DANIELSON, et al. vs GENERAL MOTORS, LLC., et al.

A Stipulation and Appointment of Official Reporter Pro Tempore (CV/E-206) is required to be signed by each party, the private court reporter, and the Judge prior to the hearing, if not using a reporter from the Court’s Approved Official Reporter Pro Tempore list.

Once the form is signed it must be filed with the clerk. If a litigant has been granted a fee waiver and requests a court reporter, the party must submit a Request for Court Reporter by a Party with a Fee Waiver (CV/E-211) and it must be filed with the clerk at least 10 days prior to the hearing or at the time the proceeding is scheduled if less than 10 days away. Once approved, the clerk will be forward the form to the Court Reporter’s Office and an official reporter will be provided.

TENTATIVE RULING

Defendant General Motors LLC’s (“Defendant”) demurrer to Plaintiffs James M. Danielson and Chelsea Danielson’s (collectively, “Plaintiffs”) Complaint is ruled upon as follows.

The notice of motion does not provide notice of the Court’s tentative ruling system, as required by Local Rule 1.06. Moving counsel is directed to contact opposing counsel and advise of Local Rule 1.06 and the Court’s tentative ruling procedure and the manner to request a hearing. If moving counsel is unable to contact opposing counsel prior to the hearing, moving counsel is ordered to appear at the hearing by Zoom or in person.

Background

This is a Lemon Law action arising from Plaintiffs’ alleged purchase on July 14, 2024 of a 2024 GMC Yukon, VIN 1GKS2BKDXRR260868 (“the Subject Vehicle”). Plaintiffs filed the Complaint on March 20, 2025 alleging claims under the Song-Beverly Consumer Warranty Act as well as a claim for fraudulent inducement – concealment. Plaintiffs allege that the Subject Vehicle suffered from engine defects, transmission defects, and electrical defects which were known to Defendant but not disclosed at the time of purchase.

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

25CV006554: DANIELSON, et al. vs GENERAL MOTORS, LLC., et al. 02/09/2026 Hearing on Demurrer to Complaint in Department 28

Defendant demurs to the fifth cause of action for fraudulent inducement – concealment on the grounds that it fails to allege facts sufficient to state a cause of action and is barred by the economic loss rule.

Discussion

Legal Standard

The function of a demurrer is to test the sufficiency of the pleading it challenges by raising questions of law. (Salimi v. State Comp. Ins. Fund (1997) 54 Cal.App.4th 216, 219; Nordlinger v. Lynch (1990) 225 Cal.App.3d 1259, 1271.) A demurrer “tests the pleadings alone and not the evidence or other extrinsic matters.” (SKF Farms v. Superior Court (1984) 153 Cal.App.3d 902, 905.) Extrinsic evidence may not properly be considered on demurrer or on a motion to strike. (Ion Equipment Corp. v. Nelson (1980) 110 Cal.App.3d 868, 881; Hibernia Savings & Loan Soc. v. Thornton (1897) 117 Cal. 481, 482.)

For the purpose of determining the effect of a complaint, its allegations are liberally construed, with a view toward substantial justice. (Code Civ. Proc. § 452; Amarel v. Connell (1988) 202 Cal.App.3d 137, 140-141; Quelimane Co. v. Stewart Title Guaranty Co. (1998) 19 Cal.4th 26, 43, fn. 7.) In this respect, the Court treats the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law, and considers matters which may be judicially noticed. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318; Poseidon Development, Inc. v. Woodland Lane Estates, LLC (2007) 152 Cal.App.4th 1106, 1111-1112.)

A demurrer may be sustained only if the complaint lacks any sufficient allegations to entitle the plaintiff to relief. (Financial Corp. of America v. Wilburn (1987) 189 Cal.App.3d 764, 778.) “Plaintiff need only plead facts showing that he may be entitled to some relief . . ., we are not concerned with plaintiff's possible inability or difficulty in proving the allegations of the complaint.” (Highlanders, Inc. v. Olsan (1978) 77 Cal.App.3d 690, 696-697.)

Specificity

Defendant first contends Plaintiffs have failed to plead the fifth cause of action with the requisite specificity for a fraud claim. Defendant argues Plaintiffs failed to allege “the content of [the] omitted facts” or the identities of any persons authorized to speak on behalf of Defendant who concealed facts. (See Demurrer MPA, pp. 9:5-25.)

Although in California, fraud must be pled specifically (general and conclusory allegations do not suffice), “it is harder to apply [the requirement of specificity] to a case of simple

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

25CV006554: DANIELSON, et al. vs GENERAL MOTORS, LLC., et al. 02/09/2026 Hearing on Demurrer to Complaint in Department 28

nondisclosure. ‘How does one show “how” and “by what means” something didn’t happen, or “when” it never happened, or “where” it never happened?’” (Alfaro v. Community Housing Improvement System & Planning Assn., (2009) 171 Cal.App.4th 1356, 1384.) “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 than of the party pleading.” (Turner v. Milstein (1951) 103 Cal.App.2d 651, 658.)

A plaintiff asserting a concealment theory will “not be able to specify the time, place, and specific content of an omission as precisely as would a plaintiff in a false representation claim.” (Falk v. GMC (N.D. Cal. 2007) 496 F.Supp.2d 1088, 1098-1099.) Such a claim “can succeed without the same level of specificity required by a normal fraud claim.' (Id. at p. 1099.) The specificity rule is relaxed in actions premised on intentional concealment or nondisclosure. (Jones v. ConocoPhillips Co. (2011) 198 Cal.App.4th 1187, 1199-1200.)

Here, given that Plaintiffs allege fraud involving concealment and a failure to disclose defects, a relaxed pleading standard is appropriate. (Committee on Children’s Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 214; Turner, supra, 103 Cal.App.2d 651, 658 [“If, in truth, Milstein concealed from plaintiff the fact that the property was to be sold, he knows it and he knows the time and place of concealment, if there was a time and place. It would seem that concealment is negative and that it would occur without any time or place. Milstein knows the facts.”].) Thus, Defendant’s arguments that Plaintiffs failed to adequately identify the specific facts that Defendant failed to disclose is rejected.

Plaintiffs also sufficiently allege Defendant knew about the defects in the Subject Vehicle prior to the sale as evidenced by Defendant’s own technical service bulletins, and Defendant’s internal reports, such as pre-production testing data and customer complaints made directly to Defendant, none of which was available to public, and none of which Defendant disclosed to Plaintiffs. (Complaint, ¶¶ 57-63.) Moreover, Plaintiffs allege Defendant had exclusive, non-public knowledge of the engine defect based on testing data and other internal information. (See Complaint, ¶ 51.)

This is sufficient to allege Defendant’s exclusive knowledge of the defects. Plaintiffs need not allege significant details as to Defendant’s internal testing data. Finally, Defendant’s argument related to “active concealment” is rejected. Since Plaintiffs have sufficiently alleged a duty to disclose, Plaintiffs need not allege facts showing “active concealment.” Finally, the Court finds Plaintiffs’ allegations related to actual and justifiable reliance to be sufficient. It is unclear what more Plaintiffs could allege on this element other than what they’ve alleged in the Complaint, namely, that they would not have purchased the Subject Vehicle absent the omissions.

The existence of the warranty does not mean that Plaintiffs must accept that any vehicle they purchase may contain the defects alleged in this case and therefore are not justified in relying on Defendant’s failure to disclose material facts about the defects. The existence of a warranty also does not excuse a seller from disclosing material facts related to the existence of a known defect. Otherwise, any seller could avoid a fraudulent concealment claim

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

25CV006554: DANIELSON, et al. vs GENERAL MOTORS, LLC., et al. 02/09/2026 Hearing on Demurrer to Complaint in Department 28

by simply providing a warranty, even if the goods contain defects known to the seller. In sum, the foregoing allegations are sufficient and are pled with the requisite specificity. The demurrer on specificity grounds is OVERRULED.

Transactional Relationship

Within its demurrer on grounds of failure to state a cause of action, Defendant also demurs on the ground the Complaint fails to allege a sufficient transactional relationship to establish a duty to disclose. This argument is rejected. Contrary to Defendant’s argument, no transactional relationship between the manufacturer of a product and subsequent purchasers is necessary to bring a fraudulent concealment claim because a manufacturer has a duty to disclose material facts not only to immediate purchasers, but to subsequent purchasers when the manufacturer has reason to know that the subject product will be resold. (See OCM Principal Opportunities Fund v.

CIBC World Markets Corp. (2007) 157 Cal.App.4th 835, 859-860.) The case law cited by Defendant does not involve such a scenario and in any event dealt with the sufficiency of evidence at trial, not the sufficiency of allegations at the demurrer stage. (Bigler-Engler v. Breg, Inc. (2017) 7 Cal.App.5th 276, 312-313.) The demurrer on this ground is OVERRULED.

Economic Loss Rule

Finally, Defendant’s argument that Plaintiffs’ fraud claim is barred by the economic loss rule and Rattagan v. Uber Technologies, Inc. (2024) 17 Cal.5th 1 is rejected. “[E]conomic loss consists of damage for inadequate value, costs of repair and replacement of the defective product or consequent loss of profits-without any claim of personal injury or damages to other property.” (Food Safety Net Services v. Eco Safe Systems USA, Inc. (2012) 209 Cal.App.4th 118, 1130.) In Rattagan, the Supreme Court made clear that “the economic loss rule does not apply to limit recovery for intentional tort claims like fraud.

The doctrine only applies to bar tort recovery for negligently inflicted economic losses unaccompanied by physical or property damage under the limits recognized in Sheen. [Citation.]” (Rattagan, supra, 17 Cal.5th at p. 38.) The Supreme Court further explained “[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.)

Here, the allegations that Defendant induced Plaintiffs to purchase the vehicle through its active concealment of the alleged defects must be accepted as true for purposes of this demurrer and removes the claim from the economic loss rule. The alleged fraudulent inducement is tortious conduct independent from any contract and, under Rattagan, is not barred by the economic loss rule. Accordingly, Defendant’s demurrer on this ground is OVERRULED.

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

25CV006554: DANIELSON, et al. vs GENERAL MOTORS, LLC., et al. 02/09/2026 Hearing on Demurrer to Complaint in Department 28

Conclusion

Defendant’s demurrer is OVERRULED.

Defendant shall file an answer to the Complaint by February 23, 2026.

This minute order is effective immediately. No formal order or other notice is required. (Code Civ. Proc. § 1019.5; Cal. Rules of Court, rule 3.1312.)