Addy's Harbor Dodge LLC v. Global Vehicles USA Incorporated et al

Filing 23

ORDER denying 15 Motion to Dismiss without prejudice. Signed by Honorable R Bryan Harwell on 10/26/2011. (hcic)

IN THE UNITED STATES DISTRICT COURT
DISTRICT OF SOUTH CAROLINA
FLORENCE DIVISION
Addy’s Harbor Dodge, LLC,

)
)
Plaintiff,
)
)
v.
)
)
Global Vehicles U.S.A. Inc., John A. Perez, )
and Manuel Baez,
)
)
Defendants.
)
____________________________________)

C/A No. 4:11-cv-01065-RBH

ORDER

This lawsuit arises from a contract dispute between the Plaintiff, Addy’s Harbor Dodge, LLC
(“Addy”), and the Defendant Global Vehicles U.S.A. Inc. (“Global”). Currently pending before the Court
is the Defendants’ Motion to Dismiss. [Doc. #15]. For the following reasons, the motion is denied without
prejudice to the right to re-file if necessary.1
Background Facts and Procedural History
On April 7, 2009, the parties entered into a Dealer Sales and Service Agreement (“Agreement”).
Under the terms of the Agreement, Global agreed to distribute vehicles manufactured by Mahindra &
Mahindra Ltd. to Addy. The Agreement specifically incorporated the following mediation clause:
In order to minimize the expense and difficulty of resolution of disputes
related to this Agreement, the parties agree to use every reasonable effort
to settle any dispute between them, relative to this Agreement, in the
foregoing manner. Should any dispute concerning any aspect of this
contract arise between the parties such disputes shall be settled first by
conducting mediation. Either party shall give written notice to the other
of the existence and subject of a dispute and its desire to commence
dispute resolution proceedings. Mediation will be conducted by a

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Under Local Rule 7.08, “hearings on motions may be ordered by the Court in its
discretion. Unless so ordered, motions may be determined without a hearing.” The issues
have been briefed by the parties, and the Court believes a hearing is not necessary.

mediator in Georgia to be mutually selected. The parties will share the
costs of the mediator equally.
See Doc. #15-3, p.30. After signing the Agreement, the parties began to dispute performance issues. The
parties did not mediate the dispute. On March 30, 2011, Addy filed its Complaint against Global alleging
the following causes of action: (1) Violation of Regulation of Manufacturers, Distributors and Dealers Act
(“RMDDA”) (S.C. Code Ann. § 56-15-10); (2) Breach of Contract Accompanied by a Fraudulent Act;
and (3) Corporate Veil Piercing. Addy also alleged the following causes of action against Defendants
Perez and Baez: (1) Violation of the RMDDA; and (2) Corporate Veil Piercing. Subsequently, the case
was removed to this Court, and the Defendants filed the instant Motion to Dismiss. The Defendants move
to dismiss the Complaint on the following grounds:
(1) The Agreement requires the parties to mediate prior to instituting litigation and this
case was filed prior to mediation and must be dismissed;
(2) This Court does not have personal jurisdiction over Defendants Perez and Baez, and
claims against them should be dismissed pursuant to Rule 12(b)(2); and
(3) The RMDDA does not provide a cause of action against Defendants Perez and Baez,
and that claim should be dismissed as to them.

Discussion
According to the Defendants, “the Agreement requires the parties to conduct mediation prior to
instituting litigation. The mediation is a condition precedent to instituting litigation.” Doc. #15, p.3. They
argue that “the Plaintiff’s Complaint should be dismissed to permit the parties to mediate their dispute in
accordance with the Agreement.” Id. In response, Addy argues that “[a]lthough Plaintiff did not retain
a mediator to assist in resolving this dispute, Plaintiff made adequate attempts at settlement of this dispute
prior to commencement of this litigation by engaging in face to face discussions with the CEO for Global
regarding the termination of the Agreement and a refund of the $195,000.00 paid for the franchise.” Doc.

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#18, p.6. Addy also argues that the mediation clause is unconscionable and “contends that in the interest
of judicial economy, it would serve no purpose to dismiss the action and re-file it, when mediation will
be conducted in either event” because mediation is mandatory in this District “post filing.” Id. at 13. In
reply, the Defendants refute Addy’s unconscionable claim and again state that “this matter should be
dismissed or, in the alternative, stayed, to allow the parties to mediate the dispute in accordance with the
Dealer Agreement.” Doc. #22, p.3.
The Court notes that both the Court’s scheduling order and the local rules in this District require
this case to be mediated. Additionally, based on their arguments, it appears that none of the parties would
object to the Court staying this case to allow the parties to mediate this dispute in lieu of dismissing the
Complaint because this Court would ultimately require mediation anyway. Therefore, the Clerk is
instructed to administratively stay this case until January 1, 2012. The parties shall mediate this case by
January 1, 2012, either in accordance with the terms incorporated in the Agreement or under such other
terms as they agree to in writing. This mediation shall satisfy the Court’s requirement for mediation.
Accordingly, the Defendants’ Motion to Dismiss is denied without prejudice to the refiling of the
motion if the parties have not resolved the case by January 1, 2012. In such an event, the parties shall
notify the Court, and the Defendants may re-file their existing [Doc. #15] Motion to Dismiss containing
their additional grounds for dismissal of claims against Defendants Perez and Baez. If the Motion to
Dismiss is re-filed, the Court will consider the matter based on the memoranda or briefs already filed with
the Court, and no further response or reply will be necessary by counsel on the Defendants’ Motion to
Dismiss.

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Conclusion
Based on the foregoing, the Defendants’ Motion to Dismiss is DENIED without prejudice.
IT IS SO ORDERED.
s/ R. Bryan Harwell
R. Bryan Harwell
United States District Judge

Florence, South Carolina
October 26, 2011

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