Green v. GAF Materials Corporation
Filing
27
ORDER AND OPINION granting in part and denying in part 17 Motion to Dismiss for Failure to State a Claim as set out. Signed by Honorable J Michelle Childs on 3/20/2013. Modified on 3/20/2013 to edit text (mbro).
UNITED STATES DISTRICT COURT
DISTRICT OF SOUTH CAROLINA
ANDERSON/GREENWOOD DIVISION
In re:
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Building Materials Corporation of America )
Asphalt Roofing Shingle Products Liability )
Litigation,
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____________________________________)
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John Green, on behalf of himself and
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all others similarly situated,
)
)
Plaintiff,
)
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vs.
)
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GAF Materials Corporation,
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Defendant.
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____________________________________)
MDL No.: 8:11-mn-02000-JMC
Civil Action No.: 8:12-cv-00088-JMC
ORDER AND OPINION
This matter is before the court on Defendant GAF Materials Corporation’s (“GAF”),
Motion to Dismiss the Complaint for Failure to State a Claim Upon Which Relief Can be
Granted [Dkt. No. 17]. Extensive memoranda in support of and in opposition to the motion have
been filed by the parties.
Having considered the written arguments of the parties and the record
before the court, GAF’s motion is granted in part and denied in part.
FACTUAL AND PROCEDURAL BACKGROUND
GAF is a Delaware corporation with its principal place of business in Wayne, New
Jersey. It manufactures roofing materials, including asphalt roofing shingles marketed under the
Timberline® brand name, in facilities located across the United States and sells these shingles
nationwide. Plaintiff John Green (“Green”) is a resident of Jacksonville, Florida, who alleges
that he purchased Timberline shingles in 2005 to place on his home that were manufactured in
Mobile, Alabama.
In the Complaint [Dkt. No. 1], Green alleges that GAF warranted the
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shingles for a period of at least thirty (30) years. Green further alleges that the shingles are
defective because they are cracking, and they fail to meet ASTM International (“ASTM”)
standard 3462 based on testing conducted by an expert. Green acknowledges that he was
unaware of the alleged defect in the shingles until the testing, which occurred shortly before the
filing of his class action complaint.
Green brings this putative class action against GAF
asserting claims for negligence (count I); breach of express and implied warranties (counts II and
III); and violation of the Florida Deceptive and Unfair Trade Practices Act (“FDUTPA”) (count
IV) arising from GAF’s sale of the allegedly defective roofing shingles.
LEGAL STANDARD
To survive a motion to dismiss, the Federal Rules of Civil Procedure require that a
complaint contain “a short and plain statement of the claim showing that the pleader is entitled to
relief.”
FED. R. CIV. P. 8(a)(2).
Although Rule 8(a) does not require “detailed factual
allegations,” it requires “more than an unadorned, the-defendant-unlawfully-harmed-me
accusation,” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Bell Atl. Corp. v. Twombly, 550
U.S. 544, 555-57 (2007)), in order to “give the defendant fair notice . . . of what the claim is and
the grounds upon which it rests,” Twombly, 550 U.S. at 555 (internal citations omitted). Stated
otherwise, “a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim
to relief that is plausible on its face.’” Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at
570). A claim is facially plausible “when the plaintiff pleads factual content that allows the court
to draw [a] reasonable inference that the defendant is liable for the misconduct alleged.” Id.
(quoting Twombly, 550 U.S. at 556). A complaint alleging facts that are “merely consistent with
a defendant’s liability . . . stops short of the line between possibility and plausibility of
‘entitlement to relief.’” Id. (quoting Twombly, 550 U.S. at 557) (internal quotation marks
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omitted).
In evaluating a motion to dismiss, a plaintiff’s well-pled allegations are taken as true, and
the complaint, including all reasonable inferences therefrom, is liberally construed in the
plaintiff’s favor. McNair v. Lend Lease Trucks, Inc., 95 F.3d 325, 327 (4th Cir. 1996). The
court may consider only the facts alleged in the complaint, which may include any documents
either attached to or incorporated in the complaint, and matters of which the court may take
judicial notice.
Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322 (2007).
Although the court must accept the plaintiff’s factual allegations as true, any conclusory
allegations are not entitled to an assumption of truth, and even those allegations pled with factual
support need only be accepted to the extent that “they plausibly give rise to an entitlement to
relief.” Iqbal, 556 U.S. at 679.
DISCUSSION
Negligence – Economic Loss Doctrine
GAF contends that Green’s negligence claim is barred by Florida’s economic loss rule
and, therefore, the court should dismiss this cause of action.
Under Florida law, “[t]he economic loss rule is a judicially created doctrine that sets forth
the circumstances under which a tort action is prohibited if the only damages suffered are
economic losses” that result from “disappointed economic expectations” or “the loss of the
benefit of the bargain.” Indemnity Ins. Co. of N. Am. v. Am. Aviation, Inc., 891 So.2d 532, 536
and n.1 (Fla. 2004). The rule bars recovery “(1) where the parties are in contractual privity and
one party seeks to recover damages in tort for matters arising out of the contract, or (2) where the
defendant is a manufacturer or distributor of a defective product which damages itself but does
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not cause personal injury or damage to any other property.” Curd v. Mosaic Fertilizer, LLC, 39
So.3d 1216, 1213 (Fla. 2010) (citing Am. Aviation, Inc., 891 So.2d at 536).
The purpose of applying the economic loss rule in circumstances where the parties are in
contractual privity is to prevent the parties from avoiding the allocation of losses agreed upon in
the contract. See Action Nissan, Inc. v. Hyundai Motor Am., 617 F. Supp. 2d 1177, 1192 (M.D.
Fla 2008) (citing Am. Aviation, Inc., 891 So.2d at 536). “Accordingly, ‘courts have held that a
tort action is barred where a defendant has not committed a breach of duty apart from a breach of
contract.’ A tort action is not barred, however, when the tort is ‘committed independently of the
contract breach.’”
Id. (citing Am. Aviation, Inc., 891 So.2d at 537).
Additionally, courts
applying Florida law have barred recovery under the economic loss rule where the only “other
property” damage alleged by the plaintiff includes the consequential costs associated with the
replacement of the defective product. See Pulte Home Corp. v. Osmose Wood Preserving, Inc.,
60 F.3d 734, 742 (11th Cir. 1995) (finding that a plaintiff could not recover under a tort sounding
in negligence for defective plywood used in a housing project where the only damages alleged
consisted of the defective plywood and the costs associated with replacing the adjacent roofing
materials); Casa Clara Condo. Ass'n v. Charley Toppino & Sons, Inc., 620 So.2d 1244, 1246
(Fla. 1993).1
Here, the parties dispute whether Green has adequately alleged damage to “other
property” to survive dismissal.
GAF vigorously contends that Green has not alleged any
damages related to the purported defect associated with the ASTM representation aside from the
alleged cracking of the shingles. First, GAF notes that Green does not allege anywhere in the
1
Green’s reliance on In re Chinese Manufactured Drywall Products Liab. Litig., 680 F. Supp. 2d
780, (E.D. La. 2010), is misplaced. In deciding In re Chinese Manufactured Drywall Products
Liab. Litig., the United States District court for the Eastern District of Louisiana actually found
that the plaintiff had sufficiently alleged damages other than those that occurred to the product
itself. Here, Green has made no such claim.
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Complaint that his roof has exhibited any leaking or that Green has actually experienced any
damage as a result of the alleged defect in the shingles.
Contrarily, Green implores the court to focus exclusively on the allegations of the
Complaint and specifically claims that he has sufficiently alleged the requisite damage to other
property. In Plaintiff’s Memorandum in Opposition to Defendant’s Motion to Dismiss [Dkt. No.
23], Green contends that his allegation in the complaint that the allegedly “defective roof
shingles have caused actual and consequential damages” is sufficient to withstand dismissal. Id.
at 8. He further explains that
It is apparent from the Green Complaint that any product failure of the shingle
would also damage other items on or in the home (e.g., rafters, ceiling tiles,
furniture, floors, and items of personal property). The specific details of a cause of
action are not required to be pled but rather facts sufficient to place a Defendant
on notice of the nature of the claims.
Id.
Other than conclusory statements concerning speculative and hypothetical damage to
Green’s property and that of the putative class members, the court finds that Green has failed to
sufficiently allege any damage to “other property.” Additionally, it is undisputed that this case
does not involve any allegations of personal injury. Without any allegation of actual injury to
property other than the defective product itself and the consequential damages resulting from the
replacement of the defective product, Green has presented the court with merely a negligence
action that is consistently barred by Florida law.
Green further urges the court to allow his negligence claim to survive dismissal because
he has made additional allegations concerning fraud and deceit against GAF. Indeed, Florida
law recognizes several exceptions to the economic loss rule including claims for intentional torts,
such as fraud, conversion, intentional interference, civil theft, abuse of process, and other torts
requiring proof of intent. Am. Aviation, 891 So.2d at 543. However, such claims must stand
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independently. Id. at 537; see also 27 FLA. JUR. 2D Fraud and Deceit § 11. Accordingly,
Green’s allegations of fraud and deceit do not save his negligence claim from the consequences
of the economic loss rule.
Finally, Green argues that the economic loss rule does not apply where the complaint
contains allegations of code violations. Green correctly notes that a statutory claim for a code
violation may withstand a motion to dismiss founded on the economic loss rule. See Stallings v.
Kennedy Electric, Inc., 710 So.2d 195, 197 (Fla. 5th Dist. Ct. App. 1998) (“The economic loss
rule does not apply to statutory causes of action and should not be used as a sword to defeat
them.”), aff’d 753 So.2d 1219 (Fla. 1999). However, Green has not asserted any cause of action
against GAF for any code violations. Therefore, Green can find no escape from the economic
loss rule for his negligence and strict liability claims under this theory either.
Based on the application of Florida’s economic loss rule, the court must dismiss Green’s
negligence claims against GAF.2
Warranty Claims
GAF seeks dismissal of Green’s causes of action for breach of express warranty and
breach of implied warranty under the premise that Florida law requires privity of contract to
recover on a warranty claim and Green has failed to plead any factual allegations of the existence
of privity between him and GAF.
A. Privity of Contract
Florida law is well-established that a plaintiff must be in privity of contract with the
defendant to recover on an implied warranty claim. See Mardegan v. Mylan, Inc., No. 10–
2
In Plaintiff’s Memorandum in Opposition to Defendant’s Motion to Dismiss [Dkt. No. 23, at
11-12], Green argues that any statute of limitations analysis as to his negligence claim would be
premature at this stage of the litigation. The court finds it unnecessary to address this issue
because GAF did not raise it as a basis for dismissal.
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14285–CIV, 2011 WL 3583743, at *6 (S.D. Fla. Aug 12, 2011) (citations omitted). Green does
not include any allegations in the Complaint that would allow the court to determine whether
privity exists between him and GAF. In Green’s Complaint, he merely states that “John Green
chose to place new shingles on his home in 2005. The shingles he purchased were GAF
Timberline shingles manufactured at GAF's Mobile Plant.” See Complaint, at ¶ 21. However,
the Complaint never clearly alleges that the shingles were purchased from GAF. Green’s failure
to adequately plead the element of privity in support of his breach of implied warranty claim is
fatal under Florida law and, therefore, the claim must be dismissed. See Freeman v. Olin Corp.,
No. 5:12–cv–6–RS–GRJ, 2012 WL 1987019, at *1 (N.D. Fla. May 3, 2012) (“Failure to plead
contractual privity in the complaint merits dismissal of an implied warranty claim under Rule
12(b)(6).”) (collecting cases).
The law is not as equally settled in Florida as to the necessity of privity in breach of
express warranty claims. Some courts have interpreted Florida law to require privity in breach of
express warranty cases. See, e.g. Mardegan, 2011 WL 3583743, at *6 (collecting cases and
quoting Weiss v. Johansen, 898 So.2d 1009, 1011 (Fla. 4th Dist. Ct. App. 2005) (stating that “in
order to recover for the breach of a warranty either express or implied, the plaintiff must be in
privity of contract with the defendant.”)). Other courts have observed exceptions under Florida
law allowing breach of express warranty claims despite the lack of privity. Id. (collecting cases
and quoting Smith v. Wm. Wrigley Jr. Co., 663 F. Supp. 2d 1336, 1343 (S.D. Fla. 2009)
(applying Florida law and denying a motion to dismiss an express warranty claim on lack of
privity based on “the particular facts of the case”)). The court cannot determine, without further
factual development, whether or not Green’s express warranty claim is of such character as to
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except it from the privity requirement. Accordingly, the court will not dismiss his breach of
express warranty claim for failure to adequately plead privity in his Complaint.
B. Warranty Disclaimer
GAF next contends that, even assuming Green can plead the requisite contractual privity,
the court should dismiss Green’s warranty claims because GAF effectively disclaimed all
express and implied warranties except as set forth in GAF’s Limited Warranty.
Florida statutory law allows for the exclusion or modification of warranties. Florida
Statute § 672.316 provides, in part,
(1) Words or conduct relevant to the creation of an express warranty and words or
conduct tending to negate or limit warranty shall be construed wherever
reasonable as consistent with each other; but, subject to the provisions of this
chapter on parol or extrinsic evidence (§672.202), negation or limitation is
inoperative to the extent that such construction is unreasonable.
(2) Subject to subsection (3), to exclude or modify the implied warranty of
merchantability or any part of it, the language must mention merchantability and
in case of a writing must be conspicuous; and, to exclude or modify any implied
warranty of fitness, the exclusion must be by a writing and conspicuous.
Language to exclude all implied warranties of fitness is sufficient if it states, for
example, that “There are no warranties which extend beyond the description on
the face hereof.”
3) Notwithstanding subsection (2): (a) Unless the circumstances indicate
otherwise, all implied warranties are excluded by expressions like “as is” or “with
all faults” or other language which in common understanding calls the buyer's
attention to the exclusion of warranties and makes plain that there is no implied
warranty. . . .
In his Complaint, Green specifically alleges that he “purchased a roofing system which is
warranted by GAF as a 30-year or longer roofing system.” Complaint, at ¶ 38. As represented
by Linda Marion, the GAF Smart Choice Shingle Limited Warranty (“Smart Choice Warranty”)
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[Dkt. No. 17-6]3 was affixed to every package of GAF shingles. The Smart Choice Warranty
explicitly limits coverage and provides for a “Sole and Exclusive Warranty” that is
“EXCLUSIVE AND REPLACES ALL OTHER WARRANTIES, WHETHER EXPRESS OR
IMPLIED, INCLUDING THE IMPLIED WARRANTIES OF MERCHANTIBILITY AND
FITNESS FOR A PARTICULAR PURPOSE.” Id. (emphasis in original).
Upon review of the disclaimer in the Smart Choice Warranty document that GAF
contends was affixed to the packaging of the shingles, the court finds that the disclaimer
complies with the statute allowing exclusion or modification of warranties. Specifically, the
disclaimer appears in all capital letters directly below a heading captioned in bold type. Indeed,
Green does not even refute GAF’s argument that the disclaimer complies with the statutory
requirements. Instead, Green argues that GAF’s disclaimer and efforts to limit its express
warranties fail because the Smart Choice Warranty is unconscionable.
Incorporating the arguments from Plaintiffs’ Omnibus Opposition to GAF’s Motion to
Dismiss Based on Warranty and Repose Arguments [MDL No. 8:11-mn-02000-JMC, Dkt. No.
71],4 Green contends that the warranty disclaimers and remedial limitations found in GAF’s
Smart Choice Warranty are unconscionable and unenforceable against him and members of the
purported class because GAF knew of the alleged defects in the shingles when it sold them and
concealed the defects from consumers to induce sales and avoid its obligations under its
warranty.
3
The GAF Smart Choice Shingle Limited Warranty is attached as Exhibit A to the Affidavit of
Linda Marion submitted by GAF in support of its motion. Green has not disputed the
authenticity of the document and has referred to GAF’s warranty in his Complaint.
4
GAF generally complains that Green’s reliance on Plaintiffs’ Omnibus Opposition to GAF’s
Motion to Dismiss Based on Warranty and Repose Arguments violates certain page limitations
established by this court’s Local Civil Rules. However, GAF has not suggested or requested any
action from this court for the alleged violation of the Local Civil Rules.
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An action for unconscionability requires a party to demonstrate both substantive and
procedural unconscionability. Complete Interiors, Inc. v. Behan, 558 So.2d 48, 52 (Fla. 5th Dist.
Ct. App. 1990) (internal citations omitted). “Substantive unconscionability generally can be
established by alleging and proving that the terms of a contract are onerous, unreasonable or
unfair. Procedural unconscionability speaks to the individualized circumstances surrounding
each contracting party at the time the contract was executed.” Id.
In the Complaint, Green makes several allegations regarding GAF’s knowledge
concerning the alleged defective condition of the shingles. See generally, Complaint. However,
the court finds that Green’s unconscionability arguments concerning the Smart Choice Warranty
or any other warranty purportedly provided by GAF are not adequately alleged in the Complaint
and may not be considered in determining this motion to dismiss. Notwithstanding the foregoing
analysis, Green’s failure to plead unconscionability does not warrant dismissal of Green’s breach
of express warranty claim on this basis. See supra, Privity of Contract discussion.
Furthermore, Green notes that Florida law requires a disclaimer of warranties in the sale
of consumer goods to be part of the basis of the bargain between the parties. See Knipp v.
Weinbaum, 351 So.2d 1081 (Fla. App. 1977). There is presently no evidence in the record from
which the court could determine whether the disclaimer was actually part of the basis of the
bargain. At this stage of the litigation, the court must simply determine whether or not Green has
pleaded his breach of express warranty claim with sufficient plausibility. The court finds that
Green has done so, and he may proceed with his breach of express warranty cause of action.
Florida Deceptive and Unfair Trade Practices Act
GAF seeks dismissal of Green’s FDUTPA cause of action on the ground that Green fails
to plead his claim with the requisite particularity.
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FDUTPA claims are subject to the pleading requirements of Federal Rule of Civil
Procedure 9(b). See e.g., Stires v. Carnival Corp., 243 F. Supp. 2d 1313, 1322 (M.D. Fla. 2002).
The rule requires that, “[i]n alleging fraud or mistake, a party must state with particularity the
circumstances constituting fraud or mistake.” Fed. R. Civ. P. 9(b).
While Rule 9(b) does not abrogate the concept of notice pleading, it plainly
requires a complaint to set forth (1) precisely what statements or omissions were
made in which documents or oral representations; (2) the time and place of each
such statement and the person responsible for making (or, in the case of
omissions, not making) them; (3) the content of such statements and the manner
in which they misled the plaintiff; and (4) what the defendant obtained as a
consequence of the fraud.
FindWhat Investor Group v. FindWhat.com, 658 F.3d 1282, 1296 (11th Cir. 2011).
Upon review of the Complaint, the court finds that the majority of Green’s claims of
fraudulent conduct do not meet the heightened standard of Rule 9(b).
Although Green’s
Complaint contains copious allegations concerning GAF’s advertising, marketing, and fraudulent
concealment of information, Green fails to specify the time, place, or manner of these alleged
fraudulent activities.
In fact, Green’s Complaint predominantly rests on broad assertions
regarding GAF’s conduct in other litigation. Green’s allegations against GAF regarding its
alleged general marketing and distribution fail the pleading standard of Rule 9(b) and cannot
support Green’s FDUTPA cause of action.5 Accordingly, Green’s FDUTPA claim is dismissed.
CONCLUSION
For the foregoing reasons, the court GRANTS IN PART AND DENIES IN PART GAF
Materials Corporation’s Motion to Dismiss the Complaint for Failure to State a Claim Upon
Which Relief Can be Granted [Dkt. No. 17]. The court grants GAF Materials Corporation’s
Motion to Dismiss Plaintiff John Green’s negligence, breach of implied warranty, and Florida
5
Because the court finds that Green fails to sufficiently allege his FDUTPA claim under Rule
9(b), the court need not address GAF’s statute of limitations argument.
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Deceptive and Unfair Trade Practices Act causes of action without prejudice.6 However, the
court denies GAF Materials Corporation’s request to dismiss Green’s breach of express warranty
claim.
IT IS SO ORDERED.
United States District Judge
March 20, 2013
Greenville, South Carolina
6
Should Green seek leave to amend his complaint to address the deficiencies noted by the court
in this order, and the court grant such action, Green may not include in the pleading any claim
for a code violation which does not apply to manufacturers.
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