Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES—D.N.J.: New York consumer protection claims proceed over alleged shingle defects, (Sep 17, 2013)

By Tobias J. Gillett, J.D., LL.M.

A purchaser of wood shingles may proceed with New York Consumer Protection Act (NYCPA) claims against the manufacturer of the shingles over Maibec’s alleged misrepresentations regarding the quality of the shingles, failure to disclose known defects affecting the shingles, and failure to honor its warranty, the federal district court in Trenton, New Jersey has ruled (Stern v. Maibec Inc., September 11, 2013, Sheridan, P.).

Maibec Incorporated is a Canadian manufacturer of wood shingles. According to the purchaser’s complaint, Maibec’s shingles have design flaws that cause them to decay. The purchaser alleged that Maibec knew its shingles were defective and nonetheless continued to sell them. Maibec allegedly made misrepresentations about the quality of its shingles and the amount of time they would last, and intentionally failed to disclose that the shingles would “routinely warp, peel, crack, buckle, and curl far in advance of the expiration of the warranty period.” The shingles also allegedly had a “flat orientation” to their grain (consistent with the lowest quality of shingle), contrary to Maibec’s representations, and Maibec purportedly failed to honor its warranty obligations.

The purchaser alleged that she installed Maibec shingles on her house, but later suffered damage to her house when the shingles cupped and buckled. The purchaser also alleged three other instances where Maibec’s shingles were found to be defective, including an individual who observed Maibec’s shingles were buckling after he installed them on a condominium complex, but was unable to get Maibec to honor its warranty; a company that installed the shingles on a residence only to have them curl and lift away from the house; and a company that installed the shingles on a renovation project but later found them warping, decaying, and cracking.

On November 5, 2012, the court granted in part and denied in part Maibec’s motion to dismiss the purchaser’s complaint. In its present decision, the court addressed Maibec’s motion to dismiss the purchaser’s NYCPA claim asserted in her Second Amended Complaint (SAC).

In its previous decision, the court had dismissed the NYCPA claim with leave to amend, finding “that the most significant allegations concerning Maibec’s alleged materially misleading acts and/or statements were made upon information and belief which fails to establish their plausibility.” In her SAC, the purchaser added facts regarding the three other alleged instances of failure of Maibec’s shingles. The court found the facts were “made upon personal knowledge,” were not merely “additional allegations made upon information and belief,” and “demonstrate[d] the claim [was] plausible.” Therefore, the court denied the motion to dismiss.

The case is Civil Action No. 3:11-cv-03951 (PGS).

Attorneys: Attorneys: Jeffrey Alan Shooman and Susana Cruz Hodge (Lite Depalma Greenberg, LLC) for Ilene Stern. Damian V. Santomauro and Michael R. McDonald (Gibbons, PC) for Maibec Incorporated.

Companies: Maibec Incorporated

Cases: StateUnfairTradePractices NewJerseyNews