Besley v. FCA US LLC

Filing 28

ORDER AND OPINION granting in part and denying in part 9 Motion to Dismiss for Failure to State a Claim. Signed by Honorable J Michelle Childs on 1/8/2016.(asni, )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF SOUTH CAROLINA
AIKEN DIVISION
Robert K. Besley, Jr., on behalf of
himself and all others similarly situated,

)
)
)
Plaintiff,
)
v.
)
)
FCA US, LLC f/k/a Chrysler Group, LLC, )
)
Defendant.
)
___________________________________ )

Civil Action No. 1:15-cv-01511-JMC

ORDER AND OPINION

Plaintiff Robert K. Besley, Jr. (“Plaintiff”) filed the instant putative class action seeking
damages on behalf of himself and all others similarly situated who purchased “certain branded
Ram trucks, including the Ram 1500, whose Monroney stickers1 contain false representations
and for which Plaintiff and class members paid for certain ‘optional’ equipment which the
vehicles did not contain, and which vehicles were manufactured, marketed and sold by
Defendant, FCA US, LLC . . . f/k/a Chrysler Group LLC” (“Defendant”). (ECF No. 1 at 1 ¶ 1.)
This matter is before the court by way of Defendant’s Motion to Dismiss the Complaint
for failure to state a claim under Fed. R. Civ. P. 12(b)(6). (ECF No. 9.) For the reasons set forth
below, the court GRANTS IN PART and DENIES IN PART Defendant’s Motion to Dismiss.
I.

RELEVANT BACKGROUND TO PENDING MOTION

On January 15, 2014, Plaintiff alleges that he purchased a model-year 2014 Ram 1500
Big Horn® pickup truck from Triangle Dodge Chrysler Jeep Dealership in Aiken, South
1

“Named after Oklahoma Senator, Almer Stillwell Monroney, who sponsored the Automobile
Information Disclosure Act of 1958, which mandated disclosure of information on new
automobiles.” (ECF No. 19 at 1 n.1.) “The Monroney sticker is required to be affixed to the
side window or windshield of every new car sold in the United States and can only be removed
by the consumer.” (ECF No. 1 at 4 ¶ 12 (citing 15 U.S.C. § 1231).) “The Monroney sticker is
required to include ‘the retail delivered price suggested by the manufacturer for each accessory
or item of optional equipment, physically attached to such automobile at the time of its delivery
to such dealer.’” (Id. at ¶ 13 (citing 15 U.S.C. § 1232(f)(2)).)

Carolina. (ECF No. 1 at 1 ¶ 3, 4 ¶ 10.) Plaintiff alleges that the Monroney sticker affixed to the
truck “indicated that the Ram pickup truck was equipped with the ‘Customer Preferred Package
26Z,’ which included a 3.55 Rear Axle Ratio.” (Id. at 4 ¶ 14.) Plaintiff states that he purchased
the truck because “he wanted the increased towing capacity provided by [a] larger rear axle
ratio.” (Id. at 4–5 ¶ 16.) However, the truck was actually equipped with a standard 3.21 rear
axle ratio. (Id. at 4 ¶ 15.)
On or about October 23, 2014, Defendant’s customer service department allegedly began
calling Plaintiff “in order to inform him that the Monroney sticker located in his truck’s window
at the time of purchase was incorrect.”

(Id. at 4–5 ¶ 16.)

Defendant’s customer service

department further allegedly offered Plaintiff 750 Mopar® dollars.2 (Id.) However, Plaintiff
contends that “[t]he cost of increasing the rear axle ratio is substantially more than $750, and
replacement parts and labor can cost as much as several thousand dollars . . . [and] [a]t no time
during his discussions with Chrysler Customer Service was Plaintiff offered a complimentary
replacement of his rear axle.” (Id.)
Plaintiff commenced the instant putative class action against Defendant on April 6, 2015,
alleging

unjust

enrichment

(Count

1),

promissory

estoppel

(Count

2),

negligent

misrepresentation (Count 3) and negligence per se (Count 4). (ECF No. 1 at 7–10.) In response
to Plaintiff’s Complaint, Defendant filed the pending Motion to Dismiss on May 22, 2015.
(ECF No. 9.) Plaintiff filed a Memorandum in Opposition to Defendant’s Motion to Dismiss on
June 15, 2015 (ECF No. 19), to which Defendant filed a Reply in Support of Its Motion to
Dismiss on June 26, 2015. (ECF No. 23.)
On November 24, 2015, the court held a hearing on the pending Motion to Dismiss.
2

“Mopar is the parts, service and customer care organization within Fiat Chrysler.” (ECF No. 19
at 3 n.2.) “Mopar parts are original equipment manufacturer (OEM) parts for Chrysler vehicles.”
(Id.)
2

(ECF No. 27.)
II.

LEGAL STANDARD

A motion to dismiss pursuant to Rule 12(b)(6) for failure to state a claim upon which
relief can be granted “challenges the legal sufficiency of a complaint.” Francis v. Giacomelli,
588 F.3d 186, 192 (4th Cir. 2009) (citations omitted); see also Republican Party of N.C. v.
Martin, 980 F.2d 943, 952 (4th Cir. 1992) (“A motion to dismiss under Rule 12(b)(6) . . . does
not resolve contests surrounding the facts, the merits of a claim, or the applicability of
defenses.”). To be legally sufficient a pleading must contain a “short and plain statement of the
claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2).
A motion to dismiss pursuant to Fed. R. Civ. P. 12(b)(6) for failure to state a claim
should not be granted unless it appears certain that the plaintiff can prove no set of facts that
would support her claim and would entitle her to relief. Mylan Labs., Inc. v. Matkari, 7 F.3d
1130, 1134 (4th Cir. 1993). When considering a motion to dismiss, the court should accept as
true all well-pleaded allegations and should view the complaint in a light most favorable to the
plaintiff. Ostrzenski v. Seigel, 177 F.3d 245, 251 (4th Cir. 1999); Mylan Labs., Inc., 7 F.3d at
1134. “To survive a motion to dismiss, a complaint must contain sufficient factual matter,
accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556
U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “A
claim has 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.” Id.
III.
A.

ANALYSIS

Dismissal of Plaintiff’s Causes of Action for Unjust Enrichment and Promissory Estoppel
1. The Parties’ Arguments
Defendant moves for dismissal of Plaintiff’s equitable claims of unjust enrichment and
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promissory estoppel arguing that he cannot pursue equitable claims when a contract governs the
transaction at issue. (ECF No. 9-1 at 5 (citing Turner v. Rams Head Co., C.A. No. 3:05-2893CMC, 2007 WL 2579386, at *7 (D.S.C. Sept. 4, 2007) (“[A]n an action for unjust enrichment
cannot lie in the face of an express contract.”) (citation omitted); R.E. Phelon Co., Inc. v. Clarion
Sintered Metals, Inc., 2006 WL 2573136, at *12 (D.S.C. Sept. 5, 2006) (“Promissory estoppel is
therefore inapplicable in situations where a contract exists.”)).) Specifically, Defendant asserts
that Plaintiff has a contractual remedy because his “claims are premised entirely on allegations of
FCA US having made a promise on a label affixed to his truck which it failed to fulfill” and “any
such promise constitutes an express warranty and gives rise to a contractual claim for breach of
express warranty under the UCC.” (ECF No. 23 at 3 (citing S.C. Code Ann. § 36-2-313 (2014)
(“Express warranties by the seller3 are created as follows: (a) Any affirmation of fact or promise,
including those on containers or labels, made by the seller to the buyer, whether directly or
indirectly, which relates to the goods and becomes part of the basis of the bargain creates an
express warranty that the goods conform to the affirmation or promise.”)).) Defendant further
asserts that Plaintiff’s contractual claim is an adequate remedy at law and therefore he cannot
pursue equitable claims. (ECF No. 9-1 at 6 (citing, e.g., Catholic Society of Religious & Literary
Educ. v. Madison Cnty., 74 F.2d 848, 850 (4th Cir. 1935) (“[T]he fundamental rule in equity in
the federal courts is that a suit will not lie when there is an adequate remedy at law”)).)
Plaintiff opposes the Motion to Dismiss his equitable claims of unjust enrichment and
promissory estoppel. Plaintiff argues that his equitable claims are viable under South Carolina
law because “a contract does not exist between the manufacturer of an automobile and the
vehicle’s purchaser, when purchased through a dealer.” (ECF No. 19 at 4 (citing Odom v. Ford
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“A ‘seller’ under the UCC is defined as anyone ‘who sells or contracts to sell goods.’” (ECF
No. 23 at 3 n.2 (citing S.C. Code Ann. § 36-2-103(1)(d)).) “It is not limited to ‘direct’ sellers,
and no privity requirement is imposed.” (Id.)
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Motor Co., 95 S.E.2d 601, 603–04 (S.C. 1956) (“The general rule is that privity of contract is
required in an action for breach of an implied warranty and that there is no such privity between
a manufacturer and one who has purchased the manufactured article from a dealer or is otherwise
a remote vendee.”)).) Because he does not have a contract with Defendant, Plaintiff argues that
he should be allowed to pursue his equitable claims. (Id. at 5–6.) Plaintiff also asserts that his
unjust enrichment and promissory estoppel claims should not be dismissed since “he has no
adequate remedy at law because his injury is not governed by any contract . . . .” (ECF No. 19 at
7.) Moreover, Plaintiff asserts that “a cursory review of the elements of both causes of action
yields no requirement that there be any ‘adequate remedy at law’ before asserting claims for
unjust enrichment or promissory estoppel.” (Id.)
2. The Court’s Review
In South Carolina, unjust enrichment and promissory estoppel are equitable doctrines.
“Unjust enrichment is an equitable doctrine, akin to restitution, which permits the recovery of
that amount the defendant has been unjustly enriched at the expense of the plaintiff.” Ellis v.
Smith Grading & Paving, Inc., 366 S.E.2d 12, 14 (S.C. Ct. App. 1988) (citing Barrett v. Miller,
321 S.E.2d 198, 199 (S.C. Ct. App. 1984)). “Promissory estoppel is an equitable doctrine which
provides that ‘an estoppel may arise from the making of a promise, even though without
consideration, if it was intended that the promise should be relied upon and in fact it was relied
upon, and if a refusal to enforce it would be virtually to sustain the perpetration of fraud or
would result in other injustice.’” Glover v. Lockheed Corp., 772 F. Supp. 898, 907 (D.S.C.
1991) (quoting Higgins Constr. Co. v. S. Bell Tel. & Tel., 281 S.E.2d 469, 470 (S.C. 1981)). In
South Carolina, a party is generally precluded from pursuing a claim for either unjust enrichment
or promissory estoppel where a valid contract governs the subject matter in dispute. See, e.g.,

5

Palmetto Health Credit Union v. Open Solutions Inc., No. 3:08-cv-3848, 2010 WL 2710551, at
*4 (D.S.C. July 7, 2010) (“Recovery under a theory of unjust enrichment is available only where
the rights and responsibilities at issue are not governed by an express contract.”) (citation
omitted); Glover v. Lockheed Corp., 772 F. Supp. 898, 907 (D.S.C. 1991) (“Promissory estoppel
is inapplicable in situations where a contract exists since a necessary element of a valid contract
is consideration.”).
As summarized above, Defendant seeks dismissal of Plaintiff’s equitable claims of unjust
enrichment and promissory estoppel on the ground that he has an adequate contractual remedy.
Defendant asserts that contractual claims arise in this matter due to an express warranty created
by the provisions of the Monroney sticker that was attached to Plaintiff’s Ram pickup truck. In
other words, if the Monroney sticker operates as a contract between the parties in this case,
Plaintiff cannot maintain causes of action against Defendant for unjust enrichment and
promissory estoppel.
In contrast to Defendant’s position, Plaintiff strongly disputes the breadth and scope of
enforceability of any contractual provisions with Defendant. (See ECF No. 19 at 5 (“[N]o such
contract exists.”).) Moreover, Plaintiff did not incorporate allegations into his equitable claims
that he and Defendant had a contractual agreement. Therefore, because there is a specified
dispute regarding the contractual adhesiveness of the aforementioned express warranty, the court
finds it premature to dismiss Plaintiff’s causes of action for unjust enrichment and promissory
estoppel. Melton v. Carolina Power & Light Co., C/A No. 4:11-cv-00270-RBH, 2012 WL
2401635, at *3 (D.S.C. June 25, 2012) (“Even if Defendant is correct, at this stage, the question
is not whether Plaintiff may ultimately recover on unjust enrichment, or even whether an unjust
enrichment claim is meritorious. The question is simply whether an unjust enrichment claim

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may legally move forward.”). Accordingly, Defendant’s Motion to Dismiss Plaintiff’s equitable
claims of unjust enrichment and promissory estoppel is denied.
B.

Dismissal of Plaintiff’s Causes of Action for Negligent Misrepresentation and Negligence
Per Se
1. The Parties’ Arguments
Defendant argues that it is entitled to dismissal of Plaintiff’s claims for negligent

misrepresentation and negligence per se because “these claims are barred by the economic loss
rule, which provides that there is no tort liability for a product defect where the only damage
suffered by the plaintiff is to the product itself.” (ECF No. 9-1 at 7 (citing Sapp v. Ford Motor
Co., 687 S.E.2d 47, 49 (S.C. 2009); id. at 8 (citing In re Bldg. Materials Corp. of Am. Asphalt
Roofing Shingle Prods. Liab. Litig., MDL No. 8:11-mn-02000-JMC, C/A No. 3:11-cv-02784JMC, 2013 WL 1316562, at *5 (D.S.C. Mar. 27, 2013) (quoting Sapp4)).)
In opposing the dismissal of his causes of action for negligent misrepresentation and
negligence per se, Plaintiff argues that the economic loss rule is inapplicable based on the source
of the duty he is alleging Defendant owed to him. (ECF No. 19 at 10.) In this regard, Plaintiff
asserts that “Defendant created a special relationship with Plaintiff when it attached the
Monroney sticker to Plaintiff’s vehicle[]” and “the breach of that duty of care will support a tort

4

In Sapp, the South Carolina Supreme Court observed:
In the context of products liability law, when a defective product only damages
itself, the only concrete and measurable damages are the diminution in the value
of the product, cost of repair, and consequential damages resulting from the
product's failure. Stated differently, the consumer has only suffered an economic
loss. The consumer has purchased an inferior product, his expectations have not
been met, and he has lost the benefit of the bargain . . . . Accordingly, where a
product damages only itself, tort law provides no remedy and the action lies in
contract; but when personal injury or other property damage occurs, a tort remedy
may be appropriate.

Sapp, 687 S.E. 2d at 49.
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action.” (Id. (citing S.C. State Ports Auth. v. Booz-Allen & Hamilton, Inc., 346 S.E.2d 324, 346
(S.C. 1986)).)
2. The Court’s Review
In South Carolina, the economic loss rule bars recovery in tort “for a product defect
without a claim of injury to the person or other property of the plaintiff.” See Carolina Winds
Owners’ Ass’n v. Joe Harden Builder, Inc., 374 S.E.2d 897, 901 (S.C. Ct. App. 1988) (giving the
general rule).5 “If the only damage is diminution in the value of the product itself, the plaintiff’s
remedy lies in contract,6 whether the loss results from inferior quality of the product, its unfitness
for an intended use, its deterioration, or its destruction by reason of the defect.” Id. “In most
instances, a negligence action will not lie when the parties are in privity of contract.” Tommy L.
Griffin Plumbing & Heating Co. v. Jordan, Jones & Goulding, Inc., 463 S.E.2d 85, 88 (S.C.
1995). “When, however, there is a special relationship between the alleged tortfeasor and the
injured party not arising in contract, the breach of that duty of care will support a tort action.” Id.
(citing generally S.C. State Ports Auth.). “[T]he question of whether the plaintiff may maintain
5

Carolina Winds was overruled by Kennedy v. Columbia Lumber and Mfg. Co., Inc., 384 S.E.2d
730, 737 (S.C. 1989), wherein the South Carolina Supreme Court provided the following
additional commentary on the economic loss rule:
This rule exists to assist in determining whether contract or tort theories are
applicable to a given case. Where a purchaser’s expectations in a sale are
frustrated because the product he bought is not working properly, his remedy is
said to be in contract alone, for he has suffered only “economic” losses.
Conversely, where a purchaser buys a product which is defective and physically
harms him, his remedy is in either tort or contract. This is so, the analysis
provides, because his losses are more than merely “economic.”
Kennedy, 384 S.E.2d at 736.
6

“The economic loss rule is founded on the theory that parties to a contract may allocate their
risks by agreement and do not need the special protections of tort law to recover for damages
caused by a breach of the contract.” S.C. Elec. & Gas Co. v. Westinghouse Elec. Corp., 826 F.
Supp. 1549, 1557 (4th Cir. 1993) (citing E. River S.S. Corp. v. TransAmerica Delaval, Inc., 476
U.S. 858, 872–874 (1986)).
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an action in tort for purely economic loss turns on the determination of the source of the duty
plaintiff claims the defendant owed.” Id. “A breach of a duty which arises under the provisions
of a contract between the parties must be redressed under contract, and a tort action will not lie.”
Id. “A breach of a duty arising independently of any contract duties between the parties,
however, may support a tort action.” Id. (citing generally S.C. State Ports Auth.).
In order for his negligent misrepresentation and negligence per se causes of action to
survive dismissal based on the economic loss rule, Plaintiff must establish a duty of care arising
outside the provisions of the Monroney sticker. Plaintiff attempts to do this by alleging that
Defendant “was negligent in that it failed to comply with federal automobile information
disclosure regulations and laws which were intended to protect purchasers of automobiles, like
Plaintiff and the Class members, from injuries caused by adulterated, misbranded, and otherwise
dangerous medical devices . . . [and] [t]hose regulations include, among others, 15 U.S.C. §
1231, 15 U.S.C. § 1232, and 15 U.S.C. § 1233.” (ECF No. 1 at 10 ¶ 45.) Upon review, the court
concludes that Plaintiff has not sufficiently alleged a duty arising independent of the Monroney
sticker that would allow his tort claims to go forward. The appellate authority simply does not
exist under South Carolina law to allow an alleged violation of either statutory law or a
regulatory standard to serve as an exception to the economic loss rule. Moreover, this court
should not create such an expansion of existing law. See, e.g., Burris Chem., Inc. v. USX Corp.,
10 F.3d 243, 247–48 (4th Cir. 1993) (“Under Erie Railroad v. Tompkins, supra, the federal
courts sitting in diversity rule upon state law as it exists and do not surmise or suggest its
expansion.”); Bennett v. Ford Motor Co., 236 F. Supp. 2d 558, 562–63 (D.S.C. 2002)
(Recognizing that expanding South Carolina tort law is “not the role of this [c]ourt” and thus
refusing to recognize an exception to the economic loss rule for a breach of industry standards.).

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Therefore, Defendant is entitled to dismissal of Plaintiff’s tort claims for negligent
misrepresentation and negligence per se pursuant to the economic loss rule.
C.

Dismissal of Plaintiff’s Class Claims
1. The Parties’ Arguments
Defendant moves to dismiss the class action allegations in the Complaint arguing that

“the class allegations should be dismiss/eliminated because it is not plausible (or possible) the
class defined in the Complaint could be certified.” (ECF No. 9-1 at 9.) In support of its
argument, Defendant offers the following explanation in support of dismissal of Plaintiff’s class
allegations:
Here, the class definition proposed by Plaintiff is one that requires a decision on
the merits in order to determine class membership. Plaintiff defines the class as
those who purchased trucks which “contained false and deceptive information
concerning the equipped rear axle ratio.” See Comp., ¶ 17. In order to determine
who is in this class, the Court would first have to determine what “information”
about the rear axle ratio was “contained” in the trucks and whether that
information was “false and deceptive.” Questions of the nature and extent of the
“information” provided and whether it is “false and deceptive” are clearly merits
issues and thus, the purported class cannot be certified.
(Id.)
In response to the aforementioned, Plaintiff counters that because Defendant is moving
for dismissal of the class allegations (as opposed to decertification), it has a heavy “burden of
demonstrating from the face of the plaintiffs’ complaint that it will be impossible to certify the
classes alleged by the plaintiffs regardless of the facts the plaintiffs may be able to prove, . . . .”
(ECF No. 19 at 11 (citing Bryant v. Food Lion, Inc., 774 F. Supp. 1484, 1495 (D.S.C. 1991).) In
this regard, Plaintiff argues that Defendant’s Motion is premature because “the class definition
can be revised to avoid the ‘fail safe’ issues” that occur if the putative class is defined by
reference to the merits of the claim. (Id. at 12–13.)

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2. The Court’s Review
To prevail on its argument seeking dismissal of class allegations when Plaintiff has yet to
move for class certification pursuant to Fed. R. Civ. P. 23, Defendant must demonstrate from the
face of Plaintiff’s Complaint that it will be impossible to certify the class alleged by Plaintiff
regardless of the facts he may be able to prove. Bryant, 774 F. Supp. at 1495.7 Defendant
asserts that such impossibility exists regarding Plaintiff’s proposed class definition because it “is
one that requires a decision on the merits in order to determine class membership.” (ECF No. 91 at 9.) In support of its position, Defendant cites several cases for the proposition “that a class
which is defined by reference to the merits of a claim is legally deficient and cannot be
certified.” (Id. (citing Melton v. Carolina Power & Light Co., 283 F.R.D. 280, 288 (D.S.C.
2012); Solo v. Bausch & Lomb Inc., C/A Nos. 2:06-MN-77777-DCN, 2:06-CV-02716-DCN,
2009 WL 4287706 (D.S.C. Sept. 25, 2009); Cuming v. S.C. Lottery Comm’n, C/A No. 3:05-cv03608-MBS, 2008 WL 906705 (D.S.C. Mar. 31, 2008); Paulino v. Dollar Gen. Corp., C/A No.
3:12-cv-75, 2014 WL 1875326 (S.D. W. Va. May 9, 2014)).)
In considering the merits of Defendant’s position, it is important to note that the courts in
the cases cited by Defendant were reacting to proposed class definitions in the context of
pending motions for class certification. See id. Plaintiff has yet to move for certification of class
pursuant to Fed. R. Civ. P. 23 in this case. Moreover, as prescribed by Rule 23, a class definition
is not finalized until it is defined in the order certifying the class action. See Fed. R. Civ. P.
23(c)(1)(B). Therefore, the court concludes that Defendant is premature in its request for
dismissal of Plaintiff’s class allegations. Banks v. Wet Dog, Inc., C/A No. RDB-13-2294, 2014
WL 4271153, at *4 (D. Md. Aug. 28, 2014) (“Normally, courts reserve their analysis of the
7

This is analogous to the standard of review for motions brought pursuant to Fed. R. Civ. P.
12(b)(6). See Bryant, 774 F. Supp. at 1495.
11

propriety of a proposed class until the plaintiffs move for class certification.”) (citation omitted).
Accordingly, Defendant’s Motion to Dismiss Plaintiff’s class allegations is denied.
IV.

CONCLUSION

Upon careful consideration of the allegations in the Complaint and the arguments of the
parties, the court hereby GRANTS IN PART Defendant’s Motion to Dismiss (ECF No. 9) and
DISMISSES Plaintiff’s causes of action for negligent misrepresentation and negligence per se.
Defendant’s Motion to Dismiss is DENIED with respect to Plaintiff’s causes of action for unjust
enrichment and promissory estoppel and as to his class allegations.
IT IS SO ORDERED.

United States District Judge
January 8, 2016
Columbia, South Carolina

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