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TL of Florida, Inc. v. Terex Corp.

United States District Court, D. Delaware

July 3, 2014

TL OF FLORIDA, INC., Plaintiff,
v.
TEREX CORPORATION, d/b/a TEREX CONSTRUCTION AMERICAS, Defendants

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[Copyrighted Material Omitted]

Page 322

Alyssa Sydni Rothman, OFFIT KURMAN, Wilmington, DE; William M. Garner, Minneapolis, MN, Attorneys for Plaintiff.

John C. Phillips, Jr. & Lisa C. Mclaughlin, PHILLIPS, GOLDMAN & SPENCE, P.A., Wilmington, DE, Attorneys for Defendants.

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MEMORANDUM OPINION

Leonard P. Stark, U.S. District Judge.

Pending before the Court are the Defendant Terex Corporation's (" Terex" ) Motion to Dismiss for Failure to State a Claim (D.I. 6) and Plaintiff TL of Florida's (" TL" ) Motion to Amend Complaint (D.I. 10).

BACKGROUND[1]

A. The Parties and the Relevant Agreements

TL is a Florida-based equipment dealership that distributes heavy equipment. (D.I. 1 at ¶ 1) Terex is a Delaware corporation and manufacturer of equipment used in construction and other infrastructure-related activities. ( Id. at ¶ 6)

In 2008, TL and Terex began discussing a potential business relationship through which TL would become a distributor of Terex construction equipment. ( Id. at ¶ 9) Those negotiations resulted in a contract that now forms the basis for the present litigation. ( Id. at ¶ 10)

1. The Distributorship Agreement

In May 2008, TL and Terex entered into a Distributorship Agreement. ( Id. ) It was renewed on April 11, 2011. ( Id. )

The Distributorship Agreement set forth the various terms and conditions under which TL was to act as a Terex distributor in Florida. ( Id. at ¶ 9) Sections 3.1(a) and 3.1(e) are at the center of the parties' disputes.

Section 3.1(a) of the Distributorship Agreement requires TL to " promote the sale, lease and use" of Terex equipment

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and to purchase such products " in at least the amount listed as the Minimum Purchases Amount in Schedule A." (D.I. 7, Ex. B) Schedule A, in turn, provides for the quarterly purchase of specific quantities of Terex articulated and rigid frame trucks. ( Id. )

Section 3.1(e) of the Distributorship Agreement requires TL to " [m]aintain an inventory of [Terex] Products reasonably sufficient to meet the anticipated short-term demand" for those products. ( Id. )

B. Events Leading to the Litigation

Pursuant to the Distributorship Agreement, TL purchased an unspecified amount of equipment from Terex. (D.I. 1 at ¶ 1) TL soon encountered commercial difficulties as a Terex distributor, finding that: (1) there was no market for the number of units that the Distributorship Agreement specified; (2) TL was surrounded by competing dealers authorized to sell Terex parts; (3) Terex did not select distributors on the basis of demand in the marketplace; and (4) Terex was in financial distress. ( Id. )

C. The Litigation

TL filed suit against Terex on December 9, 2013. (D.I. 1) The Complaint asserts four claims. Count I alleges that Terex knowingly and fraudulently failed to disclose that there was no market for the units sold to TL. ( Id. at ¶ ¶ 15-19) Count II alleges that Terex negligently misrepresented the nature of maintaining a Terex distributorship. ( Id. at ¶ ¶ 21-24) Count III alleges that Terex committed a violation of the Florida Deceptive and Unfair Trade Practices Act (FDUTPA) by misrepresenting the market for its products. ( Id. at ¶ ¶ 26-27) Count IV alleges that Terex exercised its discretion in bad faith in determining the number of units of whole goods that TL was required to purchase. ( Id. at ¶ ¶ 29-31)

Terex filed its Motion to Dismiss on February 27, 2014. (D.I. 6) In it, Terex argues that all four claims asserted by TL are barred by the statute of limitations. (D.I. 7 at 11-16) Terex further contends that Count IV fails to state a claim on which relief may be ...


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