301 F. Supp. 3d 1277 | N.D. Ga. | 2018
This putative class action concerns an alleged design defect in the heating, ventilation, and air conditioning systems ("HVAC Systems") in several vehicles manufactured and sold by Defendants Mercedes-Benz USA, LLC ("Mercedes") and Daimler AG ("Class Vehicles").
I. BACKGROUND
Plaintiff Amin bought a Class Vehicle in November, 2012. (Compl., Doc. 1 ¶ 14.) He "first experienced a noxious odor caused by the HVAC System in approximately January of 2014." (Id. ¶ 18.) Plaintiff Patel bought a Class Vehicle in January, 2015. (Id. ¶ 23.) He "first experienced a noxious, pungent, sour, musty odor caused by the HVAC System in approximately March or April 2015." (Id. ¶ 28.)
Plaintiffs allege that "because of the HVAC System Defect, the HVAC Systems in the Class Vehicles are predisposed to produce a moldy odor under normal use conditions that would not cause non-defective HVAC systems to produce a moldy odor ...." (Id. ¶ 61.) More specifically, Plaintiffs allege that the design of the HVAC System is such that moisture does not evaporate properly from the system via the evaporator. (Id. ¶ 64.) Because the moisture does not evaporate, "[t]he residual moisture provides a haven for the growth of mold and mildew as spores enter the system through outside vents." (Id. ) Plaintiffs allege that several mold species are present in the vehicle because of the defect. (Id. ¶ 65.) These species are "known to secrete mycotoxins ...." (Id. )
*1282According to Plaintiffs, the defect in the HVAC Systems of the Class Vehicles is one of design, such that even with regular treatment, the mold and accompanying odor will continue to reappear. (Id. ¶¶ 77-79, 82-83.) The near-certain reoccurrence of the condensation, mold, and foul odor requires that Plaintiffs and other putative class members undergo periodic, "costly maintenance" to temporarily ameliorate the effects of the defect. (See , e.g. , id. ¶¶ 17, 27, 118, 119e.)
Plaintiffs allege that Mercedes knew about the defect before selling the Class Vehicles. (Id. ¶¶ 72-102.) They offer several different reasons that Mercedes knew or should have known about the defect, including (1) a consumer arbitration panel decision in 2008 regarding the same alleged defect; (2) Mercedes' own technical bulletins discussing the defect as early as 2007; (3) Mercedes' own system repair data from the owners of Class Vehicles; (4) a correspondingly large number of replacement parts ordered to address the problem; (5) complaints made directly to Mercedes from putative class members; (6) complaints about the defect collected by NHTSA's Office of Defect Investigations; and (7) public complaints made by consumers in online forums. (Id. ) Plaintiffs further allege that Mercedes "knowingly manufactured and sold the Class Vehicles with the HVAC System Defect, while willfully concealing the true inferior quality and sub-standard performance of the Class Vehicles' HVAC Systems." (Id. ¶ 107.) Mercedes knew of the defect in the Class Vehicles and failed to notify putative class members and other potential purchasers before they made a purchase. (Id. ¶ 110.)
In particular, Mercedes advertised the HVAC Systems in the Class Vehicles as having HVAC Systems that clean air in the cabin (i.e., filtering " 'dust and pollen as small as 0.0002' from the air") and providing "individualized comfort in any season." (Id. ¶ 112.) Mercedes also stated in advertising that Certified Pre-Owned (CPO) vehicles have received a rigorous inspection which extends to the HVAC Systems. (Id. ¶ 114.) Mercedes further advertised that before a CPO vehicle is sold, " '[a]ny deficiencies' " to its HVAC System are " 'repaired, replaced or reconditioned.' "
Plaintiffs allege that Mercedes "actively concealed" the defect in a number of ways. (Id. ¶ 119.) Mercedes "forced Class Members to bear the cost of temporary measures to address the moldy smells," but also reduced the price for vocal complainants. (Id. ¶ 119e.) When consumers brought their Class Vehicles in for service due to the defect, Mercedes treated the car with "temporary measures ... while leaving the HVAC Systems as they were." (Id. ¶ 119f.) In this way, the HVAC Systems were "never permanently corrected" and thus, Mercedes did "not prevent the recurrence" of the formation of mold. (Id. ¶¶ 119f-g.) Rather than disclose the defect when confronted by complaints of the smell, Mercedes blamed the putative class members for the smells. (Id. ¶ 122C.)
Plaintiffs "previously filed a class action complaint in the Central District of California on May 9, 2016" in which they made substantially similar allegations. (Id. ¶ 128.) See Manan Bhatt, et al. v. Mercedes-Benz USA, LLC , No. 2:16-cv-03171-TJH-RAO (C.D Cal.). Plaintiffs were dismissed without prejudice for misjoinder on March 9, 2017. Id. They filed their Complaint in this action in May 2017. (See Compl.) Plaintiffs assert the following claims in the Complaint: (1) breach of express warranty; (2) breach of express warranty under the Magnuson-Moss Act; (3) breach of implied warranty; (4) breach of implied warranty under the Magnuson-Moss Act; (5) violations of the Georgia Fair Business Practices Act, *1283O.C.G.A. § 10-1-390, et seq. ; (6) violations of Georgia's Uniform Deceptive Trade Practices Act, O.C.G.A. § 10-1-370, et seq. ; (7) breach of implied warranty of merchatability, O.C.G.A. § 11-2-314 ; (8) fraud by concealment; and (9) unjust enrichment. (Compl., Doc. 1 ¶¶ 141-254.) Thereafter, Mercedes moved to dismiss all claims. (Motion to Dismiss, Doc. 17.)
II. LEGAL STANDARD
A complaint should be dismissed under Rule 12(b)(6) only where it appears that the facts alleged fail to state a "plausible" claim for relief. Bell Atlantic v. Twombly ,
A claim is plausible where the plaintiff alleges factual content that "allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal ,
III. DISCUSSION
a. Plaintiffs' Standing as to Absent Class Members
Mercedes challenges Plaintiffs' standing to represent absent class members as to models of the Class Vehicles they did not purchase. (Doc. 17-1 at 5-6.) "[A] class representative must be part of the class and possess the same interest and suffer the same injury as the class members." Prado-Steiman ex rel. Prado v. Bush ,
As pointed out by some of Mercedes' cited authority, there is disagreement among federal courts about when courts should analyze the standing of named plaintiffs as to the claims of absent class members. See , e.g. , Toback v. GNC Holdings, Inc. , No. 13-80526-CIV,
*1284See also , e.g. , 1 William B. Rubenstein, Newberg on Class Actions § 2:6 (5th ed. 2017) (discussing "competing approaches" among federal courts in dealing with pre-certification challenges to standing of named plaintiffs).
However, this Court declines to prematurely address arguments more appropriate in the Rule 23 context. See , e.g. , 7AA Charles Alan Wright & Arthur R. Miller, Federal Practice & Procedure § 1785.1 (3d ed. 2017) ("Representative parties who have a direct and substantial interest have standing; the question whether they may be allowed to present claims on behalf of others who have similar, but not identical, interests depends not on standing, but on an assessment of typicality and adequacy of representation."). This is in line with previous rulings in this District. See McCabe ,
[t]here is no good reason for this case not to proceed down the normal path, i.e., with the Court setting a deadline for Plaintiff to file a motion for class certification and the parties to litigate the propriety of maintaining the action as a class under the traditional Rule 23(c) rubric.
Mercedes' arguments about Prado-Steiman are misplaced. Prado-Steiman's basic holding was that "at least one named representative of each class or subclass [must have] standing for each proffered class or subclass claim."
[The class representative] alleged he owned a class gun that suffered from the same defects as the rest of the class guns. Thus, [the class representative] suffers from the same alleged injury as the rest of the class.
b. Plaintiffs' Express Warranty Claims
Mercedes argues that Plaintiffs' claim for breach of express warranty fails because they have not pled facts showing that Mercedes failed to comply with its warranty. (Doc. 17-1 at 8.) "An express warranty is a contract," Atlanta Tallow Co. v. John W. Eshelman & Sons, Inc. ,
Mercedes argues that Plaintiffs' breach of express warranty claims must fail because the warranty "only provides coverage to correct defects in material or workmanship. " (Doc. 17-1 at 8) (citing Compl., Doc. 1 ¶ 103) (emphasis in original). The relevant portion of the warranty is entitled "Limited Warranty" and reads:
Items Which Are Covered:
DEFECTS: Mercedes-Benz USA, LLC (MBUSA) warrants to the original and each subsequent owner of any new Mercedes-Benz vehicle that any authorized Mercedes-Benz Center will make any repairs or replacements necessary, to correct defects in material or workmanship arising during the warranty period.
("Warranty," Doc. 1-2 at 14.) Mercedes argues that because Plaintiffs have only alleged a defect in design and not in workmanship or material, they have not alleged that Mercedes failed to comply with the terms of its warranty. (Doc. 17-1 at 8-9.)
Plaintiffs argue that despite the language quoted above, warranty in fact covers design defects. (Doc. 18 at 8-10.) The portion of the warranty relevant to their argument reads:
General
Our intention is to repair under warranty, without charge to you, anything that goes wrong with your vehicle during the warranty period which is our fault. All we ask is that you properly maintain and care for the vehicle and that you have warranty repairs performed by an authorized Mercedes-Benz Center.
[...]
Please note the difference between "defects" and "damage" as used in the warranty. Defects are covered since we, the distributor, are responsible. Conversely, we have no control over the damage caused by such things as, but not limited to collision, misuse, and lack of or improper maintenance. Therefore, damage for whatever reason is not covered by the warranty.
[...]
[Mercedes'] obligation is limited to the authorization to exchange or repair at its option such parts which are acknowledged by it to be defective. In case of defective assemblies, factory rebuilt units can be used in exchange instead of their repair. The replaced defective parts or assemblies shall become the *1286property of [Mercedes]. Warranty repairs do not constitute an extension of the original warranty period for the vehicle or a part thereof.
(Warranty at 19) (emphasis added).
Upon review of the warranty, the Court finds that these two separate portions are in conflict. The earlier portion clearly expresses Mercedes' intent to limit the warranty to defects in "material or workmanship," (Id. at 14), thereby excluding design defects. The later provisions seem to contemplate coverage of "anything that goes wrong with [the vehicle] ... which is [Mercedes'] fault," and in isolation, would certainly cover a design defect of the type alleged by Plaintiffs. (Id. at 19.)
These conflicting provisions "create[ ] an inherent ambiguity within the [warranty]." Emp'rs Mut. Cas. Co. v. Mallard ,
Several cannons of construction are relevant to these warranty provisions. First, "[i]f the construction is doubtful, that which goes most strongly against the party ... undertaking the obligation is generally to be preferred." O.C.G.A. § 13-2-2(5). In this case, Mercedes is the party undertaking the obligation through their express warranty, and that fact would favor Plaintiffs' reading of the warranty. However, other principles militate in favor of Mercedes' construction.
"Normally, a contract with inconsistent provisions should be interpreted so that the construction which upholds the contract is preferred." Golden Peanut Co. v. Bass ,
[v]iewing the contract as a whole, where there are conflicting provisions, the clause contributing most essentially to the contract is entitled to the greater consideration. A subsidiary provision should be so interpreted as not to be in conflict with what clearly appears to be the 'dominant purpose' of the contract.
Id. at 120 (quoting Joseph Camacho Assoc. v. Millard ,
Mercedes' reading of the warranty is also supported by examining the relative specificity of the provisions. "In construing contracts, a specific provision will prevail over a general one." Holland v. Holland ,
*1287Plaintiffs' construction of the warranty fails because it would render the earlier limitation clause meaningless. "[Courts] construe a contract in a manner that does not render any of its language meaningless or mere surplusage ...." H & E Innovation, LLC ,
Finally, "[i]t is a well established rule in the construction of contracts that in the event of such a conflict [between provisions], the first provision prevails." Wilner's, Inc. v. Fine ,
In light of these canons of construction the meaning of the warranty is not ambiguous. The Court finds that the warranty does not cover design defects. Therefore, Mercedes' Motion to Dismiss Plaintiff's claims for breach of express warranty is GRANTED.
c. Plaintiffs' Implied Warranty Claims
The Court now turns to Plaintiffs' claims of breach of implied warranty. Mercedes argues that Plaintiffs have failed to sufficiently plead a claim for breach of implied warranty because even with the alleged defect, the Class Vehicles are still "fit for the ordinary purposes for which the [they are] used" under O.C.G.A. § 11-2-314(c). Additionally, Defendant argues that Plaintiff Amin's implied warranty claims are time-barred. The Court addresses these arguments in turn.
i. Have Plaintiffs' Sufficiently Pled that the Cars were Unmerchantable?
Under Georgia law, "[u]nless excluded or modified, a warranty that the goods shall be merchantable is implied in a contract for their sale if the seller is a merchant with respect to goods of that kind." O.C.G.A. § 11-2-314(1). "[T]o be merchantable," goods must: "(a) Pass without objection in the trade under the contract description; and ... (c) [be] fit for the ordinary purposes for which such goods are used ...."
The purpose of warranty statutes is that the enterprise which causes losses should lift them from the individual victims and distribute them widely among those who benefit from the activities of the enterprise. This would include strict liability on the part of the manufacturer upon an implied warranty as to defects lurking in any kind of product.
McDonald v. Mazda Motors of Am., Inc. ,
*1288("There was no evidence of any breach of the implied warranties of merchantability ... [where] the plaintiff admitted that the damage [complained of] had not affected the car's usefulness or its driveability."); Soto v. CarMax Auto Superstores, Inc. ,
Plaintiffs have plausibly alleged facts that, if proven, would show that the defect at issue affects the driveability, safety, and usefulness of their cars. (See , e.g. , Compl., ¶ 3 (alleging that the accumulation of mold and mildew and resulting odor "cause[s] the Vehicle's passenger cabin to be unbearable and thus, unusuable for its intended purpose."), Id. ¶ 5 (alleging that the "bacteria, fungus, mold, and spores" that are "blown into the passenger cabin" "can cause respiratory problems and aggravate allergies"), Id. ¶¶ 65-6 (alleging that the molds present in the HVAC System of the Class Vehicles "are known to secrete mycotoxins" and that "[m]ycotoxins are toxic to humans and animals"), Id. ¶ 67 (describing the defect as potentially "presenting a risk to [consumers'] health and safety"), Id. ¶ 74 (incorporating an arbitration panel's finding that "the odor substantially impaired the use, value and safety of the vehicle"), Id. ¶ 97 (quoting NHTSA complaint referring to defect as "this potentially fatal condition for susceptible people") ). That is all that is required of Plaintiffs at this stage. See , e.g. , Johnson v. Jaguar Cars, Inc. , No. 1:05-CV-3161-RLV,
In Johnson , the defendant cited some of the same authority cited by Mercedes in support of its motion to dismiss the claim for breach of implied warranty.
ii. Are Plaintiff Amin's Implied Warranty Claims Time-Barred?
Mercedes next argues that Plaintiff Amin's claim for breach of implied warranty is time barred. (Doc. 17-1 at 13.) This argument is meritless. "Georgia applies a four-year statute of limitations to warranty claims, regardless of whether they are based on express warranties or implied warranties." Paws Holdings, LLC v. Daikin Indus., Ltd. , No. CV 116-058,
Mercedes argues that Plaintiff Amin's claim for implied warranty is time barred *1289because Plaintiff Amin alleges that he purchased his Class Vehicle in November, 2012, and did not file suit in the Northern District until May, 2017. (Doc. 17-1 at 14). As Mercedes points out, Plaintiff Amin thus did not file suit until "more than six months after the expiration of the four-year limitations period." (Id. ) Plaintiffs argue that the claim is timely under Georgia's renewal statute, O.C.G.A. § 9-2-61(a), since Plaintiff Amin refiled "within six months of the California court's dismissal." (Doc. 18 at 15.) Plaintiffs make two alternative arguments: (1) that even if the renewal statute does not apply, the statute of limitations was tolled while Amin's claims were pending in the California court; and (2) that the Court should apply the doctrine of equitable tolling to Amin's claims in light of the California filing. (Id. at 15-16.) In its Reply, Mercedes correctly points out that the renewal statute cited by Plaintiffs is inapplicable in this case because it specifically does "not apply to contracts for the sale of goods covered by Article 2 of Title 11." O.C.G.A. § 9-2-61(b).
However, the Court does not need to address either of Plaintiffs' alternative arguments, because the plain language of O.C.G.A. § 11-2-725 is dispositive. Subsection (3) of that provision reads:
[w]here an action commenced within the time limited by subsection (1) of [ O.C.G.A. § 11-2-725 ] is so terminated as to leave available a remedy by another action for the same breach such other action may be commenced after the expiration of the time limited and within six months after the termination of the first action unless the termination resulted from voluntary discontinuance or from dismissal for failure or neglect to prosecute.
O.C.G.A. § 11-2-725(3). Plaintiffs' previous action in California plainly falls under this provision, and Plaintiff timely filed after dismissal. The Court need not address equitable tolling in light of such clear authority.
For the foregoing reasons, Plaintiffs have plausibly stated a claim for breach of implied warranty. Mercedes' Motion to Dismiss this claim is therefore DENIED.
d. Plaintiffs' Magnuson-Moss Claims
Mercedes argues that Plaintiffs' Magnuson-Moss claims should be dismissed. "The Act does not provide an independent cause of action for state law claims, only additional damages for breaches of warranty under state law." McCabe ,
e. Plaintiffs' GFPBA Claims
The Court now turns to Plaintiffs' claims under Georgia's Fair Business Practices Act ("GFPBA") that Mercedes seeks to dismiss. "A private FBPA claim has three elements: a violation of the Act, causation, and injury." Tiismann v. Linda Martin Homes Corp. ,
i. Justifiable Reliance
Defendant argues that "Plaintiffs' GFPBA claim fails because they do not allege facts showing they have justifiably relied on any misrepresentation made by [Mercedes]." (Doc. 17-1 at 14.) See Crown Ford, Inc. , supra. However, as with other similar causes of action, "[w]here the plaintiff repeatedly confronts the defendant with the apparent falsity of its representations, and the defendant repeatedly confirms its original statement, asserting special knowledge, reliance is justified." DeLong Equip. Co. v. Washington Mills Abrasive Co. ,
Plaintiffs allege that Mercedes "learned of the HVAC System Defect at least as early as 2008, when a Class Vehicle owner brought-and won-a consumer arbitration action against Mercedes for the Defect." (Compl., Doc. 1 ¶ 73.) Plaintiffs highlight testimony from the arbitration and allege that during the proceedings, an employee of Mercedes described the defect:
The system works in such a way that it will-the AC is supposed to get rid of all the humidity from the air, ok? And in some cases, you know, where you shut the car off, some water will remain in the evaporator ... what happens is it will accumulate there. It will not fully drain.
(Id. ¶ 75.) Further, Plaintiffs allege that "Mercedes went on to say that the water that accumulates is what ultimately leads to the moldy odor" and that "[u]nder questioning from the Arbitration Board, Mercedes admitted that as long as the consumer keeps the car, she's going to have to keep getting Mercedes's temporary 'fix', which one Board member called 'a band-aid.' " (Id. ¶¶ 75-76.)
Plaintiffs also allege that Mercedes issued several Technical Service Bulletins addressing the alleged defect as far back as 2007. (Compl., Doc. 1 ¶¶ 80-84.) One of these Bulletins allegedly stated:
A moldy (foul) odor can typically occur for a short time after engine start in all vehicles with air conditioning, is a technically inherent effect which likewise cannot be eliminated by cleaning the evaporator.
(Id. ¶ 83.) Another allegedly stated that the smell "is due to natural causes, repairs do not remedy the problem." (Id. ¶ 84.)
In addition, Plaintiffs allege that Mercedes actively concealed the Defect and their knowledge of it from consumers. For example, Plaintiffs allege that
[d]espite Mercedes's knowledge of the Defect, Mercedes told Class Members who called its customer service about the HVAC System Defect that Mercedes had never heard of the problem before and that no others had reported issues with their Class Vehicles' HVAC Systems, and made Class members pay for temporary "band-aid" repair measures out-of-pocket.
(Id. ¶ 118.) Plaintiffs also allege that despite knowing about the defective HVAC Systems, Mercedes concealed the defect by making misleading representations about the quality of the "climate control" systems of the cars. (See , e.g. , id. ¶ 111 (describing Mercedes' "rigorous 27-point service checklist" as including "pre-road *1291test checks of the air cleaner/filter and climate control system"); id. ¶ 112 (describing Mercedes' advertising regarding the cleanliness of the air in their vehicles); id. (quoting putative Mercedes advertising: "Standard dual-zone automatic climate control allows the driver and front passenger to enjoy individualized comfort in any season."); id. ¶ 114 (alleging that Certified Pre-Owned Mercedes Vehicles "undergo a 'climate control inspection' during a road test conducted by a Mercedes-Benz technician and '[a]ny noted deficiencies are repaired, replaced or reconditioned' before the vehicle is sold.").
Finally, Plaintiffs allege that when they confronted Mercedes about the issue, Mercedes (1) denied the existence of the defect, and (2) blamed the smell on consumers. (Compl., Doc. 1 ¶ 127.) Plaintiffs allege that in an effort to conceal the defect, Mercedes
forc[ed] Class Members to bear the cost of temporary measures to address the moldy smells, while at the same time performing those services at no (or lower) cost for those who complained vocally and often, calling these 'goodwill' services.
(Id. ¶ 119e.) In light of all of these allegations, Plaintiffs have plausibly alleged that Mercedes knew of but failed to disclose a material defect in the Class Vehicles. Plaintiffs have further plausibly alleged that in an effort to address the defect, they "repeatedly confront[ed] [Mercedes] with the apparent falsity of its representations, and [Mercedes] repeatedly confirm[ed] its original statement, asserting special knowledge ...." DeLong Equip. Co. ,
ii. Plaintiff Amin's GFPBA Claim is Not Time-Barred
Mercedes argues that Plaintiff Amin's GFBPA claim is time-barred because, according to the Complaint, Amin first noticed the smell in 2014 and did not file suit until 2017-outside of the two-year statute of limitations. (Doc 17-1 at 16.) A private right of action under the GFBPA must be filed no "[m]ore than two years after the person bringing the action knew or should have known of the occurrence of the alleged violation ...." O.C.G.A. § 10-1-401(1) ; see also Fortson v. Best Rate Funding, Corp. , No. 1:13-CV-4102-CC,
In Fortson , the court denied a motion to dismiss the plaintiff's GFBPA claims on statute of limitations grounds where it was "not apparent on the face of the Complaint when Plaintiff knew or should have known of the alleged violation of the GFBPA ...."
iii. Did Plaintiff Patel Comply with the Statutory Notice Requirements?
Mercedes argues that Plaintiff Patel failed to satisfy the notice requirement of the GFBPA under § 10-1-399(b). Mercedes asserts that Plaintiff Patel may not piggyback on the pre-suit demand sent on behalf of Plaintiff Amin "individually and on behalf of all others similarly situated" because the GFBPA does not permit representative claims. See O.C.G.A. § 10-1-399(a) (providing that an injured person "may bring an action individually, but not in a representative capacity"); & O.C.G.A. § 10-1-399(b) (requiring pre-suit written demand to identify "claimant").
"The notice requirement of O.C.G.A. § 10-1-399(b) is to be liberally construed, and the sufficiency of notice is a question for the court." Lynas v. Williams ,
For these reasons, Mercedes' motion to dismiss Plaintiffs GFBPA claims is DENIED.
f. Plaintiffs' GUDTPA Allegations
The Court now turns to Plaintiffs' allegations regarding Georgia's Uniform Deceptive Trade Practices Act ("GUDTPA"), O.C.G.A. § 10-1-370, et seq. Under GUDTPA, "[a] person likely to be damaged by a deceptive trade practice of another may be granted an injunction against it under the principles of equity and on terms that the court considers reasonable."
*1293O.C.G.A. § 10-1-373(a). An injunction under this provision requires the allegation (and presentation of evidence showing) of a likelihood of future harm by a deceptive trade practice. See Catrett v. Landmark Dodge, Inc. ,
Mercedes argues that "Plaintiffs do not plead facts plausibly alleging they are likely to be damaged by any future conduct by [Mercedes]." (Doc. 17-1 at 18.) Although Mercedes acknowledges that Plaintiffs "claim they might experience foul odors in their vehicles in the future," (Id. ), it argues that this is merely an allegation of harm involving past conduct. (Id. ) (citing Garcia v. Chrysler Group LLC ,
In Terrill , plaintiffs brought a putative class action alleging a serious design defect in front-loading washing machines manufactured and sold by defendant Electroloux.
Buske involved allegedly defective roofing shingles.
The similarity among the factual contexts of this case, Terrill , and Buske , is inescapable. In this case, most of the harm *1294Plaintiffs allege is associated with allegedly deceptive practices occuring before or during the purchase of the class vehicles or in their misrepresentations as to issues of repair. (See , e.g. , id. ¶ 217 ("Mercedes advertised the Class Vehicles ... with the intent not to sell them as advertised ...."); id. ¶ 225 ("Had Plaintiffs ... known [about the defect], they would not have purchased ... a Class Vehicle, or would have paid less for them.").) To the extent that Plaintiffs ask the Court to enjoin Mercedes' marketing and advertising practices, (e.g. , Compl., ¶ 217), this case is no different than Buske. "Here," as in Buske , "the Plaintiffs have not alleged that they intend to purchase [a Class Vehicle] in the future. Thus, they will not benefit from an injunction relating to the Defendants' marketing scheme."
Bolinger v. First Multiple Listing Serv., Inc. , cited by Plaintiffs, is instructive.
Here, unlike Bolinger , Plaintiffs have not alleged that they will likely buy another class vehicle. They do not allege that putative class members are likely to again be misled by Mercedes' advertising. In short, Plaintiffs have plausibly alleged that they have been damaged, but they have not sufficiently alleged that they are "likely to be damaged" again by Mercedes advertising and marketing. O.C.G.A. § 10-1-373(a). Nor do Plaintiffs allegations about the near-certain reoccurrence of the mold and mildew qualify under this section. While this is harm that will likely occur in the future if Plaintiffs' allegations are true, it is the result of a previous alleged deceptive trade practice. Unlike in Bolinger , an injunction would not prevent the reoccurrence of the harm alleged by Plaintiffs. See Catrett ,
Finally, the Court turns to Plaintiffs' allegations that they must periodically take their vehicles for service regarding the defect and that Mercedes (1) denies the existence of the defect and (2) charges Plaintiffs for non-permanent solutions. Plaintiffs argue that they have alleged harm that is both ongoing and will likely occur in the future. (Doc. 18 at 30-31.) They point to the following language in their complaint:
As a direct and proximate result of Mercedes' unfair or deceptive acts or practices, Plaintiffs ... will continue to suffer actual damages in that they ... may continue to experience their Class Vehicles' HVAC Systems growing mold and emitting noxious odors for which there is *1295no permanent fix and for which they must pay out of pocket.
(Compl., ¶ 228.) Plaintiffs further allege that the denial of the defect by Mercedes and the regular, periodic charging of Class Members for temporary "band-aid" fixes-flushing the system and changing the air filters-are deceptive trade practices. (See , e.g. , Compl., Doc. 1 ¶ 7.) Under O.C.G.A. § 10-1-372(a) :
A person engages in a deceptive trade practice when, in the course of his business, vocation, or occupation, he: ... (5) Represents that goods or services have ... characteristics ... that they do not have ...; [or] (7) Represents that goods or services are of a particular standard, quality, or grade ... if they are of another ....
O.C.G.A. § 10-1-372(a). As opposed to Mercedes' allegedly deceptive advertising, Plaintiffs have plausibly alleged that they are "likely to be damaged by [this] deceptive trade practice." O.C.G.A. § 10-1-373(a). This is because Plaintiffs have alleged that when they brought their vehicles to Mercedes for service related to the defect, Mercedes represented that the Class Vehicles were defect-free and possessed a certain quality with respect to the HVAC Systems-namely, the quality of being free from the specific defect alleged. Unlike Plaintiffs' other allegations, these concern both ongoing and future harm of the type contemplated by O.C.G.A. § 10-1-373. Compare Bolinger ,
Therefore, Mercedes' Motion to Dismiss Plaintiffs' GUDTPA injunctive relief claim is DENIED with respect to Plaintiffs' allegations regarding (1) Mercedes' ongoing denial of the HVAC defect and (2) their charging purchasers for ongoing repair procedures that do not actually fix the mold and odor producing characteristics of the HVAC system. Defendant's motion is GRANTED as to all other GUDTPA claims.
g. Plaintiffs' Fraudulent Concealment Allegations
Mercedes argues that Plaintiffs' claim for fraudulent concealment fails because Plaintiffs have not alleged "facts giving rise to a duty to disclose." (Doc. 17-1 at 20.) The Court finds this argument without merit.
*1296"In a claim for fraudulent concealment, a plaintiff must prove the same five elements of a fraud claim." Coleman v. H2S Holdings, LLC ,
"The obligation to communicate may arise from the confidential relations of the parties or from the particular circumstances of the case." O.C.G.A. § 23-2-53. "The particular circumstances of the case may give rise to an obligation to communicate where there is a concealment of 'intrinsic qualities of the article which the other party by the exercise of ordinary prudence and caution could not discover.' " McCabe ,
As highlighted above with respect to Plaintiffs' GFBPA claims,
h. Plaintiffs' Alternative Claim for Unjust Enrichment
Mercedes argues that "Plaintiffs' unjust enrichment claims are precluded by their allegations of an express warranty that covers the alleged defect." (Doc. 17-1 at 22.) However, Plaintiffs' claim for breach of express warranty has been dismissed. To the extent that Mercedes applies this same argument to Plaintiffs' claims for breach of implied warranty, that argument fails since Plaintiffs' claim for unjust enrichment was pled in the alternative. "While a party, indeed, cannot recover under both a breach of contract and unjust enrichment theory, a plaintiff may plead these claims in the alternative." Clark v. Aaron's, Inc. ,
i. Plaintiffs' Claims for Injunctive Relief
Mercedes challenges Plaintiffs' prayer for injunctive relief. (Doc. 17-1 at 31.) While some courts have entertained injunctive relief at the motion to dismiss stage, see , e.g. , Buske ,
IV. CONCLUSION
For the foregoing reasons, Mercedes' Motion to Dismiss [Doc. 17] is GRANTED in part and DENIED in part. Mercedes' Motion is GRANTED as to (a) Plaintiffs' claims for breach of express warranty, (b) Magnuson-Moss breach of express warranty, (c) violation of GUDTPA regarding Mercedes' marketing and advertising. Mercedes' Motion is DENIED as to all other claims. The parties are DIRECTED to confer and develop a scheduling order that addresses the time frames for fact and expert discovery as well as timing of Plaintiffs' class certification motion and briefing. The parties shall also address in their submission the extent to which discovery information and testimony gleaned in the parallel California action against Mercedes Benz, Manan Bhatt et al. v. Mercedes-Benz USA LLC , No. 2:16-cv-03171 (C.D. Cal. 2017), may be relied upon in this case so as to avoid redundancy and time delays. The parties shall file their proposed scheduling order within 15 days of the entry of this Order.
IT IS SO ORDERED this 13th day of March, 2018.
According to the Complaint,
[t]he vehicles at issue in this action include the 2004-2012 Mercedes A-Class, 2001-2017 Mercedes C-Class, 2000-2014 Mercedes CL-Class, 2013-2017 Mercedes CLA-Class, 2003-2009 Mercedes CLK-Class, 2004-2017 Mercedes CLS-Class, 2003-2016 Mercedes E-Class, 2007-2017 Mercedes GLClass, 2010-2016 Mercedes GLK-Class, 2006-2016 Mercedes M-Class, 2017 Mercedes GLE-Class, 2006-2015 Mercedes R-Class, 1999-2017 Mercedes SClass, 2003-2012 Mercedes SL-Class, 2004-2016 Mercedes SLK-Class, and 2002-2013 Maybach 57 and 62.
(Compl., Doc. 1 ¶ 2.)
Although two defendants are named in this action, Mercedes has filed this Motion alone. Daimler AG has not been served and has appeared specially to oppose Plaintiffs' pending Motion for Service by Alternate Means (Doc. 25). Therefore, when discussing allegations involving both defendants, the Court refers to them in plural form, but when referring to arguments, the Court uses the singular "Defendant" or "Mercedes."
The following description is taken from the allegations of Plaintiffs' Complaint, (Doc. 1), taken in the light most favorable to Plaintiffs.
It is certainly possible that Defendants may prove that the defect is not uniform and that there are multiple, materially distinct groups of vehicles and defects that are more appropriately dealt with as subclasses or that the alleged commonality of the HVAC systems is simply not true. That discussion is better suited for a later stage of the litigation, however, such as at class certification or summary judgment.
The Court finds it strange and concerning that Mercedes would cite to subsection (1) of O.C.G.A. § 11-2-725, dealing with the general contract tolling provision, in its briefing without noting the renewal provision covering contract actions, subsection (3).
However, the Fortson court did dismiss the plaintiff's GFBPA claims on other grounds not relevant here.
The Court notes, though, that the Court in Helpling ultimately commented that even if Plaintiffs had alleged some future harm, the Defendant's "misrepresentations or omissions would not have caused those future harms to Taylor or any class member" because they already had purchased the Rheem units at issue. The Court may well reach that same conclusion at summary judgment when the Court properly can consider evidence introduced. Catrett ,
The Court notes that not all deceptive trade practices can be practically enjoined and that it is not apparent at this juncture why Plaintiffs alleged harms could not be remedied by money and without the equitable relief requested.
See III.e., supra.