Bennett et al v. Skyline Corporation et al
Filing
46
MEMORANDUM OPINION AND ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT BELPRE'S MOTION TO DISMISS: It is ORDERED that Belpre's 33 Motion to Dismiss Count 5 of the Amended Complaint is DENIED, its Motion to Dismiss Count 7 of the Amended Complaint is GRANTED, and Count 7 as it pertains to Belpre is DISMISSED. Signed by District Judge Irene M. Keeley on 4/14/15. (cnd)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF WEST VIRGINIA
GABRIEL BENNETT and TIFFANY
BENNETT,
Plaintiffs,
v.
//
CIVIL ACTION NO. 1:14CV129
(Judge Keeley)
SKYLINE CORPORATION, BOB’S
QUALITY HOMES, INC., and
BELPRE SAVINGS BANK,
Defendants.
MEMORANDUM OPINION AND ORDER
GRANTING IN PART AND DENYING IN PART
DEFENDANT BELPRE’S MOTION TO DISMISS [DKT. NO. 33]
Pending before the Court is the motion to dismiss the amended
complaint filed by the defendant, Belpre Savings Bank (“Belpre”)
(Dkt. No. 33). For the following reasons, the Court GRANTS IN PART
and DENIES IN PART Belpre’s motion to dismiss Counts Five and Seven
of the amended complaint filed by the plaintiffs, Gabriel and
Tiffany Bennett (“the Bennetts”).
I.
A.
FACTUAL BACKGROUND
Factual Background
Construed in the light most favorable to the Bennetts, the
non-movants, the facts in this case are as follows.
Allain, 478 U.S. 265, 286 (1986).
Papasan v.
Skyline Corporation (“Skyline”)
is an Indiana corporation that manufactures home components.
Home
builders such as co-defendant Bob’s Quality Homes, Inc. (“Bob’s
Quality Homes”) purchase manufactured home components from Skyline,
BENNETT v. SKYLINE CORPORATION
1:14CV129
MEMORANDUM OPINION AND ORDER GRANTING IN PART
AND DENYING IN PART DEFENDANT BELPRE’S
MOTION TO DISMISS [DKT. NO. 33]
and then build a home from those components for purchasers.
Skyline
provides
an
express
warranty
guaranteeing
that
its
manufactured home components are free from manufacturing defects.
The Bennetts purchased a new home from Bob’s Quality Homes, an
authorized Skyline dealer/agent, on April 18, 2013.
They also
obtained a loan from co-defendant Belpre Savings Bank (“Belpre”) to
pay for the new home.
When the Bennetts purchased their new home, they informed
Bob’s Quality Homes that they needed to have the home delivered,
ready for occupancy, by a certain date.
Although Bob’s Quality
Homes guaranteed that the home would be delivered and installed by
the specified date, it failed to complete the installation of the
Bennetts’ home on time, and allegedly damaged and failed to
properly install the home.
When the installation process began to
go awry, the Bennetts instructed Belpre not to disburse loan funds
to
Bob’s
Quality
Homes.
Despite
these
instructions,
Belpre
disbursed the loan funds.
When the Bennetts finally were able to occupy their new home,
they discovered nonconformities stemming from the manufacture,
delivery,
and
installation
that
substantially
impaired
their
enjoyment of the new home. At that point, they demanded that Bob’s
2
BENNETT v. SKYLINE CORPORATION
1:14CV129
MEMORANDUM OPINION AND ORDER GRANTING IN PART
AND DENYING IN PART DEFENDANT BELPRE’S
MOTION TO DISMISS [DKT. NO. 33]
Quality Homes and Skyline undertake repairs pursuant to any and all
applicable warranties.
Bob’s Quality Homes and Skyline, however,
failed to repair the home in a timely fashion.
Consequently, the
Bennetts notified Bob’s Quality Homes, Skyline, and Belpre of their
rejection/revocation of acceptance of the home.
B.
Procedural Background
The Bennetts filed suit in the Circuit Court of Calhoun
County, West Virginia (Dkt. No. 1 at 1), after which Skyline, with
the consent of Bob’s Quality Homes and Belpre, removed the case to
federal court based on diversity of citizenship (Dkt. No. 1 at 2).
The Bennetts are citizens of West Virginia and reside in Calhoun
County, West Virginia.
Bob’s Quality Homes is an Ohio corporation
with its principal place of business in Ohio.
Belpre also is an
Ohio corporation with its principal place of business in Ohio.
Skyline is an Indiana corporation with its principal place of
business in Indiana. Id.
The price of the modular home components
used to construct the Bennetts’ home, standing alone, well exceeds
the jurisdictional threshold of $75,000.00.
Id. at 3.
Following removal, Belpre moved to dismiss the Bennetts’
complaint, on the basis that it was not a party to the Bennetts’
contract to purchase the home (Dkt. No. 15).
3
The Bennetts opposed
BENNETT v. SKYLINE CORPORATION
1:14CV129
MEMORANDUM OPINION AND ORDER GRANTING IN PART
AND DENYING IN PART DEFENDANT BELPRE’S
MOTION TO DISMISS [DKT. NO. 33]
Belpre’s motion to dismiss, and also sought leave to amend their
complaint
to
correct
any
deficiencies
(Dkt.
No.
18).
In
a
Memorandum Opinion and Order entered on October 7, 2014, the Court
granted Belpre’s motion to dismiss Counts One, Two, Three, Four,
Five, Six, Seven, Eight, Ten, Eleven, and Twelve, and denied its
motion to dismiss Count Nine (Dkt. No. 23 at 22).
Notably, in the
Order, the Court declined to allow the Bennetts to amend Counts One
through Seven of their complaint, concluding that such amendment
would be futile.
Id. at 9.
On December 1, 2014, the Bennetts filed an amended complaint
that alleged three causes of action against Belpre (Dkt. No. 29).1
Belpre then moved to dismiss Counts Five and Seven on the basis
that the Court had not given the Bennetts leave to refile those
counts (Dkt. No. 33).
The Bennetts argue that the amendments to
their complaint are within the parameters of the Court’s order, and
therefore should be allowed.
The motion is fully briefed and ripe
for disposition.
1
In addition to Counts Five and Seven, which are the subject
of the instant motion, the Bennetts allege Count Eight, Unfair or
Deceptive Acts or Practices, as to Belpre. The Court had declined
to dismiss this Count, formerly styled as Count Nine, in its
previous Memorandum Opinion and Order (Dkt. No. 23 at 15).
4
BENNETT v. SKYLINE CORPORATION
1:14CV129
MEMORANDUM OPINION AND ORDER GRANTING IN PART
AND DENYING IN PART DEFENDANT BELPRE’S
MOTION TO DISMISS [DKT. NO. 33]
II.
A.
LEGAL STANDARDS
Motion to Dismiss
In reviewing the sufficiency of a complaint, a district court
“‘must accept as true all of the factual allegations contained in
the complaint.’”
Anderson v. Sara Lee Corp., 508 F.3d 181, 188
(4th Cir. 2007) (quoting Erickson v. Pardus, 551 U.S. 89, 94
(2007)). While a complaint need not contain detailed factual
allegations, a plaintiff is obligated to provide the grounds of his
entitlement to relief with more than mere labels and conclusions;
a formulaic recitation of the elements of a cause of action will
not do.
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007).
Indeed, courts “are not bound to accept as true a legal conclusion
couched as a factual allegation.” Papasan, 478 U.S. at 286 (1986).
In considering whether the facts alleged are sufficient, a
court must consider whether “a complaint . . . contain[s] ‘enough
facts to state a claim to relief that is plausible on its face.’”
Anderson, 508 F.3d at 188 (quoting Twombly, 550 U.S. at 547).
“A
claim has facial plausibility when the plaintiff pleads factual
content that allows the court to draw the reasonable inference that
the defendant is liable for the misconduct alleged.”
5
Ashcroft v.
BENNETT v. SKYLINE CORPORATION
1:14CV129
MEMORANDUM OPINION AND ORDER GRANTING IN PART
AND DENYING IN PART DEFENDANT BELPRE’S
MOTION TO DISMISS [DKT. NO. 33]
Iqbal, 556 U.S. 662, 678 (2009).
This requires “more than a sheer
possibility that a defendant has acted unlawfully.”
B.
Id.
Motion to Amend the Complaint
The Bennetts previously sought leave to amend their complaint
in their response to Belpre’s original motion to dismiss, and later
at the scheduling conference (Dkt. No. 18 at 1).
A plaintiff may
amend a pleading one time as a matter of course before the
defendant files a responsive pleading.
Fed. R. Civ. P. 15(a).
After a responsive pleading is filed, however, a party may amend
“only with the opposing party’s written consent or the court’s
leave.
The
requires.”
court
should
freely
give
leave
when
justice
so
Fed. R. Civ. P. 15(a)(2).
The Fourth Circuit has interpreted Rule 15(a) to require that
“leave to amend a pleading should be denied only when the amendment
would be prejudicial to the opposing party, there has been bad
faith on the part of the moving party, or the amendment would have
been futile.” Johnson v. Oroweat Foods Co., 785 F.2d 503, 509 (4th
Cir. 1986) (citing Foman v. Davis, 371 U.S. 178, 182, 83 S.Ct. 227,
230 (1962)).
A court should deny leave to amend on the ground of
futility only “when the proposed amendment is clearly insufficient
or frivolous on its face.”
Johnson, 785 F.2d at 510.
6
Conjecture
BENNETT v. SKYLINE CORPORATION
1:14CV129
MEMORANDUM OPINION AND ORDER GRANTING IN PART
AND DENYING IN PART DEFENDANT BELPRE’S
MOTION TO DISMISS [DKT. NO. 33]
about the underlying merits of the litigation should not enter into
the court’s decision whether to allow an amendment. Davis v. Piper
Aircraft, 615 F.2d 606, 613-14 (4th Cir. 1980).
III. ANALYSIS
Count Five of the Bennetts’ amended complaint alleges claims
for breach of contract, and breach of the duty of good faith under
the Uniform Commercial Code, W. Va. Code § 46-1-203 (Dkt. No. 29 at
10).
Specifically, the Bennetts assert that Belpre breached its
contract with them by prematurely disbursing loan proceeds without
conducting an appraisal of the delivered and installed home, or
receiving their approval.
Id. at 11.
They further assert that
Belpre disbursed the loan funds despite having received explicit
instructions not to do so.
Id.
As currently pleaded, Count Five states a breach of contract
claim.
The Bennetts assert that in refiling this count they
“merely attempted to conform their complaint to the Court’s rulings
on Belpre’s prior motion to dismiss, and . . . were under the
impression that they had leave to do so, pursuant to both oral and
written motions and orders.”
(Dkt. No. 39 at 2).
In its Memorandum Opinion and Order dismissing Count Five of
the original complaint as to Belpre, the Court denied the Bennetts’
7
BENNETT v. SKYLINE CORPORATION
1:14CV129
MEMORANDUM OPINION AND ORDER GRANTING IN PART
AND DENYING IN PART DEFENDANT BELPRE’S
MOTION TO DISMISS [DKT. NO. 33]
leave to amend, finding it would be futile to allow them to do so.
(Dkt. No. 23 at 8, 13).
At the scheduling conference, however,
counsel for the Bennetts again sought leave to amend the complaint,
which the Court granted, but only as to Count Nine, the sole count
against Belpre remaining in the case at that point (Dkt. No. 33-1
at 1-2).
Count
Five
of
the
amended
complaint
adds
a
paragraph
explicitly referencing the Bennetts’ contract with Belpre.
claim
is
cognizable
under
West
Virginia
law
and
Such a
cures
the
deficiencies in the Bennetts’ original complaint, which had relied
upon agency and lender liability theories under the West Virginia
Consumer
Credit
and
Protection
Act
(Dkt.
No.
29
at
11).
Nevertheless, as Belpre has correctly noted, the Bennetts had not
been given leave to amend Count Five (Dkt. No. 23 at 9).
During
the
scheduling
conference,
when
counsel
for
the
Bennetts orally moved for leave to amend, he represented that he
did not “anticipate adding any claims,” and understood that any
amendment would be solely to clarify the existing claims in the
case (Dkt. No. 33-1 at 1-2).
Clearly this limited leave to amend
only permitted the Bennetts to clarify the counts remaining in the
case.
It did not grant a blank check to replead entire causes of
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BENNETT v. SKYLINE CORPORATION
1:14CV129
MEMORANDUM OPINION AND ORDER GRANTING IN PART
AND DENYING IN PART DEFENDANT BELPRE’S
MOTION TO DISMISS [DKT. NO. 33]
action that had been dismissed.
The question thus is whether the
Bennetts’ pleading of a new cause of action for breach of contract
in Count Five of their amended complaint comes within the ambit of
the Court’s Order, or is otherwise permissible.
It is well-established that, under Fed. R. Civ. P. 15(a),
leave to amend is to be “freely given.”
Under the present
circumstances, the Court finds that, at this early stage in the
litigation, it would be error to deny the Bennetts the opportunity
to plead a viable breach of contract claim against Belpre relating
to the actual loan agreement.
Fed. R. Civ. P. 15(a)(2).
Although breach of contract is a new claim against Belpre, and
not an attempt to revise claims already dismissed, the Court is
satisfied that such a claim is not futile, and is otherwise
permissible under Rule 15.
Furthermore, no real prejudice will be
suffered by Belpre if, based on a contract Belpre has already
provided to the Court, the Bennetts are allowed to amend now,
rather than having to seek leave to amend at a later point during
discovery.
Therefore, despite Belpre’s well-taken argument, the
Court is satisfied that the Bennetts’ amendment was made in good
faith, Johnson, 785 F.2d at 509, and will allow the amendment.
Fed. R. Civ. P. 15.
9
BENNETT v. SKYLINE CORPORATION
1:14CV129
MEMORANDUM OPINION AND ORDER GRANTING IN PART
AND DENYING IN PART DEFENDANT BELPRE’S
MOTION TO DISMISS [DKT. NO. 33]
Turning next to Count Seven, the amended complaint once again
alleges a claim for common law negligence against Belpre (Dkt. No.
29 at 12).
The Bennetts contend that a reasonable lender would
have handled the transaction, delivered the home, and performed the
repairs in a proper, careful manner.
Id. at 13.
The Bennetts
concede, however, that this is the same common law negligence claim
the Court previously dismissed as not cognizable against Belpre
(Dkt. No. 39 at 2).2
The Court therefore GRANTS Belpre’s renewed
motion to dismiss Count Seven.
IV.
CONCLUSION
For the reasons discussed, the Court DENIES Belpre’s motion to
dismiss Count Five, GRANTS its motion to dismiss Count Seven, and
DISMISSES Count Seven as it pertains to Belpre.
It is so ORDERED.
The Court directs the Clerk to transmit copies of this order
to counsel of record.
DATED:
April 14, 2015.
/s/ Irene M. Keeley
IRENE M. KEELEY
UNITED STATES DISTRICT JUDGE
2
Count Seven in the Bennetts’ amended complaint was dismissed
as Count Eight in the original complaint (Dkt. No. 23 at 9-13).
10
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