HTC Leleu Family Trust v. Piper Aircraft, Inc.
| Decision Date | 17 October 2012 |
| Docket Number | Case No. 1:12-cv-21118-KMM |
| Parties | HTC LELEU FAMILY TRUST, Plaintiff, v. PIPER AIRCRAFT, INC., Defendant. |
| Court | U.S. District Court — Southern District of Florida |
THIS CAUSE came before the Court upon Defendant's Motion to Dismiss (ECF No. 13). Plaintiff filed a Response (ECF No. 14) and Defendant filed a Reply (ECF No. 15). The Motion is now ripe for review. UPON CONSIDERATION of the Motion, the Response, the Reply, the pertinent portions of the record, and being otherwise fully advised in the premises, this Court enters the following Order.
This is an action arising from Plaintiff's purchase of an aircraft manufactured by Defendant. Plaintiff is a trust established under and in accordance with the laws of South Africa. Defendant is a corporation organized under the laws of Delaware with its principal place of business in Florida. Placo (Pty) Ltd. ("Placo") is an international dealer of aircrafts manufactured by Defendant. Placo is organized under the laws of South Africa with its principal place of business in South Africa.
On April 23, 2008, Plaintiff entered into an agreement with Placo to purchase a Piper Meridian aircraft manufactured by Defendant. The agreement, which was subject to the approval by the management of both Defendant and Placo, specified that the aircraft was to be new with a standard factory warranty. The agreement, however, was never approved by either company and never took effect.
After learning of Plaintiff's interest in purchasing an aircraft, Defendant invited Herwig Tillo Cornelius Leleu ("Leleu"), a trustee of Plaintiff, to visit its manufacturing facility in Vero Beach, Florida. Defendant extended this invitation because it had another Piper Meridian aircraft (the "Aircraft") that was the same model that Plaintiff previously attempted to purchase.
On November 17, 2008, Leleu visited Defendant's facility in Florida in order to examine the Aircraft. During his visit, Leleu had discussions about the Aircraft with several representatives and officials of Defendant, including James Bass, Defendant's President and Chief Executive Officer. Plaintiff alleges that Bass "expressly represented to and promised Leleu that the Aircraft would give Leleu many years of flying satisfaction." Compl., ¶ 16. On November 18, 2008, an unnamed official of Defendant (the "Official") unlocked the Aircraft and allowed Leleu to inspect it. Leleu alleges that the Official affirmed that all "snags with the Aircraft had been corrected." Compl., ¶ 17. The Official then gave Leleu a tour of Defendant's facility. During the tour, the Official showed Leleu an open wing section and allowed Leleu to inspect the construction and sealing of the wing tanks. Leleu asked if the same method of sealing tanks was used on the Aircraft and the Official answered in the affirmative. Plaintiff also alleges that other representatives of Defendant "expressly represented to and promised Leleu that the Aircraft was in [n]ew condition, entirely without defects, and that no problems had arisen during the course of the manufacturing process." Compl., ¶ 19.
Plaintiff subsequently purchased the Aircraft and it was delivered to Plaintiff on December 18, 2008 in Germiston, South Africa. The Parties, however, did not enter into a written contract for the sale of the Aircraft. Plaintiff alleges that "the management of both Placo and [Defendant] approved the sale of the Aircraft and thereby entered into a sales contract with [Plaintiff] at the time of delivery of the Aircraft." Compl., ¶ 24. Plaintiff further alleges that the terms of the contract were essentially the same as the terms of the agreement to purchase the previous aircraft manufactured by Defendant. Additionally, Leleu, as Plaintiff's representative, signed a Limited Warranty at Placo's office in Germiston, South Africa which was forwarded to Defendant.
After minimal use of the Aircraft, Leleu observed a fuel leak under the right wing of the Aircraft during a flight on January 11, 2009. It was subsequently discovered that a manufacturing error occurred in the use of a sealant on the Aircraft's wing at Defendant's facility. Due to the seriousness of the leak, the Aircraft could not be flown. Plaintiff alleges that it immediately informed Defendant of the defect and that it was canceling the agreement. Defendant refused to honor Plaintiff's request for restitution of the purchase price and compensation for the damages incurred.
On March 20, 2012, Plaintiff filed the instant action. Plaintiff alleges that the fuel leak resulted from Defendant's errors in the use of a sealant when Defendant unsuccessfully attempted to repair fuel leaks discovered in the manufacturing process. Plaintiff claims that at no time did Defendant or Placo "inform it of any defects or repair attempts relating to the fuel tanks or the sealants." Compl., ¶ 35. In its Complaint, Plaintiff alleges claims of fraud in the inducement (Count I); fraudulent concealment (Count II); negligent misrepresentation (CountIII); breach of contract (Count IV); breach of express warranties (Count V); and a violation of the Magnusson-Moss Act, 15 U.S.C. § 2301(6) (Count VI).
A motion to dismiss for failure to state a claim merely tests the sufficiency of the complaint; it does not decide the merits of the case. Milburn v. United States, 734 F.2d 762, 765 (11th Cir. 1984). On a motion to dismiss, the Court must accept the factual allegations as true and construe the complaint in the light most favorable to the plaintiff. SEC v. ESM Grp., Inc., 835 F.2d 270, 272 (11th Cir. 1988). "To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to 'state a claim for relief that is plausible on its face.'" Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009) (quoting Bell Atl. v. Twombly, 550 U.S. 544, 570 (2007)). "The plausibility standard is not akin to a 'probability requirement,' but asks for more than a sheer possibility that a defendant has acted unlawfully." Id. "But where the well pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged—but it has not 'shown'—'that the pleader is entitled to relief" Id. at 1950. A complaint must also contain enough facts to indicate the presence of the required elements. Watts v. Fla. Int'l Univ., 495 F.3d 1289, 1302 (11th Cir. 2007). However, "[a] pleading that offers 'a formulaic recitation of elements of a cause of action will not do.'" Iqbal, 129 S. Ct. at 1949 (quoting Twombly, 550 U.S. at 555). "[C]onclusory allegations, unwarranted deductions of fact or legal conclusions masquerading as facts will not prevent dismissal." Oxford Asset Mgmt., Ltd. v. Jaharis, 297 F.3d 1182, 1188 (11th Cir. 2002).
Defendant's Motion seeks to dismiss Count I for fraud in the inducement,2 Count II for fraudulent concealment,3 and Count III for negligent misrepresentation.4 Defendant argues that these counts should be dismissed because (1) the claims are barred by Florida's economic loss rule; (2) the alleged misstatements are mere puffery; and (3) the fraud allegations are not pled with sufficient particularity to meet the requirements of Federal Rule of Civil Procedure 9(b). See Def. Mot. to Dismiss, at 3. This Court addresses each of these arguments in turn.
A. Economic Loss Rule
Under Florida law, in the absence of personal injury or property damage, "the economic loss rule operates to bar tort claims for purely economic loss in cases involving a defendant who is a manufacturer or distributor of a product or where the parties have contractual privity." Topp,Inc. v. Uniden Am. Corp., 513 F. Supp. 2d. 1345, 1348 (S.D. Fla. 2007) (citation omitted).5 In Indemnity Insurance Company of North America v. American Aviation, Inc., the Florida Supreme Court explained that the economic loss rule applies in two different circumstances. 891 So.2d 532, 536 (Fla. 2004). First, "[i]f the parties have contractual privity, and a claim for tort simply restates a claim for breach of contract, the tort claim is barred." Id. ). Second, the economic loss rule "bars a tort cause of action where a product is involved, when the product damages only itself, and the losses are purely economic." Saxon Fin. Group, Inc. v. Rath, No. 11-CV-80646, 2012 WL 3278662, at *5 (S.D. Fla. Aug. 9, 2012) (citationomitted)6
'"The test to determine if the economic loss rule applies is to ask if the fraud alleged is an act of performance or in a term of the bargain." Tyco Safety Prods. Canada, Ltd., 2008 WL 4753728, at *3 (quoting D&M Jupiter, Inc. v. Fridopfer, 853 So.2d 485, 487 (Fla. Dist. Ct. App. 2003)). If the fraud is in a term of the bargain, it is not barred by the economic loss rule; however, if the alleged fraud relates to an act of performance, then it is barred by the economic loss rule. Allen v. Stephan Co., 784 So.2d 456, 458-59 (Fla. Dist. Ct. App. 2000) () (citing Greenfield v. Manor Care, Inc., 705 So.2d 926 (Fla. Dist. Ct. App. 1997)). This can be determined by looking at whether "the action is based upon fraud independent of the contractual breach." Id., at 458 (citations omitted).7 Additionally, since HTP, Ltd. v. Lineas Aereas Costarricenses, S.A., 685 So.2d 1238, 1239 (Fla. 1996), courts in Florida have found that '"statements or misrepresentations made to induce an individual to enter a contract, if later contained within the terms of the actual contract, cannot constitute a basis on which to bring the fraud claim.'" Ben-Yishay v. Mastercraft Dev., LLC, 553 F. Supp. 2d...
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