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Paws Holdings, LLC v. Daikin Applied Americas Inc.

United States District Court, S.D. Georgia, Augusta Division

January 18, 2018

PAWS HOLDINGS, LLC, on behalf of itself and all others similarly situated, Plaintiff,
v.
DAIKIN APPLIED AMERICAS INC.; DAIKIN NORTH AMERICA, LLC; DAIKIN AC; and DAIKIN APPLIED GEORGIA, Defendants.

          ORDER

          J.RANDAL HALL, CHIEF JUDGE

         On February 22, 2017, this Court granted Defendants' Daikin Applied Americas Inc. ("DAA") and Daikin North Americas, LLC's ("DNA") motion to dismiss and gave Plaintiff Paws Holdings, LLC ("Paws"), leave to amend three of its claims. (Doc. 51.) Plaintiff filed its Second Amended Complaint, which renews all but one of its original claims; adds two new causes of action; and joins two new parties: Defendants Daikin AC ("DAC") and Daikin Applied Georgia ("DAG"). (Doc. 52) Defendants now move to dismiss Plaintiff's amended complaint. (Doc. 55.) Plaintiff filed a brief in opposition to the motion (doc. 58), and Defendants filed a reply in support. Accordingly, the motion has been fully briefed and is ripe for review.

         I. BACKGROUND

         A factual background for this case was set forth in the February 22 Order. Plaintiff, however, has pleaded additional facts in its new complaint. Because it will help clarify the issues brought up by Defendants' motion to dismiss, the Court will restate the pertinent facts in this case.

         Plaintiff alleges Defendants DAC and DNA designed, manufactured, and distributed heating, ventilation, and air conditioning ("HVAC") units, which were then sold by Defendant DAG. (Second Am. Compl., Doc. 52, 11 4-5.) The HVAC units contained condenser and evaporator coils ("Daikin Coils'7) that were designed, manufactured, and distributed by Defendants DAA, DAC, and DNA. (Id. 55 2-4.) Daikin Coils "contain a refrigerant that absorbs heat from surrounding air, cooling the air in the process, and allowing Defendants' HVAC units to provide air conditioning." (Am. Compl., Doc. 5, 1 4.)

         I Plaintiff operates a dermatology clinic in Evans, Georgia. (Second Am. Compl. 5 1.) In March 2010, Plaintiff purchased a Variable Refrigerant Volume HVAC system from DAG.[1] (Id. 55 5-6.) Before Plaintiff made its purchase, someone Plaintiff identifies as "Defendants' agent" allegedly told Plaintiff that the HVAC system would "save the business money because of lower energy consumption." (Id. St 20.) Plaintiff claims this agent knew the HVAC system would be used in Evans, Georgia. Sometime between 2010 and 2015, Plaintiff began to experience problems with its HVAC system. (Id.) On several occasions, the HVAC system stopped working and Plaintiff was unable to provide air conditioning for its office. (Id. St 23.) Consequently, Plaintiff's employees were exposed to summer heat and experienced symptoms including "feelings of exhaustion, profuse sweating, mild dehydration, nausea, headaches, and general discomfort." (Id.) The heat also "forced [Plaintiff] to close its business in the early afternoon for a week at a time ... leading to lost profits" and damage to Plaintiff's reputation. (Id.)

         In August 2014, Plaintiff attempted to repair its HVAC system by purchasing and installing a replacement Daikin Coil. (Id. St 51.) However, that coil began leaking refrigerant and the HVAC system continued to breakdown. (Id. 1 52.) On December 11, 2015, Plaintiff's co-owner, Dr. Sanders R. Callaway, mailed a letter complaining about the HVAC system to Takauki Inoue, Senior Vice President of Sales and Marketing at DNA. (Id. St 24.) Mr. Inoue did not respond until January 4, 2016, after Plaintiff sent a follow up email. (Id.) Mr. Inoue offered to have a technician come to Plaintiff's office and inspect the HVAC system but Mr. Inoue did not explicitly promise to replace or repair any defects. (Id.)

         It was later revealed that Plaintiff's HVAC system was breaking down due to allegedly defective Daikin Coils, which had begun to corrode and leak refrigerant. (Id. SI 6.) Plaintiff claims the Daikin coils failed because Defendants chose an inappropriate alloy. (Id. SI 24.) Plaintiff brought the present action against DAA, DNA, and Daikin Industries, Ltd. on May 10, 2016, and amended its complaint six days thereafter. (Doc. 1.) Plaintiff's first Amended Complaint asserted the following claims: (1) violation of the Magnuson-Moss Warranty Act, 15 U.S.C. § 2301, et seq. ("MMWA"); (2) breach of express warranties; (3) breach of implied warranty of merchantability; (4) breach of implied warranty of fitness for a particular purpose; (5) strict liability - failure to warn; (6) strict liability - manufacturing defect; (7) strict liability - design defect; (8) negligence; and (9) expenses of litigation, including attorney's fees, costs, and expenses, pursuant to O.C.G.A. § 13-6-11. (Doc. 5.) The claims against DAA and DNA were dismissed pursuant to Federal Rule of Civil Procedure 12(b)(6).[2] (Doc. 51.) Specifically, Plaintiff's tort claims were barred pursuant to the economic loss doctrine; Plaintiff's implied warranty claims were barred by the statute of limitations; and Plaintiff's express warranty claims failed to cite the specific language that DAA and DNA breached. (Id.) The Court granted Plaintiff leave to amend "but only against Defendants DAA and DNA and only as to its first [Violation of the Magnuson-Moss Warranty Act], second [Breach of Express Warranties], and ninth [Attorney's Fees and Expenses] counts." (Doc. 51, at 51.)

         Plaintiff's Second Amended Complaint renews all of its claims except the MMWA violation; adds new claims for negligent misrepresentation and violation of the Georgia's Fair Business Practice Act, O.C.G.A. § 10-1-393; and joins Defendants DAC and DAG. (Doc. 55, at 5.)[3]

         II. STANDARD

         Federal Rule of Civil Procedure 8(a) requires that a plaintiff's complaint contain "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). To survive a motion to dismiss for failure to state a claim upon which relief can be granted, a complaint must include enough "factual allegations to raise a right to relief above the speculative level, " and those facts must "state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 545, 570 (2007). Although a complaint attacked by a Rule 12(b)(6) motion need not be buttressed by detailed factual allegations, the plaintiff's pleading "requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Id. at 555. The Rule 8 pleading standard "demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 555).

         A complaint should not be dismissed for failure to state a claim, however, "unless it appears beyond a doubt that the plaintiff can prove no set of circumstances that would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46 (1957); see also Robinson v. United States, 484 F. Appfx 421, 423 (11th Cir. 2012) (quoting Lopez v. First Union Nat!1 Bank of Fla., 129 F.3d 1186, 1189 (11th Cir. 1997)). At this stage, courts must accept as true all facts alleged in the complaint and construe all reasonable inferences in the light most favorable to the plaintiff. Belanger v. Salvation Army, 556 F.3d 1153, 1155 (11th Cir. 2009) (citing Jackson v. BellSouth Telecomm., 372 F.3d 1250, 1262 (11th Cir. 2004)).

         III. DISCUSSION

         A. Plaintiff's ...


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