Michelle Anderson v. Ford Motor Company

Filing 35

ORDER denying #16 motion to dismiss case. Signed on 12/29/2017 by District Judge Beth Phillips. (Sellers, Emily)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF MISSOURI
SOUTHERN DIVISION
MICHELLE ANDERSON, individually and
on behalf of all others similarly situated,
Plaintiff,
v.
FORD MOTOR COMAPNY,
Defendant.

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Case No. 17-3244-CV-S-BP
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ORDER

This matter comes before the Court on Defendant Ford Motor Company’s, (“Ford”),
Motion to Dismiss. (Doc. 16.) Ford argues that certain aspects of Plaintiff’s claims should be
dismissed because she lacks standing to assert them. In addition, Ford argues that Counts II and
III should be dismissed for failure to state a claim. For the following reasons, Ford’s Motion is
DENIED.
I. BACKGROUND
The Complaint alleges the following facts, all of which are deemed to be true and
construed in the light most favorable to Plaintiff. Ford manufactures, markets, and distributes
automobiles in the United States. Starting in the 2007 model year, Ford introduced vehicles with
expanded sunroofs known as panoramic sunroofs. Panoramic sunroofs are made of tempered or
laminated glass, and Ford is alleged to have used tempered glass. (Doc. 1, ¶ 24.) Ford also used
ceramic paint or enamel on the glass prior to tempering. (Doc. 1, ¶ 27.) Plaintiff alleges that the
use of ceramic paint or enamel in panoramic sunroofs make them prone to spontaneously
bursting. (Doc. 1, ¶¶ 28-29, 32.) Plaintiff further alleges that Ford was aware of this defect in its
panoramic sunroofs based on a number of studies on panoramic roofs and consumer complaints

of panoramic roofs spontaneously shattering. (Doc. 1, ¶¶ 33-45, 47-50; see also Doc. 1, ¶ 3031.)
In January 2016, Plaintiff purchased a new 2016 Ford Escape from Friendly Ford in
Springfield, Missouri. Plaintiff’s Escape included a panoramic sunroof. Plaintiff alleges she
researched the vehicle before purchasing it and that the panoramic sunroof was a “huge selling
point” in her buying decision. (Doc. 1, ¶ 70.) On February 7, 2017, Plaintiff was driving on I-44
East near Springfield when she alleges she heard what sounded like a shotgun being fired.
Thereafter, Plaintiff discovered a hole in the sunroof as well as shattered glass inside the vehicle.
Plaintiff took the vehicle to Friendly Ford to have the sunroof repaired, but the dealer told her
that the sunroof was not covered by the warranty. Plaintiff then paid to have the sunroof
replaced. (Doc. 1, ¶¶ 72-73.) Plaintiff asserts that she would not have purchased the vehicle or
would have paid substantially less given this defect. (Doc. 1, ¶ 74.)
Count I asserts a breach of express warranty on behalf of a nationwide class, or
alternatively on behalf of a Missouri class. Count II asserts fraudulent concealment on behalf of
a nationwide class, or alternatively on behalf of a Missouri class. Count III asserts violations of
the Missouri Merchandising Practices Act, (“MMPA”), on behalf of a Missouri class. Count IV
alleges breach of implied warranty of merchantability on behalf of a Missouri class. All four
counts assert claims on behalf of purchasers of sixteen Ford vehicles that are sold with
panoramic sunroofs.
Ford first argues that Plaintiff does not have standing to pursue claims concerning the
fifteen vehicle models she did not purchase. Ford then argues that Counts II and III should be
dismissed for any of three independent reasons: (1) Plaintiff has not alleged an actionable
omission, (2) Ford did not have a duty to disclose information to Plaintiff, or (3) the claims are

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barred under Missouri’s economic loss doctrine. Plaintiff argues that the standing argument is
more appropriately considered at the class certification stage and that Counts II and III properly
state causes of action for concealment and violation of the MMPA. The Court resolves these
arguments below.
II. DISCUSSION
A. Standing
Article III of the United States Constitution grants federal courts limited jurisdiction to
decide “cases and controversies.” To satisfy this jurisdictional standing requirement, a plaintiff
must establish (1) an injury in fact, which is (2) fairly traceable to the defendant’s conduct, and
which (3) will likely be redressed by a favorable decision. See Friends of the Earth, Inc. v.
Laidlaw Envtl. Servs. (TOC), Inc., 528 U.S. 167, 180-181 (2000). In a class action, the plaintiff
seeking to represent a class must establish that she, personally, has standing to bring the cause of
action. If the plaintiff cannot maintain the action on her own behalf, she may not seek such relief
on behalf of the class. O’Shea v. Littleton, 414 U.S. 488, 494 (1974).
Ford argues that Plaintiff lacks standing to assert claims as to the fifteen vehicle models
she did not purchase because she suffered no loss as to those vehicles. Plaintiff essentially
argues that she can represent a class of consumers who bought the panoramic sunroof. The
Court agrees that there is a factual dispute as to whether the “product” at issue is the panoramic
sunroof or the car. And, there is an additional dispute as to whether the panoramic sunroofs for
all sixteen models are sufficiently similar, such that Plaintiff “bought” the same sunroof as those
who bought one of the other fifteen Ford models. Ford may be correct, but the Court cannot
resolve this dispute at this stage of the case. Moreover, even if the Court later determines that
Ford is correct and Plaintiff can assert claims with respect to the Ford Escape only, the matter

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may be more efficiently resolved at the class certification stage by limiting the class definition.
For these reasons, Ford’s request to dismiss all claims related to the other fifteen models is
denied.
B. Failure to State a Claim 1
Dismissal under Federal Rule of Civil Procedure 12(b)(6) is proper where the complaint
fails to state a claim upon which relief can be granted. Cook v. ACS State & Local Solutions,
Inc., 663 F.3d 989, 992 (8th Cir. 2011); see also Fed.R.Civ.P. 8(a) (requiring “a short and plain
statement of the claim showing that the pleader is entitled to relief”). The Complaint must allege
facts sufficient to “state a claim for relief that is plausible on its face.” Walker v. Barrett, 650
F.3d 1198, 1203 (8th Cir. 2011) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)).
To sufficiently plead a plausible claim, the factual content of the claim must allow “the court to
draw the reasonable inference that the defendant is liable for the misconduct alleged.” Horras v.
American Capital Strategies, 729 F.3d 798, 801 (8th Cir. 2013) (quoting Ashcroft v. Iqbal, 556
U.S. 662, 678 (2009)). In ruling on a motion to dismiss, the “court accepts as true all factual
allegations but is not bound to accept as true a legal conclusion couched as a factual allegation.”
Cook, 663 F.3d at 992. Finally, the Court must construe “all reasonable inferences in favor of
the non-moving party.” Palmer v. Ill. Farmers Ins. Co., 666 F.3d 1081, 1083 (8th Cir. 2012).
1. Duty
Fraudulent concealment is “based on the misrepresentation of a material fact by silence.”
Zubres Radiology v. Providers Ins. Consultants, 276 S.W.3d 335, 340 (Mo. Ct. App. 2009)
(citation omitted). To prove a claim for fraud in Missouri, a plaintiff must show:
(1) a false material representation; (2) the speaker’s knowledge of its falsity or his
ignorance of its truth; (3) the speaker’s intent that it should be acted upon by the
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Ford’s arguments for dismissing Counts II and III are the same, so there is no need for the Court to determine
whether or to what extent Plaintiff’s MMPA and fraudulent concealment claims are coextensive.

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hearer in the manner reasonably contemplated; (4) the hearer’s ignorance of the
falsity of the statement; (5) the hearer’s reliance on its truth, and the right to rely
thereon; and (6) proximate injury.
Constance v. B.B.C. Dev. Co., 25 S.W.3d 571, 580 (Mo. Ct. App. 2000) (citation omitted). In a
case of fraudulent concealment, “a party’s silence in the face of a legal duty to speak replaces the
first element: the existence of a representation.” Hess v. Chase Manhattan Bank, USA, N.A., 220
S.W.3d 758, 765-66 (Mo. 2007) (en banc); see also Tension Envelope Corp. v. JBM Envelope
Co., 876 F.3d 1112, 1120 (8th Cir. 2017).

However, as Hess suggests, silence alone is

insufficient: “before silence can amount to a representation upon which another party may rely,
there must be a duty to speak.” Andes v. Albano, 853 S.W.2d 936, 943 (Mo. 1993) (en banc)
(citation omitted); see also Hess, 220 S.W.3d at 765-66.
Whether a duty to speak exists depends on the nature of the transaction and other facts of
the particular case. E.g., Hess, 220 S.W.3d at 765. One situation in which there is a duty to
speak is when “one of the parties has superior knowledge not within the fair and reasonable
reach of the other party.” Zubres Radiology, 276 S.W.3d at 340; see also White v. Bowman, 304
S.W.3d 141, 147-150 (Mo. Ct. App. 2009). Plaintiff alleges that Ford had superior knowledge of
the panoramic sunroof’s defect and that the knowledge was not within Plaintiff’s reach. These
allegations are sufficient to state the existence of a duty under Missouri law requiring Ford to
disclose its knowledge of the sunroof’s defective nature.
Ford cites to three cases from the Eastern District of Missouri to argue that a
manufacturer does not owe an end-purchaser a duty to disclose absent pre-sale communications
or dealings, even when the manufacturer has superior knowledge. Flynn v. CTB, Inc., 2013 WL
28244, at *8 (E.D. Mo. Sept. 28, 2015); In re General Motors Corp. Anti-Lock Brake Products
Liability Litigation, 966 F. Supp. 1525, 1535 (E.D. Mo. 1997); Garrett v. Cassity, 2011 WL

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3235633, at *7 (E.D. Mo. July 28, 2011). However, the Court concludes that these cases do not
stand for the broad proposition that, as a matter of law, a manufacturer does not have a duty to
disclose to an end-purchaser. Moreover, these cases are distinguishable. In Flynn, the plaintiffs
did “not allege that they had any pre-sale dealing or communications with defendant.” Flynn,
2013 WL 24244, *3. Here, Plaintiff alleges the existence of pre-sale dealing in the form of
advertising and brochures. (Doc. 1, ¶¶ 20-21.) 2 In re General Motors relies on Florida and
Alabama law, which require privity of contract or proof of an “artifice or trick” before a duty to
disclose arises. 966 F. Supp. at 1535-36. Missouri law is different. See White, 304 S.W.3d at
147-150 (privity of contract between the parties is not an element of fraudulent concealment).
Finally, in Garrett the court cites to only one Missouri case – Hess –which does not stand for the
proposition that a defendant must be a party to a transaction in order for a plaintiff to assert
fraudulent concealment. There was a contractual relationship in Hess, but the Missouri Supreme
Court did not state that such a relationship was required before a duty to disclose exists. Thus,
these cases do not support Ford’s argument that a manufacturer cannot owe an end-purchaser a
duty to disclose material facts.
Ford also argues that Plaintiff did not exercise ordinary diligence in the purchase of her
2016 Escape. Plaintiff pled that she researched the vehicle before purchasing it. Plaintiff also
asserted that had she known about the defect she would not have purchased the vehicle or would
have paid substantially less. Plaintiff’s investigative diligence is a question of fact and thus not

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Ford does not discuss whether these communications are sufficient to establish a relationship that could give rise
to a duty to disclose; instead, Ford denies the existence of such communications. (Doc. 30, p. 10.) However, the
Court must accept the Complaint’s allegations, and therefore must reject Ford’s claim that it made no statements so
there cannot be a duty. This also means that this Order should not be construed as holding that Ford’s
communications were sufficient to give rise to a duty; all that the Court has addressed is the specific argument raised
by Ford.

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appropriate for resolution on a motion to dismiss. See Hess, 220 S.W.3d at 766; Richards v.
ABN AMRO Mortg. Group, Inc., 261 S.W.3d 603, 611 (Mo. Ct. App. 2008).
Finally, Ford argues that the Complaint does not specifically allege that it had knowledge
of two particular facts: the December 2012 Wall Street Journal article and a 2013 article written
by the Korea Automobile Testing & Research Institute, (“KATARI”). However, the Complaint,
taken as a whole, sufficiently alleges Ford’s superior knowledge.
2. Actionable Omission
Ford next argues that the omissions Plaintiff has described are not actionable. First, Ford
argues that when a plaintiff alleges that a manufacturer knew a part would break during the
warranty period, the only remedy available is provided by the warranty. Ford supports this
proposition by citing to Owen v. General Motors Corp., 2007 WL 172355, at *4 n.4 (W.D. Mo.
Jan. 18, 2007).

However, the plaintiff’s claim in Owen was that General Motors had

fraudulently concealed that its windshield wiper blades were prone to fail after the warranty had
expired. Thus, the Court’s statement that a manufacturer’s knowledge that a part would fail
within the warranty period could not form the basis of a fraudulent concealment claim is dicta.
Second, Ford argues that the fact that it did not notify purchasers of consumer complaints does
not amount to an omission of a material fact.

Ford, however, misapprehends the Complaint.

Plaintiff is not alleging that Ford’s omission is the mere failure to disclose that customers
reported that their sunroofs shatter. Instead, Plaintiff argues that the consumer complaints are
some of the facts that put Ford on notice of the defective panoramic sunroofs. 3

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Moreover, the nature of the fact allegedly concealed in this case is markedly different from the fact allegedly
concealed in Owen. In Owen, the manufacturer did not tell the consumer of its “unremarkable knowledge that a
windshield wiper motor guaranteed for three years might be prone to failure due to fatigue . . . .” Owen v. General
Motors Corp., 533 F.3d 913, 920 (8th Cir. 2008). Here, the concealed fact is that a glass sunroof is prone to
spontaneously break for no reason – hardly an “unremarkable” fact.

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3. Economic Loss Doctrine
Finally, Ford argues that Counts II and III are barred by the economic loss doctrine. Ford
contends that Missouri courts prohibit tort actions for injury that is purely economic. A review
of the cases confirms that in Missouri the economic loss doctrine precludes tort claims arising
from the sale of defective products where there has been no personal injury or damage. See
Wilbur v. Waggoner Equip. & Excavating Co. v. Clark Equip. Co., 668 S.W.2d 601, 603 (Mo.
Ct. App. 1984); Sharp Bros. Contracting Co. v. Am. Hoist & Derrick Co., 703 S.W.2d 901, 903
(Mo. 1986) (en banc); Rockport Pharmacy, Inc. v. Digital Simplistics, Inc., 53 F.3d 195, 198 (8th
Cir. 1995). However, claims that a plaintiff was fraudulently induced to enter the contract are
widely interpreted to present an exception to the economic loss doctrine. See AKA Distrib. Co. v.
Whirlpool Corp., 137 F.3d 1083, 1086 (8th Cir. 1998); O’Neal v. Stiffel, Nicolaus & Company,
Inc., 996 S.W.2d 700, 702 (Mo. Ct. App. 1999).
Ford nonetheless argues that the economic loss doctrine applies to Plaintiff’s fraudulent
inducement claim because the misrepresentation “concerns the quality or character of the goods
sold.” (Doc. 17, p. 15) (quoting Flynn v. CTB, Inc., 2015 WL 5692299, at *12 (E.D. Mo. Sept.
28, 2015)). However, claims about the quality of goods sold may fall within the fraudulent
inducement exception if they are nevertheless independent of the contract formed. As explained
in R.W. Murray, Co. v. Shatterproof Glass Corp., 697 F.2d 818 (8th Cir. 1983), “claims based on
misrepresentation or fraud are distinct from and contain different elements than claims grounded
on breach of warranty or contract,” but “under Missouri law the same set of operative facts may
give rise to different causes of action.” Id. at 831.
Plaintiff has pleaded that Ford had reason to know about the issues with the panoramic
sunroof and that the problem could not timely be known by Plaintiff. Plaintiff also alleges she

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would not have entered into the contract, had she known of the defect. Arguably, this claim is
based on conduct that preceded the formation of the contract. Thus, given the stage of the
litigation it is premature to dismiss Plaintiff’s fraudulent concealment claim.
III. CONCLUSION
Ford’s arguments regarding Plaintiff’s ability to assert claims regarding panoramic
sunroofs in vehicle models she did not purchase cannot be properly evaluated at this time. The
arguments Ford has raised to support dismissal of Counts II and III are rejected. Accordingly,
Ford’s Motion to Dismiss, (Doc. 16), is DENIED.
IT IS SO ORDERED.

/s/ Beth Phillips
BETH PHILLIPS, JUDGE
UNITED STATES DISTRICT COURT
DATE:

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