Terex South Dakota, Inc. v. Fom USA Inc.

          MEMORANDUM OF DECISION ON MOTION TO DISMISS

          WARREN W. EGINTON SENIOR U.S DISTRICT JUDGE

         In this multi-count complaint, plaintiff Terex South Dakota, Inc., alleges that defendants FOM USA, Inc. and FOM Industrie, S.r.l. (“Defendants FOM”) caused it damage due to to an ineffective milling machine known as the Titan 012 that defendants had supplied for plaintiff's equipment manufacturing business. Plaintiff asserts the following counts: (1) breach of contract; (2) breach of implied covenant of good faith and fair dealing; (3) breach of express warranty; (4) breach of the implied warranty of fitness; (5) breach of the implied warranty of merchantability; (6) misrepresentation; and (7) negligence. Defendants have filed a motion to dismiss the claims of breach of contract, breach of implied covenant of good faith and fair dealing; misrepresentation, and negligence. For the following reasons, the motion will be granted in part and denied in part.

         BACKGROUND

         For purposes of ruling on this motion, the Court takes the facts alleged in the complaint to be true.

         Plaintiff is a manufacturer of heavy equipment. Defendant FOM USA is a subsidiary and distributor of defendant FOM Industrie.

         In 2012, Terex decided to replace its existing milling machine. It solicited a bid from defendants FOM. Terex provided drawings of certain parts that it planned to manufacture with a replacement milling machine and advised defendants FOM of its performance requirements. In August 2012, FOM USA provided Terex with a “Time Study Multifabrication Line August 2012" identifying the estimated amount of production time based on the drawings supplied by Terex.

         Terex relied upon this Time Study in making its decision to buy the milling machine from defendants FOM.

         In February 2014, Terex and FOM USA entered into a Machine Proposal and an Order Confirmation for Terex's purchase of the FOM Titan 012 for $1, 059, 000. The Terms and Conditions of Purchase attached to the Order Confirmation were negotiated between Terex and defendants FOM.

         The Titan 012 was installed at Terex's facility in March 2015. Terex S.D. incurred more than $150, 000.00 in expenses related to installation of the Titan 012, purchase of FOM's proprietary operating software, and unloading the Titan 012.

         Shortly after installation, Terex S.D. experienced performance issues with the Titan, including its software. In summer 2017, Terex S.D. contacted defendants FOM about the performance issues, but defendants were unwilling to correct the deficiencies.

         Terex S.D. maintains that the Titan S.D. did not perform as represented and warranted by defendants. Because the Titan did not meet performance requirements, Terex S.D. had to supplement the limited production provided by the Titan with the milling machine that it had sought to replace.

         DISCUSSION

         The function of a motion to dismiss is "merely to assess the legal feasibility of the complaint, not to assay the weight of the evidence which might be offered in support thereof." Ryder Energy Distrib. v. Merrill Lynch Commodities, Inc., 748 F.2d 774, 779 (2d Cir. 1984). When deciding a motion to dismiss, the Court must accept all well-pleaded allegations as true and draw all reasonable inferences in favor of the pleader. Hishon v. King & Spaulding, 467 U.S. 69, 73 (1984). The complaint must contain the grounds upon which the claim rests through factual allegations sufficient “to raise a right to relief above the speculative level.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 545 (2007). A plaintiff is obliged to amplify a claim with some factual allegations in those contexts where such amplification is needed to render the claim plausible. Iqbel v. Hasty, 490 F.3d 143, 157 (2d Cir. 2007) (applying flexible “plausibility standard” to Rule 8 pleading).

         Economic ...