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Schiesser v. Ford Motor Co.

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

October 28, 2016

DAVID SCHIESSER, on behalf of himself and all others similarly situated, Plaintiff,
v.
FORD MOTOR COMPANY, Defendant.

          MEMORANDUM OPINION AND ORDER

          JOHN W. DARRAH United States District Court Judge.

         On April 11, 2016, Plaintiff filed a First Amended Complaint, a putative class action, alleging breach of express warranty; violations of the Magnuson-Moss Act, 15 U.S.C. § 2301, et seq.; violations of the Illinois Uniform Deceptive Trade Practices Act, 815 ILCS 510/1, et seq.; and the Illinois Consumer Fraud and Deceptive Business Practices Act, 815 ILCS 505/1 et seq., as well as a claim of common-law fraud related to Defendant's sale and lease of certain vehicles from 2011 to 2015. Defendant filed a Motion to Dismiss the First Amended Complaint [25] pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim for which relief can be granted. For the reasons discussed below, Defendant's Motion to Dismiss [25] is granted.

         BACKGROUND

         Plaintiff, David Schiesser (“Plaintiff” or “Schiesser”), is a resident of Illinois. (Am. Compl. ¶ 3). Defendant, Ford Motor Company (“Ford” or “Defendant”), is a Delaware corporation with its principal place of business in Dearborn, Michigan. (Id. ¶ 4). Defendant is a merchant in the business of manufacturing, marketing, and selling vehicles. (Id. ¶ 61).

         In his First Amended Complaint (“FAC”), Plaintiff alleges that in June 2012, he purchased a model year 2013 Ford Explorer vehicle (“Vehicle”) manufactured by Defendant. (Id. ¶ 51.) Plaintiff alleges that the warranty applicable to his vehicle, Ford's New Vehicle Limited Warranty, states that it is limited to three years from the date of purchase or 36, 000 miles (“Warranty”). (Id. ¶¶ 58, 60). The Warranty promises that, while under the applicable coverage period, an authorized Ford dealership would, without charge, repair, replace, or adjust all parts on a vehicle that are affected by factory defects. (Id. ¶ 58). The Warranty is “limited to repair, replacement, or adjustment of defective parts and the duration of any implied warranty ‘including the implied warranty of merchantability and fitness for a particular purpose, are limited to the duration of the original warranty.'” (Id.). Ford's warranty allegedly purports to disclaim responsibility for “loss of time, ” “loss of your transportation or use of the vehicle, ” “the cost of rental vehicles, fuel, telephone, travel, meals, or lodging, the loss of personal or commercial property, the loss of revenue, or for any other incidental or consequential damages you may have.” (Id. ¶ 60.)

         Plaintiff alleges that since 2011, Defendant has been aware that the exhaust system of certain vehicles it designed and manufactured, including the vehicle he purchased, is defective because exhaust odor and gases, including carbon monoxide, enter into the vehicle's passenger compartment (the “Defect”). (Id. ¶¶ 1, 8, 9, 10, 13, 23, 32, 34, 49, 64). Because of the Defect, Plaintiff alleges, he is at risk of inhaling the fumes, which could cause serious physical harm; and the Defect makes his Vehicle unreasonably dangerous and unfit for safe operation. (Id. ¶ 56). Plaintiff alleges that Defendant actively represented that its cars were safe. (Id. ¶ 54). Plaintiff alleges that he would not have purchased the Vehicle had he known of the Defect. (Id. ¶ 55). Plaintiff further alleges that Defendant has not recalled the vehicles nor has it notified consumers that the vehicles could be dangerous and should be replaced. (Id. ¶ 118).

         In September 2015, Plaintiff began to notice exhaust odor accumulating in the passenger cabin of his Vehicle; and, in October 2015, Plaintiff brought his Vehicle to the dealership where he purchased the Vehicle, to service the problem. (Id. ¶ 52-53). After being contacted by Plaintiff's dealership, Defendant allegedly proposed two repairs costing between $800 to $900, and neither was guaranteed to fix the Defect. (Id.). Plaintiff claims that the dealership informed him that Defendant knew of the Defect but had no means to fix it. (Id. ¶ 84). Plaintiff alleges that he did not elect to attempt to repair the Defect because neither repair was guaranteed. (Id. ¶¶ 53, 106). As a result, Plaintiff claims to have suffered loss of use and diminished value in his Vehicle. (Id. ¶ 55.)

         Plaintiff acknowledges that the Warranty had already expired when he brought the Vehicle into the dealership for service. (Id. ¶¶ 53, 58, 89). Plaintiff alleges that the Warranty is procedurally and substantively unconscionable. (Id. ¶¶ 59-63.) Plaintiff alleges that at the time he purchased his Vehicle, Defendant knew of the Defect because: (1) Ford's internal testing systems likely demonstrated the Defect since before the first vehicles were sold in 2010; and (2) Ford has received numerous complaints on the issue in 2011 and 2012, prior to the time that Plaintiff purchased the Vehicle. (Id. ¶¶ 22-30; 61-62.) Defendant also issued two Technical Service Bulletins (“TSB”) in December 2012 and July 2014 in response to customers' complaints of an exhaust odor in the passenger compartments of vehicles. (Id. ¶¶ 32, 33). According to Plaintiff, both TSBs failed to disclose that the exhaust odor included carbon monoxide and failed to provide a specific and effective fix to the exhaust fumes problem. (Id. ¶¶ 35, 37).

         In the FAC, Plaintiff alleges the following: (Count I) breach of express warranty; (Count II) violations of the Magnuson-Moss Warranty Act; (Count III) violations of the Illinois Uniform Deceptive Trade Practices Act (“IUDTPA”); (Count IV) violations of the Illinois Consumer Fraud and Deceptive Business Practices Act (“ICFA”); and (Count V) common-law fraud.

         LEGAL STANDARD

         Rule 12(b)(6) permits a defendant to move to dismiss a complaint for “failure to state a claim upon which relief can be granted.” Fed.R.Civ.P. 12(b)(6). To survive a motion to dismiss, a complaint must allege “enough facts to state a claim to relief that is plausible on its face.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007). “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S. at 555). However, plaintiffs are not required to “plead the elements of a cause of action along with facts supporting each element.” Runnion ex rel. Runnion v. Girl Scouts of Greater Chicago & Nw. Indiana, 786 F.3d 510, 517 (7th Cir. 2015). Rather, the complaint must provide a defendant “with ‘fair notice' of the claim and its basis.” Tamayo v. Blagojevich, 526 F.3d 1074, 1081 (7th Cir. 2008) (quoting Fed.R.Civ.P. 8(a)(2) and Twombly, 550 U.S. at 555). When evaluating a Rule 12(b)(6) motion, the court accepts the complaint's well-pleaded factual allegations as true and draws all reasonable inferences in the plaintiff's favor. Twombly, 550 U.S. at 555-56.

         ANALYSIS

         Defendant argues that the FAC should be dismissed for failure to state a claim upon which relief can be granted. Defendant argues that Count I of the Complaint (breach of express warranty) should be dismissed because Plaintiff's Warranty expired and that if Count I fails, Count II (violation of Magnuson-Moss Warranty Act) also fails. Defendant argues that Count III (violation of IUDTPA) should be dismissed because Plaintiff does not demonstrate a plausible likelihood of future harm. With respect to Count IV (violation of ICFA), Defendant argues it should be dismissed because Plaintiff does not plead that he received a communication from Ford that omitted material information prior to purchasing his Vehicle. Finally, Defendant argues that Count V (common-law fraud) should be dismissed because Plaintiff failed to plead in accordance with the requirements of Federal Rule of Civil Procedure 9(b).

         Count I (Breach of ...


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