United States District Court, D. Minnesota
Jim Lupient Company d/b/a Lupient Infiniti of Golden Valley, Plaintiff,
Nissan North America, Inc., Defendant.
T. Allen, Bass Sox Mercer, and Douglas R. Boettger, Stinson
LLP, (for Plaintiff); and
J. Wells, Dorsey & Whitney LLP, (for Defendant).
REPORT AND RECOMMENDATION
N. Leung United States Magistrate Judge
matter is before the Court, United States Magistrate Judge
Tony N. Leung, on Plaintiff's Motion to Strike
Defendant's Defenses. (ECF No. 26). This motion has been
referred to the undersigned magistrate judge for a report and
recommendation to the Honorable Michael J. Davis, United
States District Judge for the District of Minnesota, pursuant
to 28 U.S.C. § 636(b)(1) and Local Rule 72.1. (ECF No.
27). Based on all the files, records, and proceedings herein,
and for the reasons set forth below, this Court recommends
that Plaintiff's motion be DENIED.
Jim Lupient Company (“Lupient”) owns and operates
an Infiniti motor vehicle dealership. (Compl., ¶ 2, ECF
No. 1). Defendant Nissan North America, Inc.
(“Nissan”) manufactures Infiniti automobiles and
sells those vehicles through its franchised dealerships,
including Lupient. (Compl. ¶¶ 3-4). Pursuant to the
franchise agreement between the parties, Lupient is required
to provide warranty service on all vehicles it is authorized
to sell. (Compl. ¶ 9).
August 9, 2018, Lupient submitted a request to Nissan to set
its warranty labor reimbursement rate at $163.63, pursuant to
Minnesota Statutes section 80E.041, subdivision 4. (Compl.
¶ 19). Included in its request were certain documents
that Minnesota law required Lupient to provide in order to
justify its proposed rate. (Compl. ¶ 19). These
documents included reports, certain repair orders, and other
“analytical documentation.” (Compl. ¶ 19).
rejected Lupient's request on August 29, 2018. (Compl.
¶ 20). It stated that Lupient's requested rate was
unreasonable because it was well above the competitive market
average of $132.00. (Compl. ¶ 20). Nissan proposed an
alternate labor reimbursement rate of $139.00. (Compl. ¶
parties attempted to resolve their dispute through formal
mediation. (Compl. ¶ 23). After that proved
unsuccessful, Lupient filed suit, alleging that Nissan
violated Minnesota Statutes section 80E.041 and seeking a
declaratory judgment as to the value of the labor
reimbursement rate. (Compl. ¶¶ 25-38). Lupient also
seeks damages and attorney's fees.
filed an amended answer to the complaint on March 4, 2019.
(ECF No. 21). In its amended answer, Nissan continued to
allege that Lupient's requested rate was unreasonable.
(Amend. Ans. ¶¶ 42-43). Nissan also challenged
Lupient's requested rate in two additional ways. First,
Nissan alleged that Lupient failed to comply with Minnesota
law because it included improper documentation in its request
for a new retail reimbursement rate. (Amend. Ans. ¶ 40).
Second, Nissan alleged that it retained the right to audit
Lupient's submission under Minnesota law. (Amend. Ans.
¶¶ 20, 41).
moved to strike Nissan's two new defenses, arguing that
neither was permitted under Minnesota law. (ECF No. 26).
Nissan filed a memorandum of law in response. (ECF No. 39).
The Court took the matter under advisement following a May
20, 2019 hearing.
MOTION TO STRIKE
Rule 12(f) of the Federal Rules of Civil Procedure, the Court
may “strike from a pleading an insufficient defense, or
any redundant, immaterial, impertinent, or scandalous
matter.” Though the Court has broad discretion to grant
motions to strike, it must exercise that discretion with
caution, because Rule 12(f) motions are highly disfavored and
rarely granted. Stanbury Law Firm, P.A. v. Internal
Revenue Serv., 221 F.3d 1059, 1063 (8th Cir. 2000). A
motion to strike is appropriate when it will result in a
less-complicated trial or “otherwise streamline the
ultimate resolution of the action.” Daigle v. Ford
Motor Co., 713 F.Supp.2d 822, 830 (D. Minn. 2010).
“Any doubt as to the striking of matters in a pleading
should be resolved in favor of the pleading.”
Vernon J. Rockler & Co., Inc. v. Minneapolis
Shareholders Co., 69 F.R.D. 1, 5 (D. Minn. 1975).
the parties' dispute relates to two provisions of
Minnesota Statutes section 80E.041, which governs the
relationship between an automobile manufacturer and a dealer.
The first provision, contained in subdivision four of the
statute, sets forth a system for determining the compensation
a manufacturer pays a dealer for warranty labor. Minn. Stat.
§ 80E.041, subd. 4. It requires that,
“[c]ompensation for warranty labor . . . equal the
dealer's effective nonwarranty labor rate multiplied by
the time allowances recognized by the manufacturer to
compensate its dealers for warranty work.”
Id., subd. 4(a). To determine the nonwarranty labor
rate, the dealer must submit to the manufacturer the lesser
of “100 sequential nonwarranty customer-paid service
repair orders which contain warranty-like repairs” or
“90 consecutive days of nonwarranty customer paid
orders which contain warranty-like repairs.”