GONZALEZ et al v. MAZDA MOTOR CORPORATION et al, No. 3:2016cv02087 - Document 71 (N.D. Cal. 2017)
Court Description: ORDER GRANTING DEFENDANTS' MOTION TO STRIKE AND TO DISMISS; SETTING CASE MANAGEMENT CONFERENCE. Signed by Judge Maxine M. Chesney on 12/18/2017. (mmclc2, COURT STAFF) (Filed on 12/18/2017)
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1 2 3 4 IN THE UNITED STATES DISTRICT COURT 5 FOR THE NORTHERN DISTRICT OF CALIFORNIA 6 7 8 IRIS GONZALEZ, et al., Plaintiffs, v. Case No. 16-cv-02087-MMC 9 10 United States District Court Northern District of California 11 MAZDA MOTOR CORPORATION, et al., Defendants. ORDER GRANTING DEFENDANTS’ MOTION TO STRIKE AND TO DISMISS; SETTING CASE MANAGEMENT CONFERENCE Re: Dkt. No. 63 12 Before the Court is defendants Mazda Motor Corporation and Mazda Motor of 13 America, Inc.’s (collectively, “Mazda”) “Motion to Strike [Pursuant to Fed. R. Civ. P. 12(f)] 14 Allegations Pertaining to Lithia Motors, Inc. and Motion to Dismiss [Pursuant to Fed. R. 15 Civ. P. 12(b)(6)] Claims Alleged in the Third Amended Complaint,” filed September 8, 16 2017. Plaintiffs have filed opposition, to which Mazda has replied. Having read and 17 considered the parties’ respective written submissions, the Court rules as follows. 18 PROCEDURAL BACKGROUND 19 By order filed August 1, 2017, the Court dismissed, with leave to amend, the Fifth, 20 21 22 Tenth, and Twelfth Causes of Action brought in plaintiffs’ Second Amended Complaint on behalf of plaintiffs Heather Weeter (“Weeter”) and Gregory Schaaf (“Schaaf”). On August 16, 2017, plaintiffs filed their Third Amended Complaint (“TAC”). By the instant motion, 23 Mazda again seeks dismissal of the Fifth, Tenth, and Twelfth Causes of Action, as well 24 as to strike certain newly added portions of the TAC. 25 FACTUAL BACKGROUND 26 27 28 Plaintiffs allege Weeter is a “citizen of the State of Florida” who, “[o]n January 29, 2011,” purchased a new Mazda vehicle “from Gunther Mazda, an authorized Mazda 1 dealer in Fort Lauderdale, Florida.” (See TAC ¶¶ 88-89.) Plaintiffs allege that “[o]n or 2 around June 6, 2014,” Weeter’s vehicle required clutch-related repairs that “should have 3 been covered by Mazda's Powertrain Warranty,” but that Gunther Mazda told her the 4 repairs were a “wear item not covered by warranty” and charged her for the cost of those 5 repairs. (See id. ¶ 91.) Plaintiffs further allege that “[o]n or around September 6, 2016,” 6 Weeter “again brought her vehicle to Gunther Mazda,” which informed her she needed 7 additional clutch-related repairs that were, once more, “not covered by warranty.” (See 8 id. ¶ 92.) After paying Gunther Mazda “a diagnostic fee,” plaintiffs allege, Weeter paid to 9 have her vehicle repaired by “W M Auto Services, Inc.” and, in October 2016, “disposed 10 of” her vehicle “out of concern” that it had “an ongoing defect.” (See id. ¶¶ 92, 93, 95.) Plaintiffs allege Schaaf is a “citizen of the State of North Carolina” who, “[i]n or United States District Court Northern District of California 11 12 around Spring 2011,” purchased a new Mazda vehicle from “Sport Durst Mazda, an 13 authorized Mazda dealer in Durham, North Carolina.” (See id. ¶¶ 97, 98.) Plaintiffs 14 allege that “[o]n or around January 3, 2013,” Schaaf’s vehicle required clutch-related 15 repairs, which were made by Sport Durst Mazda “at no cost.” (See id. ¶ 100.) Plaintiffs 16 further allege that “[o]n or around April 1, 2016,” Schaaf “was again forced to bring his 17 vehicle to Sport Durst [Mazda],” which informed him he needed additional clutch-related 18 repairs for which Schaaf was charged, even though, according to Schaaf, those repairs 19 “should have been covered by Mazda's Powertrain Warranty.” (See id. ¶ 102.) DISCUSSION 20 21 22 A. Motion to Strike A “court may strike from a pleading . . . any redundant, immaterial, impertinent, or 23 scandalous matter.” See Fed. R. Civ. P. 12(f). The TAC cites to and quotes passages 24 from a dealer agreement between Mazda and Lithia Mazda of Fresno, California 25 (“Lithia”), a Mazda dealer that is not a party to the instant action and from which no 26 plaintiff alleges to have purchased a vehicle. By the instant motion, Mazda seeks to 27 strike, as immaterial or impertinent, all reference to Lithia from paragraphs 113 and 114 28 of said dealer agreement (“hereinafter, “Lithia Dealer Agreement”), and to strike 2 1 paragraphs 115 and 126 in their entirety. (See Mot. at 1:10-22.)1 In response, plaintiffs state the challenged language is intended to “illustrate the 2 3 manner in which Mazda controls elements of vehicle advertising, and whether and how it 4 discloses pervasive defects to its authorized dealers.” (See Opp. at 3 n.2; see also TAC 5 at 23:4 (describing Lithia Dealer Agreement as “example”).) As Mazda correctly notes, 6 however, the TAC contains no factual allegations to support an inference that the 7 agreement between Mazda and Lithia is identical, or even similar, to any dealer 8 agreement that may exist between Mazda and either Gunther Mazda or Sport Durst 9 Mazda. Accordingly, the motion to strike will be granted. 10 United States District Court Northern District of California 11 12 B. Motion to Dismiss 13 1. 14 Dismissal under Rule 12(b)(6) of the Federal Rules of Civil Procedure “can be Legal Standard 15 based on the lack of a cognizable legal theory or the absence of sufficient facts alleged 16 under a cognizable legal theory.” See Balistreri v. Pacifica Police Dep’t, 901 F.2d 696, 17 699 (9th Cir. 1990). Rule 8(a)(2), however, “requires only ‘a short and plain statement of 18 the claim showing that the pleader is entitled to relief.’” See Bell Atlantic Corp. v. 19 Twombly, 550 U.S. 544, 555 (2007) (quoting Fed. R. Civ. P. 8(a)(2)). Consequently, “a 20 complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual 21 allegations.” See id. Nonetheless, “a plaintiff’s obligation to provide the grounds of his 22 entitlement to relief requires more than labels and conclusions, and a formulaic recitation 23 of the elements of a cause of action will not do.” See id. (internal quotation, citation, and 24 alteration omitted). 25 26 27 28 1 Mazda’s unopposed Request for Judicial Notice of the Lithia Dealer Agreement, as well as a technical service bulletin (“TSB”), specifically, TSB #RF-12-17, both of which are cited in the TAC as support for plaintiffs’ claims, is hereby GRANTED. See Knievel v. ESPN, 393 F.3d 1068, 1076 (9th Cir. 2005) (holding courts may take judicial notice of documents “‘whose contents are alleged in a complaint and whose authenticity no party questions, but which are not physically attached to the [plaintiff’s] pleading’”). 3 1 In analyzing a motion to dismiss, a district court must accept as true all material 2 allegations in the complaint, and construe them in the light most favorable to the 3 nonmoving party. See NL Indus., Inc. v. Kaplan, 792 F.2d 896, 898 (9th Cir. 1986). “To 4 survive a motion to dismiss, a complaint must contain sufficient factual material, accepted 5 as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 6 662, 678 (2009) (quoting Twombly, 550 U.S. at 570). “Factual allegations must be 7 enough to raise a right to relief above the speculative level[.]” Twombly, 550 U.S. at 555. 8 Courts “are not bound to accept as true a legal conclusion couched as a factual 9 allegation.” See Iqbal, 556 U.S. at 678 (internal quotation and citation omitted). Plaintiffs’ Claims 2. 11 United States District Court Northern District of California 10 As noted above, Mazda moves to dismiss certain of Weeter and Schaaf’s claims, 12 13 14 each of which the Court addresses below. a. Fifth Cause of Action (Weeter’s Claim Under Florida Unfair and Deceptive Trade Practices Act) In the Fifth Cause of Action, plaintiffs, on behalf of Weeter and those similarly 15 16 17 18 situated, allege Mazda violated Florida’s Deceptive and Unfair Trade Practices Act (“FDUTPA”), by “willfully fail[ing] to disclose and actively conceal[ing] the dangerous risk of the [clutch-related] [d]efect.” (See TAC ¶ 231). In its prior order, the Court dismissed plaintiffs’ FDUTPA claim as barred by the 19 applicable four-year statute of limitations, and, in particular, for failure to allege facts 20 sufficient to support tolling predicated on a theory of fraudulent concealment. (See Order, 21 filed August 1, 2017, at 7:3-4 (“August 1 Order”).) By the instant motion, Mazda again 22 seeks dismissal of said claim as time-barred. 23 24 25 26 27 As set forth in the Court’s prior order, a plaintiff, to “establish fraudulent concealment sufficient to toll the statute under Florida law, . . . must show”: (1) the defendant’s “successful concealment of the cause of action,” (2) the defendant’s use of “fraudulent means to achieve that concealment,” and (3) the plaintiff’s “reasonable care and diligence in seeking to learn the facts which would disclose the fraud.” (See August 28 4 1 1 Order, at 5:24-6:7 (citing Berisford, 667 So. 2d. at 811-12).) As further set forth therein, 2 “[t]he ‘fraudulent means’ alleged must go beyond mere non-disclosure, and must 3 constitute active and willful concealment.” (See id. (citing Licul v. Volkswagen Grp. of 4 Am., Inc., No. 13-6186-CIV, 2013 WL 6328734, at *6 (S.D. Fla. Dec. 5, 2013) (applying 5 Florida law)).) 6 Here, plaintiffs argue, Mazda took “active steps to conceal” the defect. (See Opp. 7 at 10:11 (emphasis in original).) In support thereof, plaintiffs first rely on their previous 8 allegation that Gunther Mazda, on two occasions, told Weeter the clutch failure was due 9 to a “wear item not covered by the warranty” and proceeded to make repairs (see TAC ¶¶ 91-92) using components which, plaintiffs assert, were “similarly defective” (see Opp. 11 United States District Court Northern District of California 10 at 10:18). Plaintiffs then argue that the actions and statements of Gunther Mazda may 12 be imputed to Mazda because “the authorized technician acted in accordance with 13 Mazda policy.” (See Opp. at 9-10.) As set forth below, however, plaintiffs have failed to 14 allege in the TAC facts to show the existence of any such policy. 15 Plaintiffs allege that “Mazda has yet to disclose the [d]efect’s existence to its 16 authorized dealers.” (See TAC ¶ 127.) In particular, plaintiffs now allege that in the 17 absence of a TSB or recall, by which Mazda dealers ordinarily are informed of a defect,2 18 such dealers “generally remain[ed] unaware of [the] defect’s existence,” conducted 19 repairs using defective components, and “almost uniformly misinformed” plaintiffs. (See 20 TAC ¶¶ 125, 127.) 3 Plaintiffs’ new allegations as to conduct on the part of Mazda, 21 22 23 24 25 26 2 Plaintiffs also cite to provisions in the Lithia Dealer Agreement whereby Mazda “agree[d] to ‘(e) keep DEALER promptly and fully advised with respect to customer matters involving DEALER, and timely respond to notices from DEALER in situations involving claims of defects in MAZDA Products, and (f) provide suitable information to permit DEALER to respond to customers, consumer organizations and government agencies in a timely and courteous fashion in customer satisfaction matters involving DEALER.’” (See TAC ¶ 126 (quoting Lithia Dealer Agreement).) Even if those allegations were not stricken, however, the Court’s resolution of the motion to dismiss would remain unchanged. As set forth herein, non-disclosure is not sufficient to establish fraudulent concealment. 3 27 28 Plaintiffs’ reliance on In re Takata Airbag Productions Liability Litigation, 193 F. Supp. 3d 1324 (S.D. Fla. June 15, 2016), is unavailing, as the issue of whether a manufacturer may be held liable for a dealer’s statements was not raised by the defendant or otherwise addressed therein. See id. at 1344. 5 1 however, plead no more than non-disclosure, which, as discussed above, is not sufficient 2 to plead “active and willful concealment.” See Licul, 2013 WL 6328734, at *6. 3 The cases on which plaintiffs rely for the proposition that “illusory repairs” 4 performed by dealers can be imputed to the manufacturer (see Opp. at 11:4) are 5 distinguishable. In two of the cited cases, the alleged illusory repairs were made under 6 warranty and, consequently, were paid for and authorized by the manufacturer, see 7 Valencia v. Volkswagen Group of America Inc., 119 F. Supp. 3d 1130, 1134, 1137 (N.D. 8 Cal. Aug. 11, 2015) (explaining repairs were made by manufacturer under warranty “in 9 order to ensure that the defect [would] manifest itself outside of the warranty period”); Falk v. General Motors Corp., 496 F. Supp. 2d 1088, 1097 (N.D. Cal. July 3, 2007) 11 United States District Court Northern District of California 10 (noting plaintiffs’ argument that “‘[w]here GM replaced the Truck’s speedometers 12 pursuant to warranty provisions, GM utilized equally defective’” parts), whereas, here, 13 plaintiffs allege the subject repairs were not made under warranty (see TAC ¶¶ 91-92). In 14 the third case on which plaintiffs rely, the court did not reach the issue “because neither 15 [plaintiff] actually alleg[ed] that he received repairs during the statute of limitations 16 period.” See Majdipour v. Jaguar Land Rover North America, LLC, No. 12-CV-07849- 17 WHW, 2015 WL 1270958 (D.N.J. Mar. 18, 2015) 18 Accordingly, plaintiffs again having failed to allege a basis on which Gunther 19 Mazda’s conduct can be imputed to Mazda, the Fifth Cause of Action will be dismissed 20 without further leave to amend. 21 22 b. Tenth Cause of Action (Schaaf’s Claim under North Carolina Unfair & Deceptive Trade Practices Act) In the Tenth Cause of Action, plaintiffs, on behalf of Schaaf and those similarly 23 24 situated, allege Mazda violated North Carolina’s Unfair and Deceptive Trade Practices Act (“NCUDTPA”), by “willfully fail[ing] to disclose and actively conceal[ing] the [d]efect.” 25 (See TAC ¶ 282.) 26 Mazda argues the Tenth Cause of Action is subject to dismissal for failure to 27 allege sufficient aggravating circumstances to convert a breach of warranty claim into a 28 6 1 NCUDTPA claim. Under North Carolina law, as set forth in the Court’s prior order, a 2 “breach of warranty, standing alone, does not constitute a violation of” the NCUDTPA 3 (see August 1 Order, at 7:14-15 (citing Walker v. Fleetwood Homes of N. Carolina, Inc., 4 362 N.C. 63, 72 (2007)), nor does “a mere breach of contract, even if intentional” (see id. 5 at 7:16-17 (citing Branch Banking & Trust Co. v. Thompson, 107 N.C. App. 53, 62 6 (1992)); rather, “some type of egregious or aggravating circumstances must be alleged 7 and proved before [the NCUDTPA’s] provisions may take effect” (see id. at 7:17-19 8 (citing Dalton v. Camp, 353 N.C. 647, 657 (2001)), e.g., “deception either in the formation 9 of the contract or in the circumstances of the breach” (see id. at 7:20-22 (citing Bartolomeo v. S&B Thomas, Inc., 889 F.2d 530, 535 (4th Cir. 1989); Branch Banking & 11 United States District Court Northern District of California 10 Tr. Co. v. Thompson, 107 N.C. App. 53, 62 (1992)). 12 In its prior order, the Court dismissed the Tenth Cause of Action, finding plaintiffs 13 failed to allege facts to show conduct on the part of Mazda sufficient to constitute 14 aggravating circumstances, or, alternatively, to show any conduct on the part of Sport 15 Durst Mazda could be imputed to Mazda. Plaintiffs now contend they have alleged 16 sufficient aggravating circumstances, namely that “Mazda’s refusal to disclose the latent 17 [d]efect” amounted to deception in the formation of Schaaf’s vehicle sales contract. (See 18 Opp. at 7:18-19.) 19 Under North Carolina law, to establish actionable deception based on a failure to 20 disclose a fact, the plaintiff must show the defendant had a duty to disclose that fact. See 21 Bear Hollow, L.L.C. v. Moberk, L.L.C., No. 05-CV-210, 2006 WL 1642126, at *6 22 (W.D.N.C. June 5, 2016 (citing North Carolina law)). Such a duty, however, only arises 23 under a limited number of circumstances, one of which, plaintiffs contend, is applicable 24 here, specifically, where “the parties are negotiating at arm’s length” and “one party has 25 knowledge of a latent defect in the subject matter of the negotiations about which the 26 other party is both ignorant and unable to discover through reasonable diligence.” See id. 27 28 In support thereof, plaintiffs again allege that Schaaf, “[p]rior to purchasing his vehicle, . . . test drove the vehicle, viewed advertisements for the vehicle and the 7 1 vehicle’s window sticker, and spoke with Mazda sales representatives concerning the 2 vehicle’s features,” and that none of those interactions “disclosed or revealed” the defect. 3 (See TAC ¶ 99.) In addition, plaintiffs now allege that Mazda “developed the marketing 4 material referenced [in the TAC]” and “design[ed], determin[ed] the substance of, and 5 affix[ed]” the window stickers to its vehicles. (See TAC ¶¶ 113, 114). As before, 6 however, plaintiffs fail to allege any facts demonstrating that Mazda, as opposed to only 7 Sport Durst Mazda, was a party to the negotiations leading to Schaaf’s purchase of the 8 subject vehicle. 9 Plaintiffs’ reliance on Johnson v. Ford Motor Company, No. 13-CV-6529, 2015 WL 7571841 (S.D. W.Va. Nov. 24, 2015), the sole case plaintiffs cite as applying North 11 United States District Court Northern District of California 10 Carolina law and holding a vehicle manufacturer liable for a failure to disclose, is 12 unavailing. In Johnson, in contrast to the instant case, the manufacturer did not simply 13 fail to disclose a known defect, but, rather, was alleged to have directly made affirmative 14 misrepresentations. See 2015 WL 7571841, at *13 (noting allegation that manufacturer 15 itself “blamed [the defect] on driver error or other circumstances”). 16 Further, to the extent plaintiffs may be contending Mazda’s advertisements or 17 stickers constituted misrepresentations, plaintiffs fail to allege the content of any such 18 materials; rather, as discussed above, plaintiffs only allege the absence of content, i.e., a 19 failure to disclose. 20 21 22 23 Accordingly, the Tenth Cause of Action will be dismissed without further leave to amend. c. Twelfth Cause of Action (Weeter and Schaaf’s Breach of Implied Warranty Claims) In the Twelfth Cause of Action, plaintiffs, on behalf of Weeter, Schaaf, and those 24 similarly situated, allege Mazda provided to plaintiffs an “implied warranty that [their 25 vehicles] and any parts thereof are merchantable and fit for the ordinary purposes for 26 27 which they are sold,” which implied warranty, plaintiffs allege, was breached because the vehicles “suffered from the [d]efect at the time of sale that causes the vehicles’ clutch to 28 8 1 fail prematurely.” (See TAC ¶ 296.) 2 By its prior order, the Court dismissed plaintiffs’ Twelfth Cause of Action, “with 3 leave to amend to allege facts sufficient to establish privity.” (See August 1 Order, at 4 11:9, 12:4.) In the TAC, plaintiffs allege no new facts bearing on privity and indeed 5 “concede they cannot meet the pleading requirements set forth by the Court.” (See Opp. 6 at 2 n.1.) 7 Additionally, to the extent the Court also dismissed the Twelfth Cause of Action on 8 the further ground that Schaaf’s claim, in the absence of allegations to support tolling, is 9 barred by the applicable four-year statute of limitations, plaintiffs, although given leave to 10 United States District Court Northern District of California 11 12 plead tolling, have failed to allege any new facts to make such showing. Accordingly, the Twelfth Cause of Action will be dismissed without further leave to amend. CONCLUSION 13 14 For the reasons stated: 15 (1) Mazda’s motion to strike is hereby GRANTED, and 16 (2) Mazda’s motion to dismiss is hereby GRANTED and the Fifth, Tenth, and 17 Twelfth Causes of Action are DISMISSED without further leave to amend. 18 Lastly, the Case Management Conference is rescheduled for January 5, 2018. A 19 Joint Case Management Statement shall be filed no later than December 29, 2017. 20 21 IT IS SO ORDERED. 22 23 Dated: December 18, 2017 MAXINE M. CHESNEY United States District Judge 24 25 26 27 28 9
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