Beattie v. Skyline Corp.

• Decision Date: 05 November 2012
• Docket Number: Civil Action No. 3:12–2528.
• Citation: 906 F.Supp.2d 528
• Court: U.S. District Court — Southern District of West Virginia
• Parties: Jonathan BEATTIE and Heather Beattie, Plaintiffs, v. SKYLINE CORPORATION, a foreign corporation, CMH Homes Inc., d/b/a Luv Homes # 760 and Vanderbilt Mortgage and Finance, Inc., Defendants.

906 F.Supp.2d 528

Jonathan BEATTIE and Heather Beattie, Plaintiffs,

v.SKYLINE CORPORATION, a foreign corporation, CMH Homes Inc., d/b/a Luv Homes # 760 and Vanderbilt Mortgage and Finance, Inc., Defendants.

Civil Action No. 3:12–2528.

United States District Court, S.D. West Virginia.

Nov. 5, 2012.

Cameron S. McKinney, David L. Grubb, The Grubb Law Group, Charleston, WV, for Plaintiffs.

John R. Teare, Jr., Spilman Thomas & Battle, Charleston, WV, Jason J. Stemple, Duffield Lovejoy & Stemple, Huntington, WV, for Defendants.

MEMORANDUM OPINION AND ORDER

ROBERT C. CHAMBERS, District Judge.

Plaintiffs Jonathan and Heather Beattie have alleged ten separate causes of action against Skyline Corporation (manufacturer of mobile homes, hereinafter “Skyline”), CMH Homes, Inc. (dealer of mobile homes, d/b/a/ Luv Homes, hereinafter “CMH”), and Vanderbilt Mortgage and Finance, Inc. (lender, hereinafter “VMF”). All ten claims stem from the Plaintiffs' purchase of a mobile home in November 2007, and the alleged faulty installation and repair thereof. These ten claims are as follows:

Count One—Cancellation of Contract by Rejection

Count Two—Cancellation of Contract by Revocation of Acceptance

Count Three—Breach of Express Warranties

Count Four—Breach of Implied Warranty of Merchantability

Count Five—Breach of Implied Warranty of Fitness

Count Six—Breach of Contract & Duty of Good Faith

Count Seven—Unconscionability

Count Eight—Common Law Negligence—Negligent Repair

Count Nine—Unfair or Deceptive Acts or Practices

Count Ten—Common Law Fraud and Misrepresentation

Skyline filed a motion to dismiss and a memorandum in support thereof on July 23, 2012. ECF Nos. 4, 5. Plaintiffs filed a response in opposition on August 6, 2012, ECF No. 9, and Skyline filed its reply on August 16, 2012. ECF No. 12.

VMF and CMH together filed a motion to dismiss and memorandum in support thereof on August 17, 2012. ECF Nos. 13, 14. In making their motion to dismiss, VMF and CMH incorporated by reference Skyline's motion to dismiss, Skyline's memorandum in support thereof, and Skyline's reply to Plaintiffs' response. VMF and CMH also put forth additional arguments in support of their motion to dismiss. Plaintiffs filed a response in opposition to VMF's and CMH's motion to dismiss on August 31, 2012, ECF No. 15, and VMF and CMH together filed a reply on September 10, 2012. ECF No. 18. Although two separate motions to dismiss have been filed, because this is a single case, the Court will analyze the two motions in a single Opinion.

Section I analyzes all ten counts under Federal Rule of Civil Procedure 12(b)(6). Section II examines the application of Rule 9(b) to Counts Nine and Ten. Section III discusses the statutes of limitations applicable to Counts Four, Five, and Eight. Section IV considers the application of West Virginia Code § 46–2–725 to Counts One through Six. Section V focuses on remaining issues surrounding Count Six, while Section VI does the same for Count Eight. Section VII analyzes exhaustion of administrative remedies. Lastly, Section VIII discusses the application of statutes of limitation to lenders specifically.

For the reasons stated below, Skyline's motion to dismiss (ECF No. 4) and VMF's and CMH's motion to dismiss (ECF No. 13) are GRANTED in part as to Count Eight (Common Law Negligence—Negligent Repair). Additionally, the motions are GRANTED in part as to Count Six (Breach of Contract & Duty of Good Faith), which can proceed only as a claim for Breach of Contract. Furthermore, Count Four (Breach of Implied Warranty of Merchantability) and Count Five (Breach of Implied Warranty of Fitness) are DISMISSED as to Defendants Skyline and CMH only. Plaintiffs may proceed on the balance of their claims.

I. Application of Rule 12(b)(6) of the Federal Rules of Civil Procedure

A. Standard of Review

Defendants have moved for dismissal of all claims pursuant to Rule 12(b)(6). In Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007), the United States Supreme Court disavowed the “no set of facts” language found in Conley v. Gibson, 355 U.S. 41, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957), which was long used to evaluate complaints subject to 12(b)(6) motions. 550 U.S. at 563, 127 S.Ct. 1955. In its place, courts must now look for “plausibility” in the complaint. This standard requires a plaintiff to set forth the “grounds” for an “entitle[ment] to relief” that is more than mere “labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Id. at 555, 127 S.Ct. 1955 (internal quotation marks and citations omitted). Accepting the factual allegations in the complaint as true (even when doubtful), the allegations “must be enough to raise a right to relief above the speculative level....” Id. (citations omitted). If the allegations in the complaint, assuming their truth, do “not raise a claim of entitlement to relief, this basic deficiency should ... be exposed at the point of minimum expenditure of time and money by the parties and the court.” Id. at 558, 127 S.Ct. 1955 (internal quotation marks and citations omitted).

In Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009), the Supreme Court explained the requirements of Rule 8 and the “plausibility standard” in more detail. In Iqbal, the Supreme Court reiterated that Rule 8 does not demand “detailed factual allegations[.]” 556 U.S. at 678, 129 S.Ct. 1937 (internal quotation marks and citations omitted). However, a mere “unadorned, the-defendant-unlawfully-harmed-me accusation” is insufficient. Id. “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ ” Id. (quoting Twombly, 550 U.S. at 570, 127 S.Ct. 1955). Facial plausibility exists when a claim contains “factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. (citation omitted). The Supreme Court continued by explaining that, although factual allegations in a complaint must be accepted as true for purposes of a motion to dismiss, this tenet does not apply to legal conclusions. Id. “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Id. (citation omitted). Whether a plausible claim is stated in a complaint requires a court to conduct a context-specific analysis, drawing upon the court's own judicial experience and common sense. Id. at 679, 129 S.Ct. 1937. If the court finds from its analysis that “the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged—but it has not ‘show[n]’—‘that the pleader is entitled to relief.’ ” Id. (quoting, in part, Fed.R.Civ.P. 8(a)(2)). The Supreme Court further articulated that “a court considering a motion to dismiss can choose to begin by identifying pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth. While legal conclusions can provide the framework of a complaint, they must be supported by factual allegations.” Id.

Plaintiffs argue that given the purposes behind the West Virginia Consumer Credit and Protection Act, which underlies many of the causes of action in this case, the Court should interpret such causes of action broadly. Plaintiffs point to the state legislature's statement that “in construing this article, the courts [should] be guided by the interpretation given by the federal courts to the various federal statutes dealing with the same or similar matters. To this end, this article shall be liberally construed so that its beneficial purposes may be served.” W. Va Code § 46A–6–101. The Court makes clear, however, that the Court's analysis of pleading in general, and pleading fraud in particular (as will be discussed later), is grounded in federal law, not state law. Johnson v. Hugo's Skateway, 974 F.2d 1408, 1416 (4th Cir.1992) (“Generally, then, federal courts applying state-created law are still to conduct those trials under federally established rules of procedure.”); Minger v. Green, 239 F.3d 793, 800 (6th Cir.2001) (citing Hayduk v. Lanna, 775 F.2d 441, 443 (1st Cir.1985)) (“While state law governs the burden of proving fraud at trial in a diversity action in federal court, the procedure for pleading fraud in all diversity suits in federal court is governed by the special pleading requirements of Fed.R.Civ.P. 9(b).”).

B. Analysis of the Ten Counts

Defendants argue that Plaintiffs' claims fail under Rule 12(b)(6). Plaintiffs respond that their pleadings do satisfy Rule 12(b)(6), and also note that motions to dismiss are rarely granted by the court and are a disfavored means of resolving litigation. Plaintiffs further argue that dismissal under 12(b)(6) would be premature, as the record remains undeveloped regarding, inter alia, the nature of the defects in their mobile home, repair attempts, Defendants' promises about repairs, and the applicable warranties.

As VMF and CMH themselves bring to the Court's attention, “[a]lthough as a general rule extrinsic evidence should not be considered at the 12(b)(6) stage, [the Court of Appeals has] held that when a defendant attaches a document to its motion to dismiss, ‘a court may consider it in determining whether to dismiss the complaint [if] it was integral to and explicitly relied on in the complaint and [if] the plaintiffs do not challenge its authenticity.’ ” Am. Chiropractic v. Trigon Healthcare, 367 F.3d 212, 234 (4th Cir.2004) (quoting Phillips v. LCI Int'l Inc., 190 F.3d 609, 618 (4th Cir.1999)). However, “the courts have made clear that the document at issue must be explicitly relied upon.” Guthrie v. McClaskey, No. 1:11CV00061, 2012 WL 2515341, at *4 (W.D.Va. June 28, 2012). VMF and CMF have attached to their motion to dismiss the consumer complaint which Plaintiffs filed with the ...