Carton v. General Motors Acceptance Corporation
| Decision Date | 14 July 2009 |
| Docket Number | No. 08-CV-1032-LRR.,08-CV-1032-LRR. |
| Citation | 639 F.Supp.2d 982 |
| Parties | Dawn CARTON, James Carton, Jodi Feller, Terry Feller, Cody Medinger, Stephanie Nieland, Plaintiffs, v. GENERAL MOTORS ACCEPTANCE CORPORATION, Defendant. |
| Court | U.S. District Court — Northern District of Iowa |
Darwin Bunger, Steven J. Crowley, Crowley & Bunger, Burlington, IA, for Plaintiffs.
Stephanie L. Hinz, Thad J. Collins, Pickens Barnes & Abernathy, Cedar Rapids, IA, for Defendant.
TABLE OF CONTENTS
I. INTRODUCTION ................................................. 984
II. RELEVANT PROCEDURAL BACKGROUND ............................... 984
III. SUBJECT MATTER JURISDICTION .................................. 985
IV. RULE 12(b)(6) .............................. ................. 985
A. Material Beyond the Pleadings ............................. 985
B. Standard .................................................. 986
V. FACTUAL BACKGROUND ................ .......................... 986
A. Parties ................................................... 986
B. Ms. Gannon ................................................ 986
C. Lease ..................................................... 986
D. Default ................................................... 987
E. Ms. Gannon Retains the Vehicle ............................ 987
F. Accident .................................................. 987
VI. ANALYSIS ..................................................... 987
A. Choice of Law ............................................. 987
B. Vicarious Liability ....................................... 990
1. Graves Amendment ....................................... 990
i. Effect of the Replevin Judgment on the Lease ....... 991
ii. Constitutionality of the Graves Amendment .......... 991
2. Iowa Code § 321.493 ............................... 993
i. "Owner" of the Vehicle ............................. 993
ii. Constitutionality of § 321.493 ............... 994
C. Negligence ................................................ 995
VII. CONCLUSION .................................................... 996
The matter before the court is Defendant General Motors Acceptance Corporation's Motion to Dismiss ("Motion") (docket no. 9).
On September 24, 2008, Plaintiffs Dawn Carton, James Carton, Jodi Feller, Terry Feller, Cody Medinger and Stephanie Nieland filed the Complaint (docket no. 2). In the Complaint, Plaintiffs allege Defendant is vicariously liable for the negligence of a third party who caused an accident that injured Plaintiffs. Plaintiffs also allege Defendant is liable for its own negligence.
On December 29, 2008, Defendant filed the Motion. In the Motion, Defendant asks the court to dismiss the Complaint for lack of subject matter jurisdiction and for failure to state a claim. On February 20, 2009, Plaintiffs filed a Resistance (docket no. 23). On March 13, 2009, Defendant filed a Reply (docket no. 33).
On April 14, 2009, the court held a hearing on the Motion. Attorney Steven J. Crowley represented Plaintiffs. Attorney Stephanie L. Hinz represented Defendant. The Motion is fully submitted and ready for decision.
In the Motion, Defendant moves to dismiss the Complaint for lack of subject matter jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(1). Defendant claims Wisconsin law ought to govern Plaintiffs' claims and caps Plaintiffs' total damages at $50,000, which is less than the $75,000 amount in controversy set forth in 28 U.S.C. § 1332, the relevant subject matter jurisdiction statute. As discussed more fully below, the court declines to apply Wisconsin law in the instant action, which moots this aspect of Defendant's jurisdictional challenge.
Diversity must be complete, meaning "no defendant holds citizenship in the same state where any plaintiff holds citizenship." OnePoint Solutions, LLC v. Borchert, 486 F.3d 342, 347 (8th Cir.2007). Plaintiffs allege they are all Iowa residents and that the Defendant is domiciled in Delaware. Plaintiffs also allege that the amount in controversy exceeds $75,000. The court is satisfied that diversity jurisdiction exists in this case pursuant to 28 U.S.C. § 1332.
Generally, a court reviewing a motion to dismiss pursuant to Rule 12(b)(6) only considers the factual allegations in the complaint. Riley v. St. Louis County of Mo., 153 F.3d 627, 629 (8th Cir.1998). In this case, however, Defendant filed a substantial amount of evidence in support of the Motion that is not referenced in the Complaint. A district court "has complete discretion to determine whether or not to accept any material beyond the pleadings that is offered in conjunction with a Rule 12(b)(6) motion." Stahl v. USDA, 327 F.3d 697, 701 (8th Cir.2003) (internal citation and quotation marks omitted). If the court accepts material beyond the pleadings, the motion to dismiss is generally converted into a motion for summary judgment under Federal Rule of Civil Procedure 56. Id. If the court converts a motion to dismiss into a motion for summary judgment, "[a]ll parties must be given a reasonable opportunity to present all the material that is pertinent to the motion." Fed.R.Civ.P. 12(d). The court declines to review the Motion under the summary judgment standard and shall not consider the extraneous material the parties filed, except to the extent some of the material falls into a recognized exception to the general rule of conversion.
In its Rule 12(b)(6) analysis, the court may consider public records the parties filed in support of their respective positions, because courts have created exceptions to the general rule of conversion for public records. See, e.g., Porous Media Corp. v. Pall Corp., 186 F.3d 1077, 1079 (8th Cir.1999) (). In this case, the court may consider the court records Defendant filed in support of the Motion, see Defendant's Appendix ("Def. App'x") (docket nos. 12-2, 3 & 4), at 7-14, as well as the confirmation of security interest, see id. at 5. The court may also examine "materials that are `necessarily embraced by the pleadings.'" Porous Media, 186 F.3d at 1079 (quoting Piper v. Jaffray Cos. v. Nat'l Union Fire Ins. Co., 967 F.Supp. 1148, 1152 (D.Minn.1997)). Under this exception, the court may consider the motor vehicle lease at issue and a copy of a complaint in a related case, which are attached to the Complaint as Exhibits A and B, respectively.1 The remaining evidence does not fall within any exception to the summary judgment conversion rule, and the court shall not consider it.2
Federal Rule of Civil Procedure 12(b)(6) authorizes a district court to dismiss a claim for a "failure to state a claim upon which relief can be granted[.]" Fed. R.Civ.P. 12(b)(6). In assessing a motion to dismiss, the court must view the allegations in the complaint in the light most favorable to the non-moving party. In re Operation of Mo. River Sys. Litig., 418 F.3d 915, 917 (8th Cir.2005). The court must accept all the factual allegations in the complaint as true. Erickson v. Pardus, 551 U.S. 89, 127 S.Ct. 2197, 2200, 167 L.Ed.2d 1081 (2007) (citing, in part, Swierkiewicz v. Sorema N.A., 534 U.S. 506, 508 n. 1, 122 S.Ct. 992, 152 L.Ed.2d 1 (2002)). In a complaint, a plaintiff must set forth his or her entitlement to relief, which "requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). "The complaint must allege facts, which, when taken as true, raise more than a speculative right to relief." Benton v. Merrill Lynch & Co., 524 F.3d 866, 870 (8th Cir. 2008); see also Schaaf v. Residential Funding Corp., 517 F.3d 544, 549 (8th Cir.2008) .
Viewed in the light most favorable to the non-moving parties, Plaintiffs, the relevant facts are:
A. Parties
Dawn Carton and James Carton are married and reside in Iowa. Jodi Feller and Terry Feller are also married and reside in Iowa. Cody Medinger and Stephanie Nieland are residents of Iowa. Defendant is a Delaware corporation. Defendant finances and leases General Motors vehicles in Iowa and elsewhere in the United States.
B. Ms. Gannon
Tiffany J. Gannon is an Illinois resident. At all times relevant to the Complaint, Ms. Gannon was enrolled as a student at a post-secondary school in Wisconsin.
C. Lease
On December 7, 2006, Ms. Gannon entered into a lease ("Lease") (docket no. 2-3) with Ballweg Chevrolet, Inc., located in Middleton, Wisconsin. The Lease was for a new 2006 Chevrolet Cobalt (the "Vehicle"). Pursuant to the Lease, Ms. Gannon was required to make monthly payments of $205.95 for a period of 48 months, put no more than 48,045 miles on the Vehicle and maintain liability insurance on the Vehicle. Ballweg Chevrolet, Inc. assigned the Lease to Defendant.
The Lease was scheduled to end "one month after the last payment [was] due." Lease at ¶ 16. However, the Lease provides that Defendant may end the Lease if Ms. Gannon is in "default." Id. ¶ 17. A "default" occurs if a payment "is more than 10 days past due." Id. at ¶ 18. The Lease allowed Ms. Gannon to cure a default. In the event Ms. Gannon failed to cure a default, Defendant could elect to do the following: (1) end the...
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