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Mountain Motorsports Paving and Construction LLC v. Yamaha Motor Corporation, Usa

United States District Court, E.D. Kentucky, Southern Division, Pikeville

October 20, 2014



AMUL R. THAPAR, District Judge.

Litigation is almost never a smooth journey. The first bump in the road to a judgment often comes in the form of a motion to dismiss. A plaintiff can usually navigate around this hurdle by pleading sufficient facts to state a claim. Not so in this case involving a local dealer of motorcycles and all-terrain vehicles. Because the dealer failed to provide sufficient facts to state plausible claims for relief in its complaint, the Court must apply the brakes to part of this litigation.


Plaintiff Mountain Motorsports Paving and Construction, LLC ("Mountain") is a Kentucky limited liability company dealing in Yamaha brand vehicles. R. 14 ¶ 1 (Amended Complaint). For years, Mountain sold Yamaha's all-terrain vehicles (ATVs), utility vehicles, motorcycles, motor scooters, and other products in and around the Prestonsburg area. Id. ¶ 4; see also R. 1-2 at 2. During this time, Mountain operated pursuant to the terms of a dealer agreement with distributor Yamaha Motor Corporation ("Yamaha"). R. 1-2. The agreement selected California law to govern the contract. See R. 1-2 ¶ 9.5.

The relationship between the two businesses soon took a turn for the worse. Following a theft at the dealership, Mountain claimed that Yamaha improperly charged payments for the stolen vehicles, incorrectly computed fees, and forced Mountain to dramatically increase its credit line to continue operating the franchise. R. 14 ¶¶ 6, 10, 11, 12. Mountain also claims that Yamaha failed to reimburse the dealership after suspending its sale of certain vehicles. Id. ¶ 14. Mountain alleges that, to add insult to injury, Yamaha unreasonably required the dealership to maintain financing from General Electric ("GE"), despite GE's alleged accounting failures. Id. ¶ 17.

Fed up with Yamaha and GE, Mountain sought alternative lenders. Yamaha informed Mountain that its search for alternative lenders amounted to a breach of the dealer agreement. Id. ¶ 18. But after some negotiation, Yamaha agreed to allow Mountain to resell the dealership. Id. ¶ 19. Mountain expected Yamaha to repurchase Mountain's inventory and transfer the franchise to Mountain's successors. Id. ¶ 19. However, Mountain claims that Yamaha actually obstructed its efforts to resell the stock of vehicles and transfer the business, which led Mountain to be named in an action for replevin. Id. ¶¶ 19, 20.

Mountain filed and subsequently amended a complaint in this Court. See R. 1; R. 14. Mountain seeks to recover monetary damages from Yamaha under eight causes of action sounding in contract, tort, and Kentucky statute. Although the Court has jurisdiction over the complaint under Federal Rule of Civil Procedure 12(b)(1), it cannot hear all the claims therein. Why? Because Mountain failed to adequately plead a legal claim for some of its causes of action. For the reasons discussed below, Yamaha's motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) is granted in part and denied in part.


The standard for evaluating a motion to dismiss differs for motions brought under Rule 12(b)(1) and those brought under Rule 12(b)(6). When considering a motion to dismiss under Rule 12(b)(1), a federal court determines whether it can exercise its limited jurisdiction over the action. See Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994) (characterizing federal courts as courts of limited jurisdiction). Federal courts have jurisdiction over civil actions between citizens of different states in which the amount in controversy exceeds $75, 000. 28 U.S.C. § 1332.

On the other hand, a court examines whether the plaintiff has adequately stated a claim for legal relief when evaluating a motion to dismiss under Rule 12(b)(6). In its review, the court must accept all well-pled allegations as true and must determine whether they plausibly state a claim for relief under the law. Glazer v. Chase Home Fin. LLC, 704 F.3d 453, 457 (6th Cir. 2013); see also Aschroft v. Iqbal, 556 U.S. 662, 678 (2009) (requiring a complaint to state a claim for relief that is "plausible on its face" in order to survive a motion to dismiss).

Mountain provided sufficient information to demonstrate diversity of citizenship and an adequate amount-in-controversy to survive Yamaha's motion to dismiss under Rule 12(b)(1). But because Mountain failed to establish elements in some of its causes of action and adequately plead viable claims for legal relief, its complaint must be dismissed in part under Rule 12(b)(6).

I. Mountain Provided Sufficient Information to Demonstrate That This Court Has Jurisdiction Under 28 U.S.C. § 1332.

As a plaintiff bringing a lawsuit in federal court based on diversity jurisdiction, Mountain bears the burden of demonstrating that the parties are citizens of different states. Cleveland Housing Renewal Project v. Deutsche Bank Trust Co., 621 F.3d 554, 559 (6th Cir. 2010) (citation omitted). And Mountain, as a limited liability company, is considered a citizen of each state in which its members are citizens. See Delay v. Rosenthal Collins Grp., LLC, 585 F.3d 1003, 1005 (6th Cir. 2009) (citation omitted). Yamaha argues that because Mountain-a limited liability company-claimed Kentucky citizenship on the basis of its place of organization instead of the citizenship of its members, its jurisdictional statement is deficient. R. 17-1 at 7. Yamaha is correct. But this deficiency does not warrant dismissing the complaint. Why? Because Mountain responded to the motion by asserting that its sole member is a citizen of Kentucky and providing a supporting affidavit. R. 19 at 11; R. 19-1. And defective allegations of jurisdiction may be amended by filing an amendment setting forth facts demonstrating diversity jurisdiction. See Homfeld II, L.L.C. v. Comair Holdings, Inc., 53 F.Appx. 731, 732-33 (6th Cir. 2002) (referring to 28 U.S.C. § 1653). Accordingly, Mountain has shown facts that indicate that this case meets the citizenship requirement of 28 U.S.C. § 1332. As Mountain also asserts that the "matter in controversy exceeds the sum value of $75, 000, " R. 14 ¶ ...

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