Meadow v. Nibco, Inc.

CHAD MEADOW, et al. v. NIBCO, INC.

NO. 3-15-1124

UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF TENNESSEE NASHVILLE DIVISION

May 24, 2016

JUDGE CAMPBELL

MEMORANDUM

Pending before the Court is Defendant's "Partial Motion to Dismiss the Class Action Complaint" (Docket No. 31). The Court heard argument on Defendant's Motion on May 11, 2016. For the reasons stated herein, Defendant's Motion is GRANTED in part and DENIED in part.

INTRODUCTION

Plaintiffs' Complaint alleges that Defendant manufactures certain plumbing products ("PEX products") which prematurely failed and proximately caused damages to Plaintiffs' homes. Plaintiff Meadow is from Tennessee, Plaintiffs Plisko are from South Carolina, and Plaintiff McLaughlin is from Alabama. These Plaintiffs purport to bring this action on behalf of themselves and all individuals and entities which own or have owned PEX products or structures in which PEX products have been installed, but no class action has been certified in this matter.

Plaintiffs' Complaint (Docket No. 1) alleges 13 causes of action. Defendant seeks to dismiss some of those causes of action.

MOTIONS TO DISMISS

For purposes of a motion to dismiss, the Court must take all of the factual allegations in the complaint as true. Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009). To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face. Id. 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. Id. Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice. Id. When there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief. Id. at 1950. A legal conclusion couched as a factual allegation need not be accepted as true on a motion to dismiss, nor are recitations of the elements of a cause of action sufficient. Fritz v. Charter Township of Comstock, 592 F.3d 718, 722 (6th Cir. 2010).

ANALYSIS

Tennessee Product Liability Act

Defendant first argues that Plaintiff Meadow's tort and warranty claims are subsumed by the Tennessee Product Liability Act ("TPLA"). The TPLA defines "product liability action" to include "all actions brought for or on account of personal injury, death or property damage caused by or resulting from the manufacture, construction, design, formula, preparation, assembly, testing, warning, instruction, marketing, packaging or labeling of any product." Tenn. Code Ann. § 29-28-102(6). The TPLA governs Plaintiff Meadow's claims because those claims were brought for or on account of property damage resulting from the alleged manufacture, construction, design, assembly, testing, warning, instruction, marketing, packaging or labeling of PEX products.

The TPLA goes on to state that "product liability action" includes all actions based upon the following theories: strict liability in tort, negligence, breach of warranty (express or implied), breach of or failure to discharge a duty to warn or instruct (whether negligent or innocent), misrepresentation, concealment or non-disclosure (whether negligent or innocent), or under any substantive legal theory in tort or contract whatsoever. Tenn. Code Ann. § 29-28-102(6). The TPLA governs PlaintiffMeadow's claims because the TPLA embraces all product liability theories under Tennessee law.¹ Strayhorn v. Wyeth Pharmaceuticals, Inc., 737 F.3d 378, 392 (6^th Cir. 2013).

For these reasons, Defendant's Motion on this issue is granted, and Plaintiff Meadow's tort and warranty claims should be combined under his TPLA claim.² Plaintiff Meadow shall file, by June 15, 2016, an Amended Complaint asserting, to the extent they are not otherwise dismissed herein, his various theories under a single TPLA claim.

Alabama Extended Manufacturers' Liability Doctrine

Defendant also argues that Plaintiff McLaughlin's strict liability claim is subsumed by the Alabama Extended Manufacturers' Liability Doctrine ("AEMLD"), a judicially-created doctrine. Alabama law does not recognize a strict liability cause of action but instead substitutes the AEMLD. Miller v. Pfizer, Inc., 2014 WL 2155020 at * 2 (N.D. Ala. May 22, 2014) (citing Casrell v. Altec Indus., Inc., 335 So.2d 128 (Ala. 1976)).

Plaintiff McLaughlin does not object to this argument and, indeed, suggests that Count III, as it relates to Plaintiff McLaughlin, be dismissed because it is subsumed by Count XI. Docket No. 55, n.8. Accordingly, Defendant's Motion on this issue is granted. Plaintiff McLaughlin shall file, by June 15, 2016, an Amended Complaint asserting his strict liability theory under a single AEMLD claim.

Express Warranty

Defendant contends that Plaintiffs' express warranty claims should be dismissed because Plaintiffs have not alleged that the express warranty was the basis for any bargain between Defendant and Plaintiffs and because Plaintiffs do not allege that they even knew about the warranty, let alone relied upon it, when they purchased their homes.

Defendant is not arguing there was no express warranty, as Plaintiffs seem to think. In fact, as Plaintiffs' counsel stated, this issue is about "the warranty people see when they buy the product." But Plaintiffs here did not buy the products, so they could not have seen or relied upon the existence of the warranty. Plaintiffs summarily allege that the warranty was part of the basis of the bargain between NIBCO and Plaintiffs (Complaint, ¶ 111), but there was no bargain between NIBCO and Plaintiffs. Plaintiffs became the owners of the PEX products simply by purchasing homes in which those products were installed.

Plaintiffs contend, however, that the PEX products warranty is not limited to those who purchased the PEX products and that the warranty includes no prohibition against transfer of the warranty. The warranty, which is attached to the Complaint, provides that in the event any defect occurs which the owner believes is covered by the warranty, the owner should immediately contact NIBCO and return the allegedly defective product to NIBCO. The warranty states that if NIBCO determines that the product is defective, a replacement shall be mailed free of charge to the owner. Docket No. 1-1.

Tennessee law provides that an express warranty is created when a seller makes a representation or promise to a buyer that becomes part of the basis of the bargain. Tenn. Code Ann. § 47-2-313(1); Bearden v. Honeywell Int'l Inc., 2010 WL 3239285 at * 5 (M.D. Tenn. Aug. 16, 2010)."This means that the plaintiff must have been aware of the warranty and must have relied on it when deciding to purchase the product." Id.

As indicated above, Plaintiff Meadow did not purchase these products and therefore could not have relied upon the express warranty. In addition, he does not allege that the contractor or plumbers who purchased the PEX products for his house relied upon any express warranty. See Bearden at * 5.

Although Tennessee law does provide a third-party beneficiary extension of the warranty, that extension is limited to "any natural person who is in the family or household of the buyer or who is a guest in his home if it is reasonable to expect that such person may use, consume or be affected by the goods and who is injured in person by breach of the warranty." Tenn. Code Ann. § 47-2-318. Plaintiff Meadow does not meet this definition. Accordingly, Plaintiff Meadow's express warranty claim should be dismissed.

South Carolina law similarly provides that express warranties include any affirmation of fact made by a seller to a buyer which becomes part of the basis of the bargain. S.C. Code Ann. § 36-2-313(1). In South Carolina, however, the law also provides that a seller's warranty, whether express or implied, extends to any natural person who may be expected to use, consume or be affected by the goods and whose person or property is damaged by breach of the warranty. S.C. Code Ann. § 36-2-318. Thus, the law extends warranties to end-users such as the Pliskos.

However, in In Re MI Windows and Doors, Inc. Products Liability Litigation, 2012 WL 5408563 (D. S.C. Nov. 6, 2012), ruling on a motion to dismiss, the court found that South Carolina law still expressly requires an allegation that the express warranty formed a basis of the bargain between a buyer and the seller and factual details in support of such an allegation. Id. at * 4. Here, asthere, there is no allegation that the buyers of these PEX products relied upon the express warranty of Defendant as a basis of the bargain.

The Plisko Plaintiffs have failed to alleged that the warranty was the basis for any bargain here, so even if the warranty extended to them, they have not sufficiently alleged a breach of express warranty claim, and that claim is dismissed.

Alabama law includes a similar requirement that an express warranty become part of the basis of the bargain between the seller and the buyer. Ala. Code § 7-2-313(1). Under Alabama law, a manufacturer's express warranty may run in favor of a third-party beneficiary. Ala. Code § 7-2-318; Lisk v. Lumber One Wood Preserving, LLC, 792 F.3d 1331, 1338 (11^th Cir. 2015). The Alabama extension of the warranty is the same as South Carolina's - to any natural person if it is reasonable to expect that such person may use, consume or be affected by the goods and who is injured in person by breach of the warranty. Ala. Code § 7-2-318.

The Lisk court held that to adequately allege a claim for relief as a third-party beneficiary of the express warranty, a plaintiff must allege the elements of a third-party beneficiary claim as with contracts; that is, that (1) the contracting parties intended, at the time the contract was created to bestow a direct benefit upon a third party, (2) the plaintiff was...