Judge: Theodore R. Howard, Case: 20-1172831, Date: 2022-09-22 Tentative Ruling

Before the Court is a Motion for Judgment on the Pleadings (the “MJOP”), filed by moving parties Defendants FCA US LLC, and Surf City Auto Group dba Huntington Beach Chrysler Dodge Jeep Ram (here “MPs”) on 4/13/22, as to the Sixth Cause of Action in the Complaint filed by Plaintiffs Luis Angel Preciado Perez & Anna Marcella Biollo (“Plaintiffs”). The MJOP is GRANTED.

Here, Plaintiffs’ Sixth Cause of Action asserts a claim for “Fraudulent Inducement – Concealment” based on alleged undisclosed defects in their vehicle but asserts only economic losses. 

Under the economic loss rule (“ELR”), where a purchaser's expectations in a sale are frustrated because the product is not working properly, the remedy is in contract alone, for he has suffered only economic losses. (Robinson Helicopter Co., Inc. v. Dana Corp. (2004) 34 Cal.4th 979, 988.)  Claims for monetary losses between contractual parties are barred under the ELR when they arise from or are not independent of the parties’ underlying contracts. (Sheen v. Wells Fargo Bank, N.A. (2022) 12 Cal.5th 905, 9223-924.) The ELR does not bar fraud claims where premised on affirmative misrepresentations upon which the plaintiff relies, that expose the plaintiff to liability for personal damages independent of the plaintiff's economic loss. (Robinson Helicopter, supra, 34 Cal.4th at 993)  But Robinson’s holding was “narrow in scope,” and did not also find an exception to the ELR for concealment claims. (Id. at 991.) 

Whether the ELR bars claims for fraudulent concealment thus remains an unsettled area of California law. (See Rattagan v. Uber Technologies, Inc. (9th Cir. 2021) 19 F.4th 1188, 1191 [certifying question to California Supreme Court: “Under California law, are claims for fraudulent concealment exempted from the economic loss rule?].) 

But absent California Supreme Court clarification, this Court concludes that Robinson continues to present a narrow exception to the ELR, which does not permit the concealment claim here. A number of federal courts have similarly found that the ELR bars concealment claims such as those presented here. (See e.g. Farrales v. Ford Motor Company (N.D. Cal., 4/27/22) 2022 WL 1239347; Avila v. Ford Motor Co. (C.D. Cal., 5/27/22)  2022 WL 2283310; Tilahun v. Nissan North America, Inc. et al. (C.D. Cal., 8/16/22) 2022 WL 3591068; Friche v. Hyundai Motor, America (C.D. Cal., 1/28/22) 2022 WL 1599868.) Some other courts have reached a contrary conclusion but appear to be in the minority. (See e.g. Scherer v. FCA US, LLC (S.D. Cal. 2021) 565 F.Supp.3d 1184, 1193; Edwards v. FCA US LLC (N.D. CA 6/2/22) 2022 WL 1814144 and White v. FCA US LLC (N.D. CA 8/16/22) 2022 WL 3370791.)  And while Plaintiffs point to Anderson v. Ford Motor Co. (2022) 74 Cal.App.5th 946, 963 as authority for their position, that case did not address the application of the ELR to such claims.

Accordingly, in light of the narrow holding in Robinson and the absence of any alleged injury here beyond the alleged defects in the vehicle itself, the Motion for Judgment on the Pleadings, as to the Sixth Cause of Action in Plaintiffs’ Complaint, is GRANTED.

Both sides’ Requests for Judicial Notice are GRANTED under Ev. Code §452(d).

Counsel for MPs is to give notice of this ruling.