HARDWIRE LLC v. Goodyear Tire & Rubber Co.

360 F. Supp. 2d 728, 2005 U.S. Dist. LEXIS 4212, 2005 WL 638271
CourtDistrict Court, D. Maryland
DecidedMarch 18, 2005
DocketCIV. RDB 04-2524
StatusPublished
Cited by15 cases

This text of 360 F. Supp. 2d 728 (HARDWIRE LLC v. Goodyear Tire & Rubber Co.) is published on Counsel Stack Legal Research, covering District Court, D. Maryland primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
HARDWIRE LLC v. Goodyear Tire & Rubber Co., 360 F. Supp. 2d 728, 2005 U.S. Dist. LEXIS 4212, 2005 WL 638271 (D. Md. 2005).

Opinion

MEMORANDUM OPINION

BENNETT, District Judge.

Pending before the Court is a Motion to Dismiss Plaintiffs First Amended Complaint, pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, filed by The Goodyear Tire & Rubber Company (“Goodyear” or “Defendant”). The initial Complaint filed by Hardwire LLC (“Hard-wire” or “Plaintiff’) in the Circuit Court for Worcester County, Maryland, alleged anticipatory breach of contract, requested a declaratory judgment regarding the contract, and specific performance on the contract. Goodyear removed this case based on diversity of citizenship to this Court and, on August 4, 2004, moved to dismiss the case. Hardwire did not respond to the August 4, 2004 Motion to Dismiss, and instead, filed a First Amended Complaint. In addition to the Counts alleged in the initial Complaint, the First Amended Complaint alleges (1) breach of contract, (2) fraud, (3) negligent misrepresentation, and (4) tortious interference with economic advantage.

This Court denied Goodyear’s initial Motion to Dismiss the initial Complaint without prejudice. Goodyear now moves to dismiss all Counts of Hardwired First Amended Complaint. Hardwire, with Goodyear’s consent, moved the court for leave to file a Second Amended Complaint pursuant to Fed.R.Civ.P. 15(a) and Local Rule 103.6(b) (D.Md.2004). On October 7, *730 2004, this Court granted Hardwired Motion for Leave to Amend and ordered that Goodyear’s Motion to Dismiss and Hard-wire’s Opposition to the Motion to Dismiss, applied to the Second Amended Complaint. Additionally, this Court ordered that Goodyear had the right to file a reply memorandum in response to Hardwired Opposition to the Motion to Dismiss. The Second Amended Complaint (“the Complaint”) deleted paragraph 20 of the First Amended Complaint, which asserted that there was no integration clause in an agreement between the parties that is the subject of this litigation. There were no other changes to the Complaint setting forth the Plaintiffs cause of action.

This Court has jurisdiction pursuant to 28 U.S.C. § 1332 and 28 U.S.C. § 1441. The issues have been fully briefed by counsel for the parties and no hearing is necessary on this motion. See Local Rule 105.6 (D.Md.2004). For the reasons set forth below, Goodyear’s Motion to Dismiss is STAYED as to Counts I — III and DENIED as to the remaining Counts IV-VII.

BACKGROUND

Hardwire, formerly known as Tunis Works, is a small, closely held, Delaware limited liability corporation with its principal place of business in Pocomoke City, Maryland. Hardwire founder and current President, George Tunis, III, invented the Hardwire product, a light-weight reinforcing material with the strength of steel and the malleability of plastic. The two principal ingredients to the Hardwire product are a steel tire cord, and various resinous materials.

The Defendant, Goodyear, is an Ohio corporation engaged in the sale of tire and rubber products. Goodyear manufactures a steel tire cord such as that used in the Hardwire product. In or around early 2000, Goodyear began searching for opportunities in which it could market its tire cord. At the same time, Hardwire was searching for a consistent supply of tire cord to continue to develop the company.

Hardwire, then known as Tunis Works, negotiated an agreement with Goodyear for a supply of tire cord on or about May 13, 2002. The agreement consisted of a “Purchase Order Agreement” (the “Purchase Order”) and a “Purchase Order, Exclusive Sales and Representation Agreement” (the “Agreement”). Section 1A of the Agreement appointed Hardwire as Goodyear’s “exclusive, independent sales representative” for tire cord and products containing tire cord. Section 1A also obliged Hardwire to “aggressively promote the sale of Tire Cord manufactured by Goodyear,” to “call upon customers ... [to] inform them ... of the potential applications for the product,” and to “solicit and obtain short- and long-term contracts with customers to supply and sell the Products.” Section IB of the Agreement appointed Goodyear Hardware's “exclusive supplier” of tire cord, thus obligating Hardwire to purchase all of its tire cord requirements from Goodyear. The price of the tire cord for the first year of the Agreement was set in an attached schedule. The Agreement specified that revised pricing may be negotiated not more than once annually to become effective on the next anniversary of the Agreement. Paragraph 4 of the Agreement provided that all Hardwired orders shall be submitted to Goodyear for acceptance or rejection and that no order would be binding unless accepted by Goodyear in writing. In addition, paragraph 4 provided that upon Goodyear’s rejection, Hardwire is free to fill the order through another supplier.

The Agreement set a term of twenty *731 years, set to expire on December 31, 2022. 1 The parties functioned well under the Agreement for approximately three years. However, on April 19, 2004, Hardwire received a letter from Goodyear in which Goodyear purported to immediately terminate its contract with Hardwire, because, according to Goodyear, Hardwire’s alleged violations of Goodyear’s trademarks were incurable breaches of their contract. The letter offered to renegotiate the Agreement under a different pricing and term scheme. In response to this letter, Hard-wire filed its initial Complaint, seeking to enforce the parties’ Agreement. In this initial Complaint, Hardwire sought (1) relief for anticipatory breach of contract, (2) a declaratory judgment regarding the contract and (3) specific performance on the contract. On August 4, 2004, Goodyear filed a motion to dismiss Hardwire’s Complaint for failure to state a claim upon which relief can be granted, pursuant to Federal Rule of Civil Procedure 12(b)(6). In response, Hardwire filed a First Amended Complaint on August 23, 2004. The Court denied Goodyear’s Motion to Dismiss Hardwire’s initial Complaint without prejudice by letter of August 7, 2004.

Hardwire’s First Amended Complaint sought (1) relief for fraud, (2) negligent misrepresentation, (3) tortious interference with economic advantage, (4) anticipatory breach of contract, (5) breach of contract, (6) a declaratory judgment regarding the contract, and (7) specific performance on the contract. Hardwire based its fraud and negligent misrepresentation claims on its assertion that during the contract negotiations, Goodyear Akron executives “represented to Tunis that Goodyear would continue to supply Hardwire with Tire Cord as long as it was available, for a period of not less than twenty years.” Hardwire argues this false representation was made to induce Hardwire to enter into an exclusive supply agreement.

In the First Amended Complaint, Hard-wire argued that the Agreement lacked an integration clause.

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360 F. Supp. 2d 728, 2005 U.S. Dist. LEXIS 4212, 2005 WL 638271, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hardwire-llc-v-goodyear-tire-rubber-co-mdd-2005.