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Williamson v. S.A. Gear Co. Inc.

United States District Court, S.D. Illinois

January 23, 2017

STEVE WILLIAMSON and RHONDA CHRISTINE LEMASTER, On Behalf of Themselves and All Others Similarly Situated, Plaintiffs,
v.
S.A. GEAR COMPANY, INC., AUTOZONE, INC., AUTOZONE PARTS, INC., and AUTOZONE STORES, INC., Defendants.

          MEMORANDUM AND ORDER

          STACI M. YANDLE United States District Judge.

         Before the Court is Defendants' Motion to Dismiss Plaintiffs' First Amended Complaint for Failure to State a Claim (Doc. 44). Plaintiffs filed a response (Doc. 50). For the following reasons, the motion is GRANTED in part and DENIED in part.

         Background

         Plaintiffs Steve Williamson and Rhonda Christine LeMaster (“Plaintiffs”), filed this action against Defendants S.A. Gear Company, Inc., Autozone, Inc., Autozone Parts, Inc., and Autozone Stores, Inc. (“Defendants”) alleging that the Defendants manufactured, distributed, advertised, and/or sold defective timing chain tensioners (“the Part”) (Doc. 35). Plaintiffs maintain that the Part, intended and marketed for use as a replacement part in certain Chrysler engines, was defective, prone to failure and otherwise unsuitable for such use. They allege that Defendants failed to disclose that the Part was defective and, instead, knowingly sold and or promoted the defective Part into the stream of interstate commerce, knowing consumers would install the Part into their vehicles. Plaintiffs further allege that due to Defendants' misrepresentations and concealment of material information regarding the Part, its defects and its propensity to fail, the Part was not appropriate for its intended and marketed use and was not worth the purchase price paid by Plaintiffs and the Class.

         Plaintiffs' Amended Complaint sets forth the following causes of action on behalf of themselves and all others similarly situated: Count I - violations of the Magnuson-Moss Warranty Act; Count II - breach of express warranty; Count III - breach of implied warranty - merchantability; Count IV - breach of implied warranty - fitness for a particular purpose; Count V - violation of Illinois Consumer Fraud and Deceptive Practices Act; Count VI - common law fraud; Count VII - fraudulent concealment; Count VIII - violation of the Racketeer Influence and Corrupt Organization Act, 18 U.S.C. § 1962(c) and (d); Count IX - strict product liability - design defect; Count X - strict product liability - manufacturing defect; Count XI - strict product liability - failure to warn; Count XII - negligence; Count XIII - negligent misrepresentation; Count XIV - breach of contract; and Count XV - unjust enrichment. Defendants move to dismiss each count of the Amended Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim.

         Discussion

         To survive a motion to dismiss for failure to state a claim under Rule 12(b)(6), a complaint must “state a claim to relief that is plausible on its face.” Lodholtz v. York Risk Servs. Group, Inc., 778 F.3d 635, 639 (7th Cir. 2015) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). The Court draws all reasonable inferences and facts in favor of the nonmovant. See Vesely v. Armslist LLC, 762 F.3d 661, 664 (7th Cir. 2014). 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.” Twombly, 550 U.S. at 555 (citation omitted).

         Under Rule 9(b), a party pleading fraud must “state with particularity the circumstances constituting fraud.” Fed.R.Civ.P. 9(b). This “ordinarily requires describing the 'who, what, when, where, and how' of the fraud, although the exact level of particularity that is required will necessarily differ based on the facts of the case.” AnchorBank, FSB v. Hofer, 649 F.3d 610, 614 (7th Cir. 2011).

         Defendants contend that Plaintiffs' claims must be dismissed on numerous grounds:

(1) Plaintiffs' breach of written warranty claims fail because there were no written warranties provided with the Part and any alleged warranties at issue neither promised that the material/workmanship was defect free nor included a specified time period; (2) Plaintiffs' breach of implied warranty claims fail as to Defendant SA Gear, Inc. due to lack of privity; (3) Plaintiffs did not adequately support their Illinois Consumer Fraud Act claim with particularity; (4) Plaintiffs did not sufficiently plead their fraud or fraudulent concealment claims; (5) Plaintiffs fail to demonstrate a crime, criminal enterprise or pattern of racketeering activity to establish a RICO claim; (6) Plaintiffs' allegations fail to establish what purported defect existed with the Part at the time of purchase and Plaintiffs have not demonstrated that the manufacturer did not disclose an unreasonably dangerous condition or instruct on the proper use of the product; (7) Plaintiffs' negligence claims are barred under the Moorman doctrine; (8) Plaintiffs fail to demonstrate the existence of a valid and enforceable contract with the Defendants; and (9) Plaintiffs have not sufficiently pled unjust enrichment nor allege that they have no adequate remedy at law.

         Breach of Written Warranty Claims (Counts I and II)

         In Counts I and II, Plaintiffs allege claims for breach of express warranty under Illinois law and the Magnuson-Moss Warranty Act (“MMWA”). Defendants assert that Plaintiffs have failed to state a claim for breach of a written warranty because the statements identified by Plaintiffs are mere “product descriptions” or advertising that the Part met or exceeded OE performance and any such statements were puffing which do not constitute warranties under either Illinois law or the MMWA.

         Under Section 2-313 of the Uniform Commercial Code (“UCC”), an express warranty is created where (1) the seller makes an affirmation of fact or promise; (2) that relates to the goods; and (3) becomes part of the basis of the bargain between the parties. See Royal Bus. Mach., Inc. v. Lorraine Corp., 633 F.2d 34, 41 (7th Cir. 1980). “An affirmation merely of the value of the goods or a statement purporting to be merely the seller's opinion or commendation of the goods does not create a warranty.” 810 IL.C.S. 5/2-313(2) (2012). Thus, “[s]ales talk which relates only to the value of the goods or the seller's personal opinion or commendation of the goods is considered puffing and is not binding on the seller.” Redmac, Inc. v. Computerland of Peoria, 489 N.E.2d 380, 382 (3rd Dist. 1986); All-Tech Telecom, Inc. v. Amway Corp., 174 F.3d 862, 868 (7th Cir. 1999) (statements are puffing if they are “empty superlatives on which no reasonable person would rely.”). The question of whether a statement constitutes an express warranty or mere puffery is generally considered a question of fact. Redmac, Inc., 489 N.E.2d at 382; 810 I.L.C.S. 5/2-313, cmt. 3.

         Here, Plaintiffs allege that Defendants made several affirmations of fact and promises with respect the Part, including but not limited to “its specifications, quality, and proper uses… these affirmations of fact and promises became a part of the basis of the bargain with Plaintiffs and the Class members” (Doc. 35, ¶¶ 33-39). Plaintiffs further allege that the Defendants warranted, among other things, that the Part was “precision machined with high grade material for greater strength and durability, ” that the Part met or exceeded “OEM specifications in manufacturing and material, ” that the Part maintained “excellent chin or belt tension, ” and that the Part was “engineered to meet or exceed OE performance” (Doc. 35, ¶¶ 33-39). Plaintiffs also allege that Defendants' representation that the Part conforms to OEM standards and/or specifications is a representation that the Part will perform adequately for a specified period of time (for example, upon information and belief, it is the standards and specifications of OEM Chrysler that timing chain tensioners will perform adequately for a period of at least three years.” (Doc. 35, ¶ 30).

         Based on these allegations, Plaintiffs have sufficiently stated a claim for breach of written warranty to survive a motion to dismiss. Whether Defendants' statement that the Part met or exceeded OE performance is an affirmation of fact or promise is a question of fact that cannot be resolved on a motion to dismiss. Redmac, Inc., 489 N.E.2d at 382; 810 Ill. Comp. Stat. 5/2-313, cmt. 3. Accordingly, Defendants' motion to dismiss Plaintiffs' breach of written warranty claim under Illinois law is denied.

         “The MMWA is a remedial statute designed to protect consumers against deceptive warranty practices.” Anderson v. Gulf Stream Coach, Inc., 662 F.3d 775, 780 (7th Cir. 2011) (citing Skelton v. Gen. Motors Corp., 660 F.2d 311, 313 (7th Cir. 1981)). The MMWA “provides a federal private cause of action for a warrantor's failure to comply with the terms of a ‘written warranty, implied warranty or service contract.” Anderson, 662 F.3d at 780 (quoting Voelker v. Porsche Cars N. Am., Inc., 353 F.3d 516, 522 (7th Cir. 2003). The MMWA defines a written warranty as:

(A) any written affirmation of fact or written promise made in connection with the sale of a consumer product by a supplier to a buyer which relates to the nature of the material or workmanship and affirms or promises that such material or workmanship is defect free or will meet a specified level of performance over a specified period of time, or
(B) any undertaking in writing in connection with the sale by a supplier of a consumer product to refund, repair, replace, or take other remedial action with respect to such product in the event that such product fails to meet the specifications set forth in the undertaking, which written affirmation, promise, or undertaking becomes part of the basis of the bargain between a supplier and a buyer for purposes other than resale of such product.

15 U.S.C. § 2301.

         Defendants maintain that as the written warranties upon which Plaintiffs base their claim under the MMWA (Count I) are identical to the written warranties alleged in Count II, Plaintiffs' MMWA claim fails for the same reasons their written warranty claims in Count I fail. However, as the Court found with respect to the complaint allegations in Count II, and for the same reasons, Plaintiff has sufficiently stated a claim under the above-referenced MMWA standards for breach of ...


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