INTRODUCTION Plaintiff, Defendant. MEMORANDUM-DECISION AND ORDER -v- 5:05-CV-00051 5:05-CV-00051 -v- This diversity action by plaintiff Crest Cadillac Oldsmobile, Inc., an automobile This diversity action by plaintiff Crest Cadillac Oldsmobile, Case 5:05-cv-00051-NAM-GJD Document 20 Filed 12/30/05 Page 1 of 7 1 of Page 12/30/05 Filed 20 Document 5:05-cv-00051-NAM-GJD Case Hon. Norman A. Mordue, D.J.: General Motors manufacturer the decision by defendant automobile from dealership, stems ggggggggggggggggggggggggggggggggggggggggggggggggggggggggggg APPEARANCES: MyersP.A. & Fuller, W. Douglas Moody, of Counsel Esq., Richard N. Sox, Jr., Esq., of Counsel Green Circle 2822 Remington P.O. Box 14497 Tallahassee, Florida 32308 and Kowalczyk, Tolles, Deery & Hilton, L.L.P. Robert K. Hilton, III , Esq., of Counsel 185 Genesee Street, 12th Floor Utica, New York 13501 Attorneys for Plaintiff Harter, Secrest & Emery, L.L.P. of Counsel Esq., Carol E. Heckman, John G. Horn, Esq., of Counsel 12 Fountain Plaza, Suite 400 Buffalo, New York 14202-2293 and Kirkland & Ellis, L.L.P. Mark S. Lillie, Esq., of Counsel P. Reneé Wicklund, Esq., of Counsel 200 East Randolph Drive Chicago, Illinois 60601 AttorneysDefendant for General Motors Corporation, a Delaware corporation, Corporation, a Delaware General Motors ggggggggggggggggggggggggggggggggggggggggggggggggggggggggggg York corporation, Inc., a New Oldsmobile, Crest Cadillac UNITED STATES DISTRICT COURT DISTRICT STATES UNITED YORK OF NEW DISTRICT NORTHERN NAM of automobiles. Plaintiff claims that claims Plaintiff of automobiles. ntiff claims that defendant has destroyed ntiff claims 1 -2- BACKGROUND BACKGROUND Fed. R. Civ. P. 12(b)(6). For the reasons set forth herein, defendant’s motion For the reasons set forth Fed. R. Civ. P. 12(b)(6). See Defendant moves to dismiss the action on the ground that the complaint fails to state a fails that the complaint the action on the ground to dismiss Defendant moves and Cadillac franchises. has operated Oldsmobile of years plaintiff For a number 2005, plai filed on January 19, In its complaint, 1 Case 5:05-cv-00051-NAM-GJD Document 20 Filed 12/30/05 Page 2 of 7 2 of Page 12/30/05 Filed 20 Document 5:05-cv-00051-NAM-GJD Case The Glossary to the parties’ Dealer Sales and Service Agreement defines “line-make” in defines “line-make” The Glossary to the parties’ Dealer Sales and Service Agreement such brands include pertinent part as “[a] brand of General Motors Motor Vehicles”; Motor Vehicles and Cadillac Motor Vehicles. Oldsmobile to dismiss the complaint is granted insofar as it seeks dismissal of the third, fourth, fifth, sixth and of the third, granted insofar as it seeks dismissal is the complaint to dismiss of action. to the first, second and eighth causes action, and denied with respect seventh causes of defendant’s decision constitutes a breach of the Oldsmobile Dealer Sales and Service Agreement Sales and Dealer of the Oldsmobile a breach decision constitutes defendant’s the law. otherwise violates the parties and between (“Agreement”) cause of action. of sales necessary depends on the other to create a volume According to plaintiff, each franchise to between the parties pertaining viability. The current Agreement to ensure plaintiff’s economic of October 1, 2000, and had an expiration date franchise was effective November the Oldsmobile 2000, defendant announced “a phase-out of the 12, dated December 31, 2005. By memo several years.” Defendant ceased Division and its products over the next Oldsmobile 27, 2004, defendant notified by May 2004. By letter dated October Oldsmobiles manufacturing dealers that defendant would not renew the Agreements. all Oldsmobile defendant’s of and that as a result franchise Oldsmobile plaintiff’s of the value and transferability lost any right it had to franchise, value of its Oldsmobile conduct, plaintiff has “lost the complete product to sell.” and will shortly have no Oldsmobile the renewal of its franchise agreement defendant 2000 memo, 12, prior to the December that at all times Plaintiff further claims was assured for the immediate line-make “represented that the longevity of the Oldsmobile Corporation, to discontinue the Oldsmobile line-make line-make Oldsmobile the to discontinue Corporation, NAM See Valmonte See Mills v. est’s “fiduciary duty” claim is premised est’s “fiduciary duty” claim tter of law, automobile manufacturers and manufacturers law, automobile tter of een breached. Third, the existence of the een breached. Third, the existence effect. Second, Crest fails to identify any effect. Second, Crest fails to identify make. Plaintiff further contends that, although further contends Plaintiff make. w York Vehicle and Traffic Law; -3- ., 12 F.3d 1170, 1174 (2d Cir. 1993). Dismissal is proper only if it appears ., 12 F.3d 1170, 1174 (2d Cir. 1993). Dismissal 1. Violation of section 463 of Ne 2. Breach of contract; 3. Negligent misrepresentation; 4. Fraud; 5. Breach of fiduciary duty; 6. Unjust enrichment; 7. Negligence; and covenant of good faith and fair dealing. 8. Breach of implied dealers do not share a fiduciary relationship. First, the Dealer Agreement continues inFirst, the Dealer Agreement that has b portion of the Dealer Agreement precludes Crest’s quasi-contract theories such as unjust valid Dealer Agreement Fourth, Cr covenant. and implied enrichment on a relationship that does not exist; as a ma , 18 F.3d 992, 998 (2d Cir. 1994). The parties agree that, except for the claim based on for the claim , 18 F.3d 992, 998 (2d Cir. 1994). The parties agree that, except In addressing this motion, the Court reads the complaint generously, accepting the truth of the Court reads the complaint In addressing this motion, The complaint sets forth the following causes of action: causes of the following sets forth The complaint 12(b)(6) of the Federal pursuant to section the complaint to dismiss Defendant moves Case 5:05-cv-00051-NAM-GJD Document 20 Filed 12/30/05 Page 3 of 7 3 of Page 12/30/05 Filed 20 Document 5:05-cv-00051-NAM-GJD Case and drawing all reasonable inferences from all well-pleaded factual allegations. and drawing all reasonable inferences from Polar Molecular Corp entitle it to relief. beyond doubt that plaintiff can prove no set of facts which would v. Bane are governed state, the claims New York statutory law, which applies to all franchises within the future” and that in reliance on these representations, plaintiff continued to invest in the franchise. franchise. in the to invest continued plaintiff representations, these on in reliance and that future” was because defendant made were false when representations to plaintiff, these According line- the Oldsmobile to terminate already planning provisions none of those provisions relative to its termination, sets forth specific the Agreement that under case. Moreover, plaintiff contends of this in the circumstances authorizes termination by the and can only be terminated are “perpetual” agreements New York law, franchise for good cause. manufacturer upon which relief fails to state a claim ground that the complaint Rules of Civil Procedure on the as follows: its position Defendant summarizes be granted. may NAM , 865 F.2d 494 , 2004 WL 1125164 , 2004 WL N.Y. Veh. & T. Law, § See Glick v. General Motors Act, New York Vehicle and Traffic Law Act, New York contention that it may properly pursue a claim contention that it may ation to provide a reasonable supply of products, -4- n 463 of New York Vehicle and Traffic Law Vehicle and York New n 463 of DISCUSSION Robert Basil Motors, Inc. v. General Motors Corp. Robert Basil Motors, Inc. v. General New York’s Franchised Motor Vehicle Dealer New York’s Franchised and breached terms In the second cause of action, plaintiff contends that defendant has Accordingly, it cannot be said that it appears beyond doubt that plaintiff can prove no set Accordingly, it cannot be said that Case 5:05-cv-00051-NAM-GJD Document 20 Filed 12/30/05 Page 4 of 7 4 of Page 12/30/05 Filed 20 Document 5:05-cv-00051-NAM-GJD Case by Michigan law as required by the Agreement. required law as by Michigan of sectio of action: Violation First cause 463(2)(e). Second cause of action: Breach of contract with defendant to do the following: to continue to comply requiring conditions of the Agreement all provisions of the contract, including the oblig at the expiration date if the thereof; to renew the Agreement through the five year initial term the opportunity to achieve a dealer has fulfilled its obligations thereunder; to afford to each dealer under section 463 alleging constructive termination or non-renewal of its Oldsmobile franchise by or non-renewal of its Oldsmobile termination under section 463 alleging constructive leave unresolved the They line-make. of the Oldsmobile virtue of defendant’s discontinuation cause. or non-renewal is with or without question of whether such termination under section 463(2)(d)(1). Moreover, it does relief on its claim of facts which would entitle it to was the claim on the ground of untimeliness; to dismissal is subject not appear that the claim after the October 27, 2004 notice. asserted less than three months Article 17-A, provides in section 463 that it shall be unlawful for any franchisor “[t]o terminate, be unlawful for any franchisor in section 463 that it shall Article 17-A, provides for due vehicle dealer except motor to renew the franchise of any franchised cancel or refuse & T. Law, § 463(2)(d)(1). Plaintiff of the franchise.” N.Y. Veh. of the terms cause, regardless of, or failure to renew, termination to a constructive that defendant’s conduct amounts claims cause. Plaintiff relies on plaintiff’s franchise without due (2d Cir. 1989), and 2004). These cases support plaintiff’s (W.D.N.Y. NAM ., representations that defendant would i.e -5- sentation, fraud and negligence are based on pudiated the renewal provisions of the Agreement; pudiated the renewal ple, plaintiff arguably may pursue a claim for pursue a claim ple, plaintiff arguably may Moreover, plaintiff alleges that, prior to the date of the complaint, defendant breached prior to the date of the complaint, Moreover, plaintiff alleges that, Plaintiff’s claims of negligent misrepre Plaintiff’s claims The Court finds that the second cause of action states a claim for breach of contract for breach of action states a claim The Court finds that the second cause 2 2 Case 5:05-cv-00051-NAM-GJD Document 20 Filed 12/30/05 Page 5 of 7 5 of Page 12/30/05 Filed 20 Document 5:05-cv-00051-NAM-GJD Case The Court notes that the contractual expiration date of October 31, 2005, has now passed; The Court notes that the contractual expiration date of October 31, accordingly. its pleading wish to amend plaintiff may its obligations under the Agreement by, for example, failing to provide a reasonable supply of failing to provide by, for example, its obligations under the Agreement litigation that there is no basis upon which vehicles. It cannot be said at this point in the motor be granted on this cause of action. relief may of action: Negligent misrepresentation, fraud and Third, fourth and seventh causes negligence false extra-contractual allegations that, intentionally or negligently, defendant made representations upon which plaintiff reasonably relied, line- that the future of the Oldsmobile vehicles in reasonable quantities, provide a supply of motor line- was assured, and that defendant had no intention of discontinuing the Oldsmobile make anticipatory repudiation stemming from the December 12, 2000 memo or the October 27, 2004 12, 2000 memo the December from anticipatory repudiation stemming notice. that defendant has sought to terminate the Agreement on grounds not authorized by the on the Agreement sought to terminate that defendant has as vehicles reasonable supply of motor defendant has failed to provide a and that Agreement; required by the Agreement. For exam to withstand dismissal. sufficient reasonable return on its investment if it fulfilled its obligations under the Agreement; to provide a to provide the Agreement; under its obligations it fulfilled if its investment on return reasonable York’s franchise because New quantities; and, in reasonable vehicles by series motor supply of indefinitely and effect force in full the Agreement in nature, to maintain it as perpetual law treats or as allowable under provisions of the Agreement pursuant to the termination unless terminated respects. in all material the Agreement with has complied that it claims Plaintiff New York law. that defendant has re claims Plaintiff further NAM ., . , 2004 WL 1125164 at * 7- 1125164 , 2004 WL and cases cited therein Martin v. East Lansing School Dist See UAW-GM Human Resource Ctr. v. See UAW-GM Human Resource at *9-*10; Robert Basil Motors -6- These causes of action fail to state claims upon claims These causes of action fail to state See id. , 2004 WL 1125164 at * 9, , 2004 WL ., 579 N.W.2d 411 (1998); ., 579 N.W.2d See Robert Basil Motors The Court agrees with defendant that as a matter of law the contractual integration clause of law the contractual integration with defendant that as a matter The Court agrees to find the existence of a fiduciary relationship between There is no basis in Michigan law cannot stand where the underlying for unjust enrichment Under Michigan law, a claim Case 5:05-cv-00051-NAM-GJD Document 20 Filed 12/30/05 Page 6 of 7 6 of Page 12/30/05 Filed 20 Document 5:05-cv-00051-NAM-GJD Case make. The Agreement, however, at paragraph 17.11, states that, except as provided therein, except as provided states that, at paragraph 17.11, however, The Agreement, make. or agreements “there are no other to plaintiff and no promises” “has made defendant or relating to parties affecting this Agreement either oral or written, between the understandings, provides that the Agreement It further covered by this Agreement.” matters any of the subject parties that relate to any matters between the all previous agreements “cancels and supersedes covered herein[.]” between the parties by defendant or understandings based on alleged promises bars all claims between the parties. arrangement relating to the franchise KSL Recreation Corp of that would support an exception to this application complaint *9. There is no allegation in the suggest any reason why the papers on this motion well-established law. Nor do plaintiff’s given effect. integration clause should not be be granted. which relief may fiduciary duty Fifth cause of action: Breach of the parties. fails to expressly precludes such a relationship. This cause of action Moreover, the Agreement be granted. upon which relief may state a claim Sixth cause of action: Unjust enrichment conduct is covered by an express contract. is conduct of which plaintiff complains 656, 661 (Mich.App. 1992). Here, the 483 N.W.2d is dismissed. accordingly, this claim governed by the Agreement; NAM , 666

Burkhardt v. City Nat. Burkhardt v. City independent cause of action for breach of cause of action independent See Belle Isle Grill Corp. v. Detroit See Belle Isle Grill -7- ff can prove no set of facts which would entitle it ff can prove no set of facts which venth causes of action, and denied with respect to venth causes of action, and denied CONCLUSION , 226 N.W.2d 678, 680 (Mich.App. 1975). In some material respects, the material 680 (Mich.App. 1975). In some 678, , 226 N.W.2d IT IS SO ORDERED. 30, 2005 December Syracuse, New York Michigan law does not ordinarily recognize an recognize law does not ordinarily Michigan It is therefore as it seeks is granted insofar the complaint to dismiss motion ORDERED that defendant’s Case 5:05-cv-00051-NAM-GJD Document 20 Filed 12/30/05 Page 7 of 7 7 of Page 12/30/05 Filed 20 Document 5:05-cv-00051-NAM-GJD Case the first, second and eighth causes of action. the first, second and eighth causes an implied covenant of good faith and fair dealing. covenant of good an implied the contract makes however, “a party to a 2003). Where, 271, 279-80 (Mich.App. N.W.2d the hesitate to imply discretion, the law does not of its own a matter of its performance manner and in good faith.” discretion be exercised honestly proviso that such Bank of Detroit claim. on this to relief fifth, sixth and se of the third, fourth, dismissal Eighth cause of action: Breach of implied covenant of good faith and fair dealing good faith and covenant of Breach of implied of action: Eighth cause accordingly, it cannot within its own discretion; does authorize defendant to perform Agreement that plainti be said that it appears beyond doubt NAM