Fleck v. General Motors LLC, 14-CV-8176
Fleck v. General Motors LLC, 14-CV-8176
Opinion of the Court
The next bellwether trial in this multi-district litigation (“MDL”), familiarity with which is presumed, involves claims brought by Plaintiff Stephanie Cockram against General Motors LLC (also known as “New GM”) stemming from a June 28, 2011 car accident. At the time of the accident, Cockram was driving her 2006 Chevrolet Cobalt, which had been manufactured by General Motors Corporation (also known as “Old GM”)—which filed for bankruptcy in 2009, a bankruptcy from which New GM emerged. New GM now moves, pursuant to Rule 56 of the Federal Rules of Civil Procedure, for partial summary judgment, contending that Cock-ram’s claims based on New GM’s conduct alone (the only claims that could expose New GM to punitive damages in light of earlier rulings by the United States Bankruptcy Court for the Southern District of New York) fail as a matter of law. (Docket No. 2938). For the reasons that follow, New GM’s motion is GRANTED in part and DENIED in part.
FACTUAL BACKGROUND
On December 31, 2005, Cockram, a resident of Virginia, purchased a new 2006 Chevrolet Cobalt. (Def. New GM’s Statement Undisputed Material Facts Pursuant to Local Civil Rule 56.1 (Docket No. 2939) ¶ 2). Roughly five-and-a-half years later, in the early evening of June 28, 2011, Cock-ram crashed her Cobalt into a drainage ditch culvert. (Id. ¶¶ 4-6; PL’s Local Rule 56.1 Resp. in Opp’n New GM’s Statement Undisputed Material Facts & Statement of Additional Facts (Docket No. 3016) (“PL’s SOF”) ¶ 44). Despite the frontal impact, the frontal airbags did not deploy, and Cockram was severely injured in the crash. (Id. ¶¶ 45, 49). In this action, Cock-ram brings various claims under Virginia law. (See Third Am. Compl. (14-CV-8176, Docket No. 393) (“TAC”) ¶¶ 421-432). More specifically, she seeks compensatory and punitive damages for her injuries resulting from the airbag nondeployment, claiming that it was caused by a defect in the ignition switch that allowed the switch
BANKRUPTCY RULINGS
Before turning to New GM’s arguments for summary judgment, the Court briefly summarizes certain rulings by the Honorable Robert E. Gerber, former United States Bankruptcy Judge for the Southern District of New York, that bear heavily on this case. After New GM’s disclosure of the ignition switch defect in early 2014, many plaintiffs filed claims against New GM—some alleging economic losses and some, including Cockram, alleging personal injuries and wrongful deaths. In April and August 2014, New GM filed motions before the Bankruptcy Court alleging that many of those claims were barred by the 2009 Sale Order through which New GM assumed many of Old GM’s assets and some of its liabilities. In April 2015, Judge Gerber ruled that many of those claims brought against New GM were in fact barred by the 2009 Sale Order. See In re Motors Liquidation Co., 529 B.R. 510 (Bankr.S.D.N.Y. 2015). In particular, he determined that New GM could be held liable for certain assumed liabilities of Old GM (namely, products liability claims that were included in the Sale Agreement) and for “claims based solely on any wrongful conduct on its own part.” Id. at 583. A later Order implementing that opinion defined claims “based solely on New GM’s own, independent, post-Closing acts or conduct” as “Independent Claims.” See In re Motors Liquidation Co., 09-50026 (REG), Docket No. 13177 ¶4 (Bankr. S.D.N.Y. June 1, 2015).
The definition of “Independent Claims” reemerged as significant in November 2015, when Judge Gerber issued an opinion addressing the issues of punitive damages and “imputation.” See In re Motors Liquidation Co., 541 B.R. 104 (Bankr. S.D.N.Y. 2015) (“November Decision”). In that opinion, Judge Gerber made two rulings that bear significantly on this bellwether trial. First, he determined that, as a matter of bankruptcy law, knowledge of Old GM personnel or knowledge of information contained in Old GM files could be imputed to New GM only to the extent that it could be shown, as a matter of non-bankruptcy law, that New GM actually had that knowledge (for example, through an Old GM employee who later became an employee of New GM). See id. at 108. Second, Judge Gerber ruled that claims for punitive damages could only be “based on New GM knowledge and conduct alone” because New GM did not assume liability for punitive damages under the Sale Agreement. See id. In light of Judge Gerber’s decisions, it is undisputed that there are three types of damages potentially available to Cockram in this action: (1) compensatory damages for products liability claims based on Old GM conduct, liability for which was assumed by New GM; (2) compensatory damages for “Independent Claims”—that is, claims based solely on New GM conduct; and (3) punitive damages for “Independent Claims.” Cockram pursues all three. {See TAC ¶¶421-432).
Summary judgment is appropriate where the admissible evidence and pleadings demonstrate “no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a); see also Johnson v. Killian, 680 F.3d 234, 236 (2d Cir. 2012) (per curiam). A dispute over an issue of material fact qualifies as genuine if the “evidence is such that a reasonable jury could return a judgment for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); accord Roe v. City of Waterbury, 542 F.3d 31, 35 (2d Cir. 2008). The moving party bears the initial burden'of demonstrating the absence of a genuine issue of material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). “In moving for summary judgment against a party who will bear the ultimate burden of proof at trial, the movant’s burden will be satisfied if he can point to an absence of evidence to support an essential element of the non-moving party’s claim.” Goenaga v. March of Dimes Birth Defects Found., 51 F.3d 14, 18 (2d Cir. 1995) (citing Celotex, 477 U.S. at 322-23, 106 S.Ct. 2548); accord PepsiCo, Inc. v. Coca-Cola Co., 315 F.3d 101, 105 (2d Cir. 2002).
In ruling on a motion for summary judgment, all evidence must be viewed “in the light most favorable to the non-moving party,” Overton v. N.Y. State Div. of Military & Naval Affairs, 373 F.3d 83, 89 (2d Cir. 2004), and the court must “resolve all ambiguities and draw all permissible factual inferences in favor of the party against whom summary judgment is sought,” Sec. Ins. Co. of Hartford v. Old Dominion Freight Line, Inc., 391 F.3d 77, 83 (2d Cir. 2004). To defeat a motion for summary judgment, the non-moving party must advance more than a “scintilla of evidence,” Anderson, 477 U.S. at 252, 106 S.Ct. 2505, and demonstrate more than “some metaphysical doubt as to the material facts,” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). The non-moving party “cannot defeat the motion by relying on the allegations in [its] pleading or on conclusory statements, or on mere assertions that affidavits supporting the motion are not credible.” Gottlieb v. Cnty. of Orange, 84 F.3d 511, 518 (2d Cir. 1996) (citation omitted).
DISCUSSION
New GM moves for summary judgment only as to some of Cockram’s claims. Specifically, it does not seek dismissal of her claims based on Old GM’s conduct and pursued against New GM on a theory of assumed products liability.
A. Negligence
New GM moves first to dismiss Cock-ram’s claims for negligent failure to warn (or to recall) and negligence per se. (Mem. Supp. Gen. Motors LLC’s Mot. Partial Summ. J. (Docket No. 2941) (“New GM’s
For largely the same reasons, the Court reaches the identical conclusion here. Like the Oklahoma Supreme Court, the Virginia Supreme Court has not ruled on whether or when a successor corporation can have a post-sale duty to warn. Notably, the Virginia Court was presented with that precise question in Harris v. T.I., Inc., 243 Va. 63, 413 S.E.2d 605 (1992), but it merely “assum[ed], without deciding, that in a proper case” it “would recognize a successor corporation’s post-sale duty to warn.” Id. at 72, 413 S.E.2d 605. Whether Harris should be read as a thumb on the scales in favor of recognizing a successor’s post-sale duty to warn (as Cockram contends (Pl.’s Mem. Law Opp’n (Docket No. 3015) (“Pl.’s Opp’n”) 11)) or not (as New GM asserts (New GM’s Mem. 8)), the clear trend since the Virginia Supreme Court’s decision has been toward recognizing such a duty, with Section 13 of the Restatement (Third) in 1998 and decisions by many other state and federal courts thereafter. See, e.g., Herrod v. Metal Powder Prods., 413 Fed. Appx. 7, 13 (10th Cir. 2010) (per curiam) (applying Utah law); Patton v. TIC United Corp., 77 F.3d 1235, 1240-41 (10th Cir. 1996) (applying Kansas law); Florom v. Elliott Mfg., 867 F.2d 570, 577 (10th Cir. 1989) (applying Colorado law); Tabor v. Metal Ware Corp., 168 P.3d 814, 818 (Utah 2007); see also Restatement (Third) of Torts: Products Liability § 13, Reporters’
Likewise, with respect to whether New GM had a duty to warn Cockram given the facts of this case, the Court holds that the Virginia Supreme Court would find such a duty existed here—again, for largely the same reasons as in Scheuer. See Scheuer Summ. J. Op., 154 F.Supp.3d at 40-42. To be sure, the question is a closer one here in light of Harris. That case involved claims on behalf of a woman who had been killed by a reversing trash truck, manufactured and sold by Truxmore Industries and owned and operated by David Cooper. She sued Truxmore, which had acquired substantially all of the assets of Truxmore Industries after the sale to Cooper, alleging that the truck was defective because it lacked a backup warning signal. Truxmore had assumed “all liabilities and obligations of [its predecessor] arising ... under all ... contracts, leases, commitments and agreements _” Id. at 66, 413 S.E.2d 605. Further, following the acquisition, Truxmore had “made a continued, active effort to maintain the same customers[,] and acquired its predecessor’s goodwill.” Id. More specifically, Truxmore had several interactions with Cooper, the owner and operator of the trash truck: “a representative of Truxmore visited Cooper, informed him of the purchase, and advised him that Truxmore, in continuing to operate the business, would be available to satisfy Cooper’s needs,” id. at 67, 413 S.E.2d 605; Truxmore “was in contact with Cooper prior to the accident, endeavoring to sell him a new truck,” id. at 71, 413 S.E.2d 605; Cooper bought replacement parts for the truck from Truxmore (the only source for such parts), id. at 71, 413 S.E.2d 605; and “[a]t all times, Truxmore knew where Cooper resided and where the truck was located,” id. at 67, 413 S.E.2d 605.
Despite those connections between Truxmore and Cooper, the Virginia Supreme Court held that the former did not have “an independent duty to warn [the latter] about the alleged defects in the truck.” Id. at 71, 413 S.E.2d 605. In jurisdictions that have recognized a post-sale duty to warn on the part of a successor
New GM argues—admittedly not without force—that if the facts in Harris were insufficient to establish a duty to warn, the facts in this case are insufficient as well. (New GM’s Mem. 11), Nevertheless, the Court disagrees. Significantly, although the direct interactions between New GM and Cockram were, fewer in number than the direct interactions between Truxmore and Cooper, the relationship between the parties here satisfies all but the third factor (“service of the product by the successor”) cited by the Harris Court. And on top of that, this case lias several critical features that were lacking in Harris. As recounted in Scheuer, New GM’s relationship with Cockram arose from the obligations New GM undertook in the 2009 Sale Agreement, pursuant to which New GM assumed Old GM’s obligations to its customers arising from any express warranties and Old GM’s obligations under the Safety Act. See Scheuer Summ. J. Op., 154 F.Supp.3d at 40-42. (See Pl.’s Ex. 3, § 2.3(a)(vii)(A); id. § 6.15(a)-(b)).
Those features do not appear to have been present in Harris.
Accordingly, New GM’s motion for summary judgment with respect to Cock-ram’s negligent failure-to-warn claim is denied.
B. Fraud
Next, New GM moves for summary judgment with respect to Cockram’s fraud claims. Significantly, she pursues claims under Virginia law for both actual and constructive fraud. A party pursuing a cause of action for actual fraud in Virginia “must prove by clear and convincing evidence all of the elements of fraud: (1) a false representation, (2) of material fact, (3) made intentionally and knowingly, (4) with intent to mislead, (5) reliance by the party misled, and (6) damages resulting from that reliance.” Bank of Montreal v. Signet Bank, 193 F.3d 818, 826 (4th Cir. 1999). Constructive fraud differs primarily “in that the misrepresentation of material fact is not made with the intent to mislead, but is made innocently or negligently; the plaintiff must still prove the other elements of actual fraud—reliance and detriment—by clear and convincing evidence.” Hitachi Credit Am. Corp. v. Signet Bank, 166 F.3d 614, 628 (4th Cir. 1999) (emphasis added); accord Evaluation Research Corp. v. Alequin, 247 Va. 143, 148, 439 S.E.2d 387 (1994). In this case, Cockram expressly disavows any allegation that New GM engaged in “affirmative misrepresentations.” (See TAC ¶ 396 (“Plaintiff does not base [her fraud] claim on affirmative misrepresentations Old GM or New GM made to Plaintiff.”)). Instead, she bases her claims on a theory of fraud by omission. (See PL’s Opp’n 20-24). New GM contends that for such claims to succeed, Cockram must be able to show that New GM had a duty to disclose and that she cannot do so in this ease. (New GM’s Mem. 13-17; New GM’s Reply 13-14).
The Court agrees with respect to Cock-ram’s constructive-fraud claim. First, there is no question that, under Virginia law, a constructive fraud-by-omission claim requires a duty to disclose. See, e.g., Noell Crane Sys. GmbH v. Noell Crane and Serv., Inc., 677 F.Supp.2d 852, 871 (E.D.Va. 2009); see also LightSquared Inc. v. Deere & Co., No. 13-CV-5543 RMB, 2015 WL 585655, at *9 (S.D.N.Y. Feb. 5, 2015) (applying Virginia law), aff'd sub nom. Harbinger Capital Partners LLC v. Deere & Co., 632 Fed.Appx. 653 (2d Cir. 2015). Second, as New GM points out, most—if not all—Virginia eases recognizing claims of constructive fraud have involved “a fiduciary or confidential relationship between plaintiff and New GM” or “a business transaction between them.” (New GM’s Mem. 14-16 & n.24 (citing cases); New GM’s Reply 13-14 (same)). At a minimum, no Virginia court appears to have recognized a duty to disclose in circumstances remotely close to those here, involving a personal injury product liability claim. That may be because such claims are usually packaged as failure-to-warn claims. See, e.g., Baker, 272 Va. 677, 636 S.E.2d 360; Harris, 243 Va. 63, 413 S.E.2d 605. But that observation merely underscores the point: Where, as here, the question is whether a manufacturer (or its successor) owed a duty “to disclose”—that is,
That conclusion finds support in decisions from other jurisdictions dismissing nondisclosure claims as duplicative of failure-to-wam claims. See, e.g., Waterhouse v. R.J. Reynolds Tobacco Co., 270 F.Supp.2d 678, 684-85 (D.Md. 2003) (holding that the plaintiffs claim for fraudulent concealment was “in large part nothing more than a failure-to-warn claim in different dress” and dismissing it as duplica-tive); Hammer v. BMY Combat Sys., 869 F.Supp. 888, 893 (D.Kan. 1994) (dismissing the plaintiffs fraudulent concealment theory, the basis of which is “properly stated as a claim for a breach of defendants’ duty to warn”); Spangler v. Sears, Roebuck & Co., 759 F.Supp. 1337, 1338 (S.D.Ind. 1991) (concluding that fraudulent concealment and failure-to-wam claims were duplicative where the plaintiff alleged that a drug manufacturer had fraudulently misrepresented that a smoking cessation drug was safe and fraudulently concealed knowledge of the drug’s dangers); Kline v. Pfizer, Inc., No. 08-3238, 2009 WL 32477, at *4 (E.D.Pa. Jan. 6, 2009) (noting that the “very crux of [fraudulent concealment] claims rests on a failure to warn theory of liability”). Where courts have allowed the two claims to proceed in tandem, it has generally been because the fraud claim requires proof of intent to deceive or because the product liability claim sounds in strict liability rather than negligence. See, e.g., In re Neurontin Mktg., Sales Practices & Products Liab. Litig,, 618 F.Supp.2d 96, 113 (D.Mass. 2009) (“In contrast to failure to warn claims, ... claims based on a fraudulent concealment or misrepresentation require scienter.”). Yet in Virginia, constructive fraud has no mens rea requirement and strict products liability is not recognized. See Hitachi, 166 F.3d at 628; Harris, 243 Va. at 71, 413 S.E.2d 605 (rejecting rules that “are based upon the doctrine of strict liability—a doctrine that is not recognized in Virginia”). Accordingly, the Court concludes that Virginia would not recognize a constructive-fraud-by-omission claim that either duplicates or conflicts with its failure-to-warn jurisprudence, and New GM’s motion is granted with respect to Plaintiffs constructive fraud claim.
By contrast, New GM’s arguments concerning Cockram’s actual fraud claim are unpersuasive. As an initial matter, the Court agrees with Plaintiff that, under Virginia law (as under the common law generally), an actual fraud claim does not require a duty to disclose. Cf. Scheuer Summ. J. Op., 154 F.Supp.3d at 40-42, n. 5 (noting that “it is unclear whether Oklahoma recognizes a claim for actual fraud based on the concealment of a material fact, as opposed to a constructive fraud claim, which requires a particular duty to disclose”). Admittedly, there is some dictum in Bank of Montreal that supports New GM’s position (or, perhaps, assumption) that a duty to disclose is generally required for any fraud-by-omission claim, see 193 F.3d at 827 (“Silence does not constitute concealment in the absence of a duty to disclose.”), but it appears to be based on a misreading of the Virginia Supreme Court’s decision in Norris v. Mitchell, 255 Va. 235, 495 S.E.2d 809 (1998). The Norris Court distinguished concealment, which “always involves deliberate nondisclosure designed to prevent another from
Perhaps recognizing the foregoing, New GM changes tack in its reply brief and appears to argue more broadly that an actual fraud claim—not just the purportedly requisite duty to disclose—may arise only from “a (i) confidential or fiduciary relationship or (ii) transaction between the parties.” (New GM’s Reply 11-13). That argument fails. For one thing, it is arguably procedurally improper. See, e.g., In re: Gen. Motors LLC Ignition Switch Litig., No. 14-MD-2543 (JMF), 2015 WL 7769524 (S.D.N.Y. Nov. 30, 2015) (enforcing against New GM the rule that arguments raised for the first time in a reply brief are waived); In re: Gen. Motors LLC, No. 14-MC-2543 (JMF), 2015 WL 7574460, at *9 (S.D.N.Y. Nov. 25, 2015) (same against Plaintiffs). For another, New GM’s argument cannot be squared with cases holding that privity between the parties is not required for a fraud claim to be actionable in Virginia. See Alexander v. Se. Wholesale Corp., 978 F.Supp.2d 615, 623 (E.D.Va. 2013) (“In Virginia, a claim of fraud does not require direct contact or privity between the defendant and the plaintiff.”); Branin v. TMC Enters., LLC, 832 F.Supp.2d 646, 653 (W.D.Va. 2011) (upholding a fraud claim asserted against a remote seller of vehicle that had no direct relationship with plaintiff); Harris v. Universal Ford, Inc., No. 3:00-cv-693, 2001 U.S. Dist. LEXIS 8913, at *12 (E.D.Va. Feb. 5, 2001) (ruling that Virginia does not “insulate all parties who are one-step-removed from a transaction or activity, but who have to know the possible consequences of their fraudulent actions”); Mortarino v. Consultant Eng’g Servs., Inc., 251 Va. 289, 294-95, 467 S.E.2d 778 (1996) (permitting the amendment of a pleading to allege fraud against a defendant who made no direct representation to plaintiff and with whom the plaintiff had no direct relationship).
In short, Cockram’s constructive fraud claim is dismissed, but her actual fraud claim survives. Although the different outcomes might seem counterintuitive at first
C. The VCPA
Finally, New GM moves for summary judgment on Cockram’s claim under the VCPA. (New GM’s Mem. 17). The VCPA prohibits certain “fraudulent acts or practices committed by a supplier in connection with a consumer transaction,” Va. Code Ann. § 59.1-200—including, most broadly, “[u]sing any ... deception, fraud, false pretense, false promise, or misrepresentation in connection with a consumer transaction,” id. § 59.1-200 (A)(14). Thus, by its terms, the VCPA is limited to acts committed “in connection with a consumer transaction” and by “a supplier,” which it defines as “a seller, lessor or licensor who advertises, solicits or engages in consumer transactions, or a manufacturer, distributor or licensor who advertises and sells, leases or licenses goods or services to be resold, leased or sublicensed by other persons in consumer transactions.” Va. Code
CONCLUSION
For the reasons stated above, New GM’s motion for summary judgment is GRANTED in part and DENIED in part. Specifically, although Cockram’s failure-to-recall claim and constructive fraud claim are dismissed, her other Independent Claims survive. As a result, Cockram may seek punitive damages in this case. The Clerk of Court is directed to terminate 14-MD-2543, Docket No. 2938; and 14-CV-8176, Docket No. 412.
SO ORDERED.
. On July 13, 2016, the Second Circuit issued an opinion resolving various appeals from orders entered by Judge Gerber. See In re Motors Liquidation Co., 829 F.3d 135, 2016 WL 3766237 (2d Cir. 2016). On July 18, 2016, the Court held a telephone conference with counsel to discuss the implications, if any, of that decision for Cockram generally and for New GM’s motion for summary judgment in particular. The parties were in agreement that the decision had no effect on the motion or the availability of punitive damages in Cook-ram.
. As New GM notes without any opposition from Cockram (New GM’s Mem. 17; New GM’s Reply 15), Cockram brings her implied-warranty claim only on an assumed liability theory, not as an Independent Claim. (See TAC ¶¶ 377-385).
. To be sure, there is some contrary authority. See, e.g., Ambrose v. Southworth Products Corp., 953 F.Supp. 728 (W.D.Va. 1997); Estate of Kimmel v. Clark Equip. Co., 773 F.Supp. 828, 831 (W.D.Va. 1991); Paschall v. Abex Corp., 2011 WL 13073287 (Va.Cir.Ct. July 26, 2011); Hart v. Savage, No. L-04-1663, 2006 WL 3021110, at *3 (Va.Cir.Ct. Oct. 19, 2006). In the Court’s view, however, those decisions are unpersuasive. Among other things, the Ambrose and Kimmel Courts placed undue weight on the fact that the Virginia Supreme Court had not adopted a post-sale duty to warn, ignoring that a federal court’s duty where a state's highest court has not ruled on an issue is to predict how that court would rule on it. See Travelers Ins. Co. v. 633 Third Assocs., 14 F.3d 114, 119 (2d Cir. 1994). And the Hart and Paschall Courts provided little or no reasoning for their holdings. In the absence of either binding or persuasive authority to the contrary, the Court elects to follow the influential Restatement (Third) of Torts and the Fourth Circuit. See Jill Wieber Lens, Warning: A Post-Sale Duty to Warn Targets Small Manufacturers, 2014 Utah L. Rev. 1013, 1020 (2014) ("[OJver half the states have adopted a post-sale duty to warn and more are likely to follow given the Third Restatement also includes a post-sale duty to warn.”); Kenneth Ross & Professor J. David Prince, Post-Sale Duties: The Most Expansive Theory in Products Liability, 74 Brook. L. Rev. 963, 984-985 (2009) (discussing the influence of the Restatement (Third) with respect to recognition of a post-sale duty to warn); Tom Stilwell, Warning: You May Possess Continuing Duties After the Sale of Your Product! (An Evaluation of the Restatement (Third) of Torts: Products Liability’s Treatment of Post-Sale Duties), 26 Rev. Litig. 1035, 1064-65 (2007) ("In the ten years since the publishing of Third Restatement, post-sale duties climbed from relative obscurity to common assertions
, New GM contends that the obligations it undertook in the Sale Order are irrelevant to the question of whether it owed Old GM’s customers a duty under Virginia (or, really, any State's) law. (New GM's Mem 3-7; New GM’s Reply 2-3). More specifically, New GM repeatedly notes—as it did in Scheuer—that the Sale Agreement did not create third-party-beneficiary rights. (New GM’s Mem 3-6; New GM’s Reply 2-3). True enough, but as this Court has previously explained, New GM is being sued in tort for breach of a duty under state tort law, not in contract for breach of a duty under the Sale Agreement. See Scheuer Summ. J. Op., 154 F.Supp.3d at 43-45 n. 8 (“As discussed, New GM’s duty is grounded in the common law of torts, not the 2009 Sale Order, and thus does not rest on any third-party beneficiary status under the Sale Order (which, New GM rightly points out, would be inconsistent with Judge Gerber’s rulings).’’); see also id. at 37-39 n,4 (agreeing with New GM "that a post-sale duty to warn cannot be imposed solely on the basis of the 2009 Sale Agreement” under some kind of successor-in-bankruptcy theory). New GM also argues that the Sale Agreement is irrelevant because it does not constitute New GM's "own, independent, post-Closing acts or conduct.” (New GM's Mem. 7). If New GM had a duty to warn under applicable state law, however, its "independent conduct” was in allegedly failing to fulfill that duty. The "post-Closing acts or conduct” limitation applies to New GM’s acts or omissions, not to whether a duty to warn existed.
. The task of interpreting Harris is complicated by the fact that the Court engaged in more assertion than it did analysis. After noting the factors that courts had used to determine if there was a duty to warn, the Court did little more than assert that the ongoing commercial relationship between Truxmore and Cooper (which involved multiple distinct interactions) was "a” (note the singular) "mere casual contact.” Id. at 72, 413 S.E.2d 605. This lack of explicit reasoning, as well as the peculiar factual posture of the case (among other things, it is unclear whether the truck involved was defective at the time of sale and the plaintiff was not Truxmore's customer but rather a third party who had already settled with the driver of the truck) and more recent developments in the law, are reasons to be wary of putting too much weight here on the result reached in that case.
. New GM's remaining arguments are unpersuasive and warrant little discussion. For instance, New GM states (without explanation or citation) that "warranties are not service contracts.” (New GM's Reply 6). That may be true as a technical matter, see, e.g., Federal Trade Commission, Auto Service Contracts and Warranties ("A service contract is a promise to perform (or pay for) certain repairs or services. Sometimes called an 'extended warranty,’ a service contract is not a warranty as defined by federal law. A service contract may be arranged at any time and always costs extra; a warranty comes with a new car and is included in the purchase price.”), available at https://www.consumer.ftc.gov/articles/ 0054-auto-service-contracts-and-warranties, but it is hard to see how it is relevant. But see Tracey by Tracey v. Winchester Repeating Arms Co. 745 F.Supp. 1099, 1112 (E.D.Pa. 1990) (suggesting, without explanation, that there is a relevant distinction between warranties and service contracts for purposes of a duty to warn), aff'd, 928 F.2d 397 (3d Cir. 1991). And Baker does not call for a different result, as it dealt with whether a repair service, not a successor, had a duty to warn, and it neither cited nor discussed Harris. See 272 Va. at 685-86, 636 S.E.2d 360.
. Unlike Scheuer, Cockram does not pursue a claim for a negligently administered recall (since her accident predated New GM’s recalls). See Scheuer Summ. J. Op., 154 F.Supp.3d at 43-45 (concluding that “[i]n any event, New GM also assumed a duty when it instituted the recall"); Restatement (Third) of Torts § 11(a)(2) (providing liability for a defendant if it “fails to act as a reasonable person in recalling the product").
. McCabe v. Daimler AG, 160 F.Supp.3d 1337 (N.D.Ga. 2015), upon which New GM relies heavily (New GM’s Mem. 15), is distinguishable for similar reasons. Specifically, whether because the plaintiffs in that case did not allege deliberate concealment or because the Court (perhaps understandably) misread applicable Virginia law, the McCabe Court did not address deliberate concealment—specifically, the fact that it does not require a duty to disclose—when it stated that "a fraud by omission claim carries with it a concomitant showing that the defendant owed the plaintiff a duty to disclose the information.” Id. at 1358-59.
. In a footnote in its reply memorandum of law, New GM asserts that it argued in its initial memorandum that the VCPA claim should be dismissed because "there was no transaction.” (New GM’s Reply 15 n.10). That assertion is disingenuous at best. New GM plucks language from the introduction of its initial memorandum out of context, and ignores the section of its initial memorandum actually devoted to Cockram’s VCPA claim. That section argues only that the claim should be dismissed "for the same reasons as her fraud claim” and does not rely on, let alone quote, the language of the statute. (See New GM’s Mem. 17).
Reference
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- IN RE: GENERAL MOTORS LLC IGNITION SWITCH LITIGATION. This Document Relates To: Fleck v. General Motors LLC, 14-CV-8176
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