Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Butler v. Sears

November 4, 2009

LARRY BUTLER, JOSEPH LEONARD, KEVIN BARNES, VICTOR MATOS, ALFRED BLAIR, AND MARTIN CHAMPION, INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED, AND ALAN JARASHOW, LAUREN CRANE, AND LAWRENCE L'HOMMEDIEU, INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED, AND JOHN BETTUA, GIUSEPPINA P. DONIA, DERRAL HOWARD, DENISE MILLER, CHARLES NAPOLI, VIC PFEFER, JEFFREY A. AND SANDRA K. ROBINSON, INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED, PLAINTIFFS,
v.
SEARS, ROEBUCK AND CO., DEFENDANT.



The opinion of the court was delivered by: Judge Joan H. Lefkow

OPINION AND ORDER

Plaintiffs, owners of Kenmore HE2, HE2t, HE3, HE3t, HE4t, HE5t, and other front-loading automatic washers (collectively, "washing machines"), filed an Amended Consolidated Class Action Complaint (hereinafter "Consolidated Complaint") against Sears, Roebuck and Co.*fn1 ("Sears"). Plaintiffs allege breach of written warranties (Counts I and III), breach of implied warranties (Counts II and V), violation of their respective home states' consumer protection statutes (Counts IV and VI-XXI), and unjust enrichment (Count XXII). Before the court is Sears's motion to dismiss Counts IV and VI-XXII under Federal Rules of Civil Procedure 9(b) and 12(b)(6). For the following reasons, Sears's motion [#141] is granted in part and denied in part.

BACKGROUND*fn2

In their Consolidated Complaint, plaintiffs allege that the washing machines they bought from Sears suffer from electronic control board failure and a serious design defect that prevents adequate water drainage and proper self-cleaning. Consol. Compl. ¶ 2. The water drainage and cleaning defect allegedly results in foul odors on clothes and in homes and the washing machines being virtually unusable. Id. Plaintiffs contend that the electronic control board failure is manifested by the washing machines prematurely and repeatedly failing mechanically, stopping or not starting, and displaying error codes, in addition to the washing machine door remaining locked. Id. Plaintiffs assert that the number of washing machines that have experienced electronic control board failure and self-cleaning and drainage problems exceeds industry standards, making the failure rate a material fact that should have been disclosed to purchasers. Id. ¶¶ 57-59. Reportedly, at least 22,987 of washing machines (1.5%) have required electrical control board repairs, and at least 15,538 (1%) have had mold issues. Id. ¶ 58. Plaintiffs aver that industry standards require a failure rate below .01% for electromechanical defects and that "washing machines having the ability to self-clean through and after each washing cycle are 100% of all units short of some defect in design and manufacturing." Id. ¶ 57.

Sears is alleged to have known about the defects because (1) there had been similar problems with Calypso washing machines, which Sears had marketed and sold, id. ¶ 60; (2) plaintiffs notified Sears of the defects beginning in late 2004, id. ¶ 62; and (3) Sears had received many complaints of mold problems by the end of 2002. Id. Plaintiffs assert that, despite having knowledge of the problems with the washing machines, Sears has never disclosed them but has instead continued to represent that the washing machines are "dependable and effective" and provide "outstanding cleaning." Id. ¶¶ 39, 61. As a result, plaintiffs contend that Sears has violated their respective home states' consumer fraud statutes.

Prior versions of these allegations have been the subject of three motions to dismiss. In Munch I, the court dismissed the Munch plaintiffs' claims for violation of their home state consumer fraud statutes and unjust enrichment. Munch I, 2007 WL 2461660. After considering the Munch plaintiffs' amended complaint, in Munch II, these same claims were dismissed with prejudice, as the court found that the Munch plaintiffs had not cured the pleading defects identified in Munch I. Munch II, 2008 WL 4450307. In Bettua, the court dismissed claims for violation of consumer fraud statutes and unjust enrichment, finding that, "as in Munch, plaintiffs' allegations are insufficiently specific to show a deceptive practice or to permit an inference of materiality, fail to identify a specific point at which the defendant clearly knew of the defect yet conveyed an opposite message to plaintiffs, and fail to provide an engineering explanation for the alleged defect." Bettua, 2009 WL 230573, at *3.

Upon consolidation, plaintiffs were given leave to file a consolidated amended complaint, see Dkt. No. 129, which they did on February 27, 2009. Sears again moved to dismiss Counts IV and VI-XXII of the Consolidated Complaint. Sears claims that (1) Count IV, alleging violation of California's Song-Beverly Act, is time-barred; (2) Counts VII, X-XVI, XX, and XXII, alleging violations of the consumer protection laws of California, Illinois, Indiana, Kentucky, Michigan, Minnesota, New Jersey, New York, and Washington, and unjust enrichment pursuant to the laws of these states, on behalf of the Munch plaintiffs cannot be realleged because they were dismissed with prejudice in Munch II; and (3) Counts VI, VIII, IX, XVII-XIX, XXI, and XXII, alleging violations of the consumer protection laws of Arizona, Colorado, Florida, Ohio, Oklahoma, Pennsylvania, and Wisconsin, and unjust enrichment pursuant to the laws of these states, do not meet Rule 9(b)'s requirements. Def.'s Mot. at 1-2.

LEGAL STANDARD

A motion to dismiss under Rule 12(b)(6) challenges a complaint for failure to state a claim upon which relief may be granted. See Fed. R. Civ. P. 12(b)(6); General Elec. Capital Corp. v. Lease Resolution Corp., 128 F.3d 1074, 1080 (7th Cir. 1997). The court accepts as true all well-pleaded facts in the plaintiff's complaint and draws all reasonable inferences from those facts in the plaintiff's favor. Dixon v. Page, 291 F.3d 485, 586 (7th Cir. 2002). In order to survive a Rule 12(b)(6) motion, the complaint must not only provide the defendant with fair notice of the claim's basis, but must also establish that the requested relief is plausible on its face. Ashcroft v. Iqbal, --- U.S. ----, 129 S.Ct. 1937, 1949, 173 L.Ed. 2d 868 (2009); see also Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed. 2d 929 (2007). Allegations of fraud are subject to the heightened pleading standard of Rule 9(b), which requires a plaintiff to "state with particularity the circumstances constituting fraud or mistake." Fed. R. Civ. P. 9(b). This means that the plaintiff must plead the "who, what, when, where, and how: the first paragraph of any newspaper story." DiLeo v. Ernst & Young, 901 F.2d 624, 627 (7th Cir. 1990).

DISCUSSION

I. Song-Beverly Act (Count IV)

Plaintiffs allege a violation of California's Song-Beverly Consumer Warranty Act ("Song-Beverly Act"), Cal. Civil Code § 1790 et seq., on behalf of plaintiff Blair, a California citizen.Blair was substituted as a plaintiff for Stephen Papaleo after Sears filed the instant motion to dismiss, after which plaintiffs were given leave to file an amended complaint consistent with the party substitutions made.*fn3 See Dkt. Nos. 161, 163. Sears argues that Count IV must be dismissed because Papaleo, previously named as the class representative for California purchasers of the washing machines, was time-barred from bringing a claim under the Song-Beverly Act. See Def.'s Mem. at 12-13. As Papaleo is no longer involved in the litigation, the court will evaluate Sears's contention with respect to Blair.

The Song-Beverly Act provides a buyer with a remedy for the violation of an implied warranty of merchantability for consumer goods. Cal. Civil Code § 1791.1(d).Section 1791.1(c) addresses the duration of this implied warranty, specifically providing that "in no event shall such implied warranty have a duration of less than 60 days nor more than one year following the sale of new consumer goods to a retail buyer." Id. § 1791.1(c).Sears maintains that this durational provision means that the problems underlying an implied warranty claim must manifest themselves within a one-year period. Def.'s Mem. at 12; Def.'s Reply at 11. Plaintiffs argue that the implied warranty is breached at the time of sale and thus, because the washing machines were defective when sold, the durational provision would not bar an action under the Song-Beverly Act even if problems were alleged to have manifested themselves only after the one-year durational period. Pls.' Resp. at 23-24.

Whether a plaintiff bringing a claim under the Song-Beverly Act must allege that problems arose within the year after purchase is a question the court need not decide here.*fn4 Blair alleges that he bought his washing machine on February 12, 2005 and started experiencing problems within the first year of ownership. Consol. Compl. ΒΆ 8. He further alleges that he contacted Sears within that year to report his problems with the washing machine. Id. Thus, his claim would not be barred by the durational provision of the Song-Beverly Act under Sears's or plaintiffs' interpretations as the ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.