Alderson v. General Motors, LLC

The Court finds that the parties conferred as required by Code of Civil Procedure section 430.41

Legal Standard 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.¿ (Wilson v. Transit Authority of City of Sacramento (1962) 199 Cal.App.2d 716, 720-21.)¿In a demurrer proceeding, the defects must be apparent on the face of the pleading or via proper judicial notice.¿(Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994.)¿"A demurrer tests the pleading alone, and not on the evidence or facts alleged." (E-Fab, Inc. v.

Accountants, Inc. Servs. (2007) 153 Cal.App.4th 1308, 1315.) As such, the court assumes the truth of the complaint's properly pleaded or implied factual allegations. (Id.) The only issue a demurrer is concerned with is whether the complaint, as it stands, states a cause of action. (Hahn, supra, 147 Cal.App.4th at 747.) Fifth Cause of Action: Fraudulent Inducement - Concealment Duty to Disclose Defendant argues that Plaintiff has not pled a transactional relationship between GM and Plaintiff which gives rise to a duty to disclose. "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¿. . .¿A relationship between the parties is present¿[only]¿if there is some sort of¿transaction¿between the parties.¿ (Hoffman v. 162 North Wolfe LLC¿(2014)¿228 Cal.App.4th¿1178, 1187;¿see¿Nissan Motor Acceptance Cases¿(2021) 63 Cal.App.5th¿793¿.)¿¿"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,¿(2017) 7 Cal.App.5th¿at¿312.)¿ Here, Plaintiff has alleged that Defendant issued warranties directly on Plaintiff's vehicle, and the Subject Vehicle was purchased at GM's authorized retail dealership Penske Chevrolet of Cerritos, California (FAC, P.P. 6-7.)

Thus, a transactional relationship exists pursuant to Dhital, wherein the court found that the plaintiffs' allegations were sufficient to establish a relationship requiring the manufacturer to disclose known defects. There, plaintiffs bought the car from a Nissan dealership, and Nissan backed the car with an express warranty. The court noted that Nissan's authorized dealerships were its agents for the purposes of selling Nissan vehicles to consumers (Dhital v. Nissan North America, Inc., 84 Cal.App.5th 828 (2022)).

Further, the claim is based on both Defendant's superior knowledge and Defendant's knowing and intentional concealment (Id. P.P. 71-78). Plaintiff has alleged Defendant had exclusive knowledge of, failed to disclose and concealed the existence of the transmission defect in order to ensure Plaintiff's purchase of the Subject Vehicle. (Id.) A duty to disclose has been pled. Defendant's demurrer is OVERRULED on this ground. Specificity However, even where a duty exists, a plaintiff must still plead the circumstances of fraudulent concealment with particularity. (Rattagan v.

Uber Techs., Inc. (2024) 17 Cal.5th 1, 43-44.) "'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 to the plaintiff; (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 not have acted as he or she did if he or she had known of the concealed or suppressed fact; and (5) plaintiff sustained damage as a result of the concealment or suppression of the fact. [Citation.]' [Citation.]" (Hambrick v.

Healthcare

Partners Medical Group, Inc. (2015) 238 Cal.App.4th 124, 162.) Ordinarily, "fraud must be pleaded specifically; general and conclusory allegations do not suffice." (Lazar v. Superior Court (1996) 12 Cal.4th 631, 645.). "This particularity requirement necessitates pleading facts which show how, where, to whom, and by what means" the alleged fraud occurred. (Id.) The purpose of the particularity requirement is to "separate meritorious and nonmeritorious cases, if possible in advance of trial." (Small v.

Fritz Companies, Inc. (2003) 30 Cal.4th 167, 184.)¿¿¿¿ California courts apply the same specificity standard to evaluate the factual underpinnings of a fraudulent concealment claim at the pleading stage, even though the focus of inquiry shifts to the unique elements of the claim. (Rattagan v. Uber Techs., Inc., 17 Cal. 5th 1, 43-44, 553 P.3d 1213, 1240 (2024) citing Goodman v. Kennedy (1976) 18 Cal.3d 335, 347, 134 Cal.Rptr. 375, 556 P.2d 737; Boschma v. Home Loan Center, Inc. (2011) 198 Cal.App.4th 230, 248, 129 Cal.Rptr.3d 874; Cansino v.

Bank of America (2014) 224 Cal.App.4th 1462, 1472, 169 Cal.Rptr.3d 619.) In Rattagan, the court held that it had to determine whether the plaintiff alleged a sufficient factual basis for establishing a duty of disclosure on the part of the defendant independent of the parties' contract. If the duty allegedly arose by virtue of the parties' relationship and defendant's exclusive knowledge or access to certain facts, as the plaintiff alleged there, the Court found that the complaint also had to include specific allegations establishing all the required elements, including (1) the content of the omitted facts, (2) defendant's awareness of the materiality of those facts, (3) the inaccessibility of the facts to plaintiff, (4) the general point at which the omitted facts should or could have been revealed, and (5) justifiable and actual reliance, either through action or forbearance, based on the defendant's omission. "[M]ere conclusionary allegations that the omissions were intentional and for the purpose of defrauding and deceiving plaintiff[] ... are insufficient for the foregoing purposes." (Goodman, at p. 347, 134 Cal.Rptr. 375, 556 P.2d 737.) (Rattagan v.

Uber Techs., Inc., 17 Cal. 5th 1, 43-44, 553 P.3d 1213, 1240 (2024)). Defendant argues that Plaintiff has not pled this cause of action with the requisite specificity. Namely, Defendant argues that Plaintiff failed to allege the specific "facts" that GM allegedly failed to disclose; allegations establishing that GM knew of those "facts" at the time Plaintiffs purchased the vehicle; what advertisements, brochures, or other materials where GM could have disclosed the allegedly omitted "facts" that Plaintiff reviewed and relied upon in purchasing the Subject Vehicle; how long prior to purchasing the vehicle he viewed them; and whether those materials, if any, were prepared by GM or someone else (such as a dealership).

Defendant further argues that Plaintiff failed to allege Defendant's intent to defraud. Here, the Court agrees that Plaintiff does not plead the fraudulent concealment claim with the requisite particularity. Although Plaintiff alleges that GM had superior knowledge of the defect through pre-production and post-production testing data; early consumer complaints about the Transmission Defect; aggregate warranty data; testing conducted in response to these complaints; as well as warranty repair and part replacements data, (FAC P. 71) the pleading does not specify when, where, or how GM's alleged omissions occurred, nor does it identify which advertisements, marketing materials, or representations Plaintiff reviewed, when he reviewed them, or how those materials were prepared or disseminated by GM as opposed to the dealership.

Further, Plaintiff does not allege the general point at which disclosure should or could have been made. Further, while Plaintiff allege that GM's concealment induced him to purchase the vehicle and that he would not have done so had he known of the defect (FAC P. 77), the FAC does not allege any facts establishing Defendant's intent to defraud. The demurrer is SUSTAINED on this ground, with leave to amend. Statute of Limitations Finally, Defendant argues that Plaintiff's Fraudulent Concealment claim is time-barred.

To sustain demurrer to the complaint based on a statute of limitations defect, "the defect must clearly and affirmatively appear on the face of the complaint.... A demurrer will not lie where the action may be but is not necessarily barred." (Citizens for a Responsible Caltrans Decision v. Department of Transportation (2020) 46 Cal.App.5th 1103, 1117.) The fraudulent concealment claim is not time-barred on the face of the complaint. Under Code of Civil Procedure Sec. 338(d), a claim for fraud accrues when the aggrieved party discovers, or reasonably should have

discovered, the facts constituting the fraud. Here, Plaintiff alleges that the defect became apparent only after repeated failed repair attempts, and that he was unaware of GM's concealment until shortly before filing the complaint. (FAC P. 33.) Plaintiff also invokes several tolling doctrines, including the discovery rule, fraudulent concealment, the repair doctrine, and Emergency Rules Related to COVID-19. (FAC P.P. 33-47). These allegations are sufficient at the pleading stage, as a demurrer based on statute of limitations can only be sustained where the defect clearly and affirmatively appears on the face of the complaint.

Defendant's demurrer is OVERRULED on this ground. Motion to Strike Defendant moves to strike Plaintiff's prayer for punitive damages from the FAC on the grounds the FAC fails to state facts sufficient to support the recovery of punitive damages. Civil Code Section 3294(a) authorizes the recovery of punitive damages in non-contract cases "where it is proven by clear and convincing evidence that the defendant has been guilty of oppression, fraud, or malice... (1) "Malice" means conduct which is intended by the defendant to cause injury to the plaintiff or despicable conduct which is carried on by the defendant with a willful and conscious disregard of the rights or safety of others. (2) "Oppression" means despicable conduct that subjects a person to cruel and unjust hardship in conscious disregard of that person's rights. (3) "Fraud" means an intentional misrepresentation, deceit, or concealment of a material fact known to the defendant with the intention on the party of the defendant of thereby depriving a person of property or legal rights or otherwise causing injury. (Civ.

Code Sec. 3294(c)(1)-(3).) As reviewed above, the Court finds that Plaintiff's fraud-based claim is not sufficiently pled with regard to specificity to survive general demurrer. Accordingly, the Court GRANTS Defendant's Motion to Strike Plaintiff's punitive damage request based on Plaintiff's fraudulent concealment claim. Because the Court has allowed Plaintiff leave to amend to address the specificity issues in the fifth cause of action and punitive damages may be awarded upon a properly pled fraud claim (see Civil Code Sec. 3294), the ruling as to Plaintiff's fifth cause of action is without prejudice - Plaintiff may plead punitive damages upon amendment of his fifth cause of action.

Defendant's Motion to Strike Punitive Damages from Plaintiff's FAC is GRANTED as to the fifth cause of action for Fraudulent Inducement - Concealment, with leave to amend.

Conclusion

The demurrer is SUSTAINED with leave to amend. The Motion to Strike is GRANTED, with leave to amend. Plaintiff shall file his Amended Complaint within 20 days. If an Amended Complaint is not filed by September 4, 2026, the Court will deem Plaintiff's failure to amend as a concession that the Demurrer and Motion to should be sustained as described in this order, and Defendants may file their Answer by October 6, 2026. The Case Management Conference presently set for September 17, 2026, is continued to December 10, 2026 at 8:30 a.m.

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 on the tentative, and copying all parties in the email communication. Please be advised that if you submit on the tentative and elect not to appear at the hearing, the opposing party may nevertheless appear at the hearing and argue the matter. Unless you receive a submission from all other parties in the matter, you should assume that others might appear at the hearing to argue.

If the Court does not receive emails from the parties indicating submission on this tentative ruling and there are no appearances at the hearing, the Court will adopt the tentative as the final order, or take the matter off calendar at its discretion. | Home