Quinonez v. FCA US LLC ( 2020 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA 10 11 MARY QUINONEZ, No. 2:19-cv-2032-KJM 12 Plaintiff, 13 v. ORDER 14 FCA US LLC, 15 Defendants. 16 17 In this case brought under California’s Song-Beverly Consumer Warranty Act 18 (“Song-Beverly Act”), plaintiff moves to remand on the basis that the amount in controversy does 19 not meet the jurisdictional minimum for diversity jurisdiction in federal court. For the reasons 20 below, the court DENIES the motion. 21 I. BACKGROUND 22 On or around January 15, 2018, plaintiff Mary Quinonez (“plaintiff”) purchased 23 the vehicle at issue from defendants; the vehicle was a 2017 Jeep that qualified as a new vehicle 24 under the Song-Beverly Act. Notice of Removal Ex. A, ECF No. 1-1 at 16 (plaintiff’s state court 25 complaint). At the time of purchase, plaintiff claims she received express and implied warranties 26 under the Song-Beverly Act from defendants, including representations that: the vehicle would be 27 free from all defects; the vehicle would be fit “for the ordinary purposes for which it was 28 intended”; defendants would perform any “repairs, alignments, adjustments, and/or replacements” 1 of the vehicle for three years; and defendants would maintain the utility of the vehicle for three 2 years. Id. at 17. Plaintiff alleges that on three separate occasions she delivered the vehicle to 3 defendants for repairs related to “transmission failure, replacement transmission failures, loss of 4 power, acceleration issues, cooler failure and engine light malfunctions.” Id. With each 5 attempted repair, defendants allegedly communicated to plaintiff they would conform the vehicle 6 to the express and implied warranties. Id. at 17–18. Plaintiff claims that despite these 7 communications, defendants failed to conform the vehicle to the warranties because “said defects, 8 malfunctions, misadjustments [sic], and/or nonconformities continue to exist even after a 9 reasonable number of attempts to repair was given.” Id. at 18. 10 Following these alleged events, on September 25, 2019 plaintiff filed her 11 complaint in San Joaquin County Superior Court. Id. at 15. On October 9, 2019, defendants 12 FCA US LLC (“defendants”) filed with this court a Notice of Removal of the San Joaquin County 13 Superior Court case, No. STK-CV-UBC-2019-12729. Notice of Removal, ECF No. 1. On 14 February 5, 2020, plaintiff moved to remand this action to San Joaquin County Superior Court. 15 Mot. to Remand, ECF No. 7. On February 20, 2020, defendants filed an opposition to plaintiff’s 16 motion. Opp’n, ECF No. 10. On February 28, 2020, plaintiff filed a reply to defendants’ 17 opposition. Reply, ECF No. 12. 18 Defendants removed the action to this court on the basis of diversity jurisdiction, 19 arguing diversity of citizenship exists between defendants and plaintiff and the amount in 20 controversy exceeds $75,000. Notice of Removal ¶¶ 9–20; see also 28 U.S.C. § 1332(a). 21 Plaintiff moves to remand, arguing defendants have failed to demonstrate diversity jurisdiction. 22 Mot. to Remand at 3–5; Barry Decl., ECF No. 7-1 (attorney for plaintiff outlining timing of 23 instant motion and his meeting with defendants’ counsel). Plaintiff concedes there is diversity of 24 citizenship between herself and defendants, but she disputes the amount in controversy. Mot. to 25 Remand at 3. 26 27 28 1 II. LEGAL STANDARD 2 A motion to remand is the proper procedure to challenge a removal based on lack 3 of jurisdiction. See 28 U.S.C. § 1447(c).1 Removal is only proper when (1) the case presents a 4 federal question or (2) there is diversity of citizenship between the parties and the amount in 5 controversy exceeds $75,000. See 28 U.S.C. §§ 1331, 1332(a). 6 The amount in controversy is an “estimate of the total amount in dispute.” Lewis 7 v. Verizon Communications, Inc., 627 F.3d 395, 400 (9th Cir. 2010). It is not “a prospective 8 assessment of defendant’s liability.” Id. In this circuit, when the amount of damages is 9 unspecified, the removing party must show by a preponderance of the evidence that the amount in 10 controversy exceeds the jurisdictional threshold. Id. at 397; Sanchez v. Monumental Life Ins. Co., 11 102 F.3d 398, 404 (9th Cir. 1996) (“Under this burden, the defendant must provide evidence 12 establishing that it is ‘more likely than not’ that the amount in controversy exceeds [the 13 jurisdictional amount].”). To determine if the amount in controversy is met, the district court 14 considers the complaint, allegations in the removal petition, and “summary-judgment-type 15 evidence relevant to the amount in controversy at the time of removal,” Kroske v. U.S. Bank 16 Corp., 432 F.3d 976, 980 (9th Cir. 2005) (citation omitted), as well as evidence filed in 17 opposition to the motion to remand, Lenau v. Bank of Am., N.A., 131 F. Supp. 3d 1003, 1005 18 (E.D. Cal. 2015) (including Cohn v. Petsmart, Inc., 281 F.3d 837, 840 n.1 (9th Cir. 2002) (per 19 curiam)). Ultimately, “[w]here doubt regarding the right to removal exists, a case should be 20 remanded to state court.” Matheson v. Progressive Specialty Ins. Co., 319 F.3d 1089, 1090 (9th 21 Cir. 2003) (citation omitted). 22 III. DISCUSSION 23 Plaintiff did not specify an amount of damages in her complaint—she merely 24 stated the amount in controversy exceeded the state court jurisdictional requirement of $25,000. 25 26 1 A motion to remand the case on the basis of any defect other than lack of subject matter 27 jurisdiction must be made within 30 days after the filing of the notice of removal under section 1446(a). If at any time before final judgment it appears that the district court lacks subject matter 28 jurisdiction, the case shall be remanded. 1 Notice of Removal Ex. A at 18. Therefore, defendants must show it is more likely than not that 2 the total amount in controversy exceeds $75,000 for this court to exercise jurisdiction over this 3 case. The court turns to the arguments and evidence regarding this issue. 4 A. Damages and Civil Penalties Sought 5 To decide whether defendants have met their burden of showing it is more likely 6 than not the amount in controversy exceeds $75,000, the court analyzes plaintiff’s complaint and 7 defendants’ subsequent arguments, reviewing both the notice of removal and the opposition to 8 plaintiff’s motion to remand. Plaintiff’s complaint identifies the damages and penalties sought as 9 follows: 10 The amount in controversy exceeds TWENTY-FIVE THOUSAND 11 DOLLARS ($25,000.00), exclusive of interest and costs, for which Plaintiff seeks judgment against Defendants, together with 12 equitable relief. In addition, Plaintiff seeks damages from Defendants, and each of them, for incidental, consequential, 13 exemplary, and actual damages including interest, costs, and actual attorneys’ fees. 14 15 Notice of Removal Ex. A at 18. Defendants maintain that because the second sentence quoted 16 above begins with “[i]n addition,” plaintiff seeks “more than $25,000 in damages and additionally 17 exemplary damages.” Opp’n at 4 (emphasis in original). Plaintiff disputes defendants’ reading; 18 she argues defendants omit key parts in quoting her damages request in their opposition and 19 included the word “[and]” before “[i]n addition,” which alters the paragraph’s meaning. Reply at 20 2. Plaintiff further clarifies her position, that “the fact that actual damages are included in the 21 list of damages from the second sentence should be an indicator that the intention of this sentence 22 is not to list additional damages beyond the $25,000.00 amount.” Id. (emphasis in original). 23 On the one hand, plaintiff’s interpretation of this portion of her complaint makes 24 some sense. The first sentence can be read as introductory, functioning as an umbrella for the 25 whole paragraph, whereas the second sentence acts as explanatory connected by “[i]n addition.” 26 The court notes that defendants’ insertion of the word “[and]” in its quotation of plaintiff’s 27 complaint does alter the meaning of the sentences taken together, as plaintiff argues. Plaintiff’s 28 1 prayer for relief also lists potential damages, and can be seen as consistent with plaintiff’s reading 2 of the quoted paragraph. In her prayer for relief, specifically, plaintiff requests the following: (1) 3 replacement or restitution, “at Plaintiff’s election, according to proof”; (2) incidental damages; (3) 4 consequential damages; (4) damages “sustained from negligent auto repairs”; (5) civil penalty “as 5 provided in Song-Beverly, in an amount not to exceed two times the amount of Plaintiff’s actual 6 damages”; (6) attorneys’ fees; (7) costs of the lawsuit and expenses; (8) the difference between 7 the value of the vehicle as accepted and the value of the vehicle had it been as warranted; (9) 8 remedies from Chapter 6 and 7 of Division 2 of the Commercial Code; (10) pre-judgment 9 interest; and (11) any other appropriate relief. Notice of Removal Ex. A at 22. This list closely 10 tracks the second sentence of the paragraph quoted above. 11 Accepting plaintiff’s construction of the relevant language, however, does not 12 mean plaintiff is correct about the amount in controversy. Rather, the court finds it is more likely 13 than not that the amount in controversy exceeds $75,000 for the following reasons. 14 First, plaintiff concedes she has alleged she entered into “a retail installment 15 contract in the amount of approximately $31,500.00” for the vehicle. Mot. to Remand at 4. 16 Despite this concession, plaintiff does not believe $31,500.00 reflects the amount in controversy 17 because plaintiff requests “restitution for all money paid to Defendant, yet Defendant fails to 18 indicate an amount of payments made.” Id. The court does not agree. As noted, plaintiff’s 19 prayer for relief requests “replacement or restitution” and also lists incidental, consequential, and 20 negligent auto repair damages. Notice of Removal Ex. A at 22. As defendants correctly show, if 21 plaintiff successfully litigates her claims, then defendants must “pay restitution to her for 22 payments made on the sales contract and pay off the balance of Plaintiff’s loan, on her behalf, to 23 the lienholder of the Vehicle.” Opp’n at 5. In other words, she could receive “$31,500 in the 24 form of both payments made to date as well as value of the release from her personal loan.” Id. 25 Plaintiff’s focus on payments and any decrease in value resulting from her use of the vehicle 26 mischaracterizes the amount in controversy as a “prospective assessment of defendant’s liability” 27 as opposed to the “estimate of the total amount in dispute.” 28 1 Second, plaintiff’s prayer for relief includes a request for civil penalties “as 2 provided in Song-Beverly, in an amount not to exceed two times the amount of Plaintiff’s actual 3 damages.” Notice of Removal Ex. A at 22. Two times plaintiff’s potential actual damages of 4 $31,500 is $63,000; the total of $31,500 and $63,000 is $94,500. Thus, even without the other 5 damages listed in plaintiff’s prayer for relief, the total restitution and civil penalties in controversy 6 are more likely than not to exceed the $75,000 jurisdictional minimum. The court also notes that 7 other courts, when analyzing a complaint with the exact wording incorporated in plaintiff’s 8 complaint here, have reached the same conclusion with respect to interpretation of that wording. 9 See Bernstein v. BMW of N.Am., No. 18-cv-01801-JSC, 2018 WL 2210683 at *2, (N.D. Cal. May 10 15, 2018) (reasoning the “incidental, consequential, exemplary, and actual damages” sought are 11 in addition to the $25,000 sought). 12 B. Attorneys’ Fees 13 In the notice of removal, defendants state that even though they do not need to 14 include attorneys’ fees in this calculation, the court “should consider the range of fee awards that 15 Plaintiff would receive if he [sic] were to be victorious at trial.” Notice Of Removal at 16 6. Defendants further claim: “It requires no great familiarity with the cost of litigation to 17 conclude that Plaintiff will likely incur further expenses in taking this case through discovery, 18 depositions, motions, experts, and trial.” Id. at 6–7. 19 Plaintiff notes district courts within this circuit are split with respect to including 20 prospective attorneys’ fees in the amount in controversy. Mot. to Remand at 5. While district 21 courts have split on this issue in the past, plaintiff neglects to mention recent Ninth Circuit 22 precedent directing district courts to engage in some consideration of prospective attorneys’ fees 23 when calculating the amount in controversy. See Arias v. Residence Inn by Marriott, 936 F.3d 24 920, 927–29 (9th Cir. Sept. 3, 2019) (overruling district court’s remand order where that court 25 had declined to include attorneys’ fees in its calculations). 26 The court need not calculate, however, prospective attorneys’ fees for this case at 27 this juncture. This is because, for the reasons listed in the previous section, the court has already 28 1 found the amount in controversy is more likely than not to exceed $75,000, even without the 2 inclusion of fees. 3 C. Comity Principles 4 Finally, plaintiff asserts that comity principles weigh heavily in favor of this 5 court’s remanding the case to state court; plaintiff argues basing an amount in controversy 6 calculation on Song-Beverly Act civil penalties does not respect comity and could lead to federal 7 courts deciding all Song-Beverly Act cases. Mot. to Remand at 7. Plaintiff also claims the 8 express and implied warranties here “require consideration of numerous state-specific issues on 9 sensitive, uniquely state-law issues of regulation and statutory interpretation.” Id. 10 Plaintiff’s argument does not persuade this court. She does not cite controlling or 11 persuasive authority on point, and does not acknowledge the numerous cases allowing federal 12 courts to exercise jurisdiction over Song-Beverly Act civil penalties. See, e.g., Gonzales v. 13 CarMax Auto Superstores, LLC, 840 F.3d 644, 648 (9th Cir. 2016) (affirming district court’s 14 calculation of amount in controversy, which included penalties under state Song-Beverly Act). 15 IV. CONCLUSION 16 The motion to remand is DENIED. This order resolves ECF No. 7. 17 IT IS SO ORDERED. 18 DATED: June 19, 2020. 19 20 21 22 23 24 25 26 27 28