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Winnie v. D.R. Horton, Inc.

United States District Court, D. South Carolina, Florence Division

January 22, 2019

Hyland Winnie, Jr., on behalf of himself and others similarly situated, Plaintiff,
v.
D.R. Horton, Inc., Defendant.

          ORDER

          R. Bryan Harwell United States District Judge

         This matter is before the Court on Defendant D.R. Horton, Inc.'s motion to dismiss Plaintiff's complaint for lack of subject matter jurisdiction and failure to state a claim upon which relief can be granted pursuant to Federal Rule of Civil Procedure 12(b)(1) and (6). [ECF No. 4]. The Court grants the motion for the reasons set forth below.[1]

         Factual Allegations

         The complaint and attachments thereto allege and describe the following. Defendant D.R. Horton, Inc. is a builder and seller of new homes in South Carolina. Compl. at 1 [ECF No. 1-1]. In 2015, Plaintiff Hyland Winnie, Jr. purchased a new home in Horry County, South Carolina from Defendant. Id. at ¶ 1. Defendant requires home buyers, including Plaintiff, to execute Defendant's Home Purchase Agreement. Id. at ¶ 9; see Home Purchase Agreement [ECF No. 1-1]. The Home Purchase Agreement contains a purported waiver of the warranty of habitability, which is implied by South Carolina law, and instead provides a limited warranty through a third party. Compl. at ¶¶ 10, 13; Home Purchase Agreement at ¶ 14. Despite requiring purchasers of unequal sophistication and bargaining power-including Plaintiff-to waive the implied warranty of habitability as a condition of buying a new home, Defendant provides no consideration in exchange, such as a reduction in price or other benefit. Compl. at ¶¶ 3, 16. Plaintiff contends that Defendant's Home Purchase Agreement is unlawful and unfair, entitling Plaintiff to money damages and injunctive relief. Id. at 2, ¶ 17. Notably, Plaintiff does not allege any defect with the home he purchased. This is a proposed class action that includes “all persons, excluding Defendant's agents or principals, who have purchased a new home from [Defendant] or any of its related companies using this Home Purchase Agreement or materially similar [s]ales [c]ontract[s].” Id. at ¶ 6.

         Procedural History

         On March 13, 2018, Plaintiff filed suit against Defendant in the South Carolina Court of Common Pleas for Horry County, asserting claims for: (1) breach of contract/breach of implied covenant of good faith and fair dealing; (2) unjust enrichment; and (3) declaratory relief. Compl. at 5-6. On April 13, 2018, Defendant timely removed the case to this Court under diversity jurisdiction. See Notice of Removal [ECF No. 1]. On the same date, Defendant filed the instant motion to dismiss. On May 4, 2018, Plaintiff filed a response, [ECF No. 9], and on May 11, 2018, Defendant filed a reply thereto, [ECF No. 10]. The matter is now ripe for the Court's consideration.

         Standard of Review

         Federal Rule of Civil Procedure 12(b)(1) allows a party to challenge a federal court's jurisdiction over the subject matter of the complaint. See Fed. R. Civ. P. 12(b)(1). Here, Defendant challenges Plaintiff's standing and the ripeness of Plaintiff's claims. Although some elements of standing are “merely prudential considerations that are part of judicial self-government, the core component of standing is an essential and unchanging part of the case-or-controversy requirement of Article III[, ]” limiting the Court's subject-matter jurisdiction. Lujan v. Defs. of Wildlife, 504 U.S. 555, 559-60 (1992) (citation omitted). “When standing is challenged on the pleadings, ” the Court “accept[s] as true all material allegations of the complaint and construe[s] the complaint in favor of the complaining party.” S. Walk at Broadlands Homeowner's Ass'n, Inc. v. OpenBand at Broadlands, LLC, 713 F.3d 175, 181-82 (4th Cir. 2013). The plaintiff has the burden of demonstrating standing. Valley Forge Christian Coll. v. Ams. United for Separation of Church & State, Inc., 454 U.S. 464, 484 (1982).

         Like other justiciability doctrines, ripeness derives from Article III of the United States Constitution. Nat'l Park Hosp. Ass'n v. Dep't of Interior, 538 U.S. 803, 808 (2003). Ripeness addresses “the appropriate timing of judicial intervention, ” Cooksey v. Futrell, 721 F.3d 226, 240 (4th Cir. 2013), and “prevents judicial consideration of issues until a controversy is presented in ‘clean-cut and concrete form.'” Miller v. Brown, 462 F.3d 312, 318-19 (4th Cir. 2006) (quoting Rescue Army v. Mun. Court of City of L.A., 331 U.S. 549, 584 (1947)). “Analyzing ripeness is similar to determining whether a party has standing.” Id. at 319. “Although the phrasing makes the questions of who may sue and when they sue seem distinct, in practice there is an obvious overlap between the doctrines of standing and ripeness.” Id. (citation omitted). Like standing, ripeness is a question of subject matter jurisdiction. Sansotta v. Town of Nags Head, 724 F.3d 533, 548 (4th Cir. 2013).

         If the Court lacks subject-matter jurisdiction over the case, then remand, rather than outright dismissal, is appropriate pursuant to 28 U.S.C. § 1447(c), which governs procedure after removal and plainly mandates remand where jurisdiction is lacking. See 28 U.S.C. § 1447(c) (“If at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded.”); In re Blackwater Sec. Consulting, LLC, 460 F.3d 576, 589 (4th Cir. 2006) (citing Int'l Primate Prot. League v. Adm'rs of Tulane Educ. Fund, 500 U.S. 72, 89 (1991)) (holding that § 1447(c)'s “mandate is so clear that, once a district court has found that it lacks subject matter jurisdiction in a removed case, no other fact-finding, legal analysis, or exercise of judicial discretion is necessary in order to follow the congressional directive; the decision to remand a case to remedy a lack of subject matter jurisdiction is purely ministerial”).

         When ruling on a 12(b)(1) motion, the Court “should apply the standard applicable to a motion for summary judgment, under which the nonmoving party must set forth specific facts beyond the pleadings to show that a genuine issue of material fact exists.” Richmond, Fredericksburg & Potomac R.R. Co. v. United States, 945 F.2d 765, 768 (4th Cir. 1991) (citation omitted). The Court “may consider evidence outside the pleadings without converting the proceeding to one for summary judgment.” Id. (citation omitted). “The moving party should prevail only if the material jurisdictional facts are not in dispute and the moving party is entitled to prevail as a matter of law.” Id. (citation omitted).

         Discussion

         Defendant moves to dismiss under Federal Rule of Civil Procedure 12(b)(1) for lack of subject-matter jurisdiction and 12(b)(6) for failure to state a claim upon which relief can be granted. Mem. in Supp. of Mot. to Dismiss at 1 [ECF No. 4-1]. In particular, Defendant argues that: (1) Plaintiff lacks standing because he has not suffered an injury; (2) Plaintiff's claims are not ripe; (3) Plaintiff fails to plead the necessary elements for each his three causes of action; and (4) Defendant “is entitled to summary judgment as to any . . . attorney's fees.” Id. at 4-8. Defendant contends that “[i]n short, Plaintiff seeks to make a seller's disclaimer of the implied warranty of habitability actionable and ignores prior precedent that . . . an ineffective disclaimer is simply unenforceable.” Id. In response, Plaintiff maintains that he has standing for his claims that are ripe for adjudication because he has suffered an actual injury in fact and a clear justiciable controversy exists between the parties. Pl.'s Resp. at 1 [ECF No. 9]. Plaintiff further contends that the complaint adequately sets forth facts, accepted as true, stating a plausible claim for relief. Id. However, because Plaintiff lacks standing and his claim is not ripe, as explained below, the Court addresses the motion to dismiss under Rule 12(b)(1). To satisfy the “irreducible constitutional minimum of standing[, ] . . . [a] plaintiff must have (1) suffered an injury in fact, (2) that it fairly traceable to the challenged conduct of the defendant, and (3) that is likely to be redressed by a favorable judicial decision.” Spokeo, Inc. v. Robins, 136 S.Ct. 1540, 1547 (2016); Lujan v. Defs. of Wildlife, 504 U.S. 555, 560-61 (1992). Defendant argues that Plaintiff has not suffered an injury in fact. Mem. in Supp. of Mot. to Dismiss at 4-5. Plaintiff has the burden of demonstrating injury in fact as an element of standing. Valley Forge Christian Coll., 454 U.S. at 484.

         To establish injury in fact, Plaintiff must show that he “suffered ‘an invasion of a legally protected interest' that is ‘concrete and particularized' and ‘actual or imminent, not conjectural or hypothetical.'” Spokeo, 136 S.Ct. at 1548 (quoting Lujan, 504 U.S. at 560). Plaintiff claims that his injury is “having to execute a Home Purchase Agreement in which [Defendant] receives a valuable waiver of warranty rights without paying the new home buyer separate consideration as required by South Carolina law.” Pl.'s Resp. at 6. “Stated another way, from the date of closing on the sale of the new home onward, the Home Purchase Agreement's waiver of the implied warranty of habitability alters the parties' positions at common law for [Defendant's] benefit and to the actual, immediate detriment of new home buyers such as Plaintiff.” Id. at 7. Plaintiff asserts that “[a]t this pleading stage, these allegations are sufficient to establish injury in fact for standing purposes.” Pl.'s Resp. at 6. In response, Defendant points out that if the waiver is indeed invalid, then the implied warranty remains intact, and there is no detriment to Plaintiff. Mem. in Supp. of Mot. to Dismiss at 4. In the absence of an alleged defect with Plaintiff's house, Defendant contends, there is no injury, but “if Plaintiff were to discover an issue . . . in the future and bring a claim alleging a breach of the ...


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