Rakofsky v. Mercedes-Benz USA, LLC

Background

Joseph Rakofsky sued Mercedes-Benz USA, LLC (MBUSA), Daimler Aktiengesellschaft, Mercedes-Benz of Monterey, Wienik Bleyenberg, Devon Thompson, and unnamed defendants. The claims concerned work on Rakofsky’s 2011 Mercedes-Benz ML350 BlueTEC. Rakofsky alleged that a new turbo installed at a certified Mercedes-Benz repair facility in Florida failed after he drove the vehicle to California. He further alleged that the vehicle was taken to Mercedes-Benz of Monterey, that defendants refused to repair the vehicle under warranty, and that the vehicle’s engine was damaged while it was operated without oil.

The complaint asserted seven causes of action: unjust enrichment; violation of California Business and Professions Code section 17200, known as the unfair competition law; breach of contract; breach of express and implied warranties; negligent misrepresentation; declaratory and injunctive relief; and fraud. Rakofsky sought damages for the vehicle, repairs, engine work, rental fees, and hotel fees, as well as attorney’s fees, costs, and punitive damages.

MBUSA removed the case from Monterey County Superior Court and later moved for judgment on the pleadings. A motion for judgment on the pleadings under Federal Rule of Civil Procedure 12(c) tests whether the pleadings legally state a claim, using essentially the same standard as a motion to dismiss for failure to state a claim under Rule 12(b)(6).

Judicial Notice

MBUSA asked the court to take judicial notice of Rakofsky’s complaint and five district-court records from the earlier emissions class action. The court found that notice of the complaint was unnecessary because it was already part of the record. It granted MBUSA’s request as to the five records from the earlier emissions case because courts may take notice of district-court records. The court did not treat disputed facts in those records as established merely because it took notice of the records.

Discussion

The court first addressed the complaint’s repeated use of the collective term “Defendants.” The court held that Rakofsky needed to identify what action each defendant allegedly took that would support a claim. Because the complaint grouped the defendants together, the court could not determine whether the allegations were sufficient against any particular defendant. The court therefore granted MBUSA’s motion with leave to amend on this basis.

MBUSA also argued that the emissions class-action settlement barred all of Rakofsky’s claims. The court found that Rakofsky was a member of that class because he purchased a 2011 Mercedes-Benz ML350 BlueTEC. But the court concluded that MBUSA had not shown that the claims concerning the allegedly defective turbo fell within the settlement’s release. The settlement materials did not address whether a turbo was an emissions-control device, and MBUSA offered no support for its assertion that the turbo was directly related to the emissions case. The court therefore did not grant judgment on the pleadings on the ground that the settlement barred the claims.

Individual Claims

For unjust enrichment, the court found that the complaint did not clearly identify what benefit MBUSA received and unjustly retained at Rakofsky’s expense. The complaint also did not explain the claimed repair expenses or allege clearly that Rakofsky paid for the engine repair. The court held that Rakofsky failed to state an unjust-enrichment claim and granted MBUSA’s motion with leave to amend.

For the unfair competition law claim, the court found that the complaint did not clearly identify whether Rakofsky relied on the unlawful, unfair, or fraudulent theory. It also lacked supporting facts for the references to the Consumer Legal Remedies Act, the Federal Clean Air Act, and California Health and Safety Code provisions. To the extent the claim was based on fraud, the complaint did not meet Federal Rule of Civil Procedure 9(b)’s requirement that fraud be pleaded with particularity. The allegations also did not identify who operated the vehicle without oil or explain what was concealed, how Rakofsky was misled, or how the public was deceived. The court granted MBUSA’s motion with leave to amend.

For breach of contract, the court found that the complaint did not identify an operative contract, the parties to the contract, or the contractual terms allegedly requiring MBUSA to act. The court held that Rakofsky failed to plead the existence of a contract and granted MBUSA’s motion with leave to amend.

For breach of warranty, the court found that Rakofsky did not identify a specific and unequivocal written statement that constituted an express warranty. The allegations concerning implied warranties were also too general because they did not identify which vehicles, parts, or services were involved or which defendant was responsible. The court granted MBUSA’s motion with leave to amend.

For negligent misrepresentation, the court found that Rakofsky had not adequately pleaded the existence of the warranty that he claimed was misrepresented. The complaint also did not clearly identify who made the alleged representation, why the speaker lacked reasonable grounds to believe it was true, or sufficient facts supporting the alleged damage. The court granted MBUSA’s motion with leave to amend.

For declaratory and injunctive relief, the court held that Rakofsky could not sustain that claim after failing to state his other claims. The court granted MBUSA’s motion with leave to amend.

For fraud, the court found that the complaint did not identify which defendant allegedly committed the fraud or provide the required details about what was promised, when and where it was promised, and how Rakofsky relied on it. The complaint’s conclusory allegations about intent and reliance did not meet Rule 9(b)’s particularity requirement.

Disposition

Judge Edward J. Davila granted MBUSA’s motion for judgment on the pleadings. The court dismissed Rakofsky’s claims against MBUSA with leave to amend. The court stated that the deficiencies might be cured by additional facts and ordered that any amended complaint be filed within 21 days of the order. The opinion’s conclusion addresses the claims against MBUSA; it does not state that the claims against every other named defendant were dismissed.