John W. Lodge Distributing Co., Inc. v. Texaco, Inc.

• Decision Date: 06 June 1978
• Docket Number: No. 13731,13731
• Citation: 161 W.Va. 603,245 S.E.2d 157
• Court: West Virginia Supreme Court
• Parties: JOHN W. LODGE DISTRIBUTING CO., INC. v. TEXACO, INC.

Page 157

245 S.E.2d 157

161 W.Va. 603

JOHN W. LODGE DISTRIBUTING CO., INC. v. TEXACO, INC.

No. 13731.

Supreme Court of Appeals of West Virginia.

June 6, 1978.

Syllabus by the Court

"The trial court, in appraising the sufficiency of a complaint on a Rule 12(b)(6) motion, should not dismiss the complaint unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Syl. pt. 3, Chapman v. Kane Transfer Company, W.Va., 236 S.E.2d 207 (1977) quoting Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957).

Fred M. Frisk, Jr., Ralph C. Dusic, Jr., Charleston, for appellant.

Steptoe & Johnson, E. Loyd Leckie, Charleston, for appellee.

McGRAW, Justice:

On December 1, 1963, John W. Lodge Distributing Company, Inc., a corporation, entered into a written consignment agreement with Texaco, Inc., a corporation, whereby Lodge would act as a distributor of Texaco's petroleum products. Pertinent to this case is the eighth section of this written agreement which reads:

1. This agreement shall continue in full force and effect until terminated by either party on five (5) days' written notice . . .

2. Any and all agreements heretofore existing between Consignee and Consignor respecting compensation from sale of Consignor's products are hereby superseded and cancelled, and no modification of this agreement shall be binding unless signed by the parties hereto.

On September 17, 1973, Texaco notified Lodge that it was going to terminate the agreement effective November 1, 1973. Lodge thereafter filed in the Circuit Court of Kanawha County a complaint against Texaco containing twenty enumerated allegations. The trial court sustained a defense motion to dismiss under Rule 12(b)(6) of the W.Va. Rules of Civil Procedure on the grounds that the terms of the agreement were clear and unambiguous and that there were no factual situations or circumstances stated in the complaint which could be construed as stating a proper claim against the defendant. The court, however, granted the plaintiff the right to file an amended complaint which was later filed and similarly dismissed under Rule 12(b)(6). Thereafter, the plaintiff filed a motion to set aside the judgment, which was denied by order on October 15, 1975, and this appeal followed.

The eight-page amended complaint, containing 21 enumerated sections and 13 subsections, alleges, in pertinent part, that the terms and conditions of said agreement were altered and amended several times by letter agreements subsequent to the date of the original agreement; that although the original agreement failed to provide that the defendant must have some cause to cancel the agreement it was implied that both parties entered into the agreement in good faith and intended that if the service was performed in a satisfactory manner that no cause existed for the termination of plaintiff's franchise by defendant; that defendant did not exercise good faith in terminating said franchise; that said termination was arbitrary and wrongful and in breach of the agreements between plaintiff and defendant, and that the terms and conditions of the contract were unilateral and against public policy.

The issue now before this Court is whether the circuit court committed error when it granted the defendant's motion to dismiss under Rule 12(b)(6) of the West Virginia Rules of Civil Procedure.

The purpose of a motion under Rule 12(b)(6) of the West Virginia Rules of Civil Procedure is to test the formal sufficiency of the complaint. For purposes of the motion to dismiss, the complaint is construed in the light most favorable to plaintiff, and its allegations are to be taken as true. Since common law demurrers have been abolished, pleadings are now liberally construed so as to do substantial justice. W.Va. R.C.P. 8(f). The policy of the rule is thus to decide cases upon their merits, and if the complaint states a claim upon which relief can be granted under any legal theory, a motion under Rule 12(b)(6) must be denied. United States Fidelity & Guaranty Co. v. Eades, 150 W.Va. 238, 144 S.E.2d 703 (1965). "The trial court's inquiry (is) directed to whether the allegations constitute a statement of a claim under Rule 8(a)." Chapman v. Kane Transfer Co., W.Va., 236 S.E.2d 207, 212 (1977). W.Va. R.C.P. 8(a) reads as follows:

(a) A pleading which sets forth a claim for relief . . . shall contain (1) a short and plain statement of the claim showing that the pleader is entitled to relief . . . .

In a recent case we tried to assist the lower courts in ruling on 12(b)(6) motions by adopting the standard promulgated by the United States Supreme Court for the identical Federal Rule 12(b)(6). The third syllabus point of Chapman v. Kane Transfer Co., supra at 208 sets out the standard:

3. The trial court, in appraising the sufficiency of a complaint on a Rule 12(b)(6) motion, should not dismiss the complaint unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief. Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957).

All that the pleader is required to do is to set forth sufficient information to outline the elements of his claim or to permit inferences to be drawn that these elements exist. The trial court should not dismiss a complaint merely because it doubts that the plaintiff will prevail in the action, and whether the plaintiff can prevail is a matter properly determined on the basis of proof and not merely on the pleadings. Wright & Miller, Federal Practice and Procedure : Civil § 1216 (1969).

In view of the liberal policy of the rules of pleading with regard to the construction of plaintiff's complaint, and in view of the policy of the rules favoring the determination of actions on the merits, the motion to dismiss for failure to state a claim should be viewed with disfavor and rarely granted. The standard which plaintiff must meet to overcome a Rule 12(b)(6) motion is a liberal standard, and few complaints fail to meet it. The plaintiff's burden in resisting a motion to dismiss is a relatively light one. Williams v. Wheeling Steel Corp., 266 F.Supp. 651 (N.D.W.Va.1967).

Plaintiff's complaint alleges, inter alia, that the original contract that the parties entered into was modified by subsequent oral and written agreements between the parties and that a new amended or implied contract was created.

It is a well-established, fundamental principle of contract law that a valid, unambiguous written contract may be modified or superseded by a subsequent contract based on a valuable consideration. Wilkinson v. Searls, 155 W.Va. 475, 184 S.E.2d 735 (1971); Steinbrecher v. Jones, 151 W.Va. 462, 153 S.E.2d 295 (1967); syl. pt. 1, Lewis v. Dils Motor Co., 148 W.Va. 515, 135 S.E.2d 597 (1964); State ex rel. Coral Pools, Inc. v. Knapp, 147 W.Va. 704, 131 S.E.2d 81 (1963); see 4B M.J., Contracts § 54 (1974).

It, therefore, does not appear beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief, so, consequently, this test set forth in Chapman is not met, and the trial court erred in granting the motion to dismiss. Lodge alleged that the contract was altered by subsequent oral and written agreements between the parties and he need not submit evidence in order to withstand a motion to dismiss. Since this is a sufficient claim for relief under our rules, the plaintiff should not be denied the right to show why he feels he is entitled to the relief he seeks.

The plaintiff further alleges, inter alia, that the contract is unconscionable and against public policy on the ground that there is a lack of equality in the respective bargaining positions of the parties.

In the court below, appellant relied heavily on the case of Shell Oil Co. v. Marinello 63 N.J. 402, 307 A.2d 598 (1973) which held void as against public policy a contract provision giving Shell the absolute right to terminate the contract on 10 days notice. The court...