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Zeno v. Ford Motor Co.

March 28, 2007

DAVID ZENO, INDIVIDUALLY, AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED, PLAINTIFF,
v.
FORD MOTOR COMPANY, INC., DEFENDANT.



The opinion of the court was delivered by: Conti, District Judge.

MEMORANDUM OPINION

In this memorandum opinion, the court considers the motion for summary judgment, (Doc. No. 49), filed by defendant Ford Motor Company, Inc. ("defendant" or "Ford") with respect to the breach of contract claim asserted against defendant by plaintiff David Zeno individually and on behalf of all others similarly situated ("plaintiff" or "Zeno"). The court granted plaintiff's motion for class certification on September 27, 2006, (Doc. No. 82), and certified the above-captioned civil action as a class action pursuant to Federal Rule of Civil Procedure 23(a) and 23(b)(3), finding that all of the Rule 23(a) prerequisites for certification were met, that questions of law or fact common to the members of the class predominate over any questions affecting only individual members, and that a class action is superior to other available methods for the fair and efficient adjudication of the controversy. See FED.R.CIV.P. 23(b)(3).*fn1

After considering the joint statement of material facts and the respective submissions of the parties, the court will deny defendant's motion for summary judgment with respect to the arguments concerning causation and damages. The court will deny without prejudice defendant's motion for summary judgment with respect to the arguments concerning agency and will permit plaintiff to pursue discovery on this issue as requested in the Rule 56(f) affidavit, for the reasons set forth herein.

Factual Background

The factual background of this case was reviewed in connection with the motion for class certification in order to decide whether the Rule 23 requirements were met and whether this case could proceed as a class action. See September 27, 2006 Order Certifying the Class (Doc. No. 82)("class certification opinion") at 2-19. The parties are familiar with the factual background set forth in the class certification opinion. That factual background overlaps with the factual background reviewed for this opinion and is incorporated in this opinion by reference. As necessary, additional facts relevant to the motion for summary judgment will be addressed.*fn2

A brief recitation of the pertinent facts relevant to defendant's summary judgment motion, however, will frame the background requisite for a determination of the issues raised in the motion for summary judgment. As discussed in the class certification opinion, plaintiff purchased a new Ford F-150 truck in May 2001 from Lake View Ford in Conneaut Lake, Pennsylvania. Defendant's Joint Concise Statement of Material Facts ("Def.'s S.F.") ¶ 1; Def.'s S.F. Ex. A (purchase agreement -- document P0020). Plaintiff and an authorized representative of Lake View Ford signed the purchase agreement related to the sale. Def.'s S.F. Ex. A (purchase agreement). The purchase agreement specified, inter alia, plaintiff's name, address and other details, the vehicle identification number (commonly known as the "VIN") of the vehicle he purchased, insurance information, warranty information, and pricing for the vehicle. Id. It reflected that the "cash price of the vehicle and accessories" was $29,125.00, $500.00 less than the Manufacturer's Suggested Retail Price ("MSRP"). Id.; see also Def.'s S.F. Ex. B (window sticker). The purchase agreement did not specify the details of the options included on the vehicle. Id.

At or around the time of the sale, plaintiff received a window sticker corresponding to the vehicle that he purchased. Def.'s S.F. Ex. B (plaintiff's window sticker). The window sticker listed the VIN, the MSRP, the vehicle description, fuel economy information, the standard equipment on the vehicle, and price information for optional equipment included on the vehicle. Id. The window sticker for plaintiff's F-150 truck indicated, among other things, that his vehicle included a Class III Trailer Towing Group option (the "towing option"). Id. The window sticker showed that the total MSRP for plaintiff's F-150 truck was $29,625.00 and that this total MSRP included a MSRP of $350.00 for the towing option. Id. The window sticker did not specify the component parts of the towing option -- in particular, it did not specify the type of radiator installed in the vehicle. Id.

Plaintiff produced evidence which indicates that the towing option and another option package that was a component of the towing option, the Heavy Duty Electrical/Cooling Group option (the "cooling option"), were to include, among other things, an upgraded radiator which was 1.42" thick -- .40" thicker than the regular radiator. See generally (Doc. No. 82)(class certification opinion) at 1-19; Plaintiff's Counter-Statement of Material Facts ("Pl.'s S.F.") ¶¶ 8-26. This evidence includes, among other things, internal Ford pricing documents, materials distributed by Ford to dealerships, and a report describing communications to Ford from its radiator supplier Visteon Climate Control Systems notifying Ford on September 29, 2000, that all Ford F-150 trucks equipped with the towing option and cooling option built since August 2, 1999, mistakenly had been built with the "standard radiator" instead of the "upgraded radiator described in the ordering guide," and analyzing the consequences of this information.*fn3

The gravamen of plaintiff's class action complaint alleging breach of contract is the allegation that plaintiff and other members of the class who purchased or leased a 2000 or 2001 model year F-150 truck manufactured by defendant Ford which was supposed to include the towing option or cooling option were charged for the upgraded radiator when they paid for those options but received vehicles that were built with a standard radiator instead.*fn4

Defendant's motion for summary judgment raises arguments disputing plaintiff's ability to establish damages, to show causation, and to establish the existence of a contract with Ford. With respect to plaintiff's ability to establish the existence of a contract with Ford, defendant argues that there is no genuine dispute as to any material fact concerning plaintiff's inability to show Ford was in contractual privity with plaintiff. Defendant argues that plaintiff cannot show an agency relationship between Ford and Lake View Ford, the dealership where plaintiff purchased his vehicle. Facts relevant to these arguments, including the facts that overlap with the facts set forth in the class certification opinion, will be described in more detail below.

Standard of Review

Federal Rule of Civil Procedure 56(c) provides that summary judgment may be granted if, drawing all inferences in favor of the nonmoving party, "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." FED.R.CIV.P. 56(c). A motion for summary judgment will not be defeated by the mere existence of some disputed facts, but will be defeated when there is a genuine issue of material fact. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986). In determining whether the dispute is genuine, the court's function is not to weigh the evidence or to determine the truth of the matter, but only to determine whether the evidence of record is such that a reasonable jury could return a verdict for the nonmoving party. Id. at 249. The court may consider any material or evidence that would be admissible or usable at trial in deciding the merits of a motion for summary judgment. Horta v. Sullivan, 4 F.3d 2, 8 (1st Cir. 1993) (citing WRIGHT AND MILLER, FEDERAL PRACTICE § 2721); Pollack v. City of Newark, 147 F.Supp. 35, 39 (D.N.J. 1956), aff'd, 248 F.2d 543 (3d Cir. 1957), cert. denied, 355 U.S. 964 (1958) ("[I]n considering a motion for summary judgment, the court is entitled to consider exhibits and other papers that have been identified by affidavit or otherwise made admissible in evidence") (emphasis added)(citations omitted).

The Supreme Court in Celotex Corp. v. Catrett, 477 U.S. 317 (1986), held that "where the nonmoving party will bear the burden of proof at trial on a dispositive issue, a summary judgment motion may properly be made in reliance solely on the 'pleadings, depositions, answers to interrogatories, and admissions on file.'" Id. at 324 (quoting FED.R.CIV.P. 56(c)). "Such a motion, whether or not accompanied by affidavits, will be 'made and supported as provided in this rule,' and Rule 56(e) therefore requires the nonmoving party to go beyond the pleadings and by her own affidavits, or by the 'depositions, answers to interrogatories, and admissions on file,' designate 'specific facts showing that there is a genuine issue for trial.'" Id. (quoting FED.R.CIV.P. 56(c) and (e)). The nonmoving party must prove beyond a "mere scintilla" of evidence that a genuine issue of material fact exists and may not rest on the allegations set forth in its pleadings. See Big Apple BMW v. BMW of N. Am., 974 F.2d 1358, 1363 (3d Cir. 1992).

Discussion

Defendant primarily raises three arguments in favor of its position that the undisputed evidence of record demonstrates that plaintiff cannot establish the required elements of his breach of contract claim and that summary judgment in defendant's favor, therefore, is appropriate in this case. First, defendant argues that plaintiff did not suffer any damages as a result of the alleged breach of contract. Second, defendant argues that plaintiff cannot demonstrate causation under Pennsylvania law. Third, defendant argues that plaintiff cannot demonstrate the existence of a contract with defendant Ford, or that any term of any agreement with Ford promised him a so-called "radiator upgrade."

Plaintiff argues that defendant's motion for summary judgment should be denied because material issues of fact exist regarding plaintiff's breach of contract claim or alternatively that consideration of summary judgment at this time is premature because plaintiff has not yet had the opportunity to complete discovery with respect to issues raised in the motion.

Plaintiff filed a Rule 56(f) affidavit setting forth the additional discovery plaintiff believes that he needs. See (Doc. No. 69)("FRCP 56(f) Affidavit by Joseph N. Kravec, Jr., Esquire in Response to Defendant's Motion for Summary Judgment")(the "Rule 56(f) affidavit"); see also FED.R.CIV.P. 56(f)("Should it appear from the affidavits of a party opposing the motion that the party cannot for reasons stated present by affidavit facts essential to justify the party's opposition, the court may refuse the application for judgment or may order a continuance to permit affidavits to be obtained or depositions to be taken or discovery to be had or may make such other order as is just").

In the Rule 56(f) affidavit, plaintiff set forth his position that based on the current record there is enough evidence to show that genuine issues of material fact exist for a jury to resolve as to each of defendant's summary judgment grounds, and therefore, that the record is sufficient for the court to deny summary judgment in defendant's favor at this time. In the alternative, however, plaintiff requested that if the court were inclined to find that the current record does not present sufficient evidence to justify denial of defendant's motion, plaintiff be allowed to complete specific discovery set forth in the affidavit in order fully to contest the grant of summary judgment in defendant's favor. See (Doc. No. 69)(listing, inter alia, discovery into pricing attributable to the radiator, any reductions in market value once Ford made public that the towing options did not contain the upgraded radiator, and facts related to the contractual relationship between Ford and Lake View Ford concerning privity and agency). Defendant opposed plaintiff's request for additional discovery on various grounds. See (Doc. No. 76).

The court finds that plaintiff has adduced sufficient evidence with respect to defendant's arguments concerning damages and causation to make granting summary judgment on those grounds unwarranted. The court, however, finds that with respect to the fiercely disputed issue of agency, a decision on summary judgment based upon plaintiff's ability to establish agency is premature at this time. The court will address each of defendant's arguments raised in the summary judgment motion, and plaintiff's responses, in turn.*fn5

At the outset, it is helpful to note that plaintiff asserts a garden-variety breach of contract claim, and not an express warranty claim, as some of defendant's arguments seem to presuppose. Plaintiff's claim as asserted -- that Ford charged him for an upgraded radiator that it never provided to him -- must rise or fall as a breach of contract claim.*fn6

I. Whether Plaintiff Suffered Damages from the Alleged Breach of Contract

Defendant points broadly to two kinds of evidence in support of its theory that plaintiff cannot establish damages even if he can show a breach of contract: (1) evidence related to the trade-in value of the F-150;*fn7 and (2) evidence relating to the price and the functionality of the F- 150.*fn8 Defendant argues that these facts show that plaintiff cannot prevail on his breach of contract claim because doing so requires showing damages, and the evidence of record -- and, in particular, plaintiff's own testimony -- shows that he has not suffered any damages.

Plaintiff responds that these arguments are without merit. Plaintiff offers three ways that he could prove damages: (1) proving nominal damages, (2) proving actual damages by calculating actual damages from the base MSRP and actual sale price, or (3) proving actual damages based upon Ford's admission through its customer satisfaction program. First, under Pennsylvania law, plaintiff argues that if he prevails on his breach of contract claim he would be entitled at the very least to nominal damages.*fn9 Plaintiff argues that he has adduced sufficient evidence to survive summary judgment on his breach of contract claim.

Second, plaintiff argues that he has adduced some evidence of actual damages thus far. For example, plaintiff points to Ford documents suggesting that at least $98.00 of the $350.00 MSRP for the towing option was attributable to the "upgraded radiator" or 1.42" thick radiator, and that applying a percentage discount method of calculation, plaintiff can demonstrate what amount plaintiff was charged for the upgraded radiator he did not receive even taking into account the $500.00 discount he received from Lake View Ford on the vehicle. Third, plaintiff argues that he could more fully demonstrate actual damages at trial once discovery is completed. Plaintiff adduced evidence that Ford offered some, but not all, affected F-150 customers compensation (i.e., a $100.00 check, a $500.00 coupon, or installation of an updated radiator) when Ford learned that F-150 vehicles with the towing or cooling options did not contain the 1.42" radiator. Plaintiff argues that this evidence constitutes Ford's own admission that some damages resulted to F-150 owners like plaintiff who did not receive the 1.42" radiator. From this, plaintiff argues that once full discovery is completed, plaintiff will be able to show the actual damages caused by the alleged breach.

It is elementary that a plaintiff asserting a breach of contract claim under Pennsylvania law must "establish [three] elements: '(1) the existence of a contract, including its essential terms, (2) a breach of a duty imposed by the contract[,] and (3) resultant damages.'" Ware v. Rodale Press, Inc., 322 F.3d 218, 225 (3d Cir. 2003) (quoting CoreStates Bank, N.A. v. Cutillo, 723 A.2d 1053, 1058 (Pa.Super.Ct. 1999). "To prove damages, a plaintiff must give a factfinder evidence from which damages may be calculated to a 'reasonable certainty.'" Id. at 225-26 (quoting ATACS Corp. v. Trans World Communications, Inc., 155 F.3d 659, 668 (3d Cir.1998)). "At a minimum, reasonable certainty embraces a rough calculation that is not 'too speculative, vague or contingent' upon some unknown factor." Id. (quoting ATACS Corp., 155 F.3d at 669 (quoting Spang & Co. v. United States Steel Corp., 519 Pa. 14, 545 A.2d 861, 866 (1988))). The court of appeals in Ware explained that under Pennsylvania law some uncertainty with respect to the amount of damages would not defeat a claim:

"It is true . . . that the Pennsylvania law of contracts allows for some uncertainty in calculating damages . . . ." ATACS Corp., 155 F.3d at 670. However, "[w]hile mathematical certainty is not required, the plaintiff must introduce sufficient facts upon which the jury can determine the amount of damages without conjecture." Delahanty v. First Pennsylvania Bank, N.A., 318 Pa.Super. 90, 464 A.2d 1243, 1257 (1983); see also Scully v. U.S. WATS, Inc., 238 F.3d 497, 515 (3d Cir.2001). After years of discovery, Plaintiff . . . has failed to present evidence upon which the factfinder could base a damages calculation to a reasonable certainty.

Id.*fn10

As discussed in more detail below, plaintiff may be able to adduce sufficient evidence to survive summary judgment on his breach of contract claim with respect to the existence of a contract and breach. In light of the law of Pennsylvania allowing nominal damages for a breach of contract, summary judgment cannot be granted for failure to show damages. Even more tellingly, defendant's arguments that plaintiff cannot demonstrate any identifiable actual damages challenge the fact of actual damages rather than the amount and viewing disputed evidence in the light favorable to plaintiff, as the nonmoving party, summary judgment cannot be granted.

Specifically, plaintiff argues that actual damages could be calculated based upon the MSRP for the upgraded radiator, notwithstanding that plaintiff negotiated a $500.00 discount on the entire vehicle. See In re Flat Glass Antitrust Litigation, 191 F.R.D. 472, 486 (W.D.Pa. 1999)("[E]ven though some plaintiffs negotiated prices, if plaintiffs can establish that the base price from which these negotiations occurred was inflated, this would establish at least the fact of damage, even if the extent of the damage by each plaintiff varied.")(antitrust class action).

In addition, plaintiff argues that the functionality of the vehicle is irrelevant to plaintiff's breach of contract claim. Plaintiff's claim for damages is predicated on the theory that he paid a price for the vehicle that included a towing package and upgraded radiator and he received a vehicle without an upgraded radiator. Relatedly, plaintiff argues that his claim does not fail, as defendant argues, because some of his testimony suggested that he purchased the vehicle without regard to the kind of radiator that it had.*fn11 Plaintiff argues that the law is clear that a plaintiff needs neither to have read nor to have been aware of all of the terms of a contract in order to be bound by it and entitled to its benefits. See Klingman v. Advanced Polymer System, Inc., 2001 WL 1173998, *3 n. 4 (E.D. Pa. 2001)("[T]he failure of a literate adult to read a contract or a decision by him to sign in haste without understanding the terms does not alter the enforceability of the contract.")(citing Tose v. First Pennsylvania Bank, N.A., 648 F.2d 879, 900 (3d Cir.1981); Simeone v. Simeone, 581 A.2d 162, 165 (Pa.1990); Thrasher v. Rothrock, 105 A.2d 600, 604 (Pa.1954)). In addition, as the court and the parties discussed at the hearing on class certification, a consumer who purchases something with multiple component parts -- like a vehicle or a dishwasher -- does not need to address and assent to each component part or widget making up the item purchased or expressly to assent to its inclusion, or base the decision to purchase on its inclusion, to be entitled to receiving an item that includes each essential component part. Here, the contract, if there is one, included the term that the vehicle plaintiff received included the towing option. See RESTATEMENT (SECOND) CONTRACTS § 5 ("Terms of Promise, Agreement, or Contract") (". . . . (2) A term of a contract is that portion of the legal relations resulting from the promise or set of promises which relates to a particular matter, whether or not the parties manifest an intention to create those relations."), cmt. A ("Agreed terms")("The terms of a promise or agreement are those expressed in the language of the parties or implied in fact from other conduct. . . .").

In addition, plaintiff points to his testimony that it was important to him to receive all the options he paid for in support of the notion that he was damaged when the wrong radiator was included in his vehicle. He did not separately consider every ...


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