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Merkin v. Honda North America, Inc.

United States District Court, D. New Jersey

November 9, 2017

JOEL MERKIN, Plaintiff,


          PETER G. SHERIDAN, U.S.D.J.

         This matter comes before the Court on Defendants Honda North America, Inc., American Honda Motor Co., Inc., and Honda Motor Company, Ltd.'s (collectively, “Honda”) Motion to Dismiss Plaintiff Joel Merkin's First Amended Complaint (“FAC”) pursuant Fed.R.Civ.P. 12(b)(6) (ECF No. 16). Plaintiff asserts the following claims: (1) violation of the New Jersey Consumer Fraud Act; (2) breach of express warranty; (3) breach of implied warranty of merchantability; (4) common law fraud; (5) breach of the duty of good faith and fair dealing; and (6) unjust enrichment. For the reasons expressed herein, Honda's Motion to Dismiss is granted.


         In this putative class action, Plaintiff Joel Merkin alleges that Honda failed to disclose alleged defects present in the starter motor of certain Honda vehicles. Plaintiff, a New Jersey citizen, seeks to certify a class of all New Jersey owners or lessees of 2013-2015 model year Honda Accord and Crosstour vehicles containing V6 engines (“Class Vehicles”). (FAC at ¶¶ 1, 16, 72).

         On July 20, 2015, Plaintiff purchased a pre-owned 2013 Honda Accord, purportedly within the New Vehicle Limited Warranty from a Honda dealership in Toms River, New Jersey. (Id. at ¶¶ 7, 17). The limited warranty extended coverage for the lesser of 3 years or 36, 000 miles. (Id. at ¶ 7). According to the FAC, in May 2016, with approximately 40, 400 miles, Plaintiff began experiencing issues starting his vehicle. (Id. at ¶ 19). At least once or twice a week, Plaintiff's vehicle would not start immediately and would require him to turn the ignition “repeatedly” in order to start the engine. (Id.). Two months later, with an additional 18, 000 miles, Plaintiff claims his vehicle would not start approximately five to six times a day. (Id. at ¶ 20). When he brought this issue to Honda of Toms River's attention, he was told that his vehicle was no longer under warranty and that he would be charged the full price for service and replacement of the defective starter motor (“starter”), and was charged $200 for a replacement. (Id. at ¶ 22).

         Plaintiff alleges that Honda was aware of the starter defect, yet failed to make proper disclosures. (Id. at ¶ 2). Plaintiff alleges that the defect manifests during or shortly after the expiration of the limited warranty period. (Id.). As background, “[a] starter motor is an electric motor that turns over or ‘cranks' the vehicle's engine in order to start it” (Id. at ¶ 39), and since the defective starters prematurely fail, the vehicle will not start. (Id. at ¶ 2).

         In February 2016, Honda issued a Technical Service Bulletin (“TSB”) to Honda dealers, which addressed “complaints of grinding or spinning noises at startup in the Class Vehicles.” (Id. at ¶ 44). According to Plaintiff, the TSB “acknowledged that the Class Vehicles were manufactured with ‘not optimal' clearance between the starter motor and the torque converter ring gear.” (Id. at ¶ 45). Without proper clearance, these starters experienced premature wear, thereby causing significant damage, which required removal and replacement with a new starter with corrected clearance. (Id. at ¶¶ 45-47).

         Although Honda was purportedly aware of the defect, it was never disclosed to the general public. (Id. at ¶ 48). Moreover, Plaintiff alleges that Honda actively concealed and refused to acknowledge the defect. (Id. at ¶¶ 56-65). In support of this assertion, Plaintiff relies generally on: “(1) [Honda's] own record[] of customers' complaints, (2) dealership repair records, (3) records from the National Highway Traffic Safety Administration (NHTSA), (4) warranty and post-warranty claims, (5) internal presale durability testing and TSBs, and (6) other various sources.” (Id. at ¶ 56). Given Honda's quality assurance efforts, Plaintiff claims “[Honda] knew or should have known that the starter system in the Class Vehicles was defective” and “expressly warranted the affected vehicles to be free from defects for a period of 3 years or 36, 000 miles.” (Id. at ¶¶ 65-66).

         To illustrate Honda's purported awareness of the defective starters, Plaintiff cites to complaints made by Honda Accord owners to the NHTSA's Office of Defects Investigation (ODI). ( Id. at ¶¶ 70).[1] In a January 2014 complaint, a 2013 Honda Accord owner claimed, “Vehicle does not start easily. 3-5 ignition attempts are needed to start it every time. However, once it starts everything seems fine. The battery was checked by the dealer and found to be fine.” (Id.) (capitalization omitted). In a similar entry, dated May 2014, another 2013 Honda Accord owner stated, “Went to start the car, the car will not turn on, everything works but the car won't start. Seems to be a problem with the starter.” (Id.) (capitalization omitted). According to the FAC, “[a]ll automobile manufacturers routinely monitor and analyze NHTSA complaints because this information is used [for] determining if a recall should be issued.” (Id. at ¶ 69).

         Plaintiff brings six causes of action based on state law, on behalf of himself and the putative class. Specifically, he alleges violation of the New Jersey Consumer Fraud Act (“NJCFA”), N.J.S.A. § 56:8-2; breach of express warranty; breach of implied warranty; breach of the duty of good faith and fair dealing; and unjust enrichment.

         Legal Standard

         On a motion to dismiss for failure to state a claim pursuant to Fed.R.Civ.P. 12(b)(6), the Court is required to accept as true all allegations in the Complaint and all reasonable inferences that can be drawn therefrom, and to view them in the light most favorable to the non-moving party. See Oshiver v. Levin, Fishbein, Sedran & Berman, 38 F.3d 1380, 1384 (3d Cir. 1994). “To survive a motion to dismiss, a complaint 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)). While a court will accept well-pleaded allegations as true for the purposes of the motion, it will not accept bald assertions, unsupported conclusions, unwarranted inferences, or sweeping legal conclusions cast in the form of factual allegations. Iqbal, 556 U.S. at 678-79; see also Morse v. Lower Merion School District, 132 F.3d 902, 906 (3d Cir. 1997). A complaint should be dismissed only if the well-pleaded alleged facts, taken as true, fail to state a claim. See In re Warfarin Sodium, 214 F.3d 395, 397-98 (3d Cir. 2000).

         For allegations sounding in fraud, Fed.R.Civ.P. 9(b) imposes a heightened pleading standard. “The purpose of Rule 9(b) is to provide notice of the precise misconduct with which defendants are charged in order to give them an opportunity to respond meaningfully to a complaint, Aand to prevent false or unsubstantiated charges.” Rolo v. City Investing Co. Liquidating Trust, 155 F.3d 644, 658 (3d Cir. 1998) (citations omitted). “Under Rule 9(b), when a plaintiff is alleging fraud or mistake, he ‘must state with particularity the circumstances constituting fraud or mistake, ' though conditions of a person's mind, such as knowledge or intent, may be alleged generally.” Gotthelf v. Toyota Motor Sales, U.S.A., Inc. 525 Fed.Appx. 94, 103 n.15 (3d Cir. 2013) (quoting Fed.R.Civ.P. 9(b)). However, “when pleading knowledge, the complaint must still contain more than a ‘conclusory allegation, ' and the pleading must meet the ‘less rigid -though still operative-strictures of Rule 8.'” Id. (quoting Iqbal, 556 U.S. at 686-87)).


         A. Counts I and IV ...

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