Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES—N.D. Ala.: Consumer’s fraud claims against Behr, Home Depot fail, (Nov 18, 2015)

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

A consumer’s allegations of fraudulent misrepresentation, fraudulent suppression, and violations of the Alabama Deceptive Trade Practices Act (ADTPA) against paint manufacturer Behr Process Corporation and retailer Home Depot failed to state a claim for relief, the federal district court in Birmingham, Alabama has ruled (Holmes v. Behr Process Corp., November 17, 2015, Acker, W.).

Mary Lee Holmes purchased Kilz primer, which was manufactured by Behr, at Home Depot. After applying the Kilz primer, the top coat of paint was damaged, which required repair to the surfaces and repriming and repainting the walls and ceilings. She alleged that she become aware of a maximum dry time for Kilz after speaking with a Behr representative in October 2013. In March 2015, she filed an action against Behr and Home Depot, alleging that: (1) Behr violated the ADTPA; (2) Home Depot and Behr made fraudulent representations; and (3) Behr fraudulently suppressed information. The defendants filed a joint motion to strike Holmes’ complaint.

The court first noted that the ADTPA statute of limitations was one year. Holmes’ alleged that she became aware of the defendants’ violation of the ADTPA in October 2013, when she spoke with a Behr representative and that she did not file her action until March 2015. Consequently, the court determined that Holmes’ ADTPA claim was barred by the ADTPA’s one-year statute of limitations.

In addition to the bar of the statute of limitations, the court determined that Holmes procedurally waived her right to pursue a claim under the ADTPA by pursuing her other fraud claims against Behr. An election to pursue an ADTPA claim excludes and is a surrender of all other available rights and remedies.

Fraud by misrepresentation. The court explained that a fraud claim must be based on representations independent of the promises contained in the contract and must independently satisfy the elements of fraud. Holmes’ allegation of fraudulent misrepresentation by Home Depot was based on a Home Depot employee telling her that Kilz was “a high quality primer suitable for adhering to both plaster and sheetrock/drywall walls and ceilings.” The court, however, found that these representations were nothing more than puffery and were not independent or distinguishable from the representations about the product on the label.

Holmes alleged two theories of fraudulent misrepresentation against Behr: (1) she was misled by the labeling, WHERE TO USE, section on the Kilz product; and (2) she was misled by a Behr representative that it was not necessary for her to send Behr pictures, residual primer, residual paint or primer/paint samplings, in order to receive compensation for the failed Kilz primer.

With respect to the first theory, the court determined that, because this representation is the actual product label itself, Holmes failed to allege a sufficiently independent representation by Behr to support a cognizable claim of fraud. With respect to the second theory, while the Behr representative’s representations were distinct from Holmes’ contract claims, her assertion that they induced her to destroy evidence was unreasonable.

Fraudulent suppression. Holmes alleged that, despite Behr’s legal duty to disclose, it fraudulently suppressed and concealed the fact that moisture could seep under the primer causing it to fail. The court, however, found Holmes’ allegation conclusory and that she did not provided a basis for finding that Behr had a duty to disclose or allege that Behr had responded untruthfully to any direct questions.

The case is No. 2:15-CV-0454.

Attorneys: C. Paul Cavender (Burr & Forman LLP) for Home Depot USA Inc. and Behr Process Corp.

Companies: Home Depot USA Inc.; Behr Process Corp.

Cases: StateUnfairTradePractices AlabamaNews