TANYA INIGUEZ vs. FCA US, LLC; ET AL.

California Legislature (1998) 60 Cal.App.4th 1205, 1216.) As with a demurrer, then, a court considering a motion for judgment on the pleadings accepts as true all properly pleaded facts of a complaint but does not accept as true mere conclusions or deductions of fact or law. (Greif v. Sanin (2022) 74 Cal.App.5th 412, 426.) Admissions contradicting the allegations of the party making the admissions are properly considered on a motion for judgment on the pleadings. (Evans v. California Trailer Court, Inc. (1994) 28Cal.App.4th 540; Del E.

Webb Corp. v. Structural Materials Co. (1981) 123 Cal.App.3d 593, 604-605.)

Statutes of Limitations and Repose. Code of Civil Procedure section 871.21, subdivision (a) provides that an action covered by section 871.20 shall be commenced within one year of expiration of the applicable warranty. Section 871.21, subdivision (b) provides a six-year statute of repose for the same actions, stating that no such action shall be brought later than six years after the date of original delivery of the motor vehicle. Plaintiff obtained the Vehicle on July 19, 2016, which means that her statute of limitations on the applicable five-year warranty and the statute of repose both expired on July 19, 2022. (1AC at ¶¶ 7-8, Exhibit A [warranty showing five-year duration].)

However, section 871.21 only went into effect on July 1, 2025. It would be unjust to hold Plaintiff to a statute of limitations that expired before it existed. Further, section 871.21 only applies to actions involving manufacturers who opt in to the statutory scheme of which it is a part and at the time Plaintiff originally filed this action FCA had not opted in. The court finds that section 871.21 does not bar any of Plaintiff’s causes of action.

Commercial Code section 2725 states that a breach of warranty claim must be commenced within four years of accrual, with accrual occurring at tender of delivery unless the warranty explicitly extends to future performance of goods and discovery of the breach must await the time of such performance. In that excepted case accrual occurs when the breach is or should have been discovered. FCA argues that its warranty, which it admits was a three year or 36,000 mile warranty, did not include a promise of future performance, citing Cardinal Health 301, Inc. v.

Tyco Electronics Corp. (2008) 169 Cal.App.4th 116, 131 (Cardinal Health). However, Cardinal Health at that pin citation states that the future performance exception applies where a manufacturer warranties performance for a specific period of time. At page 133 Cardinal Health distinguishes Krieger v. Nick Alexander Imports, Inc. (1991) 234 Cal.App.3d 205 (Krieger), the case upon which Plaintiff relies to state that she had a guarantee of future performance, on the basis that Krieger featured an automobile warranty lasting three years or 36,000 miles and including a promise to repair.

Krieger and Cardinal Health concur that the warranty in this case constituted a guarantee of future performance and the cause of action did not accrue until Plaintiff discovered FCA’s breach of warranty.

The three-year statute of limitations on fraud does not apply due to Plaintiff’s delayed discovery of the allegedly fraudulently concealed transmission defect, which by the face of the complaint occurred on September 13, 2022 at the earliest. (1AC at ¶ 15.) That date is within three years of the February 2025 filing of the original complaint in this action.

There is no one-year statute of limitations applicable to Plaintiff’s implied warranty claim either. Mexia v. Rinker Boat Co., Inc. (2009) 174 Cal.App.4th 1297, 1304-1306 states that an implied warranty under Song-Beverly is coextensive in duration with an express warranty, has a four-year statute of limitations, and can be breached by a latent defect undiscoverable at time of sale, which is just what Plaintiff alleges here.

Sufficiency of Pleading Fraudulent Inducement. Dhital v. Nissan North America Inc. (2022) 84 Cal.App.5th 828 (Dhital) offers applicable precedent as to the sufficiency of Plaintiff’s fraudulent inducement cause of action.

In Dhital the plaintiff brought a lemon law action over his Nissan vehicle’s faulty transmission and additionally alleged fraudulent inducement. (Dhital, supra, 84 Cal.App.5th at p. 834.) The trial court sustained Nissan’s demurrer on the fraudulent inducement cause of action, deciding that the economic loss rule barred the claim. (Id. at p. 835-836.) The appellate court reversed, finding both that the economic loss rule did not bar the claim and that the plaintiff’s allegations sufficiently stated fraudulent inducement (insufficiency of pleading being an alternative ground for affirming the trial court ruling that Nissan urged on appeal). (Id. at p. 845.)

Regarding the economic loss rule, the Dhital court first described the rule: “[i]n general, there is no recovery in tort for negligently inflicted ‘purely economic losses,’ meaning financial harm unaccompanied by physical or property damage.” (Sheen v. Wells Fargo Bank, N.A. (2022) 12 Cal.5th 905, 922; Dhital, supra, 84 Cal.App.5th at p. 837.) “[W]here a purchaser’s expectations in a sale are frustrated because the product he bought is not working properly, his remedy is said to be in contract alone, for he has suffered only ‘economic’ losses...The economic loss rule requires a purchaser to recover in contract for purely economic loss due to disappointed expectations, unless he can demonstrate harm above and beyond a broken contractual promise.” (Robinson Helicopter Co., Inc. v.

Dana Corp. (2004) 34 Cal.4th 979, 988 (Robinson).) Examples of such harm include “where a breach of duty directly causes physical injury; for breach of the covenant of good faith and fair dealing in insurance contracts; for wrongful discharge in violation of fundamental public policy; or where the contract was fraudulently induced.” (Id. at pp. 989-990.) “[I]n each of these cases, the duty that gives rise to tort liability is either completely independent of the contract or arises from conduct which is both intentional and intended to harm. (Ibid.)

The Dhital court noted that Robinson states its point quite plainly: fraudulent inducement is an exception to the economic loss rule. (Dhital at p. 839.) Dhital further observed that although Robinson discussed affirmative misrepresentations from the defendant as opposed to fraudulent concealment it did not state that only cases of affirmative misrepresentation qualify for the exception. (Ibid.) Rather, Robinson’s plain statement was that tort recovery should be allowed where the underlying duty is independent of the contract, and fraudulent inducement by concealment originates independent of the resulting contract because it literally predates formation of the contract. (Id. at pp. 840-841.)

Robinson and Dhital make it clear that the economic loss rule does not bar Plaintiff’s fraudulent inducement claim in the instant case. Plaintiff’s claim is based on conduct independent of the resulting contract and is expressly authorized in Robinson.

Regarding sufficiency of pleading, the Dhital court again first discussed the basic law. Fraudulent inducement is a subset of fraud and so requires the same elements be proven: (1) a misrepresentation, (2) knowledge of falsity, (3) intent to induce reliance, (4) justifiable reliance, and (5) damages. (Dhital, supra, 84 Cal.App.5th at p. 843; Hinesley v. Oakshade Town Center (2005) 135 Cal.App.4th 289, 294-295.) Fraud must always be pleaded with specificity. (Linear Technology Corp. v. Applied Materials, Inc. (2007) 152 Cal.App.4th 115, 132.)

The Dhital plaintiff’s allegations included that Nissan manufactured and distributed more than 500,000 vehicles with faulty transmissions; that Nissan knew or should have known of the faults from premarket testing and consumer complaints to both the National Highway Traffic Safety Administration (“NHTSA”) and to Nissan itself; and that Nissan issued Technical Service Bulletins (“TSBs”) regarding the transmission problem. (Dhital at pp. 833-834.) The Dhital court found all of this sufficient: the allegations stated that Nissan made lemons with transmission defects, Nissan knew of the transmission defects and the hazards they posed, Nissan had exclusive knowledge of the defects but did not disclose them to consumers, Nissan intended to conceal the information, and the plaintiff would not have bought the vehicle in question had the plaintiff known the information. (Id. at p. 844.)

Allegations that the plaintiff bought the car from a Nissan dealership with a Nissan-backed warranty and that dealerships are Nissan’s agents for purposes of sale sufficed to state a buyer-seller relationship between the parties. (Ibid.) The court rebuffed Nissan’s argument that the plaintiff was not specific enough about what it should have disclosed where the plaintiff described the effects of the transmission defect and alleged that Nissan knew of these effects from premarket testing and consumer complaints. (Ibid.)

Plaintiff’s allegations line up well with those approved in Dhital. Plaintiff here describes the transmission defect at issue as causing “hesitation on acceleration, loss of power, hard and/or harsh shifts, and/or jerking.” (1AC at ¶ 26.) Plaintiff alleges that FCA knew or should have known of the transmission system defect from pre- and post-production market testing, consumer complaints, and warranty data. (Id. at ¶ 29.) Plaintiff alleges that FCA concealed information about the transmission defect that would have changed Plaintiff’s purchase decision had it been known to Plaintiff. (Id. at ¶ 31.) Plaintiff alleges a transactional relationship between the parties giving rise to a duty to disclose in that Plaintiff alleges she obtained the Vehicle from FCA’s authorized dealership. (Id. at ¶ 9.)

Conclusion. FCA’s motion for judgment on the pleadings is denied.