Millan v. Ford Motor Company

Before the Court is a motion for judgment on the pleadings filed defendants Ford Motor Company (Ford) and Tuttle-Click Ford Lincoln (Tuttle)(collectively, Defendants) on the complaint filed by plaintiffs Yesenia Millan and Bonifacio Cruz (Plaintiffs). For the reasons set forth below, the motion is DENIED.

2nd cause of action: For fraudulent concealment, the plaintiff must plead with specificity: (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.) Here, Plaintiffs sufficient allege each element with the requisite specificity under the pleading standards set forth in Dhital v. Nissan North America, Inc. (2022) 84 Cal.App.5th 828, including concealment, duty to disclose and justifiable reliance. (Compl. ¶¶ 12-53, 79-95.)

Contrary to Defendants’ contention, the economic loss rule does not bar the fraud claim. (Dhital v. Nissan N. Am., Inc., supra, 84 Cal.App.5th at 840-841.) Defendants rely on Rattagan in their motion, but the court in Rattagan distinguished Dhital and dismissed the appeal of Dhital without vacating the decision. (Moore v. American Honda Motor Co., Inc. (N.D. Cal., Mar. 28, 2025, No. 5:23-CV-05011-BLF) 2025 WL 948114, at *7 [noting the distinction between Rattagan and Dhital and concluding Rattagan controls fraudulent concealment within contractual relationships, whereas Dhital controls fraudulent concealment inducing the formation of a contractual relationship]; see also Cal. Rules of Court, rule 8.1115(e)(2) and rule 8.528(b)(3).) Thus, Dhital remains the applicable law, and the economic loss rule does not bar Plaintiff’s claim. The motion is therefore DENIED as to this cause of action.

3rd cause of action (negligent repair): The elements for negligent repair are the same as the elements for negligence. (Sabicer v. Ford Motor Company (C.D. Cal. 2019) 362 F.Supp.3d 837, 840.) The elements of negligence are duty, breach, causation, and damages. (Kesner v. Sup. Ct. (Pneumo Abex, LLC) (2016) 1 Cal.5th 1132, 1142.) Here, the Complaint states sufficient facts to constitute this cause of action. (Compl. ¶¶ 97-100.)

Contrary to Defendants’ contention, the economic loss rule does not bar this claim. The economic loss rule arises out of the distinction that the law has drawn between tort recovery for physical injuries and warranty recovery for economic loss. (Sabicer v. Ford Motor Company, supra, 362 F.Supp.3d at p. 841.) The rule provides that, in general, there is no recovery in tort for negligently inflicted purely economic losses, i.e., financial harm unaccompanied by physical or property damage. (Sheen v. Wells Fargo Bank, N.A. (2022) 12 Cal.5th 905, 922.) The economic loss rule, however, does not apply in cases involving the negligent performance of services that results in foreseeable economic loss. (North American Chemical Co. v. Superior Court (1997) 59 Cal.App.4th 764, 777, 781-785 see also Sabicer v. Ford Motor Company, supra, 362 F.Supp.3d at 840-842; Madison v. Ford Motor Company (E.D. Cal., Aug. 6, 2019, No. 2:19-CV-00853 WBS DB) 2019 WL 3562386, at *2.) Further, Plaintiffs do not allege that repair obligations arose out of a contract between Plaintiffs and Tuttle. Thus, it cannot be said that Plaintiff’s negligent repair claims are barred by the economic loss rule. The motion is therefore DENIED as to this cause of action.

Counsel for Plaintiffs shall provide notice of this ruling.