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Silverstein v. Weather Shield Mfg., Inc.

United States District Court, S.D. Alabama, Southern Division

February 14, 2018




         This action is before the Court on the motion to dismiss Count Five of the complaint under Federal Rule of Civil Procedure 12(b)(6) (Doc. 36) filed by Defendant Weather Shield Mfg., Inc. (“WSM”). The Court has referred the motion (Doc. 36) to the undersigned Magistrate Judge for appropriate action under 28 U.S.C. § 636(a)-(b), Federal Rule of Civil Procedure 72, and S.D. Ala. GenLR 72(a). See S.D. Ala. GenLR 72(b); (11/13/2017 electronic references). Plaintiff Jerry Silverstein has timely filed a response (Doc. 48) in opposition to the motion. WSM has not filed any reply to the response, the deadline to do so has passed, and the motion is now under submission. (See Doc. 40). Upon consideration, and pursuant to § 636(b)(1)(B)-(C) and Federal Rule 72(b)(1), the undersigned RECOMMENDS that the motion to dismiss be DENIED.

         I. Factual Determinations

         Per the well-pleaded factual allegations in the complaint (Doc. 1), [1] on or about January 20, 2000, Silverstein was building a custom luxury home in Mobile, Alabama, when he purchased 70 matching windows and doors manufactured by WSM, along with a lifetime warranty on same, and installed them in the home. However, since being installed, the windows and doors have deteriorated due to water infiltration, causing the wood structural material to rot and deteriorate. In 2006, and again in 2014, Silverstein noticed this deterioration and notified WSM. WSM performed an inspection after being notified in 2006, but denied the rot and offered a paint-only solution. After being notified in 2014, WSM had several inspections performed, with two of the inspectors recommending the windows and doors be replaced. Again, however, WSM did not replace the windows, instead only offering to paint over the rotten wood. In October 2016, Silverstein informed WSM of additional deterioration, but WSM again refused to repair or replace the windows and doors.

         Based on the foregoing allegations, Silverstein initiated this action by filing a five-count complaint with the Court (Doc. 1). The first four counts allege state law causes of action for breach of contract and breach of warranty. Count Five alleges a cause of action under the federal Magnuson-Moss Warranty Act of 1975, 15 U.S.C. § 2301, et seq. (“MMWA, ” or “the Act”).[2]

         II. Analysis

         The MMWA “imposes specific duties and liabilities on suppliers who offer written warranties on consumer products.” 16 C.F.R. § 700.3; Marlborough Holdings Grp., Ltd. v. Azimut-Benetti, Spa, Platinum Yacht Collection No. Two, Inc., 505 F. App'x 899, 904 (11th Cir. 2013) (per curiam) (unpublished). For purposes of the Act, “[t]he term ‘consumer product' means any tangible personal property which is distributed in commerce and which is normally used for personal, family, or household purposes (including any such property intended to be attached to or installed in any real property without regard to whether it is so attached or installed).” 15 U.S.C. § 2301(1).

         WSM argues that Count Five is due to be dismissed for failure to state a claim because the windows and doors at issue do not qualify as “consumer products, ” based on the following Federal Trade Commission interpretive regulation:[3]

The coverage of building materials which are not separate items of equipment is based on the nature of the purchase transaction. An analysis of the transaction will determine whether the goods are real or personal property. The numerous products which go into the construction of a consumer dwelling are all consumer products when sold “over the counter, ” as by hardware and building supply retailers. This is also true where a consumer contracts for the purchase of such materials in connection with the improvement, repair, or modification of a home (for example, paneling, dropped ceilings, siding, roofing, storm windows, remodeling). However, where such products are at the time of sale integrated into the structure of a dwelling they are not consumer products as they cannot be practically distinguished from realty. Thus, for example, the beams, wallboard, wiring, plumbing, windows, roofing, and other structural components of a dwelling are not consumer products when they are sold as part of real estate covered by a written warranty.
In the case where a consumer contracts with a builder to construct a home, a substantial addition to a home, or other realty (such as a garage or an in-ground swimming pool) the building materials to be used are not consumer products. Although the materials are separately identifiable at the time the contract is made, it is the intention of the parties to contract for the construction of realty which will integrate the component materials. Of course, as noted above, any separate items of equipment to be attached to such realty are consumer products under the Act.

16 C.F.R. § 700.1(e)-(f) (section markers omitted).

         WSM argues that, because Silverstein purchased the subject windows and doors “for installation into the construction of a new, custom-built luxury home and not for the purpose of improvements, repairs, or modifications of an existing home[, ]” the windows and doors “became part of the realty” and are thus not “consumer products” as defined by § 700.1. (Doc. 36 at 4). In support, WSM cites Miller v. Herman, 600 F.3d 726 (7th Cir. 2010). However, WSM's substantive application of that case is flawed for at least two reasons.

         First, WSM claims that Millerheld, ‘When products are purchased to add to an existing dwelling, then they are consumer products, but when purchased as part of a larger real estate sales contract, they are not.' ” (Doc. 36 at 4 (emphasis added)). While this quotation does appear in Miller, it is not a holding of the Seventh Circuit. Rather, it was included as part of a parenthetical quotation of a California state court decision, Atkinson v. Elk Corp. of Texas, 142 Cal.App.4th 212, 48 Cal.Rptr.3d 247, 255 (2006), which was itself included in a string citation comparing cases to show that “there is arguably some ambiguity in the case law interpreting subsections (e) and (f)…” Miller, 600 F.3d at 737.

         Second, WSM is incorrect that the “purchase and intended use of the windows by the Plaintiff in this case mirrors that of the claimant in Miller.” (Doc. 36 at 4). In that case, plaintiff Miller contracted with builder Herman and his company to construct a new, custom-built home. Miller, 600 F.3d at 728. In the course of building the home, Herman purchased and installed windows and doors that were warranted by the manufacturer, Pella Products. Id. After the windows and doors leaked, causing mold damage to the home, Miller filed suit against Herman, Herman's company, and Pella, alleging claims under MMWA, among others. See Id. at 729. All defendants moved for judgment in their ...

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