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Defillippo v. Whirlpool Corp.

United States District Court, D. New Jersey

August 30, 2019

JUSTIN DEFILLIPPO, DEREK SCACHETTI, and TIMOTHY BABBITT, on behalf of themselves and all others similarly situated, Plaintiffs,
v.
WHIRLPOOL CORPORATION, Defendant.

          BRUCE HELLER NAGEL RANDEE M. MATLOFF NAGEL RICE, LLP JOSEPH LOPICCOLO POULOS LOPICCOLO PC On behalf of Plaintiffs

          LATHROP BARRERE NELSON, III MONTGOMERY MCCRACKEN WALKER & RHOADS LIBERTYVIEW, SUITE MEGAN B. TRESEDER LOWENSTEIN SANDLER LLP On behalf of Defendant

          OPINION

          NOEL L. HILLMAN, U.S.D.J.

         This putative class action concerns claims by Plaintiffs and all similarly situated individuals arising out of allegedly defective refrigerators manufactured by Defendant Whirlpool Corporation. Pending before the Court is the motion of Defendant to dismiss Plaintiffs' complaint. For the reasons expressed below, Defendant's motion will be granted in part and denied in part.

         BACKGROUND[1]

         Plaintiffs, Justin DeFillippo, Derek Scachetti, and Timothy Babbitt, on behalf of themselves and others who are similarly situated, claim that Defendant, Whirlpool Corporation, has violated the New Jersey Consumer Fraud Act, N.J.S.A. 56:8-1, et seq. (“NJCFA”), the New Jersey Truth-in-Consumer Contract, Warranty and Notice Act (“TCCWNA”), N.J.S.A. 56:12-14, et seq., New York's General Business Law §§ 349 and 350, and the Magnuson-Moss Act, 15 U.S.C. § 2301 et seq. Plaintiffs also assert claims against Whirlpool for common law fraud, breach of implied and express warranties, and unjust enrichment.

         All these claims arise out of Whirlpool's sale of French Door Bottom Mount refrigerators. Plaintiffs summarize their claims as follows:

• [U]nder various brand names such as Whirlpool, KitchenAid and Maytag, [from 2012 to the present Whirlpool sold French Door Bottom Mount (“FDBM”) refrigerators] containing defects that cause the refrigerators to provide insufficient cooling in the refrigerator and/or freezer of the unit. According to internal technical service pointers (“TSP”) released by Whirlpool to its service providers, the defect occurs due to impeded air flow in the freezer compartment which is caused by frost on the freezer evaporator. Corrosion then forms on the brass freezer defrost thermistor impacting the thermistor performance allowing ice to accumulate on the evaporator (the “Defect”).
• Whirlpool knew about the Defect as early as March 2014 when it issued a TSP to its Dealers. The TSP provided details of the Defect. This TSP was distributed to dealers but not the public.
• Additional TSPs were released in June 2016 and then again in September 2016, each one informing dealers, but not the public, about the Defect, explaining the Defect occurs due to “impeded air flow in the freezer compartment [which is caused by] frost on the freezer evaporator.” “Corrosion [then forms] on the brass freezer defrost thermistor [impacting] the thermistor performance allowing ice to accumulate on the evaporator.” • According to the TSPs, there is a way to remedy the problem. The TSPs instruct the service provider to “[o]rder and install service kit Wl0902214 [which] includes a plastic thermistor, foil and wire tie.” • Whirlpool knew, or was reckless in not knowing, at or before the time it sold the first unit, that the Whirlpool Refrigerators contained the Defect. Whirlpool had sole and exclusive possession of this knowledge.
• Notwithstanding this knowledge, Whirlpool uniformly concealed this material information in its marketing, advertising, and sale of the Refrigerators, which Whirlpool knew to be defective, both at the time of sale and on an ongoing basis.
• At all times, Whirlpool uniformly concealed the Defect from Plaintiffs and all consumers of Whirlpool refrigerators and failed to remove Plaintiffs' refrigerators from the marketplace or take adequate remedial action. Instead, Whirlpool sold and serviced Plaintiffs' refrigerators even though it knew, or was reckless in not knowing, that its refrigerators were defective and would ultimately provide insufficient cooling in the refrigerator and/or freezer of the units.
• As a consequence of Whirlpool's false and misleading statements and active and ongoing concealment of the Defect, Plaintiffs and the Class Members purchased and currently own defective Refrigerators and have incurred damages.
• Moreover, in addition to affirmatively misleading the Class Members, Whirlpool routinely declined to provide Class Members warranty repairs or other remedies for the Defect.

(Plaintiffs' Second Amended Compl., Docket No. 17 at 1-2, citations to exhibits omitted).

         Plaintiffs' complaint details each of the three Plaintiff's alleged experience with his FDBM refrigerator. DeFillippo, a citizen of New York, purchased a FDBM refrigerator in September 2015 for $3, 000 and began experiencing the alleged defect within one week. DeFillippo contacted Whirlpool right away, and a Whirlpool representative instructed him to unplug his refrigerator and plug it back in. That fixed the problem until the improper cooling occurred again. DeFillippo contacted Whirlpool again, and because the defect does not cause a “trouble shooting code” to appear, the Whirlpool representative instructed him to unplug the refrigerator and plug it back in. That temporary fix failed, and DeFillippo's FDBM refrigerator has experienced the defect numerous times over the course of 26 months. DeFillippo now has to use a spare refrigerator. (Docket No. 17 at 4-5.)

         Scachetti, a citizen of New Jersey, purchased a home in August 2017 that included a FDBM refrigerator manufactured in 2012. On June 1, 2018, Scachetti's FDBM refrigerator stopped cooling properly, and he immediately contacted Whirlpool, which sent a repair technician on June 4, 2018. The Whirlpool technician told Scachetti that based on the description of the problem that he knew before even looking at the refrigerator what the problem was and that Whirlpool knows about this defect. The technician confirmed the EVAP was not working properly and installed a new one. Whirlpool charged Scachetti a $96.00 service call fee, but despite Scachetti's demands, Whirlpool has refused to reimburse him the $96.00 service call fee because the refrigerator was outside its warranty period. (Docket No. 17 at 5-6.)

         Babbitt, a citizen of New Jersey, purchased a FDBM refrigerator on January 21, 2013 for $2, 342.00, along with a 5- year extended warranty for $152.96 from Warrantech. Within 10 months the FDBM refrigerator did not cool properly, and Babbitt contacted Whirlpool immediately. Babbitt was instructed to unplug the refrigerator for a few hours and then replug it, but because that would result in food spoilage, Babbitt insisted that Whirlpool send a repair person. On December 24, 2013, a repair person from American Home Appliance Service noted that the compressor was noisy and that Babbitt had attempted to resolve the issue by defrosting the ice in the freezer.

         The problem occurred again a year later. By then, the Whirlpool warranty had expired, and a repair person was sent under Babbitt's extended warranty. On January 7, 2015, a repair person changed the compressor, but in a few weeks, the refrigerator stopped cooling properly. On January 28, 2015, another repair person again replaced the compressor and replaced the evaporator coil. In mid-October 2018, Babbitt's FDBM refrigerator stopped cooling sufficiently, and Whirlpool has refused to repair the defect. Babbitt had to purchase another refrigerator to store his food. (Docket No. 17 at 6-8.)

         Whirlpool has moved to dismiss all the claims of each of the Plaintiffs on various bases depending on the particular claim and the plaintiff who asserts it.[2] Plaintiffs have opposed Whirlpool's motion.

         DISCUSSION

         A. Subject Matter Jurisdiction

         This Court has original subject matter jurisdiction under the Class Action Fairness Act, 28 U.S.C. §§ l332(d) and (6) because (i) the number of Class Members is 100 or more; (ii) the Class Members' damages, the aggregate amount in controversy exclusive of interest and costs, exceeds $5, 000, 000; and (iii) minimal diversity exists because at least one of the Class Plaintiffs[3] and one Defendant[4] are citizens of different states. This Court also has original subject matter jurisdiction over the Class Plaintiffs' federal statutory claim under the Magnuson-Moss Warranty Act, 15 U.S.C. § 2301 et seq., and supplemental jurisdiction over the remaining claims under 28 U.S.C. § 1367.

         B. Standard for Motion to Dismiss

         When considering a motion to dismiss a complaint for failure to state a claim upon which relief can be granted pursuant to Federal Rule of Civil Procedure 12(b)(6), a court must accept all well-pleaded allegations in the complaint as true and view them in the light most favorable to the plaintiff. Evancho v. Fisher, 423 F.3d 347, 351 (3d Cir. 2005). It is well settled that a pleading is sufficient if it contains “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2).

         “While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the ‘grounds' of his ‘entitle[ment] to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do . . . .” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (alteration in original) (citations omitted) (first citing Conley v. Gibson, 355 U.S. 41, 47 (1957); Sanjuan v. Am. Bd. of Psychiatry & Neurology, Inc., 40 F.3d 247, 251 (7th Cir. 1994); and then citing Papasan v. Allain, 478 U.S. 265, 286 (1986)).

To determine the sufficiency of a complaint, a court must take three steps. First, the court must “tak[e] note of the elements a plaintiff must plead to state a claim.” Second, the court should identify allegations that, “because they are no more than conclusions, are not entitled to the assumption of truth.” Third, “whe[n] there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement for relief.”

Malleus v. George, 641 F.3d 560, 563 (3d Cir. 2011) (alterations in original) (citations omitted) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 664, 675, 679 (2009)).

         A district court, in weighing a motion to dismiss, asks “not whether a plaintiff will ultimately prevail but whether the claimant is entitled to offer evidence to support the claim.” Twombly, 550 U.S. at 563 n.8 (quoting Scheuer v. Rhoades, 416 U.S. 232, 236 (1974)); see also Iqbal, 556 U.S. at 684 (“Our decision in Twombly expounded the pleading standard for ‘all civil actions' . . . .”); Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (3d Cir. 2009) (“Iqbal . . . provides the final nail in the coffin for the ‘no set of facts' standard that applied to federal complaints before Twombly.”). “A motion to dismiss should be granted if the plaintiff is unable to plead ‘enough facts to state a claim to relief that is plausible on its face.'” Malleus, 641 F.3d at 563 (quoting Twombly, 550 U.S. at 570).

         A court in reviewing a Rule 12(b)(6) motion must only consider the facts alleged in the pleadings, the documents attached thereto as exhibits, and matters of judicial notice. S. Cross Overseas Agencies, Inc. v. Kwong Shipping Grp. Ltd., 181 F.3d 410, 426 (3d Cir. 1999). A court may consider, however, “an undisputedly authentic document that a defendant attaches as an exhibit to a motion to dismiss if the plaintiff's claims are based on the document.” Pension Benefit Guar. Corp. v. White Consol. Indus., Inc., 998 F.2d 1192, 1196 (3d Cir. 1993). If any other matters outside the pleadings are presented to the court, and the court does not exclude those matters, a Rule 12(b)(6) motion will be treated as a summary judgment motion pursuant to Rule 56. Fed.R.Civ.P. 12(b).

         C. Analysis

         1. Plaintiff's consumer fraud claims

         Plaintiffs have asserted claims under the New Jersey Consumer Fraud Act and the New York General Business Law §§ 349 and 350, all of which concern deceptive business practices.[5]

         “The capacity to mislead is the prime ingredient of all types of consumer fraud.” Argabright v. Rheem Manufacturing Company, 201 F.Supp.3d 578, 605-06 (D.N.J. 2016) (quotations and citations omitted) (discussing the NYGBL § 349 and NJCFA). “False promises, misrepresentations, and concealment or omission of material facts all constitute deceptive practices under these statutes.” Id. (citations omitted).

         “A successful GBL § 349 claim requires that a plaintiff prove, by a preponderance of the evidence, that (1) the defendant has engaged in an act or practice that is deceptive or misleading in a material way; (2) the plaintiff has been injured by reason thereof; and (3) the deceptive act or practice is consumer oriented.” Koch v. Greenberg, 14 F.Supp.3d 247, 261 (S.D.N.Y. 2014) (quoting Gaidon v. Guardian Life Ins. Co. of Am., 94 N.Y.2d 330, 343-44, 704 N.Y.S.2d 177, 725 N.E.2d 598 (Ct. App. 1999)) (quotations and citations omitted). “In contrast to private contract disputes, unique to the parties, consumer-oriented conduct within the meaning of the statute requires acts or practices that have a broader impact on consumers at large.” Id. (citation omitted). “Consumer-oriented conduct does not require a repetition or pattern of deceptive behavior, ” and as long as conduct was aimed at the public at large, it is immaterial that the defendant may not have “committed the complained-of acts repeatedly-either to the same plaintiff or to other consumers.” Id. (citation omitted). Where the “acts complained of potentially affect similarly situated consumers, the consumer-oriented prong will be met.” Id. (quotations and citations omitted).

         GBL § 350 prohibits false advertising and has the same elements as § 349, except for the requirement that the Defendant's advertisement “(1) had an impact on consumers at large, (2) was deceptive or misleading in a material way, and (3) resulted in injury.” Koch v. Greenberg, 14 F.Supp.3d 247, 261 (S.D.N.Y. 2014) (citation omitted).

         The NJCFA was passed to address “sharp practices and dealings in the marketing of merchandise and real estate whereby the consumer could be victimized by being lured into a purchase through fraudulent, deceptive or other similar kind of selling or advertising practices.” Chaudhri v. Lumileds LLC, 2018 WL 6322623, at *6 (D.N.J. 2018) (quoting Daaleman v. Elizabethtown Gas Co., 77 N.J. 267, 271 (1978)). As “remedial legislation, ” the NJCFA “should be construed liberally.” Id. (quoting Int'l Union of Operating Engineers Local No. 68 Welfare Fund v. Merck & Co., 192 N.J. 372, 377 n.1 (2007)). To establish a prima facie case under the NJCFA, “a plaintiff must allege (1) unlawful conduct by the defendant, (2) an ascertainable loss by plaintiff; and (3) a causal connection between the defendant's unlawful practice and the plaintiff's ascertainable loss.” Angelo ...


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