Thompson Ventures, Inc. v. Brunswick Corporation

Filing 66

OMNIBUS ORDER ON MOTIONS TO DISMISS denying 46 Motion to Dismiss for Failure to State a Claim; denying 55 Motion to Dismiss. Signed by Judge Beth Bloom on 1/28/2019. See attached document for full details. (pcs)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
Case No. 18-cv-60816-BLOOM/Valle
THOMPSON VENTURES, INC.,
Plaintiff,
v.
BRUNSWICK CORPORATION, et al.,
Defendants.
___________________________________/
OMNIBUS ORDER ON MOTIONS TO DISMISS
THIS CAUSE is before the Court upon Defendant Brunswick Corporation’s (“Defendant
Brunswick”) Motion to Dismiss, ECF No. [46] and Defendant Hatteras/Cabo Yachts LLC’s
(“Defendant Hatteras”) Motion to Dismiss, ECF No. [55]. The Court has carefully considered
the motions, the record, the parties’ briefs, and the applicable law. For the reasons that follow,
both motions are denied.
I.

BACKGROUND
On January 15, 2010, Plaintiff, Thompson Ventures, Inc. (“Plaintiff” or “Thompson”)

purchased a custom, 2010 Cabo Express yacht manufactured by Defendant Brunswick from
Marine Max, Inc. (“Marine Max”), pursuant to a written agreement (the “Purchase Agreement”).
ECF No. [1], at ¶ 20. Within 90 days of the sale, Plaintiff entered into service contracts for the
vessel with Marine Max, as contemplated by certain provisions of the Purchase Agreement. Id.
at ¶¶ 22-23.
Plaintiff asserts that Defendant Brunswick, as the boat’s manufacturer, was and is the
obligor on these service contracts. Id. at ¶ 24. Plaintiff alleges that the Purchase Agreement

Case No. 18-cv-60816-BLOOM/Valle
incorporated several warranties from the vessel’s manufacturer, Defendant Brunswick. Id. at ¶¶
26, 28. These warranties included: 1) a Cabo Yachts Limited Warranty, which included a 10year Limited Structural Hull Warranty (“Hull Warranty”), and a Five-year Limited Warranty on
Components (“Components Warranty”), and 2) an Extended Marine Protection Warranty, which
included an engines warranty (“Engines Warranty”). Id. at ¶ 25. Plaintiff alleges that the
Service Agreement was modified on or about September 19, 2011, by Tripper Vincent
(“Vincent”), a management level employee of Hatteras/Cabo Yachts, to include the agreement
that “any damage to systems, do [sic] to saltwater, will be replaced” by the Cabo Yachts division
of Brunswick.” Id. at ¶¶ 33-35.
Plaintiff asserts that each of the Warranties was subject to different warranty periods.
Under the Hull Warranty portion of the agreement, Plaintiff claims that Defendant Brunswick
was obligated to “repair or replace…any defect in material or workmanship in the Yacht” that is
determined to be a structural hull defect, and that is reported to Brunswick within 10 years of the
date of the first retail purchase of the Yacht (the “Hull Warranty Period”). Id. at ¶ 48. Under the
Components Warranty portion of the Contract, Plaintiff alleges that Defendant Brunswick is
“obligated to ‘repair or replace…[a] part or parts…found to be defective in material or
workmanship on components manufactured by CABO Yachts,’ which defect is reported to
Brunswick within five years of the date of the first retail purchase of the Yacht (the
“Components Warranty Period”).” Id. at ¶ 57. And lastly, under the Engines Warranty portion
of the Contract, Defendant Brunswick was allegedly obligated to “reimburse the approved cost
of a Mechanical Breakdown of the Agreement Holder’s Watercraft…,” which engine problem is
reported to Brunswick within five years of the date of the first retail purchase of the Yacht (the
“Engines Warranty Period”). Id. at ¶ 65.

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Plaintiff alleges that it reported defects to Marine Max and Defendant Brunswick and
demanded that Defendant Brunswick make repairs or replacements related to those defects
within the applicable warranty periods. Id. at ¶¶ 51, 60, 68. Plaintiff further claims that despite
Thompson Ventures’ timely invocation of the Warranties, Defendant Brunswick refused to make
the repairs or replacements upon request, and therefore breached the Service Contract. Id. at ¶¶
56, 64, 71.
On October 19, 2018, Plaintiff filed its Second Amended Complaint (“SAC”), ECF No.
[44]. In the SAC, Plaintiff asserts claims for breaches of contract and a claim for breach of
implied warranty of merchantability. Defendants Brunswick and Hatteras now move to dismiss
the Second Amended Complaint asserting that Plaintiff has failed to state claims under Federal
Rule of Civil Procedure 12(b)(6).
II.

LEGAL STANDARD
When reviewing a motion under Rule 12(b)(6), a court, as a general rule, must accept the

plaintiff’s allegations as true and evaluate all plausible inferences derived from those facts in
favor of the plaintiff. See Miccosukee Tribe of Indians of Fla. v. S. Everglades Restoration
Alliance, 304 F.3d 1076, 1084 (11th Cir. 2002); AXA Equitable Life Ins. Co. v. Infinity Fin. Grp.,
LLC, 608 F. Supp. 2d 1349, 1353 (S.D. Fla. 2009). However, this tenet does not apply to legal
conclusions, and courts “are not bound to accept as true a legal conclusion couched as a factual
allegation.” Twombly, 550 U.S. at 555; see Iqbal, 556 U.S. at 678; Thaeter v. Palm Beach Cnty.
Sheriff’s Office, 449 F.3d 1342, 1352 (11th Cir. 2006). Moreover, “courts may infer from the
factual allegations in the complaint ‘obvious alternative explanations,’ which suggest lawful
conduct rather than the unlawful conduct the plaintiff would ask the court to infer.” Am. Dental
Ass’n v. Cigna Corp., 605 F.3d 1283, 1290 (11th Cir. 2010) (quoting Iqbal, 556 U.S. at 682).

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III.

DISCUSSION
Both Defendants Brunswick and Hatteras argue that Plaintiffs’ claims must be dismissed

because they are barred by the applicable statute of limitations. “Generally, whether a claim is
barred by the statute of limitations should be raised as an affirmative defense in the answer rather
than in a motion to dismiss . . . However, if facts on the face of the pleadings show that the
statute of limitations bars the action, the defense can be raised by motion to dismiss.” Spadaro v.
City of Miramar, 855 F. Supp. 2d 1317, 1328 (S.D. Fla. 2012) (citing Cabral v. City of Miami
Beach, 76 So.3d 324, 326 (Fla. 3d DCA 2011)); see also Keira v. U.S. Postal Inspection Serv.,
157 Fed. Appx. 135, 136 (11th Cir. 2005) (“At the motion-to-dismiss stage, a complaint may be
dismissed on the basis of a statute-of-limitations defense only if it appears beyond a doubt that
Plaintiffs can prove no set of facts that toll the statute.”) (internal quotation marks and citation
omitted). “A statute of limitations bar is an affirmative defense, and plaintiffs are not required to
negate an affirmative defense in their complaint.” La Grasta v. First Union Securities, Inc., 358
F.3d 840, 845 (11th Cir. 2004) (internal citations and quotations omitted). “[A] Rule 12(b)(6)
dismissal on statute of limitations grounds is appropriate only if it is apparent from the face of
the complaint that the claim is time barred.” Id.; see also Avco Corp. v. Precision Air Parts, Inc.,
676 F.2d 494, 495 (11th Cir. 1982) (stating that statute of limitations defect can be raised in
motion for summary judgment where failure to comply with statute of limitations does not
appear on face of complaint).
a. Breach of Contract Claims
Both Defendant Brunswick and Defendant Hatteras move to dismiss with prejudice the
respective breach of contract claims asserted against them (Counts One and Three), arguing that
the claims are barred by a five year statute of limitations. Both Defendants assert that the statute

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Case No. 18-cv-60816-BLOOM/Valle
of limitations began to run on June 13, 2012, the date of an email sent by the Plaintiff, and
attached to the SAC as Exhibit 5. This email indicates that Plaintiff was aware of the “leaks in
the Subject Vessel and how they have caused corrosion to the component parts within” and
identifies “the very same issues that are listed at length in Count I of the Second Amended
Complaint.” Brunswick Mot. to Dismiss, ECF No. [46], at 5-6; see also Hatteras Mot. to
Dismiss, ECF No. [55], at 6 (“Based on Plaintiff’s own allegations in the Complaint, he was well
aware of the alleged problems that he is now suing for on June 13, 2012.”).

In the SAC,

Plaintiff alleges that the Warranties “were incorporated by reference into the Contract” and that
“a breach of the Hull Warranty, Components Warranty, or Engines Warranty constitutes a breach
of the Purchase Agreement.” ECF No. [44], at ¶¶ 26-27.

In its response to Defendant

Brunswick’s Motion, Plaintiff argues that the statute of limitations for a breach of contract claim
begins to run when the last element of the cause of action occurs, which would be at the time of
the breach. ECF No. [54], at 1. Plaintiff asserts that the statute of limitations therefore occurred
when the Defendants refused to make repairs to a timely request by the Plaintiff. Id. at 7.
Plaintiff claims that because the SAC “does not establish” that the breaches of contract occurred
more than five years before this action was filed, the “Defendant[s] cannot meet [their] burden of
establishing that this action” is barred by the statute of limitations. Id. at 3-4.
Both breach of contract and breach of warranty claims are subject to a five year statute of
limitations. See Fla. Stat. § 95.11(2)(b). In Florida, the statute of limitations for a breach of
contract claim begins to run from “the time of the breach.” Med. Jet, S.A. v. Signature Flight
Support-Palm Beach, Inc., 941 So. 2d 576, 578 (Fla. 4th DCA 2006) (internal citation omitted).
The statute of limitations for a breach of warranty claim, however, begins to run from when the
“breach giving rise to the cause of action is discovered or should have been discovered, or when

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Case No. 18-cv-60816-BLOOM/Valle
such warranty expires, whichever occurs first.” Aprigliano v. American Honda Motor Co., Inc.,
979 F. Supp. 2d 1331, 1340 n.3 (S.D. Fla. 2013) (citing McKissic v. Country Coach, Inc., No.
8:07-cv-1488-T-17EAJ, 2009 WL 500502, at *12 (M.D. Fla. Feb. 27, 2009).
Here, Defendants argue that the accrual date for a breach of warranty claim should apply
to Plaintiff’s breach of contract claims because the alleged breaches relate to terms of the
Warranties. Defendants each cite to two Southern District of Florida decisions, Kaplan v. Volvo
Penta of the Americas, LLC, No. 14-22226-CIV, 2014 WL 6908423, at *2 (S.D. Fla. Dec. 8,
2014) and Speier-Roche v. Volkswagen Grp. of Amer., Inc., No. 14- 20107-CIV, 2014 WL
1745050 (S.D. Fla. Apr. 30, 2014), to support their argument that the earlier accrual date should
apply. ECF Nos. [46], at 5-6; [55], at 7-8. The accrual date’s application in those cases,
however, are inapplicable to the breach of contract claims asserted in the instant case. Neither of
the plaintiffs in Speier-Rocher or Kaplan asserted claims for breaches contract. See Kaplan v.
Volvo Penta of the Americas, LLC, No. 14-22226-CIV, 2014 WL 6908423, at *2 (S.D. Fla. Dec.
8, 2014) (dismissing a claim for breach of express warranty at the motion to dismiss stage due to
its being barred by the statute of limitations); see also Speier-Roche v. Volkswagen Grp. of
Amer., Inc., No. 14- 20107-CIV, 2014 WL 1745050, at *5 (S.D. Fla. Apr. 30, 2014) (dismissing
a claim for breach of written warranty where the statute of limitations had expired).
The Court agrees with the Plaintiff that the statute of limitations for a breach of contract
claim begins to run on the date the breach occurred, not the date the defect was or should have
been discovered. Because the SAC does not demonstrate on its face that the breach of contract
claims are time-barred, Defendants have failed to meet their burden to warrant dismissal of the
claims at this stage of the proceedings.

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Case No. 18-cv-60816-BLOOM/Valle
b. Breach of Implied Warranty of Merchantability
Defendant Brunswick also argues that Plaintiff’s claim for breach of implied warranty
and merchantability (Count Two) is barred by the applicable statute of limitations. ECF No.
[46], at 7-10. Defendant Brunswick argues that the statute of limitations for a breach of express
warranty claim and its accrual date is five years and begins to run from the time the Plaintiff first
discovered or should have discovered the defect.

Id.

Plaintiff argues that the statute of

limitations would not have begun to run until it discovered the specific “defect giving rise to the
cause of action,” which it asserts is the “non-adhesion of the vessel’s hull and the port reservoir,”
and that such opportunity to discover the breach was “thwarted by Brunswick employees.” ECF
No. [54], at 12. The Court agrees with the Defendant that the statute of limitations for a breach
of warranty claim begins to run from the date a “defect giving rise to the cause of action is
discovered or should have been discovered,” not from the date a party fully discovers the extent
of the defect. McKissi, 2009 WL 500502, at *9 (quoting Florida Power & Light Co. v. AllisChalmers Corp., 1989 U.S. Dist. LEXIS 16640, at *14 (S.D. Fla. March 21, 1989).
Defendant Brunswick also argues that the SAC affirmatively alleges that Plaintiff was
aware of the defects, noting that the Plaintiff directly alleged that it knew in June of 2012 that it
“believed water was coming in the engine from the boat’s baitwell and/or from the boat’s port
hull vent.” Brunswick Mot. to Dismiss, ECF No. [46], at 9; see also 2d Am. Compl., ECF No.
[44], at ¶ 101. Plaintiff also attached an email dated June 13, 2012 (the “Email”), to the SAC,
which outlines a number of issues, including the leak issues occurring on the vessel. See ECF
No. [44-5]. Conversely, Plaintiff argues that these events did not trigger the statute of limitations
because Plaintiff did not discover the specific defect, the “hull-reservoir non-adhesion,” until
2016. ECF No. [54], at 11-12. Plaintiff, however, “cannot rely on [its] lack of knowledge of the

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specific cause or nature of the defect to protect [it] from the running of the limitations period.”
Reisman

v.

Gen.

Motors

Corp.,

845

F.2d

289,

291

(11th

Cir.

1988)

(citing

Kelley v. School Board of Seminole County, 435 So. 2d 804, 806-07 (Fla.1983)). Moreover, the
Florida Supreme Court has previously considered such arguments and found them to be without
merit. See Kelley, 435 So. 2d at 806 (holding that a plaintiff could not rely “on a lack of
knowledge of the specific cause to protect it from the running of the statute of limitations” where
the plaintiff was previously put on notice that the defect existed).
Nonetheless, dismissal on statute of limitations grounds is appropriate only if it is
“apparent from the face of the complaint” that the claim is time-barred. La Grasta v. First Union
Sec., Inc., 358 F.3d 840, 845 (11th Cir. 2004). Here, Plaintiff has alleged facts sufficient to
support a claim that the statute of limitations may have been tolled based on the doctrine of
fraudulent concealment. A plaintiff seeking to toll the statute of limitations as a result of
fraudulent concealment “must allege ... (1) successful concealment of the cause of action, (2)
fraudulent means to achieve that concealment, and (3) plaintiff exercised reasonable care and
diligence in seeking to discover the facts that form the basis of his claim.” Burr v. Philip Morris
USA Inc., No. 8:07-CV-01429-MSS, 2012 WL 5290164, at *3 (M.D. Fla. Sept. 28, 2012), aff’d,
559 F. App’x 961 (11th Cir. 2014) (citing Berisford v. Jack Eckerd Corp., 667 So. 2d 809, 811–
12 (Fla. 4th DCA 1995)). The “fraudulent means” alleged must go beyond mere non-disclosure,
and must constitute active and willful concealment. Raie v. Cheminova, Inc., 336 F.3d 1278,
1282 n. 1 (11th Cir. 2003). A complaint alleging fraud “must state with particularity the
circumstances constituting fraud.” Fed. R. Civ. Pro. 9(b). This requires the plaintiff to “plead
the who, what, when, where, and how” of the allegedly fraudulent statements or omissions,
though the “specific facts related to the defendant’s specific state of mind when the allegedly

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fraudulent statements were made” need only be alleged generally. Mizzaro v. Home Depot,
Inc., 544 F.3d 1230, 1237 (11th Cir.2008).
Here, in the SAC, Plaintiff has alleged that on July 31, 2018, Vincent, knowingly told
Plaintiff false information, which included that “there was no problem with the area of the engine
room vents” and that “water was not getting through there and into the engine room.” ECF No.
[44], at ¶¶ 110-111.

Plaintiff further alleges that Brunswick “knowingly and fraudulently

concealed the existence of the “catastrophic problem” and “purposefully made” Plaintiff believe
that water was not getting into the engine room through the vent (Id. at ¶ 113.), in order to induce
the Plaintiff to “forgo searching the interior of the boat” (Id. at ¶ 114.).

Plaintiff claims

Defendant Brunswick made these false misrepresentations because Defendant knew “they would
cause Plaintiff not to demand an expensive repair that Brunswick was obligated to make” (Id. at
¶ 116.), and because it would “delay[] the filing of a lawsuit” (Id. at ¶ 117).

In light of the

inclusion of these allegations, the Court finds that the Plaintiff has sufficiently and with
particularity alleged facts of fraudulent concealment. Plaintiff has alleged the who, what, when,
where, and how” of the allegedly fraudulent statements.

Accordingly, the Court cannot

determine from the face of complaint that the limitations period has run, and thus, dismissal of
Plaintiff’s claim for breach of implied warranty and merchantability (Count Two) is
inappropriate at this stage of the proceedings. See Caplen v. Guardian Life Ins. Co. of Am., 1996
WL 1057652 *4, No. 96–8359–CIV (S.D. Fla. Oct. 22, 1996) (stating that statute of limitations
may be raised on motion to dismiss only if court can determine from face of complaint that
limitations period has run).

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IV.

CONCLUSION
Accordingly, it is ORDERED and ADJUDGED as follows:
1. Defendant Brunswick Corporation’s Motion to Dismiss the Second Amended
Complaint, ECF No. [46], is DENIED.
2. Defendant Hatteras /Cabo Yachts LLC’s Motion to Dismiss the Second Amended
Complaint, ECF No. [55], is DENIED.
3. Defendants shall answer the Second Amended Complaint, ECF No. [44], no later
than February 8, 2019.
DONE AND ORDERED in Miami, Florida, this 28th day of January, 2019.

_________________________________
BETH BLOOM
UNITED STATES DISTRICT JUDGE
Copies to:
Counsel of Record

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