Crosslin v. Sears Automotive and Tire et al

Filing 21

OPINION AND ORDER treating the Demurrer of defendant Subaru of America, Inc. as a Motion to Dismiss and denying motion; treating the Demurrer of defendant Sedgwick Claims Management Services, Inc. as a Motion to Dismiss and granting motion; Defendant Sedgwick Claims Management Services, Inc. is dismissed as a party to this action; denying motion to dismiss crossclaim by Sears Automotive and Tire document # 10 ) Signed by Judge James P. Jones on 7/23/2014. (lml)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF VIRGINIA
ABINGDON DIVISION
JANICE CROSSLIN,

)
)
Plaintiff,
)
)
v.
)
)
SEARS AUTOMOTIVE AND TIRE, ET )
)
AL.,
)
Defendants.
)

Case No. 1:14CV00030
OPINION AND ORDER
By: James P. Jones
United States District Judge

Bernard S. Via, III, Bristol, Virginia, and Parke S. Morris, Chattanooga,
Tennessee, for Plaintiff; Stephanie G. Cook, Kalbaugh, Pfund & Messersmith,
P.C., Roanoke, Virginia, for Defendants Sears, Roebuck and Co. and Sedgwick
Claims Management Services, Inc.; Cameron S. Bell, Penn, Stuart & Eskridge,
Abingdon, Virginia, for Defendant Subaru of America, Inc.
In this diversity civil action removed from state court, Janice Crosslin
(“plaintiff” or “Crosslin”) has sued Subaru of America, Inc. (“Subaru”) for breach
of contract for failing to fulfill a duty plaintiff believes she is owed under an
extended warranty she purchased along with her Subaru automobile. Crosslin has
also sued Sears, Roebuck and Co. (“Sears”) citing breach of contract, violation of
the Virginia Consumer Protection Act, and common law fraud, because of
automotive services performed on the vehicle by an employee at the Sears Auto
Center in Bristol, Virginia. Finally, Crosslin has named Sedgwick Claims

Management Services, Inc. (“Sedgwick”), a third party administrator that handles
insurance claims for Sears, as a defendant.
The case was timely removed from state court to this court. Subaru and
Sedgwick filed separate Demurrers while the case was pending in state court and
Subaru also filed a Crossclaim against Sears seeking indemnity or contribution.
After removal, Sears filed a Motion to Dismiss Subaru’s Crossclaim pursuant to
Federal Rule of Civil Procedure 12(b)(6). I will treat the Demurrers filed by
Subaru and Sedgwick as Motions to Dismiss under Rule 12(b)(6).
For the reasons that follow, Subaru’s Motion to Dismiss will be denied,
Sedgwick’s Motion to Dismiss will be granted, and Sears’ Motion to Dismiss
Subaru’s Crossclaim will be denied.1
I.
The Complaint alleges the following facts, which I am bound at this point in
the case to accept as true.
Crosslin took her 2010 Subaru Outback to the Sears Auto Center located in
Bristol, Virginia. A Sears service technician told her that Subaru advises changing
the differential fluid in this car at 37,500 miles. This guidance was incorrect.
Nevertheless, the service technician drained the fluid and then mistakenly test

1

I will dispense with oral argument because the facts and legal contentions are
adequately presented in the materials before the court and argument would not
significantly aid the decisional process.
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drove the car without any fluid, resulting in damage to the transmission. The
differential fluid was then refilled, perhaps to cover the technician’s mistake.
Thereafter, the car’s transmission failed and Crosslin had the car towed to a
Subaru dealership, where she learned of the problem. In bringing this matter to the
attention of Sears, Crosslin was instructed to contact Sedgwick, the insurance
adjuster. Because the car had been found at the Subaru dealer to have differential
fluid containing metal shavings, indicating a parts failure, Sedgwick determined
that Sears could not be the liable party.
Crosslin then attempted to have the car repaired under a “6 Year/100,000
Miles – Classic Added Security with Roadside Assistance” warranty she had
purchased from Subaru. Subaru said that the problem was not a manufacturing
defect covered by the warranty and denied her claim. 2
II.
In deciding whether a complaint will survive a Rule 12(b)(6) motion to
dismiss, the court evaluates it and any documents attached or incorporated by
reference. Sec’y of State for Defence v. Trimble Navigation Ltd., 484 F.3d 700,
705 (4th Cir. 2007). “To survive a motion to dismiss, a complaint must contain
2

The facts alleged in the Complaint were amplified by documents attached to
Crosslin’s brief in opposition to the defendants’ motions to dismiss. While normally a
plaintiff may not bolster her complaint with a later brief, see Altizer v. Town of Cedar
Bluff, Va., No. 1:14CV00007, 2014 WL 2535057, at *2 (W.D. Va. June 5, 2014), I will
treat the plaintiff’s response as a granted motion to amend to add these documents to the
other documents that were exhibited with the Complaint.
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sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible
on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp.
v. Twombly, 550 U.S. 544, 570 (2007)). In ruling, the court must regard as true all
of the factual allegations contained in the complaint, Erickson v. Pardus, 551 U.S.
89, 94 (2007), and must view those facts in the light most favorable to the plaintiff,
Christopher v. Harbury, 536 U.S. 403, 406 (2002). “The issue is not whether a
plaintiff will ultimately prevail but whether the claimant is entitled to offer
evidence to support the claims.” Scheuer v. Rhodes, 416 U.S. 232, 236 (1974).
Turning first to Subaru’s Motion to Dismiss Crosslin’s claim for breach of
express warranty, the Supreme Court of Virginia3 has ruled that in order to
successfully bring a breach of warranty claim, there must be “(1) a legally
enforceable obligation of a defendant to a plaintiff; (2) the defendant’s violation or
breach of that obligation; and (3) injury or damage to the plaintiff caused by the
breach of obligation.” Ulloa v. QSP, Inc., 624 S.E.2d 43, 48 (Va. 2006).
A plaintiff may assert inconsistent causes of action, see Fed. R. Civ. P.
8(d)(3), and Crosslin has alleged sufficient facts showing breach of the warranty
contract she purchased and resulting damage, even though she also claims that
Sears caused the problem.
3

In keeping with Erie R.R. v. Tompkins, 304 U.S. 64 (1938), a federal court
exercising diversity jurisdiction must apply the substantive law of the highest court of the
state in which the federal court sits. Wells v. Liddy, 186 F.3d 505, 527-28 (4th Cir. 1999).
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I next consider Sedgwick’s Motion to Dismiss. In her Complaint, the
plaintiff does not cite a specific duty owed to her by Sedgwick, nor does she
explicitly allege any misrepresentation or other impermissible conduct that would
give rise to a legal claim. Sedgwick’s Motion to Dismiss will thus be granted.
As to Sears’ Motion to Dismiss Subaru’s Crossclaim, it contends that it
cannot be held liable for any manufacturer’s warranty provided to Crosslin by
Subaru. While that may be true, Sears may be responsible under the principles of
equitable indemnification for any damages caused by negligence by it for which
Subaru is held liable. See Pulte Home Corp. v. Parex, Inc., 579 S.E.2d 188, 193
(Va. 2003) (holding that equitable indemnification is viable under Virginia law).
Of course, no determination of any such liability has yet been made, but section
8.01-281(A) of the Code of Virginia provides that
[a] party asserting either a claim, counterclaim, cross-claim, or thirdparty claim or a defense may plead alternative facts and theories of
recovery against alternative parties, provided that such claims,
defenses, or demands for relief so joined arise out of the same
transaction or occurrence. Such claim, counterclaim, cross-claim, or
third-party claim may be for contribution, indemnity, subrogation, or
contract, express or implied; it may be based on future potential
liability, and it shall be no defense thereto that the party asserting such
claim, counterclaim, cross-claim, or third-party claim has made no
payment or otherwise discharged any claim as to him arising out of
the transaction or occurrence.
Va. Code Ann. § 8.01-281(A) (emphasis added). Even though it is difficult to
contemplate a legal or factual situation in which Subaru would be held liable for
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damages caused by Sears’ negligence, at this point I cannot grant Sears’ Motion to
Dismiss Subaru’s Crossclaim.
III.
For the foregoing reasons, it is ORDERED as follows:
1.

Subaru’s Demurrer, treated as a Motion to Dismiss, is DENIED;

2.

Sedgwick’s Demurrer, treated as a Motion to Dismiss, is GRANTED

and Sedgwick is DISMISSED as a party to this action; and
3.

Sears’ Motion to Dismiss Subaru’s Crossclaim (ECF No. 10) is

DENIED.

ENTER: July 23, 2014
/s/ James P. Jones
United States District Judge

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