Preview
1 Mary Arens McBride, Esq. (SBN: 282459)
Kyle B. Roybal, Esq. (SBN: 291520)
2 ERSKINE LAW GROUP, PC E-FILED
1/7/2021 2:29 PM
3 1576 N. Batavia St., Suite A Superior Court of California
Orange, CA 92867 County of Fresno
4 Tel: (949) 777-6032 By: C. York, Deputy
Fax: (714) 844-9035
5 Email: marensmcbride@erskinelaw.com
Email: kroybal@erskinelaw.com
6
7 Attorneys for Defendant,
GENERAL MOTORS LLC
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9 SUPERIOR COURT OF THE STATE OF CALIFORNIA
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FOR THE COUNTY OF FRESNO – B.F. SISK COURTHOUSE
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12 CGA PROPERTY MANAGEMENT, INC., CASE NO.: 20CECG01796
13 dba RENTPROS, INC., a California
Corporation,
14 DEFENDANT GENERAL MOTORS
Plaintiff, LLC’S NOTICE OF DEMURRER AND
15 DEMURRER TO PLAINTIFF’S FIRST
v. AMENDED COMPLAINT;
16
MEMORANDUM OF POINTS OF
GENERAL MOTORS LLC, a Delaware AUTHORITIES
17 Limited Liability Company; and DOES
18 1 through 20, inclusive, [Filed concurrently with Declaration of Kyle
B. Roybal; [Proposed] Order; and Motion
19 Defendants. to Strike Punitive Damages]
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DATE: June 3, 2021
21 TIME: 3:30 p.m.
DEPT: 403
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PAGE 1 OF 13
DEFENDANT GENERAL MOTORS LLC’S NOTICE OF DEMURRER AND DEMURRER TO PLAINTIFF’S FIRST
AMENDED COMPLAINT; MEMORANDUM OF POINTS OF AUTHORITIES
1 TO THE HONORABLE COURT, ALL PARTIES AND THEIR ATTORNEYS OF RECORD:
2 PLEASE TAKE NOTICE that on June 3, 2021 at 3:30 p.m., or as soon thereafter as the
3 matter may be heard in Department 403 of the above Court located at the B.F. Sisk Courthouse,
4 1130 O St, Fresno, CA 93721, General Motors LLC (“GM”) will and hereby does move this Court
5 for an order sustaining GM’s Demurrer to Plaintiff CGA Property Management, Inc. dba Rentpros,
6 Inc.’s (“Plaintiff”) First Amended Complaint.
7 DEMURRER TO PLAINTIFF’S COMPLAINT
8 GM hereby demurs to Plaintiff’s Causes of Action within Plaintiff’s First Amended
9 Complaint as filed herein, on the following grounds:
10 1. The third cause of action, for Fraudulent Inducement-Concealment, fails to state
11 facts sufficient to establish the fraud cause of action. (Code Civ. Proc., § 430.10(e)).
12 2. The third cause of action, for Fraudulent Inducement-Concealment, is barred by the
13 economic loss rule. (Id.)
14 This Demurrer is brought pursuant to California Code of Civil Procedure § 430.10, and is
15 based on this Notice of Demurrer and the attached Demurrer, Memorandum of Points and
16 Authorities, the Declaration of Kyle B. Roybal, the papers and pleading on file in this action and
17 such other papers, pleadings, and arguments as this Court shall admit at the time of the hearing.
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19 DATED: January 7, 2021 ERSKINE LAW GROUP, PC
20
21
KYLE B. ROYBAL, Esq.
22 Attorney for Defendant,
GENERAL MOTORS LLC
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DEFENDANT GENERAL MOTORS LLC’S NOTICE OF DEMURRER AND DEMURRER TO PLAINTIFF’S FIRST
AMENDED COMPLAINT; MEMORANDUM OF POINTS OF AUTHORITIES
1 TABLE OF CONTENTS
2
I. INTRODUCTION..............................................................................................................6
3
II. SUMMARY OF ALLEGATIONS ...................................................................................6
4
5 III. MEET AND CONFER PER CODE OF CIVIL PROCEDURE § 430.41 ......................7
6 IV. LEGAL STANDARD ON DEMURRER. ........................................................................7
7
V. ARGUMENT ......................................................................................................................8
8
A. Plaintiff’s Fraudulent Inducement-Concealment Claim Fails Because The Complaint
9
Fails to Plead Fraud With the Required Specificity.........................................................8
10
11 B. Plaintiff’s Fraudulent Inducement-Concealment Claim Fails Because Plaintiff Does Not
12 Allege a Transactional Relationship Between GM and Plaintiff Giving Rise to a Duty to
13 Disclose ............................................................................................................................8
14 C. The Economic Loss Rule Bars the Fraud Cause of Action. ..........................................10
15 VI. CONCLUSION ................................................................................................................12
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DEFENDANT GENERAL MOTORS LLC’S NOTICE OF DEMURRER AND DEMURRER TO PLAINTIFF’S FIRST
AMENDED COMPLAINT; MEMORANDUM OF POINTS OF AUTHORITIES
1 TABLE OF AUTHORITIES
2 Page(s)
3 Cases
4
Applied Equip. Corp. v. Litton Saudi Arabia Ltd.
5 (1994) 7 Cal.4th 503 ................................................................................................................11
6 Bigler-Engler v. Breg, Inc.
(2017) 7 Cal.App.5th 276 ....................................................................................................9, 10
7
Blank v. Kirwan
8
(1985) 39 Cal.3d 311 .................................................................................................................7
9
Donabedian v. Mercury Ins. Co.
10 (2004) 116 Cal.App.4th 968 ......................................................................................................7
11 Erlich v. Menezes
(1999) 21 Cal.4th 543 ..............................................................................................................11
12
Food Safety Net Services v. Eco Safe Systems USA, Inc.
13
(2012) 209 Cal.App.4th 1118 ............................................................................................10, 12
14
Hoffman v. 162 North Wolfe LLC
15 (2014) 228 Cal.App.4th 1178 .................................................................................................... 9
16 Jiminez v. Superior Court
(2002) 29 Cal. 4th 473 .............................................................................................................11
17
18 Kamen v. Lindley
(2001) 94 Cal.App.4th 197 ........................................................................................................7
19
La Vista Cemetery Assoc. v. Am. Savings & Loan Assoc.
20 (1970) 12 Cal.App.3d 365 .........................................................................................................8
21 Lazar v. Superior Court
22 (1996) 12 Cal.4th 631 ............................................................................................................8, 9
23 LiMandri v. Judkins
(1997) 52 Cal.App.4th 326 ........................................................................................................ 9
24
Moore v. Regents of Univ. of Cal.
25 (1990) 51 Cal.3d 120 .................................................................................................................7
26
Penrose v. Winter
27 (1901) 135 Cal. 289 ...................................................................................................................7
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DEFENDANT GENERAL MOTORS LLC’S NOTICE OF DEMURRER AND DEMURRER TO PLAINTIFF’S FIRST
AMENDED COMPLAINT; MEMORANDUM OF POINTS OF AUTHORITIES
1 Robinson Helicopter Co., Inc. v. Dana Corp.
(2004) 34 Cal.4th 979 ..................................................................................................10, 11, 12
2
Tenzer v. Superscope, Inc.
3
(1985) 39 Cal.3d 18 ................................................................................................................... 8
4
Warner Construction Corp. v. City of Los Angeles
5 (1970) 2 Cal.3d 285 ................................................................................................................... 9
6 Wise v. Southern Pacific Co.
(1963) 223 Cal.App.2d 50 .........................................................................................................9
7
8 Statutes
9 Code of Civ. Proc., § 430.10(e) .......................................................................................................7
10 Code of Civ. Proc., § 430.10 (f) .......................................................................................................7
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DEFENDANT GENERAL MOTORS LLC’S NOTICE OF DEMURRER AND DEMURRER TO PLAINTIFF’S FIRST
AMENDED COMPLAINT; MEMORANDUM OF POINTS OF AUTHORITIES
1 MEMORANDUM OF POINTS AND AUTHORITIES
2 I. INTRODUCTION
3 Plaintiff CGA Property Management, Inc. dba Rentpros, Inc. (“Plaintiff”) wrongly
4 attempts to turn this simple lemon law action into a complicated extra-contractual fraudulent
5 concealment case against Defendant General Motors LLC (“GM”). As explained below, however,
6 Plaintiff’s “fraud” claim fails as a matter of law because—among other deficiencies—Plaintiff
7 never alleged it purchased the vehicle directly from GM or that it viewed (much less relied on) any
8 representations made by GM in deciding to purchase its vehicle.
9 In short, there is zero factual or legal basis for Plaintiff’s “fraud” claim. GM’s demurrer
10 should be sustained without leave to amend.
11
II. SUMMARY OF ALLEGATIONS
12 On or about December 2, 2017, Plaintiff purchased a 2015 Cadillac Escalade, VIN
13
1GYS4NKJ0FR671926 (the “Subject Vehicle” or “Escalade”). (See First Amended Complaint
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(“FAC”), ¶¶ 4, 5) On June 22, 2020, Plaintiff filed breach of warranty and fraud claims based upon
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allegations that the Subject Vehicle developed various alleged “defects” during the warranty
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period. (See generally id.) On December 11, 2020 Plaintiff filed a FAC asserting additional
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allegations. (Id. at ¶¶ 82-91). Plaintiff’s FAC asserts claims against GM for fraudulent inducement-
18
concealment, but it fails to provide the critical facts that would support its claims.
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Plaintiff’s Fraudulent Inducement-Concealment cause of action is based almost entirely on
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Plaintiff’s generic allegations that GM failed to disclose that the Subject Vehicle’s 8L90 MYC
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Hydra-Matic automatic transmission was allegedly defective. (See FAC, ¶¶ 15-22, 24-26, 28-29,
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33, 87-88). According to Plaintiff, GM supposedly acquired knowledge about the specific
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performance of the Subject Vehicle from aggregated data in multiple unidentified sources about
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vehicles other than the Subject Vehicle—namely, other customers’ Cadillac Escalade vehicles
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manufactured between 2010 and 2019 (id. at ¶ 35)—then knowingly and intentionally concealed
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material facts from Plaintiff. (See generally id.) However, Plaintiff fails to allege (i) the identity
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of the person who sold it the Subject Vehicle, (ii) whether or not Plaintiff had any interaction with
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DEFENDANT GENERAL MOTORS LLC’S NOTICE OF DEMURRER AND DEMURRER TO PLAINTIFF’S FIRST
AMENDED COMPLAINT; MEMORANDUM OF POINTS OF AUTHORITIES
1 GM at or before it bought the Subject Vehicle, (iii) GM’s knowledge of the alleged defects in
2 Plaintiff’s Vehicle, (iv) GM’s intent to defraud Plaintiff, and (v) specifics about the alleged
3 warranty that accompanied the sale of the Subject Vehicle. Instead, Plaintiff asserts its claims in
4 wholly conclusory fashion. Essentially, Plaintiff alleges only that its vehicle is a type of vehicle
5 that may suffer from a type of defect and that during the unspecified warranty period, the vehicle
6 contained various alleged defects, which Plaintiff describes only in general terms. (See generally
7 FAC.) As explained below, such allegations are insufficient. GM’s demurrer should be sustained.
8 III. MEET AND CONFER PER CODE OF CIVIL PROCEDURE § 430.41
9 GM made a good faith effort to meet and confer telephonically to resolve the issues
10 outlined in this demurrer without the need for court intervention but was unsuccessful despite its
11 best efforts. (Declaration of Kyle B. Roybal, ¶ 2.)
12 IV. LEGAL STANDARD ON DEMURRER.
13 A demurrer challenges defects apparent on the face of the complaint or judicially noticeable
14 matters outside the pleadings. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318; Donabedian v.
15 Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994.) In ruling on a demurrer, “the trial court . . .
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treats the demurrer as admitting all material facts properly pleaded, but not contentions, deductions
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or conclusions of fact or law.” (Kamen v. Lindley (2001) 94 Cal.App.4th 197, 201; see also Moore
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v. Regents of Univ. of Cal. (1990) 51 Cal.3d 120, 125.)
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A pleading that “does not state facts sufficient to constitute a cause of action” is subject to
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demurrer.” (Code of Civ. Proc., § 430.10(e)). A pleading fails to state a cause of action if it pleads
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essential allegations as legal conclusions rather than as facts. (Penrose v. Winter (1901) 135 Cal.
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289, 290-291.) Further, a pleading that is uncertain, ambiguous and/or unintelligible is subject to
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demurrer. (Code of Civ. Proc., § 430.10 (f)). The Court must determine if the flaws inherent in
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the pleading can be remedied by the amendment; if the plaintiff cannot correct the deficiencies,
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leave to amend should be denied. (La Vista Cemetery Assoc. v. Am. Savings & Loan Assoc. (1970)
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12 Cal.App.3d 365, 369.)
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Against this standard, Plaintiff’s “fraud” claim is barred by significant factual deficiencies
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DEFENDANT GENERAL MOTORS LLC’S NOTICE OF DEMURRER AND DEMURRER TO PLAINTIFF’S FIRST
AMENDED COMPLAINT; MEMORANDUM OF POINTS OF AUTHORITIES
1 and a number of legal doctrines such that this Court should sustain GM’s demurrer without leave
2 to amend.
3 V. ARGUMENT
4 A. Plaintiff’s Fraudulent Inducement-Concealment Claim Fails Because the FAC
5 Fails to Plead Fraud with the Required Specificity.
6 As Plaintiff’s Third Cause of Action is premised on fraud, “[i]n California, fraud must be
7 pled specifically; general and conclusory allegations do not suffice.” (Lazar v. Superior Court
8 (1996) 12 Cal.4th 631, 645.). “This particularity requirement necessitates pleading facts which
9 show how, where, to whom, and by what means” the alleged fraud occurred. (Id.)
10 Plaintiff’s FAC falls far short of meeting this standard. Plaintiff fails to identify the
11 salesperson with whom Plaintiff spoke; what advertisements or marketing brochures Plaintiff
12 reviewed or relied upon in purchasing the Subject Vehicle, how long “prior to purchasing the
13 vehicle” it viewed them, and which representation therein it relied upon; and whether those
14 materials, if any, were prepared by GM or someone else (such as a dealership). Plaintiff has also
15 failed to plead with specificity, as required, facts supporting any allegation that GM intended to
16 defraud it by either making affirmative statements or failing to disclose material facts. (Tenzer v.
17 Superscope, Inc. (1985) 39 Cal.3d 18, 30 [“something more than non-performance is required to
18 prove the defendant’s intent not to perform his promise”].) Therefore, Plaintiff failed to allege, in
19 detail, facts showing the circumstances of discovery and/or what was discovered. Consequently,
20 Plaintiff’s fraudulent concealment cause of action fails to meet the applicable pleading standard
21 and should be dismissed.
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B. Plaintiff’s Fraudulent Inducement-Concealment Claim Fails Because Plaintiff
23 Does Not Allege a Transactional Relationship Between GM and Plaintiff
Giving Rise to a Duty to Disclose.
24
California law does not permit a cause of action for concealment that did not arise in a
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fiduciary relationship or in a transaction involving “direct dealings” between the plaintiff and the
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defendant. Because the FAC does not allege that Plaintiff purchased the Subject Vehicle directly
27
from GM or otherwise entered into a transaction with GM, Plaintiff has not alleged facts
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DEFENDANT GENERAL MOTORS LLC’S NOTICE OF DEMURRER AND DEMURRER TO PLAINTIFF’S FIRST
AMENDED COMPLAINT; MEMORANDUM OF POINTS OF AUTHORITIES
1 demonstrating that GM was under a duty to disclose, so Plaintiff has not stated a claim against GM
2 for fraudulent concealment.
3 To state a claim for fraudulent inducement-concealment, Plaintiff must allege: (1) the
4 defendant “concealed or suppressed a material fact,” (2) the defendant was “under a duty to
5 disclose the fact to the plaintiff,” (3) the defendant “intentionally concealed or suppressed the fact
6 with the intent to defraud the plaintiff,” (4) the plaintiff was “unaware of the fact and would not
7 have acted as he did if he had known of the concealed or suppressed fact,” and (5) “as a result of
8 the concealment or suppression of the fact, the plaintiff must have sustained damage.” (Bigler-
9 Engler v. Breg, Inc. (2017) 7 Cal.App.5th 276, 310–11; see also Lazar, supra, 12 Cal.4th at 638.)
10 Absent a fiduciary relationship between the parties (which Plaintiff does not—and could not—
11 allege here), a duty to disclose can arise in only three circumstances: (1) the defendant had
12 exclusive knowledge of the material fact; (2) the defendant actively concealed the material fact; or
13 (3) the defendant made partial representations while also suppressing the material fact. (Bigler-
14 Engler, supra, 7 Cal.App.5th at p. 311; LiMandri v. Judkins (1997) 52 Cal.App.4th 326, 336.)
15 “These three circumstances, however, ‘presuppose[ ] the existence of [a] relationship
16
between the plaintiff and defendant in which a duty to disclose can arise.’” (Bigler-Engler, supra,
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7 Cal. App.5th at p. 311 [quoting Limandri, supra, 52 Cal.App.4th at pp. 336–37; citing examples
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including “seller and buyer”].) Indeed, the California Supreme Court “has described the necessary
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relationship giving rise to a duty to disclose as a ‘transaction’ between the plaintiff and defendant
20
….” (Bigler-Engler, supra, 7 Cal.App.5th at p. 311; Warner Construction Corp. v. City of Los
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Angeles (1970) 2 Cal.3d 285, 294 [“In transactions which do not involve fiduciary or confidential
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relations”]; Hoffman v. 162 North Wolfe LLC (2014) 228 Cal.App.4th 1178, 1187–89 [rejecting
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concealment claim where plaintiffs “were not involved in a transaction with the parties they claim
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defrauded them”]; LiMandri, supra, 52 Cal.App.4th at p. 337 [“such a relationship can only come
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into being as a result of some sort of transaction between the parties”].)
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“Such a transaction must necessarily arise from direct dealings between the plaintiff and
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defendant; it cannot arise between the defendant and the public at large.” (Bigler-Engler, supra,
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DEFENDANT GENERAL MOTORS LLC’S NOTICE OF DEMURRER AND DEMURRER TO PLAINTIFF’S FIRST
AMENDED COMPLAINT; MEMORANDUM OF POINTS OF AUTHORITIES
1 7 Cal.App.5th at p. 311, emphases added.) In Bigler-Engler, for example, the Court of Appeal
2 reversed a verdict for fraudulent concealment against the manufacturer of a medical device
3 because the manufacturer and the plaintiff (who was injured by using the device) did not have the
4 required direct transactional relationship. (Id. at pp. 314-15.) The plaintiff did not obtain the
5 device directly from the manufacturer but from a medical group that sold and leased such devices.
6 (Id. at 287, 314.) As the Court of Appeal explained, the lack of direct dealings between the plaintiff
7 and the manufacturer was fatal to the plaintiff’s argument that the manufacturer had a duty to
8 disclose. (Id. at 312 [“Where, as here, a sufficient relationship or transaction does not exist, no
9 duty to disclose arises even when the defendant speaks.”].)
10 The same is true here. The FAC does not allege that Plaintiff purchased the Subject Vehicle
11 directly from GM. Thus, any alleged concealment by GM did not arise in a direct transaction
12 between Plaintiff and GM. Accordingly, under California law, there could not have been any
13 actionable concealment by GM that allegedly induced Plaintiff’s purchase of the vehicle. Thus,
14 as a matter of law, Plaintiff cannot establish that GM had a duty to disclose. GM’s demurrer should
15 be sustained.
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C. The Economic Loss Rule Bars the Fraud Cause of Action.
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The economic loss rule provides that where a purchaser’s expectations in a sale are
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frustrated because the product he bought is not working properly, his remedy is in contract alone,
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for he has suffered only economic losses. (Food Safety Net Services v. Eco Safe Systems USA, Inc.
20
(2012) 209 Cal.App.4th 1118, 1130 [citing Robinson Helicopter Co., Inc. v. Dana Corp. (2004)
21
34 Cal.4th 979, 988].) The economic loss rule requires a purchaser to recover in contract for purely
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economic loss due to disappointed expectations, unless he can demonstrate harm above and beyond
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a broken contractual promise. Quite simply, the economic loss rule prevents the law of contract
24
and the law of tort from dissolving one into the other. (Id. at 988 [citing Redarowicz v. Ohlendorf
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(Ill. 1982) 92 Ill. 2d 171]).
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The rationale for the economic loss rule was set forth in Jiminez v. Superior Court, where
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the court provided:
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DEFENDANT GENERAL MOTORS LLC’S NOTICE OF DEMURRER AND DEMURRER TO PLAINTIFF’S FIRST
AMENDED COMPLAINT; MEMORANDUM OF POINTS OF AUTHORITIES
1 The distinction that the law has drawn between tort recovery for
physical injuries and warranty recovery for economic loss is not
2 arbitrary and does not rest on the “luck” of one plaintiff in having
an accident causing physical injury. The distinction rests, rather, on
3 an understanding of the nature of the responsibility a manufacturer
must undertake in distributing his products. We concluded that the
4 nature of this responsibility meant that a manufacturer could
appropriately be held liable for physical injuries (including both
5 personal injury and damage to property other than the product
itself), regardless of the terms of any warranty. But the manufacturer
6 could not be held liable for ‘the level of performance of his products
in the consumer's business unless he agrees that the product was
7 designed to meet the consumer's demands.
8 ((2002) 29 Cal. 4th 473, 482 [citing Seely v White Motor Co. (1965) 63 Cal.2d 9, 18-19].)
9 The economic loss rule precludes Plaintiff from pursuing a fraud claim here because the
10 FAC acknowledges the existence of a contract, which governs the terms of the parties’ dispute
11 (namely, the Purchase Agreement and Vehicle Limited Warranty, FAC ¶¶ 5, 46). As explained by
12 the California Supreme Court in Applied Equip. Corp. v. Litton Saudi Arabia Ltd. (1994) 7 Cal.4th
13 503, 514, “Contract and tort are different branches of law. Contract law exists to enforce legally
14 binding agreements between parties; tort law is designed to vindicate social policy.”
15 The California Supreme Court also discussed the reasoning and importance of the
16 Economic Loss rule in Erlich v. Menezes (1999) 21 Cal.4th 543, 55, explaining that “[c]onduct
17 amounting to a breach of contract becomes tortious only when it also involves a duty independent
18 of the contract arising from principles of tort law. . . . An omission to perform a contract obligation
19 is never a tort unless that omission is also an omission of a legal duty.” Importantly,
20 the Erlich Court emphasized: “the importance of predictability in assuring commercial stability in
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the contractual dealing … and the potential for converting every contract breach into a tort with
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accompanying punitive damage recovery” that risked rendering the demarcation between tort and
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contract remedies meaningless. (See id. at 554.)
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Further, in Robinson Helicopter, the California Supreme Court specifically held that a fraud
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cause of action may only be brought where alleged fraudulent representations were made as to
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matters which were independent from those contained in the contract and which exposed the
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plaintiff to personal injury damages independent of the plaintiff’s economic loss. (Robinson
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DEFENDANT GENERAL MOTORS LLC’S NOTICE OF DEMURRER AND DEMURRER TO PLAINTIFF’S FIRST
AMENDED COMPLAINT; MEMORANDUM OF POINTS OF AUTHORITIES
1 Helicopter Co., supra, 34 Cal.4th at 979) (emphasis added). The California Supreme Court carved
2 out this narrow and limited circumstance where “a party alleging fraud or deceit in connection
3 with a contract” can recover in tort if he can “establish tortious conduct independent of a breach
4 of the contract itself, that is, violation of ‘some independent duty arising from tort law.’” (Id. at
5 1130.) This exception is extremely “narrow in scope and limited to a defendant’s affirmative
6 misrepresentations on which a plaintiff relies, and which expose a plaintiff to liability for personal
7 damages independent of the plaintiff’s economic loss.” (Robinson Helicopter, supra, at 993.) That
8 is, where there is a tort allegation that a contract was fraudulently induced, the fraud is only
9 actionable when (1) the fraudulent conduct breached an independent tort duty and, (2) the
10 fraudulent misrepresentation exposes a plaintiff to liability for personal damages independent of
11 the plaintiff’s economic loss. (Id. at 991 and 993.)
12 Plaintiff’s FAC contains no such allegations. Thus, applying the economic loss rule to the
13 allegations in Plaintiff’s FAC warrants sustaining GM’s demurrer.
14
VI. CONCLUSION
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For the reasons explained above, Plaintiff’s First Amended Complaint fails to allege
16
sufficient facts to support the cause of action and fails to state a claim for fraudulent concealment.
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Accordingly, based on the facts and arguments contained herein and specified above, GM
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respectfully requests that this Honorable Court grant GM’s demurrer without leave to amend.
19
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Dated: January 7, 2021 ERSKINE LAW GROUP, PC
21
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_______________________________
23 KYLE B. ROYBAL, Esq.
Attorney for Defendant,
24 GENERAL MOTORS LLC
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DEFENDANT GENERAL MOTORS LLC’S NOTICE OF DEMURRER AND DEMURRER TO PLAINTIFF’S FIRST
AMENDED COMPLAINT; MEMORANDUM OF POINTS OF AUTHORITIES
1 PROOF OF SERVICE
2 I am employed in the County of Orange and my business address is 1576 N. Batavia St., Suite
A, Orange, CA 92867. I am over the age of 18 years and I am not a party to this action. I am
3 readily familiar with the practices of Erskine Law Group for the collection and processing of
correspondence for mailing with the United States Postal Service. Such correspondence is
4 deposited with the United States Postal Service the same day in the ordinary course of business.
5 On January 7, 2021, I served the foregoing document(s), bearing the title(s):
6 DEFENDANT GENERAL MOTORS LLC’S NOTICE OF DEMURRER AND
DEMURRER TO PLAINTIFF’S FIRST AMENDED COMPLAINT; MEMORANDUM
7 OF POINTS OF AUTHORITIES
8 on the interested parties in the action as follows:
9 [X] by placing [ ] the original [X] a true copy thereof enclosed in a sealed envelope
addressed as follows:
10
DAVID N. BARRY, Esq.
11 THE BARRY LAW FIRM
11845 West Olympic Blvd., Suite 1270
12 Los Angeles, CA 90064
Phone: (310) 684-5859; Fax: (310) 862-4539
13 dbarry@mylemonrights.com
14 [ ] (BY MAIL SERVICE) I placed such envelopes for collection and to be mailed on this
date following ordinary business practices.
15
16 [ ] (BY PERSONAL SERVICE) I caused to be delivered such envelope by hand to the
office of the addressee.
17
[ ] (BY FACSIMILE) The document stated herein was transmitted by facsimile
18 transmission and the transmission was reported as complete and without error. A transmission
report was properly issued by the transmitting facsimile machine and a copy of said transmission
19 report is attached to the original proof of service indicating the time of transmission.
20 [ ] (BY NEXT DAY DELIVERY) I caused to be delivered such envelope by hand to the
office of the addressee.
21
[X] (BY E-MAIL) I served the above mentioned document via electronic transmission per
22 agreement of the parties.
23 [X] (State) I declare under penalty of perjury under the laws of the State of California that the
foregoing is true and correct.
24
[ ] (Federal) I declare under penalty of perjury that I am employed by a member of the Bar
25 of this Court, at whose direction this service is made.
26 Executed on January 7, 2021, at Orange, CA.
27 Signed: ______________________
Stanley Chan
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DEFENDANT GENERAL MOTORS LLC’S NOTICE OF DEMURRER AND DEMURRER TO PLAINTIFF’S FIRST
AMENDED COMPLAINT; MEMORANDUM OF POINTS OF AUTHORITIES
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1 Mary Arens McBride, Esq. (SBN: 282459) Kyle B. Roybal, Esq. (SBN: 291520) 2 ERSKINE LAW GROUP, PC E-FILED 1/7/2021 2:29 PM 3 1576 N. Batavia St., Suite A Superior Court of California Orange, CA 92867 County of Fresno 4 Tel: (949) 777-6032 By: C. York, Deputy Fax: (714) 844-9035 5 Email: marensmcbride@erskinelaw.com Email: kroybal@erskinelaw.com 6 7 Attorneys for Defendant, GENERAL MOTORS LLC 8 9 SUPERIOR COURT OF THE STATE OF CALIFORNIA 10 FOR THE COUNTY OF FRESNO – B.F. SISK COURTHOUSE 11 12 CGA PROPERTY MANAGEMENT, INC., CASE NO.: 20CECG01796 13 dba RENTPROS, INC., a California Corporation, 14 DEFENDANT GENERAL MOTORS Plaintiff, LLC’S NOTICE OF DEMURRER AND 15 DEMURRER TO PLAINTIFF’S FIRST v. AMENDED COMPLAINT; 16 MEMORANDUM OF POINTS OF GENERAL MOTORS LLC, a Delaware AUTHORITIES 17 Limited Liability Company; and DOES 18 1 through 20, inclusive, [Filed concurrently with Declaration of Kyle B. Roybal; [Proposed] Order; and Motion 19 Defendants. to Strike Punitive Damages] 20 DATE: June 3, 2021 21 TIME: 3:30 p.m. DEPT: 403 22 23 24 25 26 27 28 PAGE 1 OF 13 DEFENDANT GENERAL MOTORS LLC’S NOTICE OF DEMURRER AND DEMURRER TO PLAINTIFF’S FIRST AMENDED COMPLAINT; MEMORANDUM OF POINTS OF AUTHORITIES 1 TO THE HONORABLE COURT, ALL PARTIES AND THEIR ATTORNEYS OF RECORD: 2 PLEASE TAKE NOTICE that on June 3, 2021 at 3:30 p.m., or as soon thereafter as the 3 matter may be heard in Department 403 of the above Court located at the B.F. Sisk Courthouse, 4 1130 O St, Fresno, CA 93721, General Motors LLC (“GM”) will and hereby does move this Court 5 for an order sustaining GM’s Demurrer to Plaintiff CGA Property Management, Inc. dba Rentpros, 6 Inc.’s (“Plaintiff”) First Amended Complaint. 7 DEMURRER TO PLAINTIFF’S COMPLAINT 8 GM hereby demurs to Plaintiff’s Causes of Action within Plaintiff’s First Amended 9 Complaint as filed herein, on the following grounds: 10 1. The third cause of action, for Fraudulent Inducement-Concealment, fails to state 11 facts sufficient to establish the fraud cause of action. (Code Civ. Proc., § 430.10(e)). 12 2. The third cause of action, for Fraudulent Inducement-Concealment, is barred by the 13 economic loss rule. (Id.) 14 This Demurrer is brought pursuant to California Code of Civil Procedure § 430.10, and is 15 based on this Notice of Demurrer and the attached Demurrer, Memorandum of Points and 16 Authorities, the Declaration of Kyle B. Roybal, the papers and pleading on file in this action and 17 such other papers, pleadings, and arguments as this Court shall admit at the time of the hearing. 18 19 DATED: January 7, 2021 ERSKINE LAW GROUP, PC 20 21 KYLE B. ROYBAL, Esq. 22 Attorney for Defendant, GENERAL MOTORS LLC 23 24 25 26 27 28 PAGE 2 OF 13 DEFENDANT GENERAL MOTORS LLC’S NOTICE OF DEMURRER AND DEMURRER TO PLAINTIFF’S FIRST AMENDED COMPLAINT; MEMORANDUM OF POINTS OF AUTHORITIES 1 TABLE OF CONTENTS 2 I. INTRODUCTION..............................................................................................................6 3 II. SUMMARY OF ALLEGATIONS ...................................................................................6 4 5 III. MEET AND CONFER PER CODE OF CIVIL PROCEDURE § 430.41 ......................7 6 IV. LEGAL STANDARD ON DEMURRER. ........................................................................7 7 V. ARGUMENT ......................................................................................................................8 8 A. Plaintiff’s Fraudulent Inducement-Concealment Claim Fails Because The Complaint 9 Fails to Plead Fraud With the Required Specificity.........................................................8 10 11 B. Plaintiff’s Fraudulent Inducement-Concealment Claim Fails Because Plaintiff Does Not 12 Allege a Transactional Relationship Between GM and Plaintiff Giving Rise to a Duty to 13 Disclose ............................................................................................................................8 14 C. The Economic Loss Rule Bars the Fraud Cause of Action. ..........................................10 15 VI. CONCLUSION ................................................................................................................12 16 17 18 19 20 21 22 23 24 25 26 27 28 PAGE 3 OF 13 DEFENDANT GENERAL MOTORS LLC’S NOTICE OF DEMURRER AND DEMURRER TO PLAINTIFF’S FIRST AMENDED COMPLAINT; MEMORANDUM OF POINTS OF AUTHORITIES 1 TABLE OF AUTHORITIES 2 Page(s) 3 Cases 4 Applied Equip. Corp. v. Litton Saudi Arabia Ltd. 5 (1994) 7 Cal.4th 503 ................................................................................................................11 6 Bigler-Engler v. Breg, Inc. (2017) 7 Cal.App.5th 276 ....................................................................................................9, 10 7 Blank v. Kirwan 8 (1985) 39 Cal.3d 311 .................................................................................................................7 9 Donabedian v. Mercury Ins. Co. 10 (2004) 116 Cal.App.4th 968 ......................................................................................................7 11 Erlich v. Menezes (1999) 21 Cal.4th 543 ..............................................................................................................11 12 Food Safety Net Services v. Eco Safe Systems USA, Inc. 13 (2012) 209 Cal.App.4th 1118 ............................................................................................10, 12 14 Hoffman v. 162 North Wolfe LLC 15 (2014) 228 Cal.App.4th 1178 .................................................................................................... 9 16 Jiminez v. Superior Court (2002) 29 Cal. 4th 473 .............................................................................................................11 17 18 Kamen v. Lindley (2001) 94 Cal.App.4th 197 ........................................................................................................7 19 La Vista Cemetery Assoc. v. Am. Savings & Loan Assoc. 20 (1970) 12 Cal.App.3d 365 .........................................................................................................8 21 Lazar v. Superior Court 22 (1996) 12 Cal.4th 631 ............................................................................................................8, 9 23 LiMandri v. Judkins (1997) 52 Cal.App.4th 326 ........................................................................................................ 9 24 Moore v. Regents of Univ. of Cal. 25 (1990) 51 Cal.3d 120 .................................................................................................................7 26 Penrose v. Winter 27 (1901) 135 Cal. 289 ...................................................................................................................7 28 PAGE 4 OF 13 DEFENDANT GENERAL MOTORS LLC’S NOTICE OF DEMURRER AND DEMURRER TO PLAINTIFF’S FIRST AMENDED COMPLAINT; MEMORANDUM OF POINTS OF AUTHORITIES 1 Robinson Helicopter Co., Inc. v. Dana Corp. (2004) 34 Cal.4th 979 ..................................................................................................10, 11, 12 2 Tenzer v. Superscope, Inc. 3 (1985) 39 Cal.3d 18 ................................................................................................................... 8 4 Warner Construction Corp. v. City of Los Angeles 5 (1970) 2 Cal.3d 285 ................................................................................................................... 9 6 Wise v. Southern Pacific Co. (1963) 223 Cal.App.2d 50 .........................................................................................................9 7 8 Statutes 9 Code of Civ. Proc., § 430.10(e) .......................................................................................................7 10 Code of Civ. Proc., § 430.10 (f) .......................................................................................................7 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PAGE 5 OF 13 DEFENDANT GENERAL MOTORS LLC’S NOTICE OF DEMURRER AND DEMURRER TO PLAINTIFF’S FIRST AMENDED COMPLAINT; MEMORANDUM OF POINTS OF AUTHORITIES 1 MEMORANDUM OF POINTS AND AUTHORITIES 2 I. INTRODUCTION 3 Plaintiff CGA Property Management, Inc. dba Rentpros, Inc. (“Plaintiff”) wrongly 4 attempts to turn this simple lemon law action into a complicated extra-contractual fraudulent 5 concealment case against Defendant General Motors LLC (“GM”). As explained below, however, 6 Plaintiff’s “fraud” claim fails as a matter of law because—among other deficiencies—Plaintiff 7 never alleged it purchased the vehicle directly from GM or that it viewed (much less relied on) any 8 representations made by GM in deciding to purchase its vehicle. 9 In short, there is zero factual or legal basis for Plaintiff’s “fraud” claim. GM’s demurrer 10 should be sustained without leave to amend. 11 II. SUMMARY OF ALLEGATIONS 12 On or about December 2, 2017, Plaintiff purchased a 2015 Cadillac Escalade, VIN 13 1GYS4NKJ0FR671926 (the “Subject Vehicle” or “Escalade”). (See First Amended Complaint 14 (“FAC”), ¶¶ 4, 5) On June 22, 2020, Plaintiff filed breach of warranty and fraud claims based upon 15 allegations that the Subject Vehicle developed various alleged “defects” during the warranty 16 period. (See generally id.) On December 11, 2020 Plaintiff filed a FAC asserting additional 17 allegations. (Id. at ¶¶ 82-91). Plaintiff’s FAC asserts claims against GM for fraudulent inducement- 18 concealment, but it fails to provide the critical facts that would support its claims. 19 Plaintiff’s Fraudulent Inducement-Concealment cause of action is based almost entirely on 20 Plaintiff’s generic allegations that GM failed to disclose that the Subject Vehicle’s 8L90 MYC 21 Hydra-Matic automatic transmission was allegedly defective. (See FAC, ¶¶ 15-22, 24-26, 28-29, 22 33, 87-88). According to Plaintiff, GM supposedly acquired knowledge about the specific 23 performance of the Subject Vehicle from aggregated data in multiple unidentified sources about 24 vehicles other than the Subject Vehicle—namely, other customers’ Cadillac Escalade vehicles 25 manufactured between 2010 and 2019 (id. at ¶ 35)—then knowingly and intentionally concealed 26 material facts from Plaintiff. (See generally id.) However, Plaintiff fails to allege (i) the identity 27 of the person who sold it the Subject Vehicle, (ii) whether or not Plaintiff had any interaction with 28 PAGE 6 OF 13 DEFENDANT GENERAL MOTORS LLC’S NOTICE OF DEMURRER AND DEMURRER TO PLAINTIFF’S FIRST AMENDED COMPLAINT; MEMORANDUM OF POINTS OF AUTHORITIES 1 GM at or before it bought the Subject Vehicle, (iii) GM’s knowledge of the alleged defects in 2 Plaintiff’s Vehicle, (iv) GM’s intent to defraud Plaintiff, and (v) specifics about the alleged 3 warranty that accompanied the sale of the Subject Vehicle. Instead, Plaintiff asserts its claims in 4 wholly conclusory fashion. Essentially, Plaintiff alleges only that its vehicle is a type of vehicle 5 that may suffer from a type of defect and that during the unspecified warranty period, the vehicle 6 contained various alleged defects, which Plaintiff describes only in general terms. (See generally 7 FAC.) As explained below, such allegations are insufficient. GM’s demurrer should be sustained. 8 III. MEET AND CONFER PER CODE OF CIVIL PROCEDURE § 430.41 9 GM made a good faith effort to meet and confer telephonically to resolve the issues 10 outlined in this demurrer without the need for court intervention but was unsuccessful despite its 11 best efforts. (Declaration of Kyle B. Roybal, ¶ 2.) 12 IV. LEGAL STANDARD ON DEMURRER. 13 A demurrer challenges defects apparent on the face of the complaint or judicially noticeable 14 matters outside the pleadings. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318; Donabedian v. 15 Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994.) In ruling on a demurrer, “the trial court . . . 16 treats the demurrer as admitting all material facts properly pleaded, but not contentions, deductions 17 or conclusions of fact or law.” (Kamen v. Lindley (2001) 94 Cal.App.4th 197, 201; see also Moore 18 v. Regents of Univ. of Cal. (1990) 51 Cal.3d 120, 125.) 19 A pleading that “does not state facts sufficient to constitute a cause of action” is subject to 20 demurrer.” (Code of Civ. Proc., § 430.10(e)). A pleading fails to state a cause of action if it pleads 21 essential allegations as legal conclusions rather than as facts. (Penrose v. Winter (1901) 135 Cal. 22 289, 290-291.) Further, a pleading that is uncertain, ambiguous and/or unintelligible is subject to 23 demurrer. (Code of Civ. Proc., § 430.10 (f)). The Court must determine if the flaws inherent in 24 the pleading can be remedied by the amendment; if the plaintiff cannot correct the deficiencies, 25 leave to amend should be denied. (La Vista Cemetery Assoc. v. Am. Savings & Loan Assoc. (1970) 26 12 Cal.App.3d 365, 369.) 27 Against this standard, Plaintiff’s “fraud” claim is barred by significant factual deficiencies 28 PAGE 7 OF 13 DEFENDANT GENERAL MOTORS LLC’S NOTICE OF DEMURRER AND DEMURRER TO PLAINTIFF’S FIRST AMENDED COMPLAINT; MEMORANDUM OF POINTS OF AUTHORITIES 1 and a number of legal doctrines such that this Court should sustain GM’s demurrer without leave 2 to amend. 3 V. ARGUMENT 4 A. Plaintiff’s Fraudulent Inducement-Concealment Claim Fails Because the FAC 5 Fails to Plead Fraud with the Required Specificity. 6 As Plaintiff’s Third Cause of Action is premised on fraud, “[i]n California, fraud must be 7 pled specifically; general and conclusory allegations do not suffice.” (Lazar v. Superior Court 8 (1996) 12 Cal.4th 631, 645.). “This particularity requirement necessitates pleading facts which 9 show how, where, to whom, and by what means” the alleged fraud occurred. (Id.) 10 Plaintiff’s FAC falls far short of meeting this standard. Plaintiff fails to identify the 11 salesperson with whom Plaintiff spoke; what advertisements or marketing brochures Plaintiff 12 reviewed or relied upon in purchasing the Subject Vehicle, how long “prior to purchasing the 13 vehicle” it viewed them, and which representation therein it relied upon; and whether those 14 materials, if any, were prepared by GM or someone else (such as a dealership). Plaintiff has also 15 failed to plead with specificity, as required, facts supporting any allegation that GM intended to 16 defraud it by either making affirmative statements or failing to disclose material facts. (Tenzer v. 17 Superscope, Inc. (1985) 39 Cal.3d 18, 30 [“something more than non-performance is required to 18 prove the defendant’s intent not to perform his promise”].) Therefore, Plaintiff failed to allege, in 19 detail, facts showing the circumstances of discovery and/or what was discovered. Consequently, 20 Plaintiff’s fraudulent concealment cause of action fails to meet the applicable pleading standard 21 and should be dismissed. 22 B. Plaintiff’s Fraudulent Inducement-Concealment Claim Fails Because Plaintiff 23 Does Not Allege a Transactional Relationship Between GM and Plaintiff Giving Rise to a Duty to Disclose. 24 California law does not permit a cause of action for concealment that did not arise in a 25 fiduciary relationship or in a transaction involving “direct dealings” between the plaintiff and the 26 defendant. Because the FAC does not allege that Plaintiff purchased the Subject Vehicle directly 27 from GM or otherwise entered into a transaction with GM, Plaintiff has not alleged facts 28 PAGE 8 OF 13 DEFENDANT GENERAL MOTORS LLC’S NOTICE OF DEMURRER AND DEMURRER TO PLAINTIFF’S FIRST AMENDED COMPLAINT; MEMORANDUM OF POINTS OF AUTHORITIES 1 demonstrating that GM was under a duty to disclose, so Plaintiff has not stated a claim against GM 2 for fraudulent concealment. 3 To state a claim for fraudulent inducement-concealment, Plaintiff must allege: (1) the 4 defendant “concealed or suppressed a material fact,” (2) the defendant was “under a duty to 5 disclose the fact to the plaintiff,” (3) the defendant “intentionally concealed or suppressed the fact 6 with the intent to defraud the plaintiff,” (4) the plaintiff was “unaware of the fact and would not 7 have acted as he did if he had known of the concealed or suppressed fact,” and (5) “as a result of 8 the concealment or suppression of the fact, the plaintiff must have sustained damage.” (Bigler- 9 Engler v. Breg, Inc. (2017) 7 Cal.App.5th 276, 310–11; see also Lazar, supra, 12 Cal.4th at 638.) 10 Absent a fiduciary relationship between the parties (which Plaintiff does not—and could not— 11 allege here), a duty to disclose can arise in only three circumstances: (1) the defendant had 12 exclusive knowledge of the material fact; (2) the defendant actively concealed the material fact; or 13 (3) the defendant made partial representations while also suppressing the material fact. (Bigler- 14 Engler, supra, 7 Cal.App.5th at p. 311; LiMandri v. Judkins (1997) 52 Cal.App.4th 326, 336.) 15 “These three circumstances, however, ‘presuppose[ ] the existence of [a] relationship 16 between the plaintiff and defendant in which a duty to disclose can arise.’” (Bigler-Engler, supra, 17 7 Cal. App.5th at p. 311 [quoting Limandri, supra, 52 Cal.App.4th at pp. 336–37; citing examples 18 including “seller and buyer”].) Indeed, the California Supreme Court “has described the necessary 19 relationship giving rise to a duty to disclose as a ‘transaction’ between the plaintiff and defendant 20 ….” (Bigler-Engler, supra, 7 Cal.App.5th at p. 311; Warner Construction Corp. v. City of Los 21 Angeles (1970) 2 Cal.3d 285, 294 [“In transactions which do not involve fiduciary or confidential 22 relations”]; Hoffman v. 162 North Wolfe LLC (2014) 228 Cal.App.4th 1178, 1187–89 [rejecting 23 concealment claim where plaintiffs “were not involved in a transaction with the parties they claim 24 defrauded them”]; LiMandri, supra, 52 Cal.App.4th at p. 337 [“such a relationship can only come 25 into being as a result of some sort of transaction between the parties”].) 26 “Such a transaction must necessarily arise from direct dealings between the plaintiff and 27 defendant; it cannot arise between the defendant and the public at large.” (Bigler-Engler, supra, 28 PAGE 9 OF 13 DEFENDANT GENERAL MOTORS LLC’S NOTICE OF DEMURRER AND DEMURRER TO PLAINTIFF’S FIRST AMENDED COMPLAINT; MEMORANDUM OF POINTS OF AUTHORITIES 1 7 Cal.App.5th at p. 311, emphases added.) In Bigler-Engler, for example, the Court of Appeal 2 reversed a verdict for fraudulent concealment against the manufacturer of a medical device 3 because the manufacturer and the plaintiff (who was injured by using the device) did not have the 4 required direct transactional relationship. (Id. at pp. 314-15.) The plaintiff did not obtain the 5 device directly from the manufacturer but from a medical group that sold and leased such devices. 6 (Id. at 287, 314.) As the Court of Appeal explained, the lack of direct dealings between the plaintiff 7 and the manufacturer was fatal to the plaintiff’s argument that the manufacturer had a duty to 8 disclose. (Id. at 312 [“Where, as here, a sufficient relationship or transaction does not exist, no 9 duty to disclose arises even when the defendant speaks.”].) 10 The same is true here. The FAC does not allege that Plaintiff purchased the Subject Vehicle 11 directly from GM. Thus, any alleged concealment by GM did not arise in a direct transaction 12 between Plaintiff and GM. Accordingly, under California law, there could not have been any 13 actionable concealment by GM that allegedly induced Plaintiff’s purchase of the vehicle. Thus, 14 as a matter of law, Plaintiff cannot establish that GM had a duty to disclose. GM’s demurrer should 15 be sustained. 16 C. The Economic Loss Rule Bars the Fraud Cause of Action. 17 The economic loss rule provides that where a purchaser’s expectations in a sale are 18 frustrated because the product he bought is not working properly, his remedy is in contract alone, 19 for he has suffered only economic losses. (Food Safety Net Services v. Eco Safe Systems USA, Inc. 20 (2012) 209 Cal.App.4th 1118, 1130 [citing Robinson Helicopter Co., Inc. v. Dana Corp. (2004) 21 34 Cal.4th 979, 988].) The economic loss rule requires a purchaser to recover in contract for purely 22 economic loss due to disappointed expectations, unless he can demonstrate harm above and beyond 23 a broken contractual promise. Quite simply, the economic loss rule prevents the law of contract 24 and the law of tort from dissolving one into the other. (Id. at 988 [citing Redarowicz v. Ohlendorf 25 (Ill. 1982) 92 Ill. 2d 171]). 26 The rationale for the economic loss rule was set forth in Jiminez v. Superior Court, where 27 the court provided: 28 PAGE 10 OF 13 DEFENDANT GENERAL MOTORS LLC’S NOTICE OF DEMURRER AND DEMURRER TO PLAINTIFF’S FIRST AMENDED COMPLAINT; MEMORANDUM OF POINTS OF AUTHORITIES 1 The distinction that the law has drawn between tort recovery for physical injuries and warranty recovery for economic loss is not 2 arbitrary and does not rest on the “luck” of one plaintiff in having an accident causing physical injury. The distinction rests, rather, on 3 an understanding of the nature of the responsibility a manufacturer must undertake in distributing his products. We concluded that the 4 nature of this responsibility meant that a manufacturer could appropriately be held liable for physical injuries (including both 5 personal injury and damage to property other than the product itself), regardless of the terms of any warranty. But the manufacturer 6 could not be held liable for ‘the level of performance of his products in the consumer's business unless he agrees that the product was 7 designed to meet the consumer's demands. 8 ((2002) 29 Cal. 4th 473, 482 [citing Seely v White Motor Co. (1965) 63 Cal.2d 9, 18-19].) 9 The economic loss rule precludes Plaintiff from pursuing a fraud claim here because the 10 FAC acknowledges the existence of a contract, which governs the terms of the parties’ dispute 11 (namely, the Purchase Agreement and Vehicle Limited Warranty, FAC ¶¶ 5, 46). As explained by 12 the California Supreme Court in Applied Equip. Corp. v. Litton Saudi Arabia Ltd. (1994) 7 Cal.4th 13 503, 514, “Contract and tort are different branches of law. Contract law exists to enforce legally 14 binding agreements between parties; tort law is designed to vindicate social policy.” 15 The California Supreme Court also discussed the reasoning and importance of the 16 Economic Loss rule in Erlich v. Menezes (1999) 21 Cal.4th 543, 55, explaining that “[c]onduct 17 amounting to a breach of contract becomes tortious only when it also involves a duty independent 18 of the contract arising from principles of tort law. . . . An omission to perform a contract obligation 19 is never a tort unless that omission is also an omission of a legal duty.” Importantly, 20 the Erlich Court emphasized: “the importance of predictability in assuring commercial stability in 21 the contractual dealing … and the potential for converting every contract breach into a tort with 22 accompanying punitive damage recovery” that risked rendering the demarcation between tort and 23 contract remedies meaningless. (See id. at 554.) 24 Further, in Robinson Helicopter, the California Supreme Court specifically held that a fraud 25 cause of action may only be brought where alleged fraudulent representations were made as to 26 matters which were independent from those contained in the contract and which exposed the 27 plaintiff to personal injury damages independent of the plaintiff’s economic loss. (Robinson 28 PAGE 11 OF 13 DEFENDANT GENERAL MOTORS LLC’S NOTICE OF DEMURRER AND DEMURRER TO PLAINTIFF’S FIRST AMENDED COMPLAINT; MEMORANDUM OF POINTS OF AUTHORITIES 1 Helicopter Co., supra, 34 Cal.4th at 979) (emphasis added). The California Supreme Court carved 2 out this narrow and limited circumstance where “a party alleging fraud or deceit in connection 3 with a contract” can recover in tort if he can “establish tortious conduct independent of a breach 4 of the contract itself, that is, violation of ‘some independent duty arising from tort law.’” (Id. at 5 1130.) This exception is extremely “narrow in scope and limited to a defendant’s affirmative 6 misrepresentations on which a plaintiff relies, and which expose a plaintiff to liability for personal 7 damages independent of the plaintiff’s economic loss.” (Robinson Helicopter, supra, at 993.) That 8 is, where there is a tort allegation that a contract was fraudulently induced, the fraud is only 9 actionable when (1) the fraudulent conduct breached an independent tort duty and, (2) the 10 fraudulent misrepresentation exposes a plaintiff to liability for personal damages independent of 11 the plaintiff’s economic loss. (Id. at 991 and 993.) 12 Plaintiff’s FAC contains no such allegations. Thus, applying the economic loss rule to the 13 allegations in Plaintiff’s FAC warrants sustaining GM’s demurrer. 14 VI. CONCLUSION 15 For the reasons explained above, Plaintiff’s First Amended Complaint fails to allege 16 sufficient facts to support the cause of action and fails to state a claim for fraudulent concealment. 17 Accordingly, based on the facts and arguments contained herein and specified above, GM 18 respectfully requests that this Honorable Court grant GM’s demurrer without leave to amend. 19 20 Dated: January 7, 2021 ERSKINE LAW GROUP, PC 21 22 _______________________________ 23 KYLE B. ROYBAL, Esq. Attorney for Defendant, 24 GENERAL MOTORS LLC 25 26 27 28 PAGE 12 OF 13 DEFENDANT GENERAL MOTORS LLC’S NOTICE OF DEMURRER AND DEMURRER TO PLAINTIFF’S FIRST AMENDED COMPLAINT; MEMORANDUM OF POINTS OF AUTHORITIES 1 PROOF OF SERVICE 2 I am employed in the County of Orange and my business address is 1576 N. Batavia St., Suite A, Orange, CA 92867. I am over the age of 18 years and I am not a party to this action. I am 3 readily familiar with the practices of Erskine Law Group for the collection and processing of correspondence for mailing with the United States Postal Service. Such correspondence is 4 deposited with the United States Postal Service the same day in the ordinary course of business. 5 On January 7, 2021, I served the foregoing document(s), bearing the title(s): 6 DEFENDANT GENERAL MOTORS LLC’S NOTICE OF DEMURRER AND DEMURRER TO PLAINTIFF’S FIRST AMENDED COMPLAINT; MEMORANDUM 7 OF POINTS OF AUTHORITIES 8 on the interested parties in the action as follows: 9 [X] by placing [ ] the original [X] a true copy thereof enclosed in a sealed envelope addressed as follows: 10 DAVID N. BARRY, Esq. 11 THE BARRY LAW FIRM 11845 West Olympic Blvd., Suite 1270 12 Los Angeles, CA 90064 Phone: (310) 684-5859; Fax: (310) 862-4539 13 dbarry@mylemonrights.com 14 [ ] (BY MAIL SERVICE) I placed such envelopes for collection and to be mailed on this date following ordinary business practices. 15 16 [ ] (BY PERSONAL SERVICE) I caused to be delivered such envelope by hand to the office of the addressee. 17 [ ] (BY FACSIMILE) The document stated herein was transmitted by facsimile 18 transmission and the transmission was reported as complete and without error. A transmission report was properly issued by the transmitting facsimile machine and a copy of said transmission 19 report is attached to the original proof of service indicating the time of transmission. 20 [ ] (BY NEXT DAY DELIVERY) I caused to be delivered such envelope by hand to the office of the addressee. 21 [X] (BY E-MAIL) I served the above mentioned document via electronic transmission per 22 agreement of the parties. 23 [X] (State) I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct. 24 [ ] (Federal) I declare under penalty of perjury that I am employed by a member of the Bar 25 of this Court, at whose direction this service is made. 26 Executed on January 7, 2021, at Orange, CA. 27 Signed: ______________________ Stanley Chan 28 PAGE 13 OF 13 DEFENDANT GENERAL MOTORS LLC’S NOTICE OF DEMURRER AND DEMURRER TO PLAINTIFF’S FIRST AMENDED COMPLAINT; MEMORANDUM OF POINTS OF AUTHORITIES