Roberts v. Harley Davidson Fin. Servs., Inc.
| Decision Date | 13 February 2020 |
| Docket Number | Case No. 4:19-CV-00841-SRB |
| Citation | 611 F.Supp.3d 761 |
| Parties | Ernest ROBERTS, individually and on behalf of all others similarly situated, Plaintiff, v. HARLEY DAVIDSON FINANCIAL SERVICES, INC. d/b/a Harley Davidson Credit Corp., d/b/a Eaglemark Savings Bank, Defendant. |
| Court | U.S. District Court — Western District of Missouri |
Bryce B. Bell, Mark W. Schmitz, Bell Law, LLC, Gina Chiala, Heartland Center for Jobs and Freedom, Kansas City, MO, for Plaintiff.
Blaec C. Croft, Pro Hac Vice, McGuire Woods LLP, Pittsburg, PA, Robert K. Warren, McGuire Woods LLP, Charlotte, NC, for Defendant.
Before the Court is Defendant's Motion to Compel Arbitration, or in the Alternative, to Dismiss Second Amended Class Complaint. (Doc. #5). For the reasons stated below, the motion is DENIED.1
On or around March 19, 2016, Plaintiff Ernest Roberts ("Roberts") purchased a 2016 Harley-Davidson FLSS Softail Slim motorcycle from a Harley-Davidson dealership located in Grandview, Missouri. To finance that purchase, Roberts applied for a loan from Eaglemark Savings Bank ("ESB"), a subsidiary of Defendant Harley-Davidson Financial Services, Inc. ("HDFS"). This dispute arises from a Promissory Note and Security Agreement ("PNSA") Roberts allegedly executed when he bought his Softail Slim motorcycle, though the question of whether Roberts signed that PNSA and agreed to its terms is contested.
Roberts alleges that when he agreed to purchase the motorcycle, his monthly installment payments were not supposed to exceed $330. Roberts states that he manually signed all of the required purchase paperwork at the dealership and did not receive any copies of those signed documents. When Roberts later received his first monthly statement from HDFS, it stated that he owed $521 per month. Roberts returned to the dealership where he purchased the motorcycle to inquire about the increased monthly payment rate. There, the Harley-Davidson salespeople produced a PNSA stating Roberts owed monthly installment payments of $521 with Roberts' computer-generated digital signature and initials appearing at the bottom of the form. Roberts insists he never digitally signed the PNSA, contends the PNSA was not provided to him at the time of sale, and alleges that additional terms were inserted into the PNSA by the seller to inflate the total monthly payment rate.
On March 19, 2019, Roberts filed a petition for damages against HDFS in the Circuit Court of Jackson County, Missouri. (Doc. #1-4, pp. 1–8). Roberts asserted claims for alleged violations of the Missouri Motor Vehicle Time Sales Act ("MVTSA") as well as the Missouri Merchandising Practices Act ("MMPA"), and sought actual, statutory, and punitive damages. On June 28, 2019, HDFS filed a motion to compel arbitration (Doc. #1-4, pp. 21–31). On August 26, 2019, the state court denied HDFS's motion to compel arbitration. (Doc. #1-4, p. 93). HDFS did not appeal that denial. On September 12, 2019, Roberts filed an amended class action petition for damages (Doc. #1-4, pp. 99–108), and on September 20, 2019, he filed a second amended class action petition. (Doc. #1-4, pp. 113–126). In his second amended class action petition,2 Roberts added a claim for injunctive relief (Count III) and sought recovery on behalf of "all persons residing in Missouri who purchased, or attempted to purchase, a motor vehicle from Defendant an [sic] installment contract or similar financing instrument ... from March 19, 2014 to the present." (Doc. #1-4, p. 117). On October 18, 2019, HDFS removed the case to federal court pursuant to diversity jurisdiction under the Class Action Fairness Act ("CAFA"), and subsequently filed the instant motion to compel arbitration or, in the alternative, dismiss. Briefing on the instant motion was stayed pending the outcome of Roberts' motion to remand (Doc. #13), which this Court denied on January 2, 2020. (Doc. #18).
HDFS argues Roberts is subject to an arbitration agreement included in the PNSA or, in the alternative, that Roberts' second amended complaint is subject to dismissal under Federal Rule of Civil Procedure 12(b)(6). Roberts opposes the motion, arguing the Court should not consider the motion to compel arbitration because the issue was decided in state court prior to removal. For the reasons discussed below, this Court declines to disturb the state court's prior order denying HDFS's motion to compel arbitration and will only consider HDFS's motion to dismiss for failure to state a claim pursuant to Rule 12(b)(6).
Under Rule 12(b)(6), a court may dismiss a claim for "failure to state a claim upon which relief can be granted." Fed. R. Civ. P. 12(b)(6). "To survive a motion to dismiss [for failure to state a claim], a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face." Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (internal citations and quotation marks omitted) (quoting Bell Atlantic Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ). "A claim has facial plausibility when the [party] pleads factual content that allows the court to draw the reasonable inference that the [opposing party] is liable for the misconduct alleged." Ash v. Anderson Merchs., LLC , 799 F.3d 957, 960 (8th Cir. 2015) (internal citation and quotation marks omitted) (quoting Iqbal , 556 U.S. at 678, 129 S.Ct. 1937 ). The Court must accept all facts alleged in the complaint as true when deciding a motion to dismiss. See Data Mfg., Inc. v. United Parcel Serv., Inc. , 557 F.3d 849, 851 (8th Cir. 2009) ().
A threshold issue presented by the parties is whether this Court should even consider HDFS's motion to compel arbitration. Roberts argues this Court, pursuant to the law-of-the-case doctrine, should decline to disturb the state court's order denying HDFS's motion to compel arbitration issued prior to removal. HDFS contends the law-of-the-case doctrine does not apply3 and urges this Court to consider the issue anew in light of the procedural posture of the case. For the reasons discussed below, this Court declines to disturb the state court's denial of HDFS's motion to compel arbitration and elects not to exercise its discretion in this case.
The law-of-the-case doctrine "requires courts to adhere to decisions made in earlier proceedings in order to ensure uniformity of decisions, protect the expectations of the parties, and promote judicial economy." Gander Mountain Co. v. Cabela's, Inc. , 540 F.3d 827, 830 (8th Cir. 2008) ; see also Alexander v. Jensen-Carter , 711 F.3d 905, 909 (8th Cir. 2013) (citing Arizona v. California , 460 U.S. 605, 618, 103 S.Ct. 1382, 75 L.Ed.2d 318 (1983) ) ("[W]hen a court decides upon a rule of law, that decision should continue to govern the same issues in subsequent stages in the same case."). "Law of the case is a doctrine of discretion, not a command to the courts." Little Earth of the United Tribes, Inc. v. U.S. Dep't of Hous. & Urban Dev. , 807 F.2d 1433, 1440 (8th Cir. 1986). The doctrine "promotes the finality and efficiency of the judicial process by protecting against the agitation of settled disputes." Christianson v. Colt Indus. Operating Corp. , 486 U.S. 800, 816, 108 S.Ct. 2166, 100 L.Ed.2d 811 (1988). Generally, a court will not reconsider an issue that has already been decided in a case unless substantially new evidence is introduced, an intervening change of law occurs, or the decision is "clearly erroneous and works a manifest injustice." Bethea v. Levi Strauss & Co. , 916 F.2d 453, 457 (8th Cir. 1990) ; see also Little Earth , 807 F.2d at 1441.
The law-of-the-case doctrine is particularly relevant where, as here, the case is removed from state to federal court. "After removal, the federal court takes up the case where the State Court left it off." Granny Goose Foods, Inc. v. Bd. of Teamsters & Auto Truck Drivers Local No. 70 of Alameda Cnty. , 415 U.S. 423, 436, 94 S.Ct. 1113, 39 L.Ed.2d 435 (1974) (internal quotation marks and citations omitted). "All injunctions, orders, and other proceedings had in such action prior to its removal shall remain in full force and effective until dissolved or modified by the district court." 28 U.S.C. § 1450. In turn, a state court order issued prior to removal "is the law of the case until modified." Groh v. JPMorgan Chase Bank, N.A. , No. 14-CV-40-W-DGK, 2014 WL 1687696, at *2 (W.D. Mo. Apr. 29, 2014) (citing Duncan v. Gegan , 101 U.S. 810, 812, 25 L.Ed. 875 (1879) ); see also 18 MOORE'S FEDERAL PRACTICE –Civil § 134.22 (Matthew Bender 3d. Ed.) ("When an action is removed from a state court to a federal court, the law of the case doctrine applies to the decisions entered by the state court prior to removal.").
After considering the parties' arguments and thoroughly reviewing the circumstances of this case, the Court declines to exercise its discretion to reopen the state court's previous denial of HDFS's motion to compel arbitration. In the state court proceeding prior to removal, HDFS filed a motion to compel arbitration and argued that Roberts was subject to the arbitration clause contained within the PNSA. The arbitration clause in the PNSA itself expressly states:
This arbitration provision relates to a transaction (or transactions) involving interstate commerce. The parties acknowledge and agree that this clause and the Federal Arbitration Act ( 9 U.S.C. § 1 et seq ) shall govern any and all claims between [Roberts] and [HDFS][.]
(Doc. #1-2, p. 21). A state court reviewing a motion to compel arbitration governed by the Federal Arbitration Act ("F...
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