Kelly v. Georgia-Pacific LLC
| Citation | 671 F.Supp.2d 785 |
| Decision Date | 30 September 2009 |
| Docket Number | No. 7:08-CV-197-D.,7:08-CV-197-D. |
| Court | U.S. District Court — Eastern District of North Carolina |
| Parties | Earl Clyde KELLY, on behalf of himself and all others similarly situated, Plaintiff, v. GEORGIA-PACIFIC LLC, and Georgia Pacific Wood Products LLC, Defendants. |
Daniel K. Bryson, Scott C. Harris, Lewis & Roberts, PLLC, Raleigh, NC, Joel R. Rhine, Lea, Rhine, Rosbrugh & Chleborowicz, PLLC, Wilmington, NC, for Plaintiff.
Martin L. White, Robert L. Burchette, Johnston, Allison & Hord, P.A., Charlotte, NC, for Defendants.
Earl Clyde Kelly ("Kelly" or "plaintiff') built a home in Carolina Beach, North Carolina, and now brings several North Carolina state-law claims and a claim under the Magnuson-Moss Act ("MMA") against Georgia-Pacific LLC and Georgia Pacific Wood Products (collectively "defendants" or "GP"). Defendants are the designers and manufacturers of PrimeTrim, a product that Kelly's builder used in constructing Kelly's home. Kelly contends that PrimeTrim failed to work as promised, that his remedies under PrimeTrim's express warranty are not adequate, and that he should be able to pursue this case as a class action. Defendants acknowledge the viability of Kelly's express warranty claim, but move to dismiss Kelly's remaining claims for failure to state a claim upon which relief can be granted [D.E. 6]. In addition, defendants filed a third-party complaint seeking indemnification and contribution from the builder of plaintiffs home and the builders of putative class members' homes [D.E. 15]. Kelly moves to strike the third-party complaint [D.E. 30]. As explained below, the court grants defendants' partial motion to dismiss and denies plaintiffs motion to strike.
Georgia Pacific, LLC and Georgia Pacific Wood Products, LLC are designers and manufacturers of exterior building products, including PrimeTrim. Compl ¶¶ 2,12; Answer ¶¶ 2, 12. GP sold Prime-Trim — directly and through dealers and other retail outlets—within the United States (including in North Carolina), to homeowners, developers, contractors, and subcontractors. Compl. ¶ 38; Answer ¶ 38. Defendants are no longer selling PrimeTrim. See Compl. ¶ 38.
When defendants were selling Prime-Trim, homebuilders used the product on the exterior of homes as fascia, soffit, corner board, window trim, and door trim. Id. ¶ 2; Answer ¶ 2; see Defs.' Resp. to Mot. to Strike, Ex. A (copy of PrimeTrim installation instructions). GP marketed, advertised, and warranted that PrimeTrim was fit for the ordinary purpose for which wood trim is used, free from defects, suitable for exterior use, reliable, and superior to wood. Compl. ¶¶ 3, 14-17, 39-41; see Answer ¶¶ 15-17. Specifically, GP warranted that "PrimeTrim may be installed wherever non-structural wood trim can be used." Compl. ¶ 4; see Answer ¶ 4.
Kelly is a resident of New Hanover County, North Carolina and, since late 2003, has resided in a home that he built in Carolina Beach, North Carolina. Compl. ¶ 10. Plaintiff's builder used PrimeTrim in constructing plaintiff's home. Id. ¶ 25; Answer ¶ 25. However, plaintiff did not directly purchase PrimeTrim from GP. See Compl. ¶ 54. According to defendants, plaintiffs builder, Walter Thorpe McCartney, installed the PrimeTrim in plaintiffs home. Third Party Compl. ¶ 13. After installation, moisture penetrated behind the PrimeTrim, and the moisture absorption caused damage to the PrimeTrim and the "[i]nner walls, sheathing, unprotected lumber and other areas" of the home. Compl. ¶ 86; see id. ¶¶ 26, 43. Kelly makes no claims for damages other than the damage to his home. Cf. id. ¶¶ 86-87.
According to the complaint, GP failed to disclose that PrimeTrim would degrade and fail when used for its intended purpose. Id. ¶ 22, 43-44. Kelly attributes these failures to design defects. Id. ¶ 7. Further, Kelly contends that GP did not adequately instruct plaintiff and other direct and indirect purchasers on how to properly install PrimeTrim. Id. ¶ 18. Kelly cites as an example that the instructions did not include steps to seal and to prime any site-cut ends of the PrimeTrim boards despite GP knowing that builders would cut the boards on site. Id. ¶¶ 18, 23. As a result, when builders cut the Prime-Trim on site before installing it and did not seal or prime the site-cut boards, the PrimeTrim became vulnerable to moisture intrusion. Id. ¶¶ 18-19, 21. Accordingly, when builders followed GP's instructions for installing PrimeTrim, PrimeTrim permitted water intrusion, which damaged the PrimeTrim and the structures in which it was installed. Id. ¶¶ 18-20.
PrimeTrim is covered by a thirty-year limited warranty ("limited warranty"). See id., Ex. A (copy of the limited warranty agreement).1 Under the limited warranty GP promises to remedy any defects in the PrimeTrim by "[r]epair of the affected trim" or "[c]ash payment to the owner equivalent to the reasonable cost of repair or replacement of the affected trim with similar trim." Id., Ex. A; see id. ¶ 60. The limited warranty restricts repair costs and cash payments to no more than two times the original sales price of the affected trim. Id., Ex. A; see id. ¶ 60. Kelly contends that the remedies under the limited warranty will not make him whole; therefore, the limited warranty fails of its essential purpose. See id. ¶ 58.
Nonetheless, on or about June 23, 2008, Kelly submitted a claim under the limited warranty to GP. Id. ¶ 27, Ex. A; Answer ¶ 27. In August 2008, GP inspected Kelly's residence to investigate the warranty claim. Compl. ¶ 28; Answer ¶ 28. GP and Kelly were unable to resolve the warranty claim. Compl. ¶ 29.
On October 15, 2008, Kelly sued defendants in New Hanover County Superior Court [D.E. 1-2]. Kelly claims breach of express warranty, breach of implied warranty, negligence, violation of the Magnuson-Moss Act ("MMA"), 15 U.S.C. §§ 2301 et seq., and violation of the North Carolina Unfair and Deceptive Trade Practices Act ("UDTPA"), N.C. Gen.Stat. §§ 75-1.1 et seq. Compl. ¶¶ 51-96. Kelly seeks certification as a class action, compensatory and statutory (treble) damages, equitable and injunctive relief, costs, attorney's fees, expert fees, and pre-and post-judgment interest. Id. at 20; see id. ¶¶ 31-50.
On November 19, 2008, defendants removed the action to this court based on diversity and federal-question jurisdiction [D.E. 1]. See 28 U.S.C. §§ 1331, 1332(a). Defendants are limited liability companies organized and existing under the laws of the State of Delaware with their headquarters located in Atlanta, Georgia. Compl. ¶ 11. The court has diversity jurisdiction under 28 U.S.C. § 1332(a). See Notice of Removal ¶¶ 7-10. The court also has federal-question jurisdiction due to the MMA claim and supplemental jurisdiction over the state-law claims. See 28 U.S.C. §§ 1331, 1367.
On December 18, 2008, defendants filed their answer [D.E. 8] and a partial motion to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure [D.E. 6]. Defendants contend that Kelly only states a claim for breach of express warranty and that the court should dismiss his other claims. See Defs.' Mem. 2. Essentially, defendants argue that (1) the economic loss rule bars the negligence claim; (2) the lack of privity between plaintiff and defendants bars the implied warranty claim; (3) the contractual nature of the dispute bars the UDPTA claim; and (4) the MMA claim fails because PrimeTrim is not a consumer product. See id. Alternatively, defendants argue that the applicable statutes of limitations bar Kelly's implied warranty, negligence, MMA, and UDTPA claims. See id.
On January 6, 2009, defendants filed a third-party complaint against Walter Thorpe McCartney and John Does 1-500 [D.E. 15]. According to the third-party complaint, McCartney built Kelly's home, and John Does 1-500 are the unknown builders of the homes of the putative class members. Id. ¶¶ 5-6. According to defendants, the third-party defendants negligently installed the PrimeTrim. See id. ¶¶ 18, 21. Thus, if defendants are liable to plaintiff and the putative class, defendants seek indemnification and contribution from the third-party defendants. Id. ¶¶ 2, 8, 21-49; see id. at 11 (prayer for relief).
On January 23, 2009, Kelly responded in opposition to defendants' partial motion to dismiss [D.E. 20]. On February 6, 2009, defendants replied [D.E. 26].
On April 13, 2009, Kelly filed a motion to strike defendants' third-party complaint or, in the alternative, to sever defendants' third-party claims or try defendants' thirdparty claims separately [D.E. 30]. Kelly contends that the gist of. his claims against defendants concern the defective design and manufacture of PrimeTrim and the inadequate instructions accompanying the product. See id. at 7. Accordingly, even if defendants prove that the third-party defendant-builders negligently installed the PrimeTrim, defendants would not necessarily have a right to contribution. See id. at 7-12. Alternatively, Kelly asks the court to sever the third-party complaint or order a separate trial on the third-party claims. See id. at 14-24.
On May 6, 2009, defendants responded to Kelly's motion to strike [D.E. 33]. Defendants contend that a central question in this case will be causation—did defendants' defective design and manufacturing of the product and the subsequent failure to adequately instruct builders how to install the product cause the PrimeTrim's deterioration (as plaintiff contends), or did the builders' improper installation cause the damage (as defendants contend). See id. at 2-3. As for Kelly's other arguments for severing the third-party complaint from the original action, defendants argue that the court should not strike the thirdparty complaint because the claims against the third-party defendant-builders are meritorious and consistent with Rule 14 of the Federal Rules of Civil Procedure and that...
To continue reading
Request your trial
-
Avram v. Samsung Elecs. Am., Inc.
...of privity is abolished as between the buyer and the seller in any action brought by the buyer."))), with Kelly v. Georgia-Pac. LLC, 671 F. Supp. 2d 785, 796 (E.D.N.C. 2009) ("Under North Carolina common law, privity of contract is generally required to assert an implied warranty claim."). ......
-
City of High Point v. Suez Treatment Solutions Inc.
...based on these allegations. Severn Peanut Co. v. Indus. Fumigant Co., 807 F.3d 88, 94 (4th Cir. 2015) ; see Kelly v. Georgia-Pacific LLC, 671 F. Supp. 2d 785, 794 (E.D.N.C. 2009) (finding economic loss rule bars recovery when a warranty operates to allocate risk). The court will dismiss Pla......
-
Rogers v. Keffer, Inc.
..."Whether an act or practice is unfair or deceptive under the UDTPA is a question of law for the court." Kelly v. Georgia–Pacific, LLC , 671 F.Supp.2d 785, 799 (E.D.N.C. 2009) (collecting cases); see Tucker v. Boulevard A t Piper Glen LLC , 150 N.C.App. 150, 153, 564 S.E.2d 248, 250 (2002) ;......
-
Abbington Spe, LLC v. U.S. Bank, Nat'l Ass'n, 7:16–CV–249–D
..."Whether an act or practice is unfair or deceptive under the UDTPA is a question of law for the court." Kelly v. Georgia–Pac., LLC, 671 F.Supp.2d 785, 798–99 (E.D.N.C. 2009) (collecting cases). A mere breach of contract does not violate the UDTPA. See, e.g., PCS Phosphate Co. v. Norfolk S. ......
-
Table of Cases
...768 A.2d 425 (R.I. 2001), 1091, 1095 Kelley v. Microsoft Corp., 2007 WL 2600841 (W.D. Wash. 2007), 541 Kelly v. Georgia-Pacific, LLC, 671 F. Supp. 2d 785 (E.D.N.C. 2009), 1048 Kelly v. Palmer, Reifler & Assocs., 681 F. Supp. 2d 1356 (S.D. Fla. 2009), 807, 812 Kelton v. Hollis Ranch, LLC, 92......
-
State Consumer Protection Laws
...Ct. App. 1992)). 2625. See e.g ., Bumpers v. Community Bank of N. Va., 747 S.E.2d 220, 227 (2013); Kelly v. Georgia-Pacific, LLC, 671 F. Supp. 2d 785, 799 (E.D.N.C. 2009) (citing Sunset Beach Dev. v. Amec, Inc., 675 S.E.2d 46, 53 (N.C. Ct. App. 2009)). 2626. 678 S.E. 2d 671 (N.C. Ct. App. 2......