Fortune v. Nissan North America, Inc.

Background

Mellissa L. Fortune alleged that she purchased a 2019 Nissan Sentra in 2021 as a Certified Pre-owned vehicle with Nissan’s new and full Certified Pre-owned warranty. She claimed that the vehicle had serious defects and warranty nonconformities, including problems involving its Forward Emergency Braking system and a Continental ARS410 radar sensor.

Fortune brought the vehicle to Nissan’s authorized repair facility several times. She reported rattling, lack of power during acceleration, an unexplained collision-warning light, slipping between gears, and other noises. She alleged that the vehicle continued to have problems after the repair attempts, including unexpected braking, phantom decelerations and stops, and other false activations of the Forward Emergency Braking system.

Her operative complaint asserted four claims: breach of express warranty under the Song-Beverly Act, breach of implied warranty under that Act, violation of section 1793.2(b) of the Act, and fraudulent concealment. Nissan moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), arguing that the complaint did not adequately state these claims.

Court’s analysis

The court found that Fortune adequately identified the alleged defect. She identified the Forward Emergency Braking system and the Continental ARS410 radar sensor, and she also identified diagnostic code C1A16, Nissan’s service bulletin NTB19-033D, and the problems allegedly caused by the defect, including reduced acceleration power and the collision-warning light.

For the express-warranty claims, the court found that Fortune sufficiently alleged repeated presentations for repair involving the Forward Emergency Braking system. She reported the lack of power during acceleration on September 23, 2021, and reported the same problem again on April 27, 2022, along with other Forward Emergency Braking-related problems. She also alleged that the problems continued after the repairs.

For the implied-warranty claim, Nissan argued that Fortune had not alleged that the vehicle was unfit for ordinary use. The court found the allegations sufficient because unexpected automatic braking, abrupt slowdowns, complete stops without an actual need to stop, and phantom decelerations could compromise the vehicle’s safety and drastically undermine its ordinary operation.

The court also found that Fortune adequately pleaded fraudulent concealment. She alleged that Nissan knew about false activations of the Forward Emergency Braking system based on information including the owner’s manual, technical service bulletins, a Canadian notice of defect, and a 2020 recall. She further alleged that Nissan’s website, vehicle sticker, promotional materials, and sales representatives did not disclose the defect; that dependability and safety influenced her purchase; and that she would not have purchased the vehicle, or would have paid less, had the defect been disclosed.

The court rejected Nissan’s argument that the economic-loss rule barred the concealment claim, relying on the California Court of Appeal’s discussion of fraudulent inducement in a related Nissan case. The court also found Nissan’s argument that there was no transactional relationship between the parties unpersuasive in light of the alleged Certified Pre-owned purchase and warranty.

Disposition

The court DENIED Nissan North America, Inc.’s motion to dismiss. The order therefore did not dismiss Fortune’s four pleaded claims at this stage: the express-warranty, implied-warranty, section 1793.2(b), and fraudulent-concealment claims. The order was dated February 16, 2023, and signed by United States Magistrate Judge Kandis A. Westmore.