BEUCLER v. CPG INTERNATIONAL INC. et al

Filing 123

OPINION. Signed by Judge Madeline C. Arleo on 1/30/15. (dc, )

FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY

Civil Action No. 12-6627
In re: AZEK BUILDING PRODUCTS, INC.;
MARKETING AND SALES PRACTICES
LITIGATION

MDL Docket No. 2506
OPINION

ARLEO, UNITED STATES DISTRICT JUDGE
This matter comes before this Court on Defendant’s Motion to Dismiss Plaintiffs’
Consolidated Amended Complaint (“CAC”) for failure to state a claim, pursuant to Federal Rules
of Civil Procedure 9(b) and 12(b)(6) [Dkt. No. 95]. For the reasons set forth below, the motion is
GRANTED-IN-PART and DENIED-IN-PART.
I.

FACTS
In this case, sixteen named plaintiffs seek to bring a class-action lawsuit under the laws of

eleven states against Defendant AZEK Building Products, Inc. (“Defendant”). This dispute centers
on alleged defects in Defendant’s decking products rising from the materials used therein.
Specifically, Plaintiffs claim that polyvinyl chloride (PVC), from which Defendant’s decking
products are made, develops stains, scratches, discoloration, chalking, and streaking under normal
use.

Defendant, however, allegedly made written representations through “pamphlets and

information sheets” which assured prospective customers that its decking had superior aesthetic
durability to other decking alternatives, such as wood. (CAC ¶¶ 66, 74, 82, 92, 100, 108, 116, 131,
139, 147, 155, 162, 169). 1 Plaintiffs identify at least ten specific statements at issue which concern

1

Plaintiff Marino alleges he saw and reviewed the representations “on Defendant’s website at www.azek.com and in
AZEK decking brochures . . . .” (Id. ¶ 124). This does not alter the Court’s analysis.

1

AZEK decking. (See id. ¶¶ 5, 6, 8, 10, 12). Among these statements are: AZEK decking would
only “weather very slightly over time and will look luxurious for years to come;” “[B]y leaving
out the wood fillers AZEK deck materials are engineered to resist stains and mold;” Azek decking
is “Designed to last beautifully;” and “WOOD AND COMPOSITES ROT, STAIN AND FADE.
AZEK DOESN’T. AZEK exterior products look so beautiful and last so long why would you ever
use anything else? . . . AZEK deck is the embodiment of durability. At the end of the day all you
have to do is enjoy it.” (Id. ¶ 6(b)-(c), (e), (j)) (capitalization in original).
Plaintiffs also claim Defendant had knowledge of the disputed defects when it made these
statements and covered up those defects when selling the product. Specifically, they claim that
Defendant held itself out as having “over 25 years of experience in cellular PVC manufacturing,”
and touted itself as an expert in the manufacture and use of PVC materials. (Id. ¶¶ 6, 10). Plaintiffs
further allege that, as an expert, Defendant knew or should have known that its PVC decking would
undergo various degradations, but made representations contrary to that knowledge. (Id. ¶¶ 11,
12, 17). The scientific and industrial community also knew that PVC was highly susceptible to
degradation if it was exposed to sunlight and heat. (Id. ¶ 11, 19).
Each Plaintiff provides a date range—for most Plaintiffs a specific month, but for some a
range of several months—within which he or she bought the AZEK decking. (Id. ¶¶ 65, 73, 81,
91, 99, 107, 115, 123, 130, 138, 146, 154, 161, 168). Each Plaintiff also alleges that, before
purchasing the product, he or she reviewed and relied on the alleged misrepresentations made by
Defendant, including the misrepresentations alleged in paragraphs 5, 6, 8, 10, and 12 of the CAC.
(Id. ¶¶ 66, 74, 82, 92, 100, 108, 116, 124, 131, 139, 147, 155, 162, 169).
Defendant provided a Lifetime Limited Warranty which accompanied all AZEK decking.
The Lifetime Limited Warranty warrants AZEK deck components

2

to be free from defects in material and workmanship that (1) occur as a direct result
of the manufacturing process, (ii) occur under normal use and service, (iii) occur
during the warranty period and (iv) result in blistering, peeling, flaking, cracking,
splitting, cupping, rotting or structural defects from termites or fungal decay.
(Id., Ex. A). The Lifetime Limited Warranty also contains a disclaimer which states
THE WARRANTY STATEMENTS CONTAINED IN THIS LIFETIME LIMITED
WARRANTY SET FORTH THE ONLY WARRANTIES EXTENDED BY AZEK AND
ARE IN LIEU OF ALL OTHER CONDITIONS AND WARRANTIES, EITHER
EXPRESSED OR IMPLIED, INCLUDING WITHOUT LIMITATION, THE IMPLIED
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR
PURPOSE. THE PROVISIONS OF THIS WARRANTY SHALL CONSTITUTE THE
ENTIRE LIABILITY OF AZEK AND THE PURCHASER/PROPERTY OWNER'S
EXCLUSIVE REMEDY FOR BREACH OF THIS WARRANTY. IN PARTICULAR, IN
NO EVENT SHALL AZEK BE LIABLE TO THE PURCHASER/PROPERTY OWNER
FOR SPECIAL, INCIDENTAL, INDIRECT, CONSEQUENTIAL, OR PUNITIVE
DAMAGES ARISING FROM THE USE OF THE AZEK PRODUCTS OR THE
BREACH OF ANY EXPRESS OR IMPLIED WARRANTY.

(Id.) (capitalization in original). The Lifetime Limited Warranty requires that the manufacturer be
given notice by the consumer of any defect and an opportunity to inspect defective decking. (Id.).
Various Plaintiffs allege they provided notice of the alleged defects to Defendant and Defendant
refused to provide coverage under the Lifetime Limited Warranty, claiming it covered only defects
in “performance,” not aesthetics. (Id. ¶ 19).
Plaintiffs’ claims fall in five categories: breach of express warranty, breach of the implied
warranty of merchantability, violation of various state consumer fraud statutes, breach of duty of
good faith and fair dealing, and a declaratory judgment claim. Defendant’s moves to dismiss each
claim for various general and specific deficiencies. The Court will address these in turn.
II.

STANDARD OF REVIEW
In considering a Rule 12(b)(6) motion to dismiss on the pleadings, the court accepts as true

all of the facts in the complaint and draws all reasonable inferences in favor of the plaintiff.
Phillips v. Cnty. of Allegheny, 515 F.3d 224, 231 (3d Cir. 2008). Moreover, dismissal is

3

inappropriate even where “it appears unlikely that the plaintiff can prove those facts or will
ultimately prevail on the merits.” Id.
The facts alleged, however, must be “more than labels and conclusions, and a formulaic
recitation of the elements of a cause of action will not do.” Bell Atlantic Corp. v. Twombly, 550
U.S. 544, 555 (2007). The allegations in the complaint “must be enough to raise a right to relief
above the speculative level.” Id. Accordingly, a complaint will survive a motion to dismiss if it
provides a sufficient factual basis such that it states a facially plausible claim for relief. Ashcroft
v. Iqbal, 556 U.S. 662, 678 (2009).
For allegations sounding in fraud, Rule 9(b) imposes a heightened pleading standard:
namely, “a party must state with particularity the circumstances constituting fraud or mistake,” but
“[m]alice, intent, knowledge, and other conditions of a person’s mind may be alleged generally.”
Fed. R. Civ. P. 9(b). The circumstances of the fraud must be stated with sufficient particularity to
put a defendant on notice of the “precise misconduct with which [it is] charged.” Lum v. Bank of
America, 361 F.3d 217, 224 (3d Cir. 2004). “To satisfy this standard, the plaintiff must plead or
allege the date, time and place of the alleged fraud or otherwise inject precision or some measure
of substantiation into a fraud allegation.” Frederico v. Home Depot, 507 F.3d 188, 200 (3d Cir.
2007).
III.

LEGAL ANALYSIS
A. Miscellaneous Dismissals
As a preliminary matter, the Court grants Plaintiff Esposito’s request to dismiss his express

and implied warranty claims. (See Dkt. No. 103, Pls.’ Opp. at 15 n.29). The Court also dismisses
Plaintiff Solo’s implied warranty claim, as Plaintiffs do not contest that his allegations fail to

4

indicate manifestation of the defect within one year. 2 See Tietsworth v. Sears, 720 F. Supp. 2d
1123, 1142-43 (N.D. Cal. 2010) (dismissing implied warranty claim premised on a latent defect in
a washing machine because plaintiff failed to plead that the machine “was unfit for its ordinary
purpose of cleaning clothes within the one-year warranty period”).
B. The Warranty Claims (Counts I-II)
1. Express Warranty
Plaintiffs present two theories under their cause of action for breach of express warranty.
First, they allege that the Lifetime Limited Warranty provided by Defendant was breached by
Defendant’s unwillingness to provide relief for aesthetic defects.

Second, they allege that

Defendant made several specific, written statements concerning the aesthetic longevity of the
decking which created express warranties and which were contrary to the inherent properties of
PVC, the material used to make the decking.
“Under New Jersey law, in order 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.” Snyder v. Farnam Cos., Inc., 792 F. Supp. 2d 712, 721 (D.N.J. 2011).
i. Breach of the Lifetime Limited Warranty
Defendant correctly argues that Plaintiffs have failed adequately to plead breach of the
Lifetime Limited Warranty. The Lifetime Limited Warranty warranted AZEK deck components
to be free from defects in material and workmanship that (1) occur as a direct result
of the manufacturing process, (ii) occur under normal use and service, (iii) occur
during the warranty period and (iv) result in blistering, peeling, flaking, cracking,
splitting, cupping, rotting or structural defects from termites or fungal decay.
2

Plaintiffs ascribe this to a typo with regard to the dates Plaintiff Solo noticed the defect. The dismissal is without
prejudice, so Plaintiffs may move to amend to include adequate allegations for Plaintiff Solo.

5

(CAC, Ex. A). In order for the Lifetime Limited Warranty to apply, on its terms, any defect must
result in structural or physical damage as listed in part (iv). Plaintiffs’ CAC alleges “discoloring,
fading, chalking, and degrading,” (id. ¶ 18), and “scratch[ing]” and “stain[ing].” (Id. ¶ 20).
Nothing in Plaintiffs’ CAC alleges that any Plaintiff’s deck suffered from “blistering, peeling,
flaking, cracking, splitting, cupping, rotting or structural defects from termites or fungal decay.”
(Id., Ex. A). Nor do Plaintiffs anywhere allege that the aesthetic defects fall under the actual
language found in part (iv) of the Lifetime Limited Warranty. Therefore, Plaintiffs have not
alleged facts sufficient to form a dispute as to whether the promises contained in the Lifetime
Limited Warranty were breached by alleged defects in AZEK decking. This Court dismisses
Plaintiffs’ claim of breach of express warranty under the Lifetime Limited Warranty without
prejudice to Plaintiffs’ right to replead this claim consistent with this opinion.
ii. Breach of Express Warranty Based Upon Misrepresentations
Plaintiffs’ second express warranty theory identifies various written statements made by
Defendant and argues that these statements create an express warranty. Defendant replies that the
allegations are insufficiently specific with regard to when and where the statements were made
and which ones influenced which Plaintiffs. 3
When deciding whether an express warranty is created by statements made to a buyer, the
Court examines whether a promise is made by a seller to a buyer which relates to a good and which
then becomes part of the basis of the bargain. Liberty Lincoln-Mercury, Inc., 171 F.3d 818, 824
(3d Cir. 1999). “A statement can amount to warranty . . . if it could be fairly understood . . . to
constitute an affirmation or representation that the [product] possesse[s] a certain quality or

3

Defendant also argues that any alleged misrepresentations were mere puffery. This is a fact question, and so cannot
defeat Plaintiff’s express warranty claims at this stage. See Union Ink Co. v. AT&T Corp., 352 N.J. Super. 617, 645
(App. Div. 2002) (stating that puffery is ordinarily a question of fact).

6

capacity relating to future performance.” Avram v. Samsung Elecs. Am., Inc., No. 11-6973, 2013
WL 3654090, at *8 (D.N.J. July 11, 2013). “[W]hether a given statement constitutes an express
warranty is normally a question of fact for the jury.” Dzielak v. Whirlpool Corp., 26 F. Supp. 3d
304, 324 (D.N.J. 2014); accord Snyder, 792 F. Supp. 2d at 722.
Representations are presumed to be part of the basis of the bargain once the buyer becomes
aware of the affirmations, absent clear affirmative proof that the buyer knew the promise or fact
was untrue. See Liberty Lincoln-Mercury, 171 F.3d at 825; Viking Yacht Co. v. Composites One
LLC, 496 F. Supp. 2d 462, 469 (D.N.J. 2007). Indeed, affirmations of fact by a seller are presumed
to be part of the basis of the bargain unless the seller shows by clear affirmative proof that the
buyer knew the affirmation was false. Cipollone v. Liggett Grp., Inc., 893 F.2d 541, 568 (3d Cir.
1990), overruled on other grounds, 505 U.S. 504 (1992).
Defendant argues that the CAC insufficiently identifies the representations at issue because
Plaintiffs do not identify where the statements were made, which ones each Plaintiff saw, when
each Plaintiff saw them, and which one(s) influenced each Plaintiff’s purchasing decision. The
Court disagrees.
Defendant cites In re Clorox Consumer Litig., 894 F. Supp. 2d 1224, 1235 (N.D. Cal.
2012), for support, but the facts in that case are inapposite. In Clorox, the plaintiffs merely referred
to “product labels” without providing any allegations concerning what the labels said. Id. at 1235.
In requiring specific allegations of facts sufficient to satisfy the pleading stage, some courts require
plaintiffs to mention the particular promise or description that allegedly gave rise to an express
warranty. See Heisner ex rel. Heisner v. Genzyme Corp., No. 08-593, 2008 WL 2940811, at *89 (N.D. Ill. July 25, 2008); see also Simmons v. Stryker Corp., No. 08-3451, 2008 WL 4936982,
at *2 (D.N.J. Nov. 17, 2008). Plaintiffs here have done so.

7

Plaintiffs allege the precise language of ten specific representations made by Defendant on
written brochures and pamphlets which were “uniformly represented” to consumers. (CAC ¶ 6).
Plaintiffs’ allegations contain sufficiently particular statements concerning AZEK decking to
identify them. (See id. ¶¶ 5, 6, 8, 10, 12). For example, one such alleged representation was that
“WOOD AND COMPOSITES ROT, STAIN AND FADE. AZEK DOESN’T.” (Id. ¶ 6(j))
(capitalization in original).
Further, Plaintiffs identified which statements influenced their decision—each statement
identified by Plaintiffs in paragraphs 5, 6, 8, 10, and 12. (Id. ¶¶ 66, 74, 82, 92, 100, 108, 116, 124,
131, 139, 147, 155, 162, 169). The allegations’ breadth alone does not eliminate their status as
factual allegations. Each Plaintiff also provides a date range of a few months in which he or she
bought the AZEK decking. (Id. ¶¶ 65, 73, 81, 91, 99, 107, 115, 123, 130, 138, 146, 154, 161, 168).
Because Plaintiffs have alleged specific, written misrepresentations were made by Defendant and
were available to and relied upon by Plaintiffs before purchasing AZEK decking within a date
range of a few months, Plaintiffs have adequately pled breach of express warranty. See Fleisher
v. Fiber Composites, LLC, No. 12-1326, 2012 WL 5381381, at *4 (E.D. Pa. Nov. 2, 2013)
(representations in promotional materials regarding quality and characteristics of decking may be
viewed as express warranties). The Court therefore finds that Plaintiffs have stated a claim for
breach of express warranty as to the misrepresentations attributed to Defendant.
2. Implied Warranty of Merchantability
Defendant moves to dismiss the implied warranty count as to all Plaintiffs, arguing that the
essential function of AZEK decking is to serve as an outdoor structure, so any alleged aesthetic
defects cannot be a breach of the implied warranty of merchantability. Plaintiffs argue that the
essential function of AZEK decking includes aesthetic improvement of property. This is a

8

quintessential fact question. Dismissal at this stage would be premature. Therefore, the Court
finds Plaintiffs have stated a claim for breach of the implied warranty of merchantability.
3. Effectiveness of the Lifetime Limited Warranty’s Disclaimer
Defendant moves to dismiss both the implied and express warranty causes of action as
disclaimed by the Lifetime Limited Warranty. (See CAC, Ex. A). On its terms, the Lifetime
Limited Warranty disclaims both Plaintiffs’ express warranty cause of action premised on alleged
prior misrepresentations in product brochures and Plaintiffs’ implied warranty cause of action
premised on the implied warranty of merchantability. (Id.).
Plaintiffs argue that the Lifetime Limited Warranty, to the extent it includes the disclaimer,
is unconscionable. Defendant replies that Plaintiffs have not alleged unconscionability and the
CAC’s allegations concerning Defendant’s purported knowledge are conclusory and unsupported
by statements of fact. The Court disagrees.
The question of unconscionability is one of law for the court. N.J. Stat. Ann. § 12A:2302(1). Unconscionability is determined on a case-by-case basis considering procedural and
substantive unconscionability—unfairness in the contract’s formation and excessively
disproportionate terms, respectively. Sitogum Holdings, Inc. v. Ropes, 352 N.J. Super. 555, 564
(Ch. Div. 2002). “Evidence of the ‘knowledge of [a] stronger party that the weaker party will be
unable to receive substantial benefits from the contract’—or any related showing that ‘the
transaction involved elements of deception’—should in most cases ‘contribute to a finding of
unconscionability in the bargaining process.’” Duffy v. Samsung Electronics Am., Inc., No. 065259, 2007 WL 703197, at *5 (D.N.J. Mar. 2, 2007) (citing Restatement (Second) of Contracts §
208 comment d (1981)). Unconscionability “should but rarely be determined on the bare-bones
pleadings.” Carlson v. Gen. Motors Corp., 883 F.2d 287, 292 (4th Cir. 1989).

9

Plaintiffs did not use the word “unconscionable” in their CAC. Nonetheless, Plaintiffs
made all the predicate allegations sufficient to show unconscionability, and argue it now.
Specifically, Plaintiffs allege that:
Plaintiffs did not negotiate or bargain for the terms of the express warranty
provisions and any purported limitations contained therein. Upon information and
belief, the distributors, contractor, and other customers of Defendant did not and
could not negotiate or bargain for the terms of the express warranty provisions and
any purported limitations contained therein. Instead, Defendant stood in a position
of domination and control over the terms.
Under these circumstances, Defendant’s purported exclusions or limitations of
liability and remedies are invalid because they fail of their essential purpose in
providing Plaintiffs and Class members the benefit of the bargain i.e., defect-free
decking materials.
(CAC ¶¶ 205-06). Plaintiffs further allege specific facts which, when taken as true, support
Plaintiffs’ claims that Defendant was an expert in PVC with knowledge of its defects, but made
misrepresentations directly contrary to those defects when selling the product. (See id. ¶¶ 6, 10,
11, 12, 17). As further proof of Defendant’s knowledge of the falsity of its statements, Plaintiffs
allege that the scientific and industrial community also knew that PVC was likely to degrade if it
was exposed to sunlight and heat. (Id. ¶ 11, 19). Finally, as mentioned above, Plaintiffs allege
that “Defendant stood in a position of domination and control over the terms” and denied Plaintiffs
“the benefit of the bargain i.e., defect-free decking materials.” (Id. ¶¶ 205-06).
The Court has not had the benefit of full discovery to provide insight into “the general
commercial background and the commercial needs of the particular trade,” N.J. Stat. Ann. §
12A:2-302, Comment, and to determine the scope of procedural and substantive unconscionability.
The Court therefore declines to rule that Defendant’s disclaimer is not unconscionable at the
pleading stage. 4 As a result, neither remaining warranty claim can be cast out as effectively

4

This dispute is more form than substance. Even if the allegations in the CAC did not sufficiently support a claim of
unconscionability, this could simply be cured through amendment pursuant to Rule 15(a). See Fed. R. Civ. P. 15(a).

10

disclaimed at this stage of the case. 5 Therefore, the Court denies Defendant’s motion to dismiss
all of Plaintiffs’ express warranty and implied warranty claims based upon the disclaimer
contained in the Lifetime Limited Warranty.
4. Privity for Express and Implied Warranty Claims in Various States
Defendant argues that the express warranty claims of Maryland Plaintiff Murdoch,
Connecticut Plaintiff Wayne, and New York Plaintiff Fennell and the implied warranty claims of
Florida Plaintiffs Dalpiaz and Edmonds, Michigan Plaintiff Derwich, and New York Plaintiff
Fennell fail as a matter of law because these Plaintiffs are not in privity with Defendant. Plaintiffs
reply that, in these states, privity is not required for various reasons and, in any event, Plaintiffs
adequately allege privity, a fact question not appropriate for dismissal at the pleading stage.
The fact-intensive nature of privity frequently renders dismissal at the pleading stage
premature. See Dewey v. Volkswagen, AG, 558 F. Supp. 2d 505, 524 n.17 (D.N.J. 2008) (denying
motion to dismiss New York warranty claims because privity “involves issues of fact not
appropriate for resolution at the motion to dismiss stage”). Lady Di Fishing Team, LLC v.
Brunswick Corp., No. 3:07-402-J-33, 2007 WL 3202715 (M.D. Fla. Oct. 29, 2007), is instructive.

5

Even if the Court found that the disclaimer was not unconscionable, an additional fact question prevents dismissal
of the express warranty claim due to disclaimer: namely, whether the disclaimer is inoperable as “unreasonably
inconsistent” with express warranties made. To be effective, a disclaimer must be (1) clear and conspicuous and (2)
not “‘unreasonably inconsistent’ with the express warranties given.” Viking Yacht Co. v. Composites One LLC, 496
F. Supp. 2d 462, 470 (D.N.J. 2007) on reconsideration in part, No. 05-538, 2007 WL 2746713 (D.N.J. Sept. 18, 2007)
and aff'd sub nom. Viking Yacht Co. v. Composite One LLC, 385 F. App'x 195 (3d Cir. 2010). The conspicuity
requirement is uncontested here. If written representations create express warranties, inconsistency with such
representations may be sufficient to render the disclaimer inoperable. See id. (holding that representations in a product
bulletin created an express warranty inconsistent with disclaimer contained therein, which was thereby inoperable);
see also Dzielak v. Whirlpool Corp., No. 12-0089, 2014 WL 2758746, at *5 (D.N.J. June 16, 2014) (finding a
disclaimer in a limited warranty not to be a conspicuous disclaimer of the express warranty created by the Energy Star
logo). Plaintiffs’ allegations contain facts which, if true, may render the Limited Lifetime Warranty disclaimer
unreasonably inconsistent with the express warranties potentially created by Defendant’s statements. Thus, the Court
cannot dismiss the express warranty claim, even if it found the disclaimer to be not unconscionable.

11

In that case, the plaintiff alleged only that it had purchased a yacht from the manufacturer’s
“representative within the state of Florida” and then negotiated the manufacture, purchase and sale
agreement, delivery, and subsequent repairs of the yacht with the manufacturer. Id. at 5. Those
factual allegations were sufficient to allege privity, and so survived a motion to dismiss. Id. at 6.
Here, Plaintiffs have alleged sufficient facts to raise a question of fact concerning whether
Plaintiffs and Defendant are in privity. Plaintiffs alleged that they “were in privity with Defendant
because (1) they purchased their AZEK PVC decking from an actual or apparent agent of
Defendant, and (2) have a contractual relationship stemming from Defendant’s lifetime warranty
provided in conjunction with the purchase of the AZEK PVC decking.” (CAC ¶ 219). The CAC
includes allegations that Defendant’s Lifetime Limited Warranty called for a continuing
relationship with Defendant, including communications, repair, and even inspections in the event
of defective products. (Id. ¶ 19, Ex. A). Plaintiffs also allege that AZEK decking was uniformly
marketed and that Defendants coordinated such marketing “[i]n conjunction with each sale and
through various forms of media . . . .” (Id. ¶¶ 5, 49). These allegations are enough to raise a
question of fact as to whether the distributors were actual or apparent agents of Defendant or
whether Defendant otherwise established a privity relationship with Plaintiffs. The Court therefore
denies Defendant’s motion to dismiss as to the afore-mentioned Plaintiffs for failure adequately to
allege privity.
C. The Implied Covenant of Good Faith and Fair Dealing (Count III)
Defendant moves to dismiss Plaintiffs’ claims under the implied covenant of good faith
and fair dealing as to three subsets of Plaintiffs. The Court is not persuaded by Defendant’s
arguments here for the reasons below.
1. Freestanding Cause of Action in Florida, Maryland, Michigan, and
Pennsylvania
12

Defendant moves to dismiss the cause of action for breach of the implied covenant of good
faith and fair dealing as to Plaintiffs Dalpiaz, Edmonds, Murdoch, Derwich, and Berkowitz
because it is not recognized as a freestanding cause of action in their states: Florida, Maryland,
Michigan, and Pennsylvania. Plaintiffs argue that a full factual record is required to support a
choice of law analysis as to what law will control concerning the implied covenant of good faith
and fair dealing claims. As Plaintiffs contest which law applies to this cause of action, the Court
applies choice of law principles to this dispute.
Since Plaintiffs’ claims are based on state law, the Court will apply New Jersey’s choice
of law rules, “as a federal court sitting in diversity must apply the forum state’s choice of law
rules.” Snyder v. Farnam Cos., Inc., 792 F. Supp. 2d 712, 717 (D.N.J. 2011) (citing Klaxon Co.
v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496 (1941)). New Jersey uses a two-step inquiry: first,
determine whether an actual conflict exists; if one does, then determine who has the “most
significant relationship” to the claim. P.V. ex rel. T.V. v. Camp Jaycee, 197 N.J. 132, 143-144
(2008).
Here, there appears to be an actual conflict of laws. Defendant admits that breach of the
implied covenant of good faith and fair dealing is a cause of action under New Jersey law. See
Barows v. Chase Manhattan Mortg. Corp., 465 F. Supp. 2d 347, 365 (D.N.J. 2006) (identifying
circumstances under which breach of implied covenant of good faith and fair dealing provides an
independent cause of action). Plaintiffs provide no argument contesting Defendant’s cases which
indicate that breach of the implied covenant of good faith and fair dealing is not an independent
cause of action under Florida, Maryland, Michigan, and Pennsylvania law. Instead, Plaintiffs
argue that it is premature to conduct a complete choice of law analysis, as the Court does not have
a developed factual record.

13

The Court agrees with Plaintiffs. The record does not contain significant information
concerning the “most significant relationship” here—including the scope and locus of continued
dealings between Plaintiffs and Defendant, whether the sales contracts had choice of law
provisions, or whether other facts militate in favor of applying a particular state’s law. In the
absence of a full record, the Court declines to resolve this issue at the pleading stage. See Harper
v. LG Elecs. USA, Inc., 595 F. Supp. 2d 486, 491 (D.N.J. 2009) (postponing the choice of law
analysis past the pleading stage).
2. Deficient Pleadings Under New Jersey Law
Defendant further argues that even in states where breach of implied covenant of good faith
and fair dealing is recognized, such as New Jersey, Plaintiffs have failed to plead the elements
required. The Court rejects this argument as facially inadequate. The primary example to which
Defendant points—claiming that “Plaintiffs’ claim is not premised on extra-contractual dealings”
(Dkt. No. 95, Def’s Mot. to Dismiss at 27-28)—is obviously wrong. Plaintiffs allege intentional
extra-contractual misrepresentations on which they relied in purchasing of AZEK decking. See
supra at 1-2.
3. Adequate Alternate Means of Redress
Defendant also include in a footnote a request to dismiss the claims alleging breach of the
covenant of good faith and fair dealing by Massachusetts Plaintiffs Beucler and Esposito,
California Plaintiff Solo, New York Plaintiff Fennell, and Virginia Plaintiff Rule because their
other substantive counts are adequate means of vindicating Defendant’s alleged wrongdoing.
Plaintiffs’ allegations go beyond mere breach of contract, covering intentional, bad faith
sales of a product that Defendant knew to be defective, providing a warranty it did not intend to
honor, and making false representations about the product. This is enough to differentiate the

14

claim from a mere breach of contract action, at least at the pleading stage. Also, pleading in the
alternative is permissible in New Jersey, so long as the alternative claims meet the pleading
standards. Reina v. Twp. of Union, No. 13-659, 2013 WL 3864051, at *1 (D.N.J. July 24, 2013).
Plaintiffs dispute which states’ law applies, and the Court will not rule on that issue at this stage
due to the undeveloped state of the record. See supra at 13-14. The Court therefore does not
dismiss the count for breach of the implied covenant of good faith and fair dealing alleged by
Plaintiffs Beucler, Esposito, Solo, Fennell, and Rule.
D. The Consumer Protection Statutory Claims (Counts IV-XIV)
1. Sufficiency of Plaintiffs’ Allegations Under Rule 9(b)
Defendant moves to dismiss Plaintiffs’ consumer fraud claims, pled under various state
consumer protection laws, for failing to satisfy Rule 9(b)’s heightened pleading standard for causes
of action sounding in fraud, for providing only uniform and formulaic contentions, and for failing
to plead any facts supporting reliance or causation. Plaintiffs contend that they have pled with
sufficient particularity to satisfy Rule 9(b).
Here, Plaintiffs provide sufficient specifics to provide substantiation to their fraud
allegations and to put Defendant on notice of what misconduct is at issue. They identify specific
written misrepresentations made by Defendant through “pamphlets and information sheets.”
(CAC ¶¶ 66, 74, 82, 92, 100, 108, 116, 124, 131, 139, 147, 155, 162, 169). Each Plaintiff also
contends he or she reviewed the misrepresentations before purchasing AZEK decking and relied
on those misrepresentations. (Id.). Each Plaintiff provides date ranges, for most a specific month,
within which he or she purchased AZEK decking. (Id. ¶¶ 65, 73, 81, 91, 99, 107, 115, 123, 130,
138, 146, 154, 161, 168). The precise language of ten written misrepresentations at issue is quoted
in the CAC. (Id. ¶ 6). For example, paragraph 6(j) reads “WOOD AND COMPOSITES ROT,

15

STAIN AND FADE. AZEK DOESN’T. AZEK exterior products look so beautiful and last so long
why would you ever use anything else? . . . AZEK deck is the embodiment of durability. At the
end of the day all you have to do is enjoy it.” (Id. ¶ 6(j)) (capitalization in original). These are not
unidentifiable statements or the vague allegations of a frivolous claim.
Defendant’s reliance on Schmidt v. Ford Motor Co., 972 F. Supp. 2d 712 (E.D. Pa. 2013),
is misplaced. Schmidt concerned plaintiffs who alleged that they were incorrectly informed that
their vehicles were not covered under warranty for defects which caused various engine problems,
including loss of power and stalling. Id. at 715. The allegations in Schmidt were based on vaguely
described oral statements or omissions. Id. at 715-16. The Schmidt court ultimately dismissed the
count because nothing “place[d] defendant on notice of the precise misconduct with which it is
charged.” Id. at 721 (citation omitted). Here, Plaintiffs identify and specifically quote the written
fraudulent statements and provide a timeframe—usually a particular month, but occasionally a few
months—in which those statements were read and relied upon by each Plaintiff.

Such

identification provides Defendant with sufficient notice of the specific misconduct at issue.
Defendant also claims that Plaintiffs have insufficiently pled reliance, citing to inter alia,
Dewey v. Volkswagen AG, 558 F. Supp. 2d 505 (D.N.J. 2008). In Dewey, the plaintiffs’
allegations of misrepresentations made on defendant’s website and in the owner’s manual were
dismissed because “Plaintiffs [did] not allege when the statements were made or at what point—
if ever—each Plaintiff was exposed to one or more of the statements.” Id. at 526. Plaintiffs here
have alleged much more: (1) specific misrepresentations (2) made in marketing brochures and
pamphlets (3) that Plaintiffs each reviewed and relied upon when buying AZEK decking within a
certain date range.

16

Unlike in Dewey, Plaintiffs alleged that they reviewed and relied upon the
misrepresentations identified in paragraphs 5, 6, 8, 10, and 12 of the CAC before purchasing AZEK
decking. (Id. ¶¶ 66, 74, 82, 92, 100, 108, 116, 124, 131, 139, 147, 155, 162, 169). The specific
misrepresentations provided in the CAC can also reasonably be inferred to induce reliance, unlike
the alleged misrepresentations in Dewey. (See, e.g., CAC ¶ 6(c) (“[B]y leaving out the wood
fillers AZEK deck materials are engineered to resist stains and mold.”); id. ¶ 6(j)); cf. Dewey, 558
F. Supp. 2d at 527 n.20 (D.N.J. 2008) (questioning why all plaintiffs relied on a 2002 Passat
owner’s manual when only one plaintiff owned a 2002 Passat). The statements were allegedly
made as “representations and marketing . . . in pamphlets and information sheets . . . .” (Id. ¶¶ 66,
74, 82, 92, 100, 108, 116, 124, 131, 139, 147, 155, 162, 169). Presumably AZEK marketers expect
their materials to induce purchases; it is unsurprising that Plaintiffs now allege they relied on
marketing statements before purchasing.
Plaintiffs have injected sufficient particularity into their fraud allegations to put Defendant
on notice as to the specific misconduct at issue. Rule 9(b) requires no more. Defendant’s motion
to dismiss is denied as it relates to the sufficiency of Plaintiffs’ state consumer protection claims
under Rule 9(b).
2. Sufficiency of Individual Consumer Protection Statutory Claims
Defendant also moves to dismiss various Plaintiffs’ claims under their states’ consumer
protection statutes for a variety of reasons. The Court considers these issues in sequence.
i. Pennsylvania’s Economic Loss Doctrine
Defendant moves to dismiss Pennsylvania Plaintiff Berkowitz’s claim under the
Pennsylvania’s Unfair Trade Practices and Consumer Protection Law (“PUTPCPL”) as barred
under the economic loss doctrine, arguing that the Third Circuit’s decision in Werwinski v. Ford

17

Motor Co., 286 F.3d 661 (3d Cir. 2002), precludes usage of the PUTPCPL to redress mere
economic loss. 6 Plaintiffs reply that the Werwinski decision was faulty, many courts have declined
to follow its interpretation of how the Pennsylvania Supreme Court would rule, and this Court
should similarly dissent.
Plaintiffs’ concerns about Werwinski are beside the point. Plaintiffs do not cite any Third
Circuit or Pennsylvania Supreme Court decision overturning Werwinski. It is a well-established
principle of federalism that federal district courts are bound by their controlling circuit court’s
decisions concerning how a state supreme court would rule, unless and until the state supreme
court rules differently. See Gadley v. Ellis, No. 3:13-17, 2014 WL 3696209, at *5 (W.D. Pa. July
23, 2014) (“a district court ‘is bound by a Third Circuit decision where that court has predicted
how the Pennsylvania Supreme Court will decide an issue.’”) (citation omitted); Tubman v. USAA
Cas. Ins. Co., 943 F. Supp. 2d 525, 531 (E.D. Pa. 2013) (“Despite disagreement following
Werwinski, it remains the controlling law unless revisited by the Pennsylvania Supreme Court.”);
Wulf v. Bank of Am., N.A., 798 F. Supp. 2d 586, 595-96 (E.D. Pa. 2011) (“Despite several cases
questioning Werwinski, none have come from the Pennsylvania Supreme Court or the Third
Circuit. Therefore, this court is bound by Werwinski.”); but see O'Keefe v. Mercedes–Benz USA,
LLC, 214 F.R.D. 266, 275-78 (E.D. Pa. 2003) (critiquing Werwinski and declining to adopt the
Third Circuit's reasoning).
The Third Circuit continues to follow and apply Werwinski. See Sunshine v. Reassure
Am. Life Ins. Co., 515 F. App’x. 140, 144-45 (3d Cir. 2013). Thus, this Court is bound by the
Third Circuit’s holding in Werwinski that the economic loss doctrine bars claims under the

6

Economic loss concerns primarily defects in products leading to loss of value of that product, as opposed to defects
in products which cause foreseeable harm to other property or persons, which sounds in tort. See E. River S.S. Corp.
v. Transamerica Delaval, Inc., 476 U.S. 858, 871 (1986). Plaintiffs do not contest that their claim under the PUTPCPL
concerns solely economic loss.

18

PUTPCPL for mere economic loss. As such, Plaintiff Berkowitz’s claim under the PUTPCPL is
dismissed without prejudice to Plaintiffs’ right to replead this cause of action consistent with this
opinion.
ii. Massachusetts’ Demand Letter Requirements
Defendant argues that the claims of Massachusetts Plaintiffs Marino and Merriam under
Massachusetts General Laws, Chapter 93A, Section 9 should be dismissed for failure to comply
with Massachusetts’ demand letter requirements. To prosecute claims under this statute, the
Plaintiffs must first send a written demand for relief “reasonably describing the unfair or deceptive
act or practice relied upon and the injury suffered . . . .” Mass. Gen. L. ch. 93A § 9(3). Compliance
with the demand requirement must be pleaded in the complaint. Rodi v. S. New England School
of Law, 389 F.3d 5, 19 (1st Cir. 2004).
Plaintiffs provide two replies. First, they argue that Massachusetts’ pre-filing notice
requirement does not apply to a prospective respondent that does not maintain a place of business
or keep assets within the Commonwealth. See Mass. Gen. L. ch. 93A § 9(3); Burnham v. Mark
IV Homes, Inc., 441 N.E.2d 1027, 1033 n.13 (Mass. 1982). While accurate, this argument is
irrelevant. Plaintiffs have not alleged in the CAC that Defendant does not have a place of business
or keep assets within Massachusetts. 7 Those facts must be alleged in order to rely upon the
exception to the demand letter requirement. Sumner v. Mortgage Elec. Registration Sys., Inc., No.
11-11910, 2012 WL 3059429, at *6 (D. Mass. July 26, 2012) (Plaintiffs “must allege facts that the
Defendants do not maintain a place of business or keep assets in Massachusetts to show the
exception to the demand letter requirement applies to plead a Chapter 93A claim.”).

7

Defendant also represents that it does, in fact, keep assets in Massachusetts. (Dkt. No. 106, Def’s. Reply at 14 n.20).

19

Second, Plaintiffs argue that a demand letter is unnecessary when another claim has been
filed in district court providing notice of the substance of the dispute, citing Latino v. Ford Motor
Co., 403 Mass. 247, 250 (Mass. 1988), for support. 8 But Latino held that a “finding by an arbitrator
that the purchase price must be refunded or the vehicle replaced serves as the statutorily designated
equivalent of the c. 93A demand letter.” Id. Nowhere does the case even suggest that merely
filing a complaint is sufficient to satisfy the demand letter requirement of Chapter 93A. A terminal
arbitration finding and a complaint are fundamentally different; one terminates a proceeding while
the other instigates it. To the extent Plaintiffs urge this Court to adopt a new rule permitting a
complaint to satisfy the demand letter requirement, the Court declines to do so. Therefore,
Plaintiffs Marino and Merriam have failed to comply with the demand letter requirement of
Massachusetts General Laws Chapter 93A, Section 9(3). Thus, the Court dismisses Plaintiffs
Marino and Merriam’s claims under Massachusetts General Laws Chapter 93A, Section 9, without
prejudice to Plaintiffs’ right to replead this cause of action consistent with this opinion.
iii. New Jersey’s Actionable Conduct and Ascertainable Loss
Requirements
Defendant moves to dismiss New Jersey Plaintiffs Beucler and Esposito’s claims under the
New Jersey Consumer Fraud Act (CFA). See N.J. Stat. Ann. §§ 56:8-1, et seq. Under the CFA,
“[A] plaintiff must allege three elements: (1) unlawful conduct; (2) an ascertainable loss; and (3)
a causal connection between the defendants’ unlawful conduct and the plaintiffs’ ascertainable
loss.” Int’l Union of Operating Eng’rs Local No. 68 Welfare Fund v. Merck & Co., 192 N.J. 372,
389 (2007) (alterations and quotations omitted). Concerning unlawful conduct, mere breach of
warranty does not violate the CFA. D’Ercole Sales, Inc. v. Fruehauf Corp., 206 N.J. Super. 11, 25

8

Plaintiffs’ second cited case provides no support for their position, as in that case “the plaintiffs sent a demand letter
to the defendants prior to filing their c. 93A complaint.” Towne v. N. End Isuzu, Inc., No. 982708B, 1999 WL 674140,
at *2 (Mass. Super. Ct. June 21, 1999). No such notice has been provided here.

20

(App. Div. 1985). Instead, the plaintiff must plead “substantial aggravating circumstances.”
Morris v. BMW of N. Am., LLC, No. 13-4980, 2014 WL 793550, at *5 (D.N.J. Feb. 26, 2014).
Defendant argues that Plaintiffs failed adequately to allege actionable conduct and
ascertainable loss. Plaintiff argues that both actionable conduct and ascertainable loss have been
adequately pled. The Court handles the disputed allegations in turn.
Concerning actionable conduct, Plaintiffs adequately allege “substantial aggravating
circumstances” in the form of intentional misrepresentation to induce purchases of defective
products. In addition to averring generally that Defendant had knowledge of the disputed defect,
Plaintiffs provide specific allegations of fact which make such an inference of knowledge
reasonable. See supra at 2; Rait v. Sears, Roebuck & Co., No. 08-2461, 2009 WL 250309, at *4
(D.N.J. Feb. 3, 2009) (noting that a plaintiff adequately pleads a CFA claim when he pleads “facts
that provide a basis for the belief of what defendant is alleged to have known and when.”). This
Court is also mindful of the Third Circuit’s admonition concerning information uniquely in
Defendant’s control: “[I]n applying Rule 9(b), courts should be ‘sensitive’ to situations in which
‘sophisticated defrauders' may ‘successfully conceal the details of their fraud.’” In re Able Labs.
Sec. Litig., No. 05-2681, 2008 WL 1967509, at *11 (D.N.J. Mar. 24, 2008) (quoting Burlington
Coat Factory Sec. Litig., 114 F.3d 1410, 1418 (3d Cir. 1997)). Whether and when Defendant knew
of the alleged defect is information uniquely in Defendant’s hands. Considering Plaintiffs’ specific
allegations concerning the basis, scope, and public characterizations of Defendant’s knowledge,
this Court finds that Plaintiffs Beucler and Esposito have alleged actionable conduct in the form
of intentional misrepresentations.
Ascertainable loss is a different matter, however.

“In cases involving alleged

misrepresentations, as here, ‘either out-of-pocket loss or a demonstration of loss in value will

21

suffice to meet the ascertainable loss hurdle.’” Solo v. Bed Bath & Beyond, Inc., No. 06-1908,
2007 WL 1237825, at *3 (D.N.J. Apr. 26, 2007) (citing Thiedemann v. Mercedes-Benz USA,
LLC, 183 N.J. 234, 248 (2005)).

“[W]hat New Jersey Courts require for that loss to be

‘ascertainable’ is for the consumer to quantify the difference in value between the promised
product and the actual product received.” Smajlaj v. Campbell Soup Co., 782 F. Supp. 2d 84, 99
(D.N.J. 2011). Plaintiffs provide no such quantification.
Plaintiffs reply that ascertainable loss requires a quantified loss to be proven at summary
judgment, but not necessarily alleged at the pleading stage. This argument has been repeatedly
rejected by courts in this District. Durso v. Samsung Electronics Am., Inc., No. 12-05352, 2013
WL 5947005, at *9 (D.N.J. Nov. 6, 2013) (“Plaintiffs have not quantified the difference in value
between the washer promised and the actual washer received. As such, Plaintiffs have failed to
adequately plead ascertainable loss under the NJCFA.”); Lieberson v. Johnson & Johnson
Consumer Cos., Inc., 865 F. Supp. 2d 529, 541-42 (D.N.J. 2011) (“[A]bsent any specific
information concerning the price of the Products or the price of any comparable products,
Plaintiff's allegations concerning the ascertainable loss are nothing more than unsupported
conclusory statements that are insufficient to withstand a motion to dismiss.”); Solo, 2007 WL
1237825, at *3 (“Under the CFA, Plaintiff is required to plead specific facts setting forth and
defining the ascertainable loss suffered.”). Here too the Court finds that Plaintiffs must plead
specific price information or provide alternate means of quantifying their loss to allege
ascertainable loss under New Jersey law.
This is not a Sisyphean pleading burden. “[T]he valuations do not have to be perfect. They
need only provide a reasonable basis for valuation that is not speculative or unquantified.” Smajlaj,
782 F. Supp. 2d at 102-03. But in the absence of any basis for valuation, the Court is left without

22

a method to quantify Plaintiffs’ loss. Under New Jersey law, that will not do. Therefore, the Court
dismisses New Jersey Plaintiffs Beucler and Esposito’s claims under the CFA without prejudice
to Plaintiffs’ right to replead this cause of action consistent with this opinion.
E. The Declaratory Judgment Claim (Count XV)
Defendant argues that Plaintiffs’ cause of action for declaratory judgment should be
dismissed because the Declaratory Judgment Act does not provide an independent cause of action,
but merely another form of relief. Plaintiffs contend that the Declaratory Judgment Act provides
them with a new remedy.
These positions don’t contradict. The Declaratory Judgment Act is a procedural vehicle
that creates a form of relief; it does not create a cause of action courts may be compelled to enforce.
See Wilton v. Seven Falls Company, 515 U.S. 277, 288 (1995) (“By the Declaratory Judgment
Act, Congress sought to place a remedial arrow in the district court's quiver; it created an
opportunity, rather than a duty, to grant a new form of relief to qualifying litigants.”); Aetna Life
Ins. Co. of Hartford, Conn. v. Haworth, 300 U.S. 227, 240 (1937) (the Declaratory Judgment Act
provides a new remedy for existing cases or controversies). The Court agrees with Defendant that
the declaratory judgment cause of action alleged by Plaintiffs does not provide a substantive basis
for relief. An independent count for declaratory judgment adds nothing to this case. See, e.g.,
Mazzoccoli v. Merit Mountainside LLC, No. 12-2168, 2012 WL 6697439, at *9 (D.N.J. Dec. 20,
2012) (dismissing case where the only remaining cause of action was under the Declaratory
Judgment Act); Young v. Travelers Ins. Co., No. 13-02092, 2013 WL 5308289, at *3 (D. Md. Sep.
19, 2013) (dismissing a count for declaratory relief as duplicative). Therefore, the Court grants
Defendant’s motion to dismiss Plaintiffs’ cause of action for declaratory judgment. Plaintiffs have

23

leave to amend their Complaint to include declaratory judgment as a requested form of relief within
twenty-one days.
IV.

CONCLUSION
For the reasons stated above, Defendant’s motion to dismiss is GRANTED-IN-PART and

DENIED-IN-PART. Dismissal shall be without prejudice. Plaintiffs may move to amend their
complaint within twenty-one days. An appropriate Form of Order accompanies this Opinion.
Date: January 30, 2015

/s/ Madeline Cox Arleo
Hon. Madeline Cox Arleo
UNITED STATES DISTRICT JUDGE

24