Dipito LLC v. Manheim Riverside

District Court, S.D. California·Decided July 15, 2022·No. 3:21-cv-01205·Unknown

Opinion

DIPITO LLC, a Montana Limited Case No.: 3:21-cv-01205-H-JLB Liability Company d/b/a San Diego Motorwerks; CHIDIEBERE AMADI, an ORDER GRANTING BMW individual, FINANCIAL SERVICES NA, LLC’S MOTION TO DISMISS Plaintiffs,

v.

JERRY SIDERMAN, an individual; [Doc. No. 57.] BMW FINANCIAL SERVICES NA, LLC; CENTER AUTOMOTIVE, LLC,

d/b/a Center BMW; and DOES 1 through 200, inclusive, Defendants.

This is the Court’s third substantive order on a motion to dismiss in this litigation. In two previous orders issued on December 14, 2021 (Doc. No. 49, the “December Order”) and April 18, 2022 (Doc. No. 54, the “April Order”), the Court transferred or dismissed Plaintiffs’ various claims against current and former Defendants in this case. Now, after Plaintiffs’ second amended complaint, only two Plaintiffs remain: Dipito LLC (“SD Motorwerks”) and Chidiebere Amadi (“Amadi”). (Doc. No. 56, the “SAC”.) Plaintiffs pursue their remaining causes of action against BMW Financial Services NA, LLC (“BMW”), Jerry Siderman (“Siderman”), Center Automotive, Inc., and unnamed Does. (Id.) On May 23, 2022, BMW moved to dismiss Amadi’s claims against it in the SAC pursuant to Fed. R. Civ. P. 12(b)(6) for failure to state a claim upon which relief may be granted. (Doc. No. 57.) Plaintiffs filed their opposition on June 27, 2022. (Doc. No. 57) BMW filed its reply in support of its motion on July 11, 2022. (Doc. No. 58.) The Court, pursuant to its discretion under Local Rule 7.1(d)(1), determined that BMW’s motion to dismiss is fit for resolution without oral argument and submitted the motion on the parties’ papers. (Doc. No. 60.) BACKGROUND1 Plaintiffs are SD Motorwerks, an enterprise that purchase and resell vehicles, and Amadi, an individual that purchased the allegedly defective “Subject Vehicle” from SD Motorwerks.2 (SAC ¶¶ 1-2, 15.) The Subject Vehicle is a 2016 BMW M6 CPE. (Id. ¶ 6.) Defendant Jerry Siderman began leasing the Subject Vehicle on August 1, 2016; BMW financed his lease. (Id. ¶¶ 6, 21.) The Subject Vehicle was damaged during the lease. (Id. ¶¶ 18, 24, 29.) At the end of 2019, Siderman returned the Subject Vehicle to BMW. (Id. ¶ 21.) BMW then sold the car to SD Motorwerks via auction on January 28, 2020. (Id. ¶ 22.) Amadi purchased the Subject Vehicle from SD Motorwerks on February 4, 2020. (Id. ¶ 28.) Over the next six months, Amadi serviced the Subject Vehicle at BMW locations on 11 occasions and spent at least several thousand dollars on repairs. (Id. ¶¶ 30-40.) The auctioneer, Manheim Auto Auctions (“Manheim”), required that auction participants follow the arbitration rules of the National Auto Auction Association (“NAAA”) and their Terms and Conditions. (Id. ¶ 48.) The NAAA Arbitration Policy requires a vehicle seller to “disclose permanent structural damage, any structural alterations, structural repairs or replacements[.]” (Ex. M to SAC at 11.) Plaintiffs allege

1 The Court extensively reviewed the parties and factual allegations in this case in the December and April Orders. Here, the Court only summarizes allegations in the SAC as necessary. 2 As of the SAC, the entity “Euromotorwerks” and the individuals Richard John Hagen that BMW violated the NAAA rules when it failed to disclose “hidden damage” to the Subject Vehicle when it knew or should have known of those damages. (Id. ¶ 20.) I. Legal Standard BMW moves to dismiss several of Plaintiffs’ claims pursuant to Fed. R. Civ. P. 12(b)(6) for failure to state a claim upon which relief may be granted. In order to survive a Rule 12(b)(6) motion to dismiss, a complaint must contain “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Dismissal is appropriate where “the complaint lacks a cognizable legal theory or sufficient facts to support a cognizable legal theory.” Mendiondo v. Centinela Hosp. Med. Ctr., 521 F.3d 1097, 1104 (9th Cir. 2008). In reviewing the plausibility of a complaint, courts must “accept factual allegations in the complaint as true and construe the pleadings in the light most favorable to the nonmoving party.” Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008). But courts do not accept as true allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences. In re Gilead Scis. Secs. Litig., 536 F.3d 1049, 1055 (9th Cir. 2008). Additionally, claims sounding in fraud are subject to the heightened pleading requirements of Fed. R. Civ. P. 9(b), which requires that a plaintiff alleging fraud “must state with particularity the circumstances constituting fraud.” Fed. R. Civ. P. 9(b); see Kearns v. Ford Motor Co., 567 F.3d 1120, 1124 (9th Cir. 2009). To satisfy the heightened standard under Rule 9(b), the allegations must be “specific enough to give defendants notice of the particular misconduct which is alleged to constitute the fraud charged so that they can defend against the charge and not just deny that they have done anything wrong.” Semegen v. Weidner, 780 F.2d 727, 731 (9th Cir. 1985). Thus, claims sounding in fraud must allege “an account of the time, place, and specific content of the false representations as well as the identities of the parties to the misrepresentations.” Swartz v. KPMG LLP, 476 F.3d 756, 764 (9th Cir. 2007) (per curiam) (internal quotation marks omitted); see also Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1106 (9th Cir. 2003) (“Averments of fraud must be accompanied by the who, what, when, where, and how of the misconduct charged.”) (internal quotation marks omitted). II. Amadi’s Claim of Third-Party Beneficiary Status In the April Order, this Court concluded that Plaintiffs failed to adequately allege that Amadi was a third-party beneficiary of the sale agreement between BMW and SD Motorwerks. (April Order at 5.) That remains the case even after amendment. An intended third-party beneficiary of a contract has a right of action. Cal. Civ. Code § 1559. “To sue as a third-party beneficiary of a contract, the third party must show that the contract reflects the express or implied intention of the parties to the contract to benefit the third party.” Comer v. Micor, Inc., 436 F.3d 1098, 1102 (9th Cir. 2006) (citation omitted). The Court may evaluate the intent of the parties by “reading the contract as a whole in light of the circumstances under which it

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