Huston v. Mercedes–benz U.S. Llc

• Decision Date: 14 June 2011
• Docket Number: No. 35702.,35702.
• Citation: 227 W.Va. 515,711 S.E.2d 585
• Court: West Virginia Supreme Court
• Parties: William J. HUSTON and Connie A. Huston, Plaintiffsv.MERCEDES–BENZ USA, LLC, a Foreign Corporation, and Smith Motor Cars, a West Virginia Corporation, Defendants.

227 W.Va. 515

711 S.E.2d 585

William J. HUSTON and Connie A. Huston, Plaintiffs

v.MERCEDES–BENZ USA, LLC, a Foreign Corporation, and Smith Motor Cars, a West Virginia Corporation, Defendants.

No. 35702.

Supreme Court of Appeals of West Virginia.

Submitted May 10, 2011.Decided June 14, 2011.

Syllabus by the Court

1. “The appellate standard of review of questions of law answered and certified by a circuit court is de novo.” Syllabus point 1, Gallapoo v. Wal–Mart Stores, Inc., 197 W.Va. 172, 475 S.E.2d 172 (1996).

2. A court must express its intention to retain continuing jurisdiction over a settlement agreement in its final order approving of the parties' settlement. To retain such jurisdiction, the court must either (1) include in its final approval order an express provision retaining jurisdiction over the parties' settlement agreement or (2) incorporate in its final approval order the precise terms of the parties' settlement agreement.

3. “Parties cannot confer jurisdiction on this Court directly or indirectly where it is otherwise lacking.” Syllabus point 2, in part, James M.B. v. Carolyn M., 193 W.Va. 289, 456 S.E.2d 16 (1995).

4. “Courts are not constituted for the purpose of making advisory decrees or resolving academic disputes....” Syllabus point 2, in part, Harshbarger v. Gainer, 184 W.Va. 656, 403 S.E.2d 399 (1991).

Mark A. Swartz, Mary Jo Swartz, Swartz Law Offices, PLLC, Saint Albans, WV, for Plaintiffs.Harry F. Bell, Jonathan W. Price, The Bell Law Firm, PLLC, Charleston, WV, for Defendants.

DAVIS, Justice:

The instant proceeding comes before this Court upon questions certified by the Circuit Court of Kanawha County, which questions ask us to determine the scope of the circuit court's authority to adjudicate the Hustons' lawsuit against the defendants herein. In the underlying litigation from which these questions have arisen, the plaintiffs below, William J. and Connie A. Huston (hereinafter “the Hustons”), sought to enforce the terms of a global settlement agreement, to which they had been a party, in the Circuit Court of Kanawha County. The Hustons filed the instant lawsuit when the defendants below, Mercedes–Benz USA, LLC (hereinafter “Mercedes–Benz”) and Smith Motor Cars (hereinafter “Smith”), allegedly refused to repair the Hustons' sports utility vehicle in accordance with the parties' settlement agreement. Upon a review of the parties' arguments to this Court, the designated record, and the pertinent authorities, we conclude that the circuit court does not have jurisdiction to consider the Hustons' lawsuit because continuing jurisdiction over the global settlement agreement has been retained by the federal district court where the settlement agreement originally was reached. As such, the Hustons may not properly maintain their suit against the defendants in the Circuit Court of Kanawha County.

I.FACTUAL AND PROCEDURAL HISTORY

A brief recitation of the facts giving rise to the underlying proceeding is helpful to provide context for the two questions certified by the circuit court. On August 25, 1998, Mr. and Mrs. Huston purchased from defendant Smith a new 1999 model ML 320 sport-utility vehicle manufactured by defendant Mercedes–Benz. Thereafter, on May 4, 2001, an unrelated person filed a class action in Pennsylvania alleging that certain motor vehicles, which were manufactured by Mercedes–Benz between 1998 and 2001 and which were equipped with a “Flexible Service System,” used excessive oil, experienced the formation of oil sludge, and sustained engine damage upon the use of certain types of motor oil in such vehicles. See O'Keefe v. Mercedes–Benz USA, LLC, 214 F.R.D. 266 (E.D.Pa.2003). The class action suit, which initially was filed in Pennsylvania state court, subsequently was removed to federal court, specifically the United States District Court for the Eastern District of Pennsylvania.

As a result of this litigation, a global class action settlement agreement ultimately was reached. An option was provided to owners of the specified motor vehicles to opt out of the class action and resulting settlement. However, the Hustons, whose Mercedes–Benz vehicle was in the class action's enumerated list of vehicles, did not opt out but, instead, remained in the class and participated in the global class action settlement. In summary, the settlement agreement offered the aforementioned owners extended warranty protections and further afforded owners whose motor vehicles experienced the identified engine problems repair services and compensation therefor. The settlement agreement finally indicated that the federal district court in which the class action was being litigated would retain continuing jurisdiction over the settlement agreement:

Continuing Jurisdiction. Without affecting the finality of the Final Judgment, the Court shall retain continuing jurisdiction over the Action and the Settling Parties, including all members of the Settlement Class, the administration and enforcement of the settlement, and the benefits to the Settlement Class hereunder, including for such purposes as supervising the implementation, enforcement, construction, and interpretation of this Settlement Agreement, the order preliminarily approving the settlement, and the Final Judgment, and hearing and determining an application by Settlement Class Counsel for an award of attorneys' fees and reimbursement of reasonable costs and expenses. Any disputes or controversies arising with respect to the interpretation, enforcement or implementation of the Settlement shall be presented by motion to the Court.

(Emphasis in original).

Likewise, the federal district court indicated its intent to retain jurisdiction over the parties' settlement agreement in its order approving of the global class action settlement, expressly stating, in its April 2, 2003, order that, “[w]ithout affecting the finality of the Final Judgment, the Court RETAINS continuing jurisdiction over the Action and the Settling Parties.” O'Keefe v. Mercedes–Benz USA, LLC, 214 F.R.D. at 312 (emphasis in original). ¹

Returning to the instant proceeding, in March 2008, the Hustons began noticing that their Mercedes–Benz vehicle was consuming what they perceived to be an excessive amount of oil because they were required to add a quart of oil after every 800 miles of driving the vehicle. They also observed the accumulation of oil sludge. Upon presenting their Mercedes–Benz to Smith for repairs, the Hustons claim that Smith technicians informed them that the manufacturer's guidelines did not consider oil consumption to be excessive until oil had to be added after 600–650 miles of driving. Accordingly, the Hustons allege that Smith refused to provide further remedies to them in accordance with the global settlement agreement.

In an attempt to enforce the rights afforded to them by the global class action settlement agreement, the Hustons filed the instant proceeding in the Circuit Court of Kanawha County on October 15, 2008, alleging causes of action for failure to honor express warranties; violation of the West Virginia Lemon Law, i.e., W. Va.Code § 46A–6A–1 et seq. , and the West Virginia Consumer Protection Act, i.e., W. Va.Code § 46A–6–101 et seq. ; and noncompliance with the federal Magnuson–Moss Act, i.e., 15 U.S.C. § 2310(d)(1). The defendants, Mercedes–Benz and Smith, moved to dismiss the Hustons' lawsuit claiming that the circuit court did not have jurisdiction to adjudicate the Hustons' claims. By order entered October 8, 2009, the circuit court denied the defendants' motion to dismiss.

Following further proceedings, the defendants moved for summary judgment on the grounds that the remedies the Hustons could seek from them were limited to those set forth in the global settlement agreement; on this point, the circuit court granted partial summary judgment to the defendants. In so ruling, the circuit court, by order entered May 25, 2010, additionally certified two questions for resolution by this Court, which certified questions presumably reflect its respective rulings upon the defendants' motions, i.e., the first question summarizing the denial of the defendants' motion to dismiss and the second question reflecting the partial grant of the defendants' motion for summary judgment. The certified questions, and the circuit court's answers, are as follows:

1. Does the Circuit Court of Kanawha County, West Virginia, have jurisdiction over a lawsuit wherein the Plaintiffs purport to be seeking to enforce the terms of a federal class action settlement, where the federal District Court that had jurisdiction of that class action expressly retained jurisdiction over the parties thereto? Yes.

2. Are member [sic] of a federal court class who released all asserted or potential claims in exchange for the relief granted to the class under the federal court settlement barred from nonetheless pursuing claims, including a statutory “lemon law” claim under West Virginia law under the guise of enforcing the settlement and which could result in affirmative relief well beyond what is available under the settlement terms? Yes.

(Emphasis in original). From the circuit court's certification order, the parties now appear before this Court.

II.STANDARD OF REVIEW

The case sub judice presents two certified questions for this Court's consideration. We previously have held that “[t]he appellate standard of review of questions of law answered and certified by a circuit court is de novo.” Syl. pt. 1, Gallapoo v. Wal–Mart Stores, Inc., 197 W.Va. 172, 475 S.E.2d 172 (1996). In keeping with this standard, we will consider the queries posed by the circuit court.

III.DISCUSSION

Two questions have been certified to this Court by the Circuit Court of Kanawha County. In summary, these questions request us to determine the court's authority to adjudicate the Hustons' lawsuit. We will consider each certified question in turn.

A. First Certified Question

The first question...