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Patricia Wright and Kevin West, On Behalf of Themselves and All v. Owens Corning

March 21, 2011

PATRICIA WRIGHT AND KEVIN WEST, ON BEHALF OF THEMSELVES AND ALL OTHERS SIMILARLY SITUATED, PLAINTIFFS,
v.
OWENS CORNING, DEFENDANT.



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

MEMORANDUM OPINION

On November 24, 2009, plaintiff Patricia Wright ("Wright") instituted this putative class action by filing a complaint against defendant Owens Corning ("Owens Corning" or "defendant"). (ECF No. 1.) On March 11, 2010, Wright filed an amended complaint and included Kevin West ("West," and together with Wright, "plaintiffs") as an additional named plaintiff. (ECF No. 22.) On June 29, 2010, plaintiffs filed a second amended complaint, which is the subject of the instant memorandum opinion. (ECF No. 49.) Waiting the court‟s determination is defendant‟s motion for summary judgment filed on July 19, 2010. (ECF No. 55.) Defendant‟s motion requests the court grant summary judgment in its favor with respect to all plaintiffs‟ claims because those claims were discharged in defendant‟s bankruptcy proceedings.

After considering defendant‟s motion for summary judgment, plaintiffs‟ brief in opposition (ECF No. 69), the joint statement of material facts ("J.S.") (ECF No. 76), and the parties‟ other submissions, defendant‟s motion will be granted because plaintiffs‟ claims were discharged.

I. Factual background

A. Wright's purchase of Owens Corning shingles and warranty claim

In late 1998 or early 1999, Wright installed Owens Corning "Oakridge" shingles on her roof. (J.S., Part I, ¶ 1.) Wright did not purchase the shingles directly from Owens Corning; instead, she hired a contractor to purchase and install the shingles on her roof. (Id. ¶ 24.) Wright believed that the shingles she purchased through her contractor were protected by a 40-year warranty that provided non-prorated coverage for the first fifteen years. (J.S., Part II, ¶ 10.) Before the shingles were installed on the roof of her home, Wright obtained an Owens Corning product information brochure for Oakridge Shadow Premium Architectural Series Shingles at Lowe‟s or Home Depot which set forth the warranty period and non-prorated period. (Id. ¶ 11.) Wright alleges she did not receive a warranty registration card for the shingles. (Id. ¶ 12.)

In or around January 2009, Wright learned about problems associated with her Owens Corning shingles when she noticed water leaking in the four-seasons room of her home. (Id. ¶ 13.)*fn1 A roofing contractor inspected Wright‟s roof and advised her that all the shingles were cracked. (Id. ¶ 14.) Wright contacted Owens Corning by telephone in or about January 2009 regarding her leaking roof, and received a warranty claim packet from defendant dated January 13, 2009. (Id. ¶¶ 15-16.) Rosso Roofing completed the Owens Corning warranty claim form for a portion of the roof and submitted it to Owens Corning on Wright‟s behalf. (Id. ¶ 17.) During the warranty claims process, Owens Corning sent Wright a copy of a limited warranty on its roofing shingles. (Id. ¶ 18.) Owens Corning did not provide the limited warranty to Wright until she instituted the warranty claims process, and the product information brochure was the only product documentation Owens Corning provided Wright at or before the purchase and installation of the shingles. (Id. ¶ 19.)

Owens Corning refused to fully replace Wright‟s shingles; instead, defendant offered Wright $3,412.50 in compensation, plus a $500 credit toward the purchase of shingles. (Id. ¶ 20.) Wright replaced her roof in 2009 for $12,875. (Id. ¶ 21.)

B. West's purchase of Owens Corning shingles and warranty claim

In August 2005, West paid Howard Magnuson, a professional roofing installer, $10,824.50 to replace his roof with Owens Corning Oakridge Pro 30 shingles. (Id. ¶ 1.) In June 2009, West learned that he had problems with his Owens Corning roofing shingles when he noticed water leaking through the roof into his family room. (Id. ¶ 2.)*fn2 In July 2009, West made a warranty claim, alleging that, inter alia, his shingles were cracked and caused leaking in his family room ceiling. (J.S., Part I, ¶ 26; Part II, ¶ 3.)*fn3 West provided Owens Corning with pictures of the allegedly defective shingles and an estimate for replacement and repair which resulted in the creation of claim number 292-525 by Owens Corning. (J.S., Part II, ¶ 4.) Owens Corning provided West with a shingle warranty claim form and packet dated July 21, 2009. (Id. ¶ 5.) Owens Corning denied West‟s warranty claim in correspondence dated July 24, 2009, stating that the cracking problem with West‟s shingles was caused by deck movement. (Id. ¶ 6.) West was advised by a roofing inspector that the shingles on his roof, including the main, middle, and front porch roofs, exhibited signs of cracking and degranulation. (Pls.‟ App. (ECF No. 69), Ex. B at 162.)

C. The reorganization plan, confirmation order, and published notice

On October 5, 2000, Owens Corning and several related entities (the "debtors") voluntarily filed for bankruptcy relief under Chapter 11 in the United States Bankruptcy Court for the District of Delaware. (J.S., Part I, ¶ 3.) On July 10, 2006, Owens Corning issued its sixth amended joint plan of reorganization (the "reorganization plan"). (Id. ¶ 4.) On September 18, 2006, the bankruptcy court held a confirmation hearing, and on September 26, 2006, the bankruptcy court issued an order confirming the reorganization plan (the "confirmation order"). (Id. ¶¶ 12-13.) The bankruptcy court entered findings of fact and conclusions of law with respect to its confirmation order ("FOF/COL"). (Id. ¶ 19.)

Section 14.9 of the reorganization plan titled "Discharge of the Debtors" provides, inter alia:

(a) Except as otherwise provided herein or in the Confirmation Order, all consideration distributed under the Plan and the treatment of the Claims thereunder shall be, and shall be deemed to be, in exchange for, and in complete satisfaction, settlement, discharge, and release of, all Claims or other obligations, suits, judgments, damages, debts, rights, remedies, causes of action or liabilities (other than Demands) . . . relating to any of the Debtors or the Reorganized Debtors or their respective Estates . . . and upon the Effective Date, the Debtors and the Reorganized Debtors shall (i) be deemed discharged under Section 1141(d)(1)(A) of the Bankruptcy Code and released from any and all Claims or other obligations, suits, judgments, damages, debts, rights, remedies, causes of action or liabilities or Interests or other rights of an equity security holder of any nature whatsoever, including, without limitation, liabilities that arose before the Confirmation Date . . . .

(b) As of the Confirmation Date, except as otherwise provided herein or in the Confirmation Order, all Persons shall be precluded from asserting against each of the Debtors, the Reorganized Debtors and their respective Related Persons any other or further Claims or other obligations, suits, judgments, damages, debts, Demands, rights, remedies, causes of action or liabilities or Interests or other rights of an equity security holder relating to any of the Debtors or the Reorganized Debtors or their respective Estates based upon any act, omission, transaction or other activity of any nature that occurred prior to the Confirmation Date . . . .

[T]he Confirmation Order shall be a judicial determination of discharge of all such Claims or other obligations, suits, judgments, damages, debts, rights, remedies, causes of action or liabilities (other than Demands) or Interest or other rights of an equity security holder against the Debtors or the Reorganized Debtors or their respective Estates and . . . such discharge shall void any judgment obtained against any of the Debtors or the Reorganized Debtors or their respective Estates at any time, to the extent that such judgment relates to a discharged Claim or terminated OCD interest. (Def.‟s App. (ECF No. 55), Ex. E at 162-63 (emphasis added).) Section 5.16(c) of the reorganization plan titled "Releases by Holders of Claims and Interests" provides, inter alia:

Effective as of the Confirmation Date, but subject to the occurrence of the Effective Date, for good and valuable consideration, to the fullest extent permissible under applicable law, each Person that has held, currently holds or may hold a Claim or other obligation, suit, judgment, damages, debt, right, remedy, cause of action or liability that is discharged or an Interest or other right of an equity security holder that is terminated, and each of their respective Related Persons, shall be deemed to completely and forever release, waive, void, extinguish and discharge all Released Actions . . . . (Id. at 130 (emphasis added).) Section 14.11(a) of the reorganization plan titled "Special Provisions for Warranty Claims, Distributorship Indemnification Claims, Product Coupon Claims and Mira Vista Claims" provides, inter alia:

The Debtors (or, as the case may be, the Reorganized Debtors) shall have the right after the Confirmation Date to fulfill any pre-Petition Date and pre-Confirmation Date warranty claims based on the Debtors‟ (or, as the case may be, the Reorganized Debtors‟) business judgment notwithstanding discharge of the Claims and release of the Debtors pursuant to the Bankruptcy Code and the Plan . . . . (Id. at 164.) Section I, part D, of the confirmation order titled "Effects of Confirmation" provides:

In accordance with section 1141(a) of the Bankruptcy Code and Section 14.14 of the Plan, subject to Section I.C of this Confirmation Order and notwithstanding any otherwise applicable law, immediately upon the entry of this Confirmation Order, the terms of the Plan and this Confirmation Order shall be binding upon all Person, including the Debtors, the Reorganized Debtors, any and all holders of Claims, Demands or Interests (irrespective of whether such Claims or Interests are impaired under the Plan or whether the holders of such Claims or Interests accepted, rejected or are deemed to have accepted or rejected the Plan), any and all non-Debtor parties to executor contracts and unexpired leases with any of the Debtors and any and all Persons who are parties to or are subject to the settlements, compromises, releases, waivers, discharges and injunctions described herein, and in the Findings and Conclusions or in the Plan and the respective heirs, executors, administrators, trustees, affiliates, officers, directors, agents, representatives, attorneys, beneficiaries, guardians, successors or assigns, if any, of any of the foregoing. (Def.‟s App., Ex. G at 8-9.)

Owens Corning published notice of the bankruptcy proceedings, including the confirmation and the resulting discharge, on several occasions: (1) notice of the general bar date twice in the national and (if applicable) international editions of The New York Times, The Wall Street Journal and USA Today; once in approximately 250 regional or local newspapers in the areas in which the Debtors had significant business operations at the time of publication; and once in approximately 35 trade publications in the primary lines of business in which the Debtors operated (Def.‟s App., Ex. J at 78);*fn4 (2) on June 16 through June 21, 2006, notice of the hearing to consider the disclosure statement in The Wall Street Journal (U.S., Asia, and Europe editions), USA Today (U.S. and international editions), The New York Times (U.S. and International Herald Tribune), and the Toledo Blade (J.S., Part I, ¶ 23); (3) on August 1, 2006, general publication notice in the United States to all unknown creditors and parties of interest in the international edition of USA Today (Def.‟s App., Ex. L at 2-3); and (4) on November 28, 2006, notice of the entry of the confirmation order, the effective date, and the bar date for certain administrative claims in USA Today, The Wall Street Journal, The New York Times, and the Toledo Blade (J.S., Part I, ¶ 23).

II. Standard of review Federal Rule of Civil Procedure 56 provides in relevant part:

(a) Motion for Summary Judgment or Partial Summary Judgment. A party may move for summary judgment, identifying each claim or defense -- or the part of each claim or defense -- on which summary judgment is sought. The court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law. The court should state on the record the reasons for granting or denying the motion. .

(c) Procedures.

(1) Supporting Factual Positions. A party asserting that a fact cannot be or is genuinely disputed ...


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