the defendant, or an omission of a fact the defendant was obliged to disclose.” (Daugherty v.
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PLAINTIFFS’ MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEMURRER
American Honda Motor Co., Inc. (2006) 144 Cal.App.4th 824, 827.) Fraudulent omissions are
1
actionable under the CLRA. (Klein v. Chevron U.S.A., Inc. (2012) 202 Cal.App.4th 1342, 1382–83;
2
Daniel v. Ford Motor Co. (9th Cir. 2015) 806 F.3d 1217, 1225.) A duty to disclose in a CLRA claim
3
arises in four circumstances: “(1) when the defendant is in a fiduciary relationship with the plaintiff;
4
(2) when the defendant had exclusive knowledge of material facts not known to the plaintiff; (3)
5 when the defendant actively conceals a material fact from the plaintiff; and (4) when the defendant
6 makes partial representations but also suppresses some material fact.” (Falk v. General Motors
7 Corp., 496 F. Supp. 2d at 1095 citing LiMandri v. Judkins (1997) 52 Cal.App.4th 326, 337.) In order
8 for undisclosed information to be considered material, the plaintiff must show that “had the omitted
9 information been disclosed, one would have been aware of it and behaved differently.” (Mirkin v.
10 Wasserman (1993) 5 Cal.4th 1082, 1093; see also Falk v. Gen. Motors Corp. (N.D. Cal. 2007) 496
F.Supp.2d 1088, 1095.) Materiality, for CLRA claims, is judged by the effect on a “reasonable
11
consumer.” (Consumer Advocates v. Echostar Satellite Corp. (2003) 113 Cal.App.4th 1351, 1360.)
12
Defendant argues that Plaintiffs failed to plead his CLRA cause of action with requisite
13
specificity. As already established above, Plaintiffs have pled with the requisite factual specificity
14
Plaintiffs’ reliance on Ford’s misrepresentations and subsequent harm. Plaintiffs have also
15 incorporated by reference each allegation in the SAC in support of their CLRA claim. (SAC ¶ 238.)
16 Thus, Defendant’s demurrer should be overruled.
17 C. Ford’s Statute of Limitations Arguments Must be Rejected
18 1. The Statutes of Limitations Were Tolled by the Delayed Discovery Rule
19 Plaintiffs allege that the statute of limitations for their claims were tolled by the discovery
20 rule and the doctrine of fraudulent concealment. It is a well-settled rule that a cause of action does
not accrue until the plaintiff discovers, or could have discovered through the exercise of reasonable
21
diligence, all facts essential to his cause of action, including his injury and its cause. (April
22
Enterprises, Inc. v. KTTV, (1983) 147 Cal.App.3d 805, 826-827; see also Hebrew Academy of San
23
Francisco v. Goldman (2007) 42 Cal. 4th 883, 894.) Equally well-settled is that whether the plaintiff
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exercised reasonable diligence in discovering his injury and its cause are questions for the trier of
25 fact. (Fox v. Ethicon-Endo Surgery, Inc,. (2005) 35 Cal.4th 797, 810; Jolly v. Eli Lilly & Co. (1988)
26 44 Cal.3d 1103, 1112; April Enterprises, supra, at p. 833.) To constitute “discovery,” the facts made
27 known to plaintiff must constitute a “reasonable and natural clue” to the facts yet to be discovered;
28 the facts first known must bear a clear connection to the additional facts to be uncovered through
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PLAINTIFFS’ MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEMURRER
reasonable investigation. (Id. at 407.) A plaintiff whose only means of discovering the defendant’s
1
fraud through deposition is not charged with constructive knowledge of the fraud. (Sime v. Malouf
2
(1949) 95 Cal.App.2d 82, 107-8.)
3
The date Plaintiff should have discovered the irreparable defects is a factual issue that cannot
4
be determined by way of demurrer. (Broberg v. Guardian Life Ins. Co. of America (2009) 171
5 Cal.App.4th 912, 921; E-Fab Inc. v. Accountants, Inc. Services (2007) 153 Cal.App.4th 1308, 1320.)
6 Defendants mis-cite Jolly v. Eli Lilly & Co. (1988) 44 Cal.3d 1103 to support the argument that they
7 should be allowed to question the truth of Plaintiff’s allegations. Defendants’ own cited quotation
8 belies that notion: “While resolution of statute of limitations issues is normally a question of fact,
9 whether the uncontradicted facts established through discovery are susceptible of only one legitimate
10 inference, summary judgment is proper.” (Jolly, supra, 44 Cal.3d at 1112, emphasis added.) A
motion for judgment on the pleadings is limited to “issue[s] of law.” (Code Civ. Proc., § 589.) The
11
Court should decline to entertain such improper attacks on the veracity Plaintiffs’ SAC.
12
Here, Plaintiffs’ SAC sufficiently alleges time and manner of discovery. The Subject Vehicle
13
had several mechanical problems during the warranty period. (SAC ¶ 227.) Plaintiffs were told on
14
each repair visit to Ford’s authorized dealership that the problem was repaired and what had been
15 done to repair it. (SAC ¶¶ 73, 75, 83-87.) Plaintiffs discovered their claims in or around the summer
16 of 2016 when Plaintiff David F. Tibbett spoke with his son-in-law who is also a truck owner about
17 the widespread issue amongst 6.0L vehicles. (SAC ¶¶ 74-77, 88.) This is when Plaintiffs first
18 discovered that Defendants’ previous repairs had failed to conform the vehicle to warranty and that
19 the problems were not limited to Plaintiffs’ individual vehicle but were part of a widespread issue
20 among vehicles equipped with the 6.0L engine. (SAC ¶ 75-76.) Prior to this date, Plaintiff had shown
reasonable diligence and took his vehicle in for repairs. (SAC ¶¶ 75, 79-80, 83-87.) During these
21
repair visits, Plaintiffs were assured that Ford had and would repair any problems with the engine
22
that occurred during the express warranty period. (SAC ¶¶ 74, 75, 77, 83-87.) Due to the repeated
23
false assurances of Ford and its service agents at the time of these repairs, Plaintiffs were unable to
24
discover Ford’s misrepresentations, even with diligent investigation. (SAC ¶¶ 75, 78-81.) Plaintiffs
25 could not discover the irreparable defects sooner because the facts were concealed in confidential
26 and privileged documents. (Id.) Further, no amount of diligence by Plaintiffs could have led him to
27 discovery of the these facts because they were kept secret by Ford. (Id.)
28 Under the ruling in Sime, Plaintiffs were entitled to rely on Ford’s representations that the
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PLAINTIFFS’ MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEMURRER
vehicle had been repaired. Plaintiffs were not required to investigate Ford’s representations
1
regarding the repair because Ford had superior knowledge regarding its 6.0L engine. (Sime, supra.)
2
Furthermore, no ordinary and reasonable person could be charged with knowledge that Ford was
3
engaging in a scheme to market its defective 6.0L engine, under the circumstances presented here.
4
Ford concealed and misrepresented the qualities of the 6.0L engine and its ability to repair it,
5 knowing all the while that the engine was afflicted with irreparable defects. The statutes of limitation
6 for each of Plaintiffs’ claims were tolled under the delayed discovery rule.
7 Plaintiffs’ Song-Beverly Act claims are likewise timely. The California Supreme Court has
8 called the Song Beverly Act a “strongly pro-consumer” statute that “should be given a construction
9 calculated to bring its benefits into action.” (Murillo v. Fleetwood Enterprises, Inc. (1998) 17 Cal. 4th
985, 990.) Courts should avoid interpretations that conflict with “the policy repeatedly expressed by
10
California courts of the need to construe the Song–Beverly Act so as to implement the legislative intent
11
to expand consumer protection and remedies.” (Mexia v. Rinker Boat Co. (2009) 174 Cal.App.4th 1297,
12
1311.) Under Song-Beverly, the implied warranty is coextensive with an express warranty but in no event
13 will the duration be less than 60 days or more than 1 year. (Civ. Code § 1791.1, subd. (c).)
14 By including a duration provision, the legislature clearly intended for the implied warranty to
15 have a prospective existence beyond tender of delivery. (Mexia v. Rinker Boat Co., (2009) 174
16 Cal.App.4th 1297, 1309.) The Song-Beverly Act’s implied warranty merchantability may be breached
at tender of delivery or at a time beyond tender of delivery. In Mexia, the court found that so long as a
17
latent defect existed within the one-year period, its subsequent discovery beyond that time period did not
18
defeat an implied warranty claim. (Id. at 1310.) Plaintiff’s claim is not barred because latent defects
19
present on the date of sale were not discovered until years after the sale of the vehicle. For purposes of
20 assessing if there was a timely violation, “although a defect may not be discovered for months or
21 years after a sale, merchantability is evaluated as ifthe defect were known” during the implied
22 warranty period. (Mexia v. Rinker Boat Co., (2009) 174 Cal.App.4th 1297, 1306.)
23 In Ehrlich v. BMW of N. Am., LLC, (2010) 801 F.Supp. 2d 908, the defendant argued that the
24 implied warranty claim was untimely if it was not filed within five years of sale (one-year implied
25 warranty period plus a four-year statute of limitations). The court rejected that argument, holding
that “it ignores the existence of the 4-year/50,000- mile express warranty, which is a warranty that
26
‘explicitly extends to future performance of the goods.’ That warranty tolled the statute of limitations
27
until Plaintiff reasonably knew that his MINI would not perform as it should.” (Id. at 924-925; see
28
also Falco v. Nissan North America, 2013 WL 5575065, at 10 (C.D. Cal. Oct. 10, 2013.) Plaintiff’s
7
PLAINTIFFS’ MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEMURRER
claim is not barred because latent defects were not discovered until years after the sale of the vehicle.
1
(SAC ¶ 90.) The nature of the 6.0 liter engine defects, which do not appear immediately, necessitate
2
delayed discovery.
3
2. The Statutes of Limitations Were Tolled by the Doctrine of Fraudulent
4
Concealment and Equitable Estoppel
5 The doctrines of fraudulent concealment and equitable estoppel also apply because
6 Defendants intentionally concealed material facts from Plaintiffs at the time they purchased the
7 Subject Vehicle, and Ford continued to conceal those facts. (SAC ¶¶ 64-93.) As explained above,
8 Plaintiffs alleged specific facts to meet the elements of fraudulent concealment: (1) Ford concealed
9 or suppressed a material fact; (2) Ford had a duty to disclose the fact to Plaintiff; (3) Ford
10 intentionally concealed or suppressed the fact with intent to defraud Plaintiff; (4) Plaintiff was
unaware of the fact and would not have acted as he did had he known of the concealed or suppressed
11
fact; and (5) Plaintiff was damaged as a result of the concealment. (Marketing West, Inc. v. Sanyo
12
Fisher (USA) Corp. (1992) 6 Cal.App.4th 603, 612–13; CACI 1901.)
13
In order for undisclosed information to be considered material, a plaintiff must show that
14
“had the omitted information been disclosed, one w
Preview
KNIGHT LAW GROUP LLP 1 07/13/2020 Steve Mikhov (SBN 224676) 2 stevem@knightlaw.com Amy Morse (SBN 323668) 3 armandol@knightlaw.com 10250 Constellation Blvd., Ste. 2500 4 Los Angeles, CA 90067 5 Telephone: (310) 552-2250 Fax: (310) 552-7973 6 7 Attorneys for Plaintiffs, DAVID F. TIBBET and 8 DEANNA TIBBETT 9 SUPERIOR COURT OF CALIFORNIA 10 COUNTY OF PLACER 11 12 DAVID F. TIBBETT and DEANNA Case No.: SCV0042147 13 TIBBETT, Unlimited Jurisdiction 14 Plaintiff, PLAINTIFFS’ MEMORANDUM OF POINTS AND AUTHORITIES IN 15 vs. OPPOSITION TO FORD MOTOR 16 COMPANY AND WARREN- FORD MOTOR COMPANY, a Delaware ANDERSON FORD’S DEMURRER TO 17 Corporation; WARREN-ANDERSON SECOND AMENDED COMPLAINT 18 FORD, a California Corporation dba FUTURE FORD, and DOES 1 through 10, Hearing Date: July 24, 2020 19 inclusive, Hearing Time: 8:30 a.m. Department: 31 20 Defendants. Complaint Filed: November 19, 2018 21 Trial Date: Not Set 22 23 24 25 26 27 28 PLAINTIFFS’ MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEMURRER 1 TABLE OF CONTENTS 2 TABLE OF CONTENTS................................................................................................................. i 3 I. INTRODUCTION .......................................................................................................... - 1 - 4 5 II. ARGUMENT .................................................................................................................. - 1 - 6 A. Legal Standard ................................................................................................................ - 1 - 7 B. Plaintiffs Have Sufficiently Pled all of Their Fraud Claims with the Requisite 8 Factual Specificity .......................................................................................................... - 1 - 9 1. Plaintiffs Pled Sufficient Facts to Maintain Their Misrepresentation Claim ........... - 1 - 10 2. Plaintiffs Pled Sufficient Facts to Maintain the Concealment Claim ....................... - 3 - 11 12 3. Plaintiffs’ Claims Are Based on More Than Mere Non-Actionable Puffery ........... - 4 - 13 4. Plaintiffs’ CLRA Claim is Actionable ..................................................................... - 4 - 14 C. Ford’s Statute of Limitations Arguments Must be Rejected .......................................... - 5 - 15 1. The Statutes of Limitations Were Tolled by the Delayed Discovery Rule .............. - 5 - 16 2. The Statutes of Limitations Were Tolled by the Doctrine of Fraudulent 17 Concealment and Equitable Estoppel ........................................................................... - 8 - 18 19 D. The Economic Loss Rule Does Not Bar Plaintiffs’ Claims............................................ - 9 - 20 E. Alternatively, Plaintiffs Seek Leave to Amend ............................................................ - 14 - 21 III. CONCLUSION ............................................................................................................. - 15 - 22 23 24 25 26 27 28 i PLAINTIFF’S MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEMURRER TABLE OF AUTHORITIES 1 2 Cases 3 Abbott Laboratories v. Owens (Del. Super. Ct., Sept. 15, 2014, No. CV13C09186JRJCCLD) 4 2014 WL 8407613, at *8 ....................................................................................................... - 10 - 5 Abi-Najm v. Concord Condominium, LLC (2010) 280 Va. 350 ............................................... - 10 - 6 Applied Equipment Corp. v. Litton Saudi Arabia (1994) 7 Cal.4th 503................................... - 10 - 7 April Enterprises, Inc. v. KTTV (1983) 147 Cal.App.3d 805 ..................................................... - 5 - 8 Bankers Trust Co. v. Pacific Employers Insurance Co. (9th Cir. 1960) 282 F.2d 106 ............ - 11 - 9 Blank v. Kirwan (1985) 39 Cal.3d 311 ............................................................................ - 1 -, - 14 - 10 Boschma v. Home Loan Center, Inc. (2011) 198 Cal.App.4th 230, 248 .................................... - 3 - 11 Broberg v. Guardian Life Ins. Co. of America (2009) 171 Cal.App.4th 912 ............................. - 6 - 12 Buxbom v. Smith (1944) 23 Cal.2d 535 ...................................................................................... - 1 - 13 Carruth v. Fritch (1950) 36 Cal.2d 426...................................................................................... - 9 - 14 Committee on Children’s Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197 ........ - 1 - 15 Consumer Advocates v. Echostar Satellite Corp. (2003) 113 Cal.App.4th 1351 ....................... - 5 - 16 Davis v. Monte (1927) 81 Cal.App. 164, 170 ............................................................................. - 4 - 17 Del. E. Webb Corp. v. Structural Materials Co. (1981) 123 Cal.App.3d 593............................ - 1 - 18 Diamond Multimedia Systems, Inc. v. Superior Court (1999) 19 Cal.4th 1036 ....................... - 11 - 19 EED Holdings v. Palmer Johnson Acquisition Corp. (S.D.N.Y. 2004) 387 F.Supp.2d 265 .... - 10 - 20 E-Fab Inc. v. Accountants, Inc. Services (2007) 153 Cal.App.4th 1308 .................................... - 6 - 21 Ehrlich v. BMW of N. Am., LLC, (2010) 801 F.Supp. 2d 908 .................................................... - 7 - 22 Elliot v. City of Pacific Grove, 54 Cal.App.3d 53 ...................................................................... - 1 - 23 Engalla v. Permanente Medical Group, Inc. (1997) 15 Cal. 4th 951 .......................................... - 2 - 24 Erlich v. Menezes (1999) 21 Cal.4th 543............................................................ - 11 -, - 12 -, - 13 - 25 Falco v. Nissan North America, 2013 WL 5575065, at 10 (C.D. Cal. Oct. 10, 2013) ............... - 7 - 26 Ford Motor Co. v. Rice, 726 So. 2d 626, 631 (Ala. 1998) ....................................................... - 10 - 27 Formosa Plastics Corp. USA V. Presido Engineers and Contractors, Inc. (Tex. 1998) 960 S.W. 28 2d 41....................................................................................................................................... - 10 - ii PLAINTIFF’S MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEMURRER 1 Fox v. Ethicon-Endo Surgery, Inc. (2005) 35 Cal.4th 797 ......................................................... - 5 - 2 Freeman & Mills, Inc. v. Belcher Oil Co. (1995) 11 Cal.4th 85 .............................................. - 12 - 3 Furla v. Jon Douglas Co. (1998) 65 Cal.App.4th 1069 ............................................................. - 4 - 4 Giles v. General Motors Acceptance Corp. (9th Cir. 2007) 494 F.3d 865 ............................... - 12 - 5 Glendale Fed. Sav. & Loan Assn. v. Marina View Heights Dev. Co. (1977) 66 Cal.App.3d 101... - 6 11 - 7 Harris v. Atlantic Richfield Co. (1993) 14 Cal.App.4th 70 ...................................................... - 10 - 8 Hebrew Academy of San Francisco v. Goldman (2007) 42 Cal. 4th 883 ................................... - 5 - 9 Herzog v. Capital Company (1945) 27 Cal. 2d 349 ................................................................... - 4 - 10 Hospital Council of Northern Cal v. Superior Court, 30 Cal.App. 3d 331 ................................ - 1 - 11 Huron Tool and Engineering Co. v. Precision Consulting Services, Inc. (Mich. Ct. App. 1995) 12 209 Mich.App. 365 ................................................................................................................ - 10 - 13 Jiminez v. Superior Court (2002) 29 Cal.4th 473 ....................................................................... - 9 - 14 Johnson v. Ford Motor Co. (2005) 35 Cal.4th 1191 ................................................................ - 11 - 15 Jolly v. Eli Lilly & Co. (1988) 44 Cal.3d 1103 .................................................................. - 5 -, - 6 - 16 Klein v. Chevron U.S.A., Inc. (2012) 202 Cal.App.4th 1342 ...................................................... - 5 - 17 Lantzy v. Centex Homes (2003) 31 Cal.4th 363.......................................................................... - 9 - 18 Las Palmas Associates v. Las Palmas Center Associates (1991) 235 Cal.App.3d 1220 - 10 -, - 11 19 - 20 Lazar v. Superior Court (1996) 12 Cal.4th 631 ........................................................................ - 12 - 21 LiMandri v. Judkins (1997) 52 Cal.App.4th 326 ........................................................................ - 5 - 22 Marketing West, Inc. v. Sanyo Fisher (USA) Corp. (1992) 6 Cal.App.4th 603.......................... - 8 - 23 McAdams v. Monier (2010) 182 Cal.App.4th 175 ...................................................................... - 2 - 24 Mexia v. Rinker Boat Co. (2009) 174 Cal.App.4th 1297 ............................................................ - 7 - 25 Mirkin v. Wasserman (1993) 5 Cal.4th 1082 ..................................................................... - 5 -, - 8 - 26 Moorman Mfg. Co. v. National Tank Co. (1982) 91 Ill.2d 69 .................................................. - 10 - 27 Murillo v. Fleetwood Enterprises, Inc. (1998) 17 Cal. 4th 985 .................................................. - 7 - 28 Paduano v. American Honda Motor Co. (2009) 169 Cal.App.4th 1453 .................................... - 4 - iii PLAINTIFF’S MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEMURRER 1 Pat Rose Associates v. Coombe (1990) 225 Cal.App.3d 9 ....................................................... - 11 - 2 Robinson Helicopter Co., Inc. v. Dana Corp. (2004) 34 Cal.4th 979 ................ - 11 -, - 12 -, - 14 - 3 Rutledge v. Hewlett-Packard Company (2015) 238 Cal.App.4th 1164 ...................................... - 4 - 4 Sime v. Malouf (1949) 95 Cal.App.2d 82 .......................................................................... - 6 -, - 7 - 5 Stickrath v. Globalstar, Inc. (N.D. Cal. 2007) 527 F.Supp.2d 992 ............................................ - 3 - 6 Thrifty-Tel, Inc. v. Bezenek, (1996) 46 Cal.App.4th 1559 .......................................................... - 2 - 7 Tommy L. Griffin Plumbing & Heating Co. v. Jordan, Jones & Goulding, Inc. (1995) 320 S.C. 8 49............................................................................................................................................ - 10 - 9 Town of Alma v. AZCO Const., Inc. (Colo. 2000) 10 P.3d 1256 .............................................. - 10 - 10 Vu v. Prudential Property & Casualty Ins. Co., (2001) 26 Cal.4th 1142 ................................... - 9 - 11 Statutes 12 Civ. Code § 1791.1, subd. (c) ..................................................................................................... - 7 - 13 Code Civ. Proc., § 589 ................................................................................................................ - 6 - 14 Other Authorities 15 CACI 1900 .................................................................................................................................. - 2 - 16 CACI 1901 ......................................................................................................................... - 3 -, - 8 - 17 18 19 20 21 22 23 24 25 26 27 28 iv PLAINTIFF’S MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEMURRER MEMORANDUM OF POINTS AND AUTHORITIES 1 I. INTRODUCTION 2 The underlying action is a civil matter brought by Plaintiffs David F. Tibbett and Deanna 3 Tibbett against Defendants Ford Motor Company’s (“Ford”) and Defendant Future Ford Inc. 4 (“Future Ford;” collectively, “Defendants”) regarding a defective 2006 Ford F-250 sold by 5 Defendants, and equipped with a defective 6.0-liter diesel engine (“6.0L”) (SAC ¶¶ 2, 9, 25.) What 6 Plaintiffs did not know was that the 6.0L diesel engine had irreparable problems that Ford concealed 7 from Plaintiffs, and other consumers, at the time of sale, and that Ford had been aware of those 8 problems for years. (SAC ¶¶ 16-32, 35-47.) During the five-year engine warranty, Plaintiffs brought 9 their vehicle in for repairs to the 6.0L engine. (SAC ¶¶ 83-87.) During this time, Ford was aware 10 that the vehicle had irreparable problems and continued to conceal this information from Plaintiffs by misrepresenting that it was able to fix the Subject Vehicle. (SAC ¶¶ 16-32, 35-47, 48-62, 63-81, 11 113.) 12 Ford demurrers to all causes of action contained in Plaintiffs’ Second Amended Complaint 13 by arguing that Plaintiffs failed to plead facts with the requisite specificity, and on various other 14 arguments including that tolling does not apply. For the reasons below, the Court should overrule 15 Defendants; demurrer. 16 II. ARGUMENT 17 A. Legal Standard 18 A demurrer tests the sufficiency of the pleading. (Elliot v. City of Pacific Grove, 54 19 Cal.App.3d 53, 56; Hospital Council of Northern Cal v. Superior Court, 30 Cal.App. 3d 331, 337- 20 338.) Allegations must be liberally construed in a manner directed toward achieving substantial justice between the parties. (Buxbom v. Smith (1944) 23 Cal.2d 535, 545.) A demurrer admits “all 21 material facts properly pleaded.” (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) This is true no matter 22 how improbable the facts may be. (Del. E. Webb Corp. v. Structural Materials Co. (1981) 123 23 Cal.App.3d 593, 604.) For this reason, potential problems with proof are irrelevant. (Committee on 24 Children’s Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 213-4.) 25 B. Plaintiffs Have Sufficiently Pled all of Their Fraud Claims with the Requisite 26 Factual Specificity 27 1. Plaintiffs Pled Sufficient Facts to Maintain Their Misrepresentation Claim 28 The elements of intentional misrepresentation are: “(a) misrepresentation, (SAC, ¶¶ 33, 95- 1 PLAINTIFFS’ MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEMURRER 104); (b) knowledge of falsity (SAC ¶¶ 16-32, 100-101); (c) intent to defraud, i.e. to induce reliance 1 (SAC ¶¶ 34, 48-56, 105-108); (d) justifiable reliance (SAC ¶¶ 34, 48-56, 105-108); and (e) resulting 2 damage” (SAC ¶¶ 109-115) (CACI 1900; Engalla v. Permanente Medical Group, Inc. (1997) 15 3 Cal. 4th 951, 974.) “[F]alse representations made recklessly and without regard for their truth in 4 order to induce action by another are the equivalent of misrepresentations knowingly and 5 intentionally uttered”. (Id.) One “who gives information of other facts which are likely to mislead 6 for want of communication of that fact” may be liable for misrepresentation. (McAdams v. Monier, 7 (2010) 182 Cal.App.4th 175, 185.) A “misrepresentation need not be oral; it may be implied by 8 conduct.” (Thrifty-Tel, Inc. v. Bezenek, (1996) 46 Cal.App.4th 1559, 1567.) 9 Despite Defendant’s assertions otherwise, Plaintiffs in fact sufficiently alleged the elements 10 of intentional misrepresentation. Plaintiffs alleged that Defendants made representations to them through their marketing materials and their authorized agents. (SAC ¶¶ 33-34, 48-49, 52, 95-104.) 11 Plaintiffs went to Ford’s authorized dealership seeking a long-lasting vehicle that could offer 12 superior horsepower and torque. (SAC ¶ 51.) Plaintiffs were told by the sales personnel that the Ford 13 F-250 vehicles with a 6.0L engine would offer superior power and tow capacity. (SAC ¶ 52.) 14 Plaintiffs believed and reasonably relied on the representations made by the marketing materials and 15 sales personnel. (SAC ¶¶ 50, 53-54, 105-109.) 16 Defendants did not make any disclosures to Plaintiffs to qualify the representations. 17 Problems with the 6.0L engine were known by Ford prior to the purchase of the Subject Vehicle. 18 (SAC ¶¶ 16-32, 99-101.) Ford had exclusive knowledge of material facts that it failed to disclose 19 prior to purchase. (SAC ¶¶ 16-32, 72, 100-101.) Plaintiffs would not have purchased the Subject 20 Vehicle had they known of the problems with the 6.0L engine. (SAC ¶ 109, 132, 140, 157.) Defendants’ failure to disclose the problems rendered its representations misleading and fraudulent. 21 (SAC ¶¶ 35-47, 55, 72, 78, 89, 116-119.) Defendants duped Plaintiffs into buying a vehicle that had 22 defects in its engine that led to incessant problems. (SAC ¶¶ 48-62, 78, 83-87, 95-102, 106-108.) 23 The claims made by Defendants were false, and known to be false, at the time they were made, 24 especially given Ford’s knowledge of such defects and their failed attempts to implement measures 25 to address symptoms. (SAC ¶¶ 16-32, 35-47, 116-121.) 26 These factual representations concerning the characteristics of the F-250 and its 6.0L engine 27 that are capable of being proved false because objectively the vehicle either does or does not possess 28 the attributes claimed. Lastly, Plaintiffs’ cause of action for negligent misrepresentation is equally 2 PLAINTIFFS’ MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEMURRER supported with all the facts detailed above. It is much the same as the intentional misrepresentation 1 except there is no element of scienter. Thus, Plaintiffs have pled sufficient facts to maintain their 2 claims of intentional and negligent misrepresentation, and the Court is warranted in denying Ford’s 3 Motion. 4 2. Plaintiffs Pled Sufficient Facts to Maintain the Concealment Claim 5 A claim for fraudulent concealment requires that: (1) the defendant concealed or suppressed 6 a material fact; (2) the defendant was under a duty to disclose the fact to the plaintiff; (3) the 7 defendant intentionally concealed or suppressed the fact with intent to defraud the plaintiff; (4) the 8 plaintiff was unaware of the fact and would have acted otherwise if he had known of the concealed 9 or suppressed fact; and (5) as a result of the concealment or suppression of the fact, the plaintiff 10 sustained damage. (Boschma v. Home Loan Center, Inc., (2011) 198 Cal.App.4th 230, 248.) A duty to disclose occurs: (1) when the defendant is in a fiduciary relationship with the plaintiff; (2) when 11 the defendant had exclusive knowledge of material facts not known to the plaintiff; (3) when the 12 defendant actively conceals a material fact from the plaintiff; or (4) when the defendant makes partial 13 representations but also suppresses some material fact. (Stickrath v. Globalstar, Inc., (N.D. Cal. 14 2007) 527 F.Supp.2d 992, 1000-01; see also CACI 1901.) 15 The crux of Plaintiffs’ fraudulent concealment claim is that Ford identified a defect relating 16 to motor vehicle safety, prior to sale of the vehicle, and did not disclose it to consumers such as 17 Plaintiffs. (See generally, SAC.) Plaintiffs’ SAC alleges that Ford concealed or suppressed a material 18 fact: that their Ford F-250 was equipped with a defective 6.0L engine that would exhibit ongoing 19 problems. (SAC ¶¶ 16-47, 144-154.) Despite Ford’s access to years of analysis concerning the 20 problematic 6.0L engine, Ford continued to conceal the information regarding the defect. (Id.) The existence of the engine defect is a material fact that a reasonable consumer would consider in 21 determining whether to purchase a vehicle. (SAC ¶155-156.) Ford had a duty to disclose the 22 concealed facts alleged in Plaintiffs’ SAC because Ford knew that the internal testing, previous 23 consumer complaints, and other internal information were not readily accessible to Plaintiffs. (SAC 24 ¶ 68.) Further, Defendant had a duty to disclose the concealed facts about the 6.0L engine because 25 Defendant actively concealed material facts in order to induce Plaintiffs’ false belief in the quality, 26 characteristics, and safety of the 6.0L engine. (SAC ¶ 70.) Finally, Plaintiffs were damaged by 27 Ford’s concealment of the 6.0L engine defect because Plaintiffs purchased a vehicle they would not 28 have otherwise purchased. (SAC ¶¶ 154-165.) Thus, Plaintiffs’ concealment claim is sufficiently 3 PLAINTIFFS’ MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEMURRER pled, and the Court should overrule Defendant’s demurrer. 1 3. Plaintiffs’ Claims Are Based on More Than Mere Non-Actionable Puffery 2 “Whether a statement is nonactionable opinion or actionable misrepresentation of fact is a 3 question of fact for the jury.” (Furla v. Jon Douglas Co., (1998) 65 Cal.App.4th 1069, 1081; see 4 also Davis v. Monte, (1927) 81 Cal.App. 164, 170.) Representations such as “most stringent quality 5 control tests,” “carefully checked by our quality control department,” in “sound condition” and 6 “perfectly intact” are actionable. (Id.; Herzog v. Capital Company (1945) 27 Cal. 2d 349.) The 7 “question of whether a manufacturer’s representation about a product is specific, and was relied 8 upon by a consumer should be decided by a trier of fact.” (Rutledge v. Hewlett-Packard Company 9 (2015) 238 Cal.App.4th 1164, 1176.) 10 Paduano v. American Honda Motor Co. (2009) 169 Cal.App.4th 1453, demonstrates the fallacy of Ford’s contention that its statements are “nonactionable puffery.” In that case, Honda 11 advertised its Civic Hybrid as having “terrific gas mileage,” stating a rating of 48 m.p.g. Honda’s 12 brochure boasted, “IS THERE ANYTHING SPECIAL I HAVE TO DO? You just have to love 13 saving money and getting terrific gas mileage” and “Just drive the Hybrid like you would a 14 conventional car and save on fuel bills.” (Id. at 1472.) In reality, the fuel economy was 23-30 m.p.g. 15 (Id. at 1461.) In order to achieve higher mileage, the Hybrid had to be driven in specialized manner 16 that was for all intents and purposes impossible given modern driving conditions. (Id. at 1460.) The 17 court found the representation that the Hybrid had “terrific gas mileage” was actionable. (Id. at 1471– 18 72.) A reasonable juror could find that the plaintiff had been misled because he drove the vehicle as 19 a conventional car and did not receive “terrific gas mileage.” (Id.) 20 Similarly to Paduano, Ford’s statements about the 6.0L engine are more than nonactionable “puffery”: they are provably false, and were shown to be false as a result of defects in the engine. 21 (SAC ¶¶ 16-32, 33, 35-47.) As with the gas mileage claim in Paduano, a reasonable juror could find 22 that Ford’s claims that its representations that the F-250 has superior towing capacity and that it has 23 “best-in-class: horsepower, gas torque, unsurpassed diesel horsepower” are actionable 24 representations. (SAC ¶ 33.) Thus, Plaintiffs’ fraud claims alleging Ford’s misrepresentations are 25 more than mere puffery, and the Court is warranted in overruling Defendant’s demurrer. 26 4. Plaintiffs’ CLRA Claim is Actionable 27 A CLRA claim is allowed when an “omission [is] contrary to a representation actually made 28 by the defendant, or an omission of a fact the defendant was obliged to disclose.” (Daugherty v. 4 PLAINTIFFS’ MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEMURRER American Honda Motor Co., Inc. (2006) 144 Cal.App.4th 824, 827.) Fraudulent omissions are 1 actionable under the CLRA. (Klein v. Chevron U.S.A., Inc. (2012) 202 Cal.App.4th 1342, 1382–83; 2 Daniel v. Ford Motor Co. (9th Cir. 2015) 806 F.3d 1217, 1225.) A duty to disclose in a CLRA claim 3 arises in four circumstances: “(1) when the defendant is in a fiduciary relationship with the plaintiff; 4 (2) when the defendant had exclusive knowledge of material facts not known to the plaintiff; (3) 5 when the defendant actively conceals a material fact from the plaintiff; and (4) when the defendant 6 makes partial representations but also suppresses some material fact.” (Falk v. General Motors 7 Corp., 496 F. Supp. 2d at 1095 citing LiMandri v. Judkins (1997) 52 Cal.App.4th 326, 337.) In order 8 for undisclosed information to be considered material, the plaintiff must show that “had the omitted 9 information been disclosed, one would have been aware of it and behaved differently.” (Mirkin v. 10 Wasserman (1993) 5 Cal.4th 1082, 1093; see also Falk v. Gen. Motors Corp. (N.D. Cal. 2007) 496 F.Supp.2d 1088, 1095.) Materiality, for CLRA claims, is judged by the effect on a “reasonable 11 consumer.” (Consumer Advocates v. Echostar Satellite Corp. (2003) 113 Cal.App.4th 1351, 1360.) 12 Defendant argues that Plaintiffs failed to plead his CLRA cause of action with requisite 13 specificity. As already established above, Plaintiffs have pled with the requisite factual specificity 14 Plaintiffs’ reliance on Ford’s misrepresentations and subsequent harm. Plaintiffs have also 15 incorporated by reference each allegation in the SAC in support of their CLRA claim. (SAC ¶ 238.) 16 Thus, Defendant’s demurrer should be overruled. 17 C. Ford’s Statute of Limitations Arguments Must be Rejected 18 1. The Statutes of Limitations Were Tolled by the Delayed Discovery Rule 19 Plaintiffs allege that the statute of limitations for their claims were tolled by the discovery 20 rule and the doctrine of fraudulent concealment. It is a well-settled rule that a cause of action does not accrue until the plaintiff discovers, or could have discovered through the exercise of reasonable 21 diligence, all facts essential to his cause of action, including his injury and its cause. (April 22 Enterprises, Inc. v. KTTV, (1983) 147 Cal.App.3d 805, 826-827; see also Hebrew Academy of San 23 Francisco v. Goldman (2007) 42 Cal. 4th 883, 894.) Equally well-settled is that whether the plaintiff 24 exercised reasonable diligence in discovering his injury and its cause are questions for the trier of 25 fact. (Fox v. Ethicon-Endo Surgery, Inc,. (2005) 35 Cal.4th 797, 810; Jolly v. Eli Lilly & Co. (1988) 26 44 Cal.3d 1103, 1112; April Enterprises, supra, at p. 833.) To constitute “discovery,” the facts made 27 known to plaintiff must constitute a “reasonable and natural clue” to the facts yet to be discovered; 28 the facts first known must bear a clear connection to the additional facts to be uncovered through 5 PLAINTIFFS’ MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEMURRER reasonable investigation. (Id. at 407.) A plaintiff whose only means of discovering the defendant’s 1 fraud through deposition is not charged with constructive knowledge of the fraud. (Sime v. Malouf 2 (1949) 95 Cal.App.2d 82, 107-8.) 3 The date Plaintiff should have discovered the irreparable defects is a factual issue that cannot 4 be determined by way of demurrer. (Broberg v. Guardian Life Ins. Co. of America (2009) 171 5 Cal.App.4th 912, 921; E-Fab Inc. v. Accountants, Inc. Services (2007) 153 Cal.App.4th 1308, 1320.) 6 Defendants mis-cite Jolly v. Eli Lilly & Co. (1988) 44 Cal.3d 1103 to support the argument that they 7 should be allowed to question the truth of Plaintiff’s allegations. Defendants’ own cited quotation 8 belies that notion: “While resolution of statute of limitations issues is normally a question of fact, 9 whether the uncontradicted facts established through discovery are susceptible of only one legitimate 10 inference, summary judgment is proper.” (Jolly, supra, 44 Cal.3d at 1112, emphasis added.) A motion for judgment on the pleadings is limited to “issue[s] of law.” (Code Civ. Proc., § 589.) The 11 Court should decline to entertain such improper attacks on the veracity Plaintiffs’ SAC. 12 Here, Plaintiffs’ SAC sufficiently alleges time and manner of discovery. The Subject Vehicle 13 had several mechanical problems during the warranty period. (SAC ¶ 227.) Plaintiffs were told on 14 each repair visit to Ford’s authorized dealership that the problem was repaired and what had been 15 done to repair it. (SAC ¶¶ 73, 75, 83-87.) Plaintiffs discovered their claims in or around the summer 16 of 2016 when Plaintiff David F. Tibbett spoke with his son-in-law who is also a truck owner about 17 the widespread issue amongst 6.0L vehicles. (SAC ¶¶ 74-77, 88.) This is when Plaintiffs first 18 discovered that Defendants’ previous repairs had failed to conform the vehicle to warranty and that 19 the problems were not limited to Plaintiffs’ individual vehicle but were part of a widespread issue 20 among vehicles equipped with the 6.0L engine. (SAC ¶ 75-76.) Prior to this date, Plaintiff had shown reasonable diligence and took his vehicle in for repairs. (SAC ¶¶ 75, 79-80, 83-87.) During these 21 repair visits, Plaintiffs were assured that Ford had and would repair any problems with the engine 22 that occurred during the express warranty period. (SAC ¶¶ 74, 75, 77, 83-87.) Due to the repeated 23 false assurances of Ford and its service agents at the time of these repairs, Plaintiffs were unable to 24 discover Ford’s misrepresentations, even with diligent investigation. (SAC ¶¶ 75, 78-81.) Plaintiffs 25 could not discover the irreparable defects sooner because the facts were concealed in confidential 26 and privileged documents. (Id.) Further, no amount of diligence by Plaintiffs could have led him to 27 discovery of the these facts because they were kept secret by Ford. (Id.) 28 Under the ruling in Sime, Plaintiffs were entitled to rely on Ford’s representations that the 6 PLAINTIFFS’ MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEMURRER vehicle had been repaired. Plaintiffs were not required to investigate Ford’s representations 1 regarding the repair because Ford had superior knowledge regarding its 6.0L engine. (Sime, supra.) 2 Furthermore, no ordinary and reasonable person could be charged with knowledge that Ford was 3 engaging in a scheme to market its defective 6.0L engine, under the circumstances presented here. 4 Ford concealed and misrepresented the qualities of the 6.0L engine and its ability to repair it, 5 knowing all the while that the engine was afflicted with irreparable defects. The statutes of limitation 6 for each of Plaintiffs’ claims were tolled under the delayed discovery rule. 7 Plaintiffs’ Song-Beverly Act claims are likewise timely. The California Supreme Court has 8 called the Song Beverly Act a “strongly pro-consumer” statute that “should be given a construction 9 calculated to bring its benefits into action.” (Murillo v. Fleetwood Enterprises, Inc. (1998) 17 Cal. 4th 985, 990.) Courts should avoid interpretations that conflict with “the policy repeatedly expressed by 10 California courts of the need to construe the Song–Beverly Act so as to implement the legislative intent 11 to expand consumer protection and remedies.” (Mexia v. Rinker Boat Co. (2009) 174 Cal.App.4th 1297, 12 1311.) Under Song-Beverly, the implied warranty is coextensive with an express warranty but in no event 13 will the duration be less than 60 days or more than 1 year. (Civ. Code § 1791.1, subd. (c).) 14 By including a duration provision, the legislature clearly intended for the implied warranty to 15 have a prospective existence beyond tender of delivery. (Mexia v. Rinker Boat Co., (2009) 174 16 Cal.App.4th 1297, 1309.) The Song-Beverly Act’s implied warranty merchantability may be breached at tender of delivery or at a time beyond tender of delivery. In Mexia, the court found that so long as a 17 latent defect existed within the one-year period, its subsequent discovery beyond that time period did not 18 defeat an implied warranty claim. (Id. at 1310.) Plaintiff’s claim is not barred because latent defects 19 present on the date of sale were not discovered until years after the sale of the vehicle. For purposes of 20 assessing if there was a timely violation, “although a defect may not be discovered for months or 21 years after a sale, merchantability is evaluated as ifthe defect were known” during the implied 22 warranty period. (Mexia v. Rinker Boat Co., (2009) 174 Cal.App.4th 1297, 1306.) 23 In Ehrlich v. BMW of N. Am., LLC, (2010) 801 F.Supp. 2d 908, the defendant argued that the 24 implied warranty claim was untimely if it was not filed within five years of sale (one-year implied 25 warranty period plus a four-year statute of limitations). The court rejected that argument, holding that “it ignores the existence of the 4-year/50,000- mile express warranty, which is a warranty that 26 ‘explicitly extends to future performance of the goods.’ That warranty tolled the statute of limitations 27 until Plaintiff reasonably knew that his MINI would not perform as it should.” (Id. at 924-925; see 28 also Falco v. Nissan North America, 2013 WL 5575065, at 10 (C.D. Cal. Oct. 10, 2013.) Plaintiff’s 7 PLAINTIFFS’ MEMORANDUM OF POINTS AND AUTHORITIES IN OPPOSITION TO DEMURRER claim is not barred because latent defects were not discovered until years after the sale of the vehicle. 1 (SAC ¶ 90.) The nature of the 6.0 liter engine defects, which do not appear immediately, necessitate 2 delayed discovery. 3 2. The Statutes of Limitations Were Tolled by the Doctrine of Fraudulent 4 Concealment and Equitable Estoppel 5 The doctrines of fraudulent concealment and equitable estoppel also apply because 6 Defendants intentionally concealed material facts from Plaintiffs at the time they purchased the 7 Subject Vehicle, and Ford continued to conceal those facts. (SAC ¶¶ 64-93.) As explained above, 8 Plaintiffs alleged specific facts to meet the elements of fraudulent concealment: (1) Ford concealed 9 or suppressed a material fact; (2) Ford had a duty to disclose the fact to Plaintiff; (3) Ford 10 intentionally concealed or suppressed the fact with intent to defraud Plaintiff; (4) Plaintiff was unaware of the fact and would not have acted as he did had he known of the concealed or suppressed 11 fact; and (5) Plaintiff was damaged as a result of the concealment. (Marketing West, Inc. v. Sanyo 12 Fisher (USA) Corp. (1992) 6 Cal.App.4th 603, 612–13; CACI 1901.) 13 In order for undisclosed information to be considered material, a plaintiff must show that 14 “had the omitted information been disclosed, one w