Richard Ortiz v. General Motors, LLC

SUPERIOR COURT, STATE OF CALIFORNIA COUNTY OF SANTA CLARA Department 10 Honorable Jeffrey B. El-Hajj Blanca Than, Courtroom Clerk 191 North First Street, San Jose, CA 95113

DATE: August 18, 2026 TIME: 9:00 A.M. / 9:01 A.M. To contest the ruling, call (408) 808-6856 before 4:00 P.M. Make sure to let the other side know before 4:00 P.M. that you plan to contest the ruling. (Cal. Rules of Court, rule 3.1308(a)(1); Local Rule 8.D.)

**Please specify the issue to be contested when calling the Court and counsel**

Line 5 24CV451118 So Yeon Chun v. Hyeon Cross-complainant Hyeon Eui Lee’s motion to deem admitted Eui Lee requests for admission, set one, against self-represented cross- defendant Dong Suk Yoo. (Code Civ. Proc., § 2033.280.) Notice is not proper. The proof of service was served by electronic service. But Dong Suk Yoo did not expressly consent to receive electronic service. (Code Civ. Proc., § 1010.6, subd. (c) [service on unrepresented persons].) Though it does not appear the moving papers were sent by U.S.

Mail, the court also observes that cross-complainant appears to have the wrong physical address for Dong Suk Yoo. The proof of service indicates a mailing address of 34560 El Camino Real, but the party’s address of record is 3450 El Camino Real. The motion is DENIED. The court will prepare the order. Line 6 25CV474284 Richard Ortiz v. General Click LINE 6 or scroll down for ruling. Motors, LLC Line 7 25CV474284 Richard Ortiz v. General Click LINE 6 or scroll down for ruling. Motors, LLC Line 8 26CV497313 EV Core Corp. dba Club Click LINE 8 or scroll down for ruling.

Pilates Evergreen Valley, a California corporation v. JM Home Builders, Inc., a California corporation

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Calendar Line 6 Case Name: Richard Ortiz v. General Motors, LLC Case No.: 25CV474284

This is an action brought under the Song-Beverly Consumer Warranty Act by plaintiff Richard Oritz (Ortiz) against defendant General Motors, LLC (GM), and Doe defendants. It is based on Ortiz’s purchase of a 2019 Chevrolet Silverado 1500 (Subject Vehicle) in November 2019. As part of this purchase, Ortiz entered into a warranty contract with GM.

The original and still operative complaint was filed in September 2025, more than four years after Ortiz acquired the Subject Vehicle. The complaint alleges five causes of action against GM: (1) violation of Civil Code section 1793.2, subdivision (d); (2) violation of Civil Code section 1793.2, subdivision (b); (3) violation of Civil Code section 1793.2, subdivision (a)(3); (4) breach of the implied warranty of merchantability; and (5) fraudulent inducement— concealment. Attached to the complaint as exhibit A is a copy of the warranty contract.

At issue is GM’s demurrer to and motion to strike portions of the complaint, opposed by Ortiz.

LEGAL STANDARDS FOR DEMURRER

In ruling on a demurrer, the court accepts as true all properly pleaded material factual allegations but does not accept as true contentions, deductions or conclusions of fact or law. (Valero v. Spread Your Wings, LLC (2023) 88 Cal.App.5th 243, 253.) Code of Civil Procedure section 430.60 states that “[a] demurrer shall distinctly specify the grounds upon which any of the objections to the complaint, cross-complaint, or answer are taken. Unless it does so, it may be disregarded.” The California Rules of Court also require that the demurrer itself (distinct from a supporting memorandum) specify the target of any objection and the grounds. (See Cal.

Rules of Court, rules 3.1103(c), 3.1112(a), 3.1320(a) [“Each ground of demurrer must be in a separate paragraph and must state whether it applies to the entire complaint, cross-complaint, or answer, or to specified causes of action or defenses.”].)

The court cannot consider extrinsic evidence when ruling on a demurrer. That includes declarations. The court has considered the declaration from defense counsel only to the extent it describes the meet and confer efforts required by statute. Finally, “points raised in the reply brief for the first time will not be considered, unless good reason is shown for failure to present them before.” (Proctor v. Vishay Intertechnology, Inc. (2013) 213 Cal.App.4th 1258, 1273.)

DISCUSSION OF DEMURRER

GM demurs to the complaint’s fourth cause of action solely on the basis that it is barred by the statute of limitations, and demurs to the fifth cause of action on the ground that it is barred by the statute of limitations and also on the ground that it fails to state sufficient facts.

Statute of Limitations Argument

“A complaint showing on its face the cause of action is barred by the statute of limitations is subject to general demurrer.” (Iverson, Yoakum, Papiano & Hatch v. Berwald (1999) 76 Cal.App.4th 990, 995.) The running of the statute must appear clearly and 16

affirmatively from the dates alleged—it is not enough that the complaint might be barred. (Committee for Green Foothills v. Santa Clara County Board of Supervisors (2010) 48 Cal.4th 32, 42.) “Generally, the limitations period starts running when the last element of a cause of action is complete.” (NBCUniversal Media, LLC v. Super. Ct. (2014) 225 Cal.App.4th 1222, 1231.)

Fourth Cause of Action

While not labeled as A Song-Beverly claim, the fourth cause of action for breach of the implied warranty of merchantability is expressly based on Civil Code sections 1791.1, 1794 and 1794.5. (See complaint at ¶¶ 40-44.)

“Under the implied merchantability warranty, ‘every sale of consumer goods that are sold at retail in this state shall be accompanied by the manufacturer’s and the retail seller’s implied warranty that the goods are merchantable.’” (Brand v. Hyundai Motor America (2014) 226 Cal.App.4th 1538, 1545, quoting Civ. Code, § 1792.) “The warranty ‘“arises by operation of law”’ and therefore applies despite its omission from a purchase contract.” (Id.) “Merchantability, as pertinent here, means that the goods ‘[p]ass without objection in the trade under the contract description,’ and are ‘fit for the ordinary purposes for which such goods are used.’” (Ibid., quoting Civ.

Code, § 1791.1, subd. (a).) Plaintiff must allege a breach of warranty, occurring while the warranty is valid, and must sue within the limitations period. (Mexia v. Rinker Boat Co., Inc. (2009) 174 Cal.App.4th 1297, 1306 (Mexia).) The “implied warranty of merchantability may be breached by a latent defect undiscoverable at the time of sale.” (Id. at p. 1304.) Thus, if a product is sold with a latent defect, the implied warranty is breached “by the existence of the unseen defect, not by its subsequent discovery.” (Id. at p. 1305.)

Because an implied warranty is one that arises by operation of law rather than by an express agreement of the parties, courts have consistently held it is not a warranty that explicitly extends to future performance of the good. (Cardinal Health 301, Inc. v. Tyco Electronics Corp. (2008) 169 Cal.App.4th 116, 134.)

The limitations period applicable to the fourth cause of action is four years under Commercial Code section 2725, subdivision (1). The claim accrues “when the breach occurs, regardless of the aggrieved party’s lack of knowledge of the breach.” (Com. Code, § 2725, subd. (2).) The duration provision in the Song-Beverly Act provides that the duration “shall be coextensive in duration with an express warranty which accompanies the consumer goods... in no event shall such implied warranty have a duration of less than 60 days nor more than one year following the sale.” (Mexia, supra, 174 Cal.App.4th at 1304, citing Civ. Code, § 1791.1, subd. (c).)

The complaint alleges that Ortiz acquired the Subject Vehicle in November 2019. The complaint was filed more than four years later. The fourth cause of action is time-barred on its face.

The complaint’s tolling and delayed discovery allegations in the complaint are so generic and conclusory that they are legal and factual conclusions that cannot be accepted as true on demurrer. (Complaint at ¶¶ 23-24; Valero, supra, 88 Cal.App.5th at p. 253.) When a plaintiff relies on a theory of fraudulent concealment, delayed accrual, equitable tolling, or estoppel to save a cause of action that otherwise appears on its face to be time-barred, he or she must specifically plead facts which, if proved, would support the theory. (Mills v. Forestex Co. 17

(2003) 108 Cal App 4th 625, 641 (Mills).) “In order to rely on the discovery rule for delayed accrual of a cause of action, ‘[a] plaintiff whose complaint shows on its face that his claim would be barred without the benefit of the discovery rule 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.’ In assessing the sufficiency of the allegations of delayed discovery, the court places the burden on the plaintiff to ‘show diligence’; ‘conclusory allegations will not withstand demurrer.’” (Fox v.

Ethicon Endo-Surgery, Inc. (2005) 35 Cal.4th 797, 808 (Fox), internal citations omitted.) To be entitled to the benefit of the delayed discovery rule, a plaintiff must specifically plead the time and manner of discovery and show the following: (1) the plaintiff had an excuse for late discovery; (2) the plaintiff was not at fault in discovering facts late; (3) the plaintiff did not have actual or presumptive knowledge to be put on inquiry; and (4) the plaintiff was unable to make earlier discovery despite reasonable diligence. (E-Fab, Inc. v.

Accountants, Inc. Services (2007) 153 Cal.App.4th 1308, 1319, 1324-1325.)

Plaintiff argues Mexia allows for delayed discovery of a breach of implied warranty claim. In Mexia, the action was filed within four years of the date of purchase of the item (a boat) that contained the latent defect. Mexia did not articulate or purport to apply a delayed discovery rule, because resort to such a rule was unnecessary in that case. Mexia determined that latent defects that exist in the first year after tender of delivery, even if they do not manifest until after the first year, can be a basis for a breach of implied warranty claim, so long as the claim is filed within four years of the date of sale. (Mexia, supra, 174 Cal.App.4th at pp. 1306-1307.) It cannot be read as finding that a breach of implied warranty claim accrues upon discovery of the alleged breach. Here, Ortiz’s complaint was not filed within four years after he acquired the subject vehicle.

A plaintiff bears the burden of demonstrating that an amendment would cure the defect identified on demurrer. (Schifando v. City of Los Angeles (2003) 31 Cal.4th 1074, 1081.) Ortiz’s opposition does not meet this burden. But the court will grant leave to amend the fourth cause of action because this is the first pleading challenge to be heard in this case. The court does not grant leave to add new causes of action or parties.

Fifth Cause of Action

The statute of limitations applicable to the fifth cause of action for fraudulent inducement through concealment is the three-year statute set forth in Code of Civil Procedure section 338, subdivision (d). A claim for fraud accrues on the date of “discovery, by the aggrieved party, of the facts constituting the fraud.” (Code Civ. Proc. § 338, subd. (d); Britton v. Girardi (2015) 235 Cal.App.4th 721, 734.) The facts constituting the fraud here are the sale of the subject vehicle to Ortiz in November 2019 without disclosing a “transmission defect” allegedly known to GM.

The complaint was filed more than four years later. “‘Although the statute does not expressly provide that the claim will accrue based upon either actual or inquiry notice of the claimant, California courts have long construed it in such a fashion.’ As our Supreme Court has long held, under Code of Civil Procedure section 338, subdivision (d), a ‘plaintiff must affirmatively excuse his [or her] failure to discover the fraud [or mistake] within three years after it took place, by establishing facts showing that he [or she] was not negligent in failing to make the discovery sooner and that he [or she] had no actual or presumptive knowledge of facts sufficient to put him [or her] on inquiry.’” (Krolikowski v.

San Diego City

Employees’ Retirement System (2018) 24 Cal.App.5th 537, 561-562, internal citations omitted.)

The complaint’s conclusory allegations of tolling, and that Oritz did not discover the alleged fraud until August 2025, do not satisfy the standard for tolling or delayed discovery and do not affirmatively excuse the failure to discover the alleged fraud within three years of purchasing the subject vehicle. (Complaint at ¶¶ 23-24.) The court will grant leave to amend the fifth cause of action because this is the first pleading challenge in the case.

Failure to State Sufficient Facts

The elements of 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 as he or she did if the plaintiff had known of the concealed or suppressed fact; and (5) as a result of the concealment or suppression of the fact, the plaintiff sustained damage. (Burch v.

CertainTeed Corp. (2019) 34 Cal.App.5th 341, 348 (Burch), citing Bigler-Engler v. Breg, Inc. (2017) 7 Cal.App.5th 276, 310-311 (Bigler-Engler).) With respect to concealment, 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.

The latter three circumstances presuppose the existence of some other relationship between the plaintiff and defendant in which a duty to disclose can arise. This relationship has been described as a transaction, such as that between seller and buyer, employer and prospective employee, doctor and patient, or parties entering into any kind of contractual arrangement. (Id. at pp. 349-350.)

GM argues the fifth cause of action fails to state sufficient facts for three reasons: a failure to plead fraud with particularity; a failure to plead that GM had a duty to disclose; and because the action is barred by the economic loss rule.

Regarding the economic loss rule, “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.) More specifically, the economic loss rule does not apply to fraudulent inducement of a contract. (Erlich v. Menezes (1999) 21 Cal.4th 543, 552 (Erlich); Robinson Helicopter Co. v. Dana Corp. (2004) 34 Cal.4th 979, 989-990 (Robinson); County of Santa Clara v. Atlantic Richfield Co. (2006) 137 Cal.App.4th 292, 328-329 [“The analysis [in Robinson] suggested that fraud itself is immune from application of the economic loss rule because fraud is particularly blameworthy and therefore unlike both contract causes of action and products liability causes of action.”], internal citation omitted.)

Rattagan concerned fraud alleged to have occurred during a contractual relationship, not fraud in the inducement of a purchase. (Rattagan, supra, 17 Cal.5th at p. 41, fn. 12 [“Rattagan’s tort claims are, of course, based on alleged conduct committed during the contractual relationship but purportedly outside the parties’ chosen rights and obligations.”].) The Rattagan court made clear it was not addressing fraudulent inducement of contract.

Where a fraudulent inducement of a contract is alleged, the fraud occurs prior to the formation of the contract and is separate from the contract.

Regarding particularity, each element in a fraud cause of action must generally be pleaded with specificity. (Cadlo v. Owens-Illinois, Inc. (2004) 125 Cal.App.4th 513, 519.) In the case of fraud by concealment or omission, however, courts require less particularity because “[h]ow 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 Ass’n., Inc. (2009) 171 Cal.App.4th 1356, 1384.)

Less specificity is required when it appears from the nature of the allegations that the defendant necessarily possesses full information concerning the facts of the controversy. (See Committee on Children’s Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 217, superseded by statute on other grounds as stated in Californians for Disability Rights v. Mervyn’s, LLC (2006) 39 Cal.4th 223, 227.)

The complaint alleges that GM manufactures, distributes, markets, and sells motor vehicles in Santa Clara County, California. (Complaint, ¶ 4.) It alleges that Ortiz entered into a contract with GM, the written warranty contract, in November 2019. (Id. at ¶ 6.) It also alleges that GM knew of the alleged transmission defect and did not disclose it to consumers such as Ortiz. (Id. at ¶¶ 51.) At least one appellate court has found similar allegations sufficient to support a cause of action for fraudulent concealment. (Dhital v. Nissan North America, Inc. (2022) 84 Cal.App.5th 828, 843-844.) Although the Supreme Court initially granted review in Dhital, it subsequently dismissed review, which means Dhital is precedential authority. (Cal Rules of Court, rule 8.1115(e)(2)).) Dhital is persuasive. The complaint is pleaded with adequate specificity.

Regarding a duty to disclose, the complaint alleges a direct contractual relationship between Ortiz and GM via the warranty agreement. “[A]ny kind of contractual relationship” is sufficient to impose a duty to disclose. (Burch, supra, 34 Cal.App.5th at p. 350.) Even if the warranty contract was not enough to give rise to a duty to disclose, in California a “vendor has a duty to disclose material facts not only to immediate purchasers, but also to subsequent purchasers when the vendor has reason to expect that the item will be resold.” (OCM Principal Opportunities Fund, L.P. v. CIBC World Markets Corp. (2007) 157 Cal.App.4th 835, 859.) As a vehicle manufacturer and distributor, GM has reason to expect that its vehicles are likely to be sold by dealerships to consumers. The duty to disclose as a vendor is therefore triggered.

GM’s demurrer to the fifth cause of action on the ground that it fails to state sufficient facts is overruled.

LEGAL STANDARDS FOR MOTION TO STRIKE

Under Code of Civil Procedure section 436, a court may strike out any irrelevant, false, or improper matter inserted into any pleading, or strike out all or part of any pleading not drawn or filed in conformity with the laws of this state, a court rule, or an order of the court. Irrelevant matter includes (1) an allegation that is not essential to the statement of a claim or defense, (2) an allegation that is neither pertinent to nor supported by an otherwise sufficient claim or defense, and (3) a demand for judgment requesting relief not supported by the allegations of the complaint or cross-complaint. (Code Civ. Proc., § 431.10, subds. (b), (c).) At the same time, the California Court of Appeal has emphasized “[w]e have no intention of 20

creating a procedural ‘line item veto’ for the civil defendant.” (PH II, Inc. v. Superior Court (1995) 33 Cal.App.4th 1680, 1683.) The grounds for a motion to strike must appear on the face of the challenged pleading or from matters of which the court may take judicial notice. (Code Civ. Proc., § 437, subd. (a); see also City and County of San Francisco v. Strahlendorf (1992) 7 Cal.App.4th 1911, 1913.) In ruling on a motion to strike, the court reads the complaint as a whole, all parts in their context, and assumes the truth of all well-pleaded allegations. (Turman v. Turning Point of Central California, Inc. (2010) 191 Cal.App.4th 53, 63 (Turman).) As with a demurrer, extrinsic evidence cannot be considered.

California Rules of Court, rule 3.1322(a) requires that “[a] notice of motion to strike a portion of a pleading must quote in full the portions sought to be stricken except where the motion is to strike an entire paragraph, cause of action, count, or defense. Specifications in a notice must be numbered consecutively.” (Cal. Rules of Court, rule 3.1322(a).)

DISCUSSION

GM moves to strike portions of the complaint’s first, second and third causes of action, as well as a portion of the prayer (specifically paragraphs 29-31, 36 and 39) for “improperly pleading a Request for Civil Penalties” in violation of Code of Civil Procedure section 871.24. (See GM’s notice of motion.)

The complaint alleges that Ortiz requested that GM buy back the vehicle on August 18, 2025, thereby also alleging that the vehicle was still in Ortiz’s possession at that time. (Complaint at ¶ 24.)

Assembly Bill No. 1755 added chapter 12 to title 10 of part 2 of the Code of Civil Procedure. The bill added sections 871.20 through 871.28, including 871.24. (Unspecified statutory references are to the Code of Civil Procedure.) The bill was signed by the Governor in September 2024 and became effective on January 1, 2025. (Stats. 2024, ch. 938.) It initially applied to all actions seeking restitution, vehicle replacement, or civil penalties under Civil Code sections 1793.2, 1793.22, and 1794, regardless of the vehicle manufacturer. (Former section 871.20, Stats. 2024, ch. 938, § 1.)

The Legislature amended chapter 12 with Senate Bill No. 26, urgency legislation which became effective upon the Governor’s signature on April 2, 2025. (Stats. 2025, ch. 1.) Senate Bill No. 26 amended sections 871.20 and 871.24. It also added sections 871.29 and 871.30. Senate Bill No. 26 amended chapter 12 in a fundamental way by making its provisions applicable only to vehicle manufacturers who opt in to its requirements. Section 871.20, subdivision (a), now provides that chapter 12 applies to actions “brought against a manufacturer who has elected under section 871.29 to proceed under this chapter.”

Section 871.29, subdivision (a)(1) provides that a manufacturer may elect to be governed by chapter 12 by “providing written notice of that election to the Arbitration Certification Program within the Department of Consumer Affairs by October 31 of the preceding calendar year, except as provided in Section 871.30.” Section 871.29, subdivision (b) provides that “[u]nless a manufacturer has made the election described in subdivision (a) that covers a given year, Sections 871.20 to 871.28, inclusive, shall not apply to an action described in subdivision (a) of Section 871.20 with respect to all of the manufacturer’s motor vehicles sold during that year, except as provided in Section 871.30.”

Section 871.29, subdivision (d) further provides that when a motor vehicle is sold new, “a manufacturer shall provide notice to a consumer 21

specifying which one of the following procedures governs the vehicle: (1) The procedures set forth in this chapter; (2) The procedures set forth in Article 3 (commencing with Section 1792) of Chapter 1 of Title 1.7 of Part 4 of Division 3 of the Civil Code.”

Section 871.30, subdivision (a), provides: “Within 30 days of the effective date of the act adding this section, a manufacturer may elect to be governed by this chapter for all actions described in subdivision (a) of Section 871.20 with respect to all of its motor vehicles sold in the year 2025 and in all prior years by providing written notice of that election to the Arbitration Certification Program within the Department of Consumer Affairs.” Subdivision (c) further provides: “Unless a manufacturer has made the election described in subdivision (a), Sections 871.20 to 871.28, inclusive, shall not apply to an action described in subdivision (a) of Section 871.20, including actions already filed between January 1, 2025 and the effective date of the act adding this section, with respect to all of its vehicles sold new in the year 2025 and in all prior years.”

GM has not shown that section 871.24 applies here, given that the statutory scheme did not come into effect until more than five years after Ortiz’s purchase of the subject vehicle. It is not apparent from the face of the pleading or from any material offered for judicial notice that GM has elected to participate in the procedures set forth in section 871.20 et seq. GM’s motion to strike is denied.

CONCLUSION

GM’s demurrer to the complaint’s fourth and fifth causes of action on the basis that they are barred by the statute of limitations is sustained with leave to amend.

GM’s demurrer to the complaint’s fifth cause of action on the basis that it fails to state sufficient facts is overruled.

GM’s motion to strike portions of the complaint is denied.

Any amended pleading must be filed and served no later than September 18, 2026.

The court will prepare the order.

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