Ed Schmidt Pontiac-GMC Truck, Inc. v. DaimlerChrysler Motors Co.

538 F. Supp. 2d 1032, 2008 U.S. Dist. LEXIS 20360, 2008 WL 668267
CourtDistrict Court, N.D. Ohio
DecidedMarch 11, 2008
DocketCase No. 3:04CV07621
StatusPublished

This text of 538 F. Supp. 2d 1032 (Ed Schmidt Pontiac-GMC Truck, Inc. v. DaimlerChrysler Motors Co.) is published on Counsel Stack Legal Research, covering District Court, N.D. Ohio primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Ed Schmidt Pontiac-GMC Truck, Inc. v. DaimlerChrysler Motors Co., 538 F. Supp. 2d 1032, 2008 U.S. Dist. LEXIS 20360, 2008 WL 668267 (N.D. Ohio 2008).

Opinion

ORDER

JAMES G. CARR, Chief Judge.

This is a contract case between an automobile dealer and a manufacturer in which the dealer, Ed Schmidt Pontiac-GMC [1033]*1033Truck, Inc., claims that the defendant Da-imlerChrysler breached a 1994 settlement agreement. Schmidt seeks leave to amend to add a claim for spoliation of evidence. [Doc. 122], Jurisdiction arises under 28 U.S.C. § 1332.

For the reasons that follow, the motion will be granted.

Background

Schmidt is as a “dualed” dealership, in that it sells both General Motors vehicles and Jeeps produced by DaimlerChrysler. Schmidt obtained the Jeep franchise in 1993 through purchase of Southwyck Jeep, which had operated in south Toledo. Schmidt could not complete the purchase without DaimlerChrysler’s approval, which the corporation provided in 1993.

In 1994, Schmidt sought to consolidate the Southwyck Jeep outlet with its main facility in Perrysburg, Ohio. Another Toledo-area Jeep' dealer, Yark Oldsmobile-Jeep [Yark], protested such relocation under O.R.C. § 4517.50(A).1 Yark anticipated that, as a result of implementation of that reorganization, Schmidt might obtain a Chrysler franchise. Were that to occur, Yark, a dualed dealer selling Oldsmobiles as well as Jeeps, would suffer a competitive disadvantage with regard to Schmidt.

Additionally, if Schmidt were to obtain a Chrysler franchise, it would be able to pursue a § 4517.50(A) protest against a subsequent grant by DaimlerChrysler of a Chrysler franchise to Yark, as that franchise would be within Schmidt’s ten-mile zone of protection under that section.

Yark had informed DaimlerChrysler in December, 1993, that it might be interested in purchasing Valiton Chrysler-Plymouth [Valiton], located about three miles from Yark’s premises. Yark would have needed DaimlerChrysler’s approval to complete the purchase, just as Schmidt required DaimlerChrysler’s permission to purchase Southwyck Jeep.

In filing its § 4517.50(A) protest, Yark’s long-term goal was to ensure that, if Daim-lerChrysler gave Schmidt a Chrysler franchise, DaimlerChrysler also would approve Yark’s acquisition and relocation of Valiton Chrysler. Yark also wanted to avoid a protest by Schmidt of the relocation of the Valiton Chrysler franchise.

Were all that to occur, both Yark and Schmidt would be selling Chryslers, Jeeps, and GM vehicles. Thus, neither Yark nor Schmidt would have the competitive advantage that results from offering more vehicle lines than the other. Yark’s protest ultimately laid the groundwork for a three-way understanding about the process by which Yark and Schmidt would obtain Chrysler franchises in the future. The parties agreed that Yark would dismiss its protests, Schmidt would move its Jeep operation to Perrysburg, and Daim-lerChrylser would not award Chrysler franchises to either Schmidt or Yark until it could award one to both.

Approximately nine years later, Yark finally purchased Valiton. On learning that Yark was doing so, Schmidt, anticipating that DaimlerChrysler would approve both the sale of Valiton to Yark and Vali-ton’s relocation, demanded that Daimler-Chrysler grant Schmidt a Chrysler franchise pursuant to the 1994 Settlement Agreement.

DaimlerChrysler replied that the Agreement did not apply to this situation because DaimlerChrysler was not “award[1034]*1034ing” a Chrysler franchise to Yark. Yark was merely acquiring an existing franchise. Acquisition of a franchise in that manner, DaimlerChrysler asserted, was not the same as an “award,” as used in the 1994 Settlement Agreement. Disagreeing with this interpretation, Schmidt filed this lawsuit.

During two years of discovery, Schmidt alleges that DaimlerChrysler has knowingly and intentionally destroyed relevant evidence. Specifically, Schmidt alleges that DaimlerChrysler replaced or altered certain employees’ hard drives days before Schmidt made forensic images of the drives as part of its discovery process. Further, Schmidt alleges that Daimler-Chrysler attempted to hide the extent and significance of its misconduct. Schmidt now seeks to add a spoliation of evidence claim to this litigation.

Discussion

Rule 15 of the Federal Rules of Civil Procedure governs amendments to pleadings. It allows a party to “amend its pleading once as a matter of course ... before being served with a responsive pleading_” Fed.R.Civ.P. 15(a)(1). Otherwise, “a party may amend its pleading only with the opposing party’s written consent or the court’s leave. The court should freely give leave when justice so requires.” Id. at 15(a)(2). Whether justice so requires depends on the discretion of the trial court. Duchon v. Cajon Co., 791 F.2d 43, 48 (6th Cir.1986).

The court may deny a request for leave to amend if it finds “undue delay, bad faith or dilatory motive ... [or] futility of amendment.” Prater v. Ohio Educ. Ass’n, 505 F.3d 437, 445 (6th Cir.2007) (quoting Foman v. Davis, 371 U.S. 178, 182, 83 S.Ct. 227, 9 L.Ed.2d 222 (1962)). Absent any of these factors, leave to amend should be “freely given.” Foman, supra, 371 U.S. at 182, 83 S.Ct. 227. In this manner, Rule 15 stands for the proposition that cases “should be tried on their merits rather than the technicalities of pleadings.” Moore v. Paducah, 790 F.2d 557, 559 (6th Cir.1986) (quoting Tefft v. Seward, 689 F.2d 637, 639 (6th Cir.1982)). Courts in the Sixth Circuit have used Rule 15 to grant leave to add spoliation claims. See, e.g., Morrison v. Stephenson, 2007 WL 2401739, at *4 (S.D.Ohio 2007) (granting plaintiffs motion to amend complaint to add spoliation claim).

1. Futility

The Sixth Circuit has held that “[a] proposed amendment is futile if the amendment could not withstand a Fed.R.Civ.P. 12(b)(6) motion to dismiss.” Rose v. Hartford Underwriters Ins. Co., 203 F.3d 417, 420 (6th Cir.2000). A case cannot withstand a Fed.R.Civ.P. 12

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Bluebook (online)
538 F. Supp. 2d 1032, 2008 U.S. Dist. LEXIS 20360, 2008 WL 668267, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ed-schmidt-pontiac-gmc-truck-inc-v-daimlerchrysler-motors-co-ohnd-2008.