Diagle et al v. Ford Motor Company
Filing
112
MEMORANDUM OPINION AND ORDER. IT IS HEREBY ORDERED: 1. Plaintiffs' Motion to Certify a Class 73 is DENIED; and 2. Defendant's Motion for Summary Judgment 64 is GRANTED. LET JUDGMENT BE ENTERED ACCORDINGLY. (Written Opinion). Signed by Chief Judge Michael J. Davis on 7/31/12. (GRR)
UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
Edward Daigle et al.,
Plaintiffs,
v.
MEMORANDUM OPINION
AND ORDER
Civil No. 09‐3214 (MJD/LIB)
Ford Motor Company,
Defendant.
____________________________________________________________________
Robert K. Shelquist, Elizabeth R. Odette and Craig S. Davis, Lockridge
Grindal Nauen P.L.L.P, Jay P. Saltzman, Law Offices of Jay Saltzman P.C., and
James C. Shah, Shepard, Finkelman, Miller & Shah, LLP, Counsel for Plaintiffs.
David R. Kelly, Jennifer K. Huelskoetter and Michael R. Carey, Bowman
and Brooke LLP, John M. Thomas, Dykema Gossett PLLC and Janet L.
Conigliaro, LeClair Ryan, Counsel for Defendant Ford Motor Company.
____________________________________________________________________
This matter is before the Court upon Defendant Ford Motor Company’s
(“Ford”) motion for summary judgment [Doc. No. 64] and Plaintiffs’ motion for
class certification [Doc. No. 73].
I.
BACKGROUND
Plaintiffs James Genovese, Henri Caron, and Edward Daigle are owners of
Ford Freestar minivans that have experienced a transmission failure. Plaintiffs
1
allege that the failures are caused by a design defect in the vehicles’ torque
converter, a component that acts as a bridge between the engine and the
transmission. The torque converter connects to the transmission through a shaft
with grooved ends called “splines.” If the torque converter fails, the splines may
strip and the connection between the engine and the transmission is lost. When
this connection is lost, the vehicle loses propulsion. Each Plaintiff alleges that the
splines on their vehicles stripped, causing their transmissions to fail.
Plaintiffs bring this action on behalf of all who own or lease Ford Freestar
or Mercury Monterey minivans from the 2004, 2005, and 2006 model years. Both
the Freestar and Monterey were built in the same factory and used the same
design platform. Plaintiffs seek compensatory damages, costs incurred in this
action as well as costs for parts and repairs and consequential damages,
injunctive relief and an order requiring Ford to account and/or pay damages for
unjust enrichment.
Ford moves for summary judgment as to the claims remaining in this case:
breach of express and implied warranties and unjust enrichment. Plaintiffs also
move to certify subclasses in Minnesota, Florida and Maryland ‐ the states of
residence of the remaining named plaintiffs.
2
After these motions were filed, Ford notified the National Highway Traffic
Safety Administration (“NHTSA”) that it would recall 2004‐2005 Freestars and
Montereys (“covered vehicles”) to address the potential for torque converter
malfunctions. (Case Declaration ¶ 3, Ex. A.) Pursuant to the recall, owners of the
covered vehicles would be notified of the recall, and instructed to take their
covered vehicle to a dealer to have a new or remanufactured torque converter
installed. (Id.) Ford’s general recall policy also provides that Ford would refund
the owner for costs paid to service the covered vehicle to remedy the defect or
noncompliances prior to notification of the recall. (Id., Ex. C.)
II.
CLASS CERTIFICATION
A.
Rule 23(a) Requirements
The class action serves to conserve “the resources of both the courts and
the parties by permitting an issue potentially affecting every [class member] to be
litigated in an economical fashion under Rule 23.” General Telephone Co. of
Southwest v. Falcon, 457 U.S. 147, 155 (1982)).
Pursuant to Rule 23(a), there are four threshold requirements to class
certification:
1) the class is so numerous that joinder of all members is impracticable; 2)
3
there are questions of law or fact common to the class; 3) the claims or
defense of the representative parties are typical of the claims or defenses of
the class; and 4) the representative parties will fairly and adequately
protect the interests of the class.
If these prerequisites are met, the Court must then determine if the
putative class is maintainable under Rule 23(b). Plaintiffs bear the burden of
proof regarding the Rule 23 requirements. Smith v. Merchants & Farmers Bank,
574 F.2d 982, 983 (8th Cir. 1978). The district courts are accorded broad discretion
in determining whether or not to certify a class. Gilbert v. City of Little Rock,
Ark., 722 F.2d 1390, 1399 (8th Cir. 1983).
Plaintiffs seek to certify the following subclasses:
Minnesota Subclass:
All current and former owners and lessees of model year 2004 through
2006 Freestar or Mercury Monterey vehicles (the “Class Vehicles”)
purchased or leased in Minnesota. Excluded from the Minnesota Subclass
are claims for personal injury by members of the Minnesota Subclass. Also
excluded from the Minnesota Subclass is Defendant, its parents,
subsidiaries, affiliates, agents and representatives, including its registered
dealers and its officers and directors at all relevant times, members of its
immediate families and its legal representatives, heirs, successors or
assigns and any entity in which Defendant has or had a controlling
interest.
4
Maryland Subclass:
All current and former owners and lessees of the Class Vehicles purchased
or leased in Maryland. Excluded from the Maryland Subclass are claims
for personal injury by members of the Maryland Subclass. Also excluded
from the Maryland Subclass is Defendant, its parents, subsidiaries,
affiliates, agents and representatives, including its registered dealers and
its officers and directors at all relevant times, members of its immediate
families and its legal representatives, heirs, successors or assigns and any
entity in which Defendant has or had a controlling interest.
Florida Subclass:
All current and former owners and lessees of the Class Vehicles purchased
or leased in Florida. Excluded from the Florida Subclass are claims for
personal injury by members of the Florida Subclass. Also excluded from
the Florida Subclass is Defendant, its parents, subsidiaries, affiliates, agents
and representatives, including its registered dealers and its officers and
directors at all relevant times, members of its immediate families and its
legal representatives, heirs, successors or assigns and any entity in which
Defendant has or had a controlling interest.
Assuming without deciding that Plaintiffs can establish that the Rule 23(a)
prerequisites are met, the Court must nonetheless deny the motion for class
certification as Plaintiffs cannot demonstrate that this action is an appropriate
class action under Rule 23(b)(3) as discussed below.
C.
23(b)(3) Requirements
Plaintiffs move to certify a class under Rule 23(b)(3), which allows for class
certification when “questions of law or fact common to the members of the class
5
predominate over any questions affecting only individual members and that a
class action is superior to other available methods for the fair and efficient
adjudication of the controversy.”
1.
Whether Common Questions of Law or Fact Predominate
a.
Breach of Express Warranty
Plaintiffs assert that all of the Class Vehicles were covered by a New
Vehicle Warranty. (Shelquist Aff., Exs. 5‐7.) Each New Vehicle Warranty
provided for a warranty start date, which “is the day you take delivery of your
new vehicle or the day it is first put into service.” (Id. at 2.) The warranty
further provides that “Bumper to Bumper” coverage begins on the warranty start
date and ends after “three years or 36,000 miles, whichever occurs first.” (Id. at
5.) Because the express warranty upon which Plaintiffs’ rely is limited, whether
this warranty was in effect for each class member requires individual proof. The
Court thus finds this claim is not appropriate for class certification under Rule 23
(b).
b.
Breach of Implied Warranty
6
Plaintiffs assert that under Minnesota and Maryland law1, claims for
breach of implied warranty can be proven with common evidence.
i.
Minnesota Law
Under Minnesota law, a claim for breach of implied warranty of
merchantability requires proof that a product is not suitable for ordinary
purposes. Minn. Stat. § 336.2‐314. Minnesota law also provides that an implied
warranty of merchantability may be limited or disclaimed, as long as the
disclaimer is in writing, conspicuous and mentions merchantability. Transp.
Corp. of Am., Inc. v. Int’l Bus. Mach. Corp., Inc., 30 F.3d 953, 958‐59 (8th Cir.
1994) (citing Minn. Stat. § 336.2‐316). In addition, such limitations are enforceable
against subsequent buyers. Id. (citing Minn. Stat. § 336.2‐318).
Here, the New Vehicle Warranty includes the following language:
You may have some implied warranties. For example, you may have:
!
an implied warranty of merchantability (that the car or light truck is
reasonably fit for the general purpose for which it was sold); or
an implied warranty of fitness for a particular purpose (that the car
!
or light truck is suitable for your special purposes.)
These implied warranties are limited, to the extent allowed by law, to the
time period covered by the written warranties, or to the applicable time
period provided by state law, whichever period is shorter.
1
In their briefs filed in support of class certification, Plaintiffs do not address a breach of
implied warranty claim under Florida law.
7
(See, e.g., Shelquist Aff., Ex. 5 p. 4.)
Based on this language, it is clear that a claim of breach of implied
warranty under Minnesota law would be limited to the life of the New Vehicle
Warranty. Thus, whether a class member can prove a claim for breach of implied
warranty will depend on when the class member purchased the vehicle, or the
mileage on the vehicle at the time of purchase. Because such a claim can only be
proven by individualized proof, it is not amenable to class certification.
In addition, a claim of breach of implied warranty is subject to a four year
statute of limitations in Minnesota. Highway Sales, Inc. v. Blue Bird Corp., 559
F.3d 782, 788 (8th Cir. 2009) (citing Minn. Stat. § 336.2‐725(1)). “Unlike express
warranties, under Minnesota law, ‘[i]mplied warranties cannot, by their very
nature, explicitly extend to future performance.’” Id. “A breach of implied
warranty occurs, and the claim accrues, ‘when tender of delivery is made. . . ‘”
unless there is a basis for equitable tolling. Id. (quoting Minn. Stat. §
336.2‐725(2)). Individualized proof will therefore be needed to resolve the issue
of whether a claim is time‐barred.
ii.
Maryland Law
Maryland law provides that a warranty of merchantability is implied in a
8
contract of sale from a merchant seller. Md. Code, Comm. Law art. § 2‐314.
Maryland law further provides that goods must be fit for the ordinary purposes
for which such goods are used. Id. § 2‐314(2)(c). To sustain a claim for breach of
an implied warranty, a plaintiff must sufficiently allege objective facts as to the
likelihood of injury. Lloyd v. Gen. Motors Corp., 916 A.2d 257, 292 (Md. 2002).
In Lloyd, for example, the court found that the plaintiffs alleged that a significant
number of persons had been injured or harmed as a result of the product defect,
and that based on these allegations, plaintiffs had sufficiently pleaded a claim,
without requiring the additional allegations that each plaintiff had, in fact, been
injured. In doing so, the court noted that where the injury alleged is purely
speculative or nothing more than a potential, an allegation of actual injury would
be required. Id.
Here, Plaintiffs do not allege that the defect to the torque converter has
manifested in a significant amount of Class Vehicles sold in Maryland.
Accordingly, to succeed on a claim of breach of implied warranty, a class
member would have to demonstrate that his/her Class Vehicle included a
defective torque converter.
In Maryland, claims for breach of an implied warranty are also subject to a
9
four year statute of limitation. See Md. Code, Comm. Law art. § 2‐725(1) and (2).
Such a claim accrues at tender of delivery, even if the goods are nonconforming.
See Washington Freightliner, Inc. v. Shantytown Pier, Inc., 719 A.2d 541, 545 (Md.
1998) (statute of limitation for breach of implied warranty accrues at tender of
delivery of nonconforming goods).
Because a claim of breach of implied warranty under Maryland law
requires individualized proof, adjudication of such claims class certification is
not warranted.
c.
Unjust Enrichment
Plaintiffs assert that under Florida, Minnesota and Maryland law, class‐
wide issues predominate claims for unjust enrichment. Plaintiffs argue that in
analyzing such a claim, the focus is on Ford’s conduct. Here, Ford received the
benefit of the purchase of a Class Vehicle at a higher price than would have been
paid had Plaintiffs known of the PDI defect.
Under the laws of Florida, Minnesota and Maryland, an unjust enrichment
claim involves a circumstance where a defendant has been conferred a benefit,
and under the circumstances, it is inequitable for the defendant to retain such
benefit. See Nautica Int’l, Inc. v. Intermarine USA, L.P., 5 F. Supp. 2d 1333, 1341‐
10
42 (S.D. Fla. 1998) (under Florida law, elements of an unjust enrichment claim
include a benefit conferred on the defendant; appreciation by the defendant of
such benefit; and acceptance and retention of such benefit by the defendant
under such circumstances that it would be inequitable for the defendant to retain
the benefit without paying value); Klass v. Twin City Fed. Sav. & Loan Ass’n.,
190 N.W.2d 493, 494‐95 (Minn. 1971) (quoting Brand v. Williams, 13 N.W. 42, 42
(Minn. 1882)) (under Minnesota law, an unjust enrichment claim exists where the
defendant has knowingly received or obtained something of value for which the
defendant “in equity and good conscience” should pay); County Comm’rs of
Caroline County v. J. Roland Dashiell & Sons, Inc., 747 A.2d 600, 607, n.7 (Md.
2000) (under Maryland law, the elements of an unjust enrichment claim under
Maryland law are: a benefit conferred upon the defendant by plaintiff; an
appreciation or knowledge by the defendant of such benefit; and that acceptance
or retention of such benefit would be inequitable).
The Court finds that the elements of an unjust enrichment claim cannot be
proven through class‐wide evidence. See Vega v. T‐Mobile USA, Inc., 564 F.3d
1256, 1274 (11th Cir. 2009) (finding that “common questions will rarely, if ever,
predominate an unjust enrichment claim, the resolution of which turns on
11
individualized facts.”). For example, the subclasses currently include all owners
or lessees of the Class Vehicles, irregardless of whether the vehicle was
purchased new or used. If the Class Vehicle had been purchased used, no benefit
would have been conferred to Ford. Further, while Plaintiffs allege that Ford
received the benefit of a higher sale price, Plaintiffs have produced no evidence
to support his assertion.
The Court thus finds that common issues of law or fact do not predominate
the unjust enrichment claims.
2.
Superiority
This factor requires the Court to determine whether the class action is
manageable, taking into consideration choice of law determinations, Erie guesses,
and notice to class members. Castano v. Am. Tobacco Co., 84 F.3d 734, 747 (5th
Cir. 1996). The Court can also take into consideration factors such as the interest
of members of the class in individually controlling the prosecution or defense of
separate actions; the extent and nature of any litigation concerning the
controversy already commenced by or against members of the class, the
desirability or undesirability of concentrating the litigation of the claim in the
particular forum, and the difficulties likely to be encountered in the management
12
of the action. Fed. R. Civ. P. 23(b)(3)(A)‐(D).
Plaintiffs assert these factors weigh in favor of certification, given the
relatively low amount of loss to each class member compared to the cost and
expense of litigating this case. Concentrating the litigation will provide a remedy
for those class members who would otherwise not seek a remedy due to the
costs/benefits. There has also been only minimal litigation against Ford on the
issue of the defective torque converters in the Class Vehicles.
Because the Court finds that individual issues predominate, a class action
is not a superior method to adjudicate the claims asserted herein. In addition,
Ford’s voluntary safety recall of 2004‐052 Freestars and Montereys, which
provides for the installation of a new or remanufactured torque converter, or a
refund to those who paid to service their vehicle prior to the recall, provides most
of the putative class the relief it seeks. Under these circumstances, a class action
does not appear to be a superior method to adjudicate the putative class claims.
See, eg., In re Conagra Peanut Butter Prod. Liab. Litig., 251 F.R.D 689, 699 (N.D.
Ga. 2008) (finding that class action did not meet superiority requirements
2
The putative class as defined in the Complaint includes persons who purchased or
leased a 2006 Freestar or Monterey, while the recall involves only 2004 and 2005 models.
However, at this time, a subclass involving owners or lessees of 2006 models cannot go forward
as there is no named class representative that purchased or leased a 2006 model.
13
because, in part, defendant had instituted a full refund program); In re PPA Prod.
Liab. Litig., 214 F.R.D. 614, 622 (W.D. Wash. 2003) (finding that because
defendants maintained an ongoing refund and product replacement program, it
made little sense to certify a class “where class mechanism is unnecessary to
afford the class members redress.”); Berley v. Dreyfuss & Co., 43 F.R.D. 397, 399
(D. N.Y. 1967) (finding that rules governing class certification “reflect a broad
policy of economy in the use of society’s difference‐setting machinery” and that
fact that defendant “offered to refund the purchase price to its customers,
certifying a class would needlessly replace a simple, amicable settlement
procedure with complicated, protracted litigation.”); Ford Motor Co. v. Magill,
698 So.2d 1244, 1245‐46 (Fla. App. 3 Dist. 1997) (reversing class certification order
as to a recall and economic injury subclass based on fact that the NHTSA had
negotiated recall mandates and extended warranties with Ford); Aqua Dots Prod.
Liab. Litig., 654 F.3d 748 (7th Cir. 2011) (finding that where defendant had
already agreed to refund the purchase price of the alleged defective product, Rule
23(a)(4), which requires class representative to fairly and adequately represent
the interests of the class, is not met if the relief plaintiffs seek duplicates a remedy
that has been offered through the refund program and which remains available
14
to all members of the putative class).
Ford does acknowledge that there may be class members that paid to have
the entire transmission replaced, and who may not be fully reimbursed because
replacement of the entire transmission is not required to repair the defective
torque converter. Despite the possibility that certain class members will not be
fully reimbursed through the recall, the Court nonetheless finds that the recall
weighs against a finding that a class action is a superior method of adjudication
of the claims asserted in this case.
Based on the above, the Court finds that Plaintiffs have not demonstrated
that this action meets the requirements of Rule 23(b)(3). Accordingly, Plaintiffs’
motion for class certification must be denied.
III.
STANDARD FOR SUMMARY JUDGMENT
Summary judgment is appropriate if, viewing all facts in the light most
favorable to the non‐moving party, there is no genuine issue as to any material
fact, and the moving party is entitled to judgment as a matter of law. Fed. R. Civ.
P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322‐23 (1986). The party seeking
summary judgment bears the burden of showing that there is no disputed issue
of material fact. Celotex, 477 U.S. at 323. This burden can be met “by ‘showing’ ‐
15
that is, pointing out to the district court ‐ that there is an absence of evidence to
support the nonmoving party’s case.” Id. at 325. The party opposing summary
judgment may not rest upon mere allegations or denials, but must set forth
specific facts showing that there is a genuine issue for trial. Krenik v. County of
Le Sueur, 47 F.3d 953, 957 (8th Cir. 1995).
IV.
ANALYSIS
A.
Express Warranty Claim
1.
Daigle
Edward Daigle is a Minnesota resident, therefore Minnesota law controls
his claim for breach of express warranty. Under Minnesota law, an express
warranty arises when a seller makes an affirmation about a product that becomes
part of the basis of the bargain between the parties. Minn. Stat. § 336.2‐313 (2010).
“To establish a warranty claim the plaintiff must basically prove: the existence of
a warranty, a breach, and a causal link between the breach and the alleged
harm.” Peterson v. Bendix Home Sys., Inc., 318 N.W.2d 50, 52‐3 (Minn. 1982).
Daigle purchased a used 2004 Ford Freestar in May 2008 from OK Used
Cars. (Carey Decl., Ex. 12 (Daigle Dep. at 60, 62, 84‐85, 107; Exs. 4‐6).) Daigle
testified at his deposition that neither he or his wife saw any Ford advertisements
16
relating to the Freestar. (Id., Ex. 12 (Daigle Dep. at 67‐68).) Nor did they talk
with anyone at Ford before they bought the 2004 Freestar, or conduct any internet
research on the vehicle prior to purchase. (Id. at 68‐70, 71.)
When he purchased the Freestar in 2008, OK Used Cars provided a 6
month/6,000 mile warranty on the engine and the transmission. (Id. at 83; Ex. 5.)
Daigle understood he could purchase an extended warranty, but he did not buy
one. (Id. at 167.) On April 16, 2009, Daigle brought the Freestar to Kenny’s
Service Station in Bemidji after he noticed a change in the RPMs when he was
driving. (Id. at 119‐120.) At that time, the transmission fluid was changed. (Id.
at 120; Ex. 11.) Ten days later, while driving the Freestar on the highway, Daigle
heard the engine rev and then the vehicle went into neutral. (Id. at 125‐26.)
Daigle coasted the van to the shoulder, where it came to a stop. (Id. at 127.) The
vehicle was towed to Kenny’s Service Station, where he was told that the vehicle
had a major transmission problem. (Id. at 139‐140, 142.) Daigle had the van
towed to Bob Lowth Ford for repair, where he was told the transmission had to
be replaced. (Id. at 142‐43.) Daigle was charged $3,000 to replace the
transmission. (Id. at 144; Ex. 17.)
Daigle’s 2004 Freestar was covered by a New Vehicle Warranty when it
17
was originally sold. (Kalis Aff., Ex. A (2004 Car and Light Truck Warranty
Guide).) This warranty provided that “[d]uring this coverage period, authorized
Ford Motor Company dealers will repair, replace, or adjust all parts on your
vehicle that are defective in factory‐supplied materials or workmanship.” (Id. at
5.) Such bumper to bumper coverage lasted for three years or 36,000 miles,
whichever occurred first. (Id.) Because Daigle purchased his Freestar in May
2008, the New Vehicle Warranty had already expired. Plaintiffs argue that a
claim for breach of express warranty does not accrue until he discovered or
should have discovered Ford’s breach ‐ the refusal or inability to maintain the
vehicle as warranted. Highway Sales, Inc., 559 F.3d at 787. As applied here,
Plaintiffs argue the Freestar that Daigle purchased was defective at the time it
was first sold, but such defect did not manifest itself until after the term of the
New Vehicle Warranty had passed. Plaintiffs argue that as they could not have
known of Ford’s refusal to maintain the vehicle as warranted until after the
defect was discovered, the fact that the warranty had expired does not bar
Daigle’s claim that Ford breached such warranty.
To accept such an argument, however, would render any warranty limited
in time/mileage meaningless. As the Court recognized in Cannon Tech. v. Sensus
18
Metering Sys., 734 F. Supp. 2d 753, 763 (D. Minn. 2010):
A plaintiff could always claim that a defect manifesting itself after the
express‐warranty period was endemic to the product on the date it was
purchased, and hence the product was “defective” when bought. Such a
rule is non‐sensical.
Accordingly, even if [plaintiff] were correct that the [product] was
“defective” when purchased, its express‐warranty claim would still fail
because that defect did not manifest itself until after the warranty period
had ended.
See also Neuser v. Carrier Corp., No. 06‐C‐645‐S, 2007 WL 484779, at *4‐5 (W.D.
Wis. Feb. 9, 2007) (finding that a limited warranty recognizes the inevitability of
defects in the product sold).
The facts are undisputed that Daigle purchased his 2004 Freestar used and
after the New Vehicle Warranty had expired. Accordingly, any claim based on
the New Vehicle Warranty has no merit. See Liedtke v. Cloquet Serv. Ctr., 367
N.W.2d 117, 118 (Minn. Ct. App. 1985) (no claim where plaintiff did not notify or
return vehicle until after the limited warranty had expired).3
2.
Genovese
James Genovese, a resident of Maryland, purchased a 2004 Freestar in
3
It appears that Daigle relies solely on the New Vehicle Warranty for his breach of
express warranty claim. See Plaintiffs’ Memorandum in Opposition to S.J. at 15‐17.
19
January 2005 from Koons Ford, a Ford dealership in Maryland. (Kalis ¶ 9.) Prior
to buying the Freestar, Genovese recalls seeing a commercial concerning the
Freestar’s five star crash rating and other advertisements. (Carey Affidavit, Ex. 9
(Genovese Dep. at 131‐32).) He further testified that no one at Koons told him
anything that was not true. (Id. at 134.)
When Genovese purchased the Freestar, it was covered by the same New
Vehicle Limited Warranty as Daigle’s Freestar. (Kalis Aff., Ex. A.)
Genovese testified that he understood the warranty did not cover defects
that occurred beyond the warranty period. (Carey Aff., Ex. 9 (Genovese Dep. at
144‐45).) He was offered an extended warranty, but declined to purchase such a
warranty. (Id. Ex. 10 (Genovese Dep. at 233‐34).) Thereafter, the Genoveses
drove the van for about 45,000 miles with no mechanical issues. (Id. Ex. 9
(Genovese Dep. at 116).) On November 15, 2007, Genovese’s wife was driving
the Freestar when it lost all forward power. (Id. at 41, 144‐45.) The van was
towed to an AAMCO transmission shop, where the transmission was replaced
for $2,400. (Id. Ex. 11.) Genovese was informed by the shop that the cause of the
transmission failure was the torque converter ‐ that the internal splines were
stripped out. (Id.) After the transmission was replaced, Genovese drove the van
20
for another 50,000, after which he traded it in and received a $3,000 credit on the
purchase of another vehicle. (Id., Ex. 9 (Genovese Dep. at 118).)
Genovese appears to base his breach of express warranty claim on both the
New Vehicle Warranty and upon advertisements he saw prior to purchasing the
2004 Freestar. In Maryland, to prevail on an express warranty claim, a plaintiff
must show that the good sold did not, at the time of sale, conform to the
representations of the warranty. Crickenberger v. Hyundai Motor Am., 944 A.2d
1136, 1143 (Md. 2008). A plaintiff must also show a causal connection between
the defect and his damages. Id. at 1143‐44. Further, statements in advertising can
give rise to an express warranty. Gricco v. Carver Boat Corp., LLC, Civ. No. JFM‐
04‐1854, 2005 WL 3448038, at *3 (D. Md. Dec. 15, 2005). Genovese argues that he
has presented evidence that the Freestar was defective when he purchased it, and
that Ford warranted the vehicle was free of defects and advertised the vehicle
had been given a five star crash rating.
Genovese testified that he saw Ford’s advertisements as to the Freestar’s
five star crash ratings, and that he relied on the advertisements and his previous
experience with Ford, trusting that the company would not sell him a defective
vehicle. (Carey Aff., Ex. 10 (Genovese Dep. at 233).)
21
For those reasons discussed above, Genovese, like Daigle, cannot rely on
the New Vehicle Limited Warranty, as the warranty had expired on the date his
Freestar’s transmission failed given the fact that the vehicle had 45,000 miles on it
at that time. (Id., Ex. 9 (Genovese Dep. at 145).)
To the extent Genovese’s express warranty claims are based on
advertisements he saw concerning the Ford Freestar, Genovese also testified that
the advertisements he is relying on are “the incessant five‐star crash rating
commercial or ads.” (Davis Aff., Ex. 10 (Genovese Dep. at 132).) He did not
testify that those commercials made express warranties against defects in the
Freestar.
“[A]n affirmation merely of the value of the goods or a statement
purporting to be merely the seller’s opinion or commendation of the goods does
not create a warranty.” Md. Code, Comm. Law art. § 2‐313(2). Absent evidence
that Ford advertised that the 2004 Freestar was free of defects, particularly the
torque converter, advertisements that the Freestar was safe and reliable are
merely statements of opinions or commendation, which are not actionable.
Gricco, 2005 WL 3448038, at *3 (citing Rock v. Oster Corp., 810 F. Supp. 665, 667
(D. Md. 1991). See also, Rite Aid Corp. v. Levy‐Gray, 876 A.2d 115, 126 (Md. Ct.
22
App. 2005) (finding that Maryland law requires an express warranty to include
an affirmative statement of fact by the seller about the goods).
Accordingly, the Court finds that Ford is entitled to summary judgment as
to Genovese’s claim of breach of express warranty.
3.
Caron
Henri Caron, a Georgia resident, purchased a used 2005 Freestar on
January 15, 2007 from Duvall Ford in Jacksonville, Florida. (Carey Aff., Ex. 19
(HC00019).) The car was sold by Ford to a dealer on March 25, 2005, and it was
then sold to Enterprise Rental Car on March 29, 2005. (Kalis Aff. ¶ 10.) The
Freestar was covered by the 2005 Car and Light Truck Warranty when it was first
sold. (Id. Ex. B.) Like the 2004 New Vehicle Warranty, this warranty provided
for bumper to bumper coverage for three years or 36,000 miles, whichever
occurred first. (Id. at 5.) At the time Caron purchased the Freestar, it had been
driven over 55,000 miles, therefore the New Vehicle Limited Warranty had
expired. (Carey Aff. Ex. 18 (Caron Dep. at 100), Ex. 19 (HC00019).)
Caron testified that when he purchased the Freestar, the salesman told him
the Freestar was a good vehicle that would meet his family’s needs. (Id. Ex. 18
(Caron Dep. at 58, 59, 70 and 82).) He also testified that he did not recall
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receiving a written warranty on the Freestar, but that he was under the
impression he was getting a lifetime warranty as to any of the van’s components
that would prevent the car from going from point A to point B. (Id. at 67; 167‐70.)
He further testified that before buying the 2005 Freestar, he relied on his previous
experience with Ford, Ford’s reputation, and commercials to determine that Ford
manufactured good, solid‐working vehicles and that the Freestar would be a
reliable vehicle. (Id. at 57‐58.)
Caron drove the Freestar for two and one half years without any problems.
(Id. at 99‐101, 117, 132.) On July 18, 2009, Caron was driving the Freestar to a
mall in Jacksonville, Florida with his wife and family, and was on a six lane state
highway when the engine started to rev and he felt the van was not accelerating
when he stepped on the gas. (Id. at 99‐100, 133‐37, 142, 154.) He got off the
highway and pulled over onto the shoulder of the exit ramp. (Id. at 139‐40.)
While doing so, Caron testified he had no trouble steering or braking. (Id. at
141.)
The van was then towed to his home, and a few days later, was towed to
L&D Transmission, where the torque converter, pump and pump shaft filter
were replaced for $1,110. (Id. 151, 177, 182.) Thereafter, Caron began to
24
experience additional problems with the Freestar’s transmission. (Id. at 184.) As
a result, he purchased a used GMC Yukon in December 2009. (Id. at 198‐99.)
Relying on the New Vehicle Warranty, Plaintiffs argue that Caron has
established a breach of express warranty claim under Florida law, which defines
an express warranty as “any affirmation of fact or promise made by the seller to
the buyer which relates to the goods and becomes part of the basis of the bargain
creates an express warranty that the goods shall conform to the affirmation or
promise.” F.S.A. § 672.313(a)(1); State Farm Auto Ins. Co. v. Nu Prime Roll‐A‐
Way of Miami, Inc., 557 So.2d 107, 108 (Fla. App. 3 Dist. 1990). Plaintiffs assert
that Ford promised the Freestar would operate free from defects in materials and
workmanship in the New Vehicle Warranty. As noted above, however, that
warranty had expired by the time the transmission in Caron’s Freestar
experienced problems. Under Florida law, the fact that a defect did not occur
within warranty period is fatal to claim of breach of express warranty. See
Brisson v. Ford Motor Co., 349 Fed. App’x 433, 434 (11th Cir. Oct. 16, 2009).
Accordingly, to the extent Caron relies on the New Vehicle Warranty in his
breach of express warranty claim, such claim must be dismissed.
Plaintiffs further assert that under Florida law, representations made in
25
advertising can create an express warranty. See Manheim v. Ford Motor Co., 201
So.2d 440, 443 (Fla. 1967). Caron testified that Ford communicated in many
media forms and that he relied upon Ford’s advertisements, reputation,
statements by Ford dealers and his previous experience with Ford in making the
decision to purchase the 2005 Freestar. He also testified that he could not
remember any commercial in particular, but remembers them in general, and that
they gave him the impression that the Freestar was a good, solid‐working
vehicle. (Carey Aff., Ex. 18 (Caron Dep. at 57‐58).)
Florida law provides that “an affirmation merely of the value of the goods
or a statement purporting to be merely the seller’s opinion or commendation of
the does not create a warranty.” F.S.A. § 672.313(2). Thus, statements such as
“good” or “solid‐working” are nothing more than the seller’s opinions or
commendation of the goods. See, e.g., Lee v. C & P Serv. Corp. 363 So.2d 586, 588
(Fla. Ct. App. 1978). Cf State Farm Ins. Co. V. Nu Prime Roll‐A‐Way of Miami,
557 So.2d 107, 108 (Fla. Ct. App. 1990) (noting that representations as to
specifications and capacity in an advertisement may constitute an express
warranty). As Caron cannot point to any specific representation made by Ford
with respect to the transmission or torque converter of a 2005 Freestar, his claim
26
for breach of express warranty has no merit and Ford is entitled to summary
judgment.
B.
Implied Warranty Claim
1.
Daigle
As set forth in Section II (C)(1)(b) above, Minnesota law provides that an
implied warranty of merchantability may be limited or disclaimed, as long as the
limitation or disclaimer is in writing, conspicuous and mentions merchantability.
Transp. Corp. of Am., Inc., 30 F.3d at 958‐59. As a result, Daigle’s claim of breach
of implied warranty under Minnesota law is limited to the life of the New Vehicle
Warranty ‐ which is three years or 36,000 miles, whichever occurs first. It is
undisputed that Daigle purchased his 2004 Freestar after the New Vehicle
Warranty had expired, therefore his claim of breach of implied warranty has no
merit and Ford is entitled to summary judgment.
2.
Genovese
As set forth in Section II (C)(1)(b), claims for breach of implied warranty
under Maryland law are subject to a four year statute of limitation, which begins
to run at the time delivery is tendered. See Washington Freightliner, Inc., 719
A.2d at 545; In re Bridgestone/Firestone, Inc. Tires Prod. Liab. Litig., 155 F.
27
Supp.2d 1069, 1099 n.34 (S.D. Ind. 2001) (finding that under Maryland law,
statute of limitation for breach of implied warranty “will always start to run
against claims based on implied warranty from the time when delivery of the
goods is tendered.”) Here, Genovese purchased his 2004 Freestar in January
2005, and this action was filed in November 2009. Therefore, he is barred from
bringing a claim for breach of implied warranty pursuant to Maryland law. Ford
is thus entitled to summary judgment on this claim as well.
3.
Caron
Florida law requires privity between the manufacturer and the buyer
before a buyer can bring a claim for breach of implied warranty. Rentas v.
DaimlerChrysler Corp., 936 So.2d 747 (Fla. Ct. App. 2006). Lack of privity
between the buyer and the manufacturer precludes a claim for breach of implied
warranty. See David v. Am. Suzuki Motor Corp., 629 F. Supp. 2d 1309 (S.D. Fla.
2009). Caron purchased a used 2005 Freestar from Duval Ford, not Ford Motor
Company. Because there is a lack of privity between the parties with respect to
Caron’s purchase of his Freestar, Ford is entitled to summary judgment with
respect to Caron’s claim of breach of implied warranty.
C.
Unjust Enrichment Claim
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1.
Daigle
To establish an unjust enrichment claim under Minnesota law, the claimant
must show that the defendant has knowingly received or obtained something of
value for which the defendant “in equity and good conscience” should pay.
Klass, 190 N.W.2d at 494‐95. For example, an unjust enrichment claim could lie
where the defendant acted “illegally or unlawfully.” First Natʹl Bank v. Ramier,
311 N.W.2d 502, 504 (Minn. 1981). An unjust enrichment claim has also been
recognized where the defendant’s conduct in retaining a benefit is morally
wrong. Cady v. Bush, 283 Minn. 105, 166 N.W.2d 358, 361‐51(1969); Hartford Fire
Ins. Co. v. Clark, 727 F. Supp.2d 765, 777 (D. Minn. 2010). A claim for equitable
relief may only stand, however, when no other legal remedies are available to the
plaintiffs. Drobnak v. Andersen Corp., 561 F.3d 778, 787 (8th Cir. 2009) (listing
cases).
Daigle purchased a used Freestar from OK Used Cars. Plaintiffs have put
forth no evidence that Ford benefitted from the sale of a used vehicle, or more
particularly, Daigle’s purchase of a used Freestar4. Ford is thus entitled to
4
Plaintiffs argue that by not disclosing the defect to the torque converters, thousands of
the Class Vehicles were purchased at a price higher than they would have paid if the defect was
known to the purchaser. Plaintiffs have not put forth any evidence to support this assertion. In
addition, Plaintiffs argue that Ford required its dealers to use Ford parts in repairing the
29
summary judgment as to Daigle’s unjust enrichment claim. See Heimbach v.
Riedman Corp., 175 F. Supp. 2d 1167, 1180 (D. Minn. 2001) (unjust enrichment
claim under Minnesota law requires plaintiff to show that defendant received
something of value).
2.
Genovese
Under Maryland law, a claimant may not assert a claim for unjust
enrichment where the subject matter of the claim is covered by an express
contract between the parties. Dashiell, 747 A.2d at 607. Plaintiffs respond that
this Court has already held that a plaintiff may plead in the alternative, therefore
summary judgment is not appropriate even though the record demonstrates that
an express contract exists that covers the same subject matter. In support,
Plaintiffs cite to the decision in Raceredi Motorsports, LLC v. Dart Machinery,
LTD, 640 F. Supp.2d 660, 666 (D. Md. 2009). That decision is inapposite, as it
addressed a motion to dismiss, not one for summary judgment.
Where it is undisputed that an express contract exists covering the subject
matter of the unjust enrichment claim, the unjust enrichment claim must be
defective torque converters when the defects surfaced, therefore it is reasonable to assume that
when Daigle’s transmission was repaired, Ford parts were used. Plaintiffs have not, however,
submitted evidence to support the assertion that Ford parts were, in fact, used.
30
dismissed. See, e.g., Dashiell, 747 A.2d at 607 (granting summary judgment on
unjust enrichment claim where existence of express contract governing subject
matter was not contested); Clark Const. Group Inc. v. Allglass Sys., Inc., No. Civ.
A. DKC2002‐1590, 2004 WL 1778862, at *11 (D. Md. Aug. 6, 2004) (same). Here,
the parties do not dispute that an express contract, the New Vehicle Warranty,
covers the subject matter of Genovese’s unjust enrichment claim. Accordingly,
Ford is entitled to summary judgment as to this claim.
3.
Caron
Under Florida law, the elements of an unjust enrichment claim are: a
benefit conferred on the defendant; appreciation by the defendant of such benefit;
and acceptance and retention of such benefit by the defendant under such
circumstances that it would be inequitable for the defendant to retain the benefit
without paying value. Nautica Int’l, Inc., 5 F. Supp. 2d at 1341‐42. Caron, like
Daigle, purchased a used Freestar. There is no evidence before the Court that
Ford benefitted from Caron’s purchase of a used vehicle, therefore summary
judgment on this claim is appropriate as well.
IT IS HEREBY ORDERED:
1.
Plaintiffs’ Motion to Certify a Class [Doc. No. 73] is DENIED; and
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2.
Defendant’s Motion for Summary Judgment [Doc. No. 64] is
GRANTED.
LET JUDGMENT BE ENTERED ACCORDINGLY
Date: July 31, 2012
s/ Michael J. Davis
Michael J. Davis
Chief Judge
United States District Court
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