United States District Court, E.D. Virginia, Richmond Division
Hannah Lauck United States District Judge
matter comes before the Court on Defendants Amended Motion to
Dismiss. (ECF No. 27.) Plaintiff Colin Andrew
responded, and Defendants replied. (ECF Nos. 34, 35.) The
matter is ripe for disposition. The Court dispenses with oral
argument because the materials before it adequately present
the facts and legal contentions, and argument would not aid
the decisional process. For the reasons that follow, the
Court finds that Andrew lacks standing and will remand the
case to the Superior Court of the District of Columbia.
Procedural and Factual Background
2008, Andrew filed a claim in the Superior Court of the
District of Columbia (the "D.C. Superior Court")
against a Virginia-based motor vehicle dealer alleging fraud
related to the purchase of a vehicle. In 2015, Andrew obtained a
default judgment against the dealer. Because the dealership
was no longer in business, Andrew filed a claim with the
Virginia Motor Vehicle Dealer Board (the "Board")
seeking compensation for the unpaid judgment from the
Virginia Motor Vehicle Transaction Recovery Fund (the
"Fund"), which the Board administers. The Board
denied the claim after determining that Andrew did not meet
the Fund's statutory requirements.
2016, Andrew filed a second suit in D.C. Superior Court, this
time as a purported class action. (2016 D.C. Superior Ct. R.,
88-103, ECF No. 3.) Andrew, on behalf of himself and others
similarly situated, challenged the Board's interpretation
of the statutory scheme governing the Fund as
unconstitutional. On September 2, 2016, Defendants timely
removed the case to the D.C. District Court. (ECF No. 1.)
September 8, 2016, Andrew filed an Amended Complaint. (ECF
No. 4.) In his Amended Complaint, Andrew alleges that
"Defendants incorrectly interpret a statutory scheme so
as to favor judgments of the Commonwealth of Virginia over
judgments of other states" in violation of the
Constitution's Full Faith and Credit
Clause. (Am. Compl. 1, ECF No. 4.) Andrew argues
that the statute should be interpreted to treat Virginia and
non-Virginia judgments identically in order to avoid an
5, 2017, the D.C. District Court transferred the case to this
Court because the legally relevant events-particularly, the
Board's denial of Andrew's claim-would take place in
Virginia. Defendants seek dismissal of Andrew's Amended
Andrew's claim relies on the manner in which the Fund
operates, a description of the Fund and relevant aspects of
its operation follows. The Court limits this description to
facts that neither party disputes.
Fund is part of a Virginia statutory scheme designed to
protect consumers from fraudulent business practices related
to the purchase or lease of a motor vehicle. Va. Code §
46.2-1527.3. Claims must meet certain requirements to
be eligible for compensation from the Fund: a claimant must
have a valid, final judgment for fraud related to the
purchase or lease of a motor vehicle; the claimant can only
request payment for the unpaid balance on the judgment; and
the judgment must be awarded by a "court of competent
jurisdiction in the Commonwealth." Id. The
statutory scheme outlines additional procedures for
eligibility. Va. Code §§ 46.2- 1527.1-46.2-1527.8.
The Board manages the Fund and determines whether claims are
approved or denied. Va. Code §§
In 2016, Andrew Obtained a Default Judgment in the D.C.
Superior Court Against American Import Center, a Virginia
Motor Vehicle Dealer
December 2, 2008, Andrew filed a complaint in the D.C.
Superior Court against American Import Center, a Virginia
motor vehicle dealer (the "2008 D.C. Complaint").
(ECF No. 28-2.) The 2008 D.C. Complaint accused American
Import Center of fraud in violation of the District of
Columbia's consumer protection laws. Andrew alleged that
he agreed to be the co-signer on loan for a vehicle his
friend intended to purchase. Andrew claimed the auto dealer
understood this, but nevertheless prepared and induced Andrew
to sign paperwork naming Andrew as the vehicle owner.
Further, according to Andrew, the auto dealer inaccurately
reported Andrew's income and expenses to ensure the bank
approved Andrew's loan. Andrew alleged a bank would not
have approved the car loan if accurate data had been
submitted. Because Andrew was the legal owner, his friend
could not to register the vehicle and subsequently failed to
make any payments on the vehicle. The car ultimately was
repossessed and Andrew claims the damage to his credit score
negatively affected his employment opportunities and existing
lines of credit, with lingering effects.
case was continued repeatedly until July 2015. During a July
2015 Status Hearing, the D.C. Superior Court orally entered a
default judgment against American Import Center. Counsel for
American Import Center, during that same hearing, stated on
the record that he did "not think that the
Defendant's [sic] have an interest in participating in
litigating this matter because the dealership (American
Import Center) has not been a business entity for about three
years now." (D.C. Docket 6, ECF No. 28-1.) Approximately
one month later, in August 2015, Andrew testified as the only
witness in an ex parte hearing, submitting a motion
for attorney's fees and related documentation. During a
December 11, 2015 Status Hearing, the D.C. Superior Court
orally awarded Andrew $3, 000 in statutory damages and $25,
205 in attorney's fees. On January 5, 2016, the D.C.
Superior Court issued a judgment to that effect. The D.C.
Superior Court Judgment does not reference fraud.
In 2017, the Fund Denied Andrew Compensation Because the D.C.
Superior Court Judgment Was Not Obtained in Virginia and
Did Not Rest on a Finding of Fraud
January 2017, after obtaining the D.C. Superior Court
Judgment, Andrew filed a claim with the Board. The claim
requested payment for the unpaid judgment from the Fund,
which the Board administers.
letter dated March 17, 2017 (the "Board Denial"),
the Board denied Andrew's claim on two separate grounds:
"(1) the final judgment was not awarded in a court of
competent jurisdiction in the Commonwealth of Virginia and
(2) the final judgment was not for fraud." (Board Denial
2, ECF No. 28-9.) The Board noted that "the reasoning of
the Court's decision needs to be evident from the
judgment itself because the Fund is limited to compensating
fraud judgments related to the sale or lease of a vehicle.
(Id. at 2.) The Board Denial described Andrew's
right to appeal in state court and the procedure, including
applicable deadlines to do so. Although Andrew submitted a
Notice of Appeal, he never perfected his appeal. The time to
do so expired.
seek dismissal of Andrew's class action Amended Complaint
on either of two grounds: (1) for lack of subject-matter
jurisdiction under Federal Rule of Civil Procedure
12(b)(1); or (2) for failure to state a claim upon
which relief can be granted under Federal Rule of Civil
Procedure 12(b)(6). The Court begins, as it must, by
addressing Defendants' motion to dismiss for want of
subject-matter jurisdiction. Because Andrew has no valid
judgment for fraud, the Court finds that he lacks standing to
proceed in federal court. Therefore, the Court will remand this
case to the D.C. Superior Court.
The Three-Part Test Used to Evaluate ...