Free Motion to Dismiss Case/Lack of Jurisdiction - District Court of Arizona - Arizona

1 Negatu Molla (Bar No. 006254)

David W. Williams (Bar No. 022764)

2 BOWMAN AND BROOKE LLP Suite 1600, Phoenix Plaza
3 2901 North Central Avenue

Phoenix, Arizona 85012-2761
4 (602) 643-2300

Attorneys for Defendant Workhorse Custom Chassis
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UNITED STATES DISTRICT COURT
DISTRICT OF PHOENIX

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LANE SENNETT,
Plaintiff,
v.

No. CV04 0161 PHX ROS
DEFENDANT WORKHORSE CUSTOM CHASSIS, LLC'S MOTION TO DISMISS FOR LACK OF SUBJECT MATTER JURISDICTION
(Assigned to Honorable Roslyn O. Silver)

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FLEETWOOD MOTOR HOMES OF CALIFORNIA, INC. and WORKHORSE CUSTOM CHASSIS; INC.,

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Defendants.

(Oral Argument Requested)

17 Workhorse Custom Chassis, LLC ("Workhorse") moves to dismiss Plaintiff's
18 claims because Plaintiff has failed to meet the $50,000 amount in controversy
19 requirement as required by 15 U.S.C. § 2310(d)(3)(B), which is necessary for subject

20 matter jurisdiction. This Motion is supported by the following Memorandum of Points

21 and Authorities.
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MEMORANDUM OF POINTS AND AUTHORITIES
INTRODUCTION

Plaintiff has failed to meet the $50,000 amount in controversy requirement of

15 U.S.C. § 2310(d)(3)(B). Plaintiff's valuation expert has conceded that the most
Plaintiff can recover for the alleged loss of value for her motor home is $43,925.00.
Plaintiff is not entitled to recover other damages set forth in her complaint. She cannot

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recover the purchase price since the claim based on the Arizona Motor Vehicle

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Warranties Act has been dismissed. She cannot recover other incidental damages,

3 which are properly excluded by the warranty. Therefore, because Plaintiff has failed to

4 meet the jurisdictional requirements of the Court, Workhorse requests that her
5 complaint be dismissed in its entirety.
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PLAINTIFF HAS FAILED TO MEET THE AMOUNT IN CONTROVERSY
REQUIREMENTS OF 15 U.S.C. § 2310(d)(3)(B) NECESSARY TO INVOKE
THIS COURT'S JURISDICTION.

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The Federal Rules of Civil Procedure are very clear that, "(w)henever it
appears by suggestion of the parties or otherwise that the court lacks jurisdiction
over the subject matter, the court shall dismiss the action." Fed. R. Civ. P. 12(h)(3).
Subject matter jurisdiction is an absolute prerequisite for continuance of an action in

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13 federal district court. Trinanes v. Schulte, 311 F. Supp. 812 (D.C. N.Y. 1970). This
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is because the defense of "lack of subject matter jurisdiction challenges the court's

statutory or constitutional power to adjudicate the case. . . ." 2 Moore's Federal
Practice. §12.30(1) (Matthew Bender 3d ed.). Once challenged, the party asserting

subject matter jurisdiction has the burden of proving its existence. Bali Expert

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Corp. v. Balicar. Ltd., 804 F.2d 398, 401 (7th Cir. 1986); Boudreau v. United States,
53 F.3d 81,82 (5th Cir. 1995).

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The Court's subject matter jurisdiction is determined by 15 U.S.C. §
2310(d)(3)(B) of the Magnuson-Moss Warranty Act ("MMWA"). "Congress has sought

22 to limit plaintiffs' access to Federal courts. It established strict jurisdictional
23 requirements in an attempt to channel most of the Act's litigation into State courts."
24 Walsh v. Ford Motor Company, 588 F. Supp. 1513, 1519 (D.C. D.C. 1984). 15 U.S.C.
25 § 231 O( d)(3)(B) states:

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No claim shall be cognizable in a suit brought under paragralh (1 )(B)
subsection... if the amount in controversy is less than the sum or value of

(referring to an action in the United States District Court of this

$50,000 (exclusive of interests or costs) computed on the basis of all
claims to be determined in this suit.
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15 U.S.C. § 2310(d)(3)(B). Plaintiff must establish that to a legal certainty the amount
in controversy is in excess of the jurisdictional amount of $50,000 in order for the Court
to retain subject matter jurisdiction over this action. Kelly v. Fleetwood Enterprises. Inc.,

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377 F.3d 1034 (9th Cir. 2004).
A.

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Plaintiff Cannot Recover More Than $50,000 In Diminution in Value Damages.

In Kelly, the Ninth Circuit upheld the dismissal of the plaintiff's MMWA claim
for lack of subject matter jurisdiction where he failed to show damages in excess of

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the $50,000 amount in controversy requirement. lg. The plaintiff sought personal
injury and punitive damages, which were not available under the MMWA, and could

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not be counted towards the amount in controversy requirement. lg. Further, the
Kelly court did not consider the issue of the value of the subject vehicle in reaching

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the amount in controversy limit. lg.
The Sixth, Seventh and Third Circuits have adopted the following standard
formula that is applicable to the case at bar:

(T)he price of a replacement vehicle, minus both the present value of the allegedly defective car and the value that the plaintiff received from the use of the allegedly defective car.

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Schimmer v. JaQuar Cars. Inc., 384 F.3d 402, 406 (th Cir. 2004) (dismissing the
plaintiff's MMWA claim where he failed to establish damages greater than $50,000)
(citing Gardynski-Leshuk v. Ford Motor Co., 142 F.3d 955, 957 (th Cir. 1998)).

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Applying, its valuation formula, the Schimmer court stated:

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We know from Schimmer's complaint that the purchase price of a replacement XK8 is $69,513.00 because that is what he paid for the alfegedly defective vehicle. Prior to filing the present suit, Schimmer

XK8, the car was worth $54,013.00 when Jaguar removed the case.

hired an expert to inspect the XK8 and opine as to its diminished value based on its alleged defects. According to the expert's inspection of the

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formula, this $15,500.00 figure must be further reduced by the value

defective car ($54,013.00) yields $15,500.00. To complete the

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that Schimmer obtained from his use of the XK8. Although we have no

way of knowing what this figure might be, even if it is $0.00, the
$50,000 amount in controversy requirement necessary to establish
dismissed for lack of subject-matter jurisdiction.

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maximum Schimmer could recover (and the maximum loss to Jaguar) under Illinois law would be $15,500.00. As this figure is well below the

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this case was improperly removed from state court and must be
See also Golden v. Gorno Bros.. Inc., 410 F.3d 879 (6th Cir. 2004); Samuel-Bassett
v. Kia Motors America. Inc., 357 F.3d 392 (3rd Cir. 2004).

subject-matter jurisdiction under the Magnuson-Moss Act, we find that

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Applying the valuation formula from above, Plaintiff's own expert fails to
satisfy the $50,000 amount in controversy requirement. In his report, Plaintiff's
valuation expert, Mr. Trimmell, asserts that the alleged defects in the motor home

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have caused it have lost up to $43,925.00 of its value. See Trimmell Appraisal
Report, attached as Exhibit 1.

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B.

Plaintiff is Not Entitled To Recover The Purchase Price Of Her
Motor Home.

Plaintiff's amended complaint seeks to recover the purchase price of her

motor home under the Arizona Motor Vehicle Warranties Act. This Court has
already dismissed Plaintiff's Arizona Motor Vehicle Warranties Act claim; therefore,

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this has no impact on the jurisdictional analysis. See Court's Order Dated
September 13, 2005, Docket 133.

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It is anticipated that Plaintiff will argue that the amount of controversy is fixed

at the time of filing her complaint and that she expected to recover in excess of the

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$50,000 amount in controversy requirement. However, when discussing
jurisdictional amounts "(a) distinction must be made... between subsequent events
that change the amount in controversy and subsequent revelations that, in fact, the

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required amount was or was not in controversy at the commencement of the
action." Watson v. Blankinship, 20 F.3d 383, 387 (10th Cir.1994) (quoting Jones v.
Knox Exploration Corp., 2 F.3d 181, 183 (6th Cir. 1993)). "(W)here 'the proofs
adduced at trial conclusively show that the plaintiff never had a claim even arguably

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within the (jurisdictional) range,' a diversity action must be dismissed." Jones, 2

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F.3d at 183 (quoting Jiminez PuiQ v. Avis Rent-A-Car System, 574 F.2d 37, 39 (1st

Cir. 1978)). "Lack of the jurisdictional amount from the outset -- although not
recognized until later -- is not a subsequent change that can be ignored." Moore's
Fed. Practice, para. 0.92(1), at 835 (2d ed. 1993). Therefore, even though Plaintiff

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made a claim under the Arizona Motor Vehicle Warranties Act, there was no way

that she could recover a refund of her purchase price at the time she filed her
amended complaint.
C.

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Plaintiff Cannot Recover Any Amounts For Damages Excluded By
Workhorse's Limited Warranty.

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Plaintiff is not entitled to any incidental or consequential damages, damages
for loss of the use of the motor home, or for any aggravation or inconvenience when

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the motor home was being serviced. Defendant's limited written warranty explicitly

disclaims the Plaintiff's ability to recover those types of damages. Defendant's
Limited Warranty specifically provides:

Economic loss or extra expense is not covered. Examples include:

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or local taxes required on warranty repairs.

loss of vehicle use, inconvenience, storage, payment for loss of time or pay, vehicle rental expense, lodging meals, or other travel costs, state

See Workhorse Limited Warranty, attached as Exhibit 2.

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Disclaimers on these types of damages are enforced even in cases alleging
violation of the Magnuson-Moss Act. See KruQer v. Subaru of America. Inc., 996 F.

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Supp. 451, 458 (E.D. Pa. 1998) (dismissing consequential damages claim under

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Magnuson-Moss Warranty Act in light of warranty disclaimer); Nairan Co. for
General ContractinQ and TradinQ v. Fleetwood Enterprises, 659 F. Supp. 1081,

1100 (S.D. Ga. 1986) (holding that consequential damages disclaimers are
permitted under Magnuson-Moss Warranty Act); Sorce v. Naperville Jeep EaQle.

Inc., 722 N.E.2d 227, 325-26 (IIi. Ct. App. 1999). In fact, a manufacturer may
disclaim damages from a limited warranty under either the common law of contracts

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or the Uniform Commercial Code. SeekinQs v. Jimmy GMC of Tucson, 130 Ariz.

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596, 601, 638 P.2d 210, 215 (upholding the disclaimer of incidental and
consequential damages in a non-U.C.C. breach of warranty action by a consumer
against a remote manufacturer). Accordingly, because these types of damages are
disclaimed, Plaintiff cannot recover these damages, and the amounts should not be

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considered for jurisdictional purposes.
III.

CONCLUSION

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Based on all of the above, it is respectfully requested that the case be
dismissed because Plaintiff cannot show that the amount in controversy is greater
than $50,000.

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RESPECTFULLY SUBMITTED this 13th day of October, 2006.
BOWMAN AND BROOKE LLP

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By: Isl David W. Williams

Negatu Molla

David W. Williams
2901 North Central Avenue

Suite 1600, Phoenix Plaza

Phoenix, Arizona 85012-2761
Attorneys for Defendant Workhorse Custom Chassis

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CERTIFICATE OF SERVICE

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I hereby certify that on the 13th day of October, 2006 I caused the attached
document to be electronically transmitted to the Clerk's Office using the CMIECF

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System for filing and transmittal of a Notice of Electronic Filing to the following
CMIECF registrants:
KROHN & MOSS, L TD

6 Jennifer Basola

7 111 W Monroe, Suite 711

8 Phoenix, AZ 85003

Attorney for Plaintiff

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Isl Judy Kaelin

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