Ricardo Alvarez, et al. v. General Motors, LLC, et al.

Before Plaintiffs’ purchase, GM knew that vehicles equipped with the same 8-speed transmission, as installed in the Subject Vehicle, suffered from one or more defects that resulted in various problems including harsh shifting, jerking, lurching, hesitation on acceleration, surging, or deceleration ("Transmission Defect"). GM acquired this knowledge through various sources of information, including but not limited to pre-production testing,

consumer complaints, dealership repair orders, and testing conducted by GM in response to consumer complaints. However, GM and its agents actively concealed the Engine Defect and failed to disclose it to the Plaintiffs at the time of their purchase or thereafter. Had Plaintiffs known the Subject Vehicle and its transmission were defective at the time of sale, they would not have purchased it. (FAC ¶¶ 73-75, 79, 80)

Plaintiffs presented the Subject Vehicle to GM’s authorized repair facility at least on one occasion in October 2020. GM’s repair facility represented that the Subject Vehicle had been repaired, but Plaintiffs continued to experience symptoms of the defect. (FAC ¶¶ 12, 13)

Plaintiffs initiated this action on January 24, 2025, and filed their FAC on December 4, 2025, alleging causes of action for (1) Violation of Civil Code section 1793.2, subdivision (d); (2) Violation of Civil Code section 1793.2, subdivision (b); (3) Violation of Civil Code section 1793.2, subdivision (a)(3); (4) Breach of the Implied Warranty of Merchantability; and (5) Fraudulent Inducement–Concealment.

II. Legal Standard on Demurrer

“The party against whom complaint or cross-complaint has been filed may object, by demurrer or answer as provided in [Code of Civil Procedure] section 430.30, to the pleading on any one or more of the following grounds: . . . (e) The pleading does not state sufficient facts to constitute cause of action, (f) The pleading is uncertain.” (C.C.P. § 430.10(e) & (f).)

A demurrer may be used by “[t]he party against whom complaint has been filed” to object to the legal sufficiency of the pleading as whole, or to any “cause of action” stated therein, on one or more of the grounds enumerated by statute. (C.C.P. §§ 430.10 & 430.50(a).)

“A demurrer tests only the legal sufficiency of the pleading. It admits the truth of all material factual allegations in the complaint; the question of plaintiff's ability to prove these allegations, or the possible difficulty in making such proof does not concern the reviewing court.” (Committee on Children's Television, Inc. v. General Foods Corp. (1983) 35 Cal. 3d 197, 213-214.) In ruling on demurrers, courts may consider matters subject to judicial notice. A demurrer may be sustained where judicially noticeable facts render the pleading defective, and allegations in the pleading may be disregarded if they are contrary to facts judicially noticed. (Scott v. JPMorgan Chase Bank, N.A. (2013) 214 Cal. App. 4th 743, 751.) Evidentiary facts found in exhibits attached to complaint can be considered on demurrer. (Frantz v. Blackwell (1987) 189 Cal.App.3d 91, 94.)

Under California law, even if a demurrer is sustained, leave to amend the complaint is routinely granted. “Liberality in permitting amendment is the rule, if fair opportunity to correct any defect has not been given.” (Angie M. v. Superior Court (1995) 37 Cal. App. 4th 1217, 1227.) “Unless the complaint shows on its face that it is incapable of amendment, denial of leave to amend constitutes an abuse of discretion, irrespective of whether leave to

amend is requested or not.” (McDonald v. Sup. Ct. (Flintkote Co.) (1986) 180 Cal. App. 3d 297, 303-304.)

III. Analysis of the Demurrer

A. First Through Third Causes of Action: Violation of the Song- Beverly Consumer Warranty Act

GM invokes the statute of repose under Code of Civil Procedure section 871.21 in support of its contention that Plaintiff’s first through third causes of action are time-barred. Code of Civil Procedure section 871.21 provides, in pertinent part:

"(b)... [A]n action covered by Section 871.20 shall not be brought later than six years after the date of original delivery of the motor vehicle.

(c) The time periods prescribed in subdivision[] ... (b) shall be tolled as follows:

(1) As provided by tolling requirements prescribed in subdivision (c) of Section 1793.22 of the Civil Code, as applicable.

(2) For the time the motor vehicle is out of service by reason of repair for any nonconformity.

(3) For the time period after a pre-suit notice is provided to the manufacturer in accordance with Section 871.24, which time period shall not exceed 60 days.”

(Code. Civ. Proc. § 871.21)

Code of Civil Procedure section 871.20 provides:

"(a) Notwithstanding any other law, this chapter applies to an action, brought against a manufacturer who has elected under Section 871.29 to proceed under this chapter, seeking restitution or replacement of a motor vehicle pursuant to subdivision (b) or (d) of Section 1793.2, Section 1793.22, or Section 1794 of the Civil Code, or for civil penalties pursuant to subdivision (c) of Section 1794 of the Civil Code, where the request for restitution or replacement is based on noncompliance with the applicable express warranty.

(b) This chapter does not apply to service contract claims under Section 1794 of the Civil Code or any action seeking remedies that are not restitution or replacement of a motor vehicle."

(Code. Civ. Proc. § 871.20)

Code of Civil Procedure section 871.20 was added by AB 1755 with an effective date of January 1, 2025, and later amended by Senate Bill ("SB") No. 26 with an effective date of

April 2, 2025. SB 26's revision to Section 871.20 added an opt-in provision to the new procedures by allowing car manufacturers to opt in by May 2, 2025, for the procedures to apply, otherwise the pre-amendment procedures would continue to apply. (See, Code Civ. Proc. §§ 871.29(a)-(c), 871.30.)

Therefore, for GM to rely on sections 871.20 or 871.21, it needs to have “elect[ed] to be governed by this chapter for all actions described in subdivision (a) of Section 871.20 with respect to all of its motor vehicles.” (Code Civ. Proc. §§ 871.29(b)) The FAC does not allege that GM made any such election. GM’s memorandum in support of its demurrer fails to mention section 871.29 or 871.30, much less argue and demonstrate that it made any such election. Nor does GM requests judicial notice of any election.

In its Reply, GM newly argues that it complied with the opt-in provision of the statutory framework on April 23, 2025. (Reply, at 2:3-5) But again, this fact is neither presented in the opening brief nor was sought to be judicially noticed. Furthermore, GM’s reply assertion regarding its election to be governed by the chapter is only supported by an internet site; this is plainly insufficient on demurrer. (See Zumbrun Law Firm v. California Legislature (2008) 165 Cal.App.4th 1603, 1623, fn. 12; see also Huitt v. Southern California Gas Co. (2010) 188 Cal.App.4th 1586, 1605, fn. 10 (denying request for judicial notice of facts found on internet sites as not a proper subject for judicial notice, stating that “[s]imply because information is on the Internet does not mean that it is not reasonably subject to dispute”).)

GM’s argument also fails under the old statute of limitations for Song-Beverly claims. “An action for breach of any contract for sale must be commenced within four years after the cause of action has accrued. . . . A cause of action accrues when the breach occurs, regardless of the aggrieved party's lack of knowledge of the breach. A breach of warranty occurs when tender of delivery is made, except that where a warranty explicitly extends to future performance of the goods and discovery of the breach must await the time of such performance the cause of action accrues when the breach is or should have been discovered". (Mexia v. Rinker Coat Co., Inc., (2009) 174 Cal.App.4th 1297, 1305-1306; citing Cal. U. Com. Code § 2725, subds. (1), (2).)

The warranty period relating to an implied or express warranty accompanying a sale of consumer goods is tolled for the period from when the buyer delivers nonconforming goods to the manufacturer or seller for warranty repairs or service or notifies the manufacturer or seller of the nonconformity, until the goods are returned to the buyer or the buyer is notified that the goods are repaired. (Civ. Code, § 1795.6.)

Plaintiffs allege they discovered GM's wrongful conduct shortly before filing the complaint, as the Subject Vehicle continued to exhibit symptoms of defects following GM’s unsuccessful attempts to repair them. (FAC ¶¶ 12, 13, 32, 36, 39,) However, Plaintiffs do not allege facts showing how many times the Subject Vehicle was presented for warranty repair nor do they allege how long each repair lasted, during which the statute may have been tolled.

Nonetheless, for Defendant’s demurrer to prevail on the affirmative defense that the action is time-barred, the defect must clearly and affirmatively appear on the fact of the FAC and/or matters that are subject to judicial notice; it is not enough that the FAC shows that the action may be barred. (See, Committee for Sound Water & Land Development v. City of Seaside (2022) 79 Cal.App.5th 389, 400.) The FAC does not affirmatively show the action is time-barred.

Lastly, section 871.20 plainly states that it applies to a violation of section 1793.2 (b) or (d); it does not state that it applies to a violation of section 1793.2, subdivision (a)(3); as alleged in Plaintiffs’ third cause of action.

At this juncture, it is unnecessary for the Court to further analyze and address the parties’ arguments regarding retroactive application of section 871.21 and equitable tolling of the statutory limitation.

Accordingly, for all the reasons explained above, the Court in the exercise of its discretion OVERRULES GM’s Demurrer to the First through Third Causes of Action.

B. Fourth Cause of Action: Breach of the Implied Warranty of Merchantability

California Uniform Commercial Code’s (UCC) four-year statute of limitations for breach of warranty applies to the Song-Beverly breach of express warranty claims and breach of implied warranty claims. (Com. Code, section 2725(1); Krieger v. Nick Alexander Imports, Inc. (1991) 234 Cal.App.3d 205, 215.) Under that statute, a cause of action for breach of warranty accrues, at the earliest, upon tender of delivery.

Where a warranty explicitly extends to future performance of the goods and discovery of the breach must await the time of such performance, the cause of action accrues when the breach is or should have been discovered. (See UCC § 2725, subds. (1), (2).) However, "[b]ecause an implied warranty is one that arises by operation of law rather than by an express agreement of the parties, courts have consistently held it is not a warranty that "explicitly extends to future performance of the goods ...." [Citations omitted]." (Cardinal Health 301, Inc. v. Tyco Elecs. Corp. (2008) 169 Cal. App. 4th 116, 134.)

GM contends that Plaintiffs’ fourth cause of action for breach of the implied warranty of merchantability is time-barred by the four-year statute of limitations since the complaint was filed more than four years after the vehicle was purchased and delivered to Plaintiffs. (Motion at 11:21-12:14)

While the Court might imagine that the Subject Vehicle was delivered to Plaintiffs on the date they entered into the warranty agreement with GM, the FAC does not have factual allegations showing that to be so. As noted above, where Defendant demurs on the affirmative defense that the action is time-barred, the defect must clearly and affirmatively appear on the face of the complaint and/or matters subject to judicial notice; it is not

enough that the complaint shows that the action might be barred. (Committee for Sound Water & Land Development, supra, 79 Cal.App.5th at p. 400.)

Accordingly, for all the reasons explained above, the Court in the exercise of its discretion OVERRULES GM’s Demurrer to the Fourth Cause of Action.

C. Fifth Cause of Action: Fraudulent Inducement-Concealment

The elements of fraudulent inducement-concealment are: (1) the defendant concealed or suppressed a material fact; (2) the defendant was under a duty to disclose the fact to the plaintiff; (3) the defendant intentionally concealed or suppressed the fact with the intent to defraud the plaintiff; (4) the plaintiff was 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 sustained damage. (Burch v. CertainTeed Corp. (2019) 34 Cal.App.5th 341, 348.)

GM contends that Plaintiffs’ claim for fraudulent concealment fails because (1) the applicable statute of limitation lapsed three years after Plaintiffs’ purchase of the Subject Vehicle i.e., on June 21, 2021, (2) Plaintiff fails to allege a direct transactional relationship that would give rise to a legal duty to disclose. (Demurrer at 12:16-17:6) The Court is unpersuaded.

While claims for fraudulent inducement based on concealment are subject to a threeyear statute of limitations, the claim "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).) Plaintiffs allege they discovered GM’s wrongful conduct shortly before filing their complaint. (FAC ¶ 32) Nothing in the FAC specifies a date when Plaintiffs discovered the alleged fraud. As stated above, a demurrer based on the statute of limitations is only permissible when the grounds for the defense are disclosed on the face of the complaint or from matters judicially noticed. (Vaca v.

Wachovia Mortgage Corp. (2011) 198 Cal.App.4th 737, 746.) In other words, the dates alleged in the complaint must show the action is barred by the applicable statute of limitations and the running of the statute must appear clearly and affirmatively from the alleged dates. Consequently, GM’s demurrer on this ground is OVERRULED.

Moreover, a duty to disclose requires “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. [Citation.] 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 arise from direct dealings between the plaintiff and the defendant; it cannot arise between the defendant and the public at large.” (Bjoin v. J-M Manufacturing Co., Inc., (2025) 113 Cal. App. 5th 884, 901-902, citing LiMandri v. Judkins (1997) 52 Cal.App.4th 326, and 337 Bigler-Engler v. Breg, Inc. (2017) 7 Cal.App.5th 276, 312.) All the same, “[a] relationship between the parties is present if there is some sort of transaction

between the parties.” (Hoffman v. 162 N. Wolfe LLC, (2014) 228 Cal. App. 4th 1178, 1187, internal citation and quotes omitted)

Plaintiffs allege that they entered into an express warranty agreement with GM on June 21, 2018. The Court is obligated to construe all inferences in the FAC in the light most favorable to Plaintiffs. As such, Plaintiffs have sufficiently alleged a transactional relationship with GM that gives rise to a duty to disclose. Plaintiffs have also alleged sufficient facts showing GM’s exclusive knowledge of the Transmission Defect, which were not reasonably discoverable by Plaintiffs. Consequently, GM’s argument for lack of duty to disclose fails on either basis.

Accordingly, for all the reasons explained above, the Court in the exercise of its discretion OVERRULES GM’s Demurrer to the Fifth Cause of Action.

IV. Conclusion & Order

GM’s Demurrer to the First through Fifth Causes of Action of the FAC is OVERRULED.

SO ORDERED.

Date: August 5, 2026 Hon. Vincent I. Parrett Superior Court of the State of California, County of Santa Clara

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