Seattle Powersports LLC v. Harley-Davidson Motor Company Inc
2:20-cv-00311
E.D. Wis.Sep 15, 2020Background
- Renton acquired and operated a Harley‑Davidson dealership under a dealer contract with HDMC and alleges HDMC withheld new‑bike inventory, forcing a discounted sale to a successor (TMCL).
- Renton separately had retail‑financing relationships with Eaglemark Savings Bank (ESB) and Harley‑Davidson Credit Corp. (HDCC).
- On Nov. 9, 2018 Renton executed an Assignment and Assumption Agreement assigning certain financing rights to Scott City; that agreement contained a broad release of HDCC, ESB and their "affiliates" from "all actions… known or unknown… related to this Agreement… or any other documents, related transactions, relationships, acts or omissions from the beginning of time to the date of this Agreement." The agreement specified Nevada law.
- Renton sued HDMC for breach of the Dealer Contract and breach of the duty of good faith and fair dealing; HDMC moved for summary judgment arguing the Assignment release bars Renton’s claims.
- The court applied Nevada law, found the release unambiguous, concluded HDMC is an affiliate of HDCC and that the Dealer Contract is a sufficiently "related" transaction, and therefore granted summary judgment for HDMC; Renton’s Rule 56(d) discovery request was denied as futile.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Choice‑of‑law for interpreting the release | Washington law should govern | Nevada law governs per the Agreement's choice clause | Court applied the contract's Nevada choice‑of‑law clause and analyzed under Nevada law |
| Whether the release clause is ambiguous | Release limited to ESB/loan contingent liabilities; ambiguous and needs extrinsic evidence | Release is broad and unambiguous on its face | Court found the release unambiguous under Nevada law |
| Whether the release bars Renton’s Dealer Contract claims against HDMC | Dealer Contract claims fall outside the release; HDMC not excluded | HDMC is an "affiliate" of HDCC and Dealer Contract is a "related transaction," so claims are released | Court held HDMC is an affiliate and the Dealer Contract claims are covered and thus barred |
| Whether discovery under Rule 56(d) should be allowed to develop extrinsic evidence | Discovery is necessary to show ambiguity and parties' intent | Discovery would be futile because the release is clear | Court denied Rule 56(d) as discovery would be futile given the unambiguous release |
Key Cases Cited
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986) (summary‑judgment standard)
- Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487 (1941) (federal courts apply transferor forum's choice‑of‑law rules)
- Van Dusen v. Barrack, 376 U.S. 612 (1964) (principles on transfer and choice‑of‑law application)
- In re Jafari, 569 F.3d 644 (7th Cir. 2009) (applying transferor court's choice‑of‑law rules in diversity cases)
- Smith v. OSF HealthCare Sys., 933 F.3d 859 (7th Cir. 2019) (standards for denying Rule 56(d) discovery requests)
- Musser v. Bank of Am., 964 P.2d 51 (Nev. 1998) (every contract word must be given effect)
- Ringle v. Bruton, 86 P.3d 1032 (Nev. 2004) (extrinsic evidence allowed only when contract is ambiguous)
- In re Amerco Derivative Litig., 252 P.3d 681 (Nev. 2011) (unambiguous releases construed from their language)
- Norfolk S. Ry. Co. v. Kirby, 543 U.S. 14 (2004) (textual meaning of "any" as expansive)
- RLI Ins. Co. v. Conseco, Inc., 543 F.3d 384 (7th Cir. 2008) (interpreting the broad scope of "related")
