Martha L. Pulido et al. v. FCA US, LLC et al.

Case No.: 26CV486237

Defendant FCA US LLC (“FCA”) demurs to the sixth cause of action for fraudulent inducement alleged in the first amended complaint (“FAC”) filed by Martha L. Pulido and Edwin O. Geraldo (together, “Plaintiffs”). Defendant Sunnyvale Chrysler Dodge Jeep Ram (“Chrysler”) demurs to the FAC’s fifth cause of action for negligent repair.

The court SUSTAINS Chrysler’s demurrer to the FAC’s fifth cause of action without leave to amend. Chrysler’s demurrer is unopposed. A failure to oppose a motion may be deemed a consent to the granting of the motion. (California Rules of Court, Rule 8.54(c) [“A failure to oppose a motion may be deemed a consent to the granting of the motion.”]; Sexton v. Superior Court (1997) 58 Cal.App.4th 1403, 1410.)

The court OVERRULES FCA’s demurrer to the sixth cause of action for fraudulent concealment. The FAC satisfies the pleading requirements for a fraud cause of action. (See Committee on Children’s Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 217 [noting that fraud must be pleaded with specificity, but less specificity is required when it appears from the nature of the allegations that the defendant must necessarily possess full information concerning the facts of the controversy], superseded by statute on other grounds as stated in Californians for Disability Rights v. Mervyn’s, LLC (2006) 39 Cal.4th 223, 227.)

The FAC alleges a direct contractual relationship between Plaintiffs and FCA in the form of an express written warranty. (FAC, ¶ 7.) This is sufficient to plead the “existence of a buyerseller relationship between the parties.” (See Dhital v. Nissan North America, Inc. (2022) 84 Cal.App.5th 828, 843-844 (Dhital).) FCA, citing Rattagan v. Uber Technologies, Inc. (2024) 17 Cal.5th 1 (Rattagan), emphasizes that “the transactional relationship required to trigger a duty to disclose for a fraudulent concealment claim requires direct dealings between the plaintiff and the defendant.” (Memorandum of Points and Authorities in Support of Demurrer (“MPA”), p. 11:1- 23.)

However, as discussed, the FAC alleges “direct dealings” between FCA and Plaintiffs. (See FAC, ¶ 7.) The court also does not find Ford Motor Warranty Cases (2025) 17 Cal.5th 1122 (Ford Warranty) particularly helpful to FCA. (MPA, pp. 11:24-12:14.) In Ford Warranty, the Court of Appeal was not persuaded by the defendant Ford’s argument that Ford was entitled to compel arbitration by relying on an arbitration clause in sales contracts signed by the plaintiff buyers and seller dealerships—Ford itself did not sign these contracts. (Ford Warranty, supra, 17 Cal.5th at p. 1126.)

Again, the court reiterates that the FAC alleges that FCA itself and Plaintiffs entered into a warranty contract.

The FAC alleges that the 2024 Jeep Wrangler purchased by Plaintiffs (the “Subject Vehicle”) exhibited a “battery defect.” (FAC, ¶¶ 12-21.) The FAC then alleges that FCA knew that the Subject Vehicle had this defect and failed to disclose it when Plaintiffs purchased the Subject Vehicle. (Id. at ¶¶ 19-26, 67-69.) The FAC further alleges that FCA concealed this defect with the intent to defraud and induce Plaintiffs into purchasing the Subject Vehicle. (Id. at ¶¶ 67-73.) The FAC alleges that had Plaintiffs known about the Subject Vehicle’s defect, they would not have purchased it. (Id. at ¶ 74.)

The Court of Appeal in Dhital found similar allegations sufficient to support a cause of action for fraudulent concealment. (Dhital, supra, 84 Cal.App.5th at pp. 843-844.) The court notes that 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).)

Nor does the economic loss rule bar the FAC’s sixth cause of action. The Court of Appeal in Dhital held that the economic loss rule does not bar a cause of action for fraudulent inducement by concealment. (Dhital, supra, 84 Cal.App.5th at pp. 840-841; FAC, ¶¶ 64-77.) FCA argues that the FAC fails to demonstrate that FCA’s conduct “violated a duty that is independent of the duties and rights assumed by the parties when they entered the contract” and that FCA’s conduct caused injury to persons or property “that was not reasonably contemplated by the parties when the contract was formed.” (MPA, citing Rattagan, supra, 17 Cal.5th at pp. 20-21.)

Rattagan concerned fraud that allegedly occurred during a contractual relationship, not fraud in the inducement of a contract. (Rattagan, supra, 17 Cal.5th at p. 41, fn. 12.) Where fraudulent inducement is alleged, the fraud occurs prior to the formation of the contract and is independent from the contract. (Dhital, supra, 84 Cal.App.5th at pp. 840-841.)

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