Anema, et al, v. General Motors, LLC

Proc., § 338(d); Hogar Dulce Hogar v. Community Development Commission (2003) 110 Cal.App.4th 1288, 1295.) When, by the face of the complaint, it is clear a claim is time-barred, the plaintiff must specifically plead facts to show (1) the time and manner of discover;, and (2) the inability to have made earlier discovery despite reasonable diligence. (CAMSI IV v. Hunter Technology Corp. (1991) 230 Cal.App.3d 1525, 1536.) The burden is on the plaintiff to show diligence, and conclusory allegations will not withstand a demurrer. (Id. at pp. 1536-37.)

Here, the FAC alleges that on July 28, 2019, Plaintiffs purchased the subject vehicle. They allege it had a defective transmission, engine, and electrical system. They assert that Defendant’s wrongful conduct was discovered shortly before the filing of the Complaint. They assert that they could not have discovered the defects earlier because the subject vehicle continued to exhibit symptoms of defects following unsuccessful attempts to repair them (FAC, ¶¶6, 11, & 24). The FAC also alleges that any statute of limitations has been tolled under the doctrines of equitable tolling, equitable estoppel, the repair rule, or class action tolling, (FAC, ¶23.)

Specificity: Any fraud claim must be pleaded fully, factually, and specifically. (Wilhelm v. Pray, Price, Williams & Russell (1986)186 Cal. App. 3d 1324, 1331.) The particularity requirement necessitates pleading facts that show how, when, where, to whom, and by what means the representation was tendered. (Stansfield v. Starkey (1990)220 Cal. App. 3d 59, 73.) The plaintiff must also plead specifically the detriment proximately caused by defendant's conduct. In other words, the plaintiff must plead the facts of both the injury suffered and its causal connection with plaintiff's reliance on defendant's misrepresentations. (Service of Medallion, Inc. v.

Clorox Co. (1996) 44 Cal.App.4th 1807, 1818.) Further, when alleging fraud against a corporation, the plaintiff must allege the names of the persons who made the allegedly fraudulent representation, their authority to speak, to whom they spoke, what they said or wrote, and when it was said or written. (Lazar v. Superior Court (1996)12 Cal.4th 631, 645.)

Here, again, Plaintiffs allege that Defendant knew of the defects because of the pre-production and post-production testing data, the early consumer complaints, and the warranty repairs. (FAC, ¶¶53a-53c.) Yet, they assert, “Defendant” intentionally omitted any reference to the defects. (See, e.g., FAC, ¶55.) However, as to the supposed agent interactions, Plaintiffs are found wanting: Plaintiffs characterize absolutely no interaction or communication between the Plaintiffs and any agent. To be frank, there are insufficient pleadings to determine whether the purchase was entirely online or whether there was any discussion with any party whatsoever.

Rather, only in the most general terms do they assert that some unnamed and unidentified agent “failed to disclose the defective nature of the Vehicle . . . .” (FAC, 51.) The pleadings do not indicate – even in the most general terms – what “agent” said or what was said that would have required the disclosure. Thus, as currently pleaded, the allegations are insufficiently pleaded to indicate circumstances made it wrongful for the unnamed agent to remain silent.

Transactional Relationship: Fraud by Concealment requires that the defendant owed a duty to disclose. “A duty to speak may arise in four ways: it may be directly imposed by statute or other prescriptive law; it may be voluntarily assumed by contractual undertaking; it may arise as an incident of a relationship between the defendant and the plaintiff; and it may arise as a result of other conduct by the defendant that makes it wrongful for him to remain silent.” (SCC Acquisitions, Inc. v. Central Pacific Bank (2012) 207 Cal.App.4th 859, 860.)

Our Supreme Court has described the necessary relationship giving rise to a duty to disclose as a “transaction” 3 between the plaintiff and defendant: “In transactions which do not involve fiduciary or confidential relations, a cause of action for non-disclosure of material facts may arise in at least three instances: (1) the defendant makes representations but does not disclose facts which materially qualify the facts disclosed, or which render his disclosure likely to mislead; (2) the facts are known or accessible only to defendant, and defendant knows they are not known to or reasonably discoverable by the plaintiff; (3) the defendant actively conceals discovery from the plaintiff.” (Bigler-Engler v.

Breg, Inc. (2017) 7 Cal.App.5th 276, 311, citing Warner Construction Corp. v. City of Los Angeles (1970) 2 Cal.3d 285, 294.)

However, an action for deceit does not require contractual privity. (Shapiro v. Sutherland (1998) 64 Cal.App.4th 1534, 1549.) This is true because “a defendant cannot escape liability if he or she makes a representation to one person while intending or having reason to expect that it will be repeated to and acted upon by the plaintiff.” (Id. at p. 1548.) A duty to disclose may arise from a seller to a subsequent purchaser when it has reason to expect the item will be resold. (OCM Principal Opportunities Fund, L.P. v. CIBC World Markets Corp. (2007) 157 Cal.App.4th 835, 859.)

Here, Plaintiffs are only one step removed from the dealer’s acquisition of the car from Defendant, with Defendant reasonably expecting that a car sold to a dealership would then be sold to a consumer. Per the FAC’s allegations, Defendant had exclusive knowledge of, or had a superior position of knowing, the issues existing in the transmission [FAC, ¶¶49, 53a-b], and it could reasonably know an authorized dealership would sell the vehicle to a consumer, and the dealership would not be able to pass on material information about the vehicle being purchased.

Thus, an indirect transactional relationship could be said to exist between Defendant and Plaintiffs. Additionally, the FAC alleges a transactional relationship by Defendant warranting the Subject Vehicle. (OCM, supra, 157 Cal.App.4th at p. 859 [noting transactional relationship may arise between “parties entering into any kind of contractual agreement.”].) Thus, the allegations sufficiently plead duty.

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