Elicet Maldonado v. Ford Motor Company; LAD-F, Inc.

Opinion

1 2 3 4 5 6 UNITED STATES DISTRICT COURT 7 CENTRAL DISTRICT OF CALIFORNIA 8 9 10 ELICET MALDONADO, Case No. 2:25-cv-07344-MAR 11 Plaintiff, 12 v. ORDER GRANTING MOTION TO REMAND, DKT. 9 13 FORD MOTOR COMPANY; LAD-F, INC., 14 Defendants. 15 16 I. 17 SUMMARY OF ORDER 18 Plaintiff Elicet Maldonado (“Plaintiff”) filed the instant action in Los Angeles 19 County Superior Court on December 27, 2024. ECF Docket No. (“Dkt.”) 1-1. 20 Defendant removed the matter to this Court on August 7, 2025. Plaintiff now moves 21 to remand to state court. Dkt. 9. For the reasons stated below, the motion is 22 GRANTED. 23 II. 24 BACKGROUND 25 On December 27, 2024, Plaintiff filed a complaint in Los Angeles County 26 Superior Court alleging several claims related to her purchase of a 2019 Ford Ranger 27 manufactured by Defendant Ford Motor Company (“Ford”) and serviced by 1 Dealership”). Dkt. 1-1. Plaintiff brought a claim against Ford for violation of 2 California’s Song-Beverly Consumer Warranty Act, California Civil Code Sections 3 1790–1795.8, alleging that Ford was unwilling or unable to repair her vehicle under 4 warranty, and failed to replace the vehicle or offer restitution to Plaintiff. Complaint ¶ 5 86. The Complaint also alleged that Ford fraudulently induced Plaintiff to purchase 6 the vehicle without disclosing a known transmission defect. Id. ¶¶ 93–102. The 7 Complaint also alleged a third cause of action against the Dealership alone for 8 Negligent Repair, alleging that, although Plaintiff brought her vehicle to the 9 Dealership for repair “on numerous occasions,” the Dealership “breached its duty to 10 use ordinary care and skill by failing to properly store, prepare and repair the Subject 11 Vehicle in accordance with industry standards.” Id. ¶¶ 112–113. 12 Defendant Ford removed the matter to this Court on August 7, 2025. Plaintiff 13 now moves to remand to state court, arguing primarily that the parties are not 14 completely diverse. 15 III. 16 LEGAL STANDARD 17 District courts have original diversity jurisdiction over “all civil actions where 18 the matter in controversy exceeds the sum or value of $75,000, exclusive of interest 19 and costs, and is between citizens of different States.” 28 U.S.C. § 1332(a). A 20 defendant may remove a case from state court to federal court if the case could have 21 originally been filed in federal court. See 28 U.S.C. § 1441(a). The case must, 22 however, be remanded to state court if, at any time before final judgment, it appears 23 that the federal court lacks subject matter jurisdiction. See 28 U.S.C. § 1447(c); Int’l 24 Primate Prot. League v. Adm’rs of Tulane Educ. Fund, 500 U.S. 72, 87 (1991). 25 Federal courts “strictly construe the removal statute against removal jurisdiction,” 26 such that any doubt as to the propriety of removal is resolved in favor of remanding 27 the case to state court. Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992). 1 A removing defendant bears the burden of proving federal jurisdiction. See Luther v. 2 Countrywide Home Loans Servicing, LP, 533 F.3d 1031, 1034 (9th Cir. 2008); Gaus, 3 980 F.2d at 566. 4 IV. 5 DISCUSSION 6 Ford’s Notice of Removal states that Plaintiff is a citizen of California. Notice 7 of Removal (“NOR”) (Dkt. 1) at 4. Plaintiff’s Complaint alleges that the Dealership is 8 a “California Stock Corporation.” Dkt. 1-1 ¶ 4. Implicitly acknowledging that the 9 parties are thus not completely diverse on the face of the Complaint, Ford 10 nevertheless contends that the Dealership’s “putative California citizenship should be 11 disregarded because it is fraudulently joined by Plaintiff in an attempt to destroy 12 diversity jurisdiction.” NOR at 4:23-25. Moving to remand, Plaintiff argues that 13 complete diversity is lacking because Ford has failed to meet its burden to 14 demonstrate that the Dealership was improperly joined. Motion (Dkt. 9) at 3-5. 15 District courts have original jurisdiction where the matter in controversy 16 exceeds $75,000 in value “and is between citizens of different States.” 28 U.S.C. § 17 1332(a). Complete diversity of citizenship is required, meaning each plaintiff must be 18 a citizen of a different state than each defendant. Caterpillar Inc. v. Lewis , 519 U.S. 19 61, 68 (1996). There is, however, an exception to the complete diversity requirement 20 “where a non-diverse defendant has been ‘fraudulently joined.’” Morris v. Princess 21 Cruises, Inc., 236 F.3d 1061, 1067 (9th Cir. 2001). “[T]here is a general presumption 22 against fraudulent joinder,” which is itself “a term of art.” Hamilton Materials, Inc. v. 23 Dow Chem. Corp., 494 F.3d 1203, 1206 (9th Cir. 2007); Morris, 236 F.3d at 1067. 24 Nevertheless, a defendant can establish fraudulent joinder by showing that a non- 25 diverse defendant “cannot be liable on any theory.” Id.; Grancare, LLC v. Thrower 26 by & through Mills, 889 F.3d 543, 548 (9th Cir. 2018). This is a “heavy burden” that 27 can only be satisfied “by clear and convincing evidence.” Grancare, 889 F.3d at 548; 1 Hamilton, 494 F.3d at 1206. Indeed, “if there is [even] a possibility that a state court 2 would find that the complaint states a cause of action against any of the resident 3 defendants, the federal court must find that the joinder was proper and remand the 4 case to state court.” Grancare, 889 F.3d at 548 (quoting Hunter v. Philip Morris USA, 5 582 F.3d 1039, 1044 (9th Cir. 2009)), 549 (likening standard to “wholly insubstantial 6 and frivolous” standard applicable under Federal Rule of Procedure 12(b)(1)). Federal 7 courts, moreover, “resolve all ambiguities in the controlling state law in favor of the 8 non-removing party.” Ballesteros v. Am. Standard Ins. Co. of Wisc., 436 F. Supp. 2d 9 1070, 1072 (D. Ariz. 2006) (quoting Dodson v. Spiliada Maritime Corp., 951 F.2d 40, 10 42 (5th Cir.1992)) (internal alteration omitted). 11 With this framework in mind, the Court turns to Ford’s contention that 12 Plaintiff’s negligent repair claim against the Dealership is barred by the “economic 13 loss rule.” Opposition (Dkt. 11) at 7. That rule, designed to “prevent the law of 14 contract and the law of tort from dissolving one into the other,” “requires a purchaser 15 to recover in contract for purely economic loss due to disappointed expectations, 16 unless he can demonstrate harm above and beyond a broken contractual promise.” 17 Robinson Helicopter Co. v. Dana Corp., 34 Cal. 4th 979, 988 (2004) (citation and 18 internal alteration omitted). In the motor vehicle context, the economic loss rule 19 often operates to bar tort claims related to vehicle warranties because, in such cases, a 20 plaintiff’s “harm is purely economic and derives from [the manufacturer’]s alleged 21 breach of its warranty obligation to fix or replace the vehicle if it is defective,” and 22 under the economic loss rule, “a plaintiff cannot assert tort claims based on a product 23 not performing as promised—that is simply an economic loss recoverable in a 24 contract-based action.” In re Ford Motor Co. DPS6 Powershift Transmission Prods. 25 Liab. Litig., 483 F. Supp. 3d 838, 848 (C.D. Cal. 2020). 26 /// 27 /// 1 Here, Plaintiff’s negligent repair claim makes no reference to any vehicle 2 warranty, or any other contract, and is alleged not against the manufacturer, but solely 3 against the Dealership to which she brought her vehicle for repairs. Ford nevertheless 4 contends that the economic loss rule bars Plaintiff’s negligence claim against the 5 Dealership “because a defective Vehicle was in the contemplation of the warranty that 6 gave rise to the [Dealership’s] putative repair obligation.” Opp. at 9:5–-6. None of 7 the elements of Plaintiff’s negligent repair claim, however, depends upon or implicates 8 the existence of the vehicle warranty. “To state a claim for negligent repair, the 9 plaintiff must establish the elements of a standard negligence claim: duty, breach, 10 causation, and damages.” Andrade v. Ford Motor Co., No. 322CV00291RBMMSB, 11 2023 WL 2586302, at *5 (S.D. Cal. Mar. 20, 2023). Although the Complaint is not 12 particularly detailed, Plaintiff does allege that the Dealership owed her a duty to use 13 ordinary care and skill in storing, preparing, and repairing her vehicle in accordance 14 with industry standards, and that its breach of that duty damaged Plaintiff. Regardless 15 of what the warranty might have “contemplated,” or indeed whether Plaintiff’s vehicle 16 was covered by any warranty, “[o]ne who undertakes repairs has a duty arising in tort 17 to do them without negligence.” McKeown v. Ford Motor Co., No. 18 CV1900281CJCPLAX, 2019 WL 1199468, at *2 (C.D. Cal. Mar. 13, 2019) (quoting 19 Sw. Forest Indus., Inc. v. Westinghouse Elec. Corp., 422 F.2d 1013, 1020 (9th Cir. 20 1970)); see also Frank v. FCA US LLC, No. CV 20-2699-GW-RAOX, 2020 WL 21 3487640, at *4 (C.D. Cal. June 15, 2020) (“California law recognizes an exception to 22 the economic loss doctrine where the plaintiff alleges negligent performance of 23 services.”). Thus, courts have regularly concluded that even “threadbare” allegations 24 similar to those here are sufficient to state a claim for negligent repair. Andrade, 2023 25 WL 2586302 at *5; see also, e.g., Cortez v. Nissan N. Am., Inc., No. 2:24-CV-05909- 26 ODW (PDX), 2024 WL 5054378, at *6 (C.D. Cal. Dec. 10, 2024); Burch v. Ford 27 Motor Co., 758 F. Supp. 3d 1092, 1099 (N.D. Cal. 2024); Lytle v. Ford Motor Co., 1 No. 2:18-CV-1628 WBS EFB, 2018 WL 4793800, at *2 (E.D. Cal. Oct. 2, 2018). 2 Accordingly, “[d]istrict courts in California have been virtually unanimous in rejecting 3 the argument that a dealer is fraudulently joined because the economic loss rule bars a 4 negligent repair claim.” Cortez, 2024 WL 5054378 at * 6 (citations omitted). 5 Defendant also argues that the California Supreme Court “went beyond the 6 economic loss rule” in Rattagan v. Uber Techs, Inc., 17 Cal.5th 1, (2024), to discuss 7 an “independent tort principle” that also bars Plaintiff’s negligent repair claim against 8 the Dealership. Opp. at 5. In the course of addressing whether the economic loss 9 rule bars intentional tort claims, the court observed that, notwithstanding the 10 economic loss rule, “[c]ourts generally permit tort suits if the defendant allegedly 11 violated a duty rooted in tort principles that is independent of the parties’ contractual 12 rights and obligations and exposed the plaintiff to a risk of harm beyond the parties’ 13 reasonable contemplation when they entered into the contract.” Rattagan, 17 Cal. 5th 14 at 23. The court observed further that “[w]hether the alleged harm arises 15 independently from the contract can be a nuanced question.” Id. at 26. The court 16 explained that in determining whether the parties’ expectations bar recovery in tort, 17 courts must “[(1)] ascertain the full scope of the parties’ contractual agreement . . ., 18 [(2)] determine whether there is an independent tort duty to refrain from the alleged 19 conduct,” and, if such a duty exists, (3) “consider whether the plaintiff can establish 20 all elements of the tort independently of the rights and duties assumed by the parties 21 under the contract.” Id. In other words, “[i]f the alleged breach is based on a failure 22 to perform as the contract provides, and the parties reasonably anticipated and 23 allocated the risks associated with the breach, the cause of action will generally sound 24 only in contract.” Id. at 27. 25 Defendant asserts that Plaintiff’s negligent repair claim “squarely falls within 26 the Rattagan bar because the repairs were performed at Ford’s expense pursuant to 27 warranty obligations.” Opp. at 6:24-25. This argument appears to track, and indeed 1 cites only to, a brief discussion in Bakhtiari v. Nissan N. Am., Inc., No. 25-CV-02521- 2 JD, 2025 WL 2380964 (N.D. Cal. Aug. 15, 2025), wherein the court concluded that 3 Rattagan barred a negligent repair claim where “the only plausible duty [a dealership] 4 could have owed to plaintiffs in this regard was one that arose from plaintiffs’ 5 warranty or their entering into a contract for the repair of the vehicle.” Bakhtiari, 6 2025 WL 2380964 at *1. As another court in this district has recognized, however, 7 “the Bakhtiari court never addressed how the exceptions to the economic loss rule . . . 8 should be applied post-Rattagan, especially in light of the California Supreme Court’s 9 emphasis that the economic loss rule is best understood as a specific application of 10 the independent tort principle.” Farret v. Ford Motor Co., No. 2:25-CV-08510-SVW- 11 PD, 2026 WL 26054, at *3 (C.D. Cal. Jan. 5, 2026) (internal quotation marks and 12 alteration omitted). Indeed, even after Rattagan, the overwhelming majority of courts 13 have continued to conclude that the economic loss rule does not necessarily bar 14 negligent repair claims such as that brought by Plaintiff. See, e.g., Luera v. Ford 15 Motor Co., No. 8:25-CV-01857-JDE, 2025 WL 2992483, at *3 (C.D. Cal. Oct. 23, 16 2025) (collecting cases); Acosta v. Nissan N. Am., Inc., No. 8:25-CV-00480-FWS- 17 DFM, 2025 WL 2835462, at *2 (C.D. Cal. Oct. 6, 2025); Soto v. Nissan N. Am., Inc., 18 No. 2:25-CV-02975-KS, 2025 WL 2842034, at *8 (C.D. Cal. Sept. 29, 2025); Viloria v. 19 Ford Motor Co., No. 2:24-CV-06945 MWC (AGRX), 2025 WL 3050218, at *4 (C.D. 20 Cal. June 2, 2025); Cortez, 2024 WL 5054378 at *5; Burch, 758 F. Supp. 3d at 1099 21 (N.D. Cal. 2024). Several of these courts, moreover, have explicitly rejected the 22 Rattagan-based argument Defendant raises here. See, e.g., Farret, 2026 WL 26054 at 23 *3; Luera, 2025 WL 2992483 at *3; Acosta, 2025 WL 2835462 at *2. 24 This Court agrees with the continuing consensus view that the economic loss 25 rule does not necessarily bar a negligent repair claim. Even assuming that the full 26 scope of the warranty contract contemplated the possibility of subsequent repairs to 27 Plaintiff’s vehicle, it is not clear that the Dealership owed no independent duty to 1 Plaintiff. McKeown, 2019 WL 1199468 at *2; Frank, 2020 WL 3487640 at *4. And if 2 the Dealership did owe Plaintiff such a duty, there is no indication on the record 3 before this Court that Plaintiff could not satisfy the remaining elements of breach, 4 causation, and damages without reference to the warranty contract. Although 5 Defendant has, at best, arguably identified some ambiguity as to the effect of the 6 Rattagan court’s discussion of the relationship between contract and intentional tort 7 claims on negligence claims such as that brought here, this Court must resolve any 8 such ambiguity in favor of Plaintiff, the non-removing party. Ballesteros, 436 F. 9 Supp. 2d at 1072. Viewing Plaintiff’s complaint through that lens, the Court cannot 10 conclude that there is no possibility that a state court would allow Plaintiff’s negligent 11 repair claim to proceed, whether as currently alleged or upon amendment. See 12 Grancare, 889 F.3d at 550 (“[T]he district court must consider . . . whether a[ny] 13 deficiency in the complaint can possibly be cured by granting the plaintiff leave to 14 amend.”). The Court therefore finds that the Dealership was not fraudulently joined. 15 Absent fraudulent joinder, this Court cannot disregard the Dealership’s 16 California citizenship.1 Because the parties are not completely diverse, this Court 17 lacks jurisdiction under 28 U.S.C. § 1332(a). Caterpillar, 519 U.S. at 68. 18 /// 19 /// 20 /// 21 /// 22 /// 23 /// 24 25

26 1 The Court declines to exercise its discretion to sever or dismiss the Dealership pursuant to 27 Federal Rule of Procedure 21. See Sams v. Beach Aircraft Corp., 625 F. 2d 273, 277 (9th Cir. 1980); Smith v. Ford Motor Co., No. 19-CV-05170-CRB, 2020 WL 609864, at *5 (N.D. Cal. Feb. 4, 2020); 1 V. 2 CONCLUSION AND ORDER 3 For the reasons stated above, Plaintif’s Motion to Remand is GRANTED. 4 5 IT IS THEREFORE ORDERED: 6 This action is REMANDED to the Superior Court of California, 7 | County of Los Angeles. 8 9 | Dated: January 28, 2026 J BA x 10 HONORABLE MARGO A. ROCCONI United States Magistrate Judge 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28