Bull International, Inc. v. MTD Consumer Group, Inc., 062916 FED3, 15-2438

Docket Nº:15-2438
Opinion Judge:GREENBERG, Circuit Judge.
Party Name:BULL INTERNATIONAL, INC., Appellant v. MTD CONSUMER GROUP, INC., successor in interest to CUB CADET CORPORATION t/d/b/a MTD PRODUCTS, INC., MTD CONSUMER GROUP, CUB CADET CORPORATION, BOLENS, COLUMBIA, CUB CADET COMMERCIAL, CUB CADET YANMAR, FARM KING, GARDEN WAY, GOLD SERIES, GUTBROD, GUTBROD-KEHRER, LAWN FLITE, MASTERCUT, MOW MASTER, MOW MASTE...
Attorney:Jeffrey J. Ludwikowski (argued) Gregory M. Monaco Picadio Sneath Miller & Norton, P.C. Four Gateway Center Attorneys for Appellant Frederick W. Bode, III Steven W. Zoffer (argued) Brett W. Farrar Michael P. Flynn Dickie McCamey & Chilcote, P.C. Two PPG Place, Attorneys for Appellee Gregory A. Hol...
Judge Panel:BEFORE: JORDAN, GREENBERG, and SCIRICA, Circuit Judges
Case Date:June 29, 2016
Court:United States Courts of Appeals, Court of Appeals for the Third Circuit
 
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BULL INTERNATIONAL, INC., Appellant

v.

MTD CONSUMER GROUP, INC., successor in interest to CUB CADET CORPORATION t/d/b/a MTD PRODUCTS, INC., MTD CONSUMER GROUP, CUB CADET CORPORATION, BOLENS, COLUMBIA, CUB CADET COMMERCIAL, CUB CADET YANMAR, FARM KING, GARDEN WAY, GOLD SERIES, GUTBROD, GUTBROD-KEHRER, LAWN FLITE, MASTERCUT, MOW MASTER, MOW MASTER MASTERCUT, MTD BLACK EDITION, MTD SILVER EDITION, MTD GOLD, MTD MOWMASTER, MTD PLATINUM PRO, MTD PLATINUM SD, MTD PRO, MTD SUPER, MTD TARAL, MTD TRADESMAN, MTD TURBOMAX, MTD 2000 ELITE, NOVOTRAC, RANCH KING, RASENTRAC, REMINGTON, RYOBI, TROY-BILT, VENTZKI, VENTZKI MTD, WHITE OUTDOOR, YARD MACHINES, YARD-MAN, YARD-MAN ELITE, YARD-MAN SELECT, and YARDWORKS

No. 15-2438

United States Court of Appeals, Third Circuit

June 29, 2016

NOT PRECEDENTIAL

Argued March 2, 2016

On Appeal from the United States District Court for the Western District of Pennsylvania (No. 2:14-cv-00255) Honorable David Stewart Cercone, District Judge

Jeffrey J. Ludwikowski (argued) Gregory M. Monaco Picadio Sneath Miller & Norton, P.C. Four Gateway Center Attorneys for Appellant

Frederick W. Bode, III Steven W. Zoffer (argued) Brett W. Farrar Michael P. Flynn Dickie McCamey & Chilcote, P.C. Two PPG Place, Attorneys for Appellee

Gregory A. Holmes Holmes Law Offices PLLC Attorney for Amici Curiae Northeast Equipment Dealers Association and Ohio-Michigan Equipment Dealers Association

BEFORE: JORDAN, GREENBERG, and SCIRICA, Circuit Judges

OPINION [*]

GREENBERG, Circuit Judge.

I. INTRODUCTION

This matter comes on before this Court on an appeal from an order of the District Court granting motions by defendant-appellee, MTD Consumer Group, Inc. ("MTD"), an Ohio corporation with its principal place of business in Cleveland, Ohio, seeking dismissal of this action brought against it by plaintiff-appellant, Bull International, Inc. ("Bull"), a Pennsylvania corporation with its principal place of business in Washington, Pennsylvania. Bull brought this action because MTD terminated certain written contracts that it had with Bull setting forth the terms of the relationship between Bull, a family-owned business dealing in lawn and garden, commercial mowing, and farm and light industrial equipment in Western Pennsylvania, and MTD, a global manufacturer of equipment that Bull and other retailers sold.

The written contractual relationship between Bull and MTD with which we are concerned dates from 1985 when Cub Cadet Corporation ("Cub Cadet"), a predecessor in interest to MTD, entered into several agreements ("Agreements") that provided for Bull to sell at retail products that MTD manufactured under MTD's Cub Cadet brand. Though the Agreements did not specify their temporal length, two of the Agreements provided that either party could terminate that Agreement at any time after providing 30 days prior written notice to the other party. The Agreements did not require that the party terminating an Agreement state or have a cause for the termination. Essentially, therefore, the Agreements were contracts at will. The Agreements provided that any questions or matters arising under them would be subject to Ohio law.

We draw the inference from Bull's complaint and amended complaint that the relationship between Bull and MTD proceeded without incident for many years. Indeed, Bull became an exclusive Cub Cadet dealer for lawn and garden products in 1991, after which Bull did not sell other manufacturers' lawn and garden products. In September 2013, however, MTD's attorney wrote Bull to inform it that MTD would terminate its Wholesale Finance Agreement and Sales and Service Agreement with Bull effective after expiration of the 30-day notice period provided in the Agreements. Bull objected to the termination, claiming that under the statute regulating equipment dealer agreements in Ohio, Ohio Rev. Code §§ 1353 et seq. ("OEDA"), enacted in 2001, MTD only could terminate its Agreements with Bull for "good cause" after providing no fewer than "one hundred eighty days' prior written notice." Id. § 1353.06 (A)(1) and (B).1 But MTD denied that the Agreements were subject to the OEDA's procedural and substantive termination requirements inasmuch as the parties had executed the Agreements more than 15 years prior to their enactment. Therefore, notwithstanding Bull's objection, MTD terminated its Agreements with Bull without giving a reason for why it was doing so and without providing notice beyond the 30-day period required by the Agreements.

Bull responded by filing a nine-count complaint, the details of which we discuss below, in the District Court against MTD. MTD moved to dismiss the complaint but Bull, with leave of the Court, then amended its complaint to add a tenth count, which MTD also moved to dismiss. On May 11, 2015, the Court filed an opinion and entered an order granting MTD's motions to dismiss from which, in June 2015, Bull filed a timely notice of appeal. We conclude that the Court erred when it dismissed a claim that Bull predicated on MTD's breach of an implied warranty of merchantability with respect to the products it supplied to Bull. Therefore, we in part will reverse the May 11, 2015 order and will remand the case to the District Court for further proceedings on Bull's implied warranty claim. In all other respects, we will affirm the May 11, 2015 order.

II. STATEMENT OF JURISDICTION

The District Court exercised diversity of citizenship jurisdiction pursuant to 28 U.S.C. § 1332. We have jurisdiction pursuant to 28 U.S.C. § 1291, because the Court's May 11, 2015 order constituted a final order.2

III. STANDARD OF REVIEW

We exercise de novo review over the order granting MTD's Rule 12(b)(6) motions to dismiss. See Pension Trust Fund for Operating Eng'rs v. Mortg. Asset Securitization Transactions, Inc., 730 F.3d 263, 268 (3d Cir. 2013); Renfro v. Unisys Corp., 671 F.3d 314, 320 (3d Cir. 2011). In doing so, we first "take note of the elements a plaintiff must plead to state a claim." Malleus v. George, 641 F.3d 560, 563 (3d Cir. 2011) (citation and internal quotation marks omitted). Then, we determine if the claim has facial plausibility, a threshold that can be reached only when a plaintiff pleads factual content- as opposed to mere conclusions-that allows us to "draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 1949 (2009). Although we "must accept the allegations in the complaint as true, we are not compelled to accept unsupported conclusions and unwarranted inferences, or a legal conclusion couched as a factual allegation." Morrow v. Balaski, 719 F.3d 160, 165 (3d Cir. 2013) (quoting Baraka v. McGreevey, 481 F.3d 187, 195 (3d Cir. 2007)) (internal quotation marks omitted); James v. City of Wilkes-Barre, 700 F.3d 675, 679 (3d Cir. 2012). Accordingly, we must examine the context in which Bull made its claims, including the underlying substantive law, in order to assess the plausibility of the claims. See In re Ins. Brokerage Antitrust Litig., 618 F.3d 300, 320 n.18 (3d Cir. 2010).

IV. BACKGROUND

A. Factual History

Dennis Bull founded Bull as Somerville Equipment Company in 1967, but he changed its name to Bull International, Inc. in 1978. Bull sold and serviced commercial mowing, lawn and garden, and farm and light industrial equipment, at least some of which was manufactured under the Cub Cadet brand. Though International Harvester originally manufactured and distributed Cub Cadet products, MTD purchased the brand in 1981 and created the Cub Cadet Corporation.

By contracts dated August 1, 1985, Bull and Cub Cadet entered into a Dealer Wholesale Finance Agreement, a Sales and Service Agreement (the "Dealer Agreement"), and an Account Finance Agreement. As we already have stated, the Agreements do not contain provisions specifying their temporal duration, but the Wholesale Finance and Dealer Agreements provide that either party could terminate the Agreements at "any time" after providing 30 days prior written notice to the other party. See App. 294, ¶ M; App. 298, ¶ M. But as we also already have indicated, we draw the inference from the amended complaint that the relationship between Bull and MTD was amicable for an extended period. In fact, though Bull no longer is in business, it had a strong record in selling Cub Cadet products and MTD repeatedly honored it for being a consistent high-performing dealer. For example, MTD named Bull the Cub Cadet North Region Retailer of the Year in 2010 and Bull was a repeat member of the Cub Cadet Million Dollar Club. In addition, MTD recognized Bull with a 50-Year Partnership Award and invitations to Cub Cadet incentive trips every year since the late 1980s until the termination of the Bull-MTD relationship.

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