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Winn v. Chrysler Group

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF CALIFORNIA


April 8, 2010

DANIEL STACEY WINN, INDIVIDUALLY AND AS SUCCESSOR IN INTEREST TO PETRA MONIKA WINN, DECEASED, KORY MICHAEL WINN, INDIVIDUALLY AND AS SUCCESSOR IN INTEREST TO PETRA MONIKA WINN, DECEASED, BREEONNA WINN, INDIVIDUALLY AND AS SUCCESSOR IN INTEREST TO PETRA MONIKA WINN, DECEASED, ERIKA WINN, INDIVIDUALLY AND AS SUCCESSOR IN INTEREST TO PETRA MONIKA WINN, DECEASED, PLAINTIFFS,
v.
CHRYSLER GROUP, LLC, A DELAWARE CORPORATION, SUCCESSOR IN INTEREST TO DAIMLER CHRYSLER CORPORATION; MAGNA POWERTRAIN, INC.; MAGNA INTERNATIONAL OF AMERICA, INC., ALSO KNOWN AS MAGNA POWERTAIN; GREAT VALLEY CHRYSLER JEEP, AN UNKNOWN BUSINESS ENTITY; ENTERPRISE RENT-A-CAR COMPANY, A CALIFORNIA CORPORATION; S.J. DENHAM, INC., A CALIFORNIA CORPORATION, DEBORAH MATISENGLE; ET AL., DEFENDANTS.

The opinion of the court was delivered by: Morrison C. England, Jr. United States District Judge

ORDER

By Memorandum and Order filed December 24, 2009, this Court granted Plaintiffs' Motion to Remand the above-captioned matter back to the Superior Court of the State of California in and for the County of Shasta for further adjudication. On December 31, 2009, Defendant Chrysler Group, LLC ("Chrysler") submitted an Ex Parte Application asking that the remand order be stayed in order to permit further briefing. That request was granted on January 29, 2010, with the Court staying this matter pending its adjudication of a Motion for Reconsideration. Now before the Court is that reconsideration request, filed February 10, 2010.

A court should not revisit its own decisions unless extraordinary circumstances show that its prior decision was clearly erroneous or would work a manifest injustice. Christianson v. Colt Indus. Operating Corp., 486 U.S. 800, 816, 108 S.Ct. 2166, 100 L.Ed. 2d 811 (1988). This principle is generally embodied in the law of the case doctrine. That doctrine counsels against reopening questions once resolved in ongoing litigation. Pyramid Lake Paiute Tribe of Indians v. Hodel, 882 F.2d 364, 369 (9th Cir. 1989). Nonetheless, in certain limited situations the court may reconsider its prior decisions.

Reconsideration may be appropriate where 1) the court is presented with newly discovered evidence; 2) the court committed clear error or the initial decision was manifestly unjust; or 3) there is an intervening change in controlling law. See Turner v. Burlington N. Santa Fe R.R. Co., 338 F.3d 1058, 1063 (9th Cir. 2003); School Dist. No. 1J, Multnomah County v. ACandS, Inc., 5 F.3d 1255, 1263 (9th Cir. 1993) (citations and quotations omitted). Local Rule 230(j) similarly requires a party seeking reconsideration to demonstrate "what new or different facts or circumstances are claimed to exist which did not exist or were not shown upon such prior motion, or what other grounds exist for the motion," and "why the facts or circumstances were not shown at the time of the prior motion."

"Motions for reconsideration serve a limited function: to correct manifest errors of law or fact or to present newly discovered evidence." Ayala v. KC Envtl. Health, 426 F. Supp. 2d 1070, 1098 (E.D. Cal. 2006) (emphasis in original) (internal citations omitted). Mere dissatisfaction with the court's order, or belief that the court is wrong in its decision, are accordingly not sufficient. Reconsideration requests are addressed to the sound discretion of the district court. Turner v. Burlington N. Santa Fe R.R., supra, 338 F.3d at 1063. According to Chrysler, it initially emphasized Plaintiffs' successor liability claims in opposing Plaintiffs' Motion to Remand because in Chrysler's view those claims clearly ran counter to the terms of prior bankruptcy proceedings (which approved its purchase of assets from Chrysler's predecessor in interest, Chrysler Corp. LLC) and accordingly supported the exercise of federal jurisdiction in order to safeguard the bankruptcy court's orders. The successor liability claims against Chrysler were, however, dismissed at a point after briefing on the original Motion to Remand had been completed.

Given that change of circumstances, and in view of Chrysler's argument that it would not have relied so exclusively on the successor liability claims to support federal jurisdiction had it known those claims would be dismissed, the Court permitted this Motion in order to afford Chrysler the opportunity to show that a different result is indicated and that the Court should retain jurisdiction on the basis of Plaintiffs' breach of contract claims against Chrysler, alone.*fn1 Consequently, Chrysler urges that the Court reconsider its prior ruling based on facts that had not been previously adduced given the earlier complexion of this case.

In satisfying its burden in that regard, Chrysler primarily points to the fact that in purchasing its predecessor's assets, it did not expressly assume liabilities arising from the dealership agreement reached with one of the so-called "dealer" defendants involved in this case, Great Valley Chrysler Jeep ("Great Valley").

Chrysler argues that because it can assert that defense with regard to any liability it may have with respect to Great Valley, the Court should retain jurisdiction over this entire case,*fn2 despite the fact that the lawsuit admittedly only alleges claims grounded in state law, and despite the fact Chrysler does not contest that it assumed liability with respect to the other two named dealer defendants, R.J. Denham, Inc. and Enterprise Rent-aCar Company.*fn3

The gravamen of Chrysler's argument, then, is because any claims as to the Great Valley dealership agreement undermine the terms of the Sales Order as approved by the bankruptcy court, those claims "have a direct impact on the administration of the bankruptcy estate" and consequently fall within the bankruptcy court's "retained jurisdiction to interpret the force and effect of its Sales Order." Reply, 3:23-26.

This contention loses sight of what appears to be a relatively minor role of Great Valley in this case as a whole. As set forth in the Court's December 24, 2009 Memorandum and Order, this lawsuit is a wrongful death action which claims damages against the manufacturers/suppliers of the Chrysler vehicle driven by Plaintiffs' decedent, Petra Winn, at the time of ths subject accident.

Other named defendants include S.J. Denham, the dealership who bought the Chrysler from Enterprise Rent-a-Car and sold it to Ms. Winn, and the driver of the other vehicle involved in the accident, Deborah Matisengle. Great Valley's dealership role appears to be two layers removed from Petra Winn: the sales transaction it brokered was the initial purchase, by Enterprise. Enterprise, in turn, sold the vehicle to Denham and it was Denham that sold the car to Petra Winn herself. As indicated above, because Chrysler has already assumed the dealership agreements applicable to both Enterprise and Denham, only the first sales transaction (and the one arguably most remote from Petra Winn) falls within the purview of Chrysler's argument for invoking this Court's jurisdiction.

Under 28 U.S.C. § 1334(b), this Court has original, but not exclusive, jurisdiction over cases that either "arise under" or are "related to" bankruptcy cases under Title 11. Mann v. GTCR Golder Rauner, LLC, 483 F. Supp. 2d 884, 894 n.8 (D. Ariz. 2007). While this Court consequently has the discretion to retain this matter to the extent that it bears some relation to the bankruptcy proceedings of Chrysler's predecessor in interest (which it assuredly does), care must nonetheless be taken to avoid construing § 1334(b) too broadly so as to bring into federal court matters that should be left for state courts to decide. See, e.g., In Matter of FedPak Systems, Inc., 80 F.3d 207, 213-14 (7th Cir. 1996).

As stated in its December 24, 2009 Memorandum and Order, under principles of equitable remand it is proper for this matter to be adjudicated in state court. Equitable remand focuses on the consideration of several factors: "(1) the effect of the action on the administration of the bankruptcy estate; (2) the extent to which the issues of state law predominate; (3) the difficulty of applicable state law: (4) comity; (5) the relatedness or remoteness of the action to the bankruptcy case: (6) the existence of a right to jury trial; and (7) prejudice to the party involuntarily removed from state court. In the Matter of: Baptist Foundation of Arizona, 2000 WL 35575676 at *7 (D. Ariz. 1996), citing Williams v. Shell Oil Co., 169 B.R. 684, 692 (S.D. Cal. 1994).

As the Court has already explained, weighing these factors tips decisively in favor of remanding this matter back to state court. The actual debtor in bankruptcy, Chrysler Corp. LLC, is not even a party to this lawsuit. Plaintiffs' lawsuit asserts claims sounding exclusively in state law, and to the extent that bankruptcy is a potential issue at all, it affects only a single affirmative defense available to one defendant in this multiple-defendant case. The issue of bankruptcy is therefore, at best, an attenuated one. Finally, to the extent that a bankruptcy defense is appropriate as to Defendant Chrysler, there is no reason why the defense cannot be asserted in state court.

State law issues clearly predominate as a whole, and trying this case together in state court, in a forum that can adjudicate this entire matter through a unitary jury trial (a procedure not normally available in bankruptcy court), clearly favors concerns of both judicial economy and comity.

The only reason advanced by Chrysler for federal jurisdiction is to allow its single federal defense as to one defendant to be adjudicated by federal court. This is not enough to counter all the other reasons which plainly favor resolution in state court. Significantly, too, Chrysler has already assumed liability for the two other dealer defendants, Denham and Enterprise, and is therefore a proper defendant in state court on the breach of contract claims in any event.*fn4

For all the foregoing reasons, Defendant Chrysler's Motion for Reconsideration (Docket No. 43) is DENIED.*fn5 Plaintiffs' request that the Court assess costs against Chrysler for bringing this Motion is, however, also DENIED. Finally, the stay placed on remanding this case back to Shasta County is lifted. The case is transferred and the Clerk of this Court is ordered to close the file.

IT IS SO ORDERED.


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