Ocean City Express Co. v. Atlas Van Lines, Inc.

46 F. Supp. 3d 503, 2014 U.S. Dist. LEXIS 127231, 2014 WL 4542418
CourtDistrict Court, D. New Jersey
DecidedSeptember 11, 2014
DocketCivil Action No. 13-1467 (JBS/KMW)
StatusPublished
Cited by2 cases

This text of 46 F. Supp. 3d 503 (Ocean City Express Co. v. Atlas Van Lines, Inc.) is published on Counsel Stack Legal Research, covering District Court, D. New Jersey primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Ocean City Express Co. v. Atlas Van Lines, Inc., 46 F. Supp. 3d 503, 2014 U.S. Dist. LEXIS 127231, 2014 WL 4542418 (D.N.J. 2014).

Opinion

OPINION

SIMANDLE, Chief Judge:

I. INTRODUCTION

The matter comes before the Court on Defendant Atlantic Van Lines, Inc.’s (hereinafter, “Defendant”) motion to dismiss Plaintiffs Amended Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). [Docket Item 20.] Plaintiff Ocean City Express Co., Inc.’s (hereinafter, “Plaintiff’) two-count Amended Complaint asserts claims for violation of the New Jersey Franchise Protection Act (hereinafter, the “NJFPA”) and for breach of the implied duty of good faith and fair dealing. Defendant generally alleges that Plaintiff fails to state a viable claim under the NJFPA and, alternatively, that federal law preempts the NJFPA as applied to the parties’ relationship. Defendant also challenges Plaintiffs Amended Complaint to the extent it reasserts a good faith and fair dealing claim.

The Court has previously addressed, on two separate occasions, the viability of Plaintiffs claims. In the first such ruling, the Court granted Defendant’s motion to dismiss for failure to state a claim pursuant to Federal Rule of Civil Procedure [505]*50512(b)(6), and dismissed as moot Defendant’s motion for improper venue under Federal Rule of Civil Procedure 12(b)(3). See Ocean City Express Co., Inc. v. Atlas Van Lines, Inc., No. 13-1467, 2013 WL 3873235, at *5 (D.N.J. July 25, 2013). In the second, the Court denied Plaintiffs motion to amend pursuant to Federal Rule of Civil Procedure 15(a) and dismissed with prejudice Plaintiffs good faith and fair dealing claim.1 See Ocean City Express Co., Inc. v. Atlas Van Lines, Inc., No. 13-1467, 2014 WL 654589, at *7 (D.N.J. Feb. 19, 2014). With respect to Plaintiffs NJFPA claim, the Court concluded that Plaintiff pleaded facts sufficient to satisfy the license, community of interest, gross sales, and sales percentage requirements of the NJFPA, but failed to plead the requisite facts with respect to the NJFPA’s place of business requirement. Id. at *7. The Court accordingly dismissed without prejudice Plaintiffs NJFPA claim. Id.

The principal issues now before the Court are whether Plaintiff, in its third attempt, states a plausible NJFPA claim and, relatedly, whether federal law preempts application of the NJFPA in this instance. For the reasons explained below, the Court will deny in part and dismiss as moot in part Defendant’s motion to dismiss.

II. BACKGROUND

A. Factual Background

The. facts set forth below are those alleged in Plaintiffs Amended Complaint, which the Court accepts as true for the purposes of the pending motion. Defendant Atlas Van Lines, Inc., an entity incorporated in Indiana, and with its principal place of business in Evansville, Indiana, engages in interstate commerce as a motor carrier registered with the Department of Transportation. (First Am. Compl. [Docket Item 18], ¶ 3 & Ex. A.)

On or about March 31, 2006, Defendant entered into an agency agreement with Plaintiff Ocean City Express Co., Inc., a corporation formed in New Jersey and with a principal place of business in Pleas-antville, New Jersey. (First Am. Compl. at ¶ 4.) In the agreement, Plaintiff generally agreed to represent and act on Defendant’s behalf in connection with Defendant’s “business as an interstate common and contract motor carrier and property broker.” (Id., Ex. A.) Plaintiff alleges that compliance with the agency agreement required it to incur “substantial expense” in order to conform its markings, signage, and printed materials to Defendant’s requirements. (First Am. Compl. at ¶ 5.) Despite the initial expense, Plaintiff asserts that its gross sales arising out of the agency agreement amounted to more than $35,000 within the twelve months preceding this action, that “gross sales for 2010 exceeded $2.7 million[,]” and that “gross sales for 2011 exceeded $1.8 million.” (Id. at ¶ 7.) Plaintiff further alleges that the revenue derived from the agency agreement “comprised between 85% and 90% of Plaintiffs total revenue.” (Id. at ¶ 8.)

[506]*506Plaintiff also asserts that the NJFPA governs the “business relationship” between the parties, including “Defendant’s performance” pursuant to the agency agreement, with Plaintiff acting as “ ‘Franchisee’ ” and Defendant assuming the role of “ ‘Franchisor’ ” under the NJFPA. (Id. at ¶ 6.) Plaintiff alleges, however, that Defendant violated the NJFPA by terminating the agency relationship on December 17, 2010, without “ ‘good cause’ ” under the NJFPA for such termination. (Id. at ¶ 9-10.) Plaintiff accordingly seeks to recover the monetary damages it incurred as a result of Defendant’s purportedly improper termination. (Id. at ¶¶ 11-14.)

B. Procedural History

Defendant removed this action from the Superior Court of New Jersey on March 11, 2013. (See Notice of Removal [Docket Item 1].)

On March 18, 2013, Defendant filed its first motion to dismiss Plaintiffs complaint for improper venue pursuant to Federal Rule of Civil Procedure 12(b)(3) and/or for failure to state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6). [Docket Item 3.] The Court’s July 25, 2013 Opinion found that Plaintiff “failed to plead sufficient facts” to demonstrate that the parties’ business relationship “qualified as a franchise relationship under the NJFPA.” Ocean City Express Co., Inc., 2013 WL 3873235, at *5. The Court found, in particular, that Plaintiffs pleading failed to allege the gross sales stemming from the parties’ relationship and also failed to allege the percentage of Plaintiffs sales derived from the agency agreement. Id. at *3. The Court therefore dismissed Plaintiffs NJFPA claim without prejudice, and without reaching the issue of whether federal law preempts the NJFPA nor whether Plaintiff alleged facts in support of the NJFPA’s other requirements. Id. at *5.

On August 7, 2013, Plaintiff filed a motion to amend pursuant to Federal Rule of Civil Procedure 15(a). [Docket Item 12.] The Court’s February 19, 2014 Opinion found that Plaintiff pleaded “facts sufficient to satisfy the license, community of interest, gross sales, and sales percentage requirements of an NJFPA franchise[,]” but failed “to plead that its principal office” constituted a qualifying place of business under the NJFPA. Ocean City Express Co., Inc., 2014 WL 654589, at *7. Consequently, without reaching the issue of whether federal law preempts the NJFPA, the Court again dismissed Plaintiffs NJFPA claim without prejudice, and with the right to file an amended pleading without “seeking leave of court” to the extent such filing comported with counsel’s obligations under Federal Rule of Civil Procedure 11.

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Bluebook (online)
46 F. Supp. 3d 503, 2014 U.S. Dist. LEXIS 127231, 2014 WL 4542418, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ocean-city-express-co-v-atlas-van-lines-inc-njd-2014.