Bedgood v. Nissan N. Am., Inc.

CLIFFORD D. BEDGOOD and ALLISON BEDGOOD, Plaintiffs, v. NISSAN NORTH AMERICA, INC., BERKSHIRE HATHAWAY AUTOMOTIVE, INC.,and NISSAN MOTOR ACCEPTANCE CORPORATION, Defendants.

CAUSE NO.: A-16-CA-00281-SS

UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF TEXAS AUSTIN DIVISION

FILED: June 24, 2016

June 23, 2016

ORDER

BE IT REMEMBERED on this day the Court reviewed the file in the above-styled cause, and specifically Defendant Nissan North America, Inc.'s Motion to Dismiss [#4]. Plaintiffs Clifford Bedgood and Allison Bedgood have not responded. Having reviewed the documents, the governing law, and the file as a whole, the Court now enters the following opinion and orders.

Background

This case involves claims for breach of warranty, negligence, and breach of contract. On July 12, 2013, Plaintiffs Clifford Bedgood and Allison Bedgood purchased a new Nissan Pathfinder from Defendant Berkshire Hathaway Automotive, Inc. (Berkshire) for $50,473.27. Plaintiffs claim the total cost of the vehicle, including financing charges, will exceed $150,000.00.

According to Plaintiffs, Defendants Berkshire Hathaway Automotive, Inc. (Berkshire) and Nissan North America, Inc. (Nissan) expressly warranted any repairs during the warranty period due to defects in materials or workmanship. Plaintiffs also allege an implied warranty of merchantability arose in connection with the sale of the Pathfinder and an implied warranty that any repair work would be performed in a good and workmanlike manner. Plaintiffs allege they discovered defects in the Pathfinder's materials and workmanship within the warranty period, including transmission defects, a transmission control unit defect, external cosmetic defects, and a door defect. Although Plaintiffs delivered their Pathfinder to authorized warranty service dealers for repairs, Plaintiffs allege the more significant and dangerous conditions were not repaired and the defects which remain today substantially impair the vehicle's use, value, and safety. Plaintiffs also assert a lender liability claim against Defendant Nissan Motor Acceptance Corporation (Nissan Motor).

Nissan moves to dismiss this lawsuit, arguing Plaintiffs failed to plead viable causes of action for breaches of express and implied warranties, violations of the Magnuson-Moss Warranty Act (MMWA) and the Texas Deceptive Trade Practices Act (DTPA), negligence, and breach of contract. The Court turns to the substance of this motion below.

Analysis

I. Legal Standard

Federal Rule of Civil Procedure 8(a)(2) requires a complaint to contain "a short and plain statement of the claim showing that the pleader is entitled to relief." FED. R. CIV. P. 8(a)(2). A motion under Federal Rule of Civil Procedure 12(b)(6) asks a court to dismiss a complaint for "failure to state a claim upon which relief can be granted." FED. R. CIV. P. 12(b)(6). The plaintiff must plead sufficient facts to state a claim for relief that is facially plausible. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009); 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." Iqbal, 566 U.S. at678. Although a plaintiff's factual allegations need not establish that the defendant is probably liable, they must establish more than a "sheer possibility" that a defendant has acted unlawfully. Id. Determining plausibility is a "context-specific task," and must be performed in light of a court's "judicial experience and common sense." Id. at 679.

In deciding a motion to dismiss under Rule 12(b)(6), a court generally accepts as true all factual allegations contained within the complaint. Leatherman v. Tarrant Cnty. Narcotics Intelligence & Coordination Unit, 507 U.S. 163, 164 (1993). However, a court is not bound to accept legal conclusions couched as factual allegations. Papasan v. Allain, 478 U.S. 265, 286 (1986). Although all reasonable inferences will be resolved in favor of the plaintiff, the plaintiff must plead "specific facts, not mere conclusory allegations." Tuchman v. DSC Commc'ns Corp., 14 F.3d 1061, 1067 (5th Cir. 1994). In deciding a motion to dismiss, courts may consider the complaint, as well as other sources such as documents incorporated into the complaint by reference, and matters of which a court may take judicial notice. Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322 (2007).

II. Application

Nissan argues Plaintiffs have failed to adequately plead their claims for breach of warranty, violations of the DTPA, and breach of contract, and additionally contends the economic loss rule bars recovery on Plaintiffs' negligence claims. Plaintiffs have failed to respond to Nissan's motion to dismiss in contravention of Local Rule CV-7(e)(2). Having reviewed the merits of Nissan's motion below, the Court agrees with Nissan and DISMISSES all of Plaintiffs' claims but their common law and MMWA claims for breach of the implied warranty of merchantability.

A. Common Law Warranty Claims

Plaintiffs assert common law claims for breach of express warranty and the implied warranty of merchantability. Nissan challenges Plaintiffs' warranty claims on the grounds that Plaintiffs have failed to state a plausible claim for relief. Plaintiffs offer no defense of their claims.

i. Express Warranty

First, Plaintiffs allege a claim for breach of express warranty. To prevail on a claim for breach of an express warranty, a plaintiff must show:

(1) the defendant-seller made an express affirmation of fact or promise relating to the goods;

(2) that affirmation or promise became part of the bargain;

(3) the plaintiff relied upon that affirmation or promise;

(4) the goods did not comply with the affirmation or promise;

(5) the plaintiff was damaged by the noncompliance; and

(6) the failure of the product to comply was the proximate cause of the plaintiff's injury.

Omni USA, Inc. v. Parker-Hannifin Corp., 964 F. Supp. 2d 805, 814-15 (S.D. Tex. 2013).

In this case, Plaintiffs allege "advertisements and statements in written promotional and other materials" amounted to an express warranty that the Pathfinder was free from latent defects, as did a written statement from Nissan promising the Pathfinder was free of defects in materials and workmanship. Compl. [#1] ¶ 49. Not only have Plaintiffs failed to provide a cohesive description of the content, terms, and nature of these advertisements and statements, Plaintiffs have not alleged sufficient facts to show the alleged warranties formed "part of the basis of the bargain." Id. ¶ 14. Without more, the Court cannot reasonably infer an express warranty became part of the bargain and therefore DISMISSES Plaintiffs' claim for breach of express warranty.

ii. Implied Warranty

As to Nissan's alleged breach of the implied warranty of merchantability, however, the Court finds Plaintiffs have adequately pled this claim. "To prevail on a claim of breach of implied warranty of merchantability, a plaintiff must show as follows: (1) that the merchant sold goods to the plaintiff; (2) that the goods were unmerchantable, that is, unfit for ordinary purposes; (3) that the plaintiff notified the defendant of the breach; and (4) that the plaintiff suffered injury." Hartford v. Lyndon-DFS Warranty Servs., Inc., No. 01-08-00398-CV, 2010 WL 2220443, at *11 (Tex. App.—Houston [1st Dist.] May 28, 2010, no pet.). In accordance with Hartford, Plaintiffs have alleged (1) Berkshire sold the Pathfinder to Plaintiffs, (2) the Pathfinder was unfit for ordinary purposes, (3) Plaintiffs notified the defendants of this breach, and (4) Plaintiffs thereafter suffered an injury. As a result, Nissan's motion to dismiss Plaintiffs' implied warranty of merchantability claim is DENIED.

B. MMWA Claims

Plaintiffs allege their claims for breach of express and implied warranty constitute violations of the MMWA. The MMWA "creates a statutory cause of action for consumers 'damaged by the failure of a supplier, warrantor, or service contractor to comply with any obligation [imposed by the Act] or [established by] a written warranty, implied warranty, or service contract.'" Walton v. Rose Mobile Homes LLC, 298 F.3d 470, 474 (5th Cir. 2002) (quoting 15 U.S.C. § 2310(d)(1)). However, the MMWA "does not provide an independent basis for liability, but instead provides a federal cause of action for state law express and implied warranty claims." Taliaferro v. Samsung Telecomm. Am., LLC, No. 3:11-CV-1119-D, 2012 WL 169704, at *10 (N.D. Tex. Jan. 19, 2012). Plaintiffs' MMWA claims are thus contingent upon their state law warranty claims. In this instance, only Plaintiffs' claim for breach of the impliedwarranty of merchantability remains, and therefore their corresponding MMWA claim survives Nissan's motion to dismiss. Nevertheless, the failure of Plaintiffs' express warranty claim mandates dismissal of the corresponding MMWA claim. Id. at *11; see also Clemens v. DaimlerChyrsler Corp., 534 F.3d 1017, 1022 n.3 (9th Cir. 2008); Schimmer v. Jaguar Cars, Inc., 384 F.3d 402, 405 (7th Cir. 2004). Accordingly, the Court DISMISSES Plaintiffs' MMWA claim contingent on Plaintiffs' claim for breach of express warranty.

C. DTPA Claims

Plaintiffs allege Nissan violated the DTPA by (1) breaching express and implied warranties, (2) making false, misleading, and deceptive statements which Plaintiffs relied on to their detriment, and (3) engaging in unconscionable conduct by selling Plaintiffs an allegedly defective vehicle. Compl. [#1] ¶ 25. Plaintiffs' DTPA claims, however, are barred by the two-year statute of limitations. See TEX. BUS. & COM. CODE § 17.565; Howard v. Fiesta Tex. Show Park, Inc., 980 S.W.2d 716, 719 (Tex. App.—San Antonio 1998, pet. denied) (holding the statute of limitations under the DTPA for claims for breach of express and implied warranty is two years). Plaintiffs assert Nissan's alleged misconduct occurred when it sold P...