Hatten v. Estes Cadillac, Inc., Civ. A. No. 83-3113.

• Decision Date: 13 January 1986
• Docket Number: Civ. A. No. 83-3113.
• Citation: 625 F. Supp. 913
• Parties: Mrs. Norman H. HATTEN v. ESTES CADILLAC, INC., et al.
• Court: U.S. District Court — Eastern District of Louisiana

625 F. Supp. 913

Mrs. Norman H. HATTEN v. ESTES CADILLAC, INC., et al.

Civ. A. No. 83-3113.

United States District Court, E.D. Louisiana.

January 13, 1986.

Thos. W. Davenport, Jr., Davenport, Files & Kelly, Monroe, La., Charles C. Garretson, New Orleans, La., for Mrs. Norman H. Hatten.

Deutsch, Kerrigan & Stiles, David L. Campbell, New Orleans, La., for General Motors Corp.

Edwin A. Stoutz, Jr., New Orleans, La., for Estes Cadillac, Inc.

OPINION

ARCENEAUX, District Judge.

This is a redhibitory action for recission of the sale of a 1982 Cadillac Seville. Jurisdiction is based on diversity of citizenship pursuant to 28 U.S.C. § 1332.

Presently before the Court are numerous motions filed by defendants General Motors Corporation (GMC) and Estes Cadillac, Inc. (Estes). The parties agreed to waive oral argument; the Court ordered supplemental memoranda and took the motions under submission. Having considered the memoranda of counsel, the record and the applicable law, the Court 1) DENIES the joint motion of GMC and Estes to dismiss for lack of jurisdictional amount, 2) DENIES the motion of GMC and Estes to dismiss on the grounds of prescription, 3) GRANTS as to Estes but DENIES as to GMC the motion to dismiss for failure to tender for repair, 4) DENIES the motion of GMC to determine reasonable attorneys' fees, 5) GRANTS the motion of GMC to dismiss claims of plaintiff for the cost of the Mississippi Road and Bridge Privilege Tax 6) DENIES the motion of GMC to determine mileage credit and 7) DENIES the motion of GMC to dismiss claims of plaintiff against GMC for acts or omissions of GMC dealerships. This Court has previously dismissed plaintiff's claim for non-pecuniary damages on defendants' motion for summary judgment.

Plaintiff purchased the Seville on March 5, 1982, from Estes in New Orleans for $25,404.00. In subsequent months, plaintiff claims the auto revealed many defects ranging from the incessant illumination of the "check engine" light on the dashboard to uncontrollable acceleration. On five occasions in the following twelve months, plaintiff brought the Seville in for service and repair at Estes. The service record reflects minor complaints except for the last two occasions involving the malfunctioning cruise control (February 9, 1983) and intermittently non-operational windshield wipers (March 17, 1983). Eight other malfunctions occurred and were repaired on the road or were repaired by Watkins Oldsmobile-Cadillac (Watkins), a Gulfport, Mississippi, Cadillac dealer unrelated to Estes.

On April 20, 1983, plaintiff abandoned the Seville at Watkins upon learning of new complications which rendered the car immobile. After this suit was filed the Seville was sold at an auction pursuant to an agreement among the parties to the lawsuit. By the terms of the agreement, titled "Agreement to Mitigate Damages," the proceeds are to be credited against any recovery by plaintiff in this action.

At Louisiana law, a seller is bound to two principal obligations: that of delivering and that of warranting the object sold. La.Civ. Code.Ann. art. 2475 (1952). The obligation of warranty has two facets. First, the seller warrants that the buyer will not be deprived of the thing sold by claims of third persons. La.Civ.Code Ann. arts. 2476, 2500 (1952). Second, the seller warrants that the thing sold is free from hidden defects or redhibitory vices. La.Civ. Code Ann. arts. 2476, 2520 (1952).

A buyer has two options upon his discovery of a defect in the thing sold. First, he may bring an action in redhibition for recission of the sale if the defect renders the thing sold "either absolutely useless, or its use so inconvenient and imperfect, that it must be supposed that the buyer would not have purchased it, had he known of the vice." La.Civ.Code Ann. art. 2520 (1952). A seller in good faith, i.e. one who was unaware at the time of sale of the defect in the thing sold, is initially bound only to repair the defect. La.Civ.Code Ann. art. 2531 (1985). If the seller is unable to repair the defect, the seller is bound to restore the price, expenses of sale and expenses of preservation of the object of sale. Id. The bad faith seller, one who knew of the defect and neglected to declare it, is liable for damages suffered by the buyer as a result of the defect in addition to liability for the price and expenses. La. Civ.Code Ann. art. 2545 (1952).

The second option available to the buyer is the action for reduction of the price or action in quanti minoris. La.Civ.Code Ann. art. 2541 (1952). This action permits the buyer to retain the defective thing sold and obtain a refund of part of the purchase price in proportion to the reduction in value caused by the defect.

Although an action in redhibition is essentially contractual, Louisiana law requires no privity of contract for a buyer to recover from the manufacturer of a defective product.¹Rey v. Cuccia, 298 So.2d 840 (La.1974). Because the manufacturer is presumed to be a bad faith seller, the manufacturer is subject to the provisions of article 2545 in a suit in redhibition. Id. at 845.

PLAINTIFF'S CLAIM SATISFIES THE REQUISITE JURISDICTIONAL AMOUNT

In a joint motion to dismiss, GMC and Estes contend that plaintiff's claim fell below the minimum jurisdictional amount after this Court's denial of non-pecuniary damages and after the parties' sale of the Seville at the auction. As a result, movers argue, this Court no longer has jurisdiction.

The amount in controversy is determined at the time suit is filed in federal court. Subsequent events, "whether beyond plaintiff's control or the result of his own volition," cannot destroy the Court's jurisdiction once it has been acquired. C. Wright, A. Miller & E. Cooper, Federal Practice & Procedure: Jurisdiction § 3702 (1976).

That plaintiff purchased the Seville for over $25,000.00 is undisputed. Clearly, plaintiff's claim for recission of the sale was also in excess of $25,000.00 at the time suit was filed. The subsequent sale of the Seville and court order denying non-pecuniary damages, even if they caused the claim to fall below $10,000.00, do not affect this Court's jurisdiction. See Commercial Credit Corp. v. Lane, 466 F.Supp. 1326 (M.D.Fla.1979) (Creditor's recovery of $7,000 by repossession and sale of mobile homes did not destroy federal jurisdiction in the diversity action, even though the amount in controversy fell below $10,000.00) Thus, the motion to dismiss for lack of jurisdictional amount is DENIED.

PRESCRIPTION DOES NOT BAR PLAINTIFF'S ACTION

Movers argue that prescription bars plaintiff's suit because it was filed more than one year after the date of sale. Under La.Civ.Code art. 2534, a redhibitory claim prescribes one year after the date of sale. The article does not, however, apply to sellers with knowledge of the defect. In the case of such sellers, La.Civ.Code art. 2546 provides that prescription runs from the time the buyer discovers the defect. Because the manufacturer is presumed to be a seller with knowledge of the defect, redhibitory prescription runs from the time the buyer discovers the defect. Rey v. Cuccia, 298 So.2d 840, 845 (La.1974); Blalock v. American Employers Insurance Co., 345 So.2d 166, 167 (La.App. 2nd Cir. 1977), writ denied, 396 So.2d 221 (La.1978). In the instant case, most of the defects complained of were discovered within a year of the initiation of plaintiff's action. Thus, for the purposes of this motion, plaintiff's claim against GMC has not prescribed.

Furthermore, plaintiff's claim against Estes has not prescribed. Where a seller attempts to remedy a defect in the thing sold, the one year prescriptive period begins to run when the seller abandons his attempt to repair the defect. De la Houssaye v. Star Chrysler, Inc., 284 So.2d 63 (La.App. 4th Cir.), writ denied, 286 So.2d 662 (La.1973); Domingue v. Whirlpool Corp., 303 So.2d 813, 815 (La.App. 3rd Cir. 1974). "Once the prescriptive period has commenced to run, any repair attempts made by the seller interrupt prescription, and the purchaser has one year from the last attempted repair to bring suit." Domingue, 303 So.2d at 815. Estes concedes that plaintiff's car was brought in for repair on several occasions but questions whether the defects repaired were of a redhibitory nature.

The question of the existence of a redhibitory defect is a question of fact to be decided by the trier of fact. Newman v. Dixie Sales & Service, 387 So.2d 1333, 1339 (La.App. 1st Cir.1980). Caselaw indicates that even where defects considered in isolation are not redhibitory, the defects may be redhibitory when considered in toto. Chalmers v. Stephens Chevrolet, Inc., 461 So.2d 395 (La.App. 4th Cir.1984); Redman, Redhibition in Louisiana; Uses and Its Problems Today, 50 Tul.L.Rev. 530, 536 (1976). In cases such as this one where many of the defects claimed do not rise to redhibitory vices, the factual issue is whether the defects, considered in toto, would render use of the car "so inconvenient that it must be supposed plaintiffs would not have paid almost $28,000 had they known of the defects." Chalmers, 461 So.2d at 399. Such a determination should be made at trial. The motion of GMC and Estes for summary judgment on the grounds of prescription are DENIED.

PLAINTIFF FAILED TO TENDER THE AUTOMOBILE FOR REPAIR

Defendants further argue that plaintiff's claim must fail because of plaintiff's failure to tender her car for repair before the filing of this action. Tender to the seller for repair is a prerequisite to recovery from the good faith seller in redhibition. La.Civ.Code Ann. art. 2531 (1985), Dickerson v. Begnaud Motors, Inc., 446 So.2d 536 (La.App. 3rd Cir.), writ denied, 449 So.2d 1349 (La.1984).

Plaintiff failed to tender the Seville to the seller Estes when she abandoned the car in Mississippi. Plaintiff, without citing authority, argues that abandoning the car at a GMC dealer in Mississippi constituted the requisite tender to Estes...