HAGEN, et al. vs FCA US LLC, et al.

25CV014900: HAGEN, et al. vs FCA US LLC, et al. 08/18/2026 Hearing on Demurrer (Lemon Law) to First Amended Complaint in Department 16D

Tentative Ruling

NOTICE: Consistent with Local Rule 1.06(B), any party requesting oral argument on any matter on this calendar must comply with the following procedure: To request limited oral argument, on any matter on this calendar, you must call the Department 16D Oral Argument Request Line at (916) 874-3056 by 4:00 p.m. the Court day before the hearing and advise opposing counsel. At the time of requesting oral argument, the requesting party shall leave a voice mail message: a) identifying themselves as the party requesting oral argument; b) indicating the specific matter/motion for which they are requesting oral argument; and c) confirming that it has notified the opposing party of its intention to appear and that opposing party may appear via Zoom using the Zoom link and Meeting ID indicated below.

If no request for oral argument is made, the tentative ruling becomes the final order of the Court. Unless ordered to appear in person by the Court, parties may appear remotely either telephonically or by video conference via the Zoom video/audio conference platform with notice to the Court and all other parties in accordance with Code of Civil Procedure §367.75. Although remote participation is not required, the Court will presume all parties are appearing remotely for non-evidentiary civil hearings.

The Department 16D Zoom Link is https://saccourt-cagov.zoomgov.com/j/16146506749 and the Zoom Meeting ID is 161 4650 6749. To appear on Zoom telephonically, call (833) 568-8864 and enter the Zoom Meeting ID referenced above. NO COURTCALL APPEARANCES WILL BE ACCEPTED. Parties requesting services of a court reporter will need to arrange for private court reporter services at their own expense, pursuant to Government code §68086 and California Rules of Court, Rule 2.956. Requirements for requesting a court reporter are listed on the Court Reporter Services webpage available on the Sacramento Superior Court website at https://saccourt.ca.gov/general-information/court-reporter-servicestranscripts.

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25CV014900: HAGEN, et al. vs FCA US LLC, et al. 08/18/2026 Hearing on Demurrer (Lemon Law) to First Amended Complaint in Department 16D

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 forward the form to the Court Reporter’s Office and an official reporter will be provided.

In this “Lemon Law” action, Plaintiffs Curtis L. Hagen and Jackalyn G. Hagen (“Plaintiffs”) allege that on February 15, 2019, they purchased a 2019 Jeep Cherokee (“Subject Vehicle”), which was manufactured and/or distributed by Defendant FCA US LLC (“Defendant” or “FCA”). Plaintiffs allege that the Subject Vehicle has various defects, including but limited to the engine, transmission, and electrical systems. Plaintiffs’ First Amended Complaint (“FAC”) alleges against Defendant FCA four causes of action (COA 1-4) under the Song-Beverly Act and also a cause of action (COA 6) for fraudulent inducement-concealment.

Plaintiffs also plead a cause of action for negligent repair (COA 5) against dealership defendant Lodi Chrysler Dodge Jeep Ram. Defendant FCA now demurs to Causes of Action 1-4 and 6 on the grounds that the claims are barred by the various applicable statutes of limitation and/or statute of repose. FCA also demurs to the Sixth Cause of Action for failure to allege facts sufficient to constitute a cause of action for fraud, and failure to allege a transactional relationship giving rise to a duty to disclose.

LEGAL STANDARD A demurrer tests the legal sufficiency of the pleadings, raising issues of law, not fact, regarding the form or content of the opposing party's pleading. (Code Civ. Proc. §§422.10, 589.) A demurrer may only challenge defects on the face of the complaint or from matters that are judicially noticeable. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318; Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994.) However, the face of the complaint includes facts contained in exhibits attached to the complaint. (Frantz v.

Blackwell (1987) 189 Cal.App.3d 91, 94.) A demurrer can be utilized where a complaint itself is incomplete or discloses some defense that would bar recovery.

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

25CV014900: HAGEN, et al. vs FCA US LLC, et al. 08/18/2026 Hearing on Demurrer (Lemon Law) to First Amended Complaint in Department 16D

(Guardian North Bay, Inc. v. Superior Court (2001) 94 Cal.App.4th 963, 971-972.) In reviewing the sufficiency of a complaint against a general demurrer, courts treat the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law. Matters which may be judicially noticed may also be considered. The complaint is to be given a reasonable interpretation, reading it as a whole and its parts in their context. (Farmers v. Zerin (1997) 53 CaI.App.4th 445, 451.)

Consideration of extrinsic evidence or facts asserted in the memorandum supporting or opposing the demurrer is improper. (Ion Equipment Corp. v. Nelson (1980) 110 Cal.App.3d 868, 881.) 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.) '[Courts] are required to construe the complaint liberally to determine whether a cause of action has been stated, given the assumed truth of the facts pleaded.' (Picton v. Anderson Union High School Dist. (1996) 50 Cal.App.4th 726, 733.) Still, the plaintiff has the burden of showing that the facts pleaded are sufficient to establish every element of the cause of action. (See, e.g., Martin v. Bridgeport Community Assn., Inc. (2009) 173 Cal.App.4th 1024, 1031; Sui v.

Price (2011) 196 Cal.App.4th 933, 938.) The allegations must be factual and specific, not vague or conclusionary. (Rakestraw v. California Physicians' Service (2000) 81 Cal.App.4th 39, 43–44.) A demurrer admits the truth of all material facts properly pled and the sole issue raised by a general demurrer is whether the facts pled state a valid cause of action - not whether they are true. (Serrano v. Priest (1971) 5 Cal.3d 584, 591.) Finally, a demurrer may only be sustained where it disposes of an entire cause of action. (See, e.g., Fremont Indemnity Co. v.

Fremont General Corp. (2007) 148 Cal.App.4th 97, 119.) DISCUSSION Song-Beverly Causes of Action and Application of CCP § 871.21 Defendant demurs to the first, second, and third causes of action, arguing that the new rule set forth in Code of Civil Procedure section 871.21 applies. Code of Civil Procedure section 871.20[1] provides:

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

25CV014900: HAGEN, et al. vs FCA US LLC, et al. 08/18/2026 Hearing on Demurrer (Lemon Law) to First Amended Complaint in Department 16D

(a) Notwithstanding any other law, this chapter applies to an action, brought against a manufacturer who has elected under Section 871.29 to proceed under this chapter, seeking restitution or replacement of a motor vehicle pursuant to subdivision (b) or (d) of Section 1793.2, Section 1793.22, or Section 1794 of the Civil Code, or for civil penalties pursuant to subdivision (c) of Section 1794 of the Civil Code, where the request for restitution or replacement is based on noncompliance with the applicable express warranty. (b) This chapter does not apply to service contract claims under Section 1794 of the Civil Code or any action seeking remedies that are not restitution or replacement of a motor vehicle.

Section 871.21 states: (a) An action covered by Section 871.20 shall be commenced within one year after the expiration of the applicable express warranty. (b) Notwithstanding subdivision (a), an action covered by Section 871.20 shall not be brought later than six years after the date of original delivery of the motor vehicle. (c) The time periods prescribed in subdivisions (a) and (b) shall be tolled as follows: (1) As provided by tolling requirements prescribed in subdivision (c) of Section 1793.22 of the Civil Code, as applicable. (2) For the time the motor vehicle is out of service by reason of repair for any nonconformity. (3) For the time period after a pre-suit notice is provided to the manufacturer in accordance with Section 871.24, which time period shall not exceed 60 days.

FCA notes that Plaintiffs allege that they entered into a warranty contract on February 15, 2019, but did not file their complaint within the six-year statute of repose (February 15, 2025). (See Def. Dem. at 12:20-24.) FCA also argues that the statute of limitations has run, as Plaintiffs failed to file their complaint within one year after the expiration of the applicable express warranty. FCA also insists that none of the tolling provisions set forth in Section 871.21, subdivision (c), apply because Plaintiff has not alleged any circumstances to allow for such tolling.

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

25CV014900: HAGEN, et al. vs FCA US LLC, et al. 08/18/2026 Hearing on Demurrer (Lemon Law) to First Amended Complaint in Department 16D

Pointing to the Legislative Counsel's Digest for Senate Bill 26 (2025-2026 Reg. Sess.) ('SB 26'), Plaintiffs claim that Sections 871.20 and 871.21 do not apply here because: [FCA’s] ability to invoke section 871.21's statutes of limitations is contingent on whether it opted into the new procedures under section 871.29. But the laws applicable to the opt-in process were amended under Senate Bill No. 26, and those amendments did not become fully effective until July 1, 2025. Because the amended opt-in procedures will not become fully effective until July 1, 2025, actions commenced prior to July 1, 2025, are not affected by section 871.21's statutes of limitations. (Opp. at 5:23-28.)

The Court agrees with Plaintiffs. This case was filed June 24, 2025 – prior to the fully effective date of Sections 871.20 and 871.21, which is July 1, 2025. FCA fails to show that the Legislature intended the statutes to be retroactive; the original Complaint was filed before the effective date of the statutes and, therefore, Sections 871.20 and 871.21 do not apply to his action. A fundamental principle of statutory interpretation is that statutes generally operate prospectively only, and will not be given a retrospective operation that interferes with antecedent rights unless such is the unequivocal and inflexible import of the terms of the statute and the manifest intent of the Legislature. (See Myers v.

Philip Morris Companies, Inc. (2002) 28 Cal.4th 828, 840.) Thus, a statute that interferes with antecedent rights may be applied retroactively only if it contains express language of retroactivity or if other sources provide a clear and unavoidable implication that the Legislature intended retroactive application. (See Thurman v. Bayshore Transit Management, Inc. (2012) 203 Cal.App. 4th 1112, 1140; Quarry v. Doe I (2012) 53 Cal.4th 945, 955.) A law has a retroactive effect when it changes the legal consequences of past conduct by imposing new or different liabilities upon such conduct - in other words, when it substantially affects existing rights and obligations. (Quarry v.

Doe I, supra, 53 Cal.4th at 956.) ''In general, application of a law is retroactive only if it attaches new legal consequences to, or increases a party's liability for, an event, transaction, or conduct that was completed before the law's effective date.'' (Ibid.) 'Ordinarily, considerations of basic fairness militate against such retroactive changes. [Citations.]' (Ibid.) There is a strong presumption against retroactivity. (See McClung v. Employment Development Department (2004) 34 Cal.4th 467, 475.)

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

25CV014900: HAGEN, et al. vs FCA US LLC, et al. 08/18/2026 Hearing on Demurrer (Lemon Law) to First Amended Complaint in Department 16D

As noted, Plaintiffs allege that they entered into a warranty contract with FCA on February 19, 2019, concerning the Vehicle. If Section 871.21 were applied here, it would require Plaintiffs to have filed suit either within one year after the expiration of the applicable warranty or within six years after the original delivery date (February 19, 2025), prior to there being any such statutory time requirements in effect. It is neither reasonable nor feasible to conclude that Plaintiffs were required to comply with a deadline that was not yet in existence.

Further, the Court finds no clear or express indication that the Legislature intended section 871.21 to apply retroactively, nor does FCA identify any such language in the statute. (See Landgraf v. USI Film Prods. (1994) 511 U.S. 244, 270 [recognizing the presumption against retroactivity based on the unfairness of imposing new burdens after the fact].) Therefore, FCA's demur on this basis is OVERRULED. Fourth Cause of Action – Breach of Implied Warranty/Statute of Limitations FCA demurs to the Fourth Cause of Action for breach of the implied warranty of merchantability on the grounds that it is barred by the statute of limitations.

According to FCA, the Song-Beverly Act limits a claim based on implied warranties to four years from the purchase date (citing inter alia Comm. Code § 2725 and Montoya v. Ford Motor Co. (2020) 46 Cal.App.5th 493.) Since the FAC alleges Plaintiffs purchased the subject vehicle on February 15, 2019, Defendant argues that the four-year period expired on February 15, 2023, long before this action was commenced on June 24, 2025. In Opposition, Plaintiffs argue that FCA’s breach of its Song-Beverly obligations occurred when the defects manifested themselves, and FCA was unable to repair the Vehicle after a reasonable number of repair attempts, which was shortly before filing the Complaint.

Commercial Code section 2725 states, in relevant part: (1) An action for breach of any contract for sale must be commenced within four years after the cause of action has accrued. By the original agreement the parties may reduce the period of limitation to not less than one year but may not extend it. (2) A cause of action accrues when the breach occurs, regardless of the aggrieved party's lack of knowledge of the breach. A breach of warranty occurs when tender of delivery is made, except that where a warranty explicitly extends to future performance of the goods and discovery of the breach must await the

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

25CV014900: HAGEN, et al. vs FCA US LLC, et al. 08/18/2026 Hearing on Demurrer (Lemon Law) to First Amended Complaint in Department 16D

time of such performance the cause of action accrues when the breach is or should have been discovered.

(4) This section does not alter the law on tolling of the statute of limitations nor does it apply to causes of action which have accrued before this code becomes effective. (Comm. Code § 2725.) Defendant FCA's demurrer based on a four-year statute of limitations is overruled. Contrary to Defendant's suggestion (Def. Dem. at 15:7-16), Mexia v. Rinker Boat Co. (2009) 174 Cal.App.4th 1297, actually stands for the relevant proposition that, among other things, Civil Code §1791.1(c) establishes the 'duration of the implied warranty of merchantability' but then clarifies that the Song-Beverly Act does not include its own statute of limitations. (Mexia, at 1304-1305.)

There, the appellate court stated, in pertinent part: California courts have held that the statute of limitations for an action for breach of warranty under the Song-Beverly Act is governed by the same statute that governs the statute of limitations for warranties arising under the California Uniform Commercial Code: section 2725 of the California Uniform Commercial Code. [Citations.] Under this statute, '(1) An action for breach of any contract for sale must be commenced within four years after the cause of action has accrued. [¶] (2) A cause of action accrues when the breach occurs, regardless of the aggrieved party's lack of knowledge of the breach.

A breach of warranty occurs when tender of delivery is made, except that where a warranty explicitly extends to future performance of the goods and discovery of the breach must await the time of such performance the cause of action accrues when the breach is or should have been discovered.' [Citations.]

[Defendants] now concede that the statute of limitations for an action for breach of warranty under the Song-Beverly Act is four years pursuant to section 2725 of the California Uniform Commercial Code. [Citations.] Under that statute, a cause of action for breach of warranty accrues, at the earliest, upon tender of delivery. [Citation.] Thus, the earliest date the implied warranty of merchantability regarding Mexia's boat could have accrued was the date Mexia purchased it -- April 12,

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

25CV014900: HAGEN, et al. vs FCA US LLC, et al. 08/18/2026 Hearing on Demurrer (Lemon Law) to First Amended Complaint in Department 16D

2003. (Mexia, at 1305-1306 (emphasis added).) Mexia also clearly specifies that the existence of a claim for implied warranty of merchantability is not limited to the time of delivery. (Id. at 1309 [“by giving the implied warranty a limited prospective existence beyond the time of delivery, the Legislature created the possibility that the implied warranty could be breached after delivery”].) This Court rejects FCA’s assertion that the Fourth Cause of Action is barred by the fouryear limitation period of Commercial Code section 2725.

Of necessity, the limitations period commences upon discovery of the alleged breach. The Court concludes that the statute of limitations in this matter did not begin to run on the date of delivery, but on the date of discovery of the breach, because the FAC asserts that the Subject Vehicle came with an express warranty extending the time for future performance. (Compl., ¶ 6, Exh. A.) There simply is no way for a consumer to know that the implied warranty of merchantability has been breached until such circumstances occur that would give the consumer reason to know or suspect that the breach had occurred in the first instance. ''A demurrer on the ground of the bar of the statute of limitations will not lie where the action may be, but is not necessarily barred.'' (Favila v.

Katten Muchin Rosenman LLP (2010) 188 Cal.App.4th 189, 224 [internal citations omitted].) ''It must appear clearly and affirmatively that, upon the face of the complaint and matters of which the court may properly take judicial notice, the right of action is necessarily barred.' [Citations.]' (Ibid.) FCA fails to show that Plaintiffs’ Song-Beverly Act claims are untimely on the face of the FAC, and the demurrer on this basis is overruled. Sixth Cause of Action – Fraudulent Inducement - Concealment Defendant FCA demurs to this cause of action for fraudulent inducement- concealment on several grounds, which the Court addresses as follows.

A. Statute of Limitations. Defendant FCA first argues that the fraud cause of action is barred by the applicable three-year statute of limitations contained in Code of Civil Procedure section 338(d) because (1) Plaintiffs allege that FCA concealed material facts about the Vehicle's alleged defects, intending to induce them into purchasing it and (2) all elements of the concealment claim were complete and actionable at the time of the sale, thereby triggering the commencement of the three-year statute of limitations on the date Plaintiffs took delivery of the vehicle.

In other words, FCA argues that in the absence of

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

25CV014900: HAGEN, et al. vs FCA US LLC, et al. 08/18/2026 Hearing on Demurrer (Lemon Law) to First Amended Complaint in Department 16D

specific allegations to support tolling, the statute of limitations requires that Plaintiffs discovered, or should have discovered, the alleged fraud no earlier than June 24, 2022 – three years before the Complaint was originally filed, or the action must be barred. FCA's demurrer based on the three-year statute of limitations is overruled because the allegations in Paragraphs 13-19 and 94-102 of the FAC affirmatively allege that the Vehicle was defective in various respects, and that FCA had a duty to disclose such defects.

Plaintiffs also allege that the concealed information is material to a reasonable person deciding whether to purchase a vehicle, that Plaintiffs would not have purchased the vehicle if the concealed information had been known to them, and that Plaintiffs suffered harm by purchasing the defective vehicle. These allegations, without more, do not necessarily or affirmatively establish when precisely the cause of action for fraud accrued. When and how Plaintiffs should have reasonably become aware that FCA purportedly concealed facts and/or defects at the time of purchase is a question of fact which cannot be determined at the pleading stage, as resolution of a statute of limitations issue is typically a question of fact. (See, e.g., Fox v.

Ethicon Endo-Surgery, Inc. (2005) 35 Cal.4th 797, 810.) Further, '[a] demurrer based on a statute of limitations will not lie where the action may be, but is not necessarily, barred. In order for the bar of the statute of limitations to be raised by demurrer, the defect must clearly and affirmatively appear on the face of the complaint; it is not enough that the complaint shows that the action may be barred.' (Guardian North Bay, Inc. v. Superior Court (2001) 94 Cal.App.4th 963, 971-972 [citation omitted].)

Because the defect of the statute of limitations does not plainly appear on the face of the FAC, FCA's demurrer on this basis fails, and the Court need not address additional arguments as to whether Plaintiffs' alleged facts are sufficient to invoke tolling of the statute of limitations on any basis. B. Heightened Specificity for Fraud FCA contends Plaintiffs have failed to plead the Sixth Cause of Action for fraudulent inducement-concealment with sufficient specificity that is required for fraud claims.

Separate and distinct from a claim for fraudulent misrepresentation, a claim based on fraudulent concealment requires the plaintiff to show (1) the defendant concealed or suppressed a material fact, (2) the defendant had a duty to disclose the fact, (3) the defendant intentionally concealed or suppressed the fact with the intent to defraud, (4) the plaintiff was unaware of the fact, and would not have acted as he or she did if he had known of the concealed or suppressed fact, and (5) as a result of the concealment

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

25CV014900: HAGEN, et al. vs FCA US LLC, et al. 08/18/2026 Hearing on Demurrer (Lemon Law) to First Amended Complaint in Department 16D

or suppression of the fact, the plaintiff sustained damage. (See, e.g., Prakashpalan v. Engstrom, Lipscomb & Lack (2014) 223 Cal.App.4th 1105, 1130.) Although in California fraud must generally be pleaded with factual particularity, this general rule requiring a heightened degree of specificity is less applicable to cases that involve nondisclosure. After all, it is difficult to set a standard that would require a plaintiff to describe 'how' and 'by what means' something did not happen, or 'when' it never happened, or 'where' it never happened. (See, e.g., Alfaro v.

Community Housing Improvement System & Planning Assn., (2009) 171 Cal.App.4th 1356, 1384.) Moreover, '[e]ven 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.) In short, 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' and thus, such a claim 'can succeed without the same level of specificity required by a normal fraud claim.' (See, e.g., Falk v.

GMC (N.D. Cal. 2007) 496 F.Supp.2d 1088, 1098-1099.) The specificity rule is relaxed in actions premised on concealment or nondisclosure, as they are inherently different from those based on affirmative misrepresentations. (See, e.g., Jones v. ConocoPhillips Co. (2011) 198 Cal.App.4th 1187, 1199-1200.) Here, given that Plaintiffs are alleging fraud not based on any affirmative misrepresentations, but rather only concealment of existing defects, a somewhat relaxed pleading standard is appropriate. (Committee on Children's Television, Inc. v.

General Foods Corp. (1983) 35 Cal.3d 197, 214; Turner v. Milstein, 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, FCA's contention that Plaintiffs failed to adequately allege the 'who, what, when, where, and how' is incorrect.

Finding no merit to any of Defendant’s challenges to the sufficiency of the FAC’s fraud allegations, defendant FCA's demurrer to the fraud cause of action on such grounds is overruled. C. Duty to Disclose. Relying largely on LiMandri v. Judkins (1997) 52 Cal.App.4th 326, FCA next

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

25CV014900: HAGEN, et al. vs FCA US LLC, et al. 08/18/2026 Hearing on Demurrer (Lemon Law) to First Amended Complaint in Department 16D

demurs to the fraud cause of action on the ground that the FAC fails to establish any 'direct dealings' giving rise to a duty on the part of FCA to disclose the alleged defects. (Def. Dem. at 10:1-5.) First, while it may be true that Plaintiffs did not purchase the subject vehicle directly from FCA, Paragraph 7 of the FAC explicitly alleges that on or about February 15, 2019, they 'entered into a warranty contract with Defendant FCA regarding a 2019 Jeep Cherokee which was manufactured and[/]or distributed by Defendant FCA.'

This allegation must be accepted as true for purposes of this demurrer, and pleading facts regarding the existence of a 'warranty contract' between Plaintiffs and FCA is sufficient, in this Court's view, to establish 'direct dealings' between these two parties. Accordingly, FCA's suggestion that the complaint fails to establish the existence of any 'direct dealings' between plaintiff and FCA is meritless. Second, as this Court has repeatedly explained in connection with demurrers in other 'lemon law' cases, no 'transactional relationship' between a vendor and subsequent purchasers is necessary to bring a fraudulent concealment-inducement claim because a vendor has a duty to disclose material facts not only to immediate purchasers, but to subsequent purchasers when the vendor has reason to know that the subject product will be resold. (See, e.g., OCM Principal Opportunities Fund v.

CIBC World Markets Corp. (2007) 157 Cal.App.4th 835, 859-860.) This is also alleged in the FAC, and thus, FCA's demurrer is overruled for this reason as well. Moreover, the requirement of 'direct dealings' between Plaintiffs and FCA must be rejected because the Song-Beverly Act treats a manufacturer and its representatives in 'this state' or 'agents' as a single entity. (See, e.g., Ibrahim v. Ford Motor Co. (1989) (1989) 214 Cal.App.3d 878, 889.) Thus, the current allegations are sufficient to show that FCA was aware that the Subject Vehicle would be sold on the open market, and also that FCA had a contractual warranty relationship with Plaintiffs, thereby defeating FCA's claim that no 'direct dealings' giving rise to a duty to disclose have been alleged.

In light of the preceding paragraphs and the FAC’s allegations confirming the existence of 'direct dealings' between Plaintiffs and FCA, FCA’s demurrer to the sixth cause of action is overruled, and the Court need not address FCA's additional arguments relating to FCA not having 'exclusive knowledge' of the alleged defects. The foregoing cited paragraphs sufficiently establish, for pleading purposes, that FCA knew about the defects alleged and intentionally chose not to disclose those material facts to

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

25CV014900: HAGEN, et al. vs FCA US LLC, et al. 08/18/2026 Hearing on Demurrer (Lemon Law) to First Amended Complaint in Department 16D

consumers such as Plaintiffs, which is sufficient at this stage to overcome Defendant’s arguments regarding “active concealment.” Further, the Court concludes that Plaintiffs sufficiently allege reliance because they affirmatively plead that they would not have purchased the Vehicle if the alleged defects had been made known to them. (FAC ¶¶ 99-100.) For these reasons, the demurrer on these grounds is overruled. D. Economic Loss Doctrine. Finally, FCA asserts that Plaintiffs’ fraud cause of action is barred by the economic loss doctrine.

In support of this argument, FCA cites Rattagan v. Uber Techs., Inc. (2024) 17 Cal.5th 1, for the proposition that fraudulent concealment claims are permitted only where the concealed information exposes the plaintiff to risks or harms beyond the reasonable contemplation of the contractual relationship. FCA argues that here the FAC lacks any allegations of independent harm that would operate to bypass the economic loss doctrine. The Court disagrees. First, according to longstanding California Supreme Court precedent, the economic loss doctrine does not apply to a claim where, as here, the underlying contract is alleged to have been fraudulently induced. (See, e.g., Robinson Helicopter Co., Inc. v.

Dana Corp. (2004) 34 Cal.4th 979, 989-900; Erlich v. Menzes (1999) 21 Cal.4th 543, 551-552 [citing Las Palmas Associates v. Las Palmas Center Associates (1991) 235 Cal.App.3d 1220, 1238-1239.) In Robinson Helicopter, the California Supreme Court stated, in pertinent part:

Tort damages have been permitted in contract cases where a breach of duty directly causes physical injury [citation]; for breach of the covenant of good faith and fair dealing in insurance contracts [citation]; for wrongful discharge in violation of fundamental public policy [citation]; or where the contract was fraudulently induced. [Citation.]' (Erlich v. Menzes, supra, 21 Cal.4th at pp. 551-552.) '[I]n each of these cases, the duty that gives rise to tort liability is either completely independent of the contract or arises from conduct which is both intentional and intended to harm. [Citation.]' (Id. at p. 552; see also Harris v. Atlantic Richfield Co. (1993) 14 Cal.App.4th 70, 78 ['when one party commits a fraud during the contract formation or performance, the injured party may recover in contract and tort'].)

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

25CV014900: HAGEN, et al. vs FCA US LLC, et al. 08/18/2026 Hearing on Demurrer (Lemon Law) to First Amended Complaint in Department 16D

(Robinson Helicopter Co., supra, 34 Cal.4th at 989-900 (italics added for emphasis).)

Thus, the Supreme Court expressly recognized the existing exception to the economic loss doctrine where a contract is fraudulently induced and did nothing to abridge that existing rule. Here, Plaintiffs specifically allege that FCA fraudulently induced them to purchase the Subject Vehicle and concurrently enter into a warranty contract by failing to disclose and/or concealing material facts concerning various vehicle defects which FCA had a duty to disclose. If true, the contract would be fraudulently induced.

Accordingly, the economic loss doctrine does not bar Plaintiffs’ cause of action for fraudulent inducement-concealment. Likewise, Defendants’ reliance on Rattagan v. Uber Technologies, supra, is misplaced. In Rattagan, the California Supreme Court concluded that a plaintiff may assert a cause of action for fraud provided that (1) the elements of the claim can be established independently of the parties' contractual rights and obligations and (2) the defendant's tortious conduct exposes the plaintiff to a risk of harm beyond the reasonable contemplation of the parties when they entered into the contract. (Rattagan, 17 Cal.5th at 13.)

Notably, the moving papers do not appear to argue that Plaintiffs did not and/or cannot plead each element of a claim for fraudulent concealment independent of the contractual relationship (i.e., the warranty contract) explicitly alleged in Paragraph 7 of the FAC; thus, Plaintiffs have satisfied the first of Rattagan's two prerequisites. This Court concludes that the second prerequisite is likewise satisfied insofar as Paragraph 29 of the FAC alleges the Subject Vehicle's 'Transmission Defect is a safety concern because it severely affects the driver's ability to control the car's speed, acceleration, and deceleration.

For example, these conditions make it difficult to safely merge into traffic or may cause a sudden loss of power or failure to accelerate while in motion. Even more troubling, the Transmission Defect can cause the vehicle to fail without warning, while the Vehicle is moving at highway speeds.” This allegation, which must be accepted as true for purposes of this demurrer, is sufficient to establish that FCA's allegedly tortious conduct exposes Plaintiffs to a serious risk of physical harm, and possibly death, which is fairly construed as being 'beyond the reasonable contemplation of the parties when they entered into the contract.' (Rattagan, 17 Cal.4th at 13.)

Accordingly, Rattagan does not advance FCA's assertion that Plaintiffs’ fraudulent concealment claim is barred by the economic loss doctrine. In light of the foregoing, FCA's demurrer to the fraudulent inducement-concealment claim based on the economic loss doctrine is overruled.

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

25CV014900: HAGEN, et al. vs FCA US LLC, et al. 08/18/2026 Hearing on Demurrer (Lemon Law) to First Amended Complaint in Department 16D

DISPOSITION For the reasons explained above, Defendant FCA’s demurrer to the FAC is OVERRULED in its entirety. FCA shall file and serve its answer to the FAC no later than September 1, 2026. This minute order is effective immediately. No formal order or other notice is required. (Code Civ. Proc. § 1019.5; CRC Rule 3.1312.)

[1] Section 871.20 became effective January 1, 2025. Section 871.20 was later amended, effective April 2,

2025, to include the phrase 'brought against a manufacturer who has elected under Section 871.29 to proceed under this chapter.'