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H-D Michigan, LLC v. Sovie's Cycle Shop

June 18, 2009

H-D MICHIGAN, LLC, AND HARLEY-DAVIDSON MOTOR COMPANY, INC, PLAINTIFFS,
v.
SOVIE'S CYCLE SHOP, INC. D/B/A SOVIE'S HARLEY-DAVIDSON, DEFENDANT.



The opinion of the court was delivered by: Thomas J. McAVOY Senior United States District Judge

DECISION and ORDER

Plaintiffs H-D Michigan, LLC ("HDM") and Harley-Davidson Motor Company, Inc. ("HDMC") brought the instant action asserting claims of trademark infringement, false designation of origin, unfair competition and trademark dilution pursuant to 15 U.S.C. §§ 1114(a), 1125(a), 1125(c), similar common law claims, and breach of contract. In its Answer Defendant Sovie's Cycle Shop, Inc. ("Sovie's") asserted counterclaims for breach of contract and violations of the New York Franchised Motor Vehicle Dealer Act, N.Y. Veh. & Traf. Law Art 17-A. Presently before the Court is Plaintiffs' motion to dismiss the Complaint pursuant to Fed. R. Civ. P. 12 or, in the alternative, for summary judgment pursuant to Fed. R. Civ. P. 56.

I. FACTS

Plaintiff Harley-Davidson Motor Company, Inc. ("HDMC") and Defendant's Sovie's Cycle Shop, Inc. entered into a Harley-Davidson Motor Company Motorcycle Dealer Contract ("Dealer Contract") in December 2004. On or about October 9, 2007, Sovie's received an overnight letter from HDMC indicating that they would be conducting a three year audit on the next day, October 10, 2007. During the course of the audit, HDMC requested various documentation. Sovie's provided the documentation that it had, but claimed that some of the records were unavailable because they had been water damaged. On or about January 30, 2008, HDMC served a Notice of Termination of the Dealer Contract on Sovie's. The termination was based on various claimed breaches of the Dealer Contract by Sovie's. Specifically, HDMC alleged violations of paragraphs B.6, F.7, J.3, J.6, M.4(b), and M.6(b) of the Dealer Contract.

Sovie's refuted the allegations in the Notice of Termination. Sovie's also requested a reasonable time to respond to the charges in the Notice of Termination and provide evidence demonstrating Sovie's compliance with the terms of the Dealer Contract. Sovie's claims that it made an oral request to transfer the franchise, but that HDMC denied the request.

Thereafter, the parties entered into negotiations concerning the future of the franchise. The parties entered into a series of agreements extending the applicable 120 day statute of limitations to file an action to review the threatened termination under N.Y. Veh. & Traf. Law §§ 463(2)(e) and 469. The final agreement extended the filing deadline to January 15, 2009. In accordance with the termination notice, the Dealer Contract expired on December 15, 2008.

In February 2009, Plaintiffs commenced the instant action asserting claims of trademark infringement, false designation of origin, unfair competition and trademark dilution pursuant to 15 U.S.C. §§ 1114(a), 1125(a), 1125(c), similar common law claims, and breach of contract. In its Answer, Sovie's asserted counterclaims for breach of contract and violations of the New York Franchised Motor Vehicle Dealer Act. Presently before the Court is Plaintiffs' motion to dismiss the counterclaims pursuant to Fed. R. Civ. P. 12 or, in the alternative, for summary judgment pursuant to Fed. R. Civ. P. 56.

Because Plaintiffs noticed their motion as being made under Rule 12 and Rule 56, filed a statement of material facts applicable only to summary judgment motions, and submitted materials outside the pleadings, and because Defendant provided a responsive statement of material facts and also submitted materials outside the pleadings, which materials the Court is not excluding from consideration, the pending motion will be treated under the standard applicable to summary judgment motions. See Fed. R. Civ. P. 12(d).*fn1

II. STANDARD OF REVIEW

Rule 56 of the Federal Rules of Civil Procedures governs motions for summary judgment. It is well settled that on a motion for summary judgment, the Court must construe the evidence in the light most favorable to the non-moving party, see Tenenbaum v. Williams, 193 F.3d 581, 593 (2d Cir. 1999), and may grant summary judgment only where "there is no genuine issue as to any material fact and . . . the moving party is entitled to judgment as a matter of law." Fed. R. Civ. P. 56( c). An issue is genuine if the relevant evidence is such that a reasonable jury could return a verdict for the nonmoving party. Anderson v. Liberty Lobby, 477 U.S. 242, 248 (1986). A party seeking summary judgment bears the burden of informing the court of the basis for the motion and of identifying those portions of the record that the moving party believes demonstrate the absence of a genuine issue of material fact as to a dispositive issue. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). If the movant is able to establish a prima facie basis for summary judgment, the burden of production shifts to the party opposing summary judgment who must produce evidence establishing the existence of a factual dispute that a reasonable jury could resolve in her favor. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). A party opposing a properly supported motion for summary judgment may not rest upon "mere allegations or denials" asserted in his pleadings, Rexnord Holdings, Inc. v. Bidermann, 21 F.3d 522, 525-26 (2d Cir. 1994), or on conclusory allegations or unsubstantiated speculation. Scotto v. Almenas, 143 F.3d 105, 114 (2d Cir. 1998).

With these standards in mind, the Court will address Plaintiffs' motion.

III. DISCUSSION

a. Claims against Plaintiff HDM

Plaintiff HDM moves to dismiss the claims against it on the grounds that it is not a signatory to the Dealer Contract and is not a franchisor within the meaning of § 462(8). Because HDM is not a signatory to the Dealer Contract, it cannot be held liable for breach of contract. Similarly, because HDM is not a franchisor within the meaning of § 462(8), it is not ...


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