Kathleen Ryan v. FCA US LLC, et al.

A final approval hearing is set for no earlier than 120 days from the date of this Order, on _____________, 2027 at 10:00 a.m. in Department 508. Plaintiff is ordered to give notice of this Order. DATED: September 8, 2026 ________________________________ Hon. Teresa A. Beaudet Judge, Los Angeles Superior Court [1] Plaintiffs' notice was filed on June 24, 2023, and pursuant to LWDA's website, "[f]or PAGA notices filed before June 19, 2024: 75% of the recovered penalties go to LWDA and 25% go to the aggrieved employees." (Private Attorneys General Act (PAGA) Frequently Asked Questions, California Labor and Workforce Development Agency <https://www.labor.ca.gov/resources/paga/paga-faqs/> [as of July 16, 2026]; see also Lab. Code, Sec. 2699, subd. (m).)

Superior Court of California County of Los Angeles Department 508 KATHLEEN RYAN, Plaintiff, vs. FCA US LLC, et al., Defendants. | Case No.: |

| Hearing Date: | September 8, 2026 | Hearing Time: 8:30 a.m. [TENTATIVE] ORDER RE: DEFENDANTS FCA US, LLC AND PEDDER CHRYSLER DODGE RAM JEEP OF POWAY'S DEMURRER TO PLAINTIFF'S COMPLAINT; DEFENDANTS FCA US, LLC AND PEDDER CHRYSLER DODGE RAM JEEP OF POWAY'S MOTION TO STRIKE PORTIONS OF PLAINTIFF'S COMPLAINT |

Background On June 30, 2025, Plaintiff Kathleen Ryan ("Plaintiff") filed this lemon law action against Defendants FCA US LLC ("FCA") and Pedder Chrysler Dodge Ram Jeep of Poway ("Pedder CDRJ") (jointly, "Defendants"), alleging six causes of action for (1) violation of subdivision (d) of Civil Code section 1793.2; (2) violation of subdivision (b) of Civil Code section 1793.2; (3) violation of subdivision (a)(3) of Civil Code section 1793.2; (4) breach of the implied warranty of merchantability; (5) negligent repair; and (6) fraudulent inducement - concealment. /// /// Defendants demur to the fifth and sixth causes of action of the complaint for negligent repair and fraudulent inducement - concealment. Defendants also move to strike Plaintiff's request for punitive damages. Plaintiff opposes both. Defendants did not reply.

Legal Standard

A demurrer for sufficiency tests whether the complaint states a cause of action. (Hahn v. Mirda¿ (2007) 147 Cal.App.4th 740, 747.) In testing the sufficiency of the complaint, the court assumes the truth of properly pleaded factual allegations, facts reasonably inferred from those expressly pleaded, and judicially noticed matters. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) "A demurrer tests the pleadings alone and not the¿evidence or other extrinsic matters.¿Therefore, it lies only where the defects appear on the face of the pleading or are judicially noticed." (SKF Farms v.

Superior Court ¿(1984) 153 Cal.App.3d 902, 905.) Accordingly, "[w]hether the plaintiff will be able to prove the pleaded facts is irrelevant to ruling upon the demurrer." (Stevens v. Superior Court (1986) 180 Cal.App.3d 605, 609-10.) Under Code of Civil Procedure section 430.10 subdivisions (e) and (f), a demurrer may be filed if the pleading is uncertain or does not state facts sufficient to constitute a cause of action. For purposes of ruling on a demurrer, all facts pleaded in a complaint are assumed to be true, but the reviewing court does not assume the truth of conclusions of law. (Aubry v.

Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 967.) Leave to amend must be allowed where there is a reasonable possibility of successful amendment, otherwise, it is abuse of discretion. (Goodman v. Kennedy (1976) 18 Cal.3d 335, 349.)

Discussion

Defendants demur to Plaintiff's fifth cause of action for negligent repair, alleged against Pedder CDRJ, and sixth cause of action for fraudulent inducement - concealment, alleged against FCA, because the complaint fails to allege facts sufficient to state a cause of action. Specifically, for the sixth cause of action, FCA asserts that it is not pled with the requisite specificity, and Plaintiff does not allege sufficient facts to support a duty to disclose. A. Allegations of the FAC

Plaintiff alleges that "[o]n or about November 16, 2021, Plaintiff entered into a warranty contract with Defendant FCA regarding a 2021 Jeep Wrangler, ... which was manufactured and or distributed by Defendant FCA." (Compl., P. 7.) Plaintiff alleges that "[t]he warranty contract contained various warranties, including but not limited to the bumper-bumper warranty, powertrain warranty, emission warranty, etc." (Compl., P. 8.) Plaintiff alleges that "[d]efects and nonconformities to warranty manifested themselves within the applicable express warranty period, including but not limited to, E-Torque System defects; Powertrain defects; steering defects; electrical defects; among other defects and nonconformities." (Compl., P. 12.)

Plaintiff pleads that the defects rendered the vehicle's value "worthless and/or de minimis." (Compl., P. 14.) Thus, FCA "had an affirmative duty to promptly offer to repurchase or replace the Subject Vehicle at the time it failed to conform the Subject Vehicle to the terms of the express warranty after a reasonable number of repair attempts," but "failed to either promptly replace the Subject Vehicle or to promptly make restitution." (Compl., P.P. 15-16.) B. Sixth Cause of Action for Fraudulent Inducement - Concealment FCA first demurs to the complaint on the grounds that Plaintiff did not establish the existence of a duty to disclose for the fraudulent inducement - concealment cause of action because there are no facts that establish a direct transaction. "There are four circumstances in which nondisclosure or concealment may constitute actionable fraud: (1) when the defendant is in a fiduciary relationship with the plaintiff; (2) when the defendant had exclusive knowledge of material facts not known to the plaintiff; (3) when the defendant actively conceals a material fact from the plaintiff; and (4) when the defendant makes partial representations but also suppresses some material facts." (Bigler-Engler v.

Breg, Inc. (2017) 7 Cal.App.5th 276, 311 (Bigler-Engler) [internal quotations omitted] .) When a fiduciary relationship does not exist, "only the latter three circumstances may apply;" however, those circumstances "'presuppose[] the existence of [a] relationship between the plaintiff and defendant in which a duty to disclose can arise." (Ibid.) In the absence of a fiduciary duty, "[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." (Ibid.) "Although, typically, a duty to disclose arises when a defendant owes a fiduciary duty to a plaintiff [citation], a duty to disclose may also arise when a defendant possesses or exerts control over material facts not readily available to the plaintiff." (Jones v.

ConocoPhillips Co. (2011) 198 Cal.App.4th 1198, 1199.) FCA relies on the general rule to argue that, because FCA is the manufacturer of Plaintiff's vehicle, there was not a "direct dealing" between the parties that gives rise to a duty to disclose. (See Bigler-Engler, supra, 7 Cal.App.5th at p. 311.) California courts have developed a distinct doctrine that applies

when, as here, an original seller manufactures or sells a product to whom it reasonably expects the product to be resold. "[A] vendor has a duty to¿disclose¿material facts not only to immediate purchasers, but also to¿ subsequent purchasers ¿when the vendor has reason to expect that¿the item will be resold." (OCM¿Principle¿Opportunities Fund v. CIBC World Markets Corp. ¿ (2007) 157 Cal.App.4th¿835, 859.) The duty to¿disclose¿to¿subsequent¿purchasers requires that a plaintiff show that the seller had special "reason to expect" that the fraud or concealment would be passed on to¿subsequent¿purchasers. (Geernaert v.

Mitchell¿ (2007) 31 Cal.App.4th 601, 607.) Mere foreseeability is insufficient; rather, this "bears more similarity to actual intent to cause third party reliance." (Ibid. ["[t]here must be something in the situation known to the maker [of the misrepresentation] that would lead a reasonable man to govern his conduct on the assumption that this [transmission to a third party] will occur."].) In determining whether the seller had "reason to expect" that the fraud will be passed onto subsequent purchasers, courts generally consider two factors: "(1) the extent of the seller's knowledge of resale to a particular person or class of persons and (2) the likelihood that the particular misrepresentation (or concealment) would be passed on to them." (Id. ¿ at p. 608.)

As a car manufacturer, FCA makes and sells vehicles to consumers through car dealerships, but an intermediary does not disrupt the transactional relationship between a manufacturer and consumer. Plaintiff asserts that "FCA forms a transactional relationship with buyers, such as Plaintiff, through retail sales of its vehicles to consumers, and FCA profits from those sales. Thus, strict privity in the sale is not required." (Opp., 10:4-5.) The essential allegation of Plaintiff's complaint is that she is a subsequent purchaser of "a 2021 Jeep Wrangler," a product manufactured by FCA. (Compl., P. 7.)

Plaintiff alleges FCA's knowledge, because that complaint states FCA performed tests on the vehicles, which "demonstrated that the relevant systems or components in the Class Vehicles would lead to failure," and FCA "knew about the eTorque Defect from its monitoring of warranty data, customer complaints, and dealer contacts." (Compl., P.P. 34-35.) Plaintiff further alleges that "Plaintiff like other consumers [was] exposed to FCA's pervasive and long term marketing campaign touting the supposed quality and reliability of the FCA vehicles equipped with the E-Torque system.

Had FCA disclosed the Torque System Defect in the 2021 Jeep Wrangeler [sic] Vehicles equipped with the Torque System, Plaintiff would have been aware of it and would not have purchased the subject vehicle." (Compl., P. 74.) Moreover, FCA's warranty contract with Plaintiff is direct evidence that FCA had reason to expect that the fraud could be passed on. (See Compl., P. 11 ["These causes of action arise out of the warranty obligations of FCA in connection with a motor vehicle for which FCA issued a written warranty."].)

As alleged, Plaintiff's¿facts are sufficient to demonstrate that FCA had reason to expect that any alleged fraud could be passed on to Plaintiff and intended this to result in reliance. Accordingly, Plaintiff's complaint demonstrates the existence of a duty. However, a cause of action for fraud must also meet a heightened pleading standard, which FCA contends that Plaintiff's "fraud claim is abundant in legal conclusions but is devoid of specific facts." (Dem., 2:8.) "[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." (Marketing West, Inc. v.

Sanyo Fisher (USA) Corp. (1992) 6 Cal.App.4th 603, 612-613.) Less specificity is required if it appears from the nature of allegations that the defendant must necessarily possess full information, or if the facts lie more in the knowledge of opposing parties.¿(Alfaro v. Community Housing Improvement System & Planning Assn., Inc.¿ (2009) 171 Cal.App.4th 1356, 1384-1385 (Alfaro) .) FCA contends that "Plaintiff must also 'allege the names of the persons who made the allegedly fraudulent representations...'" and "[t]he Complaint is devoid of the names of the people charged with the duty to disclose facts at the time of sale, including who made any representations directly on behalf of FCA to Plaintiff, what specifically they said or wrote to Plaintiff, or when the representation was made.

Thus, Plaintiff's Complaint is completely devoid of the required specificity for alleging fraudulent concealment." (Dem., 4:5-16.) In opposition, Plaintiff contends that she pleads with the requisite specificity because when fraud occurs through non-disclosure, it is not practical to allege facts for something that did not happen. (Alfaro, supra, 171 Cal.App.4th at p. 1384 ["How does one show 'how' and 'by what means' something didn't happen, or 'when' it never happened, or 'where' it never happened?"].)

Instead, such details, in the context of a fraudulent concealment claim, "are properly the subject of discovery, not demurrer." (Id., at pp. 1384-1385.) Specifically, Plaintiff contends that she "alleged (1) misrepresentation/concealment, (2) knowledge of falsity, (3) intent to induce reliance, (4) justifiable reliance, and (5) damages." (Opp., 7:1-2.) Plaintiff's complaint consists of significant and detailed allegations regarding FCA's fraud in selling and marketing the E-Torque System found in Plaintiff's Jeep.

Plaintiff alleges FCA's knowledge of the defect's falsity stating that "FCA knew prior to Plaintiff purchasing the Subject Vehicle, that the FCA vehicles equipped with the E-Torque System, including the 2020 Ram 1500 vehicles suffer from the Torque System Defect alleged herein are defective, but failed to disclose this Defect to Plaintiff," and that FCA was on notice of the system defect because of "[c]onsumer complaints made directly to FCA, NHTSA, and/or posted on public online vehicle owner forums; its own investigations; repair and replacement part sales data; and aggregate data from authorized-FCA dealerships." (Compl., P.P. 30-31.)

Plaintiff also alleges concealment because Plaintiff alleges that, prior to acquiring the vehicle, "FCA was well aware and knew that the Vehicle was defective but failed to disclose this fact to Plaintiff at the time of sale and thereafter." (Compl., P. 54.) Plaintiff alleges FCA's intent because the complaint states that "FCA directly markets, for its benefit, the FCA vehicles equipped with the ETorque system to consumers via extensive nationwide multimedia advertising campaigns ... which impart a universal and pervasive marketing message: safe and reliable family vehicles." (Compl., P. 66.)

Plaintiff similarly alleges justifiable reliance because "Plaintiff is a reasonable

consumer who interacted with FCA's sales representatives and reviewed materials disseminated by FCA concerning FCA Vehicles prior to purchasing the Subject Vehicle. Had Defendant disclosed the E-Torque System Defect, a safety hazard, to its sales representatives and/or the consumer public, Plaintiff would have been aware of it and would not have purchased the Subject Vehicle." (Compl., P. 120.) Lastly, Plaintiff pleads that she suffered damages because she "was harmed by purchasing a vehicle that Plaintiff would not have leased and/or purchased had Plaintiff known the true facts about the E-Torque System Defect," and the vehicle's value is now worthless. (Compl., P. 121.)

Because Alfaro prescribes a lower standard for specificity, Plaintiff meets this standard. Although the Court quotes allegations from the complaint, this is only one piece of the allegations; Plaintiff's complaint includes significantly more information about the alleged fraud and the lengths FCA went to cover it up. Plaintiff's complaint also references specific advertising campaigns and marketing messaging that she relied on that induced her purchase. Accordingly, FCA's demurrer to the sixth cause of action is overruled. /// /// C.

Fifth Cause of Action for Negligent Repair Pedder CDRJ demurs to the fifth cause of action for negligent repair, asserting that "Plaintiff's negligent repair claim consists solely of legal conclusions" and fails under the economic loss rule. (Dem., 5:18-19.) Negligent repair is a subset of negligence, which "[t]he elements of a negligence cause of action are duty, breach, causation and damages." (County of Santa Clara v. Atlantic Richfield Co. (2006) 137 Cal.App.4th 292, 318.) Pedder CDRJ contends that "[t]he most detailed allegation regarding negligent repair is that 'Defendant PEDDER CDRJ breached its duty to Plaintiffs to use ordinary care and skill by failing to properly store, prepare and repair the Subject Vehicle in accordance with industry standards.'

Compl. P.

62. This allegation (as well as the Complaint in general) fail to allege how PEDDER CDRJ deviated from industry norms or any factual detail as to how PEDDER CDRJ acted negligently. Without any factual details as to what PEDDER CDRJ allegedly did or failed to do or even when, PEDDER CDRJ has no notice of how it purportedly acted in a negligent manner, or how its conduct caused Plaintiff to suffer a particular injury." (Dem., 5:19-26.) In Plaintiff's complaint, she alleges that she "delivered the Subject Vehicle to Defendant PEDDER for substantial repair on at least one occasion." (Compl., P. 110.)

Plaintiff alleges Pedder CDRJ "owed a duty to Plaintiffs to use ordinary care and skill in storage, preparation and repair of the Subject Vehicle in accordance with industry standards," but it "breached its duty to Plaintiffs to use ordinary care and skill by failing to properly store, prepare and repair the Subject Vehicle in accordance with industry standards." (Compl., P.P. 111-112.) Lastly, Plaintiff alleges that the "negligent breach of its duties owed to Plaintiffs was a proximate cause of Plaintiffs' damages." (Compl., P. 113.)

These are the only

allegations Plaintiff makes regarding the negligent repair of her vehicle. Pedder CDRJ contends these allegations are insufficient because Plaintiff only utilizes legal conclusions, which under California law "the general rule [is] that a complaint must contain only allegations of ultimate facts as opposed to allegations of evidentiary facts or of legal conclusions or arguments." (Burke v. Superior Court of Sacramento County (1969) 71 Cal.2d 276, 279, fn. 4.) However, this is the general rule for pleadings; for a negligence cause of action, "they have so far modified the rule as to permit the plaintiff to state the negligence in general terms, without stating the facts constituting such negligence." (Rannard v.

Lockheed Aircraft Corp. (1945) 26 Cal. 2d 149, 155.) Accordingly, "it is sufficient to allege that an act was negligently done by defendant, and that it caused damage to plaintiff." (Id. at p. 154.) The allegations for Plaintiff's fifth cause of action adequately allege that Pedder CDRJ owed Plaintiff a duty, but breached that duty, and the breach caused Plaintiff's damages. Pedder CDRJ also demurs to the fifth cause of action as barred by the economic loss rule. Under the economic loss rule, "[w]here a purchaser's expectations in a sale are frustrated because the product he bought is not working properly, his remedy is said to be in contract alone, for he has suffered only 'economic' losses." (Robinson Helicopter Co., Inc. v.

Dana Corp. (2004) 34 Cal.4th 979, 988 (Robinson) .) The economic loss rule "prevents the law of contract and the law of tort from dissolving one into the other." (Ibid.) Restrictions on contract remedies protect the freedom to bargain over special risks and promote contract formation by limiting liability to the value of the promise. (Harris v. Atlantic Richfield (1993) 14 Cal.App.4th 70, 77.) Pedder CDRJ contends that "Plaintiff's complaint contains no allegations as to the type of damages sustained by Plaintiff, much less whether they suffered damages outside of any economic losses." (Dem., 6:6-8.)

Pedder CDRJ also states that it anticipates "that Plaintiff will claim that California law adopted the 'component exception' identified in the Supreme Court opinion of Jimenez to negligent repair claims." (Dem., 6:9-11.) In Jimenez v. Superior Court (2002) 29 Cal.4th 473, 484 (Jimenez), the court "conclude[d] that the manufacturer of a defective window installed in a mass-produced home may be held strictly liable in tort for damage that the window's defect causes to other parts of the home in which it is installed."

As Pedder CDRJ asserts, Jimenez "recognized a narrow component exception to economic loss for strict product liability cases against manufacturers that purportedly placed defective products in the stream of commerce. See Jimenez, 29 Cal. 4th at 484. Plaintiff's claim against PEDDER CDRJ, by contrast, is not a products liability claim, but instead a negligent repair claim against the retailer." (Dem., 6:19-22.) Plaintiff's opposition references Jimenez, asserting that "[f] e deral district courts in California have consistently imported the Jimenez component exception into the vehicle Engine/negligent repair context, holding that the economic loss rule does not apply to negligent repair claims where subcomponents of a vehicle cause damage to a larger component or where the

component causes damage to the vehicle into which it has been incorporated." (Opp., 11:1-12:1.) However, the Court finds the instant case distinguishable from Jimenez. Here, Plaintiff did not allege that Pedder CDRJ damaged a component of her vehicle. Indeed, Plaintiff's allegations contend that Pedder CDRJ failed to repair her vehicle, but Plaintiff fails to plead that Pedder CDRJ caused damage to any component of the vehicle beyond its allegedly defective nature. While the vehicle's pre-existing defects necessitated repair, Plaintiff does not plead evidence of any new damage or defects caused by Pedder CDRJ's repair work.

Accordingly, the Court sustains the demurrer to the fifth cause of action. Motion to Strike To succeed on a motion to strike punitive damages allegations, it must be said as a matter of law that the alleged behavior was not so vile, base, or contemptible that it would not be looked down upon and despised by ordinary decent people. (Angie M. v. Superior Court (1995) 37 Cal.App.4th 1217, 1228-1229.) Civil Code section 3294 provides that punitive damages are available in non-contract actions where a defendant is guilty of malice, oppression, or fraud, defined as follows: (c) As used in this section, the following definitions shall apply: (1) 'Malice' means conduct which is intended by the defendant to cause injury to the plaintiff or despicable conduct which is carried on by the defendant with a willful and conscious disregard of the rights or safety of others. (2) 'Oppression' means despicable conduct that subjects a person to cruel and unjust hardship in conscious disregard of that person's rights. (3) 'Fraud' means an intentional misrepresentation, deceit, or concealment of a material fact known to the defendant with the intention on the part of the defendant of thereby depriving a person of property or legal rights or otherwise causing injury.

Here, Defendants move to strike Plaintiff's prayer for punitive damages. (See Compl., Prayer P. e.) Given the Court's decision to overrule Defendants' demurrer to Plaintiff's sixth cause of action for fraud, it can be said that Plaintiff's complaint adequately pleads fraud. Because allegations of fraud are sufficient for punitive damages, Defendants' motion to strike is denied. C onclusion Based on the foregoing, Defendants' demurrer to the fifth cause of action is SUSTAINED with leave to amend.

Defendants' demurrer to the sixth cause of action is OVERRULED. Defendants' motion to strike is DENIED. The Court orders Plaintiff to file and serve an amended complaint, if any, within 20 days of this Order. If no amended complaint is filed within 20 days of this Order, Defendants are ordered to file and serve their answer within 30 days of this Order. Defendants are ordered to give notice of this Order.