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ORLANDO v. NOVURANIA OF AMERICA INC.

July 30, 2001

JOHN ORLANDO, PLAINTIFFS,
V.
NOVURANIA OF AMERICA, INC., DEFENDANTS.



The opinion of the court was delivered by: McMAHON, District Judge.

DECISION ON DEFENDANT'S MOTIONS TO DISMISS

On December 18, 2000, plaintiff, John Orlando commenced this action against, defendant, Novurania of America, Inc. (Novurania), a manufacturer, distributor and purveyor of water craft. Plaintiff asserts five separate causes of action: Count I — breach of express warranty; Count II — breach of implied warranty of merchantability; Count III — breach of implied warranty of fitness for a particular purpose; Count IV — fraudulent misrepresentation; Count V — negligent design, construction and manufacturing. Plaintiff is seeking to recover $20,000.00 in compensatory damages on each of his five causes of action, punitive damages in the amount of $500,000.00, costs and disbursements and reasonable attorney fees, and for any further relief the Court may deem just and proper.

Mr. Orlando's amended complaint alleges inter alia the following: On or about September 9, 1996, plaintiff purchased a 1995 hard bottom inflatable boat from Novurania for approximately $20,000. (Complaint at 6). At the time of the sale Novurania provided plaintiff with an express five-year written warranty, to the effect that the boat was free from defects. (Id. at ¶ 7).

Sometime in 1998, plaintiff allegedly began noticing cracks in the hull of the boat. (Id. at ¶ 10). Plaintiff returned the boat to Novurania and Novurania repaired the cracks. (Id. at ¶ 12). Subsequent to those repairs, additional cracks began to develop in the boat's hull, however, defendant refused to repair the boat or return the purchase price. (Id. at ¶ 12, 13, 14). Plaintiff alleges that the cracks in the hull of the boat are defects that are a result of faulty workmanship and materials used by the defendants. (Id. at ¶ 15). At the time the boat was purchased in 1996, he relied on defendant's representation that the boat he was purchasing had not been previously repaired. He later learned that it had been repaired. (Complaint at ¶ 33-37). Plaintiff alleges that had he known the boat was previously repaired, he would not have bought it. (Id. at ¶ 39). Plaintiff further alleges that defendant had been negligent in the "design, construction, maintenance, repair and sale" of the boat, and that that has resulted in damages suffered by plaintiff. (See Complaint at ¶ 43).

Defendant has filed a motion to dismiss plaintiffs amended complaint for failure to state a claim upon which relief can be granted, pursuant to Fed.R.Civ.P. 12(b)(6). Defendant contends that: (a) counts II and III are barred by the applicable statute of limitations; (b) count III further fails to allege facts constituting a breach of implied warranty of fitness for a particular purpose; (c) counts IV and V (both manufacturer tort claims): (i) fail to plead any duty on Novurania's part, separate from its alleged contractual obligations; and (ii) are barred by New York's economic loss rule; and (d) count IV fails to plead fraud with the requisite specificity required by Fed.R.Civ.P. 9(b). Apparently, Defendant has no quarrel with the sufficiency of count I, which pleads a breach of the express warranty.

Standard of Review

Fed.R.Civ.P. 12(b)(6) of the Federal Rules of Civil Procedure provides for dismissal of a complaint that fails to state a claim upon which relief can be granted. The standard of review on a motion to dismiss is heavily weighted in favor of the plaintiff. The Court is required to read a complaint generously, drawing all reasonable inferences from the complaint's allegations. California Motor Transport Co. v. Trucking Unlimited, 404 U.S. 508, 515, 92 S.Ct. 609, 30 L.Ed.2d 642 (1972). "In ruling on a motion to dismiss for failure to state a claim upon which relief may be granted, the court is required to accept the material facts alleged in the complaint as true." Frasier v. General Electric Co., 930 F.2d 1004, 1007 (2d Cir. 1991). The Court must deny the motion "unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Stewart v. Jackson & Nash, 976 F.2d 86, 87 (2d Cir. 1992) (quoting Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957)).

Statute of Limitations

Defendant moves to dismiss counts II and III on the ground that those counts are time barred. A pre answer motion to dismiss on statute of limitation grounds is properly viewed as a Fed.R.Civ.P. 12(b)(6) motion to dismiss for failure to state a claim upon which relief can be granted, rather than a Fed.R.Civ.P. 12(b)(1) motion to dismiss for lack of subject matter jurisdiction. Ghartey v. St. John's Queens Hosp., 869 F.2d 160, 162 (2d Cir. 1989); Marbi Corp. of New York v. Puhekker, 9 F. Supp.2d 425, 427 (S.D.N.Y. 1998). The significance is that, in determining defendant's motion, the Court must apply the Rule 12(b)(6) analysis; the Court may consider only the facts asserted in Orlando's complaint, along with the legal arguments of the parties made in support and opposition to the motion. See Ghartey, 869 F.2d at 162.

Counts II and III of the complaint allege respective causes of action for breach of the implied warranty of merchantability and breach of implied warranty of fitness for a particular purpose. (Complaint at ¶¶ 18-21, 23-28). Because the subject matter of this action clearly involves the sale of a good (the boat), the warranty claims in counts II and III are governed by the four year statute of limitations contained in Article 2 of the New York's Uniform Commercial Code, (see N.Y.UCC LAW § 2-725 (McKinney 2000); see also Whitney v. Agway, Inc., 238 A.D.2d 782, 785, 656 N.Y.S.2d 455 (3rd Dep't 1997); McGregor v. J. & L. Adikes, Inc., 112 A.D.2d 204, 491 N.Y.S.2d 426 (2nd Dep't 1985)), and not the six year statute of limitation provided by section 213 of the Civil Procedure Law and Rules, N.Y. C.P.L.R. 213 (McKinney 2000). In order to be timely filed, plaintiff must have commenced his implied warranty claims against defendant within four years of when those cause of actions accrued.

Under Article 2-725(2) of the code:

A cause of action accrues when the breach occurs, regardless of the aggrieved party's lack of knowledge of the breach. A breach of warranty occurs when tender of the delivery is made, except that where a warranty explicitly extends to future performance of the goods and discovery of the breach must await the time of such performance, the cause of action accrues when the breach is or should have been discovered.

N.Y. UCC 2-725(2). The date of tender rule for determining the accrual date for warranty actions is quite rigid. See City of Cohoes v. Kestner Engineers P.C., 226 A.D.2d 914, 640 N.Y.S.2d 917 (3rd Dep't 1996) (City's breach of warranty cause of action against manufacturer of generator accrued when generator was purchased more than four years before city brought action against manufacturer, arising from explosion at station, and, thus, breach of warranty cause of action was barred by four year statute of limitations); Heller v. U.S. Suzuki Motor Corp., 101 A.D.2d 807, 475 N.Y.S.2d 146 (1984), affirmed 64 N.Y.2d 407, 488 N.Y.S.2d 132, 477 N.E.2d 434 (1985) (Breach of warranty action against manufacturer of motor vehicle commenced more than four years after manufacturer sold the motorcycle was untimely); Couser v. Rockwell Intern., Inc., 142 Misc.2d 321, 536 N.Y.S.2d 965 (1989) (Implied warranty of merchantability and fitness claims by worker against seller of machine accrued on date seller sold machine to worker's employer, rather than on date of injury, for purposes of four year statute of limitation under the Uniform Commercial Code).

Applying the facts set forth in the amended complaint to N.Y. UCC 2-725(2), plaintiffs implied warranty cause of actions accrued on the date he purchased the boat. Mr. Orlando purchased the boat in question from Novurania on September 9, 1996.*fn1 Plaintiffs implied warranty claims would have had to have been brought no latter than September 9, 2000. Plaintiff filed his complaint with the court on December 18, 2000. Therefore, ...


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