Brockman v. American Suzuki Motor Corp.
| Decision Date | 10 August 2012 |
| Docket Number | C/A No. 6:11-3381-TMC |
| Parties | James Brockman, Jr.,Wade Hampton of Greer, LLC; Suzuki of Greer, LLC; and Plaintiffs, v. American Suzuki Motor Corporation, Defendant. |
| Court | U.S. District Court — District of South Carolina |
This matter is before the court on Defendant American Suzuki Motor Corporation's ("Defendant's") Motion for Judgment on the Pleadings pursuant to Rule 12(c), Fed. R. Civ. P. (Dkt. # 17). Plaintiffs James Brockman, Jr. ("Brockman"), Wade Hampton of Greer, LLC, and Suzuki of Greer, LLC, (collectively referred to herein as "Plaintiffs") filed a response opposing the motion (Dkt. # 21) and Defendant filed a reply (Dkt. # 23). This motion is now ripe for resolution. For the reasons set forth below, the court grants the motion in part and denies the motion in part.
In their Complaint, Plaintiffs allege the following. Between 2007-2009, Plaintiff Brockman signed letters of intent with Defendant regarding a Suzuki franchise in Greer, South Carolina. (Compl. ¶ 7). Based upon these letters of intent, Brockman formed Wade Hampton of Greer, LLC, to purchase and lease land and construct a dealership to be built to Defendant Suzuki's specifications and Plaintiff Suzuki of Greer, LLC, to operate the Suzuki dealership. Id. Plaintiffs allege that they purchased and leased land andobtained an $8 million loan to construct the dealership and a $2 million floor plan line of credit. (Compl. ¶ 8).
Plaintiffs allege that in 2007, Defendant encouraged Joe Gibson's Autoworld ("Joe Gibson"), a local Suzuki dealer, to use no or low money down and no or low payment marketing and advertising referred to as "Drive a Susuki" or "Drive for Life" programs. (Compl. ¶¶ 10, 14). Under these programs, consumers were informed that for ten to twelve months they would receive rebate checks from Joe Gibson's to cover their monthly payments and thereafter consumers could trade in their Suzukis for new Suzukis from Joe Gibson's and retain similar payment terms. (Compl. ¶¶ 16-18). Consumers were also informed that they would receive additional rebate checks once they traded in vehicles and that they would not be responsible for any loan obligation in purchasing these Suzuki vehicles. (Compl. ¶¶ 18, 23).
In reality, the promotional term was for ten months to one year, after which time the consumer had to reapply for the offer and most consumers were unable to obtain refinancing. (Compl. ¶ 24). These consumers were then required to make full payments on the vehicles, some as high as $700 per month. (Compl. ¶ 25).
As a result, many consumers' cars were repossessed, many consumers filed lawsuits, the South Carolina Attorney General's Office began a highly publicized investigation, and Joe Gibson's filed for bankruptcy on July 16, 2008. (Compl. ¶ 27; Answer ¶¶ 19, 27-28). Plaintiff alleges that these events drastically reduced the consumer's confidence in Suzuki vehicles and once Plaintiffs had completed construction of the Suzuki dealership, they were unable to obtain the floor plan line of credit required by Suzuki. (Compl. ¶¶ 28, 29). Plaintiffs allege they were finally able to obtain a $500,000 line of credit, but then Suzuki increased the minimum amount it would acceptfor the floor plan line of credit and this effectively terminated the franchise. (Compl. ¶ 29).1 Plaintiffs allege that they are left with land and a brand new dealership that is practically worthless because it was built to Suzuki specifications and further they cannot sell it to another Suzuki dealer because no one will enter the Greenville/Spartanburg market because of the negativity created by the Joe Gibson/Suzuki advertising campaign. Id.
In its Answer, Defendant contends that Plaintiffs were able to secure the required floor-plan line of credit and they became an authorized Suzuki dealer on February 26, 2010. (Answer ¶¶ 19, 29). Defendant further alleges that Plaintiffs sold the dealership to BSAC Suzuki on May 20, 2010. (Answer ¶¶ 19, 29). Defendant alleges that Plaintiffs then sought to re-purchase the Suzuki of Greer dealership from BSAC in 2011. (Answer ¶ 29). Defendant alleges Plaintiffs entered into a conditional buy/sell agreement with BASC on May 27, 2011, but because Plaintiffs were unable to meet the increased floor plan line of credit which was applicable in 2011, Defendant denied the transfer. Id.
Plaintiffs allege six causes of action for unfair methods of competition and unfair or deceptive acts or practices based upon violations of the South Carolina Regulation of Manufacturers, Distributors and Dealers Act ("Act"), S. C. Code Ann. § 56-15-10 et. seq. Specifically, Plaintiffs allege violations of §§ 56-15-40(1); 56-15-40(3)(d); 56-15-40(3)(e); 56-15-40(3)(f); 56-15-45(B)(2); and 56-15-90. Plaintiffs further allege several common law claims: unjust enrichment, negligence, breach of contract, and breach of contract with fraudulent intent. Plaintiffs are seeking actual and punitive damages, double the amount of damages pursuant to S.C. Code Ann. § 56-15-110, pre and post judgment interest, andreasonable attorney's fees and costs. (Compl. 21).
Rule 12(c) allows a party to move for judgment on the pleadings, "after the pleadings are closed—but early enough not to delay trial. . . ." Fed.R.Civ.P 12(c). In considering a motion for judgment on the pleadings under Rule 12(c), the court applies the same standard as a motion to dismiss under Rule 12(b)(6). Walker v. Kelly, 589 F.3d 127, 139 (4th Cir. 2009). "A motion to dismiss under Rule 12(b)(6) tests the sufficiency of a complaint; importantly, it does not resolve contests surrounding the facts, the merits of a claim, or the applicability of defenses." Republican Party of N.C. v. Martin, 980 F.2d 943, 952 (4th Cir. 1992) (citation omitted).
The Federal Rules of Civil Procedure "require[] only a short and plain statement of the claim showing that the pleader is entitled to relief, in order to 'give the defendant fair notice of what the . . . claim is and the grounds upon which it rests." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal citation and quotation marks omitted). A complaint need not assert "detailed factual allegations," but must contain "more than labels and conclusions" or a "formulaic recitation of the elements of a cause of action." Id. at 555 (citations omitted). The complaint must contain factual matter which, if accepted as true, would "state a claim to relief that is plausible on its face." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly). A claim is facially plausible when a plaintiff pleads sufficient factual content to allow "the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id.
When considering a motion for judgment on the pleadings, the court accepts as true all well-pleaded allegations and views the complaint in the light most favorable to theplaintiff. Mylan Labs., Inc. v. Matkari, 7 F.3d 1130, 1134 (4th Cir. 1993). The court is not, however, required to accept as true any legal conclusions contained in the complaint. Ashcroft v. Iqbal, 556 U.S. at 678. However, "[U]nlike on a Rule 12(b)(6) motion . . . on a Rule 12(c) motion the court may consider the Answer as well." Alexander v. City of Greensboro, No. 1:09-CV-293, 2011 WL 3360644, at *2 (M.D.N.C. August 3, 2011). The "factual allegations in the answer are taken as true to the extent they have not been denied or do not conflict with the complaint." Farmer v. Wilson Hous. Auth., 393 F.Supp.2d 384, 386 (E.D.N.C. 2004) (internal citation and quotation marks omitted); Jadoff v. Gleason, 140 F.R.D. 330, 331 (M.D.N.C. 1991).
For the "purposes of this motion Defendant cannot rely on allegations of fact contained only in the [A]nswer, including affirmative defenses, which contradict [the][C]omplaint" because Plaintiff was "not required to reply to Defendant's [A]nswer, and all allegations in the [A]nswer are deemed denied." Jadoff, 140 F.R.D. at 332. See Fed.R.Civ.P. 8(b)(6) (). Furthermore, in "determining a motion for judgment on the pleadings, the court may consider documents incorporated by reference in the pleadings." Farmer, 393 F.Supp.2d at 386 (internal citation and quotation marks omitted). However, documents attached to the answer are part of the pleadings for Rule 12(c) purposes, and may be considered without converting a motion for judgment on the pleadings into a motion for summary judgment, only if the documents are central to the plaintiff's claim and the authenticity is not challenged. Horsley v. Feldt, 304 F.3d 1125, 1134-35 (11th Cir. 2002).
In its Motion for Judgment on the Pleadings, Defendant contends that all ofPlaintiffs' claims are implausible as a matter of law, Plaintiffs' claims under the Act fail as a matter of law, and Plaintiffs' common law claims are barred by the statue of limitations and many fail to state a viable cause of action. Plaintiffs contend Defendant's motion is premature and based upon a false assumption. Plaintiffs dispute Defendant's contention that Plaintiffs were not a Suzuki dealer at the time of the alleged events. Plaintiffs argue that whether they were a dealer is a factual dispute which must be resolved in their favor in considering this motion, and, therefore, Defendant's motion should be denied. Alternatively, Plaintiffs request leave to amend their complaint.
Defendant contends that Plaintiffs' claims are merely conclusory allegations which are nonsensical and implausible as a matter of law and all of the Plaintiffs' claims should be dismissed. Defendant contends Plaintiffs were not Suzuki dealers in 2007-2008 when the Joe Gibson advertising scheme took place and, therefore, it is implausible that Plaintiffs were harmed by the advertising. (Def.'s Mem. Supp. Mot. ...
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