Elward v. Electrolux Home Prods., Inc.

• Decision Date: 28 August 2017
• Docket Number: 15 C 9882
• Citation: 264 F.Supp.3d 877
• Parties: Teresa ELWARD, Dennis Keesler, Bethany Williams, Cheryl Ferguson, Nathaniel Beck, Tony Fitzgerald, Stacy Cisco, John McLaughlin, Leasa Brittenham, William Ferguson, Kathy Beck, and Lauren Fitzgerald, Individually and on behalf of all others Similarly Situated, Plaintiffs, v. ELECTROLUX HOME PRODUCTS, INC., Defendant.
• Court: U.S. District Court — Northern District of Illinois

264 F.Supp.3d 877

Teresa ELWARD, Dennis Keesler, Bethany Williams, Cheryl Ferguson, Nathaniel Beck, Tony Fitzgerald, Stacy Cisco, John McLaughlin, Leasa Brittenham, William Ferguson, Kathy Beck, and Lauren Fitzgerald, Individually and on behalf of all others Similarly Situated, Plaintiffs,

v.ELECTROLUX HOME PRODUCTS, INC., Defendant.

15 C 9882

United States District Court, N.D. Illinois, Eastern Division.

Signed August 28, 2017

Edward A. Wallace, Adam Michael Prom, Wexler Wallace LLP, Amy Elisabeth Keller, DiCello Levitt & Casey LLC, Chicago, IL, Gregory F. Coleman, Adam Arthur Edwards, Pro Hac Vice, Benjamin P. Lemly, Pro Hac Vice, Justin G. Day, Pro Hac Vice, Lisa Anne White, Pro Hac Vice, Mark E. Silvey, Pro Hac Vice, Greg Coleman Law PC, Knoxville, TN, Shanon J. Carson, Arthur Stock, Pro Hac Vice, Berger & Montague, P.C., Philadelphia, PA, for Plaintiffs.

Galen D. Bellamy, Michael T. Williams, Christopher E. McCall, Pro Hac Vice, Kenneth E. Stalzer, Wheeler Trigg O'Donnell LLP, Denver, CO, James W. Ozog, Jennifer L. Rediehs, Goldberg Segalla, LLP, Chicago, IL, for Defendant.

John Z. Lee, United States District Judge

MEMORANDUM OPINION AND ORDER

Plaintiffs Teresa Elward, Dennis Keesler, Leasa Brittenham, Kathy and Nathaniel Beck, Tony and Lauren Fitzgerald, Bethany Williams, John McLaughlin, Stacy Cisco, and William and Cheryl Ferguson ("Plaintiffs") have sued Defendant Electrolux Home Products, Inc. ("Electrolux") on behalf of putative classes in regard to their purchase of dishwashers manufactured by Electrolux that unexpectedly overheated, causing fires and flooding. Plaintiffs bring various state law claims on behalf of themselves and others similarly situated in the states of California, Illinois, Indiana, Ohio, Pennsylvania, Virginia, and Washington seeking a combination of declaratory, injunctive, and compensatory relief. Electrolux has filed a motion to dismiss several counts alleged in Plaintiffs' Consolidated Amended Complaint for failure to state a claim pursuant to Federal Rule of Civil Procedure ("Rule") 12(b)(6). Specifically, Electrolux moves to dismiss Count I (claim by all Plaintiffs for breach of the implied warranty of merchantability), Counts X and XI (claims by the Washington Plaintiff under the Washington Product Liability Act), Counts XII and XIII (claims by the Indiana Plaintiffs under the Indiana Product Liability Act), Count XIV (claim by the Indiana Plaintiffs under the Indiana Deceptive Consumer Sales Act), Count XVII (claim by the California Plaintiffs under the Song–Beverly Consumer Warranty Act), and Count XVIII with respect to the Indiana and Ohio Plaintiffs (claim for fraudulent concealment). For the reasons set forth below, Electrolux's motion to dismiss is denied.

Factual Background ¹

Electrolux is the world's second-largest appliance maker by units sold. Consol. Am. Compl. ¶ 22, ECF No. 93. Electrolux designs and manufactures residential dishwashers that are sold under a variety of brand names, including its popular Frigidaire brand. Id. ¶¶ 2, 22. Plaintiffs purchased and used Electrolux dishwashers that, they claim, were "dangerously defective." Id. ¶ 2.

The defect, Plaintiffs allege, is in the electrical heating system, which heats the wash solution and dries the dishes. Id. ¶¶ 23, 27. Plaintiffs assert that the electrical system overheats, which can spark a fire or burn a hole through the bottom of the dishwasher's tub, causing water to leak and flood the floor below. Id. ¶ 27. This flooding also increases the risk of fire as water "comes into contact with exposed electrical components." Id. Plaintiffs allege that the defective heating element caused their dishwashers to ignite, causing smoke and fire damage, or to burn a hole through the bottom of the tub, leading to flooding and mold. See, e.g. , id. ¶¶ 44, 49, 53. These malfunctions occurred before the dishwashers reached their minimum life expectancies of nine to thirteen years. Id. ¶¶ 26, 43–44, 48–49, 52–53, 58, 63, 69, 73–74, 77–78, 82–83.

According to Plaintiffs, Electrolux knew of this defect as early as 2007. Id. ¶ 32. By 2007, consumers were complaining of Electrolux dishwashers overheating within one to two years of purchase, leading to melted dishwashers, smoke, and fire. Id. Plaintiffs point to recalls issued by Electrolux in Australia in both 2007 and 2013 and in the United Kingdom in 2007 as additional evidence of Electrolux's knowledge of the risk of fire. Id. ¶ 33. Furthermore, Plaintiffs assert that Electrolux had notice of this defect through recalls issued by domestic competitors and through earlier subrogation claims filed against it. Id. ¶¶ 34–35.

Plaintiffs contend that, despite possessing this knowledge, Electrolux continued to sell dishwashers without disclosing the defect. Id. ¶ 39. In fact, Electrolux has continued to represent to consumers, like Plaintiffs, that the dishwashers and their features were safe for use, including a Delay Start feature that allows the owner to run the dishwasher while sleeping or away from home. Id. ¶¶ 25, 42. Plaintiffs claim that the defect is not reasonably discoverable, and consumers continue to purchase these dishwashers without knowledge of the defect. Id. ¶ 42. Making matters worse, some Plaintiffs allege that Electrolux refused to provide any relief after they informed Electrolux of the damage caused by the defect. Id. ¶¶ 46, 50, 57, 65, 71, 75, 80. In other cases, Electrolux's proposed solution required the consumer to incur a substantial cost, such as shipping the entire dishwasher to Electrolux or paying for a technician to visit the home. Id. ¶¶ 59, 66, 84. Plaintiffs allege that they would not have purchased these dishwashers or would have insisted on a lower price if they had been apprised of the defect. Id. ¶ 42. They further allege that, as consumers, they have relatively little bargaining power compared to Electrolux. Id. ¶ 103.

Based on these facts, Plaintiffs assert the following claims: breach of implied warranty of merchantability (Count I), strict liability based on design defect (Count II), strict liability based on failure to warn (Count III), negligence (Count IV), negligent failure to warn (Count V), violation of the Illinois Consumer Fraud and Deceptive Trade Practices Act (Count VI), violation of the Illinois Uniform Deceptive Trade Practices Act (Count VII), violation of the Pennsylvania Unfair Trade Practices and Consumer Protection Law (Count VIII), violation of the Washington Consumer Protection Act (Count IX), violation of the Washington Product Liability Act ("WPLA") (Counts X and XI), violation of the Indiana Product Liability Act ("IPLA") (Counts XII and XIII), violation of the Indiana Deceptive Consumer Sales Act ("IDCSA") (Count XIV), violation of the California Unfair Competition Law (Count XV), violation of the California Consumers Legal Remedies Act (Count XVI), breach of implied warranty under the California Song–Beverly Consumer Warranty Act ("SBA") (Count XVII), and fraudulent concealment (Count XVIII).²

Legal Standard

A motion under Rule 12(b)(6) challenges the sufficiency of the plaintiff's complaint. Christensen v. Cty. of Boone , 483 F.3d 454, 457 (7th Cir. 2007). Under the federal notice pleading standards, a complaint "need only provide a short and plain statement of the claim showing that the pleader is entitled to relief, sufficient to provide the defendant with fair notice of the claim and its basis." Tamayo , 526 F.3d at 1081 (internal quotation marks omitted); see also Fed. R. Civ. P. 8(a)(2). In reviewing a motion under Rule 12(b)(6), a court must accept all well-pleaded allegations in the complaint as true. Christensen , 483 F.3d at 457.

In order to survive dismissal, a complaint must "state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). To meet the standard of facial plausibility, a plaintiff must plead "factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (citing Twombly , 550 U.S. at 556, 127 S.Ct. 1955 ). "The plausibility standard is not akin to a ‘probability requirement,’ but it asks for more than a sheer possibility that a defendant has acted unlawfully." Id. At this stage, however, it is improper for a court to "decide whose version to believe, or which version is more likely than not." Swanson v. Citibank, N.A. , 614 F.3d 400, 404 (7th Cir. 2010).

Analysis

I. Count I: Breach of Implied Warranty of Merchantability

Electrolux seeks to dismiss Count I, which encompasses all Plaintiffs' claims for breach of implied warranty of merchantability, through two different lines of reasoning. First, Electrolux argues that it expressly limited this warranty to one year, which dooms the claims of the Plaintiffs in California, Illinois, Indiana, Ohio, Pennsylvania, and Virginia because the alleged breaches occurred after the warranty had expired.³ Second, Electrolux asserts that the implied warranty claim of the Washington Plaintiff is barred by the statute of limitations. For the following reasons, the motion to dismiss Count I is denied.

A. Electrolux's One–Year Warranty Limitation

Electrolux first argues that Plaintiffs' claims for breach of implied warranty of merchantability in the states of California, Illinois, Indiana, Ohio, Pennsylvania, and Virginia fail because Plaintiffs do not allege a breach within the warranty period as expressly modified by Electrolux. Def.'s Br. Supp. at 4–7. In support, Electrolux attaches the Use & Care Guides for the Plaintiffs' dishwashers to its motion to dismiss, pointing to provisions within the Use & Care Guides that it claims limited the warranty to one year. Id. , Exs. 3–11. Electrolux asks the Court to consider these attached exhibits on the ground that they are "integral to and referenced in Plaintiffs' Complaint," in light of Plaintif...