IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF CALIFORNIA
August 11, 2009
ROBERT BARABINO, PLAINTIFF,
CITIZENS AUTOMOBILE FINANCE, INC., A CORPORATION; JP MORGAN CHASE BANK, A CORPORATION; AND DOES ONE THROUGH TWENTY, DEFENDANTS.
The opinion of the court was delivered by: Garland E. Burrell, Jr. United States District Judge
Plaintiff Robert Barabino moves to lift the stay imposed in this action, arguing "the grounds [for] the contingencies upon which this Court ordered a stay have been met" since this action was stayed because it was related to an earlier filed action in this district assigned to another judge. Plaintiff contends there is no longer justification for the stay because a stipulated judgment has been entered in the other action against the Seller Defendant, and the remaining Defendants filed for bankruptcy protection. (Pl. ['s] Mot. at 1.) Defendant JP Morgan Chase Bank ("JP Morgan") opposes the motion, but argues if the stay is lifted, JP Morgan and Citizens Automobile Finance, Inc.'s ("Citizens") Federal Rule of Civil Procedure ("Rule") 12(b)(6) motions to dismiss filed in January 2009, should be granted since Plaintiff's claims are barred by applicable statute of limitations. (Def. ['s] Mot. at 2.) For the reasons that follow, Plaintiff's motion to lift the stay will be granted and the referenced fully briefed dismissal motions are considered.
On November 3, 2004, Plaintiff filed the earlier action ("Barabino I") against Dan Gamel, Inc., Fleetwood Enterprises, and Fleetwood Motor Homes of Pennsylvania, Inc., which is assigned to another judge in this district; that judge declined to relate Barabino I to the instant action ("Barabino II"). Plaintiff conceded that the claims filed in Barabino II should have been filed in Barabino I at the February 23, 2009 hearing scheduled in Barabino II on the above referenced dismissal motions. At that hearing, Plaintiff's counsel stated he filed Barabino II (which was removed from state court) because he did not think the Barabino I judge would have authorized him to amend his complaint in Barabino I to allege the allegations contained in Barabino II. Barabino II was filed November 28, 2008 against JP Morgan and Citizens (collectively "Defendants").
Plaintiff alleges in Barabino II, under the Federal Trade Commission Holder Rule, 16 C.F.R. § 433.2, that Defendants as "holders of the consumer credit contract [, were] subject to all claims and defenses which the debtor could assert against the seller of goods or services obtained . . . ." (Compl. ¶ 16.) Plaintiff alleges that Defendants in Barabino II are subject to the same claims Plaintiff alleged against Dan Gamel, Inc., (the "Seller Defendant") in Barabino I because they are holders of the Retail Sales Installment Contract and are assignees of the Seller Defendant's rights under the Contract. (Pl. ['s] Opp'n 7:13-14.)
On February 26, 2009, an Order issued in Barabino II denying each Defendant's dismissal motion without prejudice since it was evident that the claims in Barabino II should have been filed in Barabino I and Plaintiff had no right to litigate Barabino II while Barabino I was still pending. (February 26, 2009 Order; relying on Adams v. California Dep't of Health Services, 487 F.3d 686, 688 (2007) ("Plaintiffs generally have no right to maintain two separate actions involving the same subject matter at the same time in the same [federal] court . . . .").) Therefore, Barabino II was stayed pending resolution of Barabino I. (Id. at 5:13.)
The parties agree the claims against the Seller Defendant in Barabino I have resulted in a judgment in favor of Plaintiff. But JP Morgan contends Barabino I is still pending because Plaintiff has not complied with an order issued in Barabino I concerning the remaining Barabino I Defendants that filed for bankruptcy protection. In light of the status of Barabino I, the stay is lifted. Therefore, the Barabino II dismissal motions will be considered as requested.
Defendants argue Barabino II should be dismissed because Plaintiff's claims under the Song-Beverly Consumer Warranty Act, Cal. Civ. Code § 1790 et seq., the Magnuson-Moss Warranty Act, 15 U.S.C. §§ 2301-2312, the Consumer Legal Remedies Act ("CLRA"), Cal. Civ. Code § 1750 et seq., and his common law fraud claim, are barred by the applicable statute of limitations. (JP Morgan ['s] Mot. to Dismiss at 2; Citizens ['] Mot. to Dismiss at 2.) Plaintiff counters since he timely filed claims against the Seller Defendant in Barabino I, the Defendants in Barabino II are liable for allegations Plaintiff asserted against the seller in Barabino I, since the Barabino II Defendants are assignees of the credit contract that Plaintiff alleged in Barabino I should be rescinded. (Pl. ['s] Opp'n to JP Morgan ['s] Mot. to Dismiss at 8; Pl. ['s] Opp'n to Citizens ['] Mot. to Dismiss at 7.) The essence of Plaintiff's argument is that when he filed the Barabino I case, that filing tolled the statute of limitations period for the claims in Barabino II. Specifically, Plaintiff relies on the Federal Trade Commission ("FTC") Holder Rule as his support for this argument, contending since the Barabino II Defendants are holders of the credit contract, a contract Plaintiff sought to have rescinded in Barabino I, the filing of Barabino I tolled all claims against the Barabino II Defendants. Plaintiff's reliance on the FTC's Holder Rule for his statute of limitations tolling argument is misplaced, as the FTC guidelines reveal:
[T]he Rule does not create new rights or defenses. The words 'Claims and Defenses' [in the Rule] . . . are not given any special definition by the [FTC]. The phrase simply incorporates those things which, as a matter of other applicable law, constitute legally sufficient claims and defenses in a sales transaction. Appropriate statutes, decisions, and rules in each jurisdiction will control, and the pertinent rules of law and equity, including . . . statutes of limitations, will continue to apply.
Preservation of Consumers' Claims and Defenses, 40 Fed. Reg. 20,023-024 (May 14, 1976) (to be codified at 16 C.F.R. pt. 433). Therefore, the FTC Holder Rule does not toll any statute of limitations period applicable to a claim in Barabino II.
Defendants seek dismissal of Plaintiff's claims under the Song Beverly Consumer Warranty Act and the Magnuson-Moss Warranty Act, arguing each claim is barred by a four year statute of limitations period. (JP Morgan ['s] Mot. to Dismiss at 2; Citizens ['] Mot. to Dismiss at 2.) Since both Acts do not contain their own statute of limitations, "the court must borrow a limitation period from an analogous state limitations period." Lampf, Pleva, Lipkind, Prupis & Petigrow v. Gilbertson, 501 U.S. 350, 355 (1991). California Uniform Commercial Code § 2725 provides the most analogous statute of limitations. Section 2725 prescribes "an action for breach of any contract for sale must be commenced within four years after the cause of action has accrued . . . [, which occurs] when the breach occurs, regardless of the aggrieved party's lack of knowledge of the breach." Since Plaintiff's claims under these Acts are based on a breach of warranty involved with Plaintiff's purchase of a recreational vehicle from the Seller Defendant in Barabino I, both Acts are governed by the four year limitations period in § 2725. Jensen v. BMW of North Am., 35 Cal. App. 4th 112, 132 (1995) (stating "[a]n action for damages under the [Song Beverly Consumer Warranty] Act is governed by the four year limitations period . . . [under] § 2725."); Mendelson v. Country Coach, Inc., 2007 U.S. Dist. LEXIS 96148 (C.D. Cal. 2007) (stating California applies the four year limitations period under § 2725 for claims brought under the Magnuson-Moss Warranty Act). Defendants argue since the breach of warranty about which Plaintiff complains in Barabino I is alleged to have occurred no later than November 3, 2004, the date on which Barabino I was filed, these claims alleged in Barabino II are barred by the four year statute of limitations period because Plaintiff waited until November 26, 2008 to file Barabino II. Defendants are correct. Therefore, this portion of each Defendant's motion to dismiss is granted.
Defendants also seek dismissal of Plaintiff's CLRA claim, arguing it is barred by the Act's three year statute of limitations prescribed in Cal. Civ. Code § 1783. (JP Morgan ['s] Mot. to Dismiss at 5; Citizens ['] Mot. to Dismiss at 2.) Section 1783 states "[a]ny action brought under the specific provisions of § 1770 shall be commenced not more than three years from the date of the commission of such method, act or practice." Plaintiff admits in paragraph 10 in the Barabino II complaint that he filed the same CLRA claim against the Seller Defendant in Barabino I that he filed against the Defendants in Barabino II. This reveals Plaintiff had knowledge of the commission of the CLRA claim no later than November 3, 2004, the date on which Barabino I was filed. Therefore, the three year limitations period ran on November 3, 2007, more than one year before Plaintiff filed Barabino II, making this claim untimely. Accordingly, this portion of each Defendant's motion to dismiss is granted.
Finally, Defendants seek dismissal of Plaintiff's common-law fraud claim, arguing Cal. Code of Civ. Proc. § 338(d)'s three year statute of limitations bars this claim. (Mot. to Dismiss at 5; Citizens ['] Mot. to Dismiss at 2.) Section § 338(d) provides that a fraud claim accrues when the aggrieved party discovers facts constituting the fraud. See Cal. Code of Civ. Proc. § 338(d). Plaintiff admits in paragraph 10 in the Barabino II complaint that he filed the same fraud claim against the Seller Defendant in Barabino I that he filed against the Defendants in Barabino II. This reveals Plaintiff's discovery of the fraud and thus the accruing of the statute of limitations, occurred no later than November 3, 2004, the filing date of Barabino I. Having waited more than three years after discovering the fraud to file Barabino II on November 26, 2008, this portion of each Defendant's motion to dismiss is granted.
Since all claims have been dismissed, the Clerk of the Court shall enter judgment in favor of each Defendant and against Plaintiff.