Ali v. Volkswagen Grp. of Am., Inc.
| Decision Date | 13 September 2021 |
| Docket Number | 19 C 6148 |
| Parties | Syed ALI, Plaintiff, v. VOLKSWAGEN GROUP OF AMERICA, INC., d/b/a Audi of America, Inc., and Audi AG, a foreign organization, Defendants. |
| Court | U.S. District Court — Northern District of Illinois |
Christopher Nicholas Cronauer, Cronauer Law, LLP, Sycamore, IL, Jess Dennis Jordan, Mccready, Garcia, & Leet, Michael Patrick McCready, Law Office of Michael P. McCready P.C., Chicago, IL, for Plaintiff.
Michael Alexander McCaskey, Patrick Paul Clyder, Natalie Eschbach, Madison Shepley, Swanson, Martin & Bell, LLP, Chicago, IL, for Defendant Volkswagen Group of America, Inc.
Michael Alexander McCaskey, Madison Shepley, Swanson, Martin & Bell LLP, Chicago, IL, for Defendant Audi AG.
SHEILA FINNEGAN, United States Magistrate Judge Plaintiff Syed Ali has filed this products liability suit against Defendants Volkswagen Group of America, Inc., improperly named as Volkswagen Group of America, Inc. d/b/a Audi of America, Inc. (hereinafter "Volkswagen"), and Audi AG, a foreign organization, seeking damages for injuries he suffered when the Audi Q5 vehicle he was driving struck a piece of debris on the road and ignited into flames. The parties have consented to the jurisdiction of the United States Magistrate Judge pursuant to 28 U.S.C. § 636(c). Currently before the Court is Volkswagen's motion to dismiss Plaintiff's claims for breach of implied warranties and violation of the Illinois Consumer Fraud and Deceptive Business Practices Act ("ICFA"), 815 ILCS 505/2, pursuant to Rules 12(b)(6) and 9(b). For the reasons stated here, the motion is granted.
The events giving rise to this lawsuit occurred in July 2017, when Plaintiff was driving an Audi Q5 (the "Subject Vehicle") on a flat and smooth roadway in DuPage County, Illinois. After the vehicle struck a piece of debris on the road, the car ignited into flames "without warning," resulting in "multiple injuries" to Plaintiff. (Doc. 26, FAC, ¶¶ 7, 8). About two years later, on July 5, 2019, Plaintiff filed suit in Illinois state court charging Volkswagen with negligence, breach of implied warranties of merchantability and fitness, manufacturing and design defects, and failure to warn. (Doc. 1-1). Volkswagen removed the case to federal court on September 13, 2019 based on diversity jurisdiction, noting that Plaintiff is a citizen of Illinois, while Volkswagen is a New Jersey corporation with its principal place of business in Virginia. (Doc. 1 ¶¶ 5, 6).
During a hearing on November 5, 2019, the district judge granted Plaintiff's oral motion for leave to amend the complaint in lieu of responding to a motion to dismiss filed by Volkswagen. (Doc. 23). Plaintiff filed his First Amended Complaint ("FAC") on November 19, 2019, once again asserting claims for negligence (Counts I and VII), breach of the implied warranties of merchantability and fitness (Counts II and III), and strict product liability based on design and manufacturing defects and failure to warn (Counts IV, V and VI). Plaintiff also added a new claim for violation of the ICFA (Count VIII), and named German automobile manufacturing company, Audi AG, and the car dealership where the car was purchased, McGrath Imports, Inc. ("McGrath"), as Defendants. On September 3, 2020, the district judge determined that McGrath was not properly joined in the case and dismissed the dealership without prejudice. Ali v. Volkswagen Group of Am., Inc. , No. 19 C 6148, 2020 WL 5250669 (N.D. Ill. Sept. 3, 2020).
Volkswagen has answered Plaintiff's negligence claims but seeks dismissal of all other counts. This opinion addresses the motion to dismiss the warranty and fraud claims.
In evaluating the sufficiency of a complaint under Rule 12(b)(6), the Court "construe[s] all allegations and any reasonable inferences in the light most favorable to the plaintiff." Jauquet v. Green Bay Area Catholic Educ., Inc. , 996 F.3d 802, 807 (7th Cir. 2021). See also Zahn v. North Am. Power & Gas, LLC , 847 F.3d 875, 877 (7th Cir. 2017). "[W]hile a complaint does not need ‘detailed factual allegations,’ to survive a 12(b)(6) motion to dismiss, it must allege sufficient facts to ‘state a claim to relief that is plausible on its face.’ " Id. (quoting Dix v. Edelman Fin. Servs., LLC , 978 F.3d 507, 512-13 (7th Cir. 2020) ). See also Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) ; Bell Atlantic Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). A claim is facially plausible when "the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal , 556 U.S. at 678, 129 S.Ct. 1937. See also Archer v. Chisholm , 870 F.3d 603, 612 (7th Cir. 2017). "At the motion to dismiss stage, plaintiffs must set forth ‘adequate factual detail to lift [their] claims from mere speculative possibility to plausibility.’ " Jauquet , 996 F.3d at 807.
The Court begins with Volkswagen's motion to dismiss Plaintiff's ICFA claim. The ICFA is "a regulatory and remedial statute intended to protect consumers, borrowers, and business persons against fraud, unfair methods of competition, and other unfair and deceptive business practices." Siegel v. Shell Oil Co. , 612 F.3d 932, 934 (7th Cir. 2010). To state a claim under the Act, Plaintiff must allege: "(1) a deceptive act or practice by the defendant, (2) the defendant's intent that the plaintiff rely on the deception, (3) the occurrence of the deception in the course of conduct involving trade or commerce, and (4) actual damage to the plaintiff (5) proximately caused by the deception." Oliveira v. Amoco Oil Co. , 201 Ill.2d 134, 149, 267 Ill.Dec. 14, 776 N.E.2d 151, 160 (2002). See also Maxwell as Trustee for Estate of Garcia v. Wells Fargo Bank, N.A. , No. 20 C 2402, 2021 WL 1209023, at *7 (N.D. Ill. Mar. 31, 2021).
Volkswagen argues that dismissal of the ICFA claim is warranted because Plaintiff's allegations fail to satisfy the heightened pleading requirements of Rule 9(b), he is not a "consumer" under the Act, and he cannot prove that he suffered actual damages.
The parties do not dispute that the sufficiency of Plaintiff's fraud allegations under the ICFA must be "analyzed under the heightened pleading standard set forth in Federal Rule of Civil Procedure 9(b)." Camasta v. Jos. A. Bank Clothiers, Inc. , 761 F.3d 732, 736 (7th Cir. 2014). Rule 9(b) requires a pleading to "state with particularity the circumstances constituting fraud." FED. R. CIV. P. 9(b). "This means as a practical matter that [Plaintiff] must identify the ‘who, what, when, where, and how’ of the alleged fraud." Benson v. Fannie May Confections Brands, Inc. , 944 F.3d 639, 646 (7th Cir. 2019) (quoting Vanzant v. Hill's Pet Nutrition, Inc. , 934 F.3d 730, 738 (7th Cir. 2019) ). The particularity requirement "is designed to discourage a ‘sue first, ask questions later’ philosophy." Pirelli Armstrong Tire Corp. Retiree Med. Benefits Trust v. Walgreen Co. , 631 F.3d 436, 441 (7th Cir. 2011). See also Fidelity Nat'l Title Ins. Co. of N.Y. v. Intercounty Nat'l Title Ins. Co. , 412 F.3d 745, 748-49 (7th Cir. 2005) ().
The district judge has already determined that Plaintiff's allegations do "not come close to the who, what, where, when, and how standard under Rule 9(b)" for purposes of stating an ICFA claim against McGrath. Ali , 2020 WL 5250669, at *5.1 That is, Plaintiff "did not allege any facts about the actual purchase of the car, nor did he plead any facts about the actual misrepresentations McGrath made at the time of purchase." Id . Though Rule 9(b) "does not require the plaintiff to offer evidence that the misrepresentations were actually false, it does generally require ‘the plaintiff to state the identity of the person making the misrepresentation, the time, place, and content of the misrepresentation, and the method by which the misrepresentation was communicated to the plaintiff.’ " Id. (quoting Camasta , 761 F.3d at 737 ).
This Court finds the district judge's analysis well-reasoned, persuasive and equally applicable to Plaintiff's allegations against Volkswagen. The FAC cannot survive a motion to dismiss because Plaintiff has failed to plead with particularity the misrepresentations Volkswagen made to him upon which he relied. The question is whether Plaintiff should be granted leave to amend. "The district court should freely give leave to amend a complaint ‘when justice so requires.’ " Glover v. Carr , 949 F.3d 364, 367 (7th Cir. 2020) (quoting FED. R. CIV. P. 15(a)(2) ). At the same time, leave to amend may be denied if the amendment would be futile. Id. An amendment is futile when it could not withstand a motion to dismiss. McCoy v. Iberdrola Renewables, Inc. , 760 F.3d 674, 685 (7th Cir. 2014). "Unless it is certain from the face of the complaint that any amendment would be futile or otherwise unwarranted, the district court should grant leave to amend." Runnion ex rel. Runnion v. Girl Scouts of Greater Chicago & Nw. Ind. , 786 F.3d 510, 519-20 (7th Cir. 2015) (emphasis in original).
Volkswagen argues that amendment would be futile because Plaintiff has not "set forth new or additional facts he might allege that would possibly cure the[ ] pleading deficiencies." (Doc. 83, at 2). This is true, but it does not alone demonstrate that Plaintiff cannot allege additional facts to support his ICFA claim. Though it is difficult to imagine that Plaintiff will be able to identify specific misrepresentations Volkswagen allegedly made to him given that there is no evidence the company was involved in the sale of the Subject Vehicle, the Court cannot say with absolute...
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