Renteria v. FCA US LLC, et al

Analysis

Here, Defendant FCA moves for a judgment on the pleading to the 5th cause of action on four grounds: (1) time-barred; (2) insufficiently pleaded; (3) no duty exists because no transactional relationship; and (4) barred by the economic loss rule.

Time Bar – When, by the face of the complaint, it is clear a claim is time-barred, the plaintiff must specifically plead facts to show (1) the time and manner of discovery and (2) the inability to have made earlier discovery despite reasonable diligence. (CAMSI IV v. Hunter Technology Corp. (1991) 230 Cal.App.3d 1525, 1536.)

The burden is on the plaintiff to show diligence, and conclusory allegations will not withstand a demurrer. (Id. at pp. 1536-37.)

Contrary to FCA’s position, the fraud claim did not necessarily accrue when the subject vehicle was sold because it does not accrue until it is discovered or could have been discovered. On the face of the allegations, Plaintiff alleges the concealment was not reasonably discovered until shortly before he filed his Complaint because the vehicle continued to have symptoms after repair attempts.

Now, U.S. District Courts have found that when defective symptoms continue with no resolution after repair attempts, that would, at some point, trigger a suspicion and due diligence requirement under the delayed discovery rule. (Vanella v. Ford Motor Company (N.D.Cal. 2020) 2020 WL 887978, at p. *6; Galvez v. Ford Motor Company (E.D.Cal. 2018) 2018 WL 4700001, at pp. *4-5.)

However, on the face of the Complaint, facts are not pleaded to determine, as a matter of law, that by reasonable diligence the discovery of the alleged concealment was over 3 years before the Complaint’s filing. Ultimately, even if the delayed discovery allegations are on the weaker end, it pleads enough to preclude finding the fraudulent concealment cause of action is barred based on the face of the Complaint.

Sufficiency of Pleadings – The elements for fraudulent concealment are (1) the defendant concealed or suppressed a material fact; (2) the defendant was under a duty to disclose the fact to the plaintiff; (3) the defendant intentionally concealed or suppressed the fact with the intent to defraud the plaintiff; (4) the plaintiff was unaware of the fact and would not have acted in the same way knowing of the concealed or suppressed fact; (5) causation; and (6) the plaintiff sustained damages. (Rattagan v. Uber Technologies, Inc. (2024) 17 Cal.5th 1, 40.)

The facts that constitute fraud must be alleged fully, factually, and specifically. (Wilhelm v. Pray, Price, Williams & Russell (1986)186 Cal.App.3d 1324, 1331.)

The Complaint, here, alleges that Renteria purchased the vehicle with a defective 36L engine which caused loss of power, stalling, engine running rough, and engine misfires. The defective engine was a safety concern. It impaired the use, value, or safety of the vehicle. (¶¶10, 16, 18-20.)

Defendant FCA knew of the defect prior to Plaintiff’s purchase. Nonetheless, it did not disclose the defect to Plaintiff by way of the dealer’s sales agents, advertisements, and/or marketing materials. (¶¶21-24, 26, 28-29, 60-61, 64.)

Ultimately, the above allegations sufficiently allege the elements for fraudulent concealment and specify the matter, means, and effect of the concealment.

Transactional Relationship – A duty to disclose material facts arises when (1) the defendant is under statutory or other prescriptive legal obligation; (2) a fiduciary or confidential relationship exists between the defendant and the plaintiff; (3) the defendant has exclusive knowledge of the material facts and knows that they are not reasonably discoverable by the plaintiff; (4) the defendant made some representations but failed to disclose other facts material to qualify the facts disclosed whereby the disclosure was misleading; and (5) the defendant actively concealed the discovery of the material facts from the plaintiff. (Rattagan, supra, 17 Cal.5th at p. 40; SCC Acquisitions, Inc. v. Central Pacific Bank (2012) 207 Cal.App.4th 859, 864.)

The relationship under categories 3-5 is described as transactional. (Rattagan, supra, 17 Cal.5th at pp. 40-41.)

However, an action for deceit does not require contractual privity. (Shapiro v. Sutherland (1998) 64 Cal.App.4th 1534, 1549.) “[A] defendant cannot escape liability if he or she makes a representation to one person while intending or having reason to expect that it will be repeated to and acted upon by the plaintiff.” (Id. at p. 1548.)

A duty to disclose may arise from a seller to a subsequent purchaser when it has reason to expect the item will be resold. (OCM Principal Opportunities Fund, L.P. v. CIBC World Markets Corp. (2007) 157 Cal.App.4th 835, 859.)

The facts here are analogous to the examples outlined in Shapiro because Plaintiff is only one step removed from the dealer’s acquisition of the car from Defendant FCA, with FCA reasonably expecting that a car sold to a dealership would then be sold to a consumer.

Per the Complaint’s allegations, Defendant FCA had exclusive knowledge of, or had a superior position of knowing, the issues existing in the engine [¶¶25-26, 59-61], and it could reasonably know an authorized dealership would sell the vehicle to a consumer, and the dealership would not be able to pass on material information about the vehicle being purchased. Thus, an indirect transactional relationship appears to exist. Additionally, the Complaint alleges a transactional relationship by Defendant FCA warranting the vehicle.

Economic Loss Rule – The Economic Loss Rule provides that a tort recovery for noninsurance contract breaches is precluded unless the alleged violation arises from an independent duty founded on principles of tort law. (Aas v. Superior Court (2000) 24 Cal.4th 627, 636, 643; Applied Equipment Corp. v. Litton Saudi Arabia Ltd. (1994) 7 Cal.4th 503, 515.)

However, the economic loss rule also does not lie when the contract was fraudulently induced. (Rattagan, supra, 17 Cal.5th at p. 41.)

Here, the 5th cause of action pleads fraud in the inducement via fraudulent concealment. It is properly sitting outside the Economic Loss Rule because it concerns conduct before the contract was formed.

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17. Thompson v. Food N Fuel, et al, Case No. CIVSB2520712 Defendant Food N Fuel’s Motion to Compel Deposition of Plaintiff 8/6/26, 9:00 a.m., Dept. S-17

Tentative Rulings The Court would GRANT the motion to compel Plaintiff’s deposition for August 17, 202, at 1:00 p.m.

The Court would also GRANT sanctions in the amount of $440, payable within thirty days.

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