Beattie v. Skyline Corporation

Filing 315

MEMORANDUM OPINION AND ORDER denying 285 MOTION for Reconsideration of the Court's Memorandum Opinion and Order of 12/19/2014 and denying 287 MOTION for Reconsideration of Court's Memorandum Opinion and Order of 12/19/2014. Signed by Judge Robert C. Chambers on 2/18/2015. (cc: attys; any unrepresented party) (skm)

IN THE UNITED STATES DISTRICT COURT FOR
THE SOUTHERN DISTRICT OF WEST VIRGINIA
HUNTINGTON DIVISION

JONATHAN BEATTIE and
HEATHER BEATTIE,
Plaintiffs,
v.

CIVIL ACTION NO. 3:12-2528

CMH HOMES, INC., d/b/a LUV HOMES #760 and
VANDERBILT MORTGAGE AND FINANCE, INC.,
Defendants,
MEMORANDUM OPINION AND ORDER
Pending before the Court are Defendant CMH Homes, Inc.’s Motion to Reconsider the
Court’s Memorandum Opinion and Order of December 19, 2014 (ECF No. 285) and Defendant
Vanderbilt Mortgage and Finance, Inc.’s Motion to Reconsider the Court’s Memorandum Opinion
and Order of December 19, 2014 (ECF No. 287). For the reasons outlined below, these motions
are DENIED.
In its motion, Defendant CMH Homes, Inc. (“CMH”) raises two arguments previously
rejected by the Court. First, CMH asserts that Plaintiff’s revocation of acceptance claim, found in
Count Two of the complaint, is barred by the four-year statute of repose applicable to breach of
warranty claims. The Court continues to disagree. The express provisions of the revocation
statute control: Plaintiffs must seek revocation “within a reasonable time after the buyer discovers
or should have discovered the ground for it.” W. Va. Code § 46-2-608 (1963). This language
effectively imparts a discovery rule on one recognized claim, revocation, whereas other claims for
breach of contract or warranty fall within the statute of repose. To prevail on a claim for

revocation, Plaintiffs must prove a “nonconformity” that “substantially impairs” the value of the
good and that Plaintiffs reasonably assumed would be cured by Defendant or that could not easily
be discovered prior to acceptance. See id. Taking Plaintiffs’ evidence in the light most favorable
to them, Plaintiffs’ asserted their right to revocation after learning that the mobile home was
improperly installed, a nonconformity for which CMH was responsible but that it failed to cure.
The Court thus rejects CMH’s renewed argument.1
The second issue raised in CMH’s motion concerns Plaintiffs’ fraud and unfair practices
claims, contained in Counts Nine and Ten of the complaint. CMH argues that Plaintiffs failed to
address CMH’s summary judgment arguments on these claims and then improperly amended the
claims. The Court has rejected the latter argument by denying Defendant’s motion to strike
Plaintiffs’ “orally amended” claims. See ECF No. 304. Upon review of the former argument, as
to CMH’s motion for summary judgment, the Court again rejects Defendant’s position. The
complaint alleges unfair or deceptive acts in the sale, installation, and repair of the mobile home,
then refers to numerous unfair and deceptive acts listed in the unfair practices statute. See ECF
No. 1, Ex. A. Plaintiffs developed evidence purporting to establish that CMH was required to use
a licensed contractor to install the home but failed to do so, that the installation of the foundation
and the mobile home were not completed in conformity with its specifications, and that CMH or its
agents inadequately repaired the home, resulting in substantial defects in the quality of the home.
Plaintiffs have thus raised genuine issues of fact with respect to their unfair practices claim
sufficient to survive summary judgment.
With respect to Plaintiffs’ fraud claim, Defendant misstates how fraud may be proven.
For instance, evidence that Defendant had a duty to employ a licensed contractor but then chose an
1 Defendant also asserts that a “substantial change” in the condition of the mobile home precludes Plaintiffs’ claim for
revocation. Resolution of this issue depends on disputed facts as to the nature, cause, and extent of problems in the
mobile home. It is thus not proper to resolve this matter at the summary judgment stage.

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unlicensed one to install the mobile home could support a fraud claim. Plaintiffs have put forth
sufficient evidence of such. Similarly, Plaintiffs have evidence that CMH discovered improper
bolting at the marriage line but did not disclose to the Plaintiffs the nature and extent of the
problems resulting from the improper installation. These claims all arise from disputed evidence,
thus summary judgment on these claims was denied. For these reasons, CMH’s motion to alter or
amend the Court’s order is DENIED.
Defendant Vanderbilt Mortgage and Finance, Inc. (“VMF”) also filed a motion to alter or
amend the Court’s order. VMF raises two points. First, VMF adopts the arguments made by
CMH in its motion with respect to Counts Two, Nine, and Ten. VMF argues that because
Plaintiffs seek to hold it derivatively liable as the assignee of the promissory note between
Plaintiffs and CMH, any claims dismissed as to CMH should also be dismissed as to VMF. As
explained above, the Court rejects CMH’s arguments and declines to grant CMH summary
judgment on the revocation, fraud, and unfair practice claims. Thus, the Court also declines to
grant summary judgment in favor of VMF on these claims.
Second, VMF argues that if the Court rejects CMH’s motion and the Defendants’ Motion
to Strike (ECF No. 283), which the Court has done, the Court should grant VMF summary
judgment on the amended fraud and unfair practices claims. VMF contends that “Plaintiffs are
precluded from holding VMF derivatively liable as it relates to their Orally Amended Fraud Claim
and Orally Amended UDAP claim because those claims pertain to conduct that occurred after the
consumer credit sale on November 12, 2007.” ECF No. 288. The Court disagrees with VMF’s
analysis. Section 46A-2-1-2 of the West Virginia Code does impose some limits on assignee
liability. Most importantly, it limits the amount and type of damages that a buyer may recover
from an assignee. W. Va. Code 46A-2-1-2 (1990). The provision does not, however, state that

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an assignee is only liable for claims accruing before the consumer credit sale.2 See id. Moreover,
even if VMF’s legal analysis is correct, VMF fails to recognize that in their complaint, motions,
and other papers filed with the court, Plaintiffs assert fraud and unfair practice claims based on
CMH’s actions during the sale itself, in addition to actions taken after the sale. Plaintiffs may
thus proceed on their claims against VMF. VMF’s motion is DENIED.
For the foregoing reasons, CMH Homes, Inc.’s Motion to Reconsider the Court’s
Memorandum Opinion and Order of December 19, 2014 (ECF No. 285) and Vanderbilt Mortgage
and Finance, Inc.’s Motion to Reconsider the Court’s Memorandum Opinion and Order of
December 19, 2014 (ECF No. 287) are DENIED. The Court DIRECTS the Clerk to send a copy
of this written Opinion and Order to counsel of record and any unrepresented parties.

ENTER:

February 18, 2015

2 VMF also cites One Valley Bank of Oak Hill v. Bolen, 425 S.E.2d 829 (W. Va. 1992), for the proposition that
Plaintiffs cannot recover damages beyond the original amount owed to the assignee based on a theory of fraud because
the alleged fraud did not occur at the time of the consumer credit sale. As this argument primarily concerns damages,
rather than liability, the Court declines to address it at this stage of the litigation.

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