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Boyle v. Vanguard Car Rental USA

September 30, 2009

LORETTA E. BOYLE, PLAINTIFF,
v.
VANGUARD CAR RENTAL USA, INC., DEFENDANT.



The opinion of the court was delivered by: Simandle, District Judge

OPINION

I. INTRODUCTION

This matter is before the Court on Defendant's motion to dismiss or transfer venue [Docket Item 8], Plaintiff's motion to amend the complaint [Docket Item 23], and Plaintiff's motion for a continuance pursuant to Rule 56(f), Fed. R. Civ. P. [Docket Item 27].

The outcome of the motion to dismiss or transfer primarily turns on whether New Jersey's Franchise Practices Act (FPA), N.J. Stat. Ann. § 56:10-5 (West 2001), applies to the business at issue in this case, a rental car agency. Defendant, the putative franchisor, argues that Plaintiff's business does not qualify as a franchise as defined by the FPA because of a lack of "community of interest" between the two businesses. (Def. Br. Supp. Motion to Dismiss, 17.) Defendant also argues that even if Plaintiff's business is a franchise, it does not meet a statutory requirement of gross sales between franchisor and franchisee totaling $35,000. (Id. at 12.)

Because Plaintiff's allegations about her commission are sufficient with respect to the $35,000 requirement, that part of Defendant's motion to dismiss will be denied. The remaining argument on "community of interest" will be converted to a summary judgment motion and Plaintiff's request for a continuance will be granted to allow limited discovery before resolving it. Plaintiff's request to amend her complaint will be denied without prejudice to re-filing after the issue of FPA applicability is decided, by which time Plaintiff may also obtain discovery as to the identity of any new party to be joined. Finally, the motion to transfer will be held in abeyance until the Court decides on summary judgment whether the FPA applies to the business in question.

II. BACKGROUND

A. Plaintiff's Initial Complaint and Defendant's Motion to Dismiss

According to the complaint, for over two years, Loretta E. Boyle, Plaintiff, operated a rental car agency pursuant to an Agency Operator agreement ("Agreement") with Defendant, Vanguard. (Compl. ¶ 8, 32.) Prior to the agreement in question, Plaintiff had operated the rental agency since 1989, having purchased the business from her Mother who had operated it since 1970. (Id. ¶ 5.) The complaint alleges that Vanguard terminated the Agreement without good cause or 60 days notice in violation of the FPA (Count I).*fn1 (Compl. ¶ 40.) Plaintiff also argues that the Defendant failed to pay the lease on the rental facility as required by the Agreement (Count II).*fn2 (Id. ¶ 45-49.)

Defendant moved to dismiss the complaint, arguing that Plaintiff's FPA claim fails to allege facts necessary to show that the Agreement was subject to the FPA. (Def. Br. Supp. Motion to Dismiss, 12.) In order for a business relationship to be protected by the FPA, it must be classified as a franchise as defined by the Act. A franchise is "a written arrangement for a definite or indefinite period, in which a person grants to another person a license to use a trade name, trade mark, service mark, or related characteristics, and in which there is a community of interest in the marketing of goods or services at wholesale, retail, by lease, agreement, or otherwise." § 56:10-3(a). To gain the protection of the FPA, the franchise must also meet three additional requirements that go to the nature of the relationship between franchisor and franchisee. § 56:10-4(a). The Act applies to:

a franchise (1) the performance of which contemplates or requires the franchisee to establish or maintain a place of business within the State of New Jersey, (2) where gross sales of products or services between the franchisor and franchisee covered by such franchise shall have exceeded $35,000.00 for the 12 months next preceding the institution of suit pursuant to this act, and (3) where more than 20% of the franchisee's gross sales are intended to be or are derived from such franchise.

Id.

Defendant makes two claims about the application of the Act to Plaintiff: First, that there was no "community of interest" between Plaintiff and Defendant as required by § 56:10-3(a), and second, that there was not "gross sales of products or services between franchisor and franchisee covered by such franchise exceeding $35,000 for the 12 months preceding institution of suit," as required by § 56:10-4(a)(2). (Def. Br. Supp. Motion to Dismiss, 12.)

With regard to the breach of contract claim, Defendant argues that the claim should be transferred pursuant to a forum selection clause in the Agreement.*fn3 (Id. at 19.) Defendant concedes that if Count I remains viable, the case should not be transferred.*fn4

B. Plaintiff's Motion for 56(f) Continuance

Plaintiff moved that the motion to dismiss be understood, at least in part, as a motion for summary judgment because Defendant attached and referenced an affidavit from the Vice President of Vanguard, Jerry Smith. Plaintiff asked for a 56(f) continuance in order to further develop the factual record on the issue of community of interest [Docket Item 27]. Among other things, Plaintiff wishes to depose or otherwise solicit information from Mr. Smith, whose affidavit contains claims that Defendant uses to argue that a community of interest did not exist. (Pl.'s Br. Supp. Motion for Continuance, 11.)

Plaintiff does not claim to need more time for the other issues raised in Defendant's motion, including the issue of the satisfaction of the $35,000 requirement. (Id. at 6).

C. Plaintiff's Motion to Amend Complaint

Plaintiff has also moved to amend the complaint to add as a defendant Enterprise Rent-A-Car Company, the alleged parent corporation of Vanguard [Docket Item 23]. The proposed amended complaint adds six more claims related to alleged efforts by Vanguard and Enterprise to interfere with Plaintiff's contractual rights and prospective economic gain. (Proposed Amend. Compl. ¶¶ 57-84.) The claims include intentional interference with contractual rights, intentional interference with prospective economic gain, unfair competition, and conspiracy. (Id.) Plaintiff's proposed amended complaint does not alter the allegations relevant to whether the FPA applies to Plaintiff's business, though it may affect the Court's decision as to whether to transfer the remaining claims if the FPA is found not to apply. Defendant opposes this motion to amend on the grounds that it would be futile, arguing that none of the proposed new claims would survive a motion to dismiss, in part because the Court does not have personal jurisdiction over Enterprise Rent-ACar Company, and also because this is not the proper Enterprise entity under the acquisition of Vanguard. (Def.'s Br. Opp. Motion to Amend, 5-21.)

III. DISCUSSION

A. Motion to ...


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