Webb v. CMH Homes, Inc., CIVIL ACTION NO. 3:20-0214
| Decision Date | 26 March 2021 |
| Docket Number | CIVIL ACTION NO. 3:20-0214 |
| Parties | JOHN WEBB and MARSHA BRYAN, Plaintiff, v. CMH HOMES, INC., d.b.a. Clayton Homes, VANDERBILT MORTGAGE AND FINANCE, INC., and HOMEFIRST AGENCY, INC., Defendants. |
| Court | U.S. District Court — Southern District of West Virginia |
Pending before the Court is a Motion to Dismiss or, in the Alternative, Compel Arbitration by Defendants CMH Homes, Inc, d/b/a Clayton Holmes (CMH), Vanderbilt Mortgage and Finance, Inc. (Vanderbilt) and HomeFirst Agency, Inc. (HomeFirst). ECF No. 34. Defendants also have filed a Motion to Stay. ECF No. 36. Plaintiffs John Webb and Marsha Bryan oppose both motions. Upon consideration, the Court agrees with Plaintiffs and DENIES the motions.
In 2019, Plaintiffs purchased a mobile home from CMH. At the time of the purchase, Plaintiffs entered into three contracts. First was the "Sales Agreement" with CMH. Second was a "Consumer Loan Note and Security Agreement" with Vanderbilt. Third was for a homeowner insurance policy with American Bankers Insurance Company of Florida, with HomeFirst acting as its appointed agent that issued the policy. As part of the transactions, Plaintiffs also purchased a number of goods and services from independent contractors for such as things as installation, utility hookups, vinyl skirting, a ramp, a washer, and a dryer. After moving into the home, Plaintiffs began reporting a number of problems. Ultimately, Plaintiffs brought this action against CMH, Vanderbilt, CMH Manufacturing, and five independent contractors that provided goods and services.1
In the original Complaint, Plaintiffs claimed, inter alia, that the mobile home had manufacturing defects and damage both before and/or after delivery and installation. Additionally, Plaintiffs asserted they were misled with respect to financing with Vanderbilt. Based upon these allegations, Plaintiffs made a litany of claims.2 However, before responsive pleadings were filed, the parties mediated and reached a partial settlement. The settlement with CMH and CMH Manufacturing resolved "all claims of any nature arising from or relating to the construction, installation and repair of the Home[.]" Pro Tanto Release and Settlement Agreement, at 2 (emphasis original), ECF No. 34-1. The settlement also provided that:
Plaintiffs shall file an unopposed motion to amend their complaint to remove allegations, claims and Defendants rendered unnecessary by this Release. CMH Homes, Inc. shall remain a party to the Litigation, but only as to claims that do not arise from or relate to the construction, installation and repair of the Home.
Id. Vanderbilt was not a party to the settlement, and the independent contractors were released in a separate agreement.
Thereafter, Plaintiffs filed an Amended Complaint against CMH and Vanderbilt. Plaintiffs also added HomeFirst as a new Defendant. In this complaint, Plaintiffs allege that HomeFirst, CMH, and Vanderbilt are under the same control and ownership, Am. Compl. ¶9, ECF No. 31, and they are liable for violations of the WVCCPA for Unfair and Deceptive Acts and Practices, Fraudulent Inducement, Unconscionability, violations of the Truth in Lending Act (TILA), Joint Venture, and violations of the WVCCPA for Incorporation of an Illegal Arbitration Clause. In lieu of an answer, Defendants filed the current motions, arguing that the claims must be dismissed because they are encompassed within the earlier settlement as they relate to "the construction, installation and repair of the Home." Pro Tanto Release and Settlement Agreement, at 2. Alternatively, Defendants argue that, to the extent the Court finds there are unsettled claims, some are subject to arbitration and the nonarbitrable claims should be stayed until arbitration is complete.
In Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), the United States Supreme Court disavowed the "no set of facts" language found in Conley v. Gibson, 355 U.S. 41 (1957), which was long used to evaluate complaints subject to 12(b)(6) motions. 550 U.S. at 563. In its place, courts must now look for "plausibility" in the complaint. This standard requires a plaintiff to set forth the "grounds" for an "entitle[ment] to relief" that is more than mere "labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Id. at 555 (internal quotation marks and citations omitted). Accepting the factual allegations in the complaintas true (even when doubtful), the allegations "must be enough to raise a right to relief above the speculative level . . . ." Id. (citations omitted). If the allegations in the complaint, assuming their truth, do "not raise a claim of entitlement to relief, this basic deficiency should . . . be exposed at the point of minimum expenditure of time and money by the parties and the court." Id. at 558 (internal quotation marks and citations omitted).
In Ashcroft v. Iqbal, 556 U.S. 662 (2009), the Supreme Court explained the requirements of Rule 8 and the "plausibility standard" in more detail. In Iqbal, the Supreme Court reiterated that Rule 8 does not demand "detailed factual allegations[.]" 556 U.S. at 678 (internal quotation marks and citations omitted). However, a mere "unadorned, the-defendant-unlawfully-harmed-me accusation" is insufficient. Id. "To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Id. (quoting Twombly, 550 U.S. at 570). Facial plausibility exists when a claim contains "factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. (citation omitted). The Supreme Court continued by explaining that, although factual allegations in a complaint must be accepted as true for purposes of a motion to dismiss, this tenet does not apply to legal conclusions. Id. "Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Id. (citation omitted). Whether a plausible claim is stated in a complaint requires a court to conduct a context-specific analysis, drawing upon the court's own judicial experience and common sense. Id. at 679. If the court finds from its analysis that "the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged-but it has not 'show[n]'-'that the pleader is entitled to relief.'" Id. (quoting, in part, Fed. R. Civ. P. 8(a)(2)). The Supreme Courtfurther articulated that Id.
Additionally, when ruling on a motion to dismiss, this Court may consider documents outside the pleadings under limited circumstances without converting the motion to one for summary judgment. Johnson v. James B. Nutter & Co., 438 F. Supp. 3d 697, 704 (S.D. W. Va. 2020). Documents the Court may consider specifically include those "'submitted by the movant that [were] not attached to or expressly incorporated in a complaint, so long as the document was integral to the complaint and there is no dispute about the document's authenticity.'" Id. (quoting Goines v. Valley Cmty. Servs. Bd., 822 F.3d 159, 166 (4th Cir. 2016) (internal citation omitted)). With this in mind, the Court finds that the parties do not dispute the authenticity of the contracts or the partial settlement, and they are integral to the Amended Complaint.3 Therefore, the Court may consider them without transforming Defendants' motion to one for summary judgment.
Following the partial settlement, the mediator submitted a report to the Court expressly stating that the agreement did not include "Plaintiffs' lending claims against defendants CMH Homes, Inc. and Vanderbilt Mortgage and Finance, Inc." Ltr. from Donald B. O'Dell to Rory L. Perry, II, Clerk (Aug. 21, 2020), ECF No. 19. The mediator further indicated that theparties would continue working to resolve the remaining claims. Id. Neither party disputes this representation, but Plaintiffs contend Defendants have refused to return to mediation. Instead, Defendants seek to dismiss or arbitrate the claims in the Amended Complaint, which Plaintiffs argue were not included in the partial settlement and are not subject to arbitration.
In support of their motion, Defendants draw the Court's attention to scores of allegations in the Amended Complaint "relat[ed] to the construction, installation and repair of the Home." Pro Tanto Release and Settlement Agreement, at 2. As those claims are covered under the agreement, Defendants argue they must be dismissed. Plaintiffs do not deny the Amended Complaint references these problems; however, Plaintiffs insist Defendants are mischaracterizing their claims. Upon review, the Court agrees that the remaining claims are not covered by the partial settlement.
It is clear in reading the Amended Complaint that Plaintiffs are not seeking damages for the construction, installation, and repair of the mobile home. Instead, Plaintiffs refer to these matters to show the context in which they claim Defendants induced them into the financing agreement, which was expressly excluded from the partial settlement. For instance, Plaintiffs allege that CMH, Vanderbilt, and HomeFirst "operate as departments of the same company," and CMH's salesperson "Patty" acted as an agent for all three companies. Am. Compl. ¶¶14, 28, 86. Although Plaintiffs did not want to purchase a new mobile home, Plaintiffs claim Patty mislead them and "steered them into needing to purchase a new home to obtain financing." Id. ¶¶26, 33, 34. Plaintiffs also allege that it...
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