Solum v. CertainTeed Corp.

Citations: 147 F. Supp. 3d 404; 2015 WL 6505195; 2015 U.S. Dist. LEXIS 145601Docket: No. 7:15-CV-114-D

Court: District Court, E.D. North Carolina; October 27, 2015; Federal District Court

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Timothy and Angela Solum filed a lawsuit against CertainTeed Corporation in Onslow County Superior Court on April 22, 2015, alleging violations of the North Carolina Unfair and Deceptive Trade Practices Act (UDTPA) and fraud due to CertainTeed's designation of contractors as "Master Craftsmen" on its website. CertainTeed removed the case to federal court and sought dismissal of the complaint for failure to state a claim. The court later granted CertainTeed's motion to dismiss.

The Solums, in their complaint, indicated that CertainTeed manufactures building materials, including vinyl siding, and operates a website featuring a search tool for customers to find contractors trained in CertainTeed's products. Contractors listed as "Master Craftsmen" have completed specific training and received certification from CertainTeed. Consumers must accept the website's terms, which clarify that CertainTeed does not guarantee the skills or quality of work of the listed professionals.

In early 2014, the Solums sought contractors for vinyl siding installation and consulted Donald Follett of Superior Home Improvement, who claimed to be a certified Master Craftsman. The Solums verified Follett's credentials on CertainTeed's website and decided to hire him based on that information. However, after Superior Home Improvement installed the siding improperly, the Solums incurred additional costs to hire another contractor to correct the work.

CertainTeed is accused in the complaint of misleading consumers about the prestige of its Master Craftsman certification, asserting that it rigorously evaluates the credentials of endorsed service professionals and requires them to complete a comprehensive certification program. Plaintiffs claim that in reality, the certification process is superficial, requiring only the completion of a simple workbook and a brief multiple-choice quiz, which even non-professionals can pass. As a result, the plaintiffs, lacking any professional building experience, have been able to obtain this certification in various CertainTeed products. 

The excerpt also outlines the legal standards for a motion to dismiss under Rule 12(b)(6), noting that the court evaluates the factual and legal sufficiency of the complaint while accepting well-pleaded facts as true. Legal conclusions or unsubstantiated assertions are not accepted as true. Additionally, the court may consider documents attached to the complaint or referenced therein if they are integral to the case and authentic, as well as matters subject to judicial notice.

A court may review documents that are integral to a complaint and deemed authentic to avoid situations where a plaintiff can claim fraud based on isolated statements taken out of context. In evaluating CertainTeed's motion to dismiss, the court can consider the web pages in Exhibit 1, which contain the disputed statements. Plaintiffs contend that these documents are undated, unauthenticated, and contain hearsay, but the court clarifies that at the motion to dismiss stage, no formal authentication is required. The assertion that the website materials are unreliable due to potential changes is insufficient. The court deems the website materials authentic and overrules the hearsay objection, noting that the examination is for determining representations made, not their truthfulness. Plaintiffs relied on CertainTeed's website to verify Superior Home Improvement's Master Craftsman certification, making the referenced web pages integral to their claims. Exhibit 1 includes screenshots of relevant web pages that the plaintiffs accessed, and since they do not dispute the content of these pages, the court can consider them as evidence of the representations made to the plaintiffs.

Plaintiffs contest Exhibit 2, presented by CertainTeed in its motion to dismiss, which includes screenshots about becoming a Master Craftsman. The court finds it unnecessary to determine if Exhibit 2 is integral to the plaintiffs' complaint since they accessed the information only after realizing the certification was deceptive. Consequently, they did not rely on Exhibit 2 during their hiring decision. The court applies North Carolina law, following the principle that a federal court in diversity cases must predict how the state's Supreme Court would rule on the issue if it has not addressed it directly. To allege a claim under the North Carolina Unfair and Deceptive Trade Practices Act (UDTPA), plaintiffs must demonstrate that CertainTeed engaged in an unfair or deceptive act affecting commerce, which proximately caused them injury. Deceptive acts are those with a tendency to deceive, while unfair acts offend public policy or are substantially injurious to consumers. The determination of whether an act is unfair or deceptive is a legal question. For claims based on misrepresentation, plaintiffs must show both actual and reasonable reliance on the misrepresentation to establish proximate cause, which they must plausibly allege to survive a motion to dismiss.

Under North Carolina law, a party's reliance on a representation is deemed reasonable only if they exercise reasonable care to verify its truthfulness. At the pleading stage, if a plaintiff could have discovered the truth through inquiry, they must assert that they were denied the chance to investigate or could not have ascertained the facts through reasonable diligence. Reliance is considered unreasonable as a matter of law when it contradicts the express terms of a written contract. Individuals are bound by contracts they sign without reading, unless they can justify their failure to read due to special circumstances. Additionally, reliance on mere puffery—exaggerated claims not meant to be taken literally—is not reasonable under the law, as such statements are too vague for any buyer to rely upon. General claims of superiority or comparison are classified as puffery and are not actionable.

The Solums assert reliance on CertainTeed's Master Craftsman designation, claiming it was misrepresented as prestigious, requiring rigorous coursework, and involving credential examination. However, under North Carolina law, such reliance is deemed unreasonable. The court finds CertainTeed's representations, characterized as vague opinions, amount to mere puffery and cannot form a basis for reasonable reliance. Additionally, the Solums could have easily verified the truth of CertainTeed's disclaimers about the lack of guarantees or endorsements regarding service professionals by reviewing the clickwrap agreement they accepted. The agreement explicitly states that CertainTeed does not guarantee the quality of services and includes the assertion regarding credential examination. Furthermore, the Solums could have accessed course requirements through CertainTeed's website with reasonable diligence. The court concludes that the Solums failed to plausibly allege reasonable reliance on the designation and therefore their claim under the North Carolina Unfair and Deceptive Trade Practices Act (UDTPA) is invalid. The Solums’ argument that CertainTeed's profit motive behind the Master Craftsman program constitutes unfairness also fails, as profit-seeking is not inherently deceptive under the UDTPA.

CertainTeed’s ongoing assertion that Superior Home Improvement is a qualified vinyl siding installer did not contribute to the plaintiffs' injury and cannot support their claims under the North Carolina Unfair and Deceptive Trade Practices Act (UDTPA) or fraud. Fraud claims necessitate heightened pleading requirements, as outlined in Federal Rule of Civil Procedure 9(b), which mandates that plaintiffs specify the circumstances of the fraud, including the time, place, content of false representations, the identity of the person making the misrepresentation, and the benefits gained from it. Under North Carolina law, a fraud claim requires allegations of: (1) a false representation or concealment of a material fact; (2) a deception intended to mislead; (3) actual deception; (4) resulting damages; and (5) reasonable reliance on the false representation. The reasonableness of reliance is typically a jury question unless the facts allow only one conclusion. In this case, the court determined that the plaintiffs’ reliance on the misrepresentation regarding the Master Craftsman designation was unreasonable as a matter of law, leading to the conclusion that their fraud claim fails. Consequently, the court granted CertainTeed's motion to dismiss the complaint, indicating that the plaintiffs did not present a claim upon which relief could be granted. The court also referenced the "Terms and Conditions" as a "clickwrap" agreement, which requires user acceptance before proceeding, and noted that the plaintiffs had previously completed relevant course requirements to become "Master Craftsmen."