Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES—D. S.C.: Deceptive trade practices claim against Pella barred by statute of limitations, (Nov 3, 2015)

By Michael Menzhuber, J.D., LL.M.

A claim that Pella Corporation, with respect to the sale of its windows, violated the Florida Deceptive and Unfair Trade Practices Act (FDUPTA), was barred by the statute of limitations, according to the federal district court in Charleston, South Carolina. A claim of breach of implied warranty of fitness for a particular purpose was also dismissed. However, the court denied Pella’s motion to dismiss regarding claims of breach of express warranty (Dineen v. Pella Corporation, October 30, 2015, Norton, D.).

Background. Martin and Marianne Dineen purchased Architect Series windows from Pella for their home in 2003. Two years later, the couple purchased additional windows from Pella. In 2006, they noticed damage to one of their windows. They later informed Pella about water intrusion issues. In each case, Pella completed the repair but charged the couple for the cost of labor.

In 2014, the couple filed a class action complaint against Pella that alleged, in part, violation of FDUPTA; breach of implied warranty of merchantability; breach of implied warranty of fitness for a particular purpose; and breach of express warranty. Pella moved to dismiss the claims on the grounds that they were barred by their respective statute of limitations and they were inadequately pleaded.

Tolling. The couple contended that their claims were tolled by the doctrines of: (1) class action tolling; (2) fraudulent concealment; and (3) equitable estoppel. They argued that the doctrine class action tolling applied because the filing of a previous class action, in a separate federal court, tolled all relevant statutes of limitations during the pendency of that action. The court disagreed. It found that the decision in American Pipe & Constr. Co. v. Utah, 414 U.S. 538 (1974), which first announced the doctrine of class action tolling, did not apply to the couple’s state law claims. It further determined that Florida law did not toll the statute of limitations for their claims.

The court also found that: (1) the couple failed to plead facts necessary to show that the relevant statutes of limitations were tolled by Pella’s alleged fraudulent concealment; and (2) the couple’s allegations of equitable estoppel, which were based on Pella’s failure to disclose the allege defects, failed because they did not alleged that they knew about the defects but delayed filing the suit due to Pella’s misrepresentations.

Accrual. The statute of limitations for FDUPTA expires four years from the date of the sale of the product at issue, the court explained. Because the couple purchased the last of their windows in 2005, the statute of limitations expired in 2009, nearly five years before the couple filed suit. Moreover, the continuing tort doctrine did not apply to extend the limitations period because: (1) the only damage caused by Pella’s alleged cover-up would be consequential damages arising from the windows’ progressive wood deterioration; and (2) consequential damages are not recoverable under FDUTPA.

Implied warranty. Pella’s arguments that the couple’s implied warranty claims failed for a lack of privity and their breach of the implied warranty of fitness for a particular purpose should be dismissed because the windows were used for their intended purpose were rejected. According to the court, although the couple did not purchase their windows directly from the Pella dealer, they did acquire them through a purchase by their builder. As such, they were as much third party beneficiaries to the contract between the builder and the distributor as they were to any contract between Pella and its distributor. Consequently, their implied warranty claim did not fail for lack of privity.

The implied warranty of fitness for a particular purpose arises where the seller, at the time of contracting, has reason to know any particular purpose for which the goods are required and that the buyer is relying on the seller’s skill or judgment to select or furnish suitable goods. The windows that the couple purchased from Pella were used for their ordinary purpose. Therefore, the couple failed to sufficiently plead a claim for breach of the implied warranty of fitness for a particular purpose.

Express warranty. However, the court determined that the couple sufficiently stated a claim for breach of express warranty under Florida law. Pella argued that the couple’s breach of express warranty claim should be dismissed because: (1) the couple failed to allege that they read any of the statements in Pella’s promotional materials upon which the express warranty claim is based; (2) the alleged statements from the couple’s owners’ manual did not contain any statements of express warranties; and (3) the couple did not state a claim for relief because they did not adequately allege that Pella breached the terms of the limited warranty that ships with the windows.

The failure to read any of the promotional materials was not grounds for dismissing the express warranty claim, the court noted. The plaintiffs alleged that Pella represented that the windows were free from defects on their website and various marketing materials, which sufficiently indicated the type of warranty created and the way it was created. By indicating the general nature and source of the warranty, the plaintiffs set forth more than “labels and conclusions” to state a claim for breach of express warranty, the court concluded.

The case is No. 2:14-cv-03479-DCN.

Attorneys: April Goodwin (Parker Waichman, LLP) for Martin Dineen. John P. Mandler (Faegre, Baker Law Firm) and Michael Tucker Cole (Nelson Mullins Riley and Scarborough) for Pella Corp.

Companies: Pella Corp.

Cases: StateUnfairTradePractices SouthCarolinaNews