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Kauhsen v. Aventura Motors

June 7, 2010

HEINZ KAUHSEN, D/B/A CLASSIC RACING CARS, PLAINTIFF,
v.
AVENTURA MOTORS, INC., DEFENDANT.



The opinion of the court was delivered by: Hurley, Senior District Judge

MEMORANDUM & ORDER

Plaintiff Heinz Kauhsen d/b/a/ Classic Racing Cars ("Plaintiff") commenced this action asserting claims for breach of contract, fraud, promissory estoppel and unjust enrichment. Presently before the Court is defendant Aventura Motors, Inc.'s ("Defendant") motion for an order (1) "[d]ismissing plaintiff's Summons and Complaint as they lack proper jurisdiction, as a matter of law, pursuant to U.S. Code title 28 Section 1332(a) and Part 1 Article 2(b) of the United Nations Convention on Contracts for the International Sale of Goods"; (2) "[s]etting aside plaintiff's Default Judgment and Order pursuant to Rule 60(b) of the Federal Rules of Civil Procedure granted against the defendant . . . on December 1, 2009"; and (3) "[v]acating plaintiff's Default Judgment and Order granted pursuant to Rule 55(b) of the Federal Rules of Civil Procedure against the defendant . . . on December 1, 2009." For the reasons set forth below, the motion is denied.

Background

I. Procedural History

Plaintiff commenced this action on September 23, 2009 seeking damages in the amount of $147, 560.06 plus interest, costs, and attorney's fees based on Defendant's alleged "breach of contract for the international sale of goods and the [Defendant's] fraud to the [Plaintiff's] detriment." (Complaint at 1.) Jurisdiction is premised on diversity of citizenship; Plaintiff is a German citizen and Defendant is a New York corporation, with its principal place of business in Southampton, New York. (Complaint ¶¶ 3 &4.) As alleged in the complaint, Plaintiff's claims arise from his purchase from Defendant, on eBay, of "an alleged 1955 Porsche 356 Pre A Cabriolet, VIN # 60641" for $95,000.00 (Complaint ¶¶ 5, 12, 13.) Plaintiff alleges that Defendant promised to sell and deliver a 1955 Porsche 356 Pre A Cabriolet, VIN # 60641 that (1) was "absolutely beautiful;" (2) had "received a rotisserie restoration[*fn1 ] in 1999;" (3) had a "Porsche Certificate of Authenticity;" and (4) was "equipped with a fully-assembled, running Porsche 356 Pre A 1500cc engine #33287 in good condition having a market value of $25,000." (Complaint ¶27.) In breach of the contract between the parties, the Porsche was in poor condition, had not received a rotisserie restoration within the last ten years, did not have a certificate of authenticity, and had a rusty 356 1600cc engine (which was not engine #33287) in poor condition with a market value of only $1700.00. (Complaint ¶ 28.)

The summons and complaint were served on Defendant on September 30, 2009 by delivering a copy to a managing agent at the address set forth in the complaint as the Defendant's principal place of business.

On November 4, 2009, Plaintiff sought and received a notation of default pursuant to Fed. R. Civ. P. 55(a). On November 11, 2009, Plaintiff moved for a default judgment, serving a copy of the motion on both Defendant and defense counsel. (Dkt. No. 6.) The Court granted the motion for a default judgment and referred the matter to Magistrate Judge Orenstein for an inquest on damages. On December 14, 2009 Judge Orenstein issued an Order setting the hearing on damages for April 13, 2010. Thereafter, the inquest was reasssigned to Magistrate Judge Boyle who issued an Order on March 8, 2010 directing, inter alia, the service and filing of a statement of the amount of damages, including attorney's fees, sought by the Plaintiff and directing Plaintiff to serve a copy of the Order on all parties and file proof of service thereof. In accordance with Judge Boyle's Order, Plaintiff served the Order and filed proof of service on March 8, 2010. On April 2, 2010, Defendant filed the instant motion.*fn2

II. Defendant's Motion

In support of the motion, Defendant filed an affirmation of counsel.*fn3 According to the affirmation, defense counsel was retained "to handle all legal actions brought for or against [Defendant] prior to the present action pending before this court," and [p]rior to the filing of this action, counsel tried on several occasions to settle all matters with plaintiff without success." (Astarita Affirm. ¶¶ 14-15.) On September 23, 2009 when the action was commenced, counsel "had been incapacitated as a result of medical misdiagnosis requiring a hernia operation and then underwent major surgery to repair a fractured hip." (Id. ¶15.) "The surgery required installation of rods, screws and plates to hold the fracture in place." (Id. ¶ 16.) Counsel "remained incapacitated for weeks before undergoing months of physical rehabilitation. It was during this time that plaintiff moved his action along to the present hearing date of April 13, 2010. Therefore, because of [counsel's] inability to defend this action due to medical reasons, and responding back through motion practice within a reasonable time of said decision, (approximately 4 months) [counsel] request[s] this court to dismiss plaintiff's cause of action due to improper jurisdiction, or set aside and vacate the present Default Judgment granted by the court to plaintiff and permit this action to be adjudicated on the merits, improper jurisdiction, or set aside and vacate the present Default Judgment granted by the court . . . ." (Id. ¶¶ 17-18.)

With respect to the assertion that this Court lacks jurisdiction, it is not the existence of diversity that Defendant challenges but rather the existence of an amount in controversy in excess of $75,000.00. According to the Defendant, Plaintiff has suffered damages at best in the amount of $54,740.06. Finally, Defendant asserts that (a) notwithstanding the complaint's allegation to the contrary, the United Nations Convention on Contracts for the International Sale of Goods is inapplicable because it does not apply to sales by auction and (b) if applicable, under the Convention, Plaintiff could have withdrawn his acceptance to the offer on the inspection date and returned the vehicle.

Discussion

I. Dismissal for Lack of Jurisdiction is Denied

Under 28 U.S.C. § 1332(a) federal jurisdiction lies where the parties are of diverse citizenship and "where the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs." In determining defendant's challenge to the amount in controversy, the Court must apply the "legal certainty" test:

"The rule governing dismissal for want of jurisdiction in cases brought in the federal court is that unless the law gives a different rule, the sum claimed by the plaintiff controls if the claim is apparently made in good faith. It must appear to a legal certainty that the claim ...


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