Steve Darne & Roadsafe Traffic Sys., Inc. v. Ford Motor Co.

• Decision Date: 01 September 2017
• Docket Number: No. 13 CV 03594,13 CV 03594
• Parties: STEVE DARNE and ROADSAFE TRAFFIC SYSTEMS, INC., on behalf of themselves and all others similarly situated, Plaintiffs, v. FORD MOTOR COMPANY, Defendant.
• Court: U.S. District Court — Northern District of Illinois

STEVE DARNE and ROADSAFE TRAFFIC SYSTEMS, INC.,on behalf of themselves and all others similarly situated, Plaintiffs, v. FORD MOTOR COMPANY, Defendant.

No. 13 CV 03594

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION

September 1, 2017

Judge John J. Tharp, Jr.

MEMORANDUM OPINION AND ORDER

Following this Court's dismissal of their previous complaint, plaintiffs RoadSafe Traffic Systems, Inc. and Steve Darne lodged their Second Amended Complaint on behalf of proposed nationwide, Illinois, and North Carolina classes. The proposed classes would include people who purchased or leased defendant Ford Motor Company "vehicles with the 6.4L Engine [ ] that required one or more repairs covered by Ford's New Vehicle Limited Warranty during the vehicle's first five years in service or 100,000 miles, whichever came first, to: a fuel injector, the EGR coolers, the oil cooler, and/or the radiator." Second Am. Compl. ("SAC") ¶¶ 36-38. RoadSafe brings a claim for breach of express warranty (Count I) and a claim for violation of the Illinois Consumer Fraud and Deceptive Business Practices Act, or "ICFA," 815 ILL. COMP. STAT. 505/1 et seq., (Count II),¹ both on behalf of the proposed nationwide and Illinois classes. Id. ¶¶ 48-72. Darne brings a claim for violation of the North Carolina Uniform Deceptive Trade Practices Act, or "NCUDTPA," N.C. GEN. STAT. § 75-1.1 (Count III) on behalf of the proposedNorth Carolina class. Id. ¶¶ 73-85. This Court has jurisdiction under the Class Action Fairness Act, 28 U.S.C. § 1332(d)(2), because the matter in controversy exceeds $5,000,000² and some members of the class, including Darne, are citizens of states other than Delaware,³ the state in which Ford is incorporated, and Michigan, the state in which Ford has its principal places of business. See SAC ¶ 3.

Ford moves to dismiss the SAC in its entirety. As discussed further below, although the SAC addresses some of the pleading deficiencies identified in the Court's prior ruling, it still suffers from the fundamental problem that the warranty at issue guarantees that Ford will repair, not prevent, problems with its 6.4L engines. The plaintiffs maintain that the engine "is expected to perform up to 500,000 miles." SAC ¶ 11. But Ford warrantied the engine for 100,000—not 500,000—miles. It did not promise that its 6.4L engines were free from defects, and did not conceal defects from the plaintiffs, so the claims asserted here fail as a matter of law.

BACKGROUND

In deciding a motion to dismiss under Rule 12(b)(6), the Court takes as true all well-pleaded facts alleged in the complaint and draws all reasonable inferences in favor of the non-moving party. Mann v. Vogel, 707 F.3d 872, 877 (7th Cir. 2013). The following facts are, therefore, accepted as true for the purposes of deciding this motion. Darne and RoadSafe asserted many of these same facts in their previous complaint; because they have added a select number of additional factual allegations, and in order for this Opinion to have sufficient clarity, the Court will not abbreviate its factual summary despite the recitation in its previous ruling.

Ford manufactured and sold medium and heavy-duty pickup trucks that contained the 6.4-liter Super Duty diesel engine ("6.4L engine"). SAC ¶ 10. With the trucks using this 6.4L engine, Ford issued a transferrable manufacturer's New Vehicle Limited Warranty that covered the vehicle for five years or for the first 100,000 miles driven, whichever occurred first. Id. ¶ 26; Pls.' Mem. Opp'n Ex. A ("Warranty") at 8, ECF No. 63-1.⁴ The warranty provided in part:

Your NEW VEHICLE LIMITED WARRANTY gives you specific legal rights. You may have other rights that vary from state to state. Under your New Vehicle Limited Warranty if:

- your Ford vehicle is properly operated and maintained, and

- was taken to a Ford dealership for a warranted repair during the warranty period,then authorized Ford Motor Company dealers will, without charge, repair, replace, or adjust all parts on your vehicle that malfunction or fail during normal use during the applicable coverage period due to a manufacturing defect in factory-supplied materials or factory workmanship.

This warranty does not mean that each Ford vehicle is defect free. Defects may be unintentionally introduced into vehicles during the design and manufacturing processes and such defects could result in the need for repairs. For this reason, Ford provides the New Vehicle Limited Warranty in order to remedy any such defects that result in vehicle part malfunction or failure during the warranty period.

The remedy under this written warranty, and any implied warranty, is limited to repair, replacement, or adjustment of defective parts. This exclusive remedy shall not be deemed to have failed its essential purpose so long as Ford, through its authorized dealers, is willing and able to repair, replace, or adjust defective parts in the prescribed manner. Ford's liability, if any, shall in no event exceed the cost of correcting manufacturing defects as herein provided and upon expiration of this warranty, any such liability shall terminate.

Warranty at 8-9; see also SAC ¶ 26. Purchasers who wished to extend their warranty coverage beyond the five-year or 100,000-mile coverage period could purchase an extended service plan. Warranty at 34. The warranty also contains a choice-of-law provision which states that the law of the state in which the vehicle was purchased governs all questions of enforceability and interpretation of the warranty. Warranty at 7.

Darne is a North Carolina resident and purchased a 2008 F-450 Super Duty XLT truck with a 6.4L engine on May 14, 2009, from a dealership in North Carolina. SAC ¶ 14. Before buying his truck, Darne reviewed the warranty that Ford provided with the vehicle. Id. ¶ 15. Based on Ford's representation that, in the plaintiffs' words, Ford "would repair or replace any defective parts or components in the Truck during the warranty period," Darne decided against purchasing an extended warranty plan. Id. ¶ 15. Darne also alleges that had it not been for that representation, he would not have purchased the vehicle. Id. After buying the truck, Darneexperienced problems related to "common root cause defects" with the engine, including seeing white smoke emanating from the engine, repeated radiator failures that required replacement, the failure of two exhaust gas temperature sensors, a broken lift, a broken camshaft, and a total failure and loss of power that required the vehicle to be towed on four occasions. Id. ¶ 16.

Because of those problems, Darne brought his truck in for service several times: (1) In August 2009 (when the truck had been driven 18,976 miles), Darne complained that the cooling fan turned off, the engine was overheating, and the defroster was not producing hot air, so Finish Line Ford replaced the radiator; (2) In March 2010 (when the truck had been driven 59,978 miles), Mooresville Ford replaced the gas temperature sensor twice and replaced the diesel particulate filter after the check engine light appeared and the truck failed to restart; and (3) On April 15, 2011 (when the truck had been driven 125,148 miles and, thus, was outside the warranty period), Darne had the truck towed to a Ford dealer when the truck experienced issues of "running rough and cylinders 'missing'" caused by premature wearing of the camshaft and valve lifters. Id. ¶ 17. On that third occasion, Darne paid $440 for troubleshooting because the vehicle was no longer under warranty, and the Ford dealer informed him that a complete diagnosis of the engine problems would cost "upwards of $3,000." Id. ¶ 17. In an April 20, 2011 email exchange with the Ford Customer Relationship Center, Darne was told that given the truck's mileage, he would have to pay for any repairs necessary to fix any defective engine parts. Id. ¶ 18. Darne asserts that the Ford dealerships' attempts to repair the engine "were inadequate and unsuccessful," and that the vehicle's problems resulted from the 6.4L engine's "common root cause defects in the defective oil cooling system, the defective [Engine Gas Recirculation] coolers, and the oversized radiator." Id. ¶ 20, 22. At the time those defects appeared, Darne alleges, the truck was in substantially the same condition as when Ford placed it into the streamof commerce and Darne was operating it as intended and in a manner foreseeable by Ford. Id. ¶ 21.

RoadSafe has its principal place of business in Chicago, Illinois, and is the limited partner of—with a 99 percent ownership interest in—Delaware limited partnership RoadSafe Traffic, LP. Id. ¶ 23. RoadSafe Traffic, LP "holds title" to sixty-five Ford vehicles containing 6.4L engines, which the plaintiffs list in their complaint by vehicle number, and has "assigned all of its rights related to" those vehicles to RoadSafe, the plaintiff. Id. RoadSafe asserts that before purchasing the listed trucks, it reviewed Ford's warranty, and that but-for Ford's representation regarding repairs and replacements—which the complaint again characterizes as providing for "repair or replacement of any defective parts" during the warranty period—RoadSafe would not have purchased the trucks. Id. ¶ 24. RoadSafe alleges that its trucks have spent months in repair shops because of problems with the 6.4L Engine, and provides a "sampling" of repairs, some during the warranty period and some not, in connection with four of those vehicles. Id. ¶ 25. Those alleged repairs are discussed in more detail below, in the Discussion section of this Opinion, but for each RoadSafe asserts that the engine's "common root defects" caused the issues. Id. ¶ 25.

Darne and RoadSafe allege that because of Ford's "failure to properly repair its 6.4L engines" during the warranty period, the plaintiffs' and proposed class members' engines broke down after the warranty expired and those customers were no longer able to use their vehicles. Id. ¶ 27. The...