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Prescott v. Argen Corporation

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

September 17, 2014

MATTHEW PRESCOTT, DDS, GINA TAMBORNINI, DDS, and ROY JOSEPH, DMD, Plaintiffs,
v.
ARGEN CORPORATION, et al., Defendants.

MEMORANDUM OPINION AND ORDER

MANISH S. SHAH, District Judge.

Plaintiffs, who are dentists and dental professionals, complain that dental crowns they purchased were not as advertised. Instead of being durable, the crowns fractured in a matter of months. As result, plaintiffs claim injuries owing to fraud, negligence, breach of warranty, and strict products liability, and they seek to certify a class of similarly injured professionals.

Two companies that allegedly made the dental crowns-as well as one of their CEOs-now move to dismiss for failure to state a claim. For the following reasons, the motions are granted.

I. Legal Standard

"A motion under Rule 12(b)(6) tests whether the complaint states a claim on which relief may be granted." Richards v. Mitcheff, 696 F.3d 635, 637 (7th Cir. 2012). Under Rule 8(a)(2), a complaint must include "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed.R.Civ.P. 8(a)(2). The short and plain statement under Rule 8(a)(2) must "give the defendant fair notice of what the claim is and the grounds upon which it rests." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quotation omitted). Under the federal notice pleading standards, a plaintiff's "[f]actual allegations must be enough to raise a right to relief above the speculative level...." Twombly, 550 U.S. at 555. Put differently, a "complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 570). "In reviewing the sufficiency of a complaint under the plausibility standard, [the court] accept[s] the well-pleaded facts in the complaint as true...." Alam v. Miller Brewing Co., 709 F.3d 662, 665-66 (7th Cir. 2013).

II. Background

The Captek Nano dental crown was introduced in 2007. Dkt. 35 ¶¶ 24, 26. This redesigned crown differed from its predecessors in that it contained a smaller amount of gold-a potentially significant development at the time given the commodity's increasing price. Id. The new design was flawed, however, because the Nano crown was "incapable over time of withstanding the ordinary everyday forces of human chewing[.]" Id. ¶ 24. Under the new design, "the metal and porcelain fail[ed] to sufficiently bind together, causing a failure at the junction of the two materials, and causing the porcelain generally to fracture." Id. ¶ 25.

Defendant Precious Chemicals USA, Inc. designed, manufactured, sold, distributed, and marketed the Nano crown beginning in 2007. Id. ¶ 8. Defendant Argen Corporation did the same, but starting in January 2011.[1] Id. ¶ 9. Throughout these respective periods of time, both Precious Chemicals and Argen were aware of the "defective and structurally unsound nature" of the Nano crown. Id. ¶ 27. Nevertheless, they continued to manufacture, sell, distribute, and market the Nano crown throughout the United States. Id. ¶ 28.

From 2007 to the date plaintiffs began this action, Louis Azzara and Nick Azzara-employees of both Precious Chemicals and Argen-"used numerous methods [to] advertis[e] the Nano crown, including... posting information on... www.argen.com and [www.captek.com], [and] print[ing] brochures, leaflets, fliers, pamphlets and similar advertising materials. Id. ¶ 30. "[O]ther members of Argen's and Precious Chemicals' marketing staff" did the same. Id. Precious Chemicals, Argen, and the Azzaras also all persuaded various dental laboratories-including defendants Premium Dental Lab, Inc. and Jade Dental Laboratory Group, Inc.-to direct these advertisements to plaintiffs. Id. ¶ 32.

Rather than reveal the true defective nature of the Nano crown, these advertisements falsely represented that: (1) "the Captek Nano technology enable[d] the creation of long-lasting crowns'"; (2) "the Captek Nano d[id] not change over time [and that] [t]here [would] never be any corrosion and [it would] not deteriorate over time... the optical esthetics of the final crown [would] last for many years'"; (3) "the Captek Nano's advanced technology combine[d] all the advantages of high-purity gold, without sacrificing the strength'"; and (4) "years of research and patient satisfaction ha[d] proven that Captek crowns [were] durable, accurate, attractive high-purity gold, without sacrificing the strength.'" Id. ¶ 66.

Plaintiffs Matthew Prescott, Gina Tambornini, and Roy Joseph were dentists and dental professionals who viewed these advertising materials and relied on them in deciding to purchase[2] Nano crowns and implant them into their patients. Id. ¶¶ 1, 31, 38. Plaintiffs eventually realized the Nano crowns were defective and unfit, so they "directly inform[ed] their dental laboratory representative(s) of the defective and unfit nature of the crowns and placed them on notice and apprised them of the trouble with the Captek Nano crown." Id. ¶ 40. "In turn, representatives of Premium [Dental Lab], and Jade [Dental Lab]... did directly inform and place Precious Chemicals and Argen on notice of the crown's defects and appris[ed] them of the trouble with the Captek Nano crown." Id. ¶ 41.

As a result of both the crown's defects and the defendants' false representations, "patients of Plaintiffs... experienced great pain and suffering and were required to undergo additional oral surgeries in an effort to resolve the issue[s] caused by [d]efendants' product." Id. ¶ 42. More relevant to this action, though, plaintiffs "were required to extract the defective crowns, order new crowns and seat the new crowns, which required their additional time, valued at their average dental rate, their out-of-pocket expense for [the] purchase of new crowns, and additional lab and technician costs." Id. ¶ 44.

In their First Amended Class Action Complaint, plaintiffs allege claims for (1) breach of the implied warranty of merchantability, (2) fraudulent misrepresentation, (3) violation of the Illinois Consumer Fraud and Deceptive Business Practices Act, (4) negligence, and (5) strict products liability, against defendants Argen, Anton Woolf (Argen's CEO), Precious Chemicals, Louis Azzara, Nick Azzara, Premium Dental Lab, and Jade Dental Lab. Id. at 12-21.[3]

Defendants Argen and Woolf jointly moved to dismiss Counts I-III for failure to state a claim, while Precious Chemicals moved to dismiss Counts I-V. All movants offer the same arguments as to Counts I-III.[4]

III. Analysis

A. Breach of Implied Warranty (Count I)

Under section 2-607 of the Uniform Commercial Code, a "buyer must within a reasonable time after he discovers or should have discovered any breach notify the seller of [the] breach or be barred from any remedy...." 810 ILCS 5/2-607(3)(A). "The content of the notification need merely be sufficient to let the seller know that the transaction is still troublesome and must be watched." 810 ILCS 5/2-607 cmt. 4. Notice must be given directly. See Connick v. Suzuki Motor Company, Ltd., 174 Ill.2d 482, 492 (1996). While the buyer's notice may be excused if the seller has actual knowledge of trouble with a particular product purchased by the particular buyer, a seller's general awareness of problems with the product line is insufficient. Id. at 492-94. Here, defendants argue that Count I ...


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