Kryachkov v. Mooser Moto, LLC et al

Filing 15

ORDER granting 10 Motion to Dismiss pursuant to Rule 12(b)(1); because this Court lacks subject matter jurisdiction over plf's claims for relief, dfts' other Rule 12 motions and affirmative defenses are not proper ly before this Court, and they are dismissed as moot; dismissing as moot 10 Motion to Dismiss for Failure to State a Claim; dismissing as moot 10 Motion to Dismiss for Lack of Jurisdiction. Signed by District Judge Richard Voorhees on 11/13/2013. (Pro se litigant served by US Mail.)(cbb)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF NORTH CAROLINA
STATESVILLE DIVISION
CIVIL DOCKET NO.: 5:13CV73-RLV

VICTORIA ESTHER KRYACHOV,
Individually, and on behalf of Others
Similarly Situated,
Plaintiff,

)
)
)
)
)
vs.
)
)
MOOSER MOTO, LLC,
)
B.J. MOOSE, Owner,
)
APRIL MILLS, Business Manager, and )
JIM STRICKLEN, Business Manager, )
Defendants.
)
)

Memorandum and Order

THIS MATTER comes before the Court on Defendants’ Motion to Dismiss and
Memorandum in Support, filed July 25, 2013, and all related materials. (Docs. 10-12).
I.

PROCEDURAL AND FACTUAL HISTORY

On March 26, 2013, Plaintiff Victoria Esther Kryachkov (“Plaintiff”), on behalf of
herself and others similarly situated, filed suit against Defendants Mooser Moto, LLC (“Mooser
Moto”), BJ Moose (“Defendant Moose”), April Mills (“Defendant Mills”), and Jim Stricklen
(“Defendant Stricklen”) (collectively “Defendants”) pursuant to 28 U.S.C. § 1332, alleging
negligent misrepresentation, fraudulent misrepresentation, and violation of the Georgia Fair
Business Practices Act of 1975. (Doc. 1/Pl.’s Compl.)
The facts, as recited in Plaintiff’s complaint, are as follows:
Plaintiff is a resident of Raymond, Nebraska. (Pl.’s Compl., ¶ 4). On December 1, 2012,
Plaintiff placed an order with Mooser Moto to purchase a Linhai Big Horn 28 4X4 UTV
Standard Model, a Linhai UTV windshield, an Optional Winch-Standard 1 Year Warranty, and a

60” Snow Plow with Winch in dark green (collectively “utility vehicle”). (Id., ¶¶ 4, 14). Mooser
Moto is a company whose principal place of business is in Statesville, North Carolina. (Id., ¶ 5).
Defendant BJ Moose was the owner and operator of Mooser Moto. (Id., ¶ 19). Plaintiff ordered
the utility vehicle from Mooser Moto because Mooser Moto advertised a discount for all
payments wired or made by certified check or money order. (Id., ¶ 14). Plaintiff made the
purchase using a certified check in the amount of $6,328.28, (Doc. 1-4, Pl.’s Exh. D), and
received the advertised discount. (Pl.’s Compl., ¶ 14).
Plaintiff alleges that delivery of the utility vehicle was delayed and that, when she did
receive the vehicle, it was “damaged and defective.” (Id.) Plaintiff states that she spoke to
Defendant BJ Moose and he agreed to “send a signed and dated letter stating that he [would]
issue a full refund” and that once Plaintiff received the refund in full, she would ship the utility
vehicle back to Defendants. (Id., ¶ 15). Plaintiff filed a complaint with the Better Business
Bureau (“BBB”) regarding the damaged utility vehicle.1 In response, Defendants offered
Plaintiff a full refund and agreed to waive any restocking fees for the damaged product “once the
unit [was] shipped back.” (Id.) Plaintiff “disagrees with this response” by Defendants on the
grounds that it was not the remedy to which she and Defendant BJ Moose agreed when she
spoke with him about the defective utility vehicle. (Id.) Plaintiff states that “[h]ad [she] known
that this would be the case with a purchase from [Defendants], she would have never purchased
the vehicle from Mooser Moto LLC.” (Id., ¶ 16). On March 26, 2013, Plaintiff filed suit against
Defendants “to plead for compensation.” (Id., ¶ 15).

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There is nothing in the record to indicate the actual date of the BBB complaint and the BBB
complaint itself was not attached to Plaintiff’s complaint. Plaintiff’s Exhibit A is an online report from
the BBB on Mooser Moto that demonstrates complaints had previously been filed, but this does not
provide information on Plaintiff’s specific complaint. (Pl.’s Exh. A).
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Plaintiff further alleges that she is part of a class of “[a]ll purchasers of any vehicle,
accessory, or any other item from Mooser Moto LLC in the United States.” (Id., ¶ 18). She
states that she believes that there are “hundreds of members of the Class” who were similarly
wronged, whom she will be able to identify through “business records regularly maintained by
Defendants, their employees and agents,” and who “can be notified through email, mail, and
additional supplemental published notices, if necessary.” (Id., ¶ 19). Plaintiff alleges that
Mooser Moto “deliberately advertised lower prices and discounts, as well as being a nationwide
seller of different types of vehicles, for the purpose of luring customers to putative class
members throughout North Carolina and the United States.” (Id., ¶ 17).
On July 25, 2013, Defendants filed an answer to Plaintiff’s complaint (Doc. 12), and a
Motion to Dismiss on the following grounds: for Lack of Subject-Matter Jurisdiction pursuant to
Rule 12(b)(1) of the Federal Rules of Civil Procedure, for Insufficiency of Service of Process
pursuant to Rule 12(b)(5), and for Failure to State a Claim pursuant to Rule 12(b)(6). (Docs. 10,
11). In their answer, Defendants also proffered five affirmative defenses: Failure to Plead With
Particularity pursuant to Rule 9 of the Federal Rules of Civil Procedure, Failure to Plead
Individual Defendants Are Parties to Action, that Georgia Statutory Law does not apply, that
Plaintiff failed to mitigate any damages, and that there is no basis to certify a class under Rule 23
of the Federal Rules of Civil Procedure. (Doc. 12).
On August 23, 2013, this Court issued an Order informing Plaintiff of Defendants’
Motion to Dismiss and giving Plaintiff notice that if she failed to respond to Defendants’ Motion
within 30 days (by September 23, 2013), Defendant may be entitled to dismissal of all or part of
Plaintiff’s action as a matter of law. (Doc. 13). Plaintiff responded on October 3, 2013 in the
form of a Plea for Justice. (Doc. 14).

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II.

STANDARD OF REVIEW

Rule 12(b)(1) provides for dismissal where the court lacks jurisdiction over the subject
matter of the lawsuit. FED. R. CIV. P. 12(b)(1). Lack of subject matter jurisdiction may be raised
by either litigant or the court at any time. See Mansfield, C. & L.M. Ry. Co. v. Swan, 111 U.S.
379, 382 (1884); see also FED. R. CIV. P. 12(h)(3) (“If the court determines at any time that it
lacks subject matter jurisdiction, the court must dismiss the action.”).
When a court considers whether it has subject matter jurisdiction, the burden of proof is
on the plaintiff. Adams v. Bain, 697 F.2d 1213, 1219 (4th Cir. 1982). The court “is to regard the
pleadings’ allegations as mere evidence on the issue, and may consider evidence outside the
pleadings without converting the proceeding to one for summary judgment.”

Richmond,

Fredericksburg & Potomac R.R. Co v. United States, 945 F.2d 765, 768 (4th Cir. 1991) (internal
citations omitted). Yet, like a summary judgment proceeding, “[t]he moving party should prevail
only if the material jurisdictional facts are not in dispute and the moving party is entitled to
prevail as a matter of law. Id. at 769. Where jurisdictional facts are intertwined with facts
central to the substance of a case, a court must find that jurisdiction exists and consider and
resolve the jurisdictional objection as a direct attack on the merits of the case. United States v.
North Carolina, 180 F.3d 574, 580 (4th Cir. 1999).
III.

ANALYSIS

A. Subject Matter Jurisdiction
Subject matter jurisdiction can be satisfied in one of two ways: federal question
jurisdiction pursuant to 28 U.S.C. § 1331 or diversity jurisdiction pursuant to 28 U.S.C. § 1332.
This Court will consider each of these in turn.

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1. Federal Question Jurisdiction
Federal district courts “shall have original jurisdiction of all civil actions arising under
the Constitution, laws, or treaties of the United States.” 29 U.S.C. § 1331. In determining
whether original jurisdiction exists due to the presence of a federal question, courts look to the
plaintiff’s “well-pleaded complaint,” from which it must be clear that 1) plaintiffs’ “cause of
action ‘arises under’ federal law;” or 2) a federal law is “an element, and an essential one of
plaintiffs’ cause of action.” See Franchise Tax Bd. of State California v. Constr. Laborers
Vacation Trust for S. California, 463 U.S. 1, 9-11 (1983) (citing Louisville & Nashville R.R. Co.
v. Motley, 211 U.S. 149, 154 (1908))(citing Gully v. First Nat’l Bank, 299 U.S. 109, 112 (1936)).
Federal jurisdiction may exist over a state law claim if “the state law claim necessarily
raise[s] a stated federal issue, actually disputed and substantial, which a federal forum may
entertain without disturbing congressionally approved balance of federal and state judicial
responsibilities.” Grable & Sons Metal Prods., Inc. v. Darue Eng’g & Mfg., 545 U.S. 308, 314
(2005);see also Ormet Corp. v. Ohio Power Co., 98 F.3d 799, 806 (4th Cir.1996). Federal
question jurisdiction is not established by the existence of a federal counterclaim or defense.
Vaden v. Discover Bank, 129 S. Ct. 1262, 1272 (2009).
No federal question exists in the instant case, nor does Plaintiff claim that one is present.
Plaintiff states that jurisdiction is proper pursuant to 28 U.S.C. § 1332, which speaks to diversity
jurisdiction. (Pl.’s Compl., ¶ 2). Her claim alleges common-law fraudulent misrepresentation
and negligent misrepresentation, as well as violation of the Georgia Fair Business Practices Act
of 1975 as her grounds for recovery (Id., ¶¶ 24-43), all of which are state law causes of action.
None of these grounds implicate federal law in any way, whether directly or indirectly. To be
sure, federal case law abounds wherein fraud is of central concern. Here, however, there is no

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organizing feature discernable from the facts alleged providing a jurisdictional “hook” by which
the case can be found to “arise under” federal law. Thus, federal law is not an element of
Plaintiff’s cause of action and federal question jurisdiction is not present.
2. Diversity Jurisdiction
Plaintiff’s stated basis for subject matter jurisdiction in this court is diversity jurisdiction
under 28 U.S.C. § 1332. (Pl.’s Compl., ¶ 2). In order to satisfy diversity jurisdiction, a plaintiff
must meet two separate requirements. First, the dispute must be between “citizens of different
States.” 28 U.S.C. § 1332(a)(1). Second, the amount in controversy must exceed $75,000. Id. §
1332(a).
Plaintiff alleges, and Defendants admit, that Plaintiff is a resident of the State of
Nebraska. (Pl.’s Compl., ¶¶ 4; Def.’s Motion, Answer and Further Defense, ¶ 4). Plaintiff
further alleges that Mooser Moto has its principal place of business in Statesville, North
Carolina. (Doc. 1 at ¶5). Defendants admit that Mooser Moto had its principal place of business
in Statesville, NC, but allege that at the time Plaintiff filed suit, the business had been
administratively dissolved. (Doc 12 at ¶ 5). Plaintiff and Defendants are silent as to the
residence of the individual Defendants, BJ Moose, April Mills, and Jim Stricklen. Thus,
diversity exists between Plaintiff and Mooser Moto, while more information is necessary to
determine whether complete diversity exists between Plaintiff and the three other named
defendants.
Because the amount in controversy requirement for diversity jurisdiction is not met, the
complete diversity issue need not be resolved. Under Section 1332(a), the amount in controversy
must exceed $75,000. The amount in controversy should be measured as “a reasonable reading
of the value of the rights being litigated.” Atari v. McNeal, 159 F. Supp. 2d 224, 226 (W.D.N.C.

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2000). Courts should consider actual and compensatory damages, as well as punitive and trebled
damages when they are available. See e.g., Ashworth v. Albers Medical, Inc., 395 F. Supp. 2d
395, 313 (S.D.W.Va. 2005). Here, Plaintiff requests actual damages stemming from the incident
as well as treble damages pursuant to the Georgia Fair Business Practices Act. (Pl.’s Compl.).
Though Plaintiff does not specify in her complaint the amount in actual damages that she seeks,
Exhibit D demonstrates that the she paid $6,328.28 for the utility vehicle. (Doc. 1-4). Plaintiff
does not identify any other pecuniary or proprietary interest in this case from which additional
actual damages might stem. This amount clearly falls short of the $75,000 threshold for
diversity jurisdiction to attach. The amount would still fall short of the necessary amount in
controversy even if Plaintiff received treble damages and the amount of recovery was tripled to a
total of $18,984.84.
Plaintiff has not requested any punitive damages in this case and it is unlikely that the
facts alleged would support a punitive damages award. North Carolina General Statute § 1D-15
limits when punitive damages are available to plaintiffs. N.C. Gen Stat. § 1D-15 (2013). In the
present case, the only ground alleged that could possibly support a punitive damages award is
Plaintiff’s allegation that Defendants committed fraud. See id. (noting that fraud is one of three
grounds for which punitive damages are available). Yet in order to receive punitive damages, a
plaintiff must meet the high threshold of proving that fraud existed by clear and convincing
evidence. See Scarborough v. Dillards, Inc., 363 S.E.2d 640, 643 (N.C. 2009) (noting that the
clear and convincing evidence standard requires evidence that would “fully convince” the trier of
fact). Moreover, a case grounded in fraud requires more specific allegations of fact than do other
claims. In the present case, Plaintiff’s concession that Defendant BJ Moose offered her a full
refund undermines any claim of fraud, let alone the requisite proof to warrant punitive damages.

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Furthermore, even if Plaintiff were able to recover punitive damages, she could not
recover them in addition to treble damages. The doctrine of election requires that a claimaint
choose between punitive damages and any other remedy providing for multiple damages prior to
judgment. In North Carolina, this is codified in General Statute § 1D-20. See N.C. GEN. STAT. §
1D-20 (2013). As noted above, it is unlikely that Plaintiff is eligible for either trebled damages
or punitive damages. Yet even if she were, she could not recover both.
If Plaintiff were eligible for punitive damages and elected to receive them, she is
unlikely to receive a sum sufficient to satisfy the amount in controversy requirement. The
Supreme Court has stated that, while it consistently “declines…to impose a bright-line ratio
which a punitive damages award cannot exceed…[,] in practice, few awards exceeding a singledigit ratio between punitive and compensatory damages…will satisfy due process.” State Farm
Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408, 425 (2003). Thus, even if Plaintiff were to
receive the outer bounds of single-digit ratios of punitive to compensatory damages—a nine-toone ratio—her total damages would only total $63,282.80, or more than $10,000 short of the
amount in controversy threshold.
In sum, Plaintiff has not satisfied the amount in controversy requirement under 28 U.S.C
§ 1332(a). She has not specified in her complaint an amount that, standing alone, exceeds the
$75,000 threshold. Further, even in the unlikely event that Plaintiff could receive trebled
damages or punitive damages for this claim, she is prohibited by statute from receiving both and
neither on its own satisfies the amount in controversy. As such, this Court does not have
diversity jurisdiction over Plaintiff’s claims.

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3. Jurisdiction Over Class Actions
Plaintiff also brings her suit on behalf of a class of “[a]ll purchasers of any vehicle,
accessory, or any other item from Mooser Moto LLC in the United States.” (Doc. 1 at ¶ 18).
Section 1332 creates separate diversity jurisdiction requirements for class action lawsuits. See
28 U.S.C. § 1332(d)(2). First, the class must be certifiable under Rule 23 of the Federal Rules of
Civil Procedure or comparable state or judicial rule. Id. § 1332(d)(1)(B). Next, the aggregate
amount in controversy for the entire class must “exceed[] the sum or value of $5,000,000,
exclusive of interest and costs.” Id. § 1332(d)(2).2 Finally, diversity of citizenship is satisfied if
“any member of a class of plaintiffs is a citizen of a State different from any defendant.” Id. §
1332(d)(2)(A).
In the present case, Plaintiff’s claim likely fails each of the first two requirements noted
above.3 Such analysis is unnecessary, however, as this Court is compelled to decline jurisdiction
even if these requirements were met. Subsection 1332(d)(4)(A)(ii) states that “[a] district court
2

A federal court can have supplemental jurisdiction over a class action under 28 U.S.C. § 1367
when the aggregated amount in controversy is less than $5,000,000 but when diversity exists and one
named representative plaintiff is individually claiming in excess of $75,000. See Rosmer v. Pfizer, Inc.,
263 F.3d 110, 122 (4th Cir. 2001). As noted above, Plaintiff’s claim does not meet this threshold. There
are no other representative plaintiffs named in this case.
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The Fourth Circuit has noted that “determining whether a class exists” is an implied and
“essential prerequisite to maintaining a class action” under Rule 23. Roman v. ESB, Inc., 550 F.2d 1343,
1348 (4th Cir. 1976); see also Rhodes v. E.I. du Pont De Nemours & Co., 253 F.R.D. 265, 270 (S.D.W.
Va. 2008) (“In addition to the requirements set out by Rule 23, there is an implied requirement that the
proposed class be ascertainable.”). Beyond conclusorily stating that there is a class of “[a]ll purchasers of
any vehicle, accessory, or any other item from [Defendants]” (Pl.’s Compl., ¶ 18), Plaintiff does nothing
to help ascertain who the members of this putative class are. There is also nothing in the record from
which this Court could determine whether the $5,000,000 amount in controversy requirement is met.
Indeed, Plaintiff fails to mention this requirement anywhere in her complaint. In order to determine
whether the matter in controversy meets the $5,000,000 requirement, the individual claims of the
members of the class must be aggregated. 28 U.S.C. § 1332(d)(6); Standard Fire Ins. Co. v. Knowles, 133
S. Ct. 1345, 1348 (2013). In the present case this is impossible, as Plaintiff never specifies with any
particularity the number of members of her class or the damages amounts the putative class seeks to
recover.

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shall decline to exercise jurisdiction under [§ 1332(d)(2)]…[when] during the 3-year period
preceding the filing of that class action, no other class action has been filed asserting the same or
similar factual allegations against any of the defendants on behalf of the same or other persons.”
Id. § 1332(d)(4)(A)(ii) (emphasis added). This is known as the “local controversy exception”
and it requires courts to decline jurisdiction. See Lafalier v. State Farm Fire and Cas. Co., 391
Fed. Appx. 732, 734 (10th Cir. 2010) (unpublished). Indeed, the use of the word “shall”
demonstrates that courts have no discretion over whether to decline jurisdiction under this
subsection. See Air Line Pilots Ass’n v. U.S. Airways Group, Inc., 609 F.3d 338, 342 (4th Cir.
2010) (“[I]t is uncontroversial that the term “shall” customarily connotes a command.”). In the
three years preceding this case, there have been no suits of the same or similar nature filed
against Defendants, either collectively or individually, by Plaintiff or anyone else. As such, this
Court is required to deny jurisdiction over the putative class action pleaded in the present matter.
IV.

CONCLUSION

In sum, this Court does not have jurisdiction over Plaintiff’s claims. None of Plaintiff’s
claims concern a federal question under 28 U.S.C. § 1331. In addition, Plaintiff has not met the
amount in controversy requirement for diversity jurisdiction under 28 U.S.C. § 1332. This Court
is also compelled to decline jurisdiction over Plaintiff’s class action under 28 U.S.C. §
1332(d)(4)(A)(ii). As such, there is no subject matter jurisdiction in this Court, and this case
must be dismissed.
V.

ORDER

For the reasons stated herein, Defendants’ Motion to Dismiss pursuant to Rule 12(b)(1) is
hereby GRANTED. Because this Court lacks subject matter jurisdiction over Plaintiff’s claims

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for relief, Defendants’ other Rule 12 motions and affirmative defenses are not properly before
this Court, and they are hereby DISMISSED as MOOT.

Signed: November 13, 2013

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