Tartan Constr., LLC v. New Equip. Servs. Corp.

TARTAN CONSTRUCTION, LLC, individually and on behalf of a class ofsimilarly situated individuals, Plaintiff, v. NEW EQUIPMENT SERVICES CORPORATION d/b/a NES Rentals, NES RENTALS HOLDINGS,and UNITED RENTALS (NORTH AMERICA), INC., Defendants.

Case No. 17-cv-5950

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION

September 24, 2018

Judge John Robert Blakey

MEMORANDUM OPINION AND ORDER

In this putative class action, Plaintiff Tartan Construction, LLC alleges that Defendants NES Rentals, NES Holdings, and United Rentals charged two "illegitimate" fees as part of their standard rental agreements for heavy equipment. [51] ¶ 3. Plaintiff claims that these fees unjustly enriched Defendants and violated the Illinois Consumer Fraud and Deceptive Trade Practices Act (ICFA). Id. In May 2018 this Court granted Defendants' motion to dismiss all claims. [48]. Plaintiff has since amended its complaint for the third time (TAC). [51]. Defendants have again moved to dismiss all claims, this time with prejudice [55]. For the reasons explained below, this Court grants Defendants' motion.

I. The Complaint's Allegations

This Court incorporates by reference, and presumes familiarity with, its prior opinion addressing Defendants' motion to dismiss Plaintiff's complaint, [48], and thus only briefly revisits the facts from which both parties' claims arise.

Defendants rent heavy equipment to industrial construction customers through a standard rental agreement. [51] ¶ 23. Plaintiff is a construction company based in Florida that rented a backhoe from NES Rentals in January 2009. [51-2]. Specifically, Plaintiff alleges that it ordered the backhoe over the phone with an NES Rentals employee named Brian, who was located in NES' Pensacola, Florida office. [51] ¶ 62. After the call, NES presented Plaintiff with a proposed rental agreement, which it accepted by using the equipment. [51-1] § 2; [51-2].

Along with a rental fee, Defendants charge two other fees: (1) an "environmental fee"; and (2) a fee for a "limited damage waiver" (LDW). [51] ¶ 24. Defendants do not disclose to their customers how they calculate the two additional fees. Id. ¶ [27].

The rental agreement describes the environmental fee as follows:

Customer acknowledges that it shall be charged a per item, per invoice environmental fee for the handling and disposal of waste oil and other fluids used in connection with the operation and/or cleaning of the Equipment.

Id. [51-1] § 18. Defendants charge a $10 per item environmental fee on every invoice regardless of how much equipment a customer rented, which type of equipment the customer rented, and whether Defendant disposed of any waste fluids [51]. Plaintiff always timely paid the environmental fee. Id. ¶ 38.

The rental agreement does not contain the LDW. Id. ¶ 39. Instead, it refers to the LDW as follows:

Customer acknowledges that the Company's [LDW] policy was explained at the time of entering into this Agreement. A copy of the policy is available at all branches of the Company and is available upon request. Customer acknowledges that it is responsible for the Equipment and that any [LDW] entered into is not insurance.

[51-1] § 17. Plaintiff alleges that, contrary to section 17's representations, Defendants do not explain anything about the LDW to customers when entering into rental agreements and do not make copies of the LDW available because "no such 'policy' exists." [51] ¶ 40. Defendants charge 14% of total rental costs on each invoice for the LDW. Id. ¶ 41. Plaintiff timely paid the 14% LDW fee on any applicable invoices from Defendants. Id. ¶ 58.

II. Legal Standard

To survive a motion to dismiss under Rule 12(b)(6), a complaint must provide a "short and plain statement of the claim" showing that the pleader merits relief, Fed. R. Civ. P. 8(a)(2), so Defendants have "fair notice" of the claim "and the grounds upon which it rests," Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)). A complaint must also contain "sufficient factual matter" to state a facially plausible claim to relief—one that "allows the court to draw the reasonable inference" that the defendant committed the alleged misconduct. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 570). This plausibility standard "asks for more than a sheer possibility that a defendant has acted unlawfully." Williamson v. Curran, 714 F.3d 432, 436 (7th Cir. 2013). Thus,"threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Limestone Dev. Corp. v. Vill. of Lemont, 520 F.3d 797, 803 (7th Cir. 2008).

In evaluating a complaint, this Court accepts all well plead allegations as true and draws all reasonable inferences in Plaintiffs' favor. Iqbal, 556 U.S. at 678. This Court does not, however, accept legal conclusions as true. Brooks v. Ross, 578 F.3d 574, 581 (7th Cir. 2009). On a motion to dismiss, this Court may consider the complaint itself, documents attached to the complaint, documents central to the complaint and to which the complaint refers, and information properly subject to judicial notice. Williamson, 714 F.3d at 436.

III. Analysis

Plaintiff's Third Amended Complaint (TAC) alleges claims for unjust enrichment as to the LDW (Count One), [51] ¶¶ 59-69, and violation of the ICFA as to the Environmental Fee and the LDW (Count Two), id. ¶¶ 70-89. Defendants first seek to dismiss Plaintiff's claims as time-barred under their respective statutes of limitations. [56] at 4-7. Defendants also make several arguments relating to the merits of Plaintiff's claims. See [56] at 1.

Also, as previously discussed in its May 2018 opinion, this Court honors the rental agreement's choice-of-law provision requiring that Illinois law govern any disputes arising under the agreement. See [48] at 4-5; [51-1] § 15. A. Statute of Limitations

The Court first considers Defendants' argument that Plaintiff's claims are time-barred.¹ Specifically, Defendants argue that Plaintiff's TAC should be dismissed in its entirety because the statutes of limitations on all claims expired before Plaintiff became a party to the suit in December 2017. [56] at 4.

Actions for damages under the ICFA are subject to a three-year statute of limitations. 815 ILCS 505/10a(e); Gentleman v. Mass. Higher Educ. Assistance Corp., 272 F. Supp. 3d 1054, 1069 (N.D. Ill. 2017); Sarkis' Cafe, Inc. v. Sarks in the Park, LLC, No. 12-cv-9686, 2013 WL 6632741, at *3 (N.D. Ill. Dec. 16, 2013). The statute of limitations for Plaintiff's unjust enrichment claim is five years. 735 ILCS 5/13-205; Rush Univ. Med. Ctr. v. Draeger, Inc., No. 17-cv-6043, 2017 WL 5505021, at *2 (N.D. Ill. Nov. 16, 2017); Citi Mortgage, Inc. v. Parille, 49 N.E.3d 869, 883 (Ill. App. Ct. 2016).

Both limitations periods are subject to the discovery rule—that is, neither begins to run until plaintiffs know or reasonably should know that they have been injured and that their injuries were wrongfully caused. Blankenship v. Pushpin Holdings, LLC, 157 F. Supp. 3d 788 (N.D. Ill. 2016) (discovery rule applies to the ICFA's three-year statute of limitations); CitiMortgage, 49 N.E.3d at 883 (discovery rule applies to Illinois' five-year statute of limitations for unjust enrichment claims). Under the discovery rule, the limitations period "begins when the injury could havebeen discovered through the exercise of appropriate diligence, not discovery of the actual injury." McWane, Inc. v. Crow Chicago Indus., Inc., 224 F.3d 582, 585 (7th Cir. 2000); see also In re marchFIRST Inc., 589 F.3d 901, 904 (7th Cir. 2009) (The limitations period begins to run when "the injured person becomes possessed of sufficient information concerning his injury and its cause to put a reasonable person on inquiry to determine whether actionable conduct is involved"). While the discovery rule does not require a plaintiff to file suit immediately after learning of an injury, it does not "permit a plaintiff to sit on his or her rights until such time as the plaintiff knows that he or she has a cause of action." Kremers v. Coca-Cola Co., 712 F. Supp. 2d 759, 764 (S.D. Ill. 2010).

1. Substance of Plaintiff's Arguments Addresses the Discovery Rule

Plaintiff appears to misstate its statutes of limitations arguments. In its response to Defendants' motion to dismiss, Plaintiff includes a header stating: "The Statute of Limitations Was Tolled for the ICFA and Unjust Enrichment Claims." [60] at 1 (emphasis added). But rather than discuss equitable tolling, the subsequent section goes on to argue that the discovery rule simply postponed the beginning of both limitations periods until November of 2017. [60] at 1-2; see also [51] ¶ 27.

In this same section, Plaintiff's contention that NES Rentals "intentionally concealed material facts from Plaintiff" also indicates that it is seeking to toll the statute of limitations based upon fraudulent concealment, [60] at 1; see also [51] ¶ 27, yet Plaintiff fails to allege any fraudulent concealment outside of this one statement. See, e.g., Olszewski v. Quicken Loans Inc., No. 12-cv-3131, 2013 WL 317060, at *2(N.D. Ill. Jan. 28, 2013) (dismissing a fraudulent concealment theory because Defendants failed to "allege any fraudulent concealment by Quicken outside of their conclusory statement that Quicken engaged in such concealment."). Moreover, fraudulent concealment "implies deliberate efforts by the defendant to prevent the plaintiff from suing within the applicable statute of limitation." Id. (citing Cada v. Baxter Healthcare Corp., 920 F.2d 446, 452 (7th Cir. 1990)). Plaintiff has not claimed that Defendants deliberately prevented Plaintiff from suing within the statute of limitations period; this alleged failure to disclose information about the two fees is no different from the alleged wrongdoing upon which Plaintiff bases its ICFA and unjust enrichment claims. See, e.g., [51] ¶¶ 27, 64, 77 (...