Tentative Ruling: Katharine Martin vs FCA US LLC et al
Case Number
25CV01795
Case Type
Hearing Date / Time
Fri, 05/22/2026 - 10:00
Nature of Proceedings
Demurrer
Tentative Ruling
For all reasons discussed herein, the demurrer of defendant FCA US LLC to the sixth cause of action alleged in plaintiff’s first amended complaint is overruled.
FCA US LLC shall file and serve its answer to the first amended complaint no later than June 5, 2026.
Background:
This action commenced on March 24, 2025, by the filing of the original complaint. On November 10, 2025, plaintiff Katharine Martin filed her operative first amended complaint (FAC) against defendants FCA US, LLC (FCA) and Chrysler Dodge Jeep Ram Fiat of Santa Barbara for: (1) Violation of Subdivision (D) of Civil Code Section 1793.2; (2) Violation of Subdivision (B) of Civil Code Section 1793.2; (3) Violation of Subdivision (A)(3) of Civil Code Section 1793.2; (4) Breach of the Implied Warranty of Merchantability; (5) Negligent Repair; and (6) Fraudulent Inducement - Concealment.
By way of the FAC, plaintiff alleges that on June 22, 2020, she entered into a warranty contract with FCA regarding a 2017 Jeep Cherokee (the “vehicle”) that was manufactured or distributed by FCA. (FAC, ¶ 7.) Plaintiff experienced defects and non-conformities in the vehicle including shuddering, hesitation on acceleration, jerking, loss of power, illumination of various warning lights, stalling, the infotainment screen going blank, reverse camera malfunction, and failure to connect with smart devices. (FAC, ¶ 14.)
On August 20, 2020, plaintiff presented the vehicle to FCA’s authorized repair facility with complaints including stalling and a check engine light. (FAC, ¶ 15.) FCA’s technician inspected the vehicle, verified plaintiff’s complaints, and performed warranty repairs including updating the vehicle’s software. (Ibid.) At pick up, FCA’s repair facility represented that the vehicle had been repaired and was working as designed. (Ibid.)
On February 19, 2025, plaintiff presented the vehicle to FCA’s authorized repair facility with complaints including hesitation on acceleration and a malfunctioning indicator light. (FAC, ¶ 16.) FCA’s technician inspected the vehicle, verified plaintiff’s complaints, and performed warranty repairs including reprogramming the transmission control module and powertrain control module. (Ibid.) At pick up, FCA’s repair facility represented that the vehicle had been repaired and was working as designed. (Ibid.) Plaintiff only discovered FCA’s wrongful conduct after this repair presentation. (Ibid.)
Plaintiff had no way of uncovering FCA’s deception with respect to the defects given that FCA performed various diagnostics and undertook repairs and claimed that nothing was wrong with the vehicle or that the vehicle had been repaired. (FAC, ¶ 17.)
FCA now demurs to the sixth cause of action for fraudulent inducement - concealment, arguing: (1) the sixth cause of action is barred by the statute of limitations, (2) the sixth cause of action is barred by the economic loss rule, and (3) the sixth cause of action does not state facts sufficient to constitute a cause of action.
Plaintiff opposes the demurrer.
Analysis:
“The party against whom a complaint or cross-complaint has been filed may object, by demurrer or answer as provided in Section 430.30, to the pleading on any one or more of the following grounds:
“(a) The court has no jurisdiction of the subject of the cause of action alleged in the pleading.
“(b) The person who filed the pleading does not have the legal capacity to sue.
“(c) There is another action pending between the same parties on the same cause of action.
“(d) There is a defect or misjoinder of parties.
“(e) The pleading does not state facts sufficient to constitute a cause of action.
“(f) The pleading is uncertain. As used in this subdivision, “uncertain” includes ambiguous and unintelligible.
“(g) In an action founded upon a contract, it cannot be ascertained from the pleading whether the contract is written, is oral, or is implied by conduct.
“(h) No certificate was filed as required by Section 411.35.” (Code Civ. Proc., § 430.10.)
“When any ground for objection to a complaint, cross-complaint, or answer appears on the face thereof, or from any matter of which the court is required to or may take judicial notice, the objection on that ground may be taken by a demurrer to the pleading.” (Code Civ. Proc., § 430.30, subd. (a).) “Our consideration of the facts alleged includes ‘those evidentiary facts found in recitals of exhibits attached to [the] complaint.’ [Citation.]” (Alexander v. Exxon Mobil (2013) 219 Cal.App.4th 1236, 1250.)
“[A] court must treat a demurrer as admitting all material facts properly pleaded, it does not, however, assume the truth of contentions, deductions or conclusions of law.” (Travelers Indem. Co. of Connecticut v. Navigators Specialty Ins. Co. (2021) 70 Cal.App.5th 341, 358, citing Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 967.)
Statute of Limitations
There is no dispute that the statute of limitations is three years for: “An action for relief on the ground of fraud or mistake. The cause of action in that case 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).)
“ ‘[I]t is difficult for demurrers based on the statute of limitations to succeed because (1) trial and appellate courts treat the demurrer as admitting all material facts properly pleaded and (2) resolution of the statute of limitations issue can involve questions of fact. Furthermore, when the relevant facts are not clear such that the cause of action might be, but is not necessarily, time-barred, the demurrer will be overruled. [Citation.] Thus, for a demurrer based on the statute of limitations to be sustained, the untimeliness of the lawsuit must clearly and affirmatively appear on the face of the complaint and matters judicially noticed.’ ” [Citation.]” (Schmier v. City of Berkeley (2022) 76 Cal.App.5th 549, 554.)
FCA argues that because plaintiff alleges that she entered into the warranty contract with FCA on June 22, 2020 (FAC, ¶ 7), absent sufficient tolling allegations, the statute of limitations began to run on that date and expired on June 22, 2023. As noted above, the action was not filed until March 24, 2025. FCA further argues that plaintiff’s attempt to invoke the delayed discovery rule fails because “plaintiff was on inquiry notice of the alleged fraud well before the expiration of the statute of limitations.” (Demurrer, p. 11, ll. 3-5.) FCA does not state when that “inquiry notice” began. It certainly would not have been the case that plaintiff was on notice the day she purchased the vehicle and entered into the warranty contract.
Plaintiff alleges that she did not discover FCA’s wrongdoing until after she presented the vehicle for repair on February 19, 2025. (FAC, ¶ 16.) A reasonable inference is that having to return the vehicle for the second time, for similar repairs, put her on notice of the potential fraud that she alleged occurred.
“When a plaintiff reasonably should have discovered facts for purposes of the accrual of a case of action or application of the delayed discovery rule is generally a question of fact, properly decided as a matter of law only if the evidence (or, in this case, the allegations in the complaint and facts properly subject to judicial notice) can support only one reasonable conclusion. [Citation.] Similarly, “ ‘ “[w]hether reliance [on a misrepresentation] was reasonable is a question of fact for the jury, and may be decided as a matter of law only if the facts permit reasonable minds to come to just one conclusion.” ’ ” [Citations.]” (Broberg v. The Guardian Life Ins. Co. of America (2009) 171 Cal.App.4th 912, 921.)
The complaint does not show that it is necessarily barred by the statute of limitations. Because FCA cannot show that delayed discovery rule does not apply, the argument fails. Because the argument fails, the court need not comment on FCA’s related tolling arguments, repair doctrine argument, or estoppel argument.
Economic Loss Rule and Facts Sufficient to Constitute a Cause of Action
FCA next argues that the sixth cause of action is barred by the economic loss rule, as well as that plaintiff does not state facts sufficient to constitute a cause of action.
“ ‘The required elements for fraudulent concealment are (1) concealment or suppression of a material fact; (2) by a defendant with a duty to disclose the fact to the plaintiff; (3) the defendant intended to defraud the plaintiff by intentionally concealing or suppressing the fact; (4) the plaintiff was unaware of the fact and would not have acted as he or she did if he or she had known of the concealed or suppressed fact; and (5) plaintiff sustained damage as a result of the concealment or suppression of the fact. [Citation.]’ ” (Hambrick v. Healthcare Partners Medical Group, Inc. (2015) 238 Cal.App.4th 124, 162.)
“[F]raud must be pled specifically; general and conclusory allegations do not suffice. . . . This particularity requirement necessitates pleading facts which show how, when, where, to whom, and by what means the representations were tendered.” (Lazar v. Superior Court (1996) 12 Cal.4th 631, 645.)
“Less specificity should be required of fraud claims “ ‘when ‘it appears from the nature of the allegations that the defendant must necessarily possess full information concerning the facts of the controversy,’ ” [citation]; “ ‘[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. . . .’ ” [Citation.] (Alfaro v. Community Housing Improvement System & Planning Assn., Inc. (2009) 171 Cal.App.4th 1356, 1384.)
Plaintiff’s allegations essentially mimic the allegations at issue in Dhital v. Nissan North America, Inc. (2022) 84 Cal.App.5th 828, (Dhital). Unlike other cases cited by FCA, which tend to apply to the present situation by analogy, Dhital is directly on point here. It should be noted that, at one point, the analysis presented by the Dhital court was in question and review was granted. The review was subsequently dismissed on December 18, 2024, effectively affirming the holding of Dhital for present purposes.
The Dhital court held that “[a]t the pleading stage (and in the absence of a more developed argument by Nissan on this point), we conclude plaintiffs’ allegations are sufficient. Plaintiffs alleged that they bought the car from a Nissan dealership, that Nissan backed the car with an express warranty, and that Nissan’s authorized dealerships are its agents for purposes of the sale of Nissan vehicles to consumers. In light of these allegations, we decline to hold plaintiffs’ claim is barred on the ground there was no relationship requiring Nissan to disclose known defects.” Here, plaintiff has set forth those same allegations in her FAC.
To the extent that FCA relies on California Supreme Court case of Rattagan v. Uber Technologies, Inc. (2024) 17 Cal.5th 1, for their argument, the Court made clear that Dhital is distinguishable: “Rattagan’s tort claims are, of course, based on alleged conduct committed during the contractual relationship but purportedly outside the parties’ chosen rights and obligations. This court has granted review in two other cases — Dhital v. Nissan North America, Inc. (2022) 84 Cal.App.5th 828, 300 Cal.Rptr.3d 715, review granted Feb. 1, 2023, S277568 and Kia America v. Superior Court (Feb. 3, 2022, D079858) [nonpub. opn.], review granted Apr. 20, 2022, S273170 — both of which involve claims of fraudulent inducement by concealment claims as well as the potential interplay with remedies available under the Song-Beverly Consumer Warranty Act (Civ. Code, § 1791 et seq.). We do not address these issues here.” (Id. at p. 41, fn. 12.)
“Under California law, a vendor has a duty to disclose material facts not only to immediate purchasers, but also to subsequent purchasers when the vendor has reason to expect that the item will be resold.” (OCM Principal Opportunities Fund, L.P. v. CIBC World Markets Corp. (2007) 157 Cal.App.4th 835, 859.)
There are “four circumstances in which nondisclosure or concealment may constitute actionable fraud: (1) when the defendant is in a fiduciary relationship with the plaintiff; (2) when the defendant had exclusive knowledge of material facts not known to the plaintiff; (3) when the defendant actively conceals a material fact from the plaintiff; and (4) when the defendant makes partial representations but also suppresses some material facts.” (Heliotis v. Schuman (1986) 181 Cal.App.3d 646, 651.)
A “transactional relationship” is not required. Even if it were, the warranty itself evidences a transactional relationship between the parties with respect to the vehicle.
Plaintiff has alleged that FCA had exclusive knowledge of material facts not known to plaintiff and that FCA actively concealed material facts from plaintiff. At the pleading stage, plaintiff has alleged sufficient facts to overcome demurrer on these grounds.
Likewise, the economic loss rule does not bar plaintiff’s fraudulent inducement claim. “We acknowledge the differing views taken by courts that have considered this issue. But for the reasons we have discussed above, we conclude that, under California law, the economic loss rule does not bar plaintiffs’ claim here for fraudulent inducement by concealment. Fraudulent inducement claims fall within an exception to the economic loss rule recognized by our Supreme Court [citation], and plaintiffs allege fraudulent conduct that is independent of Nissan’s alleged warranty breaches. The trial court erred by sustaining Nissan’s demurrer to plaintiffs’ fraud claim on the ground it was barred by the economic loss rule.” (Dhital, supra, 84 Cal.App.5th at p. 843.)
Plaintiff has pled sufficient allegations to overcome FCA’s demurrer, and the demurrer will be overruled.