Walters v. Pella Corp.

Decision Date19 May 2015
Docket NumberNo. 2:14-cv-00544-DCN,No. 2:14-mn-00001-DCN,2:14-mn-00001-DCN,2:14-cv-00544-DCN
CourtU.S. District Court — District of South Carolina
PartiesBRIAN WALTERS and MIRTA BIEL-WALTERS, on behalf of themselves and all others similarly situated, Plaintiff, v. PELLA CORPORATION, Defendant.
ORDER

This matter is before the court on a motion to dismiss brought by defendant Pella Corporation ("Pella"). For the reasons set forth below, the court dismisses the Walters' breach of implied warranties claim; negligence claim; negligent misrepresentation claim; fraud by uniform written misrepresentation and omission claim; NDTP claim to the extent it relies on affirmative misrepresentations; and declaratory relief claim.

I. BACKGROUND

Plaintiffs Brian Walters and Mirta Biel-Walters ("the Walters") began constructing their Reno, Nevada home in late 2006. Am. Compl. ¶ 18. They engaged BGTC Construction to furnish and install the windows, doors, and exterior cladding on the home. Id. ¶ 21. In late 2008, BGTC Construction, on behalf of and at the request of the Walters, entered into an agreement with an agent of Pella for Designer Series windows to be used in the construction of the home. Id. ¶ 22. Construction of the home was completed in or around July 2009. Id. ¶ 23. In March 2010, the Walters contacted Pella regarding excessive condensation that they observed forming in the windows of their home. Id. ¶ 24. Pella investigated the problem, made repairs, and advised theWalters that the problem had been corrected. Id. ¶ 25. In June 2010, the Walters again contacted Pella regarding problems with condensation forming in the windows, as well as other issues with the windows. Id. ¶ 26. Pella again investigated, made additional repairs, and advised the Walters that the problem was corrected. Id. ¶ 27. In November 2010 and April 2012, the Walters notified Pella that they had observed water intrude through two of their windows and Pella inspected the windows and made repairs. Id. ¶¶ 28-31. This occurred again in January 2013 and the Walters contacted Pella again regarding water intrusion through multiple windows in their home. Id. ¶ 32. Pella inspected the windows and informed the Walters that it was not responsible for the labor costs associated with the repair and replacement of the windows. Id. ¶¶ 33-34. Pella has since failed to provide any additional warranty or repair work. Id. ¶ 35.

The Walters allege that the windows suffer from various design deficiencies, including a defect that allows water intrusion "through the glazing pocket, between the aluminum cladding and wood, through the crank hardware in the windows, and through the joint between the window frame-to-sash joint." Id. ¶ 47. According to the Walters, these defects cause leaks and allow water to be "trapped between the aluminum and the operable wood frame causing damage to the Windows and other property within the home." Id. ¶ 48. The Walters further allege that Pella was or should have been aware that the windows were defective. Id. ¶ 52.

On January 7, 2014, the Walters filed a class action complaint against Pella in the United States District Court for the District of Nevada, alleging jurisdiction based on the Class Action Fairness Act of 2005, 28 U.S.C. § 1332(d). The Walters amended their complaint on January 10, 2014, bringing the following seven causes of action: (1) breachof express warranty; (2) breach of implied warranties; (3) negligence; (4) negligent misrepresentation; (5) fraud by uniform written misrepresentation and omission; (6) violation of the Nevada Deceptive Trade Practices Act ("NDTPA"); and (7) declaratory relief.

Pella filed the instant motion to dismiss on January 31, 2014. The Walters opposed the motion on March 18 2014, and Pella replied on March 28, 2014. On February 27, 2014, the United States Panel on Multidistrict Litigation transferred the case to this court as part of the consolidated multidistrict litigation. Pella's motion to dismiss has been fully briefed and is ripe for the court's review.

II. STANDARDS
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 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. 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 its face.'" 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).

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. Shady Grove Orthopedic Assocs., P.A. v. Allstate Ins. Co., 130 S. Ct. 1431, 1448 (2010) (citing Hanna v. Plumer, 380 U.S. 460, 465 (1965)). "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 Nevada substantive law and Fourth Circuit procedural law.

III. DISCUSSION

Pella asserts that all of the Walters' claims should be dismissed. The court considers each of Pella's arguments in turn.

A. Count IBreach of Express Warranty

Pella argues that the Walters's breach of express warranty claim should be dismissed because the Walters do not allege any act in violation of the limited warrantyor any other express warranty. Def.'s Mot. 5. In response, the Walters assert that the terms of the limited warranty are unconscionable and that Pella breached express warranties beyond the terms of the limited warranty. Pls.' Resp. 3. The court will first consider the limited warranty and then consider statements allegedly made outside of the limited warranty.

1. Limited Warranty

The limited warranty included with the Walters' windows states:

Pella warrants that the nonglass components of its [windows] . . . shall be free of manufacturing defects in material or workmanship or termite damage that significantly impair their proper operation and function for ten (10) years from the date of sale by Pella or its authorized dealer. If Pella is given notice of a defect in materials or workmanship occurring within ten (10) years from the date of sale by Pella or its authorized dealer, Pella shall, at its sole option: 1) repair or replace the defective part(s) or product(s) (with cost of labor included only within two [2] years of the date of sale by Pella or its authorized dealer) or 2) refund the original purchase price.

Am. Compl. ¶ 51; Def.'s Mot. Ex. 1.1 The limited warranty also states that it "is the exclusive warranty for the Covered Pella Products" and that "NEITHER PELLA NOR SELLER MAKE ANY OTHER WARRANTIES, EXPRESS OR IMPLIED . . . ." Def.'s Mot. Ex. 1.

Pella argues that the Walters' allegations do not show that it breached the limited warranty. Def.'s Mot. 6-7. Rather, Pella argues that it did exactly what it was required to do under the limited warranty—it processed complaints from the Walters, inspected the windows, and made the necessary repairs. Id. However, the Walters allege that Pella"informed [them] that Pella was not responsible for the labor costs associated with the repair and replacement of the non-functioning Windows," Am. Compl. ¶ 34, that "Pella has failed and refused to provide any additional warranty or repair work on the Windows in the Home," id. ¶ 35, and that "Pella has failed to adequately respond to Plaintiffs' warranty claims by providing the full cost to remove and replace the Windows," id. ¶ 94. Therefore, the Walters adequately plead breach of the limited warranty.

Moreover, the Walters argue that the limited warranty is unconscionable and, therefore, should not be enforced. Pls.' Resp. 5. Under Nevada law, a court is not required to enforce a contract or clause of a contract which it finds unconscionable as a matter of law. Nev. Rev. Stat. § 104.2302(1); see also Burch v. Second Judicial Dist., 49 P.3d 647, 649 (Nev. 2002). "Generally, both procedural and substantive unconscionability must be present in order for a court to exercise its discretion to refuse to enforce a contract or clause as unconscionable." Burch, 49 P.3d at 650 (citations omitted). However, "less evidence of substantive unconscionability is required in cases involving great procedural unconscionability." D.R. Horton, Inc. v. Green, 96 P.3d 1159, 1162 (Nev. 2004). "A clause is procedurally unconscionable when a party lacks a meaningful opportunity to...

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