Epps Chevrolet Co. v. Nissan N. Am., Inc.

• Decision Date: 27 March 2015
• Docket Number: Civil No. 14–40–GFVT.
• Citation: 99 F.Supp.3d 692
• Parties: EPPS CHEVROLET COMPANY, d/b/a Tom Epps Nissan, Plaintiff, v. NISSAN NORTH AMERICA, INC., Defendant.
• Court: U.S. District Court — Eastern District of Kentucky

99 F.Supp.3d 692

EPPS CHEVROLET COMPANY, d/b/a Tom Epps Nissan, Plaintiff

v.NISSAN NORTH AMERICA, INC., Defendant.

Civil No. 14–40–GFVT.

United States District Court, E.D. Kentucky, Central Division, Frankfort.

Signed March 27, 2015.

Clayton B. Patrick, Patrick Law Firm, Frankfort, KY, H. Kevin Eddins, Kevin James Fiet, Eddins Domine Law Group, PLLC, Louisville, KY, for Plaintiff.

J. Andrew Bertron, Jr., Nelson Mullins Riley & Scarborough, LLP, Tallahassee, FL, M. Ronald McMahan, Jr., Nelson Mullins Riley & Scarborough, LLP, Columbia, SC, Melissa Foster Bird, Huntington, WV, for Defendant.

MEMORANDUM OPINION & ORDER

GREGORY F. VAN TATENHOVE, District Judge.

Plaintiff Epps Chevrolet Company, d/b/a Tom Epps Nissan, was a party to a Dealer Agreement with defendant Nissan North America, which authorizes Epps to operate a Nissan dealership in Middlesboro, Kentucky. When Epps' lendor repossessed its inventory, Nissan served Epps with a Notice of Termination. Shortly afterward, Epps submitted a proposed Asset Purchase Agreement for Nissan's evaluation and consent. Nissan ultimately terminated the Agreement and declined to continue to consider the proposed transfer agreement. Epps then filed this lawsuit, alleging breach of contract and violation of the Kentucky Motor Vehicles Act and the federal Automobile Dealer's Day in Court Act, as well as several common law tort claims. Nissan filed a Motion to Dismiss the complaint for failure to state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6). For the reasons set forth below, the Court will GRANT Nissan's motion.

I

From 1971 until 2013, Plaintiff Epps Chevrolet Company operated a dealership in Middlesboro, Kentucky selling automobiles manufactured by Nissan or its predecessor, Datsun. [First Amended Compl., R. 10 at ¶ 5]. The dealership, which is owned by Thomas and Dale Epperson, entered into a Dealer Agreement that authorized Epps to sell new Nissan vehicles and required Epps to, among other things, establish and maintain wholesale financing arrangements, remain solvent, and ensure that the dealership facilities remain open during normal business hours. [See Dealer Agreement, R. 15–3]. In late 2012 and early 2013, Epps began experiencing financial difficulties and entered into a forbearance agreement with its lendor, Community Trust Bank. [First Amended Compl., R. 10 at ¶ 6]. After Epps apparently defaulted on that agreement (which Epps disputes), Community Trust repossessed substantially all of Epps' motor vehicle inventory on Friday, April 5, 2013. [Id. ]

Three days later, Drew Starke, Nissan's regional Dealer Operations Manager, visited the dealership and met with Dale Epperson, a manager and minority owner of the dealership. According to the complaint, Starke represented to Epperson that because of the repossession, Nissan would be sending Epps a letter containing a Notice of Termination, but that “there was no need to ‘worry about the termination letter.’ ” [First Amended Compl., R. 10 at ¶ 8]. Starke also allegedly represented that, “despite the anticipated termination letter, ... [Epps] would have a period of ninety (90) days in which to sell the Franchise.” [Id. at ¶ 9].

On April 16, Nissan sent Epps a Notice of Termination letter, which, by its own terms, served as “formal notice of its intent to terminate the Agreement ... effective [at] 5:00 pm on the latter occurring of either May 1, 2013, or fifteen (15) days from receipt hereof.” [R. 14–1]. After some apparent issues with delivery, Epps received this letter on April 30. [R. 14–1 at 5].

Ten days earlier, Epperson entered into an Asset Purchase Agreement with Tim Short of Tim Short Motors, LLC. [First Amended Compl., R. 10 at ¶¶ 11–12]. In accordance with the Dealer Agreement, which requires a dealer to obtain Nissan's consent before a transfer agreement can be effective, [see Dealer Agr. at ¶ 16(B) ], Epperson communicated the planned sale to Drew Starke, who referred him to Matt Nyenhuis, Nissan's Manager of Dealer Network Development. On May 1, Nyenhuis sent a letter to Epperson and Short stating that Nissan was in receipt of the proposed transfer agreement and that an email requesting several documents required for the evaluation would be forthcoming. [First Amended Compl., R. 10 at ¶ 13]. Two days later, Stephanie Stewart, a Dealer Network Specialist who worked with Nyenhuis, emailed Epperson and Short a Document Request Letter, which contained a number of attachments and forms, some of which were identified as “more urgent.” [Id. at ¶ 14]. Epperson and Short completed and forwarded several of the requested documents to Nissan, including a Voluntary Termination Letter, which Epperson mailed on May 6. [Id. at ¶ 14, 15]. Epperson contacted Stewart “at least twice” during this period to inquire into the progress of the evaluation; according to the complaint, Stewart stated that most of the outstanding documents were “needed from the prospective buyer [Short] and that she would be getting in touch with him [Epperson]” after those were received. [Id. at ¶ 15].

Despite the exchange of the sale documents, on May 16, 2013, Dale Epperson received a letter from Nissan stating that, “pursuant to the Notice of Termination letter dated April 16, 2013,” the termination of the Agreement had become finally effective “as of May 8, 2013.” [Id. at ¶ 17]. This, Epps alleges, was its first indication that Nissan “considered the April 16 [Notice of Termination] Letter to be still in effect or otherwise a potential roadblock to its approval of the Franchise's sale.” [Id. ] Shortly afterward, Nissan notified Tim Short that it had ceased considering the proposed transfer. [Id. at ¶ 18].

Pursuant to the Kentucky Motor Vehicle Act, Kentucky Revised Statute (KRS) § 190.010 et seq., Epps filed a protest claim with the Kentucky Motor Vehicle Commission on May 23, twenty-three days after the Notice of Termination was issued upon the dealership. [Ky. Motor Vehicle Commission Order, R. 14–4 at ¶ 1]. The Act, however, requires that any protest must be filed within fifteen days of service of a Notice of Termination. KRS § 190.045(1). Epps argued before the Commission that the statute of limitations was tolled because Nissan had withdrawn, waived or extended the Notice of Termination. After an evidentiary hearing, the Commission found that Nissan made no written or verbal withdrawal of the Notice and that Nissan's acceptance and review of the proposed transfer agreement “[did] not, in and of itself, waive, revoke or extend the notice of termination issued to Epps....” [Ky. Motor Vehicle Commission Order, R. 14–4 at ¶ 9]. It therefore dismissed Epps' protest as untimely. [Id. ] Pursuant to the KMVA, Epps appealed that Order to the Franklin Circuit Court for judicial review. In status reports ordered by the Court on February 24, 2015 [R. 24], the parties advised that the appeal remains pending; no briefing schedule has been entered and no other action has yet taken place in that case. [R. 25, 26].

Epps filed the instant suit on April 3, 2014 in Franklin Circuit Court, alleging breach of contract, violation of the KMVA and federal Automobile Dealer's Day in Court Act, and breach of the UCC's covenant of good faith and fair dealing, as well as intentional interference with contractual relations, fraud, negligent misrepresentation, and fraud by omission. [R. 1–1; R. 10]. Nissan removed the action, [R. 1], then filed the instant Motion to Dismiss. [R. 5].

II

Federal Rule of Civil Procedure 12(b)(6) allows a defendant to seek dismissal of a complaint which fails to state a claim upon which relief can be granted. Fed.R.Civ.P. 12(b)(6). Federal Rule of Civil Procedure 8 requires only “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). However, as is now well known, “a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ ” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ). While a plaintiff need not provide “detailed factual allegations,” she must advance more than “a formulaic recitation of the elements of a cause of action.” Id. (citing Twombly, 550 U.S. at 555, 127 S.Ct. 1955 ). A court reviewing a 12(b)(6) motion must “accept all the Plaintiffs' factual allegations as true and construe the complaint in the light most favorable to the Plaintiffs,”Hill v. Blue Cross & Blue Shield of Mich., 409 F.3d 710, 716 (6th Cir.2005), but it is “not bound to accept as true a legal conclusion couched as a factual allegation.” Id. (citing Twombly, 550 U.S. at 556, 127 S.Ct. 1955 ). Ultimately, a plaintiff must “plead[ ] factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. (citing Twombly, 550 U.S. at 556, 127 S.Ct. 1955 ).

At the outset, the Court notes that Epps did not include the Notice of Termination, the Asset Purchase Agreement, or the Dealer Agreement with its initial Complaint, [R. 1], or its First Amended Complaint, [R. 10]. Generally, a court may not refer to matters outside of the pleadings without converting a motion to dismiss into a motion for summary judgment, Fed.R.Civ.P. 12(d), and a plaintiff is under no obligation to attach to his complaint the documents upon which his cause of actions are based, Weiner v. Klais & Co., 108 F.3d 86, 89 (6th Cir.1997) (citing 5 Charles A. Wright, et al., Fed. Practice & Procedure § 1327 (2d ed.1990)). The Sixth Circuit has held, however, that a defendant may attach as exhibits the documents that are “referred to in the plaintiff's complaint and are central to [its] claim” without converting a motion to dismiss into one for summary judgment. Weiner, 108 F.3d at 89 ; see also KBC Asset Mgmt. N.V. v. Omnicare, Inc. (In re Omnicare, Inc. Sec. Litig.), 769 F.3d 455, 466 (6th...