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Gary Woods v. Maytag Co.

August 31, 2011


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


Plaintiff Gary Woods ("Woods" or "the Plaintiff") commenced this action on behalf of himself and a putative class against Maytag Company (now known as Maytag Corporation ("Maytag Corp.")), and Maytag Sales Appliance Company (now known as Maytag Sales, Inc. ("Maytag Sales") and together with Maytag Corp. "the Maytag Defendants"), and Plesser's M.S.H ("Plesser's" and together with the Maytag Defendants "the Defendants"), seeking damages associated with the purchase and use of an allegedly defective oven. In the amended complaint, the Plaintiff asserts causes of action against all of the Defendants for: (1) fraudulent inducement through misrepresentations and concealment and (2) violations of New York General Business Law §349 ("GBL § 349").

Presently before the Court is the motion by the Defendants pursuant to Fed. R. Civ. P. 12(b)(6) to dismiss the amended complaint in its entirety. For the reasons set forth below, the Court grants in part and denies in part the Defendants' motion.


A. Factual Background

The following facts are taken from the amended complaint. As required in reviewing a motion to dismiss, the Court accepts the alleged facts as true, and draws all reasonable inferences in favor of the plaintiff.

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., a department store in Babylon, New York. The Oven was "designed, manufactured, constructed, assembled, and sold" by defendant Maytag Corp. and was sold through Maytag Corp.'s subsidiary, defendant Maytag Sales. As described in the Amended Complaint, the Oven: is a combination gas oven/range designed, manufactured, marketed and sold with an electric igniter . . . commonly known as a "glow plug" or "hot surface igniter," which when activated by the end user, generates heat while simultaneously opening a gas vale with the intention of creating enough heat to cause combustion of the fuel, thus lighting the oven for use in cooking. (Am. Compl., ¶ 16.). The Oven system is commonly referred to as "self-proving" because "the opening of the gas valve and the generation of sufficient heat is 'proved' by the oven being ignited". (Am. Compl., ¶17.)

Prior to purchasing the Oven, "in light of his own concerns regarding safety and familiarity with problems associated with gas ovens and ranges", Woods asked the Plesser's sales representative who was assisting him whether the Oven "was subject to hazardous flare-ups and explosions as had been reported in similar appliances throughout the 1990's." (Am. Compl., ¶ 25.) In response, Woods states that the Plesser's sales representative assured him that the Oven "was safe and not of the type prone to hazardous flare-ups and explosions as had been reported in similar appliances throughout the 1990's." (Am. Compl., ¶ 26.) Satisfied that the Oven was safe, Woods purchased the Oven.

Subsequently, on or about February 29, 2008, when Woods attempted to use the Oven, a malfunction occurred causing the Oven to explode and catch fire, resulting in Woods suffering serious burns. According to Woods, the explosion was caused by a defect in the igniter mechanism. Following the explosion, Woods placed a service call to Cool Power LLC located in Hauppauge, New York, and an authorized Maytag repairman was dispatched to his home.

Woods alleges that the repairman told him that "he had addressed numerous other similar consumer complaints with respect to [the Oven], specifically flare-ups, explosions and fire." (Am. Compl., ¶ 30.) Furthermore, as quoted in the Amended Complaint, the repairman also created a work report ("the Work Report") that stated: "Work completed this visit: found unknown intermittent gas ignition[.] Causing gas buildup. Customer face Badly Burned." "Whirlpool [the authorized service arm for Maytag] stated to not proceed filing safety issue & personal injury. Whirlpool will call cust [sic] with what to do." (Am. Compl., ¶¶ 31 & 32.) Finally, Woods states that the repairman "advised [him] that he was specifically told by his superiors not to generate a report indicating that the incident was caused by the gas igniter". (Am. Compl., ¶ 33.)

According to Woods, the Defendants have known of the potential for this type of explosion or fire in self-proving oven systems since the early 1990s. In particular, Woods references a July 15, 2002 report by the Consumer Products Safety Commissions entitled "Gas Range Delayed Igniters" ("2002 Consumer Safety Report") which published the results of an investigation into self-proving oven systems and noted that such appliances "have no means to detect and react to the release or accumulation of non-combusted gases." (Am. Compl., ¶ 20.)

In addition, Woods contends that, upon and information and belief, in March 2003, Maytag issued a consumer recall of 23,000 units in another self-proving oven line, the Gemini Gas Range (the "2003 Gemini Recall") "because of reports of 'delayed ignition flashback fires' in the ovens which resulted in burn injuries to at least three (3) consumers." (Am. Compl., ¶ 21.) Moreover, Woods contends that since 1974 a number of patents have been obtained "addressing the concerns of fuel build up in gas ovens/ranges with hot surface ignition systems". In fact, Woods identifies two patents issued to defendant Maytag Corp. directly: (1) United States Patent 6830045 issued in 2004 for "a system designed to reduce buildups" ("2004 Patent"); and (2) United States Patent 7044729 issued in 2006 which "included a safety valve and flame detection circuit to interrupt the flow of gas if not ignited" (the "2006 Patent"). (Am. Compl., ¶ 23.)

B. Procedural History

On February 10, 2010 Woods filed this putative class action against Plesser's, Maytag Corp. and Maytag Sales, alleging that all of the Defendants knew or should of known of a defect in the Oven and falsely represented and/or concealed the information and therefore were liable for: (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. On March 10, 2010, the Maytag Defendants brought a Fed. R. Civ. P. 12(b)(6) motion to dismiss the Initial Complaint in its entirety.

In an order dated November 2, 2010, the Court granted the motion,dismissing the Plaintiff's breach of warranty claims against the Maytag Defendants as time-barred by the statute of limitations. In addition, the Court dismissed the fraud and GBL § 349 claims on the grounds that the Plaintiff failed to plead facts plausibly alleging that the Maytag Defendants had knowledge of the purported defect and failed to identify specific misrepresentations or omissions made by the Maytag Defendants to the Plaintiff or to consumers. See Woods v. Maytag Co. ("Maytag I"), No. 10-CV-0559, 2010 WL 4314313 (E.D.N.Y. Nov. 2, 2010). However, because the Court found that "the conclusory language Plaintiff use[d] to describe some of Maytag Defendants' alleged misstatements or omissions demonstrate[d] that Plaintiff may have additional information to include in the Complaint", the Court granted the Plaintiff leave to re-plead his fraud allegations with the requisite particularity required by Federal Rule of Civil Procedure 9(b) ("Rule 9(b)"), and his GBL §349 claims with sufficient plausibility under Federal Rule of Civil Procedure 8(a) ("Rule 8(a)"). Id. at *16.

As a result, on November 22, 2010, the Plaintiff filed an amended complaint ("the Amended Complaint"). The following facts from the above-stated case-description were new additions to the Amended Complaint: (1) the statement by the Plesser's sales representative; (2) the representations by the authorized Maytag repairman and the contents of the Work Report; and (3) references to the 2002 Consumer Safety Report, the Gemini Recall, the 2004 Patent, and the 2006 Patent. Based on the allegations in the Amended Complaint, the Plaintiff, on behalf of a putative class, asserted causes of action against all of the Defendants for: (1) fraudulent inducement through misrepresentations and concealment and (2) violations of the General Business Law §349. Although the Court's decision in Maytag I did not apply to Plesser's, the Court notes that the Amended Complaint abandons the warranty claims that were asserted against Plesser's in the Initial Complaint.

On December 9, 2010, all of the Defendants moved to dismiss the Amended Complaint pursuant to Rule 12(b)(6), on the grounds that the Plaintiff: (1) failed to plead his fraud claim with the requisite particularity under Rule 9(b), and (2) failed to plausibly allege a GBL §349 claim under Rule 8(a). The Court addresses the sufficiency of Plaintiff's fraud and GBL §349 claims against Plesser's and the Maytag Defendants in turn below.


A. Legal Standard on a Rule 12(b)(6) Motion to Dismiss

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 in applicable 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 1929). "'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. Whether the Plaintiff Adequately Pleads a Claim for Fraud

The Plaintiff asserts against all of the Defendants claims for fraudulent inducement based on fraudulent misrepresentations and fraudulent concealment.

Under New York law, to sustain a fraudulent inducement claim the Plaintiff must plausibly allege that "(1) the defendant made a material, false representation, (2) the defendant intended to defraud the plaintiff thereby, (3) the plaintiff reasonably relied upon the representation and (4) the plaintiff suffered damage as a result of such reliance" Wall v. CSX Transp., Inc.,471 F.3d 410, 415--16 (2d Cir. 2006) (citing Bridgestone/Firestone, Inc. v. Recovery Credit Servs., Inc., 98 F.3d 13, 19 (2d Cir. 1996)). A fraudulent concealment claim shares these same elements with the additional requirement that a plaintiff must show that the defendant had a duty to disclose the material information. See Manhattan Motorcars, Inc. v. Automobili Lamborghini, S.p.A., 244 F.R.D. 204, 213 (S.D.N.Y. 2007).

Fraudulent inducement claims are subject to the heightened pleading standards of Federal Rule of Civil Procedure 9(b), which provides that "[i]n alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake." Fed. R. Civ. P. 9(b). To comply with Rule 9(b), a complaint alleging fraudulent misrepresentation under New York law must: (1) specify the statements that the plaintiff contends were fraudulent, (2) identify the speaker, (3) state where and when the statements were made, and (4) explain why the statements were fraudulent.'" Lerner v. Fleet Bank, N.A., 459 F.3d 273, 290 (2d Cir. 2006) (quoting Mills v. Polar Molecular Corp., 12 F.3d 1170, 1175 (2d Cir. 1993)). Furthermore, where the fraudulent inducement claim is premised on concealment so that the plaintiff cannot specify the time and place because no affirmative act occurred, "the complaint must still allege: (1) what the omissions were (2) the person responsible ...

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