Case Information
IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION
JUSTIN O’CONNOR, on behalf of )
himself and all other similarly situated, )
) Plaintiff, ) Case No. 19-cv-5045 )
v. ) Judge Robert M. Dow, Jr.
)
FORD MOTOR COMPANY, )
)
Defendant. )
MEMORANDUM OPINION AND ORDER
Plaintiff Justin O’Connor (“Plaintiff”) brings this putative class action complaint against Defendant Ford Motor Company (“Defendant” or “Ford”) for damages allegedly arising out of Defendant’s sale and lease of 2017 to 2019 Model Year Ford F-150 trucks with defective 10R80 10-speed automatic transmissions. Currently before the Court is Defendant’s motion to dismiss the governing first amended complaint [23]. [1] For the following reasons, Defendant’s motion to dismiss [23] is granted. The dismissal is without prejudice to filing a second amended complaint by September 8, 2020. With that said, as the analysis that follows indicates, the Court is skeptical that Plaintiff’s warranty and negligence claims are salvageable, but less dubious about the possibility that Plaintiff’s ICFA and unjust enrichment claims can be successfully replead. In an abundance of caution, however, the Court will not place any limits on Plaintiff’s opportunity to take one more shot at stating his claims. If Plaintiff files a second amended complaint, Defendant will be given until October 6, 2020 to file a responsive pleading. If Plaintiff does not intend to file a second amended complaint, he should file a statement to that effect and the Court will set the matter for a telephonic status hearing.
I. Background
The following facts are taken from Plaintiff’s governing first amended complaint [7]. All
well-pled allegations in the complaint are assumed to be true for purposes of Defendant’s motion
to dismiss. See
Calderon-Ramirez v. McCament
,
This lawsuit concerns alleged defects in the Vehicles’ 10R80 10-speed automatic transmission (“Transmission”). Plaintiff explains that an automatic transmission is essentially an automatic gear shifter. Instead of manually shifting the gears with a clutch, the automatic transmission does it on its own. The transmission acts as a powertrain to convert the vehicle engine’s force into a controlled source of power. Accordingly, drivers need a properly functioning automatic transmission in order to safely and reliably accelerate and decelerate their Vehicles. Plaintiff alleges that Defendant knew or should have known that the Vehicles contained a design and/or manufacturing defect (“Transmission Defect”) that can cause the Transmissions to shift harshly, slip gears, hesitate, or surge. Plaintiff alleges that, because of the Defect, the Vehicles are likely to suffer serious damages and potentially catch fire if accidents occur, causing an unreasonable and extreme risk of serious bodily harm or death to the Vehicles’ occupants and others in the vicinity. Yet, according to Plaintiff, Defendant failed to disclose the defect to Plaintiff or the proposed class members at the time they purchased or leased their Vehicles or any time after. Plaintiff alleges that had he or the other proposed class members known about the defective Transmissions at the time of sale or lease, they would not have purchased their Vehicles or would have paid less for them. Plaintiff allegedly “paid and continues to pay a premium for a defective vehicle which poses a safety hazard to himself, his family, and others.” [7] at 9.
Plaintiff alleges that since the 10R80 Transmission was introduced, “drivers have repeatedly complained about difficulty shifting and vehicle lunging and/or jerking to Ford.” [7] at 9; see also id. at 7-16 (providing numerous examples of complaints submitted to the National Highway Transportation Safety Administration’s (“NHTSA”) website). As a result of these complaints, Defendant allegedly knew or should have known by 2018 through sufficient product testing or other methods that the Vehicles contained the Transmission Defect. Upon information and belief, Defendant issued multiple Technical Service Bulletins (“TSBs”) addressing the shifting problems. The TSBs stated that 2017 and 2018 F-150 vehicles “may exhibit harsh/bumpy upshift, downshift and/or engagement concerns” and suggested reprogramming the powertrain control module (“PCM”). [7] at 10, ¶ 45. The TSBs further stated that the Class Vehicles were “equipped with an adaptive transmission shift strategy which allows the vehicle’s computer to learn the transmission’s unique parameters and improve shift quality.” Id. They advised that “[w]hen the adaptive strategy is reset, the computer will begin a re-learning process,” which “may result in firmer than normal upshifts and downshifts for several days.” Id . However, Plaintiff alleges on information and belief, Defendant’s “adaptive transmission shift strategy” fails to remedy the shifting problems reported in Class Vehicles. . at 10, ¶ 46. Despite knowing this, Defendant allegedly took no further steps to remedy the issue, leaving Plaintiff and the other Class Members with knowingly defective Class Vehicles. Defendant has not recalled the Class Vehicles to repair the Transmission Defect and has not offered to reimburse Class Vehicle owners and lessees who incurred costs relating to the transmission problems.
Plaintiff alleges that the Transmissions are covered by express and/or implied warranties. In particular, Defendant offers a “New Vehicle Limited Warranty” for three years or 36,000 miles, whichever occurs first. [7] at 6. Defendant also offers extended warranty coverage for Powertrain components for five years or 60,000 miles, whichever occurs first. This extended warranty coverage includes the transmission and all internal parts, clutch cover, seals and gaskets, torque converter, transfer case (including all internal parts), transmission case, and transmission mounts. Nonetheless, Plaintiff alleges on information and belief, “Ford refuses to replace or repair the Transmissions and merely states that the abrupt and harsh shifting is normal.” . at 2, ¶ 7; see also id. at 7, ¶ 31.
Based on these allegations, Plaintiff brings a federal claim for violation of the Magnuson- Moss Warranty Act and Illinois state law claims for breach of express warranty, breach of implied warranty, violation of the Illinois Consumer Fraud and Deceptive Business Practices Act (“ICFA”), negligence, and unjust enrichment. Plaintiff requests that the Court certify the action as a class and seeks actual, punitive, and statutory damages, injunctive relief, attorneys’ fees, costs, and pre- and post-judgment interest.
More specifically, in his first claim, for breach of express warranty, Plaintiff alleges that Ford expressly warranted in writing that the vehicles were covered by certain warranties in Ford’s “New Vehicle Limited Warranty.” [7] at 22. The warranty states that “authorized Ford Motor Company dealers will, without charge, repair, replace, or adjust all parts on your vehicle that malfunction or fail during normal use during the applicable coverage period due to a manufacturing defect in the factory-supplied materials or factory workmanship.” Id . Plaintiff alleges that “Ford breached its express warranties to repair defects in materials and workmanship of any part supplied by Ford” and that “Ford has not repaired, and has been unwilling to reasonably repair, the Transmission Defect.” Id . Plaintiff further claims that “the express warranties to repair defective parts fail in their essential purpose because the contractual remedy is insufficient to make Plaintiff and Class Members whole and because Ford has failed and/or has refused to adequately provide the promised remedies within a reasonable time.” . Accordingly, Plaintiff submits, recovery by Plaintiff and the Class is not limited to the express warranties of repair to parts defective in materials or workmanship.
In his second claim, for breach of implied warranty, Plaintiff alleges that Defendant had actual knowledge of and received timely notice regarding the Transmission Defect, yet failed and refused to offer an effective remedy even after receiving numerous consumer complaints. Plaintiff asserts that this constitutes a breach of the implied warranty of merchantability and caused economic damage to Plaintiff and the Class, including “loss attributable to the diminished value of their Class Vehicles, loss of use of their Class Vehicles and other tangible property, as well as the monies spent and to be spent to repair and/or replace their Transmissions.” [7] at 25, ¶ 99.
Plaintiff’s third claim is for violation of the Magnuson-Moss Warranty Act, a federal
statute “designed to protect consumers against deceptive warranty practices.”
Reid v. Unilever
U.S., Inc
.,
In his fourth claim, for violation of the ICFA, Plaintiff alleges that Defendant engaged in deceptive trade practices by failing to disclose and actively concealing the dangers and risks posed by the Class Vehicles and/or the defective Transmissions installed in them, depriving Class members of the benefit of their bargains with Defendant. Specifically, Plaintiff claims that Defendant’s deceptive business practices include: (i) representing that its vehicles and transmissions had characteristics, uses, or benefits which they do not have; (ii) advertising its goods with intent not to sell them as advertised; (iii) representing that its vehicles and transmissions are of a particular standard, quality, or grade when they are not; (iv) representing that a transaction conferred or involved rights, remedies, or obligations which they do not; and (v) representing that its goods have been supplied in accordance with a previous representation when they have not. Plaintiff alleges that Defendant knew of the Transmission Defect since at least March 2018, when it issued the first TSB regarding the Defect. Yet, Defendant concealed the Defect, made incomplete representations about the safety of the Vehicles, and continued to allow unsuspecting new and used car purchasers to buy, lease, and drive the Class Vehicles.
Plaintiff’s fifth claim is for common law negligence. Plaintiff alleges that Defendant had a duty to design and manufacture a product that would be safe for its intended and foreseeable uses and users, including the use to which its products were put by Plaintiff and the Class Members, which it breached through its negligence in the design, development, manufacture, and testing of the Transmissions installed in the Class Vehicles. Defendant allegedly knew, or in the exercise of reasonable care should have known, that the Vehicles pose an unreasonable risk of serious bodily injury to Plaintiff, Class Members, and others because they are susceptible to shifting harshly and erratically, causing the Vehicles to jerk, lunge, and hesitate between gears, which can, among other things, distract drivers and cause them to lose control over their Vehicles. Plaintiff further contends that Defendant owed duties to the Class to ensure that an appropriate repair procedure was developed and made available to consumers, as well as a duty not to engage in fraudulent or deceptive conduct, including the knowing concealment of material information such as the Transmission’s shifting problems. Plaintiff further alleges that under the TREAD Act, Defendant owed an independent duty to send notice to Plaintiff and Class Vehicle owners, purchasers, and dealers whenever it learns the vehicle or equipment contains a defect and decides in good faith that the Defect is related to motor vehicle safety. Despite Defendant’s awareness of the Transmission Defect, it allegedly failed to timely notify owners, purchasers, and dealers.
Finally, Plaintiff asserts a claim for unjust enrichment. Plaintiff alleges that, as a result of its fraudulent acts and omissions related to the defective Transmissions, Defendant obtained monies which rightfully belong to Plaintiff and the Class Members to the detriment of Plaintiff and the proposed Class Members. In particular, Defendant’s actions allegedly caused the Class members to pay “a higher price for their vehicles which actually had lower values.” [7] at 32, ¶ 146. Defendant also allegedly “received monies for vehicles and transmissions that Plaintiff and the proposed Class Members would not have otherwise purchased or leased.” .
II. Legal Standard
A Rule 12(b)(6) motion challenges the legal sufficiency of the complaint. For purposes of
a motion to dismiss under Rule 12(b)(6), the Court “‘accept[s] as true all of the well-pleaded facts
in the complaint and draw all reasonable inferences in favor of the plaintiff.’”
Calderon-Ramirez
,
III. Analysis
A. Breach of Express and Implied Warranties and Violation of the Magnuson- Moss Warranty Act
The Court considers Plaintiff’s first three claims together. His first claim is for breach of
express warranty. Pursuant to Illinois statute, “[a]ny affirmation of fact or promise made by the
seller to the buyer which relates to the goods and becomes part of the basis of the bargain creates
an express warranty that the goods shall conform to the affirmation or promise.” 810 ILCS § 5/2-
313(1)(a). “To state a claim for breach of express warranty in Illinois, plaintiffs must allege that
the seller: (1) made an affirmation of fact or promise; (2) relating to the goods; (3) which was part
of the basis for the bargain; and (4) guaranteed that the goods would conform to the affirmation or
promise.”
Aquino v. C.R. Bard, Inc.
,
Plaintiff’s second claim is for breach of implied warranty. In Illinois, “[i]mplied warranties
arise as a matter of law.”
S.A.M. Electronics, Inc. v. Osaraprasop
,
Plaintiff’s third claim is for violation of the Magnuson-Moss Warranty Act, 15 U.S.C. § 2301 et seq. (“MMWA”). “The MMWA distinguishes between two kinds of written warranties: full warranties and limited warranties,” which “must be ‘clearly and conspicuously’ designated as one or the other.” Anderson v. Gulf Stream Coach, Inc ., 662 F.3d 775, 780 (7th Cir. 2011). “Sections 2303(a) and 2304(a) of the MMWA impose minimum federal standards for ‘full’ warranties and provide remedies for their breach”—either a full refund or replacement of the product if the defect cannot be remedied after a reasonable number of attempts. Id . (citing 15 U.S.C. §§ 2303(a), 2304(a)). “‘Limited’ warranties and ‘implied’ warranties are not subject to the same standards as ‘full’ warranties.” Id. at 781. Instead, the MMWA “allows consumers to enforce [limited] written and implied warranties in federal court, [as provided in section 2310(d)(1),] borrowing state law causes of action.” . (quoting Schimmer v. Jaguar Cars, Inc ., 384 F.3d 402, 405 (7th Cir. 2004)) (internal quotation marks omitted). “As this discussion suggests, for all practical purposes, the MMWA operates as a gloss on [a plaintiff’s] state law breach of warranty claims.” Id.
Defendant moves to dismiss both of the state law warranty claims because, among other things, Plaintiff fails to allege that he provided Defendant with pre-suit notice of any alleged breach of warranty. The Court agrees, and therefore will dismiss the first and second counts of Plaintiff’s amended complaint.
This action involves the sale of goods in Illinois and therefore is governed by Illinois’
Uniform Commercial Code (“UCC”). The UCC provides in relevant part that where a tender of
goods has been accepted, “the buyer must within a reasonable time after he discovers or should
have discovered any breach notify the seller of breach or be barred from any remedy.” 810 ILCS
5/2-607(3)(a). In construing this provision of state law, the Court is “bound by the decisions of
the state’s highest court”—here, the Illinois Supreme Court.
In re Emerald Casino, Inc
., 867 F.3d
743, 765 (7th Cir. 2017) (citing
West v. Am. Tel. & Tel. Co.
, 311 U.S. 223, 236–37 (1940)).
According to the Illinois Supreme Court, section 2-607(a)(3) requires a plaintiff to “directly notify
the seller of the troublesome nature of the transaction or be barred from recovering for a breach of
warranty.”
Connick v. Suzuki Motor Co., Ltd.
,
Quoting an opinion from Judge Learned Hand interpreting the predecessor to section 2-
607, the Illinois Supreme Court elaborated that “[t]he notice ‘of the breach’ required is not of the
facts, which the seller presumably knows quite as well as, if not better than, the buyer, but
of
buyer’s claim
that they constitute a breach.”
Connick
,
In his response to the motion to dismiss, Plaintiff never comes to terms with
Connick
.
Instead, Plaintiff cursorily states that “Courts reviewing similar allegations routinely apply the
actual knowledge exception to the direct notice requirement,” and provides a string cite to a
handful of federal district court cases that allegedly support his argument that notice is not required
when the manufacturer had learned from some source other than the plaintiff of its product’s
alleged defect. [38] at 14-15. Like Chief Judge Pallmeyer in
Muir v. NBTY, Inc
., 2016 WL
5234596 (N.D. Ill. Sept. 22, 2016), this Court respectfully “notes language from the Illinois
Supreme Court holding that this kind of generalized knowledge is not sufficient to excuse the pre-
suit notice requirement.”
Muir v. NBTY, Inc
.,
Plaintiff also asserts that “the issue of notice is usually a question of fact for the jury rather
than an issue decided on a motion to dismiss.” [38] at 15. However, “the sufficiency of notice is
not an issue if plaintiffs do not allege notice in the first place.”
Porter v. NBTY, Inc
., 2016 WL
6948379, at *7 (N.D. Ill. Nov. 28, 2016) (rejecting argument that sufficiency of notice was
question of fact inappropriate for motion to dismiss, when plaintiffs did “not allege that they
provided defendants with pre-suit notice” but rather alleged that “someone else did” and “gave no
information on where that person bought the product or his relationship to plaintiffs”). Here,
Plaintiff does not allege in the complaint or assert in response to the motion to dismiss that he ever
contacted Defendant about his vehicle in any manner before filing suit. Thus, Plaintiff has not
identified any questions of fact that need to be decided before concluding that he failed to comply
with section 2-607’s pre-suit notice requirement. “It is now impossible, of course, for [Plaintiff]
to provide pre-suit notice of the alleged breach of warranty to Ford”; he filed suit in 2019, “and
cannot now unring that bell.”
Darne
,
B. Illinois Consumer Fraud Act
The ICFA prohibits “unfair or deceptive acts or practices, including but not limited to the
use or employment of any deception, fraud, false pretense, false promise, misrepresentation or the
concealment, suppression or omission of any material fact, with intent that others rely upon the
concealment, suppression or omission of such material fact…in the conduct of trade or
commerce…whether any person has in fact been misled, deceived or damaged thereby.” 815 ILCS
505/2. The elements of a claim for violation of the ICFA are “(1) a deceptive act or practice by
the defendant, (2) the defendant’s intent that the plaintiff rely on the deception, (3) the occurrence
of the deception in a course of conduct involving trade or commerce, and (4) actual damage to the
plaintiff that is (5) a result of the deception.”
Skyrise Construction Group, LLC v. Annex
Construction, LLC
,
Defendant moves to dismiss Plaintiff’s ICFA claim on the basis that it fails to state a claim
with particularity as required by Rule 9(b). The Court agrees and will dismiss the ICFA claim.
Plaintiff alleges that Defendant engaged in deceptive trade practices in violation of the ICFA by
“(i) representing that its vehicles and transmissions had characteristics, uses, or benefits which
they do not have; (ii) advertising its goods with intent not to sell them as advertised; (iii)
representing that its vehicles and transmissions are of a particular standard, quality, or grade when
they are not; (iv) representing that a transaction conferred or involved rights, remedies, or
obligations which they do not; and (v) representing that its goods have been supplied in accordance
with a previous representation when they have not.” [7] at 27, ¶ 118. These generalized allegations
fail to describe with particularity the specific misrepresentations on which Plaintiff allegedly
relied. Defendant does not identify “the time, place, and content of the misrepresentation,” or “the
method by which the misrepresentation was communicated to the plaintiff.”
Camasta v. Jos. A.
Bank Clothiers, Inc
.,
The only Ford representations that the complaint specifically cites are three excerpts from
Ford’s website, which tout the F-150’s “class-leading capability,” “3.5L EcoBoost,” and “10-speed
automatic transmission.” [7] at 5-6. The excerpt concerning the transmission says: “F-150
EcoBoost, VB and diesel engines deliver their power through an advanced 10-speed automatic
transmission. Compared with the 6-speed, the 10-speed delivers improved overall performance,
with enhanced acceleration at the low and mid ranges of the power band. Features include
optimized wide-span gear spacing coupled with drag-reduction actions plus three overdrive gears.
What’s more, you can choose from selectable modes: Normal, Tow-Haul, Snow-Wet, EcoSelect,
and Sport.” . at 6. The complaint does not identify anything in the three excerpts that is
purportedly false. Nor does it allege that Plaintiff reviewed the website before leasing his
Vehicle—or relied on some other deceptive or misleading statement from Defendant. See
Schiesser
,
Plaintiff argues that even if he has not adequately alleged an ICFA claim based on an
alleged misrepresentation, his allegations concerning Defendant’s material omissions are
sufficient to state a claim. The complaint alleges that Defendant “has known of the defective
transmissions since at least March 2018, when it issued the first TSB regarding the Defect, thereby
acknowledging numerous consumer complaints made to the NHTSA,” [7] at 28, ¶ 119; that
Defendant deliberately “continued to allow unsuspecting new and used car purchasers to buy or
lease the Class Vehicles and allowed them to continue driving dangerous vehicles,”
id.
; that had
they “been aware of the defective transmissions installed in the Class Vehicles, Plaintiff and Class
Members either would have paid less for their vehicles or would not have purchased or leased
them at all,”
id
. at 29, ¶ 122; and that as a result “they did not receive the benefit of their bargain,”
id
. In
Connick
, the Illinois Supreme Court held that similar allegations were sufficient to state an
ICFA claim based on omissions.
Nonetheless, there is a key difference between this case and
Connick
, which requires
dismissal of Plaintiff’s ICFA claim for failure to state a claim. “[I]n
Connick
, the plaintiffs
received communications from Suzuki, through a car review piece within ‘Car & Driver’ magazine
for which Suzuki provided misleading information.”
De Bouse v. Bayer
,
Finally, Plaintiff argues that even if he fails to state a claim for deceptive practices under
Rule 9(b), his ICFA claim nonetheless survives to the extent it is based on unfair conduct, which
is not subject to a heightened pleading standard. According to Plaintiff, the complaint alleges that
Defendant engaged in unfair conduct in violation of the ICFA “by failing to disclose and actively
concealing the dangers and risks posed by the Class Vehicles and/or the defective transmissions
installed in them.” [7] at 27, ¶ 118. However, this is the same conduct that Plaintiff alleges is
“deceptive” in violation of the ICFA. The addition of “unfairness” language does not change an
ICFA claim that is “entirely grounded in fraud” to an unfairness claim.
Camasta
,
C. Unjust Enrichment
Defendant argues that Plaintiff’s unjust enrichment claim fails because it is premised on
the same conduct underlying Plaintiff’s legally deficient ICFA claim and because it independently
fails to satisfy Rule 9(b). The Court agrees and will dismiss the unjust enrichment claim as well.
To state a claim for unjust enrichment under Illinois law, “a plaintiff must allege that the
defendant has unjustly retained a benefit to the plaintiff's detriment, and that defendant’s retention
of the benefit violates the fundamental principles of justice, equity, and good conscience.”
Banco
Panamericano, Inc. v. City of Peoria
,
Here, Plaintiff’s unjust enrichment claim is premised on the same factual allegations as his underlying ICFA claim, which fails to comply with Rule 9(b) for the reasons explained above. Specifically, Plaintiff’s unjust enrichment count incorporates the factual allegations of the preceding paragraphs and asserts that “Ford has long known that its 10R80, 10-speed automatic transmissions have a propensity to shift harshly and erratically, causing the vehicle to jerk, lunge, and hesitate between gears, posing a serious safety risk, which it concealed and failed to disclose to Plaintiff and the proposed Class Members.” [7] at 32, ¶¶ 142, 144. Further, Plaintiff identifies the same “who,” “what,” “when,” “where,” and “how” in arguing why the unjust enrichment and ICFA claims are sufficient under Rule 9(b). See [38] at 29, 36. Therefore, Plaintiff’s unjust enrichment claim will be dismissed along with the ICFA claim.
D. Negligence
Finally, the Court considers Plaintiff’s negligence claim. “In Illinois, the elements of a
negligence claim are ‘the existence of a duty owed by the defendant to the plaintiff, a breach of
that duty, and injury proximately resulting from the breach.’”
Totty v. Anderson Funeral Home,
Ltd
., -- F. Supp. 3d --,
In
Moorman Manufacturing Co. v. National Tank Co.
, the Illinois Supreme Court held that
“[t]ort theory is appropriately suited for personal injury or property damage resulting from a
sudden or dangerous occurrence,” while the “remedy for economic loss ... lies in contract.” 435
N.E.2d 443, 450 (1982). “Economic loss” includes “damages for inadequate value, costs of repair
and replacement of the defective product, or consequent loss of profits—without any claim of
personal injury or damage to other property,” as well as “the diminution in the value of the product
because it is inferior in quality and does not work for the general purposes for which it was
manufactured and sold.”
Id.
at 449 (internal quotation marks and citation omitted). “Simply put,
a product that damages only itself cannot be the subject of a suit for damages.”
Mars, Inc. v.
Heritage Builders of Effingham, Inc.
, 763 N.E.2d 428, 436 (Ill. App. 2002). Further, “[e]ven
named plaintiffs who represent a class ‘must allege and show that they personally have been
injured, not that injury has been suffered by other, unidentified members of the class to which they
belong.’”
T.S. v. Twentieth Century Fox Television
, -- F.R.D. --,
The complaint does not allege that Plaintiff has suffered any non-economic damage. He does not claim to have suffered any physical injuries as a result of driving his Vehicle with an allegedly defective Transmission. Nor does Plaintiff allege that the sudden or dangerous malfunctioning of the Transmission resulted in damage to any property (other than, perhaps, the Vehicle itself, although he does not make that clear).
Plaintiff argues that he is nonetheless entitled to pursue a negligence claim under two
exceptions to the
Moorman
doctrine, which apply “where the plaintiff’s damages are proximately
caused by either (1) a defendant’s intentional false representation (i.e., fraud), or (2) a negligent
misrepresentation by a defendant in the business of supplying information for the guidance of
others in their business transactions.”
Swervo Entertainment Group, LLC v. Mensch
, 2017 WL
1355880, at *8 (N.D. Ill. Apr. 13, 2017). Plaintiff maintains that the first exception applies because
the damages alleged in the complaint “arise out of intentional false representations made by Ford.”
[38] at 33. He then concludes that “[b]ecause Plaintiff pleaded a cause of action for negligent
misrepresentations, his claim falls under the exception expressly recognized in
Moorman
in which
tort recovery may be allowed for damages caused by fraud.”
Id
. However, this argument “appears
to confuse basic tenets of tort law.”
Ibarolla v. Nutrex Research, Inc
.,
Plaintiff also asserts that the “information provider” exception applies to his negligence
claim. This exception, which is to be narrowly construed “lest the exception swallow the rule,”
“allows recovery of economic losses under a negligent misrepresentation theory when two
elements are present: First, the defendant must be in the business of supplying information, and
second, the defendant must provide this information for the guidance of others in their business
relations with third parties.”
Gerdes v. John Hancock Mut. Life Ins. Co
.,
Defendant manufactures and sells automobiles, a tangible good, and therefore falls at the
end of the spectrum of businesses that are not in the business of supplying information. See
Hartford Fire Ins. Co. v. Henry Bros. Const. Mgmt. Servs., LLC
,
Plaintiff acknowledges that Defendant’s primary business is manufacturing and selling
automobiles, but argues that the information provider exception nonetheless applies because
“under the TREAD Act Ford owed an independent duty to send notice to Plaintiff and Class
Vehicle owners, purchasers, lessees and dealers whenever it learns the vehicle or equipment
contains a defect and decides in good faith that the defect is related to motor vehicle safety.” [38]
at 34 (citing 49 U.S.C. § 30118(c)). “As such,” Plaintiff maintains, “an independent duty to
become an ‘information provider’ arose at the time Ford discovered the Transmission Defect.” .
However, Plaintiff offers no legal support for his position that having a legal duty to provide certain
information somehow transforms a company that sells goods into a company that is “in the
business of supplying information.”
Gerdes
,
IV. Conclusion
For these reasons, Defendant’s motion to dismiss Plaintiff’s amended complaint [23] is granted. As noted at the outset, out of an abundance of caution, the dismissal is without prejudice to filing a second amended complaint by September 8, 2020. If Plaintiff files a second amended complaint, Defendant will be given until October 6, 2020 to file a responsive pleading. If Plaintiff does not intend to file a second amended complaint, he should file a statement to that effect and the Court will set the matter for a telephonic status hearing.
Dated: August 7, 2020
____________________________ Robert M. Dow, Jr.
United States District Judge
Notes
[1] By agreement of the parties, three cases originally filed in other districts were transferred to this District and then reassigned to this Court as related under Local Rule 40.4. In this District, those cases were Marino v. Ford Motor Co. , No. 20-cv-1981, Orndorff v. Ford Motor Co. , No. 20-cv-2095, and Smith v. Ford Motor Co. , No. 20-cv-2612. Also, by agreement of the parties, all four related cases have been consolidated under Federal Rule of Civil Procedure 42(a), with all further filings to be made in this docket, and the three other cases administratively closed.