Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_19-cv-01029/USCOURTS-casd-3_19-cv-01029-0/pdf.json

Nature of Suit Code: 195
Nature of Suit: Contract Product Liability
Cause of Action: 28:1441cpl Removal - Contract Product Liability

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UNITED STATES DISTRICT COURT 

SOUTHERN DISTRICT OF CALIFORNIA 

RICARDO MARTINEZ and ALLISON 

MARTINEZ, 

Plaintiffs, 

v. 

FORD MOTOR COMPANY and 

KEARNY PEARSON FORD & KIA, 

Defendants. 

 Case No.: 19cv1029 JM (BLM) 

ORDER GRANTING PLAINTIFFS’ 

MOTION TO REMAND THE 

ACTION TO THE SUPERIOR 

COURT OF CALIFORNIA FOR THE 

COUNTY OF SAN DIEGO 

Plaintiffs Ricardo Martinez and Allison Martinez (“Plaintiffs”) move to remand this 

action to the Superior Court of California for the County of San Diego. (Doc. No. 12.) 

Defendants Ford Motor Company (“Ford”) and Kearny Pearson Ford & Kia (“Sunroad 

Auto”)1

 oppose the motion. (Doc. No. 17.) The motion has been briefed and the court 

finds it suitable for submission without oral argument in accordance with Civil Local Rule 

7.1(d)(1). For the reasons stated below, the motion is GRANTED. 

I. BACKGROUND 

In their Complaint, Plaintiffs state the following facts. On or about January 2, 2013, 

Plaintiffs purchased a 2013 Ford Escape (“the vehicle”) from Sunroad Auto. (Doc. No. 1-

1 at 4.) Plaintiffs received written warranties on the vehicle. (Id. at 5.) On or about January 

                                                                

1

 As explained by Ford, Kearny Pearson Ford & Kia is Sunroad Auto LLC doing business 

as Kearny Pearson Ford. (Doc. No. 17 at 10.) 

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13, 2016, with 47,268 miles on the odometer, Plaintiffs presented the vehicle to 

Defendants’ repair facility for various issues. (Id. at 7.) From about February 26, 2016 to 

January 27, 2018, Plaintiffs repeatedly took the vehicle in for repairs, which eventually led 

an engine replacement. (Id.) Problems with the vehicle persisted and in March of 2019, 

Plaintiffs requested a buyback and/or restitution from Ford, but Ford declined. (Id. at 8.) 

On April 29, 2019, Plaintiffs filed their Complaint in state court for violations of the 

Song-Beverly Consumer Warranty Act (i.e., California’s Lemon Law), breach of the 

express written warranties, breach of the implied warranty of merchantability, and fraud 

by omission. (Doc. No. 1-1 at 8-15.) The only count brought against Sunroad Auto was 

for breach of the implied warranty of merchantability. (Id. at 12.) Ford was served with a 

copy of the Complaint on May 1, 2019, and Sunroad Auto was served on May 2, 2019. 

(Doc. No. 1 at 2.) On May 31, 2019, Defendants filed a Notice of Removal based on 

diversity jurisdiction. (Id. at 1.) On July 2, 2019, Plaintiffs filed the instant Motion to 

Remand. (Doc. No. 12.) Defendants filed a Response in Opposition on September 5, 2019. 

(Doc. No. 17.) Plaintiffs did not file a reply. 

II. LEGAL STANDARD 

Federal courts are courts of limited jurisdiction. Kokkonen v. Guardian Life Ins. Co. 

of Am., 511 U.S. 375, 377 (1994). “A federal court is presumed to lack jurisdiction in a 

particular case unless the contrary affirmatively appears.” Stock West, Inc. v. Confederated 

Tribes of Colville Reservation, 873 F.2d 1221, 1225 (9th Cir. 1989). An action in state 

court can generally be removed to federal court when the case could have originally been 

brought in federal court. 28 U.S.C. § 1441; see Exxon Mobil Corp. v. Allapattah Services, 

Inc., 545 U.S. 546, 563 (2005). The defendant bears the burden of proving removal 

jurisdiction. Leite v. Crane Co., 749 F.3d 1117, 1121-22 (9th Cir. 2014). Any doubt 

regarding removal jurisdiction is construed against the defendant and in favor of remanding 

the case to state court. Gaus v. Miles, Inc. 980 F.2d 564, 566 (9th Cir. 1992); Hunter v. 

Philip Morris USA, 582 F.3d 1039, 1042 (9th Cir. 2009) (“[T]he court resolves all 

ambiguity in favor of remand to state court.”). 

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Civil cases not arising under federal law are removable to federal court only if each 

plaintiff’s citizenship is different from each defendant’s citizenship, and the amount in 

controversy exceeds $75,000. 28 U.S.C. § 1332(a)(1); Owen Equip. & Erection Co. v. 

Kroger, 437 U.S. 365, 373 (1978). A defendant may remove a civil action that alleges 

claims against a non-diverse defendant where the plaintiff has no basis for suing that 

defendant. McCabe v. General Foods Corp., 811 F.2d 1336, 1339 (9th Cir. 1987). Where 

a non-diverse defendant has been “fraudulently joined” to an otherwise completely diverse 

case, that non-diverse defendant’s citizenship is disregarded for diversity jurisdiction 

purposes. United Computer Sys., Inc. v. AT&T Corp., 298 F.3d 756, 761 (9th Cir. 2002). 

There is a general presumption, however, against fraudulent joinder. Hunter v. Philip 

Morris USA, 582 F.3d 1039, 1046 (9th Cir. 2009). A defendant is fraudulently joined when 

a “plaintiff fails to state a cause of action against a resident defendant, and the failure is 

obvious according to the settled rules of the state.” McCabe, 811 F.2d at 1339); see also 

Nasrawi v. Buck Consultants, LLC, 776 F. Supp. 2d 1166, 1169-70 (E.D. Cal. 2011) (“[A] 

non-diverse defendant is deemed a sham defendant if, after all disputed questions of fact 

and all ambiguities in the controlling state law are resolved in the plaintiff’s favor, the 

plaintiff could not possibly recover against the party whose joinder is questioned.”). The 

removing defendant bears the “heavy burden” of proving fraudulent joinder. See 

GranCare, LLC v. Thrower, 889 F.3d 543, 548 (9th Cir. 2018) (citing Hunter, 582 F.3d at 

1046); see also Hamilton Materials, Inc. v. Dow Chem. Corp., 494 F.3d 1203, 1206 (9th 

Cir. 2007) (“Fraudulent joinder must be proven by clear and convincing evidence.”). 

III. DISCUSSION 

The parties dispute whether removal based on diversity jurisdiction was proper. 

Defendants contend removal is proper based on the court’s diversity jurisdiction even 

though Plaintiffs and Sunroad Auto are all California citizens. (Doc. No. 1 at 1.) 

Defendants argue that Sunroad Auto’s citizenship can be disregarded because the sole 

cause of action against Sunroad Auto, i.e. breach of the implied warranty of 

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merchantability, is barred by the applicable four-year statute of limitations.2

 (Id. at 6-7.) 

Plaintiffs argue that the claim against Sunroad Auto is not time-barred because the statute 

of limitations was tolled under the delayed discovery rule, repair doctrine, and Ford’s 

fraudulent concealment of defects. (Doc. 12-1 at 13.) For the reasons stated below, 

removal was improper. 

A. Delayed Discovery Rule 

Plaintiffs argue that the statute of limitations did not begin to run until they could 

have reasonably discovered the breach, which occurred in March of 2019, after Defendants 

failed to fix the vehicle a reasonable number of times. (Doc. No. 12-1 at 14-18.) In support 

of their contention, Plaintiffs cite Krieger v. Nick Alexander Imports, Inc., 234 Cal. App. 

3d 205 (Ct. App. 1991) and Mexia v. Rinker Boat Co., 174 Cal. App. 4th 1297 (2009). In 

opposition, Defendants contend the statute of limitations began to run on the date of 

delivery of the vehicle, regardless of the Plaintiffs’ knowledge of the breach. (Doc. No. 17 

at 14.) In support of their contention, Defendants cite Cardinal Health 301, Inc. v. Tyco 

Elecs. Corp., 169 Cal. App. 4th 116 (2008) and argue that Plaintiffs’ reliance on Krieger

and Mexia is misplaced. (Doc. No. 17 at 14-17.) Defendants also argue that Plaintiffs 

were on notice of the defects more than four years prior to filing suit because of the 

numerous concerns raised by Plaintiffs beginning in December of 2012.3

 (Id. at 17-18.) 

Courts have reached different conclusions on the applicability of the delayed 

discovery rule in cases involving both express and implied warranties. See Cavale v. Ford 

                                                                

2

 Plaintiffs do not dispute that the statute of limitations can be a basis for finding that 

Sunroad Auto has been fraudulently joined. See Ritchey v. Upjohn Drug Co., 139 F.3d 

1313, 1320 (9th Cir. 1998). The parties also do not dispute that the statute of limitations 

is four years from the date the claim accrued. (Doc. No. 17 at 14.) 

3

 Plaintiffs allege they purchased the vehicle on January 2, 2013. (Doc. No. 1-1 at 4.) 

Defendants claim that Plaintiffs purchased the vehicle on November 18, 2013. (Doc No. 

12-1 at 15.) The difference in the parties’ allegations regarding the purchase date appears 

to be immaterial because it does not change the outcome of either party’s argument 

concerning whether the April 29, 2019 Complaint was within the statute of limitations. 

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Motor Co., Case No. 18cv680 (LJO) BAM, 2018 WL 3811727, at *3 n.5 (E.D. Cal. Aug. 

9, 2018) (listing cases). Furthermore, as Plaintiffs point out, district courts have repeatedly 

rejected the same or similar arguments made by Ford in support of removal. See, e.g., 

Phillips v. Ford Motor Co., Case No. 19cv1423 EJD, 2019 WL 5188259, at *3 (N.D. Cal. 

Oct. 15, 2019) (listing cases); Klawiter v. Ford Motor Co., Case No. 19cv1889 WHO, 2019 

WL 2484321, at *2 (N.D. Cal. June 14, 2019) (“Ford makes the same arguments that 

several courts have rejected in prior cases.”). Therefore, it is not obvious that there is 

absolutely no possibility that the delayed discovery rule, or any other of Plaintiffs’ tolling 

theories, do not apply to Plaintiffs’ claim or that Plaintiffs could not amend their Complaint 

to state a viable tolling theory. See, e.g., Less v. Ford Motor Co., Case No. 18cv1992 

MMA (AGS), 2018 WL 4444509, at *3 (S.D. Cal. Sept. 18, 2018) (noting that the court 

must find there is “absolutely no possibility” that any tolling doctrine applies and it must 

be “obvious” that plaintiff cannot state a claim against the dealership or amend the 

complaint to allege a viable tolling theory). Both parties make persuasive arguments 

supported by different authority. At best, the grounds for removal are ambiguous, which 

is itself grounds for remand. See Gaus, 980 F.2d at 566-67 (“All doubts concerning the 

sufficiency of a cause of action because of inartful, ambiguous or technically defective 

pleading must be resolved in favor of remand.”). Additionally, the question of law raised 

by the parties is one best resolved by means other than an order on a motion to remand. 

See Jimenez v. Ford Motor Co., Case No. CV 18cv3558 JFW (ASX), 2018 WL 2734848, 

at *2 (C.D. Cal. June 5, 2018) (“Ford’s arguments that Plaintiff’s claim is barred by the 

statute of limitations is better raised in a demurrer, motion to dismiss, or motion for 

summary judgment rather than a notice of removal.”); Cavale, 2018 WL 3811727, at *3. 

B. Repair Doctrine 

Plaintiffs argue that the statute of limitations was tolled because Defendants 

unsuccessfully attempted to repair the vehicle. (Doc. No 12 at 19.) In support of this 

argument, Plaintiffs cite Aced v. Hobbs-Sesack Plumbing Co., 360 P.2d 897 (1961) and 

A & B Painting & Drywall, Inc. v. Superior Court, 30 Cal. Rptr. 2d 418 (1994). In 

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opposition, Defendants argue that these cases are outdated or inapplicable and that the 

statute of limitations is not tolled on an implied warranty claim. (Doc. No. 17 at 20.) 

Defendants may be correct that the unsuccessful attempt to repair the vehicle did not 

toll the statute of limitations. It stands to reason, however, that some form of equitable 

tolling might apply where a consumer reasonably relies on statements by an automobile 

dealership that a vehicle will be repaired. See Audo v. Ford Motor Co., Case No. 18cv320 

L (KSC), 2018 WL 3323244, at *2 (S.D. Cal. July 6, 2018) (finding it plausible that 

plaintiffs could not have reasonably discovered the breach while they were still in the 

process of trying to get the vehicle repaired). As stated by another district court, while 

“[t]his rule may not ultimately be applicable here, it is not obvious on the face of the 

complaint that tolling would not apply and that such tolling would not bring the case within 

the limitations period.” Cardenas v. Ford Motor Co., Case No. 18cv1090 DSF (PLAx), 

2018 WL 2041616, at *1 (C.D. Cal. Apr. 23, 2018). 

C. Fraudulent Concealment 

Plaintiffs argue that the limitations period was tolled by Ford’s fraudulent 

concealment of the vehicle’s defects because Plaintiffs sufficiently alleged in their 

Complaint that Ford failed to disclose and actively concealed the defects. (Doc. No. 12-1 

at 19-20 (citing Doc. No. 1-1 at ¶¶ 12-28, 52-67).) Defendants argue that the doctrine of 

fraudulent concealment does not apply because Plaintiffs admit they were aware of the 

defects by pleading that “[a]t the time of purchase, or within one-year thereafter, the 

Vehicle contained or developed the defects.” (Doc. No. 17 at 19-20 (citing Doc. No. 1-1 

at ¶ 50).) 

The fact that Plaintiffs allege the defects existed at or soon after the time of purchase 

does not constitute an admission that Plaintiffs were aware of the defects or that Sunroad 

Auto did not fraudulently conceal material facts. To the contrary, Plaintiffs plead that they 

were unaware of the defects when they purchased the vehicle and they remained unaware 

until shortly before the action was filed. (Doc. No. 1-1 at 8, ¶ 27); Cavale, 2018 WL 

3811727, at *3 (finding the same allegation in the complaint to be sufficient grounds to 

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remand); Chipley v. Ford Motor Co., No. 18cv1161 YGR, 2018 WL 1965029, at *3 (N.D. 

Cal. Apr. 26, 2018). 

The Complaint can also be fairly read to allege that Defendants fraudulently 

represented that the vehicle had been repaired or was in proper working condition when 

sold. (See, e.g., Doc. No. 1-1 at 7, ¶ 23 (“Plaintiff continued to experience coolant loss and 

other symptoms of the Engine Defect, despite Defendant’s representations that the Vehicle 

had been repaired.”).) Moreover, the fact that Plaintiffs were aware of defects, if true, does 

not make it impossible for Plaintiffs to amend their Complaint in a manner that truthfully 

supports the applicability of the doctrine of fraudulent concealment. See Cavale, 2018 WL 

3811727, at *3 (“Even if the allegations concerning fraudulent concealment are not 

sufficiently pled, Ford has not shown that Plaintiff would not be able to amend the 

complaint to allege a viable tolling theory applies to Plaintiff’s claim.”). 

 D. Plaintiffs’ and Defendants’ Other Arguments 

Plaintiffs also argue that Defendants failed to show that the amount in controversy 

exceeds $75,000 or that Plaintiffs are citizens of California. (Doc. No. 12-1 at 22-26.) This 

court has previously rejected similar arguments. See Roehm v. Ford Motor Co., No. 

18CV1278 JM (JMA), 2018 WL 4520542, at *2 (S.D. Cal. Sept. 21, 2018) (“While 

residence is not necessarily the same as domicile, the ‘place where a person lives is taken 

to be his [or her] domicile until facts adduced establish the contrary.’”) (citation omitted). 

Furthermore, based on the above, it is not necessary to reach those issues to resolve the 

instant motion. See, e.g., Cavale, 2018 WL 3811727, at *4 (declining to reach similar 

issues); Chipley, 2018 WL 1965029, at *3 n.2 (same). 

Defendants also argue that the court should exercise its discretion to drop Sunroad 

Auto as a party under Federal Rule of Civil Procedure 21 because (1) it is not an 

indispensable party under Rule 19 and (2) Sunroad Auto has a statutory right to indemnity 

from Ford. (Doc. No. 17 at 21-22.) As pointed out by Plaintiffs, courts have repeatedly 

found that dealerships are indispensable parties in similar suits against automobile 

manufacturers. See, e.g., Less, 2018 WL 4444509, at *2 (“Numerous courts have found 

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implied warranty claims against dealerships to be valid, and the dealerships to be necessary 

parties, in connection with claims under the Song-Beverly Act.”). Courts have also 

previously rejected the same Rule 21 argument made by Ford. See, e.g., Phillips, 2019 WL 

5188259, at *3. Additionally, multiple courts have found that a right to indemnity does 

not invalidate an implied warranty claim. See, e.g., Sandhu v. Volvo Cars of N. Am., LLC, 

Case No. 16cv4987 BLF, 2017 WL 403495, at *4 (N.D. Cal. Jan. 31, 2017) (“Volvo does 

not cite any authority that joinder of an indemnitee is unnecessary, or somehow renders an 

otherwise valid claim invalid, simply because its indemnitor is already a party.”). 

Accordingly, the court declines to drop Sunroad Auto as a party. 

IV. CONCLUSION 

For the foregoing reasons, Plaintiffs’ Motion to Remand is GRANTED. The case 

is hereby REMANDED to the Superior Court of California for the County of San Diego. 

The Clerk of the Court is directed to close the case. 

IT IS SO ORDERED. 

DATED: November 19, 2019 JEFFREY T. MILLER 

 United States District Judge 

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