Judge: Cherol J. Nellon, Case: 24STV31431, Date: 2025-06-12 Tentative Ruling

Case Number: 24STV31431    Hearing Date: June 12, 2025    Dept: 14

#8

Case Background

This is a lemon law action.

On November 27, 2024, Plaintiff Jessica Villarreal filed a Complaint against Defendants FCA US, LLC, Cerritos Dodge Chryslyer Jeep Ram, and Does 1 through 10 for: (1) Violation of Subdivision (D) of Civil Code Section 1793.2; (2) Violation of Subdivision (B) of Civil Code Section 1793.2; (3) Violation of Subdivision (A)(3) of Civil Code Section 1793.2; (4) Breach of the Implied Warranty of Merchantability; (5) Negligent Repair; and (6) Fraudulent Inducement – Concealment.

On January 30, 2025, Defendant FCA US, LLC (“Defendant”) filed this demurrer.

On May 30, 2025, Plaintiff filed an opposition.

On June 5, 2025, Defendant filed a reply.

Instant Pleading

Defendant demurs to the sixth cause of action for fraudulent inducement – concealment.

Decision

Defendant’s demurrer is OVERRULED.

Defendant must file an answer within 20 days of this order.

Discussion

Defendant demurs to the sixth cause of action for fraudulent inducement by concealment on the grounds that the Complaint does not meet the heightened pleading standard for fraud because it lacks allegations of the “how, when, where, to whom, and by what means the fraud was tendered.” (Demurrer p. 2:10-12.)

“[T]he elements of an action for fraud and deceit based on a concealment are: (1) the defendant must have concealed or suppressed a material fact; (2) the defendant must have been under a duty to disclose the fact to the plaintiff; (3) the defendant must have intentionally concealed or suppressed the fact with the intent to defraud the plaintiff; (4) the plaintiff must have been unaware of the fact and would not have acted as he did if he had known of the concealed or suppressed fact; and (5) as a result of the concealment or suppression of the fact, the plaintiff must have sustained damage.” (Boschma v. Home Loan Center, Inc. (2011) 198 Cal.App.4th 230, 248.) Absent a fiduciary relationship between the parties, a duty to disclose can arise in only three circumstances: (1) the defendant had exclusive knowledge of the material fact; (2) the defendant actively concealed the material fact; or (3) the defendant made partial representations while also suppressing the material fact. (Bigler-Engler v. Breg, Inc. (Bigler-Engler) (2017) 7 Cal.App.5th 276, 311; LiMandri v. Judkins (1997) 52 Cal.App.4th 326, 336.) Moreover, a direct transactional relationship is not required to establish a duty to disclose. (OCM Principal Opportunities Fund, L.P. v. CIBC World Markets Corp. (2007) 157 Cal.App.4th 835, 859.) “A vendor has an affirmative duty to disclose material facts not only to immediate purchasers, but also to subsequent purchasers when the vendor has reason to expect that the item will be resold.” (Id. at 859-60 [emphasis in original].)

“Fraud must be pled specifically; general and conclusory allegations do not suffice.” (Lazar v. Superior Court (1996) 12 Cal.4th 631, 645.) “This particularity requirement necessitates pleading facts which show how, when, where, to whom, and by what means the representations were tendered” (Ibid.) However, the specificity standard is less stringent “when ‘it appears from the nature of the allegations that the defendant must necessarily possess full information concerning the facts of the controversy.’” (Committee on Children’s Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 217, superseded by statute on other grounds as stated in Californians for Disability Rights v. Mervyn's, LLC (2006) 39 Cal.4th 223, 227, quoting Bradley v. Hartford Acc. & Indem. Co. (1973) 30 Cal.App.3d 818, 825.)

The Court finds that Plaintiff alleges the elements of fraudulent concealment with the requisite specificity. The Complaint alleges that Plaintiff entered a warranty contract with Defendant in November 2019. (Compl., ¶10.) Plaintiff purchased the Subject Vehicle as manufactured with FCA’s defective engine. (Id., ¶18.) Defendant had exclusive knowledge that the vehicle was defective prior to the sale. (Id., ¶19, 21-22, 25.) Defendant concealed the defect from Plaintiff at the time of purchase, repair, and thereafter. (Id., ¶¶21, 23, 28-29, 68.) Plaintiff was unaware of the defect before they purchased the vehicle. (Id., ¶25.) If Plaintiff knew of the defect, she would not have purchased the vehicle. (Id., ¶24, 27.) As a result of the concealment, Plaintiff was harmed when she purchased a vehicle she would not have purchased had she known of the subject defect. (Id., ¶71.) As to duty to disclose, because the Complaint alleges a contractual relationship (the warranty contract) between the parties, that Defendant had exclusive knowledge of the alleged material defect, and that Defendant actively concealed the material defect, the facts pled are sufficient to establish that Defendant owed a duty to disclose the material defect. Moreover, a duty to disclose applies to Defendant, as it expected its vehicles to be sold through authorized dealerships.  

The Complaint pleads each element of fraud with sufficient specificity because it contains facts to support each element of fraud and sufficient detail to give Defendant notice of the charges against it. Any missing details would reasonably be in Defendant’s possession because Defendant was a party to the transaction described in the Complaint.

Defendant’s demurrer is OVERRULED on this ground.

Conclusion

Defendant’s demurrer is OVERRULED.

Defendant must file an answer within 20 days of this order.