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Nissan Motor Acceptance Corp v. (Gts/Atb) Dealmaker Nissan

January 11, 2011


The opinion of the court was delivered by: Hon. Glenn T. Suddaby, United States District Judge


Currently before the Court in this breach-of-contract action is a motion, filed by Nissan Motor Acceptance Corp. ("Plaintiff"), to dismiss the counterclaims asserted by Dealmaker Nissan, LLC, and Dealmaker Auto Group, LLC ("Defendants"), or, alternatively, for a more definite statement. (Dkt. No. 21.) For the reasons set forth below, Plaintiff's motion to dismiss Defendants' counterclaims is granted.


A. Plaintiff's Claims

Generally, liberally construed, Plaintiff's Complaint asserts, inter alia, the following factual allegations: (1) on or about November 27, 2006, and April 22, 2008, Defendant Dealmaker Nissan, LLC, entered into an Automotive Wholesale Financing and Security Agreement (hereinafter "Agreement") with Plaintiff, pursuant to which Plaintiff agreed to provide secured wholesale inventory financing to Defendant Dealmaker Nissan, LLC; (2) in order to secure its obligation, Defendant Dealmaker Nissan, LLC granted Plaintiff a security interest in Dealmaker Nissan LLC's motor vehicles, parts inventory, furniture, fixtures, equipment, investment property, accounts, contract rights, intangible property, accounts receivable, and all of the proceeds of the same ("Collateral"); and (3) subsequently, Dealmaker Nissan LLC, defaulted on its obligations under the Agreement. (Dkt. No. 1.) Based on these allegations, Plaintiff asserts the following claims: (1) breach of contract; (2) replevin; and (3) breach of continuing guarantees.*fn1 (Id.) Familiarity with the remaining factual allegations supporting these claims in Plaintiff's Complaint is assumed in this Decision and Order, which is intended primarily for the review of the parties. (Id.)

B. Defendants' Counterclaims

Generally, liberally construed, Defendants' Counterclaims assert, inter alia, the following factual allegations: (1) "[o]n or about January 28, 2009, and while still discussing vehicle inventories, alleged past due charges and a recapitalization plan, Mr. Westlake [and] Mr. Voorheis[, employees of Plaintiff] . . . began discussing [with Simao Defendants'] used car inventory"; (2) "[i]t was agreed that the Dealership [i.e., Defendants] would sell some of [their] used cars"; (3) "[s]ome cars were sold to wholesalers and others through the auction process"; (4) "[a]t no point in time did any one of Plaintiff's representatives advise Simao, the Dealership or Dealmaker Auto Group[, i.e., Defendants,] that any resulting deficiency between the sales price and the floor plan amount would be deemed and/or create an out-of-trust situation"; (5) "[a]ll proceeds from the sales were made payable directly to Plaintiff as requested by Plaintiff"; (6) sometime between February 5 and 9, 2009, "Plaintiff accepted and cashed the checks which represented the proceeds from the sale of some of the Dealership's used car inventory"; (7) "[t]he used car inventory was sold in good faith and with the purpose of demonstrating to Plaintiff that the Dealership was committed to moving forward in a positive manner"; (8) "[o]n the morning of February 11, 2009, Simao received a telephone call from Mr. Voorheis[ and Mr. Westlake,] who wanted to discuss the payments arising from the sale of the Dealership's used vehicle inventory"; (9) during that conversation, (a) "the parties continued their discussions about moving the business forward," and (b) "Voorheis and Westlake raised issues that had never ever been discussed, either in writing or verbally, regarding other Dealership liabilities"; (10) "Plaintiff wanted these issues [regarding Dealership liabilities] resolved before it would agree to move forward and reinstate the floor plan"; (11) "Simao . . . requested Plaintiff send him a letter that outlined in detail what he needed to do to return the Dealership to good standing"; (12) on February 12, 2009, Simao received a letter from Plaintiff dated February 11, 2009, which "for the first time, alleged an out-of-trust situation created by the sale of the Dealership's used car inventory"; (13) "upon his receipt of Plaintiff's February 11, 2009 letter, Simao telephoned Mr. Voorheis and questioned him about [it]"; (14) Simao perceived the letter to be ambiguous because it (a) "requested that all amounts set forth therein be paid within approximately 36 hours, that the Dealership's working capital be restored to Plaintiff's guidelines, and that a plan of profitability be provided by February 13, 2009[,]" and (b) "state[d] that[,] if all of these demands were complied with, then the floor plan was still going to be terminated as of February 27, 2009"; (15) "Simao instructed the Dealership's counsel to send Plaintiff a letter asking for clarification"; (16) Simao's counsel sent Plaintiff a letter dated February 13, 2009, and Simao separately made "numerous efforts to reach Plaintiff by telephone"; (17) on February 20, 2009, an article was printed in Simao's local newspaper indicating that Plaintiff had commenced this action; (18) "[f]rom the time that Simao began conversing with Plaintiff in or about December 2008, Plaintiff knew that its statements of wanting to work with the Dealership and resolve all outstanding issues were false"; and (19) "[t]he Dealership and Dealmaker Auto Group [i.e., Defendants] relied on Plaintiff's representations to their detriment." (Dkt. No. 15.)

Based on these factual allegations, liberally construed, Defendants assert the following three counterclaims: (1) fraud; (2) misrepresentation; and (3) breach of the duty of good faith and fair dealing. (Id.)

C. Plaintiff's Motion

Generally, in support of its motion to dismiss the counterclaims, Plaintiff argues as follows: (1) Defendants' first and second counterclaims, alleging fraud and misrepresentation, must be dismissed for failure to plead the essential elements of these claims with particularity, pursuant to Fed. R. Civ. P. 9(b); (2) Defendants' first and second counterclaims must be dismissed because they are duplicative of Defendants' breach-of-contract claim; and (3) Defendants' third counterclaim, alleging breach of the implied covenant of good faith and fair dealing, should be dismissed for failure to state a claim upon which relief can be granted under New York law. (See generally Dkt. No. 21 [Plf.'s Memo. of Law].)

In Defendants' response to Plaintiff's motion to dismiss the counterclaims, they argue as follows: (1) Defendants' first counterclaim, for fraud, should not be dismissed because Defendants have pled the essential elements of fraud with particularity; (2) Defendants' second counterclaim, for misrepresentation, should not be dismissed because (a) Defendants have pled the essential elements of misrepresentation with particularity, and (b) given that a "special relationship" existed between the parties, Plaintiff had a duty to disclose its intentions before terminating the financing arrangement and foreclosing on the Collateral; (3) Defendants have alleged facts plausibly suggesting a counterclaim for breach of the implied covenant of good faith and fair dealing under New York law; and (4) because the pleadings satisfy the particularity requirement of Fed. R. Civ. P. 9(b), a more definitive statement is not required. (See generally Dkt. No. 27 [Defs.' Response Memo. of Law].)

In its reply, Plaintiff reiterates its previously advanced arguments. (See generally Dkt. No. 28 [Plf.'s Reply Memo. of Law].)


A. Legal Standard Governing Motion to Dismiss for Failure to State a Claim Upon ...

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