LEE R. WEST, District Judge.
This matter comes before the Court on the Motion to Dismiss First Amended Class Action Complaint filed by defendant Suzuki Motor of America, Inc. ("Suzuki Motor"). Plaintiff Jason Dinwiddie
To the extent Suzuki Motor has challenged the factual sufficiency of Dinwiddie's allegations in his first amended complaint under Rule 12(b)(6), F.R.Civ.P., the United States Supreme Court has set forth the standards that this Court must use in determining whether those challenges have merit. In Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007), the Supreme Court held in accordance with Rule 8, F.R.Civ.P., that a complaint need not contain "heightened fact pleading of specifics," 550 U.S. at 570, 127 S.Ct. 1955, or "detailed factual allegations," id. at 555, 127 S.Ct. 1955 (citations omitted), but that it must contain "enough facts to state a claim to relief that is plausible on its face." Id. at 570, 127 S.Ct. 1955.
The United States Court of Appeals for the Tenth Circuit has stated that Twombly imposes a "burden ... on the plaintiff to frame a `[pleading] ... with enough factual matter (taken as true) to suggest' that he... is entitled to relief." Robbins v. Oklahoma, 519 F.3d 1242, 1247 (10th Cir.2008)(quoting Twombly, 550 U.S. at 556, 127 S.Ct. 1955). The allegations in the first amended complaint
The Court's task at this stage is to determine whether "there are well-pleaded factual allegations." Ashcroft v. Iqbal, 556 U.S. 662, 679, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009), in the challenged pleading; if so, the "[C]ourt should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief." Id.
Id. at 678, 129 S.Ct. 1937 (citations omitted).
In this connection, the first amended complaint "`must contain either direct or inferential allegations respecting all the material elements necessary to sustain a recovery under some viable legal theory.'" Bryson v. Gonzales, 534 F.3d 1282, 1286 (10th Cir.2008) (quotation and further citation omitted). While "[t]he nature and specificity of the allegations required to state a plausible claim will vary based on context," Kansas Penn Gaming, LLC v. Collins, 656 F.3d 1210, 1215 (10th Cir. 2011) (citations omitted), neither "`naked assertion[s]' devoid of `further factual enhancement,'" Iqbal, 556 U.S. at 678, 129 S.Ct. 1937 (quoting Twombly, 550 U.S. at 557, 127 S.Ct. 1955), nor "[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory allegations,... suffice." Id. (citing Twombly, 550 U.S. at 555, 127 S.Ct. 1955). "[T]he Twombly/Iqbal standard recognizes a plaintiff should have at least some relevant
"[I]t demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation," Iqbal, 556 U.S. at 678, 129 S.Ct. 1937 (citing Twombly, 550 U.S. at 555, 127 S.Ct. 1955 (further citation omitted)), and more than "mere `labels and conclusions,' and `a formulaic recitation of the elements of a cause of action'...." Kansas Penn Gaming, 656 F.3d at 1214 (quoting Twombly, 550 U.S. at 555, 127 S.Ct. 1955). If the plaintiff's factual allegations "are `merely consistent with' a defendant's liability," Iqbal, 556 U.S. at 678, 129 S.Ct. 1937 (quotation omitted), or "do not permit the [C]ourt to infer more than the mere possibility of misconduct," id. at 679, 129 S.Ct. 1937, the plaintiff "has not `show[n]' ... `that ... [he] is entitled to relief.'" Id. (quotation omitted).
On October 31, 2012, defendant Suzuki Motor incorporated under the laws of the State of California as a wholly-owned subsidiary of Suzuki Motor Corporation ("SMC") "for purposes of ... transactions contemplated [between Suzuki Motor and American Suzuki Motor Corporation ("ASMC")] under ... [an asset purchase agreement]." Doc. 21-3 at 16, ¶ 32. Shortly thereafter, on November 5, 2012, ASMC filed a voluntary petition seeking relief under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the Central District of California. In re American Suzuki Motor Corporation, Case 8:12-bk22808-SC (Bankr. C.D.Cal.). On March 6, 2013, Suzuki Motor and ASMC entered into the Second Amended and Restated Asset Purchase Agreement ("APA"), see Doc. 21-1, which the Bankruptcy Court found was negotiated "without collusion, in good faith, and from arm's length bargaining positions." Doc. 21-3 at 19, ¶ 39.
The APA recognized that ASMC had been "engaged in three distinct business lines ...," Doc. 21-1 at 7, ¶ B, only two of which are relevant to this action. The first was "the `Auto Sales Business,'" Id. at 7, ¶ B(i)(emphasis deleted), which was comprised of "the distribution and sale of Suzuki Automotive Products[.]" Id. The phrase "Suzuki Automotive Products" was defined in the APA as "Suzuki Automotives and automotive parts and other related products manufactured by or for SMC...." Id. at 53, ¶ 16.
The second business line — "the `Auto Servicing Business," Id. at 7, ¶ B(ii)(emphasis deleted), concerned "the servicing of Suzuki Automotives, including any warranty work...." Id. The APA described the Auto Sales Business and the Auto Servicing Business collectively "as the `Auto Business," Id. (emphasis deleted); only the latter — the Auto Servicing Business — however, was "referred [to] as `Acquired Business,'" Id., and the Bankruptcy Court specifically noted that Suzuki Motor was "not acquiring ... [ASMC's] Auto Sales Business...." Id. at 20, 43.
Pursuant to the APA and the transactions contemplated therein, see id. at 7-8, ¶ E, ASMC agreed to sell, assign and transfer and Suzuki Motor agreed to purchase, acquire and accept, inter alia, all of ASMC's right, title and interest to and in "the Acquired Business, other than any Excluded Assets," id. at 8, ¶ 1.1.1, described as "the `Purchased Assets.'" Id. Included in the Purchased Assets were "all Claims relating to any of the Purchased Assets, the Assumed Liabilities or the Acquired Business[.]" Id. at 9, ¶ 1.1.1(m). Included in the term "Excluded Assets"
The liabilities that Suzuki Motor assumed through the APA were limited to those "[l]iabilities relating to the ownership of the Purchased Assets or the Acquired Business ...," id. at 15, ¶ 2.5(i), and "all Suzuki Product Liability." Id. ¶ 12.5(ii). The latter phrase was defined as "any [l]iability of ... [ASMC], regardless of whether arising ... (i) under [e]xpress [w]arranty [c]laims on any Suzuki Products[, including `any Suzuki Automotive Products']; (ii) for recall and other obligations under the [National Traffic and Motor Vehicle Safety Act ("NTMVSA"), 49 U.S.C. § 301 et seq.,] ... with respect to Suzuki Products; or (iii) under any Lemon Laws with respect to Suzuki Products." Doc. 21-1 at 53, ¶ 16. Accordingly, the APA obligated Suzuki Motor to notify consumers about recalls conducted pursuant to NTMVSA and under the supervision of the National Highway Traffic Safety Administration ("NHTSA"),
Dinwiddie had purchased a 2007 Suzuki Forenza that had been "manufactured, marketed, distributed, and/or sold," Doc. 17 at 6, ¶ 15, by ASMC, and he "received a copy of [a] ... Recall Notice ... in mid to late July 2014." Id. at 12, ¶ 31. It was during that time that Suzuki Motor had begun notifying consumers in accordance with NTMVSA that "`certain 2004-2008 Suzuki Forenza ... vehicles,'" id. at 10, ¶ 25, were being recalled because "a defect which relate[d] to motor vehicle safety exist[ed] in ... [those] vehicles." Id. The Recall Notice identified a list of "`symptoms'... including abnormal headlamp operation, abnormal daytime running lamp operation, unusual odors of heated plastic or wiring insulation, and intermittent vehicle battery discharge." Id.
The Recall Notice further advised:
Id. at 11, ¶ 26 (emphasis deleted).
The Recall Notice also advised "that [Suzuki Motor] ... would repair the defect but added that `Recall service parts are not yet available to correct this condition. Providing repair parts is a top priority, however, their availability is not known at this time. Vehicle owners will be notified by mail when repair parts are available and scheduling appointments can then begin.'" Id. ¶ 27 (emphasis deleted).
"[A]round the same time [that Dinwiddie received the Recall Notice], the headlamps in [his] ... Forenza began not turning off intermittently when [he] ... would attempt
On August 18, 2014, while driving the Forenza, Dinwiddie observed "gray smoke start[ing] to billow out from behind the dashboard and instrument panel and down by the pedals." Id. at 13, ¶ 34. He stopped the vehicle and exited it; the "Forenza began to fill with smoke and ... flames [were seen]...." Id. ¶ 35. The fire department was called, and it "confirmed that the fire was an electrical fire." Id. ¶ 36. Even though Suzuki Motor was advised in an e-mail dated October 7, 2014, that "the probable cause of the fire [was believed] to be in the area of the recalled item," id. ¶ 38, Suzuki Motor had not repaired the Forenza or offered to pay the costs of repairs at the time this action was commenced on October 15, 2014, or by December 29, 2014, the date the first amended complaint was filed.
In his amended pleading, Dinwiddie asserted multiple causes of action. His claims for relief are based on two theories of liability:
In Count I, Dinwiddie has prayed for relief under the Oklahoma Uniform Commercial Code ("UCC"), 12A O.S. § 1-101 et seq., for breach of express warranty.
Dinwiddie has further claimed that Suzuki Motor
Id. at 19, ¶ 53.
The express written warranty that came with Dinwiddie's Forenza was limited in duration to three (3) years or 36,000 miles. See Doc. 17 at 6, ¶ 16. The pertinent section of the warranty booklet, which is entitled "NEW VEHICLE LIMITED WARRANTY WHAT IS COVERED," Doc. 21-4 at 8, reads:
Id. (emphasis deleted).
The section of the warranty booklet entitled "NEW VEHICLE LIMITED," id. at 9, on which Dinwiddie's claim for breach of the implied warranty of merchantability is grounded, provides that that warranty "shall be limited to the duration of this written warranty." Id. (capitalization deleted). The implied warranty was thereby limited to the same three (3)-year/36,000 mile duration as the express warranty.
Suzuki Motor has argued that it is entitled to dismissal of Dinwiddie's express and implied warranty claims for two reasons. First, according to the first amended complaint the alleged defect did not manifest itself until after the expiration of both warranties, and second, in Oklahoma, express and implied warranty claims must be brought within five (5) years from the time of sale. E.g., 12A O.S. § 2-725(1). Dinwiddie purchased his vehicle in 2007, see Doc. 17 at 12, ¶ 30; the fire did not occur until August 2014, see id. at 30-31, and the lawsuit was not filed until October 2014. See Doc. 1. Because Dinwiddie has not cited any persuasive authority in support of the proposition that a latent defect discovered outside a warranty's limitations extends that warranty, see Cipollone v. Liggett Group., Inc., 505 U.S. 504, 525, 112 S.Ct. 2608, 120 L.Ed.2d 407 (1992)(liability for breach of express warranty derived from, and measured by, terms of the warranty),
In this connection, Dinwiddie has first argued that because the 2007 Forenza was defective at the time of sale and ASMC knew of such defect at the time the warranties were made, the three (3)-year/36,000 mile limits are "unconscionable."
12A O.S. § 2-302(A).
"The principle [behind this section] is... [to] prevent[] ... oppression and unfair surprise and not [to] ... disturb[] ... [the] allocation of risks because of superior bargaining power." UCC Comment 1 (citation omitted). To give effect to that principle, the Court would ordinarily be tasked with deciding "whether, in the light of the general commercial background and the commercial needs of the particular trade or case, the clause[] involved [is] ... so one-sided as to be unconscionable under the circumstances existing at the time of the making of the contract." Id.
Dinwiddie's allegations of unconscionability, however, are found only in his response. He has advanced no facts in the first amended complaint, which the Court could view in his favor, that the warranties' durational limitations are unfair or one-sided or that he lacked any meaningful choice at the time he purchased the 2007 Forenza regarding the time and mileage limitations. In the absence of the same, the Court has not considered Dinwiddie's argument regarding the alleged unreasonableness of the warranties' limitations; the Court has instead considered Dinwiddie's argument that the warranties' durational limitations and/or the statutory limitations have been tolled or waived because Suzuki Motor together with ASMC "concealed and/or suppressed facts and information... concerning the [d]efect that is the subject of this lawsuit." Doc. 17 at 12, ¶ 32; e.g., id. at 19, ¶ 54.
In this connection, Dinwiddie has alleged that although ASMC "was already aware of a dangerous [d]efect existing in [the] ... [2007] Forenza ...," Doc. 17 at 12, ¶ 30, it took no "steps to inform, warn, or notify [him] ... of the existence of th[at] [d]efect or of any effect that the existence of the [d]efect would have on any warranty, express or implied." Id. He has further contended that ASMC instead "deliberately continued to advertise, distribute, market, and sell affected vehicles," id. at 9, ¶ 2, and that both ASMC and Suzuki Motor not only "actively concealed [the defect] from [him] ... until the Recall Notice of July 22, 2014[,]" id., but also "deliberately delayed issuing a vehicle recall... until such time as all warranty terms had run out in an effort to shield themselves from liability." Id. at 10, ¶ 23.
"Oklahoma law has long recognized[ that]
Masquat v. DaimlerChrysler Corp., 195 P.3d 48, 54-55 (Okla.2008)(quoting Waugh v. Guthrie Gas, Light, Fuel & Improvement Co., 37 Okla. 239, 131 P. 174 (1913) (Syllabus by the court)). In Oklahoma, however, "`[t]he mere failure to disclose such material facts is not sufficient to prevent the running of the statute[.]'" Id. at 55 (quoting Loyal Protective Insurance Co. v. Shoemaker, 178 Okla. 612, 63 P.2d 960 (1936) (Syllabus 1 by the court)). Rather, there must be "`something more than mere failure to disclose[.]'" Id. (quotation omitted). "`[S]ome actual artifice or some affirmative act of concealment, or some misrepresentation which induces the other party to inaction, or to forgo inquiry[ is required].'" Id. (quotation omitted); e.g., Legacy Crossing, L.L.C. v. Travis Wolff & Co., L.L.P., 229 Fed.Appx. 672, 681 (10th Cir.2007) (quoting Wills v. Black & West, Architects, 344 P.2d 581, 584 (Okla.1959)) (cited pursuant to Tenth Cir. R. 32.1) ("defendant must have `commit[ted] some actual artifice to prevent knowledge or some affirmative act of concealment or some misrepresentation to exclude suspicion and prevent inquiry'"). Some courts recognize that "[t]he party alleging fraudulent concealment must plead the circumstances giving rise to it with particularity," King and King Enterprises v. Champlin Petroleum Co., 446 F.Supp. 906, 911 (E.D.Okla.1978) (citations omitted), as required by Rule 9(b), F.R.Civ.P.
Dinwiddie has alleged that ASMC and/or Suzuki Motor "possessed actual and exclusive knowledge of the defect," see Doc. 17 at 32, ¶ 98, in the 2007 models as a result of the "fifteen electrical fire and related complaints,"
There are no factual allegations, well-pleaded or asserted with particularity, to support Dinwiddie's speculative and conclusory contentions that ASMC or, in particular, Suzuki Motor "deliberately delayed," Doc. 17 at 10, ¶ 23, notifying him or "actively disclaimed [their] ... responsibility for the [d]efect[.]" Id. at 20, ¶ 54. That ASMC "deliberately continued to advertise, distribute, market, and sell affected vehicles," id. at 9, ¶ 2, is not sufficient in the absence of any well-pleaded or particularized allegations that ASMC, with knowledge of the defect prior to the expiration of Dinwiddie's warranties, continued to represent, promote or market the safety of the 2007 Forenza. Dinwiddie has only theorized that ASMC and Suzuki Motor "actively concealed the facts of the [d]efect with the intent to induce [him] ... to purchase
Suzuki Motor has also challenged Counts III, IV, V and VI. The first two counts — Counts III and IV — seek relief understate common law for manufacturers' products liability and negligence, respectively;
To determine whether Dinwiddie has met his "obligation to provide the `grounds' of ... [his] `entitle[ment] to relief,'" Twombly, 550 U.S. at 555, 127 S.Ct. 1955 (citation omitted),
Oklahoma adopted the theory of manufacturers' products liability in Kirkland v. General Motors Corp., 521 P.2d 1353 (Okla.1974), which "teaches that one who sells a product in a defective condition, which is unreasonably dangerous to the user or consumer, is strictly liable for the physical harm to the person or property caused by the defect." Bishop v. Takata Corp., 12 P.3d 459, 462 (Okla.2000). To maintain a successful cause of action under this theory, Dinwiddie must prove inter alia that the 2007 Forenza was the cause of "the physical harm to [his] ... person or property," id.; e.g., Johnson v. Ford Motor Co., 45 P.3d 86, 91 n. 12 (Okla.2002) (citations omitted), because in Oklahoma, a plaintiff may not pursue a manufacturers' products liability claim where the only damages are "injury to the allegedly defective product itself and [the] consequential economic harm flowing from that injury[.]" Oklahoma Gas & Electric Co. v. McGraw-Edison Co., 834 P.2d 980, 981 (Okla.1992). "[D]isappointment associated with [a] ... manufacturer's unsuccessful attempts to remedy the defect," id. at 982, losses and costs associated with product value and repair, and damages resulting from loss of use are not sufficient.
The "economic loss rule," which was adopted by the Oklahoma Supreme Court in Waggoner v. Town & Country Mobile Homes, Inc., 808 P.2d 649 (Okla.1990), was first recognized by the United States Supreme Court in East River S.S. Corp. v. Transamerica Delaval, Inc., 476 U.S. 858, 106 S.Ct. 2295, 90 L.Ed.2d 865 (1986). The latter court, sitting in admiralty, determined that a products liability claim was not actionable absent personal injury or damage to other property. E.g., id. at 870, 106 S.Ct. 2295.
The state court in Waggoner wrote:
808 P.2d at 653.
In support of his claim for relief, Dinwiddie has alleged that he has
Doc. 17 at 24, ¶ 72. As case law teaches these allegations are not sufficient, and in the absence of well-pleaded allegations of physical damage either to the plaintiff himself or to other property,
Suzuki Motor has also challenged Count IV, wherein Dinwiddie has alleged that Suzuki Motor had a duty "to conduct vehicle recalls in a manner that is safe for consumers ...," Doc. 17 at 25, ¶ 77,
As stated, Dinwiddie has sought only economic damage.
In Count V, Dinwiddie has sought to hold Suzuki Motor liable for violations of the Oklahoma Consumer Protection Act ("OCPA" or "Act"), 15 O.S. 751 et seq. To establish an OCPA claim, a plaintiff must show (1) that the defendant engaged in an "unlawful practice" as that term is defined in section 753 of the Act, "(2) that the challenged practice occurred in the course of [the] defendant's business; (3) that the plaintiff, as a consumer, suffered an injury in fact; and (4) that the challenged practice caused the plaintiff's injury." Patterson v. Beall, 19 P.3d 839, 846 (Okla.2000). OCPA, however, exempts from its purview any "actions or transactions
In his response, Dinwiddie has argued that he "has alleged a broader OCPA violation that simply mishandling the recall: the mishandled recall is merely the final symptom of an ongoing fraudulent course of conduct by [Suzuki Motor] ... and ASMC to conceal the defect from consumers." Doc. 24 at 28-29. He has contended that the first amended complaint "detail[s] a multi-year course of conduct `to conceal a dangerous [d]efect from consumers and fail to offer a repair, honor ... warranties, or otherwise make affected consumers whole.'" Id. at 29 (quoting Doc. 17 at 29, ¶ 88). This argument is grounded on Dinwiddie's belief that Suzuki Motor "expressly adopted claims arising under consumer protection statutes in the [APA]...," Doc. 17 at 27, ¶ 83, and that it is therefore "futile for [Suzuki Motor] ..., who actively participated in the drafting and execution of the [APA] ... to now attempt to use [that document] ... as a shield from liability...." Id.
Although Suzuki Motor assumed "all Suzuki Product Liability," Doc. 21-2 at 15, ¶ 2.5(ii), which includes "any [l]iability of... [ASMC], ... arising ... under any Lemon Laws with respect to Suzuki Products," id. at 53, ¶ 16, the term "Lemon Laws" is expressly limited in the APA to "the Magnuson-Moss Warranty Act, any similar state laws, as amended,
In Count VI, Dinwiddie has alleged that "[i]t is not necessary that ... [Suzuki Motor] have expressly assumed liability for unjust enrichment in the purchase agreement, because to the extent to which ... [ASMC] Was unjustly enriched ..., [Suzuki Motor] ... was similarly enriched via its acquisition of [ASMC]...." Doc. 17 at 30, ¶ 92. Dinwiddie has further alleged in support of this count that Suzuki Motor "itself was unjustly enriched by accepting the benefits of its purchase of ... [ASMC] while simultaneously refusing to undertake liabilities which it had expressly agreed to assume, thereby harming [him] ... [by] prevent[ing him] from obtaining the benefit of [his] ... bargain with [ASMC] ... and/or with ... [Suzuki Motor]." Id.
Dinwiddie has contended that
Id. at 31, ¶ 94. As relief, Dinwiddie has prayed for "a constructive trust [to be imposed] on the monetary benefits unjustly received and retained by [Suzuki Motor]..., both in the past and to the present day." Id. ¶ 95.
To the extent unjust enrichment is an equitable, quasi-contractual claim (and not merely an equitable remedy), "a party ... [must plead and prove] ... `enrichment to another, coupled with a resulting injustice.'" City of Tulsa v. Bank of Oklahoma, 280 P.3d 314, 319 (Okla.2011)(quoting Teel v. Public Service Co. of Oklahoma, 767 P.2d 391, 398 (Okla.1985)(superceded by statute on other grounds)).
As the Bankruptcy Court observed, Suzuki Motor did not acquire ASMC's Auto Sales Business; thus, even if ASMC profited from selling allegedly defective automobiles, or as Dinwiddie has alleged, "obtained the benefit of [its] ... bargain," Doc. 17 at 31, ¶ 94, with Dinwiddie because it received "payment in full for [a] vehicle[ ] which w[as] warranted to be safe," id., any profit, benefit or payment that resulted from that sale
In response, Dinwiddie has contended that while Suzuki Motor may not have acquired the Auto Sales Business, it purchased ASMC's second business line — "the Auto Servicing Business," Doc. 21-1 at 7, ¶ B(ii)(emphasis deleted), which included "the servicing of Suzuki Automotives, including any warranty work ...," id., and that by "servicing and repairing defects ... in Suzuki vehicles," Doc. 24 at 30, Suzuki Motor has been enriched. Dinwiddie, however, has expressly alleged in the first amended complaint that despite a request to do so, Suzuki Motor has not "repair[ed] ... [his] Forenza or offer[ed] to pay the costs of the repair." Doc. 17 at 13, ¶ 37. Thus, no "monetary benefits [have been] unjustly received and retained by [Suzuki Motor]...." Id. at 31, ¶ 95. Suzuki Motor is therefore entitled to dismissal of this claim for relief.
(1) GRANTS Suzuki Motor's Motion to Dismiss First Amended Complaint [Doc. 21] filed on February 2, 2015;
(3) having addressed the issues presented in the instant motion, DECLINES Suzuki Motor's alternate request that the Court stay this matter so that the Bankruptcy Court may resolve any disputes between the parties that are governed by the APA.
In connection with the 2005-2008 Suzuki Renos, Dinwiddie has alleged that with respect to the 2005, 2006 and 2008 models, there was at least one (1) electrical fire complaint related to each (filed in 2009, 2012 and 2014). See id. at 7, ¶ 18