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Sides v. Carfax

United States District Court, Fifth Circuit

December 16, 2013

ELDON SIDES, Plaintiff,
v.
CARFAX, Defendant.

MEMORANDUM OPINION

SHARION AYCOCK, District Judge.

Plaintiff Eldon Sides filed this suit alleging fraud, misrepresentation, fraudulent concealment, and negligent misrepresentation against a car dealership, the dealership's general manager, and Carfax for allegedly making false statements as to the prior damage on a car he bought. All defendants, except Carfax, have been voluntarily dismissed. Carfax has filed a Motion to Dismiss for Failure to State a Claim [13] as to the original Complaint, and a Motion to Dismiss for Failure to State a Claim as to Plaintiff's First Amended Complaint [18]. Plaintiff responded, albeit three months later, [1] and filed a Motion for Refusal or Continuance under Rule 56(f) [28] asserting that because no discovery had been propounded the Motion to Dismiss was premature.

After reviewing the motions, responses, rules and authorities, the Court GRANTS Carfax's Motion to Dismiss [18] and DENIES Plaintiff's Motion for Refusal or Continuance under Rule 56(f).[2] All other motions are terminated as MOOT.

Factual and Procedural Background

Plaintiff Eldon Sides purchased a previously-owned vehicle from Carlock Nissan of Tupelo. During the negotiations for the price of the vehicle, Jeff Adams, General Manager of Carlock Nissan, produced a Vehicle History Report from Carfax, Inc.'s website. The Report indicates "[n]o accidents or damage reported to Carfax" and "[n]o structural damage reported to Carfax." The Report further indicates that "Not all accidents/issues are reported to Carfax." Plaintiff asserts that the Report indicates that the vehicle was not involved in any accidents, and that there existed no structural or other damage. Plaintiff alleges that after purchasing the vehicle, a "trusted collision specialist" found that the vehicle had been "significantly damaged" and that damage devalued the car.

Carfax now seeks dismissal pursuant to both Federal Rules of Civil Procedure 12(b)(6) and 9(b).

Motion to Dismiss Standard

To withstand a motion to dismiss under Rule 12(b)(6), "a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atlantic Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (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." Id., 129 S.Ct. 1937; see also In re Great Lakes Dredge & Dock Co. LLC , 624 F.3d 201, 210 (5th Cir. 2010) ("To be plausible, the complaint's [f]actual allegations must be enough to raise a right to relief above the speculative level.'") (quoting Twombly , 550 U.S. at 555). The plausibility standard is not akin to a "probability requirement, " but it asks for more than a sheer possibility that a defendant has acted unlawfully. Where a complaint pleads facts that are "merely consistent with" a defendant's liability, it "stops short of the line between possibility and plausibility of entitlement to relief.'" Id., 129 S.Ct. 1937 (quoting Twombly , 550 U.S. at 556-57, 570).

A complaint containing mere "labels and conclusions, or a formulaic recitation of the elements" is insufficient. Bowlby v. City of Aberdeen , 681 F.3d 215, 219 (5th Cir. 2012) (citation and internal quotation marks omitted). Although courts are to accept all well-pleaded facts as true and view those facts in the light most favorable to the nonmoving party, courts are not required "to accept as true a legal conclusion couched as factual allegation." Randall D. Wolcott, M.D., P.A. v. Sebelius , 635 F.3d 757, 763 (5th Cir. 2011) (citation omitted). Ultimately, the court's task "is to determine whether the plaintiff has stated a legally cognizable claim that is plausible, not to evaluate the plaintiff's likelihood of success." In re McCoy , 666 F.3d 924, 926 (5th Cir. 2012) (citing Lone Star Fund V (U.S.), L.P. v. Barclays Bank PLC , 594 F.3d 383, 387 (5th Cir. 2010)), cert. denied, 133 S.Ct. 192, 184 L.Ed.2d 38 (2012).

The Court's analysis is "generally confined to a review of the complaint and its proper attachments." Lane v. Halliburton , 529 F.3d 548, 557 (5th Cir. 2008). Because the Carfax Vehicle History Report was attached to Plaintiff's Amended Complaint, the Court reviews that document in addition to the allegations contained in the Amended Complaint.

Discussion and Analysis

Plaintiff makes a claim against Carfax for fraud, misrepresentation, fraudulent concealment, negligent misrepresentation, and punitive damages. Because this is a case of diversity jurisdiction, the Court must apply state substantive law pursuant to the "Erie Doctrine." Krieser v. Hobbs , 166 F.3d 736, 739 (5th Cir. 1999) (citing Erie R. Co. v. Tompkins , 304 U.S. 64, 79-80, 58 S.Ct. 817, 82 L.Ed. 188 (1938)).

To sustain a claim for fraudulent misrepresentation, Mississippi law requires Plaintiff to show: "(1) a representation (2) that is false (3) and material (4) that the speaker knew was false or was ignorant of the truth (5) combined with the speaker's intent that the listener act on the representation in a manner reasonably contemplated (6) combined with the listener's ignorance of the statement's falsity (7) and the listener's reliance on the statement as true (8) with a right to rely on the statement, and (9) the listener's proximate injury as a consequence." Moran v. Fairley , 919 So.2d 969, 975 (Miss. Ct. App. 2005).

Plaintiff contends that Carfax, Inc., made "representations as to the accuracy and completeness of their Vehicle History Reports. These representations were false and material." Based on the pleadings, the Vehicle History Report is Plaintiff's only basis for the misrepresentation claim against Carfax. In other words, Plaintiff has failed to plead that he had any other dealings or communications with Carfax other than the Carfax Report. Plaintiff further asserts that Carfax "knew that their ...


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