Nuzman vs. FCA US, LLC.

Sufficient facts: “[T]he elements of an action for fraud and deceit based on concealment are: (1) the defendant must have concealed or suppressed a material fact, (2) the defendant must have been under a duty to disclose the fact to the plaintiff, (3) the defendant must have intentionally concealed or suppressed the fact with the intent to defraud the plaintiff, (4) the plaintiff must have been unaware of the fact and would not have acted as he did if he had known of the concealed or suppressed fact, and (5) as a result of the concealment or suppression of the fact, the plaintiff must have sustained damage.” (Boshma v. Home Loan Center, Inc. (2011) 198 Cal.App.4th 230, 248 [citation omitted].)

“Fraud, including concealment, must be pleaded with specificity.” (Dhital v. Nissan North America, Inc. (2022) 84 Cal.App.5th 828, 843-844 [citation omitted].) This requires a plaintiff to plead facts showing “how, when, where, to whom, and by what means” any representations were made. (Alfaro v. Community Housing Improvement System & Planning Assn., Inc. (2009) 171 Cal.App.4th 1356, 1384 [citation omitted.])

“This statement of the rule reveals that it is intended to apply to affirmative misrepresentations. If the duty to disclose arises from the making of representations that were misleading or false, then those allegations should be described. (Ibid. [citation omitted].) Conversely, “[t]he pertinent question in a concealment case is not who said what to whom.” (Vega v. Jones Day, Reavis & Pogue (2004) 121 Cal.App.4th 282, 296.) Rather, the focus of the inquiry of a fraudulent concealment claim at the pleading stage, “shifts to the unique elements of the claim.” (Rattagan v. Uber Technologies, Inc. (2024) 17 Cal.5th 1, 43 [citations omitted].)

Plaintiff alleges: - FCA knew about and concealed the Battery Defect which could result in, among other things, the battery system overheating, loss 6 of propulsion power while driving, failure to start, reduced range, and spontaneous combustion and/or fire. (FAC ¶¶ 19, 70.) - FCA was under a duty to disclose the Battery Defect due to its superior knowledge of the defect through sources not available to consumers including pre-production testing data, early consumer complaint, aggregate warranty data, and testing conducted by FCA. (FAC ¶ 72.) - FCA intentionally concealed material information regarding the Battery Defect. (FAC ¶¶ 23, 28, 73.) - Plaintiff would not have purchased the vehicle or would have paid less for the vehicle if Plaintiff had known about the Battery Defect. (FAC ¶ 77.) - Plaintiff was harmed due to FCA’s concealment. (FAC ¶ 77.)

These allegations are sufficient at the pleading stage.

Duty to disclose: “A duty to disclose a material fact can arise if (1) it is imposed by statute; (2) the defendant is acting as plaintiff’s fiduciary or is in some other confidential relationship with plaintiff that imposes a disclosure duty under the circumstances; (3) the material facts are known or accessible only to defendant, and defendant knows those facts are not known or reasonably discoverable by 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) defendant actively conceals discovery of material fact from plaintiff (i.e., active concealment).” (Rattagan, supra, 17 Cal.5th at p. 40 [citations omitted].)

“Circumstances (3), (4), and (5) presuppose a preexisting relationship between the parties, such as “between seller and buyer, employer and prospective employee, doctor and patient, 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. Such a transaction must necessarily 7 arise from direct dealings between the plaintiff and the defendant; it cannot arise between the defendant and the public at large.” (Id. at pp. 40-41 [cleaned up].)

In Dhital, Nissan argued the plaintiffs did not adequately plead the existence of a buyer-seller relationship between the parties because plaintiffs bought the car from a Nissan dealership and not form Nissan itself. (84 Cal.App.5th at p. 844.) Rejecting this argument, the court concluded it was sufficient at the pleading stage for plaintiffs to allege “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 agent for purposes of the sale of Nissan vehicles to consumers.” (Ibid.) As such, it declined to hold plaintiffs’ claim was barred on the ground there was no relationship requiring Nissan to disclose known defects. (Ibid.)

Here, Plaintiff alleges he purchased the vehicle from FCA’s authorized retail dealership and received a new warranty in connection with the purchase of the vehicle. (FAC ¶¶ 10, 11, 12, 15.) Plaintiff further alleges FCA’s authorized retail dealerships convey information from FCA to prospective purchasers, including Plaintiff, using methods FCA directs such as marketing brochures and floor displays. (FAC ¶ 13.) These allegations sufficiently allege a transactional relationship between the parties giving rise to a duty to disclose.

Economic loss rule: Finally, FCA contends Plaintiff’s claim is barred under the economic loss rule. An element of independence from the parties’ contractual rights must be present to avoid application of the economic loss rule. (See Rattagan v. Uber Technologies, Inc. (2024) 17 Cal.5th, 20- 21.)

“[I]ndependence is present in the case of fraudulent inducement (whether it is achieved by intentional concealment or by intentional affirmative misrepresentations), because a defendant’s conduct in fraudulently inducing someone to enter a contract is separate from the defendant’s later breach of the contract or warranty provisions that were agreed to.” (Dhital, 84 8 Cal.App.5th at p. 841.) Accordingly, “under California law, the economic loss rule does not bar [a claim] for fraudulent inducement by concealment.” (Id. at p. 843.) As discussed above, Plaintiff has sufficiently alleged a cause of action for fraudulent inducement by concealment.

Tentative Ruling: The Court OVERRULES the demurrer to the sixth cause of action.

MOTION NO. 2 – MOTION TO STRIKE

FCA moves to strike Plaintiff’s claims for punitive damages. To support a demand for punitive damages, a plaintiff must allege facts demonstrating oppression, fraud, or malice. (Grieves v. Superior Court (1984) 157 Cal.App.3d 159, 166; Civ. Code, § 3294, subd. (a).)

“A fraud cause seeking punitive damages need not include an allegation that the fraud was motivated by the malicious desire to inflict injury upon the victim. The pleading of fraud is sufficient.” (Stevens v. Superior Court (1986) 180 Cal.App.3d 605, 610-611 [citations omitted.]) As discussed above, Plaintiff has sufficiently alleged a cause of action for fraud.