Strama et al v. Toyota Motor Sales, U.S.A., Inc.

Filing 34

MEMORANDUM OPINION Signed by the Honorable Samuel Der-Yeghiayan on 2/12/2016: Granting Defendant Toyota Motor Sales, U.S.A.,Inc.'s motion to dismiss. Mailed notice (mw, )

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
MARIA STRAMA and JAN STRAMA,

)
)
Plaintiffs,
)
)
v.
)
)
TOYOTA MOTOR SALES, U.S.A., INC., )
and TOYOTA MOTOR CORPORATION,)
)
Defendants.
)

No. 15 C 9927

MEMORANDUM OPINION
SAMUEL DER-YEGHIAYAN, District Judge
This matter is before the court on Defendant Toyota Motor Sales, U.S.A.,
Inc.’s (Toyota) motion to dismiss. For the reasons stated below, the motion to
dismiss is granted.

BACKGROUND
In 2006, Plaintiff Maria C. Strama and Plaintiff Jan Strama allegedly
purchased a new 2007 Toyota RAV4 vehicle (Vehicle). Plaintiffs contend that after
they purchased the Vehicle, they repeatedly needed to take the Vehicle to a Toyota
dealer (Dealer) to fix the problem of excessive oil consumption and a smell of
burning oil in the Vehicle. Each time Plaintiffs took the Vehicle to the Dealer for
repair, the Dealer allegedly changed the oil in the Vehicle and performed an oil
1

consumption test, but failed to fix the problem. Plaintiffs contend that they later
discovered that the Vehicle has a design defect that causes it to consume oil at an
excessively high rate. Plaintiffs further allege that Toyota failed to notify consumers
or its dealers of the alleged defect. Plaintiffs brought the instant action in Illinois
state court and Toyota removed the instant action to federal court pursuant to the
Class Action Fairness Act, 28 U.S.C. § 1332(d)(c). Plaintiffs include in their
complaint claims brought under the Illinois Consumer Fraud and Deceptive Business
Practices Act (IFCA), 815 ILCS 505/1 et seq. (Count I), and breach of the duty of
good faith and fair dealing claims (Count II). Toyota now moves to dismiss the
claims brought against Toyota pursuant to Federal Rule of Civil Procedure 12(b)(1)
(Rule 12(b)(1)) and Federal Rule of Civil Procedure 12(b)(6) (Rule 12(b)(6)).

LEGAL STANDARD
Federal Rule of Civil Procedure 12(b)(1) (Rule 12(b)(1)) requires a court to
dismiss an action when it lacks subject matter jurisdiction. Fed. R. Civ. P. 12(b)(1);
see also Ezekiel v. Michel, 66 F.3d 894, 897 (7th Cir. 1995)(stating that when
reviewing a motion to dismiss brought under Rule 12(b)(1), the court “must accept as
true all well-pleaded factual allegations, and draw reasonable inferences in favor of
the plaintiff”). When subject matter jurisdiction is not apparent on the face of the
complaint and is contested, “the district court may properly look beyond the
jurisdictional allegations of the complaint . . . to determine whether in fact subject
matter jurisdiction exists.” Sapperstein v. Hager, 188 F.3d 852, 855-56 (7th Cir.
2

1999)(internal quotations omitted)(quoting United Transportation Union v. Gateway
Western Railway Co., 78 F.3d 1208, 1210 (7th Cir. 1996)). The burden of proof in
regards to a Rule 12(b)(1) motion is on the party asserting that the court has subject
matter jurisdiction. Id.
In ruling on a motion to dismiss brought pursuant to Rule 12(b)(6), the court
must draw all reasonable inferences that favor the plaintiff, construe the allegations
of the complaint in the light most favorable to the plaintiff, and accept as true all
well-pleaded facts and allegations in the complaint. Appert v. Morgan Stanley Dean
Witter, Inc., 673 F.3d 609, 622 (7th Cir. 2012); Thompson v. Ill. Dep’t of Prof’l
Regulation, 300 F.3d 750, 753 (7th Cir. 2002). A plaintiff is required to include
allegations in the complaint that “plausibly suggest that the plaintiff has a right to
relief, raising that possibility above a ‘speculative level’” and “if they do not, the
plaintiff pleads itself out of court.” E.E.O.C. v. Concentra Health Services, Inc., 496
F.3d 773, 776 (7th Cir. 2007)(quoting in part Bell Atlantic Corp. v. Twombly, 127
S.Ct. 1955, 1965 (2007)); see also Morgan Stanley Dean Witter, Inc., 673 F.3d at
622 (stating that “[t]o survive a motion to dismiss, the complaint must contain
sufficient factual matter, accepted as true, to state a claim to relief that is plausible on
its face,” and that “[a] claim has facial plausibility when the plaintiff pleads factual
content that allows the court to draw the reasonable inference that the defendant is
liable for the misconduct alleged”)(quoting Ashcroft v. Iqbal, 556 U.S. 662
(2009))(internal quotations omitted).

3

DISCUSSION

I. Subject Matter Jurisdiction
Toyota argues that there is no case or controversy presented in this case and
that this court lacks subject matter jurisdiction. In order to show that a court has
Article III standing, a plaintiff must establish: (1) that he “has suffered an injury in
fact that is . . . concrete and particularized and . . . actual or imminent, not conjectural
or hypothetical,” (2) that “the injury is fairly traceable to the challenged action of the
defendant,” and (3) that “it is likely, as opposed to merely speculative, that the injury
will be redressed by a favorable decision.” Silha v. ACT, Inc., 807 F.3d 169, 173
(7th Cir. 2015)(internal quotations omitted)(quoting Friends of the Earth, Inc. v.
Laidlaw Envtl. Servs. (TOC), Inc., 528 U.S. 167 (2000)); see also Dunnet Bay Const.
Co. v. Borggren, 799 F.3d 676, 688-89 (7th Cir. 2015) (explaining that in addition to
Article III standing requirements there are “also prudential limitations on standing”).
Toyota contends that in 2015 it implemented a warranty enhancement program, also
known as a Special Policy Adjustment (SPA), which provided for repair services and
reimbursement of costs to customers whose vehicle had the oil consumption defect.
Toyota contends that it has offered to repair the defect in the Vehicle and that
Plaintiffs can obtain both prospective repair relief and compensatory relief for out-ofpocket costs incurred prior to the SPA.
Toyota contends that, to the extent that Plaintiffs fear what costs Toyota may
not cover, the instant action is not ripe. The ripeness doctrine is premised “on the
4

Constitution’s case-or-controversy requirements as well as discretionary prudential
considerations.” Wisconsin Right to Life State Political Action Comm. v. Barland,
664 F.3d 139, 148 (7th Cir. 2011). A claim may not be ripe if it is based upon
“uncertain or contingent events that may not occur as anticipated, or not occur at all.”
Id. Claims that are premised on “hypothetical, speculative, or illusory disputes as
opposed to actual, concrete conflicts” are unripe. Wisconsin Cent., Ltd. v. Shannon,
539 F.3d 751, 759 (7th Cir. 2008)(stating that “[r]ipeness is predicated on the central
perception . . . that courts should not render decisions absent a genuine need to
resolve a real dispute”)(internal quotations omitted)(quoting Lehn v. Holmes, 364
F.3d 862, 867 (7th Cir. 2004)).
In the instant action, Toyota has pointed to the terms of the SPA that should in
theory cover all of the past and future costs to Plaintiffs and contends that Plaintiffs
will be fully reimbursed for their costs. Plaintiffs do not dispute that they have failed
to request reimbursement from Toyota in accordance with the SPA. Plaintiffs in
response merely speculate as to the coverage of the SPA based on a “Frequently
Asked Questions” insert regarding the SPA, and a technical service bulletin for the
Vehicle. Plaintiffs, however, have not shown that such documents would preclude
reimbursement. For example, Plaintiffs point to the following in the “Frequently
Asked Questions” as evidence that they will not be fully reimbursed:
Will Toyota pay for my oil change?
No. If your vehicle requires an oil change (based upon mileage or time) when
you request to have the oil consumption test performed, the cost of the oil
change will be your responsibility. If the vehicle is within the terms of this
5

warranty enhancement program and requires the addition of oil to perform the
oil consumption test procedure, it will be provided free of charge.
(D Ex. 2). Nothing in the above text states that a customer who seeks to have a
vehicle with the alleged defect, which is covered by the warranty, will have to pay
for an oil change. The text merely provides that if a vehicle is due to a regularly
scheduled oil change when a request is made for an oil consumption test, the
customer must pay for the oil change. Plaintiffs have not pointed to any concrete
terms in the SPA that would preclude a full reimbursement to Plaintiffs.
Plaintiffs also speculate as to parts availability and the inconvenience and
delay that might be caused. Plaintiffs argue that it would be unfair to make them
wait for “months, if not years for the repair simply because [Toyota] does not have
necessary parts replacement [sic] available for the repairs.” (Resp. 6). Plaintiffs,
however, provide absolutely no evidence or facts to support their fears of months and
years of waiting because of some sort of parts shortage. Plaintiffs must offer more
than such speculation to pursue a claim in federal court. Plaintiffs admittedly have
not sought to be made whole under the SPA and the fears that they premise their
claims on in this case are the type of hypothetical and speculative concerns that are
not ripe for adjudication in a court of law. To the extent that Plaintiffs seek to hold
Toyota accountable for not honoring the terms of the SPA or providing Plaintiffs full
reimbursement for the alleged defect, such a claim is also premature. See, e.g.,
Horton Archery, LLC v. Farris Bros., 2014 WL 5847531, at *4 (S.D. Miss.
2014)(stating that the “ability to honor hypothetical future warranty claims” was not
6

ripe).
Plaintiffs have cited to the recent ruling in Campbell-Ewald Co. v. Gomez, 136
S.Ct. 663 (2016) in support of their position that the SPA will not suffice to negate
subject matter jurisdiction. However, the court in Gomez addressed an issue
concerning an offer of judgment and the mootness doctrine. Id. at 669-71. The
instant action involves the ripeness doctrine and does not involve an offer of
judgment and the mootness doctrine. Thus, Gomez is not on point. Plaintiffs also
argue that what Toyota is attempting to do is essentially make an offer of judgment
and that jurisdiction is not lost simply because a defendant tries to provide a warranty
after being sued. However, in this case the warranty was offered before the suit was
filed. The SPA was provided to consumers in early January 2015 and the instant
action was not filed in state court until September 2015. Plaintiffs in fact reference
the SPA in their complaint filed in state court. (Compl. Par. 103). Thus, the
allegations in this case indicated that Plaintiffs chose to ignore the SPA offered to
them and to instead initiate litigation and attempt to initiate a class action to obtain
the precise relief offered to them in the SPA. Therefore, this court lacks jurisdiction
in this matter.

II. Sufficiency of Facts
Toyota also contends that Plaintiffs have failed to allege sufficient facts to
state a valid ICFA claim. A claim that is “premised upon a course of fraudulent
conduct” and “sounds in fraud” must be pled with particularity in accordance with
7

Federal Rule of Civil Procedure 9(b). Camasta v. Jos. A. Bank Clothiers, Inc., 761
F.3d 732, 736-37 (7th Cir. 2014)(internal quotations omitted)(quoting Pirelli
Armstrong Tire Corp. Retiree Med. Benefits Trust v. Walgreen Co., 631 F.3d 436,
446-47 (7th Cir. 2011)). To plead with particularity, the plaintiff must allege “the
who, what, when, where, and how of the fraud.” Id. In response, to the instant
motion, Plaintiffs, apparently recognizing the deficiencies in their pleading, contends
that they are alleging that Toyota’s conduct “was unfair, though not necessary [sic]
deceptive.” (Resp. 8). However, a review of the facts alleged by Plaintiffs shows
that they allege deception by Toyota. Plaintiffs assert that Toyota lured consumers to
buy vehicles that Toyota knew had hidden defects. Plaintiffs alleged that Toyota
failed to disclose the “concealed design defect” to consumers such as Plaintiffs and
that Toyota “actively concealed the dangerous risk of the” defect before consumers
bought vehicles. (A Compl. Par. 2, 7, 9, 85 122, 124). Plaintiffs further allege that
Toyota made misrepresentations to consumers such as Plaintiffs about the Vehicle in
communications such as advertisements. (A Compl. Par. 125, 132). Such facts
relating to misrepresentations and efforts to conceal facts are based upon alleged
fraudulent conduct and sound in fraud.
Nor do Plaintiffs allege that Toyota acted unknowingly when selling to
consumers such as Plaintiffs and later learned of its mistake. Plaintiffs allege that
Toyota acted with knowledge prior to the sales of vehicles, making, for examples,
misrepresentations in advertisements. (A. Compl. 121-125). Such alleged facts
relating to deception sound in fraud, not simply unfair conduct and negligence.
8

Thus, Plaintiffs were required to plead with particularity. Plaintiffs include in their
amended complaint vague references to Toyota’s practices as to customers in general
and to “misrepresentations,” and misstatements made in advertisements. (A Compl.
Par. 125, 132). Plaintiffs fail to specifically allege who made what exact
misrepresentations or omissions concerning the Vehicle and precisely when the
alleged misconduct occurred. Nor do Plaintiffs allege specific communications in
which misstatements were made or which contained material omissions. Nor do
Plaintiffs make clear what the precise practices that Toyota employed to engage in
the alleged fraud. Plaintiffs’ general statements that Toyota has been concealing
information from consumers and making misstatements to consumers for years are
not sufficient to plead with particularity the specific facts as to the alleged fraud in
regard to the two Plaintiffs in this case. Thus, even if this court had subject matter
jurisdiction in this case, Plaintiffs have failed to allege sufficient facts to state a valid
ICFA claim.
Also, since Plaintiffs failed to allege sufficient facts for the ICFA claim, the
breach of the duty of good faith and fair dealing claims would be dismissed as well
since they cannot be stand-alone claims. Gore v. Indiana Ins. Co., 876 N.E.2d 156,
161-62 (Ill. App. Ct. 2007)(stating that “[i]t is well established that the duty of good
faith and fair dealing is implied in every contract” and that “it is not an independent
source of duties for contracting parties”). The court also notes that, in any case,
Plaintiffs have agreed to dismiss the breach of the duty of good faith and fair dealing
claims. (Resp. 1 n.1). Based on the above, Toyota’s motion to dismiss is granted.
9

CONCLUSION
Based on the foregoing analysis, Toyota’s motion to dismiss is granted. The
court also notes that the claims brought against Defendant Toyota Motor Corporation
cannot proceed for the same reasons provided as to Toyota in the instant opinion.
Therefore all claims brought against Defendant Toyota Motor Corporation are
dismissed as well. The court also notes that the docket reflects that Defendant
Toyota Motor Corporation has not been served in this matter yet, and any claims
remaining against it would have been dismissed due to the failure to serve as well.

___________________________________
Samuel Der-Yeghiayan
United States District Court Judge
Dated: February 12, 2016

10