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Schwebe v. AGC Flat Glass North America, Inc.

United States District Court, Seventh Circuit

May 16, 2013

KATHERINE SCHWEBE and ARMIN SCHWEBE, individually and on behalf of all others similarly situated, Plaintiffs,
v.
AGC FLAT GLASS NORTH AMERICA, INC., CUSTOM ALUMINUM PRODUCTS, INC. d/b/a CASCO INDUSTRIES, CASCO INDUSTRIES, INC., and DOES 1-20, Defendants.

MEMORANDUM OPINION

CHARLES P. KOCORAS, District Judge.

This matter comes before the Court on the motion of Defendants AGC Flat Glass North America, Inc. ("AGC") and Custom Aluminum Products, Inc. ("Casco") (collectively "Defendants") to dismiss the putative class action brought by Plaintiffs Katherine and Armin Schwebe (the "Schwebes") pursuant to Federal Rule of Civil Procedure 12(b)(6). For the reasons set forth below, AGC's motion is granted in its entirety. Casco's motion is granted in part and denied in part.

BACKGROUND

The following facts are alleged in the complaint which the Court is obligated to accept as true for purposes of the motion. Casco, an Illinois corporation d/b/a Casco Industries and Casco Industries, Inc., manufactures windows, doors, and other building product accessories. AGC, a Delaware corporation, manufactures and supplies a variety of glass products to the construction industry. From 2004 through 2008, AGC supplied all glass products used by Casco.

On or about October 19, 2005, the Schwebes purchased Casco windows containing AGC glass for their residence in Naperville, Illinois. The windows had a latent defect-window seal failures. A window seal failure occurs when the sealant containing the gas between the two panes of glass is defective and allows the gas to leak out and moisture to seep into the space between the two panes of glass. A glass seal failure is evidenced by the presence of moisture condensation on the inside of the glass, causing the window to become obscured or foggy.

A few months after the windows were installed, the Schwebes noticed a stress crack in the glass of one of the windows. Casco attributed this problem to faulty installation but replaced the windows on November 21, 2005. Late in the summer of 2012, the Schwebes began to notice condensation between their Casco window panes and reported this to a Casco customer service representative on November 9, 2012. On November 12, 2012, a Casco service technician inspected the faulty windows, attributing the damage to faulty installation. Based on the technician's inspection, Casco sent a letter to the Schwebes and denied a full reimbursement for a window replacement. Casco relied on a limited warranty, which was different from that which had accompanied the original purchase in 2005. In addition to the condensation in the Schwebes' windows, there was standing water between the panes of some of them, a rust-colored substance on some of the windowsills, and carpet staining. On December 12, 2012, the Schwebes filed the current putative class action on behalf of themselves as well as all other similarly situated plaintiffs against AGC, Casco, and twenty Doe Defendants who, like Casco, are manufacturers who received glass from AGC for use in windows. The complaint alleges that Defendants violated the Illinois Consumer Fraud and Deceptive Business Practices Act ("ICFA"), 815 Ill. Comp. Stat. Ann. 505/1 et seq., and the separate consumer fraud statutes of forty-one other states (Count I). The Schwebes also seek injunctive relief pursuant to the Uniform Deceptive Trade Practices Act ("UDTPA"), 815 Ill. Comp. Stat. Ann. 510/1 et seq. (Count II). Count III alleges common law fraud by omission, and Count IV seeks monetary relief based on an implied warranty of merchantability. Count V seeks a declaratory judgment pursuant to 28 U.S.C. ยง 2201 that Casco's limited warranties regarding the one-year full warranty and ten-year half-cost warranty time limitations on manufacturing defects in material or workmanship are void, invalid and unenforceable.

The Schwebes seek individual damages and attorneys' fees for themselves and other class members, plus costs and interests. The Schwebes also seek imposition of a constructive trust for amounts wrongfully collected from them and other class members by Defendants during the pendency of this litigation, as well as an order by this Court compelling Defendants to establish a program to inspect and replace Defendants' defective windows with non-defective ones and to reimburse customers for warranty claims previously denied or paid in part, plus external costs that customers have borne in repairing and/or replacing defective windows. On February 8, 2013, AGC moved to dismiss the complaint pursuant to Rule 12(b)(6), and Casco followed suit on February 13, 2013.

LEGAL STANDARD

A Rule 12(b)(6) motion to dismiss tests the legal sufficiency of the complaint. Szabo v. Bridgeport Machs., Inc., 249 F.3d 672, 675 (7th Cir. 2001). The allegations in a complaint must set forth a "short and plain statement of the claim showing that the pleader is entitled to relief." Fed.R.Civ.P. 8(a)(2). A plaintiff need not provide detailed factual allegations and merely must provide enough factual support to raise his right to relief above a speculative level. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). A claim must be facially plausible, meaning that the pleadings must allow the court to draw the reasonable inference that the defendant is liable for the purported misconduct. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).

Allegations of fraud, however, subject a complaint to the heightened pleading standards set forth under Rule 9(b). For "all averments of fraud or mistake, the circumstances constituting fraud or mistake shall be stated with particularity." Fed.R.Civ.P. 9(b). In other words, the complaint must allege "the who, what, when, where, and how: the first paragraph of a newspaper story." Borsellino v. Goldman Sachs Grp., 477 F.3d 502, 507 (7th Cir. 2007). Not every aspect of the fraud claim must be pleaded with particularity, however, for "[m]alice, intent, knowledge, and other conditions of a person's mind may be alleged generally." Fed.R.Civ.P. 9(b).

DISCUSSION

I. Motion to Dismiss by AGC

A. ICFA Claim

AGC contends that the Schwebes have not pleaded with particularity the necessary facts to sustain a claim under the ICFA. The heightened pleading requirements of Rule 9(b) apply to ICFA claims. Pirelli Armstrong Tire Corp. Retiree Med. Benefits Trust v. Walgreen Co., 631 F.3d 436, 441 (7th Cir. 2011). To state a claim under the ICFA, a plaintiff must allege that: (i) the defendant engaged in a deceptive or unfair practice; (ii) the defendant intended for the plaintiff to rely on the deception; (iii) the deception occurred in the course of conduct involving trade or commerce; (iv) the plaintiff sustained actual damages; and (v) such damages were proximately caused by the defendant's deception. Martis v. Pekin Mem'l Hosp., Inc., 917 N.E.2d 598, 603 (Ill.App.Ct. 2009). A plaintiff cannot maintain an action under the ICFA for a deceptive practice sans a communication from the defendant containing either a deceptive misrepresentation or omission. De Bouse v. Bayer AG, 922 N.E.2d 309, 318 (Ill. 2009). In the instant case, the Schwebes have not pleaded any facts that would support a reasonable inference that AGC communicated with them at any time. The Schwebes do not ...


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