Jenkins v. C3 Racing, Inc. et al
Filing
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OPINION AND ORDER granting 5 Motion to Dismiss for Lack of Subject Matter Jurisdiction. Signed by Judge Christina Reiss on 1/5/2018. (law)
U.S. DISTRACT COURT
DISTRICT~lf £ . l"J
-OFVER.,;;ONT
F 11- [J
UNITED STATES DISTRJCT COURT
FOR THE
DISTRJCT OF VERMONT
W. OWEN JENKINS,
Plaintiff,
v.
C3 RACING, INC. and
MARC F. EVANS
Defendants.
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1018 JAN-5 JtH 3: SI
Cl!· I
BY_
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DE?Uf'f CLEf?K
Case No. 2:17-cv-141
OPINION AND ORDER GRANTING DEFENDANTS' MOTION TO DISMISS
FOR LACK OF SUBJECT MATTER JURISDICTION
(Doc. 5)
Plaintiff W. Owen Jenkins brings this action against Defendant C3 Racing, Inc.,
d/b/a New England Classic Car Co., and its owner, Marc F. Evans (collectively,
"Defendants"), alleging six claims arising from the purchase and sale of a 1967 MGB
motor vehicle ("the MGB"): (1) breach of express warranties, (2) breach of the covenant
of good faith and fair dealing, (3) negligent misrepresentation, (4) fraudulent
misrepresentation, ( 5) fraudulent concealment, and (6) unfair and deceptive business
practices under Vermont's Consumer Protection Act ("CPA"), 9 V.S.A. § 2453. Plaintiff
seeks compensatory damages of $22,750, punitive damages of no less than $10,000,
exemplary damages of $56,655 pursuant to the CPA, attorney's fees and costs, and the
payment of pre-judgment interest.
Pending before the court is Defendants' motion to dismiss for lack of subject
matter jurisdiction, asserting Plaintiffs state law claims fail to exceed the $75,000
threshold for diversity of citizenship jurisdiction. (Doc. 5.) Plaintiff opposes dismissal.
Plaintiff, an attorney, is representing himself. Defendants are represented by Mary
P. Kehoe, Esq.
I.
The Complaint's Allegations.
Plaintiff alleges Defendant Evans is an individual residing in Connecticut and
Defendant C3 Racing, Inc., d/b/a as New England Classic Car Co., is a Connecticut
Corporation. Plaintiff resides in Essex Junction, Vermont. As Defendants concede,
diversity of citizenship is established.
The Complaint alleges Defendants are engaged in the business of selling classic
sports cars, vintage and historic racing cars, and various other collectible vehicles.
Defendants advertise their inventory on the Internet and offer delivery within the New
England region.
In July 2015, Defendants bought the MGB, a 1967 motor vehicle with a
removable hard top, from Daniel F. Kacher for $9,000. Before selling the MGB and in
response to Defendants' inquiries, Mr. Kacher allegedly disclosed to Defendants in
writing that the MGB had rust on the right door, undercarriage, and rims and verbally
disclosed rust on the firewall and transmission problems.
After purchasing the MGB from Mr. Kacher, Defendants immediately offered the
MGB for sale on the Internet for $17,900 without the hard top and without making any
repairs or modifications. Defendants' Internet advertisement for the MGB contained the
following representations:" ... a very nice car ... 3,000 miles on [a] rebuilt engine ...
new top, new chrome, a wonderful example of the most collectible of MGB' s ... 105
mph performance, great handling, sure braking, comfortable ride .... " (Doc. 1 at 3,
,i 12) (internal quotation marks omitted).
In response to the Internet advertisement, Plaintiff contacted Defendants, asking
for details about the MGB, including how Defendants had located and acquired the MGB
and information regarding its overall condition because Plaintiff did not want to purchase
a "project car." Id. at 3, ,i 13 (internal quotation marks omitted). Defendant Evans
replied that he found the MGB advertised on the Internet, had it inspected by a person
acting on Defendants' behalf, and, finding the car in excellent condition, decided to buy it
from Mr. Kacher. In response to Plaintiffs inquiries about specific issues with the MGB,
Defendants stated that it had only 55,400 original miles, no rust, and was in "show
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condition[.]" Id. at 4, ,i 15 (internal quotation marks omitted). Defendants further
represented in writing that:
All of the electrics and mechanicals [were] in good working order .
. . . I took my little magnet, started from the front (on each side) behind the
front bumper and moved the magnet along the lower edge of the body,
rockers, and fenders, to the rear bumper. It stuck the entire way making
this car {one) of the best bodied early MGBs on the planet.
Id. (internal quotation marks omitted).
Plaintiff discussed scheduling an appointment to view the MGB at Defendants'
place of business, but Defendants "assured Plaintiff that such [a] viewing was not
necessary because the condition of the [MGB] was excellent and precisely as advertised."
Id. at 4, ,i 17. After the parties agreed to additional minor upgrades costing $600 and a
delivery cost of $385, Plaintiff bought the MGB "sight unseen" for $18,885 without an
independent inspection from Defendants. (Doc. 1 at 4, ,i 20) (internal quotation marks
omitted). Defendants promised delivery of the MGB to Plaintiff in Vermont.
On October 29, 2015, Defendants' employee delivered the MGB to Plaintiff, gave
Plaintiff an invoice for the car, and drove the MGB to Plaintiffs residence in South Hero,
Vermont. The bill of sale contained the following warranty:
THIS VEHICLE IS SOLD "AS IS." THIS MEANS THAT YOU WILL
LOSE YOUR IMPLIED WARRANTIES. YOU WILL HAVE TO PAY
FOR ANY REP AIRS NEEDED AFTER SALE. IF WE HAVE MADE
ANY PROMISES TO YOU, THE LAW SAYS WE MUST KEEP THEM,
EVEN IF WE SELL "AS IS." TO PROTECT YOURSELF, ASK US:
1. TO PUT ALL PROMISES INTO WRITING, AND 2. IF WE OFFER A
WARRANTY ON THIS VEHICLE.
(Doc. 1-5 at 2.)
Shortly after delivery, Plaintiff notified Defendants that the MGB was not in the
condition advertised by Defendants. Plaintiff advised that the MGB had:
significant defects with respect to the windshield and transmission, had rust
on the body, undercarriage, wheels, and firewall, had hood and trunk
latches which would not stay latched, lacked locking mechanisms, did not
have a new top (but rather an older top which had permanent red paint
over-spray on it), and had excessive vibration and shaking which limited its
maximum driving speed to 55 MPH.
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(Doc. 1 at 5,
,r 22.)
In response, Defendants acknowledged that they knew about the windshield defect
but decided to deliver the MGB nonetheless and stated that all the other defects were
unimportant "because that's what you get with a 50 year old car." Id. at 5, ,r 24 (internal
quotation marks omitted). In November 2015, before storing the MGB for the winter,
Plaintiff installed, at his own cost, a replacement windshield provided by Defendants.
After removing the MGB from storage in May 2016, Plaintiff notified Defendants
that the MGB had additional issues:
significant defects with the engine and starter motor, including flywheel,
incorrect mileage because of a broken speedometer and cable, water
damage to the interior panels and carpets because the rusted-out firewall
could not prevent water infiltration into the cockpit, wiring, brakes, backup
fuel pump, front end bushings, and all four wheels.
Id. at 5-6, ,r 27.
Upon discovering these alleged defects, Plaintiff asked Defendants to produce the
MGB's full history. On June 9, 2016, Defendants produced Mr. Kacher's Internet
advertisement which disclosed rust issues on the undercarriage and wheels. When
questioned about the rust issues, Defendants dismissed them as "meaningless." Id. at 6,
,r 30 (internal quotation marks omitted).
According to the Complaint, Mr. Kacher's advertisement and Defendants'
inquiries regarding the information disclosed in that advertisement establish that
Defendants had not inspected the MGB and had not determined that it was in excellent
condition before purchasing it from Mr. Kacher. Instead, Plaintiff contends Defendants
purchased the MGB from Mr. Kacher in "extremely poor condition" and "quickly placed
[it] back on the market" for $17,900, approximately twice Defendants' $9,000 acquisition
cost. (Doc. 1 at 6,
,r 32.)
In Plaintiff's estimation, the fair market value of the MGB
when Plaintiff purchased it from Defendants was no more than $2,000 as a "parts car
only." Id. at 6, ,r 33.
On December 2, 2016, Defendants rejected Plaintiff's settlement offer. Plaintiff
then inspected the MGB on a lift for the first time, discovering the following concerns:
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the chrome bumpers were not new but rather [the] original and coated with
rust on the underside, frame damage, extensive rust to the undercarriage
and rocker panels, structural damage due to rust, and bondo applied to
cover body damage and repair to both rear fenders, and the upper and lower
rear panels.
Id. at 6, ,r 34. Noticing damage to the left rear panel and rear valence, Plaintiff
determined the MGB had been in at least two accidents.
To improve the MGB to its advertised condition, Plaintiff had the electrical and
mechanical systems repaired or replaced and rebuilt the body and structural components
of the MGB, "all at substantial costs." Id. at 7, ,r 36. In making these repairs, Plaintiff
"lost use of the [MGB] for the entire 2016 six month driving season and one month of the
2017 season." Id. at 7, ,r 37.
II.
Legal Analysis and Conclusions.
A.
Standard of Review.
"[F]ederal courts are courts of limited jurisdiction and, as such, lack the power to
disregard such limits as have been imposed by the Constitution or Congress." Purdue
Pharma L.P. v. Kentucky, 704 F.3d 208, 213 (2d Cir. 2013) (internal quotation marks
omitted). "If the court determines at any time that it lacks subject-matter jurisdiction, the
court must dismiss the action." Fed. R. Civ. P. 12(h)(3). In his Complaint, Plaintiff
invokes the court's diversity jurisdiction under 28 U.S.C. § 1332(a) which states that the
federal "district courts shall have original jurisdiction of all civil actions where the matter
in controversy exceeds the sum or value of $75,000, exclusive of interest and
costs, ... and is between[] ... citizens of different States[.]" 28 U.S.C. § 1332(a)(l).
As the party asserting subject matter jurisdiction, Plaintiff has the burden of
establishing its existence. A plaintiff invoking diversity jurisdiction "must demonstrate a
'reasonable probability' that the amount-in-controversy requirement is satisfied[.]"
Pyskaty v. Wide World of Cars, LLC, 856 F.3d 216,223 (2d Cir. 2017) (quoting
Tongkook Am., Inc. v. Shipton Sportswear Co., 14 F.3d 781, 784 (2d Cir. 1994)). "This
burden is hardly onerous, however," Scherer v. Equitable Life Assurance Soc'y of US.,
347 F.3d 394, 397 (2d Cir. 2003), because the Second Circuit "recognize[s] a rebuttable
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presumption that the face of the complaint is a good faith representation of the actual
amount in controversy[.]" Pyskaty, 856 F.3d at 223 (citing Colavito v. NY Organ Donor
Network, Inc., 438 F.3d 214, 221 (2d Cir. 2006)) (internal quotation marks omitted). A
defendant rebuts this presumption by demonstrating "to a legal certainty that the plaintiff
could not recover the amount alleged or that the damages alleged were feigned to satisfy
jurisdictional minimums." Id. (internal quotation marks omitted); see also St. Paul
Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283,289 (1938) ("It must appear to a legal
certainty that the claim is really for less than the jurisdictional amount to justify
dismissal.").
The amount in controversy requirement can be met "by a combination of
economic and non-economic losses and punitive damages, so long as the punitive
damages are permitted under the controlling law." Bracken v. MH Pillars Inc., 2017 WL
5901015, at *2 (S.D.N.Y. Nov. 29, 2017); see also A.FA. Tours, Inc. v. Whitchurch, 937
F.2d 82, 87 (2d Cir. 1991) ("[l]f punitive damages are permitted under the controlling
law, the demand for such damages may be included in determining whether the
jurisdictional amount is satisfied."). "[I]n computing the jurisdictional amount, a claim
for punitive damages is to be given closer scrutiny[] ... than a claim for actual damages."
Pyskaty, 856 F.3d at 225 (citing Zahn v. Int'l Paper Co., 469 F.2d 1033, 1033 n.1 (2d Cir.
1972)) (internal quotation marks and alteration omitted).
The court "may consider the facts as asserted within the four corners of the
complaint together with the documents attached to the complaint as exhibits" when
deciding a motion to dismiss for lack of subject matter jurisdiction. Peter F. Gaito
Architecture, LLC v. Simone Dev. Corp., 602 F.3d 57, 64 (2d Cir. 2010) (internal
quotation marks omitted). Although a court generally reads a self-represented plaintiffs
submissions "liberally[,]" interpreting them "to raise the strongest arguments that they
suggest[,]" Triestman v. Fed. Bureau ofPrisons, 470 F.3d 471, 474 (2d Cir. 2006)
(internal quotation marks and emphasis omitted), where the plaintiff is an attorney, the
same liberality is not afforded. See Tracy v. Freshwater, 623 F.3d 90, 102 (2d Cir. 2010)
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(stating that "a lawyer representing himself ordinarily receives" none of the "solicitude"
afforded to other self-represented litigants).
Because Plaintiff alleges state statutory and common law causes of action, the
substantive law of Vermont governs his claims. See Erie R.R. Co. v. Tompkins, 304 U.S.
64, 78 (1938); Gen. Star Nat'! Ins. Co. v. Universal Fabricators, Inc., 585 F.3d 662, 669
(2d Cir. 2009). "This principle ... includes examining [Vermont's] rules regarding the
applicable measure of damages and the availability of special and punitive damages, as
well as a right of attorneys' fees." 14AA Charles Alan Wright & Arthur R. Miller,
Federal Practice and Procedure§ 3702 (4th ed.); see also Ocean Ships, Inc. v. Stiles,
315 F .3 d 111, 116 (2d Cir. 2002) (applying New York law in measuring the amount of
damages alleged in the plaintiffs complaint to determine whether the complaint met the
amount in controversy requirement).
B.
Whether Plaintiff Satisfies the Amount in Controversy Required for
Diversity Jurisdiction.
Plaintiffs claim for $22,750 in compensatory damages does not, by itself, satisfy
the amount in controversy requirement. Thus, whether there is diversity jurisdiction over
the case turns on whether Plaintiffs Complaint sufficiently alleges statutory exemplary
damages, common law punitive damages, or attorney's fees under Vermont law.
Plaintiff claims that he is entitled to statutory exemplary damages for Defendants'
violation of the CPA, 9 V.S.A. § 2453.
To prevail on a [CPA] claim, one must show that: (1) there was a
representation, practice, or omission likely to mislead the consumer; (2) the
consumer interpreted the message reasonably under the circumstances; and
(3) the misleading effects were material, that is, likely to affect the
consumer's conduct or decision with regard to a product.
Lang McLaughry Spera Real Estate, LLC v. Hinsdale, 2011 VT 29, ,r 32, 190 Vt. 1, 16,
35 A.3d 100, 111 (internal quotation marks omitted). A plaintiff need not show the
defendant "inten[ded] to deceive or mislead[.]" Inkel v. Pride Chevrolet-Pontiac, Inc.,
2008 VT 6, ,r 10, 183 Vt. 144,151,945 A.2d 855,859; see also Winton v. Johnson & Dix
Fuel Corp., 515 A.2d 3 71, 376 (Vt. 1986) ("Intentional misrepresentation or bad faith is
not required for liability under the [CPA].").
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A plaintiff alleging a violation of§ 2453 of the CPA may seek exemplary
damages:
Any consumer who contracts for goods or services in reliance upon false or
fraudulent representations or practices prohibited by Section 2453 ... may
sue and recover from the seller[] ... the amount of his or her
damages, ... reasonable attorney's fees, and exemplary damages not
exceeding three times the value of the consideration given by the consumer.
9 V.S.A. § 246l(b); see also Wilder v. Aetna Life & Cas. Ins. Co., 433 A.2d 309, 310 (Vt.
1981) ("The [CPA] was created to protect citizens from unfair and deceptive acts in
consumer transactions" and "9 V.S.A. § 246l(b), providing for treble damages, was
added to the original enactment to encourage prosecution of individual consumer fraud
claims.").
Pursuant to§ 246l(b) of the CPA, Plaintiff alleges $55,655 in exemplary
damages, or three times the sale price of the MGB, which, if combined with
compensatory damages, would exceed the jurisdictional threshold of $75,000.
Defendants argue that none of the allegations in the Complaint establish that Defendants
acted with the requisite malice or ill will required for an award of exemplary damages
under Vermont law.
To recover exemplary damages, a plaintiff must show more than a mere statutory
violation of the CPA, see Bruntaeger v. Zeller, 515 A.2d 123, 127 (Vt. 1986) (finding
exemplary damages are not "mandated merely upon a showing of a statutory violation"),
as Vermont courts award exemplary damages "only where malice, ill will, or wanton
conduct is demonstrated." L 'Esperance v. Benware, 2003 VT 43, ,r 17, 175 Vt. 292, 299,
830 A.2d 675, 682 (internal quotation marks omitted). "Malice is shown through conduct
manifesting personal ill will, evidencing insult or oppression, or showing a reckless or
wanton disregard of plaintiffs rights" and "may be inferred from the surrounding
circumstances and the nature of the defendant's conduct." Id. at ,r 18, 175 Vt. at 299-300,
830 A.2d at 682 (internal quotation marks omitted).
In this case, Plaintiffs Complaint does not allege that Defendants acted with
malice, personal ill will, or a reckless or wanton disregard for Plaintiffs rights. At most,
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Plaintiff alleges that Defendants' misrepresentations were, in Plaintiff's words,
"knowing, wil[l]ful, and intentional[.]" (Doc. 1 at 10, ,r 69.) Intentional
misrepresentations can result in an award of exemplary damages under the CPA "only
where malice, ill will, or wanton conduct is demonstrated." L 'Esperance, 2003 VT 43,
,r 17, 175 Vt. at 299, 830 A.2d at 682 (internal quotation marks omitted); see also
Meadowbrook Condo. Ass 'n v. S. Burlington Realty Corp., 565 A.2d 238,245 (Vt. 1989)
(holding that the trial court erred in awarding exemplary damages in response to the
defendant landlord's failure to provide promised cable television service for residents
because the landlord's conduct, "however wrongful, did not evince the degree of malice
required"). Because Plaintiff fails to adequately allege this element of his claim, his
request for exemplary damages under the CPA cannot satisfy the amount in controversy
requirement. See, e.g., Jiminez v. Going Forward, Inc., 25 F. Supp. 2d 54, 55 (D. Conn.
1998) (refusing to consider the plaintiff's claim for punitive damages under
Connecticut's Unfair Trade Practices Act because the court had "serious doubts" as to
whether the plaintiff sufficiently alleged that the "defendant's conduct was intentional
and wanton, malicious, violent or motivated by evil.").
In addition to challenging the basis for Plaintiff's claimed exemplary damages
under the CPA, Defendants contend that Plaintiff has not alleged sufficient facts to
support a claim for common law punitive damages under Vermont law. To establish a
claim for punitive damages, a plaintiff must show ( 1) "wrongful conduct that is
outrageously reprehensible" and (2) "malice, defined variously as bad motive, ill will,
personal spite or hatred, reckless disregard, and the like." Fly Fish Vt., Inc. v. Chapin
Hill Estates, Inc., 2010 VT 33, ,r 18, 187 Vt. 541, 548-49, 996 A.2d 1167, 1173. Thus,
similar to a claim for exemplary damages under the CPA, a plaintiff must allege more
than a knowing and intentional misrepresentation to obtain punitive damages under
Vermont's common law. See Centrella v. Ritz-Craft Corp. ofPa., Inc., 2017 WL
3720757, at *5 (D. Vt. June 28, 2017) (stating that both common law punitive damages
and exemplary damages under the CPA require a showing that defendant acted with
"malice, defined variously as bad motive, ill will, personal spite or hatred, reckless
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disregard, and the like."). Plaintiffs claim for common law punitive damages therefore
also fails to satisfy the amount in controversy requirement.
Finally, Plaintiffs Complaint seeks reasonable attorney's fees and costs.
Attorney's fees "may be used to satisfy the amount in controversy threshold only if they
are recoverable as a matter of right pursuant to statute or contract." Cohen v. KIND
L.L.C., 207 F. Supp. 3d 269,272 (S.D.N.Y. 2016) (internal quotation marks omitted); see
also Givens v. W T Grant Co., 457 F.2d 612, 614 (2d Cir. 1972), vacated on other
grounds, 409 U.S. 56 (1972) ("[I]t is settled that [attorney's fees] may not properly be
included in determining the jurisdictional amount unless they are recoverable as a matter
of right."). Section 2461(b) of the CPA "expressly provides that a consumer 'may sue
and recover ... reasonable attorney's fees[.]'" Gramatan Home Inv 'rs Corp. v. Starling,
470 A.2d 1157, 1162 (Vt. 1983) (quoting 9 V.S.A. § 2461(b)). The United States
Supreme Court and Second Circuit have held, however, that a self-represented attorney
should not be awarded attorney's fees even if the statutory cause of action so provides.
See, e.g., Kay v. Ehrler, 499 U.S. 432,438 (1991) (denying an award of attorney's fees
for a prevailing self-represented attorney seeking fees under 42 U.S.C. § 1988); Hawkins
v. 1115 Legal Serv. Care, 163 F.3d 684, 694-95 (2d Cir. 1998) (holding that a self-
represented attorney is not permitted to recover attorney's fees in a Title VII or a§ 1981
action); see also Adamson v. Dodge, 2006 VT 89, ,i 8, 180 Vt. 612, 615, 910 A.2d 821,
824 ("Nor can we award attorney's fees for prose representation" (citing Kay, 499 U.S.
at 435)). While Plaintiff represents that he "will in all probability hire counsel" at a
future date (Doc. 12 at 4 n.3), at present, he proceeds as a self-represented attorney. His
request for reasonable attorney's fees therefore cannot contribute to the amount in
controversy requirement.
CONCLUSION
Because Plaintiff has not met his burden of demonstrating a reasonable probability
that the amount in controversy threshold is satisfied for diversity jurisdiction, 28 U.S.C.
§ 1332(a)(l), the court lacks subject matter jurisdiction over this action. The court
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therefore GRANTS Defendants' motion to dismiss (Doc. 5) and DISMISSES Plaintiffs
Complaint WITHOUT PREJUDICE.
SO ORDERED.
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Dated at Burlington, in the District of Vermont, this _J__ day of January, 2018.
~=
Christina Reiss, District Judge
United States District Court
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