Royal Pac. Ltd. v. Faith Elec. Mfr. Co.

322 F. Supp. 3d 1178
CourtDistrict Court, D. New Mexico
DecidedJune 13, 2018
Docket17cv357 MCA/KBM
StatusPublished
Cited by8 cases

This text of 322 F. Supp. 3d 1178 (Royal Pac. Ltd. v. Faith Elec. Mfr. Co.) is published on Counsel Stack Legal Research, covering District Court, D. New Mexico primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Royal Pac. Ltd. v. Faith Elec. Mfr. Co., 322 F. Supp. 3d 1178 (D.N.M. 2018).

Opinion

M. CHRISTINA ARMIJO, Senior United States District Judge

THIS MATTER is before the Court on Plaintiff Royal Pacific Limited's Motion to Dismiss Defendant's Counterclaims [Doc. 13]. The Court has considered the parties' submissions and the relevant law, and is otherwise fully informed. For the following reasons, the Court GRANTS in part and DENIES in part Royal Pacific's Motion.

I. Background

Royal Pacific Limited (Royal Pacific) and Faith Electric Manufacture Company, Ltd. (Faith Electric) entered into a distribution agreement through which Royal Pacific became the exclusive distributor of Faith Electric's products, including ground fault circuit interrupter (GFCI) receptacles, to certain companies. [Doc. 1, ¶¶ 6, 7; Doc. 10, Counterclaim ¶¶ 1, 8] One of these companies was Menard.1 [Doc. 1, ¶ 10; Doc. 10, Counterclaim ¶ 9] The present matter was initiated by filing of Royal Pacific's Complaint for Declaratory Judgment and Other Relief [Doc. 1], in which Royal Pacific alleges that, in 2016, problems arose with the quality of several of Faith Electric's products, including GFCI receptacles. [Doc. 1, ¶¶ 13-14] Royal Pacific further alleges that it notified Faith Electric, but that Faith Electric failed to remedy the problems and that, because the quality problems "damaged Royal Pacific's reputation and harmed Royal Pacific's business relationship with Menards," Royal Pacific terminated the distribution agreement in March 2017. [Doc. 1, ¶¶ 29, 36] Royal Pacific seeks a declaratory judgment that Faith Electric breached the contract between them and breached the implied warranty of merchantability. [Doc. 1] Faith Electric denies that any of its products were defective and alleges in counterclaims that Royal Pacific breached the agreement, defamed Faith Electric, violated the New Mexico Unfair Practices Act (NMUPA), interfered with Faith Electric's prospective business advantage, and committed prima facie tort. [Doc. 10]

After inviting the parties to clarify the facts supporting jurisdiction, this Court found that the parties are diverse and the amount in controversy is greater than $75,000. [Doc. 33] Hence, this Court has jurisdiction under 28 U.S.C. § 1332.

*1182II. Discussion

Royal Pacific filed an Answer to Faith Electric's Counterclaim I and now moves for dismissal of Counterclaims II through V for failure to state a claim. [Doc. 13, pg. 3; Doc. 14] In its Response to Royal Pacific's Motion , Faith Electric states in a footnote that it "does not oppose dismissal of [the counterclaims for violation of the NMUPA (Count III) and prima facie tort (Count V) ] without prejudice to later refiling them-as and if warranted." [Doc. 21, n.1] It opposes dismissal of its counterclaims for defamation and interference with prospective business advantage. [Doc. 21] After setting out the standard of review, the Court will address the effect of Faith Electric's agreement that counts III and V should be dismissed, then turn to Faith Electric's defamation and interference claims.

A. 12(b)(6) Standard of review

Royal Pacific brings its Motion to Dismiss under Federal Rule of Civil Procedure 12(b)(6) and argues that Faith Electric has failed to state a claim. [Doc. 13] Federal Rule of Civil Procedure 8(a)(2) requires a complaint to set out "a short and plain statement of the claim showing that the pleader is entitled to relief." In Bell Atlantic Corporation v. Twombly , 550 U.S. 544, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007), the Supreme Court held that "to withstand a motion to dismiss, a complaint must have enough allegations of fact, taken as true, 'to state a claim to relief that is plausible on its face.' " Kansas Penn Gaming, LLC v. Collins , 656 F.3d 1210, 1214 (10th Cir. 2011) (quoting Twombly , 550 U.S. at 570, 127 S.Ct. 1955 ). In applying this test, a court accepts as true all "plausible, non-conclusory, and non-speculative" facts alleged in the plaintiff's complaint, Shrader v. Biddinger , 633 F.3d 1235, 1242 (10th Cir. 2011), but does not accept as true any legal conclusions. See Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (stating that "the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions"). In short, in ruling on a Rule 12(b)(6) motion, "a court should disregard all conclusory statements of law and consider whether the remaining specific factual allegations, if assumed to be true, plausibly suggest the defendant is liable." Collins , 656 F.3d at 1214.

B. NMUPA Unfair Practices Act (Count III) and Prima Facie Tort (Count V)

Faith Electric does not oppose dismissal of its claims for violation of the NMUPA2 and prima facie tort. [Doc. 21, pg. 4, n.1] However, it asks that the Court dismiss these counts "without prejudice" so that it can later refile them "as and if warranted." [Doc. 21, pg. 4, n.1] Royal Pacific opposes dismissal without prejudice and argues in its Reply that, instead, dismissal should be "with prejudice" because Faith Electric is unable to rectify the failings inherent in these counts in any subsequent pleading. [Doc. 27, pg. 1-2]

Faith Electric's statement could be construed as a voluntary dismissal of Counts III and V under

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Bluebook (online)
322 F. Supp. 3d 1178, Counsel Stack Legal Research, https://law.counselstack.com/opinion/royal-pac-ltd-v-faith-elec-mfr-co-nmd-2018.