Roxy Home Improvement, LLC v. Mercedes-Benz United States, LLC
| Decision Date | 09 April 2018 |
| Docket Number | Case No. 1:17-cv-01817 |
| Parties | ROXY HOME IMPROVEMENT, LLC, ET AL. Plaintiffs, v. MERCEDES-BENZ USA, LLC, Defendant. |
| Court | U.S. District Court — Northern District of Ohio |
ORDER
Plaintiffs Roxy Home Improvement LLC ("RHI") and Ovidiu Radu ("Radu") instituted this action against Mercedes-Benz USA, LLC ("MBUSA") on July 28, 2017 in Cuyahoga County Common Pleas Court. See ECF Doc. 1-1, Page ID# 6-11. Plaintiffs allege causes of action for breach of express warranty, implied warranty of merchantability, and implied warranty of fitness for a particular purpose in violation of the Ohio Uniform Commercial Code ("UCC") (Count 1) and breach of implied warranty of merchantability and of fitness for a particular purpose sounding in tort (Count II). See ECF Doc. 1-1, Page ID# 9-11. Plaintiffs allege that the 2015 Van and 2016 Van ("the vehicles") plaintiffs purchased from Mercedes-Benz of North Olmsted "could not be utilized for the purposes intended by Plaintiff at the time of acquisition," were "worthless and/or substantially impaired," and the "defects and nonconformities exhibited by both vans constitute a breach of contractual, statutory and/or common law obligations of [MBUSA]." See ECF Docs. 1-1 and 15, Page ID# 7-10, 93.
Counts I and II allege violations of Ohio statutory and common law, but MBUSA removed the case to this court under 28 U.S.C § 1441(a) and pursuant to 28 U.S.C. § 1332(a)(1) because the parties are citizens of different states and the complaint (ECF Doc. 1-1) could be read to indicate that the amount in controversy exceeds $75,000. See ECF Doc. 1.
MBUSA moved for partial judgment on the pleadings (ECF Doc. 15), contending that Radu lacks standing to assert his claims against MBUSA and the economic loss doctrine bars plaintiffs' tort claims because the parties' obligations are governed by contract. See ECF Doc. 15, Page ID# 92. Plaintiffs responded in opposition (ECF Doc. 16) on February 14, 2018, arguing that Radu has standing because he suffered distinct injuries separate from those of RHI and plaintiffs' tort claim is not barred by the economic loss doctrine. See ECF Doc. 16. On February 28, 2018, MBUSA filed a reply brief. See ECF Doc. 17.
On March 8, 2018, the court ordered the parties to brief two issues: (1) whether Radu was a third-party beneficiary to the purchase contracts; and (2) whether Radu's expenditures for repairs to the vehicles can be offered as proof of RHI's damages from its claims of breach of express warranty, implied warranty of merchantability, and/or implied warranty of fitness for a particular purpose under the Ohio Uniform Commercial Code (Count I in ECF Doc. 1-1). See ECF Doc. 18, Page ID# 116. Plaintiffs briefed these issues on March 15, 2018. ECF Doc. 19. And MBUSA did so on March 22, 2018. ECF Doc. 20.
Because Plaintiff Ovidiu Radu has failed to allege facts showing that he has standing to bring this suit and because the economic loss doctrine bars plaintiffs' implied warranty in tort claims, the court will GRANT MBUSA's motion for partial judgment on the pleadings.
The following facts are undisputed. On or about January 28, 2016, RHI purchased a 2015 Mercedes-Benz Sprinter Cargo Van from Mercedes-Benz of North Olmsted bearing the vehicle identification number WD3PE8DC3F5990795 (the "2015 van"). ECF Docs. 1-1 and 15, Page ID# 7, 93. The total price of the 2015 van was approximately $49,686.50 and it came with a standard 4-year/50,000-mile limited warranty. ECF Doc. 4, Page ID# 25. On or about April 11, 2017, RHI returned to Mercedes-Benz of North Olmstead and traded in the 2015 Van for a 2016 Mercedes-Benz Sprinter Cargo Van bearing the vehicle identification number WD3PE7DD8GP350221 (the "2016 van"). ECF Docs. 1-1 and 15, Page ID# 8, 93. The price of the 2016 van was approximately $55,186.00 and it came with a standard 4-year/50,000-mile limited warranty. ECF Doc. 4, Page ID# 26.
Under Federal Rule of Civil Procedure 12(c), "[a]fter the pleadings are closed - but early enough not to delay trial - a party may move for judgment on the pleadings." Fed. R. Civ. P. 12(c). The judgment on the pleadings standard under Rule 12(c) is the same as that which applies to motions to dismiss under Fed. R. Civ. P. 12(b)(6). Lindsay v. Yates, 498 F.3d 434, 438 (6th Cir. 2007). "Under that standard, [courts] construe the complaint in the light most favorable to the nonmoving party, accept the well-pled factual allegations as true, and determine whether the moving party is entitled to judgment as a matter of law." Commercial Money Ctr., Inc. v. Illinois Union Ins. Co., 508 F.3d 327, 336 (6th Cir. 2007). In ruling on a Rule 12(c) motion, courts consider all available pleadings, including the complaint and the answer. Turk v. Oiler,732 F. Supp.2d 758, 764 (N.D. Ohio 2010). Courts may also consider any documents attached to, incorporated by, or referred to in the pleadings. Id.
Federal Rule of Civil Procedure 12(d) deals with the result of presenting matters outside the pleadings. That rule states that "[i]f, on a motion under Rule 12(b)(6) or 12(c), matters outside the pleadings are presented to and not excluded by the court, the motion must be treated as one for summary judgment under Rule 56" and "[a]ll parties must be given a reasonable opportunity to present all the material that is pertinent to the motion." Fed. R. Civ. P. 12(d). In the Sixth Circuit, "the mere presentation of evidence outside of the pleadings, absent the district court's rejection of such evidence, is sufficient to trigger the conversion of a Rule 12(c) motion to a motion for summary judgment." Max Arnold & Sons, LLC v. W.L. Hailey & Co., Inc., 452 F.3d 494, 503 (6th Cir.2006).
When jurisdiction is premised on diversity of citizenship, a plaintiff must have standing under both Article III and state law in order to maintain a cause of action. Morell v. Star Taxi, 343 F. App'x 54, 57 (6th Cir. 2009). "To satisfy Article III's standing requirement, a plaintiff must have suffered some actual or threatened injury due to the alleged illegal conduct of the defendant; the injury must be 'fairly traceable' to the challenged action; and there must be a substantial likelihood that the relief requested will redress or prevent the plaintiff's injury." VFS Leasing Co. v. J & L Trucking, Inc., No. 1:09-CV-2942, 2011 WL 3439525, at *3 (N.D. Ohio Aug. 5, 2011) (citing Coyne v. American Tobacco Co., 183 F.3d 488, 494 (6th Cir.1999)). "A plaintiff bears the burden of demonstrating standing and must plead its components with specificity." Wuliger v. Mfrs. Life Ins. Co. (USA), 567 F.3d 787, 793 (6th Cir. 2006). Further, "[a]n action must be prosecuted in the name of the real party in interest." Fed. R. Civ. P.17(a)(1). To determine the real party in interest, Ohio courts determine who is entitled to damages. Young v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 88 Ohio App. 3d 12, 623 N.E.2d 94, 97 (8th Dist.1993).
MBUSA argues that Radu lacks standing to sue for any alleged defects to the vehicles and his claims fail as a matter of law, because he is not a party to any contract with MBUSA for the vehicles and is not a "real party in interest." ECF Docs. 15 and 17, Page ID# 94. MBUSA argues Radu is not a real party in interest because RHI purchased the 2015 Van and the 2016 Van and Radu neither acquired an ownership interest in the vehicles nor entered into a contract with MBUSA for either vehicle. ECF Doc. 15, Page ID# 95 (citing ECF Docs. 4, 4-1, and 4-2). MBUSA argues that Radu cannot assert RHI's legal rights and interests because his ownership status in RHI "'does not give him standing to sue for alleged harms suffered by [the company] alone.'" Id. at 95 (quoting VFS Leasing Co. v. J & L Trucking, Inc., No. 1:09-CV-2942, 2011 WL 3439525, at *3. MBUSA further argues that RHI is the only party capable of suffering the damages plaintiffs allege, including any out-of-pocket expenses for a rental vehicle or cleaning services. ECF Doc. 17 (citing ECF Doc. 16, Section B).
Radu acknowledges that he is not a party to the purchase contracts between RHI and Mercedes-Benz of North Olmsted for the vehicles ("purchase contracts"). ECF Doc. 19. Radu claims that he is an incidental beneficiary, but concedes that an incidental beneficiary cannot recover from the promisor under the purchase contracts. Id. Thus, Radu cannot assert that he has standing pursuant to a contract between MBUSA and himself for either vehicle.
Radu instead argues that he has standing to bring the present claims because he "has suffered a concrete and particularized injury." ECF Doc 16, at 1-2. Radu attempts to supportthis argument by alleging facts through attorney argument that were neither alleged in the pleadings nor presented in any exhibits submitted with the pleadings.
MBUSA argues that plaintiffs' arguments "attempt to impermissibly expand Article III and Fed. R. Civ. P. 17 standing requirements and rely on facts that are outside of the pleadings." ECF Doc. 17. MBUSA argues that plaintiffs' references to alleged injuries outside the pleadings are improper under Rule 12(c), because "[n]owhere in [p]laintiffs' [c]omplaint does it allege any facts pertaining to verbal harassment or a 'personal attack on Radu' by any MBUSA employee, nor does it assert any claims regarding the same." Id.
MBUSA's argument is correct. The Buyers Orders (ECF Docs. 4-1 and 4-2) attached as exhibits to MBUSA's answer (ECF Doc. 4) show that the corporate entity, RHI, purchased the vehicles at issue, not Radu. See ECF Docs. 4-1 and 4-2, Page ID# 34-35. Thus, RHI would have received any express or implied warranties regarding the vehicles, not Radu. Plaintiffs' complaint also does not allege with specificity any damages particular to Radu. See ECF Doc. 1-1. Accor...
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