1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 SAN JOSE DIVISION 7 8 JOSEPH RAKOFSKY, Case No. 22-cv-04427-EJD
9 Plaintiff, ORDER GRANTING MOTION FOR JUDGMENT ON THE PLEADINGS 10 v.
11 MERCEDES-BENZ USA, LLC, et al., Re: ECF No. 36 Defendants. 12
13 14 Plaintiff Joseph Rakofsky (“Plaintiff”) filed this action against Mercedes-Benz USA, LLC 15 (“MBUSA”), Daimler Aktiengesellschaft, Mercedes-Benz of Monterey (“Monterey MB”), Wienik 16 Bleyenberg, Devon Thompson, and Does 1 to 10 (collectively, “Defendants”). Plaintiff brings 17 various claims related to Defendants’ work on Plaintiff’s 2011 Mercedes-Benz ML350 BlueTEC. 18 Having carefully reviewed the relevant documents, the Court finds this matter suitable for 19 decision without oral argument pursuant to Civil Local Rule 7-1(b). For the reasons stated below, 20 Mercedes-Benz USA’s motion for judgment on the pleadings is GRANTED with leave to amend. 21 I. BACKGROUND 22 A. Factual Allegations 23 Unless otherwise specified, the following allegations are drawn from the Complaint. 24 Plaintiff owned a 2011 Mercedes-Bens ML350 BlueTEC (the “Subject Vehicle”) that 25 required repair due to a broken turbo. Compl. ¶ 9. In January 2022, Plaintiff paid a certified 26 Mercedes-Benz repair facility in Florida to install a new turbo manufactured and sold by 27 Mercedes-Benz. Id. ¶ 10. The brand-new turbo came with a warranty. Id. ¶ 12. Plaintiff 1 thereafter drove the Subject Vehicle to California where it became inoperable about a month later, 2 on February 7, 2022. Id. ¶ 14. That day, the Subject Vehicle was towed to and diagnosed by a 3 California certified Mercedes-Benz repair facility, which is operated and owned by a Mercedes- 4 Benz “Master Technician.” Id. ¶ 16. Plaintiff alleges that at the time the Subject Vehicle was 5 towed to the repair facility, no “check engine” or other warnings were present. Id. ¶ 17. The 6 repair facility in California, through the “Master Technician,” determined that the reason the 7 vehicle became inoperable was because the turbo was broken. Id. ¶ 18. 8 Two days later, the Subject Vehicle remained inoperable and was towed to Defendant 9 Mercedes-Benz of Monterey. Id. ¶¶ 19–20. When the Subject Vehicle arrived at Monterey MB, 10 the “check engine” warning was present on the dashboard. Id. ¶ 21. That same day, Plaintiff 11 advised Monterey MB that (1) the turbo was only purchased approximately a month prior and 12 carried with it a full warranty, and (2) Defendants were responsible for replacing parts “pursuant 13 to the Settlement Agreement” in “a previous Class Action lawsuit.” Id. ¶ 23. Plaintiff also told 14 Monterey MB, through the “Master Technician,” that the broken turbo “constituted consequential 15 damages, which flowed from the fundamental problem, which was the subject matter of the [] 16 Class Action lawsuit.” Id. ¶ 24. Plaintiff alleges that Defendants “rejected this information” and 17 expressly refused to perform any repairs until “the automotive parts required in order to repair the 18 Class-Action repairs arrived first.” Id. ¶¶ 25–26. 19 Plaintiff alleges that Defendants blamed him and the Florida repair facility for the damage 20 the Subject Vehicle sustained on February 7, 2022. Id. ¶ 29. Defendant Wienik Bleyenberg 21 allegedly admitted on February 23, 2022 that the turbo purchased and installed by the Florida 22 repair facility “did nothing improper” and agreed to replace the turbo “under [Mercedes-Bens] 23 parts warranty.” Id. ¶¶ 32–33. Notwithstanding this, Mr. Bleyenberg told Plaintiff that Plaintiff 24 would be liable for the damage because he elected to have the repair performed at the Florida 25 repair facility, a certified Mercedes-Benz facility, instead of at a Mercedez-Benz dealership. 26 Id. ¶ 35. Mr. Bleyenberg also told Plaintiff on February 25, 2022, that he operated the engine 27 despite it lacking oil and as a result, the engine suffered damage while the turbo was being 1 replaced. Id. ¶¶ 39–41. Defendants, through Mr. Bleyenberg, refused to repair the damaged 2 engine, and told Plaintiff the repair would cost approximately $35,000. Id. ¶ 43. 3 B. Procedural History 4 Plaintiff initiated this lawsuit on March 2, 2022, in the Monterey County Superior Court. 5 See generally Compl. Plaintiff brought claims against all Defendants for (1) unjust enrichment, 6 (2) unfair business practices in violation of California’s Business and Professions Code §17200, 7 (3) breach of contract, (4) breach of warranties, (5) negligent misrepresentation, (6) declaratory 8 and injunctive relief, and (7) fraud. Id. at 7–12. Plaintiff seeks relief in the amount of $14,604.79 9 (the purchase price of the Subject Vehicle), $10,000 (cost of previous repairs made within the past 10 six months from filing the Complaint), $35,000 (cost of the repair of the engine), $2,000 (car 11 rental fees), and $2,000 (hotel fees). Plaintiff also requests attorneys’ fees, costs, and punitive 12 damages. 13 Defendant MBUSA removed the action to this Court on July 29, 2022 and answered the 14 Complaint on August 10, 2022. Notice of Removal, ECF No. 1; Answer to Complaint, ECF No. 15 12. 16 On June 15, 2023, MBUSA filed the present Motion. On June 29, 2023, Plaintiff filed an 17 opposition and on July 6, 2023, MBUSA filed a reply. Opposition to Motion for Judgment on the 18 Pleadings (“Opp.”), ECF No. 38; Reply in Support of Motion for Judgment on the Pleadings 19 (“Reply”), ECF No. 39. 20 II. LEGAL STANDARD 21 A motion for judgment on the pleadings under Rule 12(c) challenges the legal sufficiency 22 of the opposing party’s pleadings and operates like a motion to dismiss under Rule 12(b)(6). 23 Morgan v. Cnty. of Yolo, 436 F. Supp. 2d 1152, 1154–55 (E.D. Cal. 2006). “[T]he same standard 24 of review applicable to a Rule 12(b) motion applies to its Rule 12(c) analog,” because the motions 25 are “functionally identical.” Dworkin v. Hustler Mag., Inc., 867 F.2d 1188, 1192 (9th Cir. 1989). 26 The Court will “accept factual allegations in the complaint as true and construe the pleadings in 27 the light most favorable to the nonmoving party.” Manzarek v. St. Paul Fire & Marine Ins. Co., 1 519 F.3d 1025, 1031 (9th Cir. 2008). A district court generally may not consider materials beyond 2 the pleadings in evaluating a Rule 12(c) motion. Heliotrope Gen., Inc. v. Ford Motor Co., 189 3 F.3d 971, 981 n.18 (9th Cir. 1999). The court may, however, consider materials properly subject 4 to judicial notice or incorporation by reference. Khoja v. Orexigen Therapeutics, 899 F.3d 988, 5 998 (9th Cir. 2018). Judgment on the pleadings is appropriate if, assuming the truth of all material 6 facts pled in the complaint, the moving party is entitled to judgment as a matter of law. Hal Roach 7 Studios, Inc. v. Richard Feiner & Co., Inc., 896 F.2d 1542, 1550 (9th Cir. 1989). 8 III. REQUEST FOR JUDICIAL NOTICE 9 MBUSA requests the Court take judicial notice of six documents consisting of Plaintiff’s 10 Complaint in this action and five other district court records submitted in the In Re Mercedes-Benz 11 Emissions Litigation (“Emissions”), No. 16-cv-00881-KM-ESK (D.N.J.) matter. Request for 12 Judicial Notice (“RJN”), ECF No. 37. Plaintiff opposes the request on the grounds that none of 13 the documents are “relied upon by the Complaint,” Defendants have not established that the Class 14 Action settlement documents are applicable to Plaintiff’s case, and because the documents are 15 “prejudicial, confusing, and misleading per Fed. R. Evid. 403.” Opp. 2. 16 The doctrine of judicial notice is one of the two doctrines—the other being the doctrine of 17 incorporation by reference—under which a district court may consider material outside the 18 pleadings without converting a motion to dismiss, or a motion for judgment on the pleadings, into 19 a motion for summary judgment. Khoja v. Orexigen Therapeutics, Inc., 899 F.3d 988, 998 (9th 20 Cir. 2018). A court may judicially notice a fact that is “not subject to reasonable dispute,” i.e., a 21 fact that is “generally known,” or “can be accurately and readily determined from sources whose 22 accuracy cannot reasonably be questioned.” Fed. R. Evid. 201(b)(1)–(2). If a judicially noticeable 23 document contains disputed facts, the court may notice the document, but not the disputed facts 24 therein. Khoja, 899 F.3d at 999 (“[A] court cannot take judicial notice of disputed facts contained 25 in [judicially noticeable] public records.”) (citation omitted). 26 The Court need not take judicial notice of Plaintiff’s Complaint because the document is 27 already in the record and subject to MBUSA’s Motion. RJN, Exhibit A, ECF No. 37-1. 1 Regarding the remaining documents, Plaintiff challenges their applicability to his case, but 2 Plaintiff has identified no facts within the documents he disputes. Because Exhibits B–F are all 3 district court records submitted in the Emissions case, the Court GRANTS MBUSA’s request and 4 will take judicial notice of Exhibits B–F. See Ray v. Lara, 31 F.4th 692, 697 (9th Cir. 2022) 5 (courts “may take judicial notice of district court records”). 6 IV. DISCUSSION 7 MBUSA moves for judgment on the pleadings as to each of Plaintiffs’ seven claims on 8 several grounds. First, MBUSA contends broadly that all of Plaintiff’s claims fail as a matter of 9 law because they are barred by the Emissions class action settlement. Second, MBUSA argues 10 that even if not barred by the class action settlement, each claim individually fails for various 11 reasons. 12 The Court addresses MBUSA’s arguments below. 13 A. Generalized “Defendants” Allegations 14 The Court first addresses MBUSA’s argument that “[i]t is confusing as to which Defendant(s) 15 Plaintiff is referring to” because the Complaint frequently groups the Defendants together. Mot. 16 8. The Court agrees. “[B]y lumping all [Defendants] together, Plaintiff[] ha[s] not stated 17 sufficient facts to state a claim for relief that is plausible against one Defendant.” In re iPhone 18 Application Litig., 2011 WL 4403963, at *8 (N.D. Cal. Sept. 20, 2011) (emphasis in original); see 19 also Flores v. EMC Mortg. Co., 997 F. Supp. 2d 1088, 1103 (E.D. Cal. 2014) 20 (“Specific identification of the parties to the activities alleged by the plaintiffs is required in this 21 action to enable the defendant to plead intelligently”). Plaintiff’s failure to parse out which 22 allegations are levied against which Defendants “makes it exceedingly difficult, if not impossible, 23 for individual Defendants to respond to Plaintiff[’s] allegations.” iPhone Application Litig., 2011 24 WL 4403963, at *8. Defendants should not have to guess amongst themselves as to whom a 25 specific “Defendants” reference Plaintiff intended to apply or even whether it applies to some yet- 26 to-be-named Doe party. 27 For the same reason, the Court cannot guess as to whether any such “Defendants” 1 allegations would suffice to state a claim had they been asserted against any one particular 2 defendant. For the reasons set forth below, the Court will grant MBUSA’s motion with leave to 3 amend. In any amended complaint, Plaintiff must identify what action each Defendant took that 4 would state a claim for relief without resorting to generalized allegations against “Defendants” as 5 a whole. 6 B. Whether Plaintiff’s Claims Are Barred by the Emissions Class Action Settlement 7 MBUSA first argues that Plaintiff’s claims are all “directly related to the subject matter in 8 Emissions and were dismissed with prejudice as a result of the class-wide settlement in that 9 action.” Mot. 5. Because Plaintiff “belonged to the settlement class as a purchaser of a 2011 10 Mercedes-Benz ML350 BlueTEC Class Vehicle,” and Plaintiff “did not timely opt-out of the 11 Emissions Class Action Settlement,” the Emissions order permanently enjoins Plaintiff from 12 pursuing such claims. Id. at 6. Plaintiff argues that the Emissions settlement involves class claims 13 for misrepresentations regarding emissions which is unrelated to Plaintiff’s allegations here 14 concerning a broken engine and a broken turbo. Opp. 4. 15 The Emissions suit involved allegations that the vehicles subject to the lawsuit “were 16 equipped with emission control systems that caused the [vehicles] to emit more nitrogen oxides 17 (‘NOx’) than consumers reasonably expected, and more NOx than was permitted under federal 18 and state clean air laws.” ECF No. 37-3 at 3. Whether Plaintiff’s claims are barred by the 19 Emissions settlement depends on (1) whether Plaintiff is a member of the Emissions class, and (2) 20 if so, whether Plaintiff’s claims in this action fall within the scope of the release in the Emissions 21 settlement. 22 First, as a purchaser of a 2011 Mercedes-Benz ML350 BlueTEC Class Vehicle, Plaintiff is 23 undoubtedly a member of the Class. See Class Action Settlement Notice (“Settlement Notice”), 24 ECF No. 37-3 at 3 (showing ML350 BlueTEC vehicles from 2010-2014 listed as “Subject 25 Vehicles”). Second, the Settlement Notice provides that by staying in the Class and failing to opt- 26 out, any class member “cannot sue the Mercedes Defendants or Bosch Defendants or be part of 27 1 any other lawsuit against the Mercedes Defendants or Bosch Defendants about the issues” in the 2 Emissions case. Id. at 11. Specifically, by failing to opt-out, all class members release “all claims, 3 demands, action, or causes of action of any kind,” “arising from, in whole or in part, or in any way 4 related to the BlueTEC Diesel Matter.” Id. at 12. “BlueTEC Diesel Matter” means all claims 5 arising from or in any way relating to: 6 (1) the design, manufacture, assembly, testing, development, installation, performance, presence, disclosure, or nondisclosure of any auxiliary 7 emission control device (“AECD”) (as defined in 40 C.F.R. § 86.1803-01) 8 or defeat device (as defined in 40 C.F.R. § 86.1803-01 or 42 U.S.C. § 7522(a)(3)(B)) in any Subject Vehicle, as that term is defined in Section 9 2.70 of the Class Action Agreement; 10 (2) the design, manufacture, assembly, testing, development, installation, or performance of emission control equipment and methods and related 11 hardware or software in Subject Vehicles, including Diesel Exhaust Fluid 12 and associated equipment, Selective Catalytic Reduction systems, electronic control units, and emission-related software programming, 13 coding, and calibrations; 14 (3) overpayment or diminution in value related to the design, manufacture, assembly, testing, development, installation, or performance of emission 15 control equipment and methods and related hardware or software in Subject Vehicles; 16 17 (4) the actual or alleged noncompliance of any Subject Vehicle with state or federal environmental or emissions standards; 18 (5) the marketing or advertisement of the emissions or environmental 19 characteristics or performance of any Subject Vehicle, including as clean diesel, clean, low emissions, green, environmentally friendly, and/or 20 compliant with state or federal environmental or emissions standards; 21 (6) the marketing or advertisement of the fuel efficiency, fuel economy, 22 mileage, power, drivability, or performance of any Subject Vehicle, to the extent related in any way to the emissions performance, the design, 23 manufacture, assembly, testing, development, installation, or performance of emission control equipment and methods, and related hardware or 24 software; 25 (7) any badges, signage, or BlueTEC labels on the Subject Vehicles, 26 including any badges or signage placed on the Subject Vehicles at the point of sale or in an advertisement; 27 (8) performance of the AEM in a Subject Vehicle, exclusive of the 1 Extended Modification Warranty and any “Lemon Law” protections 2 available to Class Members; 3 (9) whether the Subject Vehicles meet or exceed (or met or exceeded) consumer expectations, to the extent related in any way to the emissions 4 performance, the design, manufacture, assembly, testing, development, installation, or performance of emission control equipment, and methods 5 and related hardware or software; or 6 (10) the subject matter of the Action as well as events or allegations 7 related to the Action, with respect to the Subject Vehicles. 8 Without limiting the foregoing, “BlueTEC Diesel Matter” includes allegations that (i) are related to any Subject Vehicle, (ii) relate to conduct 9 by a Released Party that predates the date of the Class Action Settlement, and (iii) formed or relate to the factual basis for a claim that was made or 10 could have been made in the Complaint. 11 Id. at 13–14. 12 Second, as to whether Plaintiff’s claims in this action fall within the scope of the release, 13 the Settlement Notice does not discuss whether turbos, a device that compresses the intake air in 14 an engine, is considered an emission control device such that claims involving turbos would fall 15 within the scope of the Emissions settlement. 16 Turning to the Complaint, Plaintiff’s claims all stem from allegations that (1) Defendants 17 damaged Plaintiff’s vehicle while the vehicle was their custody, and (2) repairs to Plaintiff’s 18 brand-new Turbo purchased in Florida should be performed under a warranty. See generally 19 Compl. MBUSA argues that Plaintiff’s claims “pertaining to an allegedly defective turbo which 20 controls emissions, are directly related to the subject matter of Emissions, and therefore, covered 21 by the settlement’s release of claims.” Mot. 6. The Court recognizes that the Complaint does 22 repeatedly refer to “the Class Action lawsuit.” For example, the Complaint states that Plaintiff 23 advised Monterey MB that “as a result of a previous Class Action lawsuit, Defendants were 24 responsible for replacing parts, pursuant to the Settlement Agreement of such Class Action 25 lawsuit.” Compl. ¶ 23. However, the Court finds that it is not apparent from the face of the 26 Complaint, nor in the documents subject to the Court’s judicial notice, that Plaintiff’s claims 27 relating to the allegedly defective turbo would fall within the scope of “the subject matter” the 1 Emissions suit. MBUSA states that the allegedly defective turbo “controls emissions” and is 2 therefore “directly related to the subject matter of Emissions,” but offers no support for this 3 statement. 4 Accordingly, MBUSA has not established that it is entitled to judgment on the pleadings 5 the grounds that Plaintiff’s claims are barred by the Emissions suit. The Court proceeds to 6 consider Defendants’ remaining arguments below. 7 C. First Cause of Action (Unjust Enrichment) 8 Under California law, the elements of an unjust enrichment claims are (1) the receipt of a 9 benefit and (2) the unjust retention of the benefit at the expense of another. Peterson v. Cellco 10 P’ship, 164 Cal. App. 4th 1583, 1593 (2008). MBUSA argues that Plaintiff’s unjust enrichment 11 fails because “Plaintiff has done nothing to demonstrate that either of these elements has been 12 met.” Mot. 8. 13 Here, Plaintiff alleges that Defendants were “unjustly enriched at the expense of Plaintiff” 14 by “sell[ing] parts, labor, and diagnostic services, and thereby generat[ing] income, by promising a 15 warranty, which Defendants had no intention of honoring.” Compl. ¶ 52. It is unclear from the 16 Complaint what benefit Plaintiff contends Defendants received at the expense of Plaintiff. 17 Plaintiff alleges that Defendants “failed to honor the turbo warranty or repair Plaintiff’s vehicle,” 18 but there are no allegations that Defendants retained any benefit from Plaintiff in the process. 19 Opp. 6. Plaintiff also does not explain which “parts, labor, and diagnostic services” he contends 20 Defendants sold to Plaintiff. Compl. ¶ 52. While Plaintiff does seek recovery of the purchase 21 price of the Subject Vehicle, $10,000 worth of “previous repairs made within past six months,” 22 $35,000 for the “repair of engine,” and other car rental and hotel fees, he does not elaborate on 23 these expenses and fails to allege whether these are benefits Defendants unjustly retained at the 24 expense of Plaintiff. See Compl. ¶ 13. It is also not clear from the allegations that Plaintiff 25 actually paid for the repair of the engine. Rather, the Complaint alleges that Defendants “stat[ed] 26 that the repair would cost approximately thirty-five thousand dollars” but Plaintiff does not allege 27 he chose to proceed with the repair. Id. ¶ 43. 1 Plaintiff has failed to state a claim for unjust enrichment. Accordingly, the Court 2 GRANTS MBUSA’s motion WITH LEAVE TO AMEND as to Plaintiff’s first cause of action. 3 D. Second Cause of Action (Violation of Business & Professions Code Section 17200 Claim (“UCL”)) 4 MBUSA next argues that Plaintiffs’ UCL claim should be dismissed because Plaintiff has 5 not met Rule 9(b)’s heightened pleading standard, and Plaintiff “fails to plead any specific 6 allegations pertaining to the facts of the instant case which would demonstrate that MBUSA 7 engaged in any unlawful, unfair or fraudulent conduct as prohibited by the UCL.” Mot. 9. In 8 order to bring a California UCL claim, Plaintiff must show “either an (1) ‘unlawful, unfair, or 9 fraudulent business act or practice,’ or (2) ‘unfair, deceptive, untrue or misleading advertising.’” 10 Spindler v. Johnson & Johnson Corp., No. C 10-01414 JSW, 2011 WL 13278876, at *6 (N.D. 11 Cal. Jan. 21, 2011) (quoting Lippitt v. Raymond James Fin. Servs., 340 F.3d 1033, 1043 (9th Cir. 12 2004)). If the UCL claim is grounded in fraud, “the pleading of that claim as a whole must satisfy 13 the particularity requirement of Rule 9(b).” Id. 14 It is not clear whether Plaintiff is relying on the “unlawful,” “unfair,” or “fraudulent” prong 15 of the UCL. Under any theory, Plaintiff has not sufficiently stated a claim. As an initial matter, 16 Plaintiff’s UCL claim––which centers on Defendants’ “concealment,” “non-disclosure,” 17 “misleading and deceptive practices”––appears to be grounded in fraud and so the pleading of that 18 claim must satisfy the particularity requirement of Rule 9(b). 19 As to the unlawful prong, unlawful business activity includes “anything that can properly 20 be called a business practice and that at the same time is forbidden by law.” Spindler, 2011 WL 21 13278876, at *6. Plaintiff alleges that “[t]he dishonesty and negligence of Defendants as alleged 22 herein constitutes unlawful, deceptive and unfair business practices within the meaning of the 23 California Consumer Legal Remedies Act.” Compl. ¶ 56. Defendants contend, relying on Elias, 24 903 F. Supp. 2d 843, 858–59 (N.D. Cal. 2012), that Plaintiff has not plead an unlawful act because 25 the allegations “do not support anything other than, at best, breach of warranty.” Opp. 11. But 26 construed liberally, Plaintiff also seems to allege a violation of the UCL for the additional reason 27 1 that Defendants’ “concealment and non-disclosure of the presence of warrantable conditions, 2 warrantable parts, and warranty periods,” constitutes a violation of “the Federal Clean Air Act, 42 3 U.S.C. 7541, the California Health and Safety Code 43205 et seq.” Compl. ¶ 64. 4 Whether based on an alleged violation of the Consumer Legal Remedies Act, the Federal 5 Clean Air Act, or the California Health and Safety Code, Plaintiff has provided no additional 6 support for these allegations beyond a passing reference to each law. And more importantly, 7 Plaintiff has not explained why Defendants’ conduct was purportedly unlawful under these laws. 8 Turning to the “unfair” prong, Plaintiff offers nothing other than the CLRA violation 9 discussed above and therefore the claim, which hinges on that theory, must also be dismissed. 10 Compl. ¶ 58. To the extent Plaintiff relies on its allegation that Defendants “knowingly 11 exacerbated the damages to the subject vehicle by operating it while the engine was starved of oil” 12 and this “caused the stereo system not to function correctly” to support its claim under the “unfair” 13 prong, this too fails. Compl. ¶¶ 61–62. Even with this additional context, Plaintiffs’ UCL claim 14 based on this act of knowingly operating the Subject Vehicle without oil lacks the requisite 15 particularity to sustain this cause of action because it does not specify who Plaintiff alleges took 16 this act. For example, the Complaint alleges that Mr. Bleyenberg admitted that the engine 17 suffered damaged “as a result of Defendants operation of the engine” and Mr. Bleyenberg “or his 18 agent” operated the engine, “notwithstanding it lacked oil.” Compl. ¶¶ 39–40. 19 As to the fraudulent prong, Plaintiff alleges that Defendants’ “concealment and non- 20 disclosure of the presence of warrantable conditions, warrantable parts, and warranty periods is 21 unfair and deceptive and has the capacity to mislead or deceive consumers and members of the 22 public” and “[t]hese practices affect plaintiff’s business, property, and their health in general.” 23 Compl. ¶ 59. But again, Plaintiff provides no factual support regarding what was concealed or not 24 disclosed, how this mislead Plaintiff, how this deceived members of the public, or how these 25 practices “affect plaintiff’s business, property, and their health in general.” Id. 26 Plaintiff has not met Rule 9(b)’s heightened pleading standard to state his UCL claim 27 grounded in fraud. Accordingly, the Court GRANTS MBUSA’s motion WITH LEAVE TO 1 AMEND as to Plaintiff’s second cause of action. 2 E. Third Cause of Action (Breach of Contract) 3 To state a claim for breach of contract in California, a plaintiff must plead: “(1) the 4 existence of the contract, (2) plaintiff’s performance or excuse for nonperformance, (3) 5 defendant’s breach, and (4) the resulting damages to the plaintiff.” Oasis W. Realty, LLC v. 6 Goldman, 51 Cal. 4th 811, 821 (2011). To allege the existence of a contract, a “plaintiff may set 7 forth the contract verbatim, attach it as an exhibit, or plead it according to its legal effect.” 8 McKinnon v. Dollar Thrifty Auto. Grp., Inc., 2013 WL 3357929, at *6 (N.D. Cal. July 3, 2013). A 9 pleading of the legal effect of a contract is sufficient where the plaintiff supports its assertions with 10 facts and testimonial evidence pointing to the plausible existence of contractual terms that would 11 give rise to the asserted legal effect. Boland, Inc. v. Rolf C. Hagen (USA) Corp., 685 F.Supp.2d 12 1094, 1102 (E.D. Cal. 2010). 13 MBUSA argues that Plaintiff’s breach of contract claim fails because “Plaintiff has failed 14 to identify any operative contract and groups together the multiple Defendants, making the 15 allegations unintelligible.” Mot. 14. The Court agrees. The Complaint alleges broadly that 16 “[e]xpress and implied contracts were created between Defendants and Plaintiff and the general 17 public.” Compl. ¶ 68. This is not sufficient to plead the first element required for a breach of 18 contract claim: the existence of a contract between Plaintiff and MBUSA. Additionally, Plaintiff 19 brings his breach of contract claim against all Defendants, but it remains unknown which 20 Defendant, if not all, Plaintiff is alleging he had a contractual relationship with, and which contract 21 governs. Even assuming Plaintiff is referring to a contract entered into with respect to this Subject 22 Vehicle’s warranties and repairs, the Complaint discusses multiple repairs and interactions with 23 multiple Defendants, so more specificity is required to put the Defendants on notice of the 24 contractual terms that would have the legal effect of binding Defendants to perform in a particular 25 way. 26 Having failed to plead the first essential element––the existence of a contract––Plaintiff’s 27 breach of contract claim fails. Accordingly, the Court GRANTS MBUSA’s motion WITH 1 LEAVE TO AMEND as to Plaintiff’s third cause of action. 2 F. Fourth Cause of Action (Breach of Warranties) 3 Plaintiff brings claims against all Defendants for breach of both implied and express 4 warranties. Compl. ¶ 73. MBUSA argues that both fail because “it is entirely unclear which 5 warranty or warranties serve as the basis for the claim.” Mot. 15. 6 Express Warranty. For a breach of express warranty claim, “a plaintiff must prove (1) the 7 seller’s statements constitute an affirmation of fact or promise which relates to the goods or a 8 description of the goods; (2) the statement was part of the basis of the bargain; and (3) the 9 warranty was breached.” Weinstat v. Dentsply Int’l, Inc., 180 Cal.App.4th 1213, 1227 (2010) 10 (cleaned up). Further, a breach of express warranty claim requires that the plaintiff identify a 11 “specific and unequivocal written statement” about the product that constitutes an “explicit 12 guarantee[ ].” In re iPhone 4S Consumer Litig., No. C 12-1127 CW, 2014 WL 589388, at *8 13 (N.D. Cal. Feb. 14, 2014), aff’d sub nom. In re iPhone 4s Consumer Litig., 637 F. App’x 414 (9th 14 Cir. 2016) (quotations omitted). 15 Here, Plaintiff alleges that the “brand-new turbo manufactured and sold by Defendants, 16 Mercedes-Bens, carried with it a warranty.” Compl. ¶ 12. But Plaintiff has not identified “a 17 specific and unequivocal written statement” constituting an explicit guarantee about the Subject 18 Vehicle, the turbo Plaintiff purchased, or any services performed. See Yastrab v. Apple Inc., 173 19 F. Supp. 3d 972, 982 (N.D. Cal. 2016). For that reason, Plaintiff has failed to state a claim for 20 breach of express warranty. 21 Implied Warranty. “Under the Song-Beverly Act, every retail sale of ‘consumer goods’ in 22 California includes an implied warranty by the manufacturer and the retail seller that the goods are 23 ‘merchantable.’” Mexia v. Rinker Boat Co., Inc., 174 Cal. App. 4th 1297, 1303 (quoting Cal. Civ. 24 Code, §§ 1791.3, 1792). To satisfy the Song-Beverly Act, “products must (1) pass without 25 objection in the trade under the contract description; (2) be fit for the ordinary purposes for which 26 those goods are used; (3) be adequately contained, packaged, and labeled; and (4) conform to the 27 promises or affirmation of fact made on the container or label.” Gagetta v. Walmart, Inc., No. 1 3:22-CV-03757-WHO, 2022 WL 17812924, at *9 (N.D. Cal. Dec. 19, 2022) (quoting Birdsong v. 2 Apple, Inc., 590 F.3d 955, 958 n. 2 (9th Cir. 2009)). This is a low standard for products to meet, 3 where a product “need not be perfect in every detail so long as it ‘provides for a minimum level of 4 quality.’” McGee v. Mercedes-Benz USA, LLC, 612 F. Supp. 3d 1051, 1061 (S.D. Cal. 2020) 5 (quoting Tae Hee Lee v. Toyota Motor Sales, U.S.A., Inc., 992 F. Supp. 2d 962, 979 (C.D. Cal. 6 2014)). 7 Plaintiff alleges that Defendants breached the implied warranty of merchantability because 8 Defendants’ “goods and services” were “not merchantable at the time of sale due to Defendants’ 9 misbranding, concealment and non-disclosure.” Compl. ¶ 74. Plaintiff also alleges claims for 10 breach of implied warranty for fitness for a particular purpose. Id. ¶ 75. Again, Plaintiff refers to 11 “Defendants’ conduct” broadly and fails to include any allegations regarding which “vehicles and 12 parts and services” Plaintiff is referring to. Id. ¶¶ 74–75. These allegations lack the requisite 13 specificity to state a claim for breach of express warranty, particularly where Plaintiff alleges he 14 receives multiple services from multiple Defendants. See Christiansen v. Kimberly-Clark Corp., 15 No. 23-CV-01095-AMO, 2024 WL 1182864, at *2 (N.D. Cal. Mar. 19, 2024) (dismissing breach 16 of warranty claims where plaintiff “has not alleged the terms of any warranty or [plaintiff’s] 17 reasonable reliance on such warranty”). 18 Accordingly, the Court GRANTS MBUSA’s motion WITH LEAVE TO AMEND as to 19 Plaintiff’s fourth cause of action. 20 G. Fifth Cause of Action (Negligent Misrepresentation) 21 In his fifth cause of action, Plaintiff alleges all Defendants “negligently and recklessly 22 misrepresent and conceal, from customers, the existence of these warranties provided by law.” 23 Compl. ¶ 78. The elements of negligent misrepresentation are (1) the misrepresentation of a past 24 or existing material fact, (2) without reasonable ground for believing it to be true, (3) with intent to 25 induce another’s reliance on the fact misrepresented, (4) justifiable reliance on the 26 misrepresentation, and (5) resulting damage. Apollo Cap. Fund, LLC v. Roth Cap. Partners, LLC, 27 158 Cal. App. 4th 226, 243 (2007). In contrast to fraud, negligent misrepresentation does not 1 require knowledge of falsity. Id. (citations omitted). A defendant who makes false statements 2 “honestly believing that they are true, but without reasonable ground for such belief, ... may be 3 liable for negligent misrepresentation.” Id. (citations omitted). However, a positive assertion is 4 required; an omission or an implied assertion or representation is not sufficient. Id. 5 MBUSA argues that the fifth cause of action should be dismissed because Plaintiff “has 6 failed to plead any of the required elements with specificity.” Mot. 16. MBUSA cites Small v. 7 Fritz Companies for the proposition that “a cause of action for negligent misrepresentation must 8 be plead with specificity.” Mot. 16 (emphasis in original) (citing 30 Cal. 4th 167, 184 (2003)). 9 But that holding applied to complaints for negligent misrepresentation in a shareholder’s action–– 10 the court “express[ed] no view on whether this pleading requirement would apply in other actions 11 for negligent misrepresentation.” Small, 30 Cal. 4th at 184. Since Small, other California courts 12 have required negligent misrepresentation claims to be plead with particularity. See, e.g., Charnay 13 v. Cobert, 145 Cal. App. 4th 170, 185 (2006) (“Fraud and negligent misrepresentation must be 14 pleaded with particularity and by facts that show how, when, where, to whom, and by what means 15 the representations were tendered”) (cleaned up); see also SI 59 LLC v. Variel Warner Ventures, 16 LLC, 29 Cal. App. 5th 146, 155 (2018) (negligent misrepresentation claim dismissed where it was 17 “not alleged with sufficient particularity”). 18 Here, Plaintiff alleges “Defendants” misrepresented “these warranties.” Compl. ¶ 78. The 19 Court presumes Plaintiff is referring to the warranties alleged in his breach of warranty cause of 20 action discussed above, including the warranty that came with the purchase of his new turbo. 21 See id. ¶ 12. As above, Plaintiff has not adequately alleged the existence of a warranty. See supra 22 Part IV(F). Having relied on the warranties as the “material fact” that was allegedly 23 misrepresented, Plaintiff has not adequately plead the first element of his negligent 24 misrepresentation cause of action. 25 Plaintiff also generally alleges that “Defendants” mispresented the warranties “through 26 service and sales advisors at the point of sale.” Compl. ¶¶ 78–79. Although Plaintiff alleges that 27 Defendant Wienik Bleyenberg (1) “blamed Plaintiff and the Florida certified Mercedes-Benz 1 repair facility” for the damage to the vehicle, (2) “admitted that the turbo” did “nothing improper,” 2 and (3) “stated that, because Plaintiff elected to have the repair performed at a certified Mercedes- 3 Benz repair facility,” Plaintiff was therefore “liable for the damage,” it remains unclear whether 4 Plaintiff contends that Mr. Bleyenberg made the negligent misrepresentations. See Compl. ¶¶ 31– 5 35. The Complaint thus does not adequately identify who made the alleged representation. 6 Nor does the Complaint allege why MBUSA, or the other Defendants, reasonably should 7 have known the representation regarding the warranty was false. See SI 59, 29 Cal. App. 5th at 8 155 (negligent misrepresentation claim not plead with sufficient particularity where complaint did 9 not identify “who made the representation” and where there was “no allegation as to why 10 [Defendant] reasonably should have known the representation was false”). Thus, Plaintiff has not 11 adequately plead the second element, which requires that the person who made the representation 12 did so without reasonable ground for believing it to be true. 13 Finally, Plaintiff’s conclusory allegations that (1) the representations “were negligently and 14 recklessly made” and (2) Plaintiff and members of the general public “have been damaged in an 15 amount to be proven at trial,” are insufficient to plead the third and fifth elements of the claim.1 16 Twombly, 550 U.S. at 555 (“threadbare recitals of the elements of the claim for relief, supported 17 by mere conclusory statements,” are not taken as true). 18 Accordingly, the Court GRANTS MBUSA’s motion WITH LEAVE TO AMEND as to 19 Plaintiff’s fifth cause of action. 20 H. Sixth Cause of Action (Declaratory and Injunctive Relief) 21 Plaintiff’s sixth cause of action seeks declaratory and injunctive relief against all 22 Defendants. Compl. ¶¶ 81–84. MBUSA argues that this cause of action fails because “it solely 23 consists of two paragraphs of bare and conclusory allegations.” Mot. 16. Plaintiff does not 24 address this argument, or otherwise defend this cause of action, in his opposition. 25
26 1 Plaintiff’s allegation that he “relied upon this warranty and, thereby, advised the Florida certified 27 Mercedes-Benz repair facility to purchase and install the brand-new turbo” is likely sufficient to satisfy the fourth element of the claim: justifiable reliance on the misrepresentation. 1 “The fundamental basis of declaratory relief is the existence of an actual, present 2 controversy over a proper subject.” City of Cotati v. Cashman, 29 Cal. 4th 69, 79 (2002) (citing 5 3 Witkin, Cal. Procedure (4th ed. 1997) Pleading, § 817, p. 273). A request for declaratory relief 4 “will not create a cause of action that otherwise does not exist.” Id. (citations omitted). Rather, 5 “an actual, present controversy must be pleaded specifically” and “the facts of the respective 6 claims concerning the [underlying] subject must be given.” Id. 7 Here, having found that Plaintiff has failed to state a claim as to its other causes of action, 8 Plaintiff cannot sustain its sixth cause of action for declaratory and injunctive relief. See Shroyer 9 v. New Cingular Wireless Servs., Inc., 622 F.3d 1035, 1044 (9th Cir. 2010) (affirming dismissal of 10 declaratory relief claims where dismissal of underlying claims also affirmed). 11 Accordingly, the Court GRANTS MBUSA’s motion WITH LEAVE TO AMEND as to 12 Plaintiff’s sixth cause of action. 13 I. Seventh Cause of Action (Fraud) 14 Finally, Plaintiff brings its seventh cause of action against all Defendants for fraud. 15 Compl. ¶¶ 85–93. The elements of fraud are “(a) misrepresentation (false representation, 16 concealment, or nondisclosure); (b) knowledge of falsity (or ‘scienter’); (c) intent to defraud, i.e., 17 to induce reliance; (d) justifiable reliance; and (e) resulting damage.” Small, 30 Cal. 4th at 173 18 (quotations omitted). It is “established law, in this circuit and elsewhere, that Rule 9(b)’s 19 particularity requirement applies to state-law causes of action.” Vess v. Ciba-Geigy Corp. USA, 20 317 F.3d 1097, 1103 (9th Cir. 2003). “[W]hile a federal court will examine state law to determine 21 whether the elements of fraud have been pled sufficiently to state a cause of action, the Rule 9(b) 22 requirement that the circumstances of the fraud must be stated with particularity is a federally 23 imposed rule.” Id. (quotations and citations omitted). 24 Here, Plaintiff’s cause of action for fraud “must be accompanied by the who, what, when, 25 where, and how of the misconduct charged.” Kearns v. Ford Motor Co., 567 F.3d 1120, 1124 (9th 26 Cir. 2009) (citations omitted). Plaintiff must “set for more than the neutral facts necessary to 27 identify the transaction.” Id. (emphasis in original). 1 As to the “who,” Plaintiff again improperly alleges that all Defendants engaged in fraud 2 when “they” promised Plaintiff that, pursuant to “the warranty,” “they” would provide complete 3 automotive protective for the subject vehicle, in the event it was damaged as a result of a defective 4 Mercedes-Benz part.” Id. 86. Plaintiff further alleges that “Defendants, through Defendant 5 Wienik Bleyenberg, tacitly admitted that it is misleading for Defendants to permit independent 6 automotive repair facilities to hold themselves out as being Mercedes-Benz ‘Master Technicians.’” 7 Compl. ¶ 88. This is insufficient to establish who Plaintiff alleged committed the fraudulent 8 misconduct. Which Defendants were allegedly acting through Mr. Bleyenberg? Is Mr. 9 Bleyenberg also alleged to have committed fraud? 10 Plaintiff also fails to allege the particular circumstances surrounding the alleged 11 misrepresentations. Plaintiff alleges that Defendants “made a material misrepresentation” when 12 they promised Plaintiff they would “provide complete automotive protective for the subject 13 vehicle,” and “Defendants knew or believed that they would not perform their obligations under 14 the warranty at the time they made such promises to Plaintiff,” but without additional detail 15 regarding the warranty, Defendants cannot adequately respond to what was allegedly promised. 16 See Compl. ¶¶ 86, 90. Similarly, Plaintiff’s conclusory allegations to support the reliance prong of 17 a fraud cause of action––that “Defendants intended for Plaintiff to rely on their material 18 misrepresentations” (id. ¶ 91) and “Plaintiff, thereby, relied upon Defendants’ material 19 misrepresentations” (id. ¶ 92)––are insufficient to satisfy the particularity requirement. Shroyer v. 20 New Cingular Wireless Servs., Inc., 622 F.3d 1035, 1042 (9th Cir. 2010) (“In order to plead fraud 21 with particularity, the complaint must allege the time, place, and content of the fraudulent 22 representation; conclusory allegations do not suffice”). 23 V. CONCLUSION 24 In dismissing a complaint or granting judgment on the pleadings, courts will generally 25 grant leave to amend “unless it determines that the pleading could not possibly be cured by the 26 allegation of other facts.” Beluca Ventures LLC v. Aktiebolag, 622 F. Supp. 3d 806, 812 (N.D. 27 Cal. 2022) (quoting Lopez v. Smith, 203 F.3d 1122, 1127 (9th Cir. 2000)). 1 Here, it is not apparent that the deficiencies identified in Plaintiff's Complaint could not 2 || possibly be cured by amendment. Accordingly, the Court GRANTS MBUSA’s motion, and 3 || Plaintiffs claims against MBUSA are DISMISSED WITH LEAVE TO AMEND. Any amended 4 || complaint must be filed within 21 days of this Order. 5 6 IT IS SO ORDERED. 7 Dated: March 27, 2024 8 9 EDWARD J. DAVILA 10 United States District Judge 11 a 12
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4 18 19 20 21 22 23 24 25 26 27 28 || Case No.: 22-cv-04427-EJD ORDER GRANTING MOTION FOR JUDGMENT ON THE PLEADINGS