ORDER ON DEFENDANT’S MOTION TO DISMISS
This cause comes before the Court on Defendant, Freightliner LLC’s (hereinafter “Freightliner”) Motion to Dismiss for Failure to State Cause of Action. (Dkt. 6) and response thereto (Dkt. 7).
STANDARD OF REVIEW
A district court should not dismiss a complaint unless it appears, “beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.”
See Conley v. Gibson,
In deciding a motion to dismiss, the court may only examine the four corners of the complaint.
See Rickman v. Precisionaire, Inc.,
In addition, a court must accept the plaintiffs well-pled facts as true and construe the complaint in the light most favorable tо the plaintiff.
See Scheuer v. Rhodes,
BACKGROUND
The following allegations, taken from the complaint and its attached exhibits, are considered true for the present purpose of deciding whether to dismiss Plaintiffs’ complaint.
See Beck v. Deloitte et al.,
Soon after driving their newly purchased Freightliner Vehicle, the Blands soon began experiencing defects, including faulty transmission and cruise control operations. 1 For 'each discovery, the Blands reported the defects to various Freightliner dealers around the country, requesting the repair of the newly purchased Freight-liner Vehicle. The defects and subsequent repair requests occurred on twenty-one separate occasions. To no avail, the mechanics attempted to properly restore the Freightliner Vehicle to an operable state. On January 24, 2001, the Blands notified Freightliner, through one of its dealerships, of their intent to rescind the purchase of the Freightliner Vehicle. At some point thereafter, the Blands initially filed a three-count lawsuit in state court requesting equitable and legal relief to compensate for the losses flowing from the *1206 defective Freightliner Vehicle. 2 The case was removed to federal court based upon diversity of citizenship. The Blands seek to rescind the contract for Freightliner’s failure to cure the defects. Alternatively, the Blands seek to revoke the acceptance of their new motor vehicle pursuant to Section 672.711, Florida Statutes (2001). Finally, thе Blands seek monetary damages for breach of express warranty pursuant to the terms of the manufacturer’s warranty that Freightliner provided.
In response, Freightliner, pursuant to the Federal Rules of Civil Procedure 12(b)(6), filed its Motion to Dismiss, on all three counts, claiming the Blands failed to state a claim upon which relief could be granted. Alternatively, Freightliner requests the case be transferred to a different forum, because it claims a lack of jurisdiction pursuant tó Section 47.051, Florida Statutes. This Court will take up each count and the choice of venue argument accordingly.
DISCUSSION
1. Plaintiffs’Complaint
a. Count I — Rescission
“The rescission of contract ‘amounts to the unmaking of a contract, or an undoing of it from the beginning, and not merely a termination...
Wilson v. Par Builders II, Inc.,
The fundamental requirements necessary to state a cause of action for rescission of contract are; (1) the character оr relationship of the parties; (2) the making of a contract; (3) the existence of fraud, mutual mistake, false representation, impossibility of performance, or other ground for rescission or cancellation; (4) the party seeking rescission had rescinded the contract and notified the other party to the contract of such rescission; (5) the moving party has received benefits from the contract, he should further allege an offer to restore these benefits to the party furnishing them, if restoration is рossible; and (6) the moving party has no adequate remedy at law.
Crown Ice Machine Leasing Co. v. Sam Senter Farms, Inc.,
The Plaintiffs have met the requirements to sustain the count for rescission.
1. Relationship of the Parties
In order to maintain an action for rescission of contract, the parties to the lawsuit must lie in contractual privity.
Sumitomo Corp. of America v. M/V Saint Venture,
The relationship between the Blands and the dealer, Sweeny Truck Sales, is clear and indisputable. The two respective parties lie in contractual privity. However, to . determine whether the Blands and the manufacturer, Freightliner, lie in privity merits a closer examination.
The Blands allege, in their complaint, that Sweeny Truck Sales acted as Freight-liner’s agent. In the context of vehicular-dealer-manufacturer agency relationships,
Foote v. Green Tree Acceptance, Inc.
is instructive.
While the Blands did not directly purchase the Freightliner Vehicle in question from the manufacturer, Freightliner, the Blands have sufficiently shown, for the purposes of this motion, a relation between Freightliner and themselves. The Blands allege that the dealer, Sweeny Truck Sales, acted as Freightliner’s agent. The Blands couch their agency theory on a number of factual allegations. In the attached sales contract, the dealer identifies Freightliner when waiving liability for failure to deliver the vehicle. In the same sales contract, a signature line appears requiring that a dealer or Authorized Representative sign the document. In another portion of the complaint, the Blands allege that the owner’s warranty information requires them to promptly return the vehicle to an authorized Freightliner dealer for repair. In other portions of the warranty, Freightliner is used almost interchangeably with Sweeny Truck Sales. Essentially, the Blands suggest that, without Freightliner, Sweeny Truck Sales would cease to exist. The Blands have sufficiently satisfied, for this motion, the first requirement for rescission.
2. The Making of the Contract
In Florida, courts have adopted the objective theory of contractual intent. To determine the creation and scope of a contract, courts must not “depend on the agreement of two minds in one intention, but on the agreement of two sets of external signs.”
Cheverie v. Geisser,
The Blands have sufficiently alleged a valid contract existed when they purchased the Freightliner Vehicle for $91,871.00. They evidence the sale through an attached invoice which serves as the instrument for which the purchase was transacted and consummated.
3. Existence of an Equitable Breach
“Impossibility of performance” and “frustration of purpose,” as grounds
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for rescission of contract, are separate and distinct.
See Crown Ice Machine Leasing Co.,
The Blands pled that they purchased the vehicle for their own personal use. This personal use was the benefit of the bargain. In the motor home context, such personal uses include traveling, living, cooking, and eating in the vehicle.
See Parsons v. Motor Homes of America, Inc.,
4. Proper Notice of Revocation
Before rescinding the contract, the purchaser must provide proper notice to the seller as to his intentions.
See Frank Griffin Volkswagen, Inc. v. Smith,
On or about January 24, 2001, the Blands provided proper written notice to Freightliner as to their intent to rescind the contract. In the letter to a Freightliner dealer, the Blands expressed their intent to rescind the cоntract. This, as the Blands argue, was sufficient notice because the Sweeny Truck Sales served as Freightliner’s agent.
5. Restoration to Original Position
Under Florida law, “equity will not usually order rescission unless the condition of the parties may be restored as it existed prior to the execution of the contract.”
Hibiscus Associates Ltd. v. Board of Trustees of Policemen and Firemen Retirement System of City of Detroit,
The Blands illustrate their attempts to place both Freightliner and themselves into the same condition as before the sale. In exchange for the return of the Freightliner Vehicle, they seek the return of the purchase price along with the damages flowing from the defects. However, the Freightliner Vehicle is defective and one might ask how the Blands could return the defective vehicle, leaving Freightliner with arguably a worthless asset. Florida law allows rescission where restoration to the status quo is impossible.
Braman Dodge, Inc. v. Smith,
6. No Adequate Remedy at Law
A party asserting a claim in equity must successfully demonstrate the absence of a remedy at law. “The touchstone for equity is the lack of an adequate legal remedy and hence, the scope of equity is inversely related to the scope of available remedies at law.”
Mission Bay Campland, Inc. v. Sumner Financial Corp.,
The Blands pled the defects in the Freightliner Vehicle as the reason for the lack of a legal remedy. More specifically, the repeated attempts to seek repair of the Freightliner Vehicle and Freightliner’s failure to remedy the defects is suffiсient for the Blands to survive the motion to dismiss. Additionally, the Blands allege an accurate determination for damages would be impossible to determine and that they have no adequate remedy at law.
Accordingly, Freightliner’s motion to dismiss as to count one of the Blands’ complaint is not well taken.
b. Count II — Revocation of Acceptance
Revocation of acceptance is a remedy that allows “the buyer [to] revoke her or his acceptance of a lot or commercial unit whose nonconformity substantially impairs the value to hеr or him if she or he has accepted it on the reasonable grounds that its nonconformity would be cured and it has not been seasonably cured, or without discovery of such nonconformity if her or his acceptance was reasonably induced either by the difficulty of discovery before acceptance or by the seller’s assurances.” Section 672.608, Fla. Stat. (2001). In this case, the Court must look to the defects and the extent of the defects to determine whether the nonconformity substantially impaired the Freightliner Vehicle’s value.
See Tom Bush Volkswagen, Inc. v. Kuntz,
In
Royco, Inc. v. Cottengim,
The Blands alleged a litany of defects and problems relating to the Freight-liner Vehicle. Like Royco and' Volkswagen, the defects were numerous and continuous. Initially, the defects, taken individually, would not create a right to revoke acceptance of the purchase. By the plain language of the statute, repairable defects would not substantially impair the value of the vehicle. The Blands, on numerous occasions, attempted to seek an appropriate remedy, namely repair of the vehicle. Such repairs became impossible. Collectively taking defects as- a whole, Freightliner might argue the defects still *1210 do not substantially affect the value of the Freightliner Vehicle.
The statement in
Orange Motors of Coral Gables, Inc. v. Dade County Dairies, Inc.,
When the Blands demonstrated the repeated attempts (twenty-one times) to cure the various defects, they sufficiently demonstrated the substanсe of the impairment. The alleged twenty-one repair attempts is sufficient to withstand Freightliner’s motion.
Accordingly, Freightliner’s motion to dismiss as to count two of the Blands’ complaint is not well taken.
c. Count III — Breach of Express Warranty
The Blands alternatively plead for damages alleging breach of the express warranty Freightliner provided following the purchase of the Freightliner Vehicle. A warranty, whether express or implied, is fundamentally a contract.
Navajo Circle, Inc. v. Development Concepts Corp.,
1. A Valid Contract
In order to breach a contract, the contract must have been in existence.
Johnson v. All American Life Ins. Co.,
2. Material Breach
A material breach occurs only when an injured party has sustained a substantial injury due to the breach.
Malladi v. Brown,
*1211 In their complaint, the Blands sufficiently satisfy many of the criteria needed to tip the scales in favor of a material breach. First, the. Blands seek damages for what they expected to be a valuable investment. They complain about the multitude of defects on the Freightliner Vehicle. In its present stage, the damages have limited the level of enjoyment and expectation that comes with the ownership of a new vehicle. Second, the way to compensate the Blands for the lost benefit of the enjoyment and use of the vehicle would be to repair the defects. To no avail, the Blands have traveled down the road to seek repairs twenty-one times. By alleging the problems and the repeated attempts to mitigate the damages, the Blands illustrate the breach is no longer a minor issue. It is material. Third, the Blands illustrate the numerous times they provided Freightliner with the opportunity to cure. Every time they brought the Freightliner Vehicle in for repair, the likelihood of repair steadily decreased. The likelihood of repair at this stage seems de minimus. Considering the factors as delineated by the Restatement, the Blands have sufficiently pled the materiality of the breach.
3. Damages
“Florida follows the general rule that to be recoverable, damages for breach of contract ‘must arise naturally from the breach, or have been in contemplation of both parties at the time they made the contract, as the probable result of a breach.’ ”
T.D.S., Inc. v. Shelby Mut. Ins. Co.,
The Blands claimed damages occurred as a result of the breach. However, pleading damages are not enough. The question lies in whether the Blands sufficiently pled as to whether the damages arose naturally from the breach and were reasonably expected to flow from the breach. The warranty expressly guarantees that the Freightliner Vehicle will be free from defects fоr a certain period of time. However, when the Freightliner Vehicle suffered continuous defects, the remedy flew out the window. All that remained was the Freightliner Vehicle. The question lies in whether the damages were a reasonable consequence of the breach. The Blands contend the breach of the warranty cost them money in the form of sleeping and lodging expenses. While Freightliner could argue sleeping and lodging expenses were not a reasonable consequence of the breаch, in cases 'such as a mobile home, where the purchaser relies upon the mobile home not only as a mode of transportation but as a place to sleep for the night, the damages flow from the breach. Additionally, the Blands allege the breach resulted in costs to repair the vehicle. Initially the warranty covered any vehicle defects. The warranty could only extend so far. The defects, as the Blands allege, are beyond the warranty’s scope. It is a .reasonable consеquence of the breach that the Blands suffered damages. As such, the Blands have sufficiently pled the final element needed to sustain a cause of action for Breach of Express Warranty.
Accordingly, Freightliner’s motion to dismiss as to count three of the Blands’ complaint is not well taken.
II. Improper Venue
Freightliner asserts that this action is improperly venued in Florida. In
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pertinent part, it argues that Section 47.051, Florida Statutes (2001), mandates an action involving a foreign corporation be brought in a county where the corporation has an agent or other representative. According to Freightliner, it has no agent residing in the county in which the Blands brought the original state action. While this argument may have merit under applicable Florida law, this case is now before a federal court. “Upon removal to [federal court] the question of venue is governed by federal law, not state law, and under 28 U.S.C. § 1441(a) a properly removed action necessarily fixes venue in the district where the state court action was pending.”
Hollis v. Florida State University,
In
Hollis,
the Eleventh Circuit reсently examined derivative jurisdiction and its vitality in the federal courts.
Id.
The plaintiff in
Hollis
claimed damages under the Americans with Disabilities Act and the Florida Civil Rights Act.
Id.
at 1296-1297. He originally brought the action in state court. Eventually, the case was removed to the United States District Court for the Middle District of Florida.
Id.
at 1297. The defendant sought to transfer the case to the United States District Court for the Northern District óf Florida, claiming the action was improperly venued, under applicable state law.
Id.
Defendant relied upon the judicially-created theоry of derivative jurisdiction.
Id.
Derivative jurisdiction was derived from the idea that “the jurisdiction of the federal court on removal is, in a limited sense, a derivative jurisdiction. If the state court lacks jurisdiction of the subject-matter or of the parties, the federal court acquires none, although it might in a like suit originally be brought there have had jurisdiction.”
Id.
at 1298 (quoting
Lambert Run Coal Co. v. Baltimore O.R. Co.,
The Eleventh Circuit held that derivative jurisdiction is no longer a viable option for court participants in the federal court system. Id. at 1300. “In 1986, Congress amended 28 U.S.C. § 1441 (2000), the general removal рrovision, by adding subsection (e). That subsection provides that a district court to which a civil action is removed is ‘not precluded from hearing and determining any claim’ simply because the state court from which the action was removed ‘did not have jurisdiction over the claim.’ ” Id. at 1298. As a result of the Congressional amendment to 29 U.S.C. § 1441, derivative jurisdiction is no longer a tool which federal litigants may use to transfer cases to alternative venues.
In the case at bar, the Blands originally brought their claims in state court. Under state lаw, the jurisdiction may have been improper. However, once the case moved under this Court’s jurisdiction, the state rules governing jurisdiction became secondary to the rules governing federal jurisdiction; more specifically the recent Congressional amendments. Freightliner failed to assert a lack of jurisdiction and effectively waived their claim for improper venue upon transfer to the auspices of the federal courts.
Accordingly, Freightliner’s request to transfer for improper venue is not well tаken. Accordingly, it is
ORDERED that Defendant Freightliner’s Motion to Dismiss (Dkt. 6) is denied and the Defendant shall have ten days to answer the complaint.
Notes
. The Blands, in paragraph seven of their complaint, in summation allege the following defects: (1) chassis vibration; (2) faulty acceleration; (3) faulty transmission; (4) faulty alignment; (5) faulty air-conditioning system; (6) faulty cruise control; (7) water drain failure.
. The Blands, in paragraph twelve of their complaint, seelt damages for: (1) repairs; (2) sleeping accommodations; (3) meals; (4) missed employment/work opportunities; (5) loan finance charges; (6) insurance costs; (7) improvements to the vehicle.
