Shea v. Gen. Motors LLC, CAUSE NO. 3:21-CV-86 DRL-MGG

• Court: United States District Courts. 7th Circuit. United States District Court of Northern District of Indiana
• Citation: 567 F.Supp.3d 1011
• Docket Number: CAUSE NO. 3:21-CV-86 DRL-MGG
• Parties: Ron SHEA and Robert Kelly, individually and on behalf of all others similarly situated, Plaintiffs, v. GENERAL MOTORS LLC, Defendant.
• Decision Date: 14 October 2021

567 F.Supp.3d 1011

Ron SHEA and Robert Kelly, individually and on behalf of all others similarly situated, Plaintiffs,
v.
GENERAL MOTORS LLC, Defendant.

CAUSE NO. 3:21-CV-86 DRL-MGG

United States District Court, N.D. Indiana, South Bend Division.

Signed October 14, 2021

567 F.Supp.3d 1015

Daniel R. Ferri, PHV, Pro Hac Vice, John E. Tangren, PHV, Pro Hac Vice, Adam J. Levitt, Dicello Levitt & Gutzler LLC, Chicago, IL, Henry Clay Barnett, PHV, III, Pro Hac Vice, James M. Williams, PHV, Pro Hac Vice, Beasley Allen Crow Methvin Portis & Miles PC, Montgomery, AL, Jennie Lee Anderson, PHV, Pro Hac Vice, Andrus Anderson LLP, San Francisco, CA, Scott L. Starr, Andrew B. Miller, Starr Austen & Miller LLP, Logansport, IN, for Plaintiffs.

April N. Ross, PHV, Pro Hac Vice, Kathleen T. Sooy, PHV, Pro Hac Vice, Rachel P. Raphael, PHV, Pro Hac Vice, Crowell & Moring LLP, Washington, DC, Dina M. Cox, Janelle P. Kilies, Lewis Wagner LLP, Indianapolis, IN, for Defendant.

OPINION & ORDER

Damon R. Leichty, United States District Court Judge

567 F.Supp.3d 1016

Ron Shea and Robert Kelly each purchased vehicles manufactured by General Motors LLC and fitted with Generation IV Vortec engines. They claim their engines consume an excessive amount of oil—what they call an "oil consumption defect." They sue GM for violations of the Indiana Deceptive Consumer Sales Act (IDCSA), breach of express warranty, breach of implied warranty of merchantability, fraudulent omissions, unjust enrichment, and violations of the Magnuson-Moss Warranty Act (MMWA). GM moves to dismiss all claims. The court grants the motion.

BACKGROUND

These facts emerge from the well-pleaded factual allegations in the complaint. The court must accept them as true for purposes of deciding the motion today.

Ron Shea purchased a 2013 GMC Sierra equipped with a Generation IV Vortec 5300 engine from Expressway Chevrolet Buick GMC in Mount Vernon, Indiana on January 26, 2013 [ECF 1 ¶ 33]. Mr. Shea noticed his 2013 Sierra was consuming excessive amounts of oil when there were approximately 40,000 miles on the odometer [id. ¶ 35].

Mr. Shea is a mechanic with over 30 years of experience [id. ]. He regularly checks the oil and adds more when needed [id. ]. Now, with over 104,385 miles on the vehicle, it remains three quarts low between oil changes [id. ]. Mr. Shea says he didn't receive any notification regarding the oil consumption defect before purchasing the vehicle [id. ¶¶ 36-37]. Had he known about this problem, he wouldn't have purchased the 2013 Sierra, or he at least would have paid less for it [id. ¶ 39].

Robert Kelly purchased a used 2012 Chevrolet Suburban equipped with a Generation IV Vortec 5300 engine from Basney Honda in Mishawaka, Indiana on September 5, 2018 [id. ¶ 26]. In September 2020, while Mr. Kelly's wife was driving the vehicle, she began to notice the lack of acceleration [id. ¶ 27]. When she stopped at a red light, the vehicle began to rock [id. ]. The rocking became more violent, and the engine light came on [id. ]. She drove the vehicle to a nearby grocery store parking lot; the engine died, and she left the vehicle overnight [id. ].

The next day, Mr. Kelly drove the vehicle to the Gurley Leep Buick GMC dealership a couple of blocks away [id. ]. On September 25, 2020, Gurley Leep mechanics disassembled the engine and concluded that the engine's lifters and camshaft were drastically worn [id. ¶ 28]. At no time prior to the engine failure did the vehicle's low-oil light come on [id. ]. Mr. Kelly alleges engine failure and wear to the components such as the lifter and camshaft are caused by excessive oil consumption [id. ]. He says he didn't receive any notification regarding the oil consumption defect before purchasing the vehicle [id. ¶¶ 29-30]. Like Mr. Shea, had he known about the problem, he wouldn't have purchased the 2012 Chevrolet Suburban, or he at least would have paid less for it [id. ¶ 31].

567 F.Supp.3d 1017

On June 8, 2009, GM acquired the assets of General Motors Corporation, referred to as "old GM" [id. ¶ 6]. For model years 2010-2014, GM continued manufacturing and selling Chevrolet and GMC vehicles equipped with the Generation IV Vortec 5300 engines [id. ]. According to the complaint, the piston rings within these engines fail to keep oil in the crankcase [id. ¶ 8].

These two vehicle owners also claim that the systems within these engines contribute to the excessive oil consumption defect [id. ¶¶ 9-10]. The Oil Life Monitoring System in GM vehicles with these engines doesn't advise drivers of insufficient oil in their vehicles until the oil level is critically low [id. ¶ 11]. The oil pressure gauge in these vehicles doesn't indicate when the oil pressure is low enough to damage internally lubricated parts or cause engine failure [id. ¶ 13]. The oil canister symbol doesn't illuminate until well past time when the vehicles are critically oil starved [id. ].

The two owners allege that the oil consumption defect can damage critical engine components and cause drivability problems, such as lack of power from misfire, spark plug fouling, excessive engine noise, abnormal vibration or shaking, piston cracking, head cracking, and ultimately, engine seizure [id. ¶ 15]. These problems could potentially cause the engine to catch fire or the vehicle to unexpectedly shut down [id. ¶¶ 94-95]. Beginning with certain of its model year 2014 vehicles, GM scrapped the Generation IV Vortec 5300 engine and replaced it with the Generation V Vortec 5300 engine, which was redesigned to fix this problem [id. ¶ 17].

STANDARD

In reviewing the motion to dismiss, the court accepts all well-pleaded factual allegations as true and draws all reasonable inferences in the plaintiff's favor. Reynolds v. CB Sports Bar, Inc. , 623 F.3d 1143, 1146 (7th Cir. 2010). A complaint must contain a "short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). The statement must contain enough factual matter, accepted as true, to state a plausible claim, not a speculative one. Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) ; Bell Atl. Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). A claim must be plausible, not probable. Indep. Trust Corp. v. Stewart Info. Servs. Corp. , 665 F.3d 930, 935 (7th Cir. 2012). Whether a claim is sufficiently plausible to survive a motion to dismiss is "a context-specific task that requires the reviewing court to draw on its judicial experience and common sense." McCauley v. City of Chicago , 671 F.3d 611, 616 (7th Cir. 2011) (quoting Iqbal , 556 U.S. at 678, 129 S.Ct. 1937 ).

Generally, if a party attaches evidence outside the pleadings in a motion to dismiss, "the court must either convert [the motion] into a motion for summary judgment under Rule 56 ... or exclude the documents attached to the motion to dismiss and continue under Rule 12." 188 LLC v. Trinity Indus., Inc. , 300 F.3d 730, 735 (7th Cir. 2002) (quoting Levenstein v. Salafsky , 164 F.3d 345, 347 (7th Cir. 1998) ). There is a narrow exception: a dismissal motion can rest on critical documents, central to the claim and referred to in the complaint. Geinosky v. City of Chicago , 675 F.3d 743, 745 n.1 (7th Cir. 2012) ; 188 LLC , 300 F.3d at 735. This allowance permits the court to consider GM's written warranty. See Levenstein , 164 F.3d at 347.

DISCUSSION

The court (sitting in diversity) applies Indiana's choice of law rules. See Erie R. Co. v. Tompkins, 304 U.S. 64, 78, 58 S.Ct. 817, 82 L.Ed. 1188 (1938) ;

567 F.Supp.3d 1018

Ruiz v. Blentech Corp., 89 F.3d 320, 323 (7th Cir. 1996). Both sides cite Indiana law; and, given no reason to depart from this choice, the court follows. See McCoy v. Iberdrola Renewables, Inc. , 760 F.3d 674, 684 (7th Cir. 2014) ; Simon v. United States , 805 N.E.2d 798, 805 (Ind. 2004).

A. Express Warranty.

The vehicle owners claim that GM breached its limited warranty. The limited warranty "covers repairs to correct any vehicle defect, not slight noise, vibrations, or other normal characteristics of the vehicle related to materials or workmanship occurring during the warranty period" [ECF 18-1 at 4]. They say GM breached this warranty because the oil consumption defect is a uniform "design defect" related to "materials." GM says its warranty doesn't cover design defects.

In deciding whether the warranty covers the alleged defect, the court reviews the limited warranty as a whole, attempting to construe the warranty's language "so as not to render any words, phrases, or terms ineffective or meaningless." B&R Oil Co., Inc. v. Stoler , 77 N.E.3d 823, 827 (Ind. Ct. App. 2017) (citation omitted). The construction of a written warranty is "generally a question of law for the trial court, not a question of fact," unless the terms are ambiguous. Midwestern Indem. Co. v. Leffler Constr. Co., Inc. , 463 N.E.2d 1130, 1133 (Ind. Ct. App. 1984).

Though "no Indiana court has defined the terms ‘defects in material or workmanship’ or ‘design defect,’ case law from outside Indiana reflects an understanding that defects in material and workmanship refer to departures from a product's...