The opinion of the court was delivered by: Daniel L. Hovland, District Judge United States District Court
ORDER DENYING PLAINTIFF'S MOTION TO DISMISS
Before the Court is the Plaintiff's motion to dismiss the Defendant's counterclaim filed on November 3, 2010. See Docket No. 22. The Defendant filed a response in opposition to the motion on November 24, 2010. See Docket No. 29. The Plaintiff filed a reply on December 13, 2010. See Docket No. 32. For the reasons explained below, the Plaintiff's motion is denied.
Plaintiff CNH America, LLC ("CNH") manufactures and distributes Case IH brand agricultural equipment. On August 23, 1990, CNH entered into an "Agricultural Equipment Sales & Service Agreement" ("the Agreement") with Defendant Magic City Implement, Inc. ("Magic City"), appointing Magic City as an authorized dealer of Case IH agricultural equipment. See Docket No. 1-1. The Agreement requires Magic City to "Promote and sell Products sufficient to achieve sales objectives and a share of market satisfactory to the Company within the Dealer's Sales and Service Area" and "Meet such other reasonable standards of performance as may be established from time to time by the Company." See Docket No. 1-1, pp. 1-2 (capitals in original). Between August 9, 2006, and February 8, 2010, CNH sent Magic City fourteen notices of default, informing Magic City that it had not achieved its expected market share.
On August 2, 2010, CNH filed a complaint seeking declaratory judgment "that CNH has good cause under Section [51-07-01.1], N.D.Cent.Code to terminate its Agricultural Sales and Service Agreement with Magic City." SeeDocket No. 1. N.D.C.C. § 51-07-01.1 provides:
1. Any manufacturer, wholesaler, or distributor of merchandise and tools covered under section 51-07-01, excluding automobile dealers, truck dealers, or parts dealers of the automobiles or trucks, that enters a contract with any person engaged in the business of retailing the covered merchandise by which the retailer agrees to maintain a stock of the covered merchandise may not terminate, cancel, or fail to renew the contract with the retailer without good cause.
2. For the purpose of this section, good cause for terminating, canceling, or failing to renew a contract is limited to failure by the retailer to substantially comply with those essential and reasonable requirements imposed by the contract between the parties if the requirements are not different from those requirements imposed on other similarly situated retailers. The determination by the manufacturer, wholesaler, or distributor of good cause for the termination, cancellation, or failure to renew must be made in good faith.
3. In any action against a manufacturer, wholesaler, or distributor for violation of this section, the manufacturer, wholesaler, or distributor shall establish that the termination, cancellation, or failure to renew was made in good faith for good cause. If a notice of termination is issued and the dealer challenges the notice by filing an action, there is an automatic stay during the pendency of the action. If the manufacturer, wholesaler, or distributor fails to establish good cause for its action, the manufacturer, wholesaler, or distributor is liable for all special and general damages sustained by the plaintiff, including the costs of the litigation and reasonable attorney's fees for prosecuting the action and the plaintiff, if appropriate, is entitled to injunctive relief. This section applies to all contracts now in effect which have no expiration date and are continuing contracts and all other contracts entered, amended, or renewed after July 31, 2003. Any contract in force and effect on August 1, 2003, which by its terms will terminate on a date subsequent thereto is governed by the law as it existed before August 1, 2003.
N.D.C.C. § 51-07-01.1 (emphasis added).
On September 21, 2010, Magic City filed an answer and counterclaim. See Docket No. 16. In Count I of its counterclaim, Magic City seeks a declaratory judgment "that CNH does not have 'good cause' to terminate the Written Agreement, and that any such termination by CNH would be in bad faith." See Docket No. 16. Magic City also requests costs and attorney's fees under N.D.C.C. § 51-07-01.1(3). In Count II of its counterclaim, Magic City "seeks a declaration that CNH has sought to terminate Magic City's Case IH dealership in violation of N.D. Cent. Code § 51-07-01.2(5)" and all damages proximately caused by the violation, including attorney's fees. See Docket No. 16. In Count III of its counterclaim, Magic City "seeks a declaration that CNH has breached its express duties under the contract," and damages including attorney's fees. See Docket No. 16.
On November 3, 2010, CNH filed a motion seeking dismissal of Magic City's counterclaim. See Docket No. 22. CNH contends that Magic City's counterclaim does not state a claim upon which relief can be granted. Specifically, CNH contends that portions of Magic City's counterclaim are duplicative of the complaint and CNH cannot be found to have violated the Agreement or N.D.C.C. § 51-07-01.1 because it has not yet sought to terminate the Agreement. Magic City contends that CNH has not shown good cause to terminate the Agreement.
Rule 8 of the Federal Rules of Civil Procedure sets forth the federal pleading requirements for civil cases. Rule 8(a) provides that pleadings must contain: "(1) a short and plain statement of the grounds for the court's jurisdiction"; (2) "a short and plain statement of the claim showing that the pleader is entitled to relief"; and (3) "a demand for the relief sought." Fed. R. Civ. P. 8(a).
Rule 12(b)(6) of the Federal Rules of Civil Procedure mandates the dismissal of a claim if there has been a failure to state a claim upon which relief can be granted. When considering a motion to dismiss under Rule 12(b)(6), the court must accept all factual allegations in the complaint as true. "However, the complaint must contain sufficient facts, as opposed to mere conclusions, to satisfy the legal requirements of the claim to avoid dismissal." Levy v. Ohl, 477 F.3d 988, 991 (8th Cir. 2007) (quoting DuBois v. Ford Motor Credit Co., 276 F.3d 1019, 1022 (8th Cir. 2002)). The court may generally only look to the allegations contained in the complaint to make a Rule 12(b)(6) determination. McAuley v. Fed. Ins. Co., 500 F.3d 784, 787 (8th Cir. 2007). "[I]n considering a motion to dismiss, the district court may sometimes consider materials outside the pleadings, such as materials that are necessarily embraced by the pleadings and exhibits attached to the complaint." Mattes v. ABC Plastics, Inc., 323 F.3d 695, 697 n.4 (8th Cir. 2003) (citing Porous Media Corp. v. Pall Corp., 186 F.3d 1077, 1079 (8th Cir. 1999)). "A complaint shall not be dismissed for its failure to state a claim upon which relief can be granted unless it appears beyond a reasonable doubt that plaintiff can prove no set of facts in support of a claim entitling him to relief." Young v. City of St. Charles, Mo., 244 F.3d 623, 627 (8th Cir. 2001).
In Ashcroft v. Iqbal, 129 S. Ct. 1937 (2009), the United States Supreme Court clarified the pleading requirements under the Federal Rules of Civil Procedure necessary to survive a motion to dismiss for failure to ...