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Begley v. Windsor Surry Co.

United States District Court, D. New Hampshire

March 19, 2018

Brian Begley
v.
Windsor Surry Company d/b/a WindsorONE, & Windsor Willits Company d/b/a Windsor Mill

          ORDER

          Landya McCafferty, United States District Judge

         Plaintiff Brian Begley brings this action against defendants Windsor Surry Company d/b/a WindsorONE and Windsor Willits Company d/b/a Windsor Mill. Begley raises a No. of claims relating to allegedly defective wood products that defendants manufacture and sell. Begley brings this action individually and on behalf of a putative class of New Hampshire consumers. Defendants move to dismiss the amended complaint and to strike the class allegations. Begley objects to both motions. For the following reasons, the motion to dismiss is granted in part and denied in part, and the motion to strike is denied.

         Background

         The following facts are taken from Begley's amended complaint, unless otherwise noted. This action relates to certain wood products that defendants manufacture and sell: the “WindsorONE line of pre-primed trim board products.” Doc. no. 17 at 14. Since 1996, defendants have manufactured and sold these trim boards for exterior construction-as fascia, soffit, rake board, corner board, and window trim-as well as for interior applications.

         WindsorONE trim board is made from Radiata Pine wood. Begley alleges that “nearly all” of the Radiata Pine that defendants use is sapwood, which is the outer portion of the tree stem. Id. at 15. Radiata Pine sapwood has no inherent rot resistance.

         To manufacture a board, defendants first cut wood from juvenile Radiata Pine trees. They cut a No. of smaller boards in a manner so as to remove knots and other imperfections from the wood, and then glue these boards together with an adhesive to make a single, “finger-jointed” board. Id. at 14. “[E]xterior-grade primer” is applied on the trim board before it is delivered to distributors. Id. at 15.

          Defendants marketed and advertised the boards as suitable for exterior application on buildings and other wood structures. Defendants stated that, as a result of its manufacturing process, WindsorONE trim board could be thought of as “turbo wood, ” because it “benefits from structural stability, decreased cupping, warping or twisting” and because it is “defect free.” Id. at 19. Defendants advertised the board as providing consumers with “the durability and long term performance [they] require in a finger joint Trim Board-free of defects.” Id. Defendants also stated that the joints connecting the smaller pieces of the board together “are stronger than the wood itself, and waterproof.” Id. Defendants advertised WindsorONE as superior to wood products made from other trees like cedar, redwood, pine, and fir. Defendants represented that they “use the highest quality materials to produce the highest quality products.” Id. at 21 (bolding omitted).

         Defendants provide a ten-year warranty for their end and edge gluing, and a five-year warranty for their primer. On their website, defendants state that they “will replace, without charge, any WindsorONE product that installed [sic] according to directions and fails to meet” the warranties. Id. at 28. Further, “[s]uch replacement is the exclusive remedy for breach of warranty, ” and “[t]here are no warranties, expressed or implied, including merchantability, ” beyond the glue and primer warranties. Id.

         Begley alleges that, contrary to defendants' marketing, neither the adhesive glue nor the wood itself can withstand normal outdoor weather conditions. The adhesive glue, while water resistant, is not actually waterproof and therefore breaks down through exposure to rain, snow, and other conditions. This allows water to penetrate the pieces of the board, which-because it has no resistance to rot-decays, rots, warps, and splits prematurely. The deterioration of the board can then cause deleterious effects on the underlying structure. Begley notes that treating the boards with a wood preservative could ameliorate this issue, but WindsorONE boards are not treated with any preservatives. Begley claims that WindsorONE board is thus of lower quality than boards made with cedar, redwood, Douglas fir, or eastern white pine wood, which are naturally rot resistant. Begley also alleges that defendants have known about these problems “for decades” but have nonetheless continued to market WindsorONE board as suitable for exterior applications. Id. at 3.

         Begley's experience with defendants and WindsorONE trim board began in 2004. In that year, Begley started construction on his new home in New Hampshire. He hired Paul Vandenberg to build the home. In August 2004, Vandenberg purchased WindsorONE trim boards through a local distributor and installed them throughout the exterior of the home. In total, 9, 712 linear feet of WindsorONE trim board were used on the home.

         Before Vandenberg purchased the trim board, the local distributor told him that WindsorONE “was great for exterior use” and “was the best trim board product on the market for exterior use.” Id. at 27. In addition, the distributor provided Vandenberg with WindsorONE marketing materials, product brochures, and information regarding the product warranties. Vandenberg relayed the information he learned from these sources to Begley. They decided to purchase WindsorONE trim boards “based on the information Vandenberg received . . . and thereafter communicated to [Begley].” Id.

         Vandenberg completed construction in February 2005, after which Begley and his wife moved into the home. In spring 2007, Begley noticed that some pieces of the trim board were rotting, deteriorating, or crippling at the ends. He also saw that there were splits, warping, and fungi growing out of some of the wood.

         The next year, in spring 2008, Begley noticed that the damage he had observed previously was spreading to other areas of his home-in total, 384 linear feet were affected. He contacted Vandenberg, who conducted an inspection. Vandenberg confirmed that it was WindsorONE trim board that was deteriorating, and, on Begley's behalf, he filed a warranty claim with defendants for the 384 linear feet of deteriorated trim board. Vandenberg also requested that defendants send a representative to inspect Begley's home.

         Defendants sent an agent from Norcon Forestry Ltd. (“Norcon”) to inspect the property. After inspecting the property, the agent sent Vandenberg a report dated July 12, 2008. In the report, the agent concluded, “[A]lmost all of the damage to the trim boards may be attributed to poor design or construction practices over which Windsor had no control. As the observed damage is design or installation related, Windsor does not have practical responsibility.” Id. at 29.

         In August, Norcon sent a letter to Vandenberg, which was addressed to Vandenberg, Begley, and Mrs. Begley. At the top of the letter is the following disclaimer: “OFFER OF SETTLEMENT MADE ON A WITHOUT PREJUDICE BASIS.” Doc. no. 17-1 at 2. Enclosed with the letter is a release (“2008 Release”). The letter informs Vandenberg and the Begleys that Windsor Mill would supply 400 linear feet of new WindsorONE trim board[1] in exchange for the execution of the release. The letter states, “This commitment is not an admission of liability by Windsor Mill, is made without prejudice to any of Windsor Mill's legal rights and is done solely in the interests of achieving an amicable settlement.” Id. The attached release provides as follows:

In consideration of Windsor Mill providing the following WindsoOne [sic] Protected Trim Boards . . . Mr. and Mrs. Begley (“Homeowners”), and Mr. Vandenberg (“Builder”), as “Releasors” herein, . . . hereby releases and forever discharges Windsor Mill . . . and its affiliates, agents, successors and assigns from all claims, debts, causes of action, agreements and liabilities of whatever kind or nature, which they now have, may have or ever had, whether presently known or unknown to them, including any claims arising from any purchase or installation of materials made or supplied by Windsor Mill for house construction at [Begley's property].

Doc. 17-2 at 2 (emphasis added). Vandenberg told the Begleys that they could receive credit with the local distributor for the 400 feet of trim board, but only if they signed the release. The Begleys and Vandenberg then executed the release, and Begley used the credit to purchase a different trim board product.

         Begley alleges that, in fact, defendants' warranty-claim process is an artifice, as defendants have “no intention of providing the services set forth in their warranties.” Doc. no. 17 at 2. Defendants allegedly deny warranty claims based on improper installation despite the fact that “no method of installation would avoid or cure the inherently defective nature of [d]efendants' design.” Id. at 45.

         Regardless, seven years later, in 2015, Mrs. Begley noticed additional deterioration of other WindsorONE trim boards on the home. She filed a second warranty claim with defendants. Norcon, again acting as defendants' agent, communicated with Mrs. Begley in spring 2016 to resolve her claim. As in 2008, Norcon sent another release for the Begleys to sign. In exchange for the second release, the Begleys would receive another 400 linear feet of WindsorONE trim board. Because the offered trim board would only cover a small portion of the deteriorating wood they had discovered, the Begleys declined to sign the second release.

         In July 2017, Begley filed the present action, both on his own behalf and as a class action. In his amended complaint, Begley raises the following claims: (1) breach of express warranty; (2) breach of the implied warranty of merchantability; (3) negligence; and (4) declaratory and injunctive relief.[2]Begley defines the putative class as “[a]ll persons and entities in . . . New Hampshire who own or owned homes, apartments, office buildings, or other structures in which WindsorONE trim board is or was installed, from 2001 to the present.” Id. at 34.

         Discussion

         Defendants have filed a motion to dismiss and a motion to strike the class allegations from Begley's complaint. The court addresses each motion below.

         I. Motion to Dismiss

          In support of their motion to dismiss, defendants argue: (A) the 2008 Release bars all of Begley's claims; (B) the statute of limitations bars all of Begley's claims; (C) the claim for breach of express warranty fails because the complaint does not sufficiently allege any representation that became the basis of the bargain; (D) the claims for declaratory and injunctive relief are inappropriate because Begley has adequate remedies at law, and Begley had no standing to seek injunctive relief; and (E) Begley is not entitled to seek punitive damages under New Hampshire law. After summarizing the standard of review, the court examines each argument in turn.

         Under Rule 12(b)(6), the court must accept the factual allegations in the complaint as true, construe reasonable inferences in the plaintiff's favor, and “determine whether the factual allegations in the plaintiff's complaint set forth a plausible claim upon which relief may be granted.” Foley v. Wells Fargo Bank, N.A., 772 F.3d 63, 71 (1st Cir. 2014) (internal quotation marks omitted). A claim is facially plausible “when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). In addition, “[e]xhibits attached to the complaint are properly considered part of the pleading for all purposes, including Rule 12(b)(6).” Trans-Spec Truck Serv., Inc. v. Caterpillar Inc., 524 F.3d 315, 321 (1st Cir. 2008) (internal quotation marks omitted).

         A. 2008 Release

         A release may bar a subsequent action if it applies to the defendant, encompasses the claims asserted in the subsequent action, and is legally enforceable. See Bourne v. Town of Madison, 494 F.Supp.2d 80, 96 (D.N.H. 2007). Defendants argue that the 2008 Release is enforceable and unambiguously covers the claims that Begley raises in this action. Defendants broadly interpret the 2008 Release to cover “all claims (present and future, known and unknown) against [defendants] regarding any materials made or supplied by Windsor Mill.” Doc. no. 23-1 at 12.

         Begley responds that the 2008 Release is ambiguous and that, considering the circumstances surrounding its execution and the parties' subsequent conduct, the 2008 Release should be interpreted to cover only claims “relating to the 384 linear feet of trim that failed as of the date of the Release.” Doc. no. 27-1 at 8. In the alternative, Begley contends the 2008 Release is unconscionable and therefore unenforceable.

         The court concludes that the 2008 Release unambiguously covers Begley's present claims, but that Begley has plausibly alleged that the 2008 Release is unconscionable.

         1. Interpretation of the 2008 Release

         Both parties rely on New Hampshire law in interpreting and assessing the enforceability of the 2008 Release. When interpreting a contract under New Hampshire law, the court must “give the language used by the parties its reasonable meaning, considering the circumstances and the context in which the agreement was negotiated, and reading the document as a whole.” Camden Nat'l Bank v. Greystone Select Holdings, LLC, No. 17-cv-272-JL, 2017 WL 5146166, at *2 (D.N.H. Nov. 3, 2017) (quoting In re Liquidation of Home Ins. Co., 166 N.H. 84, 88 (2014)). “The language of a contract is ambiguous if the parties to the contract could reasonably disagree as to the meaning of that language.” Id. (quoting Found. for Seacoast Health v. Hosp. Corp. of Am., 165 N.H. 168, 172 (2013)). “Absent ambiguity, the parties' intent will be determined from the plain meaning of the language used in the contract.” Id. (internal quotation marks omitted). “The interpretation of a contract, including whether a contract term is ambiguous, is ultimately a question of law for [the] court to decide.” Birch Broad., Inc. v. Capitol Broad. Corp., Inc., 161 N.H. 192, 196 (2010).

         In this case, Begley does not argue that any particular term of the 2008 Release is ambiguous. Rather, Begley contends that the scope of the 2008 Release becomes ambiguous in light of the surrounding circumstances, the parties' subsequent conduct, and the parties' subjective intent. For example, Begley contends that the 2008 Release must be understood with reference to the warranty claim which Begley had filed with defendants. In Begley's view, the warranty allowed him to make a claim only on “failed portion[s] of the trim, ” and he believed that the 2008 Release merely resolved his warranty claim to that extent. Doc. no. 27-1 at 7. For that reason, he “interpreted the language [in the 2008 Release] as applying only to future claims relating to the 384 linear feet of trim that failed as of the date of the Release.” Id. at 8. Begley asserts that his ...


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