Breeze v. Bayco Prods. Inc., Case No. 3:19-CV-00848-NJR

475 F.Supp.3d 899

David BREEZE and Heather Fletcher, Individually and as Co-Independent Administrators of the Estate of Gina Renee Breeze, Deceased, Plaintiffs,

v.BAYCO PRODUCTS INC. and Walmart Inc., d/b/a Wal-Mart Stores, Inc., Defendants.

Case No. 3:19-CV-00848-NJR

United States District Court, S.D. Illinois.

Signed July 30, 2020

Mark S. Schuver, Melissa C. Meirink, William J. Niehoff, Mathis, Marifian & Richter, Ltd., Belleville, IL, for Plaintiffs.

Craig M. Derrig, Wilson, Elser et al., Kevin S. Borozan, Wood, Smith, Henning & Berman LLP, Chicago, IL, for Defendant Bayco Products, Inc.

Craig M. Derrig, Wilson, Elser et al., Kevin S. Borozan, Wood, Smith, Henning & Berman LLP, Chicago, IL, Beth C. Boggs, Boggs, Avellino, Lach & Boggs, LLC, St. Louis, MO, for Defendant Walmart Inc.

MEMORANDUM AND ORDER

ROSENSTENGEL, Chief Judge:

Pending before the Court are two Motions to Dismiss for Failure to State a Claim (Docs. 85, 91) filed by Defendant Walmart Inc. ("Walmart"), and a Motion to Dismiss for Failure to State a Claim (Doc. 89) filed by Defendant Bayco Products, Inc. ("Bayco"). For the reasons set forth below, the Court denies the motions.

FACTUAL & PROCEDURAL BACKGROUND

This action is based on an incident in which a fire broke out at the home of Gina Renee Breeze on January 5, 2018, resulting in her death. In their latest amended complaint, Plaintiffs David Breeze and Heather Fletcher, as administrators of the estate of Gina Renee Breeze ("Plaintiffs"), allege 18 counts of strict liability, negligence, consumer fraud, breach of warranty, wrongful death and survival actions arising out of the sale of a 10.5-inch Brooder Clamp Light (the "Clamp Light"), manufactured by Bayco and sold by Walmart (Doc. 87). Plaintiffs allege that Gina Renee Breeze notified her landlord that water pipes in the home had frozen and requested that the landlord take action to have them unfrozen on December 27, 2017 (Id. at 4). To remedy the frozen water pipes, the landlord purchased the Clamp Light and a 250 watt bulb from Walmart on January 3, 2018, placing them in a crawlspace under the home on January 4 (Id. at 4–5).

Plaintiffs allege that "at all times relevant" Bayco marketed the Clamp Light as a "safe, quality product that is suitable for use in all spaces" and that Bayco marketed the Clamp Light as safe for use with bulbs up to 300 watts (Id. at 5). The amended complaint refers to certain specific statements which Plaintiffs allege were on Bayco's website "at all times relevant[,]" including statements to the effect that the Clamp Light gives "the light you need, wherever and whenever you need it[,]" that the Clamp Light can hold "securely to virtually any surface" and that the Clamp Light "will handle up to a 300W Med Screw Base Bulb" (Id. at 6).

Plaintiffs further allege that Walmart "at all times relevant" had statements on its website to the effect that the Clamp Light was "ideal to use ... in your backyard ... or working on projects in dim areas" and that the Clamp Light is "suitable for use on a variety of surfaces" and "with a 300-watt incandescent bulb" and that the Clamp Light could be used with a heat lamp bulb to "prevent freezing of water pipes, car radiators, and pumps" (Id. at 7-8).

Plaintiffs allege that both Bayco and Walmart made the statements on their websites with the intent of inducing reliance by customers, and that Walmart further stocked 250-watt heat lamp bulbs on retail shelves immediately next to the Clamp Light for the purpose of inducing customers to buy heat lamp bulbs with the clamp light (Id. ).

Plaintiffs further allege the Clamp Light was inherently defective and dangerous and, as a result, caused the fire to originate in the crawlspace where it was placed (Doc. 87 at 8–9). Bayco and Walmart failed to warn consumers of the unreasonably dangerous and defective conditions of the Clamp Light, Plaintiffs allege (Id. at 9).

On April 23, 2020, Walmart filed a motion to dismiss for failure to state a claim (Doc. 85). On May 8, 2020, Plaintiffs filed an amended complaint (Doc. 87), and Walmart on May 22 refiled its motion to dismiss with arguments amended to address the amended complaint (Doc. 91). In Walmart's second motion to dismiss, it argues that Counts X and XI, alleging product liability claims against Walmart for the Clamp Light, should be dismissed pursuant to the statutory seller's exception in Illinois law. Walmart further argues that Counts XIV and XV, alleging claims against Walmart under the Illinois Consumer Fraud Act (ICFA), should be dismissed because Plaintiffs: (1) have not satisfied pleading requirements under Fed. R. Civ. P. 9(b), (2) are not a consumer under the ICFA and lack standing under the "consumer nexus" test, and (3) do not allege actual deceit and show proximate cause as required by the ICFA. Walmart next argues that claims XVI and XVII, alleging claims for breach of implied warranty of merchantability against Walmart, should be dismissed because Plaintiffs failed to give pre-suit notice as required by the Uniform Commercial Code ("UCC"). Lastly, Walmart argues that Counts XI and XIII, which involve claims for punitive damages against Walmart, should be dismissed as those claims do not survive the death of Gina Breeze.

In its Motion to Dismiss (Doc. 89), Bayco reiterates the arguments made by Walmart regarding the ICFA in relation to Counts V and VI, which allege ICFA claims against Bayco. Bayco further reiterates Walmart's arguments regarding the implied warranty of merchantability in relation to Counts VII and VIII which present analogous claims against Bayco. Lastly, Bayco repeats Walmart's claims regarding punitive damages in relation to Counts II and IV, which seek punitive damages against Bayco.

LEGAL STANDARD

In addressing a motion to dismiss for failure to state a claim on which relief can be granted pursuant to Federal Rule of Civil Procedure 12(b)(6), a district court must assess whether the complaint includes "enough facts to state a claim to relief that is plausible on its face." Khorrami v. Rolince, 539 F.3d 782, 788 (7th Cir. 2008) (quoting Bell Atlantic Corp. v. Twombly , 550 U.S. 544, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ).

The Court of Appeals for the Seventh Circuit has clarified that, even after Twombly, courts must still approach Rule 12(b)(6) motions by construing the complaint in the light most favorable to the non-moving party, accepting as true all well-pleaded facts alleged, and drawing all possible inferences in the non-moving party's favor. Hecker v. Deere & Co., 556 F.3d 575, 580 (7th Cir. 2009), cert. denied, 558 U.S. 1148, 130 S.Ct. 1141, 175 L.Ed.2d 973 (2010) (quoting Tamayo v. Blagojevich, 526 F.3d 1074, 1081 (7th Cir. 2008) ).

DISCUSSION

I. Seller's Exception to Product Liability

To establish a product liability under Illinois law, a plaintiff must demonstrate: (1) that an injury resulted from a condition in the products; (2) the condition of the product was unreasonably dangerous; and (3) the condition existed at the time the product left the manufacturers control. Lexington Ins. Co. v. Office Depot, Inc. , 943 F. Supp. 2d 844, 848 (N.D. Ill. 2013). Illinois law applies strict liability to "all entities in the distributive chain of a defective product." Winters v. Fru-Con Inc. , 498 F.3d 734, 745 (7th Cir. 2007) (quotations omitted). An exception to this broad imposition of strict liability is the "Seller's Exception" created by 735 Ill. Comp. Stat. 5/2-621, which provides for dismissal of product liability claims against a nonmanufacturer defendant where that defendant files an affidavit identifying the manufacturer of the product in question and the manufacturer is joined in the suit. A plaintiff may avoid dismissal pursuant to the Seller's Exception, however, where he may prove one of the following:

(1) "that the defendant exercised some significant control over the design and manufacture of the product, or has provided instructions or warnings to the manufacturer relative to the alleged defect in the product which caused the injury, death or damage;

(2) that the defendant actually knew of the product defect that caused the injury, death or damage; or

(3) that the defendant created the product defect that caused the injury, death or damage."

735 Ill. Comp. Stat. 5/2-621(c).

Here, it is undisputed that Walmart has provided an affidavit that is satisfactory for purposes of the Seller's Exception and that Bayco has been named as a defendant in this action. Accordingly, dismissal is appropriate unless Plaintiffs can demonstrate that one of the exceptions of § 621(c) applies. Here, however, Plaintiffs’ amended complaint does allege that both Bayco and Walmart were aware of the defective nature of the Clamp Light, stating that they "knew or should have known," of the defective nature of the Clamp Light.

In its response to Walmart's motion, Plaintiffs note that at certain points in their amended complaint they state that Walmart "knew or should have known" of the defective nature of the Clamp Light. See, e.g. , Doc. 87 at 30, ¶ 133. Walmart points to its own affidavit in support of its contention that it had no knowledge, and it may well be able ultimately prevail in this argument. This is a factual issue, however, which must be resolved at a later stage in this action. The allegations in Plaintiffs’ complaint are facially sufficient to prevent dismissal pursuant to the Seller's Exception.

II. ICFA Claims

A. 9(b) Pleading Standard

A complaint alleging a violation of ICFA must be pleaded with the same particularity and specificity under Rule 9(b) as that required for common law fraud. E.g., Costa v. Mauro Chevrolet, Inc. , 390 F. Supp. 2d 720, 731 (N.D. Ill. 2005). To meet the requirements of Rule 9(b), a plaintiff may not simply characterize acts as fraudulent or deceptive, but rather must plead "the who, what, when, where and how" of the alleged deception.

DiLeo v. Ernst & Young , 901 F.2d 624, 627 (7th Cir. 1990). In the context of the ICFA,...