Aston Martin Lagonda of North America, Inc. v. VA Leasing Corp. et al
Filing
38
ORDER and Reasons; granting 8 Motion to Dismiss; granting 16 Motion for Summary Judgment; denying 28 cross-motion for summary judgment. Signed by Senior Judge William M. Hoeveler on 7/21/2011. (asl)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
10-20340-CIV-HOEVELER
ASTON MARTIN LAGONDA
OF NORTH AMERICA, INC.,
Plaintiff,
VA LEASING CORP. and
ROBERTO M. DE ARMAS,
Defendants.
ORDER AND REASONS
Before the Court are two motions filed by the plaintiff , Aston
Martin. These motions are: (1) a motion to dismiss Roberto De
Armas' s counterclaim, and (2) a motion for summary judgment against
both defendants. In addition, VA Leasing has filed a cross-motion
for summary judgment against Aston Martin. The motions are fully
briefed and the Court heard oral arguments on March 30, 2011.'
I. Background
Aston Martin filed this is one-count declaratory judgment
action September 8, 2010, asserting federal jurisdiction under 28
U.S.C.
§
2201 and 28 U.S.C.
§
1332. The pertinent facts are as
follows. In April 2008, Roberto De Armas visited The Collection
automobile dealership in Coral Gables to inquire about leasing an
ar he hearing was set for Aston Martin's motion to dismiss, but
during the hearing the Court elicited arguments concerning all
pending motions.
"Aston Martin Vantage" luxury sedan. The Collection put De Armas in
touch with
a
local
leasing agency, VA
Leasing Corp. After
completing the necessary credit inquiries on De Armas, VA Leasing
purchased the car from The Collection for $131,725.~
VA Leasing
then executed a forty-eight month lease contract with De Armas.
Under the Lease Agreement, De Armas paid VA Leasing $21,326 up
front, and agreed to pay about $2,300 per month for forty-eight
months. At the end of the lease period, De Armas was entitled to
exercise his "Purchase Option" under Paragraph 17 to buy the car
for an additional payment of $54,000, if he wished.
De Armas began using the Vantage, but
soon encountered
mechanical problems. For example, the engine would mysteriously
shut off while the car was moving. The Aston Martin dealership
serviced the car but the problems continued. De Armas eventually
sought
relief
under
Florida's
Lemon
Laws
and
initiated
an
arbitration with the Florida New Motor Vehicle Arbitration Board
("the Board") , an administrative tribunal established by the
Florida
legislature
to
adjudicate
disputes
about
defective
vehicles. The Board held an evidentiary hearing June 23, 2010. The
hearing was attended by representatives of Aston Martin, De Armas,
and VA L e a ~ i n g . ~ July 2, 2010, the Board published a ten-page
On
2~~
Leasing evidently financed the purchase with a loan from
a lender who is not a party to this suit.
At times, the defendants have suggested that VA Leasing was
not party to the arbitration proceedings. The general manager of VA
"Decision of the Board"
(which Aston Martin attached to the
complaint). The Board determined that the car was, in fact, a
"lemon" under Chapter 681 of the Florida Statutes, and Aston Martin
was therefore obligated to buy it back.4 Specifically, the Board
ordered Aston Martin to refund to De Armas all the money he spent
leasing the car (the down payment, twenty-five months of lease
payments, various taxes and expenses, etc.) , minus a statutory off set of $17,413 (representing the value De Armas gained from driving
the car for about a year). Using these calculations, the Board
concluded that De Armas was entitled to recover $62,535 from Aston
Martin.
Further, the Board ordered Aston Martin to pay VA Leasing its
expected prof its on the lease. This lawsuit would have been avoided
Leasing testified at the hearing, and VA Leasing and De Armas share
the same lawyer. It is clear from the Board's written order that it
had "jurisdiction of the parties to and the subject matter of this
case."
Decision of the Board, p. 4 7 1, ECF No. 8-1. In any
event, in paragraph 31 of VA Leasing's statement of undisputed
facts [ECF No. 301, it admits that it participated in the
arbitration proceedings.
4
The Board also offered De Armas the option of a "replacement"
remedy, but De Armas proceeded under the refund option.
5
That amount was the calculation as of the date of the Board's
decision. By now Aston Martin owes De Armas more. The Board wrote
that the 'amount of refund shall be increased by the amount of any
additional monthly lease payments the Consumer may make to the
lessor up to the date of repurchase of the vehicle." De Armas has
continued making lease payments since the Board's order, and Aston
Martin concedes these payments are refundable to De Armas (and,
conversely, deductible from the amount Aston Martin owes VA
Leasing) .
if the Board calculated the exact dollar amount Aston Martin owed
to VA Leasing, as the Board did for De Armas's refund. Instead, the
Board wrote that VA Leasing was "entitled to a refund of the lease
price less the aggregate deposit and lease payments previously paid
to the lessor for the leased vehicle." Decision, p. 7,
1 8. The
Board acknowledged that "lease price" is a legal term, defined by
Section 681.102(9) of the Florida Statutes as:
[tlhe aggregate of the capitalized cost, as
defined in s. 521.003(2), and each of the
following items to the extent not included in
the capitalized cost:
(a) Lessor's earned rent charges through the
date of repurchase.
(b) Collateral charges, if applicable.
(c) Any fee paid to another to obtain the
lease.
(d) Any insurance or other costs expended by
the lessor for the benefit of the
lessee.
(e) An amount equal to state and local sales
taxes, not otherwise included as
collateral charges, paid by the lessor
when the vehicle was initially
purchased.
Fla. Stat.
§§
681.102(9)(a) (e). 6
-
6~ection
521.003(2), which is referenced in
defines capitalized costs as:
§
681.102(9),
(2) "Capitalized cost" means the agreed-upon total
amount which, after deducting any capitalized cost
reductions, serves as the basis for calculating the
amount of the periodic payment under the lease
agreement. The capitalized cost may include, without
limitation:
(a) Taxes.
(b) Registration fees .
Finally, the Board wrote on page 9 of its decision that:
Upon compliance with this Decision by the
Manufacturer [Aston Martin] , the Consumer [De
Armas] shall deliver possession of the subject
motor vehicle to the Manufacturer and the
titleholder [VE Leasing] shall deliver clear
title to the vehicle to the Manufacturer. In
the event the Manufacturer fails to comply
within the time specified and fails to file an
appeal as set forth below, the Consumer is
directed to notify the Department of Legal
Affairs, Lemon Law Arbitration Program.
Oddly, although the Board expressly instructed the parties1 of
their rights to appeal, no party appealed. Further, although the
defendants now claim Aston Martin ignored the Board's order,
neither defendant notified the Department of Legal Affairs of the
(c) License fees.
(d) Insurance charges.
(el Charges for guaranteed auto protection or GAP
overage.
(f) Charges for service contracts and
extended warranties.
(g) Fees and charges for accessories and for
installing accessories.
(h) Charges for delivery, service, and
repair.
(i) Administrative fees, acquisition fees,
and any and all fees or charges for
providing services incidental to the
lease agreement.
(j) The unpaid balance of any amount
financed under an outstanding motor
vehicle loan agreement or motor vehicle
retail installment contract with respect
to a motor vehicle used as a trade-in.
(k) The unpaid portion of the early
termination obligation under an
outstanding lease agreement.
(1) The first periodic payment due at the
inception of the lease agreement.
non-compliance, as they should have done.
Pursuant to the Board's order, VA Leasing submitted a claim in
writing to Aston Martin for $90,544, which VA Leasing claimed was
the 'lease price." This figure included the outstanding balance of
,
De Armas's monthly payments ($41,762) plus the $54,000 VA
easing
hoped to earn if De Armas exercised his "Purchase O p t i ~ n . " ~
Aston
Martin disagreed with VA Leasing's inclusion of the $54,000 as part
of the refundable "lease price." Aston Martin responded with a
conditional offer that: once Aston Martin received, (1) the vehicle
from De Armas, and (2) clear title from VA Leasing, Aston Martin
would then pay $67,194 to De Armas, and $43,751 to VA Leasing.'
Attempts to negotiate failed, and this federal lawsuit ensued. All
sides now ask me to declare the meaning of the Board's order. The
very narrow issue presented by Aston Martin's lawsuit is stated in
Paragraph 34 of the complaint:
Aston Martin respectfully seeks declarations
that the Lease Price payable to VA Leasing
does not require payment of the $54,000 for
the Purchase Option demanded by VA Leasing.
Pl.'s Compl.
a
34. On September 24, 2010, Roberto De Armas filed a
'The figures don't equal $90,544 because there were various
other costs and off -sets that aren't in dispute, including a $7,200
'interest refund" and others. Suffice it to say, the principle
dispute concerns the $54,000 Purchase Option.
8
The Board anticipated the opposite sequence of events: Aston
Martin was first supposed to refund the money, then Aston Martin
would receive the car and title, not the other way around. Aston
Martin inexplicably ignored this aspect of the Board's decision.
one-count counterclaim, for Aston Martin's alleged violation of the
Board's decision. On October 1, 2010, VA Leasing filed a two-count
counterclaim: 'Count I - Violation of the Decision" and "Count I1 Declaratory Judgment." In filing their various declaratory judgment
claims and counterclaims--all of which are based on conflicting
interpretations of the Board's decision--theparties have presented
this entire dispute to me for a judicial resol~tion.~
11. Legal standards
A.
A complaint must provide "a short and plain statement of the
claim showing that the pleader is entitled to relief," as required
by Rule 8(a)(2). Bell Atlantic Corp. v. Twomblv, 550 U.S. 544, 555
(2007). Though the factual allegations need not be detailed, they
"must be enough to raise a right to relief above the speculative
level."
't
A
a minimum, notice pleading
requires that a
complaint contain inferential allegations from which we
can
identify each of the material elements necessary to sustain a
recovery under some viable legal theory." Wilchombe v. TeeVee
Toons, Inc., 555 F.3d 949, 960 (11th Cir. 2009) (emphasis and
internal quotes omitted).
B.
Rule 56(c) of the Federal Rules of Civil Procedure instructs
This case should have been mediated. At the hearing, I
offered to arrange mediation before a magistrate judge. The parties
could not agree to mediate.
that summary judgment is proper ' f
i
the pleadings, depositions,
answers to interrogatories, and admissions on file, together with
the affidavits, if any, show that there is no genuine issue as to
any material fact and that the moving party is entitled to a
judgment as a matter of law." Fed. R. Civ. P. 56(c). The burden of
establishing the absence of a genuine issue of material fact lies
with the moving party. Celotex Corp. v. Catrett, 477 U.S. 317, 323
(1986). The Court should not grant summary judgment unless it is
clear that a trial is unnecessary, see Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 255 (1986), and any doubts in this regard
should be resolved against the moving party. Adickes v. S.H. Kress
I
&
.
Co
398 U.S. 144, 157 (1970).
111. Aston Martin's
De Armas's
motion to dismiss
counterclaim
In his counterclaim, De Armas alleges that Aston Martin
ignored the Board's order to repurchase the car, in breach of
Florida law. The issue in the motion to dismiss is whether De Armas
is required to assert these claims within the Lemon Law arbitration
procedure, rather than in a civil lawsuit. De Armas purported to
rely on the private right of action embedded in
§
681.112(1) of the
Florida Statutes, which provides that:
A consumer may file an action to recover
damages caused by a violation of this chapter.
The court shall award a consumer who prevails
in such action the amount of any pecuniary
loss, litigation costs, reasonable attorney's
fees, and appropriate equitable relief.
Fla.
Stat.
§
681.112(1). l o Although
§
681.112(1) obviously
contemplates a category of lawsuits that can take place outside the
arbitration process, this category does not include claims based on
Lemon Law theories of recovery. In Kinq v. Kins Motor Co. of Fort
Lauderdale, 780 So. 2d 937 (Fla. 4th DCA 2001), the Fourth ~istrict
discussed the scope of damages recoverable under
§
681.112,
concluding that the statute allowed aggrieved car-buyers to seek
damages outside the administrative "refund or replacement" process
only in limited circumstances:
Section 681.112 thus allows for a Chapter 681
damages case in circumstances where a refund
or replacement is not an option. Such
circumstances might include: (1) a warranty
violation under section 681.103 which does not
rise to the level of a "nonconformity" under
section
681.104 because
it
does
not
substantially impair the use, value, or safety
of a motor vehicle within the meaning of
section 681.102(16); (2) a violation of a
provision of Chapter 681 other than sections
681.104 or 681.103, such as section 681.114,
pertaining to the resale of returned vehicles;
(3) where the refund/replacement remedy does
not fully compensate the consumer, see
Maserati Autos., Inc. v. Ca~lan,522 So. 2d
993, 996 (Fla. 3d DCA 1988); or (4) the
situation presented in this case, where the
consumer cannot take advantage of
the
refund/replacement option because he cannot
'O1n his counterclaim, De Armas pled that his case 'arises out
of the same transactions and occurrences that are the subject
matter of the Plaintiff's claim." In other words, he implicitly
suggests the Court has supplemental jurisdiction over his state law
claims under 28 U.S.C. § 1367 (a), albeit without citation to any
jurisdictional statute.
furnish clear title to and possession of the
motor vehicle.
I . at 940-941. Thus, the question presented by the motion to
d
dismiss is whether De Armas is asserting a cognizable claim for
civil damages, or, rather, an arbitrable "refund or replacement"
claim.
The thrust De Armas's complaint is that he "incurred damages
as a result of Aston Martin's failure to pay the amount ordered by
the Decision." Specifically, he points out that he is still paying
smonthly lease payments on an u e
Vantage." This is clearly a
claim based on a Lemon Law theory of recovery, which cannot be
asserted outside of the arbitration process. To save his case, De
Armas tries to fit his lawsuit into one of the exceptions discussed
by
the Fourth District in Kins v. Kins Motor
Co. of
Fort
Lauderdale, by claiming separate damages in relation to driving a
defective car that "randomly shut [s] off while being operated,"
thereby creating "an extremely dangerous condition which exposes De
Armas to a substantial risk of bodily injury." Def.'s Opp., p. 6,
ECF No. 12. These allegation do not appear in De Armas' s pleadings,
" ~ Armas continues to make lease payments because he does not
e
want to return the car until he receives the refund payment from
Aston Martin. But Aston Martin won't pay the refund until it
receives the title from VA Leasing. VA Leasing, meanwhile, claims
the title is with the company that loaned VA Leasing the $131,725
to buy the car. VA Leasing claims it cannot afford to pay the loan
without the $54,000. The result is a quintessential standoff.
and even if they did, they would fail to state a cognizable claim
for relief.
If Aston Martin has not done so already, it is ordered to pay
De Armas the specific dollar amount ordered by the Board. On top of
that amount, Aston Martin is directed to reimburse De Armas for any
lease payments he tendered to VA Leasing in the many months since
the Board's order.12 Aston Martin is directed to pay this money
without delay, whether or not Aston Martin has received title to
the vehicle. If De Armas seeks any additional relief, he must
resort to the arbitration process of the Florida Lemon Laws, if it
is still available. Even if there were an independent basis for
maintaining
federal
jurisdiction
over
De
Armas's
remaining
counterclaims (if there are any), the claims are foreclosed by
§
681.112(1). See Kins v. Kins Motor Co. of Fort Lauderdale,
780
So. 2d 937 (Fla. 4th DCA 2001).
IV. Cross-motions for summary judgment
The Board wrote that VA Leasing is "entitled to a refund of
the lease price less the aggregate deposit and lease payments
previously paid to the lessor for the leased vehicle" (emphasis
added). The dispute on summary judgment is whether the lease price
includes the $54,000. Aston Martin seeks declaratory judgment that
VA Leasing is not entitled to recover the $54,000 because that sum
I21n his motion papers, De Armas claimed that the total amount
owed was $83,504. That was months ago. I urge the parties to work
out the mathematics on their own.
represents the "Purchase Option" and is not part of the definition
of 'lease price." In its cross-motion for summary judgment, VA
Leasing argues the opposite: that the $54,000 is part of the lease
price. Having reviewed the Lease Agreement, the Board's decision,
and Sections 521.003 (2) and 681.102 ( 9 ) of the Florida Statutes, the
Court finds that Aston Martin's position is correct. Aston Martin's
motion for summary judgment is granted, and VA Leasing1s crossmotion for summary judgment is denied.
The Court recognizes the twinge of unfairness that arguably
ensues from this outcome. When VA Leasing bought the Vantage for
$131,725, it was expecting the car to generate two sources of
revenue. The first source was the prof it associated with the fortyeight month lease to De Armas. The second source was the residual
re-sale value of the car after the forty-eight months ended. If De
Armas chose to buy the car, the residual value was stipulated at
$54,000. If De Armas wasn't interested, VA Leasing would still own
a relatively new Aston Martin Vantage to sell on the used-car
market to a different buyer. Either way, the car retained an
obvious re-sale value after the lease ended.
As it turns out, the car was a dud, and the Board directed
Aston Martin to repurchase it. This entailed a two-sided buy back
transaction. On side one, Aston Martin was required to refund all
of De Armas's payments, minus the value De Armas received from
driving the Vantage for a year. This refund undeniably made De
Armas whole. Regarding the second side of the buy-back, however, VA
Leasing submits that, if Aston Martin is only required to refund VA
Leasing's "lease priceM--and not required to pay the Purchase
Option--then VA Leasing won1t even recover the price it paid for
the Vantage, and therefore will not be made whole.
Notwithstanding VA Leasing's grim financial representations,
it appears VA Leasing will, in fact, recoup the $131,725 it paid
for the Vantage. In connection with the lease to De Armas, VA
Leasing received $21,326 at the lease signing, then thirty-four
monthly installments of about $2,300 each, totaling nearly $100,000
in lease revenue VA Leasing has already collected. Aston Martin
admittedly owes VA Leasing the final fourteen months rent, which
equals $32,000. This brings VA Leasing's refund to around $132,000,
which is almost exactly what VA Leasing paid.
But regardless, the Board did not require Aston Martin to pay
VA Leasing for the re-sale value of the automobile. It would have
been easy for the Board to estimate the residual value of the car,
then include this amount in VA Leasing's refund. The Board did not
do so. Rather, the Board ruled that VA Leasing is entitled to the
lease price. VA Leasing has not plausibly explained how the $54,000
Purchase Option is part of the lease price, and it is therefore not
part of the refund. If VA Leasing disagreed with the Board's
analysis, it should have appealed. This Court is not the proper
forum for that. Accordingly, it is hereby:
ORDERED AND ADJUDGED:
1.
Aston Martin's motion for summary judgment [ECF No. 161
on
its
declaratory
judgment
claim
is
granted. VA
Leasing's cross-motion for summary judgment [ECF No. 281
on its counterclaim for declaratory judgment is denied.
Aston Martin is ordered to promptly pay De Armas the
amount required by the Board's decision, plus the amount
of additional lease payments that De Armas tendered to VA
Leasing subsequent to the Board's decision. Once De Armas
receives the refund payment from Aston Martin, he must
promptly return the vehicle to Aston Martin. Except for
the relief provided by this paragraph, De Armas is not
entitled
to
further relief
Martin's
motion
to
dismiss
from
De
this Court. Aston
Armas's
remaining
counterclaims (if there are any remaining) is granted
[ECF No. 81.
DONE AND ORDERED in Miami, Florida,
SENIOR UNITED STATES DISTRICT JUDGE
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