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Budach v. Nibco, Inc.

United States District Court, W.D. Missouri, Central Division

June 22, 2015

SAM BUDACH, on behalf of himself and all others similarly situated, Plaintiff,
v.
NIBCO, INC., Defendant.

ORDER

NANETTE K. LAUGHREY, District Judge.

Plaintiff Sam Budach, a homeowner, alleges that Defendant NIBCO, Inc.'s PEX plumbing system, which was installed in his home, failed and damaged his home. Budach seeks damages, and declaratory and injunctive relief. NIBCO filed a motion to dismiss. [Doc. 24.] During the parties' oral argument on NIBCO's motion, Budach requested and was permitted leave to file a motion to amend the Complaint. [Doc. 39.] Budach filed a motion to amend, and submitted a proposed First Amended Complaint, with the changes highlighted. [Doc. 41.] During oral argument, NIBCO also requested and was permitted leave to file supplemental authority, and subsequently did so. [Doc. 40.]

For the reasons discussed below, NIBCO's motion to dismiss is granted in part and denied in part. Budach's motion for leave to amend is denied but he is given leave to file an amended complaint consistent with this order.

I. Background[1]

NIBCO manufactures, warrants, advertises, and sells the PEX plumbing system throughout the United States. The system includes cross-linked polyethylene plumbing tubes (PEX Tubing), as well as the brass fittings (PEX Fittings) required to connect the PEX Tubing, and the stainless steel clamps (PEX Clamps) required to join the PEX Tubing and PEX Fittings.

The PEX Tubing is susceptible to failure caused by "slow growth cracking mechanisms consistent with oxidative failure and/or creep rupture. These slow growth cracking mechanisms have been caused by insufficient stabilization and/or improper cross-linking of the PEX material used by NIBCO to manufacture its PEX Tubing." [Doc. 1, p. 12, ¶ 48.]

The PEX Fittings are susceptible to decalcification corrosion because of the material with which they were manufactured. Further, the material with which the PEX Clamps were manufactured, and the clamp design, make the clamps susceptible to chloride-induced stress corrosion cracking. Decalcification corrosion and chloride-induced stress corrosion cracking can cause PEX plumbing system to fail. In the course of foreseeable and intended use, the PEX Fittings and Clamps are exposed to elements that cause corrosion. NIBCO "knew or should have known" that the PEX Fittings and Clamps were susceptible to failure. [ Id., p. 15, ¶ 64; p. 17, ¶¶ 70-71.]

PEX Tubing is sold with an express warranty that states in part:

NIBCO Inc. warrants that when NIBCO® PEX tube is used with NIBCO® PEX fittings, and NIBCO® valves and installation accessories, they will, under normal conditions, use and service in potable water and radiant heat systems, be free from defects in materials and workmanship for a period of twenty-five (25) years from the date of purchase when installed by a licensed professional contractor. This 25-year warranty is voided if any non-NIBCO products are used in the PEX system. NIBCO INC. warrants NIBCO PEX tube, when used under normal conditions, use and service in potable water and radiant heat systems with brass insert fittings meeting NSF/ANSI 61, ASTM F1807 and ASTM F877 to be free from defects in materials and workmanship for a period ten (10) years from the date of purchase. NIBCO INC. warrants NIBCO® associated hardware and tools for a period of 90 days from the date of purchase.
In the event any defect occurs which the owner believes is covered by this warranty, the owner should immediately contact NIBCO Technical Services, either in writing or by telephone at 1.888.446.4226 or 1.574.295.3000. The owner will be instructed to return said tube, fittings or accessories, at the owner's expense, to NIBCO INC., or an authorized representative for inspection. In the event said inspection discloses to the satisfaction of NIBCO INC. that said tube, fitting or accessory is defective, a replacement shall be mailed free of charge to the owner.
IN ORDER FOR THIS LIMITED WARRANTY TO APPLY, THE ABOVE REFERENCED PRODUCTS MUST BE INSTALLED BY A LICENSED PROFESSIONAL PLUMBER IN ACCORDANCE WITH NIBCO INSTALLATION INSTRUCTIONS AND IN COMPLIANCE WITH ALL APPLICABLE CODE REQUIREMENTS. FAILURE TO DO SO WILL VOID ALL APPLICABLE WARRANTIES.

[Doc. 25-1, p. 2, emphasis in original.]

Budach's home was built in 2006. A licensed professional contractor installed the plumbing system, using NIBCO PEX Products: PEX Tubing, PEX Fittings, and PEX Clamps and installation accessories. A hot water line was installed as a part of the system, and water was supplied from a local, municipally treated water source. Budach moved into the home in 2006 after construction was completed and began using it as his primary residence. In January 2012, Budach noticed water pooling near the master bathroom in his home. A licensed plumber discovered a leak in the water line near the master bathroom and repaired it. Budach noticed another leak in another area of the home in August 2013. A licensed plumber found a leak in the recirculation line and repaired it. In August 2014, Budach noticed water seeping into his kitchen from behind a set of cabinets. A licensed plumber determined there was another leak in the recirculation line and repaired it. A week after the leak in the kitchen, Budach heard a hissing sound in a wall of his home and immediately shut off the water. After cutting through the drywall, a licensed plumber found a leak in the water pipe behind the bathroom and repaired it. Every leak caused damage to various parts of Budach's home, such as carpets, walls, and cabinets, which Budach had to have repaired.[2]

In his proposed First Amended Complaint, Budach adds that he retained a general contractor to construct his home, and that it was the general contractor who retained the professional plumbing contractor to install the home's plumbing system. [Doc. 41, p. 8, ¶¶ 13-14.] Budach further alleges that the professional plumbing contractor, acting as Budach's agent, purchased the NIBCO PEX Products that were installed in Budach's home, and that the professional plumbing contractor installed the entire plumbing system using PEX Products as required by the terms of the warranty. [ Id., p. 8, ¶¶ 15-16.] Budach also alleges that the January 2012, August 2013, and August 2014 leaks in his home were caused by failed PEX Fittings. [ Id., pp. 9-10, ¶¶ 21, 25, and 28.]

NIBCO "knew or should have known that the PEX products were not suitable for use within water-carrying plumbing systems and that the PEX products suffered from" defects. [ Id., p. 3, ¶ 9.] Budach "substantially complied with [his] obligations under the NIBCO PEX warranty. NIBCO, however, has failed to fulfill its obligation to replace the defective PEX Tubing and compensate [Budach]...for the foreseeable property damage it has caused." [ Id., p. 13, ¶ 50.] Budach took corrective action at his own expense so as to mitigate any further damage related to failure of the PEX products.

Budach's Complaint contains seven counts:

I. Breach of Express Warranty;
II. Breach of Implied Warranty of Merchantability;
III. Breach of Implied Warranty of Fitness for a Particular Purpose;
IV. Negligence;
V. Violation of the Missouri Merchandising Practices Act (MMPA);
VI. Unjust Enrichment; and
VII. Declaratory and Injunctive Relief.

[ Id. ]

II. Discussion

NIBCO argues dismissal is appropriate under Fed.R.Civ.P. 12(b)(6) because Budach fails to state a claim upon which relief can be granted, and that the MMPA claim, which sounds in fraud, also fails because Budach ...


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