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Machinery Solutions, Inc. v. Doosan Corp.

United States District Court, D. South Carolina, Greenville Division

May 12, 2016

Machinery Solutions, Inc., Plaintiff,
v.
Doosan Corporation, Doosan Group, Doosan Infracore, Doosan Infracore America Corporation, Ellison Technologies, Inc., Mitsui & Co., LTD, Mitsui & Co. USA, Inc. and John Doe, Defendants.

ORDER AND OPINION

Plaintiff Machinery Solutions, Inc. ("MSI"), filed this action seeking damages from Defendants Doosan Corporation, Doosan Group, Doosan Infracore, Doosan Infracore America Corporation ("Doosan"), Mitsui & Co., LTD, Mitsui & Co. (USA), Inc., and John Doe for terminating their dealership contract with MSI and for contracting with another distributor, Elhson Technologies, Inc. ("Ellison").[1] (ECF No. 37.)

This matter is before the court by way of Ellison's Motion to Dismiss the Amended Complaint pursuant to Fed.R.Civ.P. 8 and 12(b)(6). (ECF No. 42.) For the reasons set forth below, the court GRANTS IN PART and DENIES IN PART Ellison's Motion to Dismiss.

I. RELEVANT BACKGROUND TO PENDING MOTION

Doosan manufacturers machine tools. (ECF No. 25-1 at 3 TJIJ 8-9.) MSI alleges that it has had an ongoing contractual relationship with Doosan since 1997. (ECF No. 37 at 3 ¶ 17.) On February 10, 2009, Doosan sent MSI a "Letter of Understanding" or "Distributor Agreemenf to outline the sale of new machine tool products in North Carolina, South Carolina, and Georgia. (ECF No. 1-1 at 22-25.) Pursuant to the terms of the Distributor Agreement, either party could terminate the agreement, at any time for any reason whatsoever, by giving the other party prior written notice of at least 30 days. (ECF No. 1-1 at 24 ¶ XIII.)

On August 21, 2015, MSI received a letter (the “August Letter”) from Doosan’s President in which he communicated the intent of Doosan to terminate the Distributor Agreement with MSI. (Id. at 28-30.) The August Letter stated that MSI would have 30 days to finalize all existing projects, and after that time MSI must cease pursuing any future business or representing that MSI is an authorized Doosan dealer. (Id. at 28.) The letter also included an attachment entitled “Conduct of Business During Transition Period.” (Id. at 29-30.) In the attachment, Doosan identified Ellison as the new Doosan dealer in North Carolina, South Carolina, and Georgia.[2] (Id. at 30 ¶ 6.)

On August 25, 2015, MSI filed a Complaint and a Motion for Temporary Restraining Order, Temporary (or Preliminary) Injunction, and Rule to Show Cause in the Court of Common Pleas for Lexington County, South Carolina. (ECF Nos. 1-1, 4.) Doosan removed MSI’s action from state court to this court on August 27, 2015, pursuant to 28 U.S.C. § 1332 claiming that “this civil action is ‘between citizens of different States’ and the amount ‘in controversy exceeds the sum or value of $75, 000, exclusive of interest and costs.’”[3] (ECF No. 1 at 2 ¶ 3 (quoting 28 U.S.C. § 1332(a)(1)).) On August 8, 2015, the court entered an Order that denied MSI’s Motion for Temporary Restraining Order and Rule to Show Cause and set up a briefing schedule and hearing date on MSI’s Motion for Preliminary Injunction. (ECF No. 8.) On September 18, 2015, the court denied MSI’s Motion for Preliminary Injunction. (ECF No. 34.)

MSI then filed an Amended Complaint on October 8, 2015, alleging claims against Doosan and Ellison jointly for violation of the South Carolina Unfair Trade Practices Act (“SCUTPA”) (count 4), SC Code Ann. § 39-5-10 to -560 (2014), civil conspiracy (count 5) and interference with existing and prospective contracts (count 6); and against Doosan singularly for violation of the Fair Practices of Farm, Construction, Industrial, and Outdoor Power Equipment Manufacturers, Distributors, Wholesalers, and Dealers Act (“FPA”) (count 1), SC Code Ann. § 39-6-10 to -180 (2014), breach of contract (count 2), and breach of contract accompanied by fraudulent act (count 3). (ECF No. 37.) On October 29, 2015, Ellison filed a Motion to Dismiss claims against it in the Amended Complaint for violation of SCUTPA, civil conspiracy, and interference with existing and prospective contracts. (ECF No. 42.) MSI filed opposition to the Motion to Dismiss on November 16, 2015, to which Ellison filed a Reply in support of dismissal on November 30, 2015. (ECF Nos. 43, 48.)

On April 11, 2016, the court held a hearing on the pending Motion to Dismiss. (ECF No. 54.)

II. JURISDICTION

The court has subject matter jurisdiction over this action, pursuant to 28 U.S.C. § 1332, because the parties are citizens of different states and the amount in controversy exceeds $75, 000.00. MSI is a corporation organized under the laws of South Carolina with its principal place of business in Lexington County, South Carolina. (ECF No. 37 at 1 ¶ 1.) Doosan is incorporated in the State of New York and Ellison is incorporated in the State of Delaware. (Id. at 2 ¶¶ 5 & 7; see also ECF No. 1 at 2-3.) Moreover, the court is satisfied that the amount in controversy exceeds $75, 000.00 in accordance with MSI’s representation. (ECF No. 37 at 3 ¶ 11.)

III. LEGAL STANDARD

A motion to dismiss pursuant to Rule 12(b)(6) for failure to state a claim upon which relief can be granted “challenges the legal sufficiency of a complaint.” Francis v. Giacomelli, 588 F.3d 186, 192 (4th Cir. 2009) (citations omitted); see also Republican Party of N.C. v. Martin, 980 F.2d 943, 952 (4th Cir. 1992) (“A motion to dismiss under Rule 12(b)(6) . . . does not resolve contests surrounding the facts, the merits of a claim, or the applicability of defenses.”). To be legally sufficient a pleading must contain a “short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2).

A motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(6) for failure to state a claim should not be granted unless it appears certain that the plaintiff can prove no set of facts that would support her claim and would entitle her to relief. Mylan Labs., Inc. v. Matkari, 7 F.3d 1130, 1134 (4th Cir. 1993). When considering a motion to dismiss, the court should accept as true all well-pleaded allegations and should view the complaint in a light most favorable to the plaintiff. Ostrzenski v. Seigel, 177 F.3d 245, 251 (4th Cir. 1999); Mylan Labs., Inc., 7 F.3d at 1134. “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id.

IV. ANALYSIS

A. Dismissal of MSI’s Cause of Action for ...


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