Fujifilm N. Am. Corp. v. M&R Printing Equip., Inc.

• Decision Date: 24 February 2021
• Docket Number: Civil No. 20-cv-492-LM
• Citation: 565 F.Supp.3d 222
• Parties: FUJIFILM NORTH AMERICA CORPORATION et al. v. M&R PRINTING EQUIPMENT, INC. et al.
• Court: U.S. District Court — District of New Hampshire

565 F.Supp.3d 222

FUJIFILM NORTH AMERICA CORPORATION et al.

v.M&R PRINTING EQUIPMENT, INC. et al.

Civil No. 20-cv-492-LM

United States District Court, D. New Hampshire.

Signed February 24, 2021

Matthew Joseph Delude, Thomas J. Pappas, Primmer Piper Eggleston & Cramer PC, Manchester, NH, for Fujifilm North America Corporation, Fujifilm Specialty Ink Systems Ltd., Fujifilm India Pvt. Ltd.

Jeffrey C. Spear, Orr & Reno PA, Concord, NH, for M&R Printing Equipment, Inc., Novus Printing Equipment, LLC.

William D. Woodbury, Normandin Cheney & O'Neil PLLC, Laconia, NH, for NI Holdings, Inc.

ORDER

Landya McCafferty, United States District Judge Plaintiffs Fujifilm North America Corporation, Fujifilm Speciality Systems Ltd. and Fujifilm India Pvt. Ltd. (collectively "Fujifilm"), bring this action against defendants M&R Printing Equipment, Inc. ("M&R Printing"), Novus Printing Equipment, LLC ("Novus Printing"), and NI Holdings, Inc., f/k/a Novus Imaging, Inc. ("Novus Holdings"). Plaintiffs assert claims for breach of contract and for violation of the New Hampshire Consumer Protection Act ("CPA"), RSA ch. 358-A. Defendants filed two motions for judgment on the pleadings¹ (doc. nos. 16 and 26). Plaintiffs object and move to amend the complaint (doc. no. 32), to which defendants object. The court resolves these motions as outlined below.

STANDARD OF REVIEW

Because allowing plaintiffs’ proposed amended complaint would moot the defendants’ motions for judgment on the pleadings, the court must first consider the motion to amend. Donlon v. Hillsborough Cnty., Civ. No. 18-cv-549-LM, 2019 WL 2062436, at *1 (D.N.H. May 9, 2019) ; see LR 15.1(c); Frappier v. Countrywide Home Loans, Inc., 750 F.3d 91, 96 (1st Cir. 2014). A court should "freely give leave [to amend] when justice so requires." Fed. R. Civ. P. 15(a)(2). However, this liberal standard does not require a court to grant every motion to amend. Donlon, 2019 WL 2062436, at *1. Rather, a request to amend "is appropriately denied when ... ‘the request is characterized by undue delay, bad faith, futility, or the absence of due diligence on the movant's part.’ " Manning v. Boston Med. Ctr. Corp., 725 F.3d 34, 60-61 (1st Cir. 2013) (brackets omitted) (quoting Calderón-Serra v. Wilmington Tr. Co., 715 F.3d 14, 19 (1st Cir. 2013) ).

Defendants object to the requested amendment on futility grounds. "A ‘futile’ amendment is one that ‘would fail to state a claim upon which relief can be granted.’ " Donlon, 2019 WL 2062436, at *1 (quoting Glassman v. Computervision Corp., 90 F.3d 617, 623 (1st Cir. 1996) ). When, as here, a plaintiff files a motion to amend in response to one or more motions for judgment on the pleadings and discovery is not yet complete, the futility inquiry mirrors the analysis applied under Federal Rule of Civil Procedure 12(b)(6). See id.; Frappier, 750 F.3d at 96 (explaining that the "standard of review for a motion for judgment on the pleadings under Federal Rule of Civil Procedure 12(c) is the same as that for a motion to dismiss under Rule 12(b)(6)" (quoting Marrero-Gutierrez v. Molina, 491 F.3d 1, 5 (1st Cir. 2007) )).

Under Rule 12(b)(6), the court must accept the factual allegations in the complaint as true, construe reasonable inferences in the plaintiffs’ favor, and "determine whether the factual allegations in the ... complaint set forth a plausible claim upon which relief may be granted." Foley v. Wells Fargo Bank, N.A., 772 F.3d 63, 71, 75 (1st Cir. 2014) (citation and internal quotation marks omitted). The court may also consider documents attached to the complaint and documents expressly incorporated in the complaint. See id. at 71-72. A claim is facially plausible when "the plaintiff pleads factual content that allows the court 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, 173 L.Ed.2d 868 (2009).

BACKGROUND

I. Factual Background

The following facts are drawn from the plaintiffs’ proposed amended complaint and its attachments (doc. no. 32-1). The three plaintiffs in this action are corporations organized under the laws of New York (Fujifilm North America), Great Britain (Fujifilm Speciality), and India (Fujifilm India). Each plaintiff operates its principal place of business in the jurisdiction in which it is incorporated. Defendant M&R Printing is incorporated in Delaware with a principal place of business in Illinois. Defendants Novus Printing and Novus Holdings each have a principal place of business in New Hampshire, but Novus Printing is incorporated in Delaware whereas Novus Holdings is incorporated in New Hampshire. Novus Printing is an LLC, the sole member of which is M&R Printing.

Plaintiffs are in the business of distributing photographic and graphic arts equipment. Defendants manufacture printers. In October 2015, Fujifilm entered into a "Distributor Agreement" with Novus Holdings to become a distributor and reseller of Novus Holdings’ "Synergia" Printer (the "Printer"). The Distributor Agreement contained a clause stating that Novus Holdings would indemnify Fujifilm for "all actions, suits, claims, demands, losses, damages, or other liabilities ... arising out of or related to [Novus Holdings’] manufacture, storage, packaging, and shipment" of Printers. Doc. no. 32-1 at 25. Fujifilm and Novus Holdings also entered into a "Global Service Level Agreement," (the "Service Agreement") pursuant to which Novus Holdings agreed to provide support services for malfunctioning Printers.

Fujifilm purchased eleven Printers from Novus Holdings between April 2015 and May 2018. All eleven Printers exhibited substantial malfunctions. Although Fujifilm informed Novus Holdings of these defects, Novus Holdings failed to repair or replace the Printers or to refund Fujifilm. In addition, in April 2016, Fujifilm provided Novus Holdings with the purchase price for an additional Printer as well as $408,192 in down payments for four other Printers. Novus Holdings failed to deliver any of these Printers.

By letter dated December 16, 2016, Novus Holdings informed Fujifilm of a "proposed transaction that [it] ... is contemplating with M&R Group Holdings." Doc. no. 32-1 ¶ 28. Although the letter seemingly contained no details of the proposed transaction, the letter did state Novus Holdings’ "understanding that the plan is for NOVUS or the surviving entity to continue to supply Fujifilm ... and its affiliates with product in accordance with our Distributor Agreement dated October 1, 2015." Id.

On April 18, 2017, Novus Holdings entered into an "Asset Purchase Agreement" (the "Asset Agreement") with M&R Printing and Novus Printing. Under the Asset Agreement, Novus Holdings transferred substantially all of its tangible and intangible property, including its: real property; inventory; machinery; computers; intellectual property; corporate name; goodwill; legal claims regarding any acquired asset; and contractual rights under approximately twenty contracts—including the Distributor Agreement.

Officers for all three defendants signed the Asset Agreement. Michael Mills signed on Novus Holding's behalf as its president. Subsequent to the Asset Agreement's signing, Mills sent multiple letters to Fujifilm on Novus Holdings’ letterhead. Mills signed the letters as "President, Novus Division, an M&R Company," and listed Novus Holdings’ New Hampshire business address, which Novus Holdings had sold in the Asset Agreement. Novus Holdings thereafter operated as part of M&R Printing, with Mills continuing to work from Novus Holdings’ prior business address as the company's President along with Novus Holdings’ former employees.

On April 18, 2017, Novus Holdings issued two "Credit Memos" to Fujifilm. The memos indicate that Novus Holdings held two credits from Fujifilm totaling $580,142. A notation next to the credits indicated that they had been "sold to M&R." Doc. no. 32-1 at 82-83. Finally, according to a balance sheet for Novus Holdings dated April 30, 2017, Novus Holdings had virtually no assets as of that date; it possessed only limited bank deposits, accounts receivable, and prepaid expenses.

II. Procedural Background

Fujifilm subsequently brought this action against Novus Holdings, M&R Printing, and Novus Printing. Count I of the proposed amended complaint brings a breach of contract claim against all defendants, alleging that defendants breached the Distributor Agreement and Service Agreement by, among other things, failing to repair the malfunctioning Printers and failing to deliver Printers. Count II specifically alleges that defendants breached the indemnification clause of the Distributor Agreement by failing to indemnify Fujifilm for the losses it suffered from defendants’ other breaches. Count III alleges that defendants violated the CPA by misrepresenting the Printers’ quality and characteristics.

Defendants filed two motions for judgment on the pleadings. In the first motion (doc no. 16), M&R Printing and Novus Printing argue that Fujifilm fails to state contractual or CPA claims against them because such claims rely on theories of successor liability, which Fujifilm failed to adequately plead. They further argue that judgment on the pleadings is warranted because Fujifilm has failed to allege facts sufficient to pierce Novus Printing's corporate veil. In the second motion (doc. no. 26), all three defendants argue that plaintiffs’ CPA claims should be dismissed because they do not comply with the statute's territoriality requirement and because they are not alleged with the specificity required by Federal Rule of Civil Procedure 9(b). Finally, defendants argue that any claim arising from printers purchased before April 2016 should be dismissed because such claims are barred by the relevant statute of limitations.

Fujifilm objects to both motions and seeks leave to amend the complaint to "add factual allegations based upon recently produced information." Doc. no. 32 at 1. Fujifilm...