ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT'S MOTION TO DISMISS (Docket No. 56)
EDWARD M. CHEN, United States District Judge
Plaintiffs are twenty-three persons and one organization residing in fifteen different states. They have filed a class action against Defendant Ford Motor Company, asserting, in essence, that an "infotainment system" — known as MyFord Touch ("MFT") — used in certain of its vehicles (Ford, Lincoln, and Mercury) is defective and that Ford knew the system was defective at the time it sold the vehicles to Plaintiffs and other putative class members. Plaintiffs have asserted various claims under federal and state law, but the claims can loosely be categorized into (1) fraud claims and (2) breach-of-warranty claims. Ford has challenged the bulk of the claims in the currently pending motion to dismiss.
Having considered the parties' briefs and accompanying submissions, as well as the oral argument of counsel, the Court hereby
I. FACTUAL & PROCEDURAL BACKGROUND
As a preliminary matter, the Court provides below a chart which lists the name of each named Plaintiff, the state of Plaintiff's residence, whether Plaintiff purchased or leased the car, the car that was purchased or leased, and the date of purchase or lease.
Name State Purchase or Car Date of Lease Purchase or Lease Jennifer Whalen California Purchase 2013 Ford 4/2012 Explorer XLT Center for California Lease 2013 Ford F-150 2/22/2013 Defensive Lariat Driving (CDD) Grif Rosser California Purchase 2013 Ford Focus 9/29/2012 ST Megan Raney-Aarons California Lease 2012 Ford Edge 2/2012 Richard Decker California Purchase 2011 Lincoln 10/2012 Watson MKX Darcy Thomas-Maskrey California Purchase 2013 Ford Flex 7/2012 Angela Battle Alabama Purchase 2011 Ford 5/2011 Fusion Joe D'Aguanno Arizona Purchase 2013 Ford 11/2012 Explorer Sport James Laurence Colorado Purchase 2013 Ford 6/18/2012 Sheerin Explorer Limited Deb Makowski Connecticut Purchase 2011 Ford 9/1/2011 Escape
Name State Purchase or Car Date of Lease Purchase or Lease George Florida Purchase 2012 Lincoln 12/2011 Oremland MKZ Thomas Mitchell Iowa Purchase 2011 Lincoln 11/8/2010 MKX William Creed Massachusetts Purchase 2011 Ford 3/14/2011 Explorer Joshua Matlin New Jersey Lease 2011 Ford Edge 10/28/2010 SE Russ Rizzo New Jersey Lease 2012 Ford 2/2012 Explorer XLT 4 Wheel Drive Jeffrey Miller New York Lease 2013 Ford 2/17/2013 Fusion Titanium Nuala Purcell New York Lease 2011 Ford Edge 11/2010 Daniel Fink North Carolina Purchase 2013 Ford 12/2012 Explorer Jason Zuchowski Ohio Lease 2012 Ford Edge 3/2012 Art Avedisian Pennsylvania Purchase 2011 Ford 1/31/2011 Expedition EL Jose Randy Texas Purchase 2012 Ford Focus 5/17/2011 Rodriguez Titanium Michael Ervin Texas Purchase 2013 Ford C-Max 10/14/2012 SEL Jason Connell Virginia Purchase 2011 Lincoln 10/2010 MKX Henry Miller-Jones Virginia Purchase 2013 Ford 4/20/2013 Fusion Titanium AWD
In their operative complaint, Plaintiffs allege as follows.
The MFT system is
FAC ¶ 232. Pictures of what the MFT system looks like can be found in paragraphs 242-43 and 245 of the complaint. Ford has promoted the MFT system, including in particular its safety, communication, and entertainment features, in various ways — e.g., on its website, through advertisements (including print and television),
MFT is powered by an operating system known as Ford SYNC. See FAC ¶ 3. Ford SYNC is also the name of the earlier, first generation of the MFT system. See FAC ¶ 233. "Ford designed and developed SYNC with Microsoft and installed the original Sync system in Ford vehicles in 2007." FAC ¶ 233. "The initial versions of Ford SYNC, however, did not include a touchscreen, like [MFT]." FAC ¶ 233.
"In January 2010, hoping to capitalize on the success of SYNC, Ford announced that it would be launching a second generation of SYNC called [MFT]. [MFT] was a much more comprehensive technology which utilized Ford SYNC as the operating system, but included many more features than had been available with the initial versions of Ford SYNC." FAC ¶ 235. Ford aimed to employ MFT in all of its vehicles, not just its higher-end vehicles. See FAC ¶ 237. The rollout of the MFT system began in 2010 (i.e., for 2011 model vehicles). See FAC ¶¶ 16, 238. "Currently, more than 5 million Ford vehicles contain [MFT]." FAC ¶ 238. In a June 2013 press release, Ford stated that, "combined, Sync and [MFT] systems are sold on 79 percent of new 2013 Ford vehicles." FAC ¶ 239.
Ford charges a premium for the MFT system. "As a stand-alone option, Ford's suggested retail price for the [MFT] system is approximately $1,000. Customers can add further options to their [MFT] system — such as GPS navigation capability — by paying additional fees of several hundred dollars." FAC ¶ 241.
However, according to Plaintiffs, there are serious problems with the MFT system. Plaintiffs underscore that "[t]he scope of the problem is wide. In late 2012, Ford reported 400 problems with the [MFT] system for every 1000 vehicles. That was an improvement over the problems earlier in 2012 when Ford reported a `things-gone-wrong' rate for its [MFT] system of 500 for every 1000 vehicles." FAC ¶ 10.
Plaintiffs have identified various problems with the MFT system, ranging from the entire system freezing up or crashing (in which case no features connected to MFT are operational, including the navigation technology, the radio, the rearview camera, and the defroster) to isolated problems such as random but frequent screen black outs, nonresponsiveness to touch or voice commands, locking up of the rearview camera, and inaccurate directions on the navigation system. See FAC ¶ 7; see also FAC ¶¶ 262-63. Plaintiffs maintain that the problems with the MFT system actually create safety risks as malfunctions in the system lead to the driver becoming distracted. See FAC ¶ 263. Also, there are more obvious safety risks involved when, e.g., the rearview camera or defroster breaks down. Plaintiffs maintain that, although there are varying problems with the MFT system, there is an underlying defect in the system attributable to software and/or hardware. See FAC ¶¶ 268-69.
Plaintiffs assert that Ford failed to conduct adequate testing of the MFT system prior to its release. See, e.g., FAC ¶ 271. Furthermore, soon after the release of the system, customer complaints began to mount. In response, Ford began to issue Technical Service Bulletins ("TSBs") and software updates. "TSBs are recommended repairs issued by the manufacturer and sent to dealers." FAC ¶ 274. The first TSB was issued on April 27, 2011. See FAC ¶ 275. TSBs continued to be issued through at least October 3, 2013. See FAC ¶ 286. Plaintiffs have identified at least eight TSBs, as well as multiple
According to Plaintiffs, in spite of the TSBs and software updates, Ford still has not fixed the problem with MFT — this in spite of the fact that, at the very least, there is an express limited warranty on each vehicle. See FAC ¶¶ 297-300. A copy of the relevant limited warranty can be found at Exhibit A of Ford's request for judicial notice. See Docket No. 57-2 (RJN, Ex. A) (limited warranty). The limited warranty provides, in relevant part, as follows:
Docket No. 57-2 (RJN, Ex. A) (Limited Warranty at 8-9) (emphasis added).
II. LEGAL STANDARD
Ford has moved for a dismissal pursuant to Federal Rule of Civil Procedure 12(b)(6). Rule 12(b)(6) allows for dismissal based on a failure to state a claim for relief. A motion to dismiss based on the rule essentially challenges the legal sufficiency of the claims alleged. See Parks Sch. of Bus. v. Symington, 51 F.3d 1480, 1484 (9th Cir.1995). In considering a 12(b)(6) motion, a court must take all allegations of material fact as true and construe them in the light most favorable to the nonmoving party, although "conclusory allegations of law and unwarranted inferences are insufficient to avoid a Rule 12(b)(6) dismissal." Cousins v. Lockyer, 568 F.3d 1063, 1067 (9th Cir.2009). While "a complaint need not contain detailed factual allegations ... it must plead `enough facts to state a claim to relief that is plausible on its face.'" Id. "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to
Ford's 12(b)(6) motion presents arguments with respect to the following categories of claims: (1) fraud claims; (2) certain tort claims; (3) express warranty claims; (4) implied warranty claims; (5) claims under the federal Magnuson-Moss Warranty Act ("MMWA"); and (6) claims under California's secret warranty law. Because the instant case involves fraud claims, Rule 9(b) is also implicated. "Under Rule 9(b), claims alleging fraud are subject to a heightened pleading requirement, which requires that a party `state with particularity the circumstances constituting fraud or mistake.'" Reese v. Malone, 747 F.3d 557, 568 (9th Cir.2014).
The Court's opinion addresses first the fraud and tort claims. The opinion then turns to the warranty-related claims.
III. FRAUD AND TORT CLAIMS
A. Fraud Claims
Plaintiffs' fraud claims are based on state law. The fraud claims are either claims for fraudulent concealment (common law) or claims for fraud based on a consumer protection statute.
California Count I California Unfair Competition Law, Cal. Bus. & Prof. Code § 17200 Count II California Consumer Legal Remedies Act, Cal. Civ. Code § 1750 Count III California False Advertising Law, Cal. Bus. & Prof. Code § 17500 Count VI Fraud by concealmentAlabama Count IV Fraudulent concealmentArizona Count I Consumer Fraud Act, Ariz. Rev. Stat. § 44-1521 Count V Fraudulent concealmentColorado Count I Consumer Protection Act, Colo. Rev. Stat. § 6-1-101 Count VI Fraudulent concealmentConnecticut Count I Unfair Trade Practices Act, Conn. Gen. Stat. Ann. § 42-110A Count V Fraudulent concealmentFlorida Count I Florida Deceptive & Unfair Trade Practices Act, Fla. Stat. § 501.201 Count V Fraudulent concealmentIowa Count I Consumer Frauds Act, Iowa Code § 714H.1 Count V Fraudulent concealmentMassachusetts Count I Massachusetts Consumer Protection Act, Mass. Gen. Laws Ch. 93A Count V Fraudulent concealmentNew Jersey Count I New Jersey Consumer Fraud Act, N.J. Stat. Ann. § 56:8-1 Count V Fraudulent concealment
New York Count I New York General Business Law § 349 Count II New York General Business Law § 350 Count VI Fraudulent concealmentNorth Carolina Count I North Carolina Unfair & Deceptive Trade Practices Acct, N.C. Gen. Stat. § 75-1.1 Count V Fraudulent concealmentOhio Count I Consumer Sales Practices Act, Ohio Rev. Code § 1345.01 Count VI Fraudulent concealmentPennsylvania Count I Unfair Trade Practices & Consumer Protection Law, Pa. Stat. Ann. § 201-1 Count V Fraudulent concealmentTexas Count I Deceptive Trade Practices Act, Tex. Bus. & Com. Code § 17.41 Count V Fraud by concealmentVirginia Count I Virginia Consumer Protection Act, Va. Conn. Ann. § 59.1-196 Count V Fraudulent concealment
With respect to the fraud claims, Ford makes the following arguments: (1) that Plaintiffs have failed to plead with sufficient particularity any affirmative misrepresentation by Ford; (2) that, to the extent Plaintiffs claim a failure to disclose by Ford, they fail to plead sufficient facts that (a) Ford knew, at the time of sale, of a material fact of which Plaintiffs were not aware and that (b) Ford had a duty to disclose in the first place; and (3) that, for the Iowa, Texas, and Virginia Plaintiffs, their fraud claims based on the consumer protection statutes are time barred.
1. Affirmative Misrepresentation
The Court agrees with Ford that Plaintiffs have failed to state a fraud claim based on an affirmative misrepresentation. Below are typical allegations from the operative complaint regarding the fraud on Plaintiffs:
FAC ¶ 22 (emphasis added).
FAC ¶ 187 (emphasis added).
As indicated by the above, Plaintiffs' fraud theory is really a failure to disclose rather than an affirmative misrepresentation. As Ford contends, Plaintiffs are not really arguing that the MFT system does not have the features described in, e.g., Ford's advertisements. See Mot. at 9. Rather, their beef is that the features of the MFT system do not work (and that Ford knew that fact at the time of the sales/leases to Plaintiffs but failed to disclose such). This is not a case where, e.g., Ford made an affirmative representation that the MFT system was defect free. In fact, the opposite is true given the limited warranty, which expressly states that the warranty does not mean that each Ford vehicle is defect free.
The case law cited by Ford is on point. Those cases show that, unless a product manufacturer makes claims about, e.g., a product's quality or reliability, no claim based on an affirmative misrepresentation is viable. For example, in In re Iphone 4S Consumer Litigation, No. C 12-1127 CW, 2014 WL 589388, 2014 U.S. Dist. LEXIS 19363 (N.D.Cal. Feb. 14, 2014), the plaintiffs filed suit against Apple regarding the Siri feature on its iPhone. Judge Wilken rejected the plaintiffs' fraud claim in part because they failed to point to "any specific statement by Apple that expressly indicates that Siri would be able to answer every question, or do so consistently." Id. at *6-7, 2014 U.S. Dist. LEXIS 19363, at *20-21; see also Morgan v. Harmonix Music Sys., Inc., No. C08-5211 BZ, 2009 WL 2031765, at *3 (N.D.Cal. July 30, 2009) (stating that "plaintiffs have alleged no specific representations about the durability of the foot pedal" on the drum set); Long v. Hewlett-Packard Co., No. C 06-02816 JW, 2007 WL 2994812, at *7, 2007 U.S. Dist. LEXIS 79262, at *21 (N.D.Cal. July 27, 2007) (stating that "[t]he word `notebook' describes the type of product being sold; it does not constitute a representation regarding the quality of the
The case law cited by Plaintiffs is not to the contrary. For example, in Consumer Advocates v. Echostar Satellite Corp., 113 Cal.App.4th 1351, 8 Cal.Rptr.3d 22 (2003), a fraud claim was asserted against the defendant because it had represented in its advertisements that, e.g., a customer would receive 50 channels from its satellite TV services. According to the defendant, the fraud claim was not viable because this statement "was not a statement that all 50 channels would be available at all times." Id. at 1362, 8 Cal.Rptr.3d 22. The court held that whether the statement was untrue or misleading was a triable issue of fact to be resolved later. More importantly (at least for purposes of this opinion), the court indicated that the theory here would be one of a failure to disclose. See id. ("Under the False Advertising Act and the UCL, `[a] perfectly true statement couched in such a manner that it is likely to mislead or deceive the consumer, such as by a failure to disclose other relevant information, is actionable.") (emphasis added).
In their opposition, Plaintiffs suggest that, at the very least, there were affirmative misrepresentations made in Ford's limited warranty. Plaintiffs admit that "the Limited Warranty contains a generic admission of potential defect" but maintain that "using that to insulate Ford from liability for misrepresenting specific product features (or knowingly omitting specific defects) would undermine the remedial purpose of state consumer-protection laws." Opp'n at 11-2. But Plaintiffs miss the point here. The fact that Ford's limited warranty stated "[t]his warranty does not mean that each Ford vehicle is defect free," Docket No. 57-2 (RJN, Ex. A) (Limited Warranty at 8-9), does not provide a basis for a claim that Ford made an affirmative misrepresentation that the MFT system was defect free.
Plaintiffs' reliance on Mickens v. Ford Motor Co., 900 F.Supp.2d 427 (D.N.J. 2012), see Opp'n at 12 n.35, is unavailing. In Mickens, the court simply stated that "[w]arranty coverage of a particular problem does not, as a matter of law, negate a CFA [Consumer Fraud Act] claim that the manufacturer knowingly omitted information about a design defect." Mickens, 900 F.Supp.2d at 442 (emphasis omitted). But here Plaintiffs are trying to argue not just an omission (failure to disclose) but also an affirmative misrepresentation.
Accordingly, to the extent Plaintiffs have asserted any fraud claims based on an affirmative representation (as opposed to a failure to disclose), the Court grants Ford's motion, with one exception.
The exception is with respect to one Plaintiff, Mr. Miller (New York). For Mr. Miller, there is the allegation that, he "was aware of some mixed reviews of [MFT], [but] he was informed by the sales representatives at Mahopac Ford that Ford had corrected any defects in [MFT]." FAC ¶ 164 (emphasis added). This is an affirmative representation — i.e., that all defects with the MFT system had been corrected.
Ford contends that the Court should still dismiss Mr. Miller's claim because "[a] statement by a salesperson at a dealership cannot be imputed to Ford absent an agency relationship, which Plaintiffs have not even attempted to plead." Mot. at 9 (citing Maietta v. Ford Motor Co., No. 96 C 8347, 1997 WL 162894, 1997U.S. Dist. LEXIS 3788 (N.D.Ill. Mar. 24, 1997) (citing an Illinois Supreme Court opinion for the proposition that "`[a] complaint relying on agency must plead facts which, if proved, establish the existence of an agency
Based on these paragraphs, Plaintiffs have made sufficient allegations of agency to withstand the motion to dismiss. "Under New York law an agent may bind his principal in matters within the scope of his agency," Agristor Leasing v. Hollister, No. 83-CV-1357, 1985 U.S. Dist. LEXIS 12872, at *9 (N.D.N.Y. Dec. 12, 1985), and "`[a] principal is liable for an agent's misrepresentations [or other frauds] that cause pecuniary loss to a third party, when the agent acts within the scope of his ... authority.'" Seifts v. Consumer Health Solns. LLC, No. 05 Civ. 09355(RJH), 2011 WL 4542905, at *6, 2011 U.S. Dist. LEXIS 113617, at *19 (S.D.N.Y. Sept. 30, 2011); cf. Sachs v. Cantwell, No. 10 Civ. 1663(JPO), 2012 WL 3822220, at *17, 2012 U.S. Dist. LEXIS 125335, at *55 (S.D.N.Y. Sept. 4, 2012) (stating that, "[u]nder New York law, `an employer may be vicariously liable for an intentional tort committed by an employee if the employee was acting within the scope of employment at the time the tort was committed'"). It is reasonable to infer that an agency relationship may be found where a salesperson of an authorized dealership of Ford makes a representation about the Ford product in the course of the sale of that product.
In its reply brief, Ford argues that "instructions to dealers about how to perform repairs do not create an agency relationship regarding sales representations." Reply at 4. While this argument is not necessarily without merit, ultimately, the scope of the agency is a factual one for the jury to resolve, especially as information about Ford's precise relationship with its dealers — in particular, with regard to MFT — is largely within Ford's possession, custody, or control.
2. Failure to Disclose
For Plaintiffs' claims that Ford engaged in fraud by failing to disclose, Ford makes two primary arguments: (1) that Plaintiffs have failed to adequately allege Ford knew, at the time of sale, of a material fact of which Plaintiffs were not aware and (2) that Plaintiffs have failed to adequately allege Ford had a duty to disclose in the first place.
a. Knowledge of Material Fact of Which Plaintiffs Were Unaware
As preliminary matter, the Court rejects Ford's argument that the fraud claims
Aside from the above argument, Ford makes two main arguments as to why Plaintiffs have not adequately alleged that Ford knew, at the time of sale, of a material fact of which Plaintiffs were not aware: (1) "Plaintiffs' allegations do not set forth which facts were allegedly material to each Plaintiff" and (2) "Plaintiffs' ... allegations... fail to establish Ford's knowledge" of these facts. Opp'n at 13.
i. Materiality
The materiality is argument weak. Plaintiffs should not be obligated to spell out which exact features of the MFT system they were most interested in. The FAC adequately conveys that the MFT system was an attractive component because of safety features and features that make the driving experience easier or more enjoyable. Furthermore, "materiality is generally a question of fact," Kwikset Corp. v. Superior Court, 51 Cal.4th 310, 333, 120 Cal.Rptr.3d 741, 246 P.3d 877 (2011), and a reasonable jury could well conclude that the problems with the MFT system were material facts because the system arguably was the subject of Ford's marketing efforts — the system enhanced the functionality and experience of the vehicle, including its safety.
Although Ford contends that there is no safety risk if the MFT system is rendered inoperable because a car without the MFT system can still be safe (e.g., cars that are not Fords or Lincolns do not have the MFT system), a reasonable jury could still conclude otherwise. For instance, a reasonable jury could find that a MFT system that suddenly breaks down while a person is driving the car could cause a safety risk because of the driver becoming distracted. More obviously, a reasonable jury could find a safety risk if a person was relying on the rearview camera feature of MFT while driving in reverse and that feature broke down. See, e.g., FAC ¶ 25 (Plaintiff Whalen alleging that "the backup camera would freeze while driving"). The Court also notes that it is odd for Ford to quibble with materiality here when it promoted the MFT system as a desirable component of a vehicle in the first place. In other words, if the MFT system was so desirable, then it would not be surprising for Plaintiffs to consider a problem with the system — particularly a systemic one — a material fact.
ii. Knowledge
As for Ford's argument that Plaintiffs have failed to sufficiently allege Ford knew, at the time of sale, of the material facts (i.e., the problems with the MFT system), that argument is also problematic. In evaluating the argument, the Court bears in mind that Plaintiffs purchased or leased their vehicles containing the MFT system between October 2010 and April 2013, with most purchases or leases taking place in 2011 and 2012. According to Plaintiffs, Ford knew at the time of the purchases or leases that there were problems with MFT based on, e.g., (1) the TSBs and updates that it issued to dealers; (2) the customer complaints that were made (e.g., websites set up specifically to complain about MFT and nineteen complaints ranging from October 2010 to July 2013 made to NHTSA, see FAC ¶¶ 288-91); and (3) a statement by a salesperson
For Plaintiffs who purchased or leased their vehicles from 2011 to 2013, there is a plausible allegation of knowledge on the part of Ford. For example, three Plaintiffs (CDD, Mr. Miller, and Mr. Miller-Jones) purchased or leased their vehicles in 2013. Prior to 2013, Ford had issued six TSBs to dealers as well as two updates. See FAC ¶¶ 275-83. Thus, it is more than fair to say that, by 2013, Ford was aware of significant problems with the MFT system. Of course, most Plaintiffs purchased or leased their vehicles before 2013 (four in 2010, six in 2011, and eleven in 2012). Prior to 2012, Ford had issued only two TSBs and no updates. See FAC ¶¶ 275-76. Nevertheless, it is still reasonable to infer that, if Ford had issued four TSBs and two updates in 2012 alone, Ford should have known of problems with MFT by around 2011, i.e., before it could recommend what repairs or updates needed to be done. Presumably, the TSBs and updates were proceeded by an accretion of knowledge by Ford. See Falco v. Nissan N. Am., Inc., No. CV 13-00686 DDP (MANx), 2013 WL 5575065, at *6-7, 2013 U.S. Dist. LEXIS 147060, at *17-18 (C.D.Cal. Oct. 10, 2013) (stating that, where defendant issued the first of several TSBs in July 2007 and further did a redesign in 2006 or 2007, that "permit[s] plausible inferences that [defendant] was aware of the defect at the time they sold the vehicles in 2005 and 2006").
The closer question is whether there is enough to charge Ford with knowledge with respect to those Plaintiffs who purchased or leased their vehicles in 2010.2010 was the year of the rollout of MFT. That being the case, Plaintiffs would basically have to be alleging that, at or about the time of rollout, Ford knew that the MFT system had problems. While the Court has some doubts whether Plaintiffs will actually be able to prove such, that does not mean that Plaintiffs' case is implausible. The first TSB issued in April 2011, i.e., only a few months after the rollout of the MFT system. One could reasonably infer that the TSB was issued in response to consumer complaints that surfaced immediately after rollout. That there were such complaints is substantiated by the NHTSA complaints identified by Plaintiffs, as well as the fact that some of the 2010 Plaintiffs began taking in their cars for servicing almost immediately. See, e.g., FAC ¶¶ 120 (Mr. Mitchell), 216 (Mr. Connell).
Accordingly, for 12(b)(6) purposes, given all reasonable inferences must be drawn in Plaintiffs' favor, the Court finds that Plaintiffs have adequately pled knowledge on the part of Ford.
b. Duty to Disclose
The parties agree that, where a fraud claim is based on nondisclosure or concealment, there must first be a duty to disclose and that a duty can arise from the following circumstances:
See, e.g., Smith v. Ford Motor Co., 749 F.Supp.2d 980, 987-88 (N.D.Cal.2010) (Chesney, J.); see also Wilson v. Hewlett-Packard, 668 F.3d 1136, 1141 (9th Cir. 2012).
In the instant case, Plaintiffs have relied on each of the above circumstances in arguing that Ford had a duty to disclose. For purposes of this opinion, the Court need only address the first two categories.
i. Safety Concerns
As indicated above, Plaintiffs have alleged enough to implicate a duty to disclose based on safety concerns alone. Ford argues that a vehicle with an inoperable MFT system "is no less safe than the same vehicle not equipped with a [MFT] system," Mot. at 16, but, as discussed above, a reasonable jury could find that a suddenly malfunctioning MFT system could create a safety risk, particularly if the system were to suddenly crash while a person was driving. It is one thing for a product never to have a feature; it is another for a consumer to have purchased the product with that feature and to depend on that feature, only to have it suddenly malfunction. Ford contends that, "[b]y this rationale, any feature on a car can become a safety risk," as virtually any defect could become distracting to the driver." Mot. at 17. But this argument is not particularly convincing given the prominence of the MFT system and its far-reaching capabilities with respect to the driving experience.
In any event, there are certain obvious safety risks if there is a breakdown in the MFT system — e.g., if the rearview mirror camera or the defroster were to stop functioning. See, e.g., FAC ¶ 266 ("Additionally, because certain crucial vehicle functions, including the defroster and the rearview camera, are routed through and controlled by MyFord Touch, these features become inoperable when the MyFord Touch system crashes. Thus, driving in winter becomes dangerous because the driver cannot defrost his or her windshield and other windows, and drivers are more likely to collide with other cars or pedestrians when moving in reverse because the rearview camera fails."). These safety concerns are not speculative as the concerns were in Smith, 749 F.Supp.2d at 991 (stating that "Plaintiffs offer no evidence that the ignition-lock defect causes engines to shut off unexpectedly or causes individuals to stop their vehicles under dangerous conditions," and thus "agree[ing] with Ford that the dangers envisioned by plaintiffs are speculative in nature, deriving in each instance from the particular location at which the driver initially has parked the vehicle and/or the driver's individual circumstances").
To the extent Ford disputes a safety risk because the defroster can be operated outside of the MFT system, see Reply at 12, it is not clear from the evidence provided by Ford that that purported fact is indeed true. For example, ¶ 243 of the FAC show buttons for "My Temp" but it is not clear that that function controls the defroster. Also, page 27 of the MFT Handbook, see Def.'s RJN, Ex. B (MFT Handbook), does not clearly show a button for a defroster. Furthermore, Plaintiffs allege in their complaint that, "[i]n at least some of the Class Vehicles, Ford eliminated the physical knobs for climate-control functions, including defrosters. ¶ 263. After outcry from consumers, Ford backtracked on this design choice and reintroduced knobs. ¶ 15." Opp'n at 16 (emphasis added). Thus, even if Ford's evidence did show that a defroster can be operated outside of the MFT system, Plaintiffs have alleged that this was not always the case.
Accordingly, for 12(b)(6) purposes, the Court concludes that a reasonable jury could find a safety concern here with respect to MFT that gives rise to a duty to disclose.
ii. Exclusive Knowledge
Even if there were insufficient safety concerns to give rise to a duty to disclose, Ford could still have a duty to disclose based on an independent ground. According to Plaintiffs, one such ground is exclusive knowledge. Exclusive knowledge can be established where, e.g., the defendant knew of a defect while the plaintiffs did not and, "given the nature of the defect, it was difficult to discover." Collins v. eMachines, Inc., 202 Cal.App.4th 249, 256, 134 Cal.Rptr.3d 588 (2011).
But exclusivity is not limited to this specific circumstance. Indeed, courts have noted that "[e]xclusivity is not applied with rigidity." Czuchaj v. Conair Corp., No. 13-CV-1901-BEN (RBB), 2014 WL 1664235, at *4, 2014 U.S. Dist. LEXIS 54410, at *10 (S.D.Cal. Apr. 17, 2014). Thus, for example, even the presence of information online does not automatically defeat exclusive knowledge. See id. at *4, 2014 U.S. Dist. LEXIS 54410, at *11. Also, exclusivity is analyzed in part by determining whether the defendant has superior knowledge. See id.; see also Johnson v. Harley-Davidson Motor Co. Grp., LLC, 285 F.R.D. 573, 583 (E.D.Cal. 2012). But where a plaintiff simply makes conclusory allegations that a defendant has superior knowledge, that is not enough to overcome a 12(b)(6) challenge. See, e.g., Taragan v. Nissan N. Am., Inc., No. 09-3660 SBA, 2013 WL 3157918, at *6-7, 2013 U.S. Dist. LEXIS 87148, at *21-22 (N.D.Cal. June 20, 2013) (indicating that "`a plaintiff cannot establish a duty by pleading, in a purely conclusory fashion, that a defendant was in a superior position to know the truth about a product and actively concealed the defect'"; adding that, "Plaintiffs must allege specific facts that they claim should have alerted Nissan that the Intelligent Key system design was, in fact, defective") (emphasis added).
Here, Ford primarily argues against exclusive knowledge on the ground that there was public knowledge about problems with the MFT system. See Mot. at 20. While the complaint does contain allegations regarding publicly available knowledge, that is far from being dispositive. Even if the public — and therefore Plaintiffs — were aware of some problems with MFT, that does not establish that either the public or Plaintiffs knew or should have known of the severity of the problems, including the fact that the problems could not be fixed (as alleged by Plaintiffs). Indeed, as Ford conceded at the hearing, Plaintiffs would not have had full awareness of the TSBs because the full content of the TSBs was not publicly available on the NHTSA website. Even if Plaintiffs were aware of the TSBs, that would suggest that the problems, even if significant, were still capable of being repaired. Plaintiffs would not know that the MFT system was in fact not capable of repair, as alleged in the FAC.
3. Time Bar
Ford's final argument regarding the fraud claims is that, for the Iowa, Texas,
Ford contends — and Plaintiffs do not dispute — that the consumer protection statutes for these states is two years. Plaintiffs also do not dispute that they filed suit more than two years after the Iowa, Texas, and Virginia Plaintiffs first experienced problems with the MFT system. Where the parties disagree is whether there is a basis for tolling of the statute of limitations.
Statute of limitations is, of course, an affirmative defense that a plaintiff has no obligation to plead around in his or her complaint. See Belluomini v. CitiGroup, Inc., No. CV 13-01743 CRB, 2013 WL 3855589, at *3 n.3, 2013 U.S. Dist. LEXIS 103882, at *9 n.3 (N.D.Cal. July 24, 2013) (stating that "[f]ederal courts have repeatedly held that a plaintiff is not required to plead facts in his complaint in order to avoid potential affirmative defenses"). But where there is a statute-of-limitations problem apparent from the face of the complaint, see id. at *3 n.3, 2013 U.S. Dist. LEXIS 103882, at *10 n.3 (noting that a Rule 12(b)(6) motion may still be made where "it is apparent from the face of the complaint that an action will be time barred"), it is not uncommon for a plaintiff to make allegations of tolling, as Plaintiffs did in their FAC.
Here, Plaintiffs pled tolling based on Ford's active concealment — i.e., Ford's active concealment of the problems with MFT prevented Plaintiffs from finding out about Ford's fraud (failure to disclose the problems with MFT). See FAC ¶ 230 ("Any applicable statute(s) of limitation has been tolled by Defendant's knowing and active concealment and denial of the facts alleged herein.").
For purposes of 12(b)(6), Plaintiffs have adequately alleged active concealment. If, as Plaintiffs allege, Ford pretended to fix the problems with MFT instead of actually admitting that the problems could not be fixed, that would be active concealment.
Moreover, aside from active concealment, there are enough allegations in the complaint to support Plaintiffs' position (as argued at the hearing) that the fraud claims did not accrue until well after they first began to experience problems with their cars.
B. Certain Tort Claims
For certain tort claims, Ford has also argued for dismissal largely on the basis of the economic loss rule. The claims at issue here are as follows:
Colorado Count I Colorado Consumer Protection Act, Colo. Rev. Stat. § 6-1-101 Count II Strict Product Liability Count VI Fraudulent ConcealmentFlorida Count I Florida Deceptive & Unfair Trade Practices Act, Fla. Stat. § 501.201 Count V Fraudulent ConcealmentNorth Carolina Count I North Carolina Unfair & Deceptive Trade Practices Act, N.C. Gen. Stat. § 75-1.1 Count V Fraudulent ConcealmentOhio Count IV Negligence
1. Colorado
a. Strict Liability Claim
For the Colorado Plaintiff (Mr. Sheerin), Ford asserts that, where a plaintiff brings a strict liability claim, and the only damages sought are damages to the product itself (i.e., economic loss and not, e.g., damages to the plaintiff or other property belonging to the plaintiff), Colorado does not recognize such a claim.
The critical case is Hiigel v. General Motors Corp., 190 Colo. 57, 544 P.2d 983 (1975). There, the Colorado Supreme Court adopted the doctrine of strict liability in tort which was stated in § 402A of the Restatement.
For purposes of this case, however, the Hiigel court's significant ruling was with respect to the issue of damages for strict liability. More specifically, the Hiigel court criticized the trial court's interpretation of § 402A as being
Id. at 989 (emphasis added).
A subsequent decision of the Colorado Supreme Court, Town of Alma v. AZCO Construction, Inc., 10 P.3d 1256 (Colo.2000), did not overrule Hiigel in this regard. Town of Alma addressed the issue of whether the rule barred the plaintiff's claim for negligence, not strict liability.
b. Fraud Claims
According to Ford, the two fraud claims under Colorado law (i.e., fraudulent concealment and the consumer protection statute) are directly barred by the economic loss rule.
In Town of Alma, the Colorado Supreme Court opined on the economic loss rule, stating that "[t]he key to determining the availability of a contract or tort action lies in determining the source of the duty that forms the basis of the action." Town of Alma, 10 P.3d at 1262. See id. (stating that "`[a] breach of duty which arises under the provisions of a contract must be redressed under contract, and a tort action will not lie'"). Here, Plaintiffs make three arguments as to a duty of care owed by Ford independent of the contract: (1) a duty under the consumer protection statute (in short, a statutory duty), (2) a duty not to fraudulently induce another to enter a contract, and (3) a duty to disclose that exists independent of the contract.
Plaintiffs' position has merit on all three grounds. For example, in A.C. Excavating v. Yacht Club II Homeowners Association, 114 P.3d 862 (Colo.2005), the Colorado Supreme Court essentially recognized that a statutory duty was a duty independent of a contract. See id. at 865, 868 (noting that case law established that subcontractors owe homeowners a duty of care, independent of any contractual obligations, to act without negligence in the construction of homes and that "the General Assembly has [also] explicitly recognized that subcontracts are under an independent duty of care"); see also Stan Clauson Assocs. v. Coleman Bros. Constr., LLC, 297 P.3d 1042, 1047 (Colo.Ct.App. 2013) ("concluding] that SCA does not owe Coleman a duty independent of the agreement[;] [l]and planning is not a profession that is held to an independent duty and standard of care under any Colorado statute, nor have land planners otherwise been held to such a duty or standard at common law in our state") (emphasis added). Here, one of Plaintiffs' fraud claims has a statutory basis. See Colo.Rev.Stat. § 6-1-101 (Colorado Consumer Protection Act).
The case cited by Ford — i.e., Van Rees v. Unleaded Software, Inc., ___ P.3d ___, 2013 WL 6354532, 2013 Colo.App. LEXIS 1870 (Colo.Ct.App. Dec. 5, 2013) — is not to the contrary. Indeed, in Van Rees, the court acknowledged that a precontract false representation intended to induce action would not get the benefit of the economic loss rule. See id. at ___, at *3, 2013 Colo.App. LEXIS 1870, at *7-9. The economic loss rule was a bar to the fraud claims in Van Rees because the plaintiff did not really assert fraudulent inducement (even though he claimed precontract representations had been made). Rather, the gist of the plaintiff's fraud claim was simply that the defendant had falsely promised to perform certain contract terms. See id. at ___, at *3, 2013 Colo. App. LEXIS 1870, at *7, 9. The court underscored that the promise to perform was memorialized in the parties' contracts and that the risk of nonperformance was something that the plaintiff could have protected against through contract bargaining. See id. at ___, at *3-4, 2013 Colo.App. LEXIS 1870, at *8, 10 (stating that, "[b]y bargaining for contract prices and duties, the parties had the ability to account for the risk of nonperformance"); cf. Makoto, 250 P.3d at 628 (noting that "another division of this court recently rejected a similar contention that `a claim for fraud in the performance of a contract
Finally, as discussed in Part IV. A.2.b, Ford had a duty to disclose that was entirely independent of any contract between itself and Plaintiffs. That duty to disclose had nothing to do with the terms of the limited warranty that Ford extended to Plaintiffs.
2. Florida
As above, Ford challenges the two fraud claims of the Florida Plaintiff (Mr. Oremland) — i.e., fraud under the consumer protection statute and fraudulent concealment — on the basis of the economic loss rule. And as above, Plaintiffs contend that the economic loss rule is not applicable because the fraud claims are based on a duty independent of any contract — i.e., a statutory duty, a duty not to fraudulently induce another to enter a contract, and a duty to disclose.
Plaintiffs' position is supported by the Florida Supreme Court's decision in Tiara Condo Association v. Marsh & McLennan Companies, Inc., 110 So.3d 399 (Fla.2013). There, the Supreme Court acknowledged prior case law holding that there are exceptions to the economic loss doctrine, including where there is fraudulent inducement and where there are free-standing statutory causes of action. See id. at 406 (noting that "we ... reaffirmed in cases involving either privity of contract or products liability, the other exceptions to the economic loss rule that we have developed, such as for ... fraudulent inducement... or free-standing statutory causes of action still apply"). As noted above, both exceptions apply here.
The case that Ford cites, Burns v. Winnebago Industries, Inc., No. 8:13-cv-1427-T-24 MAP, 2013 WL 4437246, 2013 U.S. Dist. LEXIS 116377 (M.D.Fla. Aug. 16, 2013), is not to the contrary. While the Burns court did find that the plaintiff's fraudulent concealment claim was barred by the economic loss rule, it made no ruling that all claims for fraud are necessarily barred by the rule. Furthermore, the court recognized the fraudulent inducement exception to the rule but simply held that, "under the facts alleged, the exception ... do[es] not apply." Id. at *4, 2013 U.S. Dist. LEXIS 116377, at *9. Unfortunately, the specific facts of the case are not clear from the order, and therefore why the fraudulent inducement exception was not applicable cannot be determined.
As for HTC Leleu Family Trust v. Piper Aircraft, Inc., No. 1:12-cv-21118-KMM, 2012 WL 4982633, 2012 U.S. Dist. LEXIS 149498 (S.D.Fla. Oct. 17, 2012), another case cited by Ford, it too is of little support. There, the court explained that, "[i]f the fraud is in a term of the bargain, it is not barred by the economic loss rule," but, "if the alleged fraud relates to an act of performance, then it is barred." Id. at *3-4, 2012 U.S. Dist. LEXIS 149498, at *10-11.
3. North Carolina
The North Carolina Plaintiff (Mr. Fink) also brings two fraud claims, one under a consumer protection statute and another for fraudulent concealment — both of which have been challenged on the basis of the economic loss rule.
The fraudulent concealment claim is clearly viable based on Plaintiffs' theory that they were fraudulently induced to purchase or lease the vehicles with the MFT system. See Schumacher Immobilien Und Beteiligungs AG v. Prova, Inc., No. 1:09cv00018, 2010 WL 3943754, at *2, 2010 U.S. Dist. LEXIS 107526, at *5 (M.D.N.C. Oct. 7, 2010) (stating that, "[u]nder North Carolina law, a party to a contract owes the other contracting party a separate and distinct duty not to provide false information to induce the execution of the contract"); see also Wireless Communs., Inc. v. Epicor Software Corp., No. 3:10CV556-DSC, 2011 WL 90238, at *5, 2011 U.S. Dist. LEXIS 2633, at *14 (W.D.N.C. Jan. 11, 2011) (distinguishing, inter alia, Schumacher because, there, the validity of the contract was challenged and the plaintiff "specifically pled facts that the defendant[] never intended to perform the contract[] or specifically intended to deceive the plaintiff[]"). Furthermore, the fraudulent concealment claim is viable based on the duty to disclose which exists independent of any contract (e.g., the limited warranty).
As for the claim under the consumer protection statute, here, there is authority to support Ford's position — namely, Ellis v. Louisiana-Pacific Corp., No. 3:11CV191, 2011 WL 5402878 (W.D.N.C. Nov. 8, 2011). In Ellis, the court found that the plaintiffs' claim under the consumer protection statute was barred by the economic loss rule because they already had a contractual remedy available, i.e., a warranty remedy. See id. at *1. The court also noted that "the damage incurred by the plaintiff is not separate and apart from the damage arising out of a breach of warranty claim." Id. at *2; see also Bussian v. Daimler-Chrysler Corp., 411 F.Supp.2d 614, 625, 627 (M.D.N.C.2005) (report and recommendation, subsequently adopted by district court) (concluding that "Plaintiff's unfair or deceptive trade practices claim should be dismissed pursuant to the `economic loss rule'"; but "limit[ing] its decision to cases such as the instant case involving allegations of a defective product where the only damage alleged is damage to the product itself and the allegations of unfair trade practices are intertwined with the breach of contract or warranty claims"). But Plaintiffs legitimately point out that, on the Ellis appeal, the Fourth Circuit declined to make a ruling on whether the economic loss rule barred the plaintiffs' claim. It explained as follows: "[T]he North Carolina courts have never
As the Fourth Circuit indicated, no state court has expressly ruled on whether claims under the consumer protection statute may be barred by the economic loss rule. Only a few federal district courts in North Carolina have so ruled. See, e.g., Reply at 19 (citing, e.g., Malone v. Tamko Roofing Prods., No. 3:13-cv-00089-MOC-DCK, 2013 WL 5561628, at *2-3, 2013 U.S. Dist. LEXIS 145530, at *6-7 (W.D.N.C. Oct. 8, 2013)). In light of this fact, the Court is not precluded from holding, and does so hold, that the consumer protection statute here gives rise to a duty independent of the contract and therefore should not be barred by the economic loss rule. See Coker v. DaimlerChrysler Corp., 172 N.C. App. 386,617 S.E.2d 306, 319 (2005) (Hudson, J., dissenting) (supporting the view that claims under consumer protection statute "are exempt from the economic loss rule because the rule is judicial, not legislative, and must give way to specific legislative policy pronouncement allowing damages for economic loss[;] [i]n other words, by enacting a remedy for economic losses suffered by reason of an act deemed wrongful by the statute, the legislature has effectively preempted the economic loss rule for those cases covered by the act'").
4. Ohio
Finally, Ford contends that the Ohio Plaintiff's (Mr. Zuchowski) claim for negligence is barred by the economic loss doctrine. In support of this position, Ford cites Chemtrol Adhesives, Inc. v. American Manufacturers Mutual Insurance Co., 42 Ohio St.3d 40, 537 N.E.2d 624 (1989). There, the Ohio Supreme Court took note of the "general rule ... that a plaintiff who has suffered only economic loss due to another's negligence has not been injured in a manner which is legally cognizable or compensable." Id. at 630.
Id. at 630-31.
In response, Plaintiffs argue that Chemtrol is not dispositive because, there, the parties were two business entities (i.e., the plaintiff was not a consumer); moreover, the parties were in contractual privity. According to Plaintiffs, there is a more relaxed rule where a consumer brings suit and is not in contractual privity with the defendant. See Opp'n at 31-32.
Plaintiffs' view has support. For example, in In re Porsche Cars N.A., Inc. Plastic Coolant Tubes Products Liability Litigation, 880 F.Supp.2d 801 (S.D.Ohio 2012), the court took note that, under Chemtrol, a commercial plaintiff in contractual privity with the defendant could not recover damages in tort for purely economic loss. See id. at 871. But in Chemtrol, the court "distinguished parties in privity from those not in privity, stating, `[f]or an ordinary consumer, i.e., one not in privity of contract with the seller or manufacturer against whom recovery is sought, an action in negligence may be an appropriate remedy to protect the consumer's property interests.'" Id. The Porsche court went on to cite several Ohio district court opinions which "permitted individual consumers to bring negligence claims for purely economic loss against a manufacturer with whom they are not in privity of contract." Id. at 872.
As Ford points out in its reply brief, Judge Seeborg recently held to the contrary in Ford Tailgate. In Ford Tailgate, Judge Seeborg cited a 1965 Ohio Supreme Court decision, see Inglis v. Am. Motors Corp., 3 Ohio St.2d 132, 209 N.E.2d 583 (1965), for the proposition that, under Ohio law, "a plaintiff cannot recover in negligence for purely economic losses allegedly caused by a defective product when the only damage is to the product itself." Ford Tailgate, 2014 U.S. Dist. LEXIS 32287, at *23; see also Inglis, 209 N.E.2d at 588 (agreeing with Dean Prosser's comments that "`the usual rule ... for negligence [is] there is no liability for mere pecuniary loss of a bargain'"). He acknowledged that "[a] more recent Ohio decision [i.e., Chemtrol] suggested in dicta that this rule applies only where the consumer was in privity with the manufacturer at the time of sale." Ford Tailgate, 2014 U.S. Dist. LEXIS 32287, at *23-24. But, he explained, "[t]he Ohio state courts... continue to apply Inglis not Chemtrol in cases involving individual consumers." See id. at *24-25 (citing three cases). While some federal district courts in Ohio followed Chemtrol, none "cite Inglis or discuss the continuing viability of that case. Because Inglis continues to be the rule in Ohio, defendant's motion to dismiss plaintiffs' Ohio negligence claim ... must be granted without leave to amend." Id. at *25-26.
However, the three Ohio state court cases cited by Judge Seeborg did not rely on Inglis in any way in reaching their conclusions. In fact, all cited Chemtrol, though none seems to have considered the Chemtrol dicta which suggested that a plaintiff-individual consumer not in privity with the defendant would not be subject to the economic loss rule. The Court therefore respectfully declines to follow Judge Seeborg's approach — particularly because, here, the duty to disclose on the part of Ford has nothing to do with any contract
C. Summary on Fraud and Tort Claims
For the foregoing reasons, the Court rules as follows on the fraud and tort claims:
IV. WARRANTY CLAIMS
Plaintiffs have asserted multiple warranty-based claims, some based on statutes and some based on a breach of contract or the common law. Ford has primarily challenged the statutory warranty claims.
A. Express Warranty Claims
Plaintiffs' claims for breach of express warranty are largely predicated on state statutes that have adopted UCC § 2-313.
According to Plaintiffs, Ford breached the terms of the limited warranty because Ford and/or its dealers were ultimately unable to fix the problems with MFT, and thus the warranty failed of its essential purpose. See, e.g., Philippine Nat'l Oil Co. v. Garrett Corp., 724 F.2d 803, 808 (9th Cir.1984) (stating that "a repair or replace remedy fails of its essential purpose only if repeated repair attempts are unsuccessful within a reasonable time") (emphasis omitted); Asp v. Toshiba Am. Consumer Prods., LLC, 616 F.Supp.2d 721, 729 (S.D.Ohio 2008) (stating that a remedy fails of its essential purpose where "buyers of products governed by exclusive repair and replace warranties ... are able to show that repairing or replacing the product will not remedy the defect"); Malkamaki v. Sea Ray Boats, Inc., 411 F.Supp.2d 737, 745 (N.D.Ohio 2005) (stating that "[f]ailure to cure defects under warranty within a reasonable time supports
1. Failure to Present Vehicle for Repair
In its motion, Ford argues first that four of the twenty-four Plaintiffs (namely, Ms. Battle, Mr. Sheerin, Mr. Miller, and Mr. Zuchowski) do not have viable express warranty claims because they never brought their cars in for repairs in the first instance. Without doing so, Ford contends, these Plaintiffs cannot assert a failure of essential purpose because Ford was never given the opportunity to repair, replace, or adjust the MFT system in their cars.
Ford's position is supported by the case law. For example, in Asp, a district court held that, "before the exclusive repair and replace remedy is considered to have failed of its essential purpose, `the seller must be given an opportunity to repair or replace the product.'" Asp, 616 F.Supp.2d at 729 (emphasis added); see also In re Toyota Motor Corp. Unintended Acceleration Mktg., Sales Pracs. & Prods. Liab. Litig., No. 8:10ML 02151 JVS (FMOx), 754 F.Supp.2d 1145, 1179 (C.D.Cal.2010) (stating that "Plaintiffs who neither sought repairs pursuant to the recalls nor sought repairs for SUA-related issues may not pursue a claim for breach of express warranty based on the written warranty"); Cooley v. Big Horn Harvestore Sys., Inc., 813 P.2d 736, 744 n.7 (Colo.1991) (stating that, "[t]o establish their claim of failure of essential purpose..., the plaintiffs were required to establish [inter alia] that the defendants had an opportunity to repair or replace the defects [but] were unable to do so"); cf. Taliaferro v. Samsung Telecomms. Am., LLC, No. 3:11-CV-1119-D, 2012 WL 169704, at *2 (N.D.Tex. Jan. 19, 2012) (stating that "a plaintiff cannot state a claim for breach of express warranty unless he meets the conditions precedent prescribed by the express warranty").
Furthermore, the case on which Plaintiffs relied at the hearing, McCollough Enterprises, LLC v. Marvin Windows & Doors, No. Civil Action 09-0573-WS-B, 2010 WL 5014670 (S.D.Ala. Dec. 2, 2010), is not to the contrary. In McCollough, the district court simply stated that, "[i]f the remedy promised by the seller is so hollow or ineffectual as to be meaningless, then the warranty fails of its essential purpose and the customer is not bound by limitations of remedy contained therein." Id. at *8. But the fact that a customer is not bound by a warranty's limitations of remedy once that warranty has failed of its essential purpose is a different issue from whether a defendant should be given an opportunity to repair or replace before the warranty can be said to have failed of its essential purpose.
To the extent Plaintiffs make the alternative argument that they are excused from bringing in their cars for repairs because to do so would have been futile, the Court is not persuaded. The Court acknowledges that futility may, in theory, be a basis for an excuse. Even in Asp, the district court implicitly acknowledged such; it rejected the plaintiff's futility argument only because "[a] handful of customer complaints about the DVR, and their experience with Toshiba's ability to repair or replace the alleged defect, does not reasonably give rise to an argument that it would have been futile for Plaintiff to give Toshiba the opportunity to fix his
Even assuming a futility argument is theoretically possible, here, there are insufficient allegations in the complaint to make futility plausible. Based on the complaint, the Court does not have a sense of whether Ford's alleged inability to fix the problems with MFT was commonplace, unique to Plaintiffs, or somewhere in between. Plaintiffs do not contend that none of MFT's problems could not be repaired. We do not know whether the named Plaintiffs' vehicles could have been repaired. Indeed, even if half of Ford's cars had problems with MFT, as alleged by Plaintiffs in their complaint, see FAC ¶ 10, that does not necessarily mean that Plaintiffs' problems could not be fixed.
Although Plaintiffs contend that the inability to fix was commonplace, that is not adequately supported by the complaint, which simply points to (1) Plaintiffs' own experiences, (2) 19 NHTSA complaints, and (3) two Internet websites called "syncsucks.com" and "outofmytouch.com." See FAC ¶¶ 8, 288 et seq. The website complaints can be discounted because there are no allegations in the FAC that there were complaints on the websites about MFT not being fixable. See FAC ¶¶ 288-90. For the NHTSA complaints, most of the complaints did suggest or state that the MFT problems were not fixable. But even if the Court were to credit all 19 NHTSA complaints as making claims of irreparable problems with MFT, and further credit the 20 Plaintiffs who did bring in their cars for repairs, that would still leave the Court with only 39 complaints. While this is more than just a handful of complaints and certainly raises the possibility of futility, it still does not meet the requisite plausibility standard of Iqbal and Twombly.
Accordingly, the Court dismisses the claims of the following four Plaintiffs: Ms. Battle, Mr. Sheerin, Mr. Miller, and Mr. Zuchowski. The dismissal on this basis is without prejudice. However, as discussed below, there are independent reasons to dismiss with prejudice the express warranty claims for two Plaintiffs (Ms. Battle and Mr. Sheerin) — i.e., for failure to provide notice of the breach of warranty.
2. "Lumping" Problems/Repairs
For the remaining twenty Plaintiffs, Ford concedes that they did bring their cars in for repairs. Ford contends, however, that their claims for breach — predicated on a failure of essential purpose — should still be dismissed on an independent ground. More specifically, Ford argues that, even if these Plaintiffs did bring their cars in for multiple repairs, the repairs were for different problems, and Plaintiffs cannot "lump" the problems/repairs together to establish a failure of essential purpose. Ford asserts:
Mot. at 29.
Ford's argument is not without any support. See, e.g., Schultz v. Gen. R.V. Ctr.,
3. Basis of the Bargain
Ford argues that, even if the twenty Plaintiffs' express warranty claims cannot be dismissed on the ground of "lumping," there is another basis for dismissal. As noted above, UCC § 2-313 provides in relevant part as follows: "Any affirmation of fact or promise made by the seller to the buyer which relates to the goods and becomes part of the basis of the bargain creates an express warranty that the goods shall conform to the affirmation or promise." UCC § 2-313(1)(a) (emphasis added). According to Ford, "basis of the bargain" means that Plaintiffs must have been aware of and relied on the limited warranty prior to purchasing their, without reliance, no express warranty claim is viable.
The Court does not agree. Comment 3 to UCC § 2-313 provides as follows:
UCC § 2-313, cmt. 3 (emphasis added). See, e.g., Weinstat v. Dentsply, 180 Cal.App.4th 1213, 1227, 103 Cal.Rptr.3d 614 (2010) (noting that "[p]re-[UCC] law governing express warranties required the purchaser to prove reliance on specific promises made by the seller" but that the UCC does not; under comment 3, there is a "presumption that the seller's affirmations
The Court acknowledges that there are a few lower court cases indicating that reliance is required, even where a claim is based on UCC § 2-313. See, e.g., Corson v. Toyota Motor Sales, U.S.A., Inc., No. CV 12-08499 JGB (VBKx), 2013 WL 1802709, at *9 (C.D.Cal. Apr. 24, 2013) (interpreting Pennsylvania law). However, these cases are not dispositive, particularly as they do not address and account for comment 3 to UCC § 2-313. Moreover, none are decisions of the highest state court. Also, many of the cases cited by Ford are distinguishable because they did not involve written warranties delivered in connection with a sale (as here). Where there is an express written warranty, an assertion that the warranty not part of the deal between the issuing party and receiving party is far less persuasive. See Cipollone v. Liggett Group, Inc., 893 F.2d 541, 568 n.29 (3d Cir.1999) (although requiring plaintiff to prove that she knew of the advertisement containing the "affirmation of fact or promise" to meet the basis-of-the-bargain requirement, noting that this burden would not be imposed where a written warranty was delivered to the purchaser in connection with a sale because, in such a situation, "there is no question that the plaintiff has knowledge that the alleged warranty exists"); Norcold v. Gateway Supply Co., 154 Ohio App.3d 594, 798 N.E.2d 618, 623 (2003) (stating that "comment 3 indicates that UCC section 2-313 is relevant to the question of whether an express warranty has been created, and the `basis of the bargain' rule is not applicable to situations were written warranties are clear and express"). See generally Pegasus Mgmt. Co., Inc. v. Lyssa, Inc., 995 F.Supp. 29, 38 (D.Mass.1998) (stating that "`[t]he problems of a reliance, and a right to rely, on the representations do not appear when the action is grounded in warranty'" because "`[t]he warranty is as much a part of the contract as any other part'").
At the hearing, Ford argued still that, under California law, reliance is a requirement where the parties are not in privity with one another. In support of this argument, Ford cites Keegan v. American Honda Motor Co., 284 F.R.D. 504 (C.D.Cal.2012). In Keegan, the parties disputed whether reliance was required for an express warranty claim. The district court acknowledged that, previously, a state appellate court had stated: "`[B]reach of express warranty arises in the context of contract formation in which reliance plays no role.'" Id. at 546 (quoting Weinstat; emphasis added). The Keegan court, however, distinguished Weinstat because, "[t]here, plaintiff alleged an express warranty claim against the product seller" and so the claim was "based on privity of contract. Here, none of the plaintiffs purchased his or her vehicles directly from the manufacturer. Therefore, none was in privity with defendants." Id.
While Keegan supports Ford's position, other courts interpreting California law have not found such a limitation — i.e., they have not required reliance where the parties are not in privity. See, e.g., Toyota, 754 F.Supp.2d at 1183 & n.22 (in case where plaintiffs sued car manufacturer, stating that plaintiffs had to have been exposed to the advertising but adding that there is no reliance requirement under Weinstat); McVicar v. Goodman Global, Inc., No. SACV 13-1223-DOC (RNBx), 2014 WL 794585, at *11 (C.D.Cal. Feb. 25, 2014) (in case where plaintiffs sued air conditioner manufacturer, relying on Weinstat); Horvath v. LG Elecs. Mobilecomm
Finally, although Plaintiffs did not buy or lease their vehicles directly from Ford (and thus no privity), there is no dispute that Ford did extend a limited warranty to Plaintiffs upon their purchase or lease of the cars. A privity requirement would seem to have little meaning under such circumstances of this case. The Court also notes that, even if reliance were required for an express warranty claim under California Commercial Code § 2313, there is no comparable reliance requirement for an express warranty claim under the Song-Beverly Act — a claim which Plaintiffs have advanced here.
The Court therefore concludes that dismissal under Rule 12(b)(6) on the ground of reliance is not warranted.
4. Notice
Ford also contends there is a notice requirement for a claim of express warranty based on UCC § 2-607(3)(a). UCC § 2-607(3)(a) provides that, "[w]here a tender has been accepted, ... the buyer must within a reasonable time after he discovers or should have discovered any breach notify the seller of breach or be barred from any remedy." UCC § 2-607(3)(a). Ford asserts that, here, eleven Plaintiffs (namely, Ms. Battle, Mr. D'Aguanno, Mr. Sheerin, Dr. Oremland, Mr. Mitchell, Mr. Zuchowski, Mr. Avedisian, Mr. Rodriguez, Mr. Ervin, Mr. Connell, and Mr. Miller-Jones) failed to allege that they satisfied this notice requirement. There is no dispute among the parties that there is a notice requirement for each of the states at issue under the relevant statute.
As the parties agreed at the hearing, the notice issue must be evaluated on a state-by-state basis. The Court first addresses the express warranty claims of Ms. Battle, Mr. Sheerin, and Mr. Zuchowski. Although the Court has already dismissed these Plaintiffs' express warranty claims on the ground of failure to present the car for repair, the dismissal was without prejudice. Here, a failure to comply with the notice requirement is a basis for dismissal with prejudice.
a. Ms. Battle (Alabama)
The Court agrees with Ford that Ms. Battle's express warranty claim should be dismissed for failure to comply with the notice requirement.
First, contrary to what Plaintiffs argue, the notice required here was notice to Ford, the manufacturer of Ms. Battle's car, and not just notice to the direct seller of Ms. Battle's car. Admittedly, UCC § 2-607(a)(3) on its face refers to notice to the seller. Nevertheless, some states, including Alabama, require notice to the manufacturer where the manufacturer (and not the seller) is the one being sued. See Hobbs v. Gen. Motors Corp., 134 F.Supp.2d 1277, 1285(M.D.Ala.2001) (stating that "remote manufacturers should be afforded the same protections as sellers, either by way of notice provided directly to them, or through notice to them by the direct seller from the buyer").
Second, although Plaintiffs contend that Ms. Battle provided the requisite notice to Ford when Plaintiffs filed the instant lawsuit, that argument lacks merit. Under Alabama law, the filing of a complaint does not constitute notice. See id. (stating that notice must "precede the filing of the complaint," at least in a case involving economic harm rather than personal injury); see also Jewell v. Seaboard Indus., 667 So.2d 653, 661 (Ala.1995) (concluding that plaintiff did not give sufficient
Third, Plaintiffs suggest that the purpose underlying the notice requirement has been satisfied because Ford already knew that many of its customers were having problems with MFT. See Opp'n at 37-38 (arguing that "Ford's contention that it lacked the requisite knowledge under U.C.C. § 2-607 is disingenuous in light of the overwhelming allegations in the FAC concerning consumer complaints, the NHTSA database, news articles and direct notice of this particular problem Ford received from Plaintiffs and similarly situated consumers"). But similar arguments have been rejected by courts applying Alabama law. For example, in Smith v. Apple, No. 08-AR-1498-S, 2009 WL 3958096 (N.D.Ala. Nov. 4, 2009), a district court stated: "[A] general awareness on Apple's part of alleged defects in its iPhone does not extinguish the purpose of the notice requirement, nor does it substitute for that requirement under Alabama law." Id. at *1; see also In re Ford Motor Co. E-350 Van Prods. Liab. Litig., No. 03-4558(HAA), 2008 WL 4126264, at *6, 9 (D.N.J. Sept. 2, 2008) (dismissing Alabama warranty claim for failure to comply with notice requirement even though there were allegations that Ford was "`fully aware of the alleged defect from the earliest stages of the E350's development, [and] was further warned by the NTSB and NHTSA'").
Accordingly, the Court dismisses Ms. Battle's express warranty claim. The dismissal is with prejudice as Plaintiffs have failed to show that they could make an amendment that would overcome dismissal on this basis.
b. Mr. Sheerin (Colorado)
The Court also concludes that dismissal of Mr. Sheerin's express warranty claim is proper.
Unlike Alabama law, Colorado law does not require notice to the manufacturer. See Cooley, 813 P.2d at 741-42 (stating that notice to the immediate seller is required, not to anyone beyond the immediate seller, including the manufacturer). Nevertheless, that does not obviate the requirement that notice still must be given to the seller, and here no notice was given to the seller because, as noted above, Mr. Sheerin did not even bring his car in for a repair.
As above, the Court dismisses the express warranty claim with prejudice — i.e., because Plaintiffs have failed to show that they could make an amendment that would overcome dismissal on this basis.
c. Mr. Zuchowski (Ohio)
For Mr. Zuchowski, the express warranty claim is not subject to dismissal based on the notice requirement.
Ohio law appears to require notice to a manufacturer. See, e.g., Radford v. Daimler Chrysler Corp., 168 F.Supp.2d 751, 754 (N.D.Ohio 2001) (in case where plaintiff sued car manufacturer for damages to her car when it spontaneously caught fire, dismissing Ohio warranty claim based on failure to provide notice).
But, under Ohio law, the filing of a complaint can serve as notice of breach. See Chemtrol, 537 N.E.2d at 638 (stating that "we believe in a proper case the filing of a civil complaint could serve as notice of breach" although concluding that "this is not such a case, as Lexington's suit was filed a full two years after the damages were sustained"); cf. Lincoln Elec. Co. v. Technitrol, Inc., 718 F.Supp.2d 876, 883 (N.D.Ohio 2010) (stating that "[t]he circumstances
Furthermore, Chemtrol is not inconsistent with the function of notice. While some courts have observed that the purpose of the notice requirement is to give pre-litigation notice of a breach, see Schmidt v. Ford Motor Co., 972 F.Supp.2d 712, 718-19 (E.D.Pa.2013) (stating that the purpose "`is to allow the seller an opportunity to resolve the dispute regarding an alleged breach before the buyer initiates a lawsuit'"), other courts have framed the purpose underlying the notice requirement more broadly, stating, e.g., that the notice requirement is "designed to allow the defendant seller an opportunity for repairing the defective item, reducing damages, avoiding defective products in the future, negotiating settlements, and protecting against stale claims." Kerr v. Hunter Div., 32 Va. Cir. 497, 507 (1981). While often pre-suit notice best serves those purposes, notice by complaint may serve that function as well. See Kerr, 32 Va. at 507 (noting, e.g., that "[n]egotiating settlement does not of course contemplate only pre-suit negotiations").
Finally, to the extent Ford argues that Mr. Zuchowski did not provide timely notice of the alleged breach, that is a factual question for the jury to decide. Here, Mr. Zuchowski filed suit against Ford on July 26, 2013. See Rosser v. Ford Motor Co., No. C-13-3471 EMC (Docket No. 1) (complaint). He leased his vehicle in March 2012, i.e., more than a year earlier. See FAC ¶ 184. Although he began to experience problems with his MFT system "[a]lmost immediately following the lease date of his vehicle," FAC ¶ 186, that does not establish that Mr. Zuchowski knew, or even should have known, at that time that Ford's limited warranty had failed of its essential purpose. The question is when Mr. Zuchowski knew or should have known that the MFT system was not repairable. Simply because Mr. Zuchowski's car had a problem at the outset does not establish that the problem was not repairable at that time; nor is it even enough to put Mr. Zuchowski on inquiry notice of such.
d. Mr. D'Aguanno (Arizona)
The Court rejects Ford's contention that, as a matter of law, Mr. D'Aguanno failed to satisfy the notice requirement.
Admittedly, there is case law indicating that, under Arizona law, notice of a breach must be conveyed to the manufacturer of a product. See, e.g., Hearn v. R.J. Reynolds Tobacco Co., 279 F.Supp.2d 1096, 1115-16 (D.Ariz.2003) (in case where plaintiffs sued tobacco manufacturers, dismissing Arizona warranty claims for failure to provide notice within a reasonable time). However, case law also indicates that, under Arizona law, notice can be given through the filing of a complaint. See id. (stating that "filing a complaint upon an opposing party (as is the case here) may constitute reasonably timely notice" because "`notice of the claim of
To the extent Ford argues that no timely notice was given, that is question of fact for the jury to decide.
e. Dr. Oremland (Florida)
The Court rejects Ford's contention that, as a matter of law, Dr. Oremland failed to satisfy the notice requirement.
Ford's argument is predicated on the assumption that Florida law requires notice to the manufacturer. However, at least one district court has held that notice to a manufacturer is not required because the relevant Florida statute refers to notice to a seller, not a manufacturer. See Fed. Ins. Co. v. Lazzara Yachts of N. Am., Inc., No. 8:09-CV-607-T-27MAP, 2010 WL 1223126, at *5, 2010 U.S. Dist. LEXIS 28865, at *14 (M.D.Fla. Mar. 25, 2010) (stating that "[t]he plain language of the statute ... does not require notice to a manufacturer," as opposed to a seller; adding that "[t]he parties have not cited to any Florida case extending [the] notice requirements to a manufacturer").
In its reply brief, Ford cites Jovine v. Abbott Laboratories, Inc., 795 F.Supp.2d 1331 (S.D.Fla.2011), to support its position. In Jovine, the district court did dismiss the plaintiff's express warranty claim because he failed to allege that he gave the defendants notice of the alleged breach of warranty. See id. at 1339-40. But even if the Court assumes — in Ford's favor — that the defendants were manufacturers (or at least not direct sellers of the product to the plaintiff), Jovine is of limited support because no rationale was given in the opinion as to why notice to a manufacturer (or a remote seller) is required, particularly given the plain language of the statute.
f. Mr. Mitchell (Iowa)
As to Mr. Mitchell, the Court rejects Ford's notice argument.
Under Iowa law, notice to the manufacturer is not required. See, e.g., Wright v. Brooke Grp. Ltd., 114 F.Supp.2d 797, 830 (N.D.Iowa 2000) (stating that, "[b]ecause defendants never sold cigarettes to Mr. Wright or contracted to sell cigarettes to Mr. Wright, the notice provision... was never triggered" and thus Mr. Wright never had a duty to notify defendants of his warranty claims).
Ford's reliance on Randa v. U.S. Homes, Inc., 325 N.W.2d 905 (Ia.Ct.App. 1982), is not persuasive because, there, the third-party defendant may have been a direct seller to the third-party plaintiff rather than a remote manufacturer. See id. at 910 (stating that the evidence at trial "showed that U.S. Plywood sold vertical cedar plywood to [U.S. Homes] to be used as exterior siding").
g. Mr. Avedisian (Pennsylvania)
For Mr. Avedisian, the Court also rejects Ford's notice argument.
Under Pennsylvania law, it does appear that notice to a manufacturer is required. See, e.g., Schmidt, 2013 WL 5303947, at *5 (stating that, under Pennsylvania law, "a plaintiff, specifically a buyer, must provide notification of the alleged product defect to the manufacturer prior to bringing suit on a breach-of-warranty theory"); In re Ford E-350 Van Prods.
However, under Pennsylvania law, the filing of a complaint may constitute sufficient notice. See id. at *39-40. Even a case cited by Ford concedes such. See Precision Towers, Inc. v. Nat-Com, Inc., No. 2143, 2002 WL 31247992, at *5, 2002 Phila. Ct. Com. Pl. LEXIS 16, at *13 (Sept. 23, 2002) (stating that "[t]he filing of a complaint has been held to satisfy the notice requirement for a breach of warranty claim").
As to whether Mr. Avedisian gave timely notice, that is a question of fact for the jury to decide.
h. Mr. Rodriguez and Mr. Ervin (Texas)
For Mr. Rodriguez and Mr. Ervin, the express warranty claims fail because of failure to satisfy the notice requirement.
First, although Plaintiffs cite a case to support their position that notice to a manufacturer is not required, see Vintage Homes, Inc. v. Coldiron, 585 S.W.2d 886, 888 (Tex.Civ.App.1979) (stating that the notice requirement "applies only as between a buyer and his immediate seller" — not a manufacturer), the weight of Texas authority supports Ford's position that such notice is required. See, e.g., McKay v. Novartis Pharms. Corp., 934 F.Supp.2d 898, 912-13 (W.D.Tex.2013) (noting that "[t]he Texas Supreme Court has acknowledged a split among its courts of appeals with regard to whether a buyer is required to give notice ... to a remote seller/manufacturer"; adding that "[t]hree out of the four Texas courts of appeal which have addressed the issue have held that the buyer is required"); United States Tire-Tech, Inc. v. Boeran, B.V., 110 S.W.3d 194, 199 (Tex.Ct.App.2003) (stating that "a buyer is required to give notice of an alleged breach of warranty to a remote manufacturer").
Second, under Texas law, the filing of a complaint does not constitute notice. See id. at 110 S.W.3d at 202 (stating that "commencement of litigation [did not] satisfy this notice requirement").
Finally, generalized knowledge of concerns are also insufficient to meet the notice requirement: "The manufacturer must be made aware of a problem with a particular product purchased by a particular buyer." Id. This would seem particularly true where it is not a foregone conclusion that Plaintiffs' cars were in fact not repairable.
The Court therefore dismisses the express warranty claims of Mr. Rodriguez and Mr. Ervin. The dismissal is with prejudice as Plaintiffs have failed to show that they could amend their pleading to avoid dismissal on this basis.
i. Mr. Connell and Mr. Miller-Jones (Virginia)
Finally, the Court rejects Ford's contention that the notice requirement is a bar to the express warranty claims of Mr. Connell and Mr. Miller Jones.
Even if notice to the manufacturer were required, compare Hebron v. Am. Isuzu Motors, Inc., 60 F.3d 1095, 1098 (4th Cir. 1995) (in case where plaintiff sued car manufacturer, dismissing Virginia warranty claim for failure to provide notice in a reasonable time frame), with Bay Point Condo. Ass'n v. RML Corp., 57 Va. Cir. 295, 317 (2002) (stating that buyer was not required to give notice of warranty claim to manufacturer because manufacturer was not the seller in the transaction);
As to whether either Mr. Connell or Mr. Miller-Jones gave timely notice, that is a question of fact for the jury to decide.
5. Privity Requirement Under Arizona Law
As to Mr. D'Aguanno (Arizona), Ford raises one final argument in favor of dismissal of the express warranty claim. More specifically, Ford contends that his claim should be dismissed because "Arizona requires a plaintiff to be in privity with a defendant to state a claim for breach of a U.C.C. warranty," Mot. at 39, and, here, Mr. D'Aguanno did not buy his car from Ford but rather a dealer.
In their opposition, Plaintiffs concede that the UCC-based express warranty claim should be dismissed. See Opp'n at 38. Plaintiffs argue, however, that Mr. D'Aguanno's express warranty claim based on the common law and/or breach of contract is still viable. See FAC ¶ 498 ("To the extent Ford's limited warranties are deemed not to be warranties under the Uniform Commercial Code as adopted in Arizona, Plaintiff pleads in the alternative under common law warranty and contract law."). In turn, Ford contends that even these claims are subject to dismissal.
The Court agrees in part. To the extent Plaintiffs assert a claim for common law warranty, courts have held that such a claim, under Arizona law, sounds in tort, and, therefore, Mr. D'Aguanno's common law warranty claim "falls squarely within the parameters of the `economic loss' rule." Apollo Grp. v. Avnet, Inc., 58 F.3d 477, 481 (9th Cir.1995).
But Plaintiffs have also alleged a warranty claim based on breach of contract. Here, Ford argues that the contract-based claim "fails because `[a]llege[d] breach of contract should not be construed as including breach of warranty theories.'" Mot. at 40 (quoting Mandeville v. Onoda Cement Co., 67 Fed.Appx. 417, 418 (9th Cir. 2003)). But Mandeville is not citable authority under Ninth Circuit Rule 36-3. See 9th Cir. R. 36-3(b) (allowing for citation of unpublished authority issued on or after January 1, 2007). Moreover, Mandeville did not address Flory v. Silvercrest Industries, 129 Ariz. 574, 633 P.2d 383 (1981), where the Arizona Supreme Court suggested that a "contract of warranty" can exist outside of the UCC. Id. at 390; see also In re Horizon Organic Milk Plus DHA Omega-3 Mktg. & Sales Prac. Litig., 955 F.Supp.2d 1311, 1340 (S.D.Fla.2013) (noting that, "in Flory, the Arizona Supreme Court found that a written warranty
Accordingly, for Mr. D'Aguanno, the UCC-based express warranty claim is dismissed as is his common law express warranty claim. However, his breach-of-contract express warranty claim survives. The dismissal of the former claims is with prejudice.
B. Implied Warranty Claims
1. Fit for Ordinary and Intended Purpose
For each of the states at issue, Plaintiffs have brought a claim (or claims) of breach of the implied warranty of merchantability. Most claims, although not all,
While Ford's position is not without any merit, the Court is not persuaded that dismissal under Rule 12(b)(6) is warranted. As even Ford implicitly concedes, the ordinary purpose of a car is not just to provide transportation but rather safe, reliable transportation. See, e.g., Carlson v. Gen. Motors Corp., 883 F.2d 287, 297 (4th Cir. 1989) ("Since cars are designed to provide transportation, the implied warranty of merchantability is simply a guarantee that they will operate in a safe condition and substantially free of defects. Thus, where a car can provide safe, reliable transportation, it is generally considered merchantable.") (internal quotation marks omitted). Here, it is a question of fact for the jury as to whether the problems with MFT posed enough of a safety risk that the cars at issue could not be said to provide safe, reliable transportation.
2. Privity
Ford asserts that, even if the Court finds a sufficiently alleged safety risk to create a question of fact regarding fitness for pleading purposes, the implied warranty claims of certain Plaintiffs should still be dismissed because they require privity and, here, Plaintiffs did not buy or lease their vehicles from Ford. Plaintiffs concede that Ford is right as to some of the individuals and therefore has withdrawn the implied warranty claims of Mr. D'Aguanno, Ms. Makowski, Dr. Oremland, Mr. Mitchell, Mr. Miller, and Mr. Purcell. See Opp'n at 41 n.138. However, Plaintiffs argue that there are still viable implied warranty claims for those individuals from Alabama (Ms. Battle), California (Ms. Whalen, CDD, Mr. Rosser, Ms. Raney-Aarons, Mr. Watson, and Ms. Thomas-Maskrey), and North Carolina (Mr. Fink).
a. Alabama
For Alabama, Plaintiffs actually concede that the implied warranty claim (pursuant to Alabama Code § 7-2-314) should be dismissed. Plaintiffs argue, however, that they have a comparable tort claim under the Alabama Extended Manufacturer's Liability Doctrine ("AEMLD"). See Opp'n at 41 & n.139 (citing White Consolid. Indus., Inc. v. Wilkerson, 737 So.2d 447, 449 (Ala.1999) (stating that "[a] claim under the AEMLD is grounded in tort and is premised on the notion that `a [manufacturer's marketing] a product not reasonably safe, when applied to its intended use in the usual and customary manner, constitutes negligence as a matter for law'"; adding that, "`[u]nder the AEMLD, a manufacturer has the duty to design and manufacture a product that is reasonably safe for its intended purpose and use'"); see also Tuscumbia City Sch. Sys. v. Pharmacia Corp., 871 F.Supp.2d 1241, 1247 (N.D.Ala.2012) (sating that the AEMLD is "Alabama's hybridized variant of the theory of strict liability in tort"); Cain v. Sheraton Perimeter Park S. Hotel, 592 So.2d 218,
Based on Plaintiffs' concession, the Court dismisses the implied warranty claim based on § 7-2-314. Plaintiffs' request for leave to amend to assert a AEMLD claim is denied. As Ford argues, a claim brought pursuant to the AEMLD would be futile here because it would be barred by the economic loss rule. See Vesta Fire Ins. Corp. v. Milam & Co. Constr., Inc., 901 So.2d 84, 107 (Ala.2004) ("[The economic loss] doctrine states that a plaintiff's AEMLD claim that a product is defective is limited to a contractual recovery when the evidence shows that the defect caused injury to only the product and to no other property."); Ford Motor Co. v. Rice, 726 So.2d 626, 631 (Ala.1998) ("Under [the economic loss] rule, a cause of action does not arise under tort theories of negligence, wantonness, strict liability, or the AEMLD where a product malfunctions or is defective and thereby causes damages only to the product itself."); Wellcraft Mar., Div. of Genmar Indus., Inc. v. Zarzour, 577 So.2d 414, 418 (Ala.1990) ("[T]here is no cause of action in tort under the AEMLD for a product defect that results in damage only to the product itself.... A defective product is a loss of the benefit of a bargain which is a contract rather than a tort action.") (internal quotation marks omitted).
b. California
As a preliminary matter, the Court notes that Plaintiffs have asserted two implied warranty claims under California law — one pursuant to California Commercial Code § 2314 (modeled on the UCC) and one pursuant to the Song-Beverly Act. For the implied warranty claim under the Song-Beverly Act, there is no privity requirement. See Ehrlich v. BMW of N. Am., LLC, 801 F.Supp.2d 908, 921 (C.D.Cal.2010) (noting that the "weight of authority" states "the plain language of section 1792 of the Song-Beverly Act does not impose a ... vertical privity requirement"; citing several cases as well as Witkin in support); see also Cal. Civ.Code § 1729 (providing that "every sale of consumer goods that are sold at retail in this state shall be accompanied by the manufacturer's and the retail seller's implied warranty that the goods are merchantable").
For the UCC-based implied warranty claim, Plaintiffs concede that there is a privity requirement but argue that "California courts recognize a well-established exception to the privity requirement where, as here, the consumer is a third-party beneficiary of the contract between the manufacturer and a third party."
Not all courts, however, have recognized the third-party beneficiary exception. For example, in Xavier v. Philip Morris USA Inc., 787 F.Supp.2d 1075 (N.D.Cal.2011) (Alsup, J.), the court declined to rely on Gilbert because it
Id. at 1083. In Long v. Graco Children's Prods., Inc., No. 13-cv-01257-WHO, 2013 WL 4655763, 2013 U.S. Dist. LEXIS 121227 (N.D.Cal. Aug. 26, 2013) (Orrick, J.), the court did not make any mention of Gilbert at all. Rather, it decided not to recognize the third-party beneficiary exception because of the Ninth Circuit's decision in Clemens v. DaimlerChrysler Corp., 534 F.3d 1017 (9th Cir.2008), which it concluded was binding authority. See Long, 2013 WL 4655763, at *12-13, 2013 U.S. Dist. LEXIS 121227, at *47-48.
In Clemens, the Ninth Circuit began by taking note that an implied warranty claim under California Commercial Code § 2314 requires vertical privity. See Clemens, 534 F.3d at 1023. The court acknowledged, however, that "[s]ome particularized exceptions to the [privity] rule exist. The first arises when the plaintiff relies on written labels or advertisements of a manufacturer. The other exceptions arise in
Id. at 1023-24.
While Ninth Circuit authority is binding on this Court, this Court does not read Clemens (as the court did in Long) as foreclosing the third-party beneficiary exception. Although Clemens, like this case, involved a plaintiff who bought a car from a dealership and then sued the manufacturer for a defect with the car, it is not clear whether the plaintiff argued for application of the third-party beneficiary exception specifically. As indicated above, the Ninth Circuit's opinion simply reflects that the plaintiff argued for "similar equities." Clemens, 534 F.3d at 1023. Furthermore, that the plaintiff did not invoke the third-party beneficiary exception specifically is suggested by the fact that nowhere in the Clemens decision did the Ninth Circuit address Gilbert.
In light of Gilbert and the lack of a clear holding to the contrary in Clemens, the Court concludes that the third-party beneficiary exception remains viable under California law. In Xavier, of course, the court chose not to follow Gilbert because Gilbert involved a homeowner suing a subcontractor, and not a consumer suing a product manufacturer. While that same factual distinction can be made between Gilbert and the instant case, the Court does not find that factual distinction material. Neither the Xavier court nor Ford here has explained why this difference should command a result different from that in Gilbert.
Accordingly, the Court rejects Ford's contention that the third-party beneficiary exception is not cognizable under California law.
c. North Carolina
Similar to above, Plaintiffs contend that the North Carolina implied warranty claim is viable because, even though there is a privity requirement, there is, in effect, a third-party beneficiary exception to the privity rule. In support, Plaintiffs rely on Coastal Leasing Corp. v. O'Neal, 103 N.C. App. 230, 405 S.E.2d 208 (1991).
In Coastal Leasing, an individual negotiated for the purchase of an ice maker and
Based on Coastal Leasing, the Court rejects Ford's lack-of-privity argument as untenable. The third-party beneficiary theory is valid under North Carolina law. Nothing in Coastal Leasing suggests that the third-party beneficiary exception should be limited to the leasing context or to situations in which the direct seller is a mere agent of the consumer.
3. Notice
In addition to the privity requirement, Ford argues that there is a notice requirement which must be satisfied in order for Plaintiffs to move forward with their implied warranty claims. Here, Ford's notice argument is the same as that raised in Part V.A.4, supra, with respect to the express warranty claims. Plaintiffs agree that the same notice analysis should apply. Accordingly, the Court's rulings on notice with respect to the express warranty claims are also applicable to the implied warranty claims (based on the UCC) as well.
C. Claims Under the Magnuson-Moss Warranty Act ("MMWA")
Plaintiffs have submitted not only state statutory warranty claims but also a federal statutory warranty claim, namely, a claim for violation of the MMWA.
1. Derivative Claim
Ford argues first that Plaintiffs' MMWA claim is, essence, derivative of the state express and implied warranty claims. The MMWA provides in relevant part that "a consumer who is damaged by the failure of a supplier, warrantor, or service contractor to comply with any obligation under this title, or under a written warranty, implied warranty, or service contract, may bring suit for damages and other legal and equitable relief." 15 U.S.C. § 2310(d); see also FAC ¶¶ 317-18 (indicating that MMWA claim is based on express and implied warranties). Ford contends that the MMWA claim should therefore be dismissed for the same reasons that the express and implied warranty claims should be dismissed. See, e.g., Clemens, 534 F.3d at 1022 (noting that plaintiff "alleges a violation of the [MMWA] only insofar as [defendant] may have breached its warranties under state law; there is no allegation that [defendant] otherwise failed to comply with the [MMWA and] [t]herefore, the federal claims hinge on the state law warranty claims"). In opposition, Plaintiffs do not dispute that the MMWA claim rises or falls with the state express and implied warranty claims. See, e.g., Opp'n at 45
2. Leases
Ford asserts next that, to the extent there is any MMWA claim that is not dismissed pursuant to the above, there is an independent basis for dismissal as to seven Plaintiffs (namely, CDD, Ms. Raney-Arons, Mr. Matlin, Mr. Rizzo, Mr. Miller, Ms. Purcell, and Zuchowski). These Plaintiffs did not purchase their vehicles but rather only leased them and, according to Ford, the MMWA does not provide a remedy for persons who are simply lessees.
Courts are divided on the issue of whether a lessee can bring a claim under the MMWA. In assessing this issue, this Court begins with the plain language of the MMWA. Under the statute, "a consumer who is damaged by the failure of a supplier, warrantor, or service contractor to comply with any obligation under this title, or under a written warranty, implied warranty, or service contract, may bring suit for damages and other legal and equitable relief." 15 U.S.C. §§ 2310(d)(1). The term "consumer" is defined as follows:
Id. § 2301(3). The third category is made up of two subclauses — (a) a person who is entitled by the terms of "such warranty" to enforce the obligations of "the warranty" and (b) a person who is entitled under the applicable state law to enforce the obligations of "the warranty." See Am. Honda Motor Co. v. Cerasani, 955 So.2d 543, 548 (Fla.2007). The question is whether a lessee can be a consumer under any of the above definitions. In their papers, the parties primarily focus on category three only — in particular, the second subclause. However, the Court finds it prudent to address all three categories. See, e.g., Opp'n at 47 n.165 (putting at issue second category through reliance on Mago v. Mercedes-Benz, U.S.A., Inc., 213 Ariz. 404, 142 P.3d 712, 717-18 (Ariz.Ct. App.2006)).
Clearly, a lessee is not a consumer under category one. A lessee does not actually "buy" a consumer product but rather only leases a consumer product.
Category two, however, presents a closer call. For example, if a car dealership purchases from a car manufacturer a vehicle that has a warranty and then the dealership leases the car to a person while the warranty is still valid, the lessee is arguably a person to whom the vehicle is transferred during the duration of the warranty. Ford implicitly argues that this construction must be rejected because of the way that "written warranty" and "implied warranty" is defined in the MMWA.
• "Written warranty" means, e.g., "any written affirmation of fact or written promise made in connection with the sale of a consumer product by a supplier to a buyer ... which written affirmation [or] promise ... becomes part of the basis of the bargain between a supplier and a buyer for purposes other
• "Implied warranty" means "an implied warranty arising under State law ... in connection with the sale by a supplier of a consumer product." Id. § 2301(7) (emphasis added).
But just because written warranty and implied warranty require a connection with a sale does not mean that the sale must be one between the direct supplier and the consumer. In other words, nothing in the statute prevents the necessary "sale" as that term is used in §§ 2301(6)(A) and (7) as being a sale between a direct supplier and a lessor. See Dekelaita v. Nissan Motor Corp., 343 Ill.App.3d 801, 278 Ill.Dec. 649, 799 N.E.2d 367, 373-74 (2003) (stating that, "[w]here, as here, there was a sale — between the dealer and the lessor — it suffices to say that there was a written warranty issued in connection with the sale"); see also Mago, 142 P.3d at 717 ("decid[ing] that a qualifying sale must occur something within the sequence of events that ultimately places the consumer product with the consumer[;] [plaintiff] produced evidence that the sale from Dealer to Lessor led to his lease [and,] [c]onsequently, [plaintiff] is not precluded from seeking relief under the [MMWA] merely because he was not the buyer in the qualifying sale"). In other words, in a typical car lease, the warranty claimed by Plaintiffs herein can be said to have been "issued in connection with" the "sale" between dealer and the lessor (e.g., the finance company).
Of course, one might argue that a written warranty (at least) requires more — i.e., that the requisite sale between the supplier and buyer must be for "purposes other than resale of [the consumer] product." 15 U.S.C. § 2301(6)(A). However, courts have recognized that a lessor purchases the vehicle not for resale, but to lease it to the lessee. See Mago, 142 P.3d at 718 ("decid[ing] that a vehicle lessor can qualify as a buyer `for purposes other than resale'" because "the plain language of § 2301(6) does not require that a buyer purchase the consumer product without a future intent to resell the product [—][r]ather, § 2301(6) requires only that the buyer have purposes for purchasing the product other than resale" and "[a] buyer who purchases a vehicle for the purpose of leasing it possesses such a purpose"; adding that to interpret otherwise "would lead to an absurd result" as "most consumers who purchase a vehicle intend to resell it after a period of use"); Peterson v. Volkswagen of Am., Inc., 281 Wis.2d 39, 697 N.W.2d 61, 71 (2005) (stating that, "`[w]hile it is true that [the leasing company] [i]s likely to sell the vehicle after the expiration of the lease (potentially even to plaintiff[]), the purpose of the transaction between [the leasing company] and defendant was not for resale, but for the lease of the vehicle to plaintiff[]'").
To be sure, not all courts are in agreement on this issue. See Voelker v. Porsche Cars N. Am., Inc., 353 F.3d 516, 523, 525 (7th Cir.2003) (noting that, under category one, the sale to the buyer must be "`other than for purposes of a resale,'" and that, "whenever a lessor takes title to a car, at least one of its purposes is, presumably, the actual resale of the vehicle"; applying the same analysis to category three). However, the interpretation advanced by Plaintiffs comports with the plain language of the statute, and the parties have not pointed to, e.g., any legislative history suggesting that "resale" as used in the MMWA was meant to cover "lease."
Finally, category three also allows for a lessee to be a consumer. Under category three, a consumer is "any other person who is entitled by the terms of such warranty (or service contract) or under
As for the second subclause, here, it is not clear whether the warranty referred to is a written or implied warranty as defined by the MMWA. See Voelker, 353 F.3d at 525 (stating that, "[f]or Voelker [the plaintiff-lessee] to state a valid claim, ... the New Car Limited Warranty need not meet the definition of written warranty contained in § 2301(6)").
In any event, Plaintiffs who are lessees are entitled under state law to enforce the limited warranty issued by Ford if only because the limited warranty on its face states that it applies both to sales and leases. See Docket No. 57-2 (RJN, Ex. A) (Limited Warranty at 4) (stating that the limited warranty applies if the vehicle "was originally sold or leased by Ford Motor Company or one of its dealers in the United States or U.S. Federalized Territories, and it was originally registered/licensed and operated in the United States, U.S. Federalized Territories, or Canada"); cf. Voelker, 353 F.3d at 524 (finding that plaintiff-lessee was entitled under state law to enforce a new car limited warranty because "Copans [the dealership] ... assigned to [plaintiff] `all
3. Exhaustion
Finally, Ford challenges the MMWA claim on the ground that all Plaintiffs except one (Ms. Makowski) failed to exhaust dispute resolution procedures before asserting the MMWA claim.
Title 15 U.S.C. § 2310(a)(3) provides as follows:
15 U.S.C. § 2310(a)(3).
Here, Ford's limited warranty does require the use of an informal dispute settlement procedure before a claim under the MMWA may be brought in a lawsuit. See Docket No. 57-2 (RJN, Ex. A) (Limited Warranty at 7) ("You are required to submit your warranty dispute to the BBB AUTO LINE before exercising rights or seeking remedies under the [MMWA]."). Notably, Plaintiffs do not dispute this in their papers. Plaintiffs' only contention in their papers is that the "dispute-resolution procedure would be futile due to [Ford's] demonstrated inability to cure the defects in its [MFT] systems." Opp'n at 47; see, e.g., FAC ¶ 14 (alleging that "[o]wner and lessee requests that Ford fix the problems have been futile[;] [d]espite the issuance of the TSBs and the upgrades, Ford does not have a fix for the defect").
Similar to above, the Court recognizes the possibility of a futility exception. See Toyota, 754 F.Supp.2d at 1188-89 (taking note of cases that futility could be an excuse for failure to comply with the dispute resolution mechanism; ultimately concluding that plaintiffs' allegations allowed for an inference of futility). However, as above, based on the allegations in the complaint, the Court cannot say that resort to the informal dispute settlement procedure provided for by Ford would have been futile for each Plaintiff. Accordingly, dismissal of the MMWA claim (without prejudice) is appropriate based on the failure to comply with the informal dispute settlement procedure.
D. Ms. Makowski's Waiver (Connecticut)
Finally, as to one Plaintiff, Ms. Makowski, Ford contends that all warranty-based claims should be dismissed because she actually participated in an informal
In the FAC, Ms. Makowski has three warranty claims: (1) breach of express warranty, see Conn. Gen. stat. Ann. § 42A-2-313; (2) breach of implied warranty, see id. § 42A-2-314; and (3) breach of contract/common law warranty. In their opposition, Plaintiffs concede that the first two claims were released, see Opp'n at 47, but is silent as to the third claim. Ford has made out at least a prima facie showing that the third claim should be dismissed because it must have been resolved at the arbitration hearing. See, e.g., Docket No. 57-4 (RJN, Ex. C) (stating that, "[i]n the original customer claim form that was filed with BBB Auto Line on May 31, 2012 the customer stated that the desired outcome to resolve the concern would be one of the following[:] replace the system, extend the manufacturer warranty or assist the customer in obtaining a new vehicle"). Plaintiffs failed to substantively explain why the third claim should not be dismissed. Thus, the Court agrees with Ford that the third claim should also be dismissed.
E. Claim Under California Secret Warranty Law
Ford challenges Plaintiffs' claim for relief brought pursuant to California's Secret Warranty Law. Under the California Secret Warranty Law, "[a] manufacturer shall, within 90 days of the adoption of an adjustment program, ... notify by first-class mail all owners or lessees of motor vehicles eligible under the program of the condition giving rise to and the principal terms and conditions of the program." Cal. Civ.Code § 1795.92(a). An adjustment program is defined as
Id. § 1795.90(d).
Plaintiffs' secret warranty claim is based on three different theories: (1) that Ford's TSBs constituted an adjustment program; (2) that Ford's decision to pay or give reimbursements for MFT repairs "in some situations" constituted an adjustment program, FAC ¶ 414; and (3) that Ford's Campaign 12M01 constituted an adjustment program. Ford contends that none of these theories supports a viable secret warranty claim.
To the extent Plaintiffs asserts that the TSBs constituted an adjustment program, the Court agrees with Ford. While repairs were made to vehicles pursuant to the TSBs, nothing indicates that the TSBs either expanded or extended the existing warranty on the cars beyond its stated limit. Plaintiffs have simply offered a conclusory allegation that the TSBs expanded or extended the original warranty without any specific factual allegations in support. See FAC ¶ 413 (alleging that the TSBs "were part of a program set forth by Ford where Ford's dealers would repair the defective vehicles free of charge only
As for Plaintiffs' theory that Ford's decision to pay or reimburse for MFT repairs "in some situations," FAC ¶ 414, that clearly is insufficient to support a valid secret warranty claim. As noted above, an "`[a]djustment program' does not include ad hoc adjustments made by a manufacturer on a case-by-case basis." Cal. Civ.Code § 1795.90(d).
However, Plaintiffs' secret warranty claim is viable to the extent Plaintiffs assert that Ford's Campaign 12M01 constituted an adjustment program. Campaign 12M01 meets the definition of an adjustment program because Plaintiffs have alleged that it extended the warranty available on cars. See FAC ¶ 278 ("Ford's Campaign 12M01 extended warranty coverage of the APIM to four years of service from the warranty start date on Ford vehicles and five years on Lincoln vehicles, regardless of mileage."). In addition, Plaintiffs have adequately alleged that Ford failed to timely give notice of this adjustment program. See FAC ¶¶ 410, 415.
Accordingly, Plaintiffs' secret warranty claim is valid to the extent it is based on the alleged adjustment program Campaign 12M01.
F. Summary
For the foregoing reasons, the Court dismisses the following warranty-based claims.
Jennifer Whalen California MMWA claim: dismissed
without prejudice for failure to
follow informal dispute
resolution process
California secret warranty
claim: dismissed in part (claim
based on Campaign 12M01
survives)
All other warranty claims
survive
Center for Defensive Driving California MMWA claim: dismissed (CDD) without prejudice for failure to follow informal dispute resolution process California secret warranty claim: dismissed in part (claim based on Campaign 12M01 survives) All other warranty claims survive Grif Rosser California MMWA claim: dismissed without prejudice for failure to follow informal dispute resolution process California secret warranty claim: dismissed in part (claim based on Campaign 12M01 survives) All other warranty claims survive Megan Raney-Aarons California MMWA claim: dismissed without prejudice for failure to follow informal dispute resolution process California secret warranty claim: dismissed in part (claim based on Campaign 12M01 survives) Richard Decker Watson California MMWA claim: dismissed without prejudice for failure to follow informal dispute resolution process California secret warranty claim: dismissed in part (claim based on Campaign 12M01 survives) All other warranty claims survive
Darcy Thomas-Maskrey California MMWA claim: dismissed without prejudice for failure to follow informal dispute resolution process California secret warranty claim: dismissed in part (claim based on Campaign 12M01 survives) All other warranty claims survive Angela Battle Alabama Express warranty: dismissed with prejudice for failure to provide notice; also dismissed for failure to present car for repair Implied warranty: dismissed with prejudice for failure to provide notice and lack of privity; no leave to file AEMLD claim because such a claim would be futile MMWA claim: dismissed with prejudice to the extent derivative of the express and implied warranty claims above; also dismissed without prejudice for failure to follow informal dispute resolution process This leaves as the only warranty claim the claim for breach of contract/common law warranty
Joe D'Aguanno Arizona Express warranty claim: dismissed with prejudice for lack of privity Implied warranty claim: dismissed with prejudice for lack of privity Claim for breach of contract/common law warranty: claim for common law warranty dismissed with prejudice based on economic loss doctrine (but no dismissal of claim for breach of contract) MMWA claim: dismissed with prejudice to the extent derivative of the express and implied warranty claims above; dismissed without prejudice for failure to follow informal dispute resolution process This leaves as the only warranty claim the claim for breach of contract James Laurence Sheerin Colorado Express warranty claim: dismissed with prejudice for failure to provide notice; also dismissed for failure to present car for repair Implied warranty claim: dismissed with prejudice for failure to provide notice MMWA claim: dismissed with prejudice to the extent derivative of the express and implied warranty claims above; also dismissed without prejudice for failure to follow informal dispute resolution process This leaves as the only warranty claim the claim for breach of contract/common law warranty
Deb Makowski Connecticut Express warranty claim: dismissed with prejudice based on arbitration release Implied warranty claim: dismissed with prejudice based on arbitration release; also dismissed with prejudice for lack of privity Claim for breach of contract/common law warranty: dismissed with prejudice based on arbitration release MMWA claim: dismissed with prejudice as derivative of the express warranty, implied warranty, and breach of contract/common law warranty claims above No warranty claims left George Oremland Florida Implied warranty claim: dismissed with prejudice for lack of privity MMWA claim: dismissed with prejudice to the extent derivative of implied warranty claim above; also dismissed without prejudice for failure to follow informal dispute resolution process This leaves as the only warranty claims the express warranty claim and claim for breach of contract/common law warranty
Thomas Mitchell Iowa Implied warranty claim: dismissed with prejudice for lack of privity MMWA claim: dismissed with prejudice to the extent derivative of implied warranty claim above; also dismissed without prejudice for failure to follow informal dispute resolution process This leaves as the only warranty claims the express warranty claim and claim for breach of contract/common law warranty William Creed Massachusetts MMWA claim: dismissed without prejudice for failure to follow informal dispute resolution process All other warranty claims survive Joshua Matlin New Jersey MMWA claim: dismissed without prejudice for failure to follow informal dispute resolution process All other warranty claims survive Russ Rizzo New Jersey MMWA claim: dismissed without prejudice for failure to follow informal dispute resolution process All other warranty claims survive
Jeffrey Miller New York Express warranty claim: dismissed without prejudice for failure to present car for repair Implied warranty claim: dismissed with prejudice for lack of privity MMWA claim: dismissed with/without prejudice to the extent derivative of express and implied warranty claims above; also dismissed without prejudice for failure to follow informal dispute resolution process This leaves as the only warranty claim the claim for breach of contract/common law warranty Nuala Purcell New York Implied warranty claim: dismissed with prejudice for lack of privity MMWA claim: dismissed with prejudice to the extent derivative of implied warranty claim above; also dismissed without prejudice for failure to follow informal dispute resolution process This leaves as the only warranty claims the express warranty claim and claim for breach of contract/common law warranty Daniel Fink North Carolina MMWA claim: dismissed without prejudice for failure to follow informal dispute resolution process All other warranty claims survive
Jason Zuchowski Ohio Express warranty claim: dismissed without prejudice for failure to present car for repair MMWA claim: dismissed without prejudice to the extent derivative of express warranty claim above; also dismissed without prejudice for failure to follow informal dispute resolution process This leaves as the only warranty claims the implied warranty claim and claim for breach of contract Art Avedisian Pennsylvania MMWA claim: dismissed without prejudice for failure to follow informal dispute resolution process All other warranty claims survive Jose Randy Rodriguez Texas Express warranty claim: dismissed with prejudice for failure to provide notice Implied warranty claim: dismissed with prejudice for failure to provide notice MMWA claim: dismissed with prejudice to the extent derivative of the express and implied warranty claims above; also dismissed without prejudice for failure to follow informal dispute resolution process This leaves as the only warranty claim the claim for breach of contract/common law warranty
Michael Ervin Texas Express warranty claim: dismissed with prejudice for failure to provide notice Implied warranty claim: dismissed with prejudice for failure to provide notice MMWA claim: dismissed with prejudice to the extent derivative of the express and implied warranty claims above; also dismissed without prejudice for failure to follow informal dispute resolution process This leaves as the only warranty claim the claim for breach of contract/common law warranty Jason Connell Virginia MMWA claim: dismissed without prejudice for failure to follow informal dispute resolution process All other warranty claims survive Henry Miller-Jones Virginia MMWA claim: dismissed without prejudice for failure to follow informal dispute resolution process All other warranty claims survive
V. CONCLUSION
For the foregoing reasons, Ford's motion to dismiss is granted in part and denied in part. The Court's specific rulings on the fraud/tort and warranty claims can be found in Part IV.C and V.F.
This order disposes of Docket No. 56.
IT IS SO ORDERED.
FootNotes
Hiigel, 544 P.2d at 986 (internal quotation marks omitted).
FAC ¶ 361 (emphasis added). The Court, however, does not address Plaintiffs' other arguments as they were not specifically raised in their opposition brief.
Id. at 548. Arguably, however, the phrase "the warranty" is arguably used not only for purposes of the second subclause but for purposes of the first subclause (i.e., a person entitled by the terms of "such warranty' to enforce the obligations of "the warranty"). Nothing on the face of the statute suggests that phrase "the warranty" should have different meanings for the two subclauses. See, e.g., DiCintio v. DaimlerChrysler Corp., 97 N.Y.2d 463, 742 N.Y.S.2d 182, 768 N.E.2d 1121, 1126-27 (N.Y.2002) (stating that the "warranty" referred to in either the first or second subclause of category three "must be a written or implied warranty as defined [under the MMWA], and, as such, must arise in connection with a sale").
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