Meifert v. MI Windows & Doors, Inc. (In re MI Windows & Doors, Inc. Prods. Liab. Litig.)

• Decision Date: 11 October 2012
• Docket Number: No. 2:12-cv-01256-DCN,No. 2:12-mn-00001,MDL No. 2333,2:12-mn-00001,2:12-cv-01256-DCN
• Court: U.S. District Court — District of South Carolina
• Parties: In re: MI WINDOWS AND DOORS, INC. PRODUCTS LIABILITY LITIGATION MIKE MEIFERT AND JANEEN MEIFERT, individually and on behalf of all others similarly situated, Plaintiffs, v. MI WINDOWS AND DOORS, INC. Defendant.

IN RE: MI WINDOWS AND DOORS, INC. PRODUCTS LIABILITY LITIGATIONMIKE MEIFERT AND JANEEN MEIFERT, individuallyand on behalf of all others similarly situated, Plaintiffs,

v.MI WINDOWS AND DOORS, INC. Defendant.

MDL No. 2333

No. 2:12-mn-00001

No. 2:12-cv-01256-DCN

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF SOUTH CAROLINA CHARLESTON DIVISION

Dated: October 11, 2012

ORDER

This matter is before the court on defendant's motion to dismiss all four counts of plaintiffs' amended complaint and to strike plaintiffs' request for equitable tolling of the statute of limitations. The court grants in part and denies in part the motion to dismiss and denies the request to strike.

I. BACKGROUND

On December 6, 2011, plaintiffs Mike and Janeen Meifert (the Meiferts) filed a class action complaint in the United States District Court for the Eastern District of Wisconsin against defendant MI Windows and Doors, Inc. (MIWD). MIWD moved to dismiss the complaint on January 23, 2012. In response to the motion to dismiss, on March 12, 2012 the Meiferts filed an amended complaint. MIWD moved to dismiss the amended complaint on March 26, 2012. On April 23, 2012, this and other cases were transferred to this court by the Judicial Panel on Multidistrict Litigation for consolidatedpretrial proceedings. The court held a hearing on the second motion to dismiss on September 18, 2012.

In their amended complaint, the Meiferts bring claims for negligence, violation of the Wisconsin Deceptive Trade Practices Act, breach of express warranty, and declaratory relief. The Meiferts allege that they purchased their home in 2004 directly from the builder and were the first and only owners of the home. Am. Compl. ¶ 11. The home contains windows manufactured by MIWD. Id. ¶ 10. MIWD allegedly designed, manufactured, marketed, advertised, warranted, and sold certain windows—those from its 3500, 4300, and 8500 series—that it knew or should have known were defective in design and not fit for their ordinary purpose. Id. ¶¶ 2-3. The Meiferts specifically claim that the windows in their home contain a defect that resulted in the loss of seal along the bottom of the glass and led to moisture and water intrusion into their home. Id. ¶ 4. This water intrusion allegedly caused "damage to property other than the Windows themselves," id., including damage to "adjoining finishes, walls and other personal property." Id. ¶ 6. The Meiferts state that they filed warranty claims with MIWD but were informed that they could not recover under the express warranty as subsequent owners of the home. Id. ¶ 11. The Meiferts seek to recover damages both individually and on behalf of two classes of persons owning structures in Wisconsin in which MIWD's 3500, 4300, and 8500 series of windows were installed. Id. ¶ 13. Finally, the Meiferts allege that MIWD should be estopped from relying on a statute of limitations defense since MIWD knew of the defect for years but failed to disclose it to the Meiferts and purported class members. Id. ¶¶ 44-45.

II. STANDARDS

A. Applicable Law

This case is predicated on diversity jurisdiction and was filed in federal court, so it is governed by state substantive law and federal procedural law. Santa's Best Craft, LLC v. St. Paul Fire & Marine Ins. Co., 611 F.3d 339, 345 (7th Cir. 2010). For diversity cases that are transferred in a MDL, "the law of the transferor district follows the case to the transferee district." Manual for Complex Litigation Fourth § 20.132. Therefore, this court must apply Wisconsin substantive law and federal procedural law.

B. Motion to Dismiss

Under Federal Rule of Civil Procedure 12(b)(6), a party may move to dismiss for "failure to state a claim upon which relief can be granted." When considering a Rule 12(b)(6) motion to dismiss, the court must accept the plaintiff's factual allegations as true and draw all reasonable inferences in the plaintiff's favor. See E.I. du Pont de Nemours & Co. v. Kolon Indus., 637 F.3d 435, 440 (4th Cir. 2011). But "the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).

On a motion to dismiss, the court's task is limited to determining whether the complaint states a "plausible claim for relief." Id. at 679. A complaint must contain sufficient factual allegations in addition to legal conclusions. Although Rule 8(a)(2) requires only a "short and plain statement of the claim showing that the pleader is entitled to relief," "a formulaic recitation of the elements of a cause of action will not do." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). The "complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on itsface.'" Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 570). "Facts pled that are 'merely consistent with' liability are not sufficient." A Soc'y Without a Name v. Virginia, 655 F.3d 342, 346 (4th Cir. 2011) (quoting Iqbal, 556 U.S. at 678).

III. DISCUSSION

MIWD seeks to dismiss all four counts of the amended complaint. At the hearing on the motion to dismiss, the Meiferts moved to dismiss without prejudice their claim under the Wisconsin Deceptive Trade Practices Act¹ ; therefore, the court only addresses the motion to dismiss as to the remaining three counts of the amended complaint. See Hr'g Tr. 32, Sept. 18, 2012, ECF No. 34.

A. Negligence

First, MIWD moves to dismiss the Meiferts' negligence claim, arguing it is barred by the economic loss doctrine and fails under Rule 12(b)(6).

1. Economic Loss Doctrine

The economic loss doctrine, adopted by the Wisconsin Supreme Court in Sunnyslope Grading, Inc. v. Miller, Bradford & Risberg, Inc., 437 N.W.2d 213 (Wis. 1989), "is a judicially created doctrine under which a purchaser of a product cannot recover from a manufacturer on a tort theory for damages that are solely economic." Bay Breeze Condo. Ass'n v. Norco Windows, Inc., 651 N.W.2d 738, 741 (Wis. Ct. App. 2002). "Economic loss" includes damage to and loss in value of a product itself, but doesnot include "personal injury or damage to other property." 1325 N. Van Buren, LLC v. T-3 Grp., Ltd., 716 N.W.2d 822, 831 (Wis. 2006) (internal quotation marks omitted); Bay Breeze, 651 N.W.2d at 742 ("The economic loss doctrine does not apply, however, if the damage is to property other than the defective product itself; in that case, a complainant may pursue an action in tort.").

To recover for damage to "other property," the property allegedly damaged must be sufficiently distinguishable from the product that caused the damage. When a component of an integrated system causes damage to either the system as a whole or to other component parts, courts in Wisconsin have held that the economic loss doctrine bars recovery. See Wausau Tile, Inc. v. Cnty. Concrete Corp., 593 N.W.2d 445, 452 (Wis. 1999) (discussing this "integrated system" rule).

Wisconsin courts have likened windows to "ingredients" of a home, such that the windows and home are together an "integrated system." Thus, the economic loss rule typically bars recovery in tort for damage to a home caused by a defect in windows. See Midland Builders, Inc. v. Semling-Menke Co., 703 N.W.2d 383 (Wis. Ct. App. 2005) (table) ("[T]he crux of Midland's claim for repair costs here is that the homes were damaged because an ingredient, Semco windows, was of insufficient quality and did not work for Midland's intended purpose. Accordingly, these costs are the 'essence of a claim for economic loss,' and Wausau Tile precludes Midland from seeking to recover such losses through its negligence . . . claim[]."). The Wisconsin Court of Appeals in Selzer v. Brunsell Bros., in applying the "integrated system" rule, held:

We cannot discern a meaningful analytical difference between a window in a house, a gear in a printing press, a generator connected to a turbine, or a drive system in a helicopter. In each of these examples, the window, the gear, the generator, and the drive system are integral parts of a greaterwhole; none of the integral parts serve an independent purpose. Thus, just as the damage to the printing press, the turbine, and the helicopter caused by their integral parts constituted damage to the products themselves, so too did the damage to Selzer's home caused by the windows constitute damage to the product itself, and not damage to "other property" for purposes of the economic loss doctrine.

652 N.W.2d 806, 835 (Wis. Ct. App. 2002). Similarly, the Wisconsin Court of Appeals in Bay Breeze wrote,

Generally, house buyers have little or no interest in how or where the individual components of a house are obtained. They are content to let the builder produce the finished product, i.e., a house. These homeowners bought finished products—dwellings—not the individual components of those dwellings. They bargained for the finished products, not their various components. . . . Here, . . . the homeowners purchased a finished product, their condominium units, the quality of which fell below expectations. While the Association argues that the defective windows caused damage to interior and exterior walls and casements, these are but other component parts in a finished product. Because of the integral relationship between the windows, the casements and the surrounding walls, the windows are simply a part of a single system or structure, having no function apart from the buildings for which they were manufactured. Although the condominium units may have suffered incidental damage as a result of the failed windows, this does not take a commercial dispute outside the economic loss doctrine.

651 N.W.2d at 745-46 (internal citations and quotation marks omitted). Here, in their amended complaint, the Meiferts allege the following types of harm: damage to "the interior of the residence[]," including damage to "adjoining finishes, walls and other personal property," Am. Compl. ¶ 6; damage to ...