Maciel v. BMW of N. Am., LLC

• Decision Date: 23 February 2021
• Docket Number: CV 20-458 (JS) (AKT)
• Parties: WAGNER MACIEL, Plaintiff, v. BMW OF NORTH AMERICA, LLC, Defendant.
• Court: U.S. District Court — Eastern District of New York

WAGNER MACIEL, Plaintiff, v. BMW OF NORTH AMERICA, LLC, Defendant.

CV 20-458 (JS) (AKT)

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK

February 23, 2021

REPORT AND RECOMMENDATION

A. KATHLEEN TOMLINSON, Magistrate Judge:

I. PRELIMINARY STATEMENT

Plaintiff Wagner Maciel commenced this action alleging claims pursuant to the Magnuson-Moss Warranty Act, 15 U.S.C. § 2301 et seq., the U.C.C., New York General Business Law § 349, and common law fraud which stem from Plaintiff's purchase of a BMW vehicle in January 2012. See generally Amended Complaint ("Am. Compl.") [DE 11]. Defendant BMW of North America, LLC has moved to dismiss the Amended Complaint,pursuant to Federal Rule of Civil Procedure 12(b)(1), for lack of subject matter jurisdiction and pursuant to Rule 12(b)(6) for failure to state a claim. See Memorandum of Law in Support of Defendant BMW of North America, LLC's Motion to Dismiss the Plaintiff's First Amended Complaint ("Def.'s Mem.") [DE 18]. Defendant principally argues the Court lacks jurisdiction because the Amended Complaint does not plausibly allege that the amount in controversy requirement pursuant to either the Magnus-Moss Warranty Act or 28 U.S.C. § 1332 is satisfied. See generally id. Plaintiff opposes Defendant's motion, primarily on the grounds that the damages pled could meet the jurisdictional amount required under either statute. See generally Plaintiff's Memorandum of Law in Opposition to Defendant BMW of North America, LLC's Motion to Dismiss the First Amended Complaint ("Pl.'s Opp'n") [DE 26]. Defendant submitted a Reply. See Memorandum of Law in Reply to Plaintiff's Opposition and in Further Support of Defendant, BMW of North America, LLC's Motion to Dismiss the Plaintiff's First Amended Complaint ("Def.'s Reply") [DE 27].

Judge Seybert referred Defendant's motion to dismiss to this Court for a Report and Recommendation as to whether Defendant's motion should be granted. For the reasons which follow, the Court respectfully recommends to Judge Seybert that Defendant's motion be GRANTED and that the Amended Complaint be dismissed in its entirety.

II. BACKGROUND

A. Factual Background

The following factual allegations have been taken from the Amended Complaint. All facts alleged by Plaintiff are assumed to be true for purposes of deciding the motion to dismiss and are construed in a light most favorable to Plaintiff as the non-moving party. See, e.g., Tanvir v. Tanzin, 894 F.3d 449, 458 (2d Cir. 2018); LaFaro v. N.Y. Cardiothoracic Grp., 570 F.3d 471, 475 (2d Cir. 2009); McGrath v. Bayer HealthCare Pharms. Inc., 393 F. Supp. 3d 161, 166 (E.D.N.Y. 2019); Matthews v. City of N.Y., 889 F. Supp. 2d 418, 425 (E.D.N.Y. 2012).

Plaintiff is a New York resident. Am. Compl. ¶ 11. Defendant is a Delaware limited liability company with its principal place of business in New Jersey. Id. ¶ 12. Defendant is also a wholly owned subsidiary of BMW (US) Holding Corp., a Delaware corporation with its principal place of business in New Jersey. Id. Defendant is engaged in the business of importing, assembling, marketing, distributing, and warranting BMW vehicles in New York and throughout the United States. Id. ¶ 13. Vehicles are sold by Defendant through a network of independently owned dealerships across the country. Id.

On January 27, 2012, Plaintiff purchased a new 2012 BMW X5, vehicle identification number 5UXZV8C58CL425188 (the "Vehicle") from Prestige BMW in Ramsey, New Jersey. Id. ¶ 15. Prestige BMW is an authorized BMW dealer. Id. The price for the Vehicle was $72,235.88, including options, fees, taxes, and other charges. Id. ¶ 16. Within a few months of his purchase of the Vehicle, Plaintiff observed that the engine consumed an excessive amount of oil which required him to add one quart of oil every 600 miles "throughout the warranty period and well before the Defendant's recommended oil change intervals." Id. ¶ 17. Defendant's "New Vehicle Limited Warranty," which accompanied the sale of the Vehicle, states that Defendant "promised to repair or replace components found to be defective in material or workmanship during the 4-year/50,000-mile [warranty] following such Vehicle delivery to consumer." Id. ¶ 26. More specifically, the New Vehicle Limited Warranty provides:

Warrantor

BMW of North America, LLC (BMW NA) warrants 2012 U.S.-specification SAVs distributed by BMW NA or sold through the BMW NA European Delivery Program against defects in materials or workmanship to the first retail purchaser, and each subsequent purchaser.

Warranty Period

The warranty period is 48 months or 50,000 miles, whichever occurs first.

. . . .

Warranty Coverage

To obtain warranty service coverage, the vehicle must be brought, upon discovery of a defect in material or workmanship, to the workshop of any authorized BMW SAV center in the United States or Puerto Rico, during normal business hours. The authorized BMW SAV center will, without charge for parts or labor, either repair or replace the defective part(s) using new or authorized remanufactured parts. The decision to repair or replace said part(s) is solely the prerogative of BMW NA. Parts for which replacements are made become the property of BMW NA.

In all cases, a reasonable time must be allowed for warranty repairs to be completed after the vehicle is received by the authorized BMW SAV Center.

See id. ¶ 28.¹ Defendant controls the execution of all warranty repairs by its authorized dealers, who are its agents for purposes of vehicle repairs. Id. ¶ 29. As such, the Amended Complaint alleges that Plaintiff is a third-party beneficiary of any contracts between Defendant and its authorized dealers. Id. ¶ 31.

During the warranty period, Plaintiff complained to an authorized BMW dealer, namely, BMW of Oyster Bay in Oyster Bay, New York, that the Vehicle consumed excessive amounts of engine oil. Id. ¶ 18. BMW of Oyster Bay told Plaintiff that the oil consumption he complained of was normal and that it did not offer any repairs to resolve this issue. Id. ¶ 19. Plaintiff has since spent approximately $3,700 in out-of-pocket costs associated with the Vehicle's engine oil consumption and the cost to replace the Vehicle's engine would range between $12,500 and $15,000. Id. ¶¶ 21-22. On July 20, 2018, Plaintiff's counsel sent Defendant a letter that reiterated the Plaintiff's complaints with respect to the excessive oil consumption and that the defect continued to persist. Id. ¶ 23. In that same letter, Plaintiff also revoked her acceptance of the Vehicle. Id.

The Amended Complaint then goes into great detail about the specifics of the engine oil defect which plagued Plaintiff's vehicle, and those details need not be repeated here. See id. ¶¶ 33-64. The particular engine in Plaintiff's vehicle is an "N63" engine and apparently hundreds of other customers complained to BMW about excessive oil consumption in their vehicles which are equipped with this same engine. See id. ¶¶ 37, 58. It has become "widely recognized that N63 engines consume excessive amounts of engine oil" and that Defendant did not disclose the defect nor the fact that many purchasers of vehicles with N63 engines "have become upset about the excessive oil consumption." See id. ¶¶ 38, 44, 48. Plaintiff would not have purchased the Vehicle or would have paid significantly less for it had he known he would be required to regularly purchase and add large volumes of engine oil to prevent the Vehicle's engine from failing. Id. ¶ 73.

The Amended Complaint asserts five causes of action: (1) breach of express warranty pursuant the Magnuson-Moss Warranty Act, 15 U.S.C. § 2310(d)(1); (2) breach of express warranties as set forth in the New Vehicle Limited Warranty; (3) breach of implied warranty of merchantability pursuant to both the Magnuson-Moss Warranty Act § 2308 and New Jersey state law, N.J. Stat. Ann. § 12A:2-314; (4) deceptive acts and practices pursuant to New York General Business Law § 349; and (5) fraudulent concealment. See id. ¶¶ 93-152. Plaintiff seeks an order approving the revocation of acceptance or rescission of his purchase of the Vehicle, monetary damages, equitable relief in form of repairs to the defective Vehicle or a new or replacement automobile, consequential damages, punitive damages, and reasonable attorney's fees. See id. at 29-30.

The Amended Complaint also contains a section entitled "Tolling of Statute of Limitations" in which Plaintiff appears to anticipate arguments that Defendant would assert in aresponsive pleading regarding the timeliness of Plaintiff's claims. See id. at 17-19. In particular, the Amended Complaint provides four arguments on this issue: (1) "Defendant is estopped from relying on any statutes of limitations in defense of this action" because it fraudulently concealed the Vehicle's defect from plaintiff; (2) Plaintiff's claims are tolled pursuant to the "discovery rule" because "Plaintiff could not have discovered through the exercise of reasonable diligence that the Vehicle contained the oil consumption defect within the time period of any applicable statute of limitations;" (3) Defendant was under a continuous duty to disclose the true character, quality and nature of the Vehicle to Plaintiff, actively concealed this information and never intended to repair the subject engine, and should be estopped from relying upon any statutes of limitations; and (4) Plaintiff's claims have been tolled pursuant to class-action tolling because Plaintiff opted out of a class action settlement in the U.S. District Court for the District of New Jersey in Bang v. BMW of North America, LLC, CV 15-6945, and was given leave by that court to file an individual action. See id. ¶¶ 74-92.

B. Procedural Background

Plaintiff commenced this action on January 27, 2020. See generally Complaint [DE 1]. Defendant filed its first pre-motion conference request to Judge Seybert on February 27, 2020 for purposes of moving to dismiss the Complaint. See DE 9. In response, Plaintiff expressed an intent...