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DANCE v. U.S. INTL. MOTORS

October 28, 1986

MICHAEL W. DANCE, Plaintiff,
v.
U.S. INTERNATIONAL MOTORS, Defendant



The opinion of the court was delivered by: GREEN

 This matter is before the Court on defendant U.S. International Motors' ("U.S. Motors") motions to dismiss, *fn1" plaintiff's oppositions thereto, defendant's reply brief, and the entire record herein.

 Plaintiff filed this suit against defendant U.S. Motors for breach of contract, breach of implied warranty of merchantability, negligent selection and installation, and fraud. Jurisdiction was based on diversity jurisdiction, 28 U.S.C. § 1332 (1976), and federal question jurisdiction under the Magnuson-Moss Warranty-Federal Trade Commission Improvement Act ("Magnuson-Moss Act"), 15 U.S.C. § 2310(d) (1982). *fn2"

 The gravamen of the complaint is that plaintiff contracted with defendant to purchase a 250 Mercedes Benz automobile engine for delivery and installation at $1,610. Plaintiff alleges that defendant breached that contract when it failed to provide the agreed upon engine and instead installed a 230 Mercedes Benz engine. Upon discovery of the 230 Mercedes Benz engine, plaintiff further alleges that he notified the defendant but the latter was "unwilling to remedy the situation and provide plaintiff with a Mercedes Benz 250 motor." Amended Complaint para. 13. Plaintiff claims that he has suffered numerous and continuous problems with his car as a result of the breach and through no fault of his own. Plaintiff seeks $25,000 in compensatory damages and $100,000 in punitive and exemplary damages.

 Defendant U.S. Motors has now moved to dismiss the complaint for lack of subject matter jurisdiction. It contends that no diversity of citizenship jurisdiction exists because both plaintiff and defendant are citizens of the District of Columbia. Renewed Motion to Dismiss Complaint paras. 2-4. Furthermore, defendant argues that no federal question jurisdiction exists because "the amount in controversy, $1,610.00, [the cost of the Mercedes Benz engine] independent of punitive damages, fails to meet the $50,000.00 minimum jurisdictional requirement of the Magnuson-Moss Act and that no basis for punitive damages is pled in the Amended Complaint." Id. para. 5 (citation to Act omitted). Defendant contends that Virginia law allows only recovery of punitive damages in a breach of contract action if there is proof of an independent, willful tort beyond the mere breach of duty imposed by contract and plaintiff has failed to allege such a tort.

 Plaintiff opposes defendant's motion to dismiss on two grounds. First, he argues that since "federal question jurisdiction [under the Magnuson-Moss Act] is proper in this case, the arguments regarding diversity of citizenship plaintiff submits, are irrelevant." Memorandum of Points and Authorities in Support of Opposition to Renewed Motion to Dismiss ("Plaintiff's Opposition") para. 1. Second, plaintiff states that the complaint sets forth clearly "an independent, willful tort" on the part of the defendant by its allegation of fraud in Count IV of the Amended Complaint. "Since defendant seems to concede by his pleading that 'an independent, willful tort, beyond the mere breach of duty imposed by contract' satisfies the requirements of the Magnuson-Moss Warranty Act . . .," plaintiff contends that federal jurisdiction under the Act is proper and the jurisdictional amount includes properly the plea for punitive damages. Id. paras. 2-4.

 It appears to the Court that there is no real dispute as to the lack of diversity jurisdiction under 28 U.S.C. § 1332. Both parties are citizens of the District of Columbia and no diversity jurisdiction exists. Plaintiff resides in the District of Columbia, Amended Complaint para. 5, and defendant U.S. Motors is incorporated in the District of Columbia. See Renewed Motion to Dismiss para. 3. The Court, therefore, will not address that issue and will focus its attention instead on whether there is federal question jurisdiction under the Magnuson-Moss Act in this action.

 "The Magnuson-Moss Act was promulgated to increase consumer rights and protections by imposing minimum standards for manufacturers' warranties and by providing various avenues for consumer redress." Walsh v. Ford Motor Co., 627 F. Supp. 1519, 1522 (D.D.C. 1986) (Green, June J.). A plaintiff must meet certain requirements in order for a federal court to have jurisdiction under the Act. These jurisdictional limitations are embodied in 15 U.S.C. § 2310(d)(3):

 
(3) No claim shall be cognizable in a suit brought under paragraph (1)(B) of this subsection --
 
(A) if the amount in controversy of any individual claim is less than the sum or value of $25;
 
(B) if the amount in controversy is less than the sum or value of $50,000 (exclusive of interests and costs) computed on the basis of all claims to be determined in this suit; or
 
(C) if the action is brought as a class action, and the number of named plaintiffs is less than one hundred.

 (Emphasis added).

 An examination of the legislative history reveals that the jurisdictional provisions serve two purposes: "1) to avoid trivial or minor actions being brought as class actions in the federal district courts; and, 2) to overcome the absence of an amount in controversy requirement in 28 U.S.C. § 1337, since the Magnuson-Moss Warranty Act is an act regulating commerce." Novosel v. Northway Motor Car Corp., 460 F. Supp. 541 (N.D.N.Y. 1978) (citing H.R. Rep. No. 1107, 93d Cong., 2d Sess. 42 (1974), reprinted in 1974 U.S. Code Cong. & Adm. News 7724). The Court notes, however, that the Act and its legislative history remain silent as to ...


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