we have here is the california supreme has decided not to decide the issue but that's before the court today and that's apparent at pages nine hundred and ninety one dollars ninety two cents of the opinion where the court says that we declined to decide the issue of whether the intentional concealment constitutes an independent tort interestingly enough went to the narrowest opinion possible but i think they give a pretty very good i think they gave a pretty good hint where they were going because right after that they cited a series of cases that strongly this unhealthy that fraud claim should be allowed to proceed as an exception to the economic loss rule they began by studying the lazard case and said because of the extra measure of blame worthiness inherent in fraud and because in fraud cases we are not concerned about the need for predictability about the cost of contractual fraud players may recover out of pocket damages in addition to the bargain they then went on just to cite diamond multimedia case stating dition california has a legitimate and compelling interest in preserving a business climate free of fraud and deceptive practices interestingly enough they also cited a case from outside of california and i this case i particularly like which says as one court stated simply put a contract is not a license allowing one party to cheat order fraud the other and finally they also just say the early case again is fraudulent conduct cannot be considered a socially useful business practice so i think that gives us a hint that if they had reached the issue they would have included could intentional concealment as part of the exception to the economic law it's really when you look at farias fraud claims it's a distinction without meaning there are just different types of fraud and the key the key point appears to be that it be intentional but they're very clear about as they don't want negligence claims as an exception to the economic loss rule and in our briefing you know we  haven't seen a case that says that intentional fraud act whether it be consumer or whether it be affirmative misrepresentations would not serve as an exception we supplied and twenty  series of court opinions that in general ruled our way had some ruled against us there seems there is confusion in district court what to do with this issue and i think items is obviously we have the other issues in this case one of which is due process i think it's probably outside the norm that a reply brief was treated as a motion for summary judgment we've kind of went over to the court had us apply a brief on a saturday or noon on one court days notice and then had them supply a brief of the day of the hearing which was at three o'clock and there's a hearing and then we find out they've granted summary judgment it was a motion eliminate there wasn't any notice that it was going to be treated as a summary judgment we took strong exception to the positions defendant took in that case and disagreed with the positions which is addressed in our brief we felt were incorrect another issue we have is the statue limitations and it's kind of challenging get one's head around b m w s argument b m w has taken the position there was no defect in this car during the warranty period then are you the plaintiffs should have known there was a defect in the car during that same warranty period the court to cut us off because there's a four year statute limitations had to find that the claim that four years had run by august of two thousand and thirteen because it was bought in two thousand and nine it's never really clear what act a court feels triggered it or when the court feels the statue of limitations was triggered as we pointed out at length we believe this is a factual issue to be determined and you can't sit there and tell a customer repeatedly that the conditions normal this is how all the cards  conducted right right so the representation that everything was normal that may create a travel issue as to whether he actually knew that there was a defect but what  about does it put him on increased notice because it's new are reasonably should have no right well at the time he cut off the claim they're going in three repairs the law requires a there had to repair if a manufacturer's unable to repair within a reasonable number of attempts reasonable goes through quite a bit of different views one hint is given by the statutory presumption that four more times creates a presumption that that's a reasonable number of cases some cases in the twenty or thirty times if it's a cigarette lighter for instance and i actually had the case published  and basically put out a notice to all buyers of these cars offering to try and fix things so that in exchange them into other vehicles we believe that probably is more logical triggering the vent on it and you know what he may have been on that's a good factual issue for the jury i think it's an issue i expect that the defense if we'd gone to trial would have argued a vigorous liam we would have defended and it would have been a fact issue for the jury to determine it on a reply brief an emotional women a without hearing any evidence i believe was improper for this is it should have been a fact issue but yes he had a he did have a lot of repairs they were to very adamant that this is a normal  claim that was not raised at all in the district court the sole basis of their motion for judgment on the pleadings was an economic loss rule argument having not raised at all in the lower court the argument is  purposes of appeal enter saying we made a number of tolling arguments as alternative arguments in our brief and the defendant's brief failed to address the tolling arguments the in the read in the reply please the court thomas peterson for a b m w of north america i think i'd like to start with the statute of limitations because the statute of limitations i think is the way in which the court can resolve the case and you don't actually have to get into the economic loss rule though of course i do propose to respond and answer any of the court's questions about it my colleague says that the statute of limitations wouldn't apply to the fraud cause of action and it's true it wasn't argued in the district court because by that point the fraud claim had been dismissed but it's an alternative ground by which you can uphold the judgment in this case because the record establishes as a matter of law that the claims time hundreds of the warrior statute of limitations which is applicable to this isn't the discovery real hair are really a question of fact for the jury no your honor i don't think it is and the reason i don't think it is is i think there's a couple of things you want to look at one is you want to look at the issue if you want to look good from acquiring enough questions you want to look at the number of repairers that occurred during the the outside more than four years before this claim was independent representations by the b m w employees while they were it was by the dealership but yet but he also testified about that and this i think is probably the most important evidence in the case and you're going to find it in the record pages five  and eighteen and this is part of the deposition of the plaintiff that the plaintiffs put into the record as part of their accompanying their twenty nine dollars brief opposing the statute of limitations after the district judge raised it fourteen and if you don't mind i just read a bit of it from the time that i got this car even with the warranty that was purchased from a type of insurance company there were a lot of issues and after the warranty expired and let me just pause there it's undisputed that the warranty in this case expired the the the the stem to stern bumper to bumper warranty expired in april of two thousand and eleven because while it was a four year warranty it also had a fifty thousand mile cap on it and nobody disputes that when it that's when it expired and also there was a seventy thousand mile warranty with respect to the small system and that expired  in it in him in october of that year but nevertheless he says so at the time of the warranty he says i started doubting myself about this car now that's certainly the reasonable suspicion which triggers inquiry notice in california but then judge wardlaw to get specifically to your point about what he was told and also it started causing me a lot more money and every time i complained to pretty heavily service advisor was pretty consistent by telling me that that's how it is and it is pretty normal for that car i guess he tried to assure me or convince me but i thought that something was not right in other words he himself testified that the assurances that he said he was receiving from the dealership did not convince him that that the car that this was just some sort of normal aspect of operating the car and you can link the temporality of this the time that he's talking about by reference to his testimony that it's really in relation to the expiration of the warranty and it's admitted i believe that footnote two of the opening brief that than a year and a half after the war if that bumper to bumper warranty would have expired in this case and with respect to the fraud cause of action it's the same basic inquiry under california law it's an inquiry notice so it's it the fraud statute of limitations period is a lesser included period which falls under the umbrella of the analysis which governs with respect to the song beverly act and so i really think i do i do agree very much with mr perry even after that point in the continue bringing the car back to be serviced to the b m w dealership well he continued he continued to bring the car to be service that's true but he testified that he he'd reached the point where he was he had his doubts notwithstanding what he was told by the dealership i don't think that he can simply defer the that he recognized there were problems with that he bought the car more than four years before he filed a lawsuit and moreover your honor he complained within this period that is a period more than four years before before he brought the lawsuit he  brought the car in according to the records that were put in before the district court he complained at least six times or at least six times you'll see in those records issues about the oil consumption of the car and he and so what does what does testify is the thing that prompted him to law file a lawsuit it's when he got a letter from his his lawyer his lawyers law firm telling him that this b m w s with this certain engine had a tendency to leak loyal ok but but so that's what he said motivated him to sue in two thousand and seventeen but he had all that knowledge long before more than enough to trigger the suspicion element of california law which puts him on inquiry notice and charges him with the obligation to charge him with knowledge of everything that he could have discovered if he had proceeded and my colleague says well there are some irony in the fact that a b m w disputes liability there's nothing at all that suggests that a defendant in order to mount a statute of limitations defense has to concede or prove that the plaintiff is bringing a valid claim rather the critical inquiry and we've cited in the brief a california pattern jury instruction that says that the critical inquiry is sort of knowledge of injury and a suspicion that something is or isn't is a ride that there's been some sort of potential injury to some sort of potential harm that's been inflicted and so i think once again if you look at the statute of limitations issue it's established as a matter of law now my friend says that we somehow didn't aggress the tolling arguments i beg to differ our brief goes through each one of them but again most of them also resolve themselves by going back to the testimony that the plaintiff himself gave which i the primary important the most important part of which i think i just read for you i think that so the problem i'm having with this not much doubt carson and depending on what the service people tell me the discovery rural begins when the plaintiff knows or should know that the defendant will not or cannot repair or defect repair the defect yet every time he took his car and they service people said they had prepared it that this was a normal  done is something that is normal for the vehicle i think he'd know even if somebody told him well you know we don't there's no more oil problem will he knows within this one period that he had five more visits where he had an oil problem and he also testified that this problem cropped up from the very beginning of his ownership of the cars so so you can't very well rely if someone had told him that will do the will problem is will not recur he knows he discovered that's not right but but more importantly again he was told this is a common characteristic of the car and from what i read to you he testified that he he doubted what he was told he did and that's enough under california law and and you know my colleague has suggested that well perhaps it was inappropriate for the court to examine this issue in this sort of accelerated context of the proceedings in may of two thousand and eighteen but but this is the testimony of the plaintiff i don't know how the you know it's well settled that a plaintiff can't after giving testimony can't come in and try to repudiate it by some sort of declaration the relevant question that we don't even have to establish his subjective state of mind we only have to establish that an objective lee reasonable person would have had suspicions aroused and i think we not only have that but we have his subjective statement so honor i mean he he he bought the car and he drove it for hundreds of thousands of miles and he says that there's some deficiency in connection with the engine but you know we dispute that  and again i don't think we were not required as part of mounting a statute of limitations defense to acknowledge that the plaintiff has acquired keys i mean people bring cases all the time and they they think here we have a situation where the plane if that he's being subjected to certain issues with respect to the performance of the car which are not as they're supposed to be and he he didn't believe people when they were telling him that they were as they were supposed to be if he thinks that that basis for b m w offering the complimentary custom care package the custom pair package was offered in two thousand and fourteen because of some concerns people had about the engine and there was some effort on their part to take their customers it did not but but importantly it didn't expect extend the warranty in any sense it specifically disclaimed the fact it was doing that so yes if they they offered some additional work on the cars  d they're there but again i don't think that constitutes any kind of concession on b m w s part that the plaintiff has in this case any sort of valid claim with respect to the performance of his automobile and i don't think we're required to carry that burden for purposes of the limiting so unless you you want me to address more here at what i was going to do quickly was talk about the proceed or that got us to the to the judgment on the statute of limitations of the plaintiff has suggested there are some great unfairness in the fact that this was done on an accelerated basis but you know put yourself in the shoes of the district judge he's he's got a trial which is supposed to start on may the th he looks at this issue and says based upon the fact that the warranty expired in april of two thousand and eleven and the fact there's a four year statute of limitations he's at a hearing he says look to me this case so so it's nothing unusual about this in the key point i want to get across to is there was no objection to this person there was no request for more time it's not even now we have no idea what this what more would have been a deuced they pay  evidence the fact that it ended up being treated as a summary judgment procedure it's the plaintiffs who brought in this evidence they're the ones who filed a twenty nine page brief they filed the plaintiff's deposition they filed these repair orders they put it into made an evidentiary question and importantly this is not something that just came out of the blue in this case if this case had gone to trial on may the th the statute of limitations was all over it as an issue that was going to be tried so you were dealing with law firms who were a few days away from starting the trial of a case which would have addressed limitations and they were they they gave no indication to the district judge that they were other than fully prepared in order to address this issue so let me men to the excuse me the economic loss rule and i think the important again i don't think you have to get there because of the the statute of limitations issue but i think the important point the overarching point i'd like to for you to focus on here is that the my my colleague takes the position and he reads a statement or two from some california cases and he says the economic loss rule is just categorically inapplicable to intentional fraud of all of its types and we don't differentiate concealment which is one of the things that the district judge did here now but i don't there are a couple of statements in some california cases which if you read them suggest that you know intentional fraud is sort of a categorical issue but i think you have to focus on how the california supreme court has actually addressed this issue because if the rule were as my friend says you cannot explain the outcome of the hunter case which is the case where the california supreme court reversed a one hundred and twenty thousand dollars fraud judgment in connection with a breach of contract case in an employment setting because again the court recognize the existence of fraud in connection with that transaction and said that it was an inappropriate blurring together of torn and contract so the rule can't be as he says because why did the california supreme court so rule and in the us the robinson he's is an infinitely easier decision to write if the rule is that it categor all types of intentional fraud or exempt from the economic loss rule if that were the case then why did the supreme court go out of each way to put to one side to seal meant and why did they go out of its way then to say that you have to analyze whether or not the intentional fraud that is the affirmative act of fraud is independent of the circumstances giving rise to the breach of contract and and so so i i i would i think it's important that there is i know of no california precedent california case that has ever dealt with concealment in this context and or and applied the economic loss rule in this context or analyzed it it's true as my friend says that there are a couple of federal cases and the federal cases go in different directions and noticed in getting ready for this argument that judge fletcher wrote an opinion for the court involving nevada law in which he talks about the fact that you know the jurisdictions are sort of all over the place on this question so should the economic loss rule then you can't say it's a sweeping rule and then if you ask yourself can you differentiate concealment of course you theory i wouldn't have bought the car if i knew it had these problems well that's buyer's remorse of the classic type it's a lot different from somebody from me telling you that i have a gold mine under my house and  affirmatively inducing you to buy and because it's buyer's remorse of the classic type you get into it all the problems that are all the concerns rather that motivate the courts when it comes to applying the economic loss rule which is the importance of creating separation between tort and contract and i would leave you finally with this if you look at and compare the fraud cause of action with us with the with the warranty causes of action as they're embellish in california by the song beverly act they are they are they are here these there's overlap indeed you can make a very strong case that the remedies that are available to the plaintiffs under song beverly are far superior to the fraud remedies under the fraud cause of action under california civil code section three thousand three hundred and forty three for a product you compare the value asserted represented and the value received if you look at the song beverly claim the pla if they rejected the goods they have they have an opportunity of which is probably more valuable than that fraud measure if they keep the goods they have an opportunity for repair which probably use a similar to that measure now punitive damages under fraud that's true but in california under a very high clear and convincing burden have to prove oppression fraud malice subject to intense judicial scrutiny and constitutional review under the sun beverly act will fall if you prove willfulness not subject to those same standards you can get up to double damages and also you get attorney's fees which aren't available for common law fraud so again the remedies we're talking about here yeah good thing you know mr riser why shouldn't your client admission that he had doubts about the ability for the ability of the b m w dealership to repair his well number one he did have you know at some point you're going to begin to doubt something but you have a lay person in a situation here where the manufacturer is not even telling its own dealers the truth and they want him to go ahead and ascertain that were lying and that we're not telling you the truth but it's knew or should have known the standard is knew or should have no right but it's that subject to various tolling doctrines which include the continued efforts to repair the vehicle to continued representations they did not address equitable tolling the reef speaks for itself but it completely failed to address that argument at all furthermore the standard is even different when they now want to bring up the fraud claim we cited the laws says they can't raise it now but under the fraud claim it's discovery you're told until discovery of the fraud and so they put it sort of like they just want to sneak it in under because it's almost not even addressed in the appellate brief it's just kind of thrown in the short section they don't even address the standard for fraud fraud is discovery of the fraud but sure he had someone point a reasonable person we did put in a lot of his deposition testimony where he went back and clarify things and where he was in his thought process on it and there's something in the deposition  that undermined the fact relied on by the district court in its analysis of the statue of limitations issue with regard to the song beverly act claim there is if you have a citation i can can look it up client was suspicious shortly after leasing the vehicle and this is the part that counsel allied on the district court relied on that as well and said there were a lot of issues  i started doubting myself about the car from the time i got it even with the warranty that was purchased from a type of insurance company there were a lot of issues that doesn't become relevant and you can't be put on notice until your cause of action accrues he can only a crew when you meet the elements of a song beverly claim which is a reasonable number of repair attempts and an inability to repair these are the elements the court picked the time period where he had and didn't even have a start to tory presumption it only had real oil stains repairers at the time right well i don't think that this off court said that from that moment on the statute began to run but what the district court said is that the testimony money demonstrates that he had some suspicion regarding wrongdoing and therefore the exercise of diligence what's really required under california law it can't begin to run into you have a claim you can have a lot of suspicions you might have suspicion on your st time that you don't have a claim yet you can have something start to run before a claim a cruise it's four years from the crew of the claim to have a claim you have to have had a reasonable number of repair attempts and an inability to fix and when you look at the equitable process here that there are two through december two thousand and fourteen they're maintaining complete innocence and this is a normal feature of the vehicle from the from oh he should have known we were launching he said you know we weren't giving him the right facts and to put that burden that the client supposed to know when the manufacturer in this case roger only claims it doesn't know which it did it did know and we've gotten into their engineers and their mechanics and what was being said at that they absolutely knew of the problems with this engine at that at the outset so when they're completely misleading a person that causes the equitable stoppel and we're not talking now just on the song beverly let alone the discovery of the fraud for purposes of the fraud cause of action so when he had one repaired when he had to repairs and  and that's on the individual item it has to have a substantial defect to it to an item in this case the let's go with the oil i think that the record shows within the statute of limitation period there were many many repairs that were specifically related to low oil a number of a number of times as far as what repairs were conducted is somewhat into that for the last thirty five years they it's normal defense on that and the question is should he have been able to find out it wasn't normal in the face of basically a blanket to not  part public part the position that they were taking on this and yes there are there are issues of fact that would have to be considered you know by the jury  point to be raise we were not told that this was going to be a quote summary judgment because obviously when we would not want to process where we get there are there are three hours before the court decides no chance to respond i think that they have a general due process here and part of what we get with the manufactures part of it was displayed here by counsel is everything becomes a buyer's you know their position on everything my car doesn't work or blows up or has this problem or that it's all always buyer's remorse you know he you know a normal person is but we and i'm sorry that can't  page out for you in our brief we put a lot of deposition testimony that we thought did contradict it what was said in that why it's a question of fact we did that both in the opening and in the direct response and in the we went through the deposition testimony where he had to go what they were telling me this time so i was thankful that maybe that was the truth and they're continuing to you know take a say we're not going to even fix say we're not going to fix this thing or give some disclosure of the defect that they're withholding to go ahead and say the time is running on him from something or hiding we're going to create a situation where basically we reward the hiding of information from the consumers the average in this in this case i know i speak i'd like to just very briefly the economic loss rule issue that we went back to and we are still look the supreme court and i understand wanted to tread very carefully here in the  and i think we both agree contradictory opinions coming out some clarification is needed it would be and i think the fact that they then went into cite a whole series of cases about the importance of having a fraud exception gives us at least some some some clue i mean obviously we probably wouldn't be here today if this supreme court had given us clarity on the issue and but they i think they went out of the what way to say don't read it this way we're not addressing this issue so by saying we won't address this issue or we don't need to address this  issue jurisprudence we've certainly seen from the u s supreme court to in deciding cases on the narrowest possible brown i don't think forces us to conclude one way or the other we do have an issue that needs to be addressed itself did not address it just means more ad hoc decisions how they're and so they put you in a rather difficult situation here of having to guess what they would do on an issue i think there's clues within the opinion itself but i believe reasonable minds could probably differ on that it's how they decided to handle it i think it would have been nice but they didn't want to reach out to an issue that they did not believe was before because they thought that let's face it the bribes and helicopter cases pretty outrageous you have your property you're not putting lawful clutches for helicopters court had originally said oh that's all k and it obviously wasn't ok to do what they did in the supreme court was clear it's not ok to do with these people did but they were not willing to reach out to an issue they did not perceive was before them but they certainly seemed knew was coming and that and i think the case well they cite afterwards i mean and they even went to the outside california case to say going to going into contract with someone else is not a license to cheat it's not a license for fraud and that the case was is very compelling and that's part of the logic here that because two parties enter a contract neither party you know has the right to cheat the other no i'm not saying negligence i'm saying an intentional act of misrepresentation concealment has to be intentional and that's a point we made repeatedly i think is fairly clear to be read into their decision issue that's going to repeal and replace it's come up and it's going to come up a lot more it manufactures have perceived the federal courts as friendlier for these cases and we're going to see economic loss rule brought up every time there's a claim outside of the current you know the warranty context so it is going to be a persistent issue and it's a weird position to have to guess what the supreme court of california is going to have to do but i think it's one that this case says place to place you in obviously have a biased opinion on that but i think when you look at the case l cited i can't see it seems like an artificial this distinction here you have some people when you thought it was just joke or pinto you know giving us another extreme case if you know the cars are going to blow up that's probably something you should tell people enough the market in the st place and we don't want to create a situation where they have immunity from basically putting on the market anything by what knowledge they have of the cars defective