Gardner et al v. Forest River, Inc. et al
MEMORANDUM OPINION. Signed by Judge Royce C. Lamberth. (ad)
UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TEXAS
SAN ANTONIO DIVISION
Derry T. Gardner and,
Kimberly D. Gardner,
Forest River, Inc. and,
Wagon Trail RV, LLC,
Civil Case No: 5:17-cv-018-RCL
Before the Court is Defendant Wagon Trail RV's Motion to Dismiss Pursuant to Federal
Rule of Procedure 12(b)(2), filed January 13, 2017, and Defendants' Motion to Dismiss Pursuant
to Federal Rules of Procedure 12(b)(6) and 9(b), filed April 21, 2017. Having considered the
motions, responses, replies, exhibits, filings, and applicable law, the Court denies the Motion to
Dismiss Pursuant to Federal Rule of Procedure 12(b)(2), but grants the Motion to Dismiss Pursuant
to Federal Rules of Procedure 12(b)(6) and 9(b).
The Gardners, plaintiffs, purchased a Dynamax DX3 (a motor home) from Wagon Trail
RV in January 2015. Pl. 's Original Pet. 5, ECF No. 1-1. Wagon Trail is a motor home dealer in
Las Vegas, and one of the few dealers in the United States that sells the Dynamax DX3, which is
manufactured by Forest River, Inc. Id. The Gardners arranged for the purchase beforehand via
email and phone, as they did when purchasing an earlier motor home from Wagon Trail. Id. When
the Gardners traveled from San Antonio to Las Vegas to pick up the vehicle, several items were
not operational or functional: the entry door into the compartment, the electronic keypad locking
mechanism, the lights on the inside steps leading outward, and there was a leak in the shower. Id.
at 5--0. The leak in the shower eventually warped the kitchen floor, which was discovered a few
months later during a trip to Austin, Texas, during which the refrigerator and freezer were not
operating properly. Id. at 6.
The following February, the Gardners drove the motor home to Forest River's facility in
Elkhart, Indiana to fix the floor. Id. During the repair, Forest River discovered that the entire
underside of the rig was in an advanced stage of rusting. Id. Three weeks later, Forest River
returned the motor home to the plaintiffs, and told them the floor was fixed and the rusting area
was re-coated. Id. During a trip in July 2016, the ice and water mechanism on the refrigerator
door stopped working, along with both the forward and rear air conditioning units and the floor
began to warp again. Id. at 6-7. The following month, the right "slide" came out completely on
its own, which rendered the vehicle inoperable until a repair person could tend to it 48 hours later.
Id. at 7.
Plaintiffs claim that from February 2015, to August 2016, they continually communicated
these issues to Wagon Trail, who advised plaintiffs to contact Forest River for assistance. Id.
Plaintiffs bring this action against defendants, alleging that they engaged in certain false,
misleading and deceptive acts, practices and/or omissions actionable under the Texas Deceptive
Trade Practice - Consumer Protection Act. TEX. Bus. & COMM. CODE §17.41 et. seq. Id. at 7-9.
Specifically, the plaintiffs allege violations of Sections 17.45(5), 17.46(b), and 17 .50(a)(2) of the
Texas Business and Commerce Code. Id. Plaintiffs sue for economic and actual damages, as well
as damages for mental anguish, sustained as a result of these actions. Id. at 10-12.
Plaintiffs filed this action on December 9. 2016, in the 131 st Judicial District Court of
Bexar County, Texas. Defendant Forest River, Inc., removed the case to this Court on January 11,
2017, with consent of co-defendant Wagon Trail RV, LLC. Defendant Wagon Trail filed a Motion
to Dismiss for Lack of Jurisdiction on January 13, 2017. Defendants filed a Joint Motion to
Dismiss for Failure to State a Claim on April 21, 2017.
Defendant Wagon Trail moves to dismiss for lack of jurisdiction pursuant to Rule 12(b)(2),
and defendants jointly move to dismiss under Rules 12(b)(6) and 9(b) for failure to state a claim.
When a nonresident defendant moves to dismiss for lack of personal jurisdiction, the
plaintiff bears the burden of demonstrating the district court's jurisdiction over the defendant.
Wilson v. Belin, 20 F.3d 644,648 (5th Cir. 1994).
A federal court may exercise personal
jurisdiction over a nonresident defendant if (1) the long-arm statute of the forum state confers
personal jurisdiction over that defendant; and (2) exercise of jurisdiction by the forum state is
consistent with due process under the United States Constitution. See Latshaw v. Johnston, 167
F.3d 208, 211 (5th Cir. 1999). Texas' long-arm statute has been found to extend to the utmost
limits of due process, and therefore the Court must determine whether subjecting nonresident
defendants to suit in Texas would be consistent with the Fourteenth Amendment. See Mink v.
AAAA Dev. LLC, 190 F.3d 333, 335 (5th Cir. 1999); See also Electrosource Inc. v. Horizon Battery
Techs., Ltd., 176 F.3d 867, 871 (5th Cir. 1999).
The due process clause is satisfied when it is established that (1) the nonresident defendant
has purposefully availed itself of the benefits and protections of the forum state by establishing
"minimum contacts" with the forum state; and (2) the exercise of jurisdiction over that defendant
does not offend "traditional notions of fair play and substantial justice." International Shoe Co. v.
State of Washington, 326 U.S. 310, 316 (1945).
Minimum contacts are established through contacts which give rise to either specific
jurisdiction or general jurisdiction. See Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472
(1985); Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 413 (1984). A forum
state has general jurisdiction over a nonresident defendants if the defendant's contacts with the
forum state are "continuous and systematic." Helicopteros, 466 U.S. at 414--15. If the defendant's
contacts with the forum state are not sufficient to support general jurisdiction, specific jurisdiction
may apply. The Fifth Circuit applies a three-part test to determine whether the exercise of specific
jurisdiction is appropriate and consistent with the due process clause, considering (1) whether the
defendant has minimum contacts with the forum state; (2) whether the plaintiffs cause of action
arises out of those contacts; and (3) whether the exercise of personal jurisdiction is fair and
reasonable. See Nuovo Pignone, PsA v. Storman Asia M/V, 310 F.3d 374, 378 (5th Cir. 2002)
(citing Burger King, 471 U.S. at 474).
If minimum contacts are found, the Court must then determine whether the exercise of
jurisdiction is in keeping with "traditional notions of fair play and substantial justice."
International Shoe, 326 U.S. at 316. A defendant that purposefully directed its activities at forum
residents must present a compelling case that the exercise of jurisdiction would be unreasonable
given the circumstances. Burger King, 471 U.S. at 477.
The Federal Rules of Civil Procedure require that a complaint "state a claim to relief that
is plausible on its face." Ashcroft v. Iqbal, 556 U.S. 662, 677-78 (2009) (quoting Bell Atlantic
Corp. v. Twombly, 550 U.S. 544, 570 (2007)). Under this standard, the complaint must plead facts
that allow for a reasonable inference ofliability. Id. at 678. The facts, taken as true and construed
in the light most favorable to the plaintiff, must raise the right to relief above speculation.
Twombly, 550 U.S. at 555 (2006).
The Federal Rules of Civil Procedure require that when "alleging fraud or mistake,
a party must state with particularity the circumstances constituting fraud or mistake." FRCP 9(b).
Under this standard, the Fifth Circuit requires that a plaintiff"specify the statements contended to
be fraudulent, identify the speaker, state when and where the statements were made, and explain
why the statements were fraudulent." Williams v. WMXTechs., 112 F.3d 175, 177 (5th Cir. 1997).
Defendant Wagon Trail claims that the plaintiff has failed to adequately demonstrate
personal jurisdiction. Def s Mot. to Dismiss for Lack of Personal Jurisdiction 2-3, ECF No. 4.
Wagon Trail is a Nevada-based corporation, and therefore a non-resident corporation of Texas.
The plaintiff has presented no evidence that Wagon Trail specifically targets Texas or utilizes the
Texas market in a systematic or continuous way. The exchange of emails submitted into evidence
in plaintiffs' response outlines an exchange between plaintiffs and Wagon Trail that is specific to
this particular business dealing, but does not represent systematic business contacts with Texas.
The contacts via email and telephone that the plaintiff cites are insufficient to support general
jurisdiction, and therefore this Court may not exercise general jurisdiction over defendant Wagon
Wagon Trail goes on to claim that the plaintiffs have also failed to adequately
demonstrate specific jurisdiction. While Wagon Trail's contacts with Texas, through emails,
phone calls, and the purchase of the motor home, do not constitute systematic general business
contacts, they do establish sufficient minimum contacts with Texas. Minimum contacts are
established with a state if the defendant, as a result of contact with the forum state, "should
reasonably anticipate being haled into court there." Burger King, 471 U.S. at 474. By agreeing to
sell a motor home that it knew would be used in Texas, Wagon Trail reasonably should have
anticipated that any breach of warranty or contract might subject it to suit in Texas.
Further, on their website Wagon Trail proudly declares that, "We know people will cross
states to get the best deal possible on a new RV," in the text of a prominent page describing a
program whereby Wagon Trail will fly people from around the country to Las Vegas in order to
facilitate their purchase of a motor home. Buy And Fly
I Wagon Trail RV, Wagon Trail RV,
http://www.wagontrailrv.com/unique-program--buy-and-tly (last visited May 30, 2017). This
program seems to be the process by which the plaintiffs purchased the motor home which is the
subject of this action. The fact that Wagon Trail knew the plaintiffs would be travelling from
Texas to purchase the motor home and returning to Texas with the motor home highlights that
Wagon Trail could reasonably anticipate being haled into court here. For Wagon Trail to conduct
a program of this nature and then claim that it did not reasonably anticipate litigation in a state
whose residents participated in that program is fundamentally nonsensical.
Defendant argues that its contact with the forum is insufficient due to the ruling in Walden
v. Fiore, which states that minimum contacts analysis looks to "the defendant's contacts with the
forum State itself, not the defendant's contacts with persons who reside there." Walden v. Fiore,
134 S. Ct. 1115, 1122 (2014). While this analysis might preclude the exercise of personal
jurisdiction in a state where plaintiffs never brought the motor home, the Walden ruling goes on to
clarify that, "physical entry into the State ... in person or through an agent, goods, mail, or some
other means-is certainly a relevant contact." Id. at 1122. Wagon Trail sold their goods knowing
that they would be operated in Texas, and even went so far as to locate a certified maintenance
facility in Texas when the vehicle began to malfunction. Wagon Trail cannot facilitate that
purchase by arranging for the plaintiffs' travel from Texas to Nevada, provide those services, and
then maintain that their contact was with the plaintiffs only. Wagon Trail's contacts with the
plaintiffs, as well as the reasonably anticipated entry and operation of their goods in Texas,
sufficiently establish minimum contacts. Thus, the first factor of specific jurisdiction is satisfied.
Further, defendant's characterization of its website as a passive advertisement does not
appropriately reflect its level of interactability. The defendant states that while the "website did
allow those in Texas to contact the owner via email, the site lacked other forms of interactivity that
would confer jurisdiction." Def s Reply in Supp. oflts Mot. to Dismiss Pls.' State Ct. Pet. for Lack
of Personal Jurisdiction 2-3, ECF No. 7. This statement is simply not true. The website provides
links for a person to schedule a test drive, secure financing, get a pricing quote, get a purported
value for a trade-in vehicle, make service requests, and leave comments for both the sales and
marketing departments. The site's level of interactivity goes beyond passive advertisement.
The second factor of specific jurisdiction is whether the plaintiffs' cause of action arises
out of those contacts. Given that the contacts dealt with the sale and subsequent operation of the
vehicle, and the action arises out of the plaintiffs' claim of deception and fraud in the selling
process as evidenced by the malfunctions of the vehicle during its subsequent operation, the actions
are sufficiently established as giving rise to the claims brought in this case. This satisfies the
second arm of the test.
The third factor of specific jurisdiction is whether the exercise of personal jurisdiction is
fair and reasonable. Having demonstrated that the defendant has minimum contacts with the forum
state, and that the cause of action arises out of those contacts, "the burden shifts to the defendant
to show that an exercise of jurisdiction would be unfair." Wien Air Alaska, Inc. v. Brandt, 195
F.3d 208, 215 (5th Cir. 1999). In their motion, defendant Wagon Trail presented no argument that
an exercise of jurisdiction would be unfair, instead resting their argument solely on the lack of
sufficient minimum contacts.
However, this Court has disposed of that argument above.
Therefore, the defendant has not met its burden, and the third arm of the test is satisfied.
Because all three factors are satisfied, this Court finds that specific jurisdiction is properly
exercised with regards to defendant Wagon Trail RV, and the defendant's Motion to Dismiss for
Lack of Jurisdiction will be denied. This Court will therefore address the defendants' Motion to
Dismiss for Failure to State a Claim.
EXCLUSION OF PLAINTIFFS' CLAIMS BROUGHT UNDER THE TEXAS DTPA
The first argument brought forth in the Defendants' Motion to Dismiss for Failure to State
a Claim is that the plaintiffs' DTP A claims brought against defendant Wagon Trail, the motor
home dealer, should be dismissed because the purchase of the motor home was an exempt
transaction under the DTP A. The DTP A does not apply "to a claim arising out of a written contract
if: (1) the contract relates to a transaction, a project, or a set of transactions related to the same
project involving total consideration by the consumer of more than $100,000; (2) in negotiating
the contract the consumer is represented by legal counsel who is not directly or indirectly
identified, suggested, or selected by the defendant or an agent of the defendant; and (3) the contract
does not involve the consumer's residence." TEX. Bus. & COM. CODE § 17.49(±). The DTP A
defines consumer as "an individual, partnership, corporation, this state, or a subdivision or agency
of this state." TEX. Bus. & COMM. CODE§ 17.45(4). The Court finds that plaintiffs purchase of
a motor home falls within this statutory exclusion.
In order to determine whether the total consideration of the plaintiff exceeds $100,000, the
Court applies an approach looking forward from the time of contract, as "applying an ex ante
approach rather than an ex post one allows parties to a contract to know with certainty whether
their contract will fit within coverage of the DTPA." Space Maker Designs, Inc. v. Weldon F.
Stump & Co., 2003 WL 21414726 *2 (N.D. Tex. June 16, 2003). The plaintiffs knew that they
were involved in a transaction which required consideration on their part of nearly $250,000, as
evidenced by the Motor Vehicle Purchase Agreement/Bill of Sale. Affidavit of Plaintiff Derry T.
Gardner 8, ECF No. 6-2.
The plaintiffs argue that their DTP A claims against Wagon Trail did not, in fact, arise from
this transaction, but as a result of Wagon Trail's later acts and omissions. However, it is well
settled that actions under the DTP A must arise from a transaction, since the DTP A is "designed to
protect consumers from any deceptive trade practices made in connection with the purchase or
leader of any goods or services." Amstadt v. United States Brass Corp., 919 S.W.2d 644---049
(Tex. 1996) (quoting Cameron v. Terrell & Garret, Inc., 618 S.W.2d 535, 541(Tex.1981). Given
that the only transaction between Wagon Trail and the plaintiffs in the record is the sale of the
motorhome, the DTP A claims must arise from that transaction in order to be actionable at all.
Further, it is equally well settled that "repairs relate back to the original purchase and [are] a
continuation of that transaction." Melody Home Mfg. Co. v. Barnes, 741 S.W.2d 349, 352 (Tex.
1987). Based on the foregoing, this Court finds that the purchase of the motor home and the claims
against defendant Wagon Trail arising from that purchase satisfy the first element of the exclusion.
In response to the second element, plaintiffs seem to argue that because Kimberly Gardner,
as an attorney, did not represent herself as an attorney until well after the purchase that the
exclusion should not apply. Pls.' Opp'n & Resp. to Defs.' Mot. to Dismiss 4-5, ECF No. 12.
Plaintiffs also admit that Kimberly Gardner was "actively involved in the negotiations involving
the purchase, financing, contracting, and delivery of the motorhome," but argue that in this
instance her status as an attorney should not be considered since she was acting as a consumer. Id.
at 2 (quoting Defs.' Mot. to Dismiss 2-3, ECF No. 11).
If the Court accepts the plaintiffs' argument that one cannot act as both consumer and
attorney, it would drastically expand the scope of this exclusion. Further, this Court finds it
difficult to believe that, while negotiating a contract for a purchase of nearly $250,000, the
plaintiffs neither benefited from nor relied upon Kimberly Gardner's legal knowledge, regardless
of whether or not she presented herself as an attorney during negotiations. Based on the foregoing,
this Court finds that the plaintiffs' were represented by legal counsel who was not directly or
indirectly identified, suggested, or selected by the defendant or an agent of the defendant.
Therefore, the purchase of the motor home and the claims against Wagon Trail arising from that
purchase satisfy the second element of the exclusion.
Finally, the plaintiffs present no argument that this motor home is their residence, so this
Court finds that the purchase of the motor home and the claims against Wagon Trail arising from
that purchase satisfy the third element of the exclusion.
Based on the foregoing, the Court finds that the plaintiffs' claims brought under the DTPA
against defendant Wagon Trail fall outside of the scope of the statute. Therefore, plaintiffs fail to
state a claim upon which relief can be granted, and the claims brought under the DTP A against
defendant Wagon Trail should be dismissed.
The plaintiffs' DTPA claims against defendant Forest River, however, do not satisfy the
first element of the exclusion, as there is no discussion in the record of the cost or payment of
Therefore, those DTPA claims will be examined below as part of the
Defendants' Motion to Dismiss for Failure to State a Claim.
The causes that remain to be addressed are the DTP A claim and the common law fraud
claim brought against defendant Forest River, and the common law fraud claim brought against
defendant Wagon Trail.
Defendants argue that dismissal is proper because the plaintiffs'
complaint failed to meet the heightened pleading requirements of Rule 9(b ), while plaintiffs argue
that there is no precedent which requires common law fraud to satisfy those requirements. Pls.'
Opp'n & Resp. to Defs.' Mot. to Dismiss 7. 1 It is' settled in this Court that both common law fraud
and violations of the DTP A are subject to the heightened pleading requirements of Rule 9(b). See
Sinkin v. Pons, 2014 WL 12488583, at *7 (W.D. Tex. Sept. 16, 2014) (Lamberth, J.).
With regards to the claims against defendant Forest River, the plaintiffs allege that they
"engaged in certain false, misleading and deceptive acts, practices and/or omissions." Pls.'
Original Pet. 6. Nowhere in their pleading do the plaintiffs designate which claims are being
Plaintiffs also seem to argue that ifRule 9 applies to their fraud-based claims, they "should be granted leave to amend
the petition." Pis.' Opp'n & Resp . to Defs.' Mot. to Dismiss 7-8. The Court addresses this alternative argument
brought against which defendant, but allege these claims generally against "Defendants." Id.
Regardless, in addition to common law fraud, the plaintiffs allege the following violations of the
DTPA: (1) unconscionable action or course of action as defined in Section 17.45(5); (2) five
different violations of Section 17.46(b); and (3) breach of the implied warranties of fitness for a
particular purpose, good and workmanlike performance, and merchantability as actionable under
Section 17.50(a)(2). Id. at 7-9.
The plaintiffs' interaction with defendant Forest River was limited in comparison to their
contact with Wagon Trail. The original petition states that, after several months of communication
with Forest River, the motor home was driven to the manufacturing facility in Indiana in order for
the floor to be fixed. Id. at 6. Forest River additionally indicated to the plaintiffs that there was a
serious rusting issue, and after three weeks Forest River "represented to Plaintiffs that the floor
was fixed and all the rusting area was re-coated." Id. at 6. Approximately five months later
plaintiff claims that the "supposedly fixed floor began to warp again." Id. at 7. These facts
adequately represent the entirety of plaintiffs' relationship with Forest River as presented in the
original petition. The plaintiff does not specify which of the nine separate allegations of fraud
apply to this particular interaction.
Of the Fifth Circuit's requirements of specificity, as enumerated in Williams, the plaintiffs
only claim that one of the statements by Forest River was made "approximately three weeks" after
"the end of February 16, 2016." Id. at 6. Plaintiffs offer no information as to the location or speaker
of that particular statement, or why it was fraudulent, and indeed the plaintiffs do not indicate
anywhere in their complaint that this is the statement contended to be fraudulent. Based on the
foregoing, this Court finds that none of the plaintiffs' claims against defendant Forest River meet
the heightened pleading standards as set forth in Rule 9(b ), and therefore should be dismissed.
The plaintiffs' claims of common law fraud against defendant Wagon Trail, as established
above, are also subject to the heightened pleading requirements of Rule 9(b ). The only potential
statements that the plaintiffs attribute to Wagon Trail in their complaint are the statements made
during the "several months of communicating ... as to who could fix the floor," and that "Wagon
Trail advised Plaintiffs that Plaintiffs should contact the manufacturer Forest River for assistance."
Id. at 6-7. The plaintiffs do not identify a speaker, location, or specific time for either statement.
The plaintiffs do not explain why either statement was fraudulent, or even identify either statement
as one of the fraudulent statements for which the plaintiffs seek relief.
The Court cannot
reasonably state that a claim based upon a fraudulent statement was sufficiently pied if the
plaintiffs did not even include a specific statement in their complaint. Based on the foregoing, this
Court finds that the plaintiffs' claims against defendant Wagon Trail for common law fraud do not
meet the heightened pleading standards as set forth in Rule 9(b), and therefore should be dismissed.
LEAVE TO AMEND
Finally, as noted above, plaintiffs argue that if their fraud-based claims are improperly
plead under Rule 9, they should be granted leave to amend their pleadings. Indeed, the Federal
Rules of Civil Procedure instruct that a "court should freely give leave [to amend pleadings] when
justice so requires." FED. R. CIV. P. 15(a)(2). "In view of the consequences of dismissal on the
complaint alone, and the pull to decide cases on the merits rather than on the sufficiency of
pleadings, district courts often afford plaintiffs at least one opportunity to cure pleading
deficiencies before dismissing a case, unless it is clear that the defects are incurable or the plaintiffs
advise the court that they are unwilling or unable to amend in a manner that will avoid dismissal."
Great Plains Trust Co. v. Morgan Stanley Dean Witter & Co., 313 F.3d 305, 329 (5th Cir. 2002).
Notably, plaintiffs here have not filed a motion for leave amend their pleadings under Rule
15, and have instead argued in the alternative that they should be given the opportunity to amend
their pleadings if this Court determines the pleadings are deficient. For the reasons discussed
above, the Court finds the pleadings here deficient. In light of the plaintiffs' failure to submit a
proposed amended complaint or to even request leave to file such a document, this Court will
dismiss the case. However, the Court cannot say that the defects in plaintiffs' pleadings are
Therefore, while the case will be dismissed for failure to state a claim under Rule 12(b)(6),
the Court will allow plaintiffs to submit a motion for leave to file an amended complaint within
fourteen (14) days. Upon review of the proposed amended complaint, the Court will reinstate the
case ifthe above identified defects are cured and leave to file is granted.
In conclusion, the Court finds that personal jurisdiction exists. However, the Court finds
that plaintiffs' DTP A claims brought against defendant Wagon Trail are statutorily exempt.
Further, the Court finds that plaintiffs' fraud-based claims against both defendants failed to rise to
the heightened pleading standard set forth in Rule 9(b ). The plaintiffs' complaint failed to explain
why any statement was fraudulent, and failed to indicate which statements were contended to be
fraudulent. Accordingly, the plaintiffs have failed state a claim upon which relief may be given,
and defendants are entitled to dismissal pursuant to Federal Rules of Civil Procedure 12(b)(6) and
The case will be dismissed. However, plaintiffs will be given fourteen (14) days to submit
a motion for leave to file an amended complaint correcting the pleading defects outlined above.
A separate order shall issue.
United States District Judge
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