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Washington v. William H. Porter, Inc.

Superior Court of Delaware

July 20, 2017


          Submitted: April 24, 2017

          Douglas A. Shachtman, Esquire, The Shachtman Law Firm, Wilmington, Delaware. Attorneys for Ana Washington.

          Patrick M. Brannigan, Esquire, Eckert Seamans Cherin & Mellott, LLC, Wilmington, Delaware. Attorneys for General Motors LLC

          Mary E. Sherlock, Esquire, Weber Gallagher Simpson Stapleton Fires & Newby, LLP, Dover, Delaware. Attorneys for William Porter, Inc.

          Eric M. Davis, Judge


         This action arises out of the sale of a 2013 Chevrolet Malibu under a Certified Pre-Owned vehicle program established by Defendant General Motors LLC ("GM") and its local dealerships, including Defendant William Porter of Porter Chevrolet ("Porter"). Plaintiff Ana Washington sues GM and Porter for (i) Breach of Contract (Count I), (ii) Breach of Warranty (Count II), (iii) Common Law Fraud (Count III), (iv) Consumer Fraud Act (Count IV), and (v) Deceptive Practices in Consumer Contracts (Count V).

         GM filed General Motors LLC's Motion to Dismiss (the "Motion"). The Motion seeks dismissal of all claims asserted against GM under Rule 12(b)(6). Subsequently, Ms. Washington filed Plaintiff's Response to Defendant General Motors LLC's Motion to Dismiss (the "Response"). The Court held a hearing on the Motion and the Response on April 24, 2017. At the hearing, counsel for Ms. Washington conceded that Ms. Washington did not have a cognizable claim for breach of contract against GM. Accordingly, on April 25, 2017, the Court entered an order dismissing Count I as against GM. The Court took all other matters under advisement.

         This is the Court's ruling on the remainder of the issues raised in the Motion. For the reasons set forth below, the Court will GRANT the Motion as to Count V and DENY the Motion as to Counts II, III and IV.

         II. RELEVANT FACTS[1]

         As a way to promote the purchase of used vehicles, GM established a Certified Pre-Owned ("CPO") vehicle program and accompanying marketing plan. Porter and other local GM dealerships across the country implemented the CPO program. GM and Porter marketed the program as encompassing, among other things, a detailed 172 point inspection and reconditions process performed by highly trained mechanics.

         The CPO program, as set forth in a CPO Operations Manual developed by GM, includes rules and standards dictating how dealers must implement the program. The CPO Operations Manual requires dealers to provide consumers with a written disclosure of a vehicle's inspection results, a copy of the GM Pre-Owned Vehicle Inspection Checklist (the "Inspection Checklist"), and a Certificate of Inspection. The Inspection Checklist must indicate all repairs or reconditioning that a vehicle required or that a mechanic performed. Additionally, the Certificate of Inspection must certify that the vehicle had a certified inspection and passed that inspection. The CPO Operations Manual further provides that commercial vehicles are excluded from the CPO program.

         On April 9, 2013, a 2013 Chevrolet Malibu (the "Malibu") was purchased in Virginia and used as a rental vehicle. Thereafter, Porter purchased the Malibu at auction. Despite the fact that the Malibu had been used for commercial purposes, the Malibu was designated as a CPO vehicle, indicating that it had undergone the multipoint inspection process.

         On January 10, 2014, Ms. Washington went to Porter and considered purchasing the Malibu. Ms. Washington asked about the vehicle's history. According to Ms. Washington, Porter represented that the vehicle only had one prior owner. Porter also failed to provide Ms. Washington with the Inspection Checklist or any other disclosure about damage and repairs. In addition, Ms. Washington requested a Carfax report which Porter apparently failed to provide.

         Based on the representations made by Porter, and the fact that the vehicle was a CPO vehicle and "GM certified, " Ms. Washington purchased the Malibu. On multiple occasions when Ms. Washington was driving the Malibu, the steering wheel locked and the car shut down. When Porter checked the car after these incidents, Porter told Ms. Washington that they could not find the problem. Later, a Porter technician informed Ms. Washington that the Malibu had a lifetime warranty to cover problems with steering, indicating that GM and Porter had been aware of the problem. The Malibu purportedly continues to have problems with the steering system.


         GM moves to dismiss each claim in the Complaint under Civil Rule 12(b)(6). GM claims that Count V, the deceptive practices claim, should be dismissed because Ms. Washington never entered into a contract with GM. GM also contends that the breach of warranty, fraud, and Consumer Fraud Act claims should be dismissed because GM itself never made any representations about the Malibu to Ms. Washington.

         Ms. Washington argues that the claims for breach of warranty, fraud, and Consumer Fraud Act state claims for relief because GM made misrepresentations through its CPO program in an attempt to deceive and mislead consumers regarding GM certified vehicles. Finally, Ms. Washington argues that Count V states a claim for relief because a contract existed between her and Porter.


         Upon a motion to dismiss under Civil Rule 12(b)(6), the Court (i) accepts all well-pleaded factual allegations as true, (ii) accepts even vague allegations as well-pleaded if they give the opposing party notice of the claim, (iii) draws all reasonable inferences in favor of the non-moving party, and (iv) only dismisses a case where the plaintiff would not be entitled to recover under any reasonably conceivable set of circumstances.[2] However, the Court must "ignore conclusory allegations that lack specific supporting factual allegations."[3]

         V. DISCUSSION

         A. The Deceptive Practices in Consumer Contracts Claim, Count V, must be dismissed because there is no contract between Ms. Washington and GM

         Ms. Washington's Count V-Deceptive Practices in Consumer Contracts Claim-arises from GM's purported misrepresentations regarding the quality of the Malibu and its eligibility for the CPO program. Regardless of the validity of these claims, Ms. Washington cannot maintain a claim for deceptive practices in consumer contracts because there was no contract between her and GM.

         Ms. Washington argues that a separate contract with GM is not required to maintain a claim for deceptive practices. Instead, Ms. Washington attempts to join GM into the contract she executed with Porter and contends that GM's alleged misrepresentation that the Malibu was "GM certified" sounds a claim for deceptive practices. In support of this argument, Ms. Washington asserts that "there is nothing in the Act that requires an offender to be a literal party to a contract."[4]

         The Court does not agree with Ms. Washington's argument. In order to maintain a claim for deceptive practices under the Delaware's Consumer Contracts Act ("DCCA"), a contract must exist between a consumer and a seller. Section 2732 of the DCCA, entitled "Deceptive practices in consumer contracts, " creates a cause of action stemming from "a contract for the sale or lease of merchandise" when an individual "distorts or obscures the terms, conditions or meaning of the contract" or "omits information required by law to be disclosed in contracts with a consumer."[5] Section 2733 then goes on to provide "factors that a court may consider in determining whether a contract complies with this subchapter."[6] These factors require the existence of an actual contract, as a court cannot determine whether "cross-references are confusing" or "sentences are unreasonably long or complex" without a contract to analyze.[7]

         Moreover, the DCCA does not provide that a person or entity can be liable for deceptive practices in a contract it did not enter into, or in a contract between two other separate parties, as is the case here. Ms. Washington does not cite to a single case where a Delaware court has relaxed the contract requirement or allowed a consumer to bring a claim against a non-party to a contract. The Court too has failed to find any case ...

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