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Wells Fargo Financial Leasing, Inc. v. Tulley Automotive Group, Inc.

United States District Court, D. New Hampshire

September 29, 2016

Wells Fargo Financial Leasing, Inc.,
v.
Tulley Automotive Group, Inc. Opinion No. 2016 DNH 177

          Wells Fargo Financial Leasing, Inc., Plaintiff, represented by Michael P. Marsille, Cohn & Dussi LLC.

          Tulley Automotive Group, Inc., Defendant, represented by Paul M. DeCarolis, Gottesman & Hollis PA.

          ORDER

          LANDYA McCAFFERTY, District Judge.

         In this contract dispute, out-of-state plaintiff Wells Fargo Financial Leasing, Inc. ("Wells Fargo") sues a New Hampshire business, Tulley Automotive Group, Inc. ("Tulley"), alleging that Tulley defaulted on a lease agreement for computer networking equipment. Because Tulley is already defending against a related but distinct lawsuit in New Jersey (a lawsuit brought by a different plaintiff), Tulley seeks to transfer this lawsuit to New Jersey (doc. no. 8) and defend itself in a single venue. Wells Fargo seeks to remand this lawsuit back to the state court where Wells Fargo originally filed it (doc. no. 6). For the reasons explained below, both motions are denied.

         Background

         During the summer of 2013, Tulley purchased a computer operating system for its auto dealerships known as a dealer management system ("DMS"). To acquire the DMS, Tulley entered into separate contracts with two associated organizations: one contract to obtain the software in June 2013 and one contract to obtain the computer equipment in July 2013.[1] First, to acquire software licenses and maintenance services related to the DMS, Tulley entered into a Master Services Agreement with ADP Dealer Services, Inc. ("ADP Dealer"). Next, to obtain the computer networking equipment, Tulley and ADP Commercial Leasing, LLC ("ADP Commercial") executed an equipment lease agreement ("Equipment Lease").

         At some point, Tulley allegedly stopped making payments and defaulted on its obligations under both the Master Services Agreement and the Equipment Lease. Tulley is now the defendant in two separate lawsuits: (1) an action for breach of the Master Services Agreement currently pending in a New Jersey federal court, and (2) the instant case filed by Wells Fargo for breach of the Equipment Lease.

         A. New Jersey Action

         On May 1, 2015, CDK Global, LLC ("CDK"), as successor-ininterest to ADP Dealer, filed suit against Tulley in the United States District Court for the District of New Jersey for breach of the Master Services Agreement. See CDK Glob., LLC v. Tulley Auto. Grp., Inc., No. 15-cv-3103-KM-JBC (D.N.J.) (hereinafter, referred to as the "New Jersey Action"). Wells Fargo is not a party to the New Jersey Action.

         Tulley filed counterclaims in the New Jersey Action alleging fraudulent inducement, rescission, breach of contract, violation of the New Jersey Consumer Fraud Act, and unjust enrichment. In those counterclaims, Tulley alleged that ADP Dealer made several misrepresentations and omissions to induce Tulley to purchase the DMS. CDK moved to dismiss Tulley's counterclaims under Federal Rule of Civil Procedure 12(b)(6), but, with the exception of the rescission claim, the district court denied CDK's motion. CDK Glob., LLC v. Tulley Auto. Grp., Inc., No. 15-cv-3103-KM-JBC, 2016 WL 1718100 (D.N.J. Apr. 29, 2016). The parties have engaged in discovery. See doc. no. 8-4 at 11.

         B. New Hampshire Action

         At some point, Wells Fargo acquired ADP Commercial's rights under the Equipment Lease.[2] In April 2016, Wells Fargo filed this lawsuit for breach of the Equipment Lease in New Hampshire Superior Court, alleging that Tulley defaulted under the terms of the Equipment Lease after making 27 of 60 monthly payments. Wells Fargo alleges that Tulley owes $84, 310.69 as a result of its breach. Tulley removed the case to this court on the basis of diversity jurisdiction.

         Discussion

         Before the court are Wells Fargo's motion to remand the case to state court and Tulley's motion to transfer or, in the alternative, stay the proceedings.

         I. Motion to Remand

         Once a case has been removed to federal court, the plaintiff may move to remand the case to state court because of a defect, other than lack of subject matter jurisdiction, within 30 days of removal. See 28 U.S.C. § 1447(c). "To oppose a motion to remand, the defendant[] bear[s] the burden of showing that removal was proper." Sevigny v. British Aviation Ins. Co., No. 15-cv-127-JD, 2015 WL 3755204, at *1 (D.N.H. June 16, 2015) (internal citations omitted).

         Tulley has met its burden of establishing that removal was timely and proper based on the court's diversity jurisdiction, and Wells Fargo does not argue that this court lacks subject matter jurisdiction over this case.[3] Rather, Wells Fargo moves to remand based on the following clause contained in Paragraph 25 of the Equipment Lease:

THE RIGHTS OF THE PARTIES UNDER THIS LEASE SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW JERSEY WITHOUT REFERENCE TO CONFLICT OF LAW PRINCIPLES[.] ANY ACTION BETWEEN LESSEE AND LESSOR SHALL BE BROUGHT IN ANY STATE OR FEDERAL COURT LOCATED IN THE COUNTY OF MORRIS, NEW JERSEY, OR AT LESSOR'S ...

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