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Gaunce v. CL Medical Inc.

United States District Court, Eastern District of Kentucky, Central Division, Lexington

March 2, 2015

MARY GAUNCE, et al., Plaintiffs,
v.
CL MEDICAL INC., et al., Defendants.

MEMORANDUM OPINION AND ORDER

Danny C. Reeves United States District Judge

This matter is pending for consideration of Defendant CL Medical, Inc.’s (“CL Medical”) motion for partial dismissal of the claims asserted against it. [Record No. 24] CL Medical argues that Counts 4 through 9 of the Complaint should be dismissed for failure to state a claim upon which relief may be granted. Plaintiffs Mary and Daniel Gaunce have not responded within the time provided by the Local Rules.[1] See Local Rule 7.1. As a result, the Court will evaluate the defendant’s motion without the benefit of a response. For the reasons stated below, the motion will be granted.

I.

This action arises out of a surgery to treat stress urinary incontinence (“SUI”) by implanting a mid-urethral sling. [Record No. 1, p. 11] Specifically, Mary Gaunce’s surgeon used an I-STOP device. [Id.] Based on injuries alleged caused by the implantation, the plaintiffs filed this product liability action against CL Medical and Uroplasty, Inc. as U.S. distributors of the I-STOP. [Id., p. 10] The plaintiffs originally filed suit in the Superior Court of the State of California, Orange County, asserting claims based upon failure to warn, defective design, breach of express and implied warranties, fraud, fraud by concealment, negligent misrepresentation, and negligent infliction of emotional distress. [Record No. 1] Shortly thereafter, the case was removed to the United States District Court for the Central District of California. [Id., p. 1] On August 25, 2014, pursuant to the parties’ joint stipulation, the case was transferred to this Court. [Record No. 14]

II.

CL Medical moves to dismiss the following claims: (i) breach of implied warranty, (ii) breach of express warranty, (iii) fraud, (iv) fraud by concealment, (v) negligent misrepresentation, and (vi) negligent infliction of emotional distress. [Record No. 24] When examining a motion to dismiss under Rule 12(b)(6), the Court must determine whether the complaint alleges “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, 555 (2007)). The plausibility standard is met “when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. (citing Twombly, 550 U.S. at 556). This requires “more than a sheer possibility that a defendant has acted unlawfully.” Id. Thus, although the complaint need not contain “detailed factual allegations” to survive a motion to dismiss, “a plaintiff’s obligation to provide the grounds of his entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Twombly, 550 U.S. at 555 (internal quotation marks and alteration omitted).

In considering a 12(b)(6) motion, the Court is required to “accept all of plaintiff’s factual allegations as true and determine whether any set of facts consistent with the allegations would entitle the plaintiff to relief.” G.M. Eng’rs & Assoc., Inc. v. West Bloomfield Twp., 922 F.2d 328, 330 (6th Cir. 1990) (citation omitted). Rule 12(b)(6) essentially “allows the Court to dismiss, on the basis of a dispositive issue of law, meritless cases which would otherwise waste judicial resources and result in unnecessary discovery.” Glassman, Edwards, Wade & Wyatt, P.C. v. Wolf Haldenstein Adler Freeman & Herz, LLP, 601 F.Supp.2d 991, 997 (W.D. Tenn. Mar. 10, 2009).

III.

A. Breach of Warranty

CL Medical argues that the plaintiffs’ breach of implied and express warranty claims (Counts 4 and 5) fail as a matter of law for lack of privity. [Record No. 24, p. 3] Under Kentucky law, privity of contract is an essential element of a claim for breach of warranty. Pruitt v. Genie Indus., 2013 U.S. Dist. LEXIS 4035, at *12 (E.D. Ky. Jan. 10, 2013). As a rule, privity of contract does not extend beyond the buyer-seller setting, and an intervening purchaser destroys privity. Compex Int’l Co. v. Taylor, 209 S.W.3d 462, 465 (Ky. 2006).

The plaintiffs have not alleged that they purchased the I-STOP directly from CL Medical. Instead, they admit that CL Medical “sold the device to Plaintiff’s physician or a facility with which he was affiliated.” [Record No. 1, p. 27] It was Gaunce’s doctor, not Gaunce, who purchased the device. Because the Complaint fails to show that the plaintiffs and CL Medical were in a buyer-seller relationship, the plaintiffs are not in privity with CL Medical. See Allen v. Abbott Labs., 2012 U.S. Dist. LEXIS 363 (E.D. Ky. 2012), Munn v. Pfizer Hosp. Products Group, Inc., 750 F.Supp. 244, 248 (W.D. Ky. 1990) (dismissing an implied warranty claim because the doctor and not the patient had purchased surgically implanted nails). Accordingly, the plaintiffs’ breach of warranty claims will be dismissed.

B. Fraud and Fraud by Concealment

CL Medical next challenges the plaintiffs’ claims of fraud (Count 6) and fraud by concealment (Count 7). Because a claim of fraud creates a “high risk of abusive litigation, ” plaintiffs asserting these claims must satisfy the more stringent pleading standard of Rule 9(b) of the Federal Rules of Civil Procedure. See Bennett v. MIS Corp., 607 F.3d 1076, 1101 (6th Cir. 2010). Rule 9(b) requires that a plaintiff state a claim with particularity as follows:

In alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake. Malice, intent, knowledge, and other conditions of a ...

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