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Yetter v. Ford Motor Co.

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

December 20, 2019

WAYNE W. YETTER, Plaintiff,
v.
FORD MOTOR COMPANY, Defendant.

          ORDER GRANTING DEFENDANT'S MOTION FOR JUDGMENT ON THE PLEADINGS WITH PREJUDICE RE: DKT. NO. 38

          LUCY H. KOH United States District Judge

         Plaintiff Wayne Yetter (“Plaintiff”) brings suit against Defendant Ford Motor Company (“Defendant”) for claims arising from Plaintiff's purchase of a vehicle manufactured by Defendant. Before the Court is Defendant's motion for judgment on the pleadings. Having considered the parties' submissions, the relevant law, and the record in this case, the Court GRANTS Defendant's motion for judgment on the pleadings with prejudice.

         I. BACKGROUND

         A. Factual Background

         Plaintiff resides in Salinas, California. ECF No. 37 ¶ 2 (“First Amended Complaint” or “FAC”). Defendant Ford is a vehicle manufacturer incorporated in Delaware. Id. ¶ 3. On June 30, 2008, Plaintiff purchased a new 2008 Ford Super Duty F-350 truck from Salinas Valley Ford, an authorized dealer of Defendant's vehicles. Id. ¶¶ 9, 56. Plaintiff paid $56, 673.20 for the vehicle. ECF No. 37-1 at 2.

         Plaintiff alleges that the vehicle that Defendant manufactured and that Plaintiff purchased contains a defective engine. FAC ¶¶ 10, 13. Navistar supplied a 6.4 liter engine for Ford's Super Duty trucks for model year 2008 to 2010. Id. ¶ 15. Ford claimed that the 6.4 liter engine “had ‘been tested the equivalent of 10 million miles on road and in the lab, helping ensure excellent long-term durability.'” Id. Nonetheless, Plaintiff alleges that the 6.4 liter engine (“6.4L Engine”) “is plagued by numerous problems and safety concerns.” Id. ¶ 17. For example, the engine loses power while in operation and is subject to overheating. Id. ¶ 19. Other defects “result[] in premature engine failure and require[] expensive repairs, including premature engine replacement.” Id. ¶ 20.

         Plaintiff alleges that Ford alerted automotive technicians about “several defects common to the 6.4L Engine.” Id. ¶ 29. Ford also issued two different recall notices in March 26, 2007 for Super Duty trucks for other defects not related to the engine, including an “excessive temperature defect” and a “wiring defect.” Id. ¶ 30. However, Ford has never developed a plan to identify and eliminate “the root cause of defects to the 6.4L Engines, ” nor has Ford implemented a recall of the engines. Id. ¶ 46. Instead, Ford instructed its dealers to undertake repairs that “misled customers to believe that the underlying problem had been fixed, when in fact the symptom likely would reoccur on a later date.” Id. ¶ 47.

         Plaintiff read promotional materials and viewed Ford advertisements that represented that the Super Duty F-350 had “best-in-class rated towing power and engine reliability.” Id. ¶¶ 53-54. Specifically, at the authorized Ford dealership on the day of Plaintiff's purchase of the vehicle, a salesperson provided Plaintiff with a marketing brochure for the Ford 2008 F-350, which Plaintiff reviewed. Id. ¶ 53. The marketing brochure represented that the 6.4L Engine has “[h]igh-pressure common-rail fuel injection hels [sic] [that] deliver 100% of its 650 lb.-ft of torque (80 lb.-ft. more than 2007) at just 2000 rpm.” Id. ¶ 142(a). The brochure also noted that the 6.4L Engine had “cast-iron block, heads, and bedplate;” a “bigger crankshaft;” “powder-forged connecting rods;” and “oil-jet piston cooling.” Id. ¶ 142(b)-(e). Plaintiff alleges that “the Vehicle as delivered to Plaintiff had an unreliable, underperforming engine prone to overheating and failure of multiple systems, from the cooling system to the electrical system, ” but Plaintiff never alleges how any of the representations in the brochure are false. Id. ¶ 143.

         Additionally, according to Plaintiff, a salesperson at Salinas Valley Ford “verbally represented to Plaintiff that the Super Duty F-350 was better and improved over prior Ford models, and specifically, that the new 6.4L Engine was a newly designed higher performing and better engine than the previous 6.0 Liter PowerStroke Engine.” Id. ¶ 56. “[W]hen asked how the 2008 F-350 would perform in comparison with Plaintiff's prior 1996 Ford truck[, ] the salesperson represented that the ‘2008 F-350 is a better truck with better performance; guaranteed'” and that “the 2008 F-350 had superior gas mileage and performance to previous Ford models.” Id.

         Plaintiff delivered the vehicle to “an authorized Ford repair facility” for various repairs on multiple occasions, including on January 15, 2009; July 9, 2009; March 4, 2010; December 7, 2010; January 5, 2011; October 3, 2011; April 30, 2012; October 27, 2012; and January 25, 2016. Id. ¶¶ 59-67. On each occasion, the technician at the repair facility informed Plaintiff “that the Vehicle had been repaired and was safe to drive.” Id.

         At least four of Plaintiff's repairs concerned the engine. On December 7, 2010, Plaintiff's vehicle received “its first engine repair.” Id. ¶ 62. Plaintiff complained “that the check engine and wrench light were o[n] and that the vehicle lacked power.” Id. Again, on October 3, 2011, for the vehicle's “second repair to the engine, ” “Plaintiff complained that the check engine light was on” and “that the engine had an exhaust leak.” Id. ¶ 64. On April 30, 2012, for the vehicle's “third engine repair, ” “Plaintiff complained that the ‘drive to clean exhause [sic]' message would come on after driving for 20 miles.” Id. ¶ 65. On October 27, 2012, for the vehicle's “fourth engine repair, ” “Plaintiff complained that the vehicle displayed the message ‘reduced engine power.'” Id. ¶ 66. Based on these allegations, Plaintiff concedes that “[t]he earliest date that a person in Plaintiff's position could have reasonably had notice of his claims would be April 30, 2012.” Id. ¶ 79.

         While Plaintiff still owned the vehicle, a class action was filed on May 14, 2013 against Defendant in the United States District Court for the Northern District of Illinois. Darne v. Ford Motor Co., No. 13-cv-03594 (N.D. Ill. May 14, 2013); see ECF No. 39, Ex. C (“RJN”).[1]The putative nationwide class was initially defined as “[a]ll persons in the United States who purchased or leased Ford trucks with the 6.4-liter Super Duty diesel engine.” ECF No. 39, Ex. C at 7. The putative class brought claims for (1) breach of express warranty; (2) breach of implied warranty; (3) breach of state consumer fraud statutes; (4) violations of the Illinois Uniform Deceptive Trade Practices Act; (5) negligence; (6) fraud; (7) unjust enrichment; and (8) exemplary damages. Id. at 11-21. Both parties acknowledge that Plaintiff was a putative member of the Darne class. On September 1, 2017, the United States District Court for the Northern District of Illinois dismissed the case with prejudice. Darne v. Ford Motor Co., 2017 WL 3836586, at *13 (N.D. Ill. Sept. 1, 2017).

         B. Procedural History

         On January 17, 2019, Plaintiff filed a complaint against Defendant in California Superior Court for the County of Monterey. ECF No. 1-3 (“Compl.”). Plaintiff's complaint alleged five causes of action: (1) breach of express warranty under the Song-Beverly Consumer Warranty Act (“Song-Beverly Act”), id. ¶¶ 83-97; (2) breach of implied warranty under the Song-Beverly Act, id. ¶¶ 98-108; (3) fraudulent concealment, id. ¶¶ 109-119; (4) fraudulent inducement - intentional misrepresentation, id. ¶¶ 120-129; and (5) fraudulent inducement - negligent misrepresentation, id. ¶¶ 130-145. Plaintiff also alleged that “all statute of limitations periods are tolled by the discovery rule and the doctrine of fraudulent concealment.” Id. ¶ 69.

         On January 31, 2019, in state court, Defendant filed an answer to Plaintiff's complaint. ECF No. 1-3, Ex. B. On February 19, 2019, Defendant removed the case to federal court. ECF No. 1.

         After removal, Defendant filed a motion for judgment on the pleadings on March 14, 2019. ECF No. 12. On July 19, 2019, the Court granted Defendant's motion for judgment on the pleadings with leave to amend. ECF No. 34. The Court determined that the Song-Beverly Act express and implied warranty claims were both subject to a four-year statute of limitations. Id. at 6. The remaining common law claims for fraud were all subject to a three-year statute of limitations. Id. at 6. Therefore, “because Plaintiff purchased his vehicle on June 30, 2008, the statute of limitations on Plaintiff's claims appear to have expired on June 30, 2011 (for Plaintiff's fraud claims) and on June 30, 2012 (for Plaintiff's Song-Beverly Act claims)-several years before Plaintiff filed his lawsuit on January 17, 2019.” Id.

         In response, Plaintiff argued that the claims did not accrue until January 2016, when Plaintiff became aware of an engine defect after visiting a Ford repair facility. The Court concluded otherwise. First, the Court determined that even if the future performance exception applied to Plaintiff's Song-Beverly Act express warranty claim, that claim would only be tolled for five years, the duration of Plaintiff's express warranty. Id. at 7-8. As a result, the four-year statute of limitations under the Song-Beverly Act began to run on June 30, 2013 and expired on June 30, 2017, more than a year and a half before Plaintiff filed his complaint. Id. at 8.

         Next, the Court held that neither the delayed discovery rule nor fraudulent concealment tolling applied to any of Plaintiff's claims because “to merit application of the discovery rule or fraudulent concealment tolling, a plaintiff must allege that he exercised due diligence to uncover his injury.” Id. (quotation marks omitted). Plaintiff failed to adequately allege that Plaintiff exercised due diligence to uncover his injury and that Plaintiff was unable to discover the engine defect until January 25, 2016 because Plaintiff had repeatedly complained of engine problems and tendered his vehicle to authorized Ford repair facilities on eight different occasions between January 9, 2009 and October 27, 2012. Id. at 9. “Plaintiff's allegation that Plaintiff only became aware of the engine defect in January 2016, even though the Ford dealer that Plaintiff visited in January 2016 made the same representation as after all prior repairs ‘that the Vehicle had been repaired and was safe to drive,' [was] implausible.” Id. at 11. Accordingly, Plaintiff's claims were all time-barred, and the Court granted Defendant's motion for judgment on the pleadings with leave to amend. Id. at 12.

         The Court noted, however, that “[e]ven though the statute of limitations alone suffice[d] to grant Defendant's motion for judgment on the pleadings on all of Plaintiff's claims, the Court [would address] Defendant's other arguments that Plaintiff's fraud claims [were] inadequate.” Id. at 12. The Court first rejected Defendant's argument that the economic loss rule barred Plaintiff's fraud claims, but agreed that Plaintiff failed to plead the fraud claims with the specificity that Rule 9(b) requires. Id. at 13. Specifically, Plaintiff alleged that he received and read written promotional materials from Ford, but Plaintiff failed to allege what those promotional materials were, how Plaintiff received them, and specifically when Plaintiff read the materials. Id. at 14. Additionally, Plaintiff alleged that he viewed television and radio commercials about the Super Duty F-350's features, but did not specify when he viewed those commercials, which specific commercials he saw or heard, and any specific statements Defendant made in those commercials. Id. Finally, Plaintiff alleged that a salesperson at Salinas Valley Ford verbally represented to Plaintiff that “‘the new 6.4L engine was a newly-designed higher performing and better engine than the previous 6.0 Liter PowerStroke Engine, '” id. (quoting Compl. ¶ 56), but Plaintiff did not allege what the salesperson specifically said or the salesperson's identity. Id. Accordingly, the Court held that “Plaintiff has failed to plead his fraud allegations with the requisite specificity under Rule 9(b), which provides another reason, beyond the statute of limitations bar, to grant Defendant's motion for judgment on the pleadings.” Id.

         Finally, for good measure, the Court addressed Defendant's puffery arguments. Plaintiff alleged that a salesperson told Plaintiff that the Ford F-350 engine was “better and improved” and “higher performing, ” and that unspecified promotional material “advertised the Super Duty F-350 and its engine as high-quality products.” Id. at 14-15. The Court concluded that “[t]hose statements are precisely the sort of ‘vague or highly subjective claims about product superiority' that are not actionable.” Id. at 15. This conclusion provided yet another reason to grant judgment on the pleadings as to Plaintiff's fraud claims. Nonetheless, the Court granted leave to amend on all of Plaintiff's fraud claims.

         Following the Court's order granting Defendant's motion for judgment on the pleadings with leave to amend, Plaintiff filed an amended complaint. ECF No. 37 (“FAC”). The FAC alleges the same five causes of action as the Complaint: (1) breach of express warranty under the Song-Beverly Act, id. ¶¶ 102-16; (2) breach of implied warranty under the Song-Beverly Act, id. ¶¶ 117-27; (3) fraudulent concealment, id. ¶¶ 128-38; (4) fraudulent inducement - intentional misrepresentation, id. ¶¶ 139-48; and (5) fraudulent inducement - negligent misrepresentation, id. ¶¶ 149-64. Similar to the Complaint, the FAC alleges that “all statute of limitations periods are tolled by the discovery rule and the doctrine of fraudulent concealment.” Id. ¶ 69. The FAC, however, also claims that Darne v. Ford Motor Co., No. 13-cv-03594 (N.D. Ill. May 14, 2013)-a class action filed on May 14, 2013 in the United States District Court for the Northern District of Illinois that alleged similar claims against Defendant-tolled the relevant statute of limitations periods because of “the tolling doctrine established in American Pipe & Construction Co. v. Utah” and “under California law by the doctrine of equitable tolling.” Id. ¶¶ 84, 93. Finally, the FAC included additional allegations regarding the statements in the Ford marketing brochure and the statements made by a salesperson at Salinas Valley Ford. Id. ¶¶ 53, 56, 142.

         II. LEGAL STANDARD

         A. Rule 12(c) Motion for Judgment on the Pleadings

         “After the pleadings are closed-but early enough not to delay trial-a party may move for judgment on the pleadings.” Fed.R.Civ.P. 12(c). “Judgment on the pleadings is properly granted when, accepting all factual allegations in the complaint as true, there is no issue of material fact in dispute, and the moving party is entitled to judgment as a matter of law.” Chavez v. United States, 683 F.3d 1102, 1108 (9th Cir. 2012) (brackets and internal quotation marks omitted). Like a motion to dismiss under Rule 12(b)(6), a motion under Rule 12(c) challenges the legal sufficiency of the claims asserted in the complaint. See Id. Indeed, a Rule 12(c) motion is “functionally identical” to a Rule 12(b)(6) motion, and courts apply the “same standard.” Dworkin v. Hustler Magazine, Inc., 867 F.2d 1188, 1192 (9th Cir. 1989) (explaining that the “principal difference” between Rule 12(b)(6) and Rule 12(c) “is the timing of filing”); see also U.S. ex rel. Cafasso v. Gen. Dynamics C4 Sys., 637 F.3d 1047, 1054 n.4 (9th Cir. 2011).

         Judgment on the pleadings should thus be entered when a complaint does not plead “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). “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.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). “The plausibility standard is not akin to a probability requirement, but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Id. (internal quotation marks omitted). For purposes of ruling on a Rule 12(c) motion, the Court “accept[s] factual allegations in the complaint as true and construe[s] the pleadings in the light most favorable to the nonmoving party.” Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008).

         B. Rule 9(b)

         Claims sounding in fraud are subject to the heightened pleading requirements of Rule 9(b) of the Federal Rules of Civil Procedure, which requires that a plaintiff alleging fraud “must state with particularity the circumstances constituting fraud.” Fed.R.Civ.P. 9(b); see Kearns v. Ford Motor Co., 567 F.3d 1120, 1124 (9th Cir. 2009). To satisfy the heightened standard under Rule 9(b), the allegations must be “specific enough to give defendants notice of the particular misconduct which is alleged to constitute the fraud charged so that they can defend against the charge and not just deny that they have done anything wrong.” Semegen v. Weidner, 780 F.2d 727, 731 (9th Cir. 1985). Thus, claims sounding in fraud must allege “an account of the time, place, and specific content of the false representations as well as the identities of the parties to the misrepresentations.” Swartz v. KPMG LLP, 476 F.3d 756, 764 (9th Cir. 2007) (per curiam) (internal quotation marks omitted); see also Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1106 (9th Cir. 2003) (“Averments of fraud must be accompanied by the who, what, when, where, and how of the misconduct charged.” (internal quotation marks omitted)). The plaintiff must also set forth “what is false or misleading about a statement, and why it is false.” Ebeid ex rel. U.S. v. Lungwitz, 616 F.3d 993, 998 (9th Cir. 2010) (internal quotation marks omitted).

         C. Leave to Amend

         If the Court determines that judgment on the pleadings is warranted, it must then decide whether to grant leave to amend. See Harris v. Cnty. of Orange, 682 F.3d 1126, 1131, 1134-35 (9th Cir. 2012) (affirming district court's dismissal under Rule 12(c) but reversing for failure to grant leave to amend). Under Rule 15(a) of the Federal Rules of Civil Procedure, leave to amend “shall be freely given when justice so requires, ” bearing in mind “the underlying purpose of Rule 15 to facilitate decisions on the merits, rather than on the pleadings or technicalities.” Lopez v. Smith, 203 F.3d 1122, 1127 (9th Cir. 2000) (en banc) (alterations and internal quotation marks omitted). When granting judgment on the pleadings, “a district court should grant leave to amend even if no request to amend the pleading was made, unless it determines that the pleading could not possibly be cured by the allegation of other facts.” Id. at 1130 (internal quotation marks omitted). Accordingly, leave to amend generally shall be denied only if allowing amendment would unduly prejudice the opposing party, cause undue delay, or be futile, or if the moving party has acted in bad faith. Leadsinger, Inc. v. BMG Music Publ'g, 512 F.3d 522, 532 (9th Cir. 2008). At the same time, a court is justified in denying leave to amend when a plaintiff “repeated[ly] fail[s] to cure deficiencies by amendments previously allowed.” See Carvalho v. Equifax Info. Servs., LLC, 629 F.3d 876, 892 (9th Cir. 2010). Indeed, a “district court's discretion to deny leave to amend is particularly broad where plaintiff has previously amended the complaint.” Cafasso, U.S. ex rel. v. Gen. Dynamics C4 Sys., Inc., 637 F.3d 1047, 1058 (9th Cir. 2011) (quotation marks omitted).

         III. DISCUSSION

         Defendant contends that the Court should grant judgment on the pleadings on all five of Plaintiff's claims. Defendant argues that all of Plaintiff's claims are time-barred and that Plaintiff's fraud claims fail to meet Rule 9(b)'s heightened pleading standard and that many of the alleged statements constitute non-actionable puffery.

         Plaintiff offers a number of responses. First, Plaintiff argues that the Song-Beverly express and implied warranty claims are tolled by the future performance exception. Second, Plaintiff again contends that the delayed discovery rule and the fraudulent concealment doctrine tolled the statute of limitations on all his claims. Third, Plaintiff asserts that all of Plaintiff's claims are subject to American Pipe tolling. Fourth, Plaintiff argues that California equitable tolling applies to save all of Plaintiff's claims. Finally, Plaintiff asserts that the Amended Complaint fulfills Rule 9(b)'s requirements and that the alleged statements are actionable.

         The Court agrees with Defendant that none of Plaintiff's tolling arguments apply to save his claims. Specifically, the future performance exception, the delayed discovery rule, the fraudulent concealment doctrine, American Pipe tolling, and California equitable tolling do not save Plaintiff's claims. The Court addresses each of these tolling arguments in turn before addressing Defendant's remaining arguments that Plaintiff's fraud claims fail to state a claim. The Court agrees with Defendant that the FAC fails to state a claim for fraud. Accordingly, the Court GRANTS Defendant's motion for judgment on the pleadings with prejudice.

         A. Statute of Limitations

         Plaintiff brings two claims under the Song-Beverly Act and three common law claims for fraud. First, Plaintiff's claims under the Song-Beverly Act for violation of express and implied warranty are both subject to a four-year statute of limitations. Krieger v. Nick Alexander Imports, Inc., 234 Cal.App.3d 205, 213-15 (1991); see Philips v. Ford Motor Co., 2016 WL 1745948, at *6 (N.D. Cal. May 3, 2016) (explaining that California courts apply to Song-Beverly Act claims the four-year statute of limitations that is also applicable to warranty actions under the California Commercial Code). Second, Plaintiff's fraud claims-specifically, for intentional fraudulent inducement, negligent fraudulent inducement, and fraudulent concealment-are all subject to a three-year statute of limitations. Cal. Civ. Proc. Code § 338(d); see Kline v. Turner, 87 Cal.App.4th 1369, 1373 (2001) (“An action for relief on the grounds of fraud or mistake must be commenced within three years.”).

         Plaintiff purchased his vehicle on June 30, 2008 and filed this lawsuit about 11 years later on January 17, 2019. Accordingly, absent the application of any tolling doctrines, the statutes of limitations on Plaintiff's claims appear to have expired on June 30, 2011 (for Plaintiff's fraud claims) and on June 30, 2012 (for Plaintiff's ...


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