NELSON et al v. NISSAN NORTH AMERICA, INC. et al
Filing
173
OPINION. Signed by Judge Joseph E. Irenas on 12/19/2014. (tf, )
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
TAMEKA NELSON, et al.,
:
individually and on behalf of :
others similarly situated,
:
:
Plaintiffs,
:
:
v.
:
:
NISSAN NORTH AMERICA, INC.,
:
et al.,
:
:
Defendants.
:
HONORABLE JOSEPH E. IRENAS
CIV. NO. 11-5712 (JEI/AMD)
OPINION
APPEARANCES:
CADDELL & CHAPMAN, P.C.
By: Michael A. Caddell, Esq.
Cynthia B. Chapman, Esq.
Cory S. Fein, Esq.
1331 Lamar, Suite 1070
Houston, Texas 77010
and
CHIMICLES & TIKELLIS, LLP
By: Joseph G. Sauder, Esq.
Matthew D. Schelkopf, Esq.
Benjamin F. Johns, Esq.
One Haverford Centre
361 West Lancaster Avenue
Haverford, Pennsylvania 19041
Counsel for Plaintiffs
SEDGWICK LLP
By: Martin Healy, Esq.
E. Paul Cauley, Jr., Esq.
S. Vance Witte, Esq.
Three Gateway Center, 12th Floor
Newark, New Jersey 07102
Counsel for Defendants
1
IRENAS, Senior District Judge:
In this putative class action lawsuit, Plaintiffs assert
that they were injured 1 by a design defect common to the 5-speed,
automatic transmissions of their Nissan Maxima vehicles, model
years 2004 through 2006 (the “Class Vehicles”).
Before the Court is NNA’s 2 Motion for Summary Judgment on
Plaintiff Nelson’s claims. 3
For the reasons stated herein, the
Motion will be granted in its entirety.
I.
In July, 2006, Plaintiff Nelson purchased a used 2006 model
year Nissan Maxima from Rancho Valley Chevrolet in California.
(Statement of Undisputed Facts and Plaintiff’s Response thereto,
1
Plaintiffs’ injuries appear to be only financial in nature.
There is no record evidence indicating that any plaintiff was
physically injured.
2
Defendants are Nissan North America, Inc.; Nissan Motor
Company Ltd.; and Nissan Extended Services North America, GP;
collectively, “NNA.”
3
There are five separate putative state-wide classes; one each
for the states of New Jersey, Pennsylvania, Ohio, Illinois and
California. Plaintiff Nelson is the putative class
representative for the California class. Separate Motions for
Summary Judgment are pending as to each putative class
representative’s claims. Separate opinions will address each
motion.
2
“SUF,” ¶ 2) 4
miles.
At the time, the car had approximately 16,000
(SUF ¶ 3)
In early 2010, the transmission problems first manifested
as jerking or slipping when shifting. (SUF ¶¶ 6-7)
Plaintiffs, relying on expert evidence, assert that the
shift problem resulted from a design defect with the 2004, 2005,
and 2006 Maximas.
The specific nature of the asserted defect is
not directly relevant to the instant motion.
Suffice it to say,
Plaintiffs maintain that the absence of a transmission cooling
system, combined with the metallic composition of certain
transmission parts, caused overheating of the transmission
system, which, over time, caused extensive wearing of the
relevant parts, leading to the harsh shift problem. 5
In December 2010, with the odometer reading approximately
60,000 miles, Nelson emailed NNA asking for a “‘goodwill repair’
based on customer loyalty.” (SUF ¶ 10)
In May 2011, with the odometer reading approximately 77,000
miles, Nelson took her car back to the dealership where she
purchased it.
(SUF ¶ 11)
needed replacing.
4
She was advised that the transmission
(SUF ¶ 12)
During all relevant times, Nelson resided in California.
5
NNA has not disputed the origin of the problem. Their own
internal documents are generally consistent with Plaintiffs’
expert report concerning the issue.
3
Nelson ultimately had an independent (non-dealership)
mechanic replace the transmission at a cost of $2,600.00.
(SUF
¶ 13-14)
At the time of her deposition in this suit, Nelson’s Maxima
had over 100,000 miles on it and she had no plans to sell it.
(SUF ¶¶ 15-16)
Nelson’s powertrain warranty from NNA extended for 60
months or 60,000 miles, “whichever comes first,” and covered
“any repairs needed to correct defects in materials or
workmanship.” (Healy Ex. C, NELSON-NELSON000412)
Nelson asserts four claims under California law: (1) breach
of express warranty; (2) violation of the California Consumers
Legal Remedies Act; (3) violation of the California Unfair
Competition Law; and (4) unjust enrichment.
II.
Federal Rule of Civil Procedure 56(c) provides that summary
judgment should be granted if “pleadings, depositions, answers
to interrogatories, and admissions on file, together with
affidavits, if any, show that there is no genuine issue as to
any material fact and that the moving party is entitled to a
judgment as a matter of law.”
See also, Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 248 (1986).
In deciding a motion for
summary judgment, the court must construe all facts and
4
inferences in the light most favorable to the nonmoving party.
See Boyle v. Allegheny Pennsylvania, 139 F.3d 386, 393 (3d Cir.
1998).
The moving party bears the burden of establishing that
no genuine issue of material fact remains.
Catrett, 477 U.S. 317, 322-23 (1986).
See Celotex Corp. v.
A fact is material only
if it will affect the outcome of a lawsuit under the applicable
law, and a dispute of a material fact is genuine if the evidence
is such that a reasonable fact finder could return a verdict for
the nonmoving party.
See Anderson, 477 U.S. at 252.
III.
A.
NNA asserts that the express warranty claim fails because
the warranty only covers defects in materials and workmanship,
whereas Plaintiffs’ expert clearly opines that the defect at
issue here is a design defect.
According to NNA, it did not
expressly warrant that the Maximas would be free from design
defects, therefore the express warranty claim fails.
The Court
agrees.
The Ninth Circuit, applying California law, has explicitly
held, “[i]n California, express warranties covering defects in
materials and workmanship exclude defects in design.” Troup v.
Toyota Motor Corp., 545 F. App’x 668, 668 (9th Cir. 2013)
(citing Daugherty v. Am. Honda Motor Co., Inc., 144 Cal. App.
5
4th 824, 830, 51 Cal. Rptr. 3d 118 (2006)). See generally Barker
v. Lull Engineering Co., 20 Cal. 3d 413, 429 (Cal. 1978) (“In
general, a manufacturing or production defect is readily
identifiable because a defective product is one that differs
from the manufacturer’s intended result or from other ostensibly
identical units of the same product line.
For example, when a
product comes off the assembly line in a substandard condition
it has incurred a manufacturing defect. . . .
A design defect,
by contrast, cannot be identified simply by comparing the
injury-producing product with the manufacturer’s plans or with
other units of the same product line, since by definition the
plans and all such units will reflect the same design.”).
Additionally, as the Third Circuit has observed in a
somewhat analogous case, absent specific language to the
contrary, design defects cannot be encompassed within the
meaning of defects in workmanship or materials:
Webster’s Dictionary defines ‘workmanship’ as ‘the
art or skill of a workman,’ or ‘the execution or
manner of making or doing something.’ Webster’s
Third New International Dictionary Unabridged 2635
(1961). A ‘workman,’ or ‘workingman,’ is defined
as ‘one who works for wages usually at manual
labor.’ Id. As made clear by its focus on the
‘manual’ ‘execution’ of a product, the definition
of ‘workmanship’ presupposes that the product
being made or assembled has already been designed.
Design is an earlier and distinct phase of product
production not captured by the workmanship
warranty.
6
Mack Trucks, Inc. v. Borgwarner Turbo Sys., Inc., 508 F. App’x
180, 184 (3d Cir. 2012) (applying Pennsylvania law). 6 See
generally Lombard Corp. v. Quality Aluminum Prods. Co., 261 F.2d
336, 338 (6th Cir. 1958) (“A defect in material is a defect in
quality. . . . A defect in workmanship is a defect in the way
some part of the machine is constructed. . . . Design, on the
contrary, involves the overall plan of construction and
operation.”); see also, Restatement (Third) Torts: Product
Liability § 2 (identifying three distinct “categories of product
defect”: “manufacturing defect,” “design defect,” and
“inadequate warnings or instructions”) and comment d (“whereas a
manufacturing defect consists of a product unit’s failure to
meet the manufacturer’s design specifications, a product
asserted to have a design defect meets the manufacturer’s design
specifications but raises the question whether the
specifications themselves create unreasonable risks”).
Other Courts of Appeals have also held that design defect
claims do not fall within the scope of an express warranty
6
Mack Trucks, Inc. v. Borgwarner Turbo Sys., Inc., 508 F. App’x
180 (3d Cir. 2012) was a suit between two commercial entities
involving a commercial contract that contained an express
warranty. Nelson’s suit is different insofar as it involves a
consumer transaction where the relative bargaining power between
the parties to the warranty almost certainly differs. However,
this distinction should not affect the Court’s determination of
the plain meaning of words.
7
against defects in materials or workmanship.
See Bruce Martin
Constr., Inc. v. CTB, Inc., 735 F.3d 750 (8th Cir. 2013);
Voelker v. Porsche Cars N. Am., Inc., 353 F.3d 516 (7th Cir.
2003). 7
In an effort to avoid the above-cited authorities, Nelson
argues that “[i]n this case, [NNA] did manufacture the Class
Vehicles . . . using defective parts and materials (i.e., the
lead in the bushings).”
(Opposition Brief, p. 19)
This
argument fails because the lead bushings were undisputedly
common to every Class Vehicle.
Therefore under the plain
meaning of the words, using lead bushings that-- according to
Plaintiffs’ expert-- were particularly susceptible to high heat
is a design defect, not a manufacturing defect.
See Bruce
Martin Constr., 735 F.3d at 754 (“Bruce Martin asserts that the
design was defective in calling for unsuitable materials,
essentially arguing that the defect is both one of design and
one of material.
This admission is ultimately fatal to Bruce
Martin’s warranty claim, for a design defect cannot also be a
defect in material and workmanship.”) (citing Mack Trucks, Inc.
v. Borgwarner Turbo Sys., Inc., 508 F. App’x 180, 184 (3d Cir.
2012)).
7
Indeed, Voelker and Troup were decided on Fed. R. Civ. P.
12(b)(6) motions, whereas NNA’s instant motion seeks summary
judgment.
8
Admittedly, Nelson relies on two cases that have rejected
the argument that a workmanship and materials warranty cannot
encompass a design defect claim.
See In re Saturn l-Series
Timing Chain Prods. Liability Litig., 2008 U.S. Dist. LEXIS
109978 (D. Neb. 2008) (following Koulajian); Koulajian v. Trek
Bicycle Corp., 1992 U.S. Dist. LEXIS 1490 (S.D.N.Y. 1992).
Both cases, however, pre-date the Courts of Appeals’ decisions
in Mack Trucks, Bruce Martin Construction, and Troup; and
Koulajian also predates Voelker.
Moreover, the Court finds
Nelson’s authorities on this issue unpersuasive.
Thus, the
Court chooses to join the vast weight of authority holding that
a workmanship and materials warranty cannot encompass a design
defect claim.
Accordingly, NNA is entitled to summary judgment on the
express warranty claim.
B.
Both of Nelson’s statutory claims fail because the record
cannot support a conclusion that NNA made a knowing omission in
connection with the sale of Nelson’s Maxima.
California’s Unfair Competition Law forbids any “unlawful,
unfair, or fraudulent business act or practice and unfair,
deceptive, untrue or misleading advertising.”
Code § 17200 et seq.
9
Cal. Bus. & Prof.
Similarly, the California Consumers Legal Remedies Act
prohibits “unfair methods of competition and unfair or deceptive
acts or practices undertaken by any person in a transaction
intended to result or which results in the sale or lease of any
goods or services to any consumer.”
Cal Civ. Code § 1770.
Nelson argues that NNA’s failure to disclose the
transmission defect was deceptive.
But the failure to disclose
could only be deceptive if NNA knew of the defect at the time
the car was sold.
Relying on the undisputed fact that NNA assembled and
manufactured the Maximas, Nelson argues that a reasonable
factfinder could conclude that NNA knew that: (1) the Maximas
lacked an external transmission cooler; (2) “and thus would be
prone to excessive heat;” (3) “which causes long-term, highmileage damage.”
(Opposition Brief p. 28)
The Court disagrees.
On summary judgment the Court is not required to give the
nonmoving party the benefit of every favorable inference, only
such inferences that are reasonable.
Matsushita Elec. Indus.
Co. v. Zenith Radio Corp., 475 U.S. 574, 587-88 (1986).
In the
Court’s view, drawing inference upon inference based on the
simple fact that NNA assembled and manufactured the Class
Vehicles is not reasonable in light of the facts of this case.
Alternatively, Nelson argues that “[h]ad [NNA] actually
done [pre-sale durability tests of the transmission system] it
10
would have known (or should have known) at the time of sale that
the Class Vehicles suffer from a material design defect.”
(Opposition Brief, p. 25)
The Court agrees with NNA that the failure to test a
product is not actionable under either statute.
To accept
Nelson’s argument would be to misinterpret the statutes as
encompassing negligent conduct.
NNA is entitled to judgment as a matter of law as to the
statutory claims.
C.
Lastly, absent evidence that NNA knew about the alleged
design defect at the time Nelson bought her car, Nelson’s claim
for unjust enrichment fails.
The record evidence cannot support
a finding that NNA retained a benefit under circumstances where
it would be unjust to do so without payment.
See McBride v.
Boughton, 123 Cal. App. 4th 379, 389 (Cal. App. 1st Dist. 2004)
(“The person receiving the benefit is required to make
restitution only if the circumstances are such that, as between
the two individuals, it is unjust for the person to retain
it.”).
Accordingly, NNA is entitled to judgment as a matter of law
as to Nelson’s unjust enrichment claim.
11
IV.
For the above-stated reasons, NNA’s Motion for Summary
Judgment on Plaintiff Nelson’s claims will be granted in its
entirety.
Dated:
An appropriate Order accompanies this Opinion.
December 19, 2014
__ s/ Joseph E. Irenas _____
Joseph E. Irenas, S.U.S.D.J.
12
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