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Moto Tech, LLC v. Ktm North America, Inc.

United States District Court, D. Idaho

September 25, 2014

MOTO TECH, LLC, an Idaho limited Plaintiff,
v.
KTM NORTH AMERICA, INC., an Ohio corporation, liability company, Defendants.

MEMORANDUM DECISION AND ORDER

B. LYNN WINMILL, Chief District Judge.

INTRODUCTION

Before the Court is defendant KTM North America, Inc.'s Motion to Dismiss the Second Amended Complaint (Dkt. 35). The motion is fully briefed and at issue, and the Court has determined that oral argument would not significantly assist the decisional process. Accordingly, the Court will resolve the motion without a hearing. Having thoroughly considered the pleadings, the Court will grant the motion to the extent MotoTech has failed to plead a false advertising claim under the ICPA. The Court will deny the motion in all other respects.

BACKGROUND

In January 2011, KTM's Northwest Area Sales Manager, Jason Dahner, traveled to plaintiff MotoTech's offices. Second Am. Compl. ("SAC") ¶ 7, Dkt. 30. During this visit, Mr. Dahner told MotoTech's representative, Loyal Gibbons, that KTM was searching for a KTM dealer in Nampa, Idaho. Id .

MotoTech had sought a KTM dealership for years. Id. Excited about the opportunity to sell the KTM brand, MotoTech requested a dealership application and asked what it would need to do to become a KTM dealer. Id . Mr. Dahner told Mr. Gibbons he would send a dealership application to MotoTech and advised Gibbons to locate a larger facility to accommodate their KTM line. Id.

By March 2011, MotoTech had located a potential facility, and KTM later sent Mr. Dahner to visit this facility. Mr. Dahner told Mr. Gibbons that the site was suitable for the KTM line and, further, that if MotoTech "submitted its application, secured the site, met the preconditions, and placed an order, it would be approved for a KTM dealership." Id. ¶ 9.

MotoTech says it took all of these steps, including submitting an order for KTM products at prices available only to KTM dealers. MotoTech said that when it placed this order, it accepted KTM's offer to become a dealer. Id. ¶ 13. After MotoTech placed this order, Mr. Dahner told Mr. Gibbons that MotoTech had obtained a KTM dealership. Id. ¶ 14. Accordingly, MotoTech began pre-selling KTM motorcycles, hired staff, bought tools, obtained insurance, bought computers and a phone system, and signed a contract for a point-of-sale system. Id. ¶ 15.

A month or so later, in July, KTM asked MotoTech to attend a KTM dealer show to view and test KTM products. In response to this request, MotoTech made reservations and attended the show in Indianapolis, Indiana. Mr. Gibbons arrived at the dealer's show apparently expecting to receive his dealer number, but KTM had not prepared his dealer's package. Id . ¶ 16. An unknown KTM representative reassured Mr. Gibbons that a dealer number was forthcoming, and the failure to have his packet prepared was a mistake. Id.

Prior to filing the complaint, Mr. Gibbons located Mr. Dahner who had since left KTM. Id . ¶ 18. Mr. Gibbons asked him what he remembered about its KTM application and MotoTech's status as a KTM dealer. Id. Mr. Dahner recalled that MotoTech was in fact approved as a KTM dealer when it placed its order, but that he was aware KTM refused to honor it and he was not sure why. Id .

MotoTech alleges that KTM acted "unfairly and deceptively" by, among other things:

a. soliciting MotoTech to become a KTM dealer;
b. offering MotoTech the opportunity to become a KTM dealer without any intention of honoring the offer;
c. providing costly preconditions to become a KTM dealer;
d. by telling MotoTech it was a KTM dealer once it placed its order;
e. by soliciting MotoTech to make orders; and
f. by inducing MotoTech to believe, and allowing it to believe, that KTM would honor its contact for MotoTech to be a KTM dealer.

Id. ¶ 27.

LEGAL STANDARD

Federal Rule of Civil Procedure 8(a)(2) requires only "a short and plain statement of the claim showing that the pleader is entitled to relief, " in order to "give the defendant fair notice of what the... claim is and the grounds upon which it rests." Bell Atlantic Corp. v. Twombly , 550 U.S. 544, 555, 127 S.Ct. 1955, 1964 (2007). While a complaint attacked by a Rule 12(b)(6) motion to dismiss "does not need detailed factual allegations, " it must set forth "more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Id . at 555. To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to "state a claim to relief that is plausible on its face." Id . at 570. A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. Id . at 556. The plausibility standard is not akin to a "probability requirement, " but it asks for ...


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