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Stavropoulos v. Hewlett-Packard Co.

United States District Court, N.D. Illinois, Eastern Division

June 9, 2014

NECTOR STAVROPOULOS, individually and as the representative of a class of similarly situated persons, Plaintiff,
v.
HEWLETT-PACKARD COMPANY, Defendant.

OPINION AND ORDER

SARA L. ELLIS, District Judge.

Plaintiff Nector Stavropoulos ("Stavropoulos") brings this putative nation-wide class action against Defendant Hewlett-Packard Company ("HP") for breach of express warranty, consumer deceptive practices, and unjust enrichment. In his Amended Complaint [20], Stavropoulos alleges HP sold him a fax machine that it knew had a defect rendering the machine unsafe and unusable. Stavropoulos states HP sold approximately 928, 000 of these fax machines (models 1040 and 1050) even though HP knew they contained the same electrical components as certain prior models that were recalled. Stavropoulos' fax machine, along with the other 1040/1050 models, was the subject of a voluntary recall in 2012 based on some instances of the machines overheating and catching fire. HP brings this motion to dismiss [33] on the basis that all of Stavropoulos' claims fail. Because the Court finds Stavropoulos' breach of warranty claim is sufficiently pled, HP's motion is denied as to Count I. Because Stavropoulos does not plead the deceptive trade practices claim with specificity, HP's motion is granted as to Count II (deceptive trade practices) and Count III (unjust enrichment).

BACKGROUND[1]

In or around 2010, Stavropoulos purchased an HP 1040 model fax machine at a retail location in DuPage County, Illinois, for $119.00 plus sales tax. Stavropoulos' 1040 model fax had a written one-year limited warranty ("Warranty"). That Warranty specifically guarantees to the end-user customer that the product will be free from defects in material and workmanship for a period of one year. Am. Compl. Ex. 2.[2] The Warranty further states:

If HP receives, during the applicable warranty period, notice of a defect in any product, HP shall either repair or replace the defective Product, at HP's option.
If HP is unable to repair or replace, as applicable, a defective product which is covered by HP's warranty, HP shall, within a reasonable time after being notified of the defect, refund the purchase price for the Product.
HP shall have no obligation to repair, replace, or refund until the customer returns the defective product to HP.

Id. Between November 2004 and December 2011, HP sold approximately 928, 000 such 1040 and 1050 model fax machines ("1040" and "1050, " respectively) through retail and online outlets or through its own website.

The 1040 and 1050 were successor products to HP's 1010 and 1010xi fax machines ("1010" and "1010xi"), and used many of the same components in their construction and design, including the power supply and associated electrical components. On June 26, 2008, HP issued a recall and rebate for the 1010 and 1010xi models for a product failure and potential safety issue related to a defect in the power supply that could cause the models to overheat and catch fire. The recall and rebate terms were a $100 rebate if consumers purchased a replacement model-a 1040 or 1050.

On January 31, 2012, HP issued a recall and rebate for the 1040s and 1050s, instructing consumers to stop using the machines, to disconnect the machines from electrical power sources, and to contact HP to participate in a rebate program. Stavropoulos alleges that the 1040/1050 recall was the result of the same defect that caused the 1010/1010xi recall and that HP knew the 1040/1050 contained the same defect that made the 1010/1010xi a fire hazard. The rebate program offered consumers between $19.00 and $100.00 to apply toward the purchase of other HP products. The designated HP replacement products all cost more than the applicable rebate amount.

Stavropoulos did not receive any mailing or communication from HP about the recall; HP posted information about the recall on its website. When Stavropoulos learned about the recall in early 2013, he disconnected his 1040 and has not used it since. Stavropoulos would not have purchased the 1040 if he had known that it posed a fire and burn risk.

Stavropoulos contacted HP by letter on June 16, 2013 and again on June 27, 2013, notifying HP that it had breached the warranty for his 1040 because he could no longer use the machine. HP responded that it would not cure the asserted breach and would not provide a full refund.

LEGAL STANDARD

A motion to dismiss under Rule 12(b)(6) challenges the sufficiency of the complaint, not its merits. Fed.R.Civ.P. 12(b)(6); Gibson v. City of Chicago, 910 F.2d 1510, 1520 (7th Cir. 1990). In considering a Rule 12(b)(6) motion to dismiss, 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. AnchorBank, FSB v. Hofer, 649 F.3d 610, 614 (7th Cir. 2011). To survive a Rule 12(b)(6) motion, the complaint must not only provide the defendant with fair notice of a claim's basis but must also be facially plausible. Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 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). "A claim ...


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