Opinion
Case No.: 19-cv-01082-AJB-AHG
2022-04-12
William LESSIN, Carol Smalley, et al., on behalf of themselves and others similarly situated, Plaintiffs, v. FORD MOTOR COMPANY, a Delaware corporation; and Does 1 through 10, inclusive, Defendants.
David Christopher Wright, Mark I. Richards, McCune Law Group, McCune Wright Arevalo Vercoski Kusel Weck, Ontario, CA, Edward A. Khatskin, Pro Hac Vice, Cafferty Clobes Meriwether Sprengel, LLP, Chicago, IL, Douglas Carl Sohn, Sohn and Associates, San Diego, CA, for Plaintiff William Lessin. Edward A. Khatskin, Pro Hac Vice, Cafferty Clobes Meriwether Sprengel, LLP, Chicago, IL, Mark I. Richards, David Christopher Wright, McCune Law Group, McCune Wright Arevalo Vercoski Kusel Weck, Ontario, CA, for Plaintiffs Scott Bittner, John Farlekas, David Morris, Joyce Jensen, Julie Snodgrass, Tamer Khalil, Mark Preiss, James Hahn, Susanne Hamilton, Dave Appel, John Kigin, Brad Nielsen, David Huffstetler, Patrick Powers, Steve Selgado, Sheri Powers. Edward A. Khatskin, Pro Hac Vice, Cafferty Clobes Meriwether Sprengel, LLP, Chicago, IL, David Christopher Wright, McCune Law Group, McCune Wright Arevalo Vercoski Kusel Weck, Ontario, CA, for Plaintiff Mark Vinson. Hank G. Greenblatt, Dreyer Babich Buccola Wood Campora LLP, Sacramento, CA, David Christopher Wright, McCune Law Group, McCune Wright Arevalo Vercoski Kusel Weck, Ontario, CA, for Plaintiffs Carol Smalley, Lloyd Atterson, Roger Saddler, Caroline McGee. Jodi Munn Schebel, Pro Hac Vice, Shannon L. H. Phillips, Pro Hac Vice, Bowman and Brooke LLP, Bloomfield Hills, MI, Randall Edwards, Victoria Corso Hargis, O'Melveny & Myers LLP, San Francisco, CA, Scott Hammack, Pro Hac Vice, O'Melveny & Myers LLP, Washington, DC, for Defendant Ford Motor Company.
David Christopher Wright, Mark I. Richards, McCune Law Group, McCune Wright Arevalo Vercoski Kusel Weck, Ontario, CA, Edward A. Khatskin, Pro Hac Vice, Cafferty Clobes Meriwether Sprengel, LLP, Chicago, IL, Douglas Carl Sohn, Sohn and Associates, San Diego, CA, for Plaintiff William Lessin.
Edward A. Khatskin, Pro Hac Vice, Cafferty Clobes Meriwether Sprengel, LLP, Chicago, IL, Mark I. Richards, David Christopher Wright, McCune Law Group, McCune Wright Arevalo Vercoski Kusel Weck, Ontario, CA, for Plaintiffs Scott Bittner, John Farlekas, David Morris, Joyce Jensen, Julie Snodgrass, Tamer Khalil, Mark Preiss, James Hahn, Susanne Hamilton, Dave Appel, John Kigin, Brad Nielsen, David Huffstetler, Patrick Powers, Steve Selgado, Sheri Powers.
Edward A. Khatskin, Pro Hac Vice, Cafferty Clobes Meriwether Sprengel, LLP, Chicago, IL, David Christopher Wright, McCune Law Group, McCune Wright Arevalo Vercoski Kusel Weck, Ontario, CA, for Plaintiff Mark Vinson.
Hank G. Greenblatt, Dreyer Babich Buccola Wood Campora LLP, Sacramento, CA, David Christopher Wright, McCune Law Group, McCune Wright Arevalo Vercoski Kusel Weck, Ontario, CA, for Plaintiffs Carol Smalley, Lloyd Atterson, Roger Saddler, Caroline McGee.
Jodi Munn Schebel, Pro Hac Vice, Shannon L. H. Phillips, Pro Hac Vice, Bowman and Brooke LLP, Bloomfield Hills, MI, Randall Edwards, Victoria Corso Hargis, O'Melveny & Myers LLP, San Francisco, CA, Scott Hammack, Pro Hac Vice, O'Melveny & Myers LLP, Washington, DC, for Defendant Ford Motor Company.
ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT'S MOTION TO DISMISS
Anthony J. Battaglia, United States District Judge Presently pending before the Court is Defendant Ford Motor Company's ("Ford") motion to dismiss portions of Plaintiffs’ First Amended Consolidated Class Action Complaint ("FACC"). Ford moves to dismiss the breach of express warranty claims of Plaintiffs Powers (CA) and Plaintiff Saddler (OH), and the contractual and tortious breach of implied warranty claims of Plaintiff Hahn (OH) and Plaintiff Saddler (OH). (Doc. No. 45.) The motion is fully briefed, (Doc. Nos. 47, 48), and the matter is suitable for determination on the papers. For the reasons stated herein, the Court GRANTS IN PART AND DENIES IN PART the motion to dismiss.
I. BACKGROUND
This matter involves alleged latent defects—which Plaintiffs refer to as the "Death Wobble"—in Ford's F-250 and F-350 trucks ("the Vehicles"). Plaintiffs allege this defect causes abnormal and premature wearing and/or loosening of the suspension parts, resulting in "violent shaking," causing drivers to lose control of the Vehicles, and having difficulty steering during their operation under normal driving conditions or speeds. (FACC ¶¶ 1–3.)
Plaintiffs first filed this lawsuit in June 2019, (Doc. No. 1), which Ford moved to dismiss in August 2019, (Doc. No. 8). Plaintiffs thereafter filed a First Amended Complaint ("FAC") on September 3, 2019, (Doc. No. 11), which mooted Ford's first motion. Ford then moved to dismiss Plaintiffs’ FAC, which the Court granted in part and denied in part, (Doc. No. 30). On December 18, 2020, Plaintiffs filed a Consolidated Class Action Complaint ("CAC"), (Doc. No. 33), which the Court again granted in part and denied in part on August 25, 2021, following Ford's motion to dismiss, (Doc. No. 41). Plaintiffs filed a First Amended Consolidated Class Action Complaint ("FACC") on September 27, 2021. (Doc. No. 44.) Ford now moves to dismiss portions of the FACC.
In the FACC, thirteen plaintiffs survive. The thirteen plaintiffs are from ten different states, asserting thirty claims for breach of warranty (express and implied), fraudulent concealment, and violations of various state consumer fraud statutes related to a purported suspension defect in new and used F-250 and F-350 trucks. They allege each Plaintiff spoke with "one or more [Ford dealership] sales representatives ... regarding the various features, benefits, and attributes" of their vehicles, and relied on those conversations when making their purchase. (FACC ¶¶ 19, 28, 45, 56, 69, 77, 87, 95, 104, 113, 120, 133, 145.) Most of the Plaintiffs also allege they relied on a window sticker when making the decision to purchase the Vehicles. Plaintiffs allege the sticker advertised various features of the vehicle, including items such as price, specifications, gas, mileage, equipment and warranty details, and crash test ratings. (FACC ¶¶ 18, 27, 44, 55, 75, 86, 94, 103, 112, 119, 132, 144.)
Texas Plaintiff, Caroline McGee's DTPA claim was dismissed without leave to amend in the Court's previous order. (Doc. No. 41 at 24.) Plaintiffs concede and withdraw Ms. McGee's DTPA claim because it was inadvertently included in the FACC. (Doc. No. 47 at 18.)
II. LEGAL STANDARD
A motion to dismiss under Rule 12(b)(6) tests the legal sufficiency of the pleadings and allows a court to dismiss a complaint upon a finding that the plaintiff has failed to state a claim upon which relief may be granted. Navarro v. Block , 250 F.3d 729, 732 (9th Cir. 2001). The court may dismiss a complaint as a matter of law for: "(1) lack of cognizable legal theory or (2) insufficient facts under a cognizable legal claim." SmileCare Dental Grp. v. Delta Dental Plan of Cal. , 88 F.3d 780, 783 (9th Cir. 1996) (citation omitted). However, a complaint survives a motion to dismiss if it contains "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007).
Notwithstanding this deference, the reviewing court need not accept legal conclusions as true. Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). It is also improper for the court to assume "the [plaintiff] can prove facts that [he or she] has not alleged ..." Assoc. Gen. Contractors of Cal., Inc. v. Cal State Council of Carpenters , 459 U.S. 519, 526, 103 S.Ct. 897, 74 L.Ed.2d 723 (1983). On the other hand, "[w]hen there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief." Iqbal , 556 U.S. at 679, 129 S.Ct. 1937. The court only reviews the contents of the complaint accepting all factual allegations as true and drawing all reasonable inferences in favor of the nonmoving party. Thompson v. Davis , 295 F.3d 890, 895 (9th Cir. 2002).
III. DISCUSSION
Ford seeks dismissal of Plaintiffs’ (1) express warranty claims under California and Ohio law, and (2) implied warranty claims under Ohio law. In this order, the Court will address the merits of Ford's request.
A. Plaintiffs’ Express Warranty Claims
The Court starts with Plaintiffs’ express warranty claims. Plaintiffs Powers (CA) and Saddler (OH) bring express warranty claims under the Magnuson-Moss Warranty Act ("MMWA"), and the laws of California and Ohio. Ford's theory supporting dismissal of these claims is based on what it believes to be insufficient facts. (Doc. No. 45-1 at 6.)
Plaintiffs Powers and Saddler challenge two of Ford's express warranties offered to purchasers of its vehicles: (1) Ford's New Vehicle Bumper-to-Bumper Limited Warranty ("Limited Warranty"), and (2) Ford's limited extended warranty, Customer Satisfaction Program 20N04 ("CSP 20N04 Warranty"). Ford's Limited Warranty provides "bumper-to-bumper" coverage for new vehicles sold at retail for 3 years or 36,000 miles, whichever occurs first. (Doc. No. 35-4 at 15.) It promises to repair, replace, or adjust a covered part only if a vehicle malfunctions "during normal use during the applicable coverage period" and is "taken to a Ford dealership for a warranted repair during the warranty period." (Id. at 16.) Similarly, Ford's CSP 20N04 Warranty operates as a separate manufacturer-backed limited warranty protection for specific vehicles, 2017 through 2019 model year F250/350 and F450/550. The program terms state:
This program extends the warranty coverage of the steering linkage damper to 7 years of service or 100,000 miles from the warranty start date of the vehicle, whichever occurs first. This is a one-time repair program. If a vehicle has
already exceeded either time or mileage limits, this extended warranty coverage will last through October 31, 2020. Coverage is automatically transferred to subsequent owners.
(Doc No. 47-1 at 2.)
Under Ninth Circuit authority, "[a] repair or replace remedy fails of its essential purpose only if repeated repair attempts are unsuccessful within a reasonable time." Phil. Nat'l Oil Co. v. Garrett Corp. , 724 F.2d 803, 808 (9th Cir. 1984). Ford argues no breach of warranty occurred for Ford's Limited Warranty nor CSP 20N04 Warranty because Plaintiffs do not allege they were refused a free repair by a Ford dealer, nor do Plaintiffs allege they experienced multiple unsuccessful repair attempts at any point during which the two warranties applied. (Doc. No. 45-1 at 6, 11.) Ford's argument regarding the express warranty claims can be divided into two challenges, which will be analyzed below: (1) California Plaintiffs, the Powers, have not provided facts sufficient to allege there were multiple repair attempts, and (2) Ohio Plaintiff Saddler did not seek a repair while the Vehicle was covered under Ford's Limited Warranty or CSP 20N04 Warranty.
1. Plaintiffs Powers (California)
In July 2019, Mr. and Mrs. Powers purchased a 2019 F-250. (FACC ¶ 42.) Thereafter, on approximately January 2, 2020, Mr. Powers presented their Vehicle to North County Ford at 9,598 miles, which was squarely within the warranty period, to diagnose and repair a shaking defect. After inspecting the Vehicle, a service technician agreed to replace the Vehicle's steering damper to attempt to cure this defect. However, at the time, North County Ford told Mr. Powers that the part was on backorder. (Id. ¶ 47.) On January 20, 2020, Mr. and Mrs. Powers brought the Vehicle back to North County Ford to have the new steering damper installed on the Vehicle. (Id. ¶ 48.) However, in September 2021, despite the attempted repair, Mr. Powers was driving the Vehicle at about 75 miles an hour when he hit a small bump in the road, allegedly triggering the Death Wobble. (Id. ¶ 49.)
Both parties cite to the case In re Seagate Technology LLC Litigation , 233 F. Supp. 3d 776 (N.D. Cal. 2017), which provides persuasive authority for the Court. The court in In re Seagate explained there are different standards for repair attempts under the Song-Beverly Act and the Uniform Commercial Code. The court stated that "before the exclusive repair or replace remedy is considered to have failed of its essential purpose, ‘the seller must be given an opportunity to repair or replace the product.’ " Id. at 784 (quoting In re MyFord Touch Consumer Litig. , 46 F. Supp. 3d 936, 970 (N.D. Cal. 2014) ). The court went on to explain, "the Court declines to hold, in the absence of authority, that a mere two successive failures within the warranty period—or in other words, only one unsuccessful replacement—can meet that test where a warranty both specifically contemplates replacement of defective drives and provides the same warranty coverage for replacement drives." Id. The court thus held a mere two successive failures or one unsuccessful replacement within the warranty cannot meet the test under the Uniform Commercial Code. Whereas, under the Song-Beverly Act, the court stated, "if the manufacturer ... does not service or repair the goods to conform to the applicable express warranties after a reasonable number of attempts, the manufacturer shall either replace the goods or reimburse the buyer in an amount equal to the purchase price paid by the buyer, less that amount directly attributable to use by the buyer prior to the discovery of the nonconformity." Id. at 785 (quoting Cal Civ. Code § 1793.2(d)(1) ). Thus, In re Seagate provided that multiple repair attempts are necessary under both the Uniform Commercial Code and the Song-Beverly Act.
Plaintiffs cite to four other cases involving Song-Beverly Act claims to attempt to clarify what courts consider "repair attempts". (Doc. No. 47 at 10.) However, Ford argues each case cited by Plaintiffs works against their position because the cases involve repeated attempts. Smothers v. BMW of N. Am. , No. 18-CV-1391-CAB-AGS, 2019 WL 2270406, at *1 (S.D. Cal. May 28, 2019) (involves four repair attempts by plaintiffs); Yi v. BMW N. Am., LLC , No. 2:17-cv-06467-SVW, 2018 WL 3359016, at *2 (C.D. Cal. May 24, 2018) (the plaintiff made fifteen complaints to the dealer); Robertson v. Fleetwood Travel Trailers of Cal. , 144 Cal. App. 4th 785, 793–96, 50 Cal.Rptr.3d 731 (2007) (the plaintiff made six attempts to repair the vehicle); and Lukather v. Gen. Motors , 181 Cal. App. 4th 1041, 1044, 104 Cal.Rptr.3d 853 (2010) (plaintiffs attempted to repair the vehicle on more than four occasions). The Court agrees the cases Plaintiffs cited to suggest the Song-Beverly Act pertains to instances where the vehicles at issue had multiple repair attempts.
Mr. and Mrs. Powers have not sufficiently alleged an express warranty claim. "A repair or replace remedy fails of its essential purpose only if repeated repair attempts are unsuccessful within a reasonable time." Phil. Nat'l Oil Co. , 724 F.2d at 808. The Powers only presented the Vehicle once for repair, and stated they experienced symptoms of the alleged defect since the repair. However, they do not allege they provided Ford another attempt to repair the Vehicle, suggesting there have not been repeated repair attempts. The Court previously noted the January 2, 2020, and the January 20, 2020, service attempts were considered one repair. (See Doc. No. 41 at 7.) The Powers allege they felt the symptom of the Death Wobble, however, they did not present the Vehicle to Ford for another service while under Ford's Limited Warranty. Thus, the facts provided by the Powers suggest there was only one repair attempt by Ford and there were not the repeated repair attempts necessary to meet the legal standard. Moreover, the legal standards addressed by Plaintiffs state there must be repeated repair attempts. Specifically, the Uniform Commercial Code states there must be repeated repair attempts that were unsuccessful within a reasonable time, In re Seagate , 233 F. Supp. 3d at 784, while the Song-Beverly Act requires a reasonable number of attempts to repair the vehicle at issue. Id. The Court previously determined the repair attempts identified by the Powers are equal to only one repair, and the Powers have not amended the FACC to allege the Vehicle was presented to Ford for repeated repair attempts that were unsuccessful within a reasonable time. Thus, the Powers have not sufficiently alleged an express warranty claim. The claims are DISMISSED WITHOUT LEAVE TO AMEND .
2. Plaintiff Saddler (Ohio)
In approximately September 2018, Plaintiff Saddler traded in his F-250 to Mount Orab Ford and purchased a 2019 F-350. (FACC ¶ 124.) Starting in March 2019, at approximately 30,000 miles, Plaintiff Saddler started experiencing wobbling on the highway and on uneven roads. (Id. ¶ 125.) Plaintiff Saddler then took the Vehicle to a tire shop, unaffiliated with Ford Motor Company, where he paid out-of-pocket for the tire shop to perform an alignment and replace the tires to correct the wobble. (Id. ¶ 126.) In approximately July 2020, Plaintiff Saddler took his 2019 F-350 in for service, at which time Ford told Plaintiff Saddler about Ford's CSP 20N04 Warranty. (Id. ¶ 127.) Plaintiff Saddler returned to Mount Orab Ford for an additional service on an unknown date with approximately 82,000 miles. (Id. ) The wobble continued after the additional service. (Id. )
The Court previously denied Ford's motion to dismiss Plaintiff Saddler's claim for breach of express warranty regarding his 2018 F-250. (See Doc. No. 41 at 10.) These claims are not at issue here.
Plaintiff Saddler fails to provide the Court with enough information to determine whether he meets the legal standard regarding the number of repair attempts necessary to state a claim for breach of express warranty. Both parties cited Trgo v. Chrysler Corp. , 34 F. Supp. 2d 581, 590 (N.D. Ohio 1998), which states, "[i]f, after repeated repairs, a vehicle fails ‘to operate as should a new vehicle,’ the repair remedy fails of its essential purpose." (quoting Goddard v. Gen. Motors Corp. , 60 Ohio St. 2d 41, 45, 396 N.E.2d 761 (1979) ). (Doc. No. 47 at 12; Doc. No. 48 at 9.)
Although Plaintiff Saddler took his F-350 in for service in July 2020, he fails to specify the type of service that was performed, and only mentions that it was at this service he was informed about Ford's CSP 20N04 Warranty. In addition, Plaintiff Saddler does not state the mileage of the Vehicle at the time of this July 2020 service. Plaintiff Saddler stated he then took the Vehicle back to Ford at 82,000 miles for another repair, and asserts the wobble continued after this service. (FACC ¶ 127.) However, the facts provided do not describe the reason for the repair and there is no date provided for the 82,000-mile repair.
There are two issues here. First, Plaintiff Saddler fails to allege he utilized the warranty repairs provided by Ford's Limited Warranty that offers "bumper-to-bumper" coverage for new vehicles sold at retail for 3 years or 36,000 miles, whichever occurs first. This is because in March 2019, Plaintiff Saddler stated he took the Vehicle to a "tire shop," unaffiliated with Ford Motor Company, with approximately 30,000 miles to perform an alignment and replace the tires to correct the wobble. (Id. ¶ 125.) Plaintiff Saddler fails to provide facts that show he took the Vehicle to Ford for repair within his express warranty because he did not provide the mileage for the July 2020 service that was performed after the tire shop service. In other words, the Vehicle was taken to an unidentified tire shop while squarely within the express warranty period, but it is unclear if the Vehicle was taken to Ford for repair within the express warranty period. Therefore, the Court cannot determine if Ford provided a repair for the issue while the Vehicle was under Ford's Limited Warranty for new vehicles.
Second, it is unclear whether Plaintiff Saddler was within the CSP 20N04 Warranty under the facts provided. Plaintiff Saddler was first informed of the CSP 20N04 Warranty at the July 2020 service. Thereafter, Plaintiff Saddler took the Vehicle in at 82,000 miles for repair, which was within Ford's CSP 20N04 Warranty. However, Plaintiff Saddler fails to specify whether the July 2020 service and the 82,000-mile service were for the same or different repairs. Moreover, there is nothing in the facts to suggest the July 2020 service was within the first warranty because Plaintiff Saddler did not provide the mileage or type of repair that was done for this service. The only information the Court has is that at the July 2020 service, he was informed about Ford's CSP 20N04 Warranty. In addition, as for the 82,000-mile service, there is no information regarding the service that was done to the Vehicle or date provided to determine if it was within the CSP 20N04 Warranty time limits. Plaintiff Saddler did not provide enough information for the Court to determine if there were repeated attempts to fix the Vehicle within the two warranty periods. Thus, the Court cannot determine whether the Vehicle failed its essential purpose because it is not clear if there were repeated repair attempts. The claims are DISMISSED WITHOUT LEAVE TO AMEND .
B. Plaintiffs’ Implied Warranty Claims (OH)
Turning to the implied warranty claims, Ford argues Plaintiffs’ warranty of 14.) The merit of each argument is addressed in detail below.
1. Lack of Privity Regarding Ohio Claims
First, Ford attacks the viability of Plaintiffs Hahn and Saddler's implied breach of warranty claims under Ohio Rev. Code §§ 1302.27 and 1310.19. (FACC ¶¶ 486–97.) Under Ohio law, implied warranty claims can be brought under both contract law and tort law. Caterpillar Fin. Servs. Corp. v. Harold Tatman & Son's Ents., Inc. , 50 N.E.3d 955, 962 (Ohio Ct. App. 2015). To bring a claim for breach of implied warranty under contract law, the parties need to be in privity of contract. Id. Alternatively, a claim for tortious breach of implied warranty does not require privity of contract because "the doctrine of implied warranty is designed to protect ‘consumers’ who are not in privity of contract." Id. at 966 (quoting Ohio Dep't of Adm. Serv. v. Robert P. Madison Int'l., Inc. , 138 Ohio App.3d 388, 741 N.E.2d 551, 556–57 (10th Dist. 2000) ). The Ohio Supreme Court addressed automobile purchasers and claims under contract law in Curl v. Volkswagen of America, Inc. , 114 Ohio St.3d 266, 871 N.E.2d 1141, 1146 (2007), stating "[f]ederal courts applying Ohio law have also held that automobile purchasers may assert a contract claim for breach of implied warranty only against parties with whom they are in privity of contract." Id.
Here, Ford and Plaintiffs Hahn and Saddler are not in privity because in Ohio, vertical privity only exists between immediate links in the distribution chain. Curl , 871 N.E.2d at 1148. In the FACC, Plaintiffs Hahn and Saddler allege they purchased the Vehicles from authorized Ford dealerships, not directly from Ford, the manufacturer. (FACC ¶¶ 110, 118.) To the extent that Plaintiffs Hahn and Saddler's claim for breach of implied warranties is based in contract law, it fails for want of privity. Ultimax, Inc. v. Mercedes-Benz USA, LLC , No. 2:06-CV-951, 2008 WL 974036, at *8 (S.D. Ohio Apr. 8, 2008) ("In this case, Defendant did not directly sell the Vehicle to Plaintiff. Rather, Plaintiff bought the Vehicle from an intermediary, Germain. Plaintiff is in privity with Germain, but not with Defendant. This lack of privity between Plaintiff and Defendant dooms Plaintiff's implied warranty claim.").
The Court addressed the want of privity issue in its previous order, stating Ford and Plaintiffs Hahn and Saddler are not in privity because they purchased the Vehicles from authorized Ford dealerships, not directly from Ford, the manufacturer. (See Doc. No. 41 at 15.) Ford asserts Plaintiffs Hahn and Saddler do not provide anything in the FACC or Opposition that supports a departure from the Court's previous holding. (Doc. No. 48 at 10.) In their Opposition, Plaintiffs cite to Roxy Home Improvement, LLC v. Mercedes-Benz USA , Case No. 1:17-cv-01817, 2018 WL 1705800, at *5 (N.D. Ohio Apr. 9, 2018), which found there was privity of contract with the defendant auto manufacturer by pleading the existence of a standard 4-year/50,000-mile limited warranty. However, this case is not mandatory authority. The court in Roxy does not make any distinction between the dealership, Mercedes-Benz of North Olmstead, and Mercedes-Benz USA, LLC. Rather, it states the existence of a standard limited warranty creates privity of contract. Id. The Court has found no binding authority under Ohio law that provides a standard limited warranty is equivalent to a contract for purposes of establishing privity of contact. Thus, the Court agrees with Ford that Plaintiffs Hahn and Saddler are not in privity of contract with Ford.
2. Third-Party Exception to Privity of Contract Ohio Claims
Plaintiffs Hahn and Saddler attempt to salvage their claim by contending the third-party beneficiary exception applies to cure any concerns about the want of privity issue here. Plaintiffs cite to two cases to make their argument. First, the court in Kondash v. Kia Motors America, Inc. , No. 1:15-cv-506, 2016 WL 11246421, at *18 (S.D. Ohio June 24, 2016), stated the plaintiff's allegations were sufficient to meet the modest pleading standards to allege a potential third-party beneficiary exception, but that it was skeptical about the facts pled by the plaintiff because Ohio law only finds vertical privity between immediate links in the distribution chain. The court in Kondash also cited to the controlling cases, Caterpillar and Curl , reiterating the point that privity requires immediate links in the distribution chain. Id. Plaintiffs also point to Bobb Forest Prods. Inc. v. Morbark Industries Inc. , 151 Ohio App.3d 63, 783 N.E.2d 560, 576 (2002), to provide the court with an example of an intended third-party exception. However, the case suggests the opposite of what Plaintiffs Hahn and Saddler argue. The court in Bobb Forest found the plaintiff was an intended third-party beneficiary because the manufacturer did not mass produce the sawmill—rather, the manufacturer knew it was creating a sawmill for the plaintiff specifically. Id. This is unlike the case here, where Ford mass produces millions of cars annually and did not do so specifically based on Plaintiffs Hahn and Saddler's needs. (Doc. 48 at 11–12.)
Under Ohio law, the third-party exception to privity may be inferred between a defendant manufacturer and plaintiff "when the manufacturer is so involved in the sales transaction that the distributor merely becomes the agent of the manufacturer" or if plaintiff "is an intended third-party beneficiary to a contract." W.H.C., Inc. v. Interlake Chems., LTD , 549 F.Supp.3d 723, 729 (N.D. Ohio 2021). Plaintiffs are required to specifically allege these exceptions in their complaint. See Traxler v. PPG Indus., Inc. , 158 F. Supp. 3d 607, 625 (N.D. Ohio 2016) (holding that consumer plaintiff and manufacturer defendant were not in privity because the plaintiff merely stated the legal conclusion that it was an intended third-party beneficiary with no other specific allegations); see also Savett v. Whirlpool Corp. , No. 12 CV 310, 2012 WL 3780451, at *10 (N.D. Ohio Aug. 31, 2012) (holding the consumer plaintiff failed to state a claim for breach of implied warranty against defendant manufacturer because the plaintiff did not specifically allege its status as a third-party beneficiary and stated in the complaint that he purchased the product from a distributer, not defendant). Plaintiffs Hahn and Saddler fall short of establishing the status of a third-party beneficiary. Plaintiffs Hahn and Saddler did not provide the Court with specific allegations to suggest Ford intended Plaintiffs to be third-party beneficiaries. Rather, Plaintiffs stated mere legal conclusions. Therefore, Ohio law requires the dismissal of this claim.
Plaintiffs provided in their opposition, "[f]irst, both Ohio Plaintiffs allege that ‘Ford's warranties were not intended to benefit the initial dealer that it is in privity of contract with; instead, they were intended to benefit the ultimate consumer purchasers of the vehicles. The consumer purchasers of those vehicles—whether used or new—are third-party beneficiaries.’ (FACC ¶ 203.)" (Doc. No. 47 at 15.)
3. Tortious Implied Breach of Warranty
Plaintiffs Hahn and Saddler make one final attempt to save their claim by alleging a tortious breach of implied warranty claim, which does not require privity. (Doc. No. 44 at 111.) " ‘Implied warranty in tort’ is a common-law cause of action that imposes liability upon a manufacturer or a seller for breach of an implied representation that a product is ‘of good and merchantable quality, fit and safe for its ordinary intended use.’ " White v. DePuy, Inc. , 129 Oh. App. 3d 472, 479, 718 N.E.2d 450 (12th Dist. 1998). The Ohio Supreme Court stated privity is not required for tortious implied warranty claims because "the doctrine of implied warranty in tort was designed to protect consumers not covered by contractual sales warranties because of lack of privity." Chemtrol Adhesives, Inc., v. Am. Mfrs. Mut Ins. Co. , 42 Ohio St. 3d 40, 49, 537 N.E.2d 624 (1989) (citing Avenell v. Westinghouse Elec. Corp. , 41 Ohio App. 2d 150, 156, 324 N.E.2d 583 (1974) ). A tort claim for breach of implied warranty requires the showing of the following elements: (1) the existence of a defect; (2) the defect was present at the time the product left the hands of the manufacture; and (3) the plaintiff's injury was directly and proximately caused by the defect. Caterpillar , 50 N.E.3d at 963. These elements are issues of fact to be determined by the trier of fact.
Ford compared the Ohio Supreme Court case, Chemtrol , to the case at issue by asserting the implied warranty in tort should not be applied here where there is an express contract stating the economic loss rule bars this kind of tort claim. (Doc. No. 48 at 14.) However, the Chemtrol court made clear a plaintiff cannot recover under tort theories of negligence or strict liability when the parities are in privity of contract, and only claiming economic loss, because this would defeat the purpose of recovery under the Uniform Commercial Code. Chemtrol , 42 Ohio St. 3d at 49, 537 N.E.2d 624. Here, under Ohio law, Ford and Plaintiffs Hahn and Saddler are not in privity of contract. Therefore, unlike the parties in Chemtrol who were in privity and thus could not sue under tort claims, Plaintiffs Hahn and Saddler's tort claims are not barred.
The Caterpillar case provides the Court with a more thorough analysis of a claim for tortious breach of implied warranty when the parties are not in privity. The economic loss doctrine, as applied by Ohio courts, generally prevents recovery in tort for damages for purely economic loss. Caterpillar , 50 N.E.3d at 964. However, the doctrine of implied warranty is designed to protect consumers who are not in privity of contract. Id. at 965–66. The Ohio appellate court explained that because implied warranty in tort is not a matter of contract, contractual provisions disclaiming implied warranties and limiting repair and replacement do not affect claims based upon implied warranty in tort. Id. at 963 (quoting Avenell , 41 Ohio App.2d at 156, 324 N.E.2d 583 ).
Moreover, the Ohio Supreme Court found plaintiffs may maintain a tort action against suppliers for a tortious breach of implied warranty for purely economic loss. See LaPuma v. Collinwood Concrete , 75 Ohio St.3d 64, 67, 661 N.E.2d 714 (1996) ; see also Iacono v. Anderson Concrete Corp. , 42 Ohio St.2d 88, 326 N.E.2d 267 (1975) (holding the plaintiff could maintain a tort action against the supplier based upon a theory of breach of implied warranty). An Ohio appellate court also found a consumer can maintain a claim for breach of implied warranty or strict liability against a manufacturer, not in privity, for purely economic loss. See Ohio Dept. of Adm. Servs. v. Robert P. Madison Int'l, Inc. , 138 Ohio App.3d 388, 397, 741 N.E.2d 551 (10th Dist. 2000). The high courts in Ohio agree that a plaintiff can maintain a tort claim for breach of implied warranty for purely economic loss when the plaintiff is not in privity with the manufacturer. Thus, this Court finds Plaintiffs Hahn and Saddler can maintain their claim for tortious breach of implied warranty.
Finally, Ford argues the Ohio Products Liability Act ("OPLA") preempts a tort claim for breach of implied warranty. (Doc. No. 48 at 14.) The court in Caterpillar provided guidance on this issue as well. The court noted OPLA does not preempt common law tort claims similar to those alleged in the case at issue. The court stated, "[e]conomic loss only includes ‘direct, incidental, or consequential pecuniary loss, including but not limited to, damage to the product in question, and nonphysical damage to property other than that product.’ " Caterpillar , 50 N.E.3d at 966 (citing R.C. 2307.71(A)(2)). Meanwhile, OPLA defines a product liability claim as one seeking compensatory damages for "death, physical injury to person, emotional distress or physical damage to property other than the product in question." Id. at 966 (citing R.C. 2307.71(A)(13)).
The Caterpillar court further explained that because the plaintiffs were only seeking damages for economic loss—the value of the alleged defective product and consequential damages therefrom—they did not fall under the purview of the OPLA and were not product liability claims. Id. (citing LaPuma , 75 Ohio St.3d 64, 661 N.E.2d 714 at syllabus) ("Although a cause of action may concern a product, it is not a product liability claim within the purview of Ohio's product liability statutes unless it alleges damages other than economic ones, and a failure to allege other than economic damages does not destroy the claim, but rather removes it from the purview of those statutes."). Plaintiffs Hahn and Saddler do not allege damages other than economic ones from the product in question, therefore, OPLA does not preempt a tort claim for breach of implied warranty. Thus, Ford's motion to dismiss Plaintiffs Hahn and Saddler's tortious breach of implied warranty claim is DENIED.
IV. CONCLUSION
For the reasons set forth above, the Court GRANTS IN PART AND DENIES IN PART Ford's motion to dismiss Plaintiffs’ FACC. (Doc. No. 45.) Specifically, the Court grants Ford's motion to dismiss the breach of express warranty claims for Plaintiffs Powers (CA) and Plaintiff Saddler (OH), and the breach of contractual implied warranty claims for Plaintiffs Hahn and Saddler (OH). The Court denies Ford's motion to dismiss the tortious breach of implied warranty claims for Plaintiffs Hahn and Saddler (OH).