Luckey v. Alside, Inc., Civil No. 15–2512 (JRT/HB)
| Decision Date | 29 March 2017 |
| Docket Number | Civil No. 15–2512 (JRT/HB) |
| Citation | 245 F.Supp.3d 1080 |
| Parties | Cheryl LUCKEY, Christine Cole, Elizabeth Welna, Eric Toop, and Robert Squatrito, Plaintiffs, v. ALSIDE, INC., Associated Materials, LLC, and Associated Materials Incorporated, Defendants. |
| Court | U.S. District Court — District of Minnesota |
Alex M. Nelson, BENSON, KERRANE, STORZ & NELSON, PC, 7760 France Avenue South, Suite 1350, Bloomington, MN 55435, and William James Rogers, BENSON, KERRANE, STORZ & NELSON, PC, 3800 American Boulevard West, Suite 1500, Bloomington, MN 55431, for plaintiffs.
Michael K. Farrell, BAKER & HOSTETLER LLP, 3200 PNC Center, 1900 East Ninth Street, Suite 3200, Cleveland, OH 44114, and Karl C. Procaccini, GREENE ESPEL PLLP, 222 South Ninth Street, Suite 2200, Minneapolis, MN 55402, for defendants.
Plaintiffs Cheryl Luckey, Christine Cole, Elizabeth Welna, Eric Toop, and Robert Squatrito are homeowners whose homes contain windows designed and manufactured by Defendants Associated Materials, LLC, and Associated Materials, Incorporated (doing business as "Alside").1 Plaintiffs assert numerous claims against Alside on behalf of themselves and those similarly situated based on alleged defects in their Alside windows. Their claims include negligence and strict liability related to the windows' design and manufacture; breach of implied warranties; fraud; negligent misrepresentation; consumer fraud under Minnesota, New Hampshire, and Ohio law; unjust enrichment; and a claim under the Magnuson–Moss Warranty Act ("MMWA"), 15 U.S.C. § 2301 et seq . Alside moves for judgment on the pleadings on all claims pursuant to Fed. R. Civ. P. 12(c), asserting that the complaint fails to state a claim upon which relief may be granted.
The Court will grant Alside's motion with respect to all claims except breach of implied warranty of merchantability and breach of implied warranty based on course of dealing/usage of trade. The negligence and strict liability claims are barred by the economic loss doctrine. Plaintiffs have failed to plead all elements of breach of implied warranty of fitness for a particular purpose, common law fraud, and unjust enrichment. As for the statutory consumer fraud claims, the Court finds that Plaintiffs have failed to plead these claims with particularity as required by Fed. R. Civ. P. 9(b). Plaintiffs abandoned their claim under the MMWA. The two remaining implied warranty claims will survive judgment on the pleadings because Plaintiffs have pled facts which, if true, could indicate that Alside's limited warranties fail of their essential purpose.
Defendants Associated Materials, LLC, and Associated Materials, Inc. are Delaware corporations with a principal place of business in Ohio. (3 Alside designs, manufactures, distributes, and sells windows to builders and distributors in the continental United States for use in commercial and residential properties, including the particular type of window at issue in this case: the two-pane insulated glass unit ("IGU"). (Id. at 6–7.) IGUs have two panes of glass that are separated by low emissivity metallic films and inert argon gas; the panes "make[ ] use of a single seal to keep air from passing in or out of the glass assembly." (Id. at 7.) After the IGU frame is assembled around the glass panes, the gas is inserted through a small hole, which is then hermetically sealed. If the seal fails, normal air can fill the space between the panes of glass, causing corrosion and condensation between the panes. (See id. at 12, 14.) Alside sells its windows with a variety of limited warranties, the details of which depend on the specific line of window at issue. (Id. at 12–15.)
Plaintiffs Luckey, Squatrito, Toop, and Welna (the "Minnesota Plaintiffs") own homes containing Alside Performance Series windows which utilize Alside's IGU technology. (Id. at 3–4, 15, 19–21.) The Minnesota homes were all constructed between 2006 and 2008, in the Symphony at Town Center subdivision ("Symphony") in Ramsey, Minnesota. (Id. at 15–16, 19–21.) Plaintiffs allege on information and belief that all eighty-eight townhomes in Symphony contain Alside Performance Series windows. (Id. at 16.) The Minnesota homes included the Alside windows in their original construction; thus the Minnesota Plaintiffs did not directly purchase their windows from Alside, but rather, Alside sold windows to developers, contractors, and/or subcontractors who built the Minnesota homes. (Id. at 15, 19–21.) Plaintiff Christine Cole lives in New Hampshire; she purchased a full set of replacement windows containing Alside's IGU technology for her home on January 22, 2002. (Id. at 3, 17.)
Plaintiffs assert that the IGUs are failing, meaning that they incur condensation and/or corrosion between the panes, "in unacceptably high numbers and at unacceptably early timeframes in the life of the products," as compared to windows produced by other manufacturers, and "[m]any Alside Two–Pane IGUs that have not yet actually failed are subject to premature failure." (Id. at 7–8.) Plaintiffs attribute the widespread IGU seal failure to design and manufacturing defects,4 resulting from Alside's alleged failure to perform adequate "testing, quality control, and research and development" that could have led to "greater durability and reliability" and would have made the "IGUs' construction more in line with the accepted industry standards." (Id. at 7–9.) In addition, Plaintiffs allege that Alside was aware or should have been aware of the defects in the IGUs, positing that even if Alside lacked actual notice, the "abnormally large number of warranty claims" from IGU owners put Alside on notice of the defects. (Id. at 9.) Despite this awareness, Alside failed to notify or warn customers and also failed to recall the defective IGUs, which it continues to manufacture and sell. (Id. at 9–10.)
Plaintiffs allege that they each own one or more Alside window that has "failed," and that "no less than 40 of the 88 townhomes in Symphony contain at least one [Alside IGU window] with condensation and/or corrosion between the panes of glass, and many units have multiple [Alside IGU windows] with that type of visible damage to them." (Id. at 16–17.) Plaintiffs allege that their damages include property damage to the windows themselves, "inconvenience, aggravation, loss of use of their windows, other noneconomic damages, and/or economic damages as a result of the condensation and corrosion that obscures the windows, and the inadequate warranties and warranty service provided by [Alside]." (Id. at 2.)
The Minnesota Plaintiffs first noticed the failure of one or more Alside IGUs "[a]t some point in time" after purchasing their homes, while Cole noticed her first IGU failure in February 2004. (Id. at 15, 17, 20–21.) Each Plaintiff has submitted at least one warranty claim to Alside based on condensation and/or corrosion between window panes.5 Alside provided replacement IGUs in each instance at no cost to the warranty-holder with the exception of Cole—in Cole's case, Alside only provided free replacements for ten years, after which Alside relied on language in its limited warranty and instead offered to provide replacement IGUs for 50% of the cost. (Id. at 18.) Alside did not pay for removal of old or installation of new IGUs for any of the Plaintiffs, based on its interpretation of Plaintiffs' limited warranties. Plaintiffs either paid a contractor to do this work or, in Cole's case, installed the replacement IGUs themselves. (Id. at 16–18, 20–21.)
Plaintiffs initiated this lawsuit on May 20, 2015 and filed the operative complaint on August 31, 2015. The Court has subject matter jurisdiction based on 28 U.S.C. § 1332(d)(2) because the amount in controversy for the proposed class exceeds $5,000,000 and at least one class member is a citizen of a state other than Ohio or Delaware—Alside's states of citizenship. Plaintiffs assert sixteen claims on behalf of themselves and three proposed classes—a nationwide class, a Minnesota class, and a New Hampshire class—comprised of "[a]ll persons (including both natural persons and legal entities) [in the relevant geographic location] who presently own or have owned real property containing Alside Two–Pane IGUs." (Id. at 24–25.) Plaintiffs' allegations fall into three general categories: product liability in tort,6 fraud and misrepresentation,7 and breach of warranty.8
On October 8, 2015, Alside filed a motion to dismiss based on improper venue, or alternatively to transfer venue, which the Court subsequently denied. On May 2, 2016, Alside filed an Answer, and on May 10, 2016, Alside filed the instant motion for judgment on the pleadings pursuant to Fed. R. Civ. P. 12(c).9
Reviewing a motion for judgment on the pleadings pursuant to Fed. R. Civ. P. 12(c), the Court applies the same standard as under a motion to dismiss pursuant to Rule 12(b)(6). Clemons v. Crawford , 585 F.3d 1119, 1124 (8th Cir. 2009). Therefore, the Court is required to " ‘accept as true all factual allegations set out in the complaint’ and to ‘construe the complaint in the light most favorable to the [plaintiff], drawing all inferences in [the plaintiff's] favor.’ " Ashley Cty. v. Pfizer, Inc. , 552 F.3d 659, 665 (8th Cir. 2009) (quoting Wishnatsky v. Rovner , 433 F.3d 608, 610 (8th Cir. 2006) ). Although a complaint need not contain "detailed factual allegations," it must contain sufficient factual allegations "to raise a right to relief above the speculative level." Bell Atl. Corp. v. Twombly , 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). "[A] formulaic recitation of the elements of a cause of action will not do." Id. The "complaint must contain sufficient factual matter, accepted as...
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