Crossroads Trucking Corp. v. TruNorth Warranty Plans of North America, LLC
3:21-cv-00318
W.D.N.C.Jan 25, 2022Background
- Crossroads Trucking leased a Freightliner from 19th Capital; the truck was covered by a TruNorth warranty. After that truck’s catastrophic engine failure, 19th Capital provided a replacement ("9789 Freightliner") and TruNorth issued a second warranty covering that truck.
- The replacement truck also suffered catastrophic engine failure; TruNorth denied coverage under the second warranty, citing prior check-engine lights and procedural/maintenance issues.
- Plaintiff alleges it leased the trucks in reliance on 19th Capital’s oral and written promises that 19th would procure a comprehensive "all-inclusive" warranty that would cover engine failures.
- The second warranty lists Crossroads as "customer," 19th Capital as "retailer," bears both TruNorth and 19th Capital logos, and was signed by a 19th Capital representative (not Crossroads); Crossroads did not receive the warranty before execution.
- Crossroads sued 19th Capital and TruNorth for breach of contract (warranty), UDTPA, fraud, negligent misrepresentation, negligence, breach of fiduciary duty/constructive fraud, and civil conspiracy; TruNorth’s claims were largely resolved via enforcement of a dispute-resolution provision, leaving claims against 19th Capital.
- 19th Capital moved to dismiss under Rule 12(b)(6) (and Rule 9(b) as to fraud), arguing (inter alia) it was not a party to the warranty and plaintiff’s other tort claims fail as a matter of law.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Breach of warranty / contract: Is 19th Capital a party to the Second Warranty? | 19th Capital’s logos/name on the warranty and sales representations show intent to be bound; plaintiff relied on 19th’s warranty promises. | Warranty was executed by TruNorth; 19th was only listed as "retailer"/lienholder and did not assume obligations—no mutual assent. | 19th Capital is not a party to the warranty; breach of contract claim dismissed. |
| Fraud / negligent misrepresentation / UDTPA: Are 19th’s statements actionable? | 19th made definite misrepresentations about truck condition and a "robust" warranty that induced the lease. | Statements were sales puffery/promissory and not statements of existing fact; plaintiff pleads no facts showing 19th knew trucks were defective or intended to deceive. | Statements are non-actionable puffery/promises; fraud, negligent misrep., and UDTPA claims dismissed. |
| Fiduciary duty / breach of fiduciary duty: Did 19th owe a fiduciary duty to plaintiff? | 19th exercised superiority/influence and controlled warranty access, so a fiduciary relationship existed. | The parties were at arms’ length retailers and customers; no de jure fiduciary relation and no facts showing domination to create de facto duty. | No fiduciary relationship; breach of fiduciary duty claim dismissed. |
| Civil conspiracy: Did plaintiff plead an agreement and overt wrongful acts? | 19th and TruNorth conspired to deny valid warranty claims and had a pattern of similar conduct. | Allegations are conclusory and lack specific wrongful overt acts or details of an agreement. | Conspiracy claim fails because underlying torts fail and plaintiff did not plead overt acts; claim dismissed. |
Key Cases Cited
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (establishes plausibility pleading standard)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (applies two-step Iqbal analysis for plausibility)
- Mylan Labs., Inc. v. Matkari, 7 F.3d 1130 (4th Cir. 1993) (accept well-pleaded allegations and view facts in plaintiff’s favor)
- E. Shore Mkts., Inc. v. J.D. Assocs., LLP, 213 F.3d 175 (4th Cir. 2000) (courts need not accept unwarranted inferences or conclusory allegations)
- Howe v. Links Club Condo. Ass’n, Inc., 263 N.C. App. 130 (N.C. Ct. App. 2018) (no contractual obligations where defendant is not a signatory/party)
- Murray v. Bensen Aircraft Corp., 259 N.C. 638 (N.C. 1963) ("warranty" implies contractual relation between warrantor and beneficiary)
- Murray v. General Motors, LLC, [citation="478 F. App'x 175"] (5th Cir. 2012) (dealer not liable under manufacturer’s warranty absent agreement)
- Dallaire v. Bank of Am., N.A., 367 N.C. 363 (N.C. 2014) (standard for fiduciary duty under North Carolina law)
- Broussard v. Meineke Disc. Muffler Shop, Inc., 155 F.3d 331 (4th Cir. 1998) (special facts required to create de facto fiduciary relationship)
- Tin Originals, Inc. v. Colonia Tin Works, Inc., 98 N.C. App. 663 (N.C. Ct. App. 1990) (mutual interdependence/arms-length bargaining does not create fiduciary duty)