ENER I LOPEZ, et al. vs FCA US LLC, et al.

The subject vehicle is alleged to have been manufactured and/or distributed by defendant FCA US, LLC (“FCA”) and sold to Plaintiffs by defendant Crown Dodge Chrysler Jeep RAM (“Crown”), which is alleged to be an authorized retail dealership. (FAC, ¶¶ 7, 9.)

Plaintiffs allege that Crown, as an authorized dealership, conveys information to prospective purchasers “using methods that FCA directs such as marketing brochures and floor displays.” (Id., ¶ 10.) Before purchasing the vehicle, Plaintiffs reviewed FCA’s marketing and advertising materials; reviewed the vehicle-specific window sticker; and took the vehicle for a test drive. (Id., ¶ 11.) Plaintiffs allege that FCA’s marketing efforts directly target purchasers of 2019-2025 Dodge Ram 1500 trucks, 2020-2023 Jeep Wranglers, and 2022-2025 Jeep Wagoneer vehicles, all of which are equipped with the E-Torque system. (Id., ¶¶ 65-75.)

The FAC further alleges that in connection with the purchase, Plaintiffs entered into a “warranty contact” with FCA. (Id., ¶ 7.) The warranty was an express written warranty, a copy of which is attached to the FAC as Exhibit H. Among the alleged warranties are a 3-year/36,000-mile Basic Limited Warranty Coverage, a 5-year/60,000-mile Powertrain Limited Warranty, the latter of which specifically covers the transmission; a 7-year/70,000-Emission Warranty that covers the generator/control unit and battery, which is also covered by a Federal Emission Warranty for 8 years or 80,000 miles. (Id., ¶¶ 8, 76-83, and Exh. H at pp. 1, 6-8.)

Plaintiffs generally allege that “[D]efects and noncomformities manifested themsleves during the applicable express warranty period, including but not limited to, E-Torque system defects; Powertrain defects, electrical defects; among other defects and non-conformities.” (Id., ¶ 22.)

Plaintiffs allege in detail that the vehicle’s E-Torque system is defective, as evidenced by the appearance of the following symptoms in vehicles equipped with the system:

• Engine stalling or shuddering. • Loss of power or hesitation. • Warning lights. • Malfunctioning start-stop feature. • Battery issues. • Overheating of motor generator unit.

2025CUBC046578: ENER I LOPEZ, et al. vs FCA US LLC, et al.

• Electrical malfunctions. • Inconsistent regenerative braking. • Erratic system behavior.

(Id., ¶¶ 34-37.) They allege that the symptoms impair the vehicle’s functionality and safety, which renders the vehicle substantially less drivable, safe, and useful, and which exposed them to the risk of accident, injury, and/or liability to others. (Id., ¶¶ 37, 38, 53, 60.)

Plaintiffs allege that FCA knew of the defective E-Torque system before Plaintiffs purchased the vehicle through various means, including consumer complaints made directly to FCA, to the NHTSA, and/or that were posted on public online vehicle owner forums. Such knowledge was also obtained through FCA’s own investigations; through repair and replacement part sales data; and from data supplied by authorized FCA dealerships. Additional knowledge was obtained through pre-release design, engineering, manufacture, and testing, and from monitoring of warranty data.

Alleged proof of such knowledge is attached to the FAC in the form of TSBs and recall notices issued by FCA; admissions made to the NHTSA; and an investigation opened into vehicles equipped with the E-Torque feature. (Id., ¶¶ 31-51, 55 and Exhs. A-F.) Such knowledge was exclusive to FCA and therefore superior to that of consumers. (Id., ¶¶ 57-58.) Further, FCA continued to market the vehicles containing the defective E-Torque system, touting them as durable and reliable vehicles, despite knowledge of the defect. (Id., ¶¶ 71-75 and Exh.

G.)

Plaintiffs alleged that despite knowledge of the defect and the NHTSA investigation, FCA failed to take adequate measures to address the defect. Further, Plaintiffs allege that at no point before they purchased the vehicle were they advised that the vehicle, including its E-torque system, were defective. (Id., ¶¶ 11, 291, 54.) FCA actively concealed the existence and the nature of the alleged defect from Plaintiffs at the time of purchase, repair, and thereafter, despite a duty to disclose the defect. (Id., ¶¶ 62, 89.) Plaintiffs allege they would not have purchased the vehicle had they known of the defect. (Id., ¶¶ 29, 56, 59.)

Plaintiff alleges the following specific repair presentations after their purchase:

• On November 11, 2024, when the vehicle had 10,357 miles on it, they presented the vehicle for repair with the following complaints: pulling to the left when driving over a bump, which was also accompanied by a sudden increase in the volume on the vehicle’s sound system. • On December 5, 2024, when the vehicle had 10,479 miles on it, for the same volume increase. Further, the channel on the sound system was changing on its own. • On March 11, 2025, with 13,735 miles on it, with the same volume-increase issue on the sound system. Further, Plaintiffs complained that the fuel mileage was inaccurate; the navigation system was not functioning properly; and the CarPlay system did not work properly on an intermittent basis.

1 The paragraph 29 referenced here is the second paragraph 29, as the number of the FAC after paragraph

39, drops down and continues with number 29.

2025CUBC046578: ENER I LOPEZ, et al. vs FCA US LLC, et al.

(Id., ¶¶ 14-16.) In the first and third instances, the repair technician could not duplicate or verified the concerns. In the second instance, the complaint was verified and repaired, with the radio being replaced. (Ibid.)

Plaintiffs assert that this repair history is not exhaustive. (Id., ¶ 13.)

Defendants demur to the fifth cause of action for negligent repair and the sixth cause of action for fraudulent concealment. In a separate motion, they move to strike the prayer for punitive damages from the operative FAC. The demurrer and motion to strike were filed on February 26, 2026. Plaintiffs oppose both motions, having filed their oppositions on June 9, 2026. Defendants filed reply memoranda were filed on June 16, 2026. No trial date has been set.

II. Demurrer

A. Legal Standard: Demurrer

The limited role of a demurrer is to test the legal sufficiency of a complaint. It is long-settled that a demurrer admits all material facts properly pleaded, but not contentions, deductions, or conclusions of law or fact. A court may also consider matters that may judicially noticed. (Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 976, 994; Blank v. Kirwan (1985) 39 Cal.3d 311, 318 (quoting Serrano v. Priest (1971) 5 Cal.3d 584, 591.) The complaint is given a reasonable interpretation, and is read as a whole, reading its parts in their context. (Blank v. Kirwan, supra, 39 Cal.3d at p. 318.)

It is an abuse of discretion to deny leave to amend if there is any reasonable possibility that any defects in the complaint can be cured by amendment. But the burden is on the plaintiff to show how the complaint can be amended and how such an amendment will change the legal effect of the pleading. (Goodman v. Kennedy (1976) 18 Cal.3d 335, 349.)

B. Application

1. Fraudulent Concealment

“The required elements for fraudulent concealment are (1) concealment or suppression of a material fact; (2) by a defendant with a duty to disclose the fact; (3) the defendant intended to defraud the plaintiff by intentionally concealing or suppressing the fact; (4) the plaintiff was unaware of the fact and would have acted differently if the concealed or suppressed fact was known; and (5) plaintiff sustained damage as a result of the concealment or suppression of the material fact.” (Rattagan v. Uber Technologies, Inc. (2024) 17 Cal.5th 1, 40.)

Fraud must be alleged with specificity. (Rattagan, supra. at p. 43.) “General and conclusory allegations are insufficient.” (Cansino v. Bank of America (2014) 224 Cal.App.4th 1462, 1469.) “Determining whether a pleading alleges facts sufficient to state a cause of action is a question of law.” (Foster v. Sexton (2021) 61 Cal.App.5th 998, 1019.) “[L]ess specificity is required in pleading matters of which the defendant has superior knowledge.” (Id. at p. 1028.) “For policy reasons, some causes of action, such as fraud and negligent misrepresentation, must be pleaded

2025CUBC046578: ENER I LOPEZ, et al. vs FCA US LLC, et al.

with particularity—that is, the pleading must set forth how, when, where, to whom, and by what means the representations were made.” (Ibid.) The pleading standard is not more relaxed when a fraud claim is based on concealment rather than an affirmative misrepresentation. (Rattagan v. Uber Technologies, Inc., supra, 17 Cal.5th at p. 43; see also Cansino, supra, 224 Cal.App.4th at p. 1472.)

In Dhital v. Nissan North America (2022) 84 Cal.App.5th 828, which was not overruled after the Supreme Court’s Rattagan decision, the Court of Appeal held that the following allegations were sufficient to withstand demurrer:

Plaintiffs alleged the above elements of fraud in the SAC. As we have discussed, plaintiffs alleged the CVT transmissions installed in numerous Nissan vehicles (including the one plaintiffs purchased) were defective; Nissan knew of the defects and the hazards they posed; Nissan had exclusive knowledge of the defects but intentionally concealed and failed to disclose that information; Nissan intended to deceive plaintiffs by concealing known transmission problems; plaintiffs would not have purchased the car if they had known of the defects; and plaintiffs suffered damages in the form of money paid to purchase the car.

(Id. at p. 844.)

The allegations here are more detailed than those found to be sufficient in Dhital. Here, Plaintiffs have alleged facts sufficient to support all the elements. Active concealment of a material defect in the E-Torque system is alleged. (FAC, ¶¶ 22, 31-51, 55, 62, 89.) Duty to disclose is alleged. (Id., ¶ 117.) Intent to defraud is alleged (id., ¶ 118), and in any event may be inferred from the facts as alleged. (People v. Hambleton (1963) 218 Cal.App.2d 479, 482 [“The intent to defraud can be inferred from all the facts and need not be proved by direct evidence.”].) Plaintiffs have alleged that they were unaware of the alleged defect, and would not have purchased the vehicle had they known of the defect. (Id., ¶¶ 11, 29, 54, 56, 57-59, 120.) They have also alleged they were harmed. (Id., ¶¶ 121-122.)

Defendant FCA argues that it did not owe a duty to disclose to Plaintiffs due to the lack of a direct transactional relationship with them. “A duty to disclose a material fact can arise if (1) it is imposed by statute; (2) the defendant is acting as plaintiff's fiduciary or is in some other confidential relationship with plaintiff that imposes a disclosure duty under the circumstances; (3) the material facts are known or accessible only to defendant, and defendant knows those facts are not known or reasonably discoverable by plaintiff (i.e., exclusive knowledge); (4) the defendant makes representations but fails to disclose other facts that materially qualify the facts disclosed or render the disclosure misleading (i.e., partial concealment); or (5) defendant actively conceals discovery of material fact from plaintiff (i.e., active concealment).” (Rattagan v.

Uber Technologies, Inc., supra, 17 Cal.5th. at pp. 40-41.) A duty can arise out of a buyer-seller relationship. “As a matter of common sense, such a relationship can only come into being as a result of some sort of transaction between the parties.” (LiMandri v. Judkins (1997) 52 Cal.App.4th 326, 337.) “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.” (Ibid.)

2025CUBC046578: ENER I LOPEZ, et al. vs FCA US LLC, et al.

Defendant relies on Bigler-Engler v. Breg (2017) 7 Cal.App.5th 276 in arguing that the dealings between Plaintiff and Defendant must have been “direct,” and since they were not, the demurrer must be sustained. Although the Court of Appeal is Bigler-Engler did use the word “direct,” it also went through a factored analysis to determine whether the relationship in that case was direct.

Bigler-Engler stands for the principle that whether a relationship is sufficiently “direct” for purposes of establishing a duty to disclose depends on the totality of the circumstances. While relationships such as buyer-seller and employer-employee are more obvious relationships, they are only examples. In any event, the facts alleged here, unlike those of Bigler-Engler, show evidence of a “relationship” between Plaintiff and Defendant. First, and foremost, Plaintiffs allege specifically that he “entered into a warranty contract with Defendant.” (FAC, ¶ 7.) This alone suffices. (LiMandri, supra, 52 Cal.App.4th at p. 337 [“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.”].)

Further, Plaintiffs allege that FCA’s marketing efforts directly targeted purchasers of several models of vehicle containing the alleged defective E-Torque system, including 2022 Jeep Wranglers, the vehicle purchased by Plaintiffs. (Id., ¶¶ 65-75.) Plaintiffs alleged they reviewed such materials before purchasing the subject vehicle. (Id., ¶ 10.)

In Dhital, the defendant argued on appeal that the plaintiffs had not adequately pled the existence of a “buyer-seller relationship,” given that the complaint had alleged that the car was purchased from a dealership and not from the defendant manufacturer. The Court rejected Defendant’s argument, finding plaintiff’s allegations sufficient in that “Plaintiffs alleged that they bought the car from a Nissan dealership, that Nissan backed the car with an express warranty, and that Nissan's authorized dealerships are its agents for purposes of the sale of Nissan vehicles to consumers. In light of these allegations, we decline to hold plaintiffs’ claim is barred on the ground there was no relationship requiring Nissan to disclose known defects.” (Dhital, supra, 84 Cal.App.5th at p. 844.)

Given the allegations of the First Amended Complaint and the holding in Dhital, the Court finds that the allegations of the fraudulent concealment claim are sufficiently specific to state a claim at the pleading stage. Accordingly, the demurrer to this claim is overruled.

2. Negligent Repair

a. Failure to State a Claim

The element of a negligent repair claim are duty, breach, causation, and damages. (Sabicer v. Ford Motor Company (C.D. Cal. 2019) 362 F.Supp.3d 837, 840.) “One who undertakes repairs has a duty arising in tort to do them without negligence.” (Southwest Forest Industries, Inc. v. Westinghouse Elec. Corp. (9th Cir. 1970) 422 F.2d 1013, 1020 [quoted by Sabicer, supra, 362 F.Supp.3d at p. 840.]; see also Civ. Code, § 1796.5 [“Any individual, partnership, corporation, association, or other legal relationship which engages in the business of providing service or

2025CUBC046578: ENER I LOPEZ, et al. vs FCA US LLC, et al.

repair to new or used consumer goods has a duty to the purchaser to perform those services in a good and workmanlike manner.”].)

“[I]n actions arising from the sale or purchase of a defective product, plaintiffs seeking economic losses must be able to demonstrate that either physical damage to property (other than the defective product itself) or personal injury accompanied such losses; if they cannot, then they would be precluded from any tort recovery in strict liability or negligence. (North American Chemical Co. v. Superior Court (1997) 59 Cal.App.4th 764, 780; see also Stop Loss Ins. Brokers, Inc. v. Brown & Toland Medical Group (2006) 143 Cal.App.4th 1036, 1044 [“[N]egligent performance of a contract gives rise to contract damages only.”].)

Here, the FAC fails to specifically identify any act by a Crown repair technician during the performance off any warranty-related inspections or repairs that resulted in damage to the subject vehicle; that resulted in personal injury to Plaintiffs after the attempted repairs or inspections; or that resulted in liability to Plaintiffs for harm suffered by third parties as a result of such repairs or inspections. The allegations are conclusory in nature. (FAC, ¶¶ 110-113.) Although Paragraph 109 incorporates the other allegations of the FAC, a review of those allegations reveals the same lack of specific allegations, and the issues with the vehicle are identified as “defects and nonconformities,” including a defective with the E-Torque system, and not as damage or harm caused by any act or omission of any Crown repair technician. (Id., ¶ 22, 34-37; see also generally id., ¶¶ 13-33.)

Consequently, the Court sustains the demurrer with leave to amend on grounds that the FAC fails to state a claim in that Plaintiff has failed to allege facts sufficient to show breach or damages.

b. Economic Loss Rule

“[T]o be held liable in tort, a defendant must commit a tort. If all the defendant has allegedly done is violate the terms of the parties' contract, depriving the plaintiff of the benefits the contract ensures, the defendant's liability is limited by the contract. Broader tort liability only arises if a defendant violates an independent legal duty and the type of harm that ensues was not reasonably contemplated or accounted for by the contractual parties.” (Rattagan v. Uber Technologies, Inc. (2024) 17 Cal.5th 1, 37.)

“Under the economic loss rule, tort recovery for breach of a contract duty is generally barred [citation] unless two conditions are satisfied. A plaintiff must first demonstrate the defendant's injury-causing conduct violated a duty that is independent of the duties and rights assumed by the parties when they entered the contract. Second, the defendant's conduct must have caused injury to persons or property that was not reasonably contemplated by the parties when the contract was formed.” (Id. at pp. 20-21.)

“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.)

2025CUBC046578: ENER I LOPEZ, et al. vs FCA US LLC, et al.

“Not all tort claims for monetary losses between contractual parties are barred by the economic loss rule. But such claims are barred 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, 924.)

Here, the Economic Loss Rule argument is made only as to the fifth cause of action for negligent repair. (Demurrer at 5:27-28.) As set forth above, the facts alleged in the FAC show that all the Defendants have done is fail to make the vehicle conform to the applicable express warranties. They do not show that Plaintiffs have suffered the type of harm that was not reasonably contemplated by the parties. (Rattagan, supra, 17 Cal.5th at p. 37.) Accordingly, the demurrer to this claim is sustained on the additional grounds that the claim is barred by the Economic Loss Rule.

III. Motion to Strike

A. Legal Standard: Motion to Strike

“Any party, within the time allowed to respond to a pleading may serve and file a notice of motion to strike the whole or any part thereof[.]” Code Civ. Proc., § 435, subd. (b)(1). Irrelevant, false, and improper matter may be stricken. (Id., § 436, subd. (a).)

“In order to plead a cause of action, the complaint must contain a ‘statement of the facts constituting the cause of action, in ordinary and concise language.’” (Perkins v. Superior Court (1981) 117 Cal.App.3d 1, 6 [quoting Code Civ. Proc., § 425.10, subd. (a)(1)].) “While it is true that pleading conclusions of law does not fulfill this requirement, it has long been recognized that ‘(t)he distinction between conclusions of law and ultimate facts is not at all clear and involves at most a matter of degree. (Citations.) For example, the courts have permitted allegations which obviously included conclusions of law and have termed them ‘ultimate facts' or ‘conclusions of facts.’”) (Perkins v. Superior Court, supra, 117 Cal.App.3d at p. 6 [quoting Burks v. Poppy Construction Co. (1962) 57 Cal.2d 463, 473]

“In passing on the correctness of a ruling on a motion to strike, judges read allegations of a pleading subject to a motion to strike as a whole, all parts in their context, and assume their truth.” (Clauson v. Superior Court (1998) 67 Cal.App.4th 1253, 1255.) “In ruling on a motion to strike, courts do not read allegations in isolation.” (Ibid.)

B. Application

“In an action for the breach of an obligation not arising from contract, where it is proven by clear and convincing evidence that the defendant has been guilty of oppression, fraud, or malice, the plaintiff, in addition to the actual damages, may recover damages for the sake of example and by way of punishing the defendant.” (Civ. Code, § 3294, subd. (a).)

Here, Plaintiffs have stated a claim for fraudulent concealment, which, if proven, supports punitive damages. (Civ. Code, § 3294, subd. (c)(3) [defining “fraud” to include concealment]; Nissan Motor Acceptance Cases (2021) 63 Cal.App.5th 793, 829 [“[F]raudulent concealment is an intentional tort that may support a punitive damage award.”]; Dhital v. Nissan North America,

2025CUBC046578: ENER I LOPEZ, et al. vs FCA US LLC, et al.

Inc. (2022) 84 Cal.App.5th 828, 844 [reversing trial court’s granting of motion to strike punitive damages where operative complaint alleged that vehicle manufacturer “was aware of the defects as a result of premarket testing and consumer complaints that were made both to the National Highway Traffic Safety Administration and to Nissan and its dealers”].) Plaintiffs’ allegations are similar to those of the plaintiff in Dhital. When the FAC is read as a whole and accepted as true, the allegations are sufficient to plead fraud and corporate ratification for purposes of punitive damages. Whether Plaintiff can ultimately prove entitlement to punitive damages is a factual question not resolvable at the pleading stage. Accordingly, the motion to strike is denied.

Finally, Plaintiff may seek both punitive damages and civil penalties where the remedies are predicated on distinct conduct: civil penalties under the Song-Beverly Act arise from Defendant’s alleged willful failure to comply with its repurchase or replacement obligations, whereas punitive damages are based on alleged pre-sale fraudulent concealment. But Plaintiff cannot recover both where the underlying conduct is the same. (Anderson v. Ford Motor Co. (2022) 74 Cal.App.5th 946, 970-971 [“[T]he recovery of both punitive damages and civil penalties is prohibited when the underlying conduct for both remedies is the same conduct, i.e., identical conduct.” (italics in original)].)

IV.

Disposition

For the reasons stated herein, the demurrer to the sixth cause of action for fraudulent concealment is OVERRULED. The demurrer to the fifth cause of action for negligent repair is SUSTAINED WITH LEAVE TO AMEND. The motion to strike is DENIED.

Plaintiffs to file a second amended complaint, if any, within 20 days.

9