Leonora Murray v. General Motors, L.L.C., e

Case: 11-60618 Document: 00511877213 Page: 1 Date Filed: 06/05/2012
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
June 5, 2012
No. 11-60618 Lyle W. Cayce
Clerk
LEONORA MURRAY; STEPHEN MURRAY, SR.; M.B., a minor, by and
through her maternal grandmother, Leonora Murray,
Plaintiffs - Appellants
v.
GENERAL MOTORS, L.L.C.; SKINNER CHEVROLET BUICK PONTIAC
GMC,
Defendants - Appellees
Appeal from the United States District Court
for the Southern District of Mississippi
USDC No. 3:10-CV-188
Before KING, HIGGINBOTHAM, and HAYNES, Circuit Judges.
PER CURIAM:*
Leonora Murray, Stephen Murray, Sr., and M.B.1 (collectively,
“Appellants”) appeal the district court’s decision dismissing their claims against
Skinners2 Chevrolet Buick Pontiac GMC Truck, Inc. (“Skinners”), and denying
*
Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR.
R. 47.5.4.
1
M.B. is a minor. Leonora Murray, M.B.’s grandmother, filed suit on M.B.’s behalf.
2
Although Appellants named this entity as “Skinner Chevrolet Buick Pontiac GMC,”
their brief corrects the name to the name given in the text. Thus, we use “Skinners” rather
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their motion to remand the case to state court. The district court concluded that
Skinners—the only non-diverse defendant—was improperly joined to defeat
diversity jurisdiction.3 Appellants argue that they pleaded valid claims against
Skinners; therefore, they contend that the district court improperly denied their
motion to remand the case to state court and dismissed their claims against
Skinners. We AFFIRM and remand for further proceedings as appropriate.
I. FACTS AND PROCEDURAL HISTORY
Stephen Murray, Sr., and Leonora Murray (the “Murrays”) purchased a
new, 2006 model Chevy HHR (the “vehicle”) from Skinners in 2005. The vehicle
was manufactured by General Motors (“GM”). Stephen Murray, Sr., alleges that
he purchased the vehicle because the salesman at Skinners told him that it was
an “economical, dependable, and good car.” He also alleges that the sticker on
the vehicle stated that it had airbags and the salesman told him it had power
steering. Appellants allege that the Murrays took the vehicle to Skinners on
several occasions for service and that GM issued several recall notices on the
vehicle, but Skinners failed to notify them of such notices.
In 2009, Leonora Murray was driving the vehicle when the left front
spindle broke, the steering mechanism failed, and the front airbags failed to
deploy. The vehicle veered off of the road, hit several objects, and flipped over,
injuring Leonora Murray and M.B.
Appellants filed suit against Skinners and GM in state court. GM filed a
notice of removal, alleging that Appellants improperly joined Skinners for
purposes of defeating diversity jurisdiction. GM is a citizen of Delaware, and
than “Skinner” as the shorthand reference for this entity.
3
The term “improper joinder” has also been referred to as “fraudulent joinder”;
however, we have previously adopted the term “‘improper joinder’ as being more consistent
with the statutory language than the term ‘fraudulent joinder’ . . . .” Smallwood v. Ill. Cent.
R.R. Co., 385 F.3d 568, 571 n.1 (5th Cir. 2004) (en banc).
2
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Skinners and Appellants are citizens of Mississippi. GM and Skinners also filed
separate motions to dismiss Skinners from the suit. The parties extensively
briefed the issues before the district court, and GM, Skinners, and Appellants
offered additional evidence to support their respective claims. After considering
this evidence and the parties’ arguments, the district court concluded that
because Appellants would be unable to establish a cause of action against
Skinners, Appellants’ motion to remand would be denied. The district court
granted Skinners’s and GM’s motions to dismiss Skinners from the suit.
Appellants requested that the district court certify its order dismissing
Skinners and denying their motion to remand as a final order pursuant to
Federal Rule of Civil Procedure 54(b), and the district court granted their motion
and stayed the case pending the outcome of this appeal. Appellants timely
appealed.
II. JURISDICTION AND STANDARD OF REVIEW
We have jurisdiction to review the district court’s order, which was
certified as final under Rule 54(b), pursuant to 28 U.S.C. § 1291. See United
States v. Caremark, 634 F.3d 808, 814 (5th Cir. 2011). Although Appellants
claim that the district court did not have jurisdiction over this suit, as complete
diversity was lacking, federal courts generally have jurisdiction to review their
own jurisdiction. See United States v. Ruiz, 536 U.S. 622, 628 (2002). Thus, we
have jurisdiction to determine whether the district court properly concluded that
it had diversity jurisdiction pursuant to 28 U.S.C. § 1332.
We review the denial of a motion to remand de novo. Guillory v. PPG
Indus., Inc., 434 F.3d 303, 308 (5th Cir. 2005). To determine whether a
defendant has been improperly joined, the district court “may conduct a Rule
12(b)(6)-type analysis, looking initially at the allegations of the complaint to
determine whether the complaint states a claim under state law against the in-
state defendant.” Smallwood v. Ill. Cent. R.R. Co., 385 F.3d 568, 573 (5th Cir.
3
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2004) (en banc). If the plaintiff can survive a Rule 12(b)(6) challenge, ordinarily,
there is no improper joinder. Id. However, if the complaint states a claim, but
“has misstated or omitted discrete facts that would determine the propriety of
joinder . . . the district court may, in its discretion, pierce the pleadings and
conduct a summary inquiry.” Id. “In deciding whether a party was improperly
joined, we resolve all contested factual issues and ambiguities of state law in
favor of the plaintiff.” Gasch v. Hartford Accident & Indem. Co., 491 F.3d 278,
281 (5th Cir. 2007). Removal raises federalism concerns because the effect of
removal is to deprive a state court of jurisdiction; therefore, we strictly construe
the removal statute, resolving “any doubt about the propriety of removal . . . in
favor of remand.” Id. at 281-82. Applying this analysis, we turn to whether
Appellants have established the possibility of recovery from Skinners on any of
their claims.
III. DISCUSSION
Ordinarily, a defendant cannot remove a lawsuit to federal court under 28
U.S.C. § 1332 absent complete diversity between plaintiffs and defendants. See
Whalen v. Carter, 954 F.2d 1087, 1094 (5th Cir. 1992) (“The diversity statute
requires complete diversity of citizenship: a district court cannot exercise
diversity jurisdiction if one of the plaintiffs shares the same state citizenship as
one of the defendants.” (internal quotation marks omitted)). If, however, the
removing party can show that a non-diverse defendant has been improperly
joined to defeat diversity jurisdiction, the case may be removed. Cf. Salazar v.
Allstate Tex. Lloyd’s, Inc., 455 F.3d 571, 574 (5th Cir. 2006) (noting that “under
the fraudulent joinder doctrine, federal removal jurisdiction premised on
diversity cannot be defeated by the presence of an improperly-joined nondiverse
and/or in-state defendant”). There are two ways to establish improper joinder:
“(1) actual fraud in the pleading of jurisdictional facts, or (2) inability of the
plaintiff to establish a cause of action against the non-diverse party in state
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court.” Smallwood, 385 F.3d at 573 (internal quotation marks omitted). In this
case, GM—the removing party—argued that there was no possibility that
Appellants could recover against Skinners and that, therefore, Skinners was
improperly joined to defeat diversity jurisdiction. We analyze each of Appellants’
causes of action in turn to determine whether it established the possibility of
recovery against Skinners.
A. Express Warranty
Appellants claim that the district court erred in refusing to remand their
case and in dismissing their express warranty claim against Skinners, as they
contend that there is a possibility that they could recover from Skinners on this
claim. The district court found that Skinners could not be liable for breach of an
express warranty, as there was no agreement between Skinners and Appellants;
rather, the only express warranty was made by GM to Appellants.4
We hold the district court did not err in finding that there was no
possibility of recovery against Skinners on Appellants’ express warranty claim.
Appellants essentially contend that Skinners is liable for personal injury
damages for breaching the manufacturer’s warranty. In an attempt to show
Skinners’s involvement, they contend that one of Skinners’s salesmen
“embrac[ed] GM’s warranty . . . .” However, under Mississippi law, Skinners
4
Appellants also raise an argument about an extended warranty they purchased
through Skinners. Appellants claim that they were told that the extended warranty would
cost $1,500, but they later received a bill for $3,000. First, we note that Appellants are not
claiming damages for alleged overbilling or failure to repair under an extended warranty; they
are claiming damages for personal injury. We fail to see how this allegation could give rise to
such a damages award. Additionally, even if they sought the proper damages for the breach
of this warranty, we cannot consider Appellants’ claims related to the extended warranty
purchased through Skinners. The complaint filed in state court (and never amended) failed
to mention an extended warranty. We may not consider post-removal filings “to the extent
that they present new causes of action or theories not raised in the controlling petition in state
court.” Griggs v. State Farm Lloyds, 181 F.3d 694, 700 (5th Cir. 1999). The theory that
Appellants raised concerning the extended warranty was not raised in the petition filed in
state court; therefore, we cannot consider this aspect of Appellants’ express warranty claim.
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cannot be held liable for “embracing” the express warranty made by the
manufacturer, even if Skinners’s salesman used the manufacturer’s warranty
to sell the car. See Wright v. Paul Moak Pontiac, Inc., 828 So. 2d 201, 202 (Miss.
Ct. App. 2001). In Wright, a Mississippi appellate court found that despite the
fact that a car salesman used the manufacturer’s warranty as a “sales tactic,” he
was not acting “in any capacity other than as an agent of [the manufacturer]”
and, therefore, the dealership could not be held liable for breach of an express
warranty. Id. The cases cited by Appellants to support their position that a car
dealer can be held liable for breaching a manufacturer’s warranty are inapposite.
See Forbes v. Gen. Motors Corp., 935 So. 2d 869, 875 (Miss. 2006) (addressing a
manufacturer’s liability for breach of its own express warranty); Fitzner Pontiac-
Buick-Cadillac, Inc. v. Smith, 523 So. 2d 324, 326 (Miss. 1988) (discussing a car
dealer’s alleged liability for a salesman’s statement that the dealer would fix an
issue with a used car).
Further, section 11-1-63(h) of the Mississippi Code provides that an
innocent seller “shall not be liable” for any action pursuant to section 11-1-
63(a)—which includes a claim for breach of an express warranty—unless the
seller either: (1) “exercised substantial control over that aspect of the design,
testing, manufacture, packaging or labeling of the product that caused the harm
for which recovery of damages is sought”; (2) “altered or modified the product,
and the alteration or modification was a substantial factor in causing the harm
for which recovery of damages is sought”; or (3) “had actual or constructive
knowledge of the defective condition of the product at the time he supplied the
product.” MISS. CODE ANN. § 11-1-63(h) (1972 & Supp. 2011).5
5
Section 11-1-63 of the Mississippi Code is also referred to as the Mississippi Products
Liability Act (“MPLA”). Subsection (h) of the MPLA is referred to as the innocent seller
exemption.
6
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Appellants contend that the “innocent seller” exemption does not prohibit
them from bringing an express warranty claim pursuant to the Mississippi
Uniform Commercial Code (the “Mississippi UCC”).6 However, although the
Mississippi Supreme Court has held that the MPLA does not preclude a claim
for breach of warranty, see McKee v. Bowers Window & Door Co., 64 So. 3d 926,
940 (Miss. 2011) (holding that the MPLA “does not abrogate . . . any warranty
claims” (citation and internal quotation marks omitted)), it is still subject to the
innocent seller exemption in a products liability action. See Gardner v. Cooksey,
No. 2:11-cv-255KS, 2012 WL 968026, at *3-4 (S.D. Miss. Mar. 21, 2012).
Appellants are seeking damages for the injuries to Leonora Murray and M.B.
that were allegedly caused by the failure of the steering mechanism and the
airbags. This claim is subject to the MPLA limits by the express terms of the
Mississippi UCC.7 Because we hold that Appellants’ claim as pleaded falls under
the MPLA, the innocent seller exemption applies.
Indeed, the Mississippi legislature specifically provided in section 11-1-
63(h) that “[i]t is the intent of this section to immunize innocent sellers who are
not actively negligent, but instead are mere conduits of a product.” MISS. CODE
ANN. § 11-1-63(h). Although Appellants pleaded that Skinners was not just a
conduit of the vehicle, their vague and conclusory allegations allowed the district
court to pierce the pleadings to conduct a summary inquiry. See Smallwood, 385
F.3d at 573. To support its argument that it was a mere conduit of the vehicle,
Skinners provided an affidavit stating that it “did not design or manufacture the
car,” “alter or modify the air bags or steering,” or “install” or “test the air bags
6
Mississippi adopted the Uniform Commercial Code. See MISS. CODE ANN. § 75-1-101
et seq. (1972).
7
Section 75-2-715 of the Mississippi UCC—labeled “Buyer’s Incidental and
Consequential Damages”—excepts the matters “otherwise provided in” § 11-1-63 from the
general rule that consequential damages available to a buyer for a seller’s breach of warranty
include “injury to [a] person.”
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and steering.” An employee of Skinners also stated in her affidavit that
“Skinners Chevrolet made no express warranties or other express factual
representations about the subject car, other than as a mere conduit of
information from the manufacturer of the car.” Appellants offered no evidence
to show that Skinners was anything more than a conduit for the vehicle. Thus,
for the reasons stated above, we find that Appellants could not recover from
Skinners on a breach of an express warranty claim.
B. Implied Warranty
Appellants next contend that they have established a possibility of
recovery on their breach of implied warranty claim, because the MPLA does not
prevent a plaintiff from bringing such a claim. See McKee, 64 So. 3d at 940. The
district court, relying on section 11-1-63(h), held that Skinners was immune
from Appellants’ breach of implied warranty claim because it was an innocent
seller. As we discussed above, we agree that the MPLA did not abrogate all UCC
warranty claims, but the innocent seller exception applies here as well.
In sum, we agree with the district court—and with four other federal
district courts in Mississippi—that if the plaintiff seeks damages for personal
injury as a result of an allegedly defective product, the innocent seller exemption
applies to a breach of implied warranty claim. See Gardner, 2012 WL 968026, at
*3-4; Jenkins v. Kellogg Co., No. 4:08-cv-121, 2009 WL 2005162, at *4 (N.D.
Miss. July 6, 2009); Land v. Agco Corp., No. 1:08-cv-012, 2008 WL 4056224, at
*3 (N.D. Miss. Aug. 25, 2008); Jones v. Gen. Motors Corp., No. 3:06-cv-00608,
2007 WL 1610478, at *3, *5 (S.D. Miss. June 1, 2007). For this reason, we
conclude that the district court properly held that Appellants had no possibility
of recovering against Skinners on a breach of implied warranty claim.
C. Fraudulent Misrepresentation
Appellants argue that the district court erred in holding that they failed
to plead their fraudulent misrepresentation claim with particularity and in
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dismissing the claim. Federal Rule of Civil Procedure 9(b) requires a plaintiff
to “state with particularity the circumstances constituting fraud or mistake.”
State-law fraud claims are subject to this requirement.8 See Sullivan v. Leor
Energy, LLC, 600 F.3d 542, 550-51 (5th Cir. 2010). “To plead fraud adequately,
the plaintiff must ‘specify the statements contended to be fraudulent, identify
the speaker, state when and where the statements were made, and explain why
the statements were fraudulent.’” Id. at 551 (quoting ABC Arbitrage v. Tchuruk,
291 F.3d 336, 350 (5th Cir. 2002)).
Here, the only allegations in the complaint concerning fraud stated that
“the defendants negligently, gross [sic] negligently, and fraudulently
misrepresented and made omissions to the public, including the plaintiffs, about
the safety and maneuverability of the 2006 Chevrolet HHR automobile.” The
complaint contains no descriptions of the specific statements that Appellants
claim were fraudulent, or when and where such statements were made.9 The
complaint is entirely devoid of specific allegations about Skinners’s alleged
fraudulent misrepresentation. Therefore, we conclude that the district court did
not err in finding that Appellants failed to demonstrate any possibility of
recovery on their fraudulent misrepresentation claim.10
8
Mississippi Rule of Civil Procedure 9(b) contains a similar requirement. See MISS.
R. CIV. P. 9(b) (requiring “the circumstances constituting fraud or mistake [to] be stated with
particularity”). If the case was remanded, Appellants’ claim would likewise fail in state court.
9
Before both the district court and this court, Appellants argued that Skinners’s
salesman fraudulently convinced Stephen Murray, Sr., to purchase an extended warranty for
$1,500, but the Murrays later received a bill for almost $3,000. However, as noted above, we
may not address this claim because we cannot consider post-removal filings “to the extent that
they present new causes of action or theories not raised in the controlling petition in state
court.” Griggs, 181 F.3d at 700.
10
We have recognized that a district court should not find fraudulent joinder and
dismiss a fraud claim for failure to satisfy the pleading requirements of Rule 9(b) without first
granting leave to amend. Hart v. Bayer Corp., 199 F.3d 239, 247 n.6 (5th Cir. 2000).
Appellants here, however, did not seek leave to replead their fraudulent misrepresentation
claim in the district court and have not advanced such an argument before this panel. Rather,
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D. Negligent Misrepresentation
On appeal, Appellants argue that they sufficiently pleaded a negligent
misrepresentation claim because Skinners’s salesman told them that the car was
“equipped with a dual frontal airbags [sic] system that worked” when, in fact,
the airbags failed to deploy. Additionally, they contend that the salesman
negligently told them that the car was “good and dependable” when it was not.
The district court held that Appellants could not proceed with their negligent
misrepresentation claim because it was barred by the innocent seller exemption,
and we agree.
Although “negligence claims can be brought alongside strict liability
claims,” McSwain v. Sunrise Med., Inc., 689 F. Supp. 2d 835, 846 (S.D. Miss.
2010), a party may not disguise a products liability claim as a negligence claim
to avoid dismissal. See, e.g., id. at 844 (concluding that the plaintiff’s “common
law negligence claims fail because they are mere restatements of the claims
brought under the MPLA, and . . . are not supported by sufficient evidence”); see
also McKee, 64 So. 3d at 940 (noting that the plaintiffs’ “negligence claim ‘fail[s]
to present any new discussion or claim that does not relate back to the . . .
products liability claim which ha[s] previously been determined to be legally
insufficient to survive summary judgment’” (alterations in original) (quoting
Moss v. Batesville Casket Co., 935 So. 2d 393, 406 (Miss. 2006)).
Here, Appellants essentially argue that Skinners negligently promised
that the frontal airbags would deploy and that the car was good and dependable.
However, Appellants’ negligent misrepresentation claim is nothing more than
an attempt to disguise a breach of warranty based upon a design or
manufacturing defect claim as a negligent misrepresentation claim in order to
avoid the innocent seller exemption of section 11-1-63(h). This they cannot do.
they have consistently argued that their fraudulent misrepresentation claim has been pled
with sufficient particularity, an argument that we reject.
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See Moss, 935 So. 2d at 406 (dismissing a negligence claim because it was merely
an attempt to “reargue the warranty claims previously discussed under the guise
of negligence”). Since the innocent seller exemption applies, and Appellants
cannot show that Skinners had actual or constructive knowledge of the defective
condition, see MISS. CODE ANN. § 11-1-63(h), Appellants fail to establish a
possibility of recovery against Skinners on their negligent misrepresentation
claim.
E. Negligence or Gross Negligence
Finally, Appellants argue that the district court improperly dismissed
their negligence claims. The complaint alleges two ways that Skinners was
negligent: (1) by failing to notify Appellants about manufacturer’s recalls of the
frontal airbags; and (2) failing to identify and repair defects, notify Appellants
of defects, or provide transportation while the defendants repaired the defects.
We reject Appellants’ contention that the failure to notify the Murrays
about several manufacturer’s recalls that allegedly applied to the vehicle
constituted negligence, because Skinners had no post-sale duty to warn under
Mississippi law. See Noah v. Gen. Motors Corp., 882 So. 2d 235, 239 (Miss. Ct.
App. 2004). Appellants have cited no authority to establish that a car dealer has
a post-sale duty to warn them of a manufacturer’s recall, and, in response to
GM’s evidence showing no relevant recalls, they have made no showing that the
recalls actually applied to their vehicle.
Next, Appellants contend that Skinners negligently failed to identify and
repair the defects that caused the accident. In essence, Appellants claim that
Skinners was negligent in failing to locate and fix a design defect. However, we
agree with the district court that the innocent seller exemption set out in section
11-1-63(h) applies to immunize Skinners from this claim. As noted above, a
party may not disguise a products liability claim as a negligence claim to avoid
dismissal. See, e.g., McKee, 64 So. 3d at 940. Appellants’ claim is nothing more
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than a creative attempt to hold Skinners liable for a design defect and for failing
to warn them about the defective nature of the vehicle. Because Appellants
cannot show that Skinners exercised substantial control over the frontal airbags
or steering mechanism, altered or modified the car in a way that caused the
injuries, or had actual or constructive knowledge of the defective condition, as
required to overcome the innocent seller exemption, see MISS. CODE ANN. § 11-1-
63(h), Appellants fail to establish a possibility of recovery against Skinners for
negligence or gross negligence.
IV. CONCLUSION
As indicated above, GM has established that Appellants do not have a
possibility of success on any of their claims against Skinners—the only in-state
defendant. Accordingly, the district court did not err in denying remand and
dismissing Skinners. As a result, the case against GM should be remanded to
the district court for further proceedings as appropriate.
AFFIRMED and REMANDED.
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