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Montgomery v. Ford Motor Co.

United States District Court, N.D. California, San Jose Division

December 18, 2019

ALISON MONTGOMERY, Plaintiff,
v.
FORD MOTOR COMPANY, Defendant.

          ORDER GRANTING MOTION TO DISMISS WITH LEAVE TO AMEND [RE: ECF 9]

          BETH LAB SON FREEMAN, UNITED STATES DISTRICT JUDGE

         Plaintiff, Alison Montgomery, brings this action arising from a lease of a Ford Escape (the “Vehicle”) on or about February 17, 2013. Plaintiff alleges two Song-Beverly Consumer Warranty Act causes of action against Ford Motor Company (“Ford”): (1) breach of implied warranty of merchantability and (2) breach of express warranty. See Compl., ECF 1-2. Before the Court is Ford's Motion to Dismiss Plaintiff's Complaint under Federal Rule of Civil Procedure 12(b)(6). Mot., ECF 8. Plaintiff did not file an opposition to Ford's motion. Pursuant to Civ. L. R. 7-1(b), the Court finds Ford's unopposed motion suitable for submission without oral argument and hereby VACATES the hearing scheduled for March 19, 2020. For reasons set forth below, the Court GRANTS the motion WITH LEAVE TO AMEND.

         I. BACKGROUND

         Plaintiff alleges that on or about February 17, 2013, she leased a 2013 Ford Escape Vehicle from an unidentified “Seller.” Compl. ¶¶ 5-6. In connection with the lease, Plaintiff received express and implied warranties. Id. ¶ 8. Under these warranties, Ford was to maintain “the utility of the Vehicle for Three (3) years or 36, 000 miles and would conform the Vehicle to the applicable express warranties.” Id. Plaintiff complains of the following issues with the Vehicle: “Recall #13B16, Recall #14W03, Recall #14804, Recall #14803 for gap handles, Recall #16530 for door latch, air filter failure, inoperable trunk latch, battery failure, inoperable panel retainers, inoperable hood, tranny leak, transmission leaking, stall out issues in two (2) occasions, and check engine light.” Id. ¶ 11.

         Plaintiff alleges that she delivered the Vehicle to a Ford “authorized service and repair facilities, agents and/or dealers, including Seller, on at least Seven (7) separate occasions” for repairs. Compl. ¶ 10, 12-13. But the issues were not corrected and “continue[d] to exist even after a reasonable number of attempts to repair was given.” Id. ¶ 13. As a result, Plaintiff brings two causes of action against ford for breach of implied warranty of merchantability and breach of express warranty. See Id. ¶¶ 15-35. Plaintiff seeks: (1) replacement or restitution (at Plaintiffs election); (2) incidental damages; (3) consequential damages; (4) civil penalties in an amount not to exceed two times the amount of Plaintiffs actual damages; (5) attorneys' fees and costs; and various other relief. Id. at 9, Prayer for Relief.

         Plaintiff filed her Complaint in the California Superior Court for the County of Santa Clara on September 9, 2019. Ford removed the case to this Court on October 28, 2019 pursuant to 28 U.S.C. §§ 1332, 1441 and 1446, based on diversity of citizenship. ECF 1.

         II. LEGAL STANDARD

         “A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief can be granted ‘tests the legal sufficiency of a claim.'” Conservation Force v. Salazar, 646 F.3d 1240, 1241-42 (9th Cir. 2011) (quoting Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001)). When determining whether a claim has been stated, the Court accepts as true all well-pled factual allegations and construes them in the light most favorable to the plaintiff. Reese v. BP Exploration (Alaska) Inc., 643 F.3d 681, 690 (9th Cir. 2011). However, the Court need not “accept as true allegations that contradict matters properly subject to judicial notice” or “allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences.” In re Gilead Scis. Sec. Litig., 536 F.3d 1049, 1055 (9th Cir. 2008) (internal quotation marks and citations omitted). While a complaint need not contain detailed factual allegations, it “must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A claim is facially plausible when it “allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id.

         When the Court grants a motion to dismiss, leave ordinarily must be granted unless one or more of the following factors is present: (1) undue delay, (2) bad faith or dilatory motive, (3) repeated failure to cure deficiencies by amendment, (4) undue prejudice to the opposing party, and (5) futility of amendment. Foman v. Davis, 371 U.S. 178, 182 (1962); see also Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1052 (9th Cir. 2003) (discussing Foman factors).

         III. DISCUSSION

         A. Claim 1: Breach of Implied Warranty of Merchantability

         Ford argues that Plaintiff's claim for breach of implied warranty is time-barred. According to Ford, the accrual of a breach of implied warranty cause of action occurs at the tender of delivery - in this case on February 17, 2013 - and thus, the statute of limitations expired on February 17, 2017, more than two years before Plaintiff filed this suit. Mot. at 4.

         The statute of limitations in Song-Beverly claims is governed by two separate time limits. First, “under California Civil Code § 1791.1(c), implied warranties exist for one year following the sale of new goods.” Gerstle v. Am. Honda Motor Co., Inc., No. 16-CV-04384-JST, 2017 WL 2797810, at *11 (N.D. Cal. June 28, 2017) (citation and alterations omitted). In other words, to state a breach of implied warranty claim, a plaintiff must allege that the product was unfit or unmerchantable at the time of sale or within a year after delivery of the product. Mexia v. Rinker Boat Co., 174 Cal.App.4th 1297, 1308 (2009). Second, pursuant to California Commercial Code § 2725, implied warranty claims must be brought within four years of the date when the breach occurred. Tanner v. Ford Motor Co., No. 5:19-CV-02495-EJD, 2019 WL 6269307, at *3 (N.D. Cal. Nov. 25, 2019) (citation omitted).

         The Court notes that courts in this district have varying views on when statute of limitations begins to run on breach of implied warranty claims. Compare e.g. Tanner, 2019 WL 6269307, at *3 (“California law, […] holds that the statute of limitations begins to run once a defect is discovered, not when a product is delivered.”) with Marcus v. Apple Inc., No. C 14-03824 WHA, 2015 WL 151489, at *8 (N.D. Cal. Jan. 8, 2015) (to “extend [the discovery rule] to breach of warranty claims ... would be nonsensical”) and Gerstle, 2017 WL 2797810, at *12 (same). Under the facts alleged here, however, the Court need not decide at this time whether the discovery rule- which postpones accrual of a cause of action until the plaintiff discovers, or has reason to discover, the cause of action-is applicable to Song-Beverly implied warranty claims. This is because Plaintiff has failed to allege whether the defects she ...


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