Judge: Christopher K. Lui, Case: 24STCV29591, Date: 2025-02-14 Tentative Ruling

Case Number: 24STCV29591    Hearing Date: February 14, 2025    Dept: 76

The following tentative ruling is issued pursuant to Rule of Court 3.1308 at 2:16 PM on February 13, 2025. 

Notice of intent to appear is REQUIRED pursuant to California Rule of Court 3.1308(a)(1).  The Court does not desire oral argument on the motion addressed herein. 

As required by Rule 3.1308(a)(1), any party seeking oral argument must notify ALL OTHER PARTIES and the staff of Department 76 by 4:00 p.m. on February 13, 2025.

Notice to Department 76 should be sent by email to smcdept76@lacourt.org, with opposing parties copied on the email.  The high volume of telephone calls to Department 76 may delay the Court’s receipt of notice, so telephonic notice to 213-830-0776 should be reserved for situations where parties are unable to give notice by email.

Per Rule of Court 3.1308, the Court may not entertain oral argument if notice of intention to appear is not given.


            Plaintiff alleges that Defendant has failed to repair the subject vehicle to conform to applicable warranties and concealed the existence of an Engine Defect.

            Defendant FCA US LLC. demurs to the Complaint.

TENTATIVE RULING

            Defendant FCA US LLC’s demurrer to the Complaint is SUSTAINED with leave to amend as to the sixth cause of action. Plaintiff is given 30 days’ leave to amend.

ANALYSIS

Demurrer

Meet and Confer

            The Declaration of Catherine A. Cranford reflects that Plaintiff’s counsel did not respond to meet and confer efforts. This satisfies Civ. Proc. Code, § 430.41(a)(3)(B).

Discussion

            Defendant FCA US LLC. demurs to the Complaint as follows:

1.         Sixth Cause of Action (Fraudulent Inducement – Concealment).

            A.        Re: No Transactional Relationship Giving Rise To A Duty To Disclose.

            Defendant argues that no transactional/contractual relationship between FCA US and Plaintiff is alleged which gives rise to a duty to disclose.

“There are ‘four circumstances in which nondisclosure or concealment may constitute actionable fraud: (1) when the defendant is in a fiduciary relationship with the plaintiff; (2) when the defendant had exclusive knowledge of material facts not known to the plaintiff; (3) when the defendant actively conceals a material fact from the plaintiff; and (4) when the defendant makes partial representations but also suppresses some material facts. [Citation.]’ ” (Citations omitted.) Where, as here, there is no fiduciary relationship, the duty to disclose generally presupposes a relationship grounded in “some sort of transaction between the parties. [Citations.] Thus, a duty to disclose may arise from the relationship between seller and buyer, employer and prospective employee, doctor and patient, or parties entering into any kind of contractual agreement. [Citation.]” (Citation omitted.)

 

(OCM Principal Opportunities Fund, L.P. v. CIBC World Markets Corp. (2007) 157 Cal.App.4th 835, 859 [bold emphasis added].)

            Thus, as discussed below at 1.B, if Plaintiff could have specifically plead the misrepresentations to which she was exposed in promotional materials, the fact that Defendant had exclusive knowledge of material facts not known to Plaintiff and which Defendant actively concealed from Plaintiff would give rise to a duty to disclose in the promotional materials. However, as discussed below, Plaintiff did not meet this pleading standard.

            This ground for demurrer is persuasive.

            B.        Re: Failure To Plead With Requisite Specificity.

Defendant argues that the fraud claim is insufficiently pled. 

Fraud causes of action must be pled with specificity. (Hills Transportation Co. v. Southwest Forest Ind., Inc. (1968) 266 Cal.App.2d 702, 707.) The complaint must allege facts as to “‘how, when, where, to whom, and by what means the representations were tendered.’” (Stansfield v. Starkey (1990) 220 Cal.App.3d 59, 73.) “The requirement of specificity in a fraud action against a corporation requires the plaintiff to allege the names of the persons who made the allegedly fraudulent representations, their authority to speak, to whom they spoke, what they said or wrote, and when it was said or written. (Citations omitted.)” (Tarmann v. State Farm Mut. Auto. Ins. Co. (1991) 2 Cal.App.4th 153, 157.) 

 Less specificity is required to plead fraud by concealment.  (Jones v. ConocoPhillips Co. (2011) 198 Cal.App.4th 1187, 1199.) However, “[i]f a fraud claim is based upon failure to disclose, and ‘the duty to disclose arises from the making of representations that were misleading or false, then those allegations should be described.’ (Citation omitted.)” (Morgan v. AT&T Wireless Services, Inc. (2009) 177 Cal.App.4th 1235, 1262.) 

Plaintiff does not allege that she was exposed to any of Defendant’s marketing materials, nor exactly what statements were made in the materials upon which Plaintiff relied in making her purchase decision. Plaintiff must allege statements which would constitute, at the very least, half-truths if not outright misrepresentations as to the subject vehicle, and actual reliance upon such statements. Civil Code § 1710(3)(deceit is defined to include “[t]he suppression of a fact, by one who is bound to disclose it, or who gives information of other facts which are likely to mislead for want of communication of that fact. . . .”)(bold emphasis added).In a misleading half-truth situation, where the defendant undertakes to provide some information, the defendant is “obliged to disclose all other facts which ‘materially qualify’ the limited facts disclosed. (Citations omitted.)” (Randi W. v. Muroc Joint Unified School Dist. (1997) 14 Cal.4th 1066, 1082.)

[T]he elements of a cause of action for fraud based on 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. [Citation.]’ [Citation.]” (Citation omitted.) 

(Kaldenbach v. Mutual of Omaha Life Ins. Co. (2009) 178 Cal.App.4th 830, 850.)

To the extent that the court in Dhital v. Nissan N. Am. Inc. (2022) 84 Cal.App.5th 828, 844 held that less specific allegations were sufficient at the pleading stage, the California Supreme Court has recently reiterated that the specificity requirement applies to fraudulent concealment claims: 

As an additional point, Robinson emphasized California's pleading requirement that fraud must be alleged with specificity. The requirement provides an important safeguard against the risk of tort recovery for fraud in every case involving conduct occurring during a contractual relationship. (Robinson, supra, 34 Cal.4th at p. 993.) When affirmative misrepresentation fraud is alleged, “‘“This particularity requirement necessitates pleading facts which ‘show how, when, where, to whom, and by what means the representations were tendered.”’” (Ibid.; see Hills Trans. Co. v. Southwest Forest Industries, Inc. (1968) 266 Cal.App.2d 702, 707 [72 Cal. Rptr. 441].) Uber argues that, because a fraudulent concealment claim “concerns a defendant's alleged failure to speak,” the pleading standard is necessarily more relaxed, thus weakening this safeguard. Not so.

California courts apply the same specificity standard to evaluate the factual underpinnings of a fraudulent concealment claim at the pleading stage, even though the focus of inquiry shifts to the unique elements of the claim. (Goodman v. Kennedy (1976) 18 Cal.3d 335, 347 [134 Cal. Rptr. 375, 556 P.2d 737]; Boschma v. Home Loan Center, Inc. (2011) 198 Cal.App.4th 230, 248 [129 Cal. Rptr. 3d 874]; Cansino v. Bank of America (2014) 224 Cal.App.4th 1462, 1472 [169 Cal. Rptr. 3d 619].) For instance, in a case such as this, the court must determine whether the plaintiff has alleged a sufficient factual basis for establishing a duty of disclosure on the part of the defendant independent of the parties' contract. If the duty allegedly arose by virtue of the parties' relationship and the defendant's exclusive knowledge or access to certain facts, as Rattagan has alleged here, the complaint must also include specific allegations establishing all the required elements, including (1) the content of the omitted facts, (2) the defendant's awareness of the materiality of those facts, (3) the inaccessibility of the facts to the plaintiff, (4) the [*44]  general point at which the omitted facts should or could have been revealed, and (5) justifiable and actual reliance, either through action or forbearance, based on the defendant's omission. “[M]ere conclusionary allegations that the omissions were intentional and for the purpose of defrauding and deceiving plaintiff[] … are insufficient for the foregoing purposes.” (Goodman, at p. 347.)

(Rattagan v. Uber Technologies, Inc. (2024) 17 Cal.5th 1, 43-44 [bold emphasis and underlining added].)

            This ground for demurrer is also persuasive.

            The demurrer to the sixth cause of action is SUSTAINED with 30 days; leave to amend.

            C.        Re: Failure To Allege Damages By Fraud.

            Defendant argues that Plaintiff cannot recover the purchase price under the fraud cause of action because Plaintiff seeks recovery of the same under the warranty causes of action. However, even if true, Plaintiff is entitled to elect remedies prior to the entry of judgment. (Ram's Gate Winery, LLC v. Roche (2015) 235 Cal.App.4th 1071, 1087.)

            This ground for demurrer is not persuasive.