United States District Court, N.D. Texas, Dallas Division
MEMORANDUM OPINION AND ORDER
J. BOYLE UNITED STATES DISTRICT JUDGE.
the Court is Plaintiff/Counter-Defendant Santander Consumer
USA Inc.'s (Chrysler Capital) Rule 12(b)(6) Motion to
Dismiss Defendant's Counterclaims. Doc. 14. For the
reasons that follow, the Court GRANTS in
part and DENIES in part Chrysler Capital's
Zeigler Chrysler Dodge Jeep-Downers Grove, LLC (Zeigler)
operates an automobile dealership that sells new and used
vehicles to consumers in the Chicago area. Doc. 4, Def.'s
Answer, Affirmative Defenses, Countercl., and Jury Demand 10
[hereinafter Zeigler's Countercl.]. Chrysler Capital buys
automobile retail installment sales contracts from automobile
dealers such as Zeigler. Doc. 1-1, Pl.'s Orig. Pet.
¶ 6 [hereinafter Chrysler Capital's Orig. Pet.].
Zeigler points out that it can only offer certain incentives,
such as 0% financing, if the funding source is Chrysler
Capital. Doc. 4, Def.'s Countercl. 10. Therefore, to
remain competitive, it needs access to funding through
Chrysler Capital. Id.
March 2013, Chrysler Capital and Zeigler entered into the
Non-Recourse Master Dealer Agreement (the Non-Recourse
Agreement). Doc. 15, Pl./Counter-Def. Santander Consumer USA
Inc.'s Br. in Supp. of its Rule 12(b)(6) Mot. to Dismiss
Def.'s Countercls. ¶ 1 [hereinafter Chrysler
Capital's Br.]; Doc. 17, Def./Counter-Pl.'s Resp. in
Opp'n to Pl./Counter-Def.'s Mot. to Dismiss 3
[hereinafter Zeigler's Resp.]; Doc. 4-2, Non-Recourse
Master Dealer Agreement [hereinafter Non Recourse Agreement].
The Non-Recourse Agreement governs Chrysler Capital and
Zeigler's participation in a financing program (the
Program) that provides customers the ability to obtain
financing for the purchase or lease of automobiles from
Zeigler. Doc. 4, Zeigler's Countercl. 14; Doc. 4-2,
Non-Recourse Agreement 2.
operating under the Non-Recourse Agreement, Zeigler would
enter into retail installment sales contracts with customers
and then sell and assign those contracts to Chrysler Capital.
Doc. 17, Zeigler's Resp. 3-4; Doc. 4-2, Non-Recourse
Agreement 2. Before selling the contracts, Zeigler had to
submit the applications to Chrysler Capital. Doc. 4,
Zeigler's Countercl. 11; Doc. 4-2, Non-Recourse Agreement
2. Chrysler Capital could approve, reject, or condition its
approval of an application. Doc. 4-2, Non-Recourse Agreement
2015, Chrysler Capital allegedly represented that it had
identified 27 sales by a single salesperson that it
considered “suspicious.” Doc. 4, Zeigler's
Countercl. 19. Chrysler Capital claimed, according to
Zeigler, that the identified salesperson had located
potential customers with unsatisfactory credit, assisted them
with fraudulently cleansing their credit, and then helped
them apply for financing with Chrysler Capital. Id.
But Zeigler alleges that it was told that Chrysler Capital
had no actual evidence of this activity. Id.
result of uncovering “suspicious” activity,
Chrysler Capital stopped accepting applications for new
financing transactions from Zeigler and blocked Zeigler's
access to information related to current or pending
applications without notice. Id. at 20. Chrysler
Capital claims it had the authority to do so under Section
15(d) of the Non-Recourse Agreement. Doc. 15, Chrysler
Capital's Br. ¶ 12. Section 15(d) states:
Chrysler Capital may immediately suspend the Program without
notice if it determines that there has been a pattern of
fraudulent or suspicious activity, excessive Chargebacks, or
excessive losses on Contracts. Upon such suspension, the
Parties shall negotiate in good faith on further assurances
to permit Chrysler Capital, in its sole discretion, to lift
Doc. 4-2, Non-Recourse Agreement § 15(d).
to Zeigler, Chrysler Capital then requested that Zeigler
repurchase the disputed contracts. Doc. 4, Zeigler's
Countercl. 22. Chrysler Capital claims it had the authority
to make the request under Section 7(a) of the Non-Recourse
Agreement, Doc. 1-1, Chrysler Capital's Orig. Pet.
¶¶ 11, 14. Section 7(a) states:
Chrysler Capital shall have the right to require [Zeigler] to
purchase from Chrysler Capital a Contract that [Zeigler] has
originated . . . Further, Chrysler Capital may in its sole
discretion require [Zeigler] to re-purchase all outstanding
Contracts originated by [Zeigler] and assigned to Chrysler
Capital if Chrysler Capital determines that there has been a
pattern of fraudulent or suspicious activity.
Doc. 4-2, Non-Recourse Agreement § 7(a).
Zeigler refused to repurchase the disputed contracts,
Chrysler Capital allegedly called one or more of
Zeigler's customers and told them that Zeigler was
involved in fraudulent activity. Doc. 4, Zeigler's
Countercl. 21. These communications allegedly caused
customers confusion and uncertainty regarding the status of
their transactions with Zeigler. Id. Chrysler
Capital also allegedly withheld funds owed to Zeigler based
on the contracts at issue. Id.
alleges that several months after Chrysler Capital froze the
Program, it formally demanded that Zeigler repurchase 50
vehicle financing contracts that Zeigler had originated for
Chrysler Capital under the Non-Recourse Agreement.
Id. at 22. Zeigler refused and contends that
Chrysler Capital uses its unique position in the marketplace
to attempt to force Zeigler to assume the credit risk on
certain contracts without providing a loan-by-loan analysis.
Id. Furthermore, Zeigler asserts that Chrysler
Capital refused to negotiate in good faith regarding lifting
the suspension of the Program. Id. Zeigler maintains
that Chrysler Capital intended to cause the financial harm
from which Zeigler suffers. Id. at 23.
October 7, 2016, Chrysler Capital filed this action in state
court, asserting breach of contract. Doc. 1-1, Chrysler
Capital's Orig. Pet. ¶ 15. Zeigler removed the state
court action to this Court on November 28, 2016. Doc. 1,
Notice of Removal. On December 9, 2016, Zeigler answered,
asserted affirmative defenses, and brought counterclaims
against Chrysler Capital. Doc. 4, Zeigler's Countercl.
Zeigler asserted counterclaims for: (1) breach of contract;
and (2) tortious interference with prospective
contracts. Id. at 24-25.
Capital then filed a 12(b)(6) Motion to Dismiss Zeigler's
counterclaims for failure to plead facts sufficient to state
a claim on which relief may be granted. Doc. 14,
Pl./Counter-Def. Santander Consumer USA Inc.'s Rule
12(b)(6) Mot. to Dismiss Def.'s Countercls.; Doc. 15,
Chrysler Capital's Br. Zeigler filed a Response (Doc.
17), and Chrysler Capital filed a Reply (Doc. 20). Thus, the
Motion is ripe for the Court's review.
Rule 8(a)(2) of the Federal Rules of Civil Procedure, a
pleading that states a claim for relief must contain “a
short and plain statement of the claim showing that the
pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2).
Rule 12(b)(6) authorizes a court to dismiss a plaintiff's
pleading for “failure to state a claim upon which
relief can be granted.” Fed.R.Civ.P. 12(b)(6). In
considering a Rule 12(b)(6) motion to dismiss, “[t]he
court accepts all well-pleaded facts as true, viewing them in
the light most favorable to the plaintiff.” In re
Katrina Canal Breaches Litig., 495 F.3d 191, 205 (5th
Cir. 2007) (quoting Martin K. Eby Constr. Co. v. Dall.
Area Rapid Transit, 369 F.3d 464, 467 (5th Cir. 2004)).
The court will “not look beyond the face of the
pleadings to determine whether relief should be granted based
on the alleged facts.” Spivey v. Robertson,
197 F.3d 772, 774 (5th Cir. 1999).
survive a motion to dismiss, a plaintiff must plead
“enough facts to state a claim to relief that is
plausible on its face.” Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 570 (2007). “Threadbare
recitals of the elements of a cause of action, supported by
mere conclusory statements, do not suffice.”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).
“A claim has facial plausibility when the plaintiff
pleads factual content that allows the court to draw the
reasonable inference that the defendant is liable for the
misconduct alleged.” Id. “The
plausibility standard is not akin to a ‘probability
requirement, ' but it asks for more than a sheer
possibility that a defendant has acted unlawfully.”
Id. When well-pled facts fail to achieve this
plausibility standard, “the complaint has alleged-but
it has not shown-that the pleader is entitled to
relief.” Id. at 679 (internal quotation marks
and alterations omitted).
Breach of Contract
recognizes the right of contracting parties to agree to
choice of law.” Tel-Phonic Servs., Inc. v. TBS
Intern., Inc., 975 F.2d 1134, 1142 (5th Cir. 1992).
“Texas courts permit choice-of-law agreements and the
default position is that they are enforceable.”
Cardoni v. Prosperity Bank, 805 F.3d 573, 581 (5th
Cir. 2015). In the Non-Recourse Agreement, the parties state
that it “shall be governed by and construed in
accordance with the laws of the State of Texas.” Doc.
4-2, NonRecourse Agreement § 18(o). The parties do not
challenge the enforceability of the contract's
choice-of-law provision and assume only Texas ...