Daniel Garcia Velazquez v. FCA US, LLC, et al.

On June 30, 2025, Plaintiff Daniel Garcia Velazquez filed this action against Defendant FCA US, LLC arising from Plaintiff's purchase of an allegedly defective vehicle. On October 9, 2025, Defendant filed a demurrer to the fourth and sixth causes of action, and a motion to strike punitive damages.

DISCUSSION

A demurrer for sufficiency tests whether the complaint states a cause of action. (Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747.) When considering demurrers, courts read the allegations liberally and in context, accepting the alleged facts as true. (Nolte v. Cedars-Sinai Medical Center (2015) 236 Cal.App.4th 1401, 1406.)

A. Plaintiff's Fourth Cause of Action is Not Time-Barred.

Defendant argues that the fourth cause of action for breach of implied warranty is time-barred because the Song-Beverly Act limits implied warranties to no more than one year from the purchase date. Defendant argues that Plaintiff must allege specific facts demonstrating that such defects existed and caused harm during the implied warranty period, citing to Mexia v. Rinker Boat Co., Inc. (2009) 174 Cal.App.4th 1397, 1304.

An implied warranty claim is governed by the four-year statute of limitations period of California's Uniform Commercial Code section 2725. (Mexia, supra, 174 Cal.App.4th 1297, 1305-1306.) Under Civil Code section 1791.1(c), implied warranties have an absolute maximum duration of one year from the sale of new consumer goods.¿ The duration provision of the Song-Beverly Act is not a statute of limitations. (Mexia, supra, 174 Cal.App.4th at 1308.)

Plaintiff's allegation that the vehicle was sold with the latent defects (Compl., P. 57) falls within the one-year implied warranty period and is sufficient at the pleadings stage. (Mexia, supra, 174 Cal.App.4th at 1310, [latent defects do not need to be discovered and reported to the seller within that time period].) The demurrer to the fourth cause of action is overruled.

B. Plaintiff's Sixth Cause of Action Fails to Plead a Duty to Disclose

Defendant argues that the sixth cause of action for Fraudulent Inducement - Concealment does not allege a direct transactional relationship giving rise to a duty to disclose. Fraud based on concealment requires that "(1) the defendant must have concealed or suppressed a material fact, (2) the defendant must have been under a duty to disclose the fact to the plaintiff, (3) the defendant must have intentionally concealed or suppressed the fact with the intent to defraud the plaintiff, (4) the plaintiff must have been unaware of the fact and would not have acted as he did if he had known of the concealed or suppressed fact, and (5) as a result of the concealment or suppression of the fact, the plaintiff must have sustained damage." (Bigler-Engler v. Breg, Inc. (2017) 7 Cal.App.5th 276, 310-311 (Bigler-Engler).)

"Even under the strict rules of common law pleading, one of the canons was that less particularity is required when the facts lie more in the knowledge of the opposite party." (Alfaro v. Community Housing Improvement System & Planning Assn., Inc. (2009) 171 Cal.App.4th 1256, 1384.) An essential element of intentional concealment includes the duty to disclose, which must be based upon a transaction, or a special relationship, between plaintiff and defendant. (Id. at p. 314.)

"There are 'four circumstances in which nondisclosure or concealment may constitute actionable fraud: (1) when the defendant is in a fiduciary relationship with the plaintiff; (2) when the defendant had exclusive knowledge of material facts not known to the plaintiff; (3) when the defendant actively conceals a material fact from the plaintiff; and (4) when the defendant makes partial representations but also suppresses some material facts.'" (Id. at p. 311.)

"[O]ther than the first instance, in which there must be a fiduciary relationship between the parties, 'the other three circumstances in which nondisclosure may be actionable presuppose[] the existence of some other relationship between the plaintiff and defendant in which a duty to disclose can arise. . . . "[W]here material facts are known to one party and not to the other, failure to disclose them is not actionable fraud unless there is some relationship between the parties which gives rise to a duty to disclose such known facts." [Citation.]' [Citation.]" (Hoffman v. 162 North Wolfe LLC (2014) 228 Cal.App.4th 1178, 1187 (Hoffman).)

"Such a transaction must necessarily arise from direct dealings between the plaintiff and the defendant; it cannot arise between the defendant and the public at large." (Bigler-Engler, supra, 7 Cal.App.5th at p. 312.) Plaintiff does not allege facts showing the existence of a relationship between the parties that gives rise to a duty to disclose facts. (See Hoffman, supra, 228 Cal.App.4th at p. 1187.)

Plaintiff alleges that Defendant had superior and exclusive knowledge of the engine defect and the defect was not known to or reasonably discoverable by Plaintiff. (Complaint P. 11.) There are no facts showing that Defendant's knowledge was exclusive or that Defendant intended to defraud. Indeed, Plaintiff alleges that there were prior customer complaints, suggesting that the knowledge was in fact public. (Complaint P. 23, 67.)

Moreover, in a transaction that does not involve fiduciary or confidential relations, the "transaction must necessarily arise from direct dealings between the plaintiff and the defendant; it cannot arise between the defendant and the public at large." (Bigler-Engler, supra, 7 Cal.App.5th at pp. 311-312.) Plaintiff alleges no such direct transaction with and direct concealment by Defendant. The demurrer is sustained on this ground.

C. Plaintiff's Sixth Cause of Action is Barred by the Economic Loss Rule.

Defendant argues that the sixth cause of action is barred by the economic loss rule. Under the economic loss rule, "[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." (Robinson Helicopter Co., Inc. v. Dana Corp. (2004) 34 Cal.4th 979, 988 (Robinson), quotation marks omitted.) However, tort damages may be permitted when the breach of contract is accompanied by a tort such as fraud. (Id. at pp. 989-990.)

To plead around the economic loss rule, a party must plead the existence of a duty that arises independent of any contractual duty and independent injury, other than economic loss, that arises from the breach of that duty. (Id. at pp. 988-991.)

"[U]nder California law, the economic loss rule does not bar [a claim] for fraudulent inducement by concealment. Fraudulent inducement claims fall within an exception to the economic loss rule recognized by our Supreme Court" in Robinson, and such claims allege fraudulent conduct that is independent of the alleged warranty breaches. (Dhital v. Nissan North America, Inc. (2022) 84 Cal.App.5th 828, 843.)

The Supreme Court has confirmed that "the economic loss rule does not apply to limit recovery for intentional tort claims like fraud." (Rattagan v. Uber Technologies, Inc. (2024) 17 Cal.5th 1, 38.) "A plaintiff may assert a tort claim for fraudulent concealment based on conduct occurring in the course of a contractual relationship, if the elements of the cause of action can be established independently of the parties' contractual rights and obligations and the tortious conduct exposes the plaintiff to a risk of harm beyond the reasonable contemplation of the parties when they entered into the agreement." (Ibid.) Accordingly, a properly pleaded claim for fraudulent inducement is not barred by the economic loss rule.

Here, however, Plaintiff does not establish all elements of fraudulent concealment independently of the parties' contractual rights and obligations. Additionally, Plaintiff fails to allege any independent duty or harm beyond the terms of the contractual relationship, and only economic damages from breach of warranty are alleged. Plaintiff "was harmed by purchasing a vehicle that Plaintiff would not have purchased." (Complaint P. 71.) This harm is purely economic from the purchase of the vehicle.

Plaintiff's allegation that the defects "unknowingly exposed [Plaintiff] to the risk of accident, injury, and/or liability to others as a result of the nature of the Engine Defect" (Complaint P. 24) does not state that Plaintiff in fact was damaged. Unknown risk that does not result in liability or injury by definition is not actual damage. (Small v. Fritz Companies, Inc. (2003) 30 Cal.4th 167, 202 ["Misrepresentation, even maliciously committed, does not support a cause of action unless the plaintiff suffered consequential damages," concurring opinion]; Boschma v. Home Loan Center, Inc. (2011) 198 Cal.App.4th 230, 248 ["as a result of the concealment or suppression of the fact, the plaintiff must have sustained damage"].)

Plaintiff's only alleged harm is the economic harm from the purchase of the vehicle, which was within the reasonable contemplation of the parties when they entered into the agreement. (See Rattagan, supra, 17 Cal.5th at p. 38.) Accordingly, this cause of action is barred by the economic loss rule. The demurrer to the sixth cause of action is sustained.

MOTION TO STRIKE

The court may, upon a motion or at any time in its discretion: (1) strike out any irrelevant, false, or improper matter inserted in any pleading; or (2) strike out all or any part of any pleading not drawn or filed in conformity with the laws of California, a court rule, or an order of the court. (Code Civ. Proc., Sec. 436, subds. (a)-(b).) Defendant moves to strike Plaintiff's prayer for punitive damages.

A plaintiff can recover punitive damages in tort cases where "the defendant has been guilty of oppression, fraud, or malice." (Civ. Code, Sec. 3294, subd. (a).) "The mere allegation an intentional tort was committed is not sufficient to warrant an award of punitive damages. [Citation.] Not only must there be circumstances of oppression, fraud or malice, but facts must be alleged in the pleading to support such a claim. [Citation.]" (Grieves v. Superior Court (1984) 157 Cal.App.3d 159, 166, fn. omitted.)

Additionally, a plaintiff is not entitled to recover both punitive damages and civil penalties under Song-Beverly. (Troensegaard v. Silvercrest Industries, Inc. (1985) 175 Cal.App.3d 218, 228.) The Court concurrently sustains the demurrer to the fraud cause of action, and there are no other specific facts showing oppression or malice. The motion to strike is granted.

CONCLUSION

The demurrer is SUSTAINED in part and OVERRULED in part. The demurrer to the fourth cause of action is overruled. The demurrer to the sixth cause of action is sustained. The motion to strike is GRANTED.

At the hearing, Plaintiff should be prepared to explain what additional facts will be pleaded and exactly how any amendments can remedy the deficiencies of the Complaint without making it a sham pleading. The Court will decide at the hearing whether to grant leave to file a First Amended Complaint. Moving party to give notice.

Parties who intend to submit on this tentative must send an email to the Court at [email protected] indicating intention to submit. If all parties in the case submit on the tentative ruling, no appearances before the Court are required unless a companion hearing (for example, a Case Management Conference) is also on calendar.

Dated this 16th day of July 2026 | | | Hon. Thomas D. Long Judge of the Superior Court | Case Number: 25STCV19753 Hearing Date: July 16, 2026 Dept: 506