JANINE BAILON vs. FCA US, LLC; ET AL.

Case No. CU25-04346

FCA’s Motion for Judgment on the Pleadings

Defendant FCA US, LLC (“FCA”) moves for judgment on the pleadings against Plaintiff JANINE BAILON’s complaint relevantly alleging violations of the Song-Beverly Consumer Warranty Act (the “Act”) and fraudulent inducement.

Summarized, Plaintiff’s complaint alleges that FCA violated the Act in that it failed to repair or repurchase Plaintiff’s 2019 Jeep Cherokee (the “Vehicle”) after the Vehicle manifested defects within the warranty period and FCA concealed existence of the Vehicle’s 9-speed transmission defect from Plaintiff prior to purchase.

Legal Standard. A defendant may move for judgment on the pleadings on the basis that the complaint against him does not state facts sufficient to constitute a cause of action. (Code Civ. Proc., § 438, subds. (b)-(c).)

The grounds for such a motion must appear on the face of the pleadings or from judicially noticeable materials. (Code Civ. Proc., § 438, subd. (d).)

The standard for granting a motion for judgment on the pleadings is essentially the same as that for sustaining a general demurrer: that is, whether the pleadings and matters judicially noticeable reveal that a party is entitled to judgment as a matter of law. (Schabarum v. California Legislature (1998) 60 Cal.App.4th 1205, 1216.)

As with a demurrer, then, a court considering a motion for judgment on the pleadings accepts as true all properly pleaded facts of a complaint but does not accept as true mere conclusions or deductions of fact or law. (Greif v. Sanin (2022) 74 Cal.App.5th 412, 426.)

Admissions contradicting the allegations of the party making the admissions are properly considered on a motion for judgment on the pleadings. (Evans v. California Trailer Court, Inc. (1994) 28Cal.App.4th 540; Del E. Webb Corp. v. Structural Materials Co. (1981) 123 Cal.App.3d 593, 604-605.)

Statutes of Limitations and Repose. Code of Civil Procedure section 871.21, subdivision (a) provides that an action covered by section 871.20 shall be commenced within one year of expiration of the applicable warranty.

Section 871.21, subdivision (b) provides a six-year statute of repose for the same actions, stating that no such action shall be brought later than six years after the date of original delivery of the motor vehicle.

Plaintiff obtained the Vehicle on August 23, 2018, which means that her statute of limitations on the applicable five-year warranty and the statute of repose both expired on August 23, 2024. (Complaint at ¶¶ 7-8, Exhibit A [warranty showing five-year duration].)

This action was not filed until May 9, 2025.

However, section 871.21 only went into effect on July 1, 2025.

It would be unjust to hold Plaintiff to a statute of limitations that expired before it existed.

Rosefield Packing Co. v. Superior Court (1935) 4 Cal.2d 120 (Rosefield) does not support applying Code of Civil Procedure section 871.21’s time limitation to the instant case.

Rosefield featured a lawsuit by Planters against Rosefield Packing Company, filed August 17, 1929. (Id. at p. 121.)

At the time Code of Civil Procedure section 583 stated than an action not brought to trial within five years after the filing of the answer was subject to mandatory dismissal; on August 21, 1933 that statute was amended to state that an action not brought within five years of the filing of the action, rather than the answer, was subject to mandatory dismissal. (Ibid.)

Rosefield moved to dismiss Planters’s action for lack of prosecution under the amended statute on October 11, 1934. (Id. at pp. 121-122.)

Our state high court observed first off that the statute at issue was expressly retroactive. (Id. at p. 122.)

It then stated that while a retroactive statute applying to criminal matters or depriving a person of a vested right is unconstitutional a statute merely applying a retroactive change to rules of civil procedure, particularly including statutes of limitation and the like, may “be made applicable to pending proceedings” if there is a reasonable time permitted for the affected party to avail himself of his remedy before the statute takes effect. (Ibid.)

The statute at issue in Rosefield was constitutional as applied to Planters because it went into effect on August 21, 1933 and Planters’s new trial deadline was August 17, 1934; this meant Planters had nearly a year to arrange for trial. (Id. at p. 123.)

Our state high court distinguished cases Planters offered to support its position on the basis that in those cases the newly shortened periods for action expired before the shortening laws became effective. (Ibid.)

Rosefield hinges its decision supporting a shortened timer on the fact that the plaintiff there had a year to act after the relevant statute became effective.

It pointedly distinguished situations like that FCA’s argument would effect in the instant case where the period for action expires before the statute becomes effective.

Further, the statute under analysis in Rosefield was expressively retroactive but Code of Civil Procedure section 871.21 is not.

The court finds that section 871.21 does not bar any of Plaintiff’s causes of action.

Commercial Code section 2725 states that a breach of warranty claim must be commenced within four years of accrual, with accrual occurring at tender of delivery unless the warranty explicitly extends to future performance of goods and discovery of the breach must await the time of such performance.

In that excepted case accrual occurs when the breach is or should have been discovered.

FCA argues that its warranty, which it admits was a five-year or 60,000-mile warranty, did not include a promise of future performance, citing Cardinal Health 301, Inc. v. Tyco Electronics Corp. (2008) 169 Cal.App.4th 116 (Cardinal Health).

However, Cardinal Health states at page 131 that the future performance exception applies where a manufacturer warranties performance for a specific period of time.

At page 133 Cardinal Health distinguishes Krieger v. Nick Alexander Imports, Inc. (1991) 234 Cal.App.3d 205 (Krieger), the case upon which Plaintiff relies to state that she had a guarantee of future performance, on the basis that Krieger featured an automobile warranty lasting three years or 36,000 miles and including a promise to repair.

Krieger and Cardinal Health concur that the warranty in this case, an automobile warranty with a duration measured alternatively by years or miles and including a promise to repair, constituted a guarantee of future performance and the cause of action did not accrue until Plaintiff discovered FCA’s breach of warranty.

There is no one-year statute of limitations applicable to Plaintiff’s implied warranty claim either.

Mexia v. Rinker Boat Co., Inc. (2009) 174 Cal.App.4th 1297, 1304-1306 states that an implied warranty under Song-Beverly has a four-year statute of limitations and can be breached by a latent defect undiscoverable at time of sale, which is just what Plaintiff alleges here.

Plaintiff alleges that she discovered FCA’s breaches of warranties when the Vehicle continued to display problems following FCA’s attempts to repair those problems. (Complaint at ¶ 38.)

The face of the pleading does not disclose a statute of limitations bar for her warranty claims.

However, Plaintiff’s tolling allegations only apply to her warranty claims. (Complaint at ¶ 36.)

Plaintiff makes no statement as to at what later date she discovered FCA’s fraudulent concealment of the Vehicle’s transmission defect.

The three-year statute of limitations on fraud applies on the face of the pleading. (Code Civ. Proc., § 338, subd. (d).)

Sufficiency of Pleading Fraudulent Inducement. Plaintiff’s fraudulent concealment cause of action is insufficiently pled besides facing a time bar on the face of the pleading.

Dhital v. Nissan North America Inc. (2022) 84 Cal.App.5th 828 (Dhital) offers applicable precedent as to the sufficiency of Plaintiff’s fraudulent inducement cause of action.

In Dhital the plaintiff brought a lemon law action over his Nissan vehicle’s faulty transmission and additionally alleged fraudulent inducement. (Dhital, supra, 84 Cal.App.5th at p. 834.)

The trial court sustained Nissan’s demurrer on the fraudulent inducement cause of action, deciding that the economic loss rule barred the claim. (Id. at p. 835-836.)

The appellate court reversed, finding both that the economic loss rule did not bar the claim and that the plaintiff’s allegations sufficiently stated fraudulent inducement (insufficiency of pleading being an alternative ground for affirming the trial court ruling that Nissan urged on appeal). (Id. at p. 845.)

Regarding the economic loss rule, the Dhital court first described the rule: “[i]n general, there is no recovery in tort for negligently inflicted ‘purely economic losses,’ meaning financial harm unaccompanied by physical or property damage.” (Sheen v. Wells Fargo Bank, N.A. (2022) 12 Cal.5th 905, 922; Dhital, supra, 84 Cal.App.5th at p. 837.)

“[W]here a purchaser’s expectations in a sale are frustrated because the product he bought is not working properly, his remedy is said to be in contract alone, for he has suffered only ‘economic’ losses...The economic loss rule requires a purchaser to recover in contract for purely economic loss due to disappointed expectations, unless he can demonstrate harm above and beyond a broken contractual promise.” (Robinson Helicopter Co., Inc. v. Dana Corp. (2004) 34 Cal.4th 979, 988 (Robinson).)

Examples of such harm include “where a breach of duty directly causes physical injury; for breach of the covenant of good faith and fair dealing in insurance contracts; for wrongful discharge in violation of fundamental public policy; or where the contract was fraudulently induced.” (Id. at pp. 989-990.)

“[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. (Ibid.)

The Dhital court noted that Robinson states its point quite plainly: fraudulent inducement is an exception to the economic loss rule. (Dhital at p. 839.)

Dhital further observed that although Robinson discussed affirmative misrepresentations from the defendant as opposed to fraudulent concealment it did not state that only cases of affirmative misrepresentation qualify for the exception. (Ibid.)

Rather, Robinson’s plain statement was that tort recovery should be allowed where the underlying duty is independent of the contract, and fraudulent inducement by concealment originates independent of the resulting contract because it literally predates formation of the contract. (Id. at pp. 840-841.)

Robinson and Dhital make it clear that the economic loss rule does not bar Plaintiff’s fraudulent inducement claim in the instant case.

Plaintiff’s claim is based on conduct independent of the resulting contract and is expressly authorized in Robinson.

Regarding sufficiency of pleading, the Dhital court again first discussed the basic law.

Fraudulent inducement is a subset of fraud and so requires the same elements be proven: (1) a misrepresentation, (2) knowledge of falsity, (3) intent to induce reliance, (4) justifiable reliance, and (5) damages. (Dhital, supra, 84 Cal.App.5th at p. 843; Hinesley v. Oakshade Town Center (2005) 135 Cal.App.4th 289, 294-295.)

Fraud must always be pleaded with specificity. (Linear Technology Corp. v. Applied Materials, Inc. (2007) 152 Cal.App.4th 115, 132.)

The Dhital plaintiff’s allegations included that Nissan manufactured and distributed more than 500,000 vehicles with faulty transmissions; that Nissan knew or should have known of the faults from premarket testing and consumer complaints to both the National Highway Traffic Safety Administration (“NHTSA”) and to Nissan itself; and that Nissan issued Technical Service Bulletins (“TSBs”) regarding the transmission problem. (Dhital at pp. 833-834.)

The Dhital court found all of this sufficient: the allegations stated that Nissan made lemons with transmission defects, Nissan knew of the transmission defects and the hazards they posed, Nissan had exclusive knowledge of the defects but did not disclose them to consumers, Nissan intended to conceal the information, and the plaintiff would not have bought the vehicle in question had the plaintiff known the information. (Id. at p. 844.)

Allegations that the plaintiff bought the car from a Nissan dealership with a Nissan-backed warranty and that dealerships are Nissan’s agents for purposes of sale sufficed to state a buyer-seller relationship between the parties. (Ibid.)

The court rebuffed Nissan’s argument that the plaintiff was not specific enough about what it should have disclosed where the plaintiff described the effects of the transmission defect and alleged that Nissan knew of these effects from premarket testing and consumer complaints. (Ibid.)

Plaintiff’s allegations in the instant complaint almost line up well with those of the Dhital plaintiff.

Plaintiff here describes the transmission defect at issue as causing “hesitation on acceleration, loss of power, hard and/or harsh shifts, and/or jerking.” (Complaint at ¶ 16.)

Plaintiff alleges that FCA knew or should have known of the transmission system defect from pre- and post-production market testing, consumer complaints, and warranty data. (Id. at ¶ 19.)

Plaintiff alleges that FCA concealed information about the transmission defect that would have changed Plaintiff’s purchase decision had it been known to Plaintiff. (Id. at ¶ 21.)

However, Plaintiff merely alleges obtaining the Vehicle under a warranty with Defendant, failing to offer a basis for finding a transactional relationship between the parties akin to the Dhital allegations of purchase from a dealer-agent. (Complaint at ¶ 7.)

Without a transactional relationship Defendant bore no duty to disclose that could support a claim of fraudulent inducement.

Leave to Amend. Leave to amend is proper where identified defects are amenable to cure. (Vaccaro v. Kaiman (1998) 63 Cal.App.4th 761, 768.)

Conclusion. FCA’s motion for judgment on the pleadings is granted with leave to amend with regard to Plaintiff’s cause of action for fraudulent inducement.

FCA’s motion is otherwise denied.

JERMINA MARIE OAKES vs. JIN-VANI HOSPITALITY LLC