Nicotra v. Ferrari Financial Services, Inc.

          RULING AND ORDER ON MOTION TO TRANSER VENUE

          VICTOR A. BOLDEN UNITED STATES DISTRICT JUDGE

         Dennis Nicotra, Premier Motor Cars, LLC, and Cunningham Gullwing Group, LLC (“Plaintiffs”) have sued Ferrari Financial Services, Inc. (“Defendant” or “Ferrari Financial”) over the depreciation in value of two antique cars. Mr. Nicotra claims breach of contract, breach of the covenant of good faith and fair dealing, negligence, breach of fiduciary duty, violation of the Connecticut Unfair Trade Practices Act, and constructive trust under Connecticut state law. Defendant now moves to dismiss these state law claims or, in the alternative, transfer venue.

         For the following reasons, the motion to transfer venue is GRANTED.

         I. FACTUAL AND PROCEDURAL BACKGROUND

         A. Factual Allegations

         Dennis Nicotra, a Connecticut resident, is allegedly a member of two limited liability companies, Premier Motor Cars, LLC (“Premier”) and Cunningham Gullwing Group, LLC (“Cunningham”). Compl., ECF No. 1-1 ¶¶ 1-3. Ferrari Financial is a corporation with its principal place of business in New Jersey. Id. ¶ 4.

         On November 14, 2017, Mr. Nicotra, Premier, Cunningham, and Ferrari Financial allegedly entered into a security agreement in which Ferrari Financial “agreed to extend a line of credit to Premier and Cunningham, and Premier and Cunningham granted” Ferrari Financial a lien in certain automobiles, including an early 20^th century Alfa Romeo and a mid-20^th century Ferrari. Id. ¶¶ 5-6.

         The two cars allegedly were appraised and inspected about once a year. Id. ¶ 7. As of October 27, 2017, the appraised value of the Alfa Romeo was $2, 228, 130 and the appraised value of the Ferrari was $1, 787, 500. Id. ¶¶ 7-8. As of October 22, 2018, the appraised value of the Alfa Romeo was $2, 418, 130 and the appraised value of the Ferrari was $1, 693, 267. Id. ¶ 9. As of October 2018, both cars had a total appraised value of $4, 111, 397. Id. The value allegedly remained steady through October 2018. Id. ¶ 10.

         On December 14, 2018, Mr. Nicotra allegedly signed a forbearance agreement, listed as the “Authorized Representative of Borrower.” Id. ¶ 11. On the same day, an individual listed as the “Authorized Representative of Ferrari Financial Services, Inc.” allegedly signed the same forbearance agreement. Id. Premier and Cunningham are both identified as “Borrower.” Id. ¶ 12.

         The forbearance agreement allegedly states that “the Borrower is in possession of the Alfa Romeo and the Ferrari; that the Borrower is in default under the [security agreement]; that there is an outstanding balance due under the [security agreement]; and that the Borrower requests [Ferrari Financial] forbear from exercising its rights under the [security agreement].” Id. ¶ 13.

         The forbearance agreement also allegedly references a consignment agreement. Id. ¶ 14. Either the forbearance agreement or the consignment agreement allegedly states that during Ferrari Financial's possession and control of the two cars, “it will market and attempt to sell the automobiles, and will forbear from exercising any of its rights under the [security agreement] with respect to the outstanding balance.” Id. The forbearance agreement further allegedly states “that any proceeds from the sale of the Alfa Romeo or the Ferrari will be used to satisfy the Borrower's outstanding obligations under the [security agreement], and that proceeds over the payoff would go to Premier and Cunningham.” Id. During the forbearance period, Ferrari Financial will allegedly use reasonable efforts to sell the cars for “a price that is sufficient to payoff the Outstanding Balance.” Id. ¶ 15. The combined appraised values of the two cars allegedly “were and are significantly more than the outstanding balance.” Id. ¶ 16.

         The consignment agreement allegedly does not identify a borrower or lender, similarly to the forbearance agreement. Id. ¶ 18. Ferrari Financial is listed as the “Consignee” and Mr. Nicotrais listed as the “Consignor.” Id.

         On December 14, 2018, Mr. Nicotra signed the consignment agreement. Id. ¶ 19. An “Authorized Representative of Ferrari Financial Services, Inc.” signed the consignment agreement the same day. Id.

         On or about December 14, 2018, both cars were delivered to 250 Sylvan Avenue in Englewood Cliffs, New Jersey, the address of Ferrari Financial. Id. ¶¶ 21; 4.

         Ferrari Financial allegedly did not sell either car. Id. ¶ 22. Nor did Ferrari Financial allegedly attempt to sell either car in a commercially reasonable manner, use reasonable efforts during the forbearance period to sell either car, or use reasonable efforts to sell either car during the forbearance period “for a price sufficient to pay off the outstanding balance.” Id. ¶ 23. Ferrari Financial allegedly put in minimal, inexpensive efforts to sell the car, none of which were commercially reasonable. Id. ¶ 25.

         Commercially reasonable methods to sell the cars allegedly would include: marketing and selling the cars separately; showing the automobiles in dealerships; and entering the cars in “at least three major auctions for rare and collectible investment-grade automobile[s].” Id. ¶ 26.

         The tele-marketing and advertising efforts undertaken by Ferrari Financial allegedly caused the two cars “significant negative publicity[, ]” which Ferrari Financial allegedly should have understood. Id. ¶ 28. The allegedly lackluster efforts “tarnished the reputation of each of these automobiles, and greatly diminished and undermined the market” for each. Id. ¶ 29.

         B. Procedural History

         On May 28, 2019, Ferrari Financial removed this case to federal court. Notice of Removal, ECF No. 1 (May 28, 2019). See also Statement in Support of Removal, ECF No. 2 (May 28, 2019); Notice of Pending Mots., ECF No. 3 (May 28, 2019). The original Complaint alleged breach of contract, breach of covenant of good faith and fair dealing, negligence, breach of fiduciary duty, violation of the Connecticut Unfair Trade Practices Act (“CUTPA”), and constructive trust.

         On July 3, 2019, Ferrari Financial timely filed a motion to dismiss or transfer venue. Mot. to Dismiss or Transfer Venue, ECF No. 12 (July 3, 2019) (“Mot. to Dismiss”); see also Mem. in Support of Mot. to Dismiss, ECF No. 13 (July 3, 2019) (“Def.'s Mem.”).

         On August 23, 2019, Plaintiffs timely filed a memorandum in opposition. Mem. in Opp., ECF No. 16 (Aug. 23, ...