Summary
holding that the plaintiff's allegation that Honda failed to disclose a known defect that causes paint discoloration on its vehicles stated a viable FDUTPA claim
Summary of this case from Velasco v. Chrysler Group LLCOpinion
CASE NO. 12-60630-CIV-WILLIAMS
06-06-2012
TARA MATTHEWS, on behalf of herself and all others similarly situated, Plaintiff, v. AMERICAN HONDA MOTOR COMPANY, INC., Defendant.
ORDER GRANTING MOTION TO DISMISS
This MATTER is before the Court on Defendant American Honda Motor Company, Inc.'s ("Honda") Motion to Dismiss [D.E. 18], Plaintiff Tara Matthews' Response [D.E. 27], and Honda's Reply [D.E. 28]. For the reasons set forth below, the motion is GRANTED.
I. BACKGROUND
In January of 2012, Matthews filed this putative class action on behalf of all Florida owners and lessees of model year 2003-2007 Honda vehicles. [D.E. 1 ¶ 1]. As the putative class representative, Matthews is the owner of a 2003 Honda Accord having the original factory black paint. [Id. ¶ 2]. Approximately two years before filing this action, Matthews "began noticing that portions of her vehicle were exhibiting areas and splotches of discoloration and eventually grey or white areas where the vehicle's black paint had delaminated." [Id. ¶ 8; see id. Exh. 1]. When Matthews brought her vehicle to the local dealership, it denied her relief because the 3-year/36,000-mile warranty had expired. [Id. ¶¶ 2, 21].
This case was originally filed in the Central District of California, but the district court there transferred the case to this Court. [D.E. 30]. Because that court transferred the case, it had no occasion to rule on the instant motion to dismiss (which was fully briefed before the transfer). [See id. at 5-6].
Matthews alleges that all 2003-2007 Honda vehicles were manufactured and sold with a defect causing such paint discoloration and delamination. [Id. ¶¶ 2-3]. Matthews points to websites and online message boards containing similar complaints by other Honda owners around the country. [Id. ¶¶ 14-20; see id., Exh. 2]. Matthews further alleges that, although this defect existed at the time of manufacture, it was not (and could not be) discovered until the discoloration and delamination symptoms began to manifest, which occurred after the expiration of the applicable warranty. [Id. ¶¶ 2-3, 12, 21, 35]. In this respect, Matthews significantly alleges that Honda was aware of this latent defect, but failed to disclose it or mention it to Matthews or the public at large. [Id. ¶¶ 4, 13, 21]. Matthews notes that in 2008 Honda acknowledged similar problems for 2003-2005 Honda Odysseys with dark blue paint, and it extended the warranty for such vehicles. [Id. ¶¶ 22-23; see id. Exh. 3]. However, Matthews reiterates that the defect was not so limited, but rather affected all 2003-2007 Honda vehicles in all colors. [Id. ¶ 23].
Matthews brings two claims against Honda in this lawsuit on behalf of herself and the putative class members. First, she brings a claim under the Florida Unfair and Deceptive Trade Practices Act ("FDUTPA"), Fla. Stat. § 501.201 et. seq. She alleges that Honda committed an unfair and/or deceptive trade practice because it was aware of the latent paint defect but nonetheless failed to disclose it or mention it to Matthews or the public at large. [Id. ¶¶ 4, 13, 27(c), 36-37]. Matthews alleges that, as a result of this unfair and/or deceptive trade practice, she and the putative class members have sustained actual damages "in that their vehicles have sustained a diminution in value." [Id. ¶¶ 38-39]. Second, Matthews brings a claim of unjust enrichment under Florida common law. She alleges that she and the putative class members have conferred benefits on Honda in the form of money paid for the vehicles and for servicing them, as well as intangible benefits such as enhancement of brand value and recognition. [Id. ¶¶ 41-42]. Matthews alleges that, due to Honda's allegedly unfair and/or deceptive trade practice, it would be unjust to allow Honda to retain these benefits. [Id. ¶ 43]. Thus, Matthews and the putative class members seek an order of disgorgement or restitution preventing such unjust enrichment. [Id. ¶ 44]. Honda moves to dismiss the Complaint.
II. LEGAL STANDARD
To survive a motion to dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure, the plaintiffs must plead sufficient facts to state a claim that is "plausible on its face." Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). All factual allegations are accepted as true and all reasonable inferences are drawn in the plaintiffs' favor. See Speaker v. U.S. Dep't of Health and Human Servs Ctrs. for Disease Control and Prevention, 623 F.3d 1371, 1379 (11th Cir. 2010). While the plaintiffs need not provide "detailed factual allegations," the complaint must provide "more than labels and conclusions." Twombly, 550 U.S. at 555 (internal citations and quotations omitted). "[A] formulaic recitation of the elements of a cause of action will not do." Id. Rule 12(b)(6) does not allow dismissal of a complaint because the court anticipates "actual proof of those facts is impossible;" however, the "[f]actual allegations must be enough to raise a right of relief above the speculative level." Watts v. Fla. Int'l Univ., 495 F.3d 1289, 1295 (11th Cir. 2007) (quoting Twombly, 550 U.S. at 545).
III. DISCUSSION
As an initial matter, the Court agrees with Honda that Matthews' unjust enrichment claim must be dismissed. It is well-established under Florida law that unjust enrichment is an equitable remedy that is available only when the plaintiff lacks an adequate remedy at law. Here, because Matthews' unjust enrichment claim is predicated on the same wrongful conduct as her FDUTPA claim, she does not lack an adequate legal remedy. See Prohias v. Pfizer, Inc., 490 F. Supp. 2d 1228, 1236-37 (S.D. Fla. 2007) ("[I]n their unjust enrichment claim, the plaintiffs seek recovery for the exact same wrongful conduct as in their consumer fraud act claim. If [the defendant's] marketing scheme is misleading, and if the plaintiffs have been damaged by such scheme, then the plaintiffs have a remedy at law as a properly pled claim under the consumer fraud acts . . . ."); accord Jovine v. Abbott Labs., Inc., 795 F. Supp. 2d 1331, 1341-42 (S.D. Fla. 2011); Nichols v. Wm. Wrigley Jr. Co., 2011 WL 181458, at *5 (S.D. Fla. Jan. 19, 2011); Am. Honda Motor Co., Inc. v. Motorcycle Information Network, Inc., 390 F. Supp. 2d 1170, 1178 (M.D. Fla. 2005).
In her Response, Matthews merely points out that FDUTPA's remedies are in addition to those otherwise available for the same conduct. [D.E. 27 at 9-10]; see Fla. Stat. § 501.213(1). However, she does not explain why she lacks an adequate remedy at law so as to render an unjust enrichment claim available.
As to Matthews' FDUTPA claim, Honda first argues that she has not identified an unfair and/or deceptive trade practice because she does not allege either an affirmative misrepresentation or a defect presenting safety concerns. However, that argument derives from case law interpreting California's consumer fraud statute, see Wilson v. Hewlett-Packard Co., 668 F.3d 1136, 1141-42 (9th Cir. 2012), and FDUTPA is not so limited. See PNR, Inc. v. Beacon Prop. Mgmt., 842 So. 2d 773, 777 (Fla. 2003) ("An unfair practice is one that offends established public policy and one that is immoral, unethical, oppressive, unscrupulous or substantially injurious to consumers," and "deception occurs if there is a representation, omission, or practice that is likely to mislead the consumer acting reasonably in the circumstances, to the consumer's detriment.") (quotation marks and citations omitted; emphasis added); see also Fla. Stat. § 501.202(2) (requiring liberal construction of FDUTPA in order to promote the policy of "protect[ing] the consuming public").
Indeed, Florida courts have recognized that a FDUTPA claim is stated where the defendant knowingly fails to disclose a material defect that diminishes a product's value. See, e.g., Davis v. Powertel, Inc., 776 So. 2d 971, 973 (Fla. Dist. Ct. App. 2000) (reversing dismissal of class action FDUTPA claim based on the defendant's alleged "practice of selling name brand cellular telephones to its subscribers without informing them that the phones had been programmed to work only with [the defendant's] wireless communication service," thereby "reduc[ing] the value of the phone in each case"). Thus, the Court concludes that Matthews has sufficiently alleged an unfair and/or deceptive trade practice.
Honda also contends that Matthews' FDUTPA claim impermissibly attempts to revive and recast a warranty claim. However, Matthews does not allege that Honda breached any warranty, nor does she seek to recover the costs required to repair the defect, as a typical warranty claim would. Rather, she alleges that Honda committed an unfair and/or deceptive trade practice, and her allegation that Honda knowingly failed to disclose the latent paint defect takes this case outside of warranty law. Thus, while Honda may be correct that "selling a defective product, in and of itself, is [not] a deceptive trade practice," Jovine, 795 F. Supp. 2d at 1343, the allegations here go beyond such misconduct.
Honda relies on a passage from Abraham v. Volkswagen of Am., Inc., 795 F.2d 238, 250 (2d Cir. 1986), where the Second Circuit commented that "[m]anufacturers always have knowledge regarding the effective life of particular parts" and thus "can always be said to 'know' that many parts will fail after the warranty period has expired." However, this comment was used to support the Court's holding that such "knowledge" cannot be used to bring an express warranty claim after the expiration of a warranty. See id. at 249-50. Again, Matthews brings no such claim here, and this Court declines to extend Abraham's comment to the FDUTPA context.
Lastly, Honda argues that Matthews' FDUTPA claim is barred by the four-year statute of limitations. Fla. Stat. § 95.11(3)(f); Brown v. Nationscredit Fin. Services Corp., 32 So. 3d 661, 662 n.1 (Fla. Dist. Ct. App. 2010). Specifically, Honda contends that this lawsuit, which was brought in 2012, is untimely because the alleged unfair and/or deceptive trade practice dates back to the vehicle's manufacture and sale in 2003. Honda further emphasizes that, although Matthews did not discover this trade practice until approximately two years before bringing the lawsuit, that discovery did not delay the application of the statute of limitations. See Yusuf Mohamad Excavation, Inc. v. Ringhaver Equipment Co., 793 So. 2d 1127 (Fla. Dist. Ct. App. 2001) (holding that the delayed discovery doctrine does not apply to FDUTPA), approved by Davis v. Monahan, 832 So. 2d 708, 711 (Fla. 2002).
Matthews does not contest these arguments, but rather points out that the four-year statute of limitations did not begin to run until the last element of her claim occurred. Fla. Stat. § 95.031(1); Daw's, 832 So. 2d at 709. The last element of her FDUTPA claim is actual damages, Wright v. Emory, 41 So. 3d 290, 292 (Fla. Dist. Ct. App. 2010), which "have long been defined as the difference in the market value of the product or service in the condition in which it was delivered and its market value in the condition in which it should have been delivered according to the contract of the parties." Collins v. DaimlerChrysler Corp., 894 So. 2d 988, 990 (Fla. Dist. Ct. App. 2004) (quoting Rollins, Inc. v. Heller, 454 So. 2d 580, 585 (Fla. Dist. Ct. App. 1984) (citation omitted)). Against this backdrop, Matthews contends that the value of her vehicle did not diminish until "the market became aware of the defect and could accordingly price the effect of this defect into the value . . . ." [D.E. 27 at 8].
Matthews has not cited any authority to support her argument, and this Court has found none. Moreover, the Court finds it difficult to square Matthews' argument with Florida law, which provides that, "[u]nder FDUTPA, Plaintiffs suffered damages when they purchased something that was not what they were led to believe they were purchasing. Therefore, Plaintiffs' FDUTPA claim accrued when they purchased the [product], not when they discovered that the [product] was unusable." Point Blank Solutions, Inc. v. Toyobo Am., Inc., 2011 WL 1833366, at *6 (S.D. Fla. May 13, 2011) (citations omitted); see also S. Motor Co. of Dade Cnty. v. Doktorcyzk, 957 So. 2d 1215, 1218 (Fla. Dist. Ct. App. 2007) (stating that the FDUTPA "cause of action accrued on the date of sale," not when payments were subsequently made); H & J Paving of Fla., Inc. v. Nextel, Inc., 849 So. 2d 1099, 1102 (Fla. Dist. Ct. App. 2003) ("[T]he correct measure of damages [under FDUTPA] . . . would be the value of the products at the time of sale based upon a useful life of approximately eight years and the value of the product which would become obsolete within a few years") (emphasis added).
Thus, Florida law suggests that Matthews sustained damage the moment that she purchased the vehicle with the alleged defect, even though the alleged defect did not manifest for several years. "Although this evidence of damage may be considered slight, uncertain, or incomplete . . . , it is immaterial that not all the damages resulting from [the defendant's] alleged fraud had then been sustained. Clearly, damage actually occurred, although the amount remained uncertain, and the [plaintiff] had more than the mere possibility of future damage." Hynd v. Ireland, 582 So. 2d 772, 773 (Fla. Dist. Ct. App. 1991); see City of Miami v. Brooks, 70 So. 2d 306, 308 (Fla. 1954) ("The general rule, of course, is that where an injury, although slight, is sustained in consequence of the wrongful act of another, and the law affords a remedy therefor, the statute of limitations attaches at once. It is not material that all the damages resulting from the act shall have been sustained at that time and the running of the statute is not postponed by the fact that the actual or substantial damages do not occur until a later date.").
Furthermore, and even assuming arguendo the validity of Matthews' theory, she still does not allege a timely FDUTPA claim. Significantly, Matthews does not allege when the "market" became aware of the alleged paint defect, let alone that it first became aware of the defect within the limitations period. Moreover, Matthews' own allegations tend to refute any such suggestion. She alleges that Honda itself—presumably a major market participant—was "long-aware" of the alleged paint defect. [D.E. 1 ¶ 21]. And there are several consumer complaints attached to Matthews' Complaint that similarly indicate that the alleged defect was known in the marketplace before the limitations period. Matthews does not explain why Honda's alleged long-standing knowledge of the alleged defect and/or customer complaints do not establish market awareness. In fact, Matthews provides no explanation at all for how market awareness should generally be ascertained.
For example, there is a complaint that dates back to June 2003 in which the consumer explains that the paint on his brand new 2003 Honda began to discolor and crack. [D.E. 1, Exh. 2 at 24 (comment by Luis of West Sacramento, CA)]. Similarly, there is a complaint from 2007 in which the owner of a 2003 Honda explains how his car has been "devalued" due to paint delamination. [Id. at 22 (comment by Michael of Cape Canaveral, FL)].
It is clear, however, that Matthews may not establish market awareness simply by pointing to her own discovery of the alleged defect. The two inquiries are legally distinct, and in this regard the Court will not permit Matthews to circumvent the delayed discovery doctrine's inapplicability to her FDUTPA claim. --------
IV. CONCLUSION
For the reasons set forth above, Honda's motion to dismiss is GRANTED, and Matthews' Complaint is hereby DISMISSED. While the Court is skeptical that Matthews' timeliness theory can be squared with Florida law, the Court will dismiss the Complaint WITHOUT PREJUDICE. The Court will afford Matthews the opportunity to attempt to cure the deficiencies identified above regarding the alleged timeliness of her FDUTPA claim, provided of course that she can do so in good faith. See Fed. R. Civ. P. 11(b). Any such Amended Complaint must be filed by no later than 5:00 p.m., June 20, 2012.
DONE AND ORDERED in Chambers, at Miami, Florida, this 6th day of June, 2012.
/s/_________
KATHLEEN M. WILLIAMS
UNITED STATES DISTRICT JUDGE