Innovative Vehicle Sols. W. v. RENNtech, Inc.

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INNOVATIVE VEHICLE SOLUTIONS WEST, LLC, d/b/a El Kapitan, Plaintiff, v. RENNTECH, INC., Defendant.

No. 21-14404-CV-CANNON/MAYNARD

United States District Court, S.D. Florida

June 16, 2022

REPORT AND RECOMMENDATION

SHANIEK MILLS MAYNARD U.S. MAGISTRATE JUDGE

THIS CAUSE is before me upon Defendant's Amended Motion to Dismiss Plaintiff's Amended Complaint (“Motion”), DE 16, to which Plaintiff has responded in opposition, DE 22, and Defendant has replied, DE 26. Presiding U.S. District Judge Aileen M. Cannon has referred the Motion to me for a report and recommendation. DE 27. Upon review of the parties' briefing and the record in this case, I respectfully recommend that the Motion be GRANTED IN PART AND DENIED IN PART as follows.

MOTION TO DISMISS STANDARD

Defendant brings its Motion under Federal Rule of Civil Procedure 12(b)(6). The purpose of a Rule 12(b)(6) motion is to test the sufficiency of a complaint; it is not to decide the merits of a case. Milburn v. U.S., 734 F.2d 762, 765 (11th Cir. 1984). Rule 12(b)(6) permits dismissal of a complaint that fails to state a claim upon which relief can be granted. Fed.R.Civ.P. 12(b)(6). It should be read alongside Federal Rule of Civil Procedure 8(a)(2), which requires a “short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). While a complaint challenged by a Rule 12(b)(6) motion does not need detailed factual allegations, a complaint must provide the “grounds” for a plaintiff's entitlement to relief, and a “formulaic recitation of the elements of a cause of action will not do.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007).

In analyzing a Rule 12(b)(6) motion, I am to assume as true all of plaintiff's well-pled allegations and construe them in the light most favorable to plaintiff. See American United Life Ins. Co. v. Martinez, 480 F.3d 1043, 1066 (11th Cir. 2007). If the complaint's allegations are more conclusory than factual, however, I need not assume their truth. Chaparro v. Carnival Corp., 693 F.3d 1333, 1337 (11th Cir. 2012). If a court “identif[ies] pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth,” it must determine if the well-pled allegations “state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678-79 (2009). A complaint can only survive Rule 12(b)(6) dismissal if it contains factual allegations that are “enough to raise a right to relief above the speculative level, on the assumption that all the [factual] allegations in the complaint are true.” Twombly, 550 U.S. at 555. However, a well-pled complaint survives a motion to dismiss “even if it strikes a savvy judge that actual proof of these facts is improbable, and ‘that a recovery is very remote and unlikely.'” Id. at 556.

While a complaint's factual allegations must be accepted as true in analyzing a motion to dismiss, when a plaintiff attaches documents or exhibits which contradict the factual allegations in the complaint, the exhibits govern. Griffin Indus., Inc. v. Irvin, 496 F.3d 1189, 1206 (11th Cir. 2007); Fed.R.Civ.P. 10(c) (providing that a written instrument that is an exhibit to a pleading is part of the pleading for all purposes); see also Jordan v. Miami-Dade Cty., 439 F.Supp.2d 1237, 1240 (S.D. Fla. 2006) (“Exhibits attached to a Complaint are properly considered part of the pleadings for all purposes, including a Rule 12(b)(6) motion.”).

BACKGROUND

This case stems from a series of agreements related to the customization of a Ford van for display at a Las Vegas trade show and other promotional purposes. Plaintiff Innovative Vehicle Solutions West, LLC d/b/a El Kapitan (“Plaintiff” or “IVS West”) is a Delaware limited liability company with its principal place of business in California. DE 5, Amended Compl. ¶ 3. Plaintiff's sole member is non-party IVS International, Inc., which is a Delaware corporation with a principal place of business in South Carolina. Id. Defendant Renntech, Inc. is a Florida corporation with a principal place of business in Stuart, Martin County, Florida. Id. ¶ 5. The below facts are drawn from the Amended Complaint and its attached documents that are central to Plaintiff's claims. I will draw all reasonable inferences in Plaintiff's favor.

On May 30, 2017, non-party Ford Motor Company (“Ford”) awarded a contract to Plaintiff (the “Ford Agreement”) under which Plaintiff would customize a Ford 2017 Transit 350 HD for Ford's promotion of its van line at an automotive trade show in Las Vegas in November 2017. Id. ¶¶ 9-11; DE 5-1. The Ford Agreement required Plaintiff to make the customized van available for advertising and company promotional materials, editorial or other exposure in trade publications, and product development. DE 5 ¶ 12; DE 5-1. After the customized van's debut at the Las Vegas show, Ford intended to take the van on a nationwide tour of Ford dealerships to promote custom van conversion, after which time Plaintiff would be entitled to sell the van for profit. DE 5 ¶ 13.

Plaintiff “cooperated with its corporate sibling” and non-party Innovative Vehicle Solutions, LLC (“IVS”) to fulfill Plaintiff's obligations under the Ford Agreement. Id. ¶ 14. Specifically, IVS provided IVS West with financial support and project supervision. Id. Nonparty IVS separately contracted with Defendant to complete the necessary modifications to the van for a fixed price of $110,000.00, as evidenced by (i) a two-page Letter of Intent dated April 13, 2017 and signed by Defendant's President, DE 5-2, (ii) email correspondence throughout the summer and fall of 2017, including but not limited to an email chain from June 30, 2017 that is attached to the Amended Complaint, DE 5-3; and (iii) a one-page document entitled SEMA Ford Transit Van Project Completion Plan dated October 4, 2017 and signed by representatives of Defendant and IVS. DE 5-4. DE 5 ¶¶ 15-16, 22-23.

Under the completion plan between Defendant and IVS, Defendant agreed to complete the following work: (1) install wheels adaptors; (2) mount wheels; (3) leave air suspension in working condition; (4) attempt to reduce noise level of air compressor; (5) functional lift system without oil leaks; (6) install loading arm (with coating to be completed and paid for by Plaintiff); (7) trim, fit, and install left front fender flare (with part ordered and purchased by Plaintiff); (8) supply, unpack, and install grill; (9) reinforce side gullwing doors and align potential misalignments of doors; (10) assist with alignment of rear and side door struts (with struts to be ordered and purchased by Plaintiff); and (11) complete and paint visor. DE 5 ¶ 17; DE 5-4. Defendant agreed to complete this work (except the work on the visor) by the “anticipated” date of October 13, 2017. DE 5-4. Plaintiff contends that Defendant always knew that Defendant's work on the van was in furtherance of the Ford Agreement and Ford's intention to take the van on a nationwide tour of Ford dealerships, after which Plaintiff would sell the van for profit. DE 5 ¶¶ 18-20.

Plaintiff claims to be a third-party beneficiary of the contract between non-party IVS and Defendant based upon Defendant's regular communications with Plaintiff about specifications for the customized van. Id. ¶ 21. Defendant failed to complete its work by the deadline of October 13, 2017, and Defendant's work on the van was deficient, including a missing air conditioner, failure to paint the van, electrical system problems, and non-functioning gullwing doors. Id. ¶¶ 24-29. When Ford realized the van customization project was behind schedule, Ford assigned the van to be placed in a less desirable outdoor location instead of placing it in a prominent place inside the Las Vegas show's venue space. Id. ¶ 30. At the expense of other jobs and income, Plaintiff and IVS tried to mitigate damages by completing Defendant's scope of work on the van themselves. Id. ¶ 31. Despite these efforts, the customized van arrived 12 hours late to the Las Vegas show and was “placed unceremoniously in the hot sun alongside the Ford track, where there was far less foot traffic compared to the convention center.” Id. ¶ 32.

After the Las Vegas show, Ford asked that the van be driven to the desert for promotional filming, however on the drive over, the van's steering column separated from the rack and pinion revealing the van to be unroadworthy and dangerous. Id. ¶ 33. Plaintiff later learned that Defendant had welded accessories to the van's boron steel frame, which is prohibited by a Ford manual attached to the Amended Complaint and is a clear violation of Ford's specifications and accepted industry standards. Id. ¶¶ 34-36. This action of welding accessories to the steel frame caused the van to lose its structural integrity and become damaged beyond repair. Id. ¶ 37. According to Plaintiff, if Defendant had properly fulfilled its contractual obligations under its agreement with IVS, the van would have been valued at approximately $244,000.00. Id. ¶ 38. Due to Defendant's breaches, the van now has only salvage value of approximately $25,000.00. Id. ¶ 39. IVS has assigned its causes of action against Defendant to Plaintiff, as evidenced by an executed Assignment of Claims dated October 1, 2021. Id. ¶ 40; DE 5-6.

Based on the above factual allegations, Plaintiff is suing Defendant for (1) breach of contract, (2) unjust enrichment, and (3) negligence.

DISCUSSION

Defendant argues that all three counts should be dismissed because (1) Counts I and II for breach of contract and unjust enrichment fail to state a cause of action, and (2) Count III for negligence is insufficiently pled and barred by Florida's economic loss rule. I will address each count in turn.

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