Katrina Louis vs General Motors, LLC

25CV-06689 Katrina Louis vs General Motors, LLC

Demurrer to Plaintiffs’ First Amended Complaint

Defendant’s demurrer to the fifth cause of action is SUSTAINED, WITH LEAVE TO AMEND, on the basis of failure to state facts sufficient to constitute a cause of action.

Here, Plaintiff does not allege enough facts to support a fraudulent inducement concealment cause of action. For example, and not exhaustive, the complaint (1) fails to sufficiently allege the required transactional relationship between Plaintiff and GM; (2) fails to allege sufficient facts identifying the specific marketing statements that were misleading and that were relied upon by Plaintiff; and (3) fails to allege sufficient facts regarding personnel, conversations, or content of omissions at the point of sale.

Defendant’s demurrer as to the fifth cause of action being barred by the economic loss rule is SUSTAINED, WITH LEAVE TO AMEND.

The Court in Rattagan stated, “the economic loss doctrine applies when the parties have entered into a contract; the plaintiff sues for tort damages, alleging defendant failed to perform as the contract requires; and negligently caused economic losses flowing from the breach. In such a case, plaintiffs are generally limited to recovery of those economic damages and cannot seek to expand their remedies beyond those available in contract. The doctrine does not apply if defendant's breach caused physical damage or personal injury beyond the economic losses caused by the contractual breach and defendant violated a duty flowing, not from the contract, but from a separate, legally recognized tort obligation.” (Rattagan v. Uber Technologies, Inc. (2024) 17 Cal.5th 1, 44.)

In short, as long as Plaintiff’s claim for fraudulent inducement by concealment allege fraudulent conduct independent of Defendant’s alleged warranty breaches, it has been found, “[f]raudulent inducement claims fall within an exception to the economic loss rule recognized by our Supreme Court . . .” (Dhital v. Nissan North America, Inc. (2022) 84 Cal.App.5th 828, 843.)

Plaintiff’s first amended complaint contradicts itself on this point. While the fifth cause of action appears to allege fraudulent conduct independent of the alleged warranty breaches, the complaint alleges at paragraph 10 “These causes of action arise out of the warranty obligations of GM . . .” (FAC ¶ 10). As this may be clarified by Plaintiff, the demurrer is sustained with leave to amend.