Bryntensen et al v. Camp Automotive, Inc. et al

Filing 162

MEMORANDUM DECISION AND ORDER granting in part and denying in part 80 Motion to Amend Complaint. Signed by Judge B. Lynn Winmill. (caused to be mailed to non Registered Participants at the addresses listed on the Notice of Electronic Filing (NEF) by (cjs)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF IDAHO
CASEY BRYNTESEN, et al.,
Case No. 2:13-cv-00491-BLW
Plaintiffs,

MEMORANDUM DECISION AND
ORDER

v.
CAMP AUTOMOTIVE, INC., et al.,
Defendants.

INTRODUCTION
The Court has before it Plaintiffs’ Motion for Leave to Amend their Complaint to
Assert Claim for Punitive Damages Pursuant to Idaho Code § 6-1604 (Dkt. 80). The issue
has been fully briefed and taken under advisement. For the reasons expressed below, the
Court will deny the motion in part and grant the motion in part.
BACKGROUND
The underlying claims of this case stem from the detention of the Bryntesen
family while driving a Camp BMW loaner vehicle that was incorrectly reported as stolen.
Steve Wilson is the used car manager at Camp BMW, a Lithia Motors dealership. On
June 17, 2013, Wilson noticed that a 2011 BMW 328 sedan was missing during a
monthly inventory. After his discovery, Wilson searched the car lot, spoke with the
available employees and a third-party repair center, and reviewed outstanding vehicle

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loan agreements. He also spoke with the service manager, Scott Grumbly, who assisted
him in the search for the vehicle.
That same day, Wilson requested that BMW perform a GPS locate on the vehicle
but was informed that he would need to first file a police report. Consequently, Wilson
reported the car as stolen. The vehicle was not stolen, but had actually been loaned to the
Bryntesens while their vehicle was being repaired. Matthew Rydman, a service
department employee, loaned the vehicle to the Bryntesens a month earlier and misfiled
the loaner agreement. Throughout Wilson’s search, he never contacted Rydman, who was
attending an event in California at the time.
A few days after Wilson reported the vehicle as stolen, police pulled over and
detained the Bryntesens for possession of a stolen vehicle. Plaintiffs now seek to amend
their Complaint to assert punitive damages claims against defendants Steve Wilson,
Camp Automotive (dba Camp BMW), and Lithia. Plaintiffs also seek to amend their
Complaint to state with more particularity the basis for negligence liability of defendant
Lithia.
ANALYSIS
1. Plaintiffs’ Motion to Amend to State Basis for Negligent Liability of Lithia
Plaintiffs seek to amend their Complaint to state with more particularity the basis
for negligence liability of defendant Lithia. Pl.’s Motion at 1-2, Dkt. 80. The Court will
freely grant a party leave to file an amended pleading "when justice so requires." FED. R.
CIV. P. 15(a)(2). In its response brief, Lithia has not opposed Plaintiffs’ amendments

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“regarding Lithia’s relationship to the other Defendants.” Def.’s Reply at 13, Dkt. 95. On
the other hand, BMW of North America opposes such an amendment because the
amended complaint “re-allege[s] false facts that they know are untrue and unsupported by
any evidence. Def. BMW’s Reply, at 3, Dkt. 94. However, the claims against BMW of
North America remain unchanged in the proposed amended complaint. BMW of North
America’s objection to those claims may be taken up on a motion for summary judgment.
Accordingly, the Court will grant this portion of Plaintiffs’ motion.
2. Plaintiffs’ Motion to Amend to Assert Punitive Damages
Plaintiffs also seek to amend their complaint to assert punitive damages. Plaintiffs’
punitive damages claim is governed by Idaho Code § 6-1604, which provides:
In any action seeking recovery of punitive damages, the claimant must
prove, by clear and convincing evidence, oppressive, fraudulent, malicious
or outrageous conduct by the party against whom the claim for punitive
damages is asserted.
IDAHO CODE ANN. § 6-1604(1) (2015).
It is in the trial court’s discretion to decide whether to submit the punitive damages
issue to the jury. See Manning v. Twin Falls Clinic & Hosp., Inc., 830 P.2d 1185, 1190
(Idaho 1992). As a matter of substantive law, it is well established in Idaho that punitive
damages are not favored and should be awarded only in the most unusual and compelling
circumstances, and are to be awarded cautiously and within narrow limits. Manning, 830
P.2d 1185; Jones v. Panhandle Distribs., Inc., 792 P.2d 315 (Idaho 1990); Soria v. Sierra
Pac. Airlines, Inc., 726 P.2d 706 (Idaho 1986); Cheney v. Palos Verdes Inv. Corp., 665

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P.2d 661 (Idaho 1983); Linscott v. Rainier Nat’l Life Ins. Co., 606 P.2d 958 (Idaho
1980).
An award of punitive damages will only be allowed when the defendant acted in a
manner that was “an extreme deviation from reasonable standards of conduct, and that
the act was performed by the defendant with an understanding of or disregard for its
likely consequences.” Manning, 830 P.2d at 1190 (quoting Cheney, 665 P.2d at 661).
Further, Plaintiffs “must prove [Defendants’] actions toward [Plaintiffs] constituted an
extreme deviation from standards of reasonable conduct, which was done with
knowledge of the likely consequences and an extremely harmful state of mind.” Seiniger
Law Office, P.A. v. N. Pac. Ins. Co., 178 P.3d 606, 615 (Idaho 2008) (emphasis added).
In other words, “[t]he issue revolves around whether the plaintiff is able to establish the
requisite intersection of two factors: a bad act and a bad state of mind.” Todd v. Sullivan
Const. LLC, 191 P.3d 196, 201 (Idaho 2008) (citing Myers v. Workmen's Auto. Ins. Co.,
95 P.3d 977, 985 (Idaho 2004)).
At trial, these elements must be shown by clear and convincing evidence. See
IDAHO CODE ANN. § 6–1604(1). “Clear and convincing evidence is generally understood
to be [e]vidence indicating that the thing to be proved is highly probable or reasonably
certain.” State v. Kimball, 181 P.3d 468, 472 (Idaho 2008) (internal quotations omitted).
For purposes of this motion to amend, however, Plaintiffs do not need to meet this high
burden—they need show only “a reasonable likelihood of proving facts at trial sufficient
to support an award of punitive damages.” See IDAHO CODE ANN. § 6–1604(2).

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Therefore, although Federal Rule of Civil Procedure 15(a) encourages the trial court to
liberally grant motions to amend pleadings this policy is substantially tempered by the
requirements under Idaho law dictating that the Court allow Plaintiffs to amend their
complaint to assert a claim for punitive damages only if they establish a reasonable
likelihood of proving, by clear and convincing evidence, that Defendants’ conduct was
oppressive, fraudulent, malicious, or outrageous.
In their briefing, Plaintiffs heavily emphasize their experience being stopped by
the police. It is not disputed that what happened to the Bryntesens was unfortunate. The
Court recognizes“[t]here are few more horrifying experiences than that of being suddenly
snatched from a peaceful and orderly existence and placed in the helpless position of
having one’s liberty restrained, under the accusation of a crime.” Halliburton-Abbott Co.
v. Hodge, 44 P.2d 122, 127 (Okla. 1935). However, an award of punitive damages
depends not on whether Plaintiffs went through a horrifying experience, but whether
Plaintiffs can show that the Defendants’ conduct was oppressive, fraudulent, malicious or
outrageous. Plaintiffs have failed to make the requisite showing.
a. Wilson’s actions were not an extreme deviation from reasonable standards
of conduct.
Plaintiffs allege that Wilson was extremely reckless when he reported the missing
vehicle as stolen. Pl.’s Br. at 15, Dkt. 81. Plaintiffs focus on the fact that Wilson reported
the car as stolen based on his “assumption” rather than actual knowledge. Plaintiffs have
also emphasized that during his deposition, Wilson agreed that customers “would want
[him] to make absolute certain that a loaner vehicle was stolen before [he] reported it as

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stolen.” Id. at 6. Such a weighted question is all but guaranteed to garner the desired
response. Clearly the person driving the vehicle to be reported as stolen would want
Wilson to be “absolutely certain.” The more appropriate inquiry is whether it was an
extreme deviation from the reasonable standard of conduct for Wilson to report the car as
stolen based on the information he then had in his possession?
It is reasonable for a manager to report a vehicle as stolen without being absolutely
certain. To require such certainty would encourage car theft and be inconsistent with the
reasonable management of a car dealership. That is not to say, of course, that a manager
may report any vehicle as stolen when he is unable to locate it. The manager should
search the lot for the missing vehicle, inquire about the vehicle’s location with other
employees at the dealership, check with repair centers, and loan agreements. Only after
the manager reasonably believes that the car was stolen should he contact the police.
Plaintiffs assert that Wilson’s conduct was an extreme deviation from the
reasonable standard of conduct because “(1) Mr. Wilson reasonably should have known
that the 2011 BMW 328 was in the Bryntesens’ lawful possession, (2) he knew or
reasonably should have known, based on past experiences, that not all unaccounted-for
cars were in actuality stolen, and (3) he recklessly disregarded the risk the Bryntesens
faced if the vehicle was reported as stolen.” Id. at 15–16.
It is undisputed that Camp BMW loaned the vehicle to the Bryntesens. When
Wilson was unable to locate the vehicle, he searched the car lot, spoke with employees
and a third-party repair center, reviewed outstanding Borrowed Vehicle Agreements

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(“BVA”), and attempted to perform a GPS locate. Wilson was unaware that Rydman,
who was not present during inventory, loaned the car to the Bryntesens. During his
search, Wilson failed to locate the BVA relating to the Bryntesens’ loaner car because it
was incorrectly filed. Moreover, Wilson had no reason to consider whether the missing
car had been used as a loaner car because it was a used car, and the dealership typically
loaned customers new, rather than used, cars. Decl. of Dylan E. Jackson, Ex. 2 at 73:3–
73:10, Dkt. 95-3. Consequently, Wilson had little reason to assume that the missing car
had been loaned to a customer.
Wilson could have done more to ensure that the missing vehicle was stolen, and
there is no doubt that there was some negligence in the handling of the BVA for the
Bryntesen’s loaner vehicle. However, under the circumstances presented here, Wilson’s
failure to further inquire into the location of the car was not an extreme deviation from
the reasonable standard of conduct. Wilson made a reasonable inquiry into the location of
the vehicle and, when he was unable to locate the vehicle, he reported the vehicle to the
police because he assumed it had been stolen.
Nonetheless, Plaintiffs allege that Wilson knew or reasonably should have known,
based on past experiences, that all unaccounted-for cars are not necessarily stolen. It
appears, however, there were only a limited number of incidents which Wilson could
have been expected to be aware of. In one incident, a missing vehicle was found at a
third-party repair center. Although other incidents occurred throughout the Lithia chain,
they do not amount to such a pervasive pattern that every Lithia employee in Wilson’s

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position would have been placed on notice of such incidents. And Plaintiffs have not
shown that Wilson knew or should have known about these past incidents. Even
assuming, arguendo, that Wilson knew about these incidents, it is questionable whether it
was unreasonable for him to report the vehicle as stolen. Certainly, that decision could
not be described as oppressive, fraudulent, malicious or outrageous.
Plaintiffs claim that “this type of occurrence has occurred on numerous
occasions.” Pl.’s Sur-Reply, at 5, Dkt. 110. For example, Plaintiffs provided evidence of
a “paperwork error” which resulted in Jeannie and Will Chandler being detained in
March 2004. Additionally, Plaintiffs rely on responses to a three-part questionnaire sent
to Lithia dealerships. However, of those responses, only four involved a customer being
questioned by police: one involved an auto accident and three involved questioning
customers at a business or residence. These responses demonstrate the rarity of a
customer being detained or seriously hindered when a vehicle is reported stolen.
Accordingly, even if Wilson knew of these incidents, his conduct cannot be considered
an extreme deviation from a reasonable standard of conduct.
In addition, Plaintiffs argue that Wilson recklessly disregarded the risk to his
customers when he “reported the vehicle as stolen with the actual knowledge that he was
reporting a felonious act and that law enforcement would track down the vehicle, and if it
was being driven at the time it was located, they would perform a felony stop on the
occupants, which was a serious and dangerous event.” Pl. Br. at 16. Plaintiffs’ argument
is steeped in hindsight. Wilson did not report the car as stolen knowing that it was in

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Plaintiffs’ possession. In the absence of such knowledge, there is simply no way that his
decision to report the car as stolen was made with an understanding of or disregard for its
likely consequences. See Manning, 830 P.2d at 119.
In addition, Plaintiffs have failed to establish that Wilson acted with a bad state of
mind. Plaintiffs claim they need only show gross negligence, or deliberate or willful
conduct. Pl.’s Reply, at 6, Dkt. 100. Contrary to Plaintiffs’ assertions, the Idaho Supreme
Court has made clear that even where the defendant’s state of mind could be termed
“gross negligence or deliberate or willful, [such conduct] is not sufficient for an award of
punitive damages.” Cummings v. Stephens, 336 P.3d 281, n.5 (Idaho 2014), reh'g denied
(Nov. 5, 2014). The Plaintiffs must show that there was “oppressive, fraudulent,
malicious, or outrageous conduct.” Id; IDAHO CODE ANN. § 6-1604(1). Plaintiffs have
failed to meet this burden.
The Court is further guided by Idaho’s reluctance to award punitive damages
absent unusual and compelling circumstances. See Manning, 830 P.2d at 1190. With
these general and specific guidelines in mind, the Court concludes that Plaintiffs have not
established a reasonable likelihood of proving—by clear and convincing evidence—facts
supporting a punitive damages award. Accordingly, the Court will deny Plaintiffs’
motion to amend their complaint to assert punitive damages against defendant Wilson.
b. Plaintiffs cannot show they are entitled to punitive damages against Camp
BMW and Lithia due to Wilson’s conduct.
Plaintiffs also seek to assert a claim of punitive damages against Camp BMW and
Lithia due to Wilson’s conduct. In Idaho, punitive damages may be recovered against a

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corporation only if “an officer or director participated in, or ratified, the conduct
underlying the punitive damage award.” Vendelin v. Costco Wholesale Corp., 95 P.3d 34,
48–49 (Idaho 2004) (citations omitted). Because Wilson’s conduct did not warrant an
award of punitive damages, such conduct alone cannot serve as a basis for punitive
damages against Camp BMW and Lithia.
c. Plaintiffs cannot show they are entitled to punitive damages against Lithia
due to Lithia’s implementation and enforcement of its policy.
In addition to Wilson’s conduct, Plaintiffs allege that they are entitled to recover
punitive damages against Lithia “because [Lithia’s] own implementation, enforcement,
and failure to clarify its policy as to when vehicles should be reported as stolen is also
extreme and outrageous conduct that is utterly indifferent to the real risks the policy
poses to Lithia customers.” Pl.’s Br. at 18, Dkt. 81. Plaintiffs contend that “[t]he extreme
nature of Lithia’s conduct is the product of two factors: (1) Lithia had knowledge that its
policy resulted in innocent customers being detained for possession of a stolen vehicle,
and (2) it intentionally and indifferently disregarded the risks that were inherent in this
foreseeable result.” Id. at 19.
Lithia’s policy requires its dealerships to complete an inventory every quarter and
instructs its 128 dealerships that “[i]f a vehicle cannot be located and you think it is
stolen, contact [e-mail] for further instructions on how to proceed.
Attach a copy of the Police Report as backup.” Schmidt Supplemental Decl., Ex. 11, Dkt.
107-1. Since Lithia’s inventory policy required that a police report must be submitted to
Lithia’s insurance department when a vehicle was reported as stolen, it is a fair

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assumption that Lithia knew of when missing cars were reported as stolen and, more
importantly, when a car reported as stolen turned out to simply be missing. Therefore,
the Court assumes that Lithia knew or should have known about any incident where a
vehicle was wrongfully reported as stolen within its network of dealerships.
However, Lithia’s records show that most of the vehicles that were reported as
stolen were indeed stolen. And, in the instances that a vehicle was incorrectly reported as
stolen, customers were only detained in a few instances. Indeed, in response to the threepart questionnaire sent to Lithia dealerships, only 13 responses were potentially pertinent
to this case. See Pl.’s Sur-Reply at 5–7, Dkt. 110. Of those 13 responses, three were
redundant, one was incorrectly included, one car was actually stolen, two police reports
were cancelled before officers ever contacted a customer, four incidents impacted
customers, and two responses included incidents similar to this incident but that occurred
after the filing of this suit.
Of the pre-suit incidents identified, only four had any impact on customers, but
none of those incidents resulted in a felony stop of a customer. In one incident, a
customer was approached by police after a vehicle listed on her paperwork was involved
in a hit and run. It was discovered that an error had been made and police did not detain
the customer. In 2011, another incident resulted in Tami Burks being detained at the
Texas hospital where she worked after an employee failed to file the BVA. Ms. Burks
was questioned for three hours by police before the error was resolved. In 2012, police
questioned a customer at their home in Fresno, California after a BVA was incorrectly

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filed. The customer provided a copy of the BVA and the matter was resolved. In the
fourth incident, a customer was approached by police at their workplace in Midland,
Texas due to a “paperwork error.” The customer provided a copy of the BVA and the
matter was resolved. Additionally, Plaintiffs identified an incident that occurred nine
years prior to this incident where the Chandlers were detained. But, in that incident, the
Chandlers were pulled over for speeding and no gun was pointed at them. Decl. of Jeanie
Chandler, at ¶5–6, Dkt. 86. These responses demonstrate that it is truly a rare occurrence
for customers to be wrongly detained on suspicion of a stolen car.
Plaintiffs supplemented their briefing with evidence that two incidents, similar to
the Bryntesens’ experience, occurred in 2014 and 2015. Pl.’s Sur-Reply, at 2–7, Dkt. 110.
Although these incidents cannot bear upon Lithia’s prior knowledge, they may be
evidence of a continuing oppressive course of conduct. See, e.g., Cuddy Mountain
Concrete Inc. v. Citadel Constr. Inc., 824 P.2d 151, 160–61 (Idaho 1992) (finding that
evidence of a general contractor’s continuing course of oppressive conduct toward a
subcontractor was a factor supporting punitive damages). However, the weight of the
evidence shows that these incidents were unlikely consequences of Lithia’s conduct.
Plaintiffs also allege that some employees felt pressured by their superiors to
report missing vehicles as stolen. However, this was not unreasonable conduct if their
superiors reasonably believed the vehicle to be stolen. As may be appreciated from the
other sections of Lithia’s policy, vehicles that have not been located during inventory
may be in a variety of places. For example, the vehicle may be in-transit, at auction,

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loaned to a customer with a BVA filed, on trade, wholesaled to another dealer, sublet,
rented, sold, or stolen. Schmidt Supplemental Decl., Ex. 11, Dkt. 107-1.When a manager
is unable to physically touch a vehicle during an inventory, and is therefore unable to
ensure it is on the lot, Lithia’s policy is to input the code corresponding to the status of
the vehicle. Accordingly, Lithia’s policy directs employees to examine all of these
potential situations before reporting a missing vehicle as stolen. Indeed, the instructions
under the heading “PR – Police Report (Stolen)” indicate that employees should report
the vehicle “if the vehicle cannot be located and you think it is stolen.” Id. (emphasis
added). As discussed above, it is not necessary to be absolutely certain that a vehicle has
been stolen. Without more, the negligence and carelessness of Lithia’s employees in
implementing the policy for reporting stolen vehicles is insufficient to show an extreme
deviation from the reasonable standard of conduct. Accordingly, Lithia’s implementation
of its policy is not an extreme deviation from the reasonable standard of conduct.
Additionally, Plaintiffs rely on Boise Dodge Inc. v. Clark, 453 P.2d 551, 558
(Idaho 1969) for their assertion that punitive damages are appropriate in this case to take
away Lithia’s incentive to engage in bad conduct by making it unprofitable. Pl.’s Reply at
2, Dkt. 100. However, there is scant evidence that Lithia’s conduct increases its profits.
In Boise Dodge, a dealership was fraudulently resetting the odometer on test vehicles and
selling them as new. Boise Dodge Inc., 453 P.2d at 553. This case simply does not
involve that kind of fraudulent conduct.

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Similar to their assertion against Wilson, Plaintiffs claim Lithia’s extremely
harmful state of mind is shown by Lithia’s “indifference and reckless disregard” to the
likely consequences of its actions. Pl.’s Sur-Reply at 3–4, Dkt. 110. Yet it is not the likely
consequence of reporting a vehicle as stolen that an innocent customer will be engaged
and detained by police officers during the recovery of the vehicle. Accordingly, Plaintiffs
have failed to show that Lithia acted with the requisite harmful state of mind.
Plaintiffs have failed to show a reasonable likelihood of proving—by clear and
convincing evidence—facts at trial that support an award of punitive damages against
Lithia. Legal remedies, other than punitive damages, are available to compensate
Plaintiffs for any damages they have suffered. Accordingly, Plaintiffs’ motion for leave
to amend their complaint to assert punitive damages against Lithia will be denied.
ORDER
IT IS ORDERED:
1.

Plaintiffs’ Motion for Leave to Amend Complaint (Dkt. 80) is GRANTED
in part, and DENIED in part as explained above.

DATED: April 16, 2015

_________________________
B. Lynn Winmill
Chief Judge
United States District Court

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