Nat'l Liab. & Fire Ins. Co. v. Matt's Auto World Preowned Cars, LLC
| Decision Date | 02 April 2015 |
| Docket Number | CIVIL ACTION NO.: 3:14-CV-38 (GROH) |
| Court | U.S. District Court — Northern District of West Virginia |
| Parties | NATIONAL LIABILITY & FIRE INSURANCE COMPANY, Plaintiff, v. MATT'S AUTO WORLD PREOWNED CARS, LLC; PRESTON MILLER; SANDY WOODWARD; and CHRISTINE SMITH, Defendants. |
This matter is before the Court for consideration of Plaintiff National Liability & Fire Insurance Company's ("National Liability") Motion to Strike [ECF 32] and Motion for Default Judgment [ECF 26], filed on November 12, 2014. For the following reasons, the Court GRANTS this motion.
This case concerns a garage insurance liability policy, policy number 73GHS025544, with effective dates July 1, 2013 through July 1, 2014 ("the Policy") that National Liability issued to Matt's Auto World Preowned Cars, LLC ("Matt's Auto World"). During the term of this policy, two civil actions were initiated in West Virginia state court: Christine Smith v. Matt's Auto World Preowned Cars, LLC and Preston Miller, Civil Action No. 14-C-19 filed in the Circuit Court of Berkeley County, West Virginia on January 13, 2014 and Sandy Woodward v. Matt's Auto World Preowned Cars, LLC, Civil Action No. 14-C-52 filed in theCircuit Court of Jefferson County, West Virginia on February 10, 2014.
The Smith action alleges the following concerning Smith's purchase of a vehicle from Matt's Auto World. Smith made a down payment on the vehicle, agreed to a payment plan and obtained car insurance. Preston Miller was the salesman for the transaction. He told Smith she needed to pay for tags and taxes when she had already paid that fee. He also did not complete an odometer certification. In addition, Miller told Smith that the transaction included a limited warranty where Matt's Auto World would cover 50% of parts and labor. Smith later realized the warranty only covered 25% of parts and labor.
On October 5, 2013, Smith notified Matt's Auto World that the vehicle was leaking antifreeze, overheating, not working well and had a blown head gasket. Miller contracted with Smith's boyfriend to repair the head gasket, but refused to pay for new parts and did not compensate Smith's boyfriend for the repair. When the vehicle continued to leak antifreeze and run poorly, Smith contacted Matt's Auto World again. On October 25, 2013, Miller called Smith and told her to bring the vehicle in for a diagnostic inspection. Smith did so, and Miller worked on the vehicle without Smith's permission. Miller called Smith and told her to pick up her car and that she owed $100. Smith asked Miller about the charges. Miller refused to tell Smith about the work he performed. Smith went with her sister to Matt's Auto World to retrieve the vehicle. There, Smith refused to pay Miller without a receipt delineating the work performed. Miller became enraged, insulted Smith and her sister and refused to release the vehicle. Smith left and called the police. The police escorted Smith to Matt's Auto World. Miller demanded $100 from Smith, which Smith paid. After accepting payment, Miller stated he had repaired the radiator cap. Then, Smith retrieved the vehicle. The vehicle had a broken passenger side mirror, scratches on itsside, the old radiator cap and a leaky radiator. Smith's boyfriend purchased a new radiator cap and installed it, which fixed the vehicle.
Around this same time, Smith called Miller to ask if she could make a weekly payment a few days late on October 30, 2013. Miller agreed to this arrangement. However, on October 29, 2013, Smith discovered that her vehicle was not in her driveway because Matt's Auto World had taken it. Smith reported the vehicle stolen to the police. Miller claimed that he repossessed the vehicle because she lacked full insurance coverage as required by the sales agreement. No such requirement existed. Miller also would not tell Smith her vehicle's location, so Smith went to Matt's Auto World to get it. There, Miller took Smith to the vehicle. Smith saw that the vehicle now had a damaged bumper. Miller told Smith to remove her belongings from the car. After Smith did so, Smith stated she would obtain full insurance coverage and return the next day. Miller responded that he did not have to refund Smith for the vehicle. To date, he has not refunded any of her money or returned the vehicle.
Based on these allegations, Smith asserted eleven claims against Matt's Auto World and Miller: (1) violation of the Truth in Lending Act ("TILA"); (2) conversion; (3) West Virginia Consumer Credit and Protection Act ("WVCCPA") violations; (4) Fair Debt Collection Act violations; (5) unlawful repossession under the Uniform Commercial Code ("UCC"); (6) breach of contract; (7) breach of express warranty; (8) Federal Odometer Act violations; (9) fraud and constructive fraud; (10) intentional infliction of emotional distress ("IIED"); and (11) conspiracy.
As for the Woodward action, it alleges the following concerning Woodward's purchase of a van from Matt's Auto World. Before the sale, Matt's Auto World stated thatthe van was in good condition. When purchasing the van, Woodward traded in another car for $300, agreed to a payment plan and obtained car insurance. The transaction included a warranty covering 25% of parts and labor.
After Woodward brought the van home, it stopped running. Woodward called Matt's Auto World, and Matt's Auto World towed the van to its location. Matt's Auto World installed a new transmission in the van without Woodward's approval. Matt's Auto World required Woodward to pay for the repair without a discount for parts and labor. Woodward paid this amount and retrieved the van. The van still had trouble running, so Woodward brought it back to Matt's Auto World a few weeks later. Matt's Auto World installed a used alternator and charged Woodward for the repair without a discount for parts and labor. Woodward retrieved her van after making this payment, and the van broke down. After the breakdown, Woodward asked Matt's Auto World for a new vehicle. Matt's Auto World stated it would cost $300 to trade the van in. Woodward rejected this offer. Then, Preston Miller asked Woodward what type of car insurance she had and suggested that she purchase full coverage so that he could take the van out back and report it totaled to the insurance company. Woodward refused to do so. The van has not run since then.
Based on these allegations, Woodward asserted seven claims against Matt's Auto World: (1) violation of the TILA; (2) WVCCPA violations for fraudulent or misleading representations; (3) WVCCPA violations for unfair collections practices; (4) Fair Debt Collection Act violations; (5) breach of express warranty; (6) Federal Odometer Act violations; and (7) fraud and constructive fraud.
National Liability is currently defending Matt's Auto World and Miller in the Smith and Woodward cases under a reservation of rights. On April 4, 2014, National Liability initiatedthis declaratory judgment action by filing a complaint against Woodward, Smith, Matt's Auto World and Miller seeking the following relief: (1) a declaration that there is no insurance coverage for Matt's Auto World and Miller under the Policy for the conduct alleged in the state lawsuits; (2) a declaration that the Policy does not obligate National Liability to defend or indemnify Matt's Auto World or Miller for any judgments awarded against them in the state lawsuits; and (3) an order authorizing National Liability to withdraw from its defense of Matt's Auto World and Miller in the state lawsuits.
After National Liability filed its complaint, Woodward and Smith waived service of the summons with an answer or Federal Rule of Civil Procedure 12 motion due sixty days from April 9, 2014. Matt's Auto World and Miller were served on May 28, 2014.
On October 14, 2014, National Liability moved for default judgment and summary judgment. The Court denied these motions without prejudice, finding default judgment inappropriate absent the clerk's entry of default and summary judgment premature without adequate time for discovery.
Following that Order, Darryl Palmer, a non-lawyer, filed two motions seeking to act on behalf of Matt's Auto World, a motion for appointment of counsel and a motion for sanctions against National Liability. The Court denied these motions because a corporation cannot proceed pro se. Then, on October 30, 2014, National Liability filed a request for the clerk to enter default. On November 7, 2014, the clerk entered default against all defendants.
Shortly thereafter, on November 12, 2014, Darryl Palmer moved for an extension of time to obtain counsel. That same day, National Liability filed the instant Motion for Default Judgment. This motion includes correspondence from counsel for Woodward andSmith stating that they do not oppose a default judgment. On November 13, 2014, the Court denied Darryl Palmer's motion, again based on the need for Matt's Auto World to appear by counsel. On December 2, 2014, counsel appeared on behalf of Matt's Auto World. On February 12, 2015, Matt's Auto World filed an answer to the complaint without seeking leave of court. National Liability filed a Motion to Strike the answer. To date, Matt's Auto World has not responded to any motion filed in this case.
Federal Rule of Civil Procedure 12(f) provides that the court "may strike from a pleading an insufficient defense or any redundant, immaterial, impertinent, or scandalous matter." Motions to strike are generally disfavored and infrequently granted because it is a "drastic remedy." Waste Mgmt. Holdings, Inc. v. Gilmore, 252 F.3d 316, 347 (4th Cir. 2001) (internal citations and quotations omitted) ( that "Rule 12(f) motions are generally viewed with disfavor 'because striking a portion of a pleading is a drastic remedy and because it is often sought by the movant simply as a...
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