Shuff v. G R Chevrolet

TED LAMONT SHUFF, Plaintiff, v. G R CHEVROLET, d/b/a Autos by Nelson; CAPPO MANAGEMENT XVIII, INC.,d/b/a Cookeville Honda; CAPPO MANAGEMENT VII, INC., d/b/a OBX Chevrolet Buick;and PREMIER CHEVROLET, BUICK, INC., d/b/a Premier Chevrolet, Defendants.

Case No. 4:15-cv-00020

UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF VIRGINIA DANVILLE DIVISION

August 1, 2016

MEMORANDUM OPINION

By: Hon. Jackson L. Kiser Senior United States District Judge

This matter is before the Court on Defendant Cappo Management XVIII, Inc.'s, d/b/a Cookeville Honda ("Cookeville Honda") Rule 12(b)(2) Motion to Dismiss. Plaintiff and Cookeville Honda have fully briefed the matter, and I have reviewed the relevant filings and counsel's arguments. For the reasons stated herein, I will grant the Motion.

I. STATEMENT OF FACTS AND PROCEDURAL BACKGROUND¹

Plaintiff seeks relief for violations of portions of the Motor Vehicle Information and Cost Savings Act, 49 U.S.C. §§ 32701-32711; actual and constructive fraud; and breach of the Virginia Consumer Protection Act, Va. Code Ann. §§ 59.1-196 thru -207. (Second Am. Compl. ¶¶ 62-74, Jan. 12, 2016 [ECF No. 52].) The central cause of action is a truck sale tainted by an incorrect odometer reading and owner history. Plaintiff conducted that transaction with G R Chevrolet, Inc., d/b/a Autos by Nelson ("Autos by Nelson"), a Virginia corporation with its principal place of business in Bassett, Virginia. (See id. ¶¶ 2, 14.) There are several more theories of relief, based on the series of preceding dealership transactions and following communications, respectively, accomplishing and concealing the central fraud.² Plaintiff has filed against Defendants for their respective roles. Here, the focus is on Cookeville Honda, "a Tennessee Corporation engaged, inter alia, in the business of selling new and used vehicles to the public on a retail basis, as well as selling vehicles wholesale." (See id. ¶ 3.) Its principal place of business is Cookeville, Tennessee. (Browning Decl. ¶ 4, Jan. 26, 2016 [ECF No. 55-1].)

In the sales timeline preceding Plaintiff's purchase, Cookeville Honda was a purchaser and seller, about five dealerships before Autos by Nelson initially acquired the truck. (See Second Am. Compl. ¶ 27(d)-(f).) Ocean Honda, a California business, sold the truck to Cookeville Honda on February 11, 2011. (Id. ¶ 27(d); see also id. ex. H [ECF No. 52-8].) Cookeville Honda had the truck for about five months, selling it to Cappo Management VII, Inc., d/b/a OBX Chevrolet Buick ("OBX Chevrolet Buick"), a North Carolina business, on July 19, 2011. (Id. ¶ 27(e)-(f); see also id. ex. I [ECF No. 52-9].) At the time of this sale, Cookeville Honda disclosed no odometer reading to OBX Chevrolet Buick.³ (Id. ¶ 27(f); see also id. ex. I.) When Cookeville Honda acquired the truck, the mileage was 31,532, and that number increased as the truck "was driven one or more miles by employees, or agents or potential customers of Cookeville Honda." (Id. ¶ 27(d)-(e); see also id. ex. H.)

In February 2014, following Plaintiff's purchase, Autos by Nelson "contacted Cookeville Honda in order to get it to complete" the Tennessee Certificate of Title Extension Form. (Id. ¶ 27(u).) The odometer reading's omission had resulted in "a title that was branded 'Not Actual' mileage" (id. ¶ 20),⁴ with which Plaintiff confronted Autos by Nelson (id. ¶¶ 21, 27(u)).⁵ Autos by Nelson sought the completed form "so the Not Actual title brand could be 'fixed'." (Id. ¶ 27(u).) Plaintiff elaborates that Autos by Nelson, confronted with the title brand, "believed it could conspire with Cookeville Honda and OBX Chevrolet Buick, to produce a false [Tennessee Certificate of Title Extension Form], and get the . . . title 'fixed', and that [Plaintiff] would then go away." (Id. ¶ 46.) In March 2014, Cookeville Honda sent (by means not stated in the Record) Autos by Nelson a completed Tennessee Certificate of Title Extension Form, bearing the same odometer reading given when Cookeville Honda bought the truck.⁶ (Id. ¶ 27(v). Compare id. ex. O [ECF No. 52-15], with id. ex. H.) OBX Chevrolet Buick received and signed the disclosure, which Autos by Nelson provided to the Virginia DMV, which issued a title without the "Not Actual" mileage brand. (See id. ¶ 27(w)-(y).)

It seems that Plaintiff theorizes Cookeville Honda's liability as follows:

• Count I: Cookeville Honda did not include an odometer disclosure when selling the truck (seeid. ¶ 62), and Cookeville Honda conspired with Autos by Nelson and OBX Chevrolet Buick "to deceive the Virginia DMV in order to remove the 'Not Actual' title brand" and "to clean up the truck's odometer history" (id. ¶ 63);

• Count II: Cookeville Honda intentionally misrepresented the truck's mileage and acted to conceal the actual mileage (see generallyid. ¶¶ 65-69); and

• Count III: Cookeville Honda failed to disclose the mileage and, later, misrepresented it to conceal fraud (id. ¶ 72(a); see generallyid. ¶¶ 70-74).

Otherwise,⁷ Cookeville Honda has no connection to the Commonwealth of Virginia. (See Browning Decl. ¶ 5.) It has no office space, mailing address, telephone number, employees, registered agent, or real property in Virginia.⁸ (Id. ¶¶ 5-6, 13.) It "does not have a Virginia business license to conduct business in the Commonwealth" (id. ¶ 7), and it "does not solicit business" or "engage in a persistent course of conduct" here (id. ¶ 8). Nor does Cookeville Honda "derive substantial revenue from goods used or consumed or services rendered in the Commonwealth" (id. ¶ 9) or "advertise its goods or services in the Commonwealth" (id. ¶ 10).

II. STANDARD OF REVIEW

"When personal jurisdiction is properly challenged under Rule 12(b)(2), the jurisdictional question is to be resolved by the judge, with the burden on the plaintiff ultimately to prove grounds for jurisdiction by a preponderance of the evidence." Carefirst of Md., Inc. v. Carefirst Pregnancy Ctrs., Inc., 334 F.3d 390, 396 (4th Cir. 2003).

[W]hen the court addresses the personal jurisdiction question by reviewing only the parties' motion papers, affidavits attached to the motion, supporting legal memoranda, and the allegations in the complaint, a plaintiff need only make a prima facie showing of personal jurisdiction to survive the jurisdictional challenge. When determining whether a plaintiff has made the requisite prima facie showing, the court must take the allegations and available evidence relating to personal jurisdiction in the light most favorable to the plaintiff.

Grayson v. Anderson, 816 F.3d 262, 268 (4th Cir. 2016) (citations omitted). "Although the standard may be lenient, a court 'need not credit conclusory allegations or draw farfetched inferences.'" Syngenta Crop Prot., LLC v. Willowood, LLC, 139 F. Supp. 3d 722, 727 (M.D.N.C. 2015) (quoting Masselli & Lane, PC v. Miller & Schuh, PA, No. 99-2440, 2000 WL 691100, at *1 (4th Cir. May 30, 2000) (per curiam)).

III. DISCUSSION

"'Personal jurisdiction' is the phrase used to express a court's power to bring a person into its adjudicative process." Noble Sec., Inc. v. MIZ Engage, Ltd., 611 F.Supp.2d 513, 525 (E.D. Va. 2009). Invoking "'an "affiliatio[n] between the forum and the underlying controversy,"'" Walden v. Fiore, 134 S. Ct. 1115, 1121 n.6 (2014) (alteration in original) (quoting Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919 (2011)), Plaintiff asserts the Court's specific personal jurisdiction over Cookeville Honda as follows⁹: Cookeville Honda, while in Tennessee, communicated a false odometer reading to Autos by Nelson, who was in Virginia, with Cookeville Honda knowing (or else it should have) that this misrepresentation would harm the purchaser in Virginia.

"A lawful assertion of personal jurisdiction over a defendant requires satisfying the standards of the forum state's long-arm statute and respecting the safeguards enshrined in the Fourteenth Amendment's Due Process Clause." Tire Eng'g & Distrib., LLC v. Shandong Linglong Rubber Co., Ltd., 682 F.3d 292, 301 (4th Cir. 2012).¹⁰ The Supreme Court of Virginia construes the Commonwealth's long-arm statute to extend personal jurisdiction as far as the Due Process Clause allows, Peninsula Cruise, Inc. v. New River Yacht Sales, Inc., 512 S.E.2d 560, 562 (Va. 1999) (collecting cases),¹¹ so the "test collapses into a single inquiry when Virginia is the forum state," Tire Eng'g & Distrib., LLC, 682 F.3d at 301.

"No State shall . . . deprive any person of life, liberty, or property, without due process of law." U.S. Const. amend. XIV, § 1. As relevant here, the Clause "constrains a State's authority to bind a nonresident defendant to a judgment of its courts." Walden, 134 S. Ct. at 1121.

The inquiry whether a forum State may assert specific jurisdiction over a nonresident defendant "focuses on 'the relationship among the defendant, the forum, and the litigation.'" For a State to exercise jurisdiction consistent with due process, the defendant's suit-related conduct must create a substantial connection with the forum State.

Id. at 1121 (emphasis added) (quoting Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 775 (1984)). The Fourth Circuit "has synthesized the due process requirements for asserting specific personal jurisdiction in a three part test," under which a court will "'consider (1) the extent to which the defendant purposefully availed itself of the privilege of conducting activities in the State; (2) whether the plaintiffs' claims arise out of those activities directed at the State; and (3) whether the exercise of personal jurisdiction would be constitutionally reasonable.'" Consulting Eng'rs Corp. v. Geometric Ltd., 561 F.3d 273, 278 (4th Cir. 2009) (quoting ALS Scan, Inc. v. Digital Serv. Consultants, Inc., 293 F.3d 707, 712 (4th Cir. 2002)). "This analysis is not mechanical; a court must weigh the totality of the facts before it." Perdue Foods LLC v. BRF S.A., 814 F.3d 185, 189 (4th Cir. 2016) (citations and internal...