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O'Grady v. FCA U.S. LLC

United States District Court, S.D. New York

April 27, 2017

FCA U.S. LLC, et al., Defendants.

          OPINION & ORDER

          HON. KIMBA M. WOOD United States District Judge.

         Marianne O'Grady ("Plaintiff) seeks compensatory and punitive damages for injuries she sustained in an automobile accident. The Court GRANTS Defendant FCA's Motion to Dismiss the portion of Plaintiff s Complaint seeking punitive damages, because punitive damages are barred by a final order of the United States Bankruptcy Court.

         I. Introduction

         On October 11, 2013, at around 9:00 p.m., a 2002 Grand Cherokee Laredo Jeep collided with Plaintiffs vehicle. (Complaint ¶ 6, Doc. No. 1-1). Plaintiff was severely injured, and both vehicles were significantly damaged. Plaintiff, a resident of Bronx County in New York, filed a lawsuit pro se on October 11, 2016 in New York Supreme Court, against FCA U.S. LLC; Roseanne Piccirilli, the Jeep driver; Nicola Piccirilli, the Jeep owner; and L&S Auto Repair.

         Plaintiffs Complaint makes four claims against Defendant FCA: (1) negligence in design and sale, which created an unreasonable risk of harm; (2) defective design and/or defective manufacture; (3) failure to warn about the foreseeable purposes of the vehicles and their components; and (4) violations of state business laws governing advertisement. This Opinion addresses FCA's Motion to Dismiss Plaintiffs punitive damage claim.

         II. Background and Procedural History

         After Plaintiff filed this case in New York Supreme Court, Defendant removed the action to federal court, pursuant to 28 U.S.C. §§ 1334, 1452(a) and 1441(a), [1] because Plaintiffs claims are related to a Bankruptcy Court decision governing FCA's liability for Chrysler's manufacturing defects. (See Notice of Removal, Doc. No. 1).

         DaimlerChrysler Corporation manufactured the Jeep involved in Plaintiffs accident. In 2007, DaimlerChrysler separated into Daimler AG and Chrysler LLC, and in 2009, Old Carco (which included Chrysler LLC) filed for bankruptcy in the United States Bankruptcy Court for the Southern District of New York. (Mot. to Dismiss at 3). That same day, Old Carco entered into a Master Transaction Agreement, in which it agreed to sell substantially all of its assets, free and clear of all claims and liabilities, other than those expressly listed, to a new company that is now known as FCA U.S. LLC. (Id. at 4). The Bankruptcy Court entered an Order authorizing the Master Transaction Agreement and specifically exempting FCA from all liabilities, other than those expressly described in the Master Transaction Agreement. (See Ex. B to MTD (In re Old Carco LLC at¶ 35, No. 09-50002 (Bankr. S.D.N.Y. June 1, 2009) (Gonzalez, J.))).

         On November 19, 2009, the Bankruptcy Court approved an amendment to the Master Transaction Agreement, in which FCA assumed any product liability claims arising from any Chrysler, Jeep or Dodge brand vehicles, "solely to the extent such Product Liability Claims ... do not include any claim for exemplary or punitive damages." (See Ex. C to MTD (In re Old Carco LLC at Annex A ¶ 1, No. 09-50002 (Bankr. S.D.N.Y Nov. 19, 2009) (Gonzalez, J.))).

         III. Legal Standard

         The Court accepts as true all of the factual allegations in Plaintiffs Complaint, while drawing all reasonable inferences in her favor. See Kaufman v. Time Warner, 836 F.3d 137, 141 (2d Cir. 2016). To survive a motion to dismiss under Rule 12(b)(6), 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 Ail. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). "Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Id. Additionally, the Court is "oblig[ed] to construe pro se complaints liberally, " interpreting the complaints to raise the strongest claims it suggests. Hill v. Curcione, 657 F.3d 116, 122 (2d Cir. 2011); Erickson v. Pardus, 551 U.S. 89, 94 (2007).

         IV. Plain Language of the Master Transaction Agreement Bars Punitive Damage Claim

         Plaintiff seeks punitive damages against FCA "for reckless disregard of public safety and [s]uch other and further relief as this Court deems just and proper, " among other forms of relief. (Complaint at p. 25). The Bankruptcy Court's Orders plainly and directly exempt FCA from punitive damages on product liability claims. (See Ex. C to MTD, Annex A ¶ 1). Accordingly, Plaintiffs claim for punitive damages is barred.

         Plaintiff argues that the Bankruptcy Court's Orders do not bar her claims, because the case involves more than simply punitive damages. (See O'Grady Letter at 2 (Apr. 21, 2017)). However, Defendant's ...

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