Veritas Auto. Mach., LLC v. FCA Int'l Operations, LLC

• Decision Date: 28 January 2021
• Docket Number: No. 346985,346985
• Citation: 968 N.W.2d 1,335 Mich.App. 602
• Parties: VERITAS AUTOMOTIVE MACHINERY, LLC, Plaintiff-Appellee, v. FCA INTERNATIONAL OPERATIONS, LLC, formerly known as Chrysler Group International, LLC, Defendant-Appellant.
• Court: Court of Appeal of Michigan — District of US

335 Mich.App. 602

968 N.W.2d 1

VERITAS AUTOMOTIVE MACHINERY, LLC, Plaintiff-Appellee,

v.FCA INTERNATIONAL OPERATIONS, LLC, formerly known as Chrysler Group International, LLC, Defendant-Appellant.

No. 346985

Court of Appeals of Michigan.

Submitted June 9, 2020, at Detroit.

Decided January 28, 2021, 9:30 a.m.

Colombo & Colombo, PC, Bloomfield Hills (by Nicholas J. Ranke ) and Foley & Lardner LLP (by Norman C. Ankers ) for Veritas Automotive and Machinery LLC.

Bodman PLC (by Thomas J. Tallerico, Troy, and Jane Derse Quasarano, Detroit) for FCA International Operations LLC.

Before: Tukel, P.J., and Servitto and Beckering, JJ.

Per Curiam.

Defendant FCA International Operations LLC, formerly known as Chrysler Group International LLC, appeals by leave granted¹ the trial court's opinion and order denying its motion for summary disposition under MCR 2.116(C)(8). Specifically, defendant argues that two claims brought by plaintiff, Veritas Automotive and Machinery LLC—one under the federal Automobile Dealer's Day in Court Act (ADDCA), 15 USC 1221 et seq. , and another under Michigan's Motor Vehicle Franchise Act (MVFA), MCL 445.1561 et seq. —failed to state a claim upon which relief could be granted. Defendant's argument in this regard primarily focuses on its assertion that plaintiff is a "foreign dealer" for purposes of both acts. We agree in part and disagree in part with defendant. The trial court did not err when it denied summary disposition to defendant as to plaintiff's ADDCA claim, but it did err by denying defendant's motion for summary disposition as to its MVFA claim. We affirm in part, reverse in part, and remand for further proceedings.

I. UNDERLYING FACTS

Plaintiff is a Delaware limited-liability company with a principal place of business in Southfield, Michigan. Plaintiff alleged that it was "engaged in the sale and service of new and used ... motor vehicles and the sale of vehicle parts manufactured by [defendant]." On September 1, 2008, plaintiff and defendant entered into a written distributor agreement "for an initial fixed term of five years." According to plaintiff, it distributed defendant's products "on the ground in Iraq"; it "invested nearly $60,000,000.00 on land for a dealership, inventory, and personnel"; and "[s]ince the inception of the [distributor agreement]," it had "endured bombings; the constant threat of violence; communication disruptions; and every other imaginable obstacle that could be encountered in a third-world country that recently escaped the grips of a brazen dictatorship and is still dealing with the consequences of ongoing sectarian violence and terrorism."

Plaintiff alleged that it did very well for defendant under the agreement. The parties amended the agreement on May 30, 2012. According to that amendment, the parties’ agreement was to expire in August 2013 unless plaintiff satisfied three prerequisites, although the parties dispute whether plaintiff did, in fact, meet those requirements. In any event, defendant terminated the agreement, which led plaintiff to file this lawsuit. Importantly for this case, plaintiff alleged that defendant violated the ADDCA and the MVFA when it terminated the agreement. The complaint did not expressly allege, although it seems to be assumed by all parties, that all of plaintiff's motor vehicle sales took place in Iraq.

Defendant moved for summary disposition under MCR 2.116(C)(8), arguing in relevant part that, as a matter of law, plaintiff was not entitled to the protections afforded under the ADDCA and the MVFA because it was a "foreign dealer." In response, plaintiff pointed to its complaint's allegation that it was not a foreign dealer, as it was a Delaware limited-liability company with a principal place of business in Southfield, Michigan; plaintiff also cited the distribution agreement's title page, which reflected the same information (although with a former address for its principal place of business in Southfield).

The trial court ultimately denied defendant's motion. Regarding the ADDCA claim, the trial court emphasized that the act defined an automobile dealer as including any "form of business enterprise resident in the United States ...." The trial court determined that it could not "conclude on the basis of the allegations alone that Plaintiff was not ‘resident in the United States.’ " Accordingly, the court held that defendant was not entitled to summary disposition on plaintiff's claim under the ADDCA.

Regarding the MVFA claim, the trial court found "that the Complaint does allege facts demonstrating that Plaintiff has an established place of business in ... Michigan" and thus was a "new motor vehicle dealer" under the act. Therefore, the trial court concluded, "Plaintiff is entitled to bring suit under the Michigan Motor Vehicle Dealer Franchise Act." In reaching this conclusion, the trial court was persuaded by the fact that the MVFA merely provided that plaintiff's "principal place of business" may display and repair motor vehicles, which, it opined, allowed but did not require the dealer to display and repair vehicles. This appeal followed.

II. STANDARD OF REVIEW

MCR 2.116(C)(8) mandates summary disposition if "the opposing party has failed to state a claim on which relief can be granted." Harbor Watch Condo. Ass'n v. Emmet Co. Treasurer , 308 Mich. App. 380, 384, 863 N.W.2d 745 (2014).

A motion under MCR 2.116(C)(8) tests the legal sufficiency of the complaint. All well-pleaded factual allegations are accepted as true and construed in a light most favorable to the nonmovant. A motion under MCR 2.116(C)(8) may be granted only where the claims alleged are so clearly unenforceable as a matter of law that no factual development could possibly justify recovery. When deciding a motion brought under this section, a court considers only the pleadings. [ Maiden v. Rozwood , 461 Mich. 109, 119-120, 597 N.W.2d 817 (1999) (quotation marks and citations omitted).]

Thus, "[a] party may not support a motion under subrule (C)(8) with documentary evidence such as affidavits, depositions, or admissions."

Dalley v. Dykema Gossett PLLC , 287 Mich. App. 296, 305, 788 N.W.2d 679 (2010).² That being said, when a contract is attached to a pleading it "becomes part of the pleadings themselves, even for purposes of review under MCR 2.116(C)(8)." Laurel Woods Apartments v. Roumayah , 274 Mich. App. 631, 635, 734 N.W.2d 217 (2007). "Conclusory statements, unsupported by factual allegations, are insufficient to state a cause of action." Churella v. Pioneer State Mut. Ins. Co. , 258 Mich. App. 260, 272, 671 N.W.2d 125 (2003). Finally, because a motion under MCR 2.116(C)(8) is based on the pleadings, discovery is not a consideration when a court determines whether to grant the motion. See Maiden , 461 Mich. at 119-120, 597 N.W.2d 817.³

This Court likewise reviews de novo a circuit court's interpretation and application of state and federal legislation. PNC Nat'l Bank Assn v. Dep't. of Treasury , 285 Mich. App. 504, 505, 778 N.W.2d 282 (2009) ; Selflube, Inc. v. JJMT, Inc. , 278 Mich. App. 298, 306, 750 N.W.2d 245 (2008). This Court and the Michigan Supreme Court have described the rules of statutory construction as follows:

The paramount rule of statutory interpretation is that we are to effect the intent of the Legislature. To do so, we begin with the statute's language. If the statute's language is clear and unambiguous, we assume that the Legislature intended its plain meaning, and we enforce the statute as written. In reviewing the statute's language, every word should be given meaning, and we should avoid a construction that would render any part of the statute surplusage or nugatory. [ PNC Nat'l Bank Ass'n , 285 Mich. App. at 506, 778 N.W.2d 282, quoting Wickens v. Oakwood Healthcare Sys. , 465 Mich. 53, 60, 631 N.W.2d 686 (2001).]

"Unless defined in the statute, every word or phrase of a statute should be accorded its plain and ordinary meaning, taking into account the context in which the words are used." In re Smith Estate , 252 Mich. App. 120, 124, 651 N.W.2d 153 (2002). Finally, "[w]hen considering the correct interpretation, the statute must be read as a whole." Mich. Props., L.L.C. v. Meridian Twp. , 491 Mich. 518, 528, 817 N.W.2d 548 (2012).

III. AUTOMOBILE DEALER'S DAY IN COURT ACT

Defendant argues that the trial court erred by denying its motion for summary disposition under the ADDCA. We disagree.

A cause of action under the ADDCA has the following elements: "(1) the plaintiff must be an automobile dealer; (2) the defendant must be an ‘automobile manufacturer’ engaged in commerce; (3) there must be a manufacturer-dealer relationship embodied in a written franchise agreement; and (4) the plaintiff must have been injured by the defendant's failure to act in good faith." Maschio v. Prestige Motors , 37 F.3d 908, 910 (C.A. 3, 1994), citing 15 USC 1222. Plaintiff's complaint alleged that it was a Delaware LLC with its principal place of business in Michigan. Plaintiff also alleged that it was "engaged in the sale and service of new and used ... motor vehicles and the sale of vehicle parts manufactured by [defendant]." There is no dispute that, as a manufacturer and seller of vehicles and vehicle parts, defendant is "engaged in commerce." Further, plaintiff stated that it entered into a written agreement with defendant "for an initial fixed term of five years," and attached to its complaint the parties’ agreement, which then became part of plaintiff's pleadings for the purpose of summary disposition. See Laurel Woods Apartments , 274 Mich. App. at 635, 734 N.W.2d 217. Finally, plaintiff alleged that defendant wrongfully terminated the agreement in violation of the ADDCA and provided specific examples of what plaintiff alleged to be defendant's failure to act in good faith. The only element as to which there was a dispute regarding the sufficiency of the allegations was whether plaintiff was an "automobile dealer" for purposes of the ADDCA.

Def...