Keeya Shaunta Malone v. CarMax Auto Superstores California, LLC et al

Filing 32

MINUTES (IN CHAMBERS) ORDER RE DEFENDANT CARMAX'S MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM (DKT. 26) DEFENDANT CARMAX'S MOTION TO STRIKE PORTIONS OF AMENDED COMPLAINT (DKT.27) by Judge John A. Kronstadt: For the reasons stated in thi s Order, the motion to strike is DENIED IN PART and MOOT IN PART. Themotion to dismiss is GRANTED IN PART and DENIED IN PART as follows:1. The motion is DENIED as to Plaintiffs CLRA and § 17200 claims for alleged violations of Cal. Civ.Code  7; 1770(a);2. The motion is GRANTED without prejudice as to Plaintiffs CLRA and § 17200 claims based onalleged violations of Cal. Veh. Code § 11713.18(a)(6), any amended complaint must set out agood faith, non-conclusory basis for an allega tion that CarMax inspected a component of theLincoln that was not listed in the CQI;3. The motion is GRANTED without prejudice as to Plaintiffs § 17200 claim based on allegedviolations of Cal. Veh. Code § 11713(t);4. The motion is DENIED as to Plaintiffs implied warranty of merchantability claim;5. The motion is GRANTED without prejudice as to Plaintiffs express warranty claim; and6. The motion is GRANTED without prejudice as to Plaintiffs fraud and punitive damages claims. Any amended complaint shall be filed by July 8, 2015. Plaintiff shall also separately file a redlined versionof the amended complaint that reflects all changes made to the FAC. See Civil Minutes for Further Specifics. (bp)

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No.

LA CV14-08978 JAK (JCx)

Title

Keeya Shaunta Malone v. CarMax Auto Superstores California, LLC, et al.

Present: The Honorable

Date

June 23, 2015

JOHN A. KRONSTADT, UNITED STATES DISTRICT JUDGE

Andrea Keifer

Not Reported

Deputy Clerk

Court Reporter / Recorder

Attorneys Present for Plaintiffs:

Attorneys Present for Defendants:

Not Present

Not Present

Proceedings:

(IN CHAMBERS) ORDER RE DEFENDANT CARMAX'S MOTION TO
DISMISS FOR FAILURE TO STATE A CLAIM (DKT. 26)
DEFENDANT CARMAX'S MOTION TO STRIKE PORTIONS OF AMENDED
COMPLAINT (DKT.27)

I.

Introduction

On October 6, 2014, Keeya Shaunta Malone (“Plaintiff”) filed this action in the Los Angeles Superior
Court against CarMax Auto Superstores of California, LLC (“CarMax”). Compl., Dkt. 1-1, Ex. A. CarMax
removed the action on November 20, 2014. Dkt. 1. On March 2, 2015, the parties stipulated to the filing of
an amended complaint. Dkt. 23. On March 16, 2015, Plaintiff filed the First Amended FAC (“FAC”). FAC,
Dkt. 25. The FAC advances four causes of action: (1) violation of the Consumers Legal Remedies Act
(“CLRA”); (2) violation of Cal. Bus. & Prof. Code § 17200; (3) violation of the Song-Beverly Consumer
Warranty Act; and (4) fraud and deceit. Id.
Plaintiff purchased a used vehicle from CarMax on June 3, 2012. FAC, Dkt. 25. The FAC alleges that the
vehicle failed to meet certification requirements under California law. Id. Shortly after purchasing the
vehicle, Plaintiff discovered defects that required repairs. Id. The FAC alleges that CarMax failed to
complete the necessary repairs in accordance with express and implied warranties. Id.
CarMax moved to dismiss the FAC or, in the alternative, to strike portions of it (“Motions”). Dkt. 26; Dkt.
27.1 Plaintiff opposed the motions. Dkt. 14. A hearing on the motions was held on June 8, 2015. Dkt. 31.
For the reasons set forth in this Order, the motions are GRANTED IN PART and DENIED IN PART.

1

CarMax requests judicial notice of several federal and state trial court decisions in other cases. Request for
Judicial Notice, Dkt. 28; Request for Judicial Notice, Dkt. 30-1. Plaintiff also requests judicial notice of several
federal district court decisions. Request for Judicial Notice, Dkt. 29-1. The parties’ requests for judicial notice, which
are unopposed, are GRANTED.
Page 1 of 11

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No.

LA CV14-08978 JAK (JCx)

Title

Keeya Shaunta Malone v. CarMax Auto Superstores California, LLC, et al.

II.

Date

June 23, 2015

Factual Background

On June 3, 2012, Plaintiff purchased a 2005 Lincoln LS (“Lincoln”) from a CarMax dealership in
Inglewood, California. FAC ¶ 5. The purchase price was $24,448.64. Id. CarMax provided an express
30-day warranty. Id. ¶¶ 9, 16. During the sales transaction, Plaintiff was assisted by Sales Consultant Nat
Hunt (“Hunt”). Id. ¶ 12. Hunt did not discuss certification of the Lincoln with Plaintiff. Id. However, Plaintiff
alleges that she “was aware CarMax sold certified vehicles and would not have purchased [the Lincoln] if
CarMax had not certified it.” Id.
Prior to the time Plaintiff purchased the Lincoln, it had been used as a rental car. FAC ¶ 17. No CarMax
representative expressly told Plaintiff about this prior use. Id. Nor did CarMax advertisements for the
Lincoln state that the vehicle was previously used as a rental car. Id.
The FAC alleges that Plaintiff did not receive a “completed inspection report indicating all the components
CarMax inspected on the subject vehicle” from Hunt or any other CarMax employee. FAC ¶¶ 13-14.
Plaintiff did receive a “one-sided version” of CarMax’s “Certificate of Quality Inspection” (“CQI”) after
completing the sales documents. Id. ¶ 15. Although the CQI was not attached to the FAC, Plaintiff
attached a copy of it to her Opposition. CQI, Dkt. 29, Ex. A.
The CQI Certificate states that “this vehicle has passed the rigorous CarMax Certified Quality Inspection.”
CQI, Dkt. 29, Ex. A. It also states that CarMax “check[s] over 125 points including (but not limited to)”
several categories of vehicle components with various subcomponents the listed. Id. The categories are:
engine, cooling system, fuel system, drive axle, transmission, suspension system, electrical system,
brake system, steering system, body/interior, heating & A/C system, lighting system, accessories and
miscellaneous. Id. The form language and elements of the CQI Certificate are not specific to the
inspected vehicle. For example, it includes certain components, such as manual transmission, that are
not elements of the vehicle that has been inspected. See id. The CQI is not signed and contains no
specific information about the Lincoln. Id. It states: “Your signed CQI certificate can be found in your
vehicle’s glove compartment.” Id. No two-sided, signed CQI was placed in the glove compartment of the
Lincoln. FAC ¶ 15. The FAC alleges that the CQI is not the actual inspection report. See id. ¶ 31. Instead,
it alleges that the actual inspection report is a checklist that CarMax inspectors filled out and then
destroyed. Id.
As noted, following her purchase of the Lincoln, Plaintiff noticed certain problems that she believed
required repairs. They included “jerking and hesitating.” FAC ¶ 16. On three separate occasions during
the 30-day warranty period, Plaintiff requested that CarMax repair the Lincoln. Id. CarMax replaced the
“ignition coil in cylinder #3, as well as the spark plugs[.]” Id. ¶ 66. Plaintiff alleges that these repairs did not
correct the problems, and that the Lincoln remains “plagued by drivability issues” and is “not operable.”
Id.
Plaintiff asked CarMax to repurchase the Lincoln. Id. ¶¶ 18, 98. CarMax refused to do so, “and only
offered to put Plaintiff into another vehicle sold by CarMax.” Id. CarMax would not return either the down
payment or any other payments that Plaintiff had made in purchasing the Lincoln. Id.

Page 2 of 11

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No.

LA CV14-08978 JAK (JCx)

Title

Keeya Shaunta Malone v. CarMax Auto Superstores California, LLC, et al.

III.

Date

June 23, 2015

Analysis
A.

CarMax’s Motion to Dismiss (Dkt. 26)
1.

Legal Standards
a)

Fed. R. Civ. P. 8(a)

Fed. R. Civ. P. 8(a), provides that a “pleading that states a claim for relief must contain . . . a short and
plain statement of the claim showing that the pleader is entitled to relief[.]” The complaint must state facts
sufficient to show that a claim for relief is plausible on its face. Bell Atl. Corp. v. Twombly, 550 U.S. 544,
570 (2007). The complaint need not include detailed factual allegations, but must provide more than a
“formulaic recitation of the elements of a cause of action.” Twombly, 550 U.S. at 555. “The plausibility
standard is not akin to a ‘probability requirement,’ but it asks for more than a sheer possibility that a
defendant has acted unlawfully. Where a complaint pleads facts that are ‘merely consistent with’ a
defendant's liability, it stops short of the line between possibility and plausibility of entitlement to relief.”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal citations and quotations omitted).
A party may bring a motion to dismiss a cause of action for failure to state a claim pursuant to Fed. R. Civ.
P. 12(b)(6). Dismissal is appropriate only where the complaint lacks a cognizable legal theory or sufficient
facts to support one. Mendiondo v. Centinela Hosp. Med. Ctr., 521 F.3d 1097, 1104 (9th Cir. 2008). In
considering a motion to dismiss, the allegations in the challenged complaint are deemed true and must
be construed in the light most favorable to the non-moving party. Cahill v. Liberty Mut. Ins. Co., 80 F.3d
336, 337-338 (9th Cir. 1996). However, a court need not “accept as true allegations that contradict
matters properly subject to judicial notice or by exhibit. Nor is the court required to accept as true
allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences.” In
re Gilead Scis. Sec. Litig., 536 F.3d 1049, 1055 (9th Cir. 2008).
b)

Heightened Pleading Standards for Fraud

Fed. R. Civ. P. 9(b) requires that a plaintiff “state with particularity the circumstances constituting fraud or
mistake.” “Malice, intent, knowledge, and other conditions of a person’s mind may be alleged generally.”
Id. Rule 9(b) requires a plaintiff to allege specific details about the fraud “including an account of the time,
place, and specific content of the false representations as well as the identities of the parties to the
misrepresentations.” Swartz v. KPMG LLP, 476 F.3d 756, 764 (9th Cir. 2007) (internal quotation marks
omitted). Allegations must be “specific enough to give defendants notice of the particular misconduct
which is alleged to constitute the fraud charged so that they can defend against the charge and not just
deny that they have done anything wrong.” Id. (internal quotation marks omitted); see also Kearns v. Ford
Motor Co., 567 F.3d 1120, 1126 (9th Cir. 2009) (a plaintiff must “articulate the who, what, when, where
and how of the alleged misconduct”).

///
Page 3 of 11

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No.

LA CV14-08978 JAK (JCx)

Title

Keeya Shaunta Malone v. CarMax Auto Superstores California, LLC, et al.
2.

Date

June 23, 2015

Whether the FAC Alleges a Claim under the CLRA
a)

Legal Standards

The CLRA prohibits unfair methods of competition and unfair or deceptive acts or practices in connection
with the sale or lease of goods to consumers. Cal. Civ. Code §§ 1750 et seq. The purpose of the Act is to
“protect consumers against unfair and deceptive business practices and to provide efficient and
economical procedures to secure such protection.” Cal. Civ. Code § 1760.
Under the CLRA, certain acts are unlawful if “intended to result” or result “in the sale or lease of goods or
services to any consumer.” Cal. Civ. Code § 1770(a). They include:
1. Misrepresenting the certification of goods (Cal. Civ. Code § 1770(a)(2)-(3));
2. Representing that goods have certain “characteristics” that they do not have (Cal. Civ.
Code § 1770(a)(5));
3. Representing that goods are of “a particular standard, quality or grade . . . if they are of
another” (Cal. Civ. Code § 1770(a)(7));
4. Advertising “goods or services with intent not to sell them as advertised” (Cal. Civ. Code
§ 1770(a)(9));
5. Representing that a “transaction confers or involves rights, remedies, or obligations which
it does not have or involve, or which are prohibited by law” (Cal. Civ. Code § 1770(a)(14);
and
6. Representing that the “subject of a transaction has been supplied in accordance with a
previous representation when it has not” (Cal. Civ. Code § 1770(a)(16)).
Violations of Cal. Veh. Code § 11713.18 can form the basis for a claim under the CLRA. Cal. Veh. Code
§ 11713.18(b). Thus, failure to provide a completed inspection report prior to the sale of a used vehicle
bars its sale as a “certified” vehicle. Cal. Veh. Code § 11713.18(a)(6). Non-compliance with this statute
gives rise to a claim under the CLRA. § 11713.18(b).
Conduct that is “likely to mislead a reasonable consumer violates the CLRA.” Wilson v. Hewlett-Packard
Co., 668 F.3d 1136, 1140 (9th Cir. 2012) (internal quotation marks omitted); accord Colgan v.
Leatherman Tool Grp., Inc., 135 Cal. App. 4th 663, 680 (2006). Omissions can form the basis for a CLRA
claim. See Daugherty v. Am. Honda Motor Co., Inc., 144 Cal. App. 4th 824, 835 (2006). However, the
“omission must be contrary to a representation actually made by the defendant, or an omission of fact the
defendant was obliged to disclose.” Id.
“Any consumer who suffers any damage as a result of the use or employment by any person of a method,
act, or practice declared to be unlawful by Section 1770 may bring an action against that person” under
the CLRA. Cal. Civ. Code § 1780(a). The phrase “any damage” has been interpreted to include monetary
damages, as well as transactional and opportunity costs. Meyer v. Spring Spectrum L.P., 45 Cal.4th 634,
640 (2009). There must still be “some kind of tangible increased cost or burden to the consumer” to
provide the basis for a claim the CLRA. Id. at 643. Consumers may recover actual damages, restitution
and punitive damages, and may also secure injunctive relief. § 1780(a).
Page 4 of 11

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No.

LA CV14-08978 JAK (JCx)

Title

Keeya Shaunta Malone v. CarMax Auto Superstores California, LLC, et al.
b)

Date

June 23, 2015

Application
(1)

Alleged Violations of Cal. Civ. Code § 1770(a)

The FAC alleges that CarMax violated Cal. Civ. Code § 1770(a) by failing to disclose certain defects of
the Lincoln to Plaintiff. In support of this claim, she alleges that this failure occurred after CarMax made
representations to her that the Lincoln was certified, inspected, and in good condition. The FAC alleges
that these representations were false and that the vehicle was not in good condition. This includes
Plaintiff’s claim that the Lincoln needed repairs and is “not operable.” CarMax argues that these
allegations are not sufficient to state a claim under § 1770(a).
The FAC alleges that CarMax falsely represented the character or quality of the Lincoln. Because these
allegations are sufficient to state a violation of the CLRA, they are adequate to state a claim for a violation
of Cal. Civ. Code § 1770(a).
CarMax also argues that Plaintiff has failed to allege damage resulting from the claimed violation of
§ 1770(a). Plaintiff alleges that, because she relied on the representations by CarMax about the Lincoln,
she made a purchase that she would not otherwise have made. This is sufficient as a theory of damages
under the CLRA.
For these reasons, the motion is DENIED on this ground.
(2)

Alleged Violation of Cal. Veh. Code § 11713.18(a)(6)
(a)

The Statute

Cal. Veh. Code § 11713.18(a)(6) provides that:
It is a violation of this code for the holder of any dealer's license issued under this article to
advertise for sale or sell a used vehicle as “certified” or use any similar descriptive term in the
advertisement or the sale of a used vehicle that implies the vehicle has been certified to meet the
terms of a used vehicle certification program if any of the following apply: . . . (6) [p]rior to sale, the
dealer fails to provide the buyer with a completed inspection report indicating all the components
inspected.
There are no published California, appellate decisions interpreting Cal. Veh. Code § 11713.18(a)(6).
This Court interpreted § 11713.18(a)(6) in Gullins v. CarMax Auto Superstores Cal., LLC, No.
2:13-CV-09398 (C.D. Cal. Feb. 20, 2015) (Dkt. 76). As stated in that Order:
In light of both the plain language and legislative history, the phrase “completed inspection report”
as used in the statute means a report that lists all of the components inspected on a vehicle.
However, neither the plain language nor the legislative history supports an interpretation that
would require a car dealership to disclose the results of the inspection or general observations
made during the inspection process. To be sure, the disclosure of this information could be seen
as furthering a purpose of the Bill -- to promote transparency between dealerships and
Page 5 of 11

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No.

LA CV14-08978 JAK (JCx)

Date

June 23, 2015

Title

Keeya Shaunta Malone v. CarMax Auto Superstores California, LLC, et al.
consumers. However, the plain language and legislative history do not support this interpretation.
Thus, § 11713.18(a)(6) requires a completed inspection report to list all components inspected,
but does not require a dealership to disclose inspection results or observations made during an
inspection.

Id. at 15.
(b)

Application

Plaintiff alleges that CarMax violated Cal. Veh. Code § 11713.18(a)(6) by not providing a completed
report that listed all components of the Lincoln that were inspected. However, the FAC alleges that
Plaintiff received a CQI. The FAC does not expressly allege, or imply, that CarMax inspected a
component of the Lincoln that was not shown in the CQI. Therefore, the FAC does not plausibly allege
that Plaintiff did not receive a completed inspection report that complied with § 11713.18(a)(6).
Plaintiff argues that the CQI is a “generic advertisement” because it does not require a dealership to
disclose inspection results or observations made during an inspection. The Court rejected this argument
in Gullins, and adheres to that view. Section 11713.18(a)(6) requires the listing of all of the components
that were inspected. It does not require the disclosure of all results or observations made during an
inspection.
Plaintiff also seeks to distinguish Gullins because Plaintiff here did not receive a two-sided, signed CQI.
However, there is no requirement that an inspection report be signed or show the stock number of the
inspected vehicle. Instead, the statute requires that the report list all components that were inspected.
The FAC has no non-conclusory allegation that CarMax inspected a component not listed on the CQI.
The motion is GRANTED with respect to the alleged violation of § 11713.18(a)(6).
3.

Whether the FAC States a Claim under Cal. Bus. & Prof. Code § 17200
a)

Legal Standards

Cal. Bus. & Prof. Code § 17200 prohibits, “the unlawful, the unfair, and the fraudulent.” Rose v. Bank of
Am., N.A., 57 Cal.4th 390, 394 (2013). The scope of § 17200 is “sweeping, embracing anything that can
properly be called a business practice and that at the same time is forbidden by law.” Cel-Tech
Comm’cns, Inc. v. L.A. Cellular Tel. Co., 20 Cal.4th 163, 180 (1999) (internal quotation marks omitted).
Section 17200 makes “violations of other laws . . . independently actionable,” but also “makes clear that a
practice may be deemed unfair even if not specifically proscribed by some other law.” Id. The California
Supreme Court has explained that § 17200 “was intentionally framed in its broad, sweeping language,
precisely to enable judicial tribunals to deal with the innumerable new schemes which the fertility of man’s
invention would contrive.” Id. at 181 (internal marks omitted). However, “courts may not use the unfair
competition law to condemn actions the Legislature permits.” Id. at 184. Further, courts “may not simply
impose their own notions of the day as to what is fair or unfair.” Id. at 182. To have standing to bring a
claim under § 17200, a person must have suffered injury in fact and have lost money or property as a
result of the unfair competition. Cal. Bus. & Prof. Code § 17204.
Page 6 of 11

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No.

LA CV14-08978 JAK (JCx)

Title

Keeya Shaunta Malone v. CarMax Auto Superstores California, LLC, et al.
b)

Date

June 23, 2015

Application

The premise of the alleged § 17200 claim is the claimed violation of the CLRA. Because Plaintiff has
stated a claim under the CLRA, the motion is DENIED as to the portions of the § 17200 claim that rely on
violations of Cal. Civ. Code § 1770(a). The motion is GRANTED as to the portion of the § 17200 claim
that relies on violation of Cal. Veh. Code § 11713.18(a)(6).
The FAC also alleges a § 17200 violation by failing to identify the Lincoln as a former rental vehicle in all
applicable advertisements. Cal. Veh. Code § 11713(t) provides that it is unlawful for a licensed dealership
to advertise for sale a vehicle that was previously used as a rental car without disclosing “clearly and
conspicuously” this previous rental status on the advertisement at issue. The FAC alleges that CarMax
did not disclose the previous rental status of the Lincoln on all advertisements.
CarMax attaches a copy of a Prior Use Disclosure form allegedly signed by Plaintiff when she purchased
the Lincoln. Dkt. 26-3, Ex. 2. This form contains Plaintiff’s acknowledgement that the Lincoln was used as
a rental vehicle before CarMax purchased it. Id. This document is not incorporated within the FAC.
Further, it is not clear that it is an adjudicative fact that is beyond reasonable dispute. Cf. Fed. R. Evid.
201(b).
Plaintiff argues that, even if she signed an acknowledgement as to the Lincoln’s prior rental status, there
was a violation of § 11713(t) because CarMax did not include this information in all advertisements about
the Lincoln. During the June 8, 2015 hearing, Plaintiff’s counsel offered additional facts not alleged in the
FAC. Thus, Plaintiff’s counsel stated that a CarMax representative showed her an image of the Lincoln
that did not disclose its prior rental status.
For the foregoing reasons, the Motion is GRANTED, with leave to amend. Any allegations in an amended
complaint must comply with the requirements of Fed. R. Civ. P. 11.
4.

Song-Beverly Consumer Warranty Act Claim
a)

Legal Standards

The Song-Beverly Consumer Warranty Act provides standards for implied and express warranties with
respect to goods sold in California. Under the Song-Beverly Consumer Warranty Act, a “consumer good”
is any “new product” purchased for personal, non-retail use. Cal. Civ. Code § 1791(a). The Act also
provides certain guarantees for “used goods.” Under § 1795.5(a), if express warranties are made to a
buyer of used goods, the “distributor or retail seller making express warranties” must “maintain sufficient
service and repair facilities within this state to carry out the terms of such express warranties.” Further,
when an express warranty is provided, the implied warranties of fitness and merchantability “shall be
coextensive in duration” with the express warranty. § 1795.5(c). The duration of the implied warranties
must be at least 30 days but not more than three months. Id. If the duration of the express warranty is not
specified, the implied warranties are for three months. Id. Finally, sellers of used goods are obligated to
honor the express warranties regarding such goods, regardless of when the goods were manufactured.
§ 1795.5(d).
Page 7 of 11

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No.

LA CV14-08978 JAK (JCx)

Date

June 23, 2015

Title

Keeya Shaunta Malone v. CarMax Auto Superstores California, LLC, et al.

Any buyer that is damaged by the failure to comply with an implied or express warranty may bring an
action for damages or other legal and equitable relief. Cal. Civ. Code § 1794(a). In the case of an express
warranty claim, the buyer must bring nonconforming goods to repair facilities to afford the seller a chance
to repair them. § 1793.2(c). In the event the goods are not repaired so that they conform to the applicable
express warranties “after a reasonable number of attempts,” the seller must “replace the goods or
reimburse the buyer in an amount equal to the purchase price by the buyer, less that amount directly
attributable to use by the buyer prior to the discovery of the nonconformity.” Id. The term “nonconformity”
as used in § 1793.2(d)(1) means “a nonconformity which substantially impairs the use, value, or safety of
the new motor vehicle to the buyer or lessee.” § 1793.229(e)(1).
(1)

Implied Warranty of Merchantability

Cal. Civ. Code § 1791.1(a) provides an implied warranty of merchantability. Goods must “pass without
objection in the trade under the contract description,” (§ 1791.1(a)(1)), be “fit for the ordinary purposes for
which goods are used” (1791.1(a)(2)), must be “adequately contained, packaged, and labeled,”
(§ 1791.1(a)(3)), and must “conform to the promises or affirmations of fact made on the container or label”
(§ 1791.1(a)(4)).
The implied warranty of merchantability is not a promise that “goods precisely fulfill the expectation of the
buyer,” but instead provides a “minimum level of quality.” Am. Suzuki Motor Corp. v. Super. Ct., 37 Cal.
App. 4th 1291, 1296 (1995). If a good is “in safe condition and substantially free of defects,” it is fit for the
ordinary purpose for which it is used. Brand v. Hyundai Motor Am., 226 Cal. App. 4th 1538, 1546 (2014)
(internal quotation marks omitted); accord Mexia v. Rinker Boat Co., Inc., 174 Cal. App. 4th 1297, 1303
(2009). “The implied warranty of merchantability may be breached by a latent defect undiscoverable at
the time of sale.” Mexia, 174 Cal. App. at 1305.
b)

Application

CarMax argues that Plaintiff’s claim for breach of the implied warranty of merchantability fails because
the warranty requires only that the vehicle “function for its intended purpose,” and the FAC does not
allege that the Lincoln did not do so. In support of this position, CarMax relies on American Suzuki, which
stated that courts in “other jurisdictions” have held that the breach of implied merchantability for an
automobile “can be breached only if the vehicle manifests a defect that is so basic it renders the vehicle
unfit for its ordinary purpose of providing transportation.” 37 Cal. App. 4th at 1296. American Suzuki was
a class action brought by consumers who had purchased a Samurai sports utility vehicle. Id. at 1294. The
plaintiffs alleged that the defendant breached the implied warranty of merchantability because their
vehicles had an “inherent defect” of rolling over due to a design defect. Id. However, because “the vast
majority of the Samurais sold to the putative class did what they were supposed to do for as long as they
were supposed to do it,” the vehicles “remained fit for their ordinary purpose” and the class could not be
certified. Id. at 1298-99 (internal quotation marks omitted). Thus, the class could not be certified based on
“a potential injury that never, in fact, materialized.” Id. at 1299. American Suzuki focused on the lack of a
coherent basis to link claims of the consumer claims.
Here, Plaintiff has alleged that her vehicle jerked and hesitated. See FAC ¶¶ 16, 66. She alleges that she
took the vehicle to CarMax for repairs three times and had the ignition coil and spark plugs replaced, but
Page 8 of 11

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No.

LA CV14-08978 JAK (JCx)

Date

June 23, 2015

Title

Keeya Shaunta Malone v. CarMax Auto Superstores California, LLC, et al.

that these repairs did not correct the problems. These allegations are sufficient to state a claim for a
breach of the implied warranty. For these reasons, the motion is DENIED as to the implied warranty of
merchantability.
The FAC fails to set out sufficient detail to support the breach of an express warranty. The FAC does not
provide any information as to the terms of any such warranty or how they were allegedly breached.
Because the allegations are conclusory, the motion is GRANTED without prejudice as to this claim.
5.

Alleged Fraud & Punitive Damages
a)

Legal Standards

Cal. Civ. Code § 1709 provides that “[o]ne who willfully deceives another with intent to induce him to alter
his position to his injury or risk, is liable for any damage which he thereby suffers.” “The elements of fraud
that will give rise to a tort action for deceit are: (a) misrepresentation (false representation, concealment,
or nondisclosure); (b) knowledge of falsity (or “scienter”); (c) intent to defraud, i.e., to induce reliance;
(d) justifiable reliance; and (e) resulting damage.” Engalla v. Permanente Med. Grp., Inc., 15 Cal.4th 951,
974 (1997). The misrepresentation must be one of fact, not law. Cal. Civ. Code § 1710; see also 5 Witkin,
Summary, § 773 (10th ed. 2005). Cal. Civ. Code § 3294 allows for punitive damages upon clear and
convincing evidence of fraud.
b)

Application

The FAC alleges two fraudulent acts: (1) failure to provide a completed inspection report despite
knowledge of Cal. Veh. Code § 11713.18(a)(6); and (2) failure to disclose the Lincoln’s former use as a
rental vehicle. As explained above, the FAC acknowledges that the CQI provided to Plaintiff satisfies the
requirements of Cal. Veh. Code § 11713.18(a)(6). Thus, the fraud claim cannot be premised on the
claimed violation of that statute. With respect to the alleged omission about the prior rental use, the FAC
contains only the following conclusory allegations:
CarMax’s [sic] fraudulently omitted this information from Plaintiff [sic] because the subject vehicle
had been used as a formal rental vehicle prior to Plaintiff’s purchase. CarMax intended that
Plaintiff rely on its fraudulent omission in Plaintiff’s purchase of the subject vehicle. Plaintiff
reasonably relied on CarMax’s fraudulent omission and purchased the subject vehicle.
FAC ¶¶ 92-93. These allegations as to intent and justifiable reliance are not plausible. However, for the
reasons stated with respect to the Cal. Bus. & Prof. Code § 17200 claim for an alleged violation of Cal.
Veh. Code § 11713(t), leave to amend is permitted.
B.

CarMax’s Motion to Strike (Dkt. 27)
1.

Legal Standards

The Court may “order stricken from any pleading . . . any redundant, immaterial, impertinent, or
scandalous matter.” Fed. R. Civ. Proc. 12(f). Improper prayers for relief may be subject to a motion to
Page 9 of 11

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No.

LA CV14-08978 JAK (JCx)

Date

June 23, 2015

Title

Keeya Shaunta Malone v. CarMax Auto Superstores California, LLC, et al.

strike if the complaint fails to allege facts supporting the plaintiff’s entitlement, as a matter of law, to the
requested relief. See Santa Clara Valley Water District v. Olin Corp., 2007 WL 2890390, at *5 (N.D. Cal.
Sept. 28, 2007) (striking prayer for punitive damages where plaintiff had not alleged facts necessary to
support a punitive damages claim); S.E.C. v. Berry, 2008 WL 4065865 (N.D. Cal. Aug. 27, 2008).
However, “[c]ourts have long disfavored Rule 12(f) motions, granting them only when necessary to
discourage parties from making completely tendentious or spurious allegations.” Sapiro v. Encompass
Ins., 221 F.R.D. 513, 518 (N.D. Cal. 2004).
2.

Application

CarMax has moved to strike the following from the FAC:







¶ 36 in its entirety;
The phrase “CarMax’s actions are sufficient to support punitive damages” in ¶ 43;
The phrases “Punitive damages are proper to deter CarMax’s acts deemed socially unacceptable
and to discourage the perpetuation of CarMax’s objectionable corporate policies” and “Plaintiff
seeks punitive damages” in ¶ 44;
¶ 50 in its entirety;
¶¶ 96-100 in their entirety; and
The request for punitive damages in the Prayer for Relief.

Most of these requests to strike concern the claim for punitive damages. Because the fraud claim has
been dismissed, the requests to strike are MOOT. As to the request to strike paragraphs 26 and 40,
factual issues remain as to whether CarMax violated the CLRA or § 17200 as to representations made to
Plaintiff when selling the vehicle. Accordingly, those allegations are not redundant or immaterial and the
motion to strike is DENIED.
IV.

Conclusion

For the reasons stated in this Order, the motion to strike is DENIED IN PART and MOOT IN PART. The
motion to dismiss is GRANTED IN PART and DENIED IN PART as follows:
1. The motion is DENIED as to Plaintiff’s CLRA and § 17200 claims for alleged violations of Cal. Civ.
Code § 1770(a);
2. The motion is GRANTED without prejudice as to Plaintiff’s CLRA and § 17200 claims based on
alleged violations of Cal. Veh. Code § 11713.18(a)(6), any amended complaint must set out a
good faith, non-conclusory basis for an allegation that CarMax inspected a component of the
Lincoln that was not listed in the CQI;
3. The motion is GRANTED without prejudice as to Plaintiff’s § 17200 claim based on alleged
violations of Cal. Veh. Code § 11713(t);
4. The motion is DENIED as to Plaintiff’s implied warranty of merchantability claim;
5. The motion is GRANTED without prejudice as to Plaintiff’s express warranty claim; and
6. The motion is GRANTED without prejudice as to Plaintiff’s fraud and punitive damages claims.

Page 10 of 11

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES – GENERAL
Case No.

LA CV14-08978 JAK (JCx)

Date

June 23, 2015

Title

Keeya Shaunta Malone v. CarMax Auto Superstores California, LLC, et al.

Any amended complaint shall be filed by July 8, 2015. Plaintiff shall also separately file a redlined version
of the amended complaint that reflects all changes made to the FAC.

IT IS SO ORDERED.

:
Initials of Preparer

ak

Page 11 of 11