United States District Court, D. Massachusetts
MEMORANDUM AND ORDER ON DEFENDANT'S MOTION TO
ALLISON D. BURROUGHS U.S. DISTRICT JUDGE.
BASF Corporation (“BASF”) filed this action
against Defendant Martineaus Auto Body, Inc. d/b/a and/or
a/k/a Metropolitan Auto Body alleging claims for breach of
contract, breach of the implied covenant of good faith and
fair dealing, and unjust enrichment, and seeking a
declaratory judgment. [ECF No. 1]. On August 10, 2018,
Plaintiff filed an Amended Complaint. [ECF No. 12
(hereinafter “Am. Compl.”)]. On August 20, 2018,
Defendant filed a motion to dismiss the Amended Complaint
pursuant to Federal Rule of Civil Procedure 12(b)(6). [ECF.
No. 13]. For the reasons set forth below, Defendant's
motion to dismiss is GRANTED IN PART and DENIED
following facts are drawn from the Amended Complaint, the
well-pleaded allegations of which are taken as true for
purposes of evaluating Defendant's motion to dismiss, and
documents expressly incorporated into the Amended Complaint.
See Ruivo v. Wells Fargo Bank, 766 F.3d 87, 90 (1st
Cir. 2014); Hannigan v. Bank of Am., N.A., 48
F.Supp.3d 135, 140 (D. Mass. 2014). Plaintiff sells
aftermarket paints, refinishes, coating, primers, thinners,
reducers, and other products related to reconditioning,
refinishing, and repainting vehicles (“Refinish
Products”). Am. Compl. ¶ 3. Defendant is an auto
body shop that reconditions, refinishes, and repaints
vehicles. Id. ¶ 4.
about March 22, 2012, Plaintiff and Defendant entered into
the Requirements Agreement. Id. ¶ 8; [ECF No.
12-1 (hereinafter the “Requirements Agreement” or
the “Agreement”)]. Pursuant to the Requirements
Agreement, Defendant agreed to purchase 100 percent of its
needed Refinish Products, up to a minimum purchase
requirement of $253, 000, from an authorized BASF
distributor. Am. Compl. ¶ 11; Requirements Agreement
¶¶ 1-2. The Requirements Agreement does not have a
fixed term; rather, the parties agreed to continue the
Agreement until Plaintiff fulfilled the $253, 000 minimum
purchase requirement. See Requirements Agreement
¶ 1. In consideration for Defendant fulfilling its
obligations under the Agreement, Plaintiff paid it $30, 000
(the “Contract Fulfillment Consideration”). Am.
Compl. ¶ 12; Requirements Agreement ¶ 3. Defendant
is obligated to refund the Contract Fulfillment Consideration
if, prior to completing the minimum purchase requirement, the
Agreement is terminated for any reason or Defendant is sold.
Am. Compl. ¶¶ 13-14; Requirements Agreement ¶
3. To date, Defendant has purchased approximately $128, 000
of BASF Refinish Products under the Requirements Agreement.
See Am. Compl. ¶ 18.
about May 2017, Defendant's operations were sold to
another body shop owner who was under contract with a
competitor of BASF. Am. Compl. ¶¶ 15-16. Since May
2017, Defendant has purchased only about $2, 700 of BASF
Refinish Products total and has purchased the remainder of
its Refinish Products from one of BASF's competitors.
Id. ¶¶ 19, 32. On July 18, 2017, Plaintiff
notified Defendant by letter that it was in breach of its
contractual obligations under the Requirements Agreements and
demanded that it refund the Contract Fulfillment
Consideration. Id. ¶ 26. To date, Defendant has
not refunded the Contract Fulfillment Consideration to
Plaintiff. Id. ¶¶ 17, 27.
STANDARD OF REVIEW
motion to dismiss for failure to state a claim, the Court
accepts as true all well-pleaded facts in the complaint and
draws all reasonable inferences in the light most favorable
to the plaintiff. United States ex rel. Hutcheson v.
Blackstone Med., Inc., 647 F.3d 377, 383 (1st Cir.
2011). While detailed factual allegations are not required,
the complaint must set forth “more than labels and
conclusions, ” Bell Atl. Corp. v. Twombly, 550
U.S. 544, 555 (2007), and it must contain “factual
allegations, either direct or inferential, respecting each
material element necessary to sustain recovery under some
actionable legal theory.” Gagliardi v.
Sullivan, 513 F.3d 301, 305 (1st Cir. 2008) (quotation
marks and citations omitted). The facts alleged, taken
together, must “state a claim to relief that is
plausible on its face.” A.G. ex rel. Maddox v.
Elsevier, Inc., 732 F.3d 77, 80 (1st Cir. 2013) (quoting
Twombly, 550 U.S. at 570). “A claim is
facially plausible if supported by ‘factual content
that allows the court to draw the reasonable inference that
the defendant is liable for the misconduct
alleged.'” Eldredge v. Town of Falmouth,
662 F.3d 100, 104 (1st Cir. 2011) (quoting Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009)).
assessing the sufficiency of a complaint, the Court first
“separate[s] the complaint's factual allegations
(which must be accepted as true) from its conclusory legal
allegations (which need not be credited).”
Maddox, 732 F.3d at 80 (quoting Morales-Cruz v.
Univ. of P.R., 676 F.3d 220, 224 (1st Cir. 2012)). Next,
the Court “determine[s] whether the remaining factual
content allows a ‘reasonable inference that the
defendant is liable for the misconduct alleged.'”
Id. (quoting Morales-Cruz, 676 F.3d at
224). “[T]he court may not disregard properly pled
factual allegations, ‘even if it strikes a savvy judge
that actual proof of those facts is improbable.'”
Ocasio-Hernandez v. Fortuño-Burset, 640 F.3d
1, 12 (1st Cir. 2011) (quoting Twombly, 550 U.S. at
556). “[W]here the well-pleaded facts do not permit the
court to infer more than the mere possibility of misconduct,
” however, a claim may be dismissed. Iqbal,
556 U.S. at 679.
Breach of Contract Claim (Count I)
Count One, Plaintiff asserts that Defendant has breached the
Requirements Agreement. “To prevail on a breach of
contract claim under New Jersey law, a plaintiff must
establish three elements: (1) the existence of a valid
contract between the parties; (2) failure of the defendant to
perform its obligations under the contract; and (3) a causal
relationship between the breach and the plaintiff's
alleged damages.” Sheet Metal Workers Int'l
Ass'n Local Union No. 27, AFL-CIO v. E.P. Donnelly,
Inc., 737 F.3d 879, 900 (3d Cir. 2013) (citing Coyle
v. Englander's, 488 A.2d 1083, 1088 (
N.J.Super.Ct.App.Div. 1985)). Plaintiff's Amended Complaint
alleges that Defendant breached the Requirements Agreement in
two respects. First, Plaintiff contends that Defendant
breached paragraph 3 of the Requirements Agreement when,
prior to completing the minimum purchase requirement under
the Agreement, Defendant's operations were sold and it
failed to refund the Contract Fulfillment Consideration to
BASF. Am. Compl. ¶¶ 15-17, 29-30. Second, Plaintiff
asserts that Defendant breached paragraphs 1 and 2 of the
Requirements Agreement by failing to purchase 100 percent of
its required Refinish Products from BASF for the term of the
contract when it began purchasing Refinish Products from one
of BASF's competitors beginning in about May 2017.
Id. ¶¶ 10-22, 31-32.
argues that the Court should dismiss Plaintiff's breach
of contract claim because, contrary to the Amended Complaint,
Defendant has not sold its business and has purchased 100
percent of its needed Refinish Products from BASF since
entering into the Requirements Agreement. [ECF No. 14 at
6-8]. In support of these assertions, Defendant has submitted
extrinsic evidence in the form of a sworn affidavit of Paul
Martineau, which controverts various allegations in the
Amended Complaint. [ECF No. 15 ¶¶ 2-7, 10-15]. In
addition, as exhibits to the Martineau affidavit, Defendant
has submitted copies of its Registration for Motor Vehicle
Repair Shop and eighteen invoices, which Defendant contends
respectively demonstrate that it is still in business and has
only purchased Refinish Products from BASF since entering
into the Requirements Agreement. [ECF Nos. 15-1, 15-3;
see ECF No. 14 at 7-8].
short, Defendant's motion challenges the merits of
Plaintiff's allegations, not their sufficiency under
Federal Rule of Civil Procedure 12(b)(6). As explained
supra at 3-4, in considering a motion to dismiss, a
court must take the allegations in the complaint as true and
make all reasonable inferences in favor of the plaintiff in
order to evaluate the sufficiency of the complaint on its
face. “In doing so, the court may consider documents
attached to or expressly incorporated into the Complaint, as
well as ‘documents the authenticity of which are not
disputed by the parties,' ‘official public
records,' ‘documents central to the plaintiffs'
claim,' and ‘documents sufficiently referred to in
the complaint.” Aronson v. Advanced Cell Tech.,
Inc., 902 F.Supp.2d 106, 112 (D. Mass. 2012) (quoting
Watterson v. Page, 987 F.2d 1, 3-4 (1st Cir. 1993).
If “matters outside the pleadings are presented to and
not excluded by the court, the [Rule 12(b)(6)] motion must be
treated as one for summary ...