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Castleman v. FCA U.S. LLC

United States District Court, D. Utah

March 28, 2019

MINDY CASTLEMAN, Plaintiff,
v.
FCA U.S. LLC f/k/a CHRYSLER GROUP, LLC, Defendant.

          MEMORANDUM DECISION AND ORDER DENYING DEFENDANT'S MOTION TO DISMISS

          Jill N. Parrish, United States District Court Judge.

         Before the court is the Motion to Dismiss Plaintiff Mindy Castleman's First Amended Complaint and Jury Demand (“Amended Complaint”) filed by Defendant FCA U.S. LLC (“FCA”). ECF No. 40. For the reasons articulated below, the court denies the motion.

         BACKGROUND

         On May 1, 2016, Plaintiff Mindy Castleman (“Castleman”) was driving eastbound on Interstate 70, near mile post 183, when the 2004 Jeep Grand Cherokee Laredo (the “Vehicle”) she was driving overturned resulting in severe injury.[1] Castleman alleges that her injuries were caused by certain design flaws and defects common to the 1999-2004 Jeep model Grand Cherokees. Castleman filed this lawsuit against Fiat Chrysler Automobiles U.S., LLC (FCA U.S. LLC) (“FCA”) seeking recovery for strict product liability, negligent product liability, breach of warranties, and for punitive damages.

         The Vehicle at issue was designed and manufactured by Chrysler, LLC, DaimlerChrysler Corporation, Old Carco LLC and its affiliates (collectively “Old Chrysler”). Plaintiff alleges that at the time of design and manufacture, the Vehicle was “defective in its design, manufacture, testing, maintenance, advertising, selling, distribution, and introduction into the stream of commerce.” See Am. Compl. at ¶ 8. These defects allegedly include, but are not limited to:

being supplied without important crashworthiness and protection systems . . ., inadequate roof strength, roof structures, inadequate roof materials, inadequate roof-crush resistance, inadequate restraint protection systems, lack of electronic stability control, and inadequate center of gravity and overall vehicle design rendering it dangerously prone to roll over during foreseeable driver maneuvers.

Id. Castleman alleges that Old Chrysler knew of these defects, but intended that the Vehicle be purchased and operated regardless of the defects.

         In April 2009, Old Chrysler filed for bankruptcy protection in the United States Bankruptcy Court, Southern District of New York. On June 1, 2009, the Bankruptcy Court entered an order authorizing the sale of Old Chrysler's assets to FCA (“Sale Order”)[2] pursuant to the Master Transaction Agreement (“MTA”). The sale closed on June 10, 2009 (“Closing” or the “Sale”). Through the Sale Order, FCA purported to proscribe liability for any product liability or successor liability claims not explicitly assumed in the MTA:

Except for the Assumed Liabilities expressly set forth in the Purchase Agreement . . . [t]he Purchaser shall not be deemed, as a result of any action taken in connection with the Purchase Agreement or any of the transactions or documents ancillary thereto or contemplated thereby or the acquisition of the Purchased Assets, to: (a) be a legal successor, or otherwise be deemed a successor to the Debtors (other than with respect to any obligations arising under the Assumed Agreements from and after the Closing); . . . [and] the Purchaser shall not have any successor, derivative or vicarious liabilities of any kind or character for any Claims, including, but not limited to, on any theory of successor or transferee liability, de facto merger or continuity, environmental, labor and employment, products or antitrust liability, whether known or unknown as of the Closing, now existing or hereafter arising, asserted or unasserted, fixed or contingent, liquidated or unliquidated.

         Sale Order ¶ 35 (emphasis added).

         On November 19, 2009, the Bankruptcy Court entered a Stipulation and Agreed Order Approving Amendment Number 4 (“Amendment 4”) to the MTA.[3] Pursuant to Amendment 4, FCA assumed liability for:

All Product Liability Claims arising from the sale on or prior to the Closing of motor vehicles or component parts, in each case manufactured by Sellers or their Subsidiaries and distributed and sold as a Chrysler, Jeep, or Dodge brand vehicle . . . solely to the extent such Product Liability Claims (A) arise directly from motor vehicle accidents occurring on or after Closing, (B) are not barred by any statute of limitations, . . . and (D) do not include any claim for exemplary or punitive damages.

         Castleman's accident occurred in May 2016, almost five years after the Closing, in a Vehicle designed and manufactured pre-Closing. Castleman alleges that when the Vehicle rolled, due in part to the inherent instability of the design, the flaws in the roof structure caused the roof to collapse, crushing the “occupant survival space.” Allegedly these defects, as well as airbag design flaws, caused Castleman's injuries. Castleman seeks to hold FCA liable for Old Chrysler's negligent conduct in designing and manufacturing the Vehicle that caused her injury under the MTA. Castleman also seeks punitive damages for FCA's post-Closing conduct. FCA has moved to dismiss Castleman's Amended Complaint in its entirety.

         ANALYSIS

         I. LEGAL STANDARD

         FCA moves under Fed.R.Civ.P. 12(b)(6) to dismiss Castleman's Amended Complaint for failure to state a claim. “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “At the motion-to-dismiss stage, [the court] must accept all the well-pleaded allegations of the complaint as true and must construe them in the light most favorable to the plaintiff.” Albers v. Bd. of Cty. Comm'rs of Jefferson Cty., 771 F.3d 697, 700 (10th Cir. 2014) (quoting Cressman v. Thompson, 719 F.3d 1139, 1152 (10th Cir. 2013)). “[A] court should disregard all conclusory statements of law [in the ...


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