Facts

Plaintiffs leased a 2014 Hyundai Elantra from defendants. The subsequent year the car was involved in a collision with a third party. Plaintiffs settled with the third party's insurer for $10,000 and released the third party from further liability. Plaintiffs asked defendants to apply gap coverage for the difference between the settlement amount and the amount still owed under the lease.

Hyundai Capital America filed a cross-complaint against plaintiffs for breach of contract, open-book account and account stated.

PLAINTIFFS' CONTENTIONS:
Plaintiffs contended that when they entered into the written lease with defendants for the vehicle, defendants forced them to purchase gap coverage from them. Following the collision, plaintiffs claimed that defendants told them that the gap coverage would cover the difference between the insurance settlement and the remaining balance owed on the vehicle. However, defendants denied gap coverage and told plaintiffs they had to pay the full amount owed on the vehicle.

Plaintiffs sued defendants for breach of contract and fraud after defendants informed them that they still owed money under the lease.

DEFENDANTS' CONTENTIONS:
Defendants contended in their demurrer that plaintiffs failed to adequately allege the terms of the contract or attach a copy of the contract. Additionally, they argued that plaintiffs could not state a cause of action for fraud because they failed to plead fraud with the required specificity.

Result

The court sustained defendants' demurrer with 14 days' leave to amend. The court did not find that the breach of contract cause of action was barred by statute of frauds or by parol evidence. The court found intent to deceive and reasonable reliance was sufficiently pleaded.

Other Information

The case is ongoing. FILING DATE: March 9, 2016.