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Joseph McSweeney Enterprises, LLC v. Mister Softee Sales and Manufacturing, LLC

United States District Court, Third Circuit

August 27, 2013

JOSEPH McSWEENEY ENTERPRISES, LLC, Plaintiff,
v.
MISTER SOFTEE SALES AND MANUFACTURING, LLC, et al., Defendants.

OPINION

ROBERT B. KUGLER, District Judge.

This matter comes before the Court on the motion of Mister Softee Sales and Manufacturing, LLC ("MSSM"), Mister Softee, Inc. ("MSI"), and Mister Softee Franchise LLC ("MSF") (collectively, "Defendants") to dismiss the complaint of Joseph McSweeney Enterprises, LLC ("Plaintiff"). Defendants contend that Plaintiff has failed to state a claim because Plaintiff relies on representations allegedly made during negotiations, which is squarely barred by the governing contracts' integration clauses. Defendants also argue that Plaintiff has failed to allege a breach of any term of the contract. Defendants alternatively move to strike Plaintiff's jury demand based on the express language of the contract. For the reasons expressed below, Defendants' motion to dismiss is GRANTED.

I. BACKGROUND

Plaintiff is a Texas limited liability company that contracted with Defendant Mister Softee Franchise LLC ("MSF") to purchase three Mister Softee Franchises in 2008, 2009, and 2010, respectively. Am. Compl. ¶9. Mister Softee Franchises are "mobile businesses which offer soft-serve ice cream and other frozen confections to the public." Id . Defendants, including MSF, are either New Jersey corporations or limited liability companies. Plaintiff alleges that under the terms of the Franchise Agreements, he was "required to purchase or lease a vehicle and equipment from Defendants in accordance with Mister Softee's specifications." Id. at ¶10. Plaintiff claims that he entered into Truck and Equipment Sale Agreements ("Sales Agreements") to purchase two trucks from Mister Softee, with each Franchise Agreement correlating with one of Plaintiff's trucks. Id. at ¶12. Plaintiff also alleges that he purchased a 2007 truck from a former franchisee. Id. at ¶11.

According to Plaintiff, the purchased trucks were "designed and manufactured in a way that fails to compensate for the temperatures associated with warmer climates." Id. at ¶13. Plaintiff alleges numerous defects in the trucks, including that they were installed with an undersized generator set and that the chassis of the trucks were "grossly overweight." Id . Plaintiff claims that because of these defects, he was forced to make numerous repairs and has been unable to properly operate the Franchised Businesses.[1] Plaintiff also claims that Defendants have acknowledged these defects and proposed for Plaintiff to purchase a newly designed truck "to cure the previous defects." Id. at ¶15. Plaintiff asserts, however, that "Defendants have failed and refused to offer Plaintiff an adequate remedy." Id. at ¶16.

Due to these alleged failures, Plaintiff filed suit against Defendants in the United States District Court for the Northern District of Texas. Shortly thereafter, Defendants moved to dismiss, or in the alternative, to transfer venue to the District of New Jersey. On October 9, 2012, the district court granted Defendants' motion to transfer venue and the matter was transferred to this Court. (Doc. No. 22). On January 17, 2013, Plaintiff filed an Amended Complaint. In the Amended Complaint, Plaintiff asserts claims for breach of contract, fraud, violation of the New Jersey Consumer Fraud Act, and breach of warranty against all Defendants. Plaintiff also requests a jury trial. Id. at ¶36. Approximately two weeks after Plaintiff filed the Amended Complaint, Defendants filed the instant motion to dismiss.

II. LEGAL STANDARD

Federal Rule of Civil Procedure 12(b)(6) allows a court to dismiss an action for failure to state a claim upon which relief can be granted. When evaluating a motion to dismiss, "courts accept all factual allegations as true, construe the complaint in the light most favorable to the plaintiff, and determine whether, under any reasonable reading of the complaint, the plaintiff may be entitled to relief." Fowler v. UPMC Shadyside , 578 F.3d 203, 210 (3d Cir. 2009) (quoting Phillips v. County of Allegheny , 515 F.3d 224, 233 (3d Cir. 2008)). In other words, a complaint survives a motion to dismiss if it contains sufficient factual matter, accepted as true, to "state a claim to relief that is plausible on its face." Ashcroft v. Iqbal , 129 S.Ct. 1937, 1949 (2009); Bell Atlantic Corp. v. Twombly , 550 U.S. 544, 570 (2007).

To make this determination, a court conducts a three-part analysis. Santiago v. Warminster Twp. , 629 F.3d 121, 130 (3d Cir. 2010). First, the court must "tak[e] note of the elements a plaintiff must plead to state a claim." Id . (quoting Iqbal, 556 U.S. at 675). Second, the court should identify allegations that, "because they are no more than conclusions, are not entitled to the assumption of truth." Id. at 131 (quoting Iqbal, 556 U.S. at 680). Finally, "where there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement for relief." Id . (quoting Iqbal, 556 U.S. at 680). This plausibility determination is a "context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Iqbal, 556 U.S. at 679. A complaint cannot survive where a court can only infer that a claim is merely possible rather than plausible. Id.

III. DISCUSSION

Defendants raise several arguments in support of their motion to dismiss. Defendants first argue that Plaintiff's CFA claim must be dismissed because the CFA is not applicable to the sale of a franchise under the Third Circuit's prediction of New Jersey law. Defendants further contend that even if the CFA were applicable, Plaintiff's CFA, fraud, and breach of warranty claims are barred by the integration clauses in both the Franchise and Sales Agreements.[2] Finally, Defendants argue that the Complaint does not sufficiently allege a breach of contract because Plaintiff has not identified any contractual obligation that any Defendant failed to perform.[3] Defendants provided copies of the Franchise and Sales Agreements, which govern the parties' relationship, to assist the Court in resolving the instant motion.[4]

Although Plaintiff urges the Court to apply an exception to the parol evidence rule, the Court finds that the integration clause bars further consideration of Plaintiff's allegations in the fraud, CFA, and breach of warranty counts. Plaintiff has also failed to articulate a breach of contract claim. Accordingly, the Court will grant Defendants' motion to dismiss in its entirety.

1. The Integration Clause

The Court will begin by addressing the integration clause in the Franchise and Sales Agreements, which Defendants maintain is a bar to Plaintiff's fraud, CFA, and breach of warranty claims. The Franchise Agreements each contain an integration clause which states: "This agreement reflects the entire agreement between the parties and may not be changed except by a written document signed by both parties." Defs.' Mot. Dismiss, Ex. A at 19. The Franchise Agreements also state: "You acknowledge that no representations, promises, inducements, guarantees or warranties of any kind were made by or on behalf of Mister Softee which have led you to enter this agreement. You understand that whether you succeed as a franchisee depends upon your efforts, business judgments, the performance of your employees, market conditions and variable factors beyond Mister Softee's control or influence." Id . The Sales Agreements contain a similar integration clause. See Id., Ex. B at 3 ("This Agreement constitutes the entire integrated agreement between the parties and may not be changed except by a written document signed by both parties.") The Sales Agreements also ...


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