Snyder Development Company v. Autozone, Inc.
2:18-cv-01274
S.D. OhioAug 12, 2019Background
- AutoZone (Inc. and AutoZone Development) leased new premises from FD Gahanna on April 3, 2015; FD Gahanna agreed in the FD Lease (Section 21.1) to assume liabilities under AutoZone’s existing Snyder Lease after an assignment.
- AutoZone executed an assignment of its Snyder Lease and relocated in December 2015; AutoZone alleges FD Gahanna failed to pay Snyder and otherwise perform obligations it had assumed.
- Snyder (original lessor) refused to consent to the assignment after FD Gahanna allegedly failed to make required payments; Snyder sued AutoZone (underlying plaintiff), and AutoZone impleaded FD Gahanna as a third‑party defendant.
- AutoZone asserted claims against FD Gahanna for breach of contract, unjust enrichment, promissory estoppel, tortious interference, indemnification, and contribution.
- FD Gahanna moved to dismiss under Fed. R. Civ. P. 12(b)(6); the court evaluated whether each claim was plausibly pleaded, applying the federal pleading standards.
Issues
| Issue | AutoZone's Argument | FD Gahanna's Argument | Held |
|---|---|---|---|
| Breach of contract — did FD materially breach the FD Lease/assignment by not assuming Snyder liabilities? | FD agreed in Section 21.1 to assume Snyder liabilities; its alleged failure to pay and to use good‑faith efforts to terminate Snyder Lease is a material breach. | Contends the assignment lacked proper consent and disputes the basis for breach. | Denied dismissal — AutoZone pleaded enough facts to state a plausible breach claim. |
| Unjust enrichment — did FD retain a benefit without compensating AutoZone? | AutoZone conferred the benefit of leasing income contingent on FD assuming Snyder liabilities; FD accepted benefit and failed to pay Snyder. | Argues contractual remedies control and disputes the facts. | Denied dismissal — elements plausibly alleged. |
| Promissory estoppel — was there a clear promise and reasonable reliance? | FD promised to assume Snyder Lease in FD Lease/assignment; AutoZone reasonably relied by relocating and incurring liability. | Invokes the parol evidence rule to bar extrinsic‑promise claims. | Denied dismissal — court will not resolve parol evidence at 12(b)(6); promissory estoppel plausibly pleaded. |
| Tortious interference — did FD intentionally procure breach of AutoZone–Snyder contract? | FD knew of Snyder Lease and allegedly induced AutoZone not to pay Snyder and lured tenants, intentionally procuring breach without justification. | Contends lack of wrongful intent/justification and challenges factual premise. | Denied dismissal — claim plausibly pleaded. |
| Indemnification & Contribution — is FD contractually/otherwise liable to indemnify or contribute? | Indemnification: AutoZone seeks reimbursement for losses caused by FD’s breach. Contribution: if AutoZone is liable to Snyder, FD should share liability. | Points to lease indemnity clause where AutoZone agreed to indemnify landlord (not vice versa). | Indemnification: Granted dismissal — AutoZone cannot plead indemnity under the cited lease clause. Contribution: Denied dismissal — contribution claim plausibly pleaded given Snyder’s negligence claim. |
Key Cases Cited
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (establishes plausibility standard for pleading)
- Ashcroft v. Iqbal, 556 U.S. 662 (applies pleading standard to legal conclusions)
- Golden v. City of Columbus, 404 F.3d 950 (6th Cir. 2005) (Rule 12(b)(6) motion tests legal sufficiency of complaint)
- Ouwinga v. Benistar 419 Plan Servs., Inc., 694 F.3d 783 (6th Cir. 2012) (accept well‑pled factual allegations on dismissal review)
- Fred Siegel Co. v. Arter & Hadden, 707 N.E.2d 853 (Ohio 1999) (elements of tortious interference claim)
- Hummel v. Hummel, 14 N.E.2d 923 (Ohio 1938) (elements of unjust enrichment)
- Travelers Indem. Co. v. Towbridge, 321 N.E.2d 787 (Ohio 1975) (principles of contractual indemnity)