GORCZYNSKI v. ELECTROLUX HOME PRODUCTS, INC. et al
Filing
90
OPINION. Signed by Judge Renee Marie Bumb on 10/18/2019. (dmr)
[Dkt. Nos. 69, 70]
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
CAMDEN VICINAGE
THOMAS P. GORCZYNSKI,
individually and on behalf of
others similarly situated,
Plaintiff,
Civil No. 18-10661(RMB/KMW)
v.
OPINION
ELECTROLUX HOME PRODUCTS, INC.,
SUPER K CORPORATION d/b/a ABC
DISCOUNT APPLIANCES, MIDEA
AMERICA CORP., MIDEA MICROWAVE
AND ELECTRICAL APPLIANCES
MANUFACTURING CO., LTD., AND
ABC CORPS. 1-10,
Defendants.
APPEARANCES:
SALTZ, MONGELUZZI, BARRETT & BENDESKY, P.C.
By: Simon B. Paris, Esq.; Patrick Howard, Esq.;
Charles J. Kochner, Esq.
1650 Market Street, 52nd Floor
Philadelphia, Pennsylvania 19103
Counsel for Plaintiff Thomas P. Gorczynski
K&L GATES LLP
By: Patrick J. Perrone, Esq.; Loly G. Tor, Esq.;
Michael S. Nelson, Esq.
One Newark Center, 10th Floor
Newark, New Jersey 07102
Counsel for Defendant Electrolux Home Products, Inc.
WARD GREENBERG HELLER & REIDY, LLP
By: Gerhard P. Dietrich, Esq.; Gabrielle A. Giombetti, Esq.
1835 Market Street, Suite 650
Philadelphia, Pennsylvania 19103
Counsel for Defendant Midea America Corp.
RENÉE MARIE BUMB, UNITED STATES DISTRICT JUDGE:
Plaintiff Thomas P. Gorczynski (“Plaintiff”) brings this
putative class action, alleging that Defendants Electrolux Home
Products, Inc. (“Electrolux”) and Midea America Corp. (“Midea
USA”)(together, “Defendants”) knowingly manufactured, marketed,
and sold microwaves with defective handles in violation of the
New Jersey Consumer Fraud Act (“CFA”), N.J.S.A. § 56:8-2.
Plaintiff also claims that Defendant Electrolux violated the
Magnuson-Moss Consumer Products Warranties Act (“MMWA”), 15
U.S.C. § 2301, et seq., and breached the implied warranty of
merchantability.
On April 29, 2019, this Court issued an Opinion
(the “April 29 Opinion”)[Dkt. No. 67], denying Defendants’
motions to dismiss [Dkt. Nos. 35, 47].
Now, Electrolux and Midea USA each move for reconsideration
of this Court’s April 29 Opinion to “correct a clear error of law
or fact to prevent injustice.” For the reasons set forth herein,
Midea USA’s Motion for Reconsideration (the “Midea MFR”)[Dkt. No.
69] will be GRANTED, but Electrolux’s Motion for Reconsideration
(the “Electrolux MFR”)[Dkt. No. 70] will be DENIED.
I.
FACTUAL AND PROCEDURAL BACKGROUND
In this putative class action, Plaintiff alleges that
Defendants designed, manufactured, and marketed over-the-range
stainless-steel microwaves (the “Microwaves”) with defective
2
stainless-steel handles that become excessively hot if an
individual is cooking on a stovetop below (the “Handle Defect”).
Plaintiff alleges that in May 2015, he purchased a Frigidaire
Gallery Over-the-Range Microwave, which is a model that suffers
from the Handle Defect.
See Am. Compl., at ¶ 12.
Plaintiff contends that the Microwaves in question,
including his own, were manufactured by Midea Microwave China
(“Midea China”)1 and distributed by Electrolux in the United
States.
As alleged in the Amended Complaint, Midea USA is “the
North American headquarters of Midea, the world’s leading
manufacturer of air conditioners and home appliances.” See id. at
¶ 26.
Meanwhile, Electrolux “distributes products under a
variety of brand names, including Electrolux, Electrolux ICON,
Frigidaire Professional, Frigidaire Gallery, Frigidaire, Eureka,
Kelvinator, Sanitaire, Tappan, and White-Westinghouse.” See id.
at ¶ 17.
Plaintiff alleges that the Handle Defect causes the
Microwaves’ handles to reach temperatures as high as 200̊
Fahrenheit when a cooktop below is operating at full power. See
Am. Compl., at ¶ 6.
Because the high temperature of the handle
can make it unsafe for an individual to open the Microwave door,
Although Midea China was named as a defendant in the Amended
Complaint, Plaintiff voluntarily dismissed his claims against
Midea China on November 26, 2018. See Dkt. Nos. 60, 61.
1
3
Plaintiff claims that the Handle Defect renders the Microwave
unreasonably dangerous and unfit for its intended purpose when
the range below is being used. See id. at ¶ 8.
According to Plaintiff, Midea China became aware of the
Handle Defect during testing in 2010, prior to distributing the
Microwaves in the United States. See Am. Compl., at ¶ 6.
Plaintiff further alleges that these test results were accessible
to Electrolux as early as 2010, and customers complained about
the Handle Defect as early as 2013, yet Electrolux continued to
sell the Microwaves throughout the United States, with over
70,000 sales in New Jersey. Id. Plaintiff contends that, despite
full knowledge of the Handle Defect, Defendants have neither
rectified the issue (through repair or replacement of the handle)
nor warned consumers about the existence of the Handle Defect.
Plaintiff filed the initial complaint [Dkt. No. 1-1],
individually and on behalf of all others similarly situated, in
the New Jersey Superior Court, Camden County, in May 2018.
Electrolux removed the case to this Court on June 15, 2018.
Following a pre-motion letter filed by Electrolux, expressing an
intent to file a motion to dismiss, Plaintiff filed the Amended
Complaint on August 6, 2018.
This Court issued an Opinion and
Order on April 29, 2019, denying the Defendants’ motions to
dismiss.
Now, this matter comes before the Court upon motions
for reconsideration, filed by Electrolux and Midea USA, asking
4
this Court to reconsider its decision to deny their respective
motions to dismiss.
II.
LEGAL STANDARD – MOTION FOR RECONSIDERATION
Pursuant to Rule 59(e) of the Federal Rules of Civil
Procedure and Local Civil Rule 7.1(i), a motion for
reconsideration must be based on one of three grounds: (1) an
intervening change in controlling law, (2) new evidence not
previously available, or (3) a clear error of law or manifest
injustice. N. River Ins. Co. v. CIGNA Reinsurance Co., 52 F.3d
1194, 1218 (3d Cir. 1995).
The Third Circuit has held that the purpose of a motion for
reconsideration is “to correct manifest errors of law or fact or
to present newly discovered evidence.” Harsco Corp. v. Zlotnicki,
779 F.2d 906, 909 (3d Cir. 1985).
However, the “extraordinary
remedy” of reconsideration is “to be granted sparingly.” A.K.
Stamping Co., Inc. v. Instrument Specialties Co., Inc., 106 F.
Supp. 2d 627, 662 (D.N.J. 2000)(quoting NL Indus. Inc., v.
Commercial Union Ins. Co., 935 F. Supp. 513, 516 (D.N.J. 1996)).
A motion for reconsideration may be granted only if there is a
dispositive factual or legal matter that was presented but not
considered that would have reasonably resulted in a different
conclusion by the court. White v. City of Trenton, 848 F. Supp.
2d 497, 500 (D.N.J. 2012).
Mere disagreement with a court’s
5
decision should be raised through the appellate process and is
thus inappropriate on a motion for reconsideration. United States
v. Compaction Sys. Corp., 88 F. Supp. 2d 339, 345 (D.N.J. 1999).
III. ANALYSIS
In response to this Court’s April 29 Opinion, Defendants
each filed motions for reconsideration.
Electrolux argues that
this Court committed “manifest errors in fact and law” in finding
that Plaintiff’s claims were neither subsumed by the New Jersey
Products Liability Act (the “PLA”) nor barred by Electrolux’s
attempt to reduce the statute of limitations.
Meanwhile, Midea
USA argues that this Court erred by conflating the “knowing
omission” claims against Midea USA, with the “affirmative
misrepresentation” claims against Electrolux.
The Court
addresses each of these arguments below.
A.
Subsumption under Products Liability Act (Electrolux)
First, Electrolux argues that the Court committed “a
manifest error of both law and fact” in finding that Plaintiff’s
claims are not subsumed by the PLA.
Previously, this Court found
that the alleged Handle Defect constituted “harm to the product
itself,” because it diminished the Microwave’s value and
usefulness.
In its Motion for Reconsideration, Electrolux argues
that claims for “harm to the product itself” should be limited to
circumstances in which “the product broke.”
6
This Court finds
that Electrolux’s proposed interpretation is unreasonably narrow
and inconsistent with precedent in the District of New Jersey.
Under the PLA, a product liability action is defined as “any
claim or action brought by a claimant for harm caused by a
product, irrespective of the theory underlying the claim, except
actions for harm caused by breach of an express warranty.”
N.J.S.A. 2A:58C–1(b)(3).
The PLA further defines “harm caused by
a product” to include the following: “(a) physical damage to
property, other than to the product itself; (b) personal physical
illness, injury or death; (c) pain and suffering, mental anguish
or emotional harm; and (d) any loss of consortium or services or
other loss deriving from any type of harm described in
subparagraphs (a) through (c) of this paragraph.” N.J.S.A.
2A:58C–1(b)(2)(emphasis added).
Thus, a claim for “physical
damage ... to the product itself” is not a “product liability
action” because the PLA specifically excludes such damage from
its definition of “harm.” Estate of Edward W. Knoster v. Ford
Motor Co., 200 F. App'x 106, 116 (3d Cir. 2006)(citing Alloway v.
General Marine Ins. L.P., 149 N.J. 620(1997)); see also Beyerle
v. Wright Med. Tech. Inc., 2014 WL 12623029, at *3 (D.N.J. Dec.
23, 2014).
Electrolux contends that Plaintiff has not alleged “harm to
the product itself,” because the Microwave “is not rendered
unusable” since “the alleged Handle Defect only manifests when
7
the range below is in use.” See Electrolux MFR, at 6.
Indeed,
Plaintiff’s Amended Complaint does not claim that the Microwave
is “broken” or totally unusable.
Rather, Plaintiff alleges that,
when an individual is cooking on the surface below, the Handle
Defect renders the Microwave unusable by making the handle
unreasonably hot and preventing consumers from opening the
Microwave door.
Although Plaintiff does not allege that the
Microwave is “broken,” Plaintiff states that the inability to use
the Microwave while cooking on the range below substantially
interferes with the intended purpose of a product marketed as an
“Over-the-Range Microwave.”
As a result, Plaintiff seeks
economic damages associated with the cost of repair or
replacement of the Microwave.
This Court finds that Plaintiff need not argue that the
Microwave is “broken” to state a claim for “harm to the product
itself.”
As noted in this Court’s prior Opinion, courts in the
District of New Jersey have held that claims alleging that a
plaintiff “did not get what [they] paid for” are not subsumed by
the PLA. See Volin v. Gen. Elec. Co., 189 F. Supp. 3d 411, 418
(D.N.J. 2016), as amended (May 31, 2016).
In Volin, the District
Court denied a motion to dismiss CFA, breach of implied warranty,
and unjust enrichment claims, based on an allegation that the
plaintiff’s oven knobs had a defect that caused the knobs to
turn, even when the user was not intentionally trying to light a
8
burner.
Id. at 415.
Although the Volin plaintiff did not allege
that the oven or the knobs were “broken,” the court found that
the plaintiff’s claims were not subsumed at the pleading stage
where plaintiff had alleged that she “did not get what she paid
for.”
As such, the Court finds that Plaintiff’s allegation, that
the Handle Defect diminishes the value and usefulness of the
Microwave, could establish “harm to the product itself.”
Electrolux argues that dismissal is warranted because
“Plaintiff has not alleged harm to the Microwave itself – he has
alleged only a risk of personal injury.” See Electrolux MFR, at 6
(emphasis added).
In support of this argument, Electrolux cites
to Arlandson v. Hartz Mountain Corp., 792 F. Supp. 2d 691 (D.N.J.
2011), a case in which plaintiffs sought to recover economic
damages for the value of a “flea and tick treatment” product
after the product sickened or killed the plaintiffs’ pets.
Although plaintiffs did not seek recovery for harm to their pets,
the District Court found that the plaintiffs’ claims were
subsumed by the PLA because their allegations were “based on the
harm caused to their pets by the alleged defects in the Products,
not based on any harm caused to the Products themselves.”
Arlandson, 792 F. Supp. 2d at 703.
However, in Arlandson, the
allegations went beyond a mere “risk” of harm; the plaintiffs
alleged that the product had already harmed (and in some cases
killed) their pets.
This is quite different from the instant
9
case, in which Plaintiff does not allege, or seek any damages
for, physical harm caused by the Handle Defect (such as burns to
his hand).
Although Electrolux attempts to recast Plaintiff’s
allegations as a PLA claim, Electrolux undercuts its own argument
by simultaneously arguing that Plaintiff lacks a viable PLA cause
of action.
In Electrolux’s initial Motion to Dismiss, Electrolux
noted that dismissal with leave to amend would be futile because
“[u]nder the PLA, a plaintiff must suffer physical injury to
him/herself or to other property to state a claim, and damage to
the product itself is not recoverable.” See Electrolux MTD [Dkt.
No. 35-1], at 2.
As explained by the Third Circuit, where the
PLA does not cover the type of damages alleged, the “PLA cannot
subsume that which it explicitly excludes from its coverage.”
Knoster, 200 F. App’x at 116 (finding that there was “no overlap”
between the CFA where plaintiffs sought only economic damages
resulting from harm to the product itself).
Thus, where a CFA
claim relates exclusively to economic damages resulting from harm
to the product itself, it cannot be precluded and subsumed by the
PLA.
See id.; see also Beyerle v. Wright Med. Tech. Inc., 2014
WL 12623029, at *3 (D.N.J. Dec. 23, 2014)(“At this stage in the
litigation, it appears that Plaintiff's CFA claim seeks economic
damages resulting from harm to the product itself, and, as such,
is not subsumed by the PLA”).
10
At the pleading stage, this Court finds that Plaintiff’s
claims, based on the theory that the Handle Defect harms the
Microwave itself by diminishing its value and usefulness, are not
subsumed by the PLA.
Therefore, the Court will deny Electrolux’s
Motion for Reconsideration as to this Court’s finding on the
issue of subsumption under the PLA.
B.
Modified Statute of Limitations (Electrolux)
In its Motion to Dismiss, Electrolux argued that Plaintiff’s
breach of the implied warranty of merchantability and MMWA claims
are time-barred based on the terms of a disclaimer (the
“Disclaimer”) in the Microwave’s “Use & Care Guide,” which
purportedly reduced the statute of limitations for breach of
implied warranty claims to one year (as opposed to the statutory
default of four years).
However, in the April 29 Opinion, this
Court concluded that the Disclaimer failed to reduce the statute
of limitations because it was not “clear and conspicuous” to an
average consumer, as required under N.J.S.A. § 12A:2-316.
Now, Electrolux argues that this Court committed “manifest
errors in fact and law,” by finding that Electrolux’s attempt to
modify the statute of limitations was subject to the “clear and
conspicuous” requirements of N.J.S.A. § 12A:2-316. Specifically,
Electrolux argues (1) that N.J.S.A. § 12A:2-316 does not apply to
provisions shortening a warranty’s statute of limitations, and
11
(2) that the reduction of the statute of limitations was properly
effectuated through an “original agreement” between the parties
in accordance with the requirements of N.J.S.A. § 12A:2-725.
This Court finds both arguments unpersuasive.
To resolve this issue, the Court analyzes the interaction
of two provisions in New Jersey’s Uniform Commercial Code
(“U.C.C.”). Under N.J.S.A. § 12A:2-316, parties are generally
allowed to modify implied warranties, provided that the
modification is done by a writing that is “clear and
conspicuous.” See Realmuto v. Straub Motors, Inc., 65 N.J. 336,
341–42 (1974); Gladden v. Cadillac Motor Car Div., 83 N.J. 320,
331 (1980).
To be conspicuous, a disclaimer must be “so written
that a reasonable person against whom it is to operate ought to
have noticed it.” Gladden, 83 N.J. at 331.
Meanwhile, N.J.S.A §
12A:2-725 sets a default statute of limitations of four years
after a cause of action, for a breach of any contract for sale,
has accrued.
However, “by the original agreement the parties may
reduce the period of limitation to not less than one year.”
N.J.S.A § 12A:2-725(1).
On reconsideration, this Court finds that attempts to reduce
to the default statute of limitations for breach of implied
warranty, pursuant to N.J.S.A. § 12A:2-725, must comply with the
12
“clear and conspicuous” requirements of § 12A:2-316.2
As
previously noted, § 12A:2-725 “provides a four-year default
[statute of limitations] if the parties do not contract for an
alternative.” See New Jersey Transit Corp. v. Harsco Corp., 497
F.3d 323, 328 (3d Cir. 2007). In other words, “if the parties
have not chosen to contract around § 12A:2-725’s default statute
of limitations, the buyer may bring suit based on that
warranty... until four years after the breach.” Id. (emphasis
added).
Where a default condition exists, any alteration of that
default condition would seem to inherently require a
“modification.”
Furthermore, finding that a party could
materially alter the length of warranty’s limitations period
without clear and conspicuous language would be entirely
The Court acknowledges that its April 29 Opinion overstated the
definitiveness of Third Circuit’s holding in New Jersey Transit
Corp. v. Harsco Corp., 497 F.3d 323 (3d Cir. 2007), but this
Court reaches the same conclusion regarding the implications of
the Third Circuit’s analysis. Although Harsco does not directly
resolve the manner in which § 12A:2-316 interacts with § 12A:2725, the Third Circuit specifically stated that it disagreed with
the District Court’s finding “that it was not § 12A:2-316, but §
12A:2-725, a provision with no specific language requirements,
which governs the parties’ ability to shorten the length of
express and implied warranties.” See Harsco, 497 F.3d at 328.
Additionally, the Third Circuit emphasized that the general
purpose of § 12:2-316 is “to ensure that there are no surprises
concerning which warranties accompany the goods sold.” Id. at
330. Taken as a whole, the Court finds that the Harsco decision
strongly implies that the “clear and conspicuous” requirements
from § 12A:2-316 should apply when a party attempts to modify the
statutory default limitations period for an implied warranty.
2
13
inconsistent with § 12A:2-316’s general purpose “to ensure that
there are no surprises concerning which warranties accompany the
goods sold.” Id. at 330.
As such, a party attempting to
“contract around” § 12A:2-725’s default statute of limitations
must comply with § 12A:2-316.
Electrolux also argues that it properly reduced the statute
of limitations because the Disclaimer was provided in an
“original agreement” between the parties.
In support of this
argument, Electrolux cites to a case from the Middle District of
Pennsylvania, Rice v. Electrolux Home Prod., Inc., 294 F. Supp.
3d 307 (M.D. Pa. 2018), which involved the very same issue
currently before this Court.
In Rice, the court found that the
reduced statute of limitations language in Electrolux’s
Disclaimer was valid and enforceable. See id. at 315-16.
For the
reasons explained below, this Court must respectfully disagree
with the conclusion in Rice.
Upon review, each of the cases cited in the Rice decision
contains crucial factual differences from the circumstances in
this matter.
For example, in Amvest, which involved the warranty
on a commercial truck, both parties were “sophisticated business
entities” who engaged in a negotiation process lasting “several
months” and plaintiff simply failed to read the contract that
indisputably included a provision reducing statute of
limitations. See Amvest Corp. v. Anderson Equip. Co., 358 F.
14
App'x 344, 348 (3d Cir. 2009).
Next, in Merricks, which involved
the warranty on an RV, the plaintiff did not receive the written
warranties until after the transaction, but admitted that the
dealer had explained that the RV was covered by warranties of
different periods and explained what each period was prior to
purchase. See Merricks v. Monaco Coach Corp., 2008 WL 5210856, at
*2 (W.D. Va. Dec. 15, 2008).
Finally, Strange involved the
warranty on seats sold to a bus manufacturer, in which the
language reducing the statute of limitations was included in the
“terms and conditions” that appeared on the reverse side of the
purchase order for the seats.
See Strange v. Keiper Recaro
Seating, Inc., 117 F. Supp. 2d 408, 411 (D. Del. 2000), aff'd sub
nom., 281 F.3d 224 (3d Cir. 2001).
In the instant matter, Plaintiff alleges that he is an
ordinary consumer who purchased a Microwave “without the terms of
[the Disclaimer] ever being disclosed until box is opened after a
purchase.” See Am. Compl. at ¶ 81.
Plaintiff elaborates that the
Disclaimer was “not available to buyers prior to purchase,” was
not visible at the point of sale “because it only appears on the
last page of the Use & Care Guide sealed within the Microwaves’
box,” and was not printed or displayed on the exterior of the
boxes. Id. at ¶¶ 87-90.
It would be a “manifest error” to
analogize these allegations to cases that involved sophisticated
business entities or plaintiffs receiving warranty information
15
before or at the time of purchase.
At this stage of the
litigation, there is no indication that the Disclaimer language
constituted an “original agreement” between the parties and the
Court is not bound to apply the reasoning from Rice, which this
Court believes was incorrectly decided.
C.
Affirmative Misrepresentations (Midea USA)
In its April 29 Opinion, this Court found that Plaintiff had
adequately alleged that Midea USA, along with Electrolux, had
made affirmative misrepresentations by marketing the Microwaves
as fit for use “Over-the-Range” despite the Handle Defect.
Now,
Midea USA argues that reconsideration is warranted because this
Court overlooked that Plaintiff did not allege that Midea USA had
any role in designing, manufacturing, testing, advertising,
marketing, distributing, or selling the Microwaves in the United
States.
On this point, the Court agrees with Midea USA.
As noted by Midea USA, Plaintiff alleges that most business
functions were fulfilled by either Electrolux or Midea China
(which is no longer a named defendant).
Plaintiff alleges that
“Midea USA deceptively and falsely made misleading
representations or committed ommissions of material fact in
connection with the marketing, promotion, and sale of the
Microwaves with the Handle Defect,” but never alleges any
specific role played by Midea USA.
16
Although Plaintiff alleges
that Midea USA is a related business entity to Midea China,
Plaintiff fails to allege any specific reason why the actions of
Midea China should be imputed to Midea USA.
Such pleading fails
to meet the level of particularity necessary when a claim is
premised on fraud or misrepresentation, as required under Fed. R.
Civ. P. 9(b).
Accordingly, this Court will grant Midea USA’s Motion for
Reconsideration and will dismiss Plaintiff’s CFA claim against
Midea USA.
However, the Court will provide Plaintiff with an
opportunity to clarify his allegations, to the extent feasible,
through a second amended complaint.
IV.
CONCLUSION
For the aforementioned reasons, Electrolux’s Motion for
Reconsideration will be DENIED.
Additionally, Midea USA’s Motion
for Reconsideration will be GRANTED and Plaintiff’s CFA claim
against Midea USA will be DISMISSED WITHOUT PREJUDICE.
The Court
will permit Plaintiff twenty-one (21) days to file a second
amended complaint, to the extent Plaintiff can, in good faith,
remedy the deficiencies outline herein. An appropriate Order
shall issue on this date.
DATED: October 18, 2019
s/Renée Marie Bumb
RENÉE MARIE BUMB
UNITED STATES DISTRICT JUDGE
17
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?