United States District Court, D. New Hampshire
McCafferty United States District Judge
contract dispute, Wells Fargo Financial Leasing, Inc.
(“Wells Fargo”) sues Tulley Automotive Group,
Inc. (“Tulley”), alleging that Tulley defaulted
on a lease agreement for computer networking equipment.
Tulley filed a third-party complaint against CDK Global, LLC
(“CDK”) for indemnification, alleging that CDK
fraudulently induced Tulley to enter into the lease
agreement. CDK now moves to dismiss Tulley's third-party
complaint. Tulley objects. For the reasons that follow,
CDK's motion is granted.
Federal Rule of Civil Procedure 12(b)(6), the court must
accept the factual allegations in the complaint as true,
construe reasonable inferences in the plaintiff's favor,
and “determine whether the factual allegations in the
plaintiff's complaint set forth a plausible claim upon
which relief may be granted.” Foley v. Wells Fargo
Bank, N.A., 772 F.3d 63, 71 (1st Cir. 2014) (internal
quotation marks omitted). A claim is facially plausible
“when the plaintiff pleads factual content that allows
the court to draw the reasonable inference that the defendant
is liable for the misconduct alleged.” Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009).
the summer of 2013, Tulley purchased a computer system for
its car 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 computer software in June 2013 and
another contract to obtain the computer hardware and
equipment in July 2013. First, to acquire software and
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
point, Tulley allegedly stopped making payments and defaulted
on its obligations under both the Master Services Agreement
and the Equipment Lease. Tulley became the defendant in two
separate lawsuits: (1) an action for breach of the Master
Services Agreement currently pending in federal court in New
Jersey, and (2) the instant case filed by Wells Fargo for
breach of the Equipment Lease.
New Jersey Action
1, 2015, CDK, as successor-in-interest 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.). 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 CDK made material
misrepresentations to induce Tulley to purchase the DMS and
enter into the Master Services Agreement. CDK moved to
dismiss Tulley's counterclaims, and, 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, at *7 (D.N.J. Apr.
New Hampshire Action
point, Wells Fargo acquired ADP Commercial's rights under
the Equipment Lease. In April 2016, Wells Fargo filed this
lawsuit for breach of the Equipment Lease in superior court,
alleging that Tulley defaulted on the Equipment Lease after
making 27 of 60 monthly payments. Wells Fargo alleged that
Tulley still owed $84, 310.69 under the Equipment Lease.
Tulley removed the case to this court and then sought to
transfer the case to the United States District Court for the
District of New Jersey. See doc. no. 8. The court
denied Tulley's motion, concluding that the New Jersey
and New Hampshire actions involved two separate contracts
containing different terms and warranties, and Tulley had not
explained how its liability under the Equipment Lease would
be affected by the outcome of the New Jersey action.
See doc. no. 16 at 13 and n.7.
thereafter, Tulley filed a third-party complaint in the New
Hampshire action against CDK, alleging one count of
fraudulent inducement. See doc. no. 18. Tulley
alleges that CDK made material misrepresentations regarding
the DMS to induce Tulley to enter into the Equipment
Lease-the same misrepresentations that induced Tulley to sign
the Master Services Agreement. In its third-party complaint,
Tulley seeks “indemnification damages” for any
amount the court finds it must pay Wells Fargo under the
Equipment Lease. Id. at 22.
2017, Wells Fargo and Tulley notified the court that they had
settled their claims, leaving Tulley's third-party claim
against CDK as the only claim remaining in the ...