Sadler v. Pella Corp.

CourtUnited States District Courts. 4th Circuit. United States District Court of South Carolina
Citation146 F.Supp.3d 734
Decision Date23 November 2015
Docket NumberNo. 2:14-mn-00001-DCN, No. 2:14-cv-03051-DCN,2:14-mn-00001-DCN
Parties John Sadler and Geriann Gatziolis, on behalf of themselves and all others similarly situated, Plaintiffs, v. Pella Corporation, Defendant.

Jonathan Shub, Sr., Daniel K. Bryson, Matthew E. Lee, Whitfield Bryson & Mason LLP, Raleigh, NC, Frank Michael Petosa, Morgan and Morgan, Plantation, FL, Marc H. Edelson, Hoffman and Edelson Law Offices, Doylestown, PA, Scott A. George, Seeger Weiss, Philadelphia, PA, Jeffrey A. Leon, Quantum Legal, Highland Park, IL, for Plaintiff.

G. Mark Phillips, Michael Tucker Cole, Nelson Mullins Riley and Scarborough, Charleston, SC, John P. Mandler, Mark J. Winebrenner, Shane A. Anderson, Faegre Baker Daniels, Minneapolis, MN, Kevin L. Morrow, Faegre Baker Daniels, Chicago, IL, for Defendant.




This matter is before the court on a motion to dismiss filed by Pella Corporation (Pella). The court grants in part and denies in part Pella's motion as set forth below.


Plaintiff John Sadler (Sadler) installed Pella windows in his Des Plaines, Illinois home in late 2002 and early 2003. Am. Compl. ¶ 30. Sadler discovered fungus growing under his windows in 2011 and discovered rot in his windows in 2013, at which time he contacted Pella. Id. ¶ 34. Pella offered to replace the windows, but indicated that Sadler would have to pay for the cost of the replacement windows and the cost of installation. Id. ¶ 35. Unsatisfied, Sadler declined Pella's offer. Id.

Plaintiff Geriann Gatziolis's (Gatziolis) St. Charles, Illinois home was built in 2004 and Pella windows were installed the same year. Id. ¶ 36. Gatziolis experienced problems with her windows about four years after they were installed, but did not observe any indication of rot at that time. Id. ¶ 40. Her windows began to exhibit worse signs of failure in 2011, at which point she contacted Pella. Id. Pella inspected Gatziolis's home and denied that her windows were defective. Id.

Plaintiffs contend that their windows suffer from various design deficiencies, including “a defect in the design of the sill extrusion and sill nailing fin attachment[,] as well as a defect in the design of [sic] allowing a gap between the jamb gasket and the sill gasket.” Id. ¶ 51. Plaintiffs allege that due to these design defects, water is permitted to be trapped between the aluminum and the operable wood frame, permitting leaks and causing damage to the windows and other property within the home. Id. Plaintiffs further allege that Pella knew, or but for its negligence should have been aware, of the defects. Id. ¶ 24.

On May 5, 2014, plaintiffs filed a class action complaint against Pella in the United States District Court for the Northern District of Illinois, alleging jurisdiction based on diversity of citizenship. On June 10, 2014, plaintiffs amended their complaint, bringing the following ten causes of action: (1) negligence; (2) breach of implied warranty of merchantability; (3) breach of implied warranty of fitness for a particular purpose; (4) breach of express warranty; (5) violation of the Illinois Consumer Fraud and Deceptive Business Practices Act (“ICFA”); (6) fraudulent misrepresentation; (7) fraudulent concealment; (8) unjust enrichment; (9) violation of the Magnuson-Moss Warranty Act (“MMWA”); and (10) declaratory relief.

On July 30, 2014, the United States Judicial Panel on Multidistrict Litigation transferred plaintiffs' case to this court as part of the consolidated multidistrict litigation. Pella filed the instant motion to dismiss on August 29, 2014. Plaintiffs opposed the motion on October 17, 2014, and Pella replied on October 31, 2014. The motion has been fully briefed and is ripe for the court's review.

A. 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[ ] all well-pleaded allegations in the plaintiff's complaint as true and draw[ ] all reasonable factual inferences from those facts in the plaintiff's favor.” Edwards v. City of Goldsboro , 178 F.3d 231, 244 (4th Cir.1999). 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, 129 S.Ct. 1937, 173 L.Ed.2d 868 (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, 129 S.Ct. 1937

. 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, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). The “complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ Iqbal , 556 U.S. at 678, 129 S.Ct. 1937 (quoting Twombly , 550 U.S. at 570, 127 S.Ct. 1955 ). “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, 129 S.Ct. 1937 ).

B. 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. Gasperini v. Ctr. for Humanities, Inc. , 518 U.S. 415, 427, 116 S.Ct. 2211, 135 L.Ed.2d 659 (1996)

. “In multidistrict litigation, the law of the transferee circuit governs questions of federal law.” In re KBR, Inc. , 736 F.Supp.2d 954, 957 (D.Md.2010) modified on reh'g sub nom. In re KBR, Inc., Burn Pit Litig. , 925 F.Supp.2d 752 (D.Md.2013) vacated and remanded on other grounds , 744 F.3d 326 (4th Cir.2014) ; see also In re Gen. Am. Life Ins. Co. Sales Practices Litig. , 391 F.3d 907, 911 (8th Cir.2004) ; Menowitz v. Brown , 991 F.2d 36, 40 (2d Cir.1993) ; In re Korean Air Lines Disaster of Sept. 1, 1983, 829 F.2d 1171, 1176 (D.C.Cir.1987) ; cf. Bradley v. United States , 161 F.3d 777, 782 n. 4 (4th Cir.1998) (applying Fourth Circuit law to questions of federal law in a case transferred from the Fifth Circuit). Therefore, this court must apply Illinois substantive law and Fourth Circuit procedural law.

A. Implied Warranty Claims

Pella argues that plaintiffs' claims for breach of the implied warranty of merchantability and the implied warranty of fitness for a particular purpose fail because they are barred by the statute of limitations. Pella also argues that: (i) Gatziolis's implied warranty claims fail because she cannot establish privity with Pella; and (ii) plaintiffs' claim for breach of the implied warranty of fitness for a particular purpose fails because the windows were used for their ordinary purpose. The court will address each argument in turn.

1. Statute of Limitations

Under Illinois law, the statute of limitations for a breach of warranty claim is four years. 810 Ill. Comp. Stat. 5/2-725(1). Ordinarily, the cause of action accrues when the breach occurs. 810 Ill. Comp. Stat. 5/2-725(2). A breach occurs when tender of delivery is made, unless the warranty at issue “explicitly extends to future performance of the goods and discovery of the breach must await the time of such performance,” in which case “the cause of action accrues when the breach is or should have been discovered.” Id. [I]mplied warranties by definition cannot explicitly extend to future performance.” Stoltzner v. Am. Motors Jeep Corp. Inc. , 127 Ill.App.3d 816, 82 Ill.Dec. 909, 469 N.E.2d 443, 445 (1984)

. Pella argues because Sadler's windows were installed in 2003 at the latest, Am. Compl. ¶ 30, and Gatziolis's windows were installed in 2004, Id. ¶ 36, the statute of limitations for each plaintiff's claim expired by 2008, about six years before the current action was filed.

Plaintiffs argue that the statute of limitations was tolled by the doctrine of equitable estoppel because Pella concealed the defect from plaintiffs and other window owners.1 Id. ¶¶ 67, 68. Pella also contends that plaintiffs have failed to adequately plead equitable estoppel.

Equitable estoppel tolls the running of a statute of limitations when the party claiming estoppel demonstrates that:

(1) the other party misrepresented or concealed material facts; (2) the other party knew at the time the representations were made that the representations were untrue; (3) the party claiming estoppel did not know that the representations were untrue when the representations were made and when they were acted upon; (4) the other party intended or reasonably expected the representations to be acted upon by the party claiming estoppel or by the public generally; (5) the party claiming estoppel reasonably relied upon the representations in good faith and to their detriment; and (6) the party claiming estoppel has been prejudiced by his reliance on the representations.

Parks v. Kownacki , 193 Ill.2d 164, 249 Ill.Dec. 897,737 N.E.2d 287, 296 (2000)

. Here, plaintiffs' equitable estoppel claim appears to be based on a theory of fraudulent concealment.2 Compl. ¶¶ 67, 68 (stating that “Pella has known of the defects ... and has concealed from owners of the [w]indows ... the defective nature of the windows,” and that [g]iven Pella's failure to disclose this known but non-public information ... Pella is estopped from” enforcing the statute of limitations).

Illinois law provides that:

If a person liable to an action fraudulently conceals the cause of such action from the knowledge of the person entitled thereto, the action may be commenced at any time within 5 years after the person entitled to bring the

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