holding that plaintiff adequately pleaded an ICFA violation where the complaint alleged that the defendant was aware of the alleged omission, that the defendant failed to disclose the information, and that the information was material because the plaintiffs would not have purchased the items had defendant disclosed the information
How later courts described this case
- holding that plaintiff adequately pleaded an ICFA violation where the complaint alleged that the defendant was aware of the alleged omission, that the defendant failed to disclose the information, and that the information was material because the plaintiffs would not have purchased the items had defendant disclosed the information
- finding plaintiffs adequately pled an ICFA violation based on a material omission where plaintiffs “alleged that Suzuki was aware of the Samurai’s safety problems,” that “Suzuki failed to disclose these defects,” and that “they would not have purchased the vehicles if Suzuki had disclosed the Samurai’s safety risk”
- stating that “even if a manufacturer is aware of problems with a particular product line, the notice requirement of section 2-607 is satisfied only where the manufacturer is somehow apprised of the trouble with the particular product purchased by a particular buyer”
- holding that defendant’s awareness of safety problems was insufficient to satisfy plaintiffs’ notice requirement where complaint did not allege that defendant had “actual knowledge of the alleged breach of the particular products purchased by the named plaintiffs”
Written by the judges who cited it.
The opinion
JUSTICE McMORROW, also concurring in part and dissenting in part:
I agree with the majority that the circuit court correctly dismissed the common law fraud counts for failure to state a cause of action. I also believe that the majority properly reinstates that part of the Illinois consumer fraud count relating to Suzuki’s concealment of the Samurai’s safety risks. However, I find that the complaint adequately alleges that Suzuki knew its vehicles were "troublesome and must be watched.” Accordingly, I would affirm the appellate court’s reinstatement of the breach of warranty claims.
As the majority observes, both the Illinois and Pennsylvania Commercial Codes provide that "[a]ny affirmation of fact or promise made by the seller to the buyer which relates to the goods and becomes part of the basis of the bargain creates an express warranty that the goods shall conform to the affirmation or promise.” 810 ILCS 5/2 — 313(l)(a) (West 1994); 13 Pa. Cons. Stat. § 2313 (a)(1) (1984). If the goods fail to conform to the affirmation or promise, the seller may be held accountable for breach of warranty. In order to maintain such an action, a "buyer must within a reasonable time after he discovers or should have discovered any breach notify the seller of breach or be barred from any remedy.” 810 ILCS 5/2 — 607(3)(a) (West 1994). There are, however, two recognized exceptions to giving notice. "Direct notice is not required when (1) the seller has actual knowledge of the defect of the particular product (Malawy v. Richards Manufacturing Co., 150 Ill. App. 3d 549 (1986)); or (2) the seller is deemed to have been reasonably notified by the filing of the buyer’s complaint alleging breach of UCC warranty (Perona v. Volkswagen of America, Inc., 276 Ill. App. 3d 609 (1995)).” 174 Ill. 2d at 492.
In this case, the complaint clearly alleges that Suzuki had actual knowledge of a defect in its vehicles. The majority itself notes: "It is uncontroverted that Suzuki was aware of the safety concerns regarding the Samurai. Suzuki knew of the unfavorable report about the Samurai issued by Consumers Union, as evidenced by its attempts to counter that report with its own publicity. Moreover, Suzuki entered [into] settlement agreements with several states following attorney general investigations of the Samurai’s safety risks.” 174 Ill. 2d at 493.
Nonetheless, the majority holds that "it is essential that the seller be notified that this particular transaction is 'troublesome and must be watched.’ ” (Emphasis in original.) 174 Ill. 2d at 493, quoting 810 ILCS Ann. 5/2 — 607, Uniform Commercial Code Comment 4 (SmithHurd 1993). Thus, because the plaintiffs here did not allege that Suzuki was aware that there was trouble with each and every one of plaintiffs’ vehicles, the majority finds that Suzuki did not have actual knowledge of the defect. Surprisingly, the court reaches this conclusion even though plaintiffs alleged that Suzuki had knowledge that all of its vehicles suffered the same design defect.
As support for its holding, the majority relies almost exclusively on the appellate court decision in Malawy v. Richards Manufacturing Co., 150 Ill. App. 3d 549 (1986). That case, however, is not only inapposite to the case at bar, it also does not stand for the proposition for which it is cited, namely, that a seller must be notified of trouble with every particular transaction.
In Malawy, a single plaintiff suffered a fracture to his right hip. As part of his surgery, doctors installed a metal plate into the femur shaft fracture. The plate later broke, resulting in at least five more surgeries. Plaintiff sued the hospital (as the seller) as well as the manufacturer of the plate under a breach of warranty theory. The manufacturer argued, however, that it did not receive notice of the plaintiff’s warranty claim. The appellate court disagreed.
First, the court held that the seller, St. Elizabeth’s Hospital, had actual notice of the defect because its doctors removed the broken plate. Second, the court noted that the manufacturer was in fact "notified of the break of the plate immediately after plaintiff [who originally sued the wrong manufacturer] obtained knowledge that it was the manufacturer of the plate.” Malawy, 150 Ill. App. 3d at 561 . Importantly, nowhere in Malawy did the court ever hold that knowledge of a particular transaction is a prerequisite to satisfying the notice requirements. It just so happened that in Malawy there was a single buyer and a single product. As a result, once the seller learned of the broken plate, the seller necessarily became aware that there was trouble with that particular transaction. That circumstance, however, is far different from the factual situation presented here.
In contrast to Malawy, this case involves a nationwide class action against the manufacturer of a product claimed to have been defectively designed. Specifically, plaintiffs allege that a defect in the Samurai’s design caused all of the vehicles to roll over during turns or evasive maneuvers. Unlike a manufacturing defect, which occurs when one or more products are defectively made, a design defect renders all of the products defective all of the time. 1 Consequently, if a manufacturer has actual knowledge that one of its products suffers a design defect, as opposed to a manufacturing defect, it necessarily follows that the manufacturer has knowledge that all of its products suffer that defect. In this case, Suzuki had actual knowledge that the Samurai suffered a design defect rather than a manufacturing defect. The majority concedes as much, citing to the negative report issued by Consumers Union as well as the attorney general investigations of the Samurai’s safety risks. Because Suzuki knew that its Samurai suffered a design defect, it knew a fortiori that each and every Samurai was defective. Contrary to the majority, I simply cannot fathom how Suzuki can claim that it did not have knowledge of a defect in each of its Samurais when in fact it had actual knowledge of a defect in all of its Samurais.
Finally, as noted above, plaintiffs seek to represent a class consisting of all persons in the United States who have purchased or leased a Samurai during the relevant time period. Putting Suzuki on notice to the same defect in every Samurai would not only be redundant, it would also likely prove impractical. What purpose would be served in requiring such notice where it appears that large quantities of the same defective product are at issue? What purpose would be served in requiring such notice where there has been a considerable number of complaints over a substantial period of time, so much so that the attorneys general of several states have intervened on consumers’ behalf?
Because I believe that plaintiffs’ complaint adequately alleges that Suzuki had actual knowledge of the defect, and because I find Suzuki’s other arguments regarding plaintiffs’ claims for breach of warranty lacking in merit, I would affirm the appellate court’s reinstatement of the breach of warranty count.
For the foregoing reasons, I respectfully dissent in part.
JUSTICE FREEMAN joins in this partial concurrence and partial dissent.
For example, if a vehicle’s wheel base is, by design, so narrow that each time a driver attempts to turn the vehicle it falls on its side, the car is said to have been defectively designed. All of the vehicles will suffer the same defect. If, on the other hand, a vehicle falls on its side, not because it was designed defectively, but because that particular vehicle was manufactured improperly (e.g., wheels put on out of alignment), only that vehicle is defective.