Ford Motor Company v. Titan Enterprise Inc
2:14-cv-07701
C.D. Cal.Apr 13, 2015Background
- Ford sued Titan for breach of a Ford CPA contract for 2014 incentives; Titan failed to meet 250-vehicle purchase and allegedly exported vehicles, affecting discounts totaling $823,000.
- CPA allowed discounts in exchange for Titan purchasing 250 Ford vehicles and required US registration/operation of such vehicles.
- Titan purchased Ford Explorers from Rush Center in California and AutoNation Ford Littleton in Colorado, receiving substantial discounts.
- In 2014, Ford found Titan’s purchased Explorers at a port in China; Titan allegedly admitted exporting vehicles to China.
- Ford filed the FAC on Jan 27, 2015; Titan moved to dismiss under Rule 12(b)(6); the court denied the motion.
- Court analyzed breach of contract elements under California law and possible severability of an alleged export restraint.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a valid contract existed between Ford and Titan. | Titan and Ford had a CPA contract (Sept. 18, 2013). | Dispute not necessary; contract existence admitted. | Yes, contract existence adequately alleged. |
| Whether Ford adequately alleged performance by Ford and nonperformance by Titan. | Ford performed; Titan failed to meet 250-vehicle target and use restrictions. | Titan prevents implied performance issues; details disputed. | Plaintiff sufficiently alleged performance and breach by Titan. |
| Whether Titan breached the 250-vehicle purchase and US-only use terms. | Titan failed to purchase 250 vehicles and violated use restrictions. | Disputes construction of the contract terms. | Titan’s breach adequately alleged; supports claim for damages. |
| Whether the export restraint clause is severable and defeat dismissal. | Even if export clause void, rest of contract enforceable. | Export clause may be void; argues undue restraint. | Even if severed, remaining contract supports breach claim; dismissal not warranted. |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (U.S. 2009) (plausibility standard for pleading under Rule 12(b)(6))
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (U.S. 2007) (plausibility pleading standard; must plead more than mere conclusory statements)
- Balistreri v. Pacifica Police Dep’t, 901 F.2d 696 (9th Cir. 1990) (standard for motion to dismiss based on failure to state a claim)
- Klarfeld v. United States, 944 F.2d 583 (9th Cir. 1991) (presume factual allegations true in Rule 12(b)(6) review)
- Palmquist v. Palmquist, 27 Cal. Rptr. 744 (Cal. Ct. App. 1963) (California breach of contract performance standard)
- Zee Med. Distrib. Ass’n, Inc. v. Zee Med., Inc., 94 Cal. Rptr. 2d 829 (Cal. Ct. App. 2000) (breach of contract elements and damages)