Maria O. Baltier et al. v. General Motors, LLC

From September 2014 to at least February 2019, GM issued various service bulletins and bulletin updates to its dealers in United States about the Transmission Defect. But GM concealed the defects and did not send the bulletins to its customers. Had Plaintiffs known the Subject Vehicle and its transmission were defective prior to or at the time of sale, they would not have purchased it. (Complaint, ¶¶ 53, 59)

Plaintiffs initiated this action on April 18, 2025, alleging causes of action for (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.

III. LEGAL STANDARD

A defendant may move for judgment on the pleadings when the “complaint does not state facts sufficient to constitute a cause of action against that defendant.” (Code Civ. Proc., § 438(b)(1) and (c)(1)(B)(ii).) “A motion for judgment on the pleadings may be made at any time either prior to the trial or at the trial itself. [Citation.]” (Ion Equipment Corp. v. Nelson (1980) 110 Cal.App.3d 868, 877.) “A motion for judgment on the pleadings performs the same function as a general demurrer and hence attacks only defects disclosed on the face of the pleadings or by matters that can be judicially noticed.

Presentation of extrinsic evidence is therefore not proper on a motion for judgment on the pleadings.” (Cloud v. Northrop Grumman Corp. (1998) 67 Cal.App.4th 995, 999 (citations omitted); see also Burnett v. Chimney Sweep (2004) 123 Cal.App.4th 1057.) The court must assume the truth of all properly pleaded material facts and allegations, but not contentions or conclusions of fact or law. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318; Wise v. Pacific Gas and Elec. Co. (2005) 132 Cal.App.4th 725, 738.)

If the motion for judgment on the pleadings is granted, it may be granted with or without leave to amend. (Code Civ. Proc., § 438, subd. (h)(1).) “Where a demurrer is sustained or a motion for judgment on the pleadings is granted as to the original complaint, denial of leave to amend constitutes an abuse of discretion if the pleading does not show on its face that it is incapable of amendment.” (Virginia G. v. ABC Unified School Dist. (1993) 15 Cal.App.4th 1848, 1852.)

IV. JUDICIAL NOTICE

GM requests judicial notice of the second amended complaint from an unrelated case from several years ago: Dhital v. Nissan North America, Inc. (2022) 84 Cal.App.5th 828. This request is denied, as an amended pleading from another case has no bearing on the court’s evaluation of the adequacy of the pleadings in this case. (See State Comp. Ins. Fund v. ReadyLink Healthcare, Inc. (2020) 50 Cal.App.5th 422, 442 [denying a request for judicial notice of “materials . . . not relevant to [the appellate court's] determination of the issues on appeal”].)

V. DISCUSSION

A. Plaintiffs’ Fourth & Fifth Causes of Action Are Not Time-Barred

GM contends that both the fourth and fifth causes of action (breach of implied warranty and fraudulent inducement – concealment) are time-barred by their applicable four-year and threeyear statutes of limitations, respectively, because: (1) the causes of action accrued on the date Plaintiffs purchased the vehicle (June 20, 2020); (2) the complaint fails to allege any facts that would permit tolling of the limitations period or the inference of such tolling; (3) Plaintiffs cannot invoke the delayed discovery rule, given that they affirmatively pleaded that the alleged defects manifested themselves during the Subject Vehicle’s express warranty period (i.e., within one year of purchase); and (4) the complaint fails to allege facts necessary to invoke the delayed discovery rule. (Motion, pp. 10:19-12:20)

1. Breach of Implied Warranty of Merchantability

California courts have held that the statute of limitations for an action for breach of warranty under the Song-Beverly Act is governed by section 2725 of the Uniform Commercial Code.

(Mexia v. Rinker Boat Co., Inc., (2009) 174 Cal.App.4th 1297, 1306.) Thus, Song-Beverly claims are subject to a four-year limitations period that commences when the action accrues – i.e., when the breach occurs. (Schick v. BMW of N. Am., LLC, (9th Cir. 2020) 801 F. App'x 519, 520; Montoya v. Ford Motor Co. (2020) 46 Cal.App.5th 493, 495.; Cal. U. Com. Code. § 2725(2).) Typically, a breach of the implied warranty of merchantability is considered to have accrued on the date of sale. (Cardinal Health 301, Inc. v. Tyco Elecs. Corp., (2008) 169 Cal.App.4th 116, 134.)

Nevertheless, the Song-Beverly Act also provides that when accompanied by an express warranty of future performance spanning one year or longer, the duration of the implied warranty of merchantability may extend to a period of not more than one year after purchase. (See Civ. Code, § 1791.1, subd. (c).) This provision has been held to extend an implied warranty to future performance, such that “the implied warranty of merchantability may be breached by a latent defect undiscoverable at time of sale.” (Mexia, supra, 174 Cal.App.4th at p. 1308.) While section 1791.1(c) provides that an implied warranty of merchantability may not extend longer than one year, "[t]here is nothing that suggests a requirement that the purchaser discover and report to the seller a latent defect within that time period.” (Id. at p. 1310.)

Here, the express warranty was for three years or 36,000 miles, whichever occurred first. (Complaint, Ex. A.) As such, the implied warranty was extended to its outer limit of one year under § 1791.1(c), and any breach of the warranty must have occurred on or before June 20, 2021—exactly one year after purchase. The four-year statute of limitations means that Plaintiffs had until June 20, 2025 to bring their implied warranty cause of action. Because Plaintiffs filed their complaint two months before that deadline, on April 18, 2025, any cause of action for breach of the implied warranty of merchantability is not time-barred.

2. Fraudulent Inducement

Causes of action for fraudulent inducement based on concealment are subject to a threeyear statute of limitations. (Code Civ. Proc., § 338(d).) A general demurrer based on the statute of limitations is only permissible when the grounds for the defense are disclosed on the face of the complaint or from matters judicially noticeable. (Vaca v. Wachovia Mortgage Corp. (2011) 198 Cal.App.4th 737, 746; Iverson, Yoakum, Papiano & Hatch v. Berwald (1999) 76 Cal.App.4th 990, 995.) In other words, the dates alleged in the complaint must show that the action is time-barred, and the running of the statute of limitations must appear clearly and affirmatively from the alleged dates.

If not, the proper remedy is to ascertain the factual basis of the cause of action through discovery and, if necessary, file a motion for summary judgment. (See Roman v. County of Los Angeles (2000) 85 Cal.App.4th 316, 324-325.)

GM contends that Plaintiffs’ cause of action accrued on June 20, 2020, when they purchased the Subject Vehicle and the express warranty went into effect. Therefore, the latest filing date for the complaint was June 20, 2023. This is not quite right. A fraud claim “is not deemed to have accrued until the discovery, by the aggrieved party, of the facts constituting the fraud or mistake.” (Code Civ. Proc., § 338, subd. (d).) Here, Plaintiffs have alleged that they discovered GM’s wrongful conduct shortly before the filing of their complaint, as the Subject Vehicle continued to exhibit symptoms of Transmission Defects following GM’s unsuccessful attempts to repair the defects. (Complaint, ¶ 24.) Nothing in the complaint indicates when Plaintiffs

discovered the alleged fraud. 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. (Lockley v. Law Office of Cantrell, Green, Pekich, Cruz & McCort (2001) 91 Cal.App.4th 875, 881.)

B. The Fifth Cause of Action Sufficiently Alleges a Duty to Disclose

As noted in Rattagan v. Uber Technologies, Inc. (2024) 17 Cal.5th 1:

A duty to disclose a material fact can arise if (1) it is imposed by statute; (2) the defendant is acting as the plaintiff’s fiduciary or is in some other confidential relationship with the plaintiff that imposes a disclosure duty under the circumstances; (3) the material facts are known or accessible only to the defendant, and the defendant knows those facts are not known or reasonably discoverable by the plaintiff (i.e., exclusive knowledge); (4) the defendant makes representations but fails to disclose other facts that materially qualify the facts disclosed or render the disclosure misleading (i.e. partial concealment); or (5) the defendant actively conceals discovery of material fact from the plaintiff (i.e., active concealment).

Circumstances (3), (4), and (5) presuppose a preexisting relationship between the parties, such as “between seller and buyer . . . or parties entering into any kind of contractual agreement. All of these relationships are created by transactions between parties from which a duty to disclose facts material to the transaction arises under certain circumstances.

(Rattagan, supra, 17 Cal.5th at p. 40, emphasis added.) Citing Bigler-Engler v. Breg, Inc. (2017) 7 Cal.App.5th 276 and the foregoing language, GM now argues that the complaint fails to establish that it owed Plaintiffs a legal duty of disclosure, because there was no direct transactional relationship between GM and Plaintiffs. According to GM, because Plaintiffs purchased the Subject Vehicle from a dealer, and not directly through GM, the necessary relationship is absent.

This argument is not persuasive. “A relationship between the parties is present if there is some sort of transaction between the parties.” (Hoffman v. 162 N. Wolfe LLC, (2014) 228 Cal.App.4th 1178, 1187.) That transaction may include a warranty agreement. In this case, Plaintiffs have alleged that they entered into an express warranty agreement with GM on June 20, 2020. (Complaint, ¶ 6.) Giving Plaintiffs the benefit of all reasonable inferences arising from this allegation, as the court must do in resolving a demurrer or motion for judgment on the pleadings, the court concludes that Plaintiffs have pleaded sufficient facts regarding a direct transactional relationship with GM from which a duty to disclose may arise.

C. The Fifth Cause of Action is Pled With the Requisite Specificity

GM goes on to argue that Plaintiffs have failed to plead with particularity: (1) the nature of the defect GM allegedly concealed; (2) what transmission-related failure was manifested by the Subject Vehicle; (3) GM’s exclusive knowledge and active concealment of the defect; and (4) Plaintiffs’ justifiable and actual reliance. GM emphasizes that Plaintiffs’ boilerplate “preproduction testing data” allegation is insufficient, as it fails to describe the nature of the test, its

connection to the defect at issue, and what the testing revealed. (Memorandum, 14:5-20, 17:12- 18, 19:23-21:6.)

The essential elements of a fraud cause of action based on concealment or nondisclosure are: (1) the defendant had a duty to disclose the concealed or suppressed fact to the plaintiff; (2) the defendant intentionally concealed or suppressed the fact with the intent to defraud the plaintiff, and (3) the plaintiff was damaged as a result. (Jones v. ConocoPhillips (2011) 198 Cal.App.4th 1187, 1198.)

It is a general principle of California law that each element in a fraud cause of action must be pleaded with specificity. (Lazar v. Super. Ct. (Rykoff-Sexton, Inc.) (1996) 12 Cal.4th 631, 645.) But this specific pleading requirement is significantly relaxed in the case of fraud by concealment or omission, because as one court has explained, “[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 Imp. System Planning Ass'n., Inc. (2009) 171 Cal.App.4th 1356, 1384.)

Additionally, one of the purposes of the specificity-in-pleading-fraud requirement is to provide “notice to the defendant, to furnish the defendant with certain definite charges which can be intelligently met.” (Committee, supra, 35 Cal.3d at p. 216, internal quotations omitted.) Where, as in this case, “it appears from the nature of the allegations that the defendant must necessarily possess full information concerning the facts of the controversy, even under strict rules of common law pleading, one of the canons [is] that less particularity is required when the facts lie more in the knowledge of the opposite party. . . .” (Id. at p. 217; see also Bushell v. JPMorgan Chase Bank, N.A. (2013) 220 Cal.App.4th 915, 931 [“plaintiffs did not have to specify the . . . personnel who prepared these documents because that information is uniquely within . . . [defendant’s] knowledge”].)

In this case, the complaint sufficiently alleges that GM knew that the Subject Vehicle had a Transmission Defect that resulted in hesitation or delayed acceleration, harsh shifting, jerking, shuddering, and surging. GM was not only aware of the defect through various testing data, consumer complaints, and repair orders, but it also acknowledged the defect in its service bulletins to its dealers – but not customers – from September 2014 to February 2019. (Complaint, ¶ 53.) Plaintiffs further allege that the concealed facts about the transmission defect were important in deciding whether or not to purchase the Subject Vehicle: had they known of the defective transmission prior to and at the time of sale, Plaintiffs claim they would not have purchased it. (Id. at ¶ 59.)

These allegations are pleaded with sufficient particularity, as GM has possession of the information concerning the allegations, and any questions may be cleared up through discovery. (See Ludgate Ins. Co. v. Lockheed Martin Corp. (2000) 82 Cal.App.4th 592, 608 [“There is no need to require specificity in the pleadings because ‘modern discovery procedures necessarily affect the amount of detail that should be required in a pleading.’”].)

D. The Fifth Cause of Action is Not Barred by the Economic Loss Rule

Finally, GM cites Rattagan v. Uber Technologies, Inc. (2024) 17 Cal.5th 1, in support of its assertion that the fifth cause of action is barred by the economic loss rule. The court disagrees.

Rattagan explained that “the economic loss rule does not apply to limit recovery for intentional tort claims like fraud.” (Id. at p. 38.) “A plaintiff may assert an independent claim of fraudulent concealment based on conduct occurring in the course of a contractual relationship, if the elements of the cause of action can be established independently of the parties’ contractual rights and obligations and the tortious conduct exposes the plaintiff to a risk of harm beyond the reasonable contemplation of the parties when they entered in the agreement.” (Ibid.)

As already discussed, Plaintiffs have sufficiently alleged a cause of action for fraudulent concealment, which is independent of their breach of contract causes of action. As a result, the economic loss rule does not apply. Moreover, even if it were to apply, it would not provide a complete defense to the cause of action, as it relates solely to an element of the tort cause of action (the damages element). (See Greystone Homes, Inc. v. Midtec, Inc. (2008) 168 Cal.App.4th 1194, 1215.) As such, it is not a proper basis for a demurrer or motion for judgment on the pleadings.

VI. CONCLUSION

For the foregoing reasons, GM’s motion for judgment on the pleadings is DENIED.

9