Dugan v. Mercedes-Benz, USA, LLC

Filing 14

ORDER AND REASONS denying 8 Motion to Dismiss for Failure to State a Claim. Signed by Judge Sarah S. Vance on 1/4/17. (jjs)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
JAMES R. DUGAN II

CIVIL ACTION

VERSUS

NO. 16-6451

MERCEDES-BENZ USA, LLC

SECTION “R” (5)

ORDER AND REASONS
James R. Dugan, II brings state Lemon Law and redhibition claims
against Mercedes-Benz USA, LLC. Mercedes USA moves to dismiss Dugan’s
redhibition claim. For the following reasons, the Court denies Mercedes
USA’s motion.
I.

BACKGROUND
James R. Dugan, II alleges that his $110,000 Mercedes Benz s550V

sedan is a lemon. According to his complaint, Dugan leased the vehicle from
Mercedes Benz of New Orleans, a Mercedes Benz dealer, on June 1, 2015. 1
The lease agreement specified a term of 36 months, with $2,313.62 due at
signing, 35 additional payments of $1,873.12, and a vehicle return payment

1

R. Doc. 1 at 2.

of $595.2 Under the lease, Mercedes Benz of New Orleans “assigned to
Dugan all rights it had under the manufacturer’s warranty.”3
According to Dugan, problems with the car began almost immediately.
Over the next seven months, the car allegedly required repeated repairs to
seatbelts, cooling fans, seat massagers, the air conditioning system, the
Bluetooth system, the WiFi system, the keyless go system, the keyless entry
system, the phone system, and a cupholder. 4 As a result of these repairs, the
car was in the shop six separate times for a total of sixty days. 5 Dugan has
since leased another car to replace the car in question.6
Dugan alleges that despite these many issues, Mercedes USA has
refused his demands to either replace the car or reimburse him.7 In his
complaint, Dugan brings claims under Louisiana redhibition law and the
Louisiana Lemon Law, La. Rev. Stat. 51:1941, et seq.

Dugan seeks

reimbursement for lease payments, maintenance and repair costs, interest,

2
3
4
5
6
7

Id.
Id.
Id. at 3-4.
Id. at 4-5.
Id. at 5.
Id.
2

and attorney’s fees and costs.8 Mercedes USA now moves to dismiss Dugan’s
redhibition claim.9

II.

LEGAL STANDARD
To survive a Rule 12(b)(6) motion to dismiss, the plaintiff must plead

enough facts “to state a claim to relief that is plausible on its face.” Ashcroft
v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550
U.S. 544, 570 (2007)). A claim is facially plausible when the plaintiff pleads
facts that allow the court to “draw the reasonable inference that the
defendant is liable for the misconduct alleged.” Id. at 678. A court must
accept all well-pleaded facts as true and must draw all reasonable inferences
in favor of the plaintiff. Lormand v. U.S. Unwired, Inc., 565 F.3d 228, 239
(5th Cir. 2009); Baker v. Putnal, 75 F.3d 190, 196 (5th Cir. 1996).
A legally sufficient complaint must establish more than a “sheer
possibility” that the plaintiff’s claim is true. Iqbal, 556 U.S. at 678. It need
not contain detailed factual allegations, but it must go beyond labels, legal
conclusions, or formulaic recitations of the elements of a cause of action. Id.
In other words, the face of the complaint must contain enough factual matter

8
9

Id. at 8-9.
R. Doc. 8.
3

to raise a reasonable expectation that discovery will reveal evidence of each
element of the plaintiff’s claim. Lormand, 565 F.3d at 257. If there are
insufficient factual allegations to raise a right to relief above the speculative
level, or if it is apparent from the face of the complaint that there is an
insuperable bar to relief, the claim must be dismissed. Twombly, 550 U.S.
at 555.

III. DISCUSSION
Under the Louisiana law of redhibition, a “seller warrants the buyer
against redhibitory defects, or vices, in the thing sold.” La. Civ. Code art.
2520. In its motion to dismiss, Mercedes USA argues that because Dugan
leased the car rather than buying it, he may not invoke the warranty against
redhibitory defects.
Mercedes USA is correct that redhibition does not apply where there is
no sale. See Alvis v. CIT Grp./Equip. Fin., Inc., 918 So. 2d 1177, 1183-84 (La.
App. 3 Cir. 2005). (“[A] redhibition cause of action relates to error in the
cause of completed sales and, absent a sale, the redhibition articles do not
apply.”); Hillard v. United States, No. 06-2576, 2007 WL 647292, at *4 (E.D.
La. Feb. 28, 2007) (granting motion to dismiss redhibition claim because no
sale occurred). In this case, however, Dugan does allege a sale. He alleges
4

that Mercedes Benz of New Orleans bought the car from Mercedes USA, and
that Mercedes Benz of New Orleans assigned its warranty rights to Dugan. 10
Although redhibition requires a sale, a redhibition claim need not be
brought by the buyer. Redhibition claims may be assigned. See Alvis, 918 So.
2d at 1183-84 (“[P]laintiffs, as subrogees and assignees of CIT’s claim against
the defendants, had the burden of proving by a preponderance of the
evidence any claim of redhibition that CIT had against the defendants.”); see
also Nelson Radiology Assocs., L.L.C. v. Integrity Med. Sys., Inc., 16 So. 3d
1197, 1201 (La. App. 4 Cir. 2009) (upholding trial court judgment in
redhibition case brought by lessee against defendant seller of medical
equipment to lessor). Here, Dugan alleges that Mercedes Benz of New
Orleans has assigned him its right to claim redhibition against Mercedes
USA.

Dugan may therefore assert any redhibition claim arising from

Mercedes Benz of New Orleans’s purchase, and Mercedes USA’s motion
must be denied.

R. Doc. 1 at 5 (“Pursuant to Mercedes Benz of New Orleans’ assignment
to Dugan in section 15 of the [lease agreement] of all of Mercedes Benz of
New Orleans’ rights under the manufacturer’s warranty, Dugan stands in
Mercedes Benz of New Orleans’ shoes as buyer for purposes of redhibition.”)
5
10

IV.

CONCLUSION

For the foregoing reasons, Mercedes-Benz USA, LLC’s motion to dismiss
James R. Dugan, II’s redhibition claim is DENIED.

4th
New Orleans, Louisiana, this _____ day of January, 2017.

_____________________
SARAH S. VANCE
UNITED STATES DISTRICT JUDGE

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