Wicks v. Chrysler Group, LLC et al

Filing 42

ORDER signed by Judge Lawrence K. Karlton on 8/31/2011 ORDERING that the complaint is DISMISSED. If Pltf chooses to amend his complaint again, he must do so within 21 days. (Zignago, K.)

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UNITED STATES DISTRICT COURT

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FOR THE EASTERN DISTRICT OF CALIFORNIA

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10 EVERT WICKS,
NO. CIV. S-10-3214 LKK/KJN
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Plaintiff,
v.
O R D E R

13 CHRYSLER GROUP, LLC, and
AUTOWEST CHRYSLER DODGE
14 JEEP,
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Defendants.
/

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Plaintiff brings a single claim for violation of the Magnuson-

18 Moss Warranty Act, 15 U.S.C. §§ 2301, et seq. (“the Act”).

He

19 alleges that defendant, an automobile dealership, violated the Act
20 by failing to honor the warranty issued by Chrysler LLC on his
21 vehicle, a Dodge Ram diesel truck.
I.

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23

BACKGROUND

Plaintiff bought the truck, manufactured by Chrysler LLC

24 (“Chrysler”), in October 2003 from a dealership not involved in
25 this lawsuit.

Amended Complaint (“Complaint”) (Dkt. No. 29) ¶ 10.

26 The truck was protected by a seven-year/100,000 mile Diesel Engine
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1 Warranty (the “Warranty”) provided by Chrysler.
2

Id.

Pursuant to a Sales and Service Agreement (“the Agreement”)

3 entered

into

between

defendant

Autowest

Chrysler

Dodge

Jeep

4 (“Autowest”) and Chrysler on April 1, 1999, Autowest agreed to
5 provide “all warranty service” to owners of Dodge vehicles, and
6 Chrysler agreed to compensate Autowest for those services.

See

7 Defendant’s Opposition, Exh. A1 (“Chrysler Corporation Dodge Sales
8 and Service Agreement / Additional Terms and Provisions”) at 3.
9 Autowest also agreed to indemnify Chrysler for any damage it caused
10 during warranty service.
11

Id.

Plaintiff brought the truck in for repairs on three separate

12 occasions.

The first time plaintiff brought the truck to a non-

13 party dealership, and on two subsequent occasions he brought it to
14 defendant Autowest.

Complaint ¶¶ 12-16.

Every time, warranty

15 service was refused, and plaintiff paid for the repairs out of his
16 own pocket.2

Id.

Ultimately, the truck’s engine failed entirely,

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Defendant attached the Agreement to its motion papers as an
exhibit.
It is incorporated by reference into plaintiff’s
complaint, see Complaint ¶¶ 20 & 21, neither party questions its
authenticity, and both parties rely upon it in their motion papers.
See Dunn v. Castro, 621 F.3d 1196, 1205 n.6 (9th Cir. 2010) (“we
may consider ‘documents whose contents are alleged in a complaint
and whose authenticity no party questions, but which are not
physically attached to the [plaintiff's] pleading’”). Accordingly,
the court will consider the Agreement as if it were an exhibit
properly attached to the complaint pursuant to Fed. R. Civ.
P. 10(c).

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The court takes judicial notice that on April 30, 2009,
Chrysler LLC – the manufacturer of plaintiff’s truck and the issuer
of the Warranty at issue here – filed for bankruptcy. See In re
Chrylser LLC, et al., Case No. 09-50002 (S.D.N.Y.); Defendant’s
Opposition at 2 n.2; Plaintiff’s Motion To Amend Complaint (Dkt.
No. 24) at 5 (April 5, 2011).
Neither party asserts that the
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1 and plaintiff paid for a new engine.3

II. DISMISSAL STANDARD

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Complaint ¶ 17.

A dismissal motion under Fed. R. Civ. P. 12(b)(6) challenges

4 a complaint's compliance with the federal pleading requirements.
5 Under Federal Rule of Civil Procedure 8(a)(2), a pleading must
6 contain a “short and plain statement of the claim showing that the
7 pleader is entitled to relief.”

The complaint must give the

8 defendant “‘fair notice of what the ... claim is and the grounds
9 upon which it rests.’”

Bell Atlantic v. Twombly, 550 U.S. 544, 555

10 (2007), quoting Conley v. Gibson, 355 U.S. 41, 47 (1957).
11

To meet this requirement, the complaint must be supported by

12 factual allegations.

Ashcroft v. Iqbal, 556 U.S. ___, ___, 129 S.

13 Ct. 1937, 1950 (2009).

“While legal conclusions can provide the

14 framework of a complaint,” neither legal conclusions nor conclusory
15 statements are themselves sufficient, and such statements are not
16 entitled to a presumption of truth.
17 Ct. at 1949–50.

Iqbal, 556 U.S. at ___, 129 S.

Iqbal and Twombly therefore prescribe a two step

18 process for evaluation of motions to dismiss.
19 identifies

the

non-conclusory

factual

The court first

allegations,

and

then

20 determines whether these allegations, taken as true and construed
21 in the light most favorable to the plaintiff, “plausibly give rise
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bankruptcy explains the refusals to honor the Warranty (especially
given that the non-party’s refusal occurred before the bankruptcy),
or that the bankruptcy otherwise affects the disposition of the
case against Autowest.
3

Plaintiff alleges damages of over $50,000. See 15 U.S.C.
§ 2310(d)(3)(B) (the minimum “amount in controversy” for a federal
court claim under the Act is $50,000).
3

1 to an entitlement to relief.”

Iqbal, 556 U.S. at ___, 129 S. Ct.

2 at 1949–50.
3

“Plausibility,” as it is used in Twombly and Iqbal, does not

4 refer to the likelihood that a pleader will succeed in proving the
5 allegations.

Instead, it refers to whether the non-conclusory

6 factual allegations, when assumed to be true, “allow[ ] the court
7 to draw the reasonable inference that the defendant is liable for
8 the misconduct alleged.”
9 1949.

Iqbal, 556 U.S. at ___, 129 S. Ct. at

“The plausibility standard is not akin to a ‘probability

10 requirement,’ but it asks for more than a sheer possibility that a
11 defendant has acted unlawfully.” Id. (quoting Twombly, 550 U.S. at
12 557).4

A complaint may fail to show a right to relief either by

13 lacking a cognizable legal theory or by lacking sufficient facts
14 alleged under a cognizable legal theory.

Balistreri v. Pacifica

15 Police Dep't, 901 F.2d 696, 699 (9th Cir. 1990).
16 ////
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Twombly imposed an apparently new “plausibility” gloss on
the previously well-known Rule 8(a) standard, and retired the longestablished “no set of facts” standard of Conley v. Gibson, 355
U.S. 41 (1957), although it did not overrule that case outright.
See Moss v. U.S. Secret Service, 572 F.3d 962, 968 (9th Cir. 2009).
The Ninth Circuit has acknowledged the difficulty of applying the
resulting standard, given the “perplexing” mix of standards the
Supreme Court has applied in recent cases. See Starr v. Baca, ___
F.3d ___,___, 2011 WL 2988827 at *13-*14, 2011 U.S. App. LEXIS
15283 at *33-37(9th Cir. July 25, 2011) (comparing the Court’s
application of the “original, more lenient version of Rule 8(a)”
in Swierkiewicz v. Sorema N.A., 534 U.S. 506 (2002) and Erickson
v. Pardus, 551 U.S. 89, 127 S. Ct. 2197 (2007) (per curiam), with
the seemingly “higher pleading standard” in Dura Pharmaceuticals,
Inc. v. Broudo, 544 U.S. 336 (2005), Twombly and Iqbal). See also
Cook v. Brewer, 637 F.3d 1002, 1004 (9th Cir. 2011) (applying the
“no set of facts” standard to a Section 1983 case).
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III. ANALYSIS

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The Magnuson-Moss Warranty Act creates a federal private cause

3 of action for any person damaged by the failure of a “supplier,
4 warrantor, or service contractor” to honor its “written warranty,
5 implied warranty, or service contract.” 15 U.S.C. § 2310(d)(1)(B);
6 Milicevic v. Fletcher Jones Imports, Ltd., 402 F.3d 912, 917 (9th
7 Cir. 2005).

With respect to written warranties, the Act specifies

8 that the warranty may be enforced only against the warrantor, “and
9 no other person.”
10

15 U.S.C. § 2310(f).

Plaintiff’s sole claim is that defendant Autowest failed to

11 honor the written Warranty issued on his truck.
12 31.

Complaint ¶¶ 27 &

There is no claim for “implied warranty.”

The factual

13 allegations of the complaint, when construed in the light most
14 favorable to plaintiff, however, establish that the “warranty was
15 provided by Chrysler LLC, as the manufacturer” of the truck,
16 Complaint ¶ 10, not defendant.
17 “warrantor,” not defendant.

Accordingly, Chrysler is the

15 U.S.C. § 2301(5) (“warrantor” is

18 the entity who “gives or offers to give a written warranty”).
19 Since the Act provides that the warranty may be enforced only
20 against the warrantor, “and no one else,” 15 U.S.C. § 2310(f), that
21 should be the end of this case.
22

The Complaint attempts to navigate around its own language and

23 the plain wording of the Act, however, by alleging that defendant
24 Autowest

is

also

a

“warrantor,”

or

that

it

has

assumed

the

25 liability of the actual warrantor, or that it is liable to the same
26 extent a warrantor would be liable.
5

Complaint ¶¶ 21, 25 & 33.

1 These allegations are all legal conclusions, however, and as such
2 are not entitled to the presumption of truth.

Papasan v. Allain,

3 478 U.S. 265, 286 (1986) (under Rule 12(b)(6) “we must take all the
4 factual allegations in the complaint as true,” but “we are not
5 bound to accept as true a legal conclusion couched as a factual
6 allegation”).

In fact, these legal conclusions are incorrect.

7 A.

Defendant Autowest Is Not a “Warrantor”

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Plaintiff’s allegation that defendant “is a ‘warrantor’” is

9 flatly refuted by the Act, which specifies that:
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The term “warrantor” means any supplier or other person

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who gives or offers to give a written warranty or who

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is or may be obligated under an implied warranty.

13 15 U.S.C. § 2301(5).

The Complaint contains no factual allegation

14 that defendant Autowest gave or offered to give a written warranty
15 to plaintiff or anyone else (and it makes no allegations about any
16 implied warranty).

To the contrary, the complaint alleges that

17 plaintiff bought the truck from a non-party dealership and that
18 Chrysler LLC provided the Warranty.
19

Complaint ¶¶ 10 & 20.

In his Opposition brief, plaintiff argues that defendant is a

20 warrantor because “Autowest became bound by means of a written
21 contract

to

provide

services

22 years/100,000-mile warranty.”

to

plaintiff

Opposition at 8.

under

the

seven-

Plaintiff states

23 that “case law” supports this assertion, in that “a party who
24 enters into a contract in which a person is deemed to be a third25 party beneficiary of the contract may be liable under the MMWA
26 because of its assumption of obligations under the warranty.”
6

Id.

1 However, plaintiff cites no authority in support of this assertion,
2 and the court is aware of none.
3

Plaintiff cites Ventura v. Ford Motor Corp., 433 A.2d 801, 810

4 (N.J.

App.

Div.

1981),

in

support

5 dealership can be a warrantor.

of

his

assertion

that

a

But in that case the dealership

6 sold the vehicle to the plaintiff.

Included in the sales contract

7 was a written undertaking from the dealership to perform repairs
8 under warranty.

Under those circumstances, the court found that

9 the sales contract functioned as the written warranty, and that the
10 dealership therefore had “furnished a written warranty to the
11 consumer.”5

Id.

Even if Ventura was decided correctly – and this

12 court does not here comment on its correctness – it does not help
13 plaintiff in this case.

In Ventura it was the sales contract that

14 made the dealership a warrantor, but there is no allegation that
15 defendant Autowest issued a sales contract or sold the truck to
16 plaintiff in this case.

The complaint does not allege that

17 defendant issued or provided anything to plaintiff that could even
18 be interpreted as a warranty.
19

Plaintiff also alleges that the Warranty was “incorporated as

20 part of the Dealer Sales and Service Agreement.”
21 But

this

assertion

contradicts

the

wording

Opposition at 8.
of

the

Agreement

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Ventura v. Ford Motor Corp., 433 A.2d 801, 810 (N.J. App.
Div. 1981) (“For the purpose of this appeal we are satisfied that
the dealer's undertaking in paragraph 7 [of the sales contract]
constitutes a written warranty within the meaning of 15 U.S.C.
§ 2301(6)(B)”).
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1 itself.6

In fact, the Agreement does not state or imply that the

2 Warranty is incorporated into the Agreement.7

The Complaint does

3 not allege such incorporation, and a review of the Agreement fails
4 to reveal any such incorporation.8
5 B.

Defendant Has Not “Assumed” Warrantor Liability.

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Plaintiff next alleges that by virtue of the Agreement,

7 defendant

has

“assumed”

8 Complaint ¶¶ 21 & 33.

Chryler

LLC’s

warrantor

liability.

Plaintiff appears to rely on a clause of the

9 Agreement that provides:
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DEALER shall perform all warranty ... services hereunder as

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an independent contractor and not as the agent of CC

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[“Chrysler LLC”] and shall assume responsibility for and

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hold CC harmless from, all claims (including, but not

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limited to, claims resulting from the negligent or willful

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act or omissions of DEALER) against CC arising out of or in

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connection with DEALER’s performance of such service.

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Plaintiff has not included the Warranty in his pleadings or
motion papers.

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Although plaintiff’s assertion is a factual one, under these
circumstances it is not entitled to a presumption of truth (even
if it had been made in the complaint rather than in the motion
papers). That is because the Agreement has been incorporated by
reference into the complaint, and it flatly contradicts the
assertion.
In a Rule 12(b)(6) motion, the court may reject
allegations of the complaint that contradict matters “properly
subject to judicial notice or by exhibit.”
Sprewell v. Golden
State Warriors, 266 F.3d 979, 988, as amended on rehearing, 275
F.3d 1187 (9th Cir. 2001).
8

Plaintiff possibly is referring to the incorporation of the
“Chrysler Corporation’s Warranty Policy and Procedure Manual” into
the Agreement. See Defendant’s Motion To Dismiss, Exh. A at 3.
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1 Exh. A at 3.

There are several problems with plaintiff’s

2 apparent interpretation of this clause.
3

First,

the

clause

4 “indemnification”

clause.

is

plainly
By

its

a

“hold

terms,

harmless”

Autowest

or

(“DEALER”)

5 promises to indemnify Chrysler (“CC”) for claims against Chrysler
6 (“CC”)

that

arise

out

of

any

damage

inflicted

7 performance of warranty or other service.

by

Autowest’s

This lawsuit does not

8 involve a claim “against CC,” and thus is not implicated by the
9 clause.

Instead, this is a claim against Autowest for its own

10 refusal to honor Chrysler’s warranty.

The court will not credit

11 plaintiff’s fanciful assertion that this routine clause is intended
12 to carry out a wholesale transfer of warranty liability from the
13 issuer, an automobile manufacturer, to a dealership.
14

Second, even if the hold-harmless clause could be read as

15 plaintiff suggests, the Act expressly precludes such an assumption
16 of liability by a non-warrantor:
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only the warrantor actually making a written

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affirmation of fact, promise, or undertaking shall be

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deemed to have created a written warranty, and any

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rights arising thereunder may be enforced under this

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section only against such warrantor and no other

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person.

23 15 U.S.C. § 2310(f).
24 permitting

the

Plaintiff has identified no legal mechanism

hold-harmless

clause

to

override

the

express

25 prohibition of a federal law, and the court is aware of none.
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Apart from the “hold-harmless” clause, defendant alleges that
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1 defendant “agreed to honor all warranties provided by Chrysler
2 LLC.”

Complaint ¶ 20.

This allegation is supported by the terms

3 of the Agreement, which clearly makes defendant (as the “DEALER”),
4 responsible

for

carrying

out

warranty

service

5 vehicles, no matter which dealership sold the car.
6 enough to make defendant a warrantor.

on

all

Dodge

But this is not

The Act provides:

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Nothing in this chapter shall be construed to prevent any

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warrantor from designating representatives to perform duties

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under the written or implied warranty: Provided, That such

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warrantor shall make reasonable arrangements for

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compensation of such designated representatives, but no such

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designation shall relieve the warrantor of his direct

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responsibilities to the consumer or make the representative

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a cowarrantor.

15 15 U.S.C. § 2307 (emphasis added).
16 C.

Defendant Is Not a Service Contractor.

17

In a final attempt to circumvent the plain bar the Act has

18 erected

here,

plaintiff

argues

in

his

Opposition

brief

that

19 defendant is a “‘service contractor’ under 15 U.S.C. § 2301(8).”
20 Opposition at 9.
21 that

“Autowest

Plaintiff’s sole support for this assertion is
agreed

to

honor

the

seven-years/100,000

22 warranty which was incorporated” into the Agreement.

Id.

miles
Apart

23 from the fact that the Warranty is not incorporated into the
24 Agreement, this assertion ignores the allegations of plaintiff’s
25 own complaint.
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Under the statute, a “service contract” is “a contract in
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1 writing to perform, over a fixed period of time or for a specified
2 duration, services relating to the maintenance or repair (or both)
3 of a consumer product.”

15 U.S.C. § 2301(8).

There simply is no

4 “service contract” alleged in the complaint, and nothing from which
5 the court could infer the existence of a service contract.
6 D.

Breach of Contract

7

Plaintiff argues in his Opposition Brief that the complaint

8 states a claim for breach of contract, to which he is a third-party
9 beneficiary.

See, e.g., Opposition at 1-2.

Even if such a claim

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10 could be found in the complaint itself, the court would decline to

11 exercise supplemental jurisdiction over it, as the complaint’s only
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12 federal claim has been dismissed.

See 28 U.S.C. § 1367(c)(3).

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There is no claim identified as “Breach of Contract” in the
complaint. Nevertheless this court would consider the claim if the
alleged facts supported it, since “a complaint need not pin
plaintiff’s claim for relief to a precise legal theory.” Skinner
v. Switzer, 562 U.S. ___, ___, 131 S. Ct. 1289, 1296 (2011).
10

The Agreement states that it is to be interpreted under the
laws of Michigan. See Defendant’s Opposition, Exh. A at 16. The
applicable choice of law rules, as applied to this court exercising
supplemental jurisdiction under 28 U.S.C. § 1367, would appear to
give effect to that provision. See Paracor Finance, Inc. v. GE
Capital Corp., 96 F.3d 1151, 1164-1165 (9th Cir. 1996) (the federal
district court exercising supplemental jurisdiction applies the
choice of law rules of the forum state; California normally gives
effect to the contract’s choice of law provision). Resolution of
any state claim based upon the Agreement would therefore likely
require this court to interpret the law of Michigan, a non-forum
state.
The court concludes that it would be inappropriate to
retain supplemental jurisdiction in this case.
See Lacey v.
Maricopa County, ___ F.3d. ___, ___, 2011 WL 2276198 at *14, 2011
U.S. App. LEXIS 11593 at *44 (9th Cir. June 9, 2011) (after
dismissing all federal claims, district court should exercise its
discretion in deciding whether it is “appropriate to keep the state
claims in federal court”), citing Carlsbad Tech., Inc. V. HIF Bio,
Inc., 556 U.S. ___, 129 S. Ct. 1862 (2009).
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IV. CONCLUSION
For the reasons stated above, the complaint does not give rise
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to a Magnuson-Moss Warranty Act claim against defendant, and
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accordingly, the complaint is dismissed.

If plaintiff chooses to

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amend is complaint again, he must do so within 21 days of the entry
4
date of this order.
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IT IS SO ORDERED.
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DATED:

August 31, 2011.

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