Lawson v. BMW of North America LLC

[2] 3 UNITED STATES DISTRICT COURT 4 NORTHERN DISTRICT OF CALIFORNIA 5 SAN JOSE DIVISION [6] 7 MICHAEL LAWSON, Case No. 21-cv-02063-BLF 8 Plaintiff, ORDER GRANTING DEFENDANT 9 v. CARMAX’S MOTION TO DISMISS WITH LEAVE TO AMEND 10 BMW OF NORTH AMERICA LLC, et al., [Re: ECF No. 47] 11 Defendants. [12] 13 Plaintiff Michael Lawson (“Plaintiff”) brings this action against BMW of North America 14 (“BMWNA”); Stevens Creek B, Inc. (“Stevens Creek”); and CarMax Auto Superstores, Inc. 15 (“CarMax”), alleging negligent repair and restitution by Stevens Creek, breach of express 16 warranty by BMWNA, and violation of the Magnuson-Moss Warranty Act (“MMWA”) by 17 BMWNA and CarMax. ECF No. 41 (“FAC”). 18 Before the Court is Defendant CarMax’s motion to dismiss. See ECF No. 47 (“MTD”); 19 see also ECF No. 49 (“Reply”). Plaintiff opposes the motion. See ECF No. 48 (“Opp.”). The 20 Court finds the motion suitable for disposition without oral argument and VACATES the hearing 21 set for August 24, 2023. See Civ. L.R. 7-1(b). For the following reasons, the Court GRANTS 22 Defendant CarMax’s motion to dismiss WITH LEAVE TO AMEND. 23 I. BACKGROUND 24 On or about April 4, 2020, Plaintiff purchased a 2017 BMW M4 covered by BMWNA’s 25 express warranty. FAC ¶¶ 5, 9. Plaintiff alleges the vehicle is defective. Id. ¶ 10. He claims that 26 he brought the vehicle to BMWNA’s authorized repair facilities on numerous occasions, first to 27 Stevens Creek approximately twenty-three days after he initially purchased it. Id. ¶¶ 10-11, 32. 1 BMWNA’s authorized repair facilities’ failure to adequately repair the defect, Plaintiff brings two 2 claims against BMWNA for breach of express warranty under California’s Uniform Commercial 3 Code and breach of the MMWA. Id. ¶¶ 7-29. Plaintiff also brings his claim for breach of the 4 MMWA against CarMax. Id. ¶¶ 17-29. Plaintiff asserts a negligent repair claim against Stevens 5 Creek premised on its alleged failure to repair the vehicle. Id. ¶¶ 30-36. 6 Plaintiff filed the Complaint in Santa Clara County Superior Court on January 13, 2021. 7 See ECF No. 1, Ex. A. BMWNA removed the case to this Court on March 24, 2021. ECF No. 1 8 at 1. On March 13, 2023, the Court issued an Order granting Plaintiff leave to amend the 9 Complaint to add CarMax as a Defendant. ECF No. 40. On March 15, 2023, Plaintiff filed the 10 FAC. See FAC. On March 29, 2023, BMWNA filed an Answer. ECF No. 42. On April 26, 11 2023, CarMax filed the instant motion. See MTD. 12 II. LEGAL STANDARD 13 “A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) for failure to state a 14 claim upon which relief can be granted ‘tests the legal sufficiency of a claim.’” Conservation 15 Force v. Salazar, 646 F.3d 1240, 1241-42 (9th Cir. 2011) (quoting Navarro v. Block, 250 F.3d 16 729, 732 (9th Cir. 2001)). When determining whether a claim has been stated, the Court accepts 17 as true all well-pled factual allegations and construes them in the light most favorable to the 18 plaintiff. Reese v. BP Exploration (Alaska) Inc., 643 F.3d 681, 690 (9th Cir. 2011). While a 19 complaint need not contain detailed factual allegations, it “must contain sufficient factual matter, 20 accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 21 U.S. 662 , 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A claim is 22 facially plausible when it “allows the court to draw the reasonable inference that the defendant is 23 liable for the misconduct alleged.” Id. On a motion to dismiss, the Court’s review is limited to 24 the face of the complaint and matters judicially noticeable. MGIC Indem. Corp. v. Weisman, 803 25 F.2d 500, 504 (9th Cir. 1986). 26 In deciding whether to grant leave to amend, the Court must consider the factors set forth 27 by the Supreme Court in Foman v. Davis, 371 U.S. 178 , 83 S. Ct. 227 (1962), and discussed at 1 2003). A district court ordinarily must grant leave to amend unless one or more of the Foman 2 factors is present: (1) undue delay, (2) bad faith or dilatory motive, (3) repeated failure to cure 3 deficiencies by amendment, (4) undue prejudice to the opposing party, or (5) futility of 4 amendment. Eminence Capital, 316 F.3d at 1052. “[I]t is the consideration of prejudice to the 5 opposing party that carries the greatest weight.” Id. However, a strong showing with respect to 6 one of the other factors may warrant denial of leave to amend. Id. 7 III. DISCUSSION 8 CarMax argues that the sole claim against it—for breach of the MMWA—should be 9 dismissed. MTD at 1. CarMax argues that the MMWA claim must fail because Plaintiff does not 10 bring a separate state warranty claim against CarMax, which the MMWA requires. Id. at 3-4. 11 CarMax further argues that Plaintiff cannot assert a breach of warranty claim because he did not 12 provide notice of a breach of warranty claim against CarMax, as required under Utah law, which 13 should apply because Plaintiff purchased the car from CarMax in Utah. Id. at 4-5. 14 Plaintiff recognizes that the MMWA requires the application of valid state warranty laws. 15 Opp. at 2. Plaintiff states that the Court’s Order granting leave to amend only granted leave to add 16 CarMax as a Defendant, and it did not allow him to add additional factual and legal claims against 17 CarMax. Id. Plaintiff represents that he has agreed to amend the FAC, but he was not able to 18 obtain consent from BMWNA to file a stipulation to allow him to do so before CarMax filed its 19 motion. Id. at 1-3; Declaration of Joshua Ullman, ECF No. 48-1 (“Ullman Decl.”) ¶¶ 2-3, Exs. 120 2. Plaintiff further argues that he can allege a claim against CarMax for violation of Utah 21 warranty law. Opp. at 3-5. 22 The parties thus agree that Plaintiff cannot bring a standalone MMWA claim against 23 CarMax without also bringing a state law warranty claim. See MTD at 3-4; Opp. at 1-3. 24 CarMax’s motion to dismiss is therefore GRANTED. See Daugherty v. Am. Honda Motor Co., 25 Inc., 144 Cal. App. 4th 824, 832-33 (2006) (“Magnuson–Moss ‘calls for the application of state 26 written and implied warranty law, not the creation of additional federal law,’ except in specific 27 instances in which it expressly prescribes a regulating rule.” (quoting Walsh v. Ford Motor Co., 1 The issue over which the parties disagree is whether the Court should grant leave to 2 amend. CarMax argues that the Court should not grant leave to amend because “even if Plaintiff 3 were to allege that CarMax provided him with a warranty at sale, he failed to meet the notice 4 requirements to bring a claim for breach of warranty under Utah law.” MTD at 5. “Under Utah 5 law, a buyer asserting a claim for breach of warranty ‘must within a reasonable time after he 6 discovers or should have discovered any breach notify the seller of the breach or be barred from 7 any remedy.’” Martinez v. Nissan N. Am., Inc., No. 1:21-cv-157-DBB, 2022 WL 1063735 , at *2 8 (D. Utah Apr. 8, 2022) (quoting Utah Code Ann. § 70A-2-607(3)(a)). Plaintiff counters that his 9 claim is timely, as it is brought within the statute of limitations. Opp. at 4. He further argues that 10 Martinez, the case cited by CarMax, is not binding on this Court and “offers no support that 11 overcomes Utah’s express law that confirm Plaintiff’s claims are timely.” Id. at 4-5. In Reply, 12 CarMax notes that Martinez cites from the Utah Uniform Commercial Code, which states: 13 “Where a tender has been accepted [] the buyer must within a reasonable time after he discovers or 14 should have discovered any breach notify the seller of breach or be barred from any remedy.” 15 Utah Code Ann. § 70A-2-607(3)(a); see Reply at 3. And, CarMax argues, the Utah statute is 16 binding on this Court. Id. CarMax asserts that Plaintiff failed to comply with this notice 17 requirement, and he is therefore barred from asserting a breach of warranty claim against CarMax. 18 Reply at 3-4. Thus, CarMax argues, the Court should not grant leave to amend. Id. 19 As stated above, a district court ordinarily must grant leave to amend unless one or more of 20 the Foman factors is present: (1) undue delay, (2) bad faith or dilatory motive, (3) repeated failure 21 to cure deficiencies by amendment, (4) undue prejudice to the opposing party, or (5) futility of 22 amendment. Eminence Capital, 316 F.3d at 1052. In evaluating the Foman factors, the Court 23 finds it is a close call as to futility. The Court must apply Utah law, which again provides: 24 “Where a tender has been accepted [] the buyer must within a reasonable time after he discovers or 25 should have discovered any breach notify the seller of breach or be barred from any remedy.” 26 Utah Code Ann. § 70A-2-607(3)(a). Plaintiff has not argued that he has provided any such notice 27 to CarMax. That being said, the Court recognizes that Plaintiff has not yet had the opportunity to 1 allegations, the Court cannot say for sure that Plaintiff cannot state a claim, and it therefore 2 || declines to find that amendment is futile. The Court will therefore GRANT LEAVE TO AMEND. 3 || That being said, in deciding whether to amend, Plaintiff should carefully consider whether he can 4 || bring a breach of warranty claim against CarMax in light of the statutory notice requirement. 5 || IV. ORDER 6 Based on the above reasoning, the Court GRANTS CarMax’s motion to dismiss. This 7 dismissal is WITH LEAVE TO AMEND. Plaintiff SHALL file his Second Amended Complaint 8 within 30 days. [9] 10 || Dated: August 9, 2023 ETH LABSON FREEMAN %L United States District Judge © [16] = 17 Z 18