Maria Ruiz v. Toyota Motor Sales, U.S.A., Inc. et al.

DEMURRER (LINE #6) I. BACKGROUND On or about October 15, 2022, plaintiff Maria Moreno Ruiz (“Ruiz”) entered into a warranty contract with defendant Toyota Motor Sales, U.S.A., Inc. (“Toyota”) regarding a 2022 Toyota Tundra vehicle (“Subject Vehicle”) manufactured and/or distributed by defendant Toyota. (Complaint, ¶¶7 – 8 and Exh. A).

Defects and nonconformities to warranty manifested themselves within the applicable express warranty period including, but not limited to, engine defects, transmission defects, electrical defects, among other defects and nonconformities. (Complaint, ¶12).

Plaintiff Ruiz alleges defendant Toyota concealed a known defect from her. (Complaint, ¶52). The 3.4L engine and/or its related components installed in the Subject Vehicle suffer from one or more defects that can result in the loss of power, stalling, engine running rough, engine misfires, failure or replacement of the engine (“Engine Defect”). (Complaint, ¶53). Prior to sale of the Subject Vehicle, defendant Toyota knew or should have known about the Engine Defect through its exclusive knowledge of non-public, internal data including pre-release test data, early consumer complaints to defendant Subaru’s dealers, dealership repair orders, testing conducted in response to complaints, and other internal sources of information possessed exclusively by defendant Toyota and its agents. (Complaint, ¶¶57, 59, 62, 63, 64, 65, 76).

Nevertheless, defendant Toyota and its agents actively concealed the Engine Defect and failed to disclose this defect to plaintiff at the time of her purchase of the Subject Vehicle or thereafter. (Id). Defendant Toyota either refused to acknowledge the existence of the defects or performed superficial and ineffectual repairs that masked the symptoms of the Engine Defect. (Complaint, ¶¶59, 75, 77, 78). If plaintiff knew about these defects at the time of sale, plaintiff would not have purchased the Subject Vehicle. (Complaint, ¶60).

On July 22, 2025, plaintiff Ruiz filed a complaint against defendants Toyota and Capitol Toyota/Scion asserting causes of action for: (1) Violation of Subdivision (d) of Civil Code Section 1793.2 [against defendant Toyota] (2) Violation of Subdivision (b) of Civil Code Section 1793.2 [against defendant Toyota] (3) Violation of Subdivision (a)(3) of Civil Code Section 1793.2 [against defendant Toyota] (4) Breach of the Implied Warranty of Merchantability [against defendant Toyota] (5) Negligent Repair [against defendant Capitol Toyota/Scion] (6) Fraudulent Inducement – Concealment [against defendant Toyota]

On November 12, 2025, defendant Toyota filed the two motions now before the court, a demurrer to the sixth cause of action of plaintiff Ruiz’s complaint and a motion to strike plaintiff Ruiz’s prayer for punitive damages.

II. LEGAL STANDARD & ANALYSIS

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; (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 have acted differently if the concealed or suppressed fact was known; and (5) the plaintiff sustained damage as a result of the concealment or suppression of the material fact. (Rattagan v. Uber Technologies, Inc. (2024) 17 Cal.5th 1, 40 (Rattagan)).

A. SPECIFICITY As a general rule, each element in a fraud cause of action must be pleaded with specificity. (Lazar v. Super. Ct. (1996) 12 Cal.4th 631, 645; Cadlo v. Owens-Illinois, Inc. (2004) 125 Cal.App.4th 513, 519). The court in Lazar v. Superior Court (1996) 12 Cal.4th 631, 645 stated that “this particularity requirement necessitates pleading facts which ‘show how, when, where, to whom, and by what means the representations were tendered.’ A plaintiff’s burden in asserting a claim against a corporate employer is even greater. In such a case, the plaintiff must ‘allege the names of the persons who made the allegedly fraudulent representations, their authority to speak, to whom they spoke, what they said or wrote, and when it was said or written.”

Though the particularity requirement generally mandates that a plaintiff plead facts establishing the aforementioned items, it is much more difficult to apply this rule in a case of non-disclosure because, as one court 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). One of the purposes of the specificity requirement is to provide “notice to the defendant, to furnish the defendant with certain definite charged which can be intelligently met.” (Committee on Children’s Television, Inc. v.

General Foods Corp. (1983) 35 Cal.3d 197, 216, internal quotations omitted). However, when “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 was that less particularity is required when the facts lie more in the knowledge of the opposite party ....” (Id., at p. 217).

However, the Rattagan court declined to allow a more relaxed pleading standard for claims of concealment, explaining:

California courts apply the same specificity standard to evaluate the factual underpinnings of a fraudulent concealment claim at the pleading stage, even though the focus of inquiry shifts to the unique elements of the claim. [Citations omitted.] For instance, in a case such as this, the court must determine whether the plaintiff has alleged a sufficient factual basis for establishing a duty of disclosure on the part of the defendant independent of the parties' contract. If the duty allegedly arose by virtue of the parties' relationship and the defendant's exclusive knowledge or access to certain facts, as [plaintiff] has alleged here, 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. “[M]ere conclusionary allegations that the omissions were intentional and for the purpose of defrauding and deceiving

plaintiff[] ... are insufficient for the foregoing purposes.” [Citation.] (Rattagan, supra, (2024) 17 Cal.5th at pp. 43-44).

Defendant Toyota contends plaintiff Ruiz’s sixth cause of action is deficient because plaintiff identifies a number of potential defects but does not specifically allege that any defect actually manifested in the Subject Vehicle. While defendant Toyota would like more specifics, plaintiff Ruiz does allege that defects “manifested themselves within the applicable express warranty period;” “the Vehicle continued to exhibit symptoms of defects following TOYOTA’s unsuccessful attempts to repair them;” “Defendant TOYOTA and its representatives in this state have been unable to service or repair the Vehicle ... after a reasonable number of opportunities;” “Plaintiff delivered the Subject Vehicle to Defendant CAPITOL for substantial repair on at least one occasion;” and “the 3.4L engine and/or its related components installed in the Subject Vehicle suffer from one or more defects.” (Complaint, ¶¶12, 25, 28, 47, and 53).

B. DUTY TO DISCLOSE Next, defendant Toyota contends the complaint is defective in that plaintiff Ruiz has not pleaded any facts establishing defendant Toyota had a duty to disclose. “The general rule for liability for nondisclosure is that even if material facts are known to one party and not the other, failure to disclose those facts is not actionable fraud unless there is some fiduciary or confidential relationship giving rise to a duty to disclose.” (La Jolla Village Homeowners’ Assn. v. Superior Court (1989) 212 Cal.App.3d 1131, 1151).

To maintain a cause of action for fraud through nondisclosure or concealment of facts, a plaintiff must demonstrate that the defendant was under a legal duty to disclose those facts. (OCM Principal Opportunities Fund, L.P. v. CIBC World Markets Corp. (2007) 157 Cal.App.4th 835, 845). “Where ... there is no fiduciary relationship, the duty to disclose generally presupposes a relationship grounded in some sort of transaction between the parties. Thus, a duty to disclose may arise from the relationship between seller and buyer ... or parties entering into any kind of contractual agreement.” (LiMandri v.

Judkins (1997) 52 Cal.App.4th 326, 337, internal citations omitted). In Bigler-Engler v. Breg, Inc. (2017) 7 Cal.App.5th 276, 311- 312 (Bigler) the court wrote:

Our Supreme Court has described the necessary relationship giving rise to a duty to disclose as a “transaction” between the plaintiff and the 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.” (Warner Constr.

Corp. v. City of Los Angeles (1970) 2 Cal.3d 285, 294 [85 Cal. Rptr. 444, 466 P.2d 996], italics added, fns. omitted). Other cases have described the requisite relationship with the same term. (See, e.g., Hoffman v. 162 North Wolfe LLC (2014) 228 Cal.App.4t 1178, 1187 [175 Cal. Rptr. 3d 820] (Hoffman); LiMandri, supra, 52 Cal.App.4th at p. 337 [“As a matter of common sense, such a relationship can only come into being as a result of some sort of transaction between the parties.”]). Such a transaction must necessarily arise from direct dealings between the plaintiff and the defendant; it cannot arise between the defendant and the public at large. (emphasis added).

Defendant Toyota contends there is no direct relationship alleged between it and plaintiff Ruiz because plaintiff Ruiz did not purchase the Subject Vehicle directly from Toyota. However, earlier in Bigler, the court cites with approval the following: “ ‘A duty to disclose facts arises only when the parties are in a relationship that gives rise to the duty, such as “‘seller and buyer, employer and prospective employee, doctor and patient, or parties entering into any kind of contractual arrangement.’”’ [Citation.]” (Bigler, supra, 7 Cal.App.5th at p. 311; emphasis added). Here, although plaintiff Ruiz does not allege she directly purchased the Subject Vehicle from defendant Toyota, plaintiff Ruiz has

alleged the existence of a contractual agreement (express written warranty) with defendant Toyota and thus, a basis upon which a duty to disclose arises. (See Complaint, ¶¶7 – 8 and Exh. A).

Defendant Toyota’s reliance on Ford Motor Warranty Cases (2023) 89 Cal.App.5th 1324, 1329 is unavailing as it does not stand for the proposition that a manufacturer’s warranty does not create the direct transactional relationship necessary to impose a duty to disclose.

C. ACTIVE CONCEALMENT As a further basis for demurrer, defendant Toyota contends plaintiff Ruiz has not adequately alleged any active concealment or partial representations by defendant Toyota. As noted above from Bigler, these are two of the three instances in which non-disclosure is actionable even in the absence of a fiduciary or confidential relationship. However, this argument misses the mark as plaintiff Ruiz’s complaint alleges liability premised on the third example, i.e., where facts are known or accessible only to defendant, and defendant knows they are not known to or reasonably discoverable by the plaintiff. (See Complaint, ¶¶57 and 62).

D. ECONOMIC LOSS Finally, defendant Toyota contends the claim for fraudulent concealment is barred by the economic loss rule. The economic loss rule provides that “where a purchaser’s expectations in a sale are frustrated because the product he brought is not working properly, his remedy is said to be in contract alone, for he has suffered only economic losses.” (Robinson Helicopter Company v. Dana Corporation (2004) 34 Cal.4th 979, 988 (Robinson)). This doctrine hinges on a “distinction drawn between transactions involving the sales of goods for commercial purposes where economic expectations are protected by commercial and contract law, and those involving the sale of defective products to individual consumers who are injured in a manner which has traditionally been remedied by resort to the law of torts.” (Ibid).

The rule requires a purchaser to recover solely in contract for purely economic loss due to disappointed expectations, unless the purchaser can demonstrate harm above and beyond a broken contractual promise. (Ibid).

Insofar as plaintiff Ruiz has asserted fraudulent concealment inducing his purchase of the Subject Vehicle, plaintiff’s sixth cause of action is not barred by the economic loss rule. (See Sheen v. Wells Fargo Bank, N.A. (2022) 12 Cal.5th 905, 923-924—“Not all tort claims for monetary losses between contractual parties are barred by the economic loss rule. But such claims are barred when they arise from—or are not independent of—the parties' underlying contracts. (See Robinson, supra, 34 Cal.4th at p. 991 [holding that “the economic loss rule does not bar [the plaintiff's] fraud and intentional misrepresentation claims because they were independent of [the defendant's] breach of contract”]).

Rattagan did not address application of the economic loss rule to claims of fraudulent inducement by concealment. (See Rattagan, supra, 17 Cal.5th at p. 41, fn. 12—“This court has granted review1 in two other cases—Dhital v. Nissan North America, Inc. (2022) 84 Cal.App.5th 828 [300 Cal. Rptr. 3d 715], review granted February 1, 2023, S277568 and Kia America v. Superior Court (Feb. 3, 2022, D079858) (nonpub. opn)., review granted April 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.”) The California Supreme Court has saved that discussion for another day.

The court declines to follow the federal trial court decisions relied upon by defendant Toyota. While instructive and perhaps even persuasive, “A written trial court ruling has no precedential value.” (Santa Ana Hospital Med. Ctr. v. Belshe (1997) 56 Cal.App.4th 819, 831; Budrow v. Dave & Buster's of California (2009) 171 Cal.App.4th 875, 885; Bolanos v. Superior Court (2008) 169 Cal.App.4th 744, 761; In re Molz (2015) 127 Cal.App.4th 836, 845).

1 Review of these two decisions has since been dismissed. (Dhital v. Nissan North America, Inc. (2024) 327 Cal.Rptr.3d 898 [559 P.3d 1083]; KIA America, Inc. v. Superior Court (Dec. 18, 2024, No. S273170) ___Cal.5th___ [2024 Cal. LEXIS 7098]). 11

III. CONCLUSION Based on the foregoing, Defendant Toyota’s demurrer to the sixth cause of action in plaintiff Ruiz’s complaint on the ground that the pleading does not state facts sufficient to constitute a cause of action [Code Civ. Proc., §430.10, subd. (e)] for fraudulent inducement-concealment is OVERRULED.

The Court will prepare the formal Order.

MOTION TO STRIKE (LINE #7)

Pursuant to Civil Code section 3294, punitive damages may be recovered “where it is proven by clear and convincing evidence that the defendant has been guilty of oppression, fraud, or malice.”

In 1980, the Legislature added subdivision (b) to section 3294, to add a special qualification for employer liability for those damages. Subdivision (b) states, in relevant part, that an employer shall not be liable for punitive damages based on an employee's acts unless “the employer had advance knowledge of the unfitness of the employee and employed him or her with a conscious disregard of the rights or safety of others or authorized or ratified the wrongful conduct for which the damages are awarded or was personally guilty of oppression, fraud, or malice.”

The statute includes an additional qualification for corporate employers, who may not be liable for punitive damages unless “the advance knowledge and conscious disregard, authorization, ratification or act of oppression, fraud, or malice [is] on the part of an officer, director, or managing agent of the corporation.” (White v. Ultramar, Inc. (1999) 21 Cal.4th 563, 566, fn. 1; emphasis added).

Among other grounds, defendant Toyota moves to strike plaintiff Ruiz’s prayer for punitive damages because, as highlighted above, plaintiff Ruiz has not set forth any allegations to support the imposition of punitive damages against Toyota, a corporate entity. Plaintiff Ruiz does not address this deficiency in her opposition.

Accordingly, Defendant Toyota’s motion to strike plaintiff Ruiz’s prayer for punitive damages is GRANTED with 10 days’ leave to amend. The Court will prepare the formal Order.

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