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Smith v. Cavalier Builders

March 25, 2008

BRIAN AND MELANIE SMITH, H/W, AND DOLORES SMITH PLAINTIFFS,
v.
CAVALIER BUILDERS, INC., CREST HOMES, JOHN H. DATZ, P.E., JOHN H. ATZ, LEE MILLS,: MICHAEL JESS EXCAVATING A/K/A MICHAEL JESS, LLC, ICHAEL JESS, JOHN DOES 1-10, ABC CORPS.,1-10. DEFENDANTS.



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

OPINION

Before the Court is defendant Crest Homes's*fn1 motion for summary judgment. Plaintiffs did not file an opposition to the motion.*fn2 Therefore we rely on plaintiffs' allegations in their complaint as well as the unopposed facts in Crest Homes's motion. For reasons explained below, Crest Homes's motion is granted.

The dismissal is based in large part on plaintiffs' failure to file any opposition and plead facts that, if true, could support their claims. See Fed.R.Civ.P. 56(e) (stating that if the party opposing summary judgment does not respond, "... summary judgment should, if appropriate, be entered against that party."). Nonetheless, each of plaintiffs' claims are addressed separately below. See Anchorage Assocs. v. V.I. Bd. of Tax Rev., 922 F.2d 168, 175 (3d Cir. 1990)(finding that movant is not automatically entitled to summary judgment simply because the non-movant fails to oppose motion).

I. INTRODUCTION

This cases arises out of a dispute over the building of a modular home in Mullica Hill, New Jersey (the "Property"). On or about November 22, 2002, plaintiffs Brian and Melanie Smith entered into a contract with Cavalier Builders, Inc. ("Cavalier") for the construction of a single family residence (the "Contract"). Cavalier ordered the modular home from defendant Crest Homes.*fn3 Although Crest Homes was not a party or signatory to the Contract, a written statement of its manufacturer limited warranty was included as an exhibit to the Contract.

Plaintiffs allege that they were induced into entering the Contract upon the written and oral representations of defendants Cavalier, Crest Homes and Lee Mills. They allege that the Property has serious defects and is unmerchantable and unfit or has lower quality materials than represented would be used. Plaintiffs also allege that Cavalier, Crest Homes and Lee Mills violated the New Jersey Consumer Fraud Act, N.J.S.A. 56:8-1, et seq. by fraudulently misleading plaintiffs regarding the materials and fixtures used and the design, construction and sale of the Property, including repeatedly failing to repair numerous "punch list" items and concealing numerous defects such as mold in the Property. Plaintiffs also charge Crest Homes with racketeering under the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1962, breach of the New Jersey New Home Warranty and Builders Registration Act, N.J.S.A. 46:3B-1, et seq., conspiracy under N.J.S.A. 2C:41-2, conversion, unjust enrichment, and theft.

II. JURISDICTION

Plaintiffs have alleged violations of the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. § 1962, and therefore this Court exercises subject matter jurisdiction pursuant to 28 U.S.C. § 1331 (federal question jurisdiction).

III. DISCUSSION

A. Summary Judgment Standard

Summary judgment is appropriate where the Court is satisfied that "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Celotex Corp. v. Catrett, 477 U.S. 317, 330 (1986); Fed. R. Civ. P. 56(c).

An issue is "genuine" if it is supported by evidence such that a reasonable jury could return a verdict in the nonmoving party's favor. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A fact is "material" if, under the governing substantive law, a dispute about the fact might affect the outcome of the suit. Id. In considering a motion for summary judgment, a district court may not make credibility determinations or engage in any weighing of the evidence; instead, the non-moving party's evidence "is to be believed and all justifiable inferences are to be drawn in his favor." Marino v. Industrial Crating Co., 358 F.3d 241, 247 (3d Cir. 2004)(quoting Anderson, 477 U.S. at 255).

Initially, the moving party has the burden of demonstrating the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Once the moving party has met this burden, the nonmoving party must identify, by affidavits or otherwise, specific facts showing that there is a genuine issue for trial. Id. Thus, to withstand a properly supported motion for summary judgment, the nonmoving party must identify specific facts and affirmative evidence that contradict those offered by the moving party. Anderson, 477 U.S. at 256-57. A party opposing summary judgment must do more than just rest upon mere allegations, general denials, or vague statements. See Saldana v. Kmart Corp., 260 F.3d 228, 232 (3d Cir. 2001).

B. Bankruptcy of Oakwood Homes Corp.

Crest Homes states that it operated as a trademark of HBOS Manufacturing, LP ("HBOS"). The general partner in HBOS was Oakwood Mobile Homes, Inc. On November 15, 2002, Oakwood Homes Corporation and its related entities voluntarily filed for relief under Chapter 11 of the Bankruptcy Code. On or about November 24, 2003, HBOS along with several other companies entered into an asset purchase agreement ("APA") with purchaser Clayton Homes, Inc. ("Clayton"). Apparently one of the assets sold to Clayton in that deal was the manufacturing plant where the Smith's modular home was built. Clayton then sold that plant to CMH Manufacturing, Inc. ("CMH") by sale agreement dated April 13, 2004. Crest Homes has identified itself in these proceedings as CMH Manufacturing, Inc., d/b/a/ Crest Homes, Inc.

Crest Homes states that CMH invokes the discharge injunction granted by 11 U.S.C. § 524(a) because the claims alleged in plaintiffs' complaint were discharged. "Under the Bankruptcy Code, a discharge acts as 'an injunction against the commencement or continuation of an action, the employment of process, or an act, to collect, recover or offset any such debt as a personal liability of the debtor.'" In re Browne, 358 B.R. 139, 142 (Bankr. D.N.J. 2006) (quoting 11 U.S.C. § 524(a)(2)). "The 'such debt' referred to is any debt discharged under section 727(b)-that is all debts that arose before the petition." Id.

Based on the record provided by Crest Homes, it is not clear that Crest Homes d/b/a CMH Manufacturing, Inc. is a "debtor" and part of the Bankruptcy reorganization plan currently pending before the Delaware Bankruptcy Court concerning Oakwood Homes Corporation and, therefore, entitled to the protections under 11 U.S.C. § 524(a). In addition, it is not clear that the debt arose before the bankruptcy petition was filed. The Smiths signed the contract with Cavalier a few days before the petition was filed, but Cavalier did not purchase the modular home from Crest Homes until February 17, 2004.

The record is incomplete at this time to rule that Crest Homes is entitled to the discharge protections under 11 U.S.C. § 524(a). This is not to say that Crest Homes does not come under its provisions; only that its motion for summary judgment does not supply the Court with an adequate record upon which to make that determination at this time.*fn4 Therefore, we deny Crest Homes's request to bar plaintiffs' claims on that ground.

C. Remedy under Limited Warranty

In concert with its argument that it is entitled to the bankruptcy discharge, Crest Homes states that the only claims that fall outside of the bankruptcy are the limited warranty and Crest Homes's obligation to repair or replace defective parts. The limited warranty attached to the contract between the Smiths and Cavalier provides that Crest Homes warrants to the purchaser for a period of one year from the date of purchase that the housing structure shall be free of substantial defects in materials and workmanship attributable to Crest Homes. It also provides that Crest Homes will remedy substantial defects in materials and workmanship and shall elect to remedy the defect by repair or replacement.

In their complaint, plaintiffs allege that the Property has serious defects and is unmerchantable and unfit or has lower quality materials than represented would be used. They also allege that defendants Cavalier, Crest Homes and Lee Mills repeatedly failed to repair numerous "punch ...


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