United States District Court, D. Massachusetts
SARAH DUNCAN, RICHARD SILVER, ANTHONY WEISSENBURGER, JUDY WEISSENBURGER, KEVIN FRY, SHAUN COONEY, CLINTON STEWART AND MICHELLE LIM STEWART, INDIVIDUALLY AND ON BEHALF OF OTHERS SIMILARLY SITUATED, Plaintiffs,
NISSAN NORTH AMERICA, INC., AND NISSAN MOTOR CO., LTD., Defendants.
MEMORANDUM AND ORDER
J. Casper United States District Judge
Plaintiffs, eight owners of cars manufactured by the
Defendants who seek to represent others similarly situated,
bring claims against the Defendants, Nissan North America,
Inc. and Nissan Motor Company, based upon an alleged
defective component in the cars. Their claims include counts
for breach of contract; breach of the implied covenant of
good faith and fair dealing; breach of an express warranty;
breach of an implied warranty of merchantability; unjust
enrichment; violations of the consumer protection statutes of
Oregon, Colorado, Texas, Massachusetts, and North Carolina;
and a violation of the Magnuson-Moss Warranty Act, 15 U.S.C.
§ 2310(d)(1). For the reasons discussed below, the Court
ALLOWS the motion to dismiss with respect to Count I (Oregon
Unlawful Trade Practices Act), Count II (Colorado Consumer
Protection Act), Count III (Texas Deceptive Trade Practices
Consumer Protection Act), Count V (North Carolina Unfair and
Deceptive Trade Practices Act) and Count VII (breach of
implied warranty of merchantability) and DENIES the motion
with respect to the remaining counts.
Court accepts all non-conclusory facts alleged in the
complaint, D. 1, as true, Ocasio- Hernández v.
Fortuño-Burset, 640 F.3d 1, 12 (1st Cir. 2011),
and “draw[s] all reasonable inferences in favor of the
plaintiff.” Gargano v. Liberty Int'l
Underwriters, Inc., 572 F.3d 45, 48 (1st Cir.
Defendants manufacture and sell or lease cars. Certain models
of these cars, identified as the “Class Vehicles,
” contain a defective Timing Chain Tensioning System
(“TCTS”). ¶¶ 1, 2. As alleged, the
defect in the TCTS causes the engine of the car to become
damaged, necessitating expensive repairs, and potentially
also posing a safety risk to the occupants of the car.
¶¶ 4, 59, 62, 101. The Defendants allegedly knew
and should have known, at the time of sale or lease of the
Class Vehicles, that the TCTS was defective. ¶¶ 5,
61, 71. However, instead of disclosing the defect in the
TCTS, the Plaintiffs contend that the Defendants concealed
information regarding the defect in the TCTS from consumers,
while disclosing information to dealerships via Technical
Service Bulletins (“TSBs”), regular publications
to dealerships that are authorized to perform repairs on the
Defendants' cars. ¶¶ 7-8, 61-62, 84-90.
According to a mechanic at an authorized dealership, the
defect in the TCTS stems from the fact that a particular
component of the TCTS is made of an inferior plastic
component, which may be worn away, even the part is supposed
to last the lifetime of the car. ¶ 75. The Defendants
subsequently improved the material of this particular
component to remedy the defect in subsequent models of its
cars. ¶ 76.
Defendants offer two warranty products on the Class Vehicles:
first, the “Basic Warranty, ” which covered
repairs during the first 36, 000 miles or 36 months
(whichever occurs first), and second, the “Powertrain
Warranty, ” which covered repairs during the first 60,
000 miles or 60 months (whichever occurs first). ¶ 6.
The warranty covers repairs for defects in “materials
and/or workmanship.” ¶ 127. The Plaintiffs allege
that the Defendants intentionally set these warranty limits
so that the warranty coverage would expire before the defect
in the TCTS would manifest itself. ¶ 64.
named Plaintiffs all purchased or leased Class Vehicles
manufactured by the Defendants from various dealerships.
¶¶ 14, 19, 24, 29, 34, 40, 45. Plaintiff Sarah
Duncan is a citizen of Massachusetts who purchased a 2007
Nissan Maxima in Massachusetts in 2010. ¶14. In 2016,
when her vehicle had approximately 127, 000 miles, she was
informed by a technician at a Nissan dealership that the TCTS
needed to be replaced at a cost of approximately $1, 500.
¶¶ 17-18. She was also informed that Nissan would
not cover the cost of the repair. ¶ 18.
Richard Silver is a citizen of Massachusetts who purchased a
2007 Nissan Maxima in Massachusetts in 2007. ¶ 19. In
2014, when his vehicle had approximately 74, 024 miles, he
was informed by a technician at a Nissan dealership that the
TCTS needed to be replaced, and that Nissan would not cover
the cost of the repair. ¶¶ 22-23. He spent $1,
641.45 replacing the TCTS. ¶ 23.
Anthony and Judy Weissenburger are citizens of Oregon who
purchased a 2004 Nissan Maxima in Oregon in 2004. ¶ 24.
In 2011, when their vehicle had approximately 39, 666 miles,
they were informed by a technician at a Nissan dealership
that the TCTS needed to be replaced and that Nissan would not
cover the cost of the repair. ¶¶ 27-28. They spent
approximately $1, 400 replacing the TCTS. ¶ 28.
Kevin Fry is a citizen of Colorado who purchased a 2009
Nissan Frontier in Colorado on or about April 18, 2009.
¶ 29. On or about June 15, 2015, when his vehicle had
approximately 58, 100 miles, he was informed by a technician
at a Nissan dealership that the TCTS needed to be replaced
and that Nissan would not cover the cost of the repair.
¶¶ 32-33. He spent approximately $1, 388.42
replacing the TCTS. ¶ 33.
Shaun Cooney is a citizen of Colorado who purchased a 2007
Nissan Xterra in 2016 in Colorado. ¶ 34. Later in 2016,
when his vehicle had approximately 78, 000 miles, he was
informed by a technician at a Nissan dealership that the TCTS
needed to be replaced and that Nissan would not cover the
cost of the repair. ¶¶ 38-39. He spent
approximately $928.01 replacing the TCTS. ¶ 39.
Clifton Stewart is a citizen of Texas who purchased a 2006
Nissan Frontier in 2006 in Texas. ¶ 40. In 2016, when
his vehicle had approximately 87, 333 miles, he was informed
by a technician at a Nissan dealership that the TCTS needed
to be replaced and that Nissan would not cover the cost of
the repair. ¶¶ 43-44. He spent approximately $1,
625.77 replacing the TCTS. ¶ 44.
Michelle Lim Stewart is a citizen of North Carolina who
purchased a 2007 Nissan Pathfinder in North Carolina. ¶
45. In 2015, when her vehicle had approximately 51, 000
miles, she was informed by a technician at a car repair shop
that the TCTS needed to be replaced. ¶¶ 48-49. She
paid approximately $1, 910 replacing the TCTS. ¶ 49.
October 21, 2016, the Plaintiffs filed their complaint, D.1.
The Defendants moved to dismiss, D. 14. This Court heard
argument on the motion to dismiss and took the motion under
advisement. D. 38.
Standard of Review
motion to dismiss based upon Rule 12(b)(6), the Court will
dismiss a complaint that fails to allege adequate facts
“to state a claim to relief that is plausible on its
face.” Bell Atl. Corp. v. Twombly, 550 U.S.
544, 570 (2007). In reviewing the complaint, the Court can
consider documents attached to or fairly incorporated into
the complaint and facts susceptible to judicial notice.
Schatz v. Republican State Leadership Comm., 669
F.3d 50, 55 (1st Cir. 2012).
Choice of Law
federal court sitting in diversity, ” as this Court
does here, “applies state substantive law.”
Levin v. Dalva Bros., Inc., 459 F.3d 68, 73 (1st
Cir. 2006). “To determine the applicable substantive
law, the federal court applies the choice-of-law principles
of the forum state, here, Massachusetts.” Id.
The Defendants assume that “the law of the state where
each Plaintiff purchased and sought repair for his or her
vehicle controls the substantive law claims of that
particular Plaintiff.” D. 15 at 20. The Plaintiffs do
not contest this position.
Breach of Express Warranty (Count VI)
complaint, the Plaintiffs allege that they entered into
either the Basic Warranty or Powertrain Warranty with the
Defendants and that the Defendants breached that warranty by
failing to cover the cost of repairing the defective TCTSs.
¶¶ 170, 171.
Defendants first contend that the complaint fails to state a
claim for relief because the warranty only covers
“repairs needed to correct defects in the materials or
workmanship, ” D. 15- 1 at 8; D. 15-2 at 10; D. 15-3 at
8; D. 15-4 at 8,  whereas the complaint only alleges a
design defect. In support of this contention, they cite
Bruce Martin Constr., Inc., v. CTB, Inc., 735 F.3d
750, 753-54 (8th Cir. 2013). In that case, the court
interpreted an express warranty against “defects in
material and workmanship” to exclude claims based on
design defects. Id. The court reasoned that
“defects in material and workmanship refer to
departures from a product's intended design while design
defects refer to the inadequacy of the design itself . . .
where a product is manufactured correctly but designed
inappropriately, the defect is one of design and not
‘material or workmanship.'” Id. at
753. The Defendants contend that both the structure of the
TCTS and the material used in the TCTS constitute the
“design” and not the “material or
workmanship” of the TCTS, and, therefore, the complaint
only alleges defects in the design rather than in the
material or workmanship. D. 15 at 25-26.
response, the Plaintiffs contend that the Defendants
mischaracterize the allegations in the complaint. D. 20 at
25. The complaint alleges that the “Defendants failed
to adequately ensure proper materials selection, research,
design, testing and/or manufacture of the [TCTS].”
¶ 82. Thus, even under the Defendants'
interpretation of the phrase “material or workmanship,
” the complaint pleads facts sufficient to state a
claim for breach of the express ...