Rockwood Retirement Communities v. Insinkerator et al

Filing 34

ORDER DENYING DEFENDANT'S MOTION TO DISMISS - denying 18 Motion to Dismiss. Signed by Judge Salvador Mendoza, Jr. (CC, Case Administrator)

1

FILED IN THE
U.S. DISTRICT COURT
EASTERN DISTRICT OF WASHINGTON

2

Jun 15, 2016
SEAN F. MCAVOY, CLERK

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WASHINGTON

3
4
5

ROCKWOOD RETIREMENT
COMMUNITIES, on behalf of itself
and all other similarly situated,

6
Plaintiff,
7

No. 2:15-CV-0346-SMJ

ORDER DENYING
DEFENDANTS’ MOTION TO
DISMISS

v.
8
9

INSINKERATOR and EMERSON
ELECTRIC COMPANY,
Defendants.

10
11

This case arises out of the structural failure of an instant hot water filtration
12
system manufactured by Defendants. Plaintiff purchased these filtration systems for
13
use in Plaintiff’s retirement communities. ECF No. 1 at 2. On January 3, 2015, one
14
of these units failed and leaked water throughout the first floor of the residence in
15
which it was installed and into the floor below. Plaintiff alleges that it suffered at
16
least $25,000 in damages as a result of this failure.
17
Before the Court, without oral argument, is Defendants’ Motion to Dismiss,
18
ECF No. 18. In it, Defendants ask the Court to dismiss each of the 7 claims alleged
19
in the complaint. The Court denies the motion for the reasons detailed below.
20

ORDER - 1

1

I.

Standard of Review

2

To survive a motion to dismiss for failure to state a claim, a complaint must

3

contain sufficient factual matter, accepted as true, to state a claim to relief that is

4

plausible on its face. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). If a complaint

5

contains well-pleaded factual allegations, a court should assume their veracity and

6

then determine whether they plausibly give rise to an entitlement to relief. Iqbal,

7

556 U.S. at 679.

8

II.

Breach of express warranty

9

Defendants argue that Plaintiff has failed to state a claim for breach of the

10

express warranty because Plaintiff has not alleged facts showing that the product

11

failed and Defendants refused to repair or replace within the 1-year warranty period.

12

ECF No. 18 a 6-10. Plaintiff responds that it can make out a claim for breach of the

13

express warranty if the product contains a defect that renders it substantially likely

14

to malfunction within its useful life. ECF No. 25 at 7-11 (citing Hicks v. Kaufman

15

and Broad Home Corp., 89 Cal.App.4th 908, 45 UCC Rep.Serv.2d 131 (2001)).

16

In Hicks, a group of homeowners brought suit against a developer and general

17

contractor for the cost of repairing or replacing defective concrete foundations

18

under their homes. Hicks, 89 Cal.App.4th at 911-12. The defendants had expressly

19

warranted that its homes “will be free from any defect resulting in or causing

20

tangible damage to the foundation of the home which materially diminishes the

ORDER - 2

1

structural integrity and load bearing performance of the home for a period of ten

2

(10) years.” Hicks, 89 Cal.App.4th at 917. The homeowners argued that to prove

3

breach of the express warranty they only needed to prove Fibermesh is an inherently

4

defective product the use of which is substantially certain to lead to foundation

5

failure. Hicks, 89 Cal.App.4th at 917. The Court agreed.
We conclude, therefore, if plaintiffs prove their foundations contain an
inherent defect which is substantially certain to result in malfunction
during the useful life of the product they have established a breach of
Kaufman's express and implied warranties. It is not necessary for each
individual homeowner to prove his foundation has already cracked or
split or that he has suffered property damage as a result of the cracking
or splitting. We see no reason why a homeowner should have to wait
for the inevitable injuries to occur before recovering damages to repair
the defect and prevent the injuries from occurring.

6
7
8
9
10
11

Hicks, 89 Cal.App.4th at 922-23.

12

Rockwood argues that, like the plaintiff in Hicks, if it can prove the filter

13

cartridges contain an inherent defect which is substantially certain to result in

14

malfunction during the useful life of the product they have established a breach of

15

the Defendants’ express warranty. The Court agrees and declines to dismiss this

16

claim at this stage of the litigation.

17 III.

Breach of implied warranty

18

In its response, Rockwood acknowledges that it has not alleged a claim for

19

breach of implied warranty and withdraws this claim. Accordingly, it is dismissed.

20

ORDER - 3

1 IV.

Common law fraud & negligent misrepresentation

2

Defendant argues that these claims fail because they are subject to Rule 9(b)

3

and Plaintiff failed to identify the person who made the misrepresentations, the

4

content of the misrepresentations, when the misrepresentation was made, why it

5

was made, and how it was made.

6

This argument fails. The allegations in the complaint give Defendants ample

7

notice of the bases of the claims and therefore satisfy Rule 9(b). Swartz v. KPMG

8

LLP, 476 F.3d 756, 764 (9th Cir. 2007) (“allegations of fraud must be specific

9

enough to give defendants notice of the particular misconduct which is alleged to

10

constitute the fraud charged so that they can defend against the charge and not just

11

deny that they have done anything wrong”).

12

representations made by Defendants to purchasers of their filter cartridges that the

13

cartridges would be “free from defects” and that the cartridges met Standard 42 and

14

would last at least 100,000 use cycles. ECF No. 1 at 10, 15. These representations

15

were made in documents containing the name and logos of both Defendants—the

16

limited warranty and the product sheet—at the time of purchase. ECF No. 25-1 at

17

2.

18

consumers to purchase the filter cartridge. ECF No. 1 at ¶¶ 5, 67. Rockwood has

19

satisfied Rule 9(b).

The claims are based on the

Plaintiff alleged that these statements were made to induce it and other

20

ORDER - 4

1

V.

Unjust enrichment

2

Defendants argue that Plaintiff’s unjust enrichment claim cannot stand in the

3

face of an express contract between the parties (i.e., the limited warranty). ECF No.

4

18 at 16-17. Unjust enrichment is an equitable theory that invokes and implied

5

contract when the parties either have no express contract or have abrogated it.

6

Vernon v. Qwest Communications Intern., 643 F.Supp.2d 1256, 1266 (W.D. Wash.

7

2009).

8

The Court disagrees for two reasons. Rule 8(d)(2) permits pleading in the

9

alternative and the cases on which Defendants rely deal with dismissal at the

10

summary judgment stage. Vernon, 643 F.Supp.2d at 1266-67 (refusing to dismiss

11

an unjust enrichment claim under similar circumstances for these reasons, among

12

others). In light of these two facts, the Court concludes that dismissal at this stage

13

is inappropriate.

14 VI.

Washington Consumer Protection Act (WCPA)

15

Defendant argues that the WCPA claim must fail because it is subject to Rule

16

9(b)’s heightened pleading standards and cannot meet them.

17

Rockwood argues that the WCPA claim is not subject to Rule 9(b) but that

18

even if it were, it satisfies Rule 9(b). It is unnecessary to determine whether the

19

WCPA claim is subject to Rule 9(b) because the Court concludes that the allegations

20

in the complaint satisfy it as discussed above.

ORDER - 5

1 VII.

Wisconsin Deceptive Trade Practices Act (WDTPA)

2

Defendant argues that the WDTPA claim must fail because Plaintiff did not

3

allege that Defendants made an affirmative deceptive statement.

4

While Plaintiff alleged omissions as the basis for some of its claims, it is clear

5

that it also alleged that Defendants represented that its products would be “free of

6

defects” and withstand 100,000 use cycles. These are affirmative statements

7

sufficient to support a claim under the DTPA. Accordingly, the WDTPA claim

8

survives.

9
10
11
12
13

Accordingly, IT IS HEREBY ORDERED: Defendant’s Motion to Dismiss,
ECF No. 18, is DENIED.
IT IS SO ORDERED. The Clerk’s Office is directed to enter this Order and
provide copies to all counsel.
DATED this 15th day of June 2016.

14
SALVADOR MENDOZA, JR.
United States District Judge

15
16
17
18
19
20

Q:\SMJ\Civil\2015\Rockwood Retirement Communities v Insinkerator et al-0346\ord deny mtd lc1 docx

ORDER - 6