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Miles v. American Honda Motor Co., Inc.

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

October 19, 2017

CAROL MILES, RYAN MOTT, JOHN WOLFE, and LIZZY WOLFE, BARBARA HENWOOD, ANDY SWIERCZYNSKI, BRANDON FRANKLIN, ANNE SHAPIRO, MARY MANSFIELD, TAMI OSTENDORF, and JULIE MACKERT, individually and on behalf of the class members described below, Plaintiffs
v.
AMERICAN HONDA MOTOR CO., INC., Defendant.

          MEMORANDUM OPINION AND ORDER

          Robert W. Gettleman United States District Judge.

         Plaintiffs Carol Miles, Ryan Mott, John Wolfe and Lizzy Wolfe, Barbara Henwood, Andy Swierczynski, Brandon Franklin, Anne Shapiro, Mary Mansfield, Tami Ostendorf, and Julie Mackert, have brought a sixteen count second amended putative class action complaint against defendant American Honda Motor Co., Inc. based on plaintiffs' purchases of allegedly defective 2015, 2016 and 2017 Honda CR-V vehicles (the “vehicles”). The second amended complaint alleges in Counts I through XVI respectively: (1) breach of the federal Magnuson-Moss Warranty Act (“MMWA”), 15 U.S.C. § 2301 et seq. This count is brought on behalf of a nationwide class defined as all persons in the United States who purchased a 2015, 2016 or 2017 Honda CR-V and reported gas fumes in the passenger cabin to a Honda automobile dealer, and seeks to apply California Commercial Code § 2313 to all plaintiffs' claims; (2) violation of California's Uniform Competition Law, Cal. Bus. & Prof. Code § 17200 et seq., also brought on behalf of a nationwide class; (3) breach of contract under Illinois law brought on behalf of Illinois residents Mott, Miles, the Wolfes, Henwood, Swierczynski, and Franklin, and an Illinois subclass defined as “all members of the nationwide class who are residents of Illinois or purchased their CR-V in Illinois; (4) violations of the Illinois Consumer Fraud and Deceptive Practices Act, 815 ILCS 501/1 et seq., on behalf of the Illinois plaintiffs and the Illinois subclass; (5) unjust enrichment under Illinois law, again on behalf of the Illinois plaintiffs and Illinois subclass; (6) breach of contract under Indiana law on behalf of Indiana residents Shapiro and Mansfield and an Indiana subclass; (7) breach of implied warranty under Indiana Code § 26-1-2-314(1); (8) violation of Indiana's Deceptive Consumer Sales Act, I.C. 24-5-0.5 et seq.; (9) unjust enrichment under Indiana law; (10) breach of contract under Wisconsin law on behalf of plaintiff Ostendorf and a Wisconsin subclass; (11) violation of the Wisconsin Deceptive Trade Practices Act, WISC. STAT. § 100.18 et seq.; (12) unjust enrichment under Wisconsin law; (13)[1] breach of contract under Maryland law on behalf of plaintiff Mackert and a Maryland subclass; (14) breach of implied warranty under Maryland Commercial Law Code Ann. § 2-314(1)(a)(b); (15) violation of the Maryland Consumer Protection Act, Md. COMMERCIAL LAW CODE ANN. § 13-301 et seq.; and (16) unjust enrichment under Maryland law. Defendant has moved to dismiss ten of the sixteen counts and seeks to strike the proposed class definitions. For the reasons described below, defendant's motion to dismiss and to strike is granted in part and denied in part.

         BACKGROUND

         Plaintiffs claim that they purchased model years 2015, 2016, 2017 Honda CR-V vehicles from Honda dealerships. Within months of their purchase, plaintiffs all experienced what smelled like an “open pool of gasoline inside the passenger cabin.” The smell persisted no matter the driving speed or duration and was overpowering if the windows were kept shut. The smell was intermittent, coming and going regardless of the outdoor temperature, speed, or duration. Plaintiffs allege that they cannot drive their vehicles when the smell exists.

         According to the complaint, defendant markets its vehicles with nationwide advertising as safe and reliable and covered by warranty. Defendant provides purchasers and lessees of the vehicles with a “New Vehicle Limited Warranty” which provides that defendant will repair or replace, free of charge, any part that is defective in material or workmanship under normal use for three years or 36, 000, whichever comes first.

         Plaintiffs allege that at the time they purchased their vehicles defendant was aware of the problem, was unable to uncover the cause, and unable to fix the problem, yet actively concealed the “defect” from its customers even if specifically asked.

         DISCUSSION

         Defendant has moved to dismiss various counts under Fed.R.Civ.P. 12(b)(6), for failing to state a claim, and under Fed.R.Civ.P. 9(b) for failing to plead fraud with particularity. A motion brought under Rule 12(b)(b) challenges the sufficiency of the complaint, not its merits. Gibson v. City of Chicago, 910 F.2d 1510, 1520 (7th Cir. 1990). The court accepts as true all well-pleaded factual allegations and draws all reasonable inferences in the plaintiff's favor. Sprint Spectrum L.P. v. City of Carmel, Ind., 361 F.3d 998, 1001 (7th Cir. 2004). The complaint must allege sufficient facts that, if true, would raise a right to relief above the speculative level, showing that the claim is plausible on its face. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). To be plausible on its face, the complaint must plead facts sufficient for the court to draw the reasonable inference that the defendant is liable for the alleged misconduct. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).

         In addition to Rule 12's requirements, plaintiffs' claims sounding in fraud, including their claims brought under the various states' consumer fraud acts, must comply with the heightened pleading requirements of Rule 9(b). Camasta v. Jos. A. Bank Clothiers, Inc., 761 F.3d 732, 736-37 (7th Cir. 2014). Rule 9(b) requires the pleading to “state with particularity the circumstances constituting fraud. Id.; Fed.R.Civ.P. 9(b). This requirement is ordinarily met when the complaint describes “the who, what, when, where, and how of the fraud.” Id. A complaint that provides a “general outline of the fraud scheme” sufficient to “reasonably notify the defendants of their purported role” in the fraud satisfies Rule 9(b). Midwest Grinding Co., Inc. v. Spitz, 976 F.2d 1016, 1020 (7th Cir. 1992).

         1. Counts I and II - Nationwide Class

         In Count I plaintiffs, none of whom are California residents or purchased their vehicles there, on behalf of a purported nationwide class, seek to apply the California Commercial Code to their claims brought pursuant to the MMWA.[2] In Count II, plaintiffs allege, on behalf of a nationwide class, violation of California's Business and Professional Code § 17200, which prohibits acts of “unfair competition.” Defendant argues that both claims should be dismissed because California law cannot be applied to claims of non-California plaintiffs. The court agrees.

         Federal courts sitting in Illinois follow Illinois' choice-of-law rules in determining which state law governs a plaintiff's state law claim. DeValk Lincoln Mercury, Inc. v. Ford Motor Co., 811 F.2d 326, 329 (7th Cir. 1987). Illinois has adopted the most significant relationship test for deciding among conflicting laws. Ingersol v. Klein, 262 N.E.2d 593, 595 (Ill. 1970). Under this test, the law of the place of the injury controls unless Illinois has a more significant relationship with the occurrence and with the parties. Id. When applying the most significant relationship test, the court considers four factors: (1) where the injury occurred; (2) where the injury causing conduct occurred; (3) the domiciles of the parties; and (4) where the relationship of the parties is entered. Id. at 596.

         None of the factors listed above favors application of California law to the non-California plaintiffs. First, with respect to Count I, “under Illinois choice-of-law rules, the place of purchase and injury governs breach of warranty claims.” In re Rust-Oleum Restore Marketing, Sales Practices and Products Litigation, 155 F.Supp.3d 772, 786 (N.D. Ill. 2016). None of the plaintiffs are domiciled in California, none purchased their vehicles in California, none entered a relationship with defendant in California, and none were injured in California. The injury occurs where the plaintiffs purchased their vehicles and were given their warranties without any warning of the alleged defect. Thus, under Illinois choice-of-law rules, the law of the state where each plaintiff purchased their vehicles (which is also their home state) is the law that applies to their state law claims.

         Plaintiffs' only argument that California law should apply relies on the Illinois Appellate Court's opinion in Barbara's Sales, Inc. v. Intel Corp., 367 Ill.App.3d 1013 (5th Dist. 2008), which applied California law to a proposed nationwide class of purchasers of computers containing an allegedly defective computer processor. That decision was reversed, however, by the Illinois Supreme Court, specifically holding that the action could not proceed as a class action and ...


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