Soft Stuff Distribs., Inc. v. Ryder Truck Rental, Inc.
| Decision Date | 30 July 2012 |
| Docket Number | Civil No. CCB-11-2605 |
| Parties | SOFT STUFF DISTRIBUTORS, INC., ET AL. v. RYDER TRUCK RENTAL, INC. |
| Court | U.S. District Court — District of Maryland |
Plaintiff Soft Stuff Distributors, Inc. ("Soft Stuff") brings this putative class action lawsuit against Ryder Truck Rental, Inc. ("Ryder") for alleged fraudulent invoicing practices related to fuel purchases by Ryder customers. Ryder filed a motion to dismiss the original complaint, Soft Stuff filed a response in opposition, and Ryder filed a reply. Before any ruling on the motion, Soft Stuff filed a motion for leave to file an amended complaint, attaching a proposed amended complaint. Ryder filed a brief in opposition, and Soft Stuff filed a reply. No oral argument is necessary. See Local Rule 105.6. For the following reasons, the motion to dismiss will be granted and the motion for leave to file the proposed amended complaint will be denied.
Soft Stuff is a baked goods distributor based in Jessup, Maryland. To distribute their products, the company leased trucks for "many years" from a Maryland facility of Ryder, a national company that has its principal place of business in Florida. (Def.'s Mot. Dismiss 2, ECF No. 12.) Ryder provided Soft Stuff with leased trucks and also with maintenance and fuel services. To accessthese services, Soft Stuff employees drove the leased trucks to the Ryder facility, where Ryder employees would pump the fuel and perform other tasks. (Id.) Ryder "fuel pumps show the amount dispensed to the hundredth of a gallon," (Def.'s Reply Mot. Dismiss 13, ECF No. 20), but Ryder's fuel invoices measured the fuel purchases only by the whole gallon. (See Invoices, ECF No. 12-1.) Soft Stuff employees were required to sign the invoices on site subsequent to the fueling services. (Def.'s Mot. Dismiss 2.)
Soft Stuff alleges that Ryder applied a method of rounding fuel sales to the nearest whole gallon that "statistically and mathematically results in Ryder receiving payment for fuel that is not being purchased." (Compl. ¶ 15, ECF No. 1.) Specifically, the complaint alleges, Ryder "maintained a pattern and practice of rounding up to the cost of the next full gallon of fuel when the vehicle . . . required 4/10 of a partial gallon or more." (Id. at 10.) Soft Stuff clarified the allegation in its opposition brief and then again later in the proposed amended complaint. "Consider for example," the opposition brief reads, (Pl.'s Opp. Mot. Dismiss 6, ECF No. 17.) According to Soft Stuff, Ryder customers are not advised in any way of this nontraditional method of rounding, even though the method on the whole results in customers being charged for more gallons of fuel than they actually receive.1
In its motion to dismiss, Ryder does not expressly deny applying the above-described rounding procedure.2 Instead, among other arguments, the company contends that the agreements the parties signed require the court to dismiss Soft Stuff's complaint. On November 28, 2005, the parties signed a Truck Lease and Service Agreement ("TLSA") (see ECF No. 12-2), and over the next three years the parties signed six different amendments to that document. (See ECF Nos. 12-3 to 12-8.) The TLSA contains the following language about fuel services:
When Ryder is designated on Schedule A, Ryder will provide fuel for each Vehicle from a Ryder or Ryder-designated facility. Ryder's charge for fuel it provides will vary over time. Fuel charges are incidental and are billed in addition to all other lease charges. If your account is past-due, Ryder may elect to stop providing fuel to you. You will be responsible for the cost of fuel you obtain from other sources and cannot charge these costs to your Ryder account.
(TLSA § 3). The Schedules then provide additional detail regarding the fuel sales. After listing the vehicles to which each applies, each states: "Ryder will provide fuel for the Vehicles and charge you for any fuel it provides in accordance with the terms of the TLSA and in addition to all other lease charges." (2005 Schedule A § 13, ECF No. 12-5; 2007 Schedule A § 13, ECF No. 12-7; 2008 Schedule A § 13, ECF No. 12-8.)
Soft Stuff does not allege that, prior to filing this lawsuit, Soft Stuff ever notified Ryder in writing of any error in the fuel invoices. Rydercontends that this failure is fatal to all of Soft Stuff's claims.
On September 13, 2011, Soft Stuff filed this class action complaint against Ryder. The complaint contains four causes of action: fraud (Count I), breach of contract (Count II), deceptive trade practices under Maryland Code § 13-303 (Count III), and unjust enrichment (Count IV). The complaint asks for damages and injunctive relief and contends there are other similarly situated persons who also purchased fuel from Ryder subject to the same allegedly unlawful practices and policies.
On October 24, 2011, Ryder moved to dismiss the complaint pursuant to Rule 12(b)(6). The motion makes several arguments, but focuses on the clause in the TLSA that deems invoices presumptively correct after 90 days. On November 23, 2011, Soft Stuff filed a brief in opposition to the motion to dismiss. In the opposition brief, Soft Stuff argues that the contractual obligations in the action do not arise from the TLSA, but rather from the implied-in-fact contract created between the parties on each individual occasion when fuel is purchased. On December 8, 2011, Ryder filed a reply brief.
On February 15, 2012, before any ruling on the motion, Soft Stuff filed a motion for leave to file an amended complaint, attaching a copy of a proposed amended complaint. The proposed amended complaint did not contain significant new factual allegations, but did include some of the arguments that Soft Stuff had made in its previous opposition brief. Following this motion, Ryder filed a brief in opposition and Soft Stuff filed a reply. The court now considers both pending motions.
A Rule 12(b)(6) motion tests the sufficiency of the complaint and does not "resolve contests surrounding the facts, the merits of a claim, or the applicability of defenses." Presley v. City of Charlottesville, 464 F.3d 480, 483 (4th Cir. 2006) (internal quotation marks and alterations omitted) (quoting Edwards v. City of Goldsboro, 178 F.3d 231, 243 (4th Cir. 1999)). When ruling on a 12(b)(6) motion, the court must "accept the well-pled allegations of the complaint as true" and "construe the facts and reasonable inferences derived therefrom in the light most favorable to the plaintiff." Ibarra v. United States, 120 F.3d 472, 474 (4th Cir. 1997).
To survive a motion to dismiss, the factual allegations of a complaint "must be enough to raise a right to relief above the speculative level." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). The plaintiff's obligation is to show sufficiently the "grounds of his entitlement to relief," offering "more than labels and conclusions." Id. It is not sufficient that the well-pleaded facts suggest "the mere possibility of misconduct." Ashcroft v. Iqbal, --- U.S.---, 129 S. Ct. 1937, 1950 (2009). Rather, to withstand a motion to dismiss, "a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face," meaning the court could draw "the reasonable inference that the defendant is liable for the conduct alleged." Id. at 1949 (internal quotations and citation omitted).
Federal Rule of Civil Procedure 15(a)(2) encourages district courts to "freely give leave [to file an amended complaint] when justice so requires." Fed. R. Civ. P. 15(a)(2). The Fourth Circuit has counseled, however, that "leave to amend is not to be granted automatically." Deasy v. Hill, 833 F.2d 38, 40 (4th Cir. 1987). Rather, "[d]isposition of a motion to amend is within the sound discretion of the district court." Id. (citing Foman v. Davis, 371 U.S. 178, 182 (1962)). A district court may deny leave to amend "only when the amendment would be prejudicial to the opposingparty, there has been bad faith on the part of the moving party, or the amendment would be futile." HCMF Corp. v. Allen, 238 F.3d 273, 276 (4th Cir. 2001) (quoting Edwards, 178 F.3d at 242). An amendment is futile "when the proposed amendment is clearly insufficient or frivolous on its face," Johnson v. Oroweat Foods Co., 785 F.2d 503, 510 (4th Cir. 1986), or if the amended claim would "still fail to survive a motion to dismiss" pursuant to Fed. R. Civ. P. 12(b)(6). Perkins v. U.S., 55 F.3d 910, 917 (4th Cir. 1995).
Soft Stuff's common law fraud claim must be dismissed. To state a claim for fraud, a plaintiff must allege that:
(1) the defendant made a false representation to the plaintiff, (2) that its falsity was either known to the defendant or that the representation was made with reckless indifference as to its truth, (3) that the misrepresentation was made for the purpose of defrauding the plaintiff, (4) that the plaintiff relied on the misrepresentation and had the right to rely on it, and (5) that the plaintiff suffered compensable injury resulting from the misrepresentation.
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