Feldmann Imports Inc. v. Mercedes-Benz USA, LLC
| Decision Date | 11 December 2020 |
| Docket Number | Case No. 20-cv-0750 (WMW/KMM) |
| Citation | 506 F.Supp.3d 687 |
| Parties | FELDMANN IMPORTS INC., Plaintiff, v. MERCEDES-BENZ USA, LLC, Defendant. |
| Court | U.S. District Court — District of Minnesota |
Aaron R. Thom, Samantha Ellingson, Thom Ellingson, PLLP, Minneapolis, MN, Steven Blatt, Pro Hac Vice, Bellavia Blatt, P.C, Mineola, NY, for Plaintiff.
David Lurie, Pro Hac Vice, Matthew F. Singer, Pro Hac Vice, Barack Ferrazzano Kirschbaum & Nagelberg, Chicago, IL, Nicholas H. Callahan, Barack Ferrazzano Kirschbaum & Nagelberg, Minneapolis, MN, for Defendant.
Wilhelmina M. Wright, United States District Judge This matter is before the Court on a motion for judgment on the pleadings filed by Defendant Mercedes-Benz USA, LLC (MBUSA). (Dkt. 16.) MBUSA seeks judgment in its favor as to each of the five claims alleged in the complaint. Plaintiff Feldmann Imports Inc. (Feldmann) opposes the motion. For the reasons addressed below, MBUSA's motion is granted and this case is dismissed.
Feldmann is a Minnesota corporation that operates a franchised motor vehicle dealership in Bloomington, Minnesota, where it sells and services Mercedes-Benz vehicles. MBUSA is a Delaware limited liability company that manufactures and sells motor vehicles to dealers, including Feldmann. Feldmann became a franchised dealer of MBUSA's vehicles in or about 1982, when the parties executed a Mercedes-Benz Passenger Car Dealer Agreement and a Mercedes-Benz Light Truck Dealer Agreement (collectively, the Franchise Agreements). The Franchise Agreements have been reissued multiple times since 1982.1 As relevant here, the Franchise Agreements require Feldmann to perform warranty repairs on qualified vehicles at the vehicle owner's request without charge to the owner. The Franchise Agreements also provide that "MBUSA agrees to compensate [Feldmann] for all warranty repairs ... at rates to be established from time to time by MBUSA."
In May 2018, the Minnesota Legislature enacted Minnesota Statutes Section 80E.041, which had an effective date of August 1, 2018. See Minn. Stat. § 80E.041. Among other provisions, Section 80E.041 provides a method by which a motor vehicle dealer may establish a "retail rate" to be applied to the cost of warranty parts, subject to the approval of the vehicle manufacturer. Id. , subdiv. 2(a), (b). If a manufacturer disapproves a dealer's retail rate and the dealer does not agree to the manufacturer's proposed adjustment of the retail rate, the "dealer must file a civil suit ... within 60 days of receiving the manufacturer's proposed adjustment to the retail rate." Id. , subdiv. 2(c).
In a letter dated October 28, 2019, Feldmann sent to MBUSA a "request for additional reimbursement on parts used in connection with warranty repairs," pursuant to Section 80E.041. In that letter, Feldmann requests reimbursement at a new "retail rate" of 94 percent "beginning thirty (30) days from the date of this letter." In a November 19, 2019 letter to Feldmann, MBUSA acknowledges receipt of Feldmann's retail rate request and provides that Feldmann's "calculation does not conform to the state statute as parts specifically excluded by the statute were included (e.g. fuses, non-OEM parts, broken components, etc.)." MBUSA's letter further provides that MBUSA "developed a program with respect to the reimbursement for parts utilized in authorized warranty repairs for all of our authorized dealers" and that this "program provides all Mercedes-Benz dealers, including those in Minnesota, with reasonable compensation for such parts in compliance with applicable laws." MBUSA's letter concludes that "all eligible warranty claims from [Feldmann] have been paid in accordance with the program guidelines."
Feldmann commenced this action against MBUSA on March 18, 2020. Feldmann's complaint advances five claims. Feldmann's first claim seeks a declaratory judgment that Minn. Stat. § 80E.041 does not violate the Contract Clause of the United States Constitution and that MBUSA must comply with Minn. Stat. § 80E.041. Feldmann's second claim alleges that MBUSA is liable for violating the Automobile Dealer Day in Court Act (ADDCA), 15 U.S.C. §§ 1221 et seq. Feldmann's third claim alleges that MBUSA is liable for failing to "act in good faith," in violation of Minn. Stat. §§ 80E.01 – 80E.17. Feldmann's fourth claim alleges that MBUSA violated Minn. Stat. § 80E.041 when MBUSA purported to disapprove Feldmann's "retail rate." Feldmann's fifth claim alleges that MBUSA breached the implied covenant of good faith and fair dealing under Minnesota common law. MBUSA seeks judgment on the pleadings in its favor as to each of Feldmann's five claims.
A party may file a motion for judgment on the pleadings "[a]fter the pleadings are closed—but early enough not to delay trial." Fed. R. Civ. P. 12(c). The same legal standard used to evaluate a motion to dismiss for failure to state a claim under Rule 12(b)(6), Fed. R. Civ. P., applies to a motion for judgment on the pleadings, see Gallagher v. City of Clayton , 699 F.3d 1013, 1016 (8th Cir. 2012). When determining whether a complaint states a facially plausible claim, a district court accepts the factual allegations in the complaint as true and draws all reasonable inferences in the plaintiff's favor. Blankenship v. USA Truck, Inc. , 601 F.3d 852, 853 (8th Cir. 2010). Factual allegations must be sufficient to "raise a right to relief above the speculative level" and "state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly , 550 U.S. 544, 555, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). Legal conclusions couched as factual allegations may be disregarded. See Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009).
Although matters outside the pleadings generally may not be considered when deciding a motion to dismiss, a district court may consider documents necessarily embraced by the pleadings. Ashanti v. City of Golden Valley , 666 F.3d 1148, 1151 (8th Cir. 2012). Documents are necessarily embraced by the pleadings when a complaint alleges the contents of the documents and no party questions their authenticity. Zean v. Fairview Health Servs. , 858 F.3d 520, 526 (8th Cir. 2017). Notably, the contract on which a breach-of-contract claim rests ordinarily is embraced by the pleadings. See Gorog v. Best Buy Co., Inc. , 760 F.3d 787, 791 (8th Cir. 2014). The Franchise Agreements at issue here are embraced by Feldmann's complaint, and there is no dispute as to the authenticity of the copies of the Franchise Agreements subsequently filed by Feldmann. Similarly, Feldmann's October 28, 2019 letter requesting a "retail rate" reimbursement and MBUSA's November 19, 2019 letter responding to that request are embraced by Feldmann's complaint and attached to MBUSA's answer. And neither party challenges the authenticity of these documents. As such, the Court may consider these documents when deciding MBUSA's motion for judgment on the pleadings.
The Court addresses each of Feldmann's five claims, beginning with the Section 80E.041 statutory claim, as that claim underlies Feldmann's other four claims.
Feldmann's complaint alleges that MBUSA violated Minn. Stat. § 80E.041 when MBUSA purported to disapprove Feldmann's requested "retail rate" for additional reimbursement on parts used in connection with warranty repairs. MBUSA argues that this claim is untimely.
If a manufacturer disapproves a dealer's retail rate and the dealer does not agree to the manufacturer's proposed adjustment of the retail rate, the "dealer must file a civil suit ... within 60 days of receiving the manufacturer's proposed adjustment to the retail rate." Minn. Stat. § 80E.041, subdiv. 2(c). It is undisputed that MBUSA responded to Feldmann's "retail rate" request on November 19, 2019. According to MBUSA, Feldmann was required to file a Section 80E.041 claim within 60 days after November 19, 2019. It is undisputed that Feldmann did not do so, as Feldmann commenced this lawsuit on March 18, 2020.
Feldmann contends that the 60-day statutory timeframe in which Feldmann was required to file its Section 80E.041 claim did not commence on November 19, 2019, because MBUSA's letter lacked "reasonable substantiation" to support MBUSA's disapproval. According to Feldmann, providing "reasonable substantiation" is a "condition precedent to a Dealer's ability to file an action" under Minn. Stat. § 80E.041, subdiv. 2(c). But Feldmann's argument is not supported by the statutory language.2 Instead, the statute requires Feldmann to file a claim "within 60 days of receiving the manufacturer's proposed adjustment to the retail rate." Minn. Stat. § 80E.041, subdiv. 2(c). Therefore, to determine whether Feldmann's claim is untimely, the Court must determine whether and, if so, when, Feldmann received from MBUSA a "proposed adjustment to the retail rate."
In its complaint, Feldmann alleges that MBUSA's disapproval did not include a proposed adjustment to Feldmann's requested "retail rate." To the extent that Feldmann's allegation reflects a legal conclusion that MBUSA failed to comply with the statutory requirement to provide a proposed adjustment to the retail rate, the Court may disregard legal conclusions couched as factual allegations. See Iqbal , 556 U.S. at 678, 129 S.Ct. 1937. Moreover, when evaluating a motion to dismiss, if "a written instrument contradicts allegations in the complaint ... the exhibit trumps the allegations." Elkharwily v. Mayo Holding Co. , 955 F. Supp. 2d 988, 996 (D. Minn. 2013) (internal quotation marks omitted), aff'd , 823 F.3d 462 (8th Cir. 2016). As such, a review of MBUSA's November 19, 2019 letter is warranted.
Although MBUSA's letter clearly rejects the retail rate that Feldmann calculated, the letter does not expressly include an alternative reimbursement rate for warranty parts. But Section...
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