Judge: Jon R. Takasugi, Case: 24STCV34628, Date: 2025-06-13 Tentative Ruling

Case Number: 24STCV34628    Hearing Date: June 13, 2025    Dept: 17

Superior Court of California

County of Los Angeles

DEPARTMENT 17

TENTATIVE RULING

            FCA’s demurrer is SUSTAINED, WITHOUT LEAVE TO AMEND, as to the fifth cause of action.

On 12/16/2024, Plaintiffs Nalley Fernandez and Edgar Silva (collectively, Plaintiffs) filed suit against FCA US, LLC, and Hemet Chrysler Dodge Jeepr AM, alleging violations of the Song-Beverly Warranty Act.

            On 2/5/2025, Defendant FCA US, LLC (Defendant) demurred to Plaintiffs’ fifth cause of action for fraudulent inducement. 

Discussion

            Defendant argues that Plaintiffs have failed to allege sufficient facts to state a claim for fraudulent inducement and that the claim is barred by the economic loss rule and independent tort principle.

            As for the contention that Plaintiffs’ claim for concealment is insufficiently pled, the Court disagrees.

            Here, Plaintiffs allege:

Plaintiffs are informed, believe, and thereon allege that while FCA knew about the Engine Defect, and its safety risks since prior to Plaintiffs purchasing the Subject Vehicle, FCA nevertheless concealed and failed to disclose the defective nature of the Vehicle and its Engine Defect to its sales representatives and Plaintiffs at the time of sale and thereafter. FCA omitted mention of the Engine Defect to its consumers.

Plaintiffs are reasonable consumers who interacted with sales representatives, considered FCA’s advertisement, and/or other marketing materials concerning the FCA Vehicles prior to purchasing the Subject Vehicle. Had FCA revealed the Engine Defect, Plaintiffs would have been aware of it and would not have purchased the Subject Vehicle.

Defendant knew or should have known, based on FCA’s routine monitoring of complaints, that the 2021 Jeep Grand Cherokee vehicles have a dangerous defect that adversely affects their drivability. Additionally, FCA knew or should have known about the Engine Defect through sources not available to consumers, including FCA’s own aggregate pre-market data and other aggregate post-market data from FCA authorized dealers.         

(Complaint ¶¶ 20-22.)

As such, Plaintiffs allege specific facts which could show Defendant knew or should have known that 2021 Jeep Grand Cherokee vehicles have a dangerous defect that adversely affects their drivability.

While Defendant contends that Plaintiffs have not sufficiently alleged facts of the identities of the individuals who allegedly concealed this information, or which could establish Defendant’s knowledge of defects at the time of purchase, access to this specific information is clearly contemplated by the discovery process. Indeed, it is nearly impossible to imagine how Plaintiffs could have access to those facts without the benefit of discovery. Rather, it is sufficient that Plaintiffs have alleged facts which, accepted as true, could state a claim for concealment.

Moreover, the Court finds sufficient facts have been alleged to show a duty to disclose. A duty to disclose can arise from 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. (BiglerEngler v. Breg, Inc. (2017) 7 Cal.App.5th 276, 311; LiMandri v. Judkins (1997) 52 Cal.App.4th 326, 336.) However, “[t]hese three circumstances, however, ‘presuppose[ ] the existence of [a] relationship between the plaintiff and defendant in which a duty to disclose can arise.’” (Bigler-Engler, supra, 7 Cal. App.5th at 311.0

“Such a transaction must necessarily arise from direct dealings between the plaintiff and defendant; it cannot arise between the defendant and the public at large.” (Bigler-Engler, supra, 7 Cal.App.5th at 311, emphases added.)

Here, Defendant manufactured the Vehicle purchased by Plaintiffs, provided warranties to Plaintiffs on behalf of that Vehicle, and attempted repair on Plaintiffs’ vehicle pursuant those warranties. As such, the Court finds direct dealings between Plaintiffs and Defendant sufficient to give rise to a duty to disclose.

However, the Court agrees that Plaintiffs’ claim is barred by the economic loss doctrine, as Plaintiffs seek purely economic damages allegedly sustained from the purchase of the Subject Vehicle. In other words, Plaintiffs allege they would not have purchased the vehicle or would have paid less for it. (Complaint ¶ 24.)

The California Supreme Court’s recent decision in Rattagan v. Uber Techs., Inc. (2024) 17 Cal.5th 1, 553 P.3d 1213 clarifies that fraudulent concealment claims are permissible only where the concealed information exposes plaintiffs to risks or harms beyond the reasonable contemplation of the contractual relationship. (Id. at 13, 31.) For example, the Rattagan plaintiff alleged reputational and personal harm, including arrest and public vilification, resulting from Uber’s intentional concealment during their contractual relationship—harms that extended far beyond economic loss tied to the contract. By contrast, Plaintiffs here allege no such independent harm. Plaintiffs’ allegations relate solely to contractual grievances about vehicle performance and warranty obligations.

The California Supreme Court’s recent dismissals of Dhital v. Nissan North America, Inc. and Kia America, Inc. v. Superior Court (Kia) on December 18, 2024 further reinforce the application of the ELD to bar claims like Plaintiffs’. In Dhital, the plaintiffs alleged fraudulent concealment based on the manufacturer’s pre-sale knowledge of vehicle defects obtained through consumer complaints, warranty data and other sources. Similarly, Kia involved allegations of presale concealment where plaintiffs claimed the automaker failed to disclose known defects in its vehicles. The dismissals of these cases suggest that the California Supreme Court did not find unresolved or novel legal issues warranting further review, particularly in light of its recent decision in Rattagan, which clarified the application of the ELD to fraudulent concealment claims. Together, these dismissals reinforce Rattagan as the paramount authority governing the economic loss doctrine.

Based on the foregoing, Defendant’s demurrer is sustained, without leave to amend, as to the fifth cause of action.

It is so ordered.

Dated:  June    , 2025

   Hon. Jon R. Takasugi
   Judge of the Superior Court

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