ARGABRIGHT et al v. RHEEM MANUFACTURING COMPANY

Filing 44

AMENDED OPINION. Signed by Chief Judge Jerome B. Simandle on 8/15/2016. (tf, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY

LAWRENCE ARGABRIGHT, VICTORIA
FECHT, and LIBRADO MONTANO, on
behalf of themselves and all
others similarly situated,
Plaintiffs,
v.

HONORABLE JEROME B. SIMANDLE
Civil No. 15-5243 (JBS/AMD)

AMENDED OPINION

RHEEM MANUFACTURING COMPANY,
Defendant.

APPEARANCES:
Melanie H. Muhlstock, Esq.
PARKER WAICHMAN LLP
6 Harbor Park Dr.
Port Washington, NY 11050
Counsel for Plaintiffs
Aaron Van Nostrand, Esq.
David Jay, Esq.
GREENBERG TRAURIG LLP
500 Campus Drive, Suite 400
P.O. Box 677
Florham Park, NJ 07932
Counsel for Defendant
SIMANDLE, Chief Judge:
I.

INTRODUCTION
In this putative multistate class action, Plaintiff alleges

that Defendant Rheem Manufacturing Company (“Rheem” or “Rheem
Manufacturing”) manufactured defective residential heating,
ventilating, and air conditioning (“HVAC”) systems under the
Rheem and Ruud brand names. Plaintiffs in the proposed class

consist of all individuals who purchased or obtained Defendant’s
HVAC systems, and the following claims are asserted in the
Complaint: breach of express and implied warranties and
violation the Magnuson-Moss Warranty Act, 15 U.S.C. § 2301, et
seq.; claims for fraudulent concealment, negligent
misrepresentation, and strict product liability; statutory
claims under the New Jersey Consumer Fraud Act, N.J.S.A. § 56:81 et seq., the Arizona Consumer Fraud Act, A.R.S. § 44-1521 et
seq., and New York General Business Law § 349; and claims for
unjust enrichment and declaratory relief.
Defendant Rheem Manufacturing has moved to dismiss all
counts under Federal Rule of Civil Procedure 12(b)(6). [Docket
Item 8.]
For the reasons set forth below, the Court finds that the
allegations support a plausible claim for breach of implied
warranty and violation of the Magnuson-Moss Warranty Act, and
Defendant’s motion will be denied with respect to those Counts.
The Court will grant Defendant’s motion with respect to the
remaining claims.

2

II.

BACKGROUND1
This putative class action arises from the alleged failure

of certain copper evaporator coils contained in HVAC units that
Defendant Rheem designed, manufactured, advertised, and sold to
homeowners, builders, and contractors in the United States. The
HVAC units are sold under the brand names Rheem and Ruud, and
come with either a five- or ten-year limited parts warranty (the
“Warranty”), which provides:
RHEEM SALES COMPANY, INC. (Manufacturer of Rheem, Ruud
and WeatherKing products) warrants the Covered Equipment
to be free from defects in materials and workmanship,
and will repair or replace, at its option, ANY PART of
Covered Equipment installed in residential . . .
applications which fails in normal use and service
within the Applicable Warranty Periods . . . .

(Limited Warranty – Parts, Ex. A to Def. Br. [Docket Item 8-2].)
Under “EXCLUSIONS,” the Warranty states:
In addition to the specific exclusions set forth in the
1

The facts alleged are drawn from Plaintiffs’ Complaint [Docket
Item 1] and from undisputedly authentic documents upon which
Plaintiffs explicitly rely in their Complaint. See In re
Rockefeller Ctr. Props., Inc., Sec. Litig., 184 F.3d 280, 287
(3d Cir. 1999). Because Plaintiffs’ breach of warranty claims
are predicated upon the warranty Defendant provided with their
products, the Limited Warranty Defendant submitted will properly
be considered in connection with the pending motion to dismiss.
(Limited Warranty, Ex. A to Def. Br. [Docket Item 8-2].) See
Pension Ben. Guar. Corp. v. White Consol. Indus., Inc., 998 F.2d
1192, 1196 (3d Cir. 1993)) (“[A] court may consider an
undisputedly authentic document that a defendant attaches as an
exhibit to a motion to dismiss if the plaintiff’s claims are
based on the document.”). For purposes of this motion, the Court
must accept Plaintiffs’ allegations as true.
3

other sections of this Limited Warranty document, THIS
Limited Warranty WILL NOT APPLY TO:
. . .
(d) parts installed with Covered Equipment or used in
connection with normal maintenance, such as cleaning or
replacing air filters, refrigerant, thermostats, tubing,
or concrete pads . . . .

(Id.) The Warranty further states, under a section titled “LABOR
COSTS,” that it “does NOT cover any labor costs or expenses for
service, NOR for removing or reinstalling parts.” (Id. (emphasis
in original); see also Compl. ¶¶ 50, 91.)2
Plaintiffs allege that the evaporator coils contained in
the Rheem and Ruud HVAC units, which are made from copper based
alloys, improperly and prematurely corrode and leak refrigerant
under normal use. (Compl. ¶ 6.) The deterioration that occurs is
referred to as formicary corrosion, or sometimes pinhole
corrosion. (Id. ¶ 39.) The loss of refrigerant reduces or
eliminates the ability of the HVAC units to provide cold air and
reduces their ability to function. (Id. ¶¶ 7, 42.) Plaintiff
alleges that the faulty evaporator coils are a defect in

2

The Warranty also limits Defendant’s liability to the terms set
forth in the Warranty:
[Defendant’s] SOLE LIABILITY WITH RESPECT TO DEFECTIVE
PARTS OR FAILURE SHALL BE AS SET FORTH IN THIS LIMITED
WARRANTY, AND ANY CLAIMS FOR INCIDENTAL OR CONSEQUENTIAL
DAMAGES ARE EXPRESSLY EXCLUDED. Some states do not allow
limitations on how long an implied warranty lasts, or
for the exclusion of consequential damages, so the above
limitation or exclusion may not apply to you.
(Ex. A to Def. Br.)
4

Defendant’s product, and violates the express warranty and
implied warranty of merchantability.
Plaintiffs additionally allege that Defendant knew or
should have known of this defect based on numerous complaints
they received from consumers and service technicians about
failing or leaking copper coils. In their Complaint, Plaintiff
includes excerpts from two dozen online consumer reviews noting
problems with the evaporator coils and leakage of refrigerant.
(See Compl. ¶ 26.) Moreover, Plaintiffs note that in 2013,
Defendant introduced new coils made from aluminum two and a half
times thicker than its counterpart in copper, and in a 2013
product video about the switch, Defendant had explained that
“obviously the biggest difference that aluminum affords us is
the elimination of formicary corrosion.” (Id. ¶¶ 58-60.)
According to Plaintiffs, the switch to thicker aluminum is also
an indication that Defendant was aware of the corrosion problems
with existing Rheem HVACs. (Id. ¶ 61.)
Plaintiffs assert that Defendant, despite knowing that
their HVACs contained this defect, continued to represent their
product’s quality and fitness, and continued to warrant that the
units were “free from defects in materials and workmanship.”
(Id. ¶¶ 54-55.) Additionally, pointing to the two dozen consumer
reviews of Defendant’s HVAC systems, Plaintiffs assert that
5

Defendant refused to honor its warranty obligations because it
consistently refused to pay for replacement refrigerant or labor
costs associated with the repair, and failed to replace HVAC
units that had failed completely. (Id. ¶¶ 62, 98, & 102.)
Plaintiffs seek to bring this suit on behalf of all persons
in the United States who purchased or acquired Rheem HVACs. In
addition, they name three Plaintiffs, Lawrence Argabright,
Victoria Fecht, and Librado Montano, to represent, alternatively
or in addition to the nationwide class, subsets of the class of
purchasers who reside in New Jersey, New York, and Arizona,
respectively. (Id. ¶ 25-27.)
Lawrence Argabright, a resident of Shamong, New Jersey,
purchased his Rheem HVAC system on September 9, 2011, from Crown
Boiler Company and had it installed by David Wardell Heating and
Cooling. (Id. ¶¶ 64, 66.) Plaintiff first noticed that his HVAC
system was not cooling his home in July 2014, and subsequently
called technicians three times over the course of July and
August to inspect his unit. On the last visit, the technician
noted that the leaks in refrigerant were due to a faulty
evaporator coil, which the technician replaced. (Id. ¶¶ 67-69.)
Plaintiff alleges that although Defendant provided Plaintiff
with a new coil under its warranty, Plaintiff paid a total of
$844.45 for replacement refrigerant and labor from the three
6

service visits, which Defendant did not cover. (Id. ¶ 70.)
Victoria Fecht, a resident of Carle Place, New York,
purchased and installed her Rheem HVAC unit through Daverio
Mechanical, a Rheem Top Contractor, who represented that Rheem
was superior to comparable products from other manufacturers.3
(Id. ¶¶ 72-74.) Plaintiff’s HVAC system was installed in 2010.
In June of 2014, Plaintiff noticed that the unit was not
adequately cooling her home, and an inspection by a technician
revealed that the system had a refrigerant leak. (Id. ¶ 77.)
During a second service visit in August 2014, the inspecting
technician noted that the unit’s evaporator coils had multiple
leaks, and a new coil was installed. (Id. ¶ 78.) Plaintiff paid
for replacement refrigerant, service costs, and the new
evaporator coil which together totaled $2,148.38. She alleges
that to date, Defendant has not provided any compensation or
reimbursement. (Id. ¶ 79.)
Plaintiff Librado Montano, a resident of Sahuarita,
Arizona, purchased and installed a Rheem HVAC system in his home
in or around October 2011, after a Rheem Top Contractor, Oasis
Air Conditioning & Heating, represented to him that Defendant’s

3

According to Rheem’s website, Rheem Top Contractors are a
“network of elite heating, ventilating and air conditioning
contractors” who “recommend Rheem products to their customers,
but may service all heating and cooling brands.” (Compl. ¶ 73.)
7

units were superior to its competitors. (Id. ¶¶ 80-84.)
Plaintiff noticed that the HVAC unit was not cooling his home in
or around March 2015 and called the same contractor who had
installed his unit to diagnose and fix the problem. The
technician found a leak in the evaporator coil in March of 2015,
and replaced the coil one month later in April. (Id. ¶¶ 85-87.)
Plaintiff asserts that the coil was covered under Defendant’s
warranty, but that Defendant has not compensated him for the
$1,312 he paid in total for replacement refrigerant and service
costs. (Id. ¶ 88-89). There are no allegations that any of the
three Plaintiffs’ HVAC units suffered problems after the
replacement coils were installed.
Plaintiffs’ Complaint asserts claims for breach of express
warranty (Count I); breach of implied warranty of merchantability
(Count II); violation of the Magnuson-Moss Warranty Act (“MMWA”)
(Count V); fraudulent concealment (Count III); negligent
misrepresentation (Count IV); strict product liability (Count
VI); violations of the New Jersey Consumer Fraud Act (“NJCFA”),
New York General Business Law (“N.Y. GBL”) § 349, and the Arizona
Consumer Fraud Act (“ACFA”) (Counts VII, VIII, & IX); unjust
enrichment (Count X); and declaratory relief (Count XI). Because
Plaintiffs do not oppose the dismissal of their claim for strict
liability (see Pl. Br. [Docket Item 26] at 14 n.3), Count VI will
8

be dismissed with prejudice.
Defendant seeks to dismiss the remaining ten counts (Def.
Br. [Docket Item 8] and Def. Reply [Docket Item 29]), and the
Court will address each claim in turn.
III.

STANDARD OF REVIEW4
When considering a motion to dismiss a complaint for

failure to state a claim upon which relief can be granted under
Fed. R. Civ. P. 12(b)(6), a court must accept all well-pleaded
allegations in the complaint as true and view them in the light
most favorable to the nonmoving party. A motion to dismiss may
be granted only if a court concludes that the plaintiff has
failed to set forth fair notice of what the claim is and the
grounds upon which it rests that make such a claim plausible on

4

The Court exercises jurisdiction over Plaintiffs’ claims under
the Class Action Fairness Act of 2005 (“CAFA”), 28 U.S.C. §
1332(d)(2). Section 1332(d)(2) provides federal district courts
with “original jurisdiction” over a case when three requirements
are met: (1) an amount in controversy that exceeds $5,000,000;
(2) minimally diverse parties; and (3) a class consisting of at
least 100 or more members (the numerosity requirement). Standard
Fire Ins. Co. v. Knowles, 133 S. Ct. 1345, 1348 (2013). With
respect to the second requirement, CAFA provides that diversity
is satisfied if “any member of a class of plaintiffs is a
citizen of a State different from any defendant.” 28 U.S.C. §
1332(d)(2)(A). Plaintiff alleges that the amount in controversy
exceeds $5,000,000; the putative class members number in the
thousands, thus meeting the numerosity requirement; and
diversity is satisfied because Defendant is incorporated in
Delaware with a principal place of business in Georgia, and
class members come from New Jersey, New York, and Arizona, among
other states. (Compl. ¶¶ 15, 20-23, & 30.) Defendant has not
contested jurisdiction under CAFA.
9

its face. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555
(2007).
Although the court must accept as true all well-pleaded
factual allegations, it may disregard any legal conclusions in
the complaint. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009);
Fowler v. UPMC Shadyside, 578 F.3d 203, 210-11 (3d Cir. 2009).
Threadbare recitals of the elements of a cause of action,
supported by mere conclusory statements, do not suffice. Iqbal,
556 U.S. at 678.
In addition, the complaint must contain enough well-pleaded
facts to show that the claim is facially plausible. This “allows
the court to draw the reasonable inference that the defendant is
liable for the misconduct alleged.” Id. “If the well-pleaded
facts do not permit the court to infer more than the mere
possibility of misconduct, the complaint has alleged – but it
has not shown – that the pleader is entitled to relief.” Id. at
679 (internal quotation marks and citation omitted).
Rule 9(b) of the Fed. R. Civ. P. requires particularized
pleading for the conduct underlying Plaintiffs’ fraud claims.
Under Rule 9(b), the “circumstances” of the alleged fraud must
be pleaded with enough specificity to “place defendants on
notice of the precise misconduct with which they are charged.”
Seville Indus. Mach. Corp. v. Southmost Mach. Corp., 742 F.2d
10

786, 791 (3d Cir. 1984). Although the rule states that
“[m]alice, intent, knowledge, and other conditions of a person's
mind may be alleged generally,” and does not require the
plaintiff to plead every material detail of the fraud, the
plaintiff must use “alternative means of injecting precision and
some measure of substantiation into their allegations of fraud.”
In re Rockefeller Ctr. Props., Inc. Sec. Litig., 311 F.3d 198,
216 (3d Cir.2002) (internal quotations and citations omitted).
IV. DISCUSSION5

5

This is a multistate class action lawsuit, and a choice of law
analysis must be conducted before the class is certified to
determine which state’s law should apply to the class. See In re
LifeUSA Holding Inc., 242 F.3d 136, 147 n.11 (3d Cir. 2001)
(overturning district court’s finding that predominance has been
satisfied for class to be certified because the court “failed to
consider how individualized choice of law analysis of the fortyeight different jurisdictions would impact on Rule 23’s
predominance requirement.”) Plaintiffs and Defendant both cite
to New Jersey cases for the state law claims in this case and
neither side has engaged in a choice of law analysis. (See Def.
Br. at 9 n.2.) Because the parties have not briefed the issue,
and because the choice of law analysis for contract or quasicontract claims is generally “a very fact-intensive inquiry” and
the factual record is not full enough to make a choice of law
determination, the Court will postpone the choice of law
analysis to a later stage. See Snyder v. Farnam Co., 792 F.
Supp. 2d 712, 721 (D.N.J. 2011) (declining to conduct choice of
law analysis in resolving a motion to dismiss certain breach of
warranty claims because the factual record was insufficiently
developed); Harper v. LG Elecs. USA, Inc., 595 F. Supp. 2d 486,
491 (D.N.J. 2009) (deferring choice of law analysis on breach of
warranty claims until record was more fully developed after
motion to dismiss stage). Since Plaintiffs have made their
allegations under New Jersey law and both parties have briefed
the sufficiency of the claims under New Jersey law, the Court
will, for purposes of deciding the present motion to dismiss,
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A. Breach of Express Warranty (Count I)
Plaintiffs complain that Defendant breached its Warranty by
failing to replace the refrigerant, failing to pay for the cost
of repair, and replacing the defective evaporator coil with
coils that are “prone to the same defect in manufacture and/or
design as the original.” (Pl. Br. at 4.) Plaintiffs also argue
that Defendant’s Warranty fails of its essential purpose because
the remedy they chose was insufficient under the contract:
Defendant never elected to repair the defective coils, and,
according to Plaintiffs, chose replacement coils that were made
of the same copper alloy material susceptible to formicary
corrosion. (Id. at 5-7.) Finally, Plaintiffs argue that the
Warranty is unconscionable because Defendant knew that their
HVAC units contained this defect when they sold them, and
“manipulated the terms of the warranty” to avoid the costs of
repair. (Id. at 8-9.)
Even construed liberally, however, the allegations in
Plaintiffs’ Complaint are insufficient to plausibly make out
Plaintiffs’ claims for breach of warranty.

apply New Jersey law to determine whether Plaintiffs have
succeeded in stating plausible claims for relief, except that,
naturally, New York law will govern Count VIII’s claim for
violation of the New York General Business Law and Arizona law
will govern the claim in Count IX for violation of the Arizona
Consumer Fraud Act.
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1. Defendant Did Not Breach the Terms of Its Warranty
Plaintiffs’ first argument, that Defendant breached its
Warranty by refusing to pay for repair costs and refrigerant, is
without merit. Under New Jersey law, “to state a claim for
breach of express warranty, Plaintiffs must properly allege: (1)
that Defendant made an affirmation, promise or description about
the product; (2) that this affirmation, promise or description
became part of the basis of the bargain for the product; and (3)
that the product ultimately did not conform to the affirmation,
promise or description.” Francis E. Parker Memorial Home, Inc.
v. Georgia–Pacific LLC, 945 F. Supp. 2d 543, 568 (D.N.J. 2013).
In this case, Defendant’s parts warranty is limited, and allows
Defendant, “at its option,” to replace a failing part, without
paying for the cost of labor and repair. (See Ex. A to Def. Br.
(stating that Rheem “will repair or replace, at its option, ANY
PART of Covered Equipment . . . which fails in normal use and
service,” and will “NOT cover any labor costs or expenses for
service, NOR for removing or reinstalling parts.”).)
As an initial matter, the Court rejects Plaintiffs’
argument that because Defendant’s Warranty promised that the
units will be “free from defects and workmanship,” Plaintiffs
“trusted they would be protected from the failure of the unit or
any part of it during the warranty period.” Plaintiffs appear to
13

be suggesting, in other words, that Defendant breached the
Warranty merely because its HVAC units malfunctioned while still
under the warranty period. No reasonable reading of the Warranty
suggests that Defendant made such a representation. Defendant
promised a working HVAC unit for five or ten years, along with
the limited remedy of repair or replacement of a part in the
case of malfunction within that time period. (Ex. A of Def. Br.
(promising that product would be “free from defects and
workmanship, and will repair or replace, at its option, ANY PART
of Covered Equipment . . . which fails in normal use and service
within the Applicable Warranty Periods”). Because the limited
replacement clause states Defendant’s obligation in the case of
a parts failure, the Warranty did not guarantee a defect-free
product that would need no replacement or repair. Plaintiffs’
interpretation of the Warranty would render the replacement
clause meaningless, and the Court will therefore decline to
adopt it. See Kuzian v. Electrolux Home Prods., Inc., 937 F.
Supp. 2d 599, 611 (D.N.J. 2013) (“[A]n express warranty with a
limited time period does not mean that a seller is promising a
defect-free product.”).
According to Plaintiffs’ own allegations, Plaintiffs
received the precise benefit to which they were entitled under
the Warranty: a replacement coil. The Complaint explicitly
14

states that a “new evaporator coil was itself provided under
warranty” to Argabright, and the coil provided to Montano was
also “covered under warranty.” (Compl. ¶¶ 70, 88.)6
Plaintiffs complain that Defendant should have exercised
the “repair” provision under the Warranty and covered the labor
costs associated with servicing their units, but that was never
required. The Warranty gave full discretion to Defendant to
“repair or replace,” and, unfortunately for Plaintiffs,
Defendant chose in this instance to exercise its option to
replace. Nor does Plaintiffs’ complaint that Defendant failed to
cover the cost of replacement refrigerant amount to a cause of

6

As for Fecht, who Plaintiffs allege received “no compensation
or reimbursement” from Defendant, there is no indication that
she ever contacted Defendant for reimbursement for the new
evaporator coil. Plaintiffs allege only that Fecht contacted a
third party technician who inspected the unit and ultimately
installed a new coil; that her expenses to date “have been paid
entirely out of pocket,” and that Defendant “has provided no
compensation or reimbursement for either materials or labor.”
(Compl. ¶¶ 78-79.) The facts in their current form are
insufficient to draw an inference that Fecht sought replacement
by Defendant of the coil and Defendant refused, in violation of
the terms of the Warranty. For this reason, Fecht has also
failed to state a plausible cause of action for breach of
warranty. See, e.g., Spera v. Samsung Elecs. Am., Inc., No. 12–
05412, 2014 WL 1334256, at *8 (D.N.J. Apr. 2, 2014) (dismissing
an express warranty claim because “the Court cannot discern from
the Complaints whether Samsung was contacted during the warranty
period”); Palmucci v. Brunswick Corp., 710 A.2d 1045, 1046 (N.J.
Super. Ct. App. Div. 1998) (plaintiff was not entitled to
recovery under breach of warranty claim because he “did not
abide by the requirements of the warranty in that he did not
allow the manufacturer to use the [repair] remedy the warranty
permitted”).
15

action for breach, since Defendant’s Warranty expressly states
that parts “used in connection with normal maintenance, such as
. . . refrigerant,” are excluded from coverage. (Ex. A. to Def.
Br.)
To the extent Plaintiffs argue that Defendant breached the
Warranty by providing the same allegedly defective copper coil
instead of the aluminum coil, that fact was nowhere in
Plaintiffs’ Complaint, and the Court will disregard it in
deciding the present motion.7 See Voneida v. Pennsylvania, 508
Fed. App’x 152 (3d Cir. 2012) (“[S]tatements in a brief are not
a substitute for the allegations in the complaint”); Seeds of
Peace Collective v. City of Pittsburgh, 453 F. App’x 211, 215
(3d Cir. 2011) (“[W]e do not consider factual allegations made
in [the plaintiff’s] brief but not pleaded in the complaint.”).
If Plaintiffs continued to experience problems with their

7

Nor is it even clear that Defendant had an obligation under the
Warranty to replace the failing coil with one of superior
quality at no cost. The Warranty provides only for replacement
of the failed part, with an “equivalent” part to be provided
only “[i]f an exact replacement is not available.” Additionally,
the Warranty states, “If government regulations, industry
certification or similar standards require the replacement unit
to have features not found in the defective unit, you will be
charged for the difference for those required features.” (Ex. A
to Def. Br.) These terms suggest that Defendant was required to
upgrade the coil only if the copper coil was not available, or
if “government regulations, industry certification or similar
standards” required it, with Plaintiff assuming the cost
differential in the latter case.
16

HVAC units even after the installation of a replacement coil,
indicating that Defendant’s remedy under the Warranty was in
fact inadequate, that might very well sway the Court’s analysis.
See Chatlos Sys. Inc. v. Nat’l Cash Register Corp., 635 F.2d
1081, 1086 (3d Cir. 1980) (where defendant “repeatedly attempted
to correct the deficiencies” but “nevertheless still had not
provided the product warranted a year and a half after” product
broke down, the “delay made the correction remedy ineffective,
and it therefore failed of its essential purpose.”). Should
Plaintiffs choose to amend their Complaint to include such
allegations, the Court will address it fully at that time.
Presently, however, the Complaint includes no facts which would
suggest that the new coil to which Plaintiffs were entitled
failed to cure the alleged defect. Accordingly, the Court finds
that Plaintiffs have not pleaded a claim for breach of the
express warranty.
2. The Warranty Does Not Fail of Its Essential Purpose
Plaintiffs’ second argument, that the Warranty fails of its
essential purpose, is equally without merit. New Jersey law
permits parties to a contract to establish an exclusive or
limited remedy under the terms of the contract. N.J.S.A. 12A:2719(1)(b). However, “[w]here circumstances cause an exclusive or
limited remedy to fail of its essential purpose,” a remedy may
17

be available under the New Jersey U.C.C. N.J.S.A. § 12A:2719(2); see also id. cmt. 1 (“[W]here an apparently fair and
reasonable clause because of circumstances fails in its purpose
or operates to deprive either party of the substantial value of
the bargain, it must give way to the general remedy provisions
of this Article.”); BOC Grp., Inc. v. Chevron Chem. Co., LLC,
819 A.2d 431, 438 (N.J. Super. Ct. App. Div. 2003). Courts have
generally concluded that “‘so long as the buyer has the use of
substantially defect-free goods, the limited remedy should be
given effect.’” Viking Yacht Co., Inc. v. Composite One LLC, 385
Fed. App’x 195, 207 (3d Cir. 2010) (quoting Chatlos Sys., Inc.
v. Nat’l Cash Register Corp., 635 F.2d 1081, 1085 (3d Cir.
1980)). But where the seller is “either unwilling or unable to
conform the goods to the contract,” Chatlos, 635 F.2d at 1085,
or where “novel circumstances not contemplated by the parties”
works to deprive a party of the “substantial value” of its
bargain, the remedy will not suffice. BOC Grp., 819 A.2d at 438
(internal quotations and citation omitted).
Thus, for example, courts have held that a remedy fails of
its essential purpose if, “after numerous attempts to repair,”
the product does not operate free of defects. Gen. Motors
Acceptance Corp. v. Jankowitz, 523 A.2d 695, 703 (N.J. Super.
Ct. App. Div. 1987); see also Chatlos, 635 F.2d at 1085-86
18

(concluding that remedy failed of its essential purpose under
New Jersey law when seller was unable to correct deficiencies in
product after a year and a half of trying). Similarly, a remedy
may also be held to fail of its purpose “if the buyer is
required to perform an act that cannot be done,” such as where a
warranty calls for parts to be delivered, but the parts were
destroyed, or when “repair or replacement take an unreasonable
time to complete.” BOC Grp., 819 A.2d at 438-39. Since the
“primary objective” of a limited remedy “is to give the seller
an opportunity to make the goods conform while limiting exposure
to risk by excluding liability for damages that might otherwise
be due,” Chatlos, 635 F.2d at 1085, the key inquiry in
determining whether a limited remedy failed of its essential
purpose is “whether the buyer is given, within a reasonable
time, goods that conform to the contract.” Delhomme Indus., Inc.
v. Houston Beechcraft Inc., 669 F.2d 1049, 1063 (5th Cir. 1982).
Similar facts are not present in this case and do not make
out a claim that the Warranty failed of its essential purpose.
Defendant warranted only that in the case of a parts failure, it
would, at its option, “repair or replace” the part. Had
Defendant refused to repair or replace the nonworking coils, or
had Defendant’s replacement parts failed to function, saddling
Plaintiffs with non-working units still under warranty,
19

Plaintiffs would have a fair claim that the remedy contemplated
under the Warranty failed of its essential purpose. See Garden
State Food Distibs., Inc. v. Sperry Rand Corp., 512 F. Supp.
975, 978 (D.N.J. 1981) (explaining that courts have held remedy
inadequate where “the plaintiff’s remedy was limited solely to
repair or replacement of defective parts and the seller failed
to replace or repair in a reasonably prompt and non-negligent
manner” (internal quotations and citation omitted)). But the
allegations in this case fall far short. Rheem reimbursed
Plaintiffs for the replacement evaporator coils in accordance
with the contractual terms,8 and there are no allegations to
suggest that Defendant delayed or failed to act. Although
Plaintiffs now claim in their brief that the replacement coils
are made of the same copper alloy material and are prone to the
same defect, that fact was not pleaded in the Complaint, and the
Court will not consider it. More importantly, even if that were
true, there is no allegation that Plaintiffs’ HVAC units
continued to malfunction after the replacement coils were

8

Of course, in Fecht’s case, there are no allegations to even
suggest that she contacted Defendant and asked for the remedy to
which she was entitled under the contract. The facts pertaining
to Fecht are also deficient, and do not make out a claim that
Defendant’s remedy failed of its essential purpose. See Palmucci
v. Brunswick Corp., 710 A.2d 1045, 1048 (N.J. Super. Ct. App.
Div. 1998) (holding that “defendant’s warranty did not fail of
its essential purpose because defendant was not allowed the
opportunity to repair the engine.”).
20

installed. Based solely on the facts in the Complaint, Defendant
replaced the malfunctioning part, leaving Plaintiffs with
working HVAC units. The Court cannot conclude, based on these
allegations, that Defendant failed to provide Plaintiffs with
“goods that conform to the contract,” or were deprived of the
“substantial value” of the bargain. Accordingly, the Court finds
that Plaintiffs have not stated a plausible claim that
Defendant’s remedy “failed of its essential purpose.”9 See
Roberts v. Detroit Diesel Corp., 2007 WL 1038986, at *6 (N.J.
Super. Ct. App. Div. Apr. 9, 2007) (“We are satisfied that the
warranty did not fail of its essential purpose because plaintiff
cannot show that Detroit Diesel failed to repair the engine
problems and that the engines did not operate properly after
they were repaired.”).
3. The Warranty Is Not Unconscionable
The Court now turns to Plaintiffs’ third argument: that
Defendant’s Warranty is unconscionable. It is well-settled that
courts “may refuse to enforce contracts that are unconscionable

9

Nor does the Court agree that the remedy was insufficient
because Defendant did not pay for replacement refrigerant or
labor and declined to exercise its option to repair the unit.
(See Pl. Br. at 4.) As noted above, the Warranty expressly
limited Defendant’s obligations to repairing or replacing a
nonconforming part, at Defendant’s discretion, which they
performed. The Warranty does not “fail of its essential purpose”
merely because the remedy is limited in scope.
21

or violate public policy.” Saxon Constr. & Mgmt Corp. v.
Masterclean of N.C., Inc., 641 A.2d 1056, 1058 (N.J. Super. Ct.
App. Div. 1994). In consumer goods transactions such as those
involved in this case, “‘unconscionability must be equated with
the concepts of deception, fraud, false pretense,
misrepresentation, concealment and the like, which are stamped
unlawful under N.J.S.A. 56:8-2.’” Palmucci v. Brunswick Corp.,
710 A.2d 1045, 1049 (N.J. Super. Ct. App. Div. 1998) (quoting
Kugler v. Romain, 279 A.2d 640, 652 (1971)). A “simple breach of
warranty or breach of contract is not per se unfair or
unconscionable.” See Gennari v. Weichert Co. Realtors, 672 A.2d
1190, 1205 (N.J. Super. Ct. App. Div. 1996); see also D'Ercole
Sales, Inc. v. Fruehauf Corp., 501 A.2d 990, 998 (N.J. Super.
Ct. App. Div. 1985).
Unconscionability may be either substantive or procedural.
New Jersey courts may find a contract term substantively
unconscionable if it is “‘excessively disproportionate’” and
involves an “‘exchange of obligations so one-sided as to shock
the court’s conscience.’” Delta Funding Corp. v. Harris, 912
A.2d 104, 120 (N.J. 2006) (quoting Sitogum Holdings, Inc. v.
Ropes, 800 A.2d 915, 921 (N.J. Super. Ct. Chanc. Div. 2002)).
Procedural unconscionability refers to unfairness in the
formation of the contract, and may be shown by “‘a variety of
22

inadequacies, such as age, literacy, lack of sophistication,
hidden or unduly complex contract terms, bargaining tactics, and
the particular setting existing during the contract formation
process.’” Muhammad v. Cty. Bank of Rehoboth Beach, Del., 912
A.2d 88, 96 (N.J. 2006) (quoting Sitogum, 800 A.2d at 921).
The Court first disposes of the argument, to the extent
Plaintiffs raise it, that Defendant’s Warranty is procedurally
unconscionable. Plaintiffs’ bare assertion is unaccompanied by
any argument or support. (See Pl. Br. at 9) Moreover, the only
allegation in the Complaint suggesting unfairness in the
formation of the contract is the general statement that the
bargaining power between Plaintiffs and Defendant “was grossly
unequal.” (See Compl. ¶ 53.) Of course, there is a disparity in
bargaining power in nearly all consumer contracts executed
between a purchaser and a manufacturer, and Plaintiffs’
conclusory assertion is by itself insufficient to render a
contract unconscionable. See Brennan v. CIGNA Corp., 282 Fed.
App’x 132, 136 (3d Cir. 2008) (“More than a disparity in
bargaining power is needed to show than an arbitration agreement
between an employer and its employee was not entered into
willingly”); Skeen v. BMW of N. Am., LLC, No. 13-1531, 2014 WL
283628, at *13 (D.N.J. Jan. 24, 2014) (noting that preprinted
contract of adhesion is not per se unconscionable); Delta
23

Funding Corp., 912 A.2d 104, 111 (N.J. 2006) (noting that
arbitration agreement in consumer contract with Delta contained
some level of procedural unconscionability but “does not, by
itself, render the arbitration agreement unenforceable”); see
also Alban v. BMW of N. Am., No. 09-5398, 2011 WL 900114, at *9
(D.N.J. Mar. 15, 2011) (rejecting plaintiff’s “bare-bones
allegations that he ‘had no meaningful choice in determining’”
the terms of warranty “and that a ‘gross disparity in bargaining
power existed’ between him and BMW” because they were “‘no more
than conclusions [that] are not entitled to the assumption of
truth.’” (quoting Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009))).
As there are no additional allegations of a defect during
contract formation, Plaintiffs’ claim for procedural
unconscionability must be dismissed.
The facts are also insufficient to support a reasonable
inference of substantive unconscionability. Plaintiffs argue
that the contract is substantively unconscionable because
Defendant “knew the HVACs were defective when they sold them,”
and “manipulated the terms of the warranty” to avoid repair
costs. (Pl. Br. at 9.) To support the allegation that Defendant
had notice of the particular defect, Plaintiffs point to the
fact that they submitted claims under their warranty; that
numerous consumers has posted in a public online forum about the
24

failure of Defendant’s evaporator coils; and that Defendant
later switched to corrosion-resistant aluminum coils. (Id.)
None of these facts, however, raise an inference that
Defendant had knowledge of the defect at the time they issued
the warranties to Plaintiffs. The two dozen consumer reviews
that were published in a public forum online were all posted
between June 2012 and October 2012, and Defendant began to use
coils made out of aluminum in September of 2013. Plaintiffs,
however, bought their HVAC systems in 2010 and 2011, well before
the date of the first posted consumer review in June of 2012.
Additionally, Argabright and Montano’s units did not begin
failing until 2014 and 2015, respectively, at which point they
notified Rheem. Likewise, Fecht’s unit did not begin to have
problems until 2014. The factual support is insufficient to
raise a plausible claim as to Defendant’s knowledge because at
most, it suggests that Defendant was made aware of the defect in
June 2012, after the warranties were issued in this case. See
McQueen v. BMW of N. Am., LLC, No. 12-06674, 2014 WL 656619, at
*4 (D.N.J. Feb. 20, 2014) (ten customer complaints were
insufficient to show that defendant had knowledge of the
specific defect alleged); Spera v. Samsung Elecs. Am., Inc., No.
12-5412, 2014 WL 1334256, at *6 (D.N.J. Apr. 2, 2014)
(dismissing consumer fraud because plaintiffs failed to state
25

sufficient facts to show that defendant knew of alleged defects
prior to sale); Weske v. Samsung Elecs. Am., Inc., 2012 WL
833003, at *5 (D.N.J. Mar. 12, 2012) (allegations showed that
consumers complained of product after the plaintiffs had already
purchased the product and thus did not establish defendants’
knowledge and concealment of the defect at the time of
plaintiffs’ purchase); Suddreth v. Mercedes-Benz, No. 10-5130,
2011 WL 5240965, at *3 (D.N.J. Oct. 31, 2011) (dismissing claim
of substantive unconscionability because plaintiffs failed to
plead sufficient facts showing that defendant knew of defect in
car at the time they issued warranty).
Plaintiffs’ claim also fails because “a finding of
unconscionability cannot be premised solely upon allegations
that Defendant knew that a defect in the product might arise,”
and created a limited warranty designed to avoid fixing the
defect. Suddreth, 2011 WL 5240965, at *3. New Jersey courts have
long held that such warranties are not so grossly unfair that
they would be considered substantively unconscionable. See,
e.g., T.J. McDermott Transp. Co. v. Cummins, Inc., 2015 WL
1119475, at *9 (D.N.J. Mar. 11, 2015) (fact that defendants knew
of alleged defects when they made the warranties did not
establish substantive unconscionability); Nelson v. Nissan N.
Am., Inc., 894 F. Supp. 2d 558, 565-66 (D.N.J. 2012) (allegation
26

that defendant car manufacturer “knew with certainty” that
transmission would fail just after expiration of the warranty
period did not make warranty substantively unconscionable);
Alban v. BMW of N. Am., No. 09-5398, 2011 WL 900114, at *9
(D.N.J. Mar. 15, 2011) (allegations that defendant knew defect
would arise after expiration of the warranty “do not indicate
that the time and mileage limitation clause in the warranty was
unconscionable); Henderson v. Volvo Cars of N. Am., LLC, No. 094146, 2010 WL 2925913, at *9 (D.N.J. July 1, 2010)
(manufacturer’s mere knowledge that a part will fail after
expiration of warranty period “does not alone make [a]
time/mileage limitation unconscionable.”).
The plaintiffs in the above cases raised claims of
substantive unconscionability, alleging that defendant knew of
the defect at the time they issued the warranty; knew when the
defect would manifest; and “manipulated” the warranty’s time
period so as to avoid liability. Such conduct, the courts held,
did not make a warranty substantively unconscionable. As one
court explained, this is because a manufacturer ‘“must predict
rates of failure of particular parts in order to price
warranties,’” and “‘[a] rule that would make failure of a part
actionable based on such “knowledge” would render meaningless’”
the limitations built into a warranty’s coverage. T.J.
27

McDermott, No. 14-4209, 2015 WL 1119475, at *9 (D.N.J. Mar. 11,
2015) (quoting Abraham v. Volkswagen of Am., Inc., 795 F.2d 238,
250 (2d Cir. 1986)); see also Majdipour v. Jaguar Land Rover N.
Am., LLC., No. 12-7849, 2013 WL 5574626, at *20 (D.N.J. Oct. 9,
2013) (explaining same). Although in the above cases, the
product defects occurred after the expiration of the warranty
period in the above cases, the reasoning applies with equal
force here. Plaintiffs’ allegation that Defendant knew of a
latent defect at the time it issued its Warranty, even if true,
does not render the warranty unconscionable. As a manufacturer,
Defendant is within its right to create a limited remedy that
minimizes its costs and obligations based on its prediction of
the rate of failure of particular parts.10

10

The rule, admittedly, is severe, and grants little favor to
consumers, but demonstrates the high standard that must be met
for a contract to be ruled “substantively unconscionable.” See
Dalton v. Gen. Motors Corp., No. 05-727, 2005 WL 2654071, at *8
(D.N.J. Oct. 17, 2005) (“‘[A] contract or contract provision is
not invariably substantively unconscionable simply because it is
foolish for one party and very advantageous to the other. . . .
Instead, a term is substantively unreasonable where the inequity
of the term is so extreme as to shock the conscience.’”)
(citation omitted).
In addition to the reasoning above, the Court finds nothing
substantively unconscionable about specific terms of Defendant’s
Warranty. Defendant’s warranty is for five years, which is not
so short as to “shock the conscience.” See, e.g., Nelson, 894 F.
Supp. 2d at 565-66 (D.N.J. 2012) (finding nothing substantively
unconscionable about a five-year/60,000 mile warranty);
Majdipour, 2013 WL 5574626, at *20 (finding nothing
substantively unconscionable about a six-year/75,000 mile
warranty). Moreover, a warranty that limits the buyer’s remedies
28

***
Accordingly, for all the reasons above, the Court will
dismiss Plaintiffs’ claim for breach of express warranty. The
claim will be dismissed without prejudice.
B. Breach of Implied Warranty of Merchantability (Count II)
An implied warranty of merchantability “protect[s] buyers
from loss where the goods purchased are below commercial
standards or are unfit for the buyer's purpose,” Crozier v.
Johnson & Johnson Consumer Co., 901 F. Supp. 2d 494, 509 (D.N.J.
2012) (quoting Altronics of Bethlehem, Inc. v. Repco, Inc., 957
F.2d 1102, 1105 (3d Cir. 1992)), and “simply means that the
thing sold is reasonably fit for the general purpose for which
it is manufactured and sold.” Henningsen v. Bloomfield Motors,
161 A.2d 69, 76 (N.J. 1960); see also Kuzian v. Electrolux Home
Prods., Inc., 937 F. Supp. 2d 599, 612 (D.N.J. 2013) (citing
N.J.S.A. § 12A:2-314). “‘Merchantability does not mean that the
goods are exactly as the buyer expected, but rather that the
goods satisfy a minimum level of quality.’” Nelson, 894 F. Supp.
2d 558, 566 (citation omitted); see also Lieberson v. Johnson &

to repair or replacement of non-conforming goods, at the
seller’s option, has long been permitted by New Jersey courts.
See, e.g., Palmucci v. Brunswick Corp., 710 A.2d 1045, 1048
(N.J. Super. Ct. App. Div. 1998); Alban, 2011 WL 900114, at *9
(warranty provision stating that defendant car manufacturer
would “repair or replace” any defective parts within four years
or 50,000 miles was not unconscionable).
29

Johnson Consumer Cos., 865 F. Supp. 2d 529, 542 (D.N.J. 2011).
In order for the implied warranty of merchantability to be
breached, the product at issue must have been defective or not
fit for the general purpose for which it was manufactured and
sold. See Altronics, 957 F.2d at 1105; Ferrari v. Am. Honda
Motor Co., 2009 WL 211702, at *3 (N.J. Super. Ct. App. Div.
2009).
Plaintiffs have stated a plausible claim for breach of the
implied warranty of merchantability. They allege that Rheem sold
them HVAC systems that did not cool their home properly, and
that they purchased these systems for the specific purpose of
cooling their homes. Plaintiffs further allege that they began
experiencing problems with Defendant’s products in the course of
normal use, all within four years of purchase and within the
warranty period. Plaintiff Argabright, for example, purchased
his HVAC unit in September of 2011 and asserts that it began
having problems in July of 2014, less than three years later.
Plaintiff Fecht installed her Rheem HVAC unit sometime in 2010,
and noticed a problem in June 2014. Likewise, Plaintiff Montano
purchased a Rheem HVAC in October of 2011 and discovered a
problem in March 2015, approximately three and a half years
later. The Court finds these allegations sufficient to state a
claim for a breach of the implied warranty of merchantability.
30

See, e.g., Kuzian, 937 F. Supp. 2d at 603 (plaintiffs adequately
stated claims for breach of implied warranties of
merchantability and fitness where they alleged that defendant
sold them refrigerators that did not produce ice properly and
they purchased the refrigerators “for the specific purpose of
ice making”).
Contrary to Defendant’s contention, the fact that the HVAC
units “functioned 3-4 years without experiencing any issues,”
(Def. Br. at 19), does not mandate dismissal of this claim.
True, “there is no duty on the part of a manufacturer to furnish
tools which will not wear out,” Jakubowski v. Minn. Min. & Mfg.,
199 A.2d 826, 831 (N.J. 1964), the fact that the evaporator
coils in each of Plaintiffs’ HVAC units malfunctioned well
within the warranty period raises an inference that the expected
useful life of the Defendant’s product had not been exhausted
when it stopped working. This particular factual allegation
distinguishes the present case from Suddreth v. Mercedes-Benz,
LLC, the only case which Defendant cites for support. (See Def.
Br. at 19.) In Suddreth, the court rejected a breach of implied
merchantability claim against a car manufacturer, noting that
plaintiff did not experience problems with the car for several
years. Importantly, the defect manifested itself outside of the
four-year express and implied warranty period, and Plaintiffs
31

had provided no “further support as to how the length of time
here fell so below industry standards as to render the product
unmerchantable.” 2011 WL 5240965, at *5.
By contrast, Plaintiffs in this case allege that
Defendant’s products consistently failed due to defective coils
even before the express and implied warranties ran out.
Defendant’s Warranty explicitly limits any implied warranties to
the same time period applicable to the express Warranty. (See
Ex. A to Def. Br. (“ANY IMPLIED WARRANTIES, INCLUDING
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, SHALL NOT
EXTEND BEYOND THE APPLICABLE WARRANTY PERIODS SPECIFIED IN THIS
LIMITED WARRANTY.”).) The warranty period was between five and
ten years, but Plaintiffs each allege that the HVAC units began
failing and required repairs and replacement of parts within
four years of purchase. Reading these allegations in Plaintiffs’
favor, as the Court must at this stage in the litigation, the
Court finds that Plaintiffs have established a plausible claim
that Defendant’s HVAC units suffered from a latent defect and
fell “below commercial standards.” Crozier, 901 F. Supp. 2d at
509.
Although Argabright and Montano have stated plausible
claims for breach of the implied warranty of merchantability,
the Court agrees with Defendant that Fecht’s claim is time32

barred. Under the New Jersey Uniform Commercial Code, any action
for breach of contract for sale “must be commenced within four
years after the cause of action has accrued.” N.J.S.A. § 12A:2725(1). Moreover, “[a] cause of action accrues when the breach
occurs, regardless of the aggrieved party’s lack of knowledge of
the breach,” and “[a] breach of warranty occurs when tender of
delivery is made.” N.J.S.A. § 12A:2-725(2). Because Fecht
purchased and installed her Rheem unit sometime in 2010, and her
Complaint would have had to have been filed in 2014 in order to
be timely.
Plaintiffs argue that the “future performance” exception to
this rule should apply. When a warranty of “future performance”
is involved, the four-year limitations period does not begin to
run until the time the defect was or should have been
discovered. N.J.S.A. § 12A:2-725(2) (“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.” (emphasis added)); see Comm’rs of
Fire Dist. No. 9 v. Am. La France, 424 A.2d 441, 444 (N.J.
Super. Ct. App. Div. 1980).
Under New Jersey law, a warranty “to repair any product
33

defect that occurs during a warranty period” constitutes a
warranty of “future performance,” and a cause of action
therefore does not accrue until the breach is or should have
been discovered. Poli v. DaimlerChrysler Corp., 793 A.2d 104,
105 (N.J. Super. Ct. App. Div. 2002); see also Docteroff v.
Barra Corp. of Am., Inc., 282 659 A.2d 948 (N.J. App. Div.
1995)) (seller's agreement to repair or replace defects that
become evident during a specified period of time “cannot be
characterized as a mere representation of the product's
condition at the time of delivery rather than its performance at
a future time.” (internal quotations and citation omitted)).
Plaintiffs may very well be correct that the express
warranty in this case, which to repair or replace any part of
the product “which fails in normal use” within a five- or tenyear period, is a warranty of “future performance.” But “implied
warranties of merchantability and fitness for a particular
purpose ‘do not explicitly extend to the future performance of
the goods.’” ACH Enters. 1 LLC v. Viking Yacht Co., 817 F. Supp.
2d 465, 471 (D.N.J. 2011) (quoting S. Jersey Gas Co. v. Mueller
Co., Ltd., No. 09-4194, 2010 WL 1742542, at *9 n.2 (D.N.J. Apr.
27, 2010)). “Implied warranties, by their very nature, cannot
extend to future performance because such an extension must be
explicit and an implied warranty cannot explicitly state
34

anything.” Travelers Indem. Co. v. Dammann & Co., Inc., 592 F.
Supp. 2d 752, 765 (D.N.J. 2008); see also Atl. Health Sys. v.
Cummins Inc., No. 08–3194, 2010 WL 5252018 at *5–6 (D.N.J. Dec.
17, 2010) (stating same); see generally Standard Alliance Indus.
v. Black Clawson Co., 587 F.2d 813, 820 (6th Cir. 1978) (“Most
courts have been very harsh in determining whether a warranty
explicitly extends to future performance. . . . [M]ost express
warranties cannot meet the test and no implied warranties can
since, by their very nature, they never ‘explicitly extend to
future performance.’”).
Thus, “[a] cause of action for breach of implied warranty
accrues when delivery of the product is made, regardless of the
purchaser’s lack of knowledge.” Moulton v. LG Elecs. USA, Inc.,
No. 11-4073, 2012 WL 3598760, at *3 (D.N.J. Aug. 21, 2012).
Because Fecht’s claim for breach of implied warranty of
merchantability accrued sometime in 2010, and this Complaint was
not filed until July of 2015, her claim is time-barred.
Accordingly, the Court will grant Defendant’s motion to dismiss
Count II with respect to Fecht.
C. Violation of the Magnuson-Moss Warranty Act (Count V)
The Magnuson–Moss Warranty Act (“MMWA”), 15 U.S.C. § 2301
et seq., provides a private right of action in federal court for
consumers who are “damaged by the failure of a supplier,
35

warrantor, or service contractor to comply with any obligation .
. . under a written warranty, [or] implied warranty.” 15 U.S.C.
§ 2310(d)(1). Claims under the MMWA depend upon the disposition
of the underlying state law warranty claims. See Johansson v.
Cent. Garden & Pet Co., 804 F. Supp. 2d 257, 265 (D.N.J. 2011)
(“A claim under the MMWA relies on the underlying state law
claim.”) Thus, if there exists no actionable warranty claim,
there can be no violation of the MMWA. See id. (dismissing MMWA
claims based on breach of implied warranty because breach of
implied warranty claims had been dismissed for lack of privity);
In re: Ford Motor Co. Ignition Switch Prods. Liability Litig.,
No. 96-1814, 2001 WL 1266317, at *24 (D.N.J .Sept. 30, 1997)
(Simandle, J.) (dismissing MMWA claims against defendant because
all express and implied warranty claims against defendant had
been dismissed).
Having failed to state a viable state law claim for breach
of express warranty, Plaintiffs’ derivative MMWA claim must also
be dismissed. See Cooper v. Samsung Elecs. Am., Inc., 374 F.
App'x 250, 254 (3d Cir. 2010) (affirming dismissal of Magnuson–
Moss Act claims that were based on state law breach of warranty
claims that had been dismissed); Demorato v. Carver Boat Corps.,
No. 06-240, 2007 WL 1456207, at *8 (“Breach of warranty actions
that fail under state law will also fail under the Magnuson-Moss
36

Act.”). Since Plaintiffs have stated a plausible state law claim
for breach of the implied warranty of merchantability, and
Defendant has offered no viable argument for dismissal of the
related MMWA claim, the Court will, at this time, permit the
MMWA claim based on breach of the implied warranty of
merchantability to proceed. See In re Shop-Vac Mktg. & Sales
Practices Litig., 2014 WL 3557189, at *10 (M.D. Pa. July 17,
2014).11

11

Defendant argues, in a single passing sentence, that
Plaintiffs failed to satisfy 15 U.S.C. § 2310(e) of the MMWA by
“fail[ing] to allege that Rheem was afforded an opportunity to
cure a purported breach of warranty.” (Def. Br. at 21 n.6.) See
15 U.S.C. § 2310(e) (“No action . . . may be brought under
subsection (d) for failure to comply with any obligation under
any written or implied warranty or service contract, . . .
unless the [warrantor] . . . is afforded a reasonable
opportunity to cure such failure to comply.”). The alleged
facts, however, show that Argabright and Montano were ultimately
compensated by Defendant for the price of the evaporator coil,
which of course implies that they sought a remedy from Defendant
and gave Defendant a “reasonable opportunity” to cure the
defect. See, e.g., Ventura v. Ford Motor Corp., 433 A.2d 801,
812 (N.J. Super. Ct. App. Div. 1981) (finding that defendant was
given reasonable opportunity to cure defect under 15 U.S.C.
§ 2310(e) when purchaser made defendant’s employee aware of
“some difficulty with the car”). It remains to be seen, however,
whether Plaintiff can prove all of the other elements of an MMWA
claim. See Temple v. Fleetwood Enters., Inc., 133 Fed. App’x
254, 268 (6th Cir. 2005) (noting that an actionable claim for
violation of the MMWA requires four elements: “that (i) the item
at issue was subject to a warranty; (ii) the item did not
conform to the warranty; (iii) the seller was given reasonable
opportunity to cure any defects; and (iv) the seller failed to
cure the defects within a reasonable time or a reasonable number
of attempts.”). Nevertheless, as Defendant does not raise any
other objection under the MMWA at this juncture, the Court will
allow the claim to proceed.
37

D. Fraudulent Concealment and Negligent Misrepresentation
(Counts III and IV)
Defendant argues that the claims for fraudulent concealment
(Count III) and negligent misrepresentation (Count IV) have not
been pleaded with the sufficient particularity required for
fraud claims under Fed. R. Civ. P. 9(b); that there is no
fiduciary duty between Defendant and Plaintiffs to support an
omission-based negligent misrepresentation claim; and that these
claims are barred by the economic loss rule. Because the Court
agrees that the presently-alleged grounds are insufficient to
show that Defendant knowingly or negligently misrepresented or
omitted a material fact about a possible defect in their HVAC
units, the Court will grant this portion of Defendant’s motion
and dismiss Counts III and IV without prejudice.
1. Fraudulent Concealment
Plaintiffs argue that Defendant is liable for fraudulent
concealment under New Jersey law because it knew of a possible
defect in its HVAC units and failed to disclose it at the time
of purchase, and affirmatively misrepresented, through
advertising and in its Warranty, that its HVAC units would be
long-lasting, durable, and free of any defects in quality and
workmanship. (Pl. Br. at 17-20.)
“[I]n its most general and fundamental conception,” fraud
“consists of the obtaining of an undue advantage by means of
38

some act or omission that is unconscientious or a violation of
good faith.” Jewish Ctr. of Sussex Cty. v. Whale, 432 A.2d 521,
524 (N.J. 1981). To prove fraudulent concealment or
misrepresentation under New Jersey law, a plaintiff must
establish five elements: “(1) a material misrepresentation of a
presently existing or past fact; (2) knowledge or belief by the
defendant of its falsity; (3) an intention that the other person
rely on it; (4) reasonable reliance thereon by the other person;
and (5) resulting damages.” Gennari v. Weichert Co. Realtors,
691 A.2d 350, 367 (N.J. 1997); see also Weske v. Samsung Elecs.,
Am., Inc., 42 F. Supp. 3d 599, 607 (D.N.J. 2014) (listing same
five elements). These factors must be pleaded with particularity
under Rule 9(b) to place the defendant on notice of the precise
misconduct with which it is charged. See Byrnes v. DeBolt
Transfer, Inc., 741 F. 2d 620, 626 (3d Cir. 1984) (“We agree, of
course, that fraud, and thus fraudulent concealment, must be
pleaded with particularity.”); Fuqua v. Bristol-Myers Squibb
Co., 926 F. Supp. 2d 538, 549 (D.N.J. 2013).
The Court agrees with Defendant that this claim must be
dismissed. A claim for fraudulent concealment based on either an
affirmative misrepresentation or an omission requires showing
that defendant had actual knowledge of the falsity of a fact, or
knowledge of the omitted fact. Here, Plaintiffs have not pleaded
39

with sufficient particularity that Defendant knew about the
alleged defect in its product when Plaintiffs purchased it. The
Court has already explained in detail why the allegations at
most could suggest that Defendant were alerted to a possible
defect in 2012, see supra Part IV.A.3, and will not repeat that
explanation here. The Complaint contains no facts to support
that Defendant was likely aware of a problem before then, and
since Plaintiffs purchased their HVAC units in 2010 and 2011, it
fails to support that Defendant knowingly misrepresented or
suppressed a material fact about the quality and longevity of
its product to Plaintiffs at the time of sale. See Stevenson v.
Mazda Motor of Am., Inc., No. 14-5250, 2015 WL 3487756, at *8-9
(D.N.J. June 2, 2015) (dismissing fraudulent concealment claim
because allegation that defendant knew of defect in one
particular model at the time of sale based on knowledge of
defect in other models was speculative and did not meet
heightened pleading standard); Spera v. Samsung Elecs. Am.,
Inc., No. 12-5412, 2014 WL 1334256, at *6 (D.N.J. Apr. 2, 2014)
(dismissing consumer fraud claim because plaintiffs failed to
state sufficient facts to show that defendant knew of alleged
defects prior to sale); Weske v. Samsung Elecs. Am., Inc., 2012
WL 833003, at *5 (D.N.J. Mar. 12, 2012) (allegations showed that
consumers complained of product after the plaintiffs had already
40

purchased the product and thus did not establish defendants’
knowledge and concealment of the defect at the time of
plaintiffs’ purchase).
In addition, with respect to Plaintiffs’ allegation that
Defendant was aware of and failed to disclose a potential defect
in their HVAC units at the time of Plaintiffs’ purchase, that
claim of fraudulent omission fails as a matter of law. “[W]here
a claim for fraud is based on silence or concealment, New Jersey
courts will not imply a duty to disclose, unless such disclosure
is necessary to make a previous statement true or the parties
share a ‘special relationship.’” Lightning Lube, Inc. v. Witco
Corp., 4 F.3d 1153, 1185 (3d Cir. 1993). “Recovery for
fraudulent concealment requires proof that [the] defendant was
legally obligated to disclose [the information].” Id. (emphasis
added) (citing Viviano v. CBS, Inc., 597 A.2d 543, 548 (N.J.
Super. Ct. App. Div. 1991)); see also Berman v. Gurwicz, 458
A.2d 1311, 1313-14 (N.J. Super. Ct. Chanc. Div. 1981) (“If
either party to a transaction conceals some fact which is
material, which is within his own knowledge, and which it is his
duty to disclose, he is guilty of actual fraud.” (internal
quotations and citation omitted)).
In New Jersey, such a duty to disclose arises: (1) when
there is a fiduciary relationship between the parties; (2) when
41

one party expressly reposits trust in another party, or else
from the circumstances, such trust necessarily is implied; and
(3) when the relationship involving the transaction is “so
intrinsically fiduciary that a degree of trust and confidence is
required to protect the parties,” for example, an insurance
contract. Lightning Lube, 4 F.3d at 1185 (3d Cir. 1993); see
also Berman, 458 A.2d at 1313-14 (describing the three classes
of transactions in which a duty to disclose arises). For a duty
to disclose to arise, one party must “expressly repose[ ] a
trust and confidence in the other; or else from the
circumstances of the case, the nature of their dealings, or
their position towards each other, such a trust and confidence
in the particular case [must be] necessarily implied.” Berman,
458 A.2d at 1313.
Plaintiffs assert only that Defendant had knowledge of a
latent defect and that Defendant had a duty to disclose “the
actual quality of the Rheem HVACs and the true nature of the
warranties,” (Compl. ¶¶ 114, 124), but these conclusory
allegations are clearly insufficient to establish that Defendant
and Plaintiffs had a special relationship giving rise to an
affirmative duty to disclose. No fiduciary or implied fiduciary
relationship existed between Plaintiffs and Defendant, and
nothing in Plaintiffs’ Complaint suggests that Defendant “did
42

anything to encourage plaintiffs to repose special trust or
confidence in their advice, thereby inducing plaintiffs’
reliance.” Green v. G.M.C., No. A-2831-01T-5, 2003 WL 21730592,
at *8 (N.J. Super. Ct. App. Div. July 10, 2003). The mere fact
that Plaintiff trusted and relied on Defendant “is insufficient
to show a special relationship requiring a duty to disclose.”
Stevenson v. Mazda Motor of Am., Inc., No. 14-5250, 2015 WL
3487756, at *9 (D.N.J. June 2, 2015).
Because Plaintiffs have failed to state with any
particularity facts showing that Defendant knew of a potential
defect adversely affecting the quality and longevity of their
HVAC units when they made their misrepresentations and
omissions, Plaintiffs’ claim for fraudulent concealment must be
dismissed, without prejudice to the right to seek a curative
amendment to the Complaint.
2. Negligent Misrepresentation
Under New Jersey law, “[a] cause of action for negligent
misrepresentation may exist when a party negligently provides
false information.” Karu v. Feldman, 574 A.2d 420, 425 (N.J.
1990). To prevail on a negligent misrepresentation claim, a
plaintiff must prove that the defendant negligently made an
incorrect statement upon which the plaintiff justifiably relied.
See Alin v. Am. Honda Motor Co., Inc., No. 08-4825, 2010 WL
43

1372308, at *13 (D.N.J. Mar. 31, 2010); Green v. Morgan Props.,
73 A.3d 478, 457 (N.J. 2013). While an act of omission may
constitute a viable negligent misrepresentation claim, see S.
Broward Hosp. Dist. v. MedQuist, Inc., 516 F. Supp. 2d 370, 397
(D.N.J. 2007), aff'd in part, 258 Fed. App’x. 466 (3d Cir.
2007), a plaintiff may not bring such a claim “unless the
breaching party owes an independent duty imposed by law.”
Saltiel v. GSI Consultants, Inc., 788 A.2d 268, 279-80 (N.J.
2002); see also Henderson v. Volvo Cars of N. Am., LLC, No. 09–
4146, 2010 WL 2925913, at *11 (D.N.J. July 21, 2010).12
Plaintiffs’ claim for negligent misrepresentation fails for

12

Although Defendant suggests that heightened pleading standards
should also be applied to Plaintiffs’ claim of negligent
misrepresentation (see Def. Br. 23), the Court finds Rule 9(b)
inapplicable because the claim here is premised on negligence
rather than fraud. See In re Suprema Specialties, Inc. Sec.
Litig., 438 F.3d 256, 272–73 (3d Cir. 2006) (“[W]here the claims
are expressly premised on negligence rather than fraud, Rule
9(b) has been held inapplicable”); Marrin v. Capital Health
Sys., Inc., No. 14-2558, 2015 WL 404783, at *9 (D.N.J. Jan. 29,
2015) (declining to apply Rule (9)’s heightened pleading
standards to negligent misrepresentation claim); Donachy v.
Intrawest U.S. Holdings, Inc., No. 10-4038, 2012 WL 869007, at
*5 (D.N.J. Mar. 14, 2012) (“[B]ecause Plaintiffs' negligent
misrepresentation claim is specifically alleged as a separate
claim [from the fraud claims], it is not subject to Rule 9(b)'s
heightened pleading requirements, notwithstanding the
significant overlap in allegations between the claims.”); see
also Rawson Food Servs., Inc. v. TD Bank, N.A., No. 13–3084,
2014 WL 809210, at *5 (D.N.J. Feb. 28, 2014) (“Rule 9(b) does
not apply to a freestanding negligence claim”). The Court will
therefore apply the ordinary pleading standards of Rule 8 to
Plaintiffs’ negligent misrepresentation claim.
44

the same reasons that Plaintiffs’ fraudulent omission fails.
There are no facts whatsoever to support that Defendant was
negligent in 2010 and 2011 when it warranted to Plaintiffs that
its HVAC units would be free from any defects. Nothing suggests,
for example, that purchasers had begun to experience problems
with their HVAC units prior to 2011, or that Defendant
previously had issues with copper alloy evaporator coils, or had
recalled other similarly designed HVAC units for refrigerant
leakage. Indeed, there are no allegations at all about known or
suspected problems with Defendant’s products before 2012, the
year of the first consumer reviews listed in Plaintiffs’
Complaint. As Plaintiffs have “provide[d] no factual support for
why Defendant[’s] behavior was negligent, or how the
specifically alleged duties of care were breached,” their claim
for negligent misrepresentation will be dismissed. McQueen v.
BMW of N. Am., LLC, No. 12-6674, 2013 WL 4607353, at *9 (D.N.J.
Aug. 29, 2013).
Additionally, an omission-based negligent misrepresentation
claim, like a claim of fraudulent concealment, is unsupported on
the current facts because Plaintiffs have not shown that
Defendant’s relationship with Plaintiffs created a duty disclose
the alleged defect. See Karu v. Feldman, 574 A.2d 420, 426 (N.J.
1990); S. Broward Hosp. Dist, 516 F. Supp. 2d at 397. Courts in
45

this district have not hesitated to dismiss negligent
misrepresentation claims by a purchaser against a manufacturer,
absent allegations showing a special relationship. Nothing in
the Complaint suggests the existence of an implied fiduciary
duty, or that Plaintiffs “reposed special trust in [D]efendant
prior to purchase,” and there is ample support for dismissal.
See Peruto v. TimberTech Ltd., 126 F. Supp. 3d 447, 457 (D.N.J.
Aug. 26, 2015) (Simandle, J.); Stevenson, 2015 WL 3487756, at
*9-10 (car manufacturer had no duty to disclose alleged defect
to car purchaser because “there [were] no allegations to suggest
that defendant did anything that would have encouraged Plaintiff
to place particular trust or confidence in it”); Coba v. Ford
Motor Co., 2013 WL 244687 at *12 (D.N.J. Jan. 22, 2013) (“New
Jersey Courts have found no special relationship between
individual consumers and automobile manufacturers that would
impose a duty to disclose on the manufacturers”); Alin v. Am.
Honda Motor Co., No. 08–4825, 2010 WL 1372308, at *14 (D.N.J.
Mar. 31, 2010) (allegations that defendant car manufacturer
failed to disclose a defect during sale were “insufficient to
state a claim for negligent misrepresentation by omission”
because there was no fiduciary or intrinsically fiduciary duty
and plaintiff did not repose a special trust in defendant when
he entered into car lease); Green v. G.M.C., No. A-2831-01T-5,
46

2003 WL 21730592, at *8 (N.J. Super. Ct. App. Div. July 10,
2003) (car manufacturer similarly had no duty to disclose a
defect to purchasers of its cars).
Accordingly, the Court will dismiss without prejudice
Plaintiffs’ claim of negligent misrepresentation.13
E. Statutory Claims (Counts VII, VIII, and IX)
The New Jersey Consumer Fraud Act (“NJCFA”), N.J.S.A.
§ 56:8-1 et seq., the Arizona Consumer Fraud Act (“ACFA”),
A.R.S. § 44-1521 et seq., and New York General Business Law
(“NYGBL”) § 349, all prohibit deceptive practices in connection
with the sale or advertisement of consumer goods. See, e.g.,
Daaleman v. Elizabethtown Gas Co., 390 A.2d 566, 569 (N.J. 1978)
(noting that NJCFA is designed to address “sharp practices and
dealings in the marketing of merchandise . . . whereby the
consumer could be victimized by being lured into a purchase
through fraudulent, deceptive or other similar kind of selling
or advertising practices.”); 349 A.R.S. § 44-1522(A)

13

Because Plaintiffs’ claims for fraudulent concealment and
negligent misrepresentation have been dismissed on the grounds
above, the Court need not reach the question of whether the
claims are barred by the economic loss rule. See Chirinos de
Alvarez v. Creole Petroleum Corp., 613 F.2d 1240, 1249 (3d Cir.
1980) (declining to reach the issue of whether defendant was a
proper party to the action “[b]ecause we have dismissed the
action on other grounds”); Panarello v. City of Vineland, No.
12-4165, -- F. Supp. 3d. ---, 2016 WL 475246, at *6, n.9 (D.N.J.
Feb. 8, 2016) (declining to reach additional arguments for
dismissal).
47

(prohibiting “deception, deceptive or unfair act or practice” in
connection with the sale or advertisement of merchandise); Small
v. Lorillard Tobacco Co., 720 N.E. 2d 892, 897 (N.Y. 1999)
(“Generally, claims under [N.Y. GBL § 349] are available to an
individual consumer who falls victim to misrepresentations made
by a seller of consumer goods through false or misleading
advertising.”).
“The capacity to mislead is the prime ingredient of all
types of consumer fraud.” Cox v. Sears Roebuck & Co., 647 A.2d
454, 462 (N.J. 1994); Fenwick v. Kay Am. Jeep, Inc., 371 A.2d
13, 16 (N.J. 1977). Thus, to determine whether a defendant’s
advertisements and marketing statements violated the consumer
fraud statute, courts examine “the overall impression created by
an advertisement” to decide whether it is “misleading and
deceptive to an ordinary reader.” Miller v. Am. Family
Publishers, 663 A.2d 643, 654 (N.J. Super. Ct. Chanc. Div.
1995); see also Oswego, 647 N.E. 2d at 745 (inquiry is limited
to whether representations or omissions are “likely to mislead a
reasonable consumer acting reasonably under the
circumstances.”).
False promises, misrepresentations, and concealment or
omission of material facts all constitute deceptive practices

48

under these statutes.14 But importantly, unlike the common law
claim of fraudulent concealment, a defendant’s knowledge or
belief of the falsity of a statement, or intent to deceive, are
not required to establish a violation under the New Jersey, New
York, and Arizona consumer fraud statutes.15
In addition to identifying the deceptive practice or
statement, the three consumer fraud statutes require the
plaintiff to establish that he or she suffered an injury that

14

See N.J.S.A. 56:8-2 (defining unlawful practice to include
“deception, fraud, false pretense, false promise,
misrepresentation, or the knowing, concealment, suppression, or
omission of any material fact with intent that others rely upon
such concealment . . . .”); Gaidon v. Guardian Life Ins. Co. of
Am., 725 N.E. 2d 598, 604 (N.Y. 1999) (defining “deceptive act
or practice” under NYGBL § 349 “as a representation or omission
likely to mislead a reasonable consumer acting reasonably under
the circumstances” (internal quotations and citation omitted));
A.R.S. § 44-1522(A) (listing “false pretense, false promise,
misrepresentation, or concealment, suppression, or omission of
any material fact” as prohibited acts).
15 See Monogram Credit Card Bank of Ga. v. Tennessee, 914 A.2d
847, 853 (N.J. Super. Ct. App. Div. 2007) (where alleged
violation consists of affirmative misrepresentation, “intent is
not an essential element,” and the conduct is unlawful “even if
unaccompanied by knowledge of its falsity or an intention to
deceive.”(emphasis added)); see also DepoLink Court Reporting &
Litig. Support Servs. v. Rochman, 64 A.3d 579, 587 (N.J. Super.
Ct. App. Div. 2013); Powers v. Guar. RV, Inc., 278 P.3d 333, 338
(Ariz. Ct. App. 2012) (defendant “need not intend to deceive to
violate the [ACFA],” nor does the statute require that the
defendant know that the misrepresentations are false); Gaidon v.
Guardian Life Ins. Co. of Am., 725 N.E. 2d 598, 603 (N.Y. 1999)
(because NYGBL § 349 “contemplates actionable conduct that does
not necessarily rise to the level of fraud,” plaintiff need not
establish intent to defraud or mislead); Small v. Lorillard
Tobacco Co., Inc., 720 N.E. 2d 892, 897 (N.Y. 1999).
49

was caused by the misrepresentation. The NJCFA, for example,
requires a showing of “1) unlawful conduct by defendant; 2) an
ascertainable loss by plaintiff; and 3) a causal relationship
between the unlawful conduct and the ascertainable loss.”
Bosland v. Warnock Dodge, Inc., 964 A.2d 741, 749 (N.J. 2009).
Likewise, to prove a claim under NYGBL § 349, a plaintiff needs
show that a defendant engaged in “an act or practice that is
deceptive or misleading in a material way and that plaintiff has
been injured by reason thereof.” Gaidon v. Guardian Life Ins.
Co. of Am., 725 N.E. 2d 603, 604 (N.Y. 1999) (internal
quotations and citation omitted); see also Koch v. Acker,
Merrall & Condit Co., 967 N.E. 2d 675, 675 (N.Y. 2012)).
Similarly, to succeed on a claim of consumer fraud under the
ACFA, a plaintiff “must show (1) a false promise or
misrepresentation made in connection with the sale or
advertisement of ‘merchandise,’ and (2) consequent and proximate
injury resulting from the misrepresentation.” Watts v. Medicis
Pharm. Corp., 365 P.3d 944, 953 (Ariz. 2016); see also Kuehn v.
Stanley, 91 P.3d 346, 351 (Ariz. Ct. App. 2004).
The claims under the NJCFA and the ACFA are subject to the
heightened pleading standard of Fed. R. Civ. P. 9(b), which
requires particularized pleading for the conduct underlying
fraud claims. See, e.g., Frederico v. Home Depot, 507 F.3d 188,
50

200 (3d Cir. 2007) (noting that “[t]he stringent pleading
restrictions of Rule 9(b)” apply to fraud claims under the
NJCFA); Silving v. Wells Fargo Bank, NA, 800 F. Supp. 2d 1055,
1075 (D. Ariz. 2011). “This requires a plaintiff to plead the
date, time, and place of the alleged fraud, or otherwise inject
precision into the allegations by some alternative means.” Grant
v. Turner, 505 Fed. App’x. 107, 111 (3d Cir. 2012), cert.
denied, 133 S. Ct. 2770 (2013); see also Schreiber Distrib. Co.
v. Serv–Well Furniture Co., Inc., 806 F.2d 1393, 1401 (9th Cir.
1986) (plaintiff “must state the time, place, and specific
content of the false representations as well as the identities
of the parties to the misrepresentation.”).
Claims under N.Y. GBL § 349, however, are examined under
the more liberal pleading standard of Fed. R. Civ. P. 8(a).
Unlike the NJCFA and the CFA, N.Y. GBL § 349 prohibits all
“[d]eceptive acts or practices in the conduct of any business,
trade or commerce or in the furnishing of any service.” Section
349 “extends well beyond common-law fraud to cover a broad range
of deceptive practices,” and as such, claims under § 349 are not
subject to the heightened pleading standard of Fed. R. Civ. P.
9(b). Pelman ex rel. Pelman v. McDonald’s Corp., 396 F.3d 508,
511 (2d Cir. 2005); see also Angermeir v. Cohen, 14 F. Supp. 3d
134, 145 (S.D.N.Y. 2014) (stating same); In re Ford Fusion and
51

C-Max Fuel Econ. Litig., No. 13-2450, 2015 WL 7018369, at *17
(S.D.N.Y. Nov. 12, 2015) (“[C]ourts in the Second Circuit have
consistently found that claims under New York General Business
Law § 349 are not subject to the heightened pleading standards
of Rule 9(b)”); Leonard v. Abbott Labs., Inc ., No. 10–4676,
2012 WL 764199, at *19 (E.D.N.Y. Mar. 5, 2012) (noting
“categorical rule” that § 349 claims are not subject to the Rule
(9) pleading standard, “regardless of whether they ‘sound in
fraud,’ or are premised on specific misrepresentations”).
Defendant argues that the Complaint fails to identify with
any specificity the fraudulent statements or misrepresentations
upon which Plaintiffs base their claims; that Rheem’s
advertising statements were not material misrepresentations
because they were “mere puffery”; and that Plaintiffs fail to
allege with the requisite particularity that they were “directly
injured as a result” of Defendant’s misrepresentations. (Def.
Br. at 29-34.) Defendant also argues that Fecht’s claim under
N.Y. GBL § 349 is barred by a three-year statute of limitations.
Each of these arguments will be addressed below.
The Court holds that although Plaintiffs have pleaded the
“who, what, when, and where” of Defendant’s misconduct with
specificity, the allegedly deceptive advertising statements are
too vague to constitute misrepresentations of material fact, and
52

the Complaint fails to state a claim for relief under either
Rule 8(a) and Rule 9(b). The Court will, however, dismiss the
claim without prejudice because the defects in the Complaint are
not fatal, and will also permit Plaintiff Fecht to join in any
amendment of Count VIII (violation of N.Y. GBL 349), as her
claim is not time-barred.
1. Plaintiffs Have Pleaded Allegations of Consumer Fraud with
Particularity, but They Do Not Establish a Claim for Relief
Defendant’s first and primary argument is that the
Complaint “fails to set forth even one allegation of a specific
fraudulent statement,” and does not reach the level of
particularity required for fraud-based claims. (See Def. Br. at
31-32.) The Court cannot agree. Plaintiffs cited several of
Defendant’s advertising statements at length in their Complaint,
which they claim constitute “specific misrepresentations about
the quality of the HVAC,” in violation of the consumer fraud
statutes. (Pl. Br. at 25.) The statements, taken from Rheem’s
website, advertise “[t]op-quality, innovative products with the
latest technology, dependable performance, great warranties and
excellent service and support,” and that Rheem products are
“routinely tested and certified” and “meet or exceed rigorous
industry and regulatory standards for quality, reliability,
[and] efficiency.” The Complaint also cited to Rheem’s Warranty
promising that the products will be “free from defects in
53

materials and workmanship . . . in normal use and service.” (See
Compl. ¶¶ 49, 50, 54.)16 Plaintiffs identified the precise
advertising statements upon which they base their claims and
quoted the marketing statements directly from Defendant’s
website in their Complaint. Rule 9(b) does not require more.
The problem, however, is not the hurdle posed by Rule
9(b)’s particularity requirement. The problem is that the
allegedly deceptive advertising claims are too vague to
constitute misrepresentations of material fact and amount to
mere puffery. “[N]ot just any erroneous statement will
constitute a misrepresentation prohibited by the [Consumer Fraud
Act]. The misrepresentation has to be one which is material to

16

The Complaint quotes the following statements from Defendant’s
website in full:
1. We simply offer the finest air conditioning solutions
in the business. Top-quality, innovative products
with the latest technology, dependable performance,
great warranties and excellent service and support.
All of this is why we confidently say, “Relax, It’s
Rheem.”
2. All Rheem products meet or exceed rigorous industry
and regulatory standards for quality, reliability,
efficiency, and air & water quality. From design and
fabrication to finished product assembly, each phase
in the manufacturing process is rigorously monitored
and measured to ensure the highest quality, durability
and
operating
excellence.
Rheem
products
are
routinely tested and certified by various government
and third-party testing labs to ensure quality
standards.
(Compl. ¶¶ 49, 50.)
54

the transaction and which is a statement of fact, found to be
false, made to induce the buyer to make the purchase.” Gennari
v. Weichert Co. Realtors, 691 A.2d 350, 366 (N.J. 1997). “A
material claim is one that involves information that is
important to consumers and, hence, likely to affect their choice
of, or conduct regarding, a product.” Bildstein v. MasterCard
Int’l, Inc., 329 F. Supp. 2d 410, 414 (S.D.N.Y. 2004) (internal
quotations and citation omitted). By contrast, statements that
are conclusory, or that constitute merely “vague and ill-defined
opinions or “puffery” “are not assurances of fact and thus do
not constitute misrepresentations.” CPS MedManagement LLC v.
Bergen Reg'l Med. Ctr., L.P., 940 F. Supp. 2d 141, 159 (D.N.J.
2013) (internal quotations and citation omitted); see also N.J.
Citizen Action v. Schering–Plough Corp., 842 A.2d 174, 177 (N.J.
App. Div. 2003); Sheth v. N.Y. Life Ins. Co., 273 A.D.2d 72, 74
(N.Y. App. Div. 2000) (purported misrepresentations that are
“conclusory and/or constitute mere puffery, opinions of value or
future expectations” may not form basis for fraudulent
misrepresentation).
The statements cited by Plaintiffs as the basis for their
consumer fraud claims are conclusory and highly subjective,
falling on the side of opinion rather than fact. The claims that
Rheem products are “top-quality,” “innovative,” and “dependable”
55

with “great warranties” and “excellent service and support” are
general claims made in the context of advertisements to the
general public. They are neither measurable nor concrete, and
are simply too imprecise to be considered material. See, e.g.,
Tatum v. Chrysler Grp. LLC, No. 10-4269, 2011 WL 1253847, at *4
(D.N.J. Mar. 28, 2011) (advertising claims that “reliable” and
“durable” “amounted to nothing more than non-actionable
hyperbole or puffery.”); Soilworks, LLC v. Midwest Indus.
Supply, Inc., 575 F. Supp. 2d 1118, 1133 (D. Ariz. 2008) (noting
that other courts have found the word “innovative” and “the
generalized and vague statements of product superiority” to be
non-actionable puffery) (citations omitted); Serbalik v. General
Motors Corp., 246 A.D.2d 724, 725 (N.Y. App. Div. 1998)
(defendant's advertisement claiming that car “would perform
excellently” and was “of high quality” constituted mere
puffery); Scaringe v. Holstein, 477 N.Y.S.2d 903, 903 (N.Y. App.
Div. 1984) (defendant's advertisement claiming that car was in
“excellent condition” constituted puffery); see also In re Sony
HDTV Television Litig., 758 F. Supp. 2d 1077, 1089 (S.D. Cal.
2010) (claims that televisions were of “superior” or “high”
quality were considered “mere puffery” and did not create a
reasonable expectation).
Likewise, Defendant’s assertions that their products are
56

routinely tested and certified” and “meet or exceed rigorous
industry and regulatory standards,” are too vague to mislead the
consumer. “General statements about compliance with safety and
quality standards are non-actionable ‘puffery’ where . . . they
fail to identify specific requirements or standards.” Leonard v.
Abbot Labs., Inc., 2012 WL 764199, at *22 (E.D.N.Y. Mar. 5,
2012) (statement that defendant is “dedicated to the highest
standards of manufacturing and marketing – and to complying with
all applicable laws and regulations” was not actionable); see
also Private Jet Servs. Grp., Inc., No. 05-98, 2006 WL 2864057,
at *5 (D.N.H. Oct. 4, 2006) (statements about the high quality
of the defendant's services were “mere puffery” and therefore
not actionable under the NHCPA because “they do not provide any
implied or express warranties as to quality or any
representations about compliance with specific requirements or
standards”); Cleveland Mack Sales, Inc. v. Foshee, No. 14–59,
2001 WL 1013393, at *4 (Tex. Ct. App. Sept. 6, 2001) (“Imprecise
or vague statements are generally considered puffing, and are
not actionable under the DTPA, while statements of material fact
are actionable.”). Defendant’s claims, which are “vague or
either mere puffery or hyperbole” “are not material, even if
they were misleading.” Leonard v. Abbot Labs., Inc., No 10-4676,
2012 WL 764199, at *21 (E.D.N.Y. Mar. 5, 2012).
57

As for the statement in Defendant’s Warranty, the Court has
already explained why the Warranty merely assured Plaintiffs
that Rheem would cover the cost of repairing or replacing any
part that malfunctioned within five years. The Warranty did not
create an expectation that Defendant’s HVAC unit would function
without defects or repairs for five years. See supra Part
IV.A.1. And, even if Defendant could be said to have breached
its implied warranty of merchantability, a breach of warranty
alone does not violate a consumer protection statute. Cox v.
Sears Roebuck & Co., 647 A.2d 454, 462 (N.J. 1994) (a breach of
warranty or any breach of contract is “‘not per se unfair or
unconscionable’” and does not violate the NJCFA) (quoting
D'Ercole Sales, Inc. v. Fruehauf Corp., 501 A.2d 90, 998 (N.J.
Super. Ct. App. Div. 1985).
Finally, the words and phrases Plaintiffs claim are
misleading – “top-quality,” “innovative,” “superior,”
“dependable,” “latest technology,” “excellent service and
support,” “great warranty,” “meets industry standards for
reliability and efficiency” – have nothing to do with the
longevity of Rheem’s parts. These advertising claims are
immaterial, not only because they are mere puffery, but also
because they have no bearing on and create no expectation about
when certain parts would need servicing or repair. See Leonard,
58

2012 WL 764199, at *21 (dismissing claim under N.Y. GBL § 349 in
part because “the majority of the [advertising] statements”
cited by Plaintiffs related to product’s quality and nutritious
value and had nothing to do with whether the product was safe
for ingestion).
Plaintiffs point to two additional instances of false
advertising with respect to Fecht and Montano, but the
allegations are equally vague. The Complaint identified two
Rheem Top Contractors, Daverio Mechanical (“Daverio”) and Oasis
Air Conditioning & Heating (“Oasis”), who worked with Fecht and
Montano to purchase their HVAC units in 2010 in New York and in
2011 in Arizona, respectively. (Compl. ¶¶ 71-72, 80-81.) Rheem
contractors “recommend Rheem products to their customers,” (id.,
¶ 73), and the Complaint alleges that Defendant’s
representatives told both Fecht and Montano “that Rheem was a
quality brand and that the Rheem HVAC was suitable for
[Plaintiffs’] home because it was superior to comparable
products from other manufacturers.” (Id. ¶¶ 74, 82.) The
Complaint notes the general content of the conversations but
goes no further, failing to specify what precise representations
were made by Daverio to Fecht, and Oasis to Montano, regarding
the “quality” and “superiority” of Defendant’s product. Without
additional detail, the particular falsity and materiality of
59

these statements cannot be established.17
Consequently, although the misrepresentations have been
pleaded with particularity, the allegations fail to state a
claim for relief.
2. Plaintiffs Have Not Sufficiently Pleaded Causation
The Court will briefly address Defendant’s third argument,
that Plaintiffs have not sufficiently pleaded the element of

17

To the extent Plaintiffs rely on a theory that Defendant
committed consumer fraud through material omission or failure to
warn about a potential defect, that argument must be dismissed.
Plaintiffs cannot plead an omission-based claim because the
Complaint contains no facts from which to reasonably infer that
Defendant knew or might have known, in 2010 and 2011, that there
was a defect in its product. See supra Part IV.A.3; see also
Gomez-Jimenez v. N.Y. Law Sch., 103 A.D.3d 13, 16-17 (N.Y. App.
Div. 2012) (omission-based claims under N.Y. GBL § 349 “are
appropriate where the business alone possesses material
information that is relevant to the consumer and fails to
provide this information.” (internal quotations and citation
omitted)); see also Alban v. BMW of N. Am., LLC, No. 09-5398,
2010 WL 3636253, at *10 (D.N.J. Sept. 8, 2010) (“[T]he NJCFA
does not require manufacturers to disclose things they do not
know. Thus, unless a defendant manufacturer knows with certainty
that a product will fail, it does not violate the NJCFA by
failing to inform its consumers of the possibility of
failure.”); Cox v. Sears Roebuck & Co., 647 A.2d 454, 462 (N.J.
1994) (“[W]hen the alleged [NJCFA] consists of an omission, the
plaintiff must show that the defendant acted with knowledge, and
intent is an essential element of fraud.”) (emphasis in
original). A claim based on a material omission under the ACFA
must also be dismissed because the Arizona consumer fraud
statute requires – and the allegations fail to show – a duty of
disclosure. See supra, Part IV.D.1; see also Grimmelman v. Pulte
Home Corp., No. 08-1878, 2010 WL 2744943, at *4 (D. Ariz. July
9, 2010) (“Under both the ACFA and the negligent
misrepresentation causes of action, an omission is actionable
only when there is a duty to communicate.” (citing Haisch v.
Allstate Ins. Co., 5 P.3d 940, 944 (Ariz. Ct. App. 2000)).
60

causation. The NJCFA and N.Y. GBL § 349 all require the
plaintiff to establish a “causal connection between some injury
to the plaintiff[] and some misrepresentation made by the
defendant.” Small v. Lorillard Tobacco Co., Inc., 252 A.D.2d 1,
15 (N.Y. App. Div. 1998); see also Bosland v. Warnock Dodge,
Inc., 964 A.2d 741, 749 (N.J. 2009) (requiring a “causal
relationship between the unlawful conduct and the ascertainable
loss”). The ACFA requires proof that “a consumer relie[d], even
unreasonably, on false or misrepresented information.” Kuehn v.
Stanley, 91 P.3d 346, 351 (Ariz. Ct. App. 2004); Grimmelmann v.
Pulte Home Corp., 2010 WL 2744943, at *7 (D. Ariz. July 9, 2010)
(“‘Reliance is a required element under Arizona’s consumer fraud
statute.’” (quoting Kuehn, 91 F.3d at 351)).
To properly allege causation or reliance, “‘a plaintiff
must state in his complaint that he has seen the misleading
statements of which he complains before he came into possession
of the products he purchased.’” Goldemberg v. Johnson & Johnson
Consumer Co., 8 F. Supp. 3d 467, 480 (S.D.N.Y. 2014) (citing
Gale v. Int’l Bus. Machs. Corp., 9 A.D.3d 446, 447 (N.Y. App.
Div. 2004) (discussing causation in the context of N.Y. GBL §
349)). If the plaintiff did not see any of the statements before
the purchase, “[the statements] could not have been the cause of
plaintiff’s injury, there being no connection between the
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deceptive act and the plaintiff’s injury.” Gale, 9 A.D.3d at 47.
The Complaint is devoid of any facts which would create an
inference that, at the time of their purchase, Argabright,
Fecht, or Montano were aware of the allegedly false advertising
claims, which Plaintiffs obtained from Defendant’s website for
purposes of filing the instant action.18 The Complaint does not
indicate, for example, when these statements were posted on
Defendant’s site; whether they existed in their current form
when Plaintiffs made their purchase in 2010 and 2011; and, if
they were, whether Argabright, Fecht, and Montano ever went on
Defendant’s website and viewed these statements before choosing
their HVAC systems. For example, Plaintiffs plead that
Argabright decided on a Rheem HVAC system “after soliciting
quotes and assessing the value and compatibility of several
competing options.” (Compl. ¶ 65.) There is no indication that
Argabright, who according to Plaintiffs’ own Complaint appeared
to have based his purchasing decision on “compatibility” and

18

Although Plaintiffs point out that there is a presumption of
causation “[w]here the representations are in written and
uniform materials presented to each prospective plaintiff,” (see
Pl. Br. at 28 (citing Elias v. Ungar’s Food Prods., 252 F.R.D.
233, 249 (D.N.J. 2008)), that is not the case here. Plaintiffs
took the advertising claims from Defendant’s website, and it is
not reasonable to presume that each consumer visited Defendant’s
website prior to purchasing Defendant’s product. (See Compl. ¶
49 n.2 & ¶ 3 n.3.) If a plaintiff did so, however, the plaintiff
should so allege such reliance on the website statements before
purchasing the product.
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“value,” was aware of Defendant’s representations about the
“quality” and “excellence” of their product at the time of his
purchase. See In re Riddell Concussion Reduction Litig., 77 F.
Supp. 3d 422, 433-34 (D.N.J. 2015) (Simandle, J.) (finding that
plaintiffs failed to plead misrepresentation with sufficient
specificity because they listed examples of defendants’
marketing statements “without identifying which specific
statement(s), if any, Plaintiffs were exposed to”); Lieberson v.
Johnson & Johnson Consumer Co., 865 F. Supp. 2d 529, 539 (D.N.J.
2011) (finding plaintiff did not satisfy Rule 9(b) where
plaintiff did not identify when statements were made or whether
and when plaintiff actually viewed them). Thus, the statutory
consumer fraud claims also fail for failure to show causation.19

3. Fecht’s Claim Under the N.Y. GBL § 349 is Not Barred by the
Statute of Limitations
“Claims pursuant to General Business Law § 349 are governed
by the three-year limitation period set forth in CPLR 214(2).”
Morelli v. Weider Nutrition Grp., Inc., 275 A.D.2d 607, 608
(N.Y. App. Div. 2000). The action must be commenced within three

19

Because the Court dismisses Plaintiffs’ consumer fraud claims
for failure to plead misrepresentation of a material fact, and
dismisses Plaintiffs’ claims on an alternative ground, it need
not reach the argument, raised only in a footnote in Defendant’s
brief, that Plaintiffs have not shown an injury or an
“ascertainable loss.” (Def. Br. at 34 n.10; Def. Reply Br. at 18
n.28.)
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years of the date of accrual, which occurs when the plaintiff is
injured by the deceptive act or practice that violated the
statute. See Gaidon v. Guardian Life Ins. Co. of Am., 750 N.E.
2d 1078, 1083 (N.Y. 2001). The date of injury occurs “‘when all
of the factual circumstances necessary to establish a right of
action have occurred.’” Statler v. Dell, Inc., 841 F. Supp. 2d
642, 648 (E.D.N.Y. 2012) (“Statler II”) (quoting Gaidon, 750
N.E. at 1083).
Relying on Defendant’s assurances of quality, Fecht chose
and purchased her Rheem HVAC unit sometime in 2010. She asserts,
however, that her claim did not accrue until either June 18,
2014 or August 12, 2014, when her HVAC began to malfunction and
when a new evaporator coil was installed. The Court finds
otherwise. “Accrual is not dependent upon any date when
discovery of the alleged deceptive practice is said to occur.”
Statler v. Dell, Inc., 775 F. Supp. 2d 474, 484 (E.D.N.Y. 2011)
(“Statler I”); see also M & T Mortg. Corp. v. Miller, No. 025410, 2009 WL 3806691, at *2 (E.D.N.Y. Nov. 13, 2009). Rather, a
claim under N.Y. GBL § 349 first accrues “when plaintiff has
been injured by a deceptive act or practice violating section
349.” Gaidon, 750 N.E. at 1083. In this case, the gravamen of
Fecht’s § 349 claim is the alleged misrepresentations that
Defendant made about the HVAC unit at the time of sale, in 2010.
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Because she also alleges that the defect was in place at the
time of purchase, the “factual circumstances necessary to
establish a right of action” were present in 2010, at least four
and a half years before this Complaint was filed. Plaintiffs’
claim falls outside the statute of limitations. See Marshall v.
Hyundai Motor Am., 51 F. Supp. 3d 451, 462 (S.D.N.Y. 2014)
(holding that plaintiffs’ § 349 claim, which was based on
defendant’s alleged misrepresentations and omissions about
latent defect in brake system, accrued at the time of purchase
and thus was barred by the statute of limitations); Statler, 841
F. Supp. 2d at 484 (plaintiff’s § 349 claim, based on
defendant’s shipping of computers with defective capacitors,
accrued at the time of shipping and was time-barred).
Equitable tolling, however, saves Fecht’s claim. Under this
doctrine, the statute of limitations may be tolled “where a
defendant's fraudulent conduct results in a plaintiff's lack of
knowledge of a cause of action.” Marshall, 51 F. Supp. 3d at
462; see also Abbas v. Dixon, 480 F.3d 636, 642 (2d Cir. 2007)
(doctrine of equitable tolling may defeat a statute of
limitations defense “when the plaintiff was induced by fraud,
misrepresentations or deception to refrain from filing a timely
action.”). To benefit from equitable tolling, “the party seeking
to invoke the doctrine bears the burden of demonstrating that it
65

was diligent in commencing the action ‘within a reasonable time
after the facts giving rise to the estoppel have ceased to be
operational.’” Marincovich v. Dunes Hotels & Casinos, Inc., 41
A.D.3d 1006, 1010 (2007) (quoting Simcuski v. Saeli, 44 N.Y.2d
442, 450 (1978)).
Drawing all reasonable inference in Plaintiff’s favor, the
Complaint supports Fecht’s contention that she was unaware of
the alleged defect until August 12, 2014, when she was informed
during a second inspection of her HVAC unit that “the unit’s
evaporator coil had multiple leaks.” (Compl. ¶ 78.) Because
Fecht’s lack of knowledge was due to Defendant’s alleged
concealment of the defect and not through any failure of Fecht’s
own diligence, the Court finds it equitable and appropriate to
toll the statute of limitations until August 12, 2014. As this
Complaint was filed within one year of that date, on July 6,
2015, Fecht’s action is not time-barred.
***
Plaintiffs’ claims for violations of the NJCFA, the ACFA,
and N.Y. GBL § 349 will be dismissed for failure to state a
claim. Because additional details may come to light about
representations Defendant made to Plaintiffs and Plaintiffs’
knowledge of or reliance upon those representations, the defect
in Plaintiffs’ Complaint is not fatal. Counts VII, VIII, and IX
66

will therefore be dismissed without prejudice.
F. Equitable Relief (Counts X and XI)
The Court will dismiss without prejudice Plaintiffs’ claims
for equitable relief, namely their claims for unjust enrichment
and declaratory relief, because they are premised on the
underlying allegations of deceptive acts and breach of express
warranty, which the Court has found insufficiently pleaded. (See
Compl. ¶ 211 (“Defendant’s acceptance and retention of these
benefits conferred upon it as a result of its materially
misleading and deceptive acts and practices make it inequitable
for Defendant to retain the benefits . . . .”); id. ¶ 217
(seeking declaration that warranty fails of its essential
purpose and is unconscionable).) See In re Riddell Concussion
Reduction Litig., 77 F. Supp. 3d 422, 439-40 (D.N.J. 2015)
(Simandle, J.) (dismissing claims for equitable relief because
underlying state law claims for consumer fraud and false
advertising, on which equitable relief claims were based, had
been dismissed). Counts X (unjust enrichment) and XI
(declaratory relief) will be dismissed without prejudice.
IV. CONCLUSION
For the foregoing reasons, the Court will deny Defendant’s
motion with respect to Counts II (breach of implied warranty)

67

and V (violation of Magnuson-Moss Warranty Act)20 and will grant
Defendant’s motion with respect to the remaining claims. The
claims will be dismissed without prejudice to Plaintiffs’ right
to seek a curative amendment to the Complaint consistent with
this Opinion. The accompanying Order will be entered.

August 15, 2016
Date

20

s/ Jerome B. Simandle
JEROME B. SIMANDLE
Chief U.S. District Judge

However, the Court will grant Defendant’s motion with respect
to Counts II and V against Fecht because Fecht’s claim is barred
by the statute of limitations.
68