Cunningham v. Ford Motor Co., Civ. A. No. 75-1780.

• Decision Date: 06 April 1976
• Docket Number: Civ. A. No. 75-1780.
• Parties: Shirley A. CUNNINGHAM, Plaintiff, v. FORD MOTOR COMPANY, Defendant.
• Court: U.S. District Court — District of South Carolina

413 F. Supp. 1101

Shirley A. CUNNINGHAM, Plaintiff, v. FORD MOTOR COMPANY, Defendant.

Civ. A. No. 75-1780.

United States District Court, D. South Carolina, Charleston Division.

April 6, 1976.

A. Hoyt Rowell, III, of Gibbs, Gaillard, Rowell & Tanenbaum, Charleston, S. C., for plaintiff.

William H. Grimball, of Grimball & Cabaniss, Charleston, S. C., for defendant.

HEMPHILL, District Judge.

On March 5, 1976, defendant Ford Motor Company (hereinafter Ford) filed in this court its motion for an order dismissing the suit (1) for lack of jurisdiction;¹ and (2) because a similar suit, based upon an identical cause or causes of action has been filed against Charleston Lincoln Mercury, Inc., in the Court of Common Pleas for Charleston County, South Carolina. Defendant relies upon the facts illustrated by papers in the Clerk's file and presented in the depositions of the plaintiff and her husband. The motion came on to be heard before this court on March 9, 1976, and counsel duly explored the facts and the facets of their particular legal positions.

The original complaint, filed in this court on October 9, 1974 and amended October 28, 1974,² seeks recovery for damages allegedly suffered by the plaintiff because of a purchase of a Lincoln Continental automobile, admittedly manufactured by Ford, which she says was defective. On January 5, 1976, plaintiff filed in the Court of Common Pleas for Charleston County, South Carolina, an identical complaint against Charleston Lincoln Mercury, Inc., the dealer who sold the vehicle to the plaintiff. Plaintiff's amended complaint initially had three causes of action but plaintiff abandoned the third cause of action, and as the complaint now appears in the records of this court, defendant's action is two-fold, for breach of an express warranty, and for breach of implied warranty of merchantability. Counsel for the plaintiff candidly admitted that the suit was "entirely under the Uniform Commercial Code."³

It is not disputed that the purchase price of the automobile involved in the suit was $11,221.40, although plaintiff claimed that finance charges increased the total purchase price to $14,075.52. Initially, this posed a question of whether or not the carrying charges can be added as a part of the purchase price of the vehicle, but the decision of this issue is not necessary to the disposition of the motion to dismiss on the ground of lack of jurisdictional amount. Plaintiff admits the costs of the car and admits that the car was driven 12,000 miles, including at least one trip to Florida, despite the fact that plaintiff and her husband testified at their depositions that the car was "worth nothing" to them because of its lack of dependability. Defendant would have the court calculate the cost as $11,221.40 and deduct $1800.00 from the value of the car, as the value of the transportation in the car for the 12,000 miles at 15 cents per mile. It is obvious that if the $1800 were deducted from $11,221.40, there would remain $9,421.40, which is less than the jurisdictional amount.

It is elementary that where an action is brought on the grounds of diversity of citizenship under 28 U.S.C. § 1332, it is absolutely essential that the amount in controversy exceed the requisite jurisdictional sum and that this should appear either by the allegations of the complaint or otherwise from proof as to the loss suffered and sought to be recovered. Pinel v. Pinel, 240 U.S. 594, 36 S.Ct. 416, 60 L.Ed. 817 (1916); Vraney v. Pinellas County, 250 F.2d 617 (5th Cir. 1958). The amount in controversy is measured not by the monetary result of determining the principle involved in the litigation, but by its pecuniary consequence to those involved. Thomson v. Gaskill, 315 U.S. 442, 62 S.Ct. 673, 86 L.Ed. 951 (1942); Electro Therapy Products Corp. v. Strong, 84 F.2d 766 (9th Cir. 1936); Pennsylvania Ins. Co. v. Allstate Ins. Co., 226 F.Supp. 99 (D.Va.1964). It has been held that to establish the jurisdictional amount it is sufficient that there is a probability that the value of the matter in controversy exceeds such amount. Jeffries v. Silver Cup Bakers, 434 F.2d 310 (7th Cir. 1970).

Initially this court had jurisdiction when plaintiff exhibited a good faith allegation that $10,000 is in issue in this litigation, because, at the time the complaint was filed, it did not appear to a legal certainty that the recovery could not exceed the jurisdictional amount. Anderson v. Moorer, 372 F.2d 747 (5th Cir. 1967); Sears Roebuck & Co. v. American Mutual Liability Ins. Co., 372 F.2d 435 (7th Cir. 1967); Jaconski v. Avisun Corp., 359 F.2d 931 (3rd Cir. 1966). Before a suit will be dismissed for lack of jurisdiction, it must appear to a legal certainty that the plaintiff cannot recover in the lawsuit more than $10,000, exclusive of interests and costs. Jeffries v. Silver Cup Bakers, Inc., 434 F.2d 310 (7th Cir. 1970), Lewis v. Cook, 419 F.2d 619 (6th Cir. 1969). The right to recover the jurisdictional amount must exist at the time of the institution of the suit in federal court, and events occurring subsequent to the institution of the suit in federal court do not oust jurisdiction though they reduce the amount recoverable below the statutory limit. St. Paul Mercury & Indemnity Co. v. Red Cab Co., 303 U.S. 283, 58 S.Ct. 586, 82 L.Ed. 845 (1938); Zunamon v. Brown, 418 F.2d 883 (8th Cir. 1969); Emland Builders, Inc. v. Shea, 359 F.2d 927 (10th Cir. 1966). Considerable latitude may be given the plaintiff to establish the basis of his claim for damages for the purpose of satisfying the jurisdictional amount requirement in a diversity suit, but there must be something other than pure speculation on which the court and/or jury can rely. Allbright v. R. J. Reynolds Tobacco Co., 350 F.Supp. 341 (D.C. Pa.1972), affirmed, 485 F.2d 678 (3rd Cir. 1973), cert. denied 416 U.S. 951, 94 S.Ct. 1961, 40 L.Ed.2d 301.

The court here is faced with plaintiff's claim, on the one hand, but under the UCC, she is entitled to a limited measure of damages for breach of the warranty she claims—a difference between the value of the goods accepted and the value the goods would have had if they had been as warranted.⁴ Defendant insists that plaintiff's claim is less than $10,000, not only because of the facts above discussed, but also because of the terms of the warranty which defendant exhibited to this court without objection by the plaintiff. This warranty, which is put out by the Ford Customer Service Division of Ford in what is known as the "Warranty Facts Booklet" for "1974 New Car and Light Truck Warranty" provides:

Ford and the Selling Dealer jointly warrant for each 1974 model passenger car or light truck (P400 or lower series) sold by Ford that for the earliest of 12 months or 12,000 miles from either first use or retail delivery, the Selling Dealer will repair or replace free of charge any part except tires that is found to be defective in factory materials or workmanship under normal use in the United States or Canada.

* * * * * *

To the extent allowed by law, THIS WARRANTY IS IN PLACE OF all other warranties, express or implied, including the ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS. Under this warranty, repair or replacement of parts is the only remedy.

It is admitted that before the 12,000 miles had expired, plaintiff took the automobile back to the dealer for various complaints, but it is the claim of the plaintiff that the dealer never complied with the guarantee set forth in this warranty. The plaintiff, in her brief, states that she will stipulate that the implied warranty of merchantability given by the defendant to the plaintiff was properly disclaimed or limited, under the criteria established in Section 10.2-316⁵ of the Code of Laws of South Carolina (1962), to the replacement of parts found to be defective under normal use. Plaintiff contends that defendant-Ford failed to comply with the properly limited warranty, that is to replace defective parts, etc., within the warranty period and that the limited warranty or exclusive limited remedy has failed in its essential purpose, said purpose being to provide the plaintiff with a new, defect-free automobile. Under such circumstances the plaintiff invokes the general remedy provision of the Uniform Commercial Code in regard to breach of warranty, as set forth in Section 10.2-719(1)(a)⁶ of the Code of Laws of South Carolina for 1962. Plaintiff claims damages under the provisions of the UCC, in the amount of the difference between the value of the automobile as it actually was and its value if it had been in the condition warranted, as well as incidental damages, "including but not limited to plaintiff's loss of use of the automobile in question, expense and inspection, receipt, transportation, care and custody of the automobile in question, and other reasonable expenses . . .."

It is easily seen that, even if defendant's theory of deduction for mileage driven be allowed and that reduction applied to the actual purchase price, instead of to the inflated price caused by the addition of finance charges, when the other damages which plaintiff claims are included, the amount may well exceed $10,000 under any calculation. It therefore does not appear to a legal certainty that the amount in controversy does not meet the jurisdictional amount required by 28 U.S.C. § 1332 in a diversity action.

Additionally, it has been recently decided by the United States Court of Appeals for the Fourth United States Circuit that the plaintiff may aggregate his claims against a single defendant, and only where it appears to a legal certainty that the plaintiff would not be entitled to the jurisdictional amount would his claim be subject to a motion for summary judgment for failure to meet the $10,000 jurisdictional requirement. Hales v. Winn Dixie Stores, Inc., 500 F.2d 836, 845 (4th Cir. 1974). See also Savarese v. Erie Transfer & Storage, Inc., 513 F.2d 140 (9th Cir. 1975); Lynch...