Winn v. Chrysler Group LLC, et al.,

Filing 54

ORDER signed by Judge Morrison C. England, Jr on 4/8/10 ORDERING dft Chrysler's Motion for Reconsideration 43 is DENIED; Pltfs' request that that court assess costs against Chrysler for bringing this motion is also DENIED; The stay placed on remanding this case to Shasta County is lifted; the case is transferred and the Clerk of this is ordered to close the file. (cc: cert copy to Shasta County Superior Court) (Carlos, K)

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Defendants. 26 27 28 /// 1 ----oo0oo---v. CHRYSLER GROUP, LLC, a Delaware corporation, successor in interest to Daimler Chrysler Corporation; MAGNA POWERTRAIN, INC.; MAGNA INTERNATIONAL OF AMERICA, INC., also known as Magna Powertain; GREAT VALLEY CHRYSLER JEEP, an unknown business entity; ENTERPRISE RENT-A-CAR COMPANY, a California corporation; S.J. DENHAM, INC., a California corporation, DEBORAH MATISENGLE; et al., DANIEL STACEY WINN, individually and as successor in interest to Petra Monika Winn, deceased, KORY MICHAEL WINN, individually and as successor in interest to Petra Monika Winn, deceased, BREEONNA WINN, individually and as successor in interest to Petra Monika Winn, deceased, ERIKA WINN, individually and as successor in interest to Petra Monika Winn, deceased, Plaintiffs, ORDER No. 2:09-cv-02805-MCE-GGH UNITED STATES DISTRICT COURT EASTERN DISTRICT OF CALIFORNIA

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By Memorandum and Order filed December 24, 2009, this Court granted Plaintiffs' Motion to Remand the above-captioned matter back to the Superior Court of the State of California in and for the County of Shasta for further adjudication. On December 31,

2009, Defendant Chrysler Group, LLC ("Chrysler") submitted an Ex Parte Application asking that the remand order be stayed in order to permit further briefing. That request was granted on

January 29, 2010, with the Court staying this matter pending its adjudication of a Motion for Reconsideration. Now before the

Court is that reconsideration request, filed February 10, 2010. A court should not revisit its own decisions unless extraordinary circumstances show that its prior decision was clearly erroneous or would work a manifest injustice. Christianson v. Colt Indus. Operating Corp., 486 U.S. 800, 816, 108 S. Ct. 2166, 100 L. Ed. 2d 811 (1988). This principle is That

generally embodied in the law of the case doctrine.

doctrine counsels against reopening questions once resolved in ongoing litigation. Pyramid Lake Paiute Tribe of Indians v. Hodel, 882 F.2d 364, 369 (9th Cir. 1989). Nonetheless, in

certain limited situations the court may reconsider its prior decisions. Reconsideration may be appropriate where 1) the court is presented with newly discovered evidence; 2) the court committed clear error or the initial decision was manifestly unjust; or 3) there is an intervening change in controlling law. See Turner

v. Burlington N. Santa Fe R.R. Co., 338 F.3d 1058, 1063 (9th Cir. 2003); School Dist. No. 1J, Multnomah County v. ACandS, Inc., 5 F.3d 1255, 1263 (9th Cir. 1993) (citations and quotations omitted). 2

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Local Rule 230(j) similarly requires a party seeking reconsideration to demonstrate "what new or different facts or circumstances are claimed to exist which did not exist or were not shown upon such prior motion, or what other grounds exist for the motion," and "why the facts or circumstances were not shown at the time of the prior motion." "Motions for reconsideration serve a limited function: to correct manifest errors of law or fact or to present newly discovered evidence." Ayala v. KC Envtl. Health, 426 F. Supp.

2d 1070, 1098 (E.D. Cal. 2006) (emphasis in original) (internal citations omitted). Mere dissatisfaction with the court's order,

or belief that the court is wrong in its decision, are accordingly not sufficient. Reconsideration requests are Turner

addressed to the sound discretion of the district court. v. Burlington N. Santa Fe R.R., supra, 338 F.3d at 1063.

According to Chrysler, it initially emphasized Plaintiffs' successor liability claims in opposing Plaintiffs' Motion to Remand because in Chrysler's view those claims clearly ran counter to the terms of prior bankruptcy proceedings (which approved its purchase of assets from Chrysler's predecessor in interest, Chrysler Corp. LLC) and accordingly supported the exercise of federal jurisdiction in order to safeguard the bankruptcy court's orders. The successor liability claims

against Chrysler were, however, dismissed at a point after briefing on the original Motion to Remand had been completed. /// /// /// 3

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Given that change of circumstances, and in view of Chrysler's argument that it would not have relied so exclusively on the successor liability claims to support federal jurisdiction had it known those claims would be dismissed, the Court permitted this Motion in order to afford Chrysler the opportunity to show that a different result is indicated and that the Court should retain jurisdiction on the basis of Plaintiffs' breach of contract claims against Chrysler, alone.1 Consequently, Chrysler urges

that the Court reconsider its prior ruling based on facts that had not been previously adduced given the earlier complexion of this case. In satisfying its burden in that regard, Chrysler primarily points to the fact that in purchasing its predecessor's assets, it did not expressly assume liabilities arising from the dealership agreement reached with one of the so-called "dealer" defendants involved in this case, Great Valley Chrysler Jeep ("Great Valley"). /// /// /// /// /// /// /// /// Those claims of Action contained In its December 14, identified in error
1

are set forth in the Sixth and Seventh Causes within Plaintiffs' First Amended Complaint. 2009 Order (at 8:6-9), those claims were as the Fifth and Sixth Causes of Action. 4

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Chrysler argues that because it can assert that defense with regard to any liability it may have with respect to Great Valley, the Court should retain jurisdiction over this entire case,2 despite the fact that the lawsuit admittedly only alleges claims grounded in state law, and despite the fact Chrysler does not

contest that it assumed liability with respect to the other two named dealer defendants, R.J. Denham, Inc. and Enterprise Rent-aCar Company.3 The gravamen of Chrysler's argument, then, is because any claims as to the Great Valley dealership agreement undermine the terms of the Sales Order as approved by the bankruptcy court, those claims "have a direct impact on the administration of the bankruptcy estate" and consequently fall within the bankruptcy court's "retained jurisdiction to interpret the force and effect of its Sales Order." Reply, 3:23-26.

This contention loses sight of what appears to be a relatively minor role of Great Valley in this case as a whole. As set forth in the Court's December 24, 2009 Memorandum and Order, this lawsuit is a wrongful death action which claims damages against the manufacturers/suppliers of the Chrysler vehicle driven by Plaintiffs' decedent, Petra Winn, at the time of ths subject accident.

Specifically, Chrysler states as follows: "Plaintiffs' breach of contract claims, which attempt to enforce the Great Valley Chrysler dealership agreement, are completely contrary to the Bankruptcy Court's Sale Order." Def.'s Mot., 9:23-25. As such, Chrysler maintains that the entire action belongs in federal court so that the bankruptcy court, in turn, can resolve such claims.
3

2

See Reply, 4:3-9. 5

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Other named defendants include S.J. Denham, the dealership who bought the Chrysler from Enterprise Rent-a-Car and sold it to Ms. Winn, and the driver of the other vehicle involved in the accident, Deborah Matisengle. Great Valley's dealership role

appears to be two layers removed from Petra Winn: the sales transaction it brokered was the initial purchase, by Enterprise. Enterprise, in turn, sold the vehicle to Denham and it was Denham that sold the car to Petra Winn herself. As indicated above,

because Chrysler has already assumed the dealership agreements applicable to both Enterprise and Denham, only the first sales transaction (and the one arguably most remote from Petra Winn) falls within the purview of Chrysler's argument for invoking this Court's jurisdiction. Under 28 U.S.C. § 1334(b), this Court has original, but not exclusive, jurisdiction over cases that either "arise under" or are "related to" bankruptcy cases under Title 11. Mann v. GTCR

Golder Rauner, LLC, 483 F. Supp. 2d 884, 894 n.8 (D. Ariz. 2007). While this Court consequently has the discretion to retain this matter to the extent that it bears some relation to the bankruptcy proceedings of Chrysler's predecessor in interest (which it assuredly does), care must nonetheless be taken to avoid construing § 1334(b) too broadly so as to bring into federal court matters that should be left for state courts to decide. See, e.g., In Matter of FedPak Systems, Inc., 80 F.3d

207, 213-14 (7th Cir. 1996). /// /// /// 6

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As stated in its December 24, 2009 Memorandum and Order, under principles of equitable remand it is proper for this matter to be adjudicated in state court. Equitable remand focuses on

the consideration of several factors: "(1) the effect of the action on the administration of the bankruptcy estate; (2) the extent to which the issues of state law predominate; (3) the difficulty of applicable state law: (4) comity; (5) the relatedness or remoteness of the action to the bankruptcy case: (6) the existence of a right to jury trial; and (7) prejudice to the party involuntarily removed from state court. of: In the Matter

Baptist Foundation of Arizona, 2000 WL 35575676 at *7 (D.

Ariz. 1996), citing Williams v. Shell Oil Co., 169 B.R. 684, 692 (S.D. Cal. 1994). As the Court has already explained, weighing these factors tips decisively in favor of remanding this matter back to state court. The actual debtor in bankruptcy, Chrysler Corp. LLC, is Plaintiffs' lawsuit asserts

not even a party to this lawsuit.

claims sounding exclusively in state law, and to the extent that bankruptcy is a potential issue at all, it affects only a single affirmative defense available to one defendant in this multipledefendant case. The issue of bankruptcy is therefore, at best, Finally, to the extent that a bankruptcy

an attenuated one.

defense is appropriate as to Defendant Chrysler, there is no reason why the defense cannot be asserted in state court. /// /// /// /// 7

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State law issues clearly predominate as a whole, and trying this case together in state court, in a forum that can adjudicate this entire matter through a unitary jury trial (a procedure not normally available in bankruptcy court), clearly favors concerns of both judicial economy and comity. The only reason advanced by Chrysler for federal jurisdiction is to allow its single federal defense as to one defendant to be adjudicated by federal court. This is not enough

to counter all the other reasons which plainly favor resolution in state court. Significantly, too, Chrysler has already assumed

liability for the two other dealer defendants, Denham and Enterprise, and is therefore a proper defendant in state court on the breach of contract claims in any event.4 /// /// /// /// /// /// /// ///

These circumstances alone distinguish this case from district court decisions coming to a contrary result, as cited by Chrysler and attached as Exhibits E-G to the Declaration of John Gherini filed in support of the instant Motion. In those cases, unlike the case at bar, there was no indication that Chrysler had properly assumed liability with respect to agreements inuring to the benefit of any other defendant. Moreover, the Court's review of those cases indicates that they revolve primarily around straightforward successor liability, a factor no longer at issue here given Plaintiffs' dismissal of all causes of action directly dependent on such liability. 8

4

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For all the foregoing reasons, Defendant Chrysler's Motion for Reconsideration (Docket No. 43) is DENIED.5 Plaintiffs'

request that the Court assess costs against Chrysler for bringing this Motion is, however, also DENIED. Finally, the stay placed The case

on remanding this case back to Shasta County is lifted.

is transferred and the Clerk of this Court is ordered to close the file. IT IS SO ORDERED. Dated: April 8, 2010

_____________________________ MORRISON C. ENGLAND, JR. UNITED STATES DISTRICT JUDGE

Because oral argument was not of material assistance, the Court ordered this matter submitted on the briefs. E.D. Cal. Local Rule 230(g). 9

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