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Multistar Industries v. Ocala

United States District Court, E.D. Washington

August 26, 2019

MULTISTAR INDUSTRIES, a Washington Corporation, Plaintiff,
v.
GETTEL OCALA d/b/a BMW of OCALA, BOBBY WATTS, LOVE CHEVROLET, INC., DARRIN TAYLOR, McCURLEY INTEGRITY CADILLAC, et al., Defendants.

          ORDER DENYING MOTION TO REMAND; DENYING MOTION TO CONTINUE; GRANTING MOTIONS TO DISMISS

          THOMAS O. RICE, CHIEF UNITED STATES DISTRICT JUDGE

         BEFORE THE COURT are Defendants Love Chevrolet and Darrin Taylor's Motion to Dismiss (ECF No. 8) and Motion to Continue Hearing on Plaintiff's Motion to Remand (ECF No. 17); Defendants Gettel Ocala and Bobby Watts' Motion to Dismiss (ECF No. 25); and Plaintiff Multistar Industries' Motion to Remand (ECF No. 14). The matters were submitted for consideration without oral argument. The Court has reviewed the record and files herein and is fully informed. For the reasons discussed below, Plaintiff's Motion to Remand (ECF No. 14) is denied, Defendants Love Chevrolet and Darrin Taylor's Motion to Continue Hearing on Plaintiff's Motion to Remand (ECF No. 17) is denied as moot, and the Motions to Dismiss (ECF Nos. 8, 25) are granted.

         BACKGROUND

         This case arises out of Plaintiff Multistar Industries' (“Multistar”) purchase of a 2016 Cadillac CTS-V from Defendant BMW of Ocala (“Ocala”) and the vehicle's breakdown shortly thereafter.[1]

         Plaintiff, a Washington corporation acting through its president, Peter Vanourek, observed an internet advertisement for the purchase of the Cadillac from Ocala. ECF No. 13 at ¶¶ 3, 13-14. Ocala is incorporated in and operates out of Florida. ECF No. 13 at ¶ 4. Ocala advertises locally through print and other sources, but its only national advertising consists of posting its cars to third-party websites such as cars.com, autotrader.com, and cargurus.com. ECF No. 25 at 3. Ocala has no physical presence in the state of Washington and has no employees who work in Washington. ECF No. 25 at 4. Defendant Bobby Watts, general manager of Ocala, is a resident of Florida and has never traveled to or performed job duties in Washington. Id.

         Plaintiff and Ocala entered into a contract for the purchase and sale of the vehicle - including the remaining balance of the manufacturer's warranty - via “telephone, fax, email and the internet” from their respective locations in Florida and Washington. ECF No. 13 at ¶¶ 14-18. Plaintiff began to drive the vehicle back to Washington, but, within 48 hours, the vehicle malfunctioned in Chattanooga, Tennessee. ECF No. 13 at ¶¶ 20-21. Plaintiff contacted Integrity Cadillac of Chattanooga (“Integrity”) to look at the vehicle. ECF No. 13 at ¶ 21. Integrity examined the vehicle and determined that it had “a cracked engine head, head damage and [a] blown head gasket.” ECF No. 13 at ¶ 24. According to Plaintiff, Integrity's “position was that the engine damage was a result of several aftermarket modifications that had been added to the engine prior to plaintiff's purchase.” ECF No. 13 at ¶ 24. Integrity informed Plaintiff that the “significant aftermarket modifications [] had voided the vehicle's factory warranty on the engine, ” so the damage was not covered by the warranty. ECF No. 13 at ¶ 25. Based on Integrity's report, Plaintiff argues Ocala misrepresented the fact that the vehicle came with a factory warranty.[2] ECF No. 13 at ¶ 26.

         Ocala and Watts “were informed of the information provided by [Integrity] and the absence of warranty coverage.” ECF No. 13 at ¶ 26. According to Plaintiff, Ocala and Watts told Plaintiff “it's not our problem” and “attempted to argue” that Plaintiff “heard the car run” and that this “somehow caused [Plaintiff] to know that the car was not covered under the manufacturer's warranty.” ECF No. 13 at ¶ 26. Plaintiff alleges that, “[a]s the vehicle had significant modifications that were undisclosed to plaintiff at the time of sale that voided the manufacturer's warranty, plaintiff demanded rescission of the sales contract and refund of his purchase money” but Ocala and Watts “refused to even respond to plaintiff's written demand.” ECF No. 13 at ¶ 27. The car then remained at Integrity. ECF No. 13 at ¶ 29.

         After approximately three months, and after Integrity requested Plaintiff retrieve the vehicle (to no avail), Ocala arranged for the vehicle to be brought back to Florida from Tennessee. ECF No. 13 at ¶¶ 29-30. Thereafter, Ocala arranged for Love Chevrolet (“Love”) in Florida to repair the vehicle. ECF No. 13 at ¶ 30. Love is a Florida corporation engaged in the business of selling and repairing motor vehicles in Florida. ECF No. 8 at 3. Love does not conduct any business in Washington or advertise in the state. ECF No. 8 at 3-4. Defendant Darrin Taylor is employed by Love and was the service advisor for the repair of Plaintiff's vehicle. ECF No. 10 at ¶¶ 1, 5.

         Love performed the repairs and represented that the “vehicle is in full GM specs and return to all factory setting. All factory warranties are in full affect [sic] with no blocks.” ECF No. 13 at ¶ 30 (brackets in original). According to Plaintiff, Love made additional “warranty specific representations” on the invoice. ECF Nos. 13 at ¶ 31; 13-2 (invoice). In July 2017, Watts informed Plaintiff that the “vehicle had been repaired and was ready for pickup[.]” ECF No. 13 at ¶ 33. Plaintiff offered to accept the vehicle if Ocala “would pay plaintiff's losses, including attorney fees and other out of pocket expenses, as well as warranty the vehicle an additional five months after expiration of the factory warranty due to the vehicle sitting for five months after it broke down in Tennessee.” ECF No. 13 at ¶ 34. Ocala and Watts “refused” the demand. ECF No. 13 at ¶ 35.

         Plaintiff sought legal recourse and demanded arbitration with Ocala under the terms of the sales agreement. ECF No. 13 at ¶ 36; see ECF No. 13-4. On May 1, 2018, the arbitrator found for Ocala and awarded Ocala attorney fees in the amount of $23, 393. ECF Nos. 13 at ¶ 40; 13-4 at 2-6. Plaintiff complains that the arbitration award is defective in that the arbitrator (1) relied upon “intentionally false evidence” (the declaration of Watts submitted by Ocala) and (2) reached incorrect conclusions with respect to other factual findings. ECF No. 13 at ¶¶ 37-41. Plaintiff moved to vacate the arbitration award in state court in Florida. ECF No. 11-4 at 2-14. The Florida court denied Plaintiff's motion and affirmed the arbitration award. ECF No. 11-6 at 2. Plaintiff did not appeal this decision. ECF No. 11-6 at 2.

         After the arbitration, Plaintiff again picked up the vehicle from Ocala in Florida and set out for Washington. ECF No. 13 at ¶ 42. Other than an issue with the vehicle's climate control, the vehicle operated for roughly four months before the vehicle stopped working, again. ECF No. 13 at ¶¶ 42-44. Plaintiff had the vehicle towed to McCurley Cadillac (“McCurley”) in Washington State. ECF No. 13 at ¶ 44. Upon inspection, McCurley determined that the “starter bolts were not ‘torqued' correctly when installed by [Love]” and that “[b]ecause of this GM (Cadillac) will not warranty the engine (it requires a new block to be properly repaired), as it is not a material defect, but a technical error of the installing technician at [Love].” ECF No. 13 at ¶ 45. According to Plaintiff, “McCurley service personnel made contact multiple times with [Love] to inform them of the problem [but Love] insisted that it wasn't ‘their problem,' and that the vehicle was indeed covered by warranty.” ECF No. 13 at ¶ 46. Based on this, as with Ocala, Plaintiff believes Love misrepresented the warranty status because the warranty did not cover the engine damage. ECF No. 13 at ¶ 47.

         On May 9, 2019, Plaintiff brought suit in the Superior Court of Washington in Adams County. ECF No. 1-1. Plaintiff asserted claims against Ocala, Love, and Darren Taylor (an employee and agent of Love) under Washington's Deceptive and Unfair Trade Practices Act, ECF No. 1-1 at ¶¶ 47-55; against Ocala for negligent misrepresentation, ECF No. 1-1 at ¶¶ 56-61; against Ocala under the Washington Uniform Commercial Code, ECF No. 1-1 at ¶¶ 62-69; against Ocala for breach of contract, ECF No. 1-1 at ¶¶ 83-88; and against Ocala, Watts, and Love under Washington's Consumer Protection Act, ECF No. 1-1 at ¶¶ 89-92.

         Plaintiff also requested declaratory judgment as to a series of questions that go to (1) the merits of the case and other incidental issues underlying the claims and (2) the legitimacy of the underlying arbitration. ECF No. 13 at ¶¶ 70-82 (requesting declaration as to the status of the warranty at differing times, the nature of the complained of affidavit and its effect on the arbitration proceeding, the legal effect - e.g., whether rescission is proper, whether Plaintiff was deprived of the benefit of the purchase - of the alleged false representation(s), General Motor's liability for the complained of acts, whether Love properly repaired the vehicle).

         On May 24, 2019, Defendants Love and Taylor removed Plaintiff's claim to federal court. ECF No. 1 at 1-5. On June 20, 2019, Plaintiff submitted an Amended Complaint identifying McCurley as a named Defendant and asserting the same above-identified claims along with an additional request that the Court “declare whether McCurley Cadillac is correct in that the engine is not under factory warranty” or, in the alternative, “to declare [McCurley] to have erred and to assess whatever damages have resulted . . . .” ECF No. 13 at ¶ 78. On June 10, 2019, Defendants Love and Taylor filed a Motion to Dismiss (ECF No. 8). On June 20, 2019, Plaintiff filed a Motion to Remand (ECF No. 14). On June 21, 2019, Defendants Love and Taylor filed a Motion to Continue Hearing on Plaintiff's Motion to Remand (ECF No. 17). On July 3, 2019, Defendants Ocala and Watts filed a Motion to Dismiss (ECF No. 25). These Motions are now before the Court.

         DISCUSSION

         A. Motion to Remand

         Plaintiff requests the Court remand this case back to state court. ECF No. 14. Plaintiff argues that remand is necessary because Plaintiff is seeking to join a non-diverse party, McCurley, as a defendant and the sole basis for federal subject matter jurisdiction is diversity. ECF No. 14 at 1-3.

         1. Applicable Law

         Generally, a defendant may remove a case to federal court if the federal court would have subject matter jurisdiction over one or more of the plaintiff's claims pursuant to 28 U.S.C. §§ 1331 (federal question) or 1332 (diversity of citizenship). See 28 U.S.C. § 1441(a), (b). However, where a case has been removed to federal court and the plaintiff subsequently “seeks to join additional defendants whose joinder would destroy subject matter jurisdiction[, ...


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