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Harney v. Associated Materials, LLC

United States District Court, D. Oregon

January 18, 2018

MICHAEL HARNEY and OZZIE GILBERT, individually and on behalf of all others similarly situated, Plaintiffs,
ASSOCIATED MATERIALS, LLC, dba AMI, a Delaware limited liability company, and ASSOCIATED MATERIALS INCORPORATED, dba AMI, a Delaware corporation, Defendants.

          Robert W. Wilkinson and Anthony T. Blake, Ball Janik, LLP, 101 SW Main Street, Suite 1100, Portland, OR 97204; Alex M. Nelson and Michael J. Lowder, Benson, Kerrane, Storz & Nelson, PC, 110 N. Rubey Drive, Suite 2000, Golden, CO 80403. Of Attorneys for Plaintiffs.

          Darin M. Sands, Lane Powell, PC, 601 SW Second Avenue, Suite 2100, Portland, OR 97204; Michael K. Farrell, Sam A. Camardo, and Daniel M. Kavouras, Baker Hostetler LLP, 127 Public Square Suite 2000, Cleveland, OH 44114. Of Attorneys for Defendants.


          Michael H. Simon, District Judge.

         Plaintiffs Michael Harney and Ozzie Gilbert (collectively, “Plaintiffs”), bring this putative class action against Defendants Associated Materials, LLC, dba AMI Building Products, Inc., and Associated Materials Incorporated, dba AMI Building Products, dba Gentek Building Products, Inc. (collectively, “AMI” or “Defendants”). Both Defendants manufacture vinyl siding. Plaintiffs allege that Defendants' siding on Plaintiffs' homes deformed under normal conditions, resulting in damage to Plaintiffs' homes. Before the Court is AMI's motion to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. For the reasons that follow, AMI's motion is granted in part and denied in part.


         A motion to dismiss for failure to state a claim may be granted only when there is no cognizable legal theory to support the claim or when the complaint lacks sufficient factual allegations to state a facially plausible claim for relief. Shroyer v. New Cingular Wireless Servs., Inc., 622 F.3d 1035, 1041 (9th Cir. 2010). In evaluating the sufficiency of a complaint's factual allegations, the court must accept as true all well-pleaded material facts alleged in the complaint and construe them in the light most favorable to the non-moving party. Wilson v. Hewlett-Packard Co., 668 F.3d 1136, 1140 (9th Cir. 2012); Daniels-Hall v. Nat'l Educ. Ass'n, 629 F.3d 992, 998 (9th Cir. 2010). To be entitled to a presumption of truth, allegations in a complaint “may not simply recite the elements of a cause of action, but must contain sufficient allegations of underlying facts to give fair notice and to enable the opposing party to defend itself effectively.” Starr v. Baca, 652 F.3d 1202, 1216 (9th Cir. 2011). All reasonable inferences from the factual allegations must be drawn in favor of the plaintiff. Newcal Indus. v. Ikon Office Solution, 513 F.3d 1038, 1043 n.2 (9th Cir. 2008). The court need not, however, credit the plaintiff's legal conclusions that are couched as factual allegations. Ashcroft v. Iqbal, 556 U.S. 662, 678-79 (2009).

         A complaint must contain sufficient factual allegations to “plausibly suggest an entitlement to relief, such that it is not unfair to require the opposing party to be subjected to the expense of discovery and continued litigation.” Starr, 652 F.3d at 1216. “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678 (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556 (2007)).


         As alleged in the Second Amended Complaint, AMI sells and distributes vinyl siding (“the Siding”) throughout the United States for installation on homes and commercial buildings. Named Plaintiff Michael Harney is a resident of Beaverton, Oregon and lived in a house clad with AMI's vinyl siding. While preparing his house for sale, Mr. Harney found blistering and distortion problems with the Siding. Mr. Harney completed a Warranty Inquiry Packet to make a claim for repair, refinishing, or replacement of the siding. AMI denied Mr. Harney's claim stating, “[o]ur findings conclude that your particular concern is not the result of a manufacturing defect covered by the warranty.” ECF 52 ¶ 11. In discussions with AMI over the denial of his warranty claim, AMI told Mr. Harney that a representative visited his property to inspect it before denying the claim. Later, AMI informed Mr. Harney that AMI had only inspected his home using Google Earth satellite imagery and had denied his claim because the siding had “sun solarization, ” which AMI stated was not covered under its express warranty. “Sun solarization, ” however, was not an expressly identified exclusion in the then-applicable AMI warranty. Mr. Harney replaced the siding himself and, in the process, discovered that the building paper beneath the Siding was also damaged and needed to be replaced.

         Named Plaintiff Ozzie Gilbert owns a home in Austell, Georgia. Ms. Gilbert purchased AMI's vinyl siding from a dealer or contractor engaged in door-to-door sales on AMI's behalf. She had the siding installed in 2000. In 2014, Ms. Gilbert noticed warping, deformation, and buckling of a significant portion of the siding. Ms. Gilbert submitted a warranty claim to AMI. AMI denied Ms. Gilbert's without inspecting her home to determine the cause of the damage. Ms. Gilbert's siding has not been repaired or replaced.

         AMI's “Vinyl Siding Lifetime Limited Warranty” (the “Warranty”) in effect in 2003 was for the natural life of an original owner, or for 50 years if the property were sold. The Warranty purported to exclude “damages or material failure including, but not limited to, normal weathering, oxidation, Acts of God, fire, flood, impact from foreign objects, chemical pollutants, mildew, structural defects, negligent maintenance or abuse.” Id. ¶ 4. The Warranty also provided that “[i]f [AMI] determines that a claim is valid in accordance with the terms of this Warranty, [AMI] agrees, at its sole option, to repair, refinish, or replace only the defective siding panels and assume 100% of the cost of material and labor to the Property Owner.” Id. On the back of the Warranty, which is contained on a pamphlet, AMI also states that its vinyl siding is “no ordinary siding. It is the result of years of intensive research and development, giving you a vinyl siding of the highest standards.” Id. ¶ 23.

         Plaintiffs allege that AMI has received numerous warranty claims alleging a manufacturing or design defect in the Siding. Rather than notify consumers about the defects, Plaintiffs claim, AMI has “intentionally embarked on a campaign to blame any distortion in the Siding on ‘external' or ‘unusual heat sources.'” Id. ¶ 32. AMI also appears to apply its current warranty language, terms, and exclusions to any and all claims, regardless of the specific terms of the warranty issued to the owner making the warranty claims.


         Plaintiffs bring five claims for relief against AMI: (1) breach of express warranty; (2) breach of implied warranties; (3) unjust enrichment; (4) unlawful trade practices; and (5) declaratory judgment and injunctive relief. AMI moves to dismiss each of these claims.

         A. Identification of a Defect

         AMI argues that Plaintiffs have alleged only injury and have failed to identify either a design or engineering defect. Because each of Plaintiffs' claims rest upon an allegation that AMI's Siding was defective, AMI argues, insufficient description of the precise defect renders each of Plaintiffs' claims insufficient under Rule 8(a) of the Federal Rules of Civil Procedure. Plaintiffs respond that to state a claim for breach of warranty, Plaintiffs need allege only that the product did not perform as promised or, in the case of implied warranty, failed of its essential purpose. Plaintiffs further argue that they have sufficiently alleged a defect in AMI's siding. Plaintiffs are correct.

         Defendants rely on Yagman v. General Motors Co., 2014 WL 4177295 (C.D. Cal. Aug. 22, 2014), to support their argument that Plaintiffs must identify a specific defect to sufficiently state a claim for breach of warranty. In Yagman, the court held that the fact that a car engine stopped working gave rise to a reasonable inference of a manufacturing defect, but fell “slightly short” of alleging that a manufacturing defect was a plausible cause of the injury. That the engine stopped working, the court explained, was a symptom of a defect and not the defect itself. Id. at *3. When challenging a “less complex component, ” however, plaintiffs need not “plead the mechanical details” of a defect. DeCoteau v. FCA U.S. LLC, 2015 WL 6951296, at *3 (E.D. Cal. Nov. 10, 2015) (quoting Cholakyan v. Mercedes-Benz USA, LLC, 796 F.Supp.2d 1220, 1237 n.60 (C.D. Cal. 2011) (quotation marks omitted).

         In alleging that the Siding became distorted and deformed, and that siding should not become distorted and deformed when exposed to normal weather conditions, Plaintiffs have sufficiently alleged that AMI's product is defective. In Force v. Wright Medical Technology., Inc., the court granted a motion to dismiss because “[t]he Complaint fail[ed] to allege any specifics about the alleged defects, how the product deviated from requirements, what about it was dangerous, or what about the warnings were inadequate.” 2012 WL 4897165, at *2 (W.D. Wash. Oct. 15, 2012). Defendants also point to Corwin v. Connecticut Valley Arms, Inc., in which the court granted a motion to dismiss a complaint about an allegedly defective bullet because the plaintiff made “no factual allegations that detail how the bullet was defective . . . whether because of the bullet's physical properties, its inherent design, or otherwise.” 74 F.Supp.3d 883, 889 (N.D. Ill. 2014). In Corwin, however, the plaintiffs were alleging that the bullet's defective design caused pressure in the gun barrel to increase, which in turn resulted in an explosion that injured the plaintiff. The alleged defect was thus part of a more complex system that gave rise to the injury, and plaintiffs had not sufficiently alleged whether the defect was with the gun or the bullet. Here, the distorted siding is not merely an injury, but evidence of the defect itself. Plaintiffs have alleged specifically that the Siding is prone to shrinkage at the joints, that it blisters and flakes, and that these qualities cause it to deviate from the basic requirements of vinyl siding and AMI's express warranty that the Siding will not become damaged under normal weather conditions. To require a sophisticated statement of the mechanical or chemical failings of the Siding would place a prohibitively high burden on plaintiffs at the pleading stage, and would go beyond the requirements of Rule 8(a).

         Moreover, Plaintiffs have alleged that AMI made certain assurances about its product, including in the Warranty, “that the Siding shall be free from blistering, corroding, flaking, and peeling and is suitable for use as an exterior home product.” Plaintiffs allege that the siding does not comport with these assurances and “experiences blistering, excessive shrinkage and expansion and long-term material degradation.” Plaintiffs further claim that AMI breached the Warranty by failing to repair, refinish, and replace Plaintiffs' defective siding, despite the fact that Plaintiffs had valid claims under the Warranty. Plaintiffs specifically dispute that the nonconformities in the Siding on their properties was caused by “unusual heat sources.” For the purposes of a claim of breach of express warranty, these allegations sufficiently allege that the Siding is defective.

         B. Breach of Implied Warranty

         Plaintiffs claim that the Siding failed its essential purpose and that AMI breached the implied warranties of fitness and merchantability. AMI moves to dismiss this claim on the bases that Plaintiff Harney is not in privity with AMI and ...

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