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Divis v. General Motors LLC

United States District Court, E.D. Michigan, Southern Division

September 27, 2019

CAROL DIVIS, et al., Plaintiffs,
v.
GENERAL MOTORS LLC, Defendant. Count Plaintiff(s) Class Claim

          ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT’S MOTION TO DISMISS PLAINTIFFS’ COMPLAINT [ECF NO. 14]

          Victoria A. Roberts United States District Judge

         I. INTRODUCTION

         In this putative class action, five individual Plaintiffs allege that model year 2010-2013 Cadillac SRX (“SRX”) vehicles have defective sunroofs that leak. Defendant General Motors LLC (“GM”) moves to dismiss the complaint pursuant to Federal Rules of Civil Procedure 8(a), 9(b), and 12(b)(6).

         As set forth below, the Court GRANTS IN PART and DENIES IN PART GM’s motion to dismiss.

         II. BACKGROUND

         The named Plaintiffs – Carol Divis (“Divis”), Brian Sirota (“Sirota”), Kathlene Scheffers (“Scheffers”), Christie Oss (“Oss”), and Antonio Fusco (“Fusco”) – purchased 2010-2013 SRXs from dealerships in the following states, respectively: Pennsylvania, Florida, Michigan, Georgia, and New York.

         Their cars came with an express warranty that “covers repairs to correct any vehicle defect relating to materials or workmanship occurring during the warranty period.” The warranty period is four years or 50, 000 miles, whichever occurs first.

         Plaintiffs rely on additional language in the warranty for part of their claims. It says: “Under certain circumstances, GM . . . may provide assistance after the . . . warranty period has expired when the problem results from a defect in material or workmanship. These instances will be reviewed on a case-by-case basis.” Plaintiffs say 2011-2013 SRXs were also covered by a “Cadillac Shield” warranty. However, the “Cadillac Shield” program relates to owner benefits – like “remote vehicle diagnostics and advanced mobile apps.” It does not provide additional warranty coverage.

         Plaintiffs allege that “[t]he sunroofs of 2010-2013 [SRXs] leak and water intrudes into the passenger compartment of the vehicles because of a defect in the design and/or manufacture of the sunroofs and their component parts (hereinafter ‘Leaking Sunroof Defect’).” Plaintiffs claim that GM’s own service bulletins demonstrate that GM had actual knowledge of the Leaking Sunroof Defect and knew how to correct it during the warranty period – “as early as August 2013.” For example, on August 30, 2013, GM issued a preliminary information bulletin to GM dealerships covering 2010-2013 SRXs with the heading: “Water Leak at Driver/ Front Passenger Floor Area and/or Front Carpet Wet.” According to the bulletin, the most common causes of the leaks related to the sunroof: (1) “a void in the cowl seam sealer, in the corners below the sunroof drain hose grommets”; (2) “[t]he sunroof front drain hose grommet(s) may not be connected or fully seated in the cowl panel or at the sunroof frame spigot”; and (3) “[t]he sunroof drain hoses are mis-routed or are too short . . . caus[ing] a future disconnect or unseating of the grommet.” In September 2013, GM issued a service bulletin regarding 2010-2013 SRXs; it has the same heading as the August 2013 bulletin and provides the same information.

         On January 14, 2015, GM issued an internal and non-public document to GM dealerships describing a Customer Satisfaction Program (the “CSP”). According to the document: (1) “[c]ertain 2010-2012 model year Cadillac SRX[s] . . . may have a condition in which the vehicle’s sunroof drain hose material may shrink due to changing environmental conditions”; and (2) if a drain hose shrinks, it could detach, leading to leaks and possible “damage [to] interior components, including wiring, electronic modules, the sound deadener and carpet.” Under the CSP, GM directed dealers “to replace the front sunroof drain hoses” in 2010-2012 (but not 2013) SRXs. The CSP only applied to SRXs in certain states; in relevant part, those states included Florida, Georgia, New York, and Pennsylvania, but not Michigan. The CSP document also explained to dealers that “whenever a vehicle subject to this program enters your vehicle inventory, or is in your facility for service through January 31, 2017, you must take the steps necessary to be sure the program correction has been made before selling or releasing the vehicle.” Moreover, the CSP document stated that “Dealers are to service all vehicles subject to this program at no charge to customers, regardless of mileage, age of vehicle, or ownership, through January 31, 2017.”

         Plaintiffs filed this case on September 26, 2018. They allege 12 claims in the complaint and seek to represent a nationwide class and five statewide classes of individuals who purchased or leased a 2010-2013 SRX:

Count
Plaintiff(s)
Class
Claim

1 2

Carol Divis

Pennsylvania

Pennsylvania Unfair Trade Practices and Consumer Protection Law

Breach of Warranty (Express and Implied)

3

Brian Sirota

Florida

Florida Deceptive and Unfair Trade Practices Act

4 5

Kathlene Scheffers

Michigan

Michigan Consumer Protection Act

Breach of Express Warranty

6 7

Christie Oss

Georgia

Georgia Uniform Deceptive Trade Practices Act

Breach of Express Warranty

8 9

Antonio Fusco

New York

New York Deceptive Practices Act, N.Y. General Business Law § 349

Breach of Express Warranty

10

All

Nationwide

Magnuson-Moss Warranty Act

11

All

Not Specified

Unjust Enrichment

12

All

Not Specified

Declaratory Relief

         Plaintiffs allege they were harmed and that they “continue to be harmed and suffer actual damages” because: (1) their SRXs manifested, and continue to manifest, the Leaking Sunroof Defect, causing them to incur costs to repair the defect; (2) GM has not provided a permanent remedy for the defect; and (3) GM refuses to repair sunroof leaks under the expired warranty.

         Plaintiffs seek damages in the amount they paid to repair the Leaking Sunroof Defect and other damages permitted by law. They also seek a declaration that the Leaking Sunroof Defect is covered by GM’s express warranty and that GM must repair the defect in their cars under the warranty.

         GM filed a motion to dismiss the complaint. The motion is fully briefed.

         On March 1, 2019, GM filed a notice of supplemental authority, notifying the Court of a recent decision from the Southern District of California in which the court granted GM’s motion to dismiss claims similar to those alleged by Plaintiffs – including a breach of express warranty claim, fraud claims, an unjust enrichment claim, and a request for declaratory relief – based on the same alleged Leaking Sunroof Defect in model year 2010-2013 SRXs. See Gaines v. Gen. Motors Co., No. 17CV1351-LAB (JLB), 2019 WL 913088 (S.D. Cal. Feb. 25, 2019). Plaintiffs’ counsel in Gaines and this case are the same. The Gaines court dismissed the breach of express warranty claim with prejudice and the remaining claims without prejudice. See id. at *5.

         III. LEGAL STANDARD

         A motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) tests a complaint’s legal sufficiency. The federal rules 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). Indeed, “[t]o 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 Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A claim is plausible where the facts allow the Court to infer that the defendant is liable for the misconduct alleged. Id. This requires more than “bare assertions of legal conclusions”; a plaintiff must provide the “grounds” of his or her “entitlement to relief.” League of United Latin Am. Citizens v. Bredesen, 500 F.3d 523, 527 (6th Cir. 2007); Twombly, 550 U.S. at 555 (while detailed factual allegations are not required, a pleading must offer more than “labels and conclusions” or “a formulaic recitation of the elements of the cause of action”). Ultimately, the question is “‘not whether [the plaintiff] will ultimately prevail’ . . . but whether [the] complaint [is] sufficient to cross the federal court’s threshold.” Skinner v. Switzer, 562 U.S. 521, 529-30 (2011) (citations omitted).

         In deciding a motion under Rule 12(b)(6), the Court must construe the complaint in the light most favorable to the plaintiff, accept as true all well-pled factual allegations, and draw all reasonable inferences in favor of the plaintiff. Bassett v. Nat’l Collegiate Athletic Ass’n, 528 F.3d 426, 430 (6th Cir. 2008). The Court “may consider the Complaint and any exhibits attached thereto, public records, items appearing in the record of the case and exhibits attached to defendant’s motion to dismiss so long as they are referred to in the Complaint and are central to the claims contained therein.” Id.

         IV. ANALYSIS

         A. EXPRESS WARRANTY CLAIMS

         Plaintiffs Divis (Count Two), Scheffers (Count Five), Oss (Count Seven), and Fusco (Count Nine) allege breach of express warranty claims under Pennsylvania, Michigan, Georgia, and New York law, respectively. Plaintiffs claim that they experienced the Leaking Sunroof Defect in their SRXs and GM breached the express warranty by refusing to repair the defect under warranty.

         GM says Plaintiffs’ express warranty claims fail because: (1) Plaintiffs fail to allege that they were “denied warranty repairs during the warranty period (four years or 50, 000 miles, whichever came first)”; and (2) the warranty, by its express terms, covers repairs only during the warranty period.

         Plaintiffs do not contest the first omission in their pleadings. Rather, they base their express warranty claims on these three theories: (1) because “GM possessed actual knowledge of the existence of the Leaking Sunroof Defect . . . during the original warranty periods” – i.e., four years or 50, 000 miles – GM must provide warranty coverage for repairs made after the applicable time or mileage limits pass; (2) notwithstanding the four years or 50, 000 miles limitation, the warranty promised “additional assistance after the . . . warranty period expired” for this defect, and GM offered the January 14, 2015 CSP that applied to some, but not all, of Plaintiffs’ SRXs; and (3) with respect to Plaintiff Divis, GM breached the warranty by failing to properly repair the defect because, after GM repaired her sunroof under warranty in April 2014, her sunroof began leaking again in June 2017. Plaintiffs’ arguments lack merit.

         1. Neither the Warranty Nor the CSP Provides Coverage for Repairs Occurring After the Four Years or 50, 000 Miles Limitation Expired

         Plaintiffs rely on a provision of GM’s warranty and the CSP offered by GM to contend that GM promised, and therefore was required, to provide “additional assistance” (i.e., free repairs) for the Leaking Sunroof Defect after the warranty period expired.

         The provision of the warranty Plaintiffs refer to states: “Under certain circumstances, GM . . . may provide assistance after the . . . warranty period has expired when the problem results from a defect in material or workmanship. These instances will be reviewed on a case-by-case basis.” Plaintiffs say the “assistance” under that provision was offered by GM through the limited CSP.

         Plaintiffs’ contention that GM promised to provide “additional assistance” (i.e., coverage) for the Leaking Sunroof Defect after the warranty period expired misconstrues the language of the warranty. Moreover, their claim that the CSP constituted part of GM’s warranty or was mandatory is unsupported.

         While the CSP may have been a method through which GM covered defects after expiration of the warranty period, the warranty itself states in plain terms that GM may provide assistance after the warranty period expired; it does not say that GM will provide coverage after expiration of the warranty period. Moreover, no other part of the warranty mandated that GM offer the CSP, and the CSP itself was not a warranty. It was a voluntary program that GM elected to offer.

         The plain language of the warranty provides that the warranty coverage ends after four years or 50, 000 miles, whichever occurs first. Neither the warranty nor the CSP required GM to cover the Leaking Sunroof Defect after Plaintiffs’ warranties expired. Accordingly, Plaintiffs’ claim that the above excerpt from the warranty and/or the CSP required GM to repair the Leaking Sunroof Defect in Plaintiffs’ cars under their expired warranties fails as a matter of law.

         2. Plaintiffs’ Allegation that GM Knew About the Leaking Sunroof Defect Does Not Save Their Breach of Express Warranty Claims

         Plaintiffs admit they failed to allege that GM denied them warranty coverage during the warranty period. Therefore, their express warranty claims fail. The law is clear that once the warranty period expires, GM was not required to provide free repairs under the warranty. See In re Ford Motor Co. Speed Control Deactivation Switch Prod. Liab. Litig., No. MDL 1718, 2007 WL 2421480, at *7 (E.D. Mich. Aug. 24, 2007) (“‘To allow a customer to seek damages for breach of an express warranty beyond the limits specified in that warranty would in effect compel the manufacturer to insure all latent defects for the entire life of the product and would place a burden on the manufacturer for which it did not contract.’” (citation omitted)); Clemens v. DaimlerChrysler Corp., 534 F.3d 1017, 1023 (9th Cir. 2008) (“The general rule is that an express warranty does not cover repairs made after the applicable time or mileage periods have elapsed.” (quoting Daugherty v. Am. Honda Motor Co., 144 Cal.App.4th 824, 830 (2006) and Abraham v. Volkswagen of Am., Inc., 795 F.2d 238, 250 (2d Cir.1986))); Gaines, 2019 WL 913088, at *4 (dismissing breach of express warranty claim where plaintiff’s sunroof leak occurred after the warranty period expired).

         Plaintiffs’ allegation that GM knew about the defect during the warranty period and/or at the time of sale does not save their express warranty claims. As the Ninth Circuit explained in Clemens:

Every manufactured item is defective at the time of sale in the sense that it will not last forever; the flip-side of this original sin is the product’s useful life. If a manufacturer determines that useful life and warrants the product for a lesser period of time, we can hardly say that the warranty is implicated when the item fails after the warranty period expires. The product has performed as expressly warranted. Claims regarding other buyer expectations and the manufacturer's state of mind properly sound in fraud and implied warranty.

Clemens, 534 F.3d at 1023. See also McCabe v. Daimler AG, 948 F.Supp.2d 1347, 1359 (N.D.Ga. 2013) (“[T]he Court holds that Defendants’ knowledge of the alleged defect at the time of sale . . . is insufficient to render the [warranty’s] time and mileage limitations unconscionable.”); Daugherty, 144 Cal.App.4th at 830 (“Several courts have expressly rejected the proposition that a latent defect, discovered outside the limits of a written warranty, may form the basis for a valid express warranty claim if the warrantor knew of the defect at the time of sale.” (citations omitted)); Gaines, 2019 WL 913088, at *4 (allegation that GM knew about defect did not save express warranty claim).

         Plaintiffs’ reliance on Alberti v. Gen. Motors Corp., 600 F.Supp. 1026 (D.D.C. 1985), does not change the outcome; that case has no binding effect and has been rejected by other courts. See, e.g., Clemens, 534 F.3d at 1023; Abraham, 795 F.2d at 250; Daugherty, 144 Cal.App.4th at 831. Alberti is not persuasive; the Court declines to follow it.

         3. Plaintiff Divis’ “Failure to Properly Repair” Claim

          Finally, like Plaintiffs’ main breach of express warranty claims, Divis’ purported “failure to ...


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