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Lawrence John Hackett, et al. v. Bmw of North American

June 30, 2011

LAWRENCE JOHN HACKETT, ET AL.
v.
BMW OF NORTH AMERICAN, LLC, A DELAWARE LIMITED LIABILITY COMPANY



Name of Assigned Judge Harry D. Leinenweber Sitting Judge if Other or Magistrate Judge than Assigned Judge

CASE TITLE

DOCKET ENTRY TEXT

BMW's Motion Pursuant to Rule 12(b)(1) is denied. BMW's Motion Pursuant to Rule 12(b)(6) is Denied with respect to Count One (breach of warranty), Granted without prejudice with respect to Count Two (Breach of Implied Warranty), Granted without prejudice with respect to Count Three (Unjust Enrichment), and Granted with prejudice with respect to Count Four (Illinois Consumer Fraud Act). Defendant's Motion to Strike the Class Allegations is Denied. Status hearing set for 7/20/2011 at 9:00 a.m. O[ For further details see text below.] Docketing to mail notices.

STATEMENT

The Plaintiff has brought a putative class action lawsuit against BMW alleging that he had purchased a BMW automobile that was equipped with a "N54 3.0 liter twin turbo-inline 6 engine." According to the Complaint, Plaintiff's vehicle, as well as the vehicles of all other purchasers of BMWs of the type purchased by Plaintiff, was equipped with a defective high pressure fuel pump (the "HPFP"). When the HPFP fails, the vehicle goes into a "limp mode," which is described as a highly reduced power mode. BMW's response was to either change the software in the vehicle or replace the fuel pump with another pursuant to a product recall. BMW contends that as a result of the recall repair, neither the Plaintiff's vehicle nor the other similar vehicles any longer go into "limp mode." However, Plaintiff alleges in his Complaint that the HPFP "continues to not accelerate as it did immediately after purchase" despite BMW'S repair efforts. Based on this alleged injury Plaintiff brings three causes of action: breach of warranty, breach of implied warranty of merchantability, common law unjust enrichment, and violation of the Illinois Consumer Fraud Act. BMW has moved to dismiss the Complaint alleging that Plaintiff lacks standing (Rule 12(b)(1), has failed to state a claim (Rule 12(b)(6), and to strike the class allegations.

I. The Rule 12(b) (1) Motion

Since the question of standing raises jurisdictional questions, the Court will deal with this Motion first. According to BMW, the Plaintiff has no standing because the HPFP in his vehicle has not failed and the only injury he claims is an alleged economic injury from diminished value as a result he overpaid for the car. Plaintiff's argument is that the reputation of the car has been injured so that the market value of the car is not what was promised. He also alleges that the HPFP in his car did not work properly, and, although BMW attempted to repair the HPFP on several occasions. He further alleges that "[t]he vehicle continues to not accelerate or perform as it did immediately after purchase." This describes an injury. Thus it appears that Plaintiff does have standing to bring a case in federal court. In re Toyota unintended Acceleration Marketing Sales Practices, 754 F.Supp.2d 1145 (D.D. Cal. 2010).

II. Breach of Warranty Count

Plaintiff's Complaint alleges that despite the express warranty given by BMW, it has refused or has been unable to correct the flaw in the HPFP. This is sufficient to state a cause of action for breach of warranty. BMW alleges that it fixed the HPFP pursuant to its obligation under the warranty but this is a Rule 12(b)(6) motion, not one for summary judgment. BMW always describes Plaintiff's Complaint as one for loss of value due to "unmanifested defects," as do the cases it cites. However, the Complaint speaks of a defect, i.e., a HPFP that causes the vehicle to go into "limp mode." This is certainly a "manifested defect." BMW argues that an owner must give the Defendant the opportunity to repair the product under warranty. However, the Complaint clearly alleges that BMW had at least three chances to repair the vehicle but was unable to do so successfully. The Motion to Dismiss Count One is denied.

III. Breach of Implied Warranty Count

Count Two alleges a claim for breach of implied warranty. BMW moves to dismiss on the ground of lack of privity between Plaintiff and BMW. The Plaintiff admits that privity is required under Illinois law, but claims that the dealers were agents of BMW and a purchaser can establish privity with a manufacturer through a dealer-agent. Connick F. Suzuki Motor Co., Ltd., 174 Ill.2d 482, 498 (Ill. 1996). However, as stated in Connick, a plaintiff must allege more than the dealer was an authorized dealer and must include facts that, if proved, could establish the existence of an agency relationship. Id. Plaintiff's Complaint mirrors the allegations in Connick's complaint and is therefore insufficient. Count Two is dismissed without prejudice.

IV. Unjust Enrichment

BMW moves to dismiss the unjust enrichment count because it is only available where there is no adequate remedy at law such as breach of contract. Guinn v. Hoskins Chevrolet, 361 Ill App. 3d 575, 604 (1st Dist. 2005). Plaintiff claims that he is merely pleading in the alternative as allowed in Guinn. However, as Guinn points out, a plaintiff must clearly plead in the alternative and not allege the existence of a contract in the unjust enrichment count as Plaintiff has done here. It is clear from ...


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