MICHAEL BELL v. GENERAL MOTORS, LLC

Statute of Limitations. The statute of limitations for fraudulent inducement is three years. (Code Civ. Proc., § 388, subd. (d).) A demurrer based on the statute of limitations must clearly and affirmatively show that the claim is barred. (Lockley v. Law

Office of Cantrell, Green, Kekich, Cruz & McCourt (2001) 91 Cal.App.4th 875, 881.) It is not sufficient that the claim only might be barred. (Roman v. County of Los Angeles (2000) 85 Cal.App.4th 316, 324.) Defendant observes that the Vehicle was purchased in 2019 yet the complaint was filed in 2024. Defendant conflates the date of purchase with the date of discovery of claims. The fact that the defect may have existed at the time of the sale does not mean that Plaintiff was aware of such fact. To the contrary, Plaintiff alleges that Defendant concealed the defect; he did not discover Defendant's wrongful conduct until the Vehicle continued to exhibit symptoms of the defect following Defendant's unsuccessful attempts to repair it; and he had no way of knowing about the defect until it manifested and Defendant could not repair it. (1AC at ¶¶ 13-14.)

These allegations are sufficient for pleading purposes to show that the fraudulent concealment cause of action is not barred by the statute of limitations.

Fraudulent Inducement. Dhital v. Nissan North America Inc. (2022) 84 Cal.App.5th 828 (Dhital) offers instructive precedent here. 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.)

Fraudulent inducement is a subset of fraud and so Plaintiffs must plead the elements of fraud: (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, supra, 84 Cal.App.5th at pp. 833-834.) The Dhital court found all of this sufficient to state fraudulent inducement: the allegations stated that Nissan made vehicles 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 1AC align with those of the Dhital plaintiff. Plaintiff here describes the transmission defect at issue as causing “hard or harsh shifts, jerking, lurching, hesitation on acceleration, surging and/or inability to control the vehicle’s speed, acceleration, or deceleration.” (1AC at ¶ 71.) Plaintiff alleges that Defendant knew or should have known of the coolant system defect from pre- and post-production market testing, consumer complaints, and warranty data. (Id. at ¶ 72.) Plaintiff alleges that Defendant concealed information about the transmission defect that would have changed Plaintiff’s purchase decision had it been known to Plaintiff. (Id. at ¶¶ 73, 79.) Plaintiff alleges obtaining the Vehicle under a warranty Defendant backed, through an authorized dealership of Defendant’s. (Id. at ¶¶ 6-8.)

Plaintiff’s cause of action for fraudulent inducement is adequately pled, per Dhital.

Motion to Strike. Code of Civil Procedure section 436, subdivision (a) permits a court to strike out any irrelevant, false, or improper matter inserted in any pleading, upon a motion or in its discretion. Irrelevant matters are those not essential to the statement of a claim or defense or not pertinent to or supported by an otherwise sufficient claim or defense and demands for relief not supported by the allegations. (Code Civ. Proc., § 431.10.) “The grounds for a motion to strike shall appear on the face of the challenged pleading or from any matter of which the court is required to take judicial notice;” therefore, a motion to strike may not be based upon extrinsic evidence such as a declaration. (Code Civ. Proc., § 437, subd. (a).)

Plaintiff has sufficiently stated a cause of action sounding in fraud, which supports imposition of punitive damages. (Civ. Code, § 3294, subd. (a) [fraud as basis for punitive damages].) This is so even where he simultaneously alleges lemon law violations. (Anderson v. Ford Motor Co. (2022) 74 Cal.App.5th 946 [permitting punitive damages on fraudulent inducement claim alongside civil penalties on Song-Beverly claim].)

Conclusion. Defendant’s demurrer is overruled. Defendant’s motion to strike is denied.

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