Central Jersey Constr. Equip. Sales, LLC v. LBX Company, LLC

CourtCourt of Appeals for the Sixth Circuit
DecidedApril 26, 2023
Docket22-5581
StatusUnpublished

This text of Central Jersey Constr. Equip. Sales, LLC v. LBX Company, LLC (Central Jersey Constr. Equip. Sales, LLC v. LBX Company, LLC) is published on Counsel Stack Legal Research, covering Court of Appeals for the Sixth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Central Jersey Constr. Equip. Sales, LLC v. LBX Company, LLC, (6th Cir. 2023).

Opinion

NOT RECOMMENDED FOR PUBLICATION File Name: 23a0194n.06

No. 22-5581

UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT

FILED Apr 26, 2023 ) CENTRAL JERSEY CONSTRUCTION DEBORAH S. HUNT, Clerk ) EQUIPMENT SALES, LLC, ) Plaintiff-Appellant, ) ON APPEAL FROM THE UNITED ) STATES DISTRICT COURT FOR v. ) THE EASTERN DISTRICT OF ) KENTUCKY LBX COMPANY, LLC, ) Defendant-Appellee. ) OPINION )

Before: STRANCH, MURPHY, and DAVIS, Circuit Judges.

MURPHY, Circuit Judge. Central Jersey Construction Equipment Sales contracted with

LBX Company to become a dealer of LBX’s construction equipment. According to Central’s

complaint, LBX later asked it to open an additional facility and promised a new dealer agreement

if it obliged. Central invested in a costly expansion but never got the promised contract. LBX

instead terminated the parties’ existing agreement a few years later. Central claims that LBX’s

conduct violated a Kentucky law that requires a manufacturer to have “good cause” to terminate a

contract with a retailer. Central also raises a promissory-estoppel claim, asserting that it opened

the additional location in reliance on LBX’s unfulfilled promise of a new agreement.

The district court properly dismissed both claims. As for its statutory claim, the parties’

existing agreement gave Central one year to file “any action” “pertaining to” the agreement. Yet

Central waited over a year before suing under the Kentucky law that required “good cause” for its No. 22-5581, Central Jersey Construction Equipment Sales v. LBX Co.

termination. This statutory claim “pertains to” (that is, has a connection with) the agreement

because the claim would not exist without it. Central also gives us no reason to conclude that

Kentucky courts would refuse to enforce this contractual time limit. As for Central’s promissory-

estoppel claim, we predict that the Kentucky Supreme Court would enforce only definite promises

in promissory-estoppel cases—just as it does in contract cases. And the abstract promise of a

future “agreement” without reference to any of its terms does not suffice. We thus affirm.

I

We must accept the well-pleaded allegations in Central’s complaint at this stage. See Rudd

v. City of Norton Shores, 977 F.3d 503, 511 (6th Cir. 2020). LBX, a company located in Kentucky,

manufactures excavators and other large construction equipment using the Link-Belt name. To

sell this equipment, it relies on authorized dealers.

Central, a New Jersey company, became an LBX dealer in 2005. LBX’s “Dealer

Agreement” governed their relationship. Agreement, R.38-1, PageID 354. This Dealer Agreement

allowed Central to sell LBX’s equipment in six and a half counties in central and southern New

Jersey, including Middlesex County. Id., PageID 355. The Agreement dated to a time when the

law barred a manufacturer from setting the minimum prices at which its dealers could sell its

products. So the Agreement instead prohibited Central from competing with LBX’s other dealers

outside Central’s territory. Id.; cf. Leegin Creative Leather Prods., Inc. v. PSKS, Inc., 551 U.S.

877, 903–04 (2007). The Agreement also required Central to sell LBX’s equipment under

Central’s name but to inform customers that the equipment had been “furnished by” LBX.

Agreement, R.38, PageID 361. And it required Central to place LBX signs at “all approved

facilities.” Id., PageID 357.

2 No. 22-5581, Central Jersey Construction Equipment Sales v. LBX Co.

The Agreement initially expired on August 31, 2006. Id., PageID 366. But it would

“automatically” renew “for additional one (1) year terms” if the parties took no action to end their

relationship. Id. To terminate the Agreement at the close of any annual term, a party had to give

notice at least 30 days in advance that the party did not intend to renew it. Id.

For several years, the parties automatically renewed the Agreement and had a mutually

beneficial relationship under its terms. In late 2011, LBX asked Central to begin serving customers

“in the North Jersey market[.]” Am. Compl., R.38, PageID 347. LBX requested that Central open

another location in either Staten Island, New York (which was outside its territory) or Middlesex

County (which was inside it). Id.; see Agreement, R.38-1, PageID 355. If Central chose to open

this facility, LBX promised it a new dealership agreement.

At first, Central opened a Staten Island facility. But this location did not succeed because

of the high costs and logistical problems on the island. At LBX’s urging, Central looked for land

to operate another facility in Middlesex County. In 2016, it found a suitable spot. Central spent

substantial sums renovating the buildings at this location, adding “LBX” signs and a “custom

designed model of an excavator” out front. Am. Compl., R.38, PageID 348.

Throughout this time, Central kept asking LBX for a new dealership agreement that would

include an expanded North Jersey territory. LBX’s dealer development manager repeatedly

promised this new agreement, stating that the parties had a “good” relationship. Id. In March

2017, LBX executives also promised a new agreement to Central executives at a Las Vegas trade

show. Central renewed its request for the new agreement over the next several months. Yet LBX

executives did not provide one and told Central to continue “business as usual[.]” Id.

Some two years later, the parties still did not have a new agreement. In August 2019,

moreover, LBX told Central that it would not renew the Dealer Agreement and that the Agreement

3 No. 22-5581, Central Jersey Construction Equipment Sales v. LBX Co.

would expire on August 31. Central alleges that it had been performing admirably up to this time

and that LBX gave no reason for the termination. Central later learned that LBX had been

negotiating with another dealer to operate a Staten Island dealership. Central adds that it made

costly investments branding its business with LBX logos in reliance on LBX’s promise of a new

agreement that never came.

On October 1, 2020, Central sued LBX in a New Jersey court. (LBX suggests that Central

did not sue until November 3, but the difference in dates does not matter now.) LBX removed this

suit to federal court and successfully moved to transfer it to a Kentucky district court under the

Dealer Agreement’s forum-selection clause. Central then amended its complaint to assert two

claims—one under a Kentucky law governing “retail agreement contracts” and the other for

promissory estoppel under Kentucky common law.

The district court dismissed Central’s complaint at the motion-to-dismiss stage. See Cent.

Jersey Constr. Equip. Sales, LLC v. LBX Co., LLC, 2022 WL 2161482, at *7 (E.D. Ky. June 15,

2022). Under the Dealer Agreement’s terms, Central had one year to file any suit on a claim

“pertaining to” the Agreement. The district court held that this limit barred Central’s claim that

LBX improperly terminated the Agreement under the law governing retail agreement contracts.

Id. at *4–6. The court next held that Central did not plausibly plead a promissory-estoppel claim.

See id. at *6–7. We review its dismissal order de novo. See Ryan P. Estes, D.M.D., M.S., P.S.C.

v. Cincinnati Ins. Co., 23 F.4th 695, 699 (6th Cir. 2022).

II

Even though Central sold LBX’s equipment in New Jersey, the parties agree that Kentucky

law governed their relationship. We thus may assume the point. See Masco Corp. v.

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