Tiner v. Ford Motor Company ( 2020 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA 10 11 MINTA LOUISE TINER, No. 1:19-cv-01599-DAD-JLT 12 Plaintiff, 13 v. ORDER GRANTING MOTION TO REMAND THIS ACTION FOR LACK OF SUBJECT 14 FORD MOTOR COMPANY, et al., MATTER JURISDICTION 15 Defendants. (Doc. No. 7) 16 17 This matter is before the court on plaintiff’s motion to remand this action to the Kern 18 County Superior Court. (Doc. No. 7.) Pursuant to Local Rule 230(g), the court found this matter 19 suitable for a decision on the papers and took it under submission on March 11, 2020. (Doc. No. 20 12.) For the reasons set forth below, the court will grant plaintiff’s motion to remand. 21 BACKGROUND 22 On October 2, 2019, plaintiff filed this action against defendants Ford Motor Company 23 (“Ford”), Haberfelde Ford, Inc. dba Jim Burke Ford (“Haberfelde”), and Does 1 through 10, 24 inclusive (collectively “defendants”) in the Kern County Superior Court. (Doc. No. 1 at 9.) 25 Plaintiff brings claims under California’s Song-Beverly Consumer Warranty Act against 26 defendants for breach of express warranty, breach of implied warranty, and failure to complete 27 repairs in violation of California Civil Code § 1793.2. (Id.) 28 ///// 1 On November 7, 2019, defendant removed this action to this court pursuant to 28 U.S.C. 2 §§ 1332, 1441, and 1446, on the grounds that Haberfelde is a fraudulently joined “sham 3 defendant,” and that diversity jurisdiction exists because plaintiff and defendant Ford are citizens 4 of different states and the amount in controversy is at least $75,000. (Doc. No. 1.) 5 On February 5, 2020, plaintiff moved to remand this action to the Kern County Superior 6 Court because Haberfelde is not a sham defendant and its California citizenship defeats complete 7 diversity. (Doc. No. 7.) Plaintiff does not dispute defendants’ assertion that the amount in 8 controversy in this case exceeds the $75,000 jurisdictional threshold. (Id. at 4.) Pursuant to 28 9 U.S.C. § 1447(c), plaintiff requests that the court award attorneys’ fees and expenses that she has 10 incurred as a result of defendants’ allegedly defective and improper removal of this action. (Id. at 11 2, 11 (requesting $1,000); id. at 3 (requesting $1,300).) On March 3, 2020, defendants filed an 12 opposition to plaintiff’s motion to remand. (Doc. No. 9.) On March 10, 2020, plaintiff filed a 13 reply in support of her motion to remand. (Doc. No. 11.) 14 LEGAL STANDARD 15 A suit filed in state court may be removed to federal court if the federal court would have 16 had original jurisdiction over the suit. 28 U.S.C. § 1441(a). Removal is proper when a case 17 originally filed in state court presents a federal question or where there is diversity of citizenship 18 among the parties and the amount in controversy exceeds $75,000. See 28 U.S.C. §§ 1331, 19 1332(a). 20 “If at any time before final judgment it appears that the district court lacks subject matter 21 jurisdiction, the case shall be remanded.” 28 U.S.C. § 1447(c). “The removal statute is strictly 22 construed against removal jurisdiction, and the burden of establishing federal jurisdiction falls to 23 the party invoking the statute.” Cal. ex rel. Lockyer v. Dynegy, Inc., 375 F.3d 831, 838 (9th Cir. 24 2004) (citation omitted); see also Provincial Gov’t of Marinduque v. Placer Dome, Inc., 582 F.3d 25 1083, 1087 (9th Cir. 2009) (“The defendant bears the burden of establishing that removal is 26 proper.”). If there is any doubt as to the right of removal, a federal court must reject jurisdiction 27 and remand the case to state court. Matheson v. Progressive Specialty Ins. Co., 319 F.3d 1089, 28 1090 (9th Cir. 2003); see also Valdez v. Allstate Ins. Co., 372 F.3d 1115, 1118 (9th Cir. 2004). 1 An action may be removed to federal court on the basis of diversity jurisdiction only 2 where there is complete diversity of citizenship. Hunter v. Phillip Morris USA, 582 F.3d 1039, 3 1043 (9th Cir. 2009). However, the Ninth Circuit has recognized an exception to the complete 4 diversity requirement where a non-diverse defendant has been “fraudulently joined.” Morris v. 5 Princess Cruises, Inc., 236 F.3d 1061, 1067 (9th Cir. 2001). If the court finds that the joinder of 6 the non-diverse defendant is fraudulent, that defendant’s citizenship is ignored for the purposes of 7 determining diversity. Id. 8 If a plaintiff “fails to state a cause of action against a resident defendant, and the failure is 9 obvious according to the settled rules of the state, the joinder of the resident defendant is 10 fraudulent.” McCabe v. Gen. Foods Corp., 811 F.2d 1336, 1339 (9th Cir. 1987); see also 11 Hamilton Materials, Inc. v. Dow Chem. Corp., 494 F.3d 1203, 1206 (9th Cir. 2007). However, 12 “if there is a possibility that a state court would find that the complaint states a cause of action 13 against any of the resident defendants, the federal court must find that the joinder was proper and 14 remand the case to the state court.” Grancare, LLC v. Thrower by & through Mills, 889 F.3d 15 543, 548 (9th Cir. 2018) (quoting Hunter, 582 F.3d at 1046); see also Good v. Prudential Ins. 16 Co., 5 F. Supp. 2d 804, 807 (N.D. Cal. 1998) (explaining that fraudulent joinder exists when 17 “there is no possibility that the plaintiff will be able to establish a cause of action in State court 18 against the alleged sham defendant”). The Ninth Circuit has acknowledged that the analysis 19 under Federal Rule of Civil Procedure 12(b)(6) shares some similarities with the fraudulent 20 joinder standard, and that “the complaint will be the most helpful guide in determining whether a 21 defendant has been fraudulently joined.” Grancare, LLC, 889 F.3d at 549. The two tests should 22 not, however, be conflated. Id. 23 If a plaintiff’s complaint can withstand a Rule 12(b)(6) motion with 24 respect to a particular defendant, it necessarily follows that the defendant has not been fraudulently joined. But the reverse is not 25 true. If a defendant cannot withstand a Rule 12(b)(6) motion, the fraudulent inquiry does not end there. For example, the district 26 court must consider, as it did in this case, whether a deficiency in the complaint can possibly be cured by granting the plaintiff leave 27 to amend. 28 Id. at 550. Remand must be granted unless the defendant establishes that plaintiff could not 1 amend her pleadings to cure the purported deficiency. Padilla v. AT&T Corp., 697 F. Supp. 2d 2 1156, 1159 (C.D. Cal. 2009). 3 There is a general presumption against fraudulent joinder, Hamilton Materials, Inc., 494 4 F.3d at 1206, and the burden on the defendant opposing remand based on an alleged fraudulent 5 joinder is a “heavy one.” Davis v. Prentiss Props. Ltd., 66 F. Supp. 2d 1112, 1113 (C.D. Cal. 6 1999). “Fraudulent joinder must be proven by clear and convincing evidence,” and district courts 7 must resolve all disputed questions of fact in favor of the plaintiff. Hamilton Materials, Inc., 494 8 F.3d at 1206. In resolving a claim of fraudulent joinder, the court may look beyond the pleadings 9 and consider evidence similar to that offered in summary judgment proceedings, such as 10 affidavits and deposition testimony. Morris, 236 F.3d at 1068. 11 ANALYSIS 12 Here, plaintiff contends that remand is appropriate because defendants have failed to 13 satisfy their burden on removal to establish federal subject matter jurisdiction based on complete 14 diversity. (Doc. No. 7 at 4.) The court agrees. 15 In her motion to remand, plaintiff argues that defendants did not show with clear and 16 convincing evidence that Haberfelde is a fraudulently joined defendant because their removal 17 papers rely on the conclusory beliefs of defense counsel as opposed to evidence. (Doc. No. 7 at 18 9.) Specifically, defendants’ notice of removal states that “[defendant] Ford contends that 19 Plaintiff fraudulently joined [Haberfelde] in this case for no reason other than to defeat diversity 20 jurisdiction and prevent removal of the action to federal court.” (Doc. No. 1 at 4.) Similarly, 21 defendants state in conclusory fashion without any supporting facts or relevant legal argument, 22 that 23 [t]hus, Plaintiff has not and cannot state any valid claims against [Haberfelde]. Ford believes that Plaintiff has no intention of 24 pursuing any claims against [Haberfelde], and that [Haberfelde] was only named to defeat the claim of diversity and removal to 25 Federal Court. Thus, [Haberfelde] has been fraudulently joined, and its citizenship should be disregarded for diversity purposes. 26 27 (Id.) Contrary to defendants’ belief, plaintiff asserts that she has alleged valid causes of action 28 under the Song-Beverly Act against Haberfelde—the authorized retail seller of the Ford vehicle 1 that plaintiff had purchased and the authorized repair facility that performed repairs on that 2 vehicle. (Doc. No. 7 at 5–7.) Plaintiff points to the allegations in her complaint that: (i) both the 3 manufacturer Ford and retail seller Haberfelde had an implied warranty of merchantability by 4 operation of law; (ii) after each repair attempt, both defendants made assurances and 5 representations to plaintiff that the vehicle was fixed when it was not; and (iii) both defendants 6 acted willfully toward plaintiff, an elderly and disabled person, and based on that willful conduct, 7 plaintiff seeks enhanced damages under California Civil Code § 3345. (Id. at 6.) 8 In their opposition, defendants explain why they believe plaintiff has not and cannot state 9 a claim against Haberfelde. Defendants argue that because plaintiff’s claims arise out of her 10 purchase of a Ford vehicle in 2010, her claims “expired a long, long time ago”; specifically, “the 11 four-year statute of limitations applicable to all of plaintiff’s claims expired approximately five 12 years ago.” (Doc. No. 9 at 2.) According to defendants, plaintiff’s claim for breach of an implied 13 warranty is time-barred because plaintiff purchased the subject vehicle on April 1, 2010, and 14 “[t]hus, any implied warranty claim would have expired, at the latest, four years after the April 1, 15 2010 sale.” (Id. at 8.) In addition, defendants argue that plaintiff’s claim for breach of an express 16 warranty cannot be stated against Haberfelde because plaintiff “does not plead the existence of 17 any express warranty provided by Haberfelde”—an essential element of that claim. (Id. at 4–7.) 18 Similarly, defendants assert that plaintiff cannot maintain a claim against Haberfelde for violating 19 California Civil Code § 1793.2(b) because an express, written warranty provided by the defendant 20 is an essential element of that claim too. (Id. at 9.) Defendants also assert that the court should 21 deny plaintiff’s request for an award of costs and expenses incurred by plaintiff in seeking 22 remand of this action because plaintiff has not established that defendants’ removal of this action 23 was improper. (Id. at 9–10.) 24 In reply, plaintiff contends that her complaint sufficiently states Song-Beverly Act claims 25 against defendant Haberfelde, and to the extent there are deficiencies in her complaint, defendants 26 have failed to show that those deficiencies cannot be cured by amendment. (Doc. No. 11 at 3–4.) 27 As to plaintiff’s express warranty claim and California Civil Code § 1793.2(b) claim, 28 plaintiff asserts that defendants’ argument—that the court should find Haberfelde was 1 fraudulently joined because Haberfelde did not offer plaintiff an express warranty—lacks merit 2 and does not support denial of plaintiff’s motion to remand. (Id.) Plaintiff argues that her 3 complaint “sufficiently sets forth facts intertwining the conduct of Ford and [Haberfelde]” and 4 “sufficiently alleges express warranty causes of action against [Haberfelde], including allegations 5 as to its willful conduct toward Plaintiff who is disabled, in both selling her the defective vehicle 6 and failing to repair it to conform to warranty.” (Id. at 3–4.) Plaintiff also contends that 7 defendants failed to address the fact that plaintiff seeks enhanced civil penalties pursuant to 8 California Civil Code §3345 based on Haberfelde’s willful conduct. (Id. at 3.) 9 The court concludes that while plaintiff’s failure to allege that Haberfelde provided an 10 express warranty to plaintiff may likely result in her claims being dismissed under Rule 12(b)(6), 11 it is possible that this deficiency could be cured by amendment. See Hall v. Kraft Heinz Food Co. 12 (LLC), No. 1:19-cv-00565-LJO-BAM, 2019 WL 2598764, at *3 (E.D. Cal. June 25, 2019) 13 (“Even where presently deficiently pled, where Plaintiffs may amend that claim to cure any 14 arguable defects, it may not be said that it is impossible for them to state a claim against [a non- 15 diverse defendant].”); Mireles v. Wells Fargo Bank, N.A., 845 F. Supp. 2d 1034, 1063 (C.D. Cal. 16 2012) (“Defendants must show that the relevant state law is so well settled that plaintiff ‘would 17 not be afforded leave to amend his complaint to cure th[e] purported deficiency.’”) Although 18 defendant points to plaintiff’s allegation that defendant Ford issued a written warranty, the court 19 is not persuaded by defendants’ argument that this allegation necessarily means plaintiff has 20 conceded that Haberfelde did not provide her an express warranty. (Doc. No. 9 at 7.) Defendants 21 have not shown that plaintiff would be unable to cure the purported failure by alleging the 22 existence of an express warranty provided by Haberfelde in an amended complaint. 23 As to plaintiff’s implied warranty claim, plaintiff asserts that her claim is not time-barred 24 because the latent defects in the vehicle were not discovered until April 2018, when plaintiff 25 “became aware that Ford and its authorized repair facilities [Haberfelde] had been unable to 26 repair the vehicle due to continued reoccurring problems,” and that prior to April 2018, “Ford and 27 its authorized agents [Haberfelde] made repeated false assurances to Plaintiff that they had 28 repaired any problems with the subject vehicle and that such problems were not repeating.” (Doc. 1 No. 11 at 7.) Plaintiff contends that the discovery rule, which “provides that a statute of 2 limitations should not begin to run until an aggrieved party discovers (or reasonably should have 3 discovered) the facts giving rise to the cause of action,” applies to her implied warranty claim. 4 (Id. at 4–5) (citing Hebrew Academy of San Francisco v. Goldman, 42 Cal. 4th 883, 894 (2007)). 5 In addition, plaintiff notes in her reply that defendants did not address the allegations in her 6 complaint that support tolling the statute of limitations based on the doctrine of fraudulent 7 concealment. (Id. at 7.) 8 Having considered the parties’ arguments, the court concludes that defendants have failed 9 to satisfy their burden by showing that it is not possible for plaintiff to state an implied warranty 10 claim against Haberfelde. Even though plaintiff initiated this action more than four years after 11 she purchased the subject vehicle, it is not obvious that plaintiff cannot state a claim against 12 Haberfelde—it is possible her implied warranty claim is not time-barred under the discovery rule. 13 See Tanner v. Ford Motor Co., 424 F. Supp. 3d 666, 671 (N.D. Cal. 2019) (rejecting defendant’s 14 argument that the statute of limitations on an implied warranty claim begins to run upon delivery 15 as “contrary to applicable California law, which holds that the statute of limitations begins to run 16 once a defect is discovered”) (citing Mexia v. Rinker Boat Co., 174 Cal. App. 4th 1297 (2009)). 17 In Tanner, the district court concluded that the defendant had not met its burden of establishing 18 that a dealership was fraudulently joined even though plaintiffs brought suit two years after the 19 four-year statutory period expired, because the plaintiffs could amend the complaint to allege 20 facts regarding when the defect was discovered. Id. Thus, the court found that their claim may 21 not have been time-barred under the discovery rule. Id. Here, plaintiff’s complaint makes an 22 even stronger case for this court to grant her motion to remand than the complaint in Tanner. 23 Plaintiff has already alleged when she discovered the defect (around April 26, 2018), and she 24 filed her complaint a year and a half later on October 2, 2019. The state court may find that this 25 supports application of the discovery rule to toll the statute of limitations and a determination that 26 plaintiff’s claim is not time-barred. 27 ///// 28 ///// 4:40 UV VEY OMAR VR MMVUETCTIL tot POC Vee Yt OMI 1 In sum, defendants have failed to show, and the court remains unconvinced, that “there is 2 | no possibility that the plaintiff could prevail on any cause of action it brought against the non- 3 | diverse defendant.” Hall, 2019 WL 2598764 at *3 (emphasis added). Thus, the court finds that 4 | defendant Haberfelde was not fraudulently joined in this action. 5 CONCLUSION 6 For the reasons set forth above, the court will grant plaintiff's motion to remand this 7 | action to the Kern County Superior Court for lack of subject matter jurisdiction. However, the 8 | court will not award plaintiff attorneys’ fees and costs because the court finds that defendants’ 9 | removal was not “objectively unreasonable.” See Grancare, LLC, 889 F.3d at 552 (“Absent 10 | unusual circumstances, a court may award costs and attorney’s fees under § 1447(c) only where 11 || the removing party lacked an objectively reasonable basis for seeking removal.’”’) 12 Accordingly, 13 1. Plaintiff's motion to remand this action (Doc. No. 7) is granted; 14 2. Plaintiff's request for an award of attorneys’ fees and expenses is denied; 15 3. This action is remanded to the Kern County Superior Court, pursuant to 28 U.S.C. 16 § 1447(c), for lack of subject matter jurisdiction; and 17 4. The Clerk of the Court is directed to close this case. 18 | IT IS SO ORDERED. me □ | Dated: _May 29, 2020 DL A. Done 20 UNITED STATES DISTRICT JUDGE 21 22 23 24 25 26 27 28