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L.L.C. v. Hyundai Motor America Corp.

United States District Court, E.D. Louisiana

May 20, 2019


         SECTION: “H” (1)



         Before the Court is Defendants' Motion to Dismiss (Doc. 16). For the following reasons, the Motion is GRANTED IN PART.


         This lawsuit arises out of the franchise relationship between Plaintiff Eddie Tourelle's Northpark Hyundai, LLC and Defendants Hyundai Motor America Corporation (“HMA”) and Genesis Motor America, LLC (“GMA”). Plaintiff alleges that it entered into a Dealer Sales and Service Agreement (“DSS Agreement”) with HMA, which gave Plaintiff the right to purchase and sell Hyundai products at its dealership, including the Hyundai Genesis. In 2015, HMA announced that the Genesis would be spun-off into a new line of luxury vehicles. Plaintiff signed an agreement with HMA to be eligible to purchase and sell the new Genesis line vehicles (“the Participation Agreement”). The Participation Agreement required Plaintiff to upgrade its sales and service facilities in order to sell the Genesis line. To comply with the Participation Agreement, Plaintiff spent $135, 208.50 on renovations and employee training.

         In connection with the re-branding, HMA allegedly made conflicting representations to the Louisiana Motor Vehicle Commission (“LMVC”) regarding whether the Genesis vehicles were manufactured by HMA or GMA. The LMVC found that GMA was the manufacturer/distributor of the new line and that it had failed to secure proper licensing to sell in Louisiana. As a result, HMA and GMA ordered Plaintiff and other Genesis dealers in Louisiana to stop selling the Genesis line. Plaintiff argues that as a result of Defendants' failure to secure proper licensing, it was prohibited from selling Genesis vehicles despite complying with the terms of the Participation Agreement.

         Plaintiff filed suit in state court, bringing claims for breach of contract, negligence, violation of the Louisiana Motor Vehicles Act, and violation of the Louisiana Unfair Trade Practices Act against HMA and GMA. Defendants removed the case to this Court on diversity grounds. Defendants now bring the instant Motion to Dismiss, arguing that Plaintiff has failed to state a claim under for which relief can be granted. This Court will consider their arguments in turn.


         To survive a Rule 12(b)(6) motion to dismiss, a plaintiff must plead enough facts “to state a claim for relief that is plausible on its face.”[1] A claim is “plausible on its face” when the pleaded facts allow the court to “draw reasonable inference that the defendant is liable for the misconduct alleged.”[2]A court must accept the complaint's factual allegations as true and must “draw all reasonable inferences in the plaintiff's favor.”[3] The court need not, however, accept as true legal conclusions couched as factual allegations.[4] To be legally sufficient, a complaint must establish more than a “sheer possibility” that the plaintiff's claims are true.[5] If it is apparent from the face of the complaint that an insurmountable bar to relief exists and the plaintiff is not entitled to relief, the court must dismiss the claim.[6] The court's review is limited to the complaint and any documents attached to the motion to dismiss that are central to the claim and referenced by the complaint.[8]


         Defendants have moved for dismissal of Plaintiff's claims for violation of the Louisiana Motor Vehicles Act (“LMVA”), breach of contract, violation of the Louisiana Unfair Trade Practices Act (“LUTPA”), and negligence against HMA and GMA. This Court will consider each claim in turn.

         A. LMVA Claims

         Plaintiff brings a claim against Defendants for violations of the LMVA. Defendants move for dismissal of these claims, arguing that the LMVA does not provide a private right of action. In Crescent City M Dealership, L.L.C. v. Mazda Motor of America, Inc., a section of this Court held that “the LMVA constitutes a comprehensive regulatory scheme that confers upon the [Louisiana Motor Vehicle] Commission the power and authority to implement its purpose. The language of the Act does not contemplate private actions to enforce its provisions. . . . [T]he grant of such broad regulatory and enforcement powers to a state agency forecloses a private right of action, absent language expressly granting one.”[9] The Fifth Circuit affirmed this holding in a per curiam opinion and other courts have adopted its reasoning.[10] This Court does not find any of Plaintiff's arguments seeking a holding contrary to these opinions compelling.[11] Accordingly, Plaintiff's claims under the LMVA are dismissed with prejudice because the LMVA does not provide a private right of action.

         B. Breach of Contract claims

         Plaintiff alleges that Defendants breached the DSS Agreement and Participation Agreement in several ways: (1) by failing to obtain proper licensing to permit the sale of Genesis vehicles, (2) by removing Plaintiff from its website as an authorized Genesis dealer, (3) by suspending the sale of Genesis vehicles, (4) by refusing to make Genesis vehicles available to Plaintiff for sale until Plaintiff entered into the Participation Agreement, and (5) by removing the Hyundai Equus model from the HMA model line and transferring it to the Genesis model line as the Genesis G90.

         Defendants set forth several arguments for the dismissal of these claims. Specifically, Defendants argue (1) that GMA cannot be liable for any breach of contract because it was not a party to either agreement, (2) that the DSS Agreement did not contemplate the sale of the Genesis vehicles at issue, (3) that each agreement contained terms reserving to HMA the right to modify or terminate the sale of its products from time to time, and (4) that neither agreement contained any obligation to obtain a license or to include Plaintiff in internet marketing. In considering these arguments, this Court will consider the DSS and Participation Agreements attached to Defendants' Motion to Dismiss because they are referenced by the Petition and are central to Plaintiff's breach of contract claims.

         1. Breach of Contract Claims against GMA

         First, Defendants argue that GMA is not a party to either the DSS Agreement or the Participation Agreement and it therefore cannot be held liable for the breach of those contracts. Under Louisiana law, it is well-settled that “an individual cannot be liable for breach of a contract to which he is not a party.”[12] Plaintiff gives short strife in opposing this argument, stating vaguely that GMA could be liable as a non-signatory under “various alter-ego theories or by virtue of the fact that GMA was a third-party beneficiary of the contracts.”[13] Plaintiff does not, however, indicate how the facts alleged in the Petition support such a claim. The Petition does not allege facts showing that GMA is an alter ego of HMA or that it was a third-party beneficiary of the contracts at issue. Accordingly, Plaintiff's claims for breach of contract against GMA are dismissed.

         2. Breach of Contract Claims against HMA

         a. Suspension of Sale ...

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