Renee Lotenero v. BMW of North America, LLC

• Court: District Court, C.D. California
• Decided: July 26, 2022
• Docket: 2:22-cv-03274
• Status: Unknown

Opinion

Case 2:22-cv-03274-RSWL-AFM Document 15 Filed 07/26/22 Page 1 of 10 Page ID #:282 'O' 1 JS-6 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 11 CV22-3274-RSWL-AFMx 12 RENEE LOTENERO et al., 13 Plaintiffs, ORDER re: PLAINTIFFS’ MOTION TO REMAND [11] 14 v. 15 BMW OF NORTH AMERICA, LLC, 16 Defendant. 17 18 19 Renee Lotenero and Steve Siegrist (collectively, 20 “Plaintiffs”) bring this Action against BMW of North 21 America, LLC (“Defendant”) alleging violations of the 22 Song-Beverly Act (“SBA”). Currently before the Court is 23 Plaintiffs’ Motion to Remand (“Motion”) [11]. Having 24 reviewed all papers submitted pertaining to the Motion, 25 the Court NOW FINDS AND RULES AS FOLLOWS: the Court 26 GRANTS Plaintiffs’ Motion. 27 /// 28 1 Case 2:22-cv-03274-RSWL-AFM Document 15 Filed 07/26/22 Page 2 of 10 Page ID #:283

1 I. BACKGROUND

2 A. Factual Background

3 Plaintiffs are individuals residing in the State of 4 California. Notice of Removal, Ex. A (“Compl.”) ¶ 2, 5 ECF No. 1-2. Defendant is a limited liability company 6 organized in Delaware and has its principal place of 7 business in New Jersey. Notice of Removal (“Removal”), 8 ¶ 11, ECF No. 1. 9 Plaintiffs’ causes of action arise out of 10 Defendant’s warranty obligations in connection with a 11 2017 BMW i3 (“the Vehicle”), for which Defendant issued 12 a written warranty. Compl. ¶¶ 4, 14. Plaintiffs and 13 Defendant entered the warranty contract for the Vehicle 14 on February 22, 2020. Id. ¶ 14. The total sales price 15 of the Vehicle was $28,792.60. Removal ¶ 2. Plaintiffs 16 allege that during the applicable express warranty 17 period, the Vehicle developed defects. Compl. ¶ 15. 18 Plaintiffs further allege that Defendant was unable to 19 repair the Vehicle in conformity with the express 20 warranty and failed to replace the Vehicle or make 21 restitution in accordance with the SBA. Id. ¶¶ 18, 20. 22 B. Procedural Background 23 Plaintiffs filed their Complaint [1-2] in the 24 Superior Court of California, County of Los Angeles, on 25 April 12, 2022. On April 14, 2022, Plaintiffs served 26 Defendant with the Summons and Complaint [1-3]. 27 On May 13, 2022, Defendant removed [1] this Action 28 to this Court based on diversity jurisdiction. 2 Case 2:22-cv-03274-RSWL-AFM Document 15 Filed 07/26/22 Page 3 of 10 Page ID #:284

1 Plaintiffs filed the instant Motion to Remand [11] on

2 May 25, 2022. Defendant filed its Opposition [12] on

3 June 7, 2022, and Plaintiffs replied [13] on June 14, 4 2022. 5 II. DISCUSSION 6 A. Legal Standard 7 Civil actions may be removed from state court if 8 the federal court has original jurisdiction. See 9 Syngenta Crop Prot., Inc. v. Henson, 537 U.S. 28, 33 10 (2002) (“Under the plain terms of § 1441(a), in order 11 properly to remove [an] action pursuant to that 12 provision, . . . original subject-matter jurisdiction 13 [must] lie[] in the federal courts.”). Diversity 14 jurisdiction exists in all civil actions between: (1) 15 citizens of different states; and (2) where the amount 16 in controversy exceeds $75,000.00, exclusive of interest 17 and costs. 28 U.S.C. § 1332. If attorneys’ fees are 18 recoverable by the plaintiff (by statute or contract), 19 the fee may be included in determining the amount in 20 controversy, regardless of whether the fee award is 21 mandatory or discretionary. Galt G/S v. JSS 22 Scandinavia, 142 F.3d 1150, 1155-56 (9th Cir. 1998); see 23 also Morrison v. Allstate Indem. Co., 228 F.3d 1255, 24 1265 (11th Cir. 2000). When a statute authorizes 25 attorneys’ fees, a reasonable amount of those fees are 26 included in the amount in controversy. See Galt G/S, 27 142 F.3d at 1155. 28 “The burden of establishing jurisdiction falls on 3 Case 2:22-cv-03274-RSWL-AFM Document 15 Filed 07/26/22 Page 4 of 10 Page ID #:285

1 the party invoking the removal statute, which is

2 strictly construed against removal.” Sullivan v. First

3 Affiliated Sec., Inc., 813 F.2d 1368, 1371 (9th Cir. 4 1987) (internal citations omitted). Courts resolve all 5 ambiguities “in favor of remand to state court.” Hunter 6 v. Philip Morris USA, 582 F.3d 1039, 1042 (9th Cir. 7 2009) (citing Gaus v. Miles, Inc., 980 F.2d 564, 566 8 (9th Cir. 1992)). A removed case must be remanded “[i]f 9 at any time before final judgment it appears that the 10 district court lacks subject matter jurisdiction.” 28 11 U.S.C. § 1447(c). 12 B. Discussion 13 Plaintiffs move to remand this Action, arguing that 14 the Court lacks subject matter jurisdiction under 28 15 U.S.C. § 1332. Pls.’ Mem. of P. & A. (“Mot.”) 2:19-22, 16 ECF No. 11-1. Specifically, Plaintiffs assert that 17 Defendant failed to meet the $75,000 amount in 18 controversy threshold for diversity jurisdiction. Id. 19 at 2:9-12. Defendant, on the other hand, argues that it 20 has met the amount in controversy requirement given the 21 allegations made by Plaintiffs in their Complaint. 22 Opp’n 9:14-17, ECF No. 12. The parties do not dispute 23 that they are diverse. Accordingly, the Court focuses 24 its analysis only on whether Defendant has met the 25 jurisdictional minimum. 26 1. Amount in Controversy 27 When a complaint filed in state court alleges on 28 its face “damages in excess of the required 4 Case 2:22-cv-03274-RSWL-AFM Document 15 Filed 07/26/22 Page 5 of 10 Page ID #:286

1 jurisdictional minimum,” the amount pled controls unless

2 it appears “to a legal certainty” that the claim is for

3 less than the jurisdictional amount. Sanchez v. 4 Monumental Life Ins. Co., 102 F.3d 398, 402-04 (9th Cir. 5 1996). Conversely, “[w]here it is unclear or ambiguous 6 from the face of a state-court complaint whether the 7 requisite amount in controversy is pled, the removing 8 Defendant bears the burden of establishing, by a 9 preponderance of the evidence, that the amount in 10 controversy exceeds the jurisdictional threshold.” 11 Fritsch v. Swift Transp. Co. of Ariz., 899 F.3d 785, 793 12 (9th Cir. 2018) (citing 28 U.S.C. § 1446(c)(2)(B)). 13 Here, Plaintiffs assert several prayers for relief 14 in their Complaint but do not otherwise specify an 15 amount in controversy. See generally Compl. Thus, 16 Defendant must show that the jurisdictional minimum is 17 met by a preponderance of the evidence. See Singer v. 18 State Farm Mut. Auto Ins. Co., 116 F.3d 373, 376 (9th 19 Cir. 1997). In assessing whether Defendant has 20 satisfied its burden here, the Court “may consider facts 21 in the removal petition” and “summary-judgment-type 22 evidence relevant to the amount in controversy at the 23 time of removal.” Id. at 377 (quoting Allen v. R & H 24 Oil & Gas. Co., 63 F.3d 1326, 1335-36 (5th Cir. 1995)). 25 Defendant relies on the Complaint and Purchase 26 Agreement as evidence to show that the jurisdictional 27 minimum is met. Opp’n 7:18-20. Specifically, Defendant 28 relies on Plaintiffs’ claims for: (1) actual damages of 5 Case 2:22-cv-03274-RSWL-AFM Document 15 Filed 07/26/22 Page 6 of 10 Page ID #:287

1 $26,673.95; (2) a maximum civil penalty of two times the

2 actual damages (totaling $53,347.90); and (3) attorneys’

3 fees of at least $15,000.00, at a billable rate of $500 4 per hour. Id. at 11:3-6. The Court examines these 5 amounts in turn to determine whether they may be 6 included in the amount in controversy calculation. 7 a. Actual Damages 8 Actual damages pursuant to the SBA are the “amount 9 equal to the actual price paid or payable by the buyer” 10 for the subject vehicle, less the reduction in the 11 vehicle’s value “directly attributable to use by the 12 buyer.” Cal. Civ. Code § 1793.2(d)(2)(B)-(C). The 13 reduction is based on miles driven by the buyer before 14 the first attempted repair of the vehicle’s 15 nonconformity. Id. 16 Here, Defendant has brought forth evidence showing 17 that the total sales price of the Vehicle was 18 $28,792.60. See generally Notice of Removal, Ex. D 19 (“Purchase Agreement”), ECF No. 1-5; see also Decl. of 20 Kyle A. Fellenz (“Fellenz Decl.”) ¶ 7, ECF No. 12-1. 21 Defendant has also shown that Plaintiff drove the 22 Vehicle 8,830 miles before the first attempted repair.1 23 Fellenz Decl. ¶ 12. Applying the statutory multiplier 24 of 120,000 to the purchase price of the Vehicle 25 ($28,792.60), the mileage offset here is $2,118.65. See 26 Cal. Civ. Code § 1793.2(d)(2)(C). Therefore, the total

27 1 23,497 miles when the Vehicle was first brought in for 28 repair minus 14,667 miles when the Vehicle was purchased. 6 Case 2:22-cv-03274-RSWL-AFM Document 15 Filed 07/26/22 Page 7 of 10 Page ID #:288

1 actual damages, including the mileage offset

2 calculation, are $26,673.95. Accordingly, the Court

3 concludes that Defendant has shown by a preponderance of 4 the evidence that $26,673.95 may be included in the 5 amount in controversy calculation. 6 b. Civil Penalty 7 A successful SBA plaintiff may be entitled to 8 recover civil penalties of up to twice the amount of the 9 actual damages. Cal. Civ. Code § 1794(c). However, 10 civil penalties cannot be assumed; a defendant must make 11 some effort to justify including civil penalties in the 12 jurisdictional analysis by a showing of willfulness. 13 D'Amico v. Ford Motor Co., No. CV 20-2985-CJC (JCx), 14 2020 WL 2614610, at *3 (C.D. Cal. May 21, 2020). Also, 15 many courts do not include a civil penalty in the 16 jurisdictional analysis unless the removing defendant 17 makes some showing that there is a possibility of civil 18 damages. See, e.g., Brass v. FCA US LLC, No. 19 EDCV211190JGBSPX, 2022 WL 622317, at *4 (C.D. Cal. Mar. 20 3, 2022) (citing Savall v. FCA US LLC, 2021 WL 1661051, 21 at *3 (S.D. Cal. Apr. 28, 2021)). 22 Here, Defendant argues that the Court should 23 include a maximum civil penalty in the amount in 24 controversy calculation based on the allegations in 25 Plaintiffs’ Complaint. Opp’n 12:2-4. In justifying 26 this amount, Defendant points to language in the 27 Complaint where Plaintiffs claim they “are entitled to a 28 civil penalty of up to two times the amount of actual 7 Case 2:22-cv-03274-RSWL-AFM Document 15 Filed 07/26/22 Page 8 of 10 Page ID #:289

1 damages” and that “[Defendant] willful[ly] fail[ed] to

2 comply with its responsibilities under the [SBA].”

3 Compl. ¶ 25. 4 Defendant has not made a sufficient showing to 5 include civil penalties in the amount in controversy 6 calculation. Other than referring to the general, 7 blanket allegations in Plaintiffs’ Complaint, Defendant 8 does nothing to justify an award of a civil penalty, let 9 alone the maximum amount of a civil penalty. See, e.g. 10 Brass, 2022 WL 622317 (declining to include civil 11 penalties in the amount in controversy calculation where 12 defendant merely pointed to allegations in the complaint 13 without offering further evidence); Sanchez, 2021 WL 14 5276829, at *1 (same); Castillo v. FCA USA, LLC, No. 19- 15 CV-151-CAB-MDD, 2019 WL 6607006, at *2 (S.D. Cal. Dec. 16 5, 2019) (same); Savall v. FCA US LLC, No. 21CV195 JM 17 (KSC), 2021 WL 1661051, at *3 (S.D. Cal. Apr. 28, 2021) 18 (declining to include civil penalties in the amount in 19 controversy calculation where defendant, “[o]ther than 20 referring to [p]laintiff's allegation that [it] acted 21 willfully . . . provide[d] no support for the likelihood 22 that a civil penalty based on its willfulness would 23 actually be awarded”). As such, Defendant has not shown 24 by a preponderance of the evidence that a civil penalty 25 of any kind should be included in the amount in 26 controversy. See Sullivan, 813 F.2d at 1371 (internal 27 citations omitted) (“The burden of establishing 28 jurisdiction falls on the party invoking the removal 8 Case 2:22-cv-03274-RSWL-AFM Document 15 Filed 07/26/22 Page 9 of 10 Page ID #:290

1 statute, which is strictly construed against removal.”).

2 Accordingly, the Court declines to include a civil

3 penalty in the amount in controversy calculation. 4 c. Attorneys’ Fees 5 “[A] court must include future attorneys' fees 6 recoverable by statute or contract when assessing 7 whether the amount in controversy requirement is met.” 8 Fritsch, 899 F.3d at 793–94. The SBA clearly states 9 that attorneys’ fees are included in SBA cases. Cal. 10 Civ. Code § 1794 (d) (“[T]he buyer shall be allowed by 11 the court to recover . . . attorney's fees.”). Further, 12 “[w]here the law entitles the prevailing plaintiff to 13 recover reasonable attorney[s’] fees, a reasonable 14 estimate of fees likely to be incurred . . . is part of 15 the . . . amount in controversy.” Brady, 243 F. Supp. 16 2d at 1011. 17 While reasonable attorneys’ fees may be included in 18 the amount in controversy calculation here, a finding as 19 to such fees is futile. See Farrales v. Ford Motor Co., 20 No. 21-CV-07624-HSG, 2022 WL 1239347, at *4 (N.D. Cal. 21 Apr. 27, 2022) (declining to consider attorneys’ fees in 22 the amount in controversy calculation because doing so 23 would not have been dispositive); Hall v. FCA US, LLC, 24 No. 116CV00684DADJLT, 2016 WL 4445335, at *4 (E.D. Cal. 25 Aug. 24, 2016) (same). Even if the Court decides to 26 include attorneys’ fees of $15,000—as suggested by 27 Defendant—the amount in controversy still falls well 28 short of the required jurisdictional threshold of 9 Case 2:22-cv-03274-RSWL-AFM Document 15 Filed 07/26/22 Page 10 of 10 Page ID #:291

1 $75,000.00.2 2 Therefore, Defendant has failed to meet the

3 requisite amount in controversy for this Court to 4 exercise diversity jurisdiction over the matter. The 5 Court must accordingly remand this Action to the 6 Superior Court of California. 7 III. CONCLUSION 8 Based on the foregoing, the Court GRANTS 9 Plaintiffs’ Motion to Remand. 10 IT IS SO ORDERED. 11 12 DATED: July 26, 2022 13 14 _/s_/ R_o_n_a_ld_ S_.W_._ L_e_w_________________ HONORABLE RONALD S.W. LEW 15 Senior U.S. District Judge 16 17 18 19 20 21 22 23 24 25 26 27 2 $15,000.00 in attorneys’ fees plus $26,673.95 in actual 28 damages would equal a total amount in controversy of $41,673.95. 10