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Nicholson v. Fitzgerald Auto Mall

United States District Court, D. Maryland

May 20, 2014

PAUL NICHOLSON, Plaintiff,
v.
FITZGERALD AUTO MALL, et al., Defendants.

MEMORANDUM OPINION

RICHARD D. BENNETT, District Judge.

The Plaintiff Paul Nicholson brought various statutory and common law claims against Defendants FOC Inc. (trading as Fitzgerald Auto Mall and Fitzgerald Volkswagen), and Volkswagen Group of America, Inc., in connection with the Defendants' denial of a warranty claim for a defect to his automobile. The Plaintiff asserts breach of warranty claims pursuant to the Magnusson-Moss Warranty Act, 18 U.S.C. § 2301, et seq., the Maryland Lemon Law, Md. Code Ann., Com. Law § 14-501, et seq., and the Uniform Commercial Code, as adopted by Maryland in Md. Code Ann., Com. Law §§ 2-313 and 2-314, in addition to Maryland common law claims for breach of contract, and fraud and misrepresentation. Now pending are the Defendants' Motions to Dismiss the Amended Complaint (ECF Nos. 30 & 31) and the Defendants' Motions to Strike the Second Amended Complaint (ECF Nos. 34 & 35). The parties' submissions have been reviewed and no hearing is deemed necessary. See Loc. R. 105.6 (D. Md. 2011). For the reasons that follow, the Defendants' Motions to Strike the Second Amended Complaint (ECF Nos. 34 & 35) are DENIED, Defendants Fitzgerald Auto Mall and Fitzgerald Volkswagen's Motion to Dismiss (ECF No. 31) is GRANTED, and Defendant Volkswagen Group of America, Inc.'s Motion to Dismiss (ECF No. 30) is GRANTED IN PART and DENIED IN PART.[1]

BACKGROUND

For purposes of a motion to dismiss, this Court accepts as true the well-pled, non-conclusory factual allegations in a plaintiff's complaint. See Aziz v. Alcolac, Inc., 658 F.3d 388, 390 (4th Cir. 2011). The Plaintiff purchased a new 2012 Volkswagen Passat on or about December 27, 2011. Am. Compl. ¶¶ 1, 15, ECF No. 28. However, there is no allegation with respect to the car dealership from which the Plaintiff purchased the vehicle, and it is undisputed that Defendants Fitzgerald Auto Mall and Fitzgerald Volkswagen (collectively, "Fitzgerald") did not sell the vehicle in question to Nicholson. Def. Fitzgerald's Mem. in Support of Mot. to Dismiss 2, ECF No. 31-1. At the time of purchase, Defendant Volkswagen Group of America ("Volkswagen") provided Nicholson with a New Vehicle Limited Warranty, covering the vehicle for any manufacturer's defect in material or workmanship for a period of 3 years or 36, 000 miles, and a Powertrain Limited Warranty to correct any manufacturer's defects associated with the engine, transmission, or drivetrain for a period of five years or 60, 000 miles. Am. Compl. ¶¶ 17-18. Both Warranties state that they will be honored by "any authorized Volkswagen dealer in the United States, including its territory." Id. ¶ 23. The Plaintiff drove the Passat, and periodically had it serviced by mechanic Troy Gross, at his shop Troy's Auto. Id. ¶ 26. At his last recorded oil change on June 5, 2013, the vehicle had been driven 27, 334 miles. Id.

On July 25, 2013, within 19 months of purchase, the Plaintiff was driving the vehicle at approximately 50 miles per hour when he alleges that it suddenly accelerated to 75-80 miles per hour on its own. Am. Compl. ¶ 4. Immediately thereafter, the vehicle shut down, white smoke emerged, and the car would not start again. Id. ¶ 5. Nicholson promptly reported the incident to Defendant Fitzgerald and provided documentation of all three oil changes that had been performed on the Passat by Troy's Auto. Id. ¶¶ 24-27. Fitzgerald provided a loaner car while the Plaintiff's Passat was inspected at Fitzgerald's facility. Id. ¶ 34. Fitzgerald employee Andrew Day stated that there was a hole in the side of the engine, a significant amount of antifreeze was spread throughout the engine compartment, and the turbo cap was blown off.[2] Id. ¶ 7-9.

On July 29, 2013, Day informed the Plaintiff by telephone that the warranty did not cover the damage because the oil filter was too old. Id. ¶¶ 28-29. Day also stated that the receipts from Troy's Auto were "not acceptable." Id. ¶ 29. The Plaintiff requested, and Fitzgerald provided by facsimile, written documentation of the decision. Id. ¶ 30. However, the written verification contradicted Day's previous explanation; the fax stated that "it appears engine was over full with oil." Id. Although Nicholson pointed out the differing statements, the Defendants provided no further explanation at that time. Id. ¶ 31. When Nicholson inquired as to how it was determined that the oil was overfilled when all of the oil had blown out through a hole in the side of the engine, Day responded that it was "speculation." Id. ¶ 32. Day also stated his belief that the Plaintiff's mechanic, Troy Gross, was a "fraud" and that the invoices of his service were "fraudulent" because "Passat" had been misspelled. Id. ¶ 33. On July 31, 2013, Fitzgerald's Director of Service, Don Sanders also expressed his opinion that the receipts seemed "suspicious" and "a fraud due to the misspelling of Passat.'" Id. ¶ 34. Sanders then demanded that Nicholson return the loaner vehicle that Fitzgerald had provided. Id. Sanders stated that the decision had been "made by a higher up." Id. ¶ 35.

Later that same day, the Plaintiff forwarded the same service receipts to Defendant Volkswagen Group of America, Inc. Id. ¶ 36. About one week later, on August 7th, Volkswagen Regional Case Manager "Erin B." sent the Plaintiff a fax informing him of Volkswagen's determination that the "crank case of the engine [was] overfilled with oil, " and "this is not a manufacturer shortcoming." Id. ¶¶ 36-37. Erin B. sent a second fax the same day, which was identical except that it added, "The Baltimore Fixed Operations Manager (FOM), our highest point of contact in the field, also reviewed the diagnosis, and has determined that this is not a manufacturer shortcoming." Id. ¶ 38. Nicholson alleges that the Defendants made certain statements with the purpose of defrauding him by avoiding payment for replacement or repair of the Passat. Am. Compl. ¶ 67.

In the opinion of the Plaintiff's expert, "oil was forced out of the engine causing a rod to blow and pierce the engine block wall, resulting in a catastrophic failure of the engine and vehicle."[3] Am. Compl. ¶ 20. According to the expert, faulty and improperly functioning valve seals caused the engine to fail, and he ruled out other causes such as overfilling the engine oil. Id. ¶¶ 20-21. In addition, the Plaintiff alleges that if the oil had been overfilled at his last oil change in June of 2013, the engine would have blown almost immediately and he could not have continued to drive it for almost two additional months. Am. Comp. ¶ 65.

On August 7, 2013, Defendant Fitzgerald charged the Plaintiff's credit card $350.00 for the loaner car without authorization. Am. Compl. ¶ 39. That day, the Plaintiff had the Passat towed to his residence, where he observed what appeared to be an aluminum seal from the mouth of an oil container sitting on top of the engine. Id. ¶ 40. There was oil on the aluminum seal and the oil filter missing. Id. The vehicle remains at the Plaintiff's house and the Defendants have refused to replace it or pay the cost of a new engine. Id. ¶¶ 24, 40.

The Plaintiff originally filed suit in the Circuit Court of Maryland for Anne Arundel County via a verified Complaint (ECF No. 2). The Defendants removed the case to this Court on the basis of federal question jurisdiction pursuant to 28 U.S.C. §§ 1331 and 1441, in light of the claim made under the Magnusson-Moss Warranty Act, 18 U.S.C. § 2310. The Defendants each moved to dismiss (ECF Nos. 12 & 16). The Plaintiff filed an Amended Complaint (ECF No. 28), asserting six counts against each Defendant, which the Defendants again moved to dismiss (ECF Nos. 30 & 31). In responding to Volkswagen's Motion to Dismiss the Amended Complaint, [4] the Plaintiff stated that due to a mistake in drafting the Amended Complaint, he filed a Second Amended Complaint (ECF Nos. 32 & 33). The Defendants then moved to strike the Second Amended Complaint (ECF Nos. 34 & 35).

DISCUSSION

I. Defendants' Motions to Strike the Second Amended Complaint

At the outset, it is necessary to address the pending Motions to Strike, in order to determine exactly what set of factual allegations are before this Court in deciding the Motions to Dismiss-the facts asserted in the Amended ...


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