Disher et al v. Tamko Building Products, Inc. et al

Filing 100

ORDER. The Court GRANTS in part and DENIES in part the Motions to Dismiss (Docs. 37 , 39 & 41 ). The Court DENIES Defendants' Motion for Leave to Submit Notice of Supplemental Authorities in Support of Pending Motions to Dismiss (Doc. 99 ). Signed by Judge Staci M. Yandle on 7/31/15. (ajr)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ILLINOIS
RICHARD DISHER, ERIC KLINE, JOHN
O’MALLEY and DIMITRI MISHUROV, on
behalf of themselves and all others similarly
situated,
Plaintiffs,
vs.

Case No. 14-cv-740-SMY-SCW

TAMKO BUILDING PRODUCTS, INC. and
TAMKO ROOFING PRODUCTS, INC.,
Defendants.
MEMORANDUM AND ORDER
This matter comes before the Court on defendants Tamko Building Products, Inc. and
Tamko Roofing Products, Inc.’s (collectively “Defendants”) Motions to Dismiss the Claims of
Richard Disher (Doc. 37), John O’Malley (Doc. 39), Eric Kline and Dimitri Mishurov (Doc. 41).
Plaintiffs filed their responses (Docs. 51, 52 & 53) to which Defendants replied (Docs. 56, 57 &
58). For the following reasons, the Court GRANTS in part and DENIES in part the motions.
Background
Defendants manufacture fiberglass roofing shingles. Plaintiffs own homes or other
structures in Illinois, Kentucky, and Colorado on which Defendants’ shingles are or have been
installed. Plaintiffs allege that based on Defendants’ representations, they purchased the shingles
with the expectation that the shingles would last for at least 30 years. Plaintiffs further allege
that the shingles failed long before 30 years due to certain design flaws that cause them to crack,
curl, blister, de-granulate, deteriorate and cause damage to the underlying structure. Plaintiffs
assert that with knowledge of these design flaws, Defendants sold and continue to sell the
shingles and to make false representations and warranties with respect to the shingles.

Plaintiffs’ Complaint sets forth the following causes of action on behalf of themselves
and all others similarly situated: Count I – Strict Liability – Design Defect, Count II – Strict
Liability – Manufacturing Defect, Count III – Strict Liability – Failure to Warn, Count IV –
Negligence, Count V – Negligent Failure to Warn, Count VI – Breach of the Implied Warranty
of Merchantability, Count VII – Breach of the Implied Warranty of Fitness for a Particular
Purpose, Count VIII – Express Warranty, Count IX – Unjust Enrichment, Count X – Failure of
Essential Purpose, Count XI – Fraudulent Concealment, Count XII – Violation of Illinois
Consumer Fraud and Deceptive Business Practices Act (“ICFA”) and Substantially Similar Law
of Certain Other States (Illinois Class Only), Count XIII – Omitted, Count XIV – Colorado
Products Liability Act (“CPLA”), Colo. Rev. Stat. §§ 13-21-401, et seq. (Colorado Class Only),
Count XV – Violation of the Kentucky Consumer Protection Act (“KCPA”), Ky. Rev. Stat. Ann.
§ § 367.110, et seq. (Kentucky Class Only), and Count XVI – Declaratory and Injunctive Relief.
Defendants filed motions to dismiss each of the named plaintiffs’ claims pursuant to Federal
Rule of Civil Procedure 12(b)(6).1
Analysis
When reviewing a Rule 12(b)(6) motion to dismiss, the Court accepts as true all
allegations in the complaint. Erickson v. Pardus, 551 U.S. 89, 94 (2007) (citing Bell Atl. Corp.
v. Twombly, 550 U.S. 544, 555 (2007)). To avoid dismissal under Rule 12(b)(6) for failure to
state a claim, a complaint must contain a “short and plain statement of the claim showing that the
pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). This requirement is satisfied if the
complaint (1) describes the claim in sufficient detail to give the defendant fair notice of what the
claim is and the grounds upon which it rests and (2) plausibly suggests that the plaintiff has a
right to relief above a speculative level. Bell Atl., 550 U.S. at 555; see Ashcroft v. Iqbal, 129 S.

1

Subsequently, the parties stipulated to the dismissal of Mishurov’s claims.

2

Ct. 1937, 1949 (2009); EEOC v. Concentra Health Servs., 496 F.3d 773, 776 (7th Cir. 2007). “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.” Iqbal, 129
S. Ct. at 1949 (citing Bell Atl., 550 U.S. at 556).
Motion to Dismiss the Claims of Richard Disher (Doc. 37)
In April 2005, Disher purchased Tamko Heritage 30 Shingles and had them installed on
his home in Alton, Illinois. In the summer of 2013, a friend told Disher that the shingles were
defective and that he should file a warranty claim. In March 2014, Disher filed a warranty claim
and Tamko sent him a settlement certificate for 15 of the 21 squares of shingles needed to re-roof
his home. Disher, however, refused to sign the release form or to accept the settlement
certificate and check from Tamko.
Defendants assert that Disher’s claims must be dismissed because his (1) strict liability
and negligence claims fail under Illinois’ economic-loss doctrine, (2) breach of express warranty
claim fails because he did not comply with the 30-day notice provision set forth in the Limited
Warranty, (3) breach of implied warranty claim fails because all implied warranties were
disclaimed by the Limited Warranty and are time-barred, (4) failure of essential purpose claim is
not a stand-alone claim and there is no breach of express warranty claim, (5) fraudulent
concealment claim fails because Defendants did not owe him a duty to disclose additional
information with regard to their roofing shingles, (6) unjust enrichment claim fails because the
written Limited Warranty governs the relationship of the parties and (7) consumer fraud claim
fails because Disher has not adequately alleged causation and it is based on the same allegations
underlying Disher’s breach of warranty claims or on non-actionable puffery.

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Strict Liability & Negligence
“‘Economic loss’ has been defined as ‘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.’” Moorman Mfg. Co. v. Nat’l Tank Co., 435 N.E.2d
443, 449 (Ill. 1982) (citing Note, Economic Loss in Products Liability Jurisprudence, 66 Colum.
L. Rev. 917, 918 (1966)). In Moorman, the Illinois Supreme Court held that economic loss was
not recoverable under the tort theories of strict liability, negligence, and innocent
misrepresentation. Moorman, 435 N.E.2d at 449, 451-53. Under the Moorman doctrine,
“[w]hen the defect is of a qualitative nature and the harm relates to the consumer’s expectation
that a product is of a particular quality so that it is fit for ordinary use, contract, rather than tort,
law provides the appropriate set of rules for recovery.” Id. at 451. However, claims for damage
to personal property other than the product itself are not barred by the Moorman doctrine. In re
Chi. Flood Litig., 680 N.E.2d 265, 275 (Ill. 1997).
Here, in addition to “economic loss,” Disher has alleged personal property damage.
Specifically, he alleges that “Plaintiffs and the Class have also suffered damage to the underlying
elements of their structures” (Doc. 2, p. 7). As such, Disher’s strict liability and negligence
claims are not barred by the economic-loss doctrine.
Breach of Implied Warranty
Under Illinois law,
(1) An action for breach of any contract for sale must be commenced within 4
years after the cause of action has accrued. By the original agreement the parties
may reduce the period of limitation to not less than one year but may not extend
it.
(2) A cause of action accrues when the breach occurs, regardless of the aggrieved
party's lack of knowledge of the breach. A breach of warranty occurs when tender
of delivery is made, except that where a warranty explicitly extends to future
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performance of the goods and discovery of the breach must await the time of such
performance, the cause of action accrues when the breach is or should have been
discovered.
810 ILCS 5/2-725. Illinois courts have found the discovery rule inapplicable in breach of
implied warranty cases because implied warranties cannot “explicitly extend[] to future
performance.” Nelligan v. Tom Chaney Motors, Inc., 479 N.E.2d 439, 442 (Ill. App. Ct. 1985).
Here, the alleged breach occurred when Disher purchased his shingles in April 2005.
Disher did not file his claim until 2014, well beyond either the default four-year statute of
limitations or the one-year limitation period prescribed by the Limited Warranty. Therefore,
Disher’s claims for breach of the implied warranties of merchantability and fitness for a
particular purpose are time-barred and must be dismissed with prejudice.
Breach of Express Warranty
To state a breach of express warranty claim, a plaintiff “must allege the terms of the
warranty, the failure of some warranted part, a demand upon the defendant to perform under the
warranty’s terms, a failure by the defendant to do so, compliance with the terms of the warranty
by the plaintiff, and damages measured by the terms of the warranty.” Evitts v. DaimlerChrysler
Motors Corp., 834 N.E.2d 942, 949 (Ill. App. Ct. 2005). “Because express warranties are
contractual in nature, the language of the warranty itself controls and dictates the rights and
obligations of the parties to it.” Id. at 950.
Here, Disher’s Limited Warranty requires that the consumer “notify TAMKO . . . of any
claims under th[e] limited warranty within thirty (30) days following discovery of the problem
with the Shingles” (Doc. 38-1). Disher alleges he became aware of problems with the shingles in
the summer of 2013. However, he did not notify Defendants of the problems until March 2014.
Thus, Disher did not comply with the 30-day notice requirement. However, Disher contends the

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30-day notice provision does not bar his express warranty claim because the provision is
unconscionable. Specifically, he argues that customers had no meaningful choice in accepting
the warranty’s terms, that the provision deprives customers of claims and remedies prior to
gaining knowledge that Defendants knew the shingles contained latent defects, that the time
period is unreasonable, and that the language of the 30-day requirement is inconspicuous.
Defendants counter that Held v. Mitsubishi Aircraft Int’l, Inc., 672 F. Supp. 369 (D. Minn.1987),
the case to which Disher cites for his unconscionable time period argument, is inapposite to the
instant case. In Held, the court ruled a one-year warranty for an aircraft was unreasonable
because the discovery of the defect within the one-year period would be unusual. Held, 672 F.
Supp. at 382-83. Defendants point out that the limited warranty provided Disher 30 years to
discover the defect and he was only required to report the defect within 30 days after discovery.
Whether a contract clause is unconscionable is a matter of law to be determined by the
court. 810 ILCS 5/2-302(1). If the court finds any clause of the contract to be “unconscionable
at the time it was made the court may refuse to enforce the contract, or it may enforce the
remainder of the contract without the unconscionable clause, or it may so limit the application of
any unconscionable clause as to avoid any unconscionable result.” Id. While “the question of
the unconscionability of a clause is for the court to decide, the court before making this
determination must give the parties a reasonable opportunity to present evidence . . . . Generally
a full hearing on the issue is required.” Frank's Maint. & Eng’g, Inc. v. C.A. Roberts Co., 408
N.E.2d 403, 409 (1980); 810 ILCS 5/2-302(2).
Here, Defendants do not address Disher’s arguments that the warranty is unconscionable.
Rather, they simply assert that the case law on which Disher relies is inapposite to this case. At
this stage of the litigation and without conducting an evidentiary hearing on the

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unconscionability issue, the Court cannot reach the conclusion that Disher’s Complaint fails to
state a claim for breach of the express warranty. As such, Disher’s breach of express warranty
claim survives Defendants’ Motion to Dismiss.
Unjust Enrichment
Unjust enrichment may sound in either quasi-contract or tort. Peddinghaus v.
Peddinghaus, 692 N.E.2d 1221, 1225 (Ill. App. Ct. 1998). Where the theory sounds in quasicontract, the claim cannot survive where the plaintiff has alleged the existence of a governing
contract. People ex rel. Hartigan v. E & E Hauling, Inc., 607 N.E.2d 165, 177 (Ill. 1992).
However, where the unjust enrichment allegations sound in tort, a plaintiff may allege both the
existence of a governing contract and unjust enrichment. Liberty Mut. Ins. Co. v. Decking &
Steel, Inc., 301 F. Supp. 2d 830, 835 (N.D. Ill. 2004) (citing Peddinghaus, 692 N.E.2d at 1225).
Here, Disher has alleged claims sounding in both contract and fraud. Accordingly, Disher’s
unjust enrichment claim, to the extent it is predicated on tort claims, survives Defendants’
Motion to Dismiss.
Failure of Essential Purpose
“Where circumstances cause an exclusive or limited remedy to fail of its essential
purpose, remedy may be had as provided [by statute]. 810 ILCS 5/2-719(2). Defendants argue
failure of essential purpose is not a stand-alone claim. Therefore, Defendants reason that
because Disher’s express breach of warranty claim fails, this claim must be dismissed. The
Court agrees that failure of essential purpose is not a standalone claim. However, with respect to
a breach of warranty claim, Illinois law provides that the parties may resort to traditional
remedies under the Uniform Commercial Code when the remedy prescribed in the limited
warranty fails of its essential purpose. Accordingly, to the extent Disher pleads failure of

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essential purpose as a stand-alone claim, the Court dismisses that claim. However, Disher may
amend his complaint to assert that the warranty’s remedy failed of its essential purpose.
Fraudulent Concealment
To plead an action for fraudulent concealment, the plaintiff must plead the elements of
fraudulent misrepresentation2 and “allege that the defendant intentionally omitted or concealed a
material fact that it was under a duty to disclose to plaintiff.” Wigod v. Wells Fargo Bank, N.A.,
673 F.3d 547, 571 (7th Cir. 2012) (citing Weidner v. Karlin, 932 N.E.2d 602, 605 (Ill. 2010)). A
duty to disclose a material fact may arise where the parties are in a fiduciary or confidential
relationship. Connick v. Suzuki Motor Co., 675 N.E.2d 584, 593 (Ill. 1996). Such a duty may
also arise where “the plaintiff places trust and confidence in defendant, thereby placing
defendant in a position of influence and superiority over plaintiff.” Id. “This position of
superiority may arise by reason of friendship, agency, or experience.” Id. However, run-of-themill business transactions and contractual relationships are not sufficient to establish a fiduciary
relationship. Benson v. Stafford, 941 N.E.2d 386, 397 (Ill. App. Ct. 2010). Moreover, if a
fiduciary relationship does not exist as matter of law, “facts from which a fiduciary relationship
arises must be pleaded and proved by clear and convincing evidence.” Schrager v N. Cmty.
Bank, 767 N.E.2d 376, 385 (Ill. App. Ct. 2002).
Disher alleges Defendants “had a duty and obligation to disclose to Plaintiffs the true
facts and their knowledge concerning its [] shingles. . .” (Doc. 2, p. 33). However, Disher does
not allege that he was in a fiduciary or confidential relationship with Defendants. Rather, he

2

In Illinois, the elements of fraudulent misrepresentation are:
(1) [a] false statement of material fact (2) known or believed to be false by the party making it; (3)
intent to induce the other party to act; (4) action by the other party in reliance on the truth of the
statement; and (5) damage to the other party resulting from that reliance.

Wigod, 673 F.3d at 569 (quoting Dloogatch v. Brincat, 920 N.E.2d 1161, 1166 (Ill. 2009)).

8

asserts that Defendants’ duty arose as a result of its position of influence and superiority.
However, the facts pled by Disher do not evidence such a relationship. While Defendants
undoubtedly had more knowledge about the shingles than Disher, this knowledge did not place
Defendants in a “position of superiority” sufficient to impose a duty to disclose. Accordingly,
Disher’s fraudulent concealment claim is dismissed without prejudice.
Illinois Consumer Fraud and Deceptive Business Practices Act
To plead a violation of section 2 of the ICFA “a plaintiff must allege: (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 the course of conduct involving trade or commerce, and (4)
actual damage to the plaintiff (5) proximately caused by the deception.” Oliveira v. Amoco Oil
Co., 776 N.E.2d 151, 160 (Ill. 2002).
Defendants argue that Disher fails to allege that he actually visited Tamko’s website
containing the alleged misrepresentations or that he viewed any misrepresentations in brochures
or advertisements. Disher points out that his decision to install the shingles was based on
Defendants’ 30-year warranty (Doc. 2, p. 13). However, while Disher alleges Defendants made
misrepresentations on a website and in brochures and advertisements, he does not allege that he
actually read or viewed those misrepresentations. To that extent, Disher fails to satisfy the
proximate causation element as to those particular representations. Disher, however, does allege
that in reliance on Defendants’ misrepresentation through its warranty that the shingles would
last 30 years, he installed the shingles. To that end, he has sufficiently pled proximate causation
under the ICFA.
Defendants further contend the ICFA claim must be dismissed because it is based on the
same allegations underlying Disher’s breach of warranty claims or on non-actionable puffery.

9

Defendant notes that “a breach of a contractual promise, without more, is not actionable under
the ICFA.” Duffy v. Ticketreserve, Inc., 722 F. Supp. 2d 977, 992 (N.D. Ill. 2010). Disher,
however, alleges more than a promise that went unfulfilled. He specifically alleges that
Defendants engaged in deceptive practices that induced him to purchase its shingles.
Next, Defendants argue that statements, including “beauty that performs” and “excellent
roof protection,” were mere non-actionable puffery insufficient to support a claim under the
ICFA. However, Disher’s ICFA allegations are based on more than the foregoing statements.
He includes allegations that Defendants fraudulently promised the shingles would last for at least
thirty years. As such, Disher’s ICFA claim will not be dismissed.
Motion to Dismiss the Claims of John O’Malley (Doc. 39)
On June 1, 2003, O’Malley installed Tamko Heritage 30 shingles on his home in
Fishersville, Kentucky. From 2010 to 2013, O’Malley hired a contractor to re-adhere at least
two to three shingles. He submitted a warranty claim in August 2013 and received a denial letter
from Defendants on May 23, 2014.
Defendants argue O’Malley’s (1) strict liability and negligence claims fail under
Kentucky’s economic-loss doctrine, (2) breach of express warranty claim fails because O’Malley
did not comply with the 30-day notice provision set forth in the Limited Warranty, (3) breach of
implied warranty claims fail because all implied warranties were disclaimed by the Limited
Warranty and are time-barred, (4) failure of essential purpose claim fails because it is not a
stand-alone claim and there is no breach of express warranty claim, (5) fraudulent concealment
claim fails because O’Malley did not allege specific facts to satisfy the heightened pleadings
standard of Fed. R. Civ. P. 9(b), (6) unjust enrichment claim fails because the written Limited

10

Warranty governs the relationship of the parties, and (7) KCPA claim fails because it is timebarred and the Complaint’s allegations do not satisfy Rule 9(b).
Strict Liability & Negligence
The Kentucky Supreme Court has held that “the economic loss rule applies to claims
arising from a defective product sold in a commercial transaction and that the relevant product is
the entire item bargained for by the parties and placed in the stream of commerce by the
manufacturer.” Giddings & Lewis, Inc. v. Indus. Risk Insurers, 348 S.W.3d 729,733 (Ky. 2011).
O’Malley argues the economic loss doctrine does not bar his claims because Kentucky’s
economic loss doctrine is limited to commercial transactions and he has alleged injuries beyond
the product itself. Defendants counter that O’Malley’s interpretation of Kentucky law limiting
the economic loss doctrine to commercial transactions is erroneous.
In Giddings, the Kentucky Supreme Court acknowledged that a previous ruling had been
interpreted to suggest that the economic loss rule did not apply to consumer transactions. Id. at
737. The Giddings court, however, did not adopt that interpretation because the facts at issue did
not require it to do so. Id. at 737 n.5. The court noted that “the Restatement (Third) of Torts:
Products Liability makes no distinction between products produced for commercial customers
and those produced for consumers.” Id. (citing Restatement (Third) of Torts § 19(a) (1998)).
Nevertheless, “[l]osses for injuries to people and to ‘other property,’ in these commercial
transactions, remain subject to the traditional product liability theories.” Id. at 737 (citing
Restatement (Third) of Torts: Products Liability §§ 1 and 21 (1998)).
This Court need not determine whether Kentucky would apply the economic loss doctrine
to consumer transactions. O’Malley has sufficiently alleged losses to “other property.” See Doc.
2, p. 2 (alleging O’Malley “will need to prematurely replace the roof at his own expense in order

11

to avoid further damage to his home”). Therefore, even if the economic loss rule applies to
consumer transactions, O’Malley’s strict liability and negligence claims survive Defendants’
Motion to Dismiss.
Breach of Implied Warranty
Under Kentucky law,
(1) An action for breach of any contract for sale must be commenced within four
(4) years after the cause of action has accrued. By the original agreement the
parties may reduce the period of limitation to not less than one (1) year but may
not extend it.
(2) A cause of action accrues when the breach occurs, regardless of the aggrieved
party's lack of knowledge of the breach. A breach of warranty occurs when tender
of delivery is made, except that where a warranty explicitly extends to future
performance of the goods and discovery of the breach must await the time of such
performance the cause of action accrues when the breach is or should have been
discovered.
Ky. Rev. Stat. Ann. § 355.2-725(2).
By their very nature, implied warranties can “never ‘explicitly extend to future
performance.’” Standard Alliance Indus. V. Black Clawson Co., 587 F.2d 813, 820 (6th Cir.
1978); see also Port Auth. of N.Y. & N.J. v. Allied Corp., 914 F. Supp. 960, 962 (SDNY 1995)
(“By its very nature an implied warranty cannot be explicit, and thus cannot be saved [by a
statutory] exception for explicit warranties as to future performance.). Here, O’Malley has pled
that he installed the allegedly defective shingles in 2003. Therefore, his claim accrued no later
than 2003 regardless of his lack of knowledge of the breach and the time for him to bring his
breach of implied warranty claims expired in 2007 at the latest. Accordingly, O’Malley’s breach
of implied warranty claims are dismissed with prejudice.
Breach of Express Warranty
Under Kentucky law, liability for breach of express warranty “is governed by the terms
of the contract and the statutory provisions of the U.C.C.” Williams v. Fulmer, 695 S.W.2d 411,
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413 (Ky. 1985). Initially, the Court notes that O’Malley did not respond to Defendants’
argument that the breach of express warranty claim fails because he did not satisfy the 30-day
notification requirement in the Limited Warranty. The Limited Warranty provided that
O’Malley must “notify Tamko . . . of any claims under this limited warranty within thirty (30)
days following discovery of the problem with the Shingles” (Doc. 40-1). O’Malley has pled that
he first discovered problems with the shingles in 2010, but did not submit a warranty claim until
August 2013. As a result, he failed to comply with the 30-day notice requirement of the contract.
Accordingly, O’Malley’s breach of express warranty claim is dismissed without prejudice.
Failure of Essential Purpose
Kentucky law provides that “[w]here circumstances cause an exclusive remedy to fail of
its essential purpose, remedy may be had as provided in this chapter.” Ky. Rev. Stat. Ann. §
355.2-719(2). The language of this statute presupposes a breach of the warranty implicating the
remedial provision of the warranty. See H.B. Fuller Co. v. Kinetic Sys., Inc., 932 681, 688 (7th
Cir. 1991). As the Court has dismissed O’Malley’s breach of express warranty cause of action,
he cannot claim that a remedy provided by Defendants in the express warranty failed of its
essential purpose. Accordingly, the Court dismisses O’Malley’s failure of essential purpose
claim without prejudice.
Fraudulent Concealment
To prevail on a fraud by omission claim under Kentucky law “a plaintiff must prove: ‘(1)
the defendant had a duty to disclose the material fact at issue; (2) the defendant failed to disclose
the fact; (3) the defendant’s failure to disclose the material fact induced the plaintiff to act; and
(4) the plaintiff suffered actual damages as a consequence.’” Republic Bank & Trust Co. v. Bear
Stearns & Co., Inc., 683 F.3d 239, 255 (6th Cir. 2012) (quoting Waldridge v. Homeservices of

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Ky., Inc., 384 S.W.3d 165, 171 (Ky. App. Ct. 2011)). A party’s fraudulent concealment
allegations must meet the heightened pleadings standards of Federal Rule of Civil Procedure
9(b). See Pirelli Armstrong Tire Corp. Retiree Benefits Trust. v. Walgreen Co., 631 F.3d 436,
447 (7th Cir. 2011). Specifically, a plaintiff must plead “(1) precisely what was omitted; (2) who
should have made a representation; (3) the content of the alleged omission and the manner in
which the omission was misleading; and (4) what [the defendant] obtained as a consequence of
the alleged fraud.” Republic Bank & Trust, 683 F.3d at 256.
O’Malley contends that the following allegation satisfies Rule 9(b)’s requirements:
“Defendant ‘knowingly and intentionally’ omitted its knowledge that the shingles would not last
for the warranted length or for the expected useful life and that defendant had no intention to
honor its warranty obligations.” O’Malley alleges that he decided to install Tamko’s shingles, in
part, based on Tamko’s 30-year warranty. These allegations indicate that Tamko omitted its
knowledge that the shingles would not last for 30 years and that Tamko obtained income from
the sale of the shingles as a result of the omission. As such, O’Malley has met the pleading
standards of Rule 9(b) and his fraudulent concealment claim survives Defendants’ motion to
dismiss.
Unjust Enrichment
Under Kentucky law, a plaintiff cannot recover under an unjust enrichment theory where
there is an explicit contract. Naiser v. Unilever U.S., Inc., 975 F. Supp. 2d 727, 748 (W.D. Ky.
2013). However, a plaintiff may plead claims in the alternative, regardless of their consistency.
Fed. R. Civ. P. 8(d)(2), (3). Here, O’Malley has alternatively pled breach of contract and unjust
enrichment claims. Unless and until the Court concludes the warranty is a valid and enforceable
contract, O’Malley has properly pled his unjust enrichment claim as an alternative theory of

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recovery. Therefore, the Court declines to dismiss O’Malley’s unjust enrichment claim at this
time.
Kentucky Consumer Protection Act
An action under the KCPA must be commenced “within (2) years after the violation.”
Ky. Rev. Stat. Ann. § 367.220(5). Courts have found that neither the discovery rule nor the
fraudulent concealment doctrine apply to KCPA claims because the KCPA is a “legislatively
enacted cause of action.” Mitchell v. Gen. Motors LLC, 3:13-cv-498-CRS, 2014 WL 1319519, at
*4 (W.D. Ky. Mar. 31, 2014); Cook v. State Farm Mut. Auto. Ins. Co., No. 2002-CA-801-MR,
2004 WL 2011375, at *4 (Ky. App. Ct. Sept. 10, 2004) (stating the plain language of the statute
evidence the legislature’s intent to foreclose use of the discovery rule).
Defendants argue that O’Malley’s KCPA claim accrued when he purchased the shingles
in June 2003 and, therefore, he was required to bring his claim before June 2005. O’Malley
asserts that his injury did not occur until May 23, 2014 - the date on which he received a letter
from Defendants denying his warranty claim.
O’Malley’s Complaint alleges Defendants violated the KCPA by selling, marketing, and
distributing defective shingles; concealing and/or failing to inform O’Malley that the shingles
were defective; falsely representing that the shingles are reliable, durable, dependable, long
lasting, and meet or exceed the highest standards in the industry; and making false
representations regarding the quality of its warranties. As such, O’Malley alleges Defendants
violated the KCPA at the time he purchased the shingles in 2003, not when he received a letter
denying his warranty claim in 2014. Based on O’Malley’s allegations, he had until June 2005 to
bring his claim under the KCPA. Therefore, his KCPA claim filed in 2014 is time-barred.

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Because the Court has determined that the claim is time-barred, it need not consider whether
Rule 9(b) has been satisfied. Accordingly, O’Malley’s KCPA claim is dismissed with prejudice.
Motion to Dismiss the Claims of Eric Kline and Dimitri Mishurov (Doc. 41)
Kline owns a home in Denver, Colorado, on which Tamko Heritage 30 Shingles are
installed. Kline’s home was built in 2005, and he purchased the home in 2011. In February
2013 and shortly thereafter, Kline was advised by multiple sources that his shingles were
deteriorating due to a defect and that replacement was necessary. Defendants informed Plaintiff
that he was ineligible for a warranty claim because he was the secondary owner of the home.
Kline ultimately had the shingles replaced at his own expense, but Tamko Heritage 30 Shingles
remain on his detached garage.
Defendants filed their Motion to Dismiss arguing Kline and Mishurov’s (1) strict
liability, negligence, fraudulent concealment, and CPLA claims fail because they only allege
economic loss, (2) breach of express warranty claims fail because they are secondary purchasers
whose claims are barred under the transferability provisions of the relevant Limited Warranties,
(3) breach of implied warranty claims fail because all implied warranties were disclaimed by the
Limited Warranties and they are time-barred, (4) failure of essential purpose claims fail because
they have no warranty rights in light of the relevant transferability provisions, and (5) unjust
enrichment claims fail because Defendants did not retain a benefit at Kline’s and Mishurov’s
expense as they were not the initial purchasers of the shingles. The parties’ have stipulated to the
dismissal of Mishurov’s claims. Accordingly, the Court will only address the Motion to Dismiss
with respect to Kline.

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Strict Liability, Negligence, Fraudulent Concealment & Colorado Products Liability Act
The CPLA applies to “any action brought against a manufacturer or seller of a product,
regardless of the substantive legal theory or theories upon which the action is brought.” Colo.
Rev. Stat. Ann. § 13-21-401(2). As such, the CPLA governs Kline’s negligence and strict
liability claims. See Zapien v. Home Depot, USA, Inc., 09-cv-2349-REB-BNB, 2010 WL
3522570, at *3 (D. Colo. Sept. 2, 2010). Under Colorado’s economic loss doctrine, parties
“suffering only economic loss from the breach of an express or implied contractual duty may not
assert a tort claim for such a breach absent an independent duty of care under tort law.” Town of
Alma v. AZCO Const., Inc., 10 P.3d 1256, 1263-64 (Colo. 2000); see also Hamon Contractors,
Inc. v. Carter & Burgess, Inc., 229 P.3d 282, 289 (Colo. App. 2009) (economic loss applicable to
fraud claims). Products liability claims, however, may be brought “for or on account of personal
injury, death, or property damage caused by or resulting from the manufacture, construction,
design . . . of any product.” Colo. Rev. Stat. Ann. § 13-21-401(2). “The question in any case
where the economic loss rule is alleged to apply is whether the duty allegedly violated exists
independent of the contract.” Hamon Contractors, Inc., 229 P.3d at 289.
Kline argues that the economic loss doctrine does not bar his product liability claims
because Defendants owed Kline an “independent duty not to design or manufacture unreasonably
dangerous products” and a “duty to disclose latent defects.” Kline’s argument is contrary to the
Colorado Supreme Court’s implicit holding that product damage that could have been addressed
by a warranty is not recoverable in tort. See In re Porsche Cars N. Am., Inc., 880 F. Supp. 2d
801 (S.D. Ohio 2012) (citing Town of Alma, 10 P.3d at 1263). To the extent Kline’s strict
liability, negligence, fraudulent concealment & CPLA claims relate to shingle damage, the
economic loss doctrine bars those claims. However, the economic loss doctrine does not bar the

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strict liability, negligence, fraudulent concealment & CPLA claims to the extent Kline has
alleged damage to other property including the “underlying structure” (Doc. 2, p. 7).
Breach of Express Warranty
Colorado law provides that
A seller's warranty whether express or implied extends to any person who may
reasonably be expected to use, consume, or be affected by the goods and who is
injured by breach of the warranty. A seller may not exclude or limit the operation
of this section.
Colo. Rev. Stat. § 4-2-318. “The effect of section 4-2-318, therefore, is to ‘enlarge the potential
liability of a seller by extending the warranty to other persons in the distributive chain.’”
Persichini v. Brad Ragan, Inc., 735 P.2d 168, 175 n.10 (Col. 1987) (citing U.C.C. § 4-2-318).
Here, the relevant portion of the warranty states as follows:
Transferability: The Owner may transfer this limited warranty one (1) time
during the first two (2) years of the Term to a purchaser of the building upon
which the Shingles are installed (a “Purchaser”). . . . Except for one transfer to a
Purchaser during the first two (2) years of the Term, this limited warranty may not
be sold, assigned or transferred in any manner whatsoever. . . . Except as set forth
in this paragraph, any assignment sale or transfer of this limited warranty or the
building to which the TAMKO Shingles are applied shall immediately terminate
all liability of TAMKO for the Shingles, all warranties contained herein or
hereunder and any applicable implied warranties including warranties of
merchantability and fitness for a particular purpose.
Doc. 42-1, p. 2. Kline purchased his home, built in 2005, in 2011. Defendants argue that the
limited transfer provision was not satisfied. Kline counters that Defendants’ limited transfer
provision is unenforceable under Colorado law.
Under the specific terms of the warranty, Kline’s claim would be excluded because the
home upon which the shingles were installed was purchased by Kline after the first two years.
However, Colo. Rev. Stat. § 4-2-318 prohibits Defendants from excluding subsequent purchasers

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from the benefit of its warranty. Accordingly, Defendants’ transfer provision does not bar
Kline’s breach of express warranty claim.
Breach of Implied Warranty
Colorado provides a three-year statute of limitations for breach of implied warranty
claims. Colo. Rev. Stat. Ann. § 13-80-101(1)(a). “A cause of action accrues when the breach
occurs, regardless of the aggrieved party’s lack of knowledge of the breach. A breach of
warranty occurs when tender of delivery is made.” Colo. Rev. Stat. Ann. § 4-2-725(2). Here,
Kline’s claim accrued in 2005 when the shingles were delivered and installed on his home. As
such, his breach of implied warranty claims filed in 2014 are beyond the three-year limitations
period and are time barred. Accordingly, Kline’s breach of implied warranty claims are
dismissed with prejudice.
Failure of Essential Purpose
“Where circumstances cause an exclusive or limited remedy to fail of its essential
purposes, remedy may be had as provided in this title.” Colo. Rev. Stat. Ann. § 4-2-719(2).
Defendants argue failure of essential purpose is not a stand-alone claim. Therefore, Defendants
reason that because Kline’s breach of warranty claim fails, this claim must also be dismissed.
The Court agrees that failure of essential purpose is not a standalone claim. However, with
respect to a breach of warranty claim, Illinois law provides that the parties may resort to
traditional remedies under the Uniform Commercial Code when the remedy prescribed in the
limited warranty fails of its essential purpose. Accordingly, to the extent Kline pleads failure-ofessential purpose as a stand-alone claim, the Court dismisses that claim. Kline, however, may
amend his complaint to assert that the warranty’s remedy failed of its essential purpose.

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Unjust Enrichment
Under Colorado law, the test for unjust enrichment is as follows: “(1) at plaintiff’s
expense (2) defendant received a benefit (3) under circumstances that would make it unjust for
defendant to retain the benefit without paying.” DCB Const. Co. v. Cent. City Dev. Co., 965
P.2d 115, 119-20 (Co. 1998). Defendants argue that Kline’s unjust enrichment claim fails
because Defendants did not receive a benefit at Kline’s expense. Specifically, Defendants point
out that Kline did not purchase the shingles from Defendants, but was a subsequent purchaser of
the home on which the shingles were installed. Kline asserts that “[t]he benefit in the present
case is clear: Defendant retains the full purchase price of its defective shingles” (Doc. 51, p. 11).
Here, the Complaint alleges that the benefit the Defendants received was the “profits
from the sale of defective shingles” (Doc. 2, p. 31). This benefit, however, was received at the
expense of the previous homeowner, not at Kline’s expense. Accordingly, Kline’s claim for
unjust enrichment is dismissed with prejudice.
Conclusion
For the foregoing reasons, the Court GRANTS in part and DENIES in part the
Motions to Dismiss (Docs. 37, 39 & 41). Specifically: (1) With respect to Disher, the Court
DISMISSES the following claims: breach of the implied warranty of merchantability with
prejudice, breach of the implied warranty of fitness for a particular purpose with prejudice,
failure of essential purpose to the extent it is pleaded as a stand-alone claim with prejudice, and
fraudulent concealment without prejudice. (2) With respect to O’Malley, the Court
DISMISSES the following claims: breach of the implied warranty of merchantability with
prejudice, breach of the implied warranty of fitness for a particular purpose with prejudice,
breach of express warranty without prejudice, failure of essential purpose without prejudice, and

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Kentucky Consumer Protection Act with prejudice. (3) With respect to Kline, the Court
DISMISSES the following claims: breach of the implied warranty of merchantability with
prejudice, breach of the implied warranty of fitness for a particular purpose with prejudice,
failure of essential purpose to the extent it is pleaded as a stand-alone claim with prejudice, and
unjust enrichment with prejudice
Finally, the Court DENIES Defendants’ Motion for Leave to Submit Notice of
Supplemental Authorities in Support of Pending Motions to Dismiss (Doc. 99) as the cases to
which Defendants cite for supplementation are unpublished district court cases and thus not
binding on this Court.

IT IS SO ORDERED.
DATED: July 31, 2015

s/ Staci M. Yandle
STACI M. YANDLE
DISTRICT JUDGE

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