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Ferro v. Volvo Penta of Americas, LLC

United States District Court, E.D. North Carolina, Western Division

August 25, 2017




         This matter is before the Court on defendants' motion to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. [DE 8]. The matter has been fully briefed and is ripe for ruling. For the reasons discussed below, the motion to dismiss is granted and the complaint is dismissed.


         In June 2007, plaintiff purchased a 2006 Cruisers Yacht, model 300, for approximately $107, 000. [DE 1 at ¶ 5], The boat was equipped with two Volvo Penta 5.70Sxi model engines which included an XDP outdrive. Id. at ¶ 6. The engines had 24 hours of logged use. Id. Plaintiff purchased a third-party extended warranty on the boat. Id. at ¶ 8.

         According to plaintiff, the XDP outdrives have a common defect in that the "U-joint bellows . . . buckle and make contact with the U-joint during high speed turning or loading maneuvers, which causes water entry and corrosion of the U-joint and gimbal bearing." [DE 1 at ¶¶ 9-10]. Plaintiff states that he experienced XDP outdrive failure "in or about August 2008, June 2009, May 2011, September 2012 and 2015." Id. at ¶ 11. When these failures occurred on open water, he and his family were stranded until they could be towed to shore. Id. at ¶ 12. Plaintiff paid approximately $14, 000 to repair and replace XDP outdrive parts in July 2008, August 2009, and June 2011. Id. at ¶¶ 15-17.

         Plaintiff alleges the engine failed again in September 2012 and after "exploring options to sell the Boat" in March 2013, he states that during online research he found evidence based on customer reviews and projected litigation that the XDP outdrives were defective. [DE 1 at ¶¶ 18-19]. After reaching out to defendants via email on March 29, 2013, plaintiff filed a formal complaint. Id. at ¶ 20. He was informed that he needed to replace the XDP outdrives. Id. at ¶ 21. In June 2013, he paid approximately $3, 450 to repair and replace the XDP outdrive parts in lieu of replacing the outdrives. Id. at ¶ 22. After this repair, he attempted to minimize the use of the boat but the problems persisted until July 2014 when the XDP drive bellows completely failed. Id. at ¶¶ 23-24. In December 2015, he paid approximately $36, 389 to completely replace the XDP outdrives. Id. at ¶ 25.

         On April 20, 2017, plaintiff filed a complaint asserting that defendants (1) violated the Magnuson-Moss Warranty Act; (2) violated North Carolina's product liability statutes by providing an inadequate warning and inadequate design; (3) committed an unfair and deceptive trade practice; (4) was unjustly enriched by receiving defective parts; (5) converted defective parts; and (5) negligently inflicted emotional distress on plaintiff. [DE 1]. On June 1, defendants filed the instant motion to dismiss, arguing that plaintiff has failed to state a claim upon which relief can be granted. [DE 8].


         A Rule 12(b)(6) motion to dismiss tests the legal sufficiency of the complaint. Papasan v. Attain, 478 U.S. 265, 283 (1986). When acting on a motion to dismiss under Rule 12(b)(6), "the court should accept as true all well-pleaded allegations and should view the complaint in a light most favorable to the plaintiff." Mylan Labs., Inc. v. Matkari, 7 F.3d 1130, 1134 (4th Cir. 1993). A complaint must allege enough facts to state a claim for relief that is facially plausible. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007). Facial plausibility means that the facts pled "allow[] the court to draw the reasonable inference that the defendant is liable for the misconduct alleged, " and mere recitals of the elements of a cause of action supported by conclusory statements do not suffice. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). A complaint must be dismissed if the factual allegations do not nudge the plaintiffs claims "across the line from conceivable to plausible." Twombly, 550 U.S. at 570. The complaint must plead sufficient facts to allow a court, drawing on judicial experience and common sense, to infer more than the mere possibility of misconduct. Nemet Chevrolet, Ltd. v., Inc., 591 F.3d 250, 256 (4th Cir. 2009). The court need not accept the plaintiffs legal conclusions drawn from the facts, nor need it accept as true unwarranted inferences, unreasonable conclusions, or arguments. Philips v. Pitt County Mem. Hosp., 572 F.3d 176, 180 (4th Cir. 2009).

         In considering a motion to dismiss pursuant to Rule 12(b)(6), the Court may consider documents attached to the complaint, as well as those attached to the motion to dismiss so long as they are integral to the complaint and authentic. Fed.R.Civ.P. 10(c); Sec 'y of State for Defence v. Trimble Navigation Ltd., 484 F.3d 700, 705 (4th Cir. 2007); Philips v. Pitt County Mem 7 Hosp., 572 F.3d 176, 180 (4th Cir. 2009). A court ruling on a motion to dismiss under Rule 12(b)(6) may also properly take judicial notice of matters of public record. Sec 'y of State for Defence, 484 F.3d at 705.

         Defendants have moved to dismiss each of plaintiff s claims as barred by the applicable statutes of limitations or repose. The Court will address each claim and its timeliness in turn.

         Plaintiffs first cause of action is a product liability and breach of express and implied warranty claim brought under the Magnuson-Moss Warranty Act ("MMWA"), 15 U.S.C. § 2301 et seq. The MMWA does not contain a statute of limitations, but when evaluating timeliness of claims under the MMWA, courts are directed to use the applicable state law. Yancy v. Remington Arms Co., LLC, No. 1:10-CV-918, 2013 WL 5462205, at *5 (M.D. N.C. Sept. 30, 2013). North Carolina applies a four-year statute of limitation to breaches of warranty on the sale of goods, beginning upon accrual of the claim, which is either (1) tender of delivery, or (2) if the goods were sold with a warranty for future performance, the date when the defect was or should have been discovered as long as it remains within the life of the express warranty terms. Id. While the discovery rule applies if goods are sold with a warranty for future performance, it "does not extend the life of an express warranty beyond its terms." Id.

         Plaintiff purchased the boat used in June 2007, and replaced engine parts in July 2008, August 2009, June 2011, and June 2013. Plaintiff attached a document to his complaint which he purports is a two-year warranty on all replacement parts. [DE 1-1].

         Even assuming the two year warranty attached to the complaint applies, [1] and even assuming the period of that warranty would begin at the time the boat was purchased used by defendant in 2007, nonetheless the warranty and limitations period expired long before plaintiff filed his complaint. Plaintiff argues that a new two-year warranty period was started each time he bought and installed replacement parts on the boat's ...

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