Akm Int'l, LLC v. Jerry Chen, Lash Volkswagen, Inc.

AKM INTERNATIONAL, LLC and CHUN-CHIEN LIN, Plaintiffs, v. JERRY CHEN, LASH VOLKSWAGEN, INC., NEW COUNTRY AUDI, INC., and MGD, LLC, Defendants.

Civ. No. 14-2111 (KM) (JBC)

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY

June 14, 2017

OPINION

KEVIN MCNULTY, U.S.D.J.:

Plaintiffs AKM International, LLC ("AKM") and Chun-Chien Lin ("Mr. Lin") (collectively, "Plaintiffs") bring this action against Defendants Jerry Chen ("Mr. Chen"), Lash Volkswagen, Inc., MGD, LLC ("MGD"), and New Country Audi Motor Cars of Greenwich, Inc. ("New Country").¹ The Complaint, in eight counts, asserts claims of tort and breach of contract arising from the defendants' alleged incomplete performance of a contract to deliver several BMW motor vehicles. Essentially, Plaintiffs contend that Jerry Chen sold them some new BMWs (for resale to a third party in China), which he failed to deliver. The issue on this motion is whether Mr. Chen was acting as the actual or apparent agent of New Country when he did that. Now before the Court is Defendant New Country's motion (ECF no. 30)² for summary judgment.

For the reasons set forth below, the evidence fails to raise any material issue of fact as to the viability of Plaintiffs' claims against New Country. Summary judgment in favor of New Country on all counts will be granted.

I. BACKGROUND

Plaintiff Chun-Chien Lin is the sole principal and owner of AKM, a New Jersey limited liability company. (Def. Facts ¶¶ 2-4) New Country is an Audi motor vehicle dealership located in Greenwich, Connecticut. (Id. ¶ 1) Connecticut's motor vehicle laws prohibit New Country, as an Audi dealership, from selling new BMWs.³ (Id. ¶ 36) Defendant MGD is a Connecticut limited liability company. (Id. ¶ 7)

On October 7, 2011, Defendant Jerry Chen,⁴ a New Country salesperson, left work early and never returned to New Country. (Pl. Opp. Ex. F) A week later, on October 14, 2011, Mr. Chen offered to sell the Plaintiffs eight⁵ new BMW X5 motor vehicles (the "BMWs"). (Id. ¶ 16) On that date, Mr. Chen sent an e-mail message from his New Country e-mail account to Mr. Lin, offering "MSRP [manufacturer's suggested retail price] less $750 off only for you my brother." (Pl. Opp. Ex. D)

Mr. Chen testified that Mr. Lin was not the "ultimate purchaser" but a reseller or agent. (Def. Mot. Ex. D, Chen Dep. 91:5-7) The client of Lin and MGD, i.e., the ultimate purchaser of the eight new BMWs, was a third party in China.⁶ On October 14, 2011, that Chinese third party made a $70,000 wire transfer payment to MGD. (Def. Facts ¶¶ 17-19; Pl. Facts ¶¶ 17-19) Subsequently, the same client made four additional wire transfer payments, totaling $453,400, to MGD's account. (Id. ¶¶ 18-19) And the communications between Mr. Chen and Plaintiffs regarding the BMWs, said Chen, had "nothing to do with New Country." (Def. Mot. Ex. D, Chen. Dep. at 110:15-24). (Def. Facts ¶ 21)

Five of the BMWs were delivered to the Plaintiffs as promised. (Pl. Facts ¶ 22) Those vehicles were purchased from various BMW dealerships: BMW of Westchester, Hassel BMW, or BMW of New London.⁷ (Def. Facts ¶ 34) None of those delivered vehicles, testified Mr. Chen, were purchased from New Country. (Def. Facts ¶ 29)

The remaining three BMWs—the ones that were not delivered as promised—are the subject of Plaintiffs' Complaint. Those three did not come from New Country, either. Rather, individuals from Clifton, NJ, Bensalem, Pennsylvania, and West Sayerville, New York purchased those BMWs from Hassel BMW. (Def. Facts ¶¶ 30, 35; Pl. Facts ¶ 30)

Mr. Lin testified that he never signed a contract with, received an invoice from, or transferred money to, New Country. (Def. Facts ¶ 25) Plaintiffs have offered no evidence that New Country had any control over the payments wired to MGD. Nevertheless, Mr. Lin states that he believed Mr. Chen was acting onbehalf of New Country and that MGD was a part of New Country.⁸ (Pl. Facts ¶¶ 17-18, 25) The plaintiffs contend that Chen acted as New Country's employee or agent in the transaction. (See Pl. Facts ¶¶ 20 - 21, 24, 26, 29, 31-35)

Although Mr. Chen did not formally resign from New Country, there seems to be no dispute that he quit at some point. According to a November 2, 2011 letter from then-New Country General Sales Manager Mark DeMarsico, Mr. Chen was removed from New Country's payroll as of October 31, 2011 for job abandonment. Mr. DeMarsico's letter describes the circumstances leading to the termination of Mr. Chen's employment at New Country:

On Friday October 7^th 2011 Gee Chen texted messaged Julia Glaser here at New Country Audi Sales stating he was leaving early from work he was not feeling well, he followed up on Saturday October 8^th that [h]e was going to be in the hospital for a few days and has not returned to work since.

I Mark DeMarsico the general sales manager have called his cell phone several times to question whether he was returning to work or not and Mr. Chen has not returned any of the calls. He has contacted David Uva to say he was still not feeling well and to question him about deals. He has not called or contacted any of the management staff making us aware he was not coming in or coming back to work.

I requested and have waited for three weeks to receive a letter from him regarding a leave of absence for medical reasons and have received nothing, As of October 31^st 2011 Gee Chen should be removed from payroll for job abandonment.

Mark DeMarsico

General Sales Manager

New Country Audi

(Def. Mot. Ex. H)

Mr. Chen began working at Lash Auto Group shortly after leaving New Country. This is corroborated by evidence that on October 21, 2011, Lash Volkswagen direct-deposited $450 into Chen's HSBC checking account. (Def. Facts ¶ 27; Def. Mot. Ex. F) Chen testified at his deposition that he was employed at Lash Volkswagen when all of the wire transfers from Plaintiffs' client to MGD for the BMWs occurred, all the way back to the first transfer on October 14, 2011. (Def Facts ¶ 28; see also Chen Dep. 154:1-13)

On January 17, 2014, New Country filed a complaint in Connecticut State Superior Court against a former employee, David Uva. New Country's claim arose from a scheme in which Uva allegedly sold Audi automobiles from New Country to an export buyer, in violation of Audi and New Country policies. (Pl. Opp. Ex. A) In that state court complaint, New Country alleged that Uva and his co-conspirators received payments from the export buyers through MGD, which, at a profit, supplied Audi automobiles that MGD purchased from New Country. (Id.) Relatedly, on December 1, 2014, New Country filed a complaint against Mr. Uva in bankruptcy court in the District of Connecticut, seeking to have Uva's liability to them declared non-dischargeable. (Pl. Opp. Ex. B)

On February 10, 2014, Plaintiffs filed the Complaint in this action in New Jersey state court. (Def. Facts ¶ 8) On April 4, 2014, New Country removed the action to federal court. To date, Plaintiffs have not served process on Defendants MGD and Lash Volkswagen. (Id. ¶ 10)

On November 18, 2016, New Country filed its motion for summary judgment. (ECF no. 30) That motion is now before the Court.

II. DISCUSSION

A. Summary Judgment Standard

Federal Rule of Civil Procedure 56(a) provides that summary judgment should be granted "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law."Fed. R. Civ. P. 56(a); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S. Ct. 2505 (1986); Kreschollek v. S. Stevedoring Co., 223 F.3d 202, 204 (3d Cir. 2000). In deciding a motion for summary judgment, a court must construe all facts and inferences in the light most favorable to the nonmoving party. See Boyle v. County of Allegheny Pennsylvania, 139 F.3d 386, 393 (3d Cir. 1998). The moving party bears the burden of establishing that no genuine issue of material fact remains. See Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S. Ct. 2548 (1986). "[W]ith respect to an issue on which the nonmoving party bears the burden of proof . . . the burden on the moving party may be discharged by 'showing'—that is, pointing out to the district court—that there is an absence of evidence to support the nonmoving party's case." Id. at 325, 106 S. Ct. 2548.

If the moving party meets its threshold burden, the opposing party must present actual evidence that creates a genuine issue as to a material fact for trial. Anderson, 477 U.S. at 248, 106 S. Ct. 2505; see also Fed. R. Civ. P. 56(c) (setting forth types of evidence on which nonmoving party must rely to support its assertion that genuine issues of material fact exist). "[U]nsupported allegations . . . and pleadings are insufficient to repel summary judgment." Schoch v. First Fid. Bancorporation, 912 F.2d 654, 657 (3d Cir. 1990); see also Gleason v. Norwest Mortg., Inc., 243 F.3d 130, 138 (3d Cir. 2001) ("A nonmoving party has created a genuine issue of material fact if it has provided sufficient evidence to allow a jury to find in its favor at trial.").

B. Analysis

1. Breach of Contract, Breach of Contract Implied at Law, and "Specific Performance: Delivery of Goods and Services" (Counts 1-3)

a. Breach of Contract

Plaintiffs allege that, of the eight new BMWs that were promised, New Country failed to deliver three. Under New Jersey law, a breach of contract claim has three essential elements: (1) the existence of a valid and enforceable contract between the parties, (2) a breach of that contract, and (3) damages. Murphy v. Implicito, 920 A.2d 678, 689 (N.J. Super. Ct. App. Div. 2007); accord Frederico v. Home Depot, 507 F.3d 188 (3d Cir. 2007).

As to Counts 1-3,⁹ New Country argues that the breach of contract claims founder on the first element: the existence of an enforceable contract between New Country and Plaintiffs. To establish the existence of a valid contract of sale, "Plaintiff must show mutual assent, consideration, legality of the object of the contract, capacity of ...