WILLIAMS vs GENERAL MOTORS, LLC., et al.

A Stipulation and Appointment of Official Reporter Pro Tempore (CV/E-206) is required to be signed by each party, the private court reporter, and the Judge prior to the hearing, if not using a reporter from the Court’s Approved Official Reporter Pro Tempore list.

Once the form is signed it must be filed with the clerk. If a litigant has been granted a fee waiver and requests a court reporter, the party must submit a Request for Court Reporter by a Party with

25CV002155: WILLIAMS vs GENERAL MOTORS, LLC., et al. 01/05/2026 Hearing on Demurrer to Complaint in Department 25

a Fee Waiver (CV/E-211) and it must be filed with the clerk at least 10 days prior to the hearing or at the time the proceeding is scheduled if less than 10 days away. Once approved, the clerk will forward the form to the Court Reporter’s Office and an official reporter will be provided.

TENTATIVE RULING:

The notice of motion does not provide notice of the Court’s tentative ruling system, as required by Local Rule 1.06. Moving counsel is directed to contact opposing counsel and advise of Local Rule 1.06 and the Court’s tentative ruling procedure and the manner to request a hearing. If moving counsel is unable to contact opposing counsel prior to the hearing, moving counsel is ordered to appear at the hearing by Zoom or in person.

Defendant General Motors, LLC’s (“Defendant”) demurrer to the complaint of Plaintiff Darell Williams (“Plaintiff”) is ruled upon as follows.

Background

This is a lemon law/Song-Beverly Act action. Plaintiff filed his complaint on January 24, 2025, alleging five causes of action which are based upon California’s lemon law statute, the Song- Beverly Consumer Warranty Act, breach of the implied warranty of merchantability, and for fraudulent inducement-concealment.

Plaintiff alleges that on August 22, 2019, he entered into a warranty contract with Defendant regarding a Certified Pre-Owned 2018 Chevrolet Malibu (the “Subject Vehicle”). (Compl., ¶ 6.) The warranty contract contained various warranties, including but not limited to the bumper-tobumper warranty, powertrain warranty, emission warranty, etc. (Ibid., Exh. A.) Plaintiff alleges, “[d]efects and nonconformities to warranty manifested themselves within the applicable express warranty period, including but not limited to engine defects, electrical defects, suspension defects, body defects, transmission defects; among other defects and non-conformities.” (Compl., ¶ 11.)

Plaintiff further alleges that the value of the Subject Vehicle is worthless and/or de minimis, and Defendant failed to either promptly replace the Subject Vehicle or to promptly make restitution in accordance with the Song-Beverly Act. (Compl., ¶¶ 13-15.)

Plaintiff also contends that Defendant concealed a known defect that the 1.5L Engine and/or its related components installed in the Subject Vehicle suffer from one or more defects that can result in loss of power, stalling, engine running rough, engine misfire(s), failure or replacement of the engine (the “Engine Defect”). (Compl. ¶¶ 45-46.) The Engine Defect causes unsafe conditions in vehicles equipped with the 1.5L Engine, including, but not limited to, the engine losing power while driving; these conditions present a safety hazard because they severely affect the driver’s ability to control the vehicle, and substantially increase the likelihood that the engine will fail, lose power, and/or cut off during operation, thereby resulting in accidents involving

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

25CV002155: WILLIAMS vs GENERAL MOTORS, LLC., et al. 01/05/2026 Hearing on Demurrer to Complaint in Department 25

property damage, personal injury and even death. (Compl., ¶ 48.) Plaintiff alleges that Defendant failed to disclose and concealed material facts at the time of the sale, repair, and thereafter. (Compl., ¶¶ 50, 52, 55-72.)

Legal Standard

The function of a demurrer is to test the sufficiency of the pleading it challenges by raising questions of law. (Salimi v. State Comp. Ins. Fund (1997) 54 Cal.App.4th 216, 219; Nordlinger v. Lynch (1990) 225 Cal.App.3d 1259, 1271.)

A demurrer “tests the pleadings alone and not the evidence or other extrinsic matters.” (SKF Farms v. Superior Court (1984) 153 Cal.App.3d 902, 905.) The purpose of a demurrer is to test the legal sufficiency of a claim. (Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994.) For the purpose of determining the effect of a complaint, its allegations are liberally construed, with a view toward substantial justice. (Code Civ. Proc., §452; Amarel v. Connell (1988) 202 Cal.App.3d 137, 140-141; Quelimane Co. v. Stewart Title Guaranty Co. (1998) 19 Cal.4th 26, 43, fn. 7.)

In this respect, the Court treats the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law, and considers matters which may be judicially noticed. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318; Poseidon Development, Inc. v. Woodland Lane Estates, LLC (2007) 152 Cal.App.4th 1106, 1111-1112.) Extrinsic evidence may not properly be considered on demurrer or on a motion to strike. (Ion Equipment Corp. v. Nelson (1980) 110 Cal.App.3d 868, 881; Hibernia Savings & Loan Soc. v. Thornton (1897) 117 Cal. 481, 482.)

A demurrer may be sustained only if the complaint lacks any sufficient allegations to entitle the plaintiff to relief. (Financial Corp. of America v. Wilburn (1987) 189 Cal.App.3d 764, 778.) “Plaintiff need only plead facts showing that he may be entitled to some relief we are not concerned with plaintiff's possible inability or difficulty in proving the allegations of the complaint.” (Highlanders, Inc. v. Olsan (1978) 77 Cal.App.3d 690, 696-697.)

“[Courts] are required to construe the complaint liberally to determine whether a cause of action has been stated, given the assumed truth of the facts pleaded.” (Picton v. Anderson Union High School Dist. (1996) 50 Cal.App.4th 726.) A demurrer admits the truth of all material facts properly pled and the sole issue raised by a general demurrer is whether the facts pled state a valid cause of action – not whether they are true. (Serrano v. Priest (1971) 5 Cal.3d 584, 591.)

Discussion

Defendant demurs to the fifth cause of action for fraudulent inducement-concealment on the following grounds:

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

25CV002155: WILLIAMS vs GENERAL MOTORS, LLC., et al. 01/05/2026 Hearing on Demurrer to Complaint in Department 25

A. Demurrer to the Fifth Cause of Action (Fraudulent Inducement - Concealment) GM demurs to the Fifth Cause of Action for Fraudulent Inducement - Concealment, on the grounds that the Complaint fails to allege facts sufficient to state a cause of action under Section 430.10(e) of the Code of Civil Procedure.

B. Demurrer to the Fifth Cause of Action (Fraudulent Inducement - Concealment) GM demurs to the Fifth Cause of Action for Fraudulent Inducement - Concealment on the grounds that it is barred by the Economic Loss Rule and Independent Tort Principle as Plaintiff(s) cannot establish the elements of their fraudulent concealment claim independently of the parties’ contractual rights and obligations.

(Demurrer, p. 2.)

Defendant requests the Court sustain its demurrer to the fifth cause of action without leave to amend. Plaintiff opposes the motion.

Failure to State Facts – Specificity. First, Defendant argues that Plaintiff fails to allege the cause of action for fraudulent inducement-concealment with the requisite specificity. Defendant contends that Plaintiff fails to plead the content of omitted facts, fails to allege with particularity the defect GM allegedly concealed, and fails to identify, by name, who made the alleged omissions.

The Court’s consideration of Defendant’s demurrer to Plaintiff’s fraudulent concealment cause of action is guided by two principles. First, in evaluating the factual underpinnings of a fraudulent concealment claim at the pleading stage, the Court focuses its inquiry on the unique elements of the claim as asserted by the plaintiff. (Rattagan v. Uber Technologies, Inc. (2024) 17 Cal.5th 1, 43- 44 [citations omitted].) “For instance [i]f the duty [of disclosure] allegedly arose by virtue of the parties' relationship and the defendant's exclusive knowledge or access to certain facts the complaint must also include specific allegations establishing all the required elements, including (1) the content of the omitted facts, (2) the defendant's awareness of the materiality of those facts, (3) the inaccessibility of the facts to the plaintiff, (4) the general point at which the omitted facts should or could have been revealed, and (5) justifiable and actual reliance, either through action or forbearance, based on the defendant's omission.” (Ibid.)

Second, although in California, fraud must be pled specifically, courts have repeatedly recognized that “[i]t is harder to apply [the requirement of specificity] to a case of simple nondisclosure. 'How does one show 'how' and 'by what means' something didn't happen, or 'when' it never happened, or 'where' it never happened?'” (Jones v. ConocoPhillips Co. (2011) 198 Cal.App.4th 1187, 1199 [citing Alfaro v. Community Housing Improvement System & Planning Assn., Inc. (2009) 171 Cal.App.4th 1356, 1384; Committee on Children's Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 217].) At the same time, allegations that

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

25CV002155: WILLIAMS vs GENERAL MOTORS, LLC., et al. 01/05/2026 Hearing on Demurrer to Complaint in Department 25

merely plead legal conclusions of fraud are insufficient. (Tindell v. Murphy (2018) 22 Cal.App.5th 1239, 1249, citations omitted.) Thus, even in cases involving claims of fraudulent concealment, “the facts and circumstances which constitute the fraud should be set out clearly, concisely, and with sufficient particularity to apprise the opposite party of what he is called on to answer, and to enable the court to determine whether, on the facts pleaded, there is any foundation, prima facie at least, for the charge of fraud.” (Scafidi v. Western Loan & Bldg. Co. (1946) 72 C.A.2d 550, 553, quoting Corpus Juris Secundum.)

In the context of a case alleging fraudulent concealment of transmission defects in a purchased vehicle, the appellate court in Dhital v. Nissan North America, Inc. (2022) 84 Cal.App.5th 828, 844, held that the plaintiffs had adequately alleged the elements of fraudulent concealment/suppression where they alleged: (1) the transmissions in numerous vehicles, including the one purchased by the plaintiffs, were defective; (2) the manufacturer knew of the defects and the hazards posed; (3) the manufacturer had exclusive knowledge of the defects but intentionally concealed and failed to disclose the information, (4) the plaintiff would not have purchased the car if they knew of the defects; and (5) the plaintiffs suffered damages in the form of the money paid to purchase the car.

The Dhital Court found sufficient allegations that the defects caused hesitation, shaking, jerking, and failure to function as well as allegations that the manufacturer was aware of the defects based on premarket testing and consumer complaints. (Ibid.)

With these considerations in mind, the Court determines that Plaintiff has sufficiently alleged a cause of action for fraudulent inducement-concealment. Plaintiff alleges he entered into a warranty contract with Defendant on August 22, 2019 (Compl., ¶ 6); Plaintiff identifies the material facts Defendant knew prior to their acquisition of Subject Vehicle and withheld from Plaintiff (Compl., ¶¶ 46, 48); Defendant had superior knowledge of the facts (Compl., ¶¶ 55-58); the safety risks posed by the Engine Defect (Compl., ¶¶ 46, 48); the materiality of that information (Compl., ¶¶ 59-60); Plaintiff’s reliance on the non-disclosure (Ibid.); and damages (Compl., ¶¶54, 70). (See Opp’n, p. 5:4-10.) Defendant’s demurrer for failure to state facts, on this ground, is OVERRULED.

Failure to State Facts – Duty to Disclose. Defendant also argues that Plaintiff’s fraud claim fails because Plaintiff did not allege a transactional relationship between Defendant and Plaintiff giving rise to a duty to disclose. Contrary to Defendant’s argument, no transactional relationship between a vendor and subsequent purchasers is necessary to bring a fraudulent omission claim because a vendor has a duty to disclose material facts not only to immediate purchasers, but to subsequent purchasers when the vendor has reason to know that the subject product will be resold. (OCM Principal Opportunities Fund v.

CIBC World Markets Corp. (2007) 157 Cal.App.4th 835, 859-860.) Those are the allegations here, in addition to the allegation that Defendant has a warranty relationship with Plaintiff. The case law cited by Defendant does not involve such a scenario. In fact, the cited case dealt with the scenario where the manufacturer was not aware that its device was provided to the plaintiff, and in any event dealt with the

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

25CV002155: WILLIAMS vs GENERAL MOTORS, LLC., et al. 01/05/2026 Hearing on Demurrer to Complaint in Department 25

sufficiency of evidence at trial. (Bigler-Engler v. Breg, Inc. (2017) 7 Cal.App.5th 276, 312-313.)

In this case, Plaintiff has alleged a transactional relationship giving rise to Defendant’s duty to disclose the Engine Defect. Plaintiff alleges that on August 22, 2019, he entered into a warranty contract directly with Defendant. (Compl., ¶ 6.) Plaintiff also adequately pleads other circumstances that give rise to Defendant’s duty to disclose. Plaintiff alleges that Defendant had superior knowledge of the true extent of the Engine Defect (Compl., ¶¶ 55-58), actively concealed information regarding the Engine Defect (Compl., ¶¶ 45-48, 52), with the intent to induce Plaintiff into purchasing the Subject Vehicle. (Compl., ¶¶ 65-67.) Defendant’s demurrer for failure to state facts, on this ground, is OVERRULED.

Economic Loss Rule. Relying largely on the California Supreme Court’s decision of Rattagan, supra, 17 Cal.5th 1, Defendant contends that Plaintiff’s fraud cause of action is barred by the Economic Loss Rule (“ELR”). Defendant maintains that, pursuant to Rattagan, tort recovery for the breach of a contractual duty is “generally barred” under the ELR unless (1) the defendant’s conduct violated a duty independent of those assumed under the contract, and (2) the resulting injury was not reasonably foreseeable by the parties when the contract was formed. (Mov MPA, pp. 14:14-17, citing Rattagan, supra, 17 Cal.5th at pp. 20-21.) In this regard, Defendant argues that Plaintiff’s claims fail to meet either of these mandatory conditions. The Court does not find this persuasive.

In Rattagan, the California Supreme Court clarified that “the economic loss rule does not apply to limit recovery for intentional tort claims like fraud. The doctrine only applies to bar tort recovery for negligently inflicted economic losses unaccompanied by physical or property damage under the limits recognized in Sheen. [Citation.]” (Rattagan, supra, 17 Cal.5th at p. 38.) The Court further explained that “[a] plaintiff may assert a tort claim for 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 into the agreement.” (Ibid.)

Dhital further supports this conclusion: “under California law, the economic loss rule does not bar plaintiffs’ fraudulent inducement claim” in the context of an auto sale with a warranty. (Dhital v. Nissan North America, Inc., supra, 84 Cal.App.5th at p. 833.)

Here, Plaintiff alleges that Defendant actively concealed the Subject Vehicle’s defects. This must be accepted as true for purposes of this demurrer, and notably, Plaintiff does not merely allege that he received a defective vehicle in violation of the express and implied warranties. Instead, Plaintiff specifically alleges that Defendant actually knew the Subject Vehicle was defective in certain respects, had exclusive knowledge of this, actively concealed this information from Plaintiff, and knowingly sold Plaintiff a defective vehicle which caused Plaintiff harm. (See Compl.) These allegations of intentional and fraudulent conduct, which are independent from any contractual obligations owed by Defendant, and which created a risk of harm not reasonably

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

25CV002155: WILLIAMS vs GENERAL MOTORS, LLC., et al. 01/05/2026 Hearing on Demurrer to Complaint in Department 25

contemplated at the time Plaintiff acquired the Subject Vehicle, make the ELR inapplicable to the fraud cause of action. Because the ELR does not bar tort damages in a contract case where it is shown the contract was fraudulently induced, and because the allegations satisfy both of Rattagan’s requirements, Defendant’s demurrer based on the ELR is OVERRULED.

Disposition

Defendant’s demurrer to the complaint is OVERRULED in its entirety.

If not already done, Defendant shall file and serve an answer to the complaint no later than January 15, 2026.

This minute order is effective immediately. No formal order or other notice is required. (Code Civ. Proc., § 1019.5; Cal. Rules Court, rule 3.1312.)