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Woods v. Maytag Co.

November 2, 2010

GARY WOODS ON BEHALF OF HIMSELF AND OTHER CONSUMERS OF THE MAYTAG GAS OVEN APPLIANCE (MODEL MGR5875QDS) SIMILARLY SITUATED, PLAINTIFFS,
v.
MAYTAG CO., MAYTAG APPLIANCES SALES CO., AND PLESSER'S M.S.H. INC. DEFENDANTS.



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

MEMORANDUM OF DECISION AND ORDER

Plaintiff Gary Woods filed this putative class action relating to an allegedly defective gas oven against Plesser's M.S.H., Inc., as well as Maytag Company and Maytag Sales Appliance Company (the "Maytag Defendants"). The Complaint alleges the following causes of action:

(1) Breach of express warranty; (2) Breach of the implied warranty of fitness; (3) Breach of the implied warranty of merchantability; (4) Fraud and deceit; and (5) Violations of General Business Law §349. Presently before the Court is the Maytag Defendants' Fed. R. Civ. P. 12(b)(6) motion to dismiss the complaint. For the reasons set forth below, the motion is granted; however, the Court will allow Plaintiff to file an amended complaint repleading the fraud and General Business Law claims.

I. BACKGROUND

On July 21, 2005, Plaintiff Gary Woods purchased a Maytag 30 inch gas range oven with the model number MGR5875QDS (the "oven") from Plesser's, M.S.H. Inc. ("Plesser's"), a department store in Babylon, New York. On or about February 29, 2008, when Plaintiff attempted to use the oven, a malfunction occurred causing the oven to explode. Plaintiff attributes this explosion to an alleged defect in the igniter mechanism in the oven, which "cause[s] the gas valve to open in such a manner that the open valve causes the oven to fill with gas but does not ignite" and instead "trigger[s] an explosion." (Compl. ¶ 19.) According to the Plaintiff, at the time of the sale, Maytag Co. (now known as Maytag Corporation, see Def. Br. at 1) was "in the business of designing, manufacturing, constructing, assembling, inspecting, and selling various types of household appliances, including gas ovens" and Maytag Sales Appliance Co. (now known as Maytag Sales, Inc., see id.) was "in the business of selling household appliances including gas ovens." (Compl. ¶¶ 10--11.)

On December 10, 2009, Plaintiff filed a complaint (the "Complaint") on behalf of a putative class comprised of individuals who purchased the Maytag 30-inch gas range convection oven model number MGR5875QDS. The Complaint asserts a number of claims based on the Plaintiff's belief that Plesser's and the Maytag Defendants possessed and intentionally withheld knowledge of the alleged defect, and made express warranties and other misrepresentations regarding the safety of the oven in order to induce consumers to purchase the oven and spend money on repairs.

Pursuant to Rule 12(b)(6), the Maytag Defendants moved to dismiss the Complaint on March 10, 2010 on the grounds that: (1) Plaintiff's breach of warranty claims are barred by the statute of limitations or otherwise fail to state a claim; (2) Plaintiff's fraud claims are duplicative of the warranty claims and fail to state a claim with the requisite particularity; and (3) The Plaintiff fails to state a claim under New York General Business Law §349. The Court addresses these arguments in turn below.

II. DISCUSSION

A. Legal Standard

Under the now well-established Twombly standard, a complaint should be dismissed only if it does not contain enough allegations of fact to state a claim for relief that is "plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 1974, 167 L.Ed. 2d 929 (2007). The Second Circuit has explained that, after Twombly, the Court's inquiry under Rule 12(b)(6) is guided by two principles. Harris v. Mills, 572 F.3d 66 (2d Cir. 2009) (citing Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949, 173 L.Ed. 2d 868 (2009)). "First, although 'a court must accept as true all of the allegations contained in a complaint,' that 'tenet' 'is inapplicable to legal conclusions,' and '[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.'" Id. (quoting Iqbal, 129 S.Ct. at 1949). "'Second, only a complaint that states a plausible claim for relief survives a motion to dismiss' and '[d]etermining whether a complaint states a plausible claim for relief will . . . be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.'" Id. (quoting Iqbal, 129 S.Ct. at 1950). Thus, "[w]hen there are well-pleaded factual allegations, a court should assume their veracity and . . . determine whether they plausibly give rise to an entitlement of relief." Iqbal, 129 S.Ct. at 1950.

B. As to the Breach of Express and Implied Warranty Causes of Action

The Plaintiff alleges three breaches by the Maytag Defendants: breach of express warranty, breach of the implied warranty of fitness, and breach of the implied warranty of merchantability. The Maytag Defendants contend, and the Court agrees, that all of the warranty claims are time-barred by the statute of limitations.

The applicable statute of limitations for a breach of warranty, express or implied, on a contract of sale for a good is four years. N.Y. U.C.C. 2-725. Under New York law, a cause of action for breach of warranty begins to accrue upon the date of delivery. See Fernandez v. Cent. Mine Equip. Co., 670 F. Supp. 2d 178, 189 (E.D.N.Y. 2009). Here, the parties do not dispute that the date of delivery is July 21, 2005 when the Plaintiff purchased the oven. It is also undisputed that, absent any applicable exception, the statute of limitations expired on the breach of warranty claims on or about July 21, 2009, more than four months before the complaint in this action was filed on December 10, 2009.

In his opposition to the motion to dismiss, the Plaintiff asserts that it is improper to dismiss the breach of warranty claims on statute of limitations grounds because "there are disputed facts regarding when Plaintiffs could or should have known that their ovens were potentially defective . . . [and] whether Maytag concealed the danger of these ovens." (Pl. Br. at 6.) The Court is aware of two exceptions to the statute of limitations that arguably could apply. First, there is an exception within the New York Uniform Commercial Code for warranties that explicitly guarantee future performance. Second, under certain circumstances where, as here, a plaintiff alleges fraudulent concealment, courts have applied equitable estoppel to toll the statute of limitations if the fraud prevented a plaintiff from filing a timely action. The Court will address the applicability of these exceptions to the Plaintiff's claims in turn.

1. Future Performance

The first issue is whether Plaintiff's express and/or implied warranty claims fall within the statutory exception to the statute of limitations for warranties relating to future performance. Pursuant to N.Y. U.C.C. 2-725(2), when a warranty guarantees future performance "the cause of action accrues when the breach is or should have been discovered." N.Y. U.C.C. 2-725(2). As an initial matter, this exception does not apply to the Plaintiff's causes of action for breach of the implied warranty of fitness and the implied warranty of merchantability because "[t]he [future performance] exception speaks to express warranties not implied warranties." Orlando v. Novurania of America, Inc., 162 F. Supp. 2d 220, 224 (S.D.N.Y. 2001); Momentive Performance Materials USA, Inc. v. AstroCosmos Metallurgical, Inc., 659 F. Supp. 2d 332, 347-- 48 (N.D.N.Y. 2009) ("Since, 'an implied warranty by definition embodies no 'explicit' guarantees ... [a] plaintiff's ... implied warranty cause[ ] of action necessarily accrue[s] as a matter of law at about the time of tender of delivery ....") (quoting Zielinski v. Alfa-Laval, Inc., No. 86-CV-296E, 1989 WL 29482, at *3 (W.D.N.Y. March 27, 1989)).

Furthermore, a court will only apply this exception to a breach of express warranty claim when "the warranty explicitly extend[s] to future performance." Rosen v. Spanierman, 894 F.2d 28, 31 (2d Cir. 1990) (emphasis in original). "[T]he term 'explicit' has been explained as plain language which is distinctly stated, clear and unequivocal to the point that there is no doubt as to its meaning." Port Auth. of N.Y. & N.J. v. Allied Corp., 914 F. Supp. 960, 962 (S.D.N.Y.1995) (citation and internal quotation omitted). In addition, "[w]arranties to repair or replace the product in the event that it fails to perform, without any promise of performance, do not constitute warranties of future performance." Rochester-Genesee Reg'l Trans. Auth. v. Cummins Inc., No. 09-CV-6370, 2010 WL 2998768, at *3--4 (W.D.N.Y. July 28, 2010) (citing, Rosen, 894 F.2d at 31); see also Ontario v. Zallea Sys., Inc., 569 F. Supp. 1261, 1266 (D. Del. 1983) (noting that the key distinction between a repair or replace warranty and one for future performance is that a "repair or replacement warranty merely provides a remedy if the product becomes defective, while a warranty for future performance guarantees the performance of the product itself for a stated period of time").

Here, the Court looks to the language included in the warranty attached as Exhibit 1 to the Motion to Dismiss to determine whether the Maytag Defendants explicitly warranted future performance. Although the Plaintiff did not include a copy of the limited warranty at issue in the Complaint, because the warranty is directly relied upon by the Plaintiff in support of the Complaint, this Court may consider the warranty without converting the motion to dismiss into one for summary judgment. See, e.g., Holoweeki v. Federal Exp. Corp., 440 F.3d 558, 565--66 (2d Cir. 2006). The Plaintiff did not contest or dispute that the warranty attached to the Maytag Defendants' motion was the full and correct copy of the warranty included with the oven. The relevant language of the warranty is as follows:

Full One Year Warranty -- Parts and Labor

For one (1) year from the original retail purchase date, any part which fails in normal home use will be repaired or replaced free of charge. . . .

The specific warranties expressed above are the ONLY warranties provided by the manufacturer. This warranty gives you specific legal rights, and you may also have other rights that vary from state to state. (Def. Br., Ex. 1 (emphasis in original).) The Court finds no ambiguity, nor does the Plaintiff point to any ambiguity, that would indicate that the warranty is anything other than a warranty for repair or replacement and therefore does not guarantee future performance. Furthermore, given the declaration in the written warranty stating that "[t]he specific warranties expressed above are the ONLY warranties provided by the manufacturer," the Court is limited in its review to the written warranty and the Plaintiff has not indicated that there are any additional facts he could present that would allow him to avail himself of the N.Y. U.C.C. 2-725(2) future performance exception.

2. Equitable Estoppel

The second exception potentially available to the Plaintiff is the equitable remedy of tolling the statute of limitations where the "plaintiff was induced by fraud, misrepresentations or deception to refrain from filing a timely action." Simcuski v. Saeli, 44 N.Y.2d 442, 406 N.Y.S.2d 259, 377 N.E.2d 713 (1978). In order for the doctrine of equitable estoppel to apply, a plaintiff must "articulate ... acts by defendant[ ] that prevented [plaintiff] from timely commencing suit . . . ." Abbas v. Dixon, 480 F.3d 636, 642 (2d Cir. 2007). Evidence that the plaintiff "was the victim of fraud, misrepresentations, or deception" alone is insufficient unless the plaintiff demonstrates that "those circumstances prevented him from timely filing his complaint." Id. (internal quotations omitted).

Here, equitable estoppel is unavailable regardless of whether the Plaintiff can state a valid fraudulent concealment claim because "[t]he doctrine of equitable estoppel will not apply if the plaintiff possesses 'timely knowledge' sufficient to place him or her under a duty to make inquiry and ascertain all the relevant facts prior to the expiration of the applicable Statute of Limitations." Harris v. Wilmorite Corp., 266 A.D.2d 902, 902, 697 N.Y.S.2d 439, 440 (4th Dep't 1999) (quoting McIvor v. Di Benedetto, 121 A.D.2d 519, 520, 503 N.Y.S.2d 836, 837 (2d Dep't 1986)); Abbas, 480 F.3d at 642.

As the Plaintiff states in the Complaint, he learned of the alleged defect on or about February 29, 2008, when the malfunction and explosion occurred-nearly two years before he commenced this action and more than a year before the limitations period expired. In the Court's view, the Plaintiff had a sufficient period of time to investigate and commence an action based on the warranty prior to the expiration of the applicable statute of ...


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