Francis E. Parker Mem'l Home, Inc. v. Georgia-Pac. LLC

• Decision Date: 20 May 2013
• Docket Number: Civ. No. 2:12–cv–02441 (ES).
• Citation: 945 F.Supp.2d 543
• Parties: FRANCIS E. PARKER MEMORIAL HOME, INC., on behalf of itself and all others similarly situated, Plaintiff, v. GEORGIA–PACIFIC LLC and Georgia–Pacific Wood Products LLC, Defendants.
• Court: U.S. District Court — District of New Jersey

945 F.Supp.2d 543

FRANCIS E. PARKER MEMORIAL HOME, INC., on behalf of itself and all others similarly situated, Plaintiff,

v.GEORGIA–PACIFIC LLC and Georgia–Pacific Wood Products LLC, Defendants.

Civ. No. 2:12–cv–02441 (ES).

United States District Court,

D. New Jersey.

May 20, 2013.

Parker Waichman LLP, Jessica E. Vertullo, Melanie H. Muhlstock, Port Washington, NY, Jordan L. Chaikin (admitted Pro Hac Vice), Bonita Springs, FL, Whitfield Bryson & Mason, LLP, Gary E. Mason (Pro Hac Vice admission pending), Nicholas A. Migliaccio (Pro Hac Vice admission pending), Jason S. Rathod (Pro Hac Vice admission pending), Washington, DC, Daniel K. Bryson (admitted Pro Hac Vice), Scott C. Harris (admitted Pro Hac Vice), Raleigh, NC, Block, Crouch, Keeter, Behm & Sayed, LLP, Auley M. Crouch, III (admitted Pro Hac Vice), Christopher K. Behm (admitted Pro Hac Vice), Rhine Law Firm, P.C., Joel R. Rhime (admitted Pro Hac Vice), Jean Martin (admitted Pro Hac Vice), Wilmington, NC, Attorneys for Plaintiff.

Porzio, Bromberg & Newman P.C., John Chester, Roy Alan Cohen, Steven P. Benenson, Heather Bryce Siegelheim, Morristown, NJ, Roger & Harden LLP, Atlanta, GA, Attorneys for Defendants.

OPINION

DEBEVOISE, Senior District Judge.

Presently before the Court is a motion to partially dismiss by Defendants Georgia–Pacific, LLC and Georgia–Pacific Woods Products, LLC (hereinafter collectively referred to as “Defendants” and/or “GP”) three counts of a consumer class action Amended Complaint pursuant to Fed.R.Civ.P. 12(b)(6). The instant motion arises out of an Amended Complaint filed by Plaintiff Francis E. Parker Memorial Home, Inc. (hereinafter “Parker”) on behalf of itself and a putative class alleging violations of the New Jersey Products Liability Act, N.J.S.A. 2A:58C–1 et seq. (“PLA”); breach of express warranty; and the New Jersey Consumer Fraud Act, N.J.S.A. 56:8–1 et seq. (“CFA”). Parker generally alleges that GP misrepresented the quality of its products, thereby causing fraud and tort-based harm, and that Parker and the putative class have suffered damages as a result thereof. Parker has not yet moved to certify the class. The Court is confronted with a motion to partially dismiss the Amended Complaint with respect to Count III for violation of the CFA and Count VI for declaratory relief. Additionally, GP urges the Court to limit Count II to claims arising under the Thirty–Year Limited Warranty and to dismiss claims with prejudice for breach of express warranty on any other basis. For the reasons set forth below, GP's motion is DENIED in part and GRANTED in part.

I. BACKGROUND

The facts here are provided to the extent relevant to the present motion, and all reasonable inferences are drawn in favor of Parker pursuant to the proper standard of review on a motion to dismiss. See Morse v. Lower Merion Sch. Dist., 132 F.3d 902, 906 (3d Cir.1997).

Parker constructed a large assisted living facility in Highland Park, New Jersey, using an exterior trim (“PrimeTrim”) designed, manufactured, warranted, advertised, and sold by GP. Parker brings a consumer class action on behalf of itself and all persons and entities in New Jersey who own a home or other structure on which Georgia–Pacific PrimTrim exterior trim is installed.

Generally, Parker alleges that despite GP's representations via marketing, express warranty, and instructions, PrimeTrim prematurely deteriorates, rots, swells, buckles, delaminates, absorbs water, warps, and/or bulges under normal conditions and natural, outdoor exposure; causes consequential water and structural damages; and promotes the growth of mold, mildew, fungi, and insect infestation in the structures in which it is installed. Parker contends that design and construction defects reduced the effectiveness and performance of the PrimeTrim and rendered it unable to perform the ordinary purposes for which it was marketed and used.

Parker further contends that GP knew, as early as 1998, that PrimeTrim had a history of failures and was capable of rot, and knew that the PrimeTrim required more exacting installation than standard construction norms, yet failed and/or omitted to inform its distributors, customers, and eventual owners of the product of these issues and potential remedies or care instructions for these deficiencies. The allegations include multiple internal acknowledgements by GP by technical personnel and senior sales personnel that the broadly-prescribed uses could “mislead” applicators of the product as to its quality, and that product complaints were expected to increase. (Am. Compl. ¶¶ 97–106.) For example, “PrimeTrim had only been on the market eleven (11) years by the year 2000, but GP personnel acknowledge internally that they fully anticipated that product complaints concerning PrimeTrim would increase as the product life increased toward 20 to 30 years.” (Am. Compl. ¶ 101.)

Moreover, GP's test productions prior to the year 2000 revealed dramatic improvements to decay resistance using various percentages of zinc borate, with no significant corresponding decrease in weatherability properties of the resulting product. (Am. Compl. ¶ 102.) By the year 2000, some of GP's competitors in the composite exterior trim market had already successfully incorporated zinc borate into their products and introduced same on the market to the public. (Am. Compl. ¶ 103.) Parker submits upon information and belief that “a proposal from the GP plant that produced PrimeTrim was submitted internally to Georgia–Pacific management in the year 2000 seeking approval to incorporate zinc borate into actual production of all products produced at the plant, at [sic] an estimated annual cost less than $1 Million Dollars. Alternatively, the proposal indicated that zinc borate could be added only to production of PrimeTrim, due to Prime Trim's increased susceptibility to rotting complaints, at even less cost. However, upon information and belief, Georgia–Pacific's management rejected both proposals due to cost.” (Am. Compl. ¶ 104.) Parker submits that GP plant personnel again provided a revised written justification seeking authority from GP management to incorporate zinc borate into actual production of PrimeTrim in 2002, at less of the cost originally estimated in 2000, however management once again refused the 2002 proposal due to estimated cost. (Am. Compl. ¶ 105.) Zinc borate was never added to PrimeTrim during the remaining four years that it remained on the market. (Am. Compl. ¶ 106.)

Parker also takes issue with GP's failure to test the thicker versions of PrimeTrim which were later manufactured, marketed and sold, and failure to test in actual installations around windows and doors, although it later expressly marketed the product for use as windowtrim though it is well-known within the construction industry the propensity for windows to leak.

Parker contends that GP falsely marketed, advertised, and marketed the quality and durability of the product. For example, representations made in marketing materials and advertisements included that PrimeTrim: “offers up to four times more decay resistance than lumber[;]” “outperformed lumber through two years of direct exposure to sun, rain, and snow[;]” is “more durable than traditional lumber[;]” has “more than fifteen years with a track record of proven performance[;]” has “virtually no waste due to material defects[;]” “looks great for years without frequent repainting, helping homeowners save money or maintenance[;]” is “[e]ngineered to withstand sun, rain, snow and time [;]” “surpasses premium lumber trim in both durability and finish [;]” “[f]eatures superior moisture and decay resistance[;]” was “proven in over four years of laboratory and field testing[;]” and was “a perfect trim product.” (Am. Compl. ¶¶ 35; 95)

GP also expressly warranted that the PrimeTrim was appropriate for its intended uses and could be used “wherever non-structural wood trim can be used”; “anywhere defect-free, nonstructural trim lumber is required”; “where any high-quality non-structural trim lumber is required”; and “is free of defects in materials and workmanship.” (Am. Compl. ¶ 76.) GP's warranty covered a thirty year period from the date of the original installation and guaranteed that PrimeTrim would not: “Crack, chip, split, or delaminate in a manner that would render the trim materially unable to perform its function; Buckle, shrink or swell in a manner that materially affects its appearance.” (Am. Compl., Ex. A.) GP also warranted that the factory-applied primed coat would not peel, crack or blister from the substrate for a period of eight years after the date of installation. ( Id.) However, the warranty did not cover liability for damages to other material to which PrimeTrim is affixed. Additionally, in order to remedy any defect in the PrimeTrim, by its sole discretion, GP warranted compensation by either repair or replacement, or cash payments equivalent to the reasonable cost of repair or replacement, provided that the “reasonable cost” of repair or replacement would not exceed two times the original GP sales price of the affected trim.

On or about July 14, 2011, Parker made a warranty claim under the express warranty for replacement of the PrimeTrim on its Structure(s). Parker presented its warranty claim using the Warranty Claim Form provided. The following September, GP inspected Parker's structures to investigate the warranty claim, but denied the claim when it discovered that the product was misinstalled. Parker alleges that the limitations of damages contained in the express warranty are harsh, oppressive, and one-sided, and render remedies available and the manner of dispute resolution unconscionable.

Additionally, Parker maintains that GP failed to provide adequate instructions for the installation of the PrimeTrim, including how to seal and to prime site-cut ends of PrimeTrim, when GP knew that the PrimeTrim would be cut to size on site. The installation...