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Metcalfe v. Renaissance Marine

May 21, 2009

RICHARD METCALFE; CYNTHIA METCALFE, APPELLANTS
v.
RENAISSANCE MARINE, INC.



On Appeal from the District Court of the Virgin Islands Division of St. Thomas (D.C. No. 07-cv-00131) District Judge: Honorable Curtis V. Gomez.

The opinion of the court was delivered by: Fisher, Circuit Judge

PRECEDENTIAL

Argued December 10, 2008

Before: FISHER, JORDAN and STAPLETON, Circuit Judges.

OPINION OF THE COURT

This appeal involves a dispute as to whether the District Court of the Virgin Islands erred in dismissing the plaintiffs' complaint for lack of personal jurisdiction after determining that the Virgin Islands Long-Arm Statute did not reach the defendant and that constitutional due process was not satisfied. Because the District Court failed to construe disputed facts in favor of the plaintiffs, as it was required to do at the motion to dismiss stage, we conclude that it erred in ruling that the plaintiffs were unable to demonstrate a prima facie case in support of the exercise of personal jurisdiction over the defendant. Therefore, we will reverse and remand to the District Court with instructions that it allow the plaintiffs an opportunity to conduct jurisdictional discovery.

I.

A. Factual History

Richard and Cynthia Metcalfe are residents of the United States Virgin Islands. In April 2006, the Metcalfes purchased a Renaissance Prowler 246 powerboat, two engines, and other equipment from Renaissance Marine, Inc. (Renaissance) for approximately $85,000. Renaissance is a corporation organized under the laws of Florida with its principal place of business in Miami, Florida.

Beyond the aforementioned facts, the parties offer materially different versions of the events that led to this current lawsuit. The Metcalfes allege that they became familiar with Renaissance boats by renting them from See & Ski, a powerboat rental company located on St. Thomas. They aver that See & Ski has at least four boats in its rental fleet that it purchased from Renaissance within a period of six years. Additionally, they contend that Renaissance advertises on its website that its boats can be rented from See & Ski in the Virgin Islands. According to the Metcalfes, Renaissance has sold at least seven boats to Virgin Islands residents in the past few years. The Metcalfes state that while they were in St. John, they negotiated the sale of the Prowler 246 with Renaissance by telephone, fax, and the internet. They assert that Renaissance was fully aware that the ultimate destination of the Prowler 246 was the Virgin Islands and that Renaissance shrink-wrapped the boat for shipping and took it to the shipper for the Metcalfes.

In contrast, Renaissance contends that the Metcalfes traveled to Miami where they purchased the Prowler 246. Renaissance also states that all of its sales, including this one, are governed by a ten-year limited warranty and a purchase agreement with additional terms and conditions. Renaissance specifically notes that the warranty contains a forum selection clause which provides that the interpretation and enforcement of the warranty is governed by Florida law and that any action shall be brought in Miami-Dade County.*fn1

Concerning the warranty, the Metcalfes assert that Renaissance contacted them in the Virgin Islands one month after they received delivery of the Prowler 246 in an effort to have them sign the warranty, which they refused to do. The Metcalfes state that the warranty was never presented to them until after the sale was complete and that one reason why they did not sign it is because they did not agree with the forum selection clause.

On December 25, 2006, the Metcalfes discovered that the Prowler 246 had partially sunk. They had a marine surveyor assess the defects in the Prowler 246 and the likely cause of the sinking. The Metcalfes shared the findings in the surveyor's report with Renaissance, and although the company initially proposed to cure the problems with the Prowler 246 in the Virgin Islands and subsequently offered to transport it to Florida to make the necessary repairs, no remedy was ultimately provided.

B. Procedural History

On October 15, 2007, the Metcalfes brought suit in the District Court of the Virgin Islands alleging breach of express warranty, breach of implied warranties, breach of the covenant of good faith and fair dealing, misrepresentation, and liability under the Magnuson-Moss Warranty--Federal Trade Commission Improvement Act. On November 29, 2007, Renaissance moved to dismiss the matter for lack of personal jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(2). On December 13, 2007, the parties stipulated to an extension of time for the Metcalfes to oppose the motion to dismiss, giving them until December 21, 2007, to do so. The parties orally stipulated to an additional extension of time on December 20, 2007, allowing the Metcalfes until January 9, 2008, to file an opposition to the motion to dismiss, but counsel for the Metcalfes neglected to file this stipulation with the District Court. Consequently, on January 2, 2008, the District Court issued an order dismissing the matter because of the Metcalfes' failure to meet their burden of establishing the District Court's jurisdiction over Renaissance.

Notwithstanding the District Court's order, on January 9, 2008, the Metcalfes filed an opposition to Renaissance's motion to dismiss and also filed a motion for reconsideration arguing that the order should be vacated to correct clear error and prevent manifest injustice. Renaissance subsequently filed a reply to the opposition to the motion to dismiss and an opposition to the motion to reconsider. Renaissance also filed a motion to supplement its original motion to dismiss.

In an effort to prevent further overlapping and conflicting pleadings, the District Court held a status conference on February 6, 2008. The District Court determined that it would consider the Metcalfes' opposition to Renaissance's motion to dismiss because, despite the oversight by the Metcalfes' counsel, ignoring their opposition would prejudice them. Thus, the District Court decided to reopen the case to determine whether dismissal of the complaint was appropriate; however, the District Court concluded that it would not consider any filings submitted after the status conference and instead would rule directly on the motion to dismiss, giving consideration to the Metcalfes' opposition to the motion.*fn2

Following the status conference, the Metcalfes and Renaissance nonetheless both continued to submit filings to the District Court. Specifically, the Metcalfes filed a reply to Renaissance's opposition to the motion for reconsideration and a document entitled a "Notice of Filing of Supplemental Declaration of Richard Metcalfe with Previously Omitted Exhibits." Renaissance filed a motion to amend its opposition to the motion for reconsideration.

On February 15, 2008, the District Court ruled on Renaissance's motion to dismiss, and indicated in a footnote in its memorandum opinion that it did not consider these additional filings. The District Court determined that the Metcalfes failed to meet their burden of showing that jurisdiction over Renaissance was appropriate under the Virgin Islands Long-Arm Statute and, even if the statute was somehow satisfied, failed to show that the exercise of jurisdiction over Renaissance would comport with constitutional due process. Because the District Court concluded that it did not have personal jurisdiction over Renaissance, it did not reach the other grounds for dismissal that Renaissance asserted in its motion. The Metcalfes filed a timely notice of appeal.

II.

As an initial matter, Renaissance argues that the District Court lacks subject matter jurisdiction over this entire action because the Metcalfes' complaint does not meet the threshold amount of $75,000 required in a diversity action under 28 U.S.C. § 1332.*fn3 Renaissance argues that an appraisal of the Metcalfes' damages reveals that their losses only amount to $16,533.39. We reject this argument because, in addition to the itemized "out of pocket expenditures" which the $16,000 figure represents, the Metcalfes also seek rescission of the contract for the sale of the Prowler 246, and thus make a claim for more than $85,000 in damages. Accordingly, the District Court has subject matter jurisdiction over this action pursuant to 28 U.S.C. § 1332 because the Metcalfes are domiciled in the Virgin Islands, Renaissance is domiciled in Florida, and the Metcalfes' complaint sets forth a good faith claim in excess of $75,000. See St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 288-89 (1938). There is also an independent basis for subject matter jurisdiction over the Metcalfes' Magnuson-Moss Warranty Act claim pursuant to 15 U.S.C. § 2310(d)(1)(B).

We have jurisdiction over this appeal from the District Court's final order pursuant to 28 U.S.C. § 1291. "Whether personal jurisdiction may be exercised over an out-of-state defendant is a question of law," Mellon Bank (East) PSFS, N.A. v. DiVeronica Bros., Inc., 983 F.2d 551, 554 (3d Cir. 1993), and therefore we will exercise plenary review over the District Court's determination that it lacked personal jurisdiction in the present case. See Pinker v. Roche Holdings Ltd., 292 F.3d 361, 368 (3d Cir. 2002).

III.

The central issue in this appeal is whether the District Court erred when it determined that it could not exercise personal jurisdiction over Renaissance, a nonresident defendant. However, Renaissance argues that we need not reach this issue because the Metcalfes are contractually prohibited from bringing their claims in any jurisdiction other than Florida as a result of a valid, binding forum selection clause contained in its warranty. The problem with this argument is that Renaissance failed to establish that the Metcalfes ever agreed to this warranty. The Metcalfes claim that Renaissance contacted them one month after they received delivery of the Prowler 246 and, at that point in time, solicited their signature in order to execute the warranty. Although Renaissance attached a copy of the warranty to an affidavit, it does not bear the signature of either Richard or Cynthia Metcalfe and Renaissance makes no attempt to explain why a signature is not present. Consequently, it appears that the warranty was not incorporated into the sales contract but was a separate agreement to which the Metcalfes did not assent.

We recognize that some tension exists between the Metcalfes' assertion that they were not bound by the warranty because they never signed it and allegations in their complaint with respect to "Renaissance's product support, service and warranty programs," but, in light of the current posture of this case, it is best for the District Court to resolve the factual dispute as to whether the warranty applied to the sale between Renaissance and the Metcalfes. The District Court did not address this issue at the time it granted the motion to dismiss, and therefore we will not ...


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