GREENE v. BMW OF NORTH AMERICA et al

Filing 48

OPINION. Signed by Judge William J. Martini on 9/17/13. (gh, )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
DAVID GREENE,
Civ. No. 2:11-04220 (WJM)

Plaintiff,
v.

OPINION

BMW OF NORTH AMERICA, et al.,
Defendants.

WILLIAM J. MARTINI, U.S.D.J.:
This is a putative consumer class action involving tires. Plaintiff David Greene
alleges that the Potenza Run Flat Tires (“Run Flats” or “the Tires”) in his leased BMW
335i convertible (the “335i”) provided Greene with an unreliable and dangerous ride. In
a First Amended Complaint (“FAC”), Greene asserts claims for, inter alia, fraud, breach
of warranty, and breach of contract against Defendants Bridgestone Americas Tire
Operations LLC, 1 Bridgestone Americas Inc. (together “Bridgestone”), and BMW of
North America, LLC (“BMW”) (together “Defendants”). Defendants move to dismiss
the FAC and to strike Greene’s class allegations. There was no oral argument. Fed. R.
Civ. P. 78(b). For the reasons set forth below, BMW’s motion to dismiss is GRANTED
IN PART, and DENIED IN PART, and Bridgestone’s motion to dismiss is GRANTED
IN PART, and DENIED IN PART. BMW’s motion to strike Greene’s class allegations
is DENIED, and, Bridgestone’s motion to strike Greene’s class allegations is DENIED,
as well.
I.

BACKGROUND

On March 17, 2010, Greene leased a 2010 BMW 335i convertible with Run Flats
from Paul Miller BMW. FAC ¶ 26, ECF No. 38. The lease was assigned to BMW
Financial Services NA, LLC, a BMW subsidiary. Id. ¶ 13.
Within six months of his lease, Greene noticed a bubble in his left-rear Tire.
Compl. ¶ 3, ECF No. 1. Within 14 months of his lease and 14,000 miles, Greene noticed
a total of three bubbles in two different tires. Id. ¶ 5. The bubbles created “an
unbearably rough ride . . . and excessively loud noise.” Id. In spite of his concerns,
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Bridgestone Americas Tire Operations LLC was formerly known as Bridgestone Firestone
North American Tire, LLC.
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Greene purchased a new set of the Tires because BMW dealership employees told
Greene that his 335i could not accommodate a different make and model of tire. Id. ¶ 43.
According to Greene, the Tires are “prone to deflate, pop, or sustain bubbles from
driving on a normal road.” Id. ¶ 25. Moreover, the Tires cannot be repaired for “even a
small puncture.” Id. In some cases, the same make and model Tires have “suffer[ed]
catastrophic failure after mere months of use.” Id. ¶ 43. Some BMWs equipped with the
Tires “sustain[] four or more flat Tires in one year.” Id. ¶ 43.
On July, 20, 2011, Greene filed a six-count putative class action Complaint against
Bridgestone and BMW. ECF No. 1. Both Defendants moved to dismiss all claims and to
strike the class allegations. The Court granted the motions to dismiss, dismissing some
counts with prejudice and others without prejudice. Greene v. BMW of North America,
No. 11-4220, 2012 WL 5986457, at **3-5 (D.N.J. Nov. 28, 2012) (“Greene I”); Greene
v. BMW of North America, No. 11-4220, 2012 WL 5986461, at **4-7 (D.N.J. Nov. 28,
2012) (“Greene II”). The Court denied the motions to strike. Id. On December 28,
2012, Greene filed the FAC. ECF No. 38. On February 11, 2013, Defendants moved to
dismiss all claims and to strike the class allegations. ECF Nos. 42, 43.
II.

LEGAL STANDARD

Federal Rule of Civil Procedure 12(b)(6) provides for the dismissal of a complaint,
in whole or in part, if the plaintiff fails to state a claim upon which relief can be granted.
The moving party bears the burden of showing that no claim has been stated. Hedges v.
United States, 404 F.3d 744, 750 (3d Cir. 2005). In deciding a motion to dismiss under
Rule 12(b)(6), a court must take all allegations in the complaint as true and view them in
the light most favorable to the plaintiff. See Warth, 422 U.S. at 501.
A Complaint’s factual allegations must be sufficient to raise a plaintiff’s right to
relief above a speculative level, such that it is “plausible on its face.” See Bell Atl. Corp.
v. Twombly, 550 U.S. 544, 570 (2007); see also Umland v. PLANCO Fin. Serv., Inc., 542
F.3d 59, 64 (3d Cir. 2008). Claims have “facial plausibility when the plaintiff pleads
factual content that allows the court to draw the reasonable inference that the defendant is
liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing
Twombly, 550 U.S. at 556). While “[t]he plausibility standard is not akin to a
‘probability requirement’ . . . it asks for more than a sheer possibility.” Id.
III.

DISCUSSION

The FAC asserts the following claims against both BMW and Bridgestone: breach
of the implied warranty of merchantability under the Magnuson-Moss Warranty Act
(“MMWA”), 15 U.S.C. § 2310(d)(1) (Counts I and II); violation of the New Jersey
Consumer Fraud Act (“NJCFA”), N.J.S.A. 56:8-2 (Counts IV and V); breach of the
implied warranty of merchantability under New Jersey’s Uniform Commercial Code
(“UCC”), N.J.S.A. § 12A:2A-212 (Counts VI and VII); and breach of the implied
covenant of good faith and fair dealing (Counts IX and X). Greene asserts a claim for
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breach of contract against BMW (Count VIII), and he also asserts a claim for breach of
express warranty under the MMWA against Bridgestone (Count III). Both parties move
to dismiss all claims and to strike the class allegations.
A.

BMW’s Motion to Dismiss
1.

Breach of Implied Warranty of Merchantability: New Jersey UCC
(Count VI)

Count VI is a claim for breach of the implied warranty of merchantability under
New Jersey’s UCC. BMW moves to dismiss Count VI, arguing that BMW provided
Greene with a safe and reliable car. Based on the facts pled in the FAC, the Court cannot
agree.
“Under an implied warranty of merchantability, a manufacture[r] warrants to
deliver a product that is reasonably suitable for the ordinary uses it was manufactured to
meet.” Green v. G.M.C., 2003 WL 21730592, at *6 (App. Div. 2003). “In the context of
a car, this warranty is satisfied when the vehicle provides safe and reliable
transportation.” Id. The implied warranty of merchantability does not provide for
perfection; “[i]nstead, it provides for a minimum level of quality.” Green v. Green
Mountain Coffee Roasters, Inc., 279 F.R.D. 275, 282-83 (D.N.J. 2011) (internal citation
and quotation omitted).
Greene claims that the Run Flat Tire is the only make and model tire that works
with a 335i. Accordingly, Greene maintains that the 335i is only as safe and reliable as
the Tires, which Greene claims are “prone to deflate, pop, or sustain bubbles from driving
on a normal road, and cannot be repaired for even a small puncture.” FAC ¶ 25. Greene
further alleges that the Tires “suffer catastrophic failure after mere months of use,” and
that some “[BMWs] with the Tires sustain[] four or more flat Tires in one year.” Id. ¶ 43.
Similar allegations survived a motion to dismiss in Marcus v. BMW of North America,
LLC. See Order Denying Motion to Dismiss, Marcus v. BMW of North America, LLC,
No. 8-5859 (D.N.J. Dec. 22, 2009), ECF No. 118.
Hoping for a different result in this case, BMW points to Sheris v. Nissan North
America Inc., No. 7-2516, 2008 WL 2354908 (D.N.J. June 3, 2008). In Sheris, a plaintiff
brought a breach of implied warranty claim alleging that his brake pads that wore out at
20,618 miles. The Sheris court dismissed the claim, holding that “[i]n light of the
undisputed facts that Plaintiff was able to drive his [car] for 20,618 miles and for about
two years before he needed to replace his brake pads and rotors, Plaintiff has failed to
allege factually what made his G35 unmerchantable or unsafe for driving.” Id. at *5.
Sheris is distinguishable, as Greene is alleging that the Tires deflate or pop within months
rather than years. See FAC ¶¶ 25, 43. The Court will DENY the motion to DISMISS
Count VI.

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2.

Breach of Implied Warranty of Merchantability: MMWA (Count I)

Count I is a claim for breach of the implied warranty of merchantability under the
MMWA. BMW concedes that if Greene has stated a claim for breach of the implied
warranty of merchantability under state law, Greene has stated a claim for breach of the
implied warranty of merchantability under the MMWA. As discussed in the previous
section, Greene has stated a claim for breach of the implied warranty of merchantability
under the New Jersey UCC. Accordingly, the Court will DENY BMW’s motion to
dismiss Count I.
3.

NJCFA (Count IV)

Count IV is a claim for fraud under the NJCFA. In support of this claim, Greene
argues that BMW “engaged in the unlawful practice of deceiving, misrepresenting, and
concealing that fact [that] the Tires were problematic at the time of sale and lease of
Plaintiff and class member’s BMW vehicles.” Pl.’s Br. at 11 (citing FAC ¶¶ 45-51), ECF
No. 44. But Greene does not allege that BMW knew with certainty that the Tires would
fail. Accordingly, Greene has failed to state a claim under the NJCFA. See Alban v.
BMW of North America, LLC, No. 9-5398, 2010 WL 3636253, at *10 (D.N.J. Sept. 8,
2010) (“[U]nless 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.”); see also Glass v. BMW North America, LLC, No. 10-529, 2011 WL 6887721,
at *10 (D.N.J. Dec. 29, 2011) (“BMW NA did not know with certainty that its product
would fail; therefore, it did not violate the NJCFA by failing to inform its consumers of
the possibility of failure.”). The Court will DISMISS Count IV WITHOUT
PREJUDICE.
4.

Breach of Contract (Count VIII) and Breach of the Implied
Covenant of Good Faith and Fair Dealing (Count IX)

Count VIII is a claim for breach of contract. Count IX is a claim for breach of the
implied covenant of good faith and fair dealing. BMW moves to dismiss both counts,
arguing that BMW Financial—not BMW—has a contract with Greene. Greene maintains
that BMW can still be held liable under Counts VIII and IX because “BMW injured
Plaintiff’s right to receive the fruits of the lease agreement by failing to replace the
problematic Tires or allow Plaintiff to enjoy the Vehicle in the manner for which he
bargained.” Pl.’s Br. at 7. The Court is not persuaded by Greene’s arguments.
“To establish a breach of contract claim, a plaintiff has the burden to show that the
parties entered into a valid contract, that the defendant failed to perform his obligations
under the contract and that the plaintiff sustained damages as a result.” Murphy v.
Implicito, 392 N.J. Super. 245, 265 (App. Div. 2007). In New Jersey, every contract
contains an implied covenant of good faith and fair dealing. Kalogeras v. 239 Broad
Ave., L.L.C., 202 N.J. 349, 366 (2010). Without an express or an implied contract with
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the defendant, a plaintiff cannot state a claim for breach of the implied covenant of good
faith and fair dealing. See Wade v. Kessler Institute, 172 N.J. 327, 345 (2002) (“To the
extent plaintiff contends that a breach of the implied covenant may arise absent an
express or implied contract, that contention finds no support in our case law.”).
Greene leased his car from Paul Miller BMW, and Paul Miller BMW assigned the
lease to BMW Financial, not BMW. Because BMW is a not party to Greene’s lease,
Greene has not stated a claim for breach of contract. For the same reason, Greene has not
stated a claim for breach of the implied covenant of good faith and fair dealing.
Finally, even if Counts VIII and IX were directed at the 335i’s warranty, as
opposed to the 335i’s lease contract, Greene’s claims would still fail because BMW’s
warranty did not cover the Tires. See Greene I, 2012 WL 5986457, at *3. The Court will
DISMISS Counts VIII and IX WITH PREJUDICE.
B.

Bridgestone’s Motion to Dismiss
1.

Breach of Express Warranty (MMWA) (Count III)

Count III is a claim for breach of express warranty under the MMWA. To state a
claim for breach of express warranty under the MMWA, Greene must allege that
Bridgestone “failed to perform its obligation to ‘repair or replace’ a warranted defect.”
Greene II, 2012 WL 5986461, at *4 (internal citation and quotation omitted).
Bridgestone’s Warranty requires Tire owners to bring their Tires to “authorized
Bridgestone Firestone retailer[s]” for service. Bridgestone Warranty at 31, ECF No. 1-1.
In the Court’s prior opinion, the Court dismissed Greene’s breach of warranty claim
because Greene did not allege that he brought his Tires to an authorized Bridgestone
Firestone retailer. Id. As the FAC makes no attempt to cure this defect, the Court will
DISMISS Count III WITH PREJUDICE.
2.

Breach of Implied Warranty: New Jersey UCC (Count VII)

Count VII is a claim for breach of the implied warranty of merchantability under
New Jersey’s UCC. Bridgestone moves to dismiss both claims, arguing that it provided
Greene with safe and reliable tires. For the reasons stated in Section III.A.1, the Court
agrees. Accordingly, the Court will DENY the motion to dismiss Count VII against
Bridgestone Americas Tire Operations LLC. For the independent reasons stated in
Section III.B.6, the Court will GRANT the motion to dismiss Count VII against
Bridgestone Americas Tires, Inc. WITHOUT PREJUDICE.
3.

Breach of Implied Warranty: MMWA (Count II)

Count II is a claim for breach of the implied warranty of merchantability under the
MMWA. Bridgestone moves to dismiss Count II, arguing that Greene cannot state a
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claim under the MMWA because Greene did not give Bridgestone a chance to fix his
Tires. The Court agrees with Bridgestone’s argument.
“[T]he MMWA provides that no legal action can be brought under its private right
of action until the warrantor is given the opportunity to cure the violation.” McGarvey v.
Penske Automotive Group, No. 8-5610, 2011 WL 1325210, at *8 (D.N.J. March 31,
2011) (citing 15 U.S.C. § 2310(e)). Bridgestone’s Warranty provided that Tires would be
fixed at an authorized Bridgestone retailer for service. In the Court’s prior opinion, the
Court dismissed Count II because Greene did not allege that he brought his Tires to an
authorized Bridgestone retailer. Greene II, 2012 WL 5986461 at *5. As the FAC
similarly fails to allege that Greene brought his Tires to an authorized retailer, the Court
will DISMISS Count II WITH PREJUDICE.
4.

New Jersey Consumer Fraud Act (Count V)

Count V is a claim for fraudulent omissions under the NJCFA. Bridgestone
moves to dismiss Count V, arguing that Bridgestone cannot be liable for omission-based
fraud because Bridgestone did not have a fiduciary relationship or some other special
relationship with Greene. Greene argues that Bridgestone can be liable for omission
based fraud because Greene and Bridgestone had an “intrinsically fiduciary” relationship
that “necessarily call[s] for perfect good faith and full disclosure, without regard to any
particular intention of the parties.” Pl.’s Br. at 15. Greene is mistaken.
Greene leased a BMW 335i with Bridgestone Tires from Paul Miller BMW. The
purchase did not give rise to a fiduciary relationship, an intrinsically fiduciary
relationship, or a special relationship of any kind between Greene and Bridgestone. See
Coba v. Ford Motor Co., No. 12-1622, 2013 WL 244687, at *12 (D.N.J. Jan. 22, 2013)
(citing Harvey v. Nissan North Am., Inc., No. C-12016-04, 2005 WL 1252341, at *4 (Ch.
Div. Apr. 29, 2005). Accordingly, the Court will DISMISS Count V WITH
PREJUDICE. 2
5.

Breach of the Implied Covenant of Good Faith and Fair Dealing
(Count X)

Count X is a claim for breach of the implied covenant of good faith and fair
dealing. Here, Greene alleges that Bridgestone prevented Greene from replacing his
Tires, and also that Bridgestone crafted its warranty to ensure that it would never have to
service or replace the Tires. Greene’s wholly speculative allegations fail to state a claim
upon which relief can be granted.
The covenant of good faith and fair dealing requires that contracting parties
“refrain from doing anything which will have the effect of destroying or injuring the right
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Greene also argues that he has stated a claim for misrepresentation-based fraud under the
NJCFA. But his failure to identify any material misrepresentations on the part of Bridgestone
dooms any such claim.
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of the other party to receive the benefits of the contract.” Brunswick Hills Racquet Club,
Inc. v. Route 18 Shopping Ctr. Assoc., 182 N.J. 210, 225 (2005) (internal citation
omitted). To establish a breach of the covenant of good faith and fair dealing, a plaintiff
must show that “the party alleged to have acted in bad faith has engaged in some conduct
that denied the benefit of the bargain originally intended by the parties.” Id. (internal
citation omitted).
Greene argues that Bridgestone breached the implied covenant of good faith and
fair dealing because it “denied [Plaintiff] the ability to replace the Tires.” FAC ¶ 41.
Bridgestone’s warranty provided that Bridgestone tires would be serviced at “authorized
Bridgestone Firestone retailer[s].” Bridgestone Warranty at 31, ECF No. 1-1. Greene
did not bring his Tires to an authorized Bridgestone Firestone retailer. Greene’s failure to
follow instructions in the Bridgestone warranty does not establish a breach of the implied
covenant of good faith and fair dealing.
Greene also argues that Bridgestone breached the implied covenant of good faith
and fair dealing because Bridgestone “intentionally wrote the Warranty to limit [its]
obligations to the point that [it] would essentially never be responsible for reimbursing or
replacing the Tires, which [it] knew were problematic at the time of sale.” FAC ¶¶ 3839. As the FAC does not offer well-pled allegations that support this claim, Greene has
not stated a claim for breach of the implied covenant of good faith and fair dealing.
Accordingly, the Court will GRANT Bridgestone’s motion to dismiss Count X. As it is
conceivable that Greene could cure the deficiencies in Count X, the dismissal operates
WITHOUT PREJUDICE.
6.

Collective Allegations Against the Bridgestone Defendants

Finally, Bridgestone moves to dismiss the FAC because the FAC “fail[s] to
properly inform each defendant [Bridgestone Americas Tire Operations LLC and
Bridgestone Americas Inc.] of its allegedly wrongful conduct.” Bridgestone’s Br. at 25,
ECF No. 42-7. Here, Bridgestone notes that the FAC’s well-pled allegations appear to be
directed at Bridgestone Americas Tire Operations LLC, the company that was party to
the Bridgestone warranty, and not at Bridgestone Americas Inc., which the FAC
describes as a holding company. FAC ¶ 15. Because Greene’s allegations appear not to
concern Bridgestone Americas, Inc., the Court will DISMISS the claims against
Bridgestone Americas, Inc. WITHOUT PREJUDICE.
Bridgestone also argues that the FAC should be dismissed because it often fails to
distinguish between Bridgestone and BMW. The Court rejects this argument because it
finds that the FAC sufficiently distinguishes between the Defendants.
C.

Motions to Strike the Class Allegations

BMW and Bridgestone both move to strike the class allegations from the FAC
under Federal Rule of Civil Procedure 12(f). Given the early stage of the proceedings,
the Court finds that Defendants’ motions are premature. See, e.g., Ehrhart v. Synthes,
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No. 7-01237, 2007 WL 4591276, at *3 (D.N.J. Dec. 28, 2007); Andrews v. Home Depot
U.S.A., Inc., 2005 WL 1490474 (D.N.J. 2005); Myers v. Medquist, Inc., 2006 WL
3751210 (D.N.J. 2006). Defendants’ request to strike the class allegations is therefore
DENIED. Defendants may renew their arguments in response to a motion for class
certification.
IV.

CONCLUSION

The Court will GRANT BMW’s motion to dismiss IN PART, and DENY it IN
PART. Count IV is DISMISSED WITHOUT PREJUDICE, and Counts VIII and IX
are DISMISSED WITH PREJUDICE. Counts I and VI survive.
The Court will GRANT Bridgestone’s motion to dismiss IN PART, and DENY it
IN PART. Count X is DISMISSED WITHOUT PREJUDICE against both
Bridgestone Defendants, and Counts II, III, and V are DISMISSED WITH
PREJUDICE against both Bridgestone Defendants. Count VII is DISMISSED
WITHOUT PREJUDICE against Bridgestone Americas Inc. Count VII survives
against Bridgestone Americas Tire Operations LLC.
The Court will DENY BMW and Bridgestone’s motions to strike the class
allegations. The Court will provide Greene with 30 days in which to file a Second
Amended Complaint consistent with this opinion. An appropriate order follows.

/s/ William J. Martini
WILLIAM J. MARTINI, U.S.D.J.
Date: September 16, 2013

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