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Dakin v. BMW of North America, LLC

United States District Court, S.D. California

November 6, 2019

ALEX DAKIN, Plaintiff,
v.
BMW OF NORTH AMERICA, LLC, Defendant.

          ORDER GRANTING MOTION TO DISMISS [ECF NO. 13]

          Hon. Gonzalo P. Curiel United States District Judge

         Before the Court is the Defendant BMW of North America, LLC's (“BMW” or “Defendant”) motion to dismiss the first amended complaint (“FAC”). ECF No. 13. Alex Dakin (“Plaintiff” or “Dakin”) filed an opposition on October 17, 2019. ECF No. 14. BMW filed a reply on October 25, 2019. ECF No. 15. For the reasons discussed below the Court GRANTS BMW's motion to dismiss with partial leave to amend.

         BACKGROUND

         Plaintiff filed the FAC on June 24, 2019. ECF No. 8. Plaintiff alleges causes of action against BMW for violations of the California Commercial Code (“Cal. Comm. Code”), the Magnuson Moss Warranty Act (“MMWA”), and California's Unfair Competition Law (“UCL”).

         Plaintiff is an “ordinary vehicle purchaser” who resides in San Diego county. FAC ¶¶ 3, 11. BMW is a Delaware corporation that manufactures and sells motor vehicles, with its principal place of business in New Jersey. Id. ¶ 4. Plaintiff alleges that he purchased a pre-owned 2012 BMW X-1 equipped with an N20 Engine (the “Subject Vehicle”) in January 2018. Id. ¶ 9. In March of 2019, Plaintiff alleges that the Subject Vehicle experienced “catastrophic engine failure.” Id. ¶ 10. At this time, the vehicle had 84, 900 miles, and the time period for unilateral express warranty for the Subject Vehicle had terminated. Id. ¶ 10. A BMW service department record stated the following about the Subject Vehicle: “Engine timing chain module disintegrated causing motor oil starvation.” Id.

         Plaintiff alleges that this “catastrophic engine failure” was due to the primary chain guide assembly in the Subject Vehicle's N20 engine, which Plaintiff alleges was constructed of defective plastic material which caused the engine to prematurely and catastrophically fail. Id. ¶ 6. The N20 engine's chain guide assembly is made of “defective polycarbonate composition, which over time becomes brittle and breaks into tiny pieces.” Id. These pieces then accumulate and cause the failure of the oil pump to provide lubricating oil, thereby causing the engine's failure. Id. According to the FAC, BMW has known about these issues with the N20 engine since 2013 and has since redesigned the chain assembly components to correct these deficiencies in the N20 engine. Id. ¶ 7.

         Plaintiff alleges that BMW intentionally failed to inform Plaintiff that the Subject Vehicle had this defect that would cause the engine to prematurely fail and omitted this information from the owner's manual and warranty and maintenance pamphlet. Id. ¶¶ 14, 16. Plaintiff further alleges that BMW refused to replace Plaintiff's engine and as a result, Plaintiff paid $3, 850 to replace the engine out of pocket. Id. ¶¶ 14, 15.

         DISCUSSION

         Federal Rule of Civil Procedure (“Rule”) 12(b)(6) permits dismissal for “failure to state a claim upon which relief can be granted.” Fed.R.Civ.P. 12(b)(6). Dismissal under Rule 12(b)(6) is appropriate where the complaint lacks a cognizable legal theory or sufficient facts to support a cognizable legal theory. See Balistreri v. Pacifica Police Dep't., 901 F.2d 696, 699 (9th Cir. 1990). Under Rule 8(a)(2), the plaintiff is required only to set forth a “short and plain statement of the claim showing that the pleader is entitled to relief, ” and “give the defendant fair notice of what the . . . claim is and the grounds upon which it rests.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007).

         A complaint may survive a motion to dismiss only if, taking all well-pleaded factual allegations as true, it contains enough facts to “state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 570). “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.” Id. “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Id. “In sum, for a complaint to survive a motion to dismiss, the non-conclusory factual content, and reasonable inferences from that content, must be plausibly suggestive of a claim entitling the plaintiff to relief.” Moss v. U.S. Secret Serv., 572 F.3d 962, 969 (9th Cir. 2009) (quotations omitted). In reviewing a Rule 12(b)(6) motion, the Court accepts as true all facts alleged in the complaint, and draws all reasonable inferences in favor of the plaintiff. al-Kidd v. Ashcroft, 580 F.3d 949, 956 (9th Cir. 2009). The Court evaluates lack of statutory standing under the Rule 12(b)(6) standard. Maya v. Centex Corp., 658 F.3d 1060, 1067 (9th Cir. 2011).

         Where a motion to dismiss is granted, “leave to amend should be granted ‘unless the court determines that the allegation of other facts consistent with the challenged pleading could not possibly cure the deficiency.'” DeSoto v. Yellow Freight Sys., Inc., 957 F.2d 655, 658 (9th Cir. 1992) (quoting Schreiber Distrib. Co. v. Serv-Well Furniture Co., 806 F.2d 1393, 1401 (9th Cir. 1986)). In other words, where leave to amend would be futile, the Court may deny leave to amend. See Desoto, 957 F.2d at 658; Schreiber, 806 F.2d at 1401.

         I. Implied Warranty of Merchantability

         Plaintiff alleges breach of implied warranty of merchantability under the California Commercial Code, which states that “a warranty that the goods shall be merchantable is implied in a contract for their sale if the seller is a merchant with respect to goods of that kind” and provides that goods “to be merchantable must be at least such as . . . fit for ordinary purposes for which such goods are used.” Cal. Comm. Code §§ 2314(1)-(2).

         Under California law, a plaintiff alleging a breach of implied warranty claim must be in vertical privity with the defendant. SeeClemens v DaimlerChrysler Corp., 534 F.3d 1017, 1023 (9th Cir. 2008) (consumer who purchased car from retailer was not in vertical privity with car manufacturer). “A buyer and seller stand in privity if they are in adjoining links of the distribution chain.” Id. Federal courts in this circuit have declined to create new exceptions to this “tight vertical privity requirement” because California courts “have painstakingly established the scope of the privity requirement . . . and a federal court sitting in diversity is not free to create new exceptions to it.” Id. at 1024. “Under California law, action for breach of implied warranty requires, without exception, that plaintiff be in vertical privity with defendant.” Allen v. Hyland's Inc., 300 F.R.D. 643 (C.D. Cal. 2014). A limited ...


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