Ouzounian v. FCA US LLC ( 2020 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 11 STEVE OUZOUNIAN, an No. 2:20-cv-00179-JAM-KJN individual, 12 Plaintiff, 13 ORDER GRANTING DEFENDANT’S v. MOTION TO DISMISS WITH LEAVE TO 14 AMEND FCA US LLC, a Delaware 15 Limited Liability Company and DOES 1 to 25, inclusive, 16 Defendants. 17 18 This matter is before the Court on Defendant FCA US LLC’s 19 (“Defendant”) Motion to Dismiss for failure to state a claim 20 upon which relief can be granted. Mot., ECF No. 11. Steve 21 Ouzounian (“Plaintiff”) filed an opposition to Defendant’s 22 motion, Opp’n, ECF No. 17, to which Defendant replied, Reply, 23 ECF No. 18. After consideration of the parties’ briefing on the 24 motion and relevant legal authority, the Court GRANTS WITH LEAVE 25 TO AMEND Defendant’s Motion to Dismiss.1 26 27 1 This motion was determined to be suitable for decision without oral argument. E.D. Cal. L.R. 230(g). The hearing was scheduled 28 for May 19, 2020. 1 I. BACKGROUND 2 Plaintiff purchased a 2013 Dodge Ram 2500 Laramie sometime 3 in May 2013. First Amended Complaint (“FAC”) ¶ 9, ECF No. 6. 4 On May 9, 2017, Defendant issued a recall covering certain 2013- 5 2016 Ram 2500 vehicles, including Plaintiff’s 2013 Dodge Ram 6 2500 Laramie. FAC ¶ 10. The recall was issued to address a 7 defect in the Occupant Restraint Controllers Modules (“ORC 8 Modules”), which could render Ram 2500 trucks unable to 9 recognize vehicle rollover. FAC ¶ 11. Failure to recognize 10 rollover results in undeployed airbags or inactivated seatbelt 11 pretentioners. Id. Plaintiff alleges he never received notice 12 of the recall. Id. 13 On October 5, 2019, Plaintiff was driving the 2013 Dodge 14 Ram 2500 Laramie when he lost control of the vehicle and 15 collided with a tree-lined center median. FAC ¶ 13. Upon 16 impact, the vehicle rolled several times. Id. At no point did 17 the vehicle’s driver front and side-curtain airbags deploy. FAC 18 ¶ 14. Neither did the seatbelt pretentioner activate. Id. As 19 a result, Plaintiff suffered several serious injuries. Id. 20 On December 12, 2019, Plaintiff filed suit against 21 Defendant in Placer County Superior Court. See Compl., ECF No. 22 1-1. The case was removed to federal court on January 24, 2020, 23 see Notice of Removal, ECF No. 1, where Plaintiff filed an 24 amended complaint, see FAC. Plaintiff alleged Defendant: 25 (1) violated the Magnuson-Moss Warranty Act, 15 U.S.C. § 2301; 26 (2) was negligent; (3) is strictly liable for design defects; 27 (4) is strictly liable for manufacturing defects; (5) breached 28 the express warranty; and (6) breached the implied warranty of 1 merchantability. Id. The parties have since stipulated that 2 the first, fifth, and sixth causes of action be dismissed. See 3 Stipulation of Dismissal, ECF No. 8. Defendant now moves for 4 the Court to dismiss Plaintiff’s claims for punitive damages 5 associated with the third and fourth causes of action pursuant 6 to Federal Rule of Civil Procedure 12(b)(6). Mot. at 6–11. 7 Defendant contends Plaintiff has not, and cannot, plead facts 8 sufficient to support punitive damages. Id. 9 II. OPINION 10 A. Legal Standard 11 A Rule 12(b)(6) motion challenges the complaint as not 12 alleging sufficient facts to state a claim for relief. “To 13 survive a motion to dismiss [under 12(b)(6)], a complaint must 14 contain sufficient factual matter, accepted as true, to state a 15 claim to relief that is plausible on its face.” Ashcroft v. 16 Iqbal, 556 U.S. 662, 679 (2009) (internal quotation marks and 17 citation omitted). While “detailed factual allegations” are 18 unnecessary, the complaint must allege more than “[t]hreadbare 19 recitals of the elements of a cause of action, supported by mere 20 conclusory statements.” Id. at 678. “In sum, for a complaint 21 to survive a motion to dismiss, the non-conclusory ‘factual 22 content,’ and reasonable inferences from that content, must be 23 plausibly suggestive of a claim entitling the plaintiff to 24 relief.” Moss v. U.S. Secret Serv., 572 F.3d 962, 969 (9th Cir. 25 2009). 26 B. Analysis 27 Plaintiff’s third and fourth causes of action allege that 28 Defendant is strictly liable for design and manufacturing 1 defects. See FAC ¶¶ 36–49. Plaintiff alleges Defendant’s 2 conduct, with regard to those defects, was “fraudulent, 3 malicious[,] and oppressive” and “justif[ies] an award of 4 punitive damages pursuant to California Civil Code § 3294.” FAC 5 ¶¶ 42, 49. To state a claim for punitive damages, a complaint 6 must set forth the elements as stated in the general punitive 7 damage statute, California Civil Code § 3294. Turman v. Turning 8 Point of Central California, Inc., 191 Cal.App.4th 53, 63 9 (2010). These statutory elements include allegations that the 10 defendant has been guilty of oppression, fraud, or malice. See 11 Cal. Civ. Code § 3294(a). 12 “Malice” is defined as conduct “intended by the defendant 13 to cause injury to plaintiff, or despicable conduct that is 14 carried on by the defendant with a willful and conscious 15 disregard for the rights or safety of others.” Cal. Civ. Code 16 § 3294(c)(1). “Oppression” means “despicable conduct that 17 subjects a person to cruel and unjust hardship in conscious 18 disregard of that person’s rights.” Cal. Civ. Code 19 § 3294(c)(2). And “fraud” is “an intentional misrepresentation, 20 deceit, or concealment of a material fact known to the defendant 21 with the intention on the part of the defendant of thereby 22 depriving a person of property or legal rights or otherwise 23 causing injury.” Cal. Civ. Code § 3294(c)(3). 24 The sort of malice required by § 3294(a) implies “an act 25 conceived in a spirit of mischief or with criminal indifference 26 towards the obligations owed to others.” Taylor v. Superior 27 Court, 24 Cal.3d 890, 894 (1979) (internal quotation marks and 28 citations omitted). “Something more than the mere commission of 1 a tort is always required for punitive damages.” Id. at 894 2 (citing Prosser, Law of Torts at 9–10 (4th Ed. 1971)). A 3 conscious disregard of the safety of others may constitute 4 malice within the meaning of § 3294, but the plaintiff must 5 establish that the defendant was aware of the probable dangerous 6 consequences of his conduct, and that he willfully and 7 deliberately failed to avoid these consequences. Id. at 895–96 8 (citations omitted). 9 Defendant argues there are no facts alleged to support a 10 finding of the oppression, fraud, or malice necessary for a 11 punitive damages award. Mot. at 7–9. Plaintiff, in his 12 opposition, sets forth the specific facts he believes support 13 punitive damages. See Opp’n at 6–7. Notably, on June 10, 2017, 14 Plaintiff brought the vehicle to an authorized dealership for 15 regularly scheduled maintenance. FAC ¶ 12. Plaintiff alleges 16 that Defendant issued the recall prior to the day he brought his 17 vehicle to the dealership, however, the dealership did not 18 repair the defect.2 Id. Nor did anyone at the dealership inform 19 him of the recall. Id. Plaintiff argues that Defendant’s 20 failure to notify him and its authorized dealerships of the 21 recall supports a finding of fraud, malice, or oppression. 22 Opp’n at 7. The Court disagrees. 23 “The mere allegation an intentional tort was committed is 24 not sufficient to warrant an award of punitive damages.” 25 26 2 Defendant contests this. Opp’n at 4, n.1. Defendant asserts the recall was not issued until June 22, 2017—twelve days after 27 Plaintiff brought his vehicle to the authorized dealership. Id. The Court need not resolve this factual dispute at present. The 28 timing of the recall does not affect the Court’s analysis. 1 Grieves v. Superior Court, 157 Cal.App.3d 159, 166 (1984) 2 (citing Taylor, 24 Cal.3d at 894). Plaintiff has failed to 3 allege even that. What Plaintiff describes in his FAC is, at 4 best, gross negligence on the part of the Defendant. Plaintiff 5 has offered no factual allegations to render plausible his claim 6 that Defendant acted with oppression, fraud, or malice. 7 Construing Plaintiff’s allegations in the light most favorable 8 to him, Defendant failed to notify Plaintiff and one of its 9 authorized dealerships of the recall. As a result of that 10 failure, Plaintiff was unaware he was driving in an unsafe 11 vehicle and, thus, continued to do so. Eventually, Plaintiff 12 was involved in an accident, wherein Plaintiff sustained serious 13 injuries due to the vehicle’s defects. 14 None of those facts suggest that Defendant acted with 15 malice. See Grieves, 157 Cal.App.3d at 166 (“Not only must 16 there be circumstances of oppression, fraud[,] or malice, but 17 facts must be alleged in the pleading to support such a claim.”) 18 (citing G.D. Searle & Co. v. Superior Court, 49 Cal.App.3d 22, 19 29 (1975)). For instance, in Ebaugh v. Rabkin, 22 Cal.App.3d 20 891, 894–95 (1972), the plaintiff sued her doctor and a hospital 21 after she went in for a breast biopsy, but the doctor instead 22 conducted an unauthorized gall bladder operation. The court 23 found there was no evidence to support a verdict of punitive 24 damages. Id. at 895. While the doctor was admittedly 25 negligent, the doctor and the hospital were not guilty of 26 malice, either express or implied. Id. “The record negated any 27 conclusion that the unauthorized operation . . . took place out 28 of evil motive or criminal indifference . . . or with an intent 1 to injure or do harm to [the plaintiff] for the mere 2 satisfaction of doing it.” Id. 3 Here, too, the facts presented suggest only that Defendant 4 acted negligently in failing to inform Plaintiff, and possibly 5 its authorized dealerships, of the recall. Plaintiffs 6 conclusory allegations that Defendant behaved in a manner 7 warranting punitive damages, see FAC ¶¶ 42, 49, are 8 insufficient. The Court has no reason to believe—through facts 9 alleged in either Plaintiff’s complaint or opposition to 10 Defendant’s motion—that Defendant intended to injure Plaintiff 11 or acted in knowing disregard of Plaintiff’s rights. And to the 12 extent that Plaintiff alleges corporate malice or oppression, he 13 has similarly failed to plead facts sufficient to support 14 malicious, oppressive, or fraudulent conduct on the part of 15 Defendant’s officers, directors, or managing agents. See 16 Ebaugh, 22 Cal.App.3d at 895 (finding there was similarly no 17 evidence that “any partner or managing agent of [the hospital] 18 directed, authorized or subsequently ratified any allegedly 19 malicious conduct of any employee with knowledge as to the 20 malicious quality of such act or conduct.”). 21 Accordingly, the Court DISMISSES Plaintiff’s claims for 22 punitive damages. 23 C. Leave to Amend 24 Courts dismissing claims under Federal Rule of Civil 25 Procedure 12(b)(6) have discretion to permit amendment, and there 26 is a strong presumption in favor of leave to amend. Eminence 27 Cap., LLC v. Aspeon, Inc., 316 F.3d 1048, 1051-52 (9th Cir. 28 2003). “Dismissal with prejudice and without leave to amend is WAS 2 EAINTOING IN Ob PIR Ue YO UO VIO 1 not appropriate unless it is clear . . . that the complaint could 2 not be saved by amendment.” Id. at 1052 (internal citation 3 omitted). Plaintiff seeks leave to amend the FAC to cure 4 deficiencies in his request for punitive damages associated with 5 the third and fourth causes of actions. See Opp’n at 9-10. The 6 Court will permit Plaintiff one final opportunity to try to plead 7 facts sufficient to support punitive damages. 8 9 Til. ORDER 10 For the reasons set forth above, the Court GRANTS WITH 11 LEAVE TO AMEND Defendant’s Motion to Dismiss. If Plaintiff 12 amends his FAC, he shall file a Second Amended Complaint within 13 twenty days (20) of this order. Defendant’s responsive pleading 14 is due twenty days thereafter. 15 IT IS SO ORDERED. 16 Dated: June 15, 2020 17 kA 18 teiren staves odermacr 7008 19 20 21 22 23 24 25 26 27 28